As filed with the Securities and Exchange Commission on July 18, 2011
Registration No. 333-175298
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
Zynga Inc.
(Exact name of Registrant as specified in its charter)
Delaware | 7371 | 42-1733483 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
444 De Haro Street, Suite 125
San Francisco, CA 94107
(800) 762-2530
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)
David M. Wehner
Zynga Inc.
444 De Haro Street, Suite 125
San Francisco, CA 94107
(800) 762-2530
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Eric C. Jensen Kenneth L. Guernsey John T. McKenna Cooley LLP 101 California Street, 5th Floor San Francisco, CA 94111 (415) 693-2000 |
Reginald D. Davis Karyn R. Smith Devang S. Shah Zynga Inc. 444 De Haro Street, Suite 125 San Francisco, CA 94107 (800) 762-2530 |
Keith F. Higgins Brian C. Erb Ropes & Gray LLP Three Embarcadero Center San Francisco, CA 94111 (415) 315-6300 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-175298) of Zynga Inc. (the Registration Statement) is being filed solely for the purpose of filing certain exhibits as indicated in Part II of this Amendment No. 1. This Amendment No. 1 does not modify any provision of the prospectus that forms a part of the Registration Statement. Accordingly, a preliminary prospectus has been omitted.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale and distribution of the securities being registered. All amounts are estimated except the SEC registration fee, the FINRA filing fee and the listing fee. Except as otherwise noted, all the expenses below will be paid by Zynga.
Item |
Amount | |||
SEC Registration fee |
$ | 116,100 | ||
FINRA filing fee |
75,500 | |||
Initial listing fee |
* | |||
Legal fees and expenses |
* | |||
Accounting fees and expenses |
* | |||
Printing and engraving expenses |
* | |||
Transfer agent and registrar fees and expenses |
* | |||
Blue Sky fees and expenses |
* | |||
Miscellaneous fees and expenses |
* | |||
Total |
$ * | |||
* | To be filed by amendment. |
ITEM 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporations board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended. Our amended and restated certificate of incorporation to be in effect upon the closing of this offering provides for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws to be in effect upon the closing of this offering provide for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law.
We have entered into indemnification agreements with our directors and officers, whereby we have agreed to indemnify our directors and officers to the fullest extent permitted by law, including advancement of expenses incurred in legal proceedings to which the director or officer was, or is threatened to be made, a party by reason of the fact that such director or officer is or was a director, officer, employee or agent of Zynga, provided that such director or officer acted in good faith and in a manner that the director or officer reasonably believed to be in, or not opposed to, the best interest of Zynga. At present, there is no pending litigation or proceeding involving a director or officer of Zynga regarding which indemnification is sought, nor is the registrant aware of any threatened litigation that may result in claims for indemnification.
We maintain insurance policies that indemnify our directors and officers against various liabilities arising under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, and amended, that might be incurred by any director or officer in his capacity as such.
The underwriters are obligated, under certain circumstances, pursuant to the underwriting agreement to be filed as Exhibit 1.1 hereto, to indemnify us, our officers, directors and the selling stockholders against liabilities under the Securities Act of 1933, as amended.
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ITEM 15. Recent Sales of Unregistered Securities.
The following sets forth information regarding all unregistered securities sold since January 1, 2008:
(a) | From January 1, 2008 to May 31, 2011, options to purchase 148,380,024 shares have been exercised for cash consideration in the aggregate amount of $6,132,353. From January 1, 2008 to May 31, 2011, we granted restricted stock units for 94,117,861 shares to our employees and directors. |
(b) | Issuances of Capital Stock |
(1) | On February 12, 2008, we issued 40,207,312 shares of our Series A-1 preferred stock, par value $0.00000625, to certain investors at a price per share of $0.125 for an aggregate purchase price of $5,025,914. |
(2) | On July 18, 2008, we issued 59,391,296 shares of our Series B preferred stock, par value $0.00000625, to certain investors at a price per share of $0.4209375 for an aggregate purchase price of $25,000,024. |
(3) | On November 4, 2009, we issued 3,200,000 shares of our Series B-1 preferred stock, par value $0.00000625, to certain investors at a price per share of $4.746075 for an aggregate purchase price of $15,187,440. |
(4) | On April 24, 2010, we issued 2,330,472 shares of our Series B-2 preferred stock, par value $0.00000625, to certain investors at a price per share of $6.436465 for an aggregate purchase price of $15,000,002. |
(5) | On June 1, 2010, we issued 22,527,892 shares of our Series B-2 preferred stock, par value $0.00000625, to certain investors at a price per share of $6.436465 for an aggregate purchase price of $144,999,988. |
(6) | On June 3, 2010, we issued 23,304,716 shares of our Series B-2 preferred stock, par value $0.00000625, to certain investors at a price per share of $6.436465 for an aggregate purchase price of $149,999,989. |
(7) | On February 18, 2011, we issued 34,927,368 shares of our Series C preferred stock, par value $0.00000625, to certain investors at a price per share of $14.029115 for an aggregate purchase price of $490,000,062. |
(8) | From January 1, 2008 to December 31, 2009, we issued 15,965,936 shares of our Series B common stock, par value $0.00000625, as consideration to certain investors in connection with acquisitions. |
(9) | From January 1, 2010 to December 31, 2010, we issued 26,584,658 shares of our Series Z preferred stock, par value $0.00000625, as consideration to certain investors in connection with acquisitions. |
(10) | From January 1, 2011 to date, we issued 858,115 shares of our Series Z preferred stock, par value $0.00000625, as consideration to certain investors in connection with acquisitions. |
The offers, sales and issuances of the securities described in Item 15(a) were deemed to be exempt from registration under the Securities Act under either (1) Rule 701 promulgated under the Securities Act as offers and sale of securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule 701 or (2) Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering, or because they did not involve a sales of securities. The recipients of securities in each of these transactions represented their intention to acquire the securities for investment only and not with view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the stock certificates and instruments issued in such transactions. All recipients had adequate access, through their relationships with us, to information about us.
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The offers, sales, and issuances of the securities described in Item 15(b) were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
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ITEM 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Exhibit |
Description of Exhibit | |
1.1* | Form of Underwriting Agreement. | |
3.1* | Amended and Restated Certificate of Incorporation of Zynga Inc. | |
3.2* | Form of Amended and Restated Certificate of Incorporation of Zynga Inc., to be in effect upon closing of the offering. | |
3.3 | Amended and Restated Bylaws of Zynga Inc., as currently in effect. | |
3.4* | Form of Amended and Restated Bylaws of Zynga Inc., to be in effect upon closing of the offering. | |
4.1* | Form of Zynga Inc. Class A Common Stock Certificate. | |
5.1* | Form of Opinion of Cooley LLP. | |
10.1 | Fifth Amended and Restated Investor Rights Agreement, by and between Zynga Inc., the investors listed on Schedule A thereto and Mark Pincus, dated February 18, 2011. | |
10.2+ | Zynga Inc. 2007 Equity Incentive Plan. | |
10.3+ | Form of Option Agreement under 2007 Equity Incentive Plan. | |
10.4*+ | Zynga Inc. 2011 Equity Incentive Plan. | |
10.5*+ | Forms of Option Agreement and Option Grant Notice under 2011 Equity Incentive Plan. | |
10.6*+ | Form of Indemnification Agreement made by and between Zynga Inc. and each of its directors and executive officers. | |
10.7*+ | Offer Letter, between Zynga Inc. and Steven Chiang, dated January 27, 2010. | |
10.8*+ | Offer Letter, between Zynga Inc. and Reginald D. Davis, dated April 21, 2009. | |
10.9*+ | Offer Letter, between Zynga Inc. and Cadir Lee, dated November 17, 2008. | |
10.10*+ | Offer Letter, between Zynga Inc. and Mark Pincus, dated November 16, 2007. | |
10.11*+ | Offer Letter, between Zynga Inc. and John Schappert, dated March 31, 2011. | |
10.12*+ | Offer Letter, between Zynga Inc. and Owen Van Natta, dated July 28, 2010. | |
10.13*+ | Offer Letter, between Zynga Inc. and David M. Wehner, dated June 22, 2010. | |
10.14 | Office Lease by and between 650 Townsend Associates LLC and Zynga Inc., dated September 24, 2010; First Amendment to Lease dated February 17, 2011; and Second Amendment to Lease dated March 25, 2011. | |
10.15 | Developer Addendum by and between Facebook, Inc. and Zynga Inc., dated May 15, 2010. | |
10.16 | Developer Addendum #2 by and between Facebook, Inc. and Zynga Inc., dated December 27, 2010. | |
10.17 | Warrant to Purchase Class B Common Stock, dated July 18, 2008, issued to KPCB Holdings, Inc. | |
10.18 | Warrant to Purchase Class B Common Stock, dated July 31, 2009, issued to Allen & Company LLC. | |
10.19 | Warrant to Purchase Class B Common Stock, dated June 16, 2011, issued to Kleiner Perkins Caufield & Byers, LLC. |
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Exhibit |
Description of Exhibit | |||
21.1 | List of subsidiaries. | |||
23.1* | Consent of Cooley LLP (included in Exhibit 5.1). | |||
23.2# | Consent of Independent Registered Public Accounting Firm. | |||
24.1# | Power of Attorney. |
* | To be filed by amendment. All other exhibits are filed herewith. |
+ | Indicates management contract or compensatory plan. |
| Portions of this exhibit have been omitted pending a determination by the Securities and Exchange Commission as to whether these portions should receive confidential treatment. |
# | Previously filed. |
(b) Financial Statement Schedules.
Schedule II Valuation and Qualifying Accounts
(Dollars in thousands) |
Beginning Balance |
Charged
to Operations(A) |
Write-offs(B) | Ending Balance |
||||||||||||
Allowance for Doubtful Accounts |
||||||||||||||||
Year ended December 31, 2010 |
$ | 356 | $ | 9 | $ | (40 | ) | $ | 325 | |||||||
Year ended December 31, 2009 |
$ | 210 | $ | 175 | $ | (29 | ) | $ | 356 | |||||||
Year ended December 31, 2008 |
$ | 0 | $ | 210 | $ | (0 | ) | $ | 210 | |||||||
(A) | Reserves for customer balances |
(B) | Uncollectible accounts written off |
ITEM 17. Undertakings.
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and |
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contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we have duly caused this Amendment No. 1 to the Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 18th day of July, 2011.
Zynga Inc. | ||
By: | /S/ MARK PINCUS | |
Mark Pincus Chief Executive Officer and Chairman |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
/S/ MARK PINCUS Mark Pincus |
Chief Executive Officer and Chairman (Principal Executive Officer) |
July 18, 2011 | ||
/S/ DAVID M. WEHNER David M. Wehner |
Chief Financial Officer (Principal Financial Officer) |
July 18, 2011 | ||
/S/ MARK VRANESH Mark Vranesh |
Chief Accounting Officer (Principal Accounting Officer) |
July 18, 2011 | ||
* Bradley A. Feld |
Director
|
July 18, 2011 | ||
* William Bing Gordon |
Director
|
July 18, 2011 | ||
* Reid Hoffman |
Director
|
July 18, 2011 | ||
* Jeffrey Katzenberg |
Director
|
July 18, 2011 | ||
* Stanley J. Meresman |
Director
|
July 18, 2011 | ||
* John Schappert |
Director
|
July 18, 2011 | ||
* Owen Van Natta |
Director
|
July 18, 2011 |
*By: |
/s/ DAVID M. WEHNER | |
David M. Wehner | ||
Attorney-in-fact |
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EXHIBIT INDEX
Exhibit |
Description of Exhibit | |
1.1* | Form of Underwriting Agreement. | |
3.1* | Amended and Restated Certificate of Incorporation of Zynga Inc. | |
3.2* | Form of Amended and Restated Certificate of Incorporation of Zynga Inc., to be in effect upon closing of the offering. | |
3.3 | Amended and Restated Bylaws of Zynga Inc., as currently in effect. | |
3.4* | Form of Amended and Restated Bylaws of Zynga Inc., to be in effect upon closing of the offering. | |
4.1* | Form of Zynga Inc. Class A Common Stock Certificate. | |
5.1* | Form of Opinion of Cooley LLP. | |
10.1 | Fifth Amended and Restated Investor Rights Agreement, by and between Zynga Inc., the investors listed on Schedule A thereto and Mark Pincus, dated February 18, 2011. | |
10.2+ | Zynga Inc. 2007 Equity Incentive Plan. | |
10.3+ | Form of Option Agreement under 2007 Equity Incentive Plan. | |
10.4*+ | Zynga Inc. 2011 Equity Incentive Plan. | |
10.5*+ | Forms of Option Agreement and Option Grant Notice under 2011 Equity Incentive Plan. | |
10.6*+ | Form of Indemnification Agreement made by and between Zynga Inc. and each of its directors and executive officers. | |
10.7*+ | Offer Letter, between Zynga Inc. and Steven Chiang, dated January 27, 2010. | |
10.8*+ | Offer Letter, between Zynga Inc. and Reginald D. Davis, dated April 21, 2009. | |
10.9*+ | Offer Letter, between Zynga Inc. and Cadir Lee, dated November 17, 2008. | |
10.10*+ | Offer Letter, between Zynga Inc. and Mark Pincus, dated November 16, 2007. | |
10.11*+ | Offer Letter, between Zynga Inc. and John Schappert, dated March 31, 2011. | |
10.12*+ | Offer Letter, between Zynga Inc. and Owen Van Natta, dated July 28, 2010. | |
10.13*+ | Offer Letter, between Zynga Inc. and David M. Wehner, dated June 22, 2010. | |
10.14 | Office Lease by and between 650 Townsend Associates LLC and Zynga Inc., dated September 24, 2010; First Amendment to Lease dated February 17, 2011; and Second Amendment to Lease dated March 25, 2011. | |
10.15 | Developer Addendum by and between Facebook, Inc. and Zynga Inc., dated May 15, 2010. | |
10.16 | Developer Addendum #2 by and between Facebook, Inc. and Zynga Inc., dated December 27, 2010. | |
10.17 | Warrant to Purchase Class B Common Stock, dated July 18, 2008, issued to KPCB Holdings, Inc. | |
10.18 | Warrant to Purchase Class B Common Stock, dated July 31, 2009, issued to Allen & Company LLC. | |
10.19 | Warrant to Purchase Class B Common Stock, dated June 16, 2011, issued to Kleiner Perkins Caufield & Byers, LLC. | |
21.1 | List of subsidiaries. | |
23.1* | Consent of Cooley LLP (included in Exhibit 5.1). |
Exhibit |
Description of Exhibit | |||
23.2# | Consent of Independent Registered Public Accounting Firm. | |||
24.1# | Power of Attorney. |
* | To be filed by amendment. |
+ | Indicates management contract or compensatory plan. |
| Portions of this exhibit have been omitted pending a determination by the Securities and Exchange Commission as to whether these portions should be granted confidential treatment. |
# | Previously filed. |
Exhibit 3.3
ZYNGA INC.
a Delaware Corporation
AMENDED AND RESTATED BYLAWS
As Adopted June 15, 2011
TABLE OF CONTENTS
Page | ||||||
ARTICLE I: STOCKHOLDERS |
1 | |||||
Section 1.1 : |
Annual Meetings | 1 | ||||
Section 1.2 : |
Special Meetings | 1 | ||||
Section 1.3 : |
Notice of Meetings | 1 | ||||
Section 1.4 : |
Adjournments | 1 | ||||
Section 1.5 : |
Quorum | 2 | ||||
Section 1.6 : |
Organization | 2 | ||||
Section 1.7 : |
Voting; Proxies | 2 | ||||
Section 1.8 : |
Fixing Date for Determination of Stockholders of Record | 2 | ||||
Section 1.9 : |
List of Stockholders Entitled to Vote | 3 | ||||
Section 1.10 : |
Action by Written Consent of Stockholders | 3 | ||||
Section 1.11 : |
Inspectors of Elections | 5 | ||||
ARTICLE II: BOARD OF DIRECTORS |
6 | |||||
Section 2.1 : |
Number; Qualifications | 6 | ||||
Section 2.2 : |
Election; Resignation; Removal; Vacancies | 6 | ||||
Section 2.3 : |
Regular Meetings | 6 | ||||
Section 2.4 : |
Special Meetings | 7 | ||||
Section 2.5 : |
Remote Meetings Permitted | 7 | ||||
Section 2.6 : |
Quorum; Vote Required for Action | 7 | ||||
Section 2.7 : |
Organization | 8 | ||||
Section 2.8 : |
Written Action by Directors | 8 | ||||
Section 2.9 : |
Powers | 8 | ||||
Section 2.10 : |
Compensation of Directors | 8 | ||||
ARTICLE III: COMMITTEES |
8 | |||||
Section 3.1 : |
Committees | 8 | ||||
Section 3.2 : |
Committee Rules. | 9 | ||||
ARTICLE IV: OFFICERS |
9 | |||||
Section 4.1 : |
Generally | 9 | ||||
Section 4.2 : |
Chief Executive Officer | 9 | ||||
Section 4.3 : |
Chairperson of the Board | 10 | ||||
Section 4.4 : |
President | 10 | ||||
Section 4.5 : |
Vice President | 10 | ||||
Section 4.6 : |
Chief Financial Officer | 10 | ||||
Section 4.7 : |
Treasurer | 10 | ||||
Section 4.8 : |
Chief Technology Officer | 10 | ||||
Section 4.9 : |
Secretary | 10 | ||||
Section 4.10 : |
Delegation of Authority | 11 | ||||
Section 4.11 : |
Removal | 11 |
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ARTICLE V: STOCK |
11 | |||||
Section 5.1 : |
Certificates | 11 | ||||
Section 5.2 : |
Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates | 11 | ||||
Section 5.3 : |
Restrictions on Transfer and Ownership of Capital Stock of the Corporation | 12 | ||||
Section 5.4 : |
Other Regulations | 12 | ||||
ARTICLE VI: INDEMNIFICATION |
12 | |||||
Section 6.1 : |
Indemnification of Officers and Directors | 13 | ||||
Section 6.2 : |
Advance of Expenses | 13 | ||||
Section 6.3 : |
Non-Exclusivity of Rights | 13 | ||||
Section 6.4 : |
Indemnification Contracts | 14 | ||||
Section 6.5 : |
Right of Indemnitee to Bring Suit | 14 | ||||
Section 6.6 : |
Nature of Rights | 14 | ||||
ARTICLE VII: NOTICES |
15 | |||||
Section 7.1 : |
Notice | 15 | ||||
Section 7.2 : |
Waiver of Notice | 16 | ||||
ARTICLE VIII: INTERESTED DIRECTORS |
16 | |||||
Section 8.1 : |
Interested Directors | 16 | ||||
Section 8.2 : |
Quorum | 16 | ||||
ARTICLE IX: MISCELLANEOUS |
16 | |||||
Section 9.1 : |
Fiscal Year | 16 | ||||
Section 9.2 : |
Seal | 16 | ||||
Section 9.3 : |
Form of Records | 16 | ||||
Section 9.4 : |
Reliance upon Books and Records | 17 | ||||
Section 9.5 : |
Certificate of Incorporation Governs | 17 | ||||
Section 9.6 : |
Severability | 17 | ||||
ARTICLE X: AMENDMENT |
17 |
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ZYNGA INC.
a Delaware Corporation
AMENDED AND RESTATED BYLAWS
As Adopted June 15, 2011
ARTICLE I: STOCKHOLDERS
Section 1.1: Annual Meetings. Unless members of the Board of Directors of the Corporation (the Board) are elected by written consent in lieu of an annual meeting, as permitted by Section 211 of the Delaware General Corporation Law (the DGCL) and these Bylaws, an annual meeting of stockholders shall be held for the election of directors at such date and time as the Board shall each year fix. The meeting may be held either at a place, within or without the State of Delaware, or by means of remote communication as the Board in its sole discretion may determine. Any proper business may be transacted at the annual meeting.
Section 1.2: Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by the Chairperson of the Board, the Chief Executive Officer, the President, the holders of shares of the Corporation that are entitled to cast not less than ten percent (10%) of the total number of votes entitled to be cast by all stockholders at such meeting, or by a majority of the Whole Board, which shall mean the total number of authorized directors, whether or not there exist any vacancies in previously authorized directorships. Special meetings may not be called by any other person or persons. If a special meeting of stockholders is called by any person or persons other than by a majority of the members of the Board, then such person or persons shall request such meeting by delivering a written request to call such meeting to each member of the Board, and the Board shall then determine the time and date of such special meeting, which shall be held not more than one hundred twenty (120) days nor less than thirty-five (35) days after the written request to call such special meeting was delivered to each member of the Board. The special meeting may be held either at a place, within or without the State of Delaware, or by means of remote communication as the Board in its sole discretion may determine.
Section 1.3: Notice of Meetings. Notice of all meetings of stockholders shall be given in writing or by electronic transmission in the manner provided by law (including, without limitation, as set forth in Section 7.1.1 of these Bylaws) stating the date, time and place, if any, of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the Certificate of Incorporation of the Corporation (the Certificate of Incorporation), such notice shall be given not less than ten (10), nor more than sixty (60), days before the date of the meeting to each stockholder of record entitled to vote at such meeting.
Section 1.4: Adjournments. The chairperson of the meeting shall have the power to adjourn the meeting to another time, date and place (if any). Any meeting of stockholders may adjourn from time to time, and notice need not be given of any such adjourned meeting if the time, date and place (if any) thereof and the means of remote communications (if any) by which stockholders and proxy holders may be deemed to be present in person and vote at such
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adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, or if a new record date is fixed for the adjourned meeting, then a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting the Corporation may transact any business that might have been transacted at the original meeting. To the fullest extent permitted by law, the Board may postpone or reschedule any previously scheduled special or annual meeting of stockholders before it is to be held, in which case notice shall be provided to the stockholders of the new date, time and place, if any, of the meeting as provided in Section 1.3 above.
Section 1.5: Quorum. At each meeting of stockholders the holders of a majority of the voting power of the shares of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business, unless otherwise required by applicable law. If a quorum shall fail to attend any meeting, the chairperson of the meeting or the holders of a majority of the shares entitled to vote who are present, in person or by proxy, at the meeting may adjourn the meeting. Shares of the Corporations stock belonging to the Corporation (or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation are held, directly or indirectly, by the Corporation), shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any other corporation to vote any shares of the Corporations stock held by it in a fiduciary capacity and to count such shares for purposes of determining a quorum.
Section 1.6: Organization. Meetings of stockholders shall be presided over by such person as the Board may designate, or, in the absence of such a person, the Chairperson of the Board, or, in the absence of such person, the President of the Corporation, or, in the absence of such person, such person as may be chosen by the holders of a majority of the voting power of the shares entitled to vote who are present, in person or by proxy, at the meeting. Such person shall be chairperson of the meeting and, subject to Section 1.11 hereof, shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him or her to be in order. The Secretary of the Corporation shall act as secretary of the meeting, but in such persons absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 1.7: Voting; Proxies. Each stockholder entitled to vote at a meeting of stockholders, or to take corporate action by written consent without a meeting, may authorize another person or persons to act for such stockholder by proxy. Such a proxy may be prepared, transmitted and delivered in any manner permitted by applicable law. Except as may be required in the Certificate of Incorporation, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Unless otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, every matter other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the voting power of the shares of stock entitled to vote on such matter that are present in person or represented by proxy at the meeting and are voted for or against the matter.
Section 1.8: Fixing Date for Determination of Stockholders of Record.
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1.8.1 Generally. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or to take corporate action by written consent without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, except as otherwise required by law, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which shall not be more than sixty (60), nor less than ten (10), days before the date of such meeting, nor, except as provided in Section 1.8.2 below, more than sixty (60) days prior to any other action. If no record date is fixed by the Board, then the record date shall be as provided by applicable law. To the fullest extent provided by law, a determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
1.8.2 Stockholder Request for Action by Written Consent. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice to the Secretary of the Corporation, request the Board to fix a record date for such consent. Such request shall include a brief description of the action proposed to be taken. Unless a record date has previously been fixed by the Board for the written consent pursuant to this Section 1.8, the Board shall, within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board within ten (10) days after the date on which such a request is received, then the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation as required by law. If no record date has been fixed by the Board and prior action by the Board is required by applicable law, then the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board adopts the resolution taking such prior action.
Section 1.9: List of Stockholders Entitled to Vote. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either on a reasonably accessible electronic network as permitted by law (provided that the information required to gain access to the list is provided with the notice of the meeting) or during ordinary business hours at the principal place of business of the Corporation. If the meeting is held at a location where stockholders may attend in person, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present at the meeting. If the meeting is held solely by means of remote communication, then the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access the list shall be provided with the notice of the meeting.
Section 1.10: Action by Written Consent of Stockholders.
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1.10.1 Procedure. Unless otherwise provided by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed in the manner permitted by law by the holders of outstanding stock having not less than the number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, to its principal place of business or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the agent of the Corporations registered office in the State of Delaware shall be by hand or by certified or registered mail, return receipt requested. Written stockholder consents shall bear the date of signature of each stockholder who signs the consent in the manner permitted by law and shall be delivered to the Corporation as provided in Section 1.10.2 below. No written consent shall be effective to take the action set forth therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation in the manner required by law, written consents signed by a sufficient number of stockholders to take the action set forth therein are delivered to the Corporation in the manner required by law.
1.10.2 Form of Consent A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxy holder, or a person or persons authorized to act for a stockholder or proxy holder, shall be deemed to be written, signed and dated for the purposes of this section, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (a) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxy holder or by a person or persons authorized to act for the stockholder or proxy holder and (b) the date on which such stockholder or proxy holder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporations registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the Board. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.
1.10.3 Notice of Consent. Prompt notice of the taking of corporate action by stockholders without a meeting by less than unanimous written consent of the stockholders shall be given to those stockholders who have not consented thereto in writing and, who, if the action had been taken at a meeting, would have been entitled to notice of the meeting, if the record date
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for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as required by law. If the action which is consented to is such as would have required the filing of a certificate under the DGCL (the Certificate of Action) if such action had been voted on by stockholders at a meeting thereof, then if the DGCL so requires, the certificate so filed shall state, in lieu of any statement required by the DGCL concerning any vote of stockholders, that written stockholder consent has been given in accordance with Section 228 of the DGCL.
Section 1.11: Inspectors of Elections.
1.11.1 Applicability. Unless otherwise required by the Certificate of Incorporation or by the DGCL, the following provisions of this Section 1.11 shall apply only if and when the Corporation has a class of voting stock that is: (a) listed on a national securities exchange; (b) authorized for quotation on an interdealer quotation system of a registered national securities association; or (c) held of record by more than two thousand (2,000) stockholders. In all other cases, observance of the provisions of this Section 1.11 shall be optional, and at the discretion of the Board.
1.11.2 Appointment. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting.
1.11.3 Inspectors Oath. Each inspector of election, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspectors ability.
1.11.4 Duties of Inspectors. At a meeting of stockholders, the inspectors of election shall (a) ascertain the number of shares outstanding and the voting power of each share, (b) determine the shares represented at a meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
1.11.5 Opening and Closing of Polls. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced by the chairperson of the meeting at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.
1.11.6 Determinations. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with proxies in accordance with any information provided pursuant to Section 211(a)(2)(B)(i) of the DGCL, or Sections 211(e) or
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212(c)(2) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification of their determinations pursuant to this Section 1.11 shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors belief that such information is accurate and reliable.
ARTICLE II: BOARD OF DIRECTORS
Section 2.1: Number; Qualifications. The Board shall consist of one or more directors. The authorized number of directors of the Corporation shall be fixed by the Board from time to time. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient.
Section 2.2: Election; Resignation; Removal; Vacancies. Each director shall hold office until the next annual meeting of stockholders and until such directors successor is elected and qualified, or until such directors earlier death, resignation or removal. Any director may resign at any time upon written notice to the Corporation. Subject to the rights of any holders of Preferred Stock or Common Stock then outstanding: (a) any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors and (b) any vacancy occurring in the Board for any reason, and any newly created directorship resulting from any increase in the authorized number of directors to be elected by all stockholders having the right to vote as a single class, may be filled by the stockholders, by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.
Section 2.3: Regular Meetings. Regular meetings of the Board may be held at such places, within or without the State of Delaware, and at such times as the Board may from time to time determine. Notice of regular meetings need not be given if the date, times and places thereof are fixed by resolution of the Board; provided that each director must receive written notice of any regular Board meeting at which any CEO Succession Matter is acted upon no less than 72 hours prior to such meeting and such written notice shall include a detailed description of the CEO Succession Matter; for the purposes of this sentence only, notice shall be deemed received by a director when delivered personally, telecopied (with confirmation) or delivered by an overnight courier (with confirmation) to the directors at their addresses appearing in the books and records of the Corporation. A CEO Succession Matter shall mean any matter before the Board concerning the hiring, termination, retention or compensation of the Chief Executive Officer (CEO) of the Corporation. Without limitation, such matters shall include any action which would (i) interpret any provision of any employment agreement between the CEO and the Corporation; (ii) approve any action which would constitute a constructive termination of the CEO or permit the CEO to terminate employment with the Corporation for good reason or other similar cause under any employment or other agreement between the CEO
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and the Corporation; (iii) determine that the CEO may be terminated for cause or other similar reason under the terms of any employment or other agreement between the CEO and the Corporation, or otherwise; (iv) determine that the CEO is disabled or otherwise unable to perform his or her job functions; (v) determine to withhold any salary, benefits, incentives, equity compensation, termination benefits, retirement benefits, perquisites, change in control payments or other similar payments, or any other compensation under any agreement between the CEO and the Corporation; (vi) terminate the CEO without cause; (vii) reduce the benefits or compensation of the CEO, including bonus target or terms; or (viii) approve of any CEO succession plan or similar measure.
Section 2.4: Special Meetings. Special meetings of the Board may be called by the Chairperson of the Board, the President or a majority of the members of the Board then in office and may be held at any time, date or place, within or without the State of Delaware, as the person or persons calling the meeting shall fix. Notice of the time, date and place of such meeting shall be given, orally, in writing or by electronic transmission (including electronic mail), by the person or persons calling the meeting to all directors at least four (4) days before the meeting if the notice is mailed, or at least twenty-four (24) hours before the meeting if such notice is given by telephone, hand delivery, telegram, telex, mailgram, facsimile, electronic mail or other means of electronic transmission. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting. Notwithstanding the above, each director must receive written notice of any special Board meeting at which any CEO Succession Matter is discussed or acted upon no less than 72 hours prior to such meeting and such written notice shall include a description of the CEO Succession Matter; for the purposes of this sentence only, notice shall be deemed received by a director when delivered personally, by telegram, telex, mailgram, facsimile, electronic mail or other means of electronic transmission (with confirmation of receipt) or delivered by an overnight courier (with confirmation of receipt) to the directors at their addresses appearing in the books and records of the Corporation.
Section 2.5: Remote Meetings Permitted. Members of the Board, or any committee of the Board, may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to conference telephone or other communications equipment shall constitute presence in person at such meeting.
Section 2.6: Quorum; Vote Required for Action. At all meetings of the Board a majority of the Whole Board shall constitute a quorum for the transaction of business. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date or time without further notice thereof. Except as otherwise provided herein or in the Certificate of Incorporation, or required by law, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. Notwithstanding the above, if the number of authorized directors has been increased to five pursuant to Section 4.5(a) of the Corporations Amended and Restated Certificate of Incorporation, the quorum for the transaction of any business at a Board meeting constituting a CEO Succession Matter shall be four, or if the number of authorized directors is increased to a number greater than five, the number of directors representing the total number of votes of the Whole Board, minus one vote (the CEO Succession Matter Quorum). In addition, notwithstanding the above, a CEO Succession Matter shall require the approval of (i) three directors if there are four authorized
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directors of the Corporation; (ii) four directors if there are five authorized directors of the Corporation; or (iii) if the number of authorized directors is increased to greater than five, then the CEO Succession Matter shall require the affirmative vote of directors representing the total number of votes of the Whole Board, minus one vote (the CEO Succession Matter Vote). Any reference in these Bylaws to a number or proportion of directors shall be deemed to refer to the number or proportion of the votes of the directors.
Section 2.7: Organization. Meetings of the Board shall be presided over by the Chairperson of the Board, or in such persons absence by the President, or in such persons absence by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in such persons absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 2.8: Written Action by Directors. Any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee, respectively, in the minute books of the Corporation. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 2.9: Powers. The Board may, except as otherwise required by law or the Certificate of Incorporation, exercise all such powers and manage and direct all such acts and things as may be exercised or done by the Corporation.
Section 2.10: Compensation of Directors. Members of the Board, as such, may receive, pursuant to a resolution of the Board, fees and other compensation for their services as directors, including without limitation their services as members of committees of the Board.
ARTICLE III: COMMITTEES
Section 3.1: Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting of such committee who are not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving, adopting, or recommending to the stockholders any action or matter (other than the election or removal of members of the Board) expressly required by the DGCL to be submitted to stockholders for approval, (b) adopting, amending or repealing any bylaw of the Corporation or (c) any CEO Succession Matter.
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Section 3.2: Committee Rules. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these Bylaws.
ARTICLE IV: OFFICERS
Section 4.1: Generally. The officers of the Corporation shall consist of a Chief Executive Officer (who may be the Chairperson of the Board or the President), a Secretary and a Treasurer and may consist of such other officers, including a Chief Financial Officer, Chief Technology Officer and one or more Vice Presidents, as may from time to time be appointed by the Board. All officers shall be elected by the Board; provided, however, that the Board may empower the Chief Executive Officer of the Corporation to appoint any officer other than the Chairperson of the Board, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer. Each officer shall hold office until such persons successor is appointed or until such persons earlier resignation, death or removal. Any number of offices may be held by the same person. Any officer may resign at any time upon written notice to the Corporation. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board.
Section 4.2: Chief Executive Officer. Subject to the control of the Board and such supervisory powers, if any, as may be given by the Board, the powers and duties of the Chief Executive Officer of the Corporation are:
(a) To act as the general manager and, subject to the control of the Board, to have general supervision, direction and control of the business and affairs of the Corporation;
(b) Subject to Article I, Section 1.6, to preside at all meetings of the stockholders;
(c) Subject to Article I, Section 1.2, to call special meetings of the stockholders to be held at such times and, subject to the limitations prescribed by law or by these Bylaws, at such places as he or she shall deem proper; and
(d) To affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for shares of stock of the Corporation; and, subject to the direction of the Board, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation.
The President shall be the Chief Executive Officer of the Corporation unless the Board shall designate another officer to be the Chief Executive Officer. If there is no President, and the Board has not designated any other officer to be the Chief Executive Officer, then the Chairperson of the Board shall be the Chief Executive Officer.
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Section 4.3: Chairperson of the Board. The Chairperson of the Board shall have the power to preside at all meetings of the Board and shall have such other powers and duties as provided in these Bylaws and as the Board may from time to time prescribe.
Section 4.4: President. The President shall be the Chief Executive Officer of the Corporation unless the Board shall have designated another officer as the Chief Executive Officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board, and subject to the supervisory powers of the Chief Executive Officer (if the Chief Executive Officer is an officer other than the President), and subject to such supervisory powers and authority as may be given by the Board to the Chairperson of the Board, and/or to any other officer, the President shall have the responsibility for the general management and control of the business and affairs of the Corporation and the general supervision and direction of all of the officers, employees and agents of the Corporation (other than the Chief Executive Officer, if the Chief Executive Officer is an officer other than the President) and shall perform all duties and have all powers that are commonly incident to the office of President or that are delegated to the President by the Board.
Section 4.5: Vice President. Each Vice President shall have all such powers and duties as are commonly incident to the office of Vice President, or that are delegated to him or her by the Board or the Chief Executive Officer. A Vice President may be designated by the Board to perform the duties and exercise the powers of the Chief Executive Officer in the event of the Chief Executive Officers absence or disability.
Section 4.6: Chief Financial Officer. The Chief Financial Officer shall be the Treasurer of the Corporation unless the Board shall have designated another officer as the Treasurer of the Corporation. Subject to the direction of the Board and the Chief Executive Officer, the Chief Financial Officer shall perform all duties and have all powers that are commonly incident to the office of Chief Financial Officer.
Section 4.7: Treasurer. The Treasurer shall have custody of all moneys and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the office of Treasurer, or as the Board or the Chief Executive Officer may from time to time prescribe.
Section 4.8: Chief Technology Officer. The Chief Technology Officer shall have responsibility for the general research and development activities of the Corporation, for supervision of the Corporations research and development personnel, for new product development and product improvements, for overseeing the development and direction of the Corporations intellectual property development and such other responsibilities as may be given to the Chief Technology Officer by the Board, subject to: (a) the provisions of these Bylaws; (b) the direction of the Board; (c) the supervisory powers of the Chief Executive Officer of the Corporation; and (d) those supervisory powers that may be given by the Board to the Chairperson or Vice Chairperson of the Board.
Section 4.9: Secretary. The Secretary shall issue or cause to be issued all authorized notices for, and shall keep, or cause to be kept, minutes of all meetings of the stockholders and
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the Board. The Secretary shall have charge of the corporate minute books and similar records and shall perform such other duties and have such other powers as are commonly incident to the office of Secretary, or as the Board or the Chief Executive Officer may from time to time prescribe.
Section 4.10: Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
Section 4.11: Removal. Any officer of the Corporation shall serve at the pleasure of the Board and may be removed at any time, with or without cause, by the Board; provided that if the Board has empowered the Chief Executive Officer to appoint any Vice Presidents of the Corporation, then such Vice Presidents may be removed by the Chief Executive Officer. Such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation.
ARTICLE V: STOCK
Section 5.1: Certificates. The shares of capital stock of the Corporation shall be represented by certificates; provided, however, that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock may be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation (or the transfer agent or registrar, as the case may be). Notwithstanding the adoption of such resolution by the Board, every holder of stock that is a certificated security shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairperson or Vice-Chairperson of the Board, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by such stockholder in the Corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue. If any holder of uncertificated shares elects to receive a certificate, the Corporation (or the transfer agent or registrar, as the case may be) shall, to the extent permitted under applicable law and rules, regulations and listing requirements of any stock exchange or stock market on which the Corporations shares are listed or traded, cease to provide annual statements indicating such holders holdings of shares in the Corporation.
Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock, or uncertificated shares, in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owners legal representative, to agree to indemnify the Corporation and/or to give the Corporation a bond sufficient to indemnify it, against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
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Section 5.3: Restrictions on Transfer and Ownership of Capital Stock of the Corporation. Until the occurrence of a Liquidity Event (as defined below), unless otherwise permitted pursuant to the terms of a written agreement between the Corporation and any such transferring stockholder or its permitted assigns, no share of capital stock of the Corporation acquired subsequent to November 10, 2010 may be Transferred (as defined below) by the acquirer thereof without the written consent of the Corporation.
For purposes of this Section 5.3, the following terms shall have the meanings ascribed to them as set forth below:
Liquidity Event means the first to occur of (i) an IPO (as defined below) or (ii) a Change of Control (as defined below).
Transferred, as it relates to the capital stock of the Corporation, means any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such capital stock or any legal or beneficial interest in such capital stock, whether or not for value and whether voluntary or involuntary or by operation of law.
IPO means an underwritten public offering by the Corporation of its securities that is registered pursuant to the U.S. Securities Act of 1933, as amended.
Change of Control means (i) (a) a dissolution or liquidation of the Corporation or (b) any reorganization, consolidation, merger or similar transaction or series of related transactions (each, a combination transaction) in which the Corporation is a constituent corporation or is a party if, as a result of such combination transaction, the voting securities of the Corporation that are outstanding immediately prior to the consummation of such combination transaction (other than any such securities that are held by an Acquiring Shareholder (as defined below)) do not represent, or are not converted into, securities of the surviving corporation of such combination transaction (or such surviving corporations parent corporation if the surviving corporation is owned by the parent corporation) that, immediately after the consummation of such combination transaction, together possess at least fifty percent (50%) of the total voting power of all securities of such surviving corporation (or its parent corporation, if applicable) that are outstanding immediately after the consummation of such combination transaction, including securities of such surviving corporation (or its parent corporation, if applicable) that are held by the Acquiring Shareholder; or (ii) a sale of all or substantially all of the assets of the Corporation, that is followed by the distribution of the proceeds to the Corporations shareholders.
Acquiring Shareholder means a shareholder or shareholders of the company that (i) merges or combines with the Corporation in such combination transaction or (ii) owns or controls a majority of another corporation that merges or combines with the Corporation in such combination transaction.
Section 5.4: Other Regulations. The issue, conversion and registration of stock certificates and uncertificated securities, and additional provisions regarding the transfer of capital stock of the Corporation, shall be governed by such other regulations as the Board may establish.
ARTICLE VI: INDEMNIFICATION
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Section 6.1: Indemnification of Officers and Directors. Each person who was or is made a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that such person (or a person of whom such person is the legal representative), is or was a member of the Board or officer of the Corporation or a Reincorporated Predecessor (as defined below) or is or was serving at the request of the Corporation or a Reincorporated Predecessor as a member of the board of directors, officer or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (for purposes of this Article VI, an Indemnitee), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expenses, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith, provided such Indemnitee acted in good faith and in a manner that the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or Proceeding, had no reasonable cause to believe the Indemnitees conduct was unlawful. Such indemnification shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of such Indemnitees heirs, executors and administrators. Notwithstanding the foregoing, the Corporation shall indemnify any such Indemnitee seeking indemnity in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board or such indemnification is authorized by an agreement approved by the Board. As used herein, the term the Reincorporated Predecessor means a corporation that is merged with and into the Corporation in a statutory merger where (a) the Corporation is the surviving corporation of such merger; (b) the primary purpose of such merger is to change the corporate domicile of the Reincorporated Predecessor to Delaware.
Section 6.2: Advance of Expenses. The Corporation shall pay all expenses (including attorneys fees) incurred by such an Indemnitee in defending any such Proceeding as they are incurred in advance of its final disposition; provided, however, that (a) if the DGCL then so requires, the payment of such expenses incurred by such an Indemnitee in advance of the final disposition of such Proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such Indemnitee, to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no appeal that such Indemnitee is not entitled to be indemnified under this Article VI or otherwise; and (b) the Corporation shall not be required to advance any expenses to a person against whom the Corporation directly brings a claim, in a Proceeding, alleging that such person has breached such persons duty of loyalty to the Corporation, committed an act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, or derived an improper personal benefit from a transaction.
Section 6.3: Non-Exclusivity of Rights. The rights conferred on any person in this Article VI shall not be exclusive of any other right that such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaw, agreement, vote or consent of stockholders or disinterested directors, or otherwise. Additionally, nothing in this Article VI shall limit the ability of the Corporation, in its discretion, to indemnify or advance
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expenses to persons whom the Corporation is not obligated to indemnify or advance expenses pursuant to this Article VI.
Section 6.4: Indemnification Contracts. The Board is authorized to cause the Corporation to enter into indemnification contracts with any director, officer, employee or agent of the Corporation, or any person serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing indemnification or advancement rights to such person. Such rights may be greater than those provided in this Article VI.
Section 6.5: Right of Indemnitee to Bring Suit. The following shall apply to the extent not in conflict with any indemnification contract provided for in Section 6.4 above.
6.5.1 Right to Bring Suit. If a claim under Section 6.1 or 6.2 of this Article VI is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in applicable law.
6.5.2 Effect of Determination. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in applicable law, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit.
6.5.3 Burden of Proof. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VI, or otherwise, shall be on the Corporation.
Section 6.6: Nature of Rights. The rights conferred upon Indemnitees in this Article VI shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the Indemnitees heirs,
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executors and administrators. Any amendment, repeal or modification of any provision of this Article VI that adversely affects any right of an Indemnitee or an Indemnitees successors shall be prospective only, and shall not adversely affect any right or protection conferred on a person pursuant to this Article VI and existing at the time of such amendment, repeal or modification.
ARTICLE VII: NOTICES
Section 7.1: Notice.
7.1.1 Form and Delivery. Except as otherwise specifically required in these Bylaws (including, without limitation, Section 7.1.2 below) or by law, all notices required to be given pursuant to these Bylaws shall be in writing and may, (a) in every instance in connection with any delivery to a member of the Board, be effectively given by hand delivery (including use of a delivery service), by depositing such notice in the mail, postage prepaid, or by sending such notice by prepaid telegram, cablegram, overnight express courier, facsimile, electronic mail or other form of electronic transmission and (b) be effectively be delivered to a stockholder when given by hand delivery, by depositing such notice in the mail, postage prepaid or, if specifically consented to by the stockholder as described in Section 7.1.2 of this Article VII by sending such notice by telegram, cablegram, facsimile, electronic mail or other form of electronic transmission. Any such notice shall be addressed to the person to whom notice is to be given at such persons address as it appears on the records of the Corporation. The notice shall be deemed given (a) in the case of hand delivery, when received by the person to whom notice is to be given or by any person accepting such notice on behalf of such person, (b) in the case of delivery by mail, upon deposit in the mail, (c) in the case of delivery by overnight express courier, when dispatched, and (d) in the case of delivery via telegram, cablegram, facsimile, electronic mail or other form of electronic transmission, when dispatched.
7.1.2 Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation, or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given in accordance with Section 232 of the DGCL. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if (a) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (b) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given pursuant to this Section 7.1.2 shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of such posting and the giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the stockholder.
7.1.3 Affidavit of Giving Notice. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given
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in writing or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Section 7.2: Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, a written waiver of notice, signed by the person entitled to notice, or waiver by electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any waiver of notice.
ARTICLE VIII: INTERESTED DIRECTORS
Section 8.1: Interested Directors. No contract or transaction between the Corporation and one or more of its members of the Board or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are members of the board of directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof that authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (a) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (b) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board, a committee thereof, or the stockholders.
Section 8.2: Quorum. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.
ARTICLE IX: MISCELLANEOUS
Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board.
Section 9.2: Seal. The Board may provide for a corporate seal, which may have the name of the Corporation inscribed thereon and shall otherwise be in such form as may be approved from time to time by the Board.
Section 9.3: Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on or by means of, or be in the form of, diskettes, CDs, or any other information
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storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to any provision of the DGCL.
Section 9.4: Reliance upon Books and Records. A member of the Board, or a member of any committee designated by the Board shall, in the performance of such persons duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporations officers or employees, or committees of the Board, or by any other person as to matters the member reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 9.5: Certificate of Incorporation Governs. In the event of any conflict between the provisions of the Certificate of Incorporation and Bylaws, the provisions of the Certificate of Incorporation shall govern.
Section 9.6: Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of these Bylaws (including without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation, that are not themselves invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation) shall remain in full force and effect.
ARTICLE X: AMENDMENT
Unless otherwise required by the Certificate of Incorporation, stockholders of the Corporation holding at least a majority of the voting power of the Corporations outstanding voting stock then entitled to vote at an election of directors shall have the power to adopt, amend or repeal Bylaws. To the extent provided in the Certificate of Incorporation, the Board shall also have the power to adopt, amend or repeal Bylaws of the Corporation; provided, however that amendment of the provisions of Sections 2.3, 2.4 or 2.6 relating to notice provisions, quorum requirements and approval requirements for CEO Succession Matters shall require the approval of stockholders of the Corporation holding at least a majority of the voting power of the Corporations outstanding voting stock then entitled to vote at an election of directors or the approval of the directors (i) at a meeting at which a CEO Succession Matter Quorum is present by a CEO Succession Matter Vote or (ii) by unanimous written consent.
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CERTIFICATION OF BYLAWS
OF
ZYNGA INC.
a Delaware Corporation
I, Reggie Davis, certify that I am Secretary of Zynga Inc., a Delaware corporation (the Corporation), that I am duly authorized to make and deliver this certification, that the attached Amended and Restated Bylaws are a true and complete copy of the Bylaws of the Corporation in effect as of the date of this certificate.
Dated: June 15, 2011
/s/ Reggie Davis |
Reggie Davis, Secretary |
Exhibit 10.1
EXECUTION
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
This Fifth Amended and Restated Investors Rights Agreement (this Agreement) is made and entered into as of February 18, 2011 by and among Zynga Inc., a Delaware corporation (the Company), the persons and entities listed on Exhibit A attached hereto (the Investors) and Mark Pincus.
WHEREAS, certain of the Investors (the Prior Investors) are holders of outstanding shares of the Companys Series A Preferred Stock (Series A Stock) issued by the Company to such Investors pursuant to a Series A Preferred Stock Purchase Agreement by and among the Company and the Prior Investors dated as of November 15, 2007, as amended (the Series A Agreement), shares of the Companys Series A-1 Preferred Stock (Series A-1 Stock) issued by the Company to such Investors pursuant to a Series A-1 Preferred Stock Purchase Agreement by and among the Company and such Investors dated as of February 12, 2008, as amended (the Series A-1 Agreement), shares of the Companys Series B Preferred Stock (Series B Stock) issued by the Company to such Investors pursuant to a Series B Preferred Stock Purchase Agreement by and among the Company and such Investors dated as of July 18, 2008, as amended (the Series B Agreement), shares of the Companys Series B-1 Preferred Stock (Series B-1 Stock) issued by the Company to such Investors pursuant to a Series B-1 Preferred Stock Purchase Agreement by and among the Company and such Investors dated as of November 4, 2009, as amended (the Series B-1 Agreement), and/or shares of the Companys Series B-2 Preferred Stock (Series B-2 Stock) issued by the Company to such Investors pursuant to a Series B-2 Preferred Stock Purchase Agreement by and among the Company and such Investors dated as of April 23, 2010, as amended (the Series B-2 Agreement), and have also been granted certain information and registration rights and rights of first refusal under that certain Fourth Amended and Restated Investors Rights Agreement by and among the Company and the Prior Investors dated as of April 23, 2010 (the Prior Rights Agreement).
WHEREAS, certain of the Investors (the Series C Investors) have agreed to purchase shares of the Companys Series C Preferred Stock (Series C Stock and together with the Series A Stock, the Series A-1 Stock, the Series B Stock, the Series B-1 Stock and the Series B-2 Stock, the Preferred Stock) pursuant to a certain Series C Preferred Stock Purchase Agreement by and among the Company and such Series C Investors dated as of even date herewith (the Series C Agreement). The Series C Agreement provides that, as a condition to the Series C Investors purchase of Series C Stock thereunder, the Company will enter into this Agreement and the Series C Investors will be granted the rights set forth herein.
WHEREAS, the Company and the undersigned parties desire to enter into this Agreement in order to amend, restate and replace their rights and obligations under the Prior Rights Agreement with the rights and obligations set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereby agree as follows:
1. INFORMATION RIGHTS.
1.1 Basic Financial Information. The Company covenants and agrees that, commencing on the date of this Agreement, (i) for so long as any Investor holds at least 4,000,000 shares of Series A Stock issued under the Series A Preferred Stock Purchase
Agreement, Series A-1 Stock issued under the Series A-1 Agreement, Series B Stock issued under the Series B Agreement, Series B-1 Stock issued under the Series B-1 Agreement, Series B-2 Stock issued under the Series B-2 Agreement, and/or the equivalent number (on an as-converted basis) of shares of Class A Common Stock, issued upon the conversion of such shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, or Series B-2 Stock, or otherwise issued to or acquired by (or issuable upon conversion or exercise of any warrant, right or other security that is issued to or otherwise acquired by) the Investors on or after the date hereof (the Conversion Stock), (ii) for so long as DST Global Limited (DST) holds at least 500,000 shares of Series B-1 Stock issued under the Series B-1 Agreement, and/or (iii) for so long as an Investor (x) holds at least 900,000 shares of Series C Preferred Stock, (y) is a Mutual Fund, or (z) is an Advisory Client of a Registered Investment Adviser which serves as the investment adviser set forth on Exhibit A hereto (or is an Advisory Client of a Registered Investment Adviser which is Controlled by or under common Control with such investment adviser) for any 1940 Act Investor(s) (each such Investor described in (i) through (iii), a Major Investor), the Company will:
(a) Annual Reports. Furnish to such Major Investor, as soon as practicable, and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, a consolidated balance sheet as of the end of such fiscal year, a consolidated statement of operations and a consolidated statement of cash flows of the Company and its subsidiaries for such year, setting forth in each case in comparative form the figures from the Companys previous fiscal year (if any), prepared in accordance with generally accepted accounting principles and audited by a certified public accountant;
(b) Quarterly Reports. Furnish to such Major Investor as soon as practicable, and in any event within thirty (30) days after the end of each fiscal quarter of the Company (except the last quarter of the Companys fiscal year), quarterly unaudited financial statements, including a balance sheet, a statement of operations and a statement of cash flows; and
(c) Monthly Reports. Use reasonable efforts to provide such Major Investor as soon as practicable after the end of each month (except the last month of the Companys fiscal year), monthly unaudited financial statements, including a balance sheet, a statement of operations and a statement of cash flows, and such other financial metrics as the Board of Directors of the Company (the Board) deems appropriate.
(d) Delivery to 1940 Act Investors. The obligation to deliver reports, access or other information to Investors who are 1940 Act Investors pursuant to this Section 1.1 or otherwise in this Agreement shall be satisfied (if applicable) if such report, access or other information is delivered to the Registered Investment Adviser for such 1940 Act Investor set forth on Exhibit A hereto or the designated Registered Investment Adviser of any permitted transferee. Notwithstanding anything to the contrary in Section 1.3 below, the Registered Investment Adviser shall not provide any information delivered hereunder to any Advisory Client(s) that is not either a Mutual Fund or an Investor listed on Schedule 1.1(d) to this Agreement, without the prior written consent of the Company; such consent not to be unreasonably withheld, conditioned or delayed, except that the Company may condition such consent on such Advisory Client(s) entering into a non-disclosure agreement with the Company on substantially the same terms set forth in Section 1.4 below.
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For the purposes of this Agreement, 1940 Act Investor means any Series C Investor (other than KPCB Holdings, Inc., as nominee) hereunder constituting (i) an investment company registered as such under the Investment Company Act of 1940, as amended (the 1940 Act) (Mutual Fund) or (ii) an advisory client (Advisory Client) of an investment adviser registered as such under the Investment Advisers Act of 1940, as amended (Registered Investment Adviser), and Control and any derivations thereof shall have the meaning set forth in Section 2(a)(9) of the 1940 Act.
1.2 Inspection Rights. The Company shall permit each Major Investor, at such Investors expense, to visit and inspect the Companys properties, to examine its books of account and records and to discuss the Companys affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Major Investor.
1.3 Confidentiality. Each Investor who receives information pursuant to this Section 1 agrees that, unless at such time such Investor (or in the case of a 1940 Act Investor, the Registered Investment Adviser (or a Registered Investment Adviser that is Controlled by or under common Control with such Registered Investment Adviser) of such 1940 Act Investor) is party to a then-binding non-disclosure agreement with the Company (an Investor NDA) (which in such case shall govern the confidentiality obligations of such Investor), such Investor will keep confidential and will not disclose, divulge or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Companys intention to file a registration statement), at all times until after such Investor can prove that such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 1.3 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Companys confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company. Notwithstanding the foregoing, an Investor may disclose confidential information:
(a) to any of the Investors attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring the Investors investment in the Company and if such professionals are obligated to maintain the confidentiality of the same;
(b) to any prospective purchaser (to the extent the transfer to such purchaser would be permitted under the terms of the Bylaws of the Company and any applicable agreement between such Investor and the Company and the prospective purchaser would, if the sale were consummated, qualify as a Major Investor under Section 1.1 above) of any Registrable Securities from the Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 1.3;
(c) as may otherwise be required by law, if the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure; or
(d) if such Investor is a 1940 Act Investor, to its Registered Investment Adviser (if applicable), provided that such Registered Investment Adviser is party to a written non-disclosure agreement which prohibits disclosure of such information.
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1.4 Competitors. If the Board determines, in its sole discretion, that a Major Investor has invested, or is directly or indirectly assisting or supporting, in a material manner, a direct competitor of the Company, the only rights under this Section 1 that such Major Investor shall have shall be to receive audited annual financial statements if and when they are delivered to the other Major Investors; provided that members of the Board shall abstain from any vote as to whether an entity is a direct competitor of the Company if the outcome of such vote may affect such members, or such members affiliates, rights under this Section 1. Notwithstanding the foregoing, a Major Investor may purchase and hold up to a ten percent (10%) interest in any publicly traded entity, including an entity that may compete directly with the Company, without reduction of its rights under Section 1 pursuant to this Section 1.4, subject to such investment being a passive investment where the Major Investor neither intends nor has the right to influence (other than through the voting of shares) or direct the operations or management of such publicly traded entity. Notwithstanding the foregoing, nothing in this Section 1.4 shall apply to Mutual Funds, any Investor set forth on Schedule 1.1(d), or their permitted transferees. The Company hereby confirms that none of (a) Facebook Inc., (b) Gaia Interactive, Inc. or (c) a gaming company primarily focused on users in the Russian Federation, Eastern Europe or the Commonwealth of Independent States are direct competitors. Notwithstanding anything to the contrary contained herein, the information rights of SOFTBANK CORP., its direct or indirect, wholly-owned subsidiaries, and the investment funds of which SOFTBANK CORP. or one or more of its wholly-owned subsidiaries is the investment advisor, managing member, general partner or entity performing a similar function (collectively, SB), as applicable, under Section 1 hereof shall not be available unless and until SOFTBANK CORP. and the Company enter into an agreement related to SBs investment in (a) RockYou, Inc. and (b) RockYou Asia, Inc., and SB remains in compliance with the provisions thereof.
1.5 Termination of Certain Rights. The Companys obligations under Sections 1.1 and 1.2 above will terminate upon the earliest to occur of the following:
(a) the closing of the first sale of securities of the Company to the public for the account of the Company pursuant to an effective registration statement filed by the Company under the Securities Act of 1933, as amended (the IPO);
(b) the Company becomes subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act); or
(c) the liquidation, dissolution or winding up of the Company or immediately prior to the consummation of an event described in Section 3.6 of Article V of the Companys Thirteenth Amended and Restated Certificate of Incorporation, as amended from time to time (the Restated Certificate).
1.6 Termination of Investors Obligations. Each Investors obligations under Sections 1.3 and 1.4 above shall terminate on the later to occur of (i) the events described in Section 1.5(a)-(c) above, or (ii) such time as the Investor NDA terminates in accordance with its terms.
1.7 Records. The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied (except as noted therein), and will set aside on its books all such
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proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Registration. The terms register, registration and registered refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the Securities Act), and the declaration or ordering of effectiveness of such registration statement.
(b) Registrable Securities. The term Registrable Securities means:
(i) any shares of Class A Common Stock issued or issuable upon the conversion of any shares of Series A Stock issued under the Series A Agreement, Series A-1 Stock issued under the Series A-1 Agreement, Series B Stock issued under the Series B Agreement, Series B-1 Stock issued under the Series B-1 Agreement, Series B-2 Stock issued under the Series B-2 Agreement, or Series C Stock issued under the Series C Agreement, as such agreement may hereafter be amended from time to time, that are now owned or may hereafter be acquired by any Investor or any Investors permitted successors and assigns;
(ii) any other shares of Class A Common Stock issued to or otherwise acquired by (or issuable upon conversion or exercise of any warrant, right or other security that is issued to or otherwise acquired by) the Investors on or after the date hereof; and
(iii) any shares of Class A Common Stock issued (or issuable upon the conversion or exercise of any warrant, right or other security that is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, all such shares of Class A Common Stock described in clauses (i) and (ii) of this subsection (b); excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which rights under this Section 2 are not assigned in accordance with this Agreement or any Registrable Securities with respect to which, pursuant to Section 2.11hereof, the holders are no longer entitled to registration rights pursuant to Sections 2.2, 2.3 or 2.4 hereof.
(c) Registrable Securities Then Outstanding. The number of shares of Registrable Securities then outstanding shall mean the number of shares of Class A Common Stock that are Registrable Securities that are then (1) issued and outstanding or (2) issuable pursuant to the exercise or conversion of then outstanding and then exercisable and qualifying options, restricted stock units, warrants or convertible securities.
(d) Holder. The term Holder means any person owning of record Registrable Securities or any assignee of record of such Registrable Securities to whom rights set forth herein have been duly assigned in accordance with this Agreement; provided, however, that for purposes of this Agreement, a record holder of shares of Series A Stock and/or Series A-1 Stock and/or Series B Stock and/or Series B-1 Stock and/or Series B-2 Stock and/or Series C Stock convertible into such Registrable Securities shall be deemed to be the Holder of such Registrable Securities; provided, further, that the Company shall in no event be obligated to
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register shares of Series A Stock, Series A-1 Stock Series B Stock, Series B-1 Stock, and/or Series B-2 Stock or Series C Stock, and that Holders of Registrable Securities will not be required to convert their shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, and/or Series B-2 Stock or Series C Stock into Class A Common Stock in order to exercise the registration rights granted hereunder until immediately before (but subject to) the closing of the offering to which the registration relates; and provided, further, that for purposes of Sections 2.9 and 3 of this Agreement, the term Holder includes Mark Pincus and any assignee of record of Mark Pincuss Company Stock (as defined in Section 3.1) to whom his rights under Section 3 hereof have been duly assigned in accordance with this Agreement.
(e) Form S-3. The term Form S-3 means such form under the Securities Act as is in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(f) SEC. The term SEC or Commission means the U.S. Securities and Exchange Commission.
2.2 Demand Registration.
(a) Request by Holders. If the Company shall receive at any time after the earlier of thirty-six (36) months after the date hereof, or one hundred eighty (180) days after the effective date of the IPO, a written request from the Holders of at least (i) a majority of the Registrable Securities then outstanding, and/or (ii) a majority of the Series C Stock then outstanding that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities pursuant to this Section 2.2, then the Company shall, within twenty (20) days after the receipt of such written request, give written notice of such request (the Request Notice) to all Holders, and effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice, subject only to the limitations of this Section 2; provided that the Registrable Securities requested by all Holders to be registered pursuant to such request must either: (i) be at least 25% of all Registrable Securities then outstanding or (ii) have an anticipated aggregate public offering price of not less than $5,000,000 if such requested registration is the IPO.
(b) Underwriting. If the Holders initiating the registration request under this Section 2.2 (the Initiating Holders) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 2.2 and the Company shall include such information in the written notice referred to in Section 2.2(a). In such event, the right of any Holder to include his, her, or its Registrable Securities in such registration shall be conditioned upon such Holders participation in such underwriting and the inclusion of such Holders Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Company. The Company shall not be required to include any securities of any Holder in such underwriting unless such Holder accepts the terms of the underwriting as
6
agreed upon between the Company and the underwriters selected by it and enters into an underwriting agreement in customary form with the underwriter or underwriters selected by the Company. Notwithstanding any other provision of this Section 2.2, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten then the Company shall so advise all Holders of Registrable Securities that would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis according to the number of Registrable Securities then outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities of the Company are first entirely excluded from the underwriting and registration. Any Registrable Securities excluded and withdrawn from such underwriting shall be withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is obligated to effect only one (1) such registration pursuant to each of this Section 2.2(a)(i) and (ii).
(d) Deferral. Notwithstanding the foregoing, if the Company shall furnish to Holders requesting the filing of a registration statement pursuant to this Section 2.2, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any consecutive twelve (12) month period.
(e) Expenses. All expenses incurred in connection with a registration pursuant to this Section 2.2, including without limitation all registration and qualification fees, printers and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders, which may be counsel for the Company (but excluding underwriters discounts and commissions), shall be borne by the Company. Each Holder participating in a registration pursuant to this Section 2.2 shall bear such Holders proportionate share (based on the number of shares sold by such Holder over the total number of shares included in such registration at the time it is declared effective) of all discounts, commissions or other amounts payable to underwriters or brokers in connection with such offering. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to this Section 2.2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered, unless the Holders of a majority of the Registrable Securities then outstanding agree to forfeit their right to one (1) demand registration pursuant to this Section 2.2 (in which case such right shall be forfeited by all Holders of Registrable Securities); provided, however, that if at the time of such withdrawal, there shall have occurred a material adverse change in the condition, business, or prospects of the Company not known to the Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such
7
material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their demand registration rights pursuant to this Section 2.2.
2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to any registration under Section 2.2 or Section 2.4 of this Agreement or to any employee benefit plan or a corporate reorganization or other transaction covered by Rule 145 promulgated under the Securities Act, or a registration on any registration form that does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities) and will afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder shall, within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If a registration statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holders Registrable Securities to be included in a registration pursuant to this Section 2.3 shall be conditioned upon such Holders participation in such underwriting and the inclusion of such Holders Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriter determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares (including Registrable Securities) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, and second, to Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the number of Registrable Securities each such Holder has requested to be included in the registration; provided, however, that the right of the underwriters to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that the number of Registrable Securities included in any such registration is not reduced below fifteen percent (15%) of the shares included in the registration, except for a registration relating to the IPO, from which all Registrable Securities may be excluded as long as such registration does not include shares of any other selling stockholders. In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable
8
Securities proposed to be sold in the offering. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice, given in accordance with Section 6.1 hereof, to the Company and the underwriter, delivered at least twenty (20) days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder that is a nominee, venture capital or private equity fund, partnership, limited liability company, corporation or 1940 Act Investor, the principal of such Holder, or affiliated venture capital or private equity funds, partners, retired partners, members, retired members, stockholders or 1940 Act Investor (which shall include all 1940 Act Investors advised by a Registered Investment Adviser that is Controlled by or under common Control with such 1940 Act Investors Registered Investment Adviser), if applicable) of such Holder or such Holders principal, or the estates and family members of any such partners and retired partners or members and retired members and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single Holder, and any pro rata reduction with respect to such Holder shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such Holder, as defined in this sentence.
(b) Expenses. All expenses incurred in connection with a registration pursuant to this Section 2.3, including without limitation all registration and qualification fees, printers and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders, which may be counsel for the Company (but excluding underwriters discounts and commissions), shall be borne by the Company. Each Holder participating in a registration pursuant to this Section 2.3 shall bear such Holders proportionate share (based on the number of shares sold by such Holder over the total number of shares included in such registration at the time it goes effective) of all discounts, commissions or other amounts payable to underwriters or brokers in connection with such offering.
2.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will do the following:
(a) Notice. Promptly give written notice of the proposed registration and the Holders or Holders request therefor, and any related qualification or compliance, to all other Holders of Registrable Securities.
(b) Registration. As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders or Holders Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 is not available for such offering;
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(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $6,000,000;
(iii) if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement no more than once during any consecutive twelve (12) month period for a period of not more than one hundred twenty (120) days after receipt of the request of the Holder or Holders under this Section 2.4;
(iv) if the Company has, within the consecutive twelve (12) month period preceding the date of such request, already effected one (1) registration on Form S-3 for the Holders pursuant to this Section 2.4; or
(v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
(c) Expenses. Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered pursuant to this Section 2.4 as soon as practicable after receipt of the request or requests of the Holders for such registration. The Company shall pay all expenses incurred in connection with the first two registrations requested pursuant to this Section 2.4, (excluding underwriters or brokers discounts and commissions), including without limitation all filing, registration and qualification, printers and accounting fees and the reasonable fees and disbursements of one (1) counsel for the selling Holder or Holders and counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders, which may be counsel for the Company. Each Holder participating in a registration pursuant to this Section 2.4 shall bear such Holders proportionate share (based on the number of shares sold by such Holder over the total number of shares included in such registration at the time it goes effective) of all discounts, commissions or other amounts payable to underwriters or brokers in connection with such offering. All expenses incurred in connection with any subsequent registration requested pursuant to this Section 2.4 shall be borne by the Holders who participate in such registration on a pro rata basis according to the number of shares sold by such Holder over the total number of shares included in such registration at the time it goes effective.
(d) Not Demand Registration. Form S-3 registrations shall not be deemed to be demand registrations as described in Section 2.2 above.
2.5 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement, the Company shall, subject to the provisions of Section 2.5(g) below, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the
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Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred eighty (180) days.
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement and, in connection with any registration on Form S-3 pursuant to Section 2.4 above, use reasonable efforts to timely file all reports required under the Exchange Act in order to maintain the right to continue to use such Form and to maintain such registration in effect.
(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.
(d) Use reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting hereby agrees to also enter into and perform its obligations under such an agreement.
(f) Use reasonable efforts to notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.
(g) Notwithstanding any other provision of this Agreement, from and after the time a registration statement filed under this Section 2 covering Registrable Securities is declared effective, the Company shall have the right to suspend the registration statement and the related prospectus in order to prevent premature disclosure of any material non-public information related to corporate developments by delivering notice of such suspension to the Holders, provided, however, that the Company may exercise the right to such suspension only once in any consecutive twelve (12) month period and for a period not to exceed ninety (90) days. From and after the date of a notice of suspension under this Section 2.5(g), each Holder agrees not to use the registration statement or the related prospectus for resale of any Registrable Security until the earlier of (1) notice from the Company that such suspension has been lifted or (2) the ninetieth (90) day following the giving of the notice of suspension.
(h) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered
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under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
(i) Use its reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.
2.6 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.
2.7 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the stockholders, partners, members, managers, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, the Violations and, individually, a Violation):
(i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; or
(ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or
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(iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement.
The Company will reimburse each such Holder, partner, member, managers, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them, within three months after a request for reimbursement has been received by the Company, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, stockholder, partner, officer, member, manager, director, underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holders partners, members, managers, directors or officers or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, partner, member, manager, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration. Each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, member, manager officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; within three months after a request for reimbursement has been received by the indemnifying Holder, provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further, that the total amounts payable in indemnity by a Holder under this Section 2.8(b) in respect of any Violation shall not exceed the net proceeds received by such Holder in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of
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the commencement thereof. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, but only to the extent prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.
(d) Contribution. If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by such indemnified party with respect to such loss, liability, claim, damage or expense in the proportion that is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In any such case, (A) no such Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities sold by such Holder pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
(e) Conflict with Underwriting Agreement. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement will control.
(f) Survival. The obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration statement, and otherwise.
2.9 Market Stand-Off Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Registrable Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided, however,
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that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the sixteen-day period beginning on the last day of the restricted period, and if the Companys securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.9 shall continue to apply until the expiration of the eighteen-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event shall the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement and the restrictions imposed by this Section 2.9 shall not apply unless all stockholders then holding more than one percent (1%) of the total equity of the Company on a fully diluted basis and all of the Companys then-current executive officers and directors enter into similar agreements. Notwithstanding the foregoing, a Holder that is a 1940 Act Investor or one of its permitted transferees shall not be prohibited from selling, transferring or disposing of shares of stock purchased in connection with, or on the open market subsequent to, the IPO, nor shall any such holder be subject to the foregoing restrictions in a registered offering subsequent to the IPO.
For purposes of this Section 2.9, the term Company shall include any wholly owned subsidiary of the Company into which the Company merges or consolidates. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section and to impose stop transfer instructions with respect to the Registrable Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.
2.10 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC that may at any time permit the sale of the Registrable Securities to the public without registration, after such time as a public market exists for the Class A Common Stock, the Company agrees to:
(a) Use reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
(b) Use reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, use reasonable efforts to furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to the reporting requirements of the Exchange Act), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or
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regulation of the SEC allowing a Holder to sell any such securities without registration (at any time after the Company has become subject to the reporting requirements of the Exchange Act).
(d) Use reasonable efforts to furnish to Holder forthwith, but in any event within five (5) business days following the receipt of a supportable request therefor, (i) unlegended stock certificates in connection with sales of Registrable Securities by a Holder pursuant to said Rule 144, or (ii) in the event that such request is made after the IPO, shall furnish to the Companys transfer agent an opinion of counsel that such unlegended stock certificates may be issued.
2.11 Termination of the Companys Obligations. The Company shall have no obligations pursuant to Sections 2.2 through 2.4 with respect to: (a) any request or requests for registration made by any Holder on a date more than two (2) years after the closing date of the IPO; or (b) any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Section 2.2, 2.3 or 2.4 at the later of (x) eighteen months subsequent to the IPO or (y) such time as, in the opinion of counsel to the Company, all such Registrable Securities proposed to be sold by a Holder may be sold in a three-month period without registration under the Securities Act pursuant to Rule 144 under the Securities Act.
3. RIGHT OF FIRST REFUSAL.
3.1 General. Mark Pincus (for so long as (i) he holds at least 2,000,000 shares of the Companys Class B Common Stock, par value $0.0000125 per share (the Class B Common Stock, and together with the Class A Common Stock, the Common Stock), and/or the equivalent number (accounting for the Class B Common Stock on an as-converted basis) of shares of Class A Common Stock and (ii) is serving as either an employee of the Company or a director of the Company), each Major Investor and any party to whom such Major Investors rights under this Section 3 have been duly assigned in accordance with Section 5.1(c) (each, a Rights Holder) has the right of first refusal to purchase such Rights Holders Pro Rata Share (as defined below and on an as-converted-to Class A Common Stock basis), of all (or any part) of any New Securities (as defined in Section 3.2) that the Company may from time to time issue after the date of this Agreement; provided, however, such Rights Holder shall have no right to purchase any such New Securities if the purchase (or offer of the right to purchase) would cause the Company to be in violation of applicable federal securities laws by virtue of such offer or sale. A Rights Holders Pro Rata Share for purposes of this right of first refusal is the ratio of (a) the number of shares of Company Stock (as defined below) as to which such Rights Holder is the Holder (and/or is deemed to be the Holder), to (b) a number of shares of Class A Common Stock equal to the sum of (1) the total number of shares of Class A Common Stock then outstanding plus (2) the total number of shares of Class A Common Stock into which all then-outstanding shares of Preferred Stock are then convertible plus (3) the total number of shares of Class A Common Stock into which all then outstanding shares of the Companys Class B Common Stock are then convertible plus (4) the number of shares of Class A Common Stock reserved for issuance upon the exercise or vesting of outstanding stock options, restricted stock units, warrants or other stock rights and/or the conversion of securities issuable upon the exercise or vesting of outstanding stock options, restricted stock units, warrants or other stock rights. The term Company Stock means (i) with respect to Mark Pincus, all shares of capital stock held or issuable upon the conversion or exercise of any warrant, right or other security that is held, including without limitation all classes of Common Stock and Preferred Stock, of the Company,
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by Mark Pincus and (ii) with respect to Rights Holders other than Mark Pincus, such Rights Holders Registrable Securities. Notwithstanding anything herein to the contrary, if the Company issues New Securities that are, or represent the right to receive, shares of Common Stock at a per-share purchase price of more than $0.112875 (as adjusted for any stock splits, combinations, stock dividends, recapitalizations or the like), then Mark Pincuss Pro Rata Share of such New Securities shall equal the ratio of (a) one half (1/2) of the number of shares of Company Stock as to which he is the Holder (and/or is deemed to be the Holder), to (b) a number of shares of Class A Common Stock equal to the sum of (1) the total number of shares of Class A Common Stock then outstanding plus (2) the total number of shares of Class A Common Stock into which all then-outstanding shares of Preferred Stock are then convertible plus (3) the total number of shares of Class A Common Stock into which all then outstanding shares of Class B Common Stock are then convertible plus (4) the number of shares of Class A Common Stock reserved for issuance upon the exercise or vesting of outstanding stock options, restricted stock units, warrants or other stock rights and/or the conversion of securities issuable upon the exercise or vesting of outstanding stock options, restricted stock units, warrants or other stock rights.
3.2 New Securities. New Securities shall mean any Preferred Stock or Common Stock, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term New Securities does not include:
(a) any shares of Series C Stock issued under the Series C Agreement, as such agreement may be amended from time to time;
(b) shares of Class A Common Stock issued or issuable upon conversion of shares of Preferred Stock and/or Class B Common Stock that are currently outstanding or issued hereafter;
(c) 9,580,000 shares of Class A Common Stock (and/or warrants or other rights therefore) issued to KPCB Holdings, Inc, as nominee, or its designee;
(d) 3,884,120 shares of Class A Common Stock (and the warrant or other rights therefor) issuable upon the exercise of a warrant to purchase shares of Class A Common Stock issuable to a strategic partner of the Corporation.
(e) 86,856 shares of Class A Common Stock (and/or warrants or other rights therefor) issued to Allen & Company or its designee;
(f) shares of Common Stock (and/or options, restricted stock units, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants, or advisors of the Company or any Subsidiary pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other compensatory arrangements that are approved by the Board;
(g) shares of Common Stock or Preferred Stock (and/or options, restricted stock units, warrants or rights therefor) issued pursuant to any strategic transaction (other than any transaction described in (i) below) entered into for primarily non-equity financing purposes, provided that any such arrangement is approved by the Board and by the
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vote of holders of a majority of the then-outstanding Preferred Stock, voting together as a single class on an as-converted to Class A Common Stock basis;
(h) shares of Common Stock or Preferred Stock (and/or options, restricted stock units, warrants or rights therefor) issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution, provided that any such arrangement is approved by the Board;
(i) shares of Common Stock or Preferred Stock (and/or options, restricted stock units, warrants or rights therefore) issued for consideration other than cash pursuant to any merger, consolidation, acquisition, joint venture or similar business combination, provided that any such arrangement is approved by the Board;
(j) shares of Common Stock or Preferred Stock issuable upon exercise or settlement of any options, restricted stock units, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof;
(k) shares of the Companys capital stock issued in connection with any stock split, stock dividend, recapitalization or similar event;
(l) shares of Common Stock issued or issuable in a public offering prior to or in connection with which all outstanding shares of Preferred Stock will be converted to Common Stock pursuant to the terms of the Restated Certificate; and
(m) shares of Common Stock or Preferred Stock (and/or options, restricted stock units, warrants or rights therefor) issued or issuable hereafter that are approved by the vote of holders of a majority of the then-outstanding Preferred Stock, voting together as a single class, as being excluded from the definition of New Securities under this Section 3.2.
3.3 Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Rights Holder a written notice of its intention to issue New Securities (the Notice), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 6.1 hereof. Each Rights Holder shall have ten (10) business days from the date such Notice is effective, as determined pursuant to Section 6.1 hereof based upon the manner or method of notice, to agree in writing to purchase such Rights Holders Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Rights Holders Pro Rata Share). If any Rights Holder fails to so agree in writing within such ten (10) business-day period to purchase such Rights Holders full Pro Rata Share of an offering of New Securities (a Nonpurchasing Holder), then such Nonpurchasing Holder shall forfeit the right hereunder to purchase that part of such Rights Holders Pro Rata Share of such New Securities that he, she or it did not so agree to purchase and the Company shall promptly give each Rights Holder who has timely agreed to purchase such Rights Holders full Pro Rata Share of such offering of New Securities (a Purchasing Holder) written notice of the failure of any Nonpurchasing Holder to purchase such Nonpurchasing Rights Holders full Pro Rata Share of such offering of New Securities (the Overallotment Notice). Each Purchasing Holder shall have a right of overallotment such that such Purchasing Holder may
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agree to purchase a portion of the Nonpurchasing Holders unpurchased Pro Rata Shares of such offering on a pro rata basis according to the relative Pro Rata Shares of the Purchasing Rights Holders, at any time within five (5) business days after receiving the Overallotment Notice.
3.4 Failure to Exercise. In the event that the Rights Holders fail to exercise in full the right of first refusal within the applicable periods set forth in Section 3.3, then the Company shall have ninety (90) days thereafter to sell the New Securities with respect to which the Rights Holders rights of first refusal hereunder were not exercised, at a price and upon general terms not more favorable to the purchasers thereof than specified in the Companys Notice to the Rights Holders. In the event that the Company has not issued and sold the New Securities within such 90-day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Rights Holders pursuant to this Section 3.
3.5 Termination. This right of first refusal shall terminate upon the earliest to occur of the following:
(a) immediately prior to but subject to the closing of the IPO;
(b) the liquidation, dissolution or winding up of the Company or immediately prior to the consummation of an event described in Section 3.6 of Article V of the Restated Certificate;
(c) with respect to Mark Pincus, on the first date he (i) no longer holds at least 2,000,000 shares of Class B Common Stock and/or the equivalent number (accounting for the Class B Common Stock on an as-converted basis) of shares of Class A Common Stock and (ii) does not serve as an employee of the Company or a director of the Company; or
(d) with respect to Rights Holders other than Mark Pincus, on the date that such Rights Holder is no longer a Major Investor.
3.6 Sale Without Notice. In lieu of giving notice to the Rights Holders prior to the issuance of New Securities as provided in Section 3.3, the Company, with the prior written consent of the Major Investors holding shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, Series B-2 Stock, Series C Stock and/or Conversion Stock representing and/or convertible into a majority of all the Investors Shares (as defined below), voting together as a single class on an as-converted basis, may elect to give notice to the Rights Holders within fifteen (15) days after the issuance of New Securities. Such notice shall describe the type, price and terms of the New Securities. Each Rights Holder shall have ten (10) business days from the date such notice is effective, as determined pursuant to Section 6.1 hereof based upon the manner or method of notice, to agree in writing to purchase such Rights Holders Pro Rata Share of such New Securities for the price and upon the general terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Rights Holders Pro Rata Share). The rights of overallotment purchases and the terms of overallotment purchases set forth in Section 3.3 will apply to any sale of New Securities under this Section 3.6 as well. The closing of the sale under this Section 3.6 shall occur within thirty (30) days of the date of notice to the Rights Holders under this Section 3.6.
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3.7 Waiver of Right of First Refusal. The undersigned Prior Investors and Mark Pincus hereby waive (on behalf of themselves and all other Prior Investors) all rights of first refusal under Section 3 of the Prior Rights Agreement with respect to the sale and issuance by the Company of the Series C Stock pursuant to the Series C Agreement (and any Common Stock issuable upon the conversion thereof). The undersigned Prior Investors and Mark Pincus also hereby waive (on behalf of themselves and all other Prior Investors) any notice period required under Section 3 of the Prior Rights Agreement with respect to the sale and issuance by the Company of the Series C Stock pursuant to the Series C Agreement (and any Common Stock issuable upon the conversion thereof).
4. COVENANTS OF THE COMPANY.
4.1 The Company covenants and agrees that, so long as at least eight million (8,000,000) shares of Preferred Stock remain outstanding, the Company shall not, except (i) in connection with any any merger, consolidation, acquisition, joint venture or similar business combination, or (ii) with the unanimous approval of the Board, grant shares of restricted Common Stock (and/or options, restricted stock units, warrants or rights for the purchase of Common Stock) to any employee, officer, director, consultant or other service provider to the Company that vest, or could vest upon the occurrence of one or more events, at a rate faster than the following: twenty-five percent (25%) of the shares vest on the one-year anniversary of the date on which vesting commenced and the remainder vests in equal monthly installments over the following thirty-six (36) months. Furthermore, all such shares of restricted Common Stock granted to any employee, officer, director, consultant or other service provider to the Company (including all shares issuable on exercise of any such options, restricted stock units, warrants and rights for the purchase of Common Stock) that are unvested shall be subject to a repurchase option in favor of the Company, which repurchase option shall provide that, upon termination of the employment of the stockholder, with or without cause, the Company or its assignees (to the extent permissible under applicable securities laws) retains the right to repurchase at cost any such unvested shares.
4.2 The Company covenants that it will use commercially reasonable efforts to ensure that, at all times on or after the date of this Agreement, all outstanding shares of Common Stock and Preferred Stock, and all shares of Common Stock and Preferred Stock issuable upon the exercise or conversion of outstanding options, restricted stock units, warrants or other exercisable or convertible securities are subject to a market standoff or lockup agreement of not less than 180 days following the Companys initial public offering, with customary extensions of the lockup period.
4.3 The Company will not grant accelerated vesting of any shares of restricted Common Stock (or any options, restricted stock units, warrants or rights for the purchase of Common Stock) held by any employee, officer, director, consultant or other service provider to the Company without the express approval of the Board, including at least one of the directors elected solely by the holders of Preferred Stock (each such director, a Preferred Director), set forth in the minutes of the Board or a written consent of the Board; provided, however, that, without any such consent of a Preferred Director, the Board may grant accelerated vesting (i) to those persons who are entitled to acceleration of (a) 25% of the then-unvested shares held by each such holder on the consummation of an event described in Section 3.6 of Article V of the Restated Certificate and/or (b) an additional 25% of the then-unvested shares held by each such
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holder on involuntary termination without cause or voluntary termination for good reason within 12 months after an event described in Section 3.6 of Article V of the Restated Certificate ((a) and (b) together, the Standard Acceleration Terms) pursuant to agreements between them and the Company outstanding as of the date of this Agreement and (ii) those persons who may execute agreements with the Company containing the Standard Acceleration Terms after the date hereof, provided that such agreements are approved by the Board.
For purposes of this Section 4.3, (i) cause means an employees termination because of (A) any willful, material violation by such employee of any law or regulation applicable to the business of the Company, such employees conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or any willful perpetration by such employee of a common law fraud; (B) such employees commission of an act of personal dishonesty that involves personal profit in connection with the Company or any other entity having a business relationship with the Company; (C) any material breach by such employee of any provision of any agreement or understanding between the Company and such employee regarding the terms of such employees service as an employee, officer, director or consultant to the Company, including without limitation, the willful and continued failure or refusal of such employee to perform the material duties required of such employee as an employee, officer, director or consultant of the Company, other than as a result of having a disability, or a breach of any applicable invention assignment and confidentiality agreement or similar agreement between the Company and such employee; (D) such employees disregard of the policies of the Company so as to cause loss, damage or injury to the property, reputation or employees of the Company; or (E) any other misconduct by such employee that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company; and (ii) good reason for an employees voluntary termination shall be deemed to exist as the result of (A) a reduction in such employees annual base salary or a material reduction by the Company in such employees medical, dental, insurance, short- and long-term disability insurance and 401(k) retirement plan benefits (collectively, the Employee Benefits) to which such employee is entitled immediately prior to such reduction with the result that such employees overall Employee Benefits package is significantly reduced (other than (1) in connection with a general decrease in the salary or Employee Benefits of all similarly situated employees and (2) in connection with an event described in Section 3.6 of Article V of the Restated Certificate to the extent necessary to make such employees salary or Employee Benefits commensurate with those of other employees of the Company or its successor entity or parent entity who are similarly situated with such employee following such event); or (B) the requirement by the Company that such employee relocate his or her principal place of employment to a location that has the effect of increasing such employees commute to more than fifty (50) miles. All references to the Company in the foregoing definitions of cause and good reason shall include parent, subsidiary, affiliate and successor entities of the Company.
4.4 The Company will cause each person now or hereafter employed by it or by any subsidiary with access to confidential information and/or trade secrets to enter into a customary invention assignment and confidentiality agreement or an employment or consulting agreement containing substantially similar terms. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any such agreement between the Company and any employee to make such agreement materially less favorable to the Company, without the consent of the Board.
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5. ASSIGNMENT AND AMENDMENT.
5.1 Assignment. Notwithstanding anything herein to the contrary:
(a) Information Rights. The rights of a Major Investor under Section 1 may be assigned only to (i) an Affiliate (as defined below) of any Major Investor, (ii) a party who acquires from a Major Investor (or a Major Investors permitted assigns), pursuant to the last paragraph of Section 4.7 of the Series B-2 Agreement, at least 4,000,000 shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, and Series B-2 Stock and/or an equivalent number (on an as-converted to Class A Common Stock basis) of shares of Conversion Stock, or (iii) a party who acquires from a 1940 Act Investor (or a 1940 Act Investors permitted assigns), any shares of Series C Stock or Conversion Stock solely to the extent such acquiring party is (A) a Mutual Fund, (B) an Advisory Client of a Registered Investment Adviser which serves as the investment adviser set forth on Exhibit A hereto (or a Registered Investment Adviser that is Controlled by or under common Control with such investment adviser) for any 1940 Act Investor(s); provided that such Registered Investment Adviser shall be the recipient of such information, or (C) a transferee of a 1940 Act Investor permitted under the Companys Bylaws who acquires at least nine hundred thousand (900,000) shares of Series C Stock and/or an equivalent number (on an as-converted to Class A Common Stock basis) of shares of Conversion Stock. An Affiliate means (x) with respect to any transferring 1940 Act Investor, any recipient 1940 Act Investor that is advised by a Registered Investment Adviser that is Controlled by or under common Control with, the Registered Investment Adviser of such transferring 1940 Act Investor set forth on Exhibit A hereto, (y) with respect to a direct or indirect, wholly-owned subsidiary of SOFTBANK CORP., of SOFTBANK CORP., or (z) with respect to any other Investor, a principal or a direct, or indirect, wholly-owned, controlled venture capital fund or subsidiary of the entity specified or such entitys principal.
(b) Registration Rights. The registration rights of a Holder under Section 2 may be assigned only to: (i) an Affiliate, partner, retired partner, member, retired member, stockholder or retired stockholder of the Holder or such Holders principal; (ii) a family member of the Holder or such Holders principal, or a trust for the benefit of any individual Holder or such Holders principal or Holders family member(s) or family member(s) of such Holders principal; or (iii) a party who acquires at least eight hundred thousand (800,000) shares of Registrable Securities (or all shares held by the transferor if less).
(c) Refusal Rights. The rights of a Rights Holder, including without limitation Mark Pincuss rights, under Section 3 may be assigned only to (i) an Affiliate of the Rights Holder or the Rights Holders principal; (ii) in the case of Mark Pincus, (1) his spouse, his siblings, the siblings of his spouse or any of his lineal ancestors or descendants or (2) a trust for the benefit of Mark Pincus, his spouse, his siblings, the siblings of his spouse or any of his lineal ancestors or descendants; (iii) a party who acquires from a Rights Holder (or a Rights Holders permitted assigns) at least 4,000,000 shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, Series B-2 Stock and/or an equivalent number (on an as-converted to Class A Common Stock basis) of shares of Conversion Stock, or (iv) a party who acquires from a Rights Holder (or a Rights Holders permitted assigns) at least nine hundred thousand (900,000) shares of Series C Stock and/or an equivalent number (on an as-converted to Class A Common Stock basis) of shares of Conversion Stock.
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No party may be assigned any of the foregoing rights unless the Company is given written notice by the assigning party at the time of such assignment stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; provided, further, that any such assignee of such rights is not deemed by the Board, in its reasonable judgment, to be a direct competitor of the Company; and provided, further, that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement, including without limitation the provisions of this Section 5 and must execute and deliver a counterpart or addendum to this Agreement manifesting their consent to be bound by the terms of this Agreement prior to any transfer of rights hereunder.
5.2 Amendment and Waiver of Rights. Any provision of this Agreement may be amended or terminated and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding shares of Series A Stock, Series A-1 Stock, Series B Stock, Series B-1 Stock, Series B-2 Stock, Series C Stock and/or Conversion Stock representing and/or convertible into a majority of all the Investors Shares (as defined below); provided, however, that Mark Pincuss rights under Section 3 hereof may not be amended or terminated without Mark Pincuss written consent; provided, further, that no provision of this Agreement may be amended or terminated, or the observance thereof waived, without the written consent of the Investor whose rights under this Agreement are affected differently by such amendment or waiver than those of other Investors; provided, however, that the specific demand registration rights of the Holders of Series C Preferred Stock hereunder may not be amended in a manner that would be adverse to such Holders or terminated without the written consent of Holders holding shares of Series C Stock representing a majority of all the Series C Stock then held by all Holders; provided, further, if an amendment or waiver disproportionately adversely affects the obligations or rights of a group of Investors in relation to other Investors, then such amendment or waiver shall require the written consent of Investors representing at least a majority of the outstanding Preferred Stock or Conversion Stock then held by the Investors so affected (it being understood that the proportionality and magnitude of such effect will be determined without regard to relative share ownership); and provided, further, that for any issuance of New Securities the Major Investors (and/or any of their permitted successors or assigns) holding a majority of the shares of Company Stock held by all Major Investors may waive any notice under Section 3 as to all Rights Holders and may waive the rights of first refusal under Section 3 in whole or in part as to all Rights Holders (including without limitation, Mark Pincus). As used herein, the term Investors Shares shall mean the shares of Series A Stock issued under the Series A Agreement and/or Series A-1 Stock issued under the Series A-1 Agreement and/or Series B Stock issued under the Series B Agreement, Series B-1 Stock issued under the Series B-1 Agreement, Series B-2 Stock issued under the Series B-2 Agreement, Series C Stock issued under the Series C Agreement plus all then-outstanding shares of Conversion Stock. Any amendment, termination or waiver effected in accordance with this Section 5.2 shall be binding upon each Investor, each Holder, each permitted successor, transferee, or assignee of such Investor or Holder, Mark Pincus and the Company.
6. GENERAL PROVISIONS.
6.1 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following:
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(i) at the time of personal delivery, if delivery is in person; (ii) when sent by electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) five (5) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. All notices for delivery outside the United States will be sent by facsimile or by express courier. All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number as follows, or at such other address, electronic mail address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto as follows or as such party may designate by ten (10) days advance written notice to the other parties hereto:
(a) if to an Investor or Mark Pincus, at such partys address as set forth on Exhibit A
(b) if to the Company, marked Attention: General Counsel at:
Zynga Inc.
444 De Haro Street
Suite 132
San Francisco, CA 94107
Email: legal@zynga.com
with a copy (which shall not constitute notice) to
Jones Day
1755 Embarcadero Road
Palo Alto, CA 94303
Attention: Timothy Curry, Esq.
Facsimile: (650) 739-3900
Email: tcurry@jonesday.com
(c) if to Mark Pincus, to:
Mark Pincus
c/o Zynga Inc.
444 De Haro Street
Suite 132
San Francisco, CA 94107
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6.2 Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.
6.3 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, without giving effect to that body of laws pertaining to conflict of laws.
6.4 Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then all parties agree to substitute such provision(s) through good faith negotiations.
6.5 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.
6.6 Successors and Assigns. Subject to the provisions of Section 5.1, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.
6.7 Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to Sections and Exhibits will mean sections of this Agreement and exhibits hereto.
6.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.
6.9 Costs and Attorneys Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such partys costs and reasonable attorneys fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.
6.10 Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of any class or series, then, upon the occurrence of any subdivision, combination, or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall
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automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination, or stock dividend.
6.11 Aggregation of Stock. For purposes of Sections 1 (including the definition of Major Investor), 3 and 5.1, all shares held or acquired by affiliated entities or persons (including the principals of an Investor or a Holder, affiliated 1940 Act Investors or, if applicable, 1940 Act Investors advised by a Registered Investment Adviser that is Controlled by or under common Control with the Registered Investment Adviser of such 1940 Act Investor) shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
6.12 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.
6.13 Facsimile Signatures. This Agreement may be executed and delivered by facsimile or other electronic means and upon such delivery the facsimile or other electronically delivered signature will be deemed to have the same effect as if the original signature had been delivered to the other party. The original signature copy shall be delivered to the other party by express overnight delivery. The failure to deliver the original signature copy and/or the nonreceipt of the original signature copy shall have no effect upon the binding and enforceable nature of this Agreement.
6.14 Prior Rights Agreement Superseded. Pursuant to Section 5.2 of the Prior Rights Agreement, the undersigned parties who are parties to such Prior Rights Agreement hereby restate the Prior Rights Agreement to read in its entirety as set forth in this Agreement, such that the Prior Rights Agreement is hereby terminated and entirely replaced and superseded by this Agreement.
6.15 Massachusetts Business Trust.
(a) A copy of the Agreement and Declaration of Trust of Fidelity Contrafund and Fidelity Advisor New Insights Fund (collectively, the Fidelity Investors) is on file with the Secretary of State of the Commonwealth of Massachusetts and notice is hereby given that this Agreement is executed on behalf of the trustees of the Fidelity Investors or any affiliate thereof as trustees and not individually and that the obligations of this Agreement are not binding on any of the trustees, officers or stockholders of the Fidelity Investors or any affiliate thereof individually but are binding only upon such Investor or any affiliate thereof and its assets and property.
(b) Certain other Investors are also Massachusetts Business Trusts. A copy of the Agreement and Declaration of Trust of each such Investor is on file with the Secretary of State of the Commonwealth of Massachusetts and notice is hereby given that this Agreement is executed on behalf of the trustees of each such Investor as trustees and not individually and that the obligations of this Agreement are not binding on any of the trustees, officers or stockholders of any such Investor individually but are binding only upon each such Investor and its assets and property.
26
6.16 Additional Parties. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Series C Stock after the date hereof, as a condition to the issuance of such shares the Company shall require that any purchaser of shares of Series C Stock become a party to this Agreement by executing and delivering a counterpart signature page hereto agreeing to be bound by and subject to the terms of this Agreement as an Investor. Each such person shall thereafter be deemed an Investor for all purposes under this Agreement and notwithstanding anything to the contrary contained herein, the Company shall update relevant Schedules to include such additional Investor without requiring notice to or consent of any party.
[SIGNATURE PAGES FOLLOW]
27
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
COMPANY: | ||
ZYNGA INC. | ||
By: | /s/ Mark Pincus | |
Name: | Mark Pincus | |
Title: | President and Chief Executive Officer |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
HOLDER: |
/s/ Mark Pincus |
MARK PINCUS |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: | ||
AVALON VENTURES VIII, LP | ||
By: | Avalon Ventures VIII GP, LLC | |
Its: | General Partner | |
By: | /s/ Rich Levandov | |
Name: | Rich Levandov | |
Title: | Managing Member |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTORS: | ||
DST GLOBAL LIMITED | ||
By: |
/s/ Sean Hogan | |
Name: | Sean Hogan | |
Title: | Director |
DIGITAL SKY TECHNOLOGIES LTD. | ||
By: |
||
Name: | ||
Title: |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTORS: | ||
DST GLOBAL LIMITED | ||
By: |
||
Name: |
||
Title: |
DIGITAL SKY TECHNOLOGIES LTD. | ||
By: |
/s/ Alexander Tamas | |
Name: |
Alexander Tamas | |
Title: |
Managing Director |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: | ||
FOUNDRY VENTURE CAPITAL 2007 L.P. | ||
By: |
Foundry Venture 2007, LLC, its general partner |
By: |
/s/ Bradley A. Feld | |
Name: |
Bradley A. Feld | |
Title: |
Manager |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: | ||
INSTITUTIONAL VENTURE PARTNERS XII, L.P. | ||
By: | Institutional Venture Management XII LLC | |
Its: | General Partner | |
By: | /s/ J. Sanford Miller | |
Managing Director | ||
J. Sanford Miller |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTORS: | ||
UNION SQUARE VENTURES 2004, L.P. | ||
By: Union Square GP 2004, L.L.C. | ||
By: | /s/ Fred Wilson | |
Name: |
Fred Wilson | |
Title: |
Managing Member |
UNION SQUARE PRINCIPALS 2004, L.L.C. | ||
By: | /s/ Fred Wilson | |
Name: |
Fred Wilson | |
Title: |
Managing Member. |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: | ||
KPCB HOLDINGS, INC., AS NOMINEE | ||
By: |
/s/ Eric J. Keller | |
Name: |
Eric J. Keller | |
Title: |
President |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: T. ROWE PRICE ASSOCIATES, INC., INVESTMENT ADVISER, FOR AND ON BEHALF OF THE ADVISORY CLIENTS ON ATTACHMENT A, LISTED BELOW: | ||
T. Rowe Price New America Growth Fund; | ||
T. Rowe Price New America Growth Portfolio; | ||
(each such advisory client, an Investor) | ||
By: | /s/ Paul R. Bartolo | |
Name: | Paul Bartolo | |
Title: | Vice President | |
INVESTOR: T. ROWE PRICE ASSOCIATES, INC., INVESTMENT ADVISER, FOR AND ON BEHALF OF THE ADVISORY CLIENTS ON ATTACHMENT A, LISTED BELOW: | ||
T. Rowe Price Global Technology Fund, Inc.; TD Mutual Funds TD Science & Technology Fund; | ||
(each such advisory client, an Investor) | ||
By: | /s/ Henry M. Ellenbogen | |
Name: | Henry M. Ellenbogen | |
Title: | Vice President |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: T. ROWE PRICE ASSOCIATES, INC., INVESTMENT ADVISER, FOR AND ON BEHALF OF THE ADVISORY CLIENTS ON ATTACHMENT A, LISTED BELOW: | ||
T. Rowe Price Growth Stock Fund, Inc.; JNL Series Trust JNL/T. Rowe Price Established Growth Fund; ING Partners, Inc. ING T. Rowe Price Growth Equity Portfolio; Metropolitan Series Fund, Inc. T. Rowe Price Large Cap Growth Portfolio; Lincoln Variable Insurance Products Trust LVIP T. Rowe Price Growth Stock Fund; Conagra Foods, Inc. Large Cap Diversified Growth; T. Rowe Price Growth Stock Trust; East Bay Municipal Utility District Domestic; Advantus Minnesota Life Insurance Co. Growth Stock; NFL Player Second Career Savings Plan; Prudential Retirement Insurance & Annuity Co.; | ||
(each such advisory client, an Investor) | ||
By: | /s/ Paul R. Bartolo | |
Name: | Paul R. Bartolo | |
Title: | VP |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: T. ROWE PRICE ASSOCIATES, INC., INVESTMENT ADVISER, FOR AND ON BEHALF OF THE ADVISORY CLIENTS ON ATTACHMENT A, LISTED BELOW: | ||
T. Rowe Price Institutional Large-Cap Growth Fund; Operating Engineers Local #18 LCG; Caterpillar Master Pension Trust; Caterpillar, Inc. Veba Trust; Caterpillar Investment Trust; Invensys, Inc. 401K Plan; Union Pacific Corporation; Harris Corporation Large Cap Growth; Sears 401K Savings Plan; Xerox Corporation; Nextera Energy Inc. Employee Pension Plan LCG; Nextera Energy Inc. Bargaining Unit Employee Savings Plan; BAE Systems; Lyondell Petrochemical Company; National Rural Electric Cooperative Association; USG Corporation Retirement Plan Trust; Monsanto Company Savings and Investment Plan; T. Rowe Price U.S. Equities Trust; | ||
(each such advisory client, an Investor) | ||
By: | /s/ Robert W. Sharps | |
Name: | Robert W. Sharps | |
Title: | Vice President |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: THE UNIVERSAL INSTITUTIONAL FUNDS, INC. MID CAP GROWTH PORTFOLIO | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Investment Manager | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
INVESTOR: MORGAN STANLEY MID CAP GROWTH FUND | ||
By: | Morgan Stanley Investment Advisors Inc. | |
Its: | Investment Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: MORGAN STANLEY SELECT DIMENSIONS INVESTMENT SERIES MID CAP GROWTH PORTFOLIO | ||
By: | Morgan Stanley Investment Advisors Inc. | |
Its: | Investment Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
INVESTOR: MORGAN STANLEY INSTITUTIONAL FUND TRUST - MID CAP GROWTH PORTFOLIO | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Investment Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: ALLIANZ VARIABLE INSURANCE TRUST AZL MORGAN STANLEY MID CAP GROWTH FUND | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
INVESTOR: EQUITABLE ADVISORS TRUST EQ/MORGAN STANLEY MID-CAP GROWTH PORTFOLIO | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: TRANSAMERICA FUNDS TRANSAMERICA MORGAN STANLEY MID-CAP GROWTH | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
INVESTOR: LAWRENCIUM ATOLL INVESTMENTS LTD | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Investment Manager | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: MET INVESTOR SERIES TRUST- MORGAN STANLEY MID CAP GROWTH PORTFOLIO | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
INVESTOR: TRANSAMERICA SERIES TRUST TRANSAMERICA MORGAN STANLEY MID-CAP GROWTH VP | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: VALIC COMPANY I MID CAP STRATEGIC GROWTH FUND | ||
By: | Morgan Stanley Investment Management Inc. | |
Its: | Sub-Adviser | |
By: | /s/ Sandeep Chainani | |
Name: | Sandeep Chainani | |
Title: | MD |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: | ||
FIDELITY CONTRAFUND: FIDELITY CONTRAFUND | ||
By: | /s/ Jeffrey Christian | |
Name: | Jeffrey Christian | |
Title: | Deputy Treasurer |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: | ||
FIDELITY CONTRAFUND: FIDELITY ADVISOR NEW INSIGHTS FUND | ||
By: | /s/ Jeffrey Christian | |
Name: | Jeffrey Christian | |
Title: | Deputy Treasurer |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR: JANUS INVESTMENT FUND ON BEHALF OF ITS SERIES, JANUS TWENTY FUND | ||
By: |
Janus Capital Management LLC | |
Its: |
Investment Adviser | |
By: |
/s/ Ron Sachs | |
Name: |
Ron Sachs | |
Title: |
Vice President |
INVESTOR: JANUS INVESTMENT FUND ON BEHALF OF ITS SERIES, JANUS FUND | ||
By: |
Janus Capital Management LLC | |
Its: |
Investment Adviser | |
By: |
/s/ Jonathan Coleman | |
Name: |
Jonathan Daniel Coleman | |
Title: |
Executive Vice President, Co-Chief Investment Officer |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
INVESTOR: JANUS INVESTMENT FUND ON BEHALF OF ITS SERIES, JANUS FORTY FUND | ||
By: |
Janus Capital Management LLC | |
Its: |
Investment Adviser | |
By: |
/s/ Ron Sachs | |
Name: |
Ron Sachs | |
Title: |
Vice President |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties have executed this Fifth Amended and Restated Investors Rights Agreement as of the date first written above.
INVESTOR:
CAPITAL WORLD INVESTORS on behalf of :
The Growth Fund of America, Inc.; New Perspective Fund, Inc. ; American Funds Insurance Series - Growth Fund;
(each such fund, an Investor | ||
By: |
/s/ Michael J. Downer | |
Name: |
Michael J. Downer | |
Title: |
Senior Vice President and Secretary, Capital Research and Management Company |
[SIGNATURE PAGE TO ZYNGA INC.
FIFTH AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT]
EXHIBIT A
Schedule of Investors
Google Inc.
1600 Amphitheatre Parkway
Mountain View, CA 94043
Attention: David Lawee
SOFTBANK CORP.
1-9-1 Higashi-Shirnbashi
Minato-ku, Tokyo 105-7303
Japan
DAG Ventures Limited
251 Lytton Avenue, Suite 200
Palo Alto, CA 94301
SB Asia Pacific Investments Limited
Ugland House, P.O. Box 309
George Town, Grand Cayman
Cayman Islands
With a copy (which shall not constitute notice) to
Sullivan & Cromwell LLP
1870 Embarcadero Road
Palo Alto, CA 94303
Attn: John L. Savva
Fax: (650) 461-5700
Digital Sky Technologies Limited
c/o Tulloch & Co - Attn: Alastair Tulloch
4 Hill Street
London, W1J 5NE
United Kingdom
DST Global Limited
c/o Tulloch & Co - Attn: Alastair Tulloch
4 Hill Street
London, W1J 5NE
United Kingdom
KPCB Holdings, Inc., as nominee
c/o Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Attention: Bing Gordon
With a copy to (which shall not constitute the giving of notice):
Sayre E. Stevick
Fenwick & West LLP
801 California Street
Mountain View, CA 94041
Institutional Venture Partners XII, L.P.
3000 Sand Hill Road
Building 2, Suite 250
Menlo Park, CA 94025
Union Square Ventures 2004, LP
Union Square Principals 2004, LLC
915 Broadway
Suite 1408
New York, NY 10010
PG Ventures, Inc.
75 Rockefeller Plaza 23rd Floor
New York, NY 10019
Foundry Venture Capital 2007, L.P.
1050 Walnut Street, Suite 210
Boulder, CO 80302
F&W Investments LLC-Series 2007
c/o Fenwick & West LLP
801 California Street
Mountain View, CA 94041
Attention: Laird H. Simons, III
Theodore H. Pincus Declaration of
Trust Dated June 10, 1992
c/o Theodore H. Pincus
400 East Ohio Street, East Penthouse
Chicago, IL 60611
Archimedes Capital
543 West Crescent Drive
Palo Alto, CA 94301
Reid Hoffman
800 Highschool Way #310
Mountain View, CA 94041
Paul Martino
146 Beverly Street
Mountain View, CA 94043
The DAnconia Trust
c/o Russell Anweiler
PO Box 475665
San Francisco, CA 94147-5665
Peter Thiel
1 Letterman Drive
Bldg. C, Suite 400
San Francisco, CA 94129
Avalon Ventures VIII, LP
888 Prospect Street
Suite 320
La Jolla, CA 92037
Gary Leff
1720 N. Larrabee Street
Chicago, IL 60614
European Founders Fund GmbH & Co.
Beteiligungs KG Nr.1
c/o Pöllath und Partners
KardinalFaulhaberStrasse 10
80333 Munich, Germany
With a copy to:
Tamara L. Thompson
Thompson Legal Advisory
229 Brannan Street, Suite 18G
San Francisco, CA 94107
Fax (415) 896-5166
The Universal Institutional Funds, Inc. Mid Cap Growth Portfolio;
Morgan Stanley Institutional Fund TrustMid Cap Growth Portfolio;
Allianz Variable Insurance Trust AZL Morgan Stanley Mid Cap Growth Fund;
Equitable Advisors Trust EQ/Morgan Stanley Mid-Cap Growth Portfolio;
Transamerica Funds Transamerica Morgan Stanley Mid-Cap Growth;
Lawrencium Atoll Investments Ltd.;
Met Investor Series Trust- Morgan Stanley Mid Cap Growth Portfolio;
Transamerica Series Trust Transamerica Morgan Stanley Mid-Cap Growth VP;
Valic Company I Mid Cap Strategic Growth Fund;
c/o Morgan Stanley Investment Management Inc.
522 Fifth Avenue (investment adviser to such Investors)
New York, New York 10036
Attention: Sandeep Chainani
Copy to Joseph Benedetti
Morgan Stanley Mid Cap Growth Fund;
Morgan Stanley Select Dimensions Investment Series Mid Cap Growth Portfolio;
c/o Morgan Stanley Investment Advisors Inc.
(investment adviser to such Investors)
522 Fifth Avenue
New York, New York 10036
Attention: Sandeep Chainani
Copy to Joseph Benedetti
Janus Twenty Fund;
Janus Fund;
Janus Forty Fund;
c/o Janus Capital Management LLC (investment adviser to such Investors)
151 Detroit Street
Denver, CO 80206
Attn: General Counsel
Fidelity Contrafund: Fidelity Contrafund
c/o Fidelity Investments
82 Devonshire Street, VI3H
Boston, MA 02109
Attn: Andrew Boyd
With a copy to:
H. David Henken, Esq.
Goodwin Procter LLP
Exchange Place
Boston, MA 02109
Fidelity Contrafund: Fidelity Advisor New
Insights Fund
c/o Fidelity Investments
82 Devonshire Street, V13H
Boston, MA 02109
Attn: Andrew Boyd
With a copy to:
H. David Henken, Esq.
Goodwin Procter LLP
Exchange Place
Boston, MA 02109
Fidelity Management and Research Company
serves as the investment adviser to both Fidelity
Contrafunds listed above.
The Growth Fund of America, Inc.;
New Perspective Fund, Inc.;
American Funds Insurance Series-Growth Fund;
c/o Capital World Investors, a division of Capital
Research and Management Company (investment adviser to such Investors)
333 South Hope Street
53rd Floor
Los Angeles, CA 90071
Attn: Michael Triessl / Don Rolfe
T. Rowe Price New America Growth Fund;
T. Rowe Price New America Growth Portfolio;
T. Rowe Price Growth Stock Fund, Inc.;
JNL Series Trust JNL/T. Rowe Price Established Growth Fund;
ING Partners, Inc. ING T. Rowe Price Growth
Equity Portfolio;
Metropolitan Series Fund, Inc. T. Rowe Price
Large Cap Growth Portfolio;
Lincoln Variable Insurance Products Trust LVIP T. Rowe Price Growth Stock Fund;
Conagra Foods, Inc. Large Cap Diversified Growth;
T. Rowe Price Growth Stock Trust;
East Bay Municipal Utility District Domestic;
Advantus Minnesota Life Insurance Co. Growth Stock;
NFL Player Second Career Savings Plan;
Prudential Retirement Insurance & Annuity Co.;
T. Rowe Price Institutional Large-Cap Growth Fund;
Operating Engineers Local #18 LCG;
Caterpillar Master Pension Trust;
Caterpillar, Inc. Veba Trust;
Caterpillar Investment Trust;
Invensys, Inc. 401K Plan;
Union Pacific Corporation;
Harris Corporation Large Cap Growth;
Sears 401K Savings Plan;
Xerox Corporation;
Nextera Energy Inc. Employee Pension Plan LCG;
Nextera Energy Inc. Bargaining Unit Employee
Savings Plan;
BAE Systems;
Lyondell Petrochemical Company;
National Rural Electric Cooperative Association;
USG Corporation Retirement Plan Trust;
Monsanto Company Savings and Investment Plan;
T. Rowe Price U.S. Equities Trust;
T. Rowe Price Global Technology Fund, Inc.;
TD Mutual Funds TD Science & Technology Fund;
c/o T. Rowe Price Associates, Inc. (as investment adviser to such Investors)
100 East Pratt Street
Baltimore, MD 21202
Attn: Andrew Baek, Vice President and Senior
Legal Counsel
Phone: 410-345-2090
Email: andrew_baek@troweprice.com
Schedule 1.1(d)
LAWRENCIUM ATOLL INVESTMENTS LTD
T. ROWE PRICE GROWTH STOCK TRUST
T. ROWE PRICE U.S. EQUITIES TRUST
TD MUTUAL FUNDS-TD SCIENCE & TECHNOLOGY FUND
Exhibit 10.2
ZYNGA GAME NETWORK INC.
2007 EQUITY INCENTIVE PLAN
Adopted on November 2, 2007
As Amended through September 3, 2010
1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, its Parent and Subsidiaries by offering eligible persons an opportunity to participate in the Companys future performance through awards of Options, Restricted Stock, and Restricted Stock Units. Capitalized terms not defined in the text are defined in Section 23 hereof. Although this Plan is intended to be a written compensatory benefit plan within the meaning of Rule 701 promulgated under the Securities Act, grants may be made pursuant to this plan which do not qualify for exemption under Rule 701 promulgated under the Securities Act or Section 25102(o) of the California Corporations Code (Section 25102(o)). Any requirement of this Plan which is required in law only because of Section 25102(o) need not apply if the Committee so provides.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 18 hereof, the total number of Shares reserved and available for grant and issuance pursuant to this Plan will be 144,000,000 Shares. Subject to Sections 2.2, 5.10 and 18 hereof, Shares subject to Awards previously granted will again be available for grant and issuance in connection with future Awards under this Plan to the extent such Shares: (i) cease to be subject to issuance upon exercise of an Option, other than due to exercise of such Option; (ii) are subject to an Award granted hereunder but the Shares subject to such Award are forfeited or repurchased by the Company at the original issue price; or (iii) are subject to an Award that otherwise terminates without Shares being issued. At all times, the Company will reserve and keep available a sufficient number of Shares as will be required to satisfy the requirements of all Awards granted and outstanding under this Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding shares of the Companys Class A Common Stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then (i) the number of Shares reserved for issuance under this Plan, (ii) the Exercise Prices of and number of Shares subject to outstanding Options and (iii) the Purchase Prices of and number of Shares subject to other outstanding Awards will be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share will not be issued but will either be paid in cash at the Fair Market Value of such fraction of a Share or will be rounded down to the nearest whole Share, as determined by the Committee; and provided, further, that the Exercise Price of any Option may not be decreased to below the par value of the Shares.
3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in Section 5 hereof), Restricted Stock Awards and Restricted Stock Units may be granted to employees, officers, directors and consultants of the Company or any Parent or Subsidiary of the Company; provided such consultants are natural persons who render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person may be granted more than one Award under this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the Committee or the Board if no Committee is created by the Board. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan;
(c) approve persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or awards under any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;
(g) subject to Sections 16.1 and 16.2 hereof, grant waivers of any conditions of this Plan or any Award;
(h) determine the terms of vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Award, any Award Agreement, any Exercise Agreement or any Restricted Stock Purchase Agreement;
(j) determine whether an Award has been earned;
(k) make all other determinations necessary or advisable for the administration of this Plan; and
2
(l) extend the vesting period beyond a Participants Termination Date.
4.2 Committee Discretion. Unless in contravention of any express terms of this Plan or an Award, any determination made by the Committee with respect to any Award will be made in its sole discretion either (i) at the time of grant of the Award, or (ii) subject to Section 5.9 hereof, at any later time. Any such determination will be final and binding on the Company and on all persons having an interest in any Award under this Plan. The Committee may delegate to one or more officers of the Company the authority to grant an Award under this Plan, provided such officer or officers are members of the Board.
5. OPTIONS. The Committee may grant Options to eligible persons described in Section 3 hereof and will determine whether such Options will be Incentive Stock Options within the meaning of the Code (ISOs) or Nonqualified Stock Options (NQSOs), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award Agreement which will expressly identify the Option as an ISO or an NQSO (Stock Option Agreement), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless a later date is otherwise specified by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.
5.3 Exercise Period. Options may be exercisable immediately but subject to repurchase pursuant to Section 12 hereof or may be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing such Option; provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted, nor exercisable earlier than six (6) months after its date of grant if granted to an employee who is a non-exempt employee for purposes of overtime pay except as permitted under the Fair Labor Standards Act of 1938; and provided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary (Ten Percent Shareholder) will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted and shall not be less than the Fair Market Value per Share unless expressly determined in writing by the Committee on the Options date of grant; provided that the Exercise Price of an ISO granted to a Ten Percent Shareholder will not be less
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than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased must be made in accordance with Section 8 hereof.
5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written stock option exercise agreement (the Exercise Agreement) in a form approved by the Committee (which need not be the same for each Participant). The Exercise Agreement will state (i) the number of Shares being purchased, (ii) the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and (iii) such representations and agreements regarding Participants investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws. Participant shall execute and deliver to the Company the Exercise Agreement together with payment in full of the Exercise Price, and any applicable taxes, for the number of Shares being purchased.
5.6 Termination. Subject to earlier termination pursuant to Sections 18 and 19 hereof and notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following:
(a) If the Participant is Terminated for any reason other than death, Disability or for Cause, then the Participant may exercise such Participants Options only to the extent that such Options are exercisable as to Vested Shares upon the Termination Date or as otherwise determined by the Committee. Such Options must be exercised by the Participant, if at all, as to all or some of the Vested Shares calculated as of the Termination Date or such other date determined by the Committee, within three (3) months after the Termination Date (or within such shorter time period, not less than thirty (30) days, or within such longer time period, not exceeding five (5) years, after the Termination Date as may be determined by the Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO) but in any event, no later than the expiration date of the Options.
(b) If the Participant is Terminated because of Participants death or Disability (or the Participant dies within three (3) months after a Termination other than for Cause), then Participants Options may be exercised only to the extent that such Options are exercisable as to Vested Shares by Participant on the Termination Date or as otherwise determined by the Committee. Such options must be exercised by Participant (or Participants legal representative or authorized assignee), if at all, as to all or some of the Vested Shares calculated as of the Termination Date or such other date determined by the Committee, within twelve (12) months after the Termination Date (or within such shorter time period, not less than six (6) months, or within such longer time period, not exceeding five (5) years, after the Termination Date as may be determined by the Committee, with any exercise beyond (i) three (3) months after the Termination Date when the Termination is for any reason other than the Participants death or disability, within the meaning of Section 22(e)(3) of the Code, or (ii) twelve (12) months after the Termination Date when the Termination is for Participants disability, within the meaning of Section 22(e)(3) of the Code, deemed to be an NQSO) but in any event no later than the expiration date of the Options.
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(c) If a Participant is terminated for Cause, such Participants Options shall expire immediately upon such termination, unless a later time is expressly determined by the Committee.
5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which it is then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan or under any other incentive stock option plan of the Company or any Parent or Subsidiary of the Company) will not exceed One Hundred Thousand Dollars ($100,000). If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds One Hundred Thousand Dollars ($100,000), then the Options for the first One Hundred Thousand Dollars ($100,000) worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the amount in excess of One Hundred Thousand Dollars ($100,000) that become exercisable in that calendar year will be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date (as defined in Section 19 hereof) to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, then such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participants rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code. Subject to Section 5.10 hereof, the Committee may reduce the Exercise Price of outstanding Options without the consent of Participants by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 5.4 hereof for Options granted on the date the action is taken to reduce the Exercise Price; provided, further, that the Exercise Price will not be reduced below the par value of the Shares, if any.
5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant, to disqualify any Participants ISO under Section 422 of the Code. In no event shall the total number of Shares issued (counting each reissuance of a Share that was previously issued and then forfeited or repurchased by the Company as a separate issuance) under the Plan upon exercise of ISOs exceed 50,000,000 Shares (adjusted in proportion to any adjustments under Section 2.2 hereof) over the term of the Plan.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares that are subject to certain specified restrictions. The
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Committee will determine to whom an offer will be made, the number of Shares the person may purchase, the Purchase Price, the restrictions to which the Shares will be subject, and all other terms and conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to this Plan will be evidenced by an Award Agreement (Restricted Stock Purchase Agreement) that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. The Restricted Stock Award will be accepted by the Participants execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement along with full payment for the Shares to the Company within such thirty (30) days, then the offer will terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award will be determined by the Committee on the date the Restricted Stock Award is granted or at the time the purchase is consummated. Payment of the Purchase Price must be made in accordance with Section 8 hereof.
6.3 Restrictions. Restricted Stock Awards may be subject to the restrictions set forth in Section 12 hereof or such other restrictions not inconsistent with Section 25102(o) of the California Corporations Code.
7. RESTRICTED STOCK UNITS.
7.1 Awards of Restricted Stock Units. A Restricted Stock Unit is an Award covering a number of Shares that may be settled in cash, or by issuance of those Shares at a date in the future. No Purchase Price shall apply to an RSU settled in Shares other than the payment of the aggregate par value of all Shares issuable upon such settlement. All grants of Restricted Stock Units will be evidenced by an Award Agreement (Restricted Stock Unit Agreement) that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan.
7.2 Form and Timing of Settlement. To the extent permissible under applicable law, the Committee may permit a Participant to defer payment under a RSU to a date or dates after the RSU is earned, provided that the terms of the RSU and any deferral satisfy the requirements of Section 409A of the Code (or any successor) and any regulations or rulings promulgated thereunder. Payment may be made in the form of cash or whole Shares or a combination thereof, all as the Committee determines.
8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted by law:
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(a) by cancellation of indebtedness of the Company owed to the Participant;
(b) by surrender of shares of the Company that: (i) either (A) for which the Company has received full payment of the purchase price within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares) or (B) were obtained by Participant in the public market and (ii) are clear of all liens, claims, encumbrances or security interests;
(c) by tender of a full recourse promissory note having such terms as may be approved by the Committee and bearing interest at a rate sufficient to avoid imputation of income under Sections 483 and 1274 of the Code; provided, however, that Participants who are not employees or directors of the Company will not be entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares; provided, further, that the portion of the Exercise Price or Purchase Price, as the case may be, equal to the par value of the Shares must be paid in cash or other legal consideration permitted by Delaware General Corporation Law;
(d) by waiver of compensation due or accrued to the Participant from the Company for services rendered;
(e) with respect only to purchases upon exercise of an Option, and provided that a public market for the Companys stock exists:
(i) through a same day sale commitment from the Participant and a Company-designated broker-dealer that is a member of the Financial Industry Regulatory Authority (a Dealer) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased sufficient to pay the total Exercise Price, and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company; or
(ii) through a margin commitment from the Participant and a Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the Dealer in a margin account as security for a loan from the Dealer in the amount of the total Exercise Price, and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may, in its sole discretion, elect to assist the Participant in paying for Shares purchased under this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to the
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Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments in satisfaction of Awards are to be made in cash by the Company, such payment will be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements.
9.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in connection with the exercise or vesting of any Award that is subject to tax withholding and the Participant is obligated to pay the Company the amount required to be withheld, the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares to be issued that minimum number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined; but in no event will the Company withhold Shares if such withholding would result in adverse accounting consequences to the Company. All elections by a Participant to have Shares withheld for this purpose will be made in accordance with the requirements established by the Committee for such elections and be in writing in a form acceptable to the Committee.
10. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any of the rights of a shareholder with respect to any Shares until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Stock. The Participant will have no right to retain such stock dividends or stock distributions with respect to Unvested Shares that are repurchased pursuant to Section 12 hereof.
11. TRANSFERABILITY. Subject to Sections 16.1 and 16.2 hereof, except as permitted by the Committee, Awards granted under this Plan, and any interest therein, will not be transferable or assignable by the Participant, other than by will or by the laws of descent and distribution, and, with respect to NQSOs, by instrument to an inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to immediate family as that term is defined in 17 C.F.R. 240.16a-1(e), and may not be made subject to execution, attachment or similar process. During the lifetime of the Participant, an Award will be exercisable only by the Participant or the Participants legal representative and any elections with respect to an Award may be made only by the Participant or the Participants legal representative.
12. RESTRICTIONS ON SHARES.
12.1 Right of First Refusal. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) in the Award Agreement a right of first refusal to purchase all Shares that a Participant (or a subsequent transferee) may propose to transfer to a third party, provided that such right of first refusal terminates upon the Companys initial public
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offering of Class A Common Stock pursuant to an effective registration statement filed under the Securities Act.
12.2 Right of Repurchase. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase Unvested Shares held by a Participant for cash and/or cancellation of purchase money indebtedness owed to the Company by the Participant following such Participants Termination at any time.
13. CERTIFICATES. All certificates for Shares or other securities delivered under this Plan will be subject to such stock transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participants Shares set forth in Section 12 hereof, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated. The Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of Participants obligation to the Company under the promissory note; provided, however, that the Committee may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participants Shares or other collateral. In connection with any pledge of the Shares, the Participant will be required to execute and deliver a written pledge agreement in such form as the Committee will from time to time approve. The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award previously granted with payment in cash, shares of Class A Common Stock of the Company (including Restricted Stock) or other consideration, based on such terms and conditions as the Committee and the Participant may agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. Although this Plan is intended to be a written compensatory benefit plan within the meaning of Rule 701 promulgated under the Securities Act, grants may be made pursuant to this plan that do not qualify for exemption under Rule 701 or Section 25102(o) of the California Corporations Code. Any requirement of this Plan which is required in law only because of Section 25102(o) need not apply with respect to a particular Award if the Committee so provides. An Award will
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not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and/or (ii) compliance with any exemption, completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the exemption, registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.
16.1 Option Compliance with the Exemption Provided by Rule 12h-1(f). Notwithstanding any other provision in this Plan or any Award Agreement, if, at the end of the Companys most recently completed fiscal year, (i) the aggregate of the number of Option Holders (plus the number of other holders of all other outstanding compensatory stock options to purchase Shares) equals or exceeds five hundred (500), and (ii) the Companys total assets as defined by Rule 12g5-2 promulgated under the Exchange Act exceed $10 million, then the following restrictions shall apply to Option Holders during any period during which the Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act: (A) the Options and, prior to exercise, the Shares to be issued upon exercise of the Options may not be transferred until the Company is no longer relying on the exemption provided by Rule 12h-1(f), except: (1) as permitted by Rule 701(c) promulgated under the Securities Act, (2) to a guardian upon the disability of the Option Holder, or (3) to an executor upon the death of the Option Holder (collectively, the Permitted Option Transferees); provided, however, that the following transfers are permitted: (x) transfers by the Option Holder to the Company, and (y) transfers in connection with a Change in Control (as defined below) or other acquisition transaction involving the Company, if after such transaction the Options no longer remain outstanding and the Company is no longer relying on the exemption provided by Rule 12h-1(f); provided further, that any Permitted Option Transferees may not further transfer the Options; (B) except as otherwise provided in (A) above, the Options and Shares to be issued upon exercise of the Options are restricted as to any pledge, hypothecation, or other transfer, including any short position, any put equivalent position as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any call equivalent position as defined by Rule 16a-1(b) promulgated under the Exchange Act by the Option Holder prior to exercise of an Option until the Company is no longer relying on the exemption provided by Rule 12h-1(f); and (C) at any time that the Company is relying on the exemption provided by Rule 12h-1(f), the Company shall deliver to Option Holders (whether by physical or electronic delivery or by written notice of the availability of the information on an internet site (and of any password needed to access the information if the internet site is password-protected)) the information required by Rules 701(e)(3), (4), and (5) promulgated under the Securities Act, every six (6) months, including financial statements that are not more than one hundred eighty (180) days old; provided, however, that the Company may condition the delivery of such information upon the Option Holders agreement to maintain the confidentiality of such information.
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16.2 RSU Compliance with the Exemption Provided by RSU Rule 12h-1(f). Notwithstanding any other provision in this Plan or any Award Agreement, if, at the end of the Companys most recently completed fiscal year, (i) the aggregate of the number of RSU Holders (plus the number of other holders of all other outstanding compensatory restricted stock units in respect of Shares) equals or exceeds five hundred (500), and (ii) the Companys total assets as defined by Rule 12g5-2 promulgated under the Exchange Act exceed $10 million, then the following restrictions shall apply to RSU Holders during any period during which the Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act: (A) the RSUs and, prior to settlement, any Shares to be issued upon the lapse or termination of all restrictions on the RSUs may not be transferred until the Company is no longer relying on the exemption provided by RSU Rule 12h-1(f), except: (1) as permitted by Rule 701(c) promulgated under the Securities Act, (2) to a guardian upon the disability of the RSU Holder, or (3) to an executor upon the death of the RSU Holder (collectively, the Permitted RSU Transferees); provided, however, that the following transfers are permitted: (x) transfers by the RSU Holder to the Company, and (y) transfers in connection with a Change in Control (as defined below) or other acquisition transaction involving the Company, if after such transaction the RSUs no longer remain outstanding and the Company is no longer relying on the exemption provided by RSU Rule 12h-1(f); provided further, that any Permitted RSU Transferees may not further transfer the RSUs; (B) except as otherwise provided in (A) above, the RSUs and any Shares to be issued upon settlement of the RSUs are restricted as to any pledge, hypothecation, or other transfer, including any short position, any put equivalent position as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any call equivalent position as defined by Rule 16a-1(b) promulgated under the Exchange Act by the RSU Holder prior to settlement of an RSU until the Company is no longer relying on the exemption provided by RSU Rule 12h-1(f); and (C) at any time that the Company is relying on the exemption provided by RSU Rule 12h-1(f), the Company shall deliver to RSU Holders (whether by physical or electronic delivery or by written notice of the availability of the information on an internet site (and of any password needed to access the information if the internet site is password-protected)) the information required by Rules 701(e)(3), (4), and (5) promulgated under the Securities Act, every six (6) months, including financial statements that are not more than one hundred eighty (180) days old; provided, however, that the Company may condition the delivery of such information upon the RSU Holders agreement to maintain the confidentiality of such information.
17. NO OBLIGATION TO EMPLOY; CHANGE IN TIME COMMITMENT. Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary or limit in any way the right of the Company or any Parent or Subsidiary to terminate a Participants employment or other relationship at any time, with or without Cause. In the event a Participants regular level of time commitment in the performance of his or her services for the Company and its Parents and Subsidiaries is reduced (for example, and without limitation, if the Participant is an employee of the Company and the employee has a change in status from a full-time employee to a part-time employee) after the date of grant of any Award to the Participant, the Committee has the right in its sole discretion to (i) make a corresponding reduction in the number of Shares subject to any portion of such Award that is scheduled to vest after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting schedule applicable to such Award. In
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the event of any such reduction, the Participant shall have no right with respect to any portion of the Award that is so reduced.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor or Acquiring Company. In the event of (a) (i) a dissolution or liquidation of the Company or (ii) any reorganization, consolidation, merger or similar transaction or series of related transactions (each, a combination transaction) in which the Company is a constituent corporation or is a party if, as a result of such combination transaction, the voting securities of the Company that are outstanding immediately prior to the consummation of such combination transaction (other than any such securities that are held by an Acquiring Shareholder (defined below)) do not represent, or are not converted into, securities of the surviving corporation of such combination transaction (or such surviving corporations parent corporation if the surviving corporation is owned by the parent corporation) that, immediately after the consummation of such combination transaction, together possess at least fifty percent (50%) of the total voting power of all securities of such surviving corporation (or its parent corporation, if applicable) that are outstanding immediately after the consummation of such combination transaction, including securities of such surviving corporation (or its parent corporation, if applicable) that are held by the Acquiring Shareholder; or (b) a sale of all or substantially all of the assets of the Company, that is followed by the distribution of the proceeds to the Companys shareholders (any of the events described in clause (a) or (b) above, a Change in Control), any or all outstanding Awards may be assumed, converted or replaced by the successor or acquiring corporation (if any), which assumption, conversion or replacement will be binding on all Participants. In the alternative, the successor or acquiring corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to shareholders of the Company (after taking into account the existing provisions of the Awards). The successor or acquiring corporation may also substitute by issuing, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to repurchase restrictions and other provisions no less favorable to the Participant than those which applied to such outstanding Shares immediately prior to such transaction described in this Section 18.1. For purposes of this Section 18.1, an Acquiring Shareholder means a shareholder or shareholders of the company that (i) merges or combines with the Company in such combination transaction or (ii) owns or controls a majority of another corporation that merges or combines with the Corporation in such combination transaction. In the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a transaction described in this Section 18.1, then notwithstanding any other provision in this Plan to the contrary, such Awards will expire on such transaction at such time and on such conditions as the Board will determine.
18.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under the foregoing provisions of this Section 18, in the event of the occurrence of any transaction described in Section 18.1 hereof, any outstanding Awards will be treated as provided in the applicable agreement or plan of reorganization, merger, consolidation, dissolution, liquidation or sale of assets.
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18.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (i) granting an Award under this Plan in substitution of such other companys award or (ii) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the exercise price and the number and nature of shares issuable upon exercise of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Option rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND SHAREHOLDER APPROVAL. This Plan was adopted by the Board on November 2, 2007 (the Effective Date) and was approved by the shareholders of the Company on November 13, 2007. Upon the Effective Date, the Board may grant Awards pursuant to this Plan; provided, however, that: (i) no Option may be exercised prior to initial shareholder approval of this Plan; (ii) no Option granted pursuant to an increase in the number of Shares approved by the Board shall be exercised prior to the time such increase has been approved by the shareholders of the Company; (iii) in the event that initial shareholder approval is not obtained within the time period provided herein, all Awards for which only the exemption from Californias securities qualification requirements provided by Section 25102(o) can apply shall be canceled, any Shares issued pursuant to any such Award shall be canceled and any purchase of such Shares issued hereunder shall be rescinded; and (iv) Awards (to which only the exemption from Californias securities qualification requirements provided by Section 25102(o) can apply) granted pursuant to an increase in the number of Shares approved by the Board which increase is not approved by shareholders within the time then required under Section 25102(o) shall be canceled, any Shares issued pursuant to any such Awards shall be canceled, and any purchase of Shares subject to any such Award shall be rescinded.
20. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this Plan will terminate ten (10) years from the Effective Date or, if earlier, the date of shareholder approval. This Plan and all agreements hereunder shall be governed by and construed in accordance with the laws of the State of California.
21. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the Board may at any time terminate or amend this Plan in any respect, including without limitation amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however, that the Board will not, without the approval of the shareholders of the Company, amend this Plan in any manner that requires such shareholder approval pursuant to Section 25102(o) of the California Corporations Code or the Code or the regulations promulgated thereunder as such provisions apply to ISO plans.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the submission of this Plan to the shareholders of the Company for approval, nor any
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provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options and other equity awards otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
23. DEFINITIONS. As used in this Plan, the following terms will have the following meanings:
Award means any award under this Plan, including any Option, Restricted Stock Award, or Restricted Stock Unit.
Award Agreement means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award, including the Stock Option Agreement, Restricted Stock Purchase Agreement, and Restricted Stock Unit Agreement.
Board means the Board of Directors of the Company.
Cause means (i) if a Participant is party to one or more agreements with the Company or a Parent or Subsidiary of the Company that relate to equity awards and contain a definition of Cause, the definition of Cause in the applicable agreement(s), or (ii) if a Participant is not party to such any such agreement, Termination because of (A) any willful, material violation by the Participant of any law or regulation applicable to the business of the Company or a Parent or Subsidiary of the Company, the Participants conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or any willful perpetration by the Participant of a common law fraud, (B) the Participants commission of an act of personal dishonesty which involves personal profit in connection with the Company or any other entity having a business relationship with the Company, (C) any material breach by the Participant of any provision of any agreement or understanding between the Company or any Parent or Subsidiary of the Company and the Participant regarding the terms of the Participants service as an employee, officer, director or consultant to the Company or a Parent or Subsidiary of the Company, including without limitation, the willful and continued failure or refusal of the Participant to perform the material duties required of such Participant as an employee, officer, director or consultant of the Company or a Parent or Subsidiary of the Company, other than as a result of having a Disability, or a breach of any applicable invention assignment and confidentiality agreement or similar agreement between the Company or a Parent or Subsidiary of the Company and the Participant, (D) the Participants disregard of the policies of the Company or any Parent or Subsidiary of the Company so as to cause loss, damage or injury to the property, reputation or employees of the Company or a Parent or Subsidiary of the Company, or (E) any other misconduct by the Participant which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or a Parent or Subsidiary of the Company.
Code means the Internal Revenue Code of 1986, as amended.
Committee means the committee created and appointed by the Board to administer this Plan, or if no committee is created and appointed, the Board.
14
Company means Zynga Game Network Inc., or any successor corporation.
Disability means a disability, whether temporary or permanent, partial or total, as determined by the Committee.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Exercise Price means the price per Share at which a holder of an Option may purchase Shares issuable upon exercise of the Option.
Fair Market Value means, as of any date, the value of a share of the Companys Class A Common Stock determined as follows:
(a) if such Class A Common Stock is then publicly traded on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading as reported in The Wall Street Journal;
(b) if such Class A Common Stock is publicly traded but is not quoted, nor listed or admitted to trading, on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported by The Wall Street Journal (or, if not so reported, as otherwise reported by any newspaper or other source as the Committee may determine); or
(c) if none of the foregoing is applicable, by the Committee in good faith.
Option means an award of an option to purchase Shares pursuant to Section 5 hereof.
Option Holder means a Participant to whom one or more Options is granted under this Plan or, if applicable, such other person who holds one or more outstanding Options.
Parent means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock representing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Participant means a person who receives an Award under this Plan.
Plan means this Zynga Game Network Inc. 2007 Equity Incentive Plan, as amended from time to time.
Purchase Price means the price at which a Participant may purchase Restricted Stock.
Restricted Stock means Shares purchased pursuant to a Restricted Stock Award.
15
Restricted Stock Award means an award of Shares pursuant to Section 6 hereof.
Restricted Stock Unit or RSU means an award made pursuant to Section 7 hereof.
RSU Holder means a Participant to whom one or more RSUs is granted under this Plan or, if applicable, such other person who holds one or more outstanding RSUs.
RSU Rule 12h-1(f) means Rule 12h-1(f), but read as if it applied to restricted stock units instead of stock options, with all conditions of Rule 12h-1(f) applicable to restricted stock units as if they were stock options (except to the extent necessary to reflect any structural differences between restricted stock units and stock options generally).
Rule 12h-1(f) means Rule 12h-1(f) promulgated under the Exchange Act.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Shares means shares of the Companys Class A Common Stock, $0.00025 par value per share, reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and 18 hereof, and any successor security.
Subsidiary means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock representing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Termination or Terminated means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to provide services as an employee, officer, director or consultant to the Company or a Parent or Subsidiary of the Company. A Participant will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days (a) unless reinstatement (or, in the case of an employee with an ISO, reemployment) upon the expiration of such leave is guaranteed by contract or statute, or (b) unless provided otherwise pursuant to formal policy adopted from time to time by the Companys Board and issued and promulgated in writing. In the case of any Participant on (i) sick leave, (ii) military leave or (iii) an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the Company or a Parent or Subsidiary of the Company as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Stock Option Agreement. The Committee will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the Termination Date).
Unvested Shares means Unvested Shares as defined in the Award Agreement.
16
Vested Shares means Vested Shares as defined in the Award Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
24. EXECUTION. To record the adoption of this Plan by the Board and the amendment and restatement of this Plan as set forth herein, the Company has caused its authorized officer to execute the same as of September 3, 2010.
ZYNGA GAME NETWORK INC. |
/s/ Reggie Davis |
Reggie Davis |
General Counsel and Secretary |
18
Exhibit 10.3
ZYNGA INC.
2007 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (the Agreement) is made and entered into as of the date of grant set forth below (the Date of Grant) by and between Zynga Inc., a Delaware corporation (the Company), and the participant named below (the Participant). Capitalized terms not defined herein shall have the meaning ascribed to them in the Companys 2007 Equity Incentive Plan (the Plan).
Participant: |
||
Social Security Number: | ||
Address: | ||
Total Option Shares: | ||
Exercise Price Per Share: | $ | |
Date of Grant: | ||
Vesting Start Date: | ||
Expiration Date: | ||
(unless earlier terminated under Section 5.6 of the Plan) | ||
Classification of Optionee | [ ] Employee | |
[ ] Non-Employee | ||
Type of Stock Option: | ||
Grant Number: |
1. Grant of Option. The Company hereby grants to Participant an option (this Option) to purchase the total number of shares of Class A Common Stock, $0.00005 par value, of the Company set forth above as Total Option Shares (the Shares) at the Exercise Price Per Share set forth above (the Exercise Price), subject to all of the terms and conditions of this Agreement and the Plan. If designated as an Incentive Stock Option above, the Option is intended to qualify as an incentive stock option (the ISO) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
2. Exercise Period.
2.1 Exercise Period of Option. Provided Participant continues to provide services to the Company or to any Parent or Subsidiary of the Company, the Shares issuable upon exercise of this Option will become vested and exercisable with respect to 25% of the Shares on the first anniversary of the Vesting Start Date set forth on the first page of this Agreement and 1/48th monthly thereafter until the Shares are vested with respect to 100% of the
Shares. If application of the vesting percentage causes a fractional share, such share shall be rounded down to the nearest whole share for each month except for the last month in such vesting period, at the end of which last month this Option shall become vested for the full remainder of the Shares. Notwithstanding any provision in the Plan or this Agreement to the contrary, Options for Unvested Shares (as defined in Section 2.2 of this Agreement) will not be exercisable on or after Participants Termination Date.
2.2 Vesting of Options. Shares that are vested pursuant to the schedule set forth in Section 2.1 are Vested Shares. Shares that are not vested pursuant to the schedule set forth in Section 2.1 are Unvested Shares.
2.3 Definitions.
(a) Cause means Termination because of:
(i) any willful, material violation by Participant of any law or regulation applicable to the business of the Company, Participants conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or any willful perpetration by Participant of a common law fraud;
(ii) Participants commission of an act of personal dishonesty that involves personal profit in connection with the Company or any other entity having a business relationship with the Company;
(iii) any material breach by Participant of any provision of any agreement or understanding between the Company and Participant regarding the terms of Participants service as an employee, officer, director or consultant to the Company, including without limitation, the willful and continued failure or refusal of Participant to perform the material duties required of Participant as an employee, officer, director or consultant of the Company, other than as a result of having a Disability, or a breach of any applicable invention assignment and confidentiality agreement or similar agreement between the Company and Participant;
(iv) Participants disregard of the policies of the Company so as to cause loss, damage or injury to the property, reputation or employees of the Company; or
(v) any other misconduct by Participant that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company.
No act or failure to act by the Participant shall be considered willful if done or omitted by the Participant in good faith with reasonable belief that such action or omission was in the best interests of the Company. All references to the Company in this definition of Cause shall include parent, subsidiary, affiliate and successor entities of the Company.
2.4 Expiration. The Option shall expire on the Expiration Date set forth above or earlier as provided in Section 3 below or pursuant to Section 5.6 of the Plan.
3. Termination.
3.1 Termination for Any Reason Except Death, Disability or Cause. If Participant is Terminated for any reason, except death, Disability or for Cause, the Option, to the extent (and only to the extent) that it would have been exercisable by Participant on the Termination Date, may be exercised by Participant no later than three months after the Termination Date, but in any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If Participant is Terminated because of death or Disability of Participant (or Participant dies within three months of Termination when Termination is for any reason other than Participants Disability or for Cause), the Option, to the extent that it is exercisable by Participant on the Termination Date, may be exercised by Participant (or Participants legal representative) no later than 12 months after the Termination Date, but in any event no later than the Expiration Date. Any exercise beyond (i) three months after the Termination Date when the Termination is for any reason other than the Participants death or disability, within the meaning of Section 22(e)(3) of the Code; or (ii) 12 months after the Termination Date when the termination is for Participants disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be an NQSO.
3.3 Termination for Cause. If the Participant is terminated for Cause, Participants Options expire immediately upon such Termination.
3.4 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer on Participant any right to continue in the employ of, or other relationship with, the Company or any Parent or Subsidiary of the Company, or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participants employment or other relationship at any time, with or without Cause.
4. Manner of Exercise.
4.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or in the case of exercise after Participants death or incapacity, Participants executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as Exhibit A, or in such other form as may be approved by the Committee from time to time (the Exercise Agreement), which shall set forth, inter alia, (i) Participants election to exercise the Option, (ii) the number of Shares being purchased, (iii) any restrictions imposed on the Shares and (iv) any representations, warranties and agreements regarding Participants investment intent and access to information as may be required by the Company to comply with applicable securities laws. If someone other than Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option and such person shall be subject to all of the restrictions contained herein as if such person were the Participant.
4.2 Limitations on Exercise. The Option may not be exercised unless such exercise is in compliance with all applicable federal and state securities laws, as they are in effect on the date of exercise. The Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by full payment of the Exercise Price for the shares being purchased in cash (by check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Companys Class A Common Stock that (i) either (A) have been paid for within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares); or (B) were obtained by Participant in the open public market; and (ii) are clear of all liens, claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant for services rendered;
(d) provided that a public market for the Companys stock exists: (i) through a same day sale commitment from Participant and a Company-designated broker-dealer that is a member of the Financial Industry Regulatory Authority (a Dealer) whereby Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased sufficient to pay for the total Exercise Price and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company, or (ii) through a margin commitment from Participant and a Dealer whereby Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the Dealer in a margin account as security for a loan from the Dealer in the amount of the total Exercise Price, and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company;
(e) any other form of consideration approved by the Committee; or
(f) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of the Option, Participant must pay or provide for any applicable federal, state and local withholding obligations of the Company. If the Committee permits, Participant may provide for payment of withholding taxes upon exercise of the Option by requesting that the Company retain the minimum number of Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld; but in no event will the Company withhold Shares if such withholding would result in adverse accounting consequences to the Company. In such case, the Company shall issue the net number of Shares to the Participant by deducting the Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in form and substance satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Participant, Participants authorized assignee, or Participants legal representative, and shall deliver certificates representing the Shares with the appropriate legends affixed thereto.
5. Notice of Disqualifying Disposition of ISO Shares. If the Option is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two years after the Date of Grant, and (ii) the date one year after
transfer of such Shares to Participant upon exercise of the Option, Participant shall immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant from the early disposition by payment in cash or out of the current wages or other compensation payable to Participant.
6. Compliance with Laws and Regulations. The Plan and this Agreement are intended to comply with Section 25102(o) of the California Corporations Code and any regulations relating thereto. Any provision of this Agreement which is inconsistent with Section 25102(o) or any regulations relating thereto shall, without further act or amendment by the Company or the Board, be reformed to comply with the requirements of Section 25102(o) and any regulations relating thereto. The exercise of the Option and the issuance and transfer of Shares shall be subject to compliance by the Company and Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Companys Class A Common Stock may be listed at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC, any state securities commission or any stock exchange to effect such compliance.
7. Nontransferability of Option. The Option may not be transferred in any manner other than by will or by the laws of descent and distribution, and, with respect to NQSOs, by instrument to an inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to immediate family as that term is defined in 17 C.F.R. 240.16a-1(e), and may be exercised during the lifetime of Participant only by Participant or in the event of Participants incapacity, by Participants legal representative. The terms of the Option shall be binding upon the executors, administrators, successors and assigns of Participant.
8. Companys Right of First Refusal. Before any Vested Shares held by Participant or any transferee of such Vested Shares may be sold or otherwise transferred (including without limitation a transfer by gift or operation of law), the Company and/or its assignee(s) shall have an assignable right of first refusal to purchase the Vested Shares to be sold or transferred on the terms and conditions set forth in the Exercise Agreement (the Right of First Refusal). The Companys Right of First Refusal will terminate when the Companys securities become publicly traded.
9. Tax Consequences. Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal and California tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
9.1 Exercise of ISO. If the Option qualifies as an ISO, there will be no regular federal or California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as a tax preference item for federal alternative minimum tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise.
9.2 Exercise of Nonqualified Stock Option. If the Option does not qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option. Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Participant is a current or former employee of the Company, the Company may be required to withhold from Participants compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.
9.3 Disposition of Shares. The following tax consequences may apply upon disposition of the Shares.
(a) Incentive Stock Options. If the Shares are held for more than 12 months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes. If Vested Shares purchased under an ISO are disposed of within the applicable one year or two year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.
(b) Nonqualified Stock Options. If the Shares are held for more than 12 months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain.
(c) Withholding. The Company may be required to withhold from the Participants compensation or collect from the Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income.
10. Privileges of Stock Ownership. Participant shall not have any of the rights of a shareholder with respect to any Shares until the Shares are issued to Participant.
11. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by Participant or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and Participant.
12. Entire Agreement. The Plan is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.
13. Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following: (i) at the time of personal delivery, if delivery is in person or by email; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one business day after deposit with an express overnight courier for United States deliveries, or
two business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries.
All notices for delivery outside the United States will be sent by facsimile or e-mail with confirmation of receipt, or by express courier. All notices not delivered personally or by facsimile or e-mail will be sent with postage and/or other charges prepaid and properly addressed to the Company at: 444 De Haro Street, Suite 132, San Francisco, CA 94107, 415-503-0222, or stockadmin@zynga.com and to the Participant at the address, facsimile number or email address set forth below the Participants signature line of this Agreement, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked Attention: Stock Plan Administrator.
14. Successors and Assigns. The Company may assign any of its rights under this Agreement including its rights to purchase Shares under the Right of First Refusal. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon Participant and Participants heirs, executors, administrators, legal representatives, successors and assigns.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to that body of laws pertaining to conflict of laws.
16. Acceptance. Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. Participant has read and understands the terms and provisions thereof, and accepts the Option subject to all the terms and conditions of the Plan and this Agreement. Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the Shares and that Participant should consult a tax adviser prior to such exercise or disposition.
17. Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.
18. Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to sections and exhibits will mean sections and exhibits to this Agreement.
19. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.
20. Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto.
If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good faith negotiations.
21. Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and Participant has executed this Agreement, effective as of the Date of Grant.
ZYNGA INC. | PARTICIPANT | |||||||||
By: | ||||||||||
Signature | ||||||||||
Reginald D. Davis | ||||||||||
(Please print name) | ||||||||||
Secretary, General Counsel | ||||||||||
444 De Haro Street, Suite 132 | Address: | |||||||||
San Francisco, CA 94107 | ||||||||||
Fax: | ||||||||||
Email: |
Exhibit 10.14
OFFICE LEASE
699 EIGHTH STREET
SAN FRANCISCO, CALIFORNIA
LANDLORD:
650 TOWNSEND ASSOCIATES LLC
TENANT:
ZYNGA GAME NETWORK INC.
TABLE OF CONTENTS |
||||||||
Page | ||||||||
1. | Definitions | 1 | ||||||
1.1 Terms Defined | 1 | |||||||
1.2 Basic Lease Information | 21 | |||||||
2. | Premises | 22 | ||||||
2.1 Lease of Premises | 22 | |||||||
2.2 Delivery of Premises | 22 | |||||||
2.3 Delay Rent Credits | 23 | |||||||
2.4 Termination for Delay in Completion | 23 | |||||||
2.5 Acceptance of the Premises | 24 | |||||||
2.6 Conditions of Delivery of Certain Premises | 24 | |||||||
2.7 Lease of Temporary Premises | 25 | |||||||
2.8 Tenant Construction | 26 | |||||||
3. | Term | 28 | ||||||
3.1 Term of Lease | 28 | |||||||
3.2 Early Access | 28 | |||||||
3.3 Tenants Early Termination Options | 28 | |||||||
3.4 Option to Extend | 30 | |||||||
4. | Rent | 34 | ||||||
4.1 Obligation to Pay Base Rent | 34 | |||||||
4.2 Manner of Rent Payment | 34 | |||||||
4.3 Additional Rent | 35 | |||||||
4.4 Late Payment of Rent; Interest | 35 | |||||||
4.5 Abatement of Base Rent | 35 | |||||||
5. | Calculation and Payments of Escalation Rent | 35 | ||||||
5.1 Payment of Estimated Escalation Rent | 35 | |||||||
5.2 Escalation Rent Statement and Adjustment | 36 | |||||||
5.3 Adjustments to Operating Expenses | 37 | |||||||
5.4 Adjustments to Tenants Percentage Share | 38 | |||||||
5.5 Payment of Real Property Taxes in Installments | 38 | |||||||
5.6 Proration for Partial Year | 38 | |||||||
5.7 Certain Real Property Taxes Limited | 38 | |||||||
5.8 Inspection of Landlords Records | 39 | |||||||
6. | Payments by Tenant | 40 | ||||||
6.1 Impositions | 40 | |||||||
6.2 Net of Electricity | 40 | |||||||
7. | Use of Premises | 41 | ||||||
7.1 Permitted Use | 41 | |||||||
7.2 Ancillary Uses | 41 | |||||||
7.3 Landlord Cooperation | 41 | |||||||
7.4 Compliance with Requirements | 42 | |||||||
7.5 Compliance With Environmental Laws; Use of Hazardous Materials | 42 |
i
7.6 Sustainable Building Operations | 43 | |||||||
7.7 Recycling and Waste Management | 44 | |||||||
7.8 Landlord Covenants | 44 | |||||||
7.9 No Third Party Beneficiary | 44 | |||||||
7.10 Generators | 44 | |||||||
8. | Building Services | 46 | ||||||
8.1 Building-Standard Services | 46 | |||||||
8.2 No Representation | 46 | |||||||
8.3 Building Security Services and Access | 46 | |||||||
8.4 Interruption or Unavailability of Services | 47 | |||||||
8.5 Tenants Use of Excess Electricity and Water; Premises Occupancy Load | 48 | |||||||
8.6 Provision of Additional Services; After-Hours HVAC Services | 48 | |||||||
8.7 Tenants Supplemental Air Conditioning | 49 | |||||||
8.8 Janitorial Service | 49 | |||||||
8.9 Tenant to Provide Security Services | 49 | |||||||
8.10 Controls | 50 | |||||||
8.11 Service Providers | 50 | |||||||
8.12 Property Management | 50 | |||||||
9. | Maintenance and Repair | 50 | ||||||
9.1 Landlords Maintenance Obligations | 50 | |||||||
9.2 Operable Building Systems upon Lease Commencement | 51 | |||||||
9.3 Tenants Obligations | 51 | |||||||
10. | Alterations to Premises | 51 | ||||||
10.1 Landlord Consent; Procedure | 51 | |||||||
10.2 General Requirements | 52 | |||||||
10.3 Landlords Right to Inspect | 53 | |||||||
10.4 Tenants Obligations Upon Completion | 53 | |||||||
10.5 Ownership and Removal of Alterations | 53 | |||||||
10.6 Minor Alterations | 54 | |||||||
10.7 Landlords Fee | 54 | |||||||
11. | Liens | 54 | ||||||
12. | Damage or Destruction | 55 | ||||||
12.1 Repair Obligations | 55 | |||||||
12.2 Termination Rights | 55 | |||||||
12.3 Completion of Repairs | 56 | |||||||
12.4 Rent Abatement | 56 | |||||||
12.5 Waiver of Statutory Provisions | 56 | |||||||
12.6 Casualty Following Exercise of Purchase Option | 57 | |||||||
13. | Eminent Domain | 57 | ||||||
13.1 Lease Termination | 57 | |||||||
13.2 Partial Taking | 57 | |||||||
13.3 Landlords Termination Right | 57 | |||||||
13.4 Compensation | 57 | |||||||
13.5 Waiver | 58 |
ii
14. | Insurance | 58 | ||||||
14.1 Liability Insurance | 58 | |||||||
14.2 Form of Policies | 58 | |||||||
14.3 Landlords Insurance | 59 | |||||||
15. | Waiver of Subrogation Rights | 59 | ||||||
16. | Waiver of Liability and Indemnification | 59 | ||||||
16.1 Indemnification | 60 | |||||||
16.2 Duty to Defend | 60 | |||||||
16.3 Survival | 60 | |||||||
17. | Assignment and Subletting | 60 | ||||||
17.1 Restriction on Transfers | 61 | |||||||
17.2 Notice of Proposed Transfer | 61 | |||||||
17.3 Reasonable Conditions | 62 | |||||||
17.4 Transfer Premium | 62 | |||||||
17.5 Terms of Consent | 63 | |||||||
17.6 Subsequent Consents | 63 | |||||||
17.7 Permitted Transfers | 63 | |||||||
17.8 Permitted Occupancy by Certain Business Affiliates | 64 | |||||||
17.9 Arbitration | 64 | |||||||
18. | Rules and Regulations | 64 | ||||||
19. | Entry of Premises by Landlord; Modification to Common Areas | 65 | ||||||
19.1 Entry of Premises | 65 | |||||||
19.2 Modifications to Common Areas | 65 | |||||||
19.3 Waiver of Claims | 66 | |||||||
20. | Default and Remedies | 66 | ||||||
20.1 Events of Default | 66 | |||||||
20.2 Landlords Remedies Upon Occurrence of Event of Default | 67 | |||||||
20.3 Damages Upon Termination | 67 | |||||||
20.4 Computation of Certain Rent for Purposes of Default | 68 | |||||||
20.5 Landlords Right to Cure Defaults | 68 | |||||||
20.6 Remedies Cumulative | 68 | |||||||
20.7 Landlords Default | 68 | |||||||
21. | Subordination, Attornment and Nondisturbance | 69 | ||||||
21.1 Subordination and Attornment | 69 | |||||||
21.2 Mortgage Subordination | 70 | |||||||
21.3 Notice to Encumbrancer | 70 | |||||||
21.4 Rent Payment Direction | 70 | |||||||
21.5 SNDA | 70 | |||||||
22. | Sale or Transfer by Landlord; Lease Non-Recourse | 71 | ||||||
22.1 Release of Landlord on Transfer | 71 | |||||||
22.2 Lease Nonrecourse to Landlord; Limitation of Liability | 71 | |||||||
23. | Estoppel Certificate | 71 |
iii
23.1 Tenant Estoppel | 71 | |||||||
23.2 Landlord Estoppel | 71 | |||||||
24. | No Light, Air, or View Easement | 72 | ||||||
25. | Holding Over | 72 | ||||||
26. | Letter Of Credit | 72 | ||||||
26.1 Delivery of Letter of Credit | 72 | |||||||
26.2 Transfer of Letter of Credit | 73 | |||||||
26.3 In General | 73 | |||||||
26.4 Application of Letter of Credit | 74 | |||||||
26.5 Security Deposit | 75 | |||||||
26.6 Increase in Letter of Credit Amount | 75 | |||||||
26.7 Reduction in Letter of Credit | 77 | |||||||
27. |
Waiver |
77 | ||||||
28. |
Notices; Tenants Agent for Service |
77 | ||||||
29. |
Authority |
78 | ||||||
30. |
Parking; Transportation |
78 | ||||||
30.1 Lease of Parking Spaces | 78 | |||||||
30.2 Tenants Right to Secure Parking | 79 | |||||||
30.3 Use of the Parking Spaces | 79 | |||||||
30.4 Management of Parking Garage | 80 | |||||||
30.5 Abatement | 80 | |||||||
30.6 Shuttle Service | 80 | |||||||
31. |
Communications and Computer Lines |
80 | ||||||
31.1 Tenants Rights | 80 | |||||||
31.2 Landlords Rights | 81 | |||||||
31.3 Removal; Line Problems | 81 | |||||||
32. |
Miscellaneous |
82 | ||||||
32.1 No Joint Venture | 82 | |||||||
32.2 Successors and Assigns | 82 | |||||||
32.3 Construction and Interpretation | 82 | |||||||
32.4 Severability | 82 | |||||||
32.5 Entire Agreement | 82 | |||||||
32.6 Governing Law | 83 | |||||||
32.7 Costs and Expenses | 83 | |||||||
32.8 Standards of Performance and Approvals | 83 | |||||||
32.9 Brokers | 83 | |||||||
32.10 Memorandum of Lease | 84 | |||||||
32.11 Quiet Enjoyment | 84 | |||||||
32.12 Force Majeure | 84 | |||||||
32.13 Surrender of Premises | 84 | |||||||
32.14 Exhibits | 85 | |||||||
32.15 Survival of Obligations | 85 |
iv
32.16 Time of the Essence | 85 | |||||||
32.17 Waiver of Trial By Jury; Waiver of Counterclaim | 85 | |||||||
32.18 Consent to Venue | 86 | |||||||
32.19 Financial Statements | 86 | |||||||
32.20 Subdivision; Future Ownership | 86 | |||||||
32.21 Modification of Lease | 87 | |||||||
32.22 No Option | 87 | |||||||
32.23 Reserved | 87 | |||||||
32.24 Compliance with Anti-Terrorism Law | 87 | |||||||
32.25 First Source Hiring Program | 87 | |||||||
32.26 Landlord Lien Waiver | 88 | |||||||
32.27 Rent Not Based on Income | 88 | |||||||
32.28 Counterparts | 88 | |||||||
33. |
Expansion Options |
88 | ||||||
33.1 Expansion Option at Lease Terms | 88 | |||||||
33.2 Expansion Option at Modified Lease Terms | 90 | |||||||
33.3 Expansion Option at Market Terms | 92 | |||||||
33.4 Conditions of Exercise | 94 | |||||||
33.5 Expansion Premises Tenant Improvement Allowance | 94 | |||||||
33.6 Letter of Credit Amendment; Commissions | 94 | |||||||
33.7 Amendment to Lease | 95 | |||||||
33.8 Expansion Rent Adjustment | 95 | |||||||
33.9 Rights Personal to Original Tenant | 95 | |||||||
34. |
Right of First Refusal |
95 | ||||||
34.1 First Refusal Space | 95 | |||||||
34.2 First Refusal Notice | 95 | |||||||
34.3 Lease of First Refusal Space | 96 | |||||||
34.4 Conditions of Exercise | 96 | |||||||
34.5 Letter of Credit Amendment; Commissions | 96 | |||||||
34.6 Amendment to Lease | 97 | |||||||
34.7 Suite 500 Premises Limited Rights | 97 | |||||||
34.8 Rights Personal to Original Tenant | 97 | |||||||
35. |
Right of First Offer |
97 | ||||||
35.1 First Offer Space | 97 | |||||||
35.2 Offering Notice | 97 | |||||||
35.3 Lease of First Offer Space | 98 | |||||||
35.4 Conditions of Exercise | 98 | |||||||
35.5 Letter of Credit Amendment | 99 | |||||||
35.6 Amendment to Lease | 99 | |||||||
35.7 Rights Personal to Original Tenant | 99 | |||||||
36. |
Purchase Option |
99 | ||||||
36.1 Grant of Purchase Option | 99 | |||||||
36.2 Offer Procedure | 99 | |||||||
36.3 Purchase Agreement | 100 | |||||||
36.4 Rejection of Offer | 100 | |||||||
36.5 Excluded Transfers | 101 | |||||||
36.6 Condition of Title | 101 |
v
36.7 Right to Effect a Like Kind Exchange | 101 | |||||||
36.8 Brokers Commission | 102 | |||||||
36.9 No Implied Obligation | 102 | |||||||
36.10 Personal to Original Tenant | 102 | |||||||
36.11 Time of Essence | 102 | |||||||
37. |
Rooftop Parking Area; Terrace and Dog Run |
102 | ||||||
37.1 Use | 102 | |||||||
37.2 Improvements to Parking Garage Roof Space | 102 | |||||||
37.3 Protection of Project | 102 | |||||||
37.4 Use and Maintenance | 103 | |||||||
37.5 Costs | 103 | |||||||
37.6 Conditions to Continued Use | 103 | |||||||
37.7 Lease Provisions | 104 | |||||||
38. |
Tenants Rooftop and Other Equipment |
104 | ||||||
38.1 Grant of License | 104 | |||||||
38.2 Interference | 104 | |||||||
38.3 Roof Repairs | 105 | |||||||
38.4 Rules and Regulations | 105 | |||||||
38.5 Transfer of Rights | 105 | |||||||
39. |
Sidewalk Areas |
105 | ||||||
40. |
Cafeteria |
106 | ||||||
40.1 Construction and Use | 106 | |||||||
40.2 Operation | 106 | |||||||
40.3 Costs | 107 | |||||||
41. |
Tenant Competitors |
107 | ||||||
42. |
Dogs |
108 | ||||||
42.1 General Conditions | 108 | |||||||
42.2 Costs and Expenses | 108 | |||||||
42.3 Insurance; Indemnity | 108 | |||||||
42.4 Rights Personal to Original Tenant | 109 | |||||||
43. |
Storage Premises |
109 | ||||||
44. |
Signs |
109 | ||||||
44.1 Building Directory | 109 | |||||||
44.2 Interior Signage | 109 | |||||||
44.3 Exterior Signs | 110 | |||||||
44.4 Approvals | 111 | |||||||
44.5 Maintenance and Removal | 111 | |||||||
44.6 Restriction on Competitor Signage | 112 | |||||||
44.7 Assignment and Subleasing | 112 | |||||||
45. |
JAMS ARBITRATION |
112 | ||||||
45.1 General Submittals to Arbitration | 112 | |||||||
45.2 JAMS | 112 |
vi
45.3 Provisional Remedies | 113 | |||||||
45.4 Waiver of Rights to Litigate in a Court or Jury Trial | 113 | |||||||
46. |
Representations and Warranties. Landlord warrants and represents that: |
113 | ||||||
46.1 No Other Third-Party Rights | 113 | |||||||
46.2 Encumbrances | 114 |
vii
Exhibits |
||
Exhibit A-1: | Floor Plans of Premises and Storage Space | |
Exhibit A-2: | Floor Plans of Temporary Premises | |
Exhibit A-3: | Floor Plans of Expansion Premises | |
Exhibit A-4: | Floor Plans Depicting Relocation Tenants | |
Exhibit A-5: | Reserved | |
Exhibit A-6: | Plan Depicting Location of Sidewalk Area | |
Exhibit B-1: | Rules and Regulations | |
Exhibit B-2: | Rooftop Rules | |
Exhibit C: | Work Letter | |
Exhibit D: | Confirmation of Lease Term | |
Exhibit E: | Janitorial Specifications | |
Exhibit F: | Form of Subordination, Non-Disturbance and Attornment | |
Exhibit G: | Form of Letter of Credit | |
Exhibit H: | Example of Calculation of Weighted Average Abatement Period | |
Exhibit I: | Location of Existing Generators | |
Exhibit J: | Landlord Security Program | |
Exhibit K: | Location of Parking Spaces | |
Exhibit L: | Memorandum of Lease | |
Exhibit M: | Tenant Competitors | |
Exhibit N: | Reserved | |
Exhibit O: | Reserved | |
Exhibit P: | Existing Encumbrances | |
Exhibit Q: | Form of Estoppel Certificate | |
Exhibit R: | Form of Confidentiality Agreement | |
Exhibit S: | Early Termination Example Calculations |
viii
OFFICE LEASE
699 EIGHTH STREET
San Francisco, California
BASIC LEASE INFORMATION
Lease Date: |
September 24, 2010 |
Landlord: |
650 Townsend Associates LLC, |
a Delaware limited liability company
Tenant: |
Zynga Game Network Inc., |
a Delaware corporation
Premises: |
A total of approximately 267,866 Adjusted Rentable Square Feet (as defined in Section 1.1.1 below) at the Building comprised of the following: |
(i) | Suites 120 and 140 located on the concourse level containing approximately 75,000 Adjusted Rentable Square Feet (the Concourse Premises); |
(ii) | Suites 50, 60 and 70 and the lobby located on the first floor containing approximately 20,425 Adjusted Rentable Square Feet (the First Floor Premises); |
(iii) | Suites 250, 252, 260, 270, 271, 275, 280, 285 and 290 located on the second floor containing approximately 24,066 Adjusted Rentable Square Feet and certain corridor space adjacent thereto containing approximately 8,000 Adjusted Rentable Square Feet (Second Floor Corridor Space), totaling approximately 32,066 Adjusted Rentable Square Feet on the second floor (the Second Floor Premises); |
(iv) | Suites 350, 352, 360, 365 and 375 located on the third floor containing approximately 36,492 Adjusted Rentable Square Feet (Third Floor Premises); |
(v) | Suites 550 and 575 located on the fifth floor containing approximately 52,071 Adjusted Rentable Square Feet (the Fifth Floor Premises); and |
(vi) | Suites 650, 675 and 680 located on the sixth floor containing approximately 51,812 Adjusted Rentable Square Feet (the Sixth Floor Premises). |
Floor plans of the Premises are attached hereto as Exhibit A 1. |
ix
Term: |
Commencing on the Lease Date and expiring on the day preceding the seventh (7th) year anniversary of the first full month following the Commencement Date, except as may be extended pursuant to Section 3.4 below. |
Commencement Date: |
The earlier to occur of (a) the date which is thirty (30) days after the Phase 1 Substantial Completion Date (as defined in the Work Letter) and (b) the date Tenant commences business operations in at least one hundred nineteen thousand (119,000) Adjusted Rentable Square Feet of the Phase 1 Premises. The Commencement Date shall occur before (and shall be a precondition to) the occurrence of the Phase 2 Substantial Completion Date (as defined in the Work Letter). |
Target Phase 1 Completion Date: |
April 1, 2011 |
Target Phase 2 Completion Date: |
June 1, 2011 |
Phase 1 Rent Commencement Date: |
The Commencement Date, subject to abatement as provided in Section 4.5 below. |
Phase 2 Rent Commencement Date: |
The earlier to occur of (a) the date which is thirty (30) days after the Phase 2 Substantial Completion Date or (b) with respect to each Suite comprising the Phase 2 Premises, the date Tenant commences business operations in such Suite, subject to abatement as provided in Section 4.5 below. |
Expiration Date: |
The day preceding the seventh (7th) year anniversary of the first full month following the Commencement Date. |
Base Rent (Net of Electrical):
Time Period |
Annual Base Rent/ARSF |
Annual Base Rent | Monthly Base Rent |
|||||||
Phase 1 Rent Commencement Date until the Phase 2 Rent Commencement Date |
$24.50 (except for the Concourse Premises which is $15.00) |
$ | 4,717,606.50 | $ | 393,133.88 | |||||
Phase 2 Rent Commencement Date to the first anniversary of the Phase 1 Rent Commencement Date |
$24.50 (except for the Concourse Premises which is $15.00) |
$ | 5,850,217.00 | $ | 487,518.08 | |||||
First anniversary of the Phase 1 Rent Commencement Date to the second anniversary of the Phase 1 Rent Commencement Date |
$25.50 (except for the Concourse Premises which is $16.00) |
$ | 6,118,083.00 | $ | 509,840.25 |
x
Second anniversary of the Phase 1 Rent Commencement Date to the third anniversary of the Phase 1 Rent Commencement Date |
$26.50 (except for the Concourse Premises which is $17.00) |
$ | 6,385,949.00 | $ | 532,162.42 | |||||
Third anniversary of the Phase 1 Rent Commencement Date to the fourth anniversary of the Phase 1 Rent Commencement Date |
$27.50 (except for the Concourse Premises which is $18.00) |
$ | 6,653,815.00 | $ | 554,484.58 | |||||
Fourth anniversary of the Phase 1 Rent Commencement Date to the fifth anniversary of the Phase 1 Rent Commencement Date |
$28.50 (except for the Concourse Premises which is $19.00) |
$ | 6,921,681.00 | $ | 576,806.75 | |||||
Fifth anniversary of the Phase 1 Rent Commencement Date to the sixth anniversary of the Phase 1 Rent Commencement Date |
$29.50 (except for the Concourse Premises which is $20.00) |
$ | 7,189,547.00 | $ | 599,128.92 | |||||
Sixth anniversary of the Phase 1 Rent Commencement Date to the Expiration Date |
$30.50 (except for the Concourse Premises which is $21.00) |
$ | 7,457,413.00 | $ | 621,451.08 | |||||
Extension Terms |
See Section 3.4 below |
Base Year: |
Calendar year 2011 |
Tenants Percentage Share: |
33.12% as of the Phase 1 Commencement Date (initially being the quotient of 221,637 Adjusted Rentable Square Feet of the Phase 1 Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100); and |
40.03% as of the Phase 2 Commencement Date (initially being the quotient of 267,866 Adjusted Rentable Square Feet of the Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100). |
Letter of Credit/Security Deposit: |
As described in Article 26 |
Number of Parking Spaces: |
One (1) parking space for each 1,800 Adjusted Rentable Square Feet in the Premises |
Tenants Address: |
Prior to Commencement Date: |
Zynga Game Network Inc.
365 Vermont Street
San Francisco, CA 94103
Attention: Director of Real Estate
xi
with a copy to: |
Zynga Game Network Inc. |
365 Vermont Street
San Francisco, CA 94103
Attention: General Counsel
and a copy to: |
Paul, Hastings, Janofsky & Walker LLP |
55 Second Street, 24th Floor
San Francisco, CA 94105
Attention: Stephen I. Berkman, Esq.
On and after Commencement Date:
Zynga Game Network Inc. |
699 Eighth Street
San Francisco, California 94103
Attention: Director of Real Estate
with a copy to: |
Zynga Game Network Inc. |
699 Eighth Street
San Francisco, California 94103
Attention: General Counsel
and a copy to: |
Paul, Hastings, Janofsky & Walker LLP |
55 Second Street, 24th Floor
San Francisco, CA 94105
Attention: Stephen I. Berkman, Esq.
Landlords Address for Notices: |
650 Townsend Associates LLC |
c/o TMG Partners
100 Bush Street, 26th Floor
San Francisco, California 94104
Attn: Lynn Tolin
Landlords Address for Payments: |
650 Townsend Associates LLC |
P.O. Box 49034
San Jose, California 95161-9034
Brokers:
Landlords Broker: |
The CAC Group (Bruce A. Wilson and Steve Anderson) |
Tenants Broker: |
Colliers International (Jay Sternberg and Philip Arnautou) |
Exhibits
Exhibit A-1: Floor Plans of Premises and Storage Space
Exhibit A-2: Floor Plans of Temporary Premises
Exhibit A-3: Floor Plans of Expansion Premises
Exhibit A-4: Floor Plans Depicting Relocation Tenants
Exhibit A-5: Reserved
Exhibit A-6: Plan Depicting Location of Sidewalk Area
xii
Exhibit B-1: |
Rules and Regulations | |
Exhibit B-2: |
Rooftop Rules | |
Exhibit C: |
Work Letter | |
Exhibit D: |
Confirmation of Lease Term | |
Exhibit E: |
Janitorial Specifications | |
Exhibit F: |
Form of Subordination, Non-Disturbance and Attornment | |
Exhibit G: |
Form of Letter of Credit | |
Exhibit H: |
Example of Calculation of Weighted Average Abatement Period | |
Exhibit I: |
Location of Existing Generators | |
Exhibit J: |
Landlord Security Program | |
Exhibit K: |
Location of Parking Spaces | |
Exhibit L: |
Memorandum of Lease | |
Exhibit M: |
Tenant Competitors | |
Exhibit N: |
Reserved | |
Exhibit O: |
Reserved | |
Exhibit P: |
Existing Encumbrances | |
Exhibit Q: |
Form of Estoppel Certificate | |
Exhibit R: |
Form of Confidentiality Agreement | |
Exhibit S: | Early Termination Example Calculations |
xiii
OFFICE LEASE
THIS LEASE is made and entered into by and between Landlord and Tenant as of the Lease Date.
Landlord and Tenant hereby agree as follows:
1. Definitions.
1.1 Terms Defined. The following terms have the meanings set forth below. Certain other terms have the meanings set forth elsewhere in this Lease.
1.1.1 8th Street Signage. The term 8th Street Signage shall have the meaning set forth in Section 44.3.3 below.
1.1.2 AAA. The term AAA shall have the meaning set forth in Section 45.2 below.
1.1.3 Abatement Event. The term Abatement Event shall have the meaning set forth in Section 8.4 below.
1.1.4 Acceptance Notice. The term Acceptance Notice shall have the meaning set forth in Section 36.2.2 below.
1.1.5 Acceptance Period. The term Acceptance Period shall have the meaning set forth in Section 36.2.2 below.
1.1.6 Additional Generator. The term Additional Generator shall have the meaning set forth in Section 7.10.2 below.
1.1.7 Adjusted Rentable Square Feet. The term Adjusted Rentable Square Feet means the rentable square footage of the Premises or the Building, as the case may be, determined in accordance the Building Owners and Managers Association standard method of measurement (ANSI Z65/1-1996) and adjusted based on a load factor determined by Landlords architect and approved by Tenants architect.
1.1.8 Alterations. The term Alterations means alterations, additions or other improvements to the Premises made by or on behalf of Tenant, other than the Tenant Improvements and Ancillary Tenant Improvements.
1.1.9 Amortization Rate. The term Amortization Rate means the applicable Interest Rate at the time a capital improvement or capital asset is installed, constructed or acquired (whichever is earliest), but not more than the maximum rate permitted by Applicable Laws at the time such capital improvements or capital assets are installed, constructed or acquired (whichever is earliest).
1.1.10 Ancillary Tenant Improvements. The term Ancillary Tenant Improvements shall have the meaning set forth in the Work Letter.
1
1.1.11 Ancillary Uses. The term Ancillary Uses means fitness/health facility (including showers for users of such facility), ATM facility, travel agency, concessions and franchises related specifically to office services functions that may be outsourced by a tenant (such as food service, reproduction services, mail room services, cleaning, security, IT services, MEP services and/or engineering services), childcare facility, auditorium, board rooms, libraries, training rooms and facilities, audiovisual and closed circuit television facilities, messenger and mailroom facilities, reproduction and copying facilities, word processing centers, computer and communications facilities, pantries (including vending machines), file rooms (including condensed file rooms with reinforced flooring if required), meeting and conference centers and rooms, storage space and kitchens, serveries, cafeterias and dining rooms, in all cases as a use ancillary to Tenants use of the Premises for general office and administrative use.
1.1.12 Annual Statement. The term Annual Statement shall have the meaning set forth in Section 5.2 below.
1.1.13 Anti-Terrorism Law. The term Anti-Terrorism Law means any Applicable Laws relating to terrorism, anti-terrorism, money-laundering or anti-money laundering activities, including without limitation the United States Bank Secrecy Act, the United States Money Laundering Control Act of 1986, Executive Order No. 13224, and Title 3 of the USA Patriot Act, and any regulations promulgated under any of them.
1.1.14 Anticipated Delivery Date. The term Anticipated Delivery Date shall have the meaning set forth in Section 33.1.1 below.
1.1.15 Applicable Laws. The term Applicable Laws means all applicable laws, statutes, ordinances, orders, judgments, decrees, regulations, permit conditions, and requirements of all courts and all federal, state, county, municipal or other governmental or quasi-governmental authorities, departments, commissions, agencies and boards now or hereafter in effect, including, but not limited to, the Americans With Disabilities Act (42 U.S.C. § 12101 et seq.) and Title 24 of the California Code of Regulations and all regulations and guidelines promulgated thereunder.
1.1.16 Approval. The term approval shall have the meaning set forth in Section 32.8 below.
1.1.17 Arbitration of Disputes. The term Arbitration of Disputes shall have the meaning set forth in Section 45.1 below.
1.1.18 Arbitration Notice. The term Arbitration Notice shall have the meaning set forth in Section 45.2 below.
1.1.19 Arbitration Panel. The term Arbitration Panel shall have the meaning set forth in Section 3.4.6 (d) below.
1.1.20 Arbitration Rules. The term Arbitration Rules shall have the meaning set forth in Section 45.2 below.
1.1.21 Arbitrator. The term Arbitrator shall have the meaning set forth in Section 45.2 below.
1.1.22 Available Expansion Premises. The term Available Expansion Premises shall mean (a) those portions of the Expansion Premises comprised of Suite 460 (as defined
2
herein), Suite 500 (as defined herein), and Suite 600 (as defined herein), each as depicted on the floor plans attached hereto as Exhibit A-3, all of which are Available for Lease (as defined herein) as of the Lease Date and to the extent such portions remain Available for Lease during any applicable period in which an Expansion Option may be exercised and (b) the remaining portions of the Expansion Premises that first become and remain Available for Lease during any applicable period in which an Expansion Option may be exercised.
1.1.23 Available for Lease: The term Available for Lease shall mean an applicable space is vacant or, if occupied, when Landlord has reasonably determined that it will place the applicable space on the market for lease.
1.1.24 Bank. The term Bank shall have the meaning set forth in Section 26.1 below.
1.1.25 Bankruptcy Code. The term Bankruptcy Code means the United States Bankruptcy Code or any state bankruptcy code.
1.1.26 Base Rent. The term Base Rent shall have the meaning set forth in Section 4.1 below.
1.1.27 Base Year. The term Base Year shall have the meaning set forth in the Basic Lease Information.
1.1.28 Base Real Property Taxes. The term Base Real Property Taxes means the Real Property Taxes allocable to the Base Year, including any reduction in Base Real Property Taxes obtained by Landlord after the date hereof as a result of a commonly called Proposition 8 application; provided, however, that the Base Real Property Taxes shall hereafter be increased by (a) the amount of any increase in Real Property Taxes due solely to the expiration or reversal of such Proposition 8 application or (b) the positive difference between a reduction to the Real Property Taxes obtained by Landlord as a result of a Proposition 8 application applicable to the Base Year and a reduction to the Real Property Taxes obtained by Landlord as a result of a Proposition 8 application applicable to any year subsequent to the Base Year.
1.1.29 Bona Fide Offer. The term Bona Fide Offer shall have the meaning set forth in Section 34.2 below.
1.1.30 Building. The term Building means the six-story office building located within the Project, including related Common Areas and the Parking Garage.
1.1.31 Building Fuel Tank. The term Building Fuel Tank shall have the meaning set forth in Section 7.10.1 below.
1.1.32 Building Holidays. The term Building Holidays means New Years Day, Martin Luther King, Jr. Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after Thanksgiving and Christmas Day.
1.1.33 Building Rules. The term Building Rules shall have the meaning set forth in Section 18 below.
1.1.34 Building Standard Hours. The term Building Standard Hours means 8:00 a.m. to 6:00 p.m. on weekdays (except Building Holidays).
3
1.1.35 Building Systems. The term Building Systems means all systems serving the Building in general, including, but not limited to, the fire/life safety, electrical, plumbing, HVAC, security and telecommunications systems, including all components thereof and related equipment, but excluding any equipment that is separately installed by or on behalf of Tenant and any distribution systems or equipment existing within the Premises as of the Lease Date.
1.1.36 Business Affiliates. The term Business Affiliates shall have the meaning set forth in Section 17.8 below.
1.1.37 Cable Path. The term Cable Path shall have the meaning set forth in Section 38.1 below.
1.1.38 Cafeteria. The term Cafeteria shall have the meaning set forth in Section 40.1 below.
1.1.39 Casualty. The term Casualty means fire, earthquake, or other event of a sudden, unexpected, or unusual nature.
1.1.40 Change of Ownership Transaction. The term Change of Ownership Transaction shall have the meaning set forth in Section 17.1 below.
1.1.41 Claims. The term Claims means any and all obligations, losses, claims, actions (including remedial or enforcement actions of any kind and administrative or judicial proceedings, suits, orders or judgments), causes of action, liabilities, penalties, damages (excluding, except with respect to third-party claims, foreseeable and unforeseeable consequential damages and punitive damages), costs and expenses (including reasonable attorneys and consultants fees and expenses).
1.1.42 Common Areas. The term Common Areas means all areas of the Project designated by Landlord from time to time for the common use or benefit of occupants of the Building, and their employees and invitees, or the public.
1.1.43 Comparable Buildings. The term Comparable Buildings means the other office buildings located in the South of Market and Showplace Square sub-market areas of San Francisco, California, that are comparable in terms of age, size, location, quality of construction and quality of common area improvements to the Building.
1.1.44 Comparison Leases. The term Comparison Leases shall have the meaning set forth in Section 3.4.4 below.
1.1.45 Complete Termination. The term Complete Termination shall have the meaning set forth in Section 2.4.1 below.
1.1.46 Confirmation. The term Confirmation shall have the meaning set forth in Section 3.1 below.
1.1.47 Connections. The term Connections shall have the meaning set forth in Section 38.1 below.
1.1.48 Construction Completion Date. The term Construction Completion Date shall have the meaning set forth in Section 2.8 (b) below.
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1.1.49 Control. The term Control means the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of more than fifty percent (50%) of the voting interest in, any person or entity.
1.1.50 Current Assets. The term Current Assets shall have the meaning set forth in Section 26.6.3 below.
1.1.51 Current Liabilities. The term Current Liabilities shall have the meaning set forth in Section 26.6.4 below.
1.1.52 Deed. The term Deed shall have the meaning set forth in Section 36.6 below.
1.1.53 Delay Rent Credits. The term Delay Rent Credits shall have the meaning set forth in Section 2.3 below.
1.1.54 Delayed Delivery Premises. The term Delayed Delivery Premises shall have the meaning set forth in Section 2.6.1 below.
1.1.55 Deposit. The term Deposit shall have the meaning set forth in Section 26.5 below.
1.1.56 Determination. The term Determination shall have the meaning set forth in Section 3.4.6 (a) below.
1.1.57 Early Phase 2 Occupancy. The term Early Phase 2 Occupancy shall have the meaning set forth in Section 2.2.2 below.
1.1.58 Early Phase 2 Occupancy Space. The term Early Phase 2 Occupancy Space shall have the meaning set forth in Section 2.2.2 below.
1.1.59 Early Termination Date. The term Early Termination Date shall have the meaning set forth in Section 3.3.1 below.
1.1.60 Early Termination Option. The term Early Termination Option shall have the meaning set forth in Section 3.3.1 below.
1.1.61 Eligibility Period. The term Eligibility Period shall have the meaning set forth in Section 8.4 below.
1.1.62 Encumbrance. The term Encumbrance means any ground lease or underlying lease, or the lien of any mortgage, deed of trust, and other encumbrances now or hereafter placed on or against the Building or the Project, or both, and all renewals, extensions, modifications, consolidations and replacements thereof.
1.1.63 Encumbrancer. The term Encumbrancer means the holder of the beneficial interest under an Encumbrance.
1.1.64 Environmental Laws. The term Environmental Laws means all Applicable Laws in any way relating to or regulating human health or safety, industrial hygiene, or the
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use, generation, handling, emission, release, discharge, storage or disposal of Hazardous Materials, now or hereafter in force, as amended from time to time.
1.1.65 Equipment. The term Equipment shall have the meaning set forth in Section 38.1 below.
1.1.66 Escalation Rent. The term Escalation Rent means the Tenants Percentage Share of the total dollar increase, if any, in Operating Expenses allocable to each calendar year, or part thereof, after the Base Year, over the amount of Base Operating Expenses, and Tenants Percentage Share of the total dollar increase, if any, in Real Property Taxes allocable to the tax year or years occurring in each such calendar year over the Base Real Property Taxes for the tax year or years occurring in the Base Year.
1.1.67 Estimated Restoration Period. The term Estimated Restoration Period shall have the meaning set forth in Section 12.1 below.
1.1.68 Estoppel Reminder Notice. The term Estoppel Reminder Notice shall have the meaning set forth in Section 23.1 below.
1.1.69 Event of Default. The term Event of Default shall have the meaning set forth in Section 20.1 below.
1.1.70 Excess Cooling Problem. The term Excess Cooling Problem shall have the meaning set forth in Section 8.5 below.
1.1.71 Executive Order No. 13224. The term Executive Order No. 13224 means Executive Order No. 13224 on Terrorist Financing effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, as may be amended from time to time.
1.1.72 Existing Generators. The term Existing Generators shall have the meaning set forth in Section 7.10.1 below.
1.1.73 Existing Security Holder. The term Existing Security Holders shall have the meaning set forth in Section 21.5 below.
1.1.74 Existing Tenants. The term Existing Tenants shall have the meaning set forth in Section 2.6.1 below.
1.1.75 Expansion at Lease Terms Period. The term Expansion at Lease Terms Period shall have the meaning set forth in Section 33.1.1 below.
1.1.76 Expansion at Market Terms Period. The term Expansion at Market Terms Period shall have the meaning set forth in Section 33.3.1 below.
1.1.77 Expansion at Modified Lease Terms Period. The term Expansion at Modified Lease Terms Period shall have the meaning set forth in Section 33.2.1 below.
1.1.78 Expansion Delays. The term Expansion Delays shall have the meaning set forth in Section 33.1.3 below.
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1.1.79 Expansion Notice. The term Expansion Notice shall have the meaning set forth in Section 33.4 below.
1.1.80 Expansion Option. The term Expansion Option shall have the meaning set forth in Section 33.3.1 below.
1.1.81 Expansion Premises. The term Expansion Premises means (a) Suite 265 located on the second floor containing approximately 2,557 Adjusted Rentable Square Feet (Suite 265), (b) Suite 380 located on the third floor containing approximately 11,064 Adjusted Rentable Square Feet (Suite 380), (c) Suite 450 located on the fourth floor containing approximately 12,549 Adjusted Rentable Square Feet (Suite 450), (d) Suite 460 located on the fourth floor containing approximately 14,279 Adjusted Rentable Square Feet (Suite 460), (e) Suite 475 located on the fourth floor containing approximately 20,531 Adjusted Rentable Square (Suite 475), (f) Suite 480 located on the fourth floor containing approximately 4,703 Adjusted Rentable Square Feet (Suite 480), (g) the Suite 500 Premises, and (h) Suite 600 located on the sixth floor containing approximately 59,056 Adjusted Rentable Square Feet (Suite 600), as depicted on the floor plans attached hereto as Exhibit A-3.
1.1.82 Expense Claim. The term Expense Claim shall have the meaning set forth in Section 5.2 below.
1.1.83 Expense Resolution Period. The term Expense Resolution Period shall have the meaning set forth in Section 5.2 below.
1.1.84 Extension Option. The term Extension Option shall have the meaning set forth in Section 3.4.1 below.
1.1.85 Extension Term. The term Extension Term shall have the meaning set forth in Section 3.4.1 below.
1.1.86 Fair Market Rent. The term Fair Market Rent shall have the meaning set forth in Section 3.4.4 below.
1.1.87 Fee Transfer. The term Fee Transfer shall have the meaning set forth in Section 36.2.1 below.
1.1.88 First Offer Space. The term First Office Space shall have the meaning set forth in Section 35.1 below.
1.1.89 First Refusal Election Period. The term First Refusal Election Period shall have the meaning set forth in Section 34.2 below.
1.1.90 First Refusal Exercise Notice. The term First Refusal Exercise Notice shall have the meaning set forth in Section 34.2 below.
1.1.91 First Refusal Notice. The term First Refusal Notice shall have the meaning set forth in Section 34.2 below.
1.1.92 First Refusal Space. The term First Refusal Space shall have the meaning set forth in Section 34.1 below.
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1.1.93 Force Majeure Event. The term Force Majeure Event shall have the meaning set forth in Section 32.12 below.
1.1.94 FSHP. The term FSHP shall have the meaning set forth in Section 32.25 below.
1.1.95 Green Rating Systems. The term Green Rating Systems means the U.S. EPAs Energy Star® rating system, the U.S. Green Building Councils Leadership in Energy and Environmental Design (LEED) rating system and other third party rating systems.
1.1.96 Hazardous Materials. The term Hazardous Materials means any substance or material that is described as a toxic, hazardous, corrosive, ignitable, flammable or reactive substance, waste or material or a pollutant or contaminant, or words of similar import, in any Environmental Laws, and includes asbestos, petroleum, petroleum products, polychlorinated biphenyls, radon gas, radioactive matter, and chemicals that may cause cancer or reproductive toxicity.
1.1.97 HVAC. The term HVAC means the heating, ventilation and air conditioning system serving the Building in general.
1.1.98 Impasse Date. The term Impasse Date shall have the meaning set forth in Section 3.4.6 (a) below.
1.1.99 Impositions. The term Impositions means any and all taxes, excluding Real Property Taxes, payable by Landlord (other than net income taxes) whether or not now customary or within the contemplation of the parties hereto imposed upon, measured by or reasonably attributable to the cost or value of Tenants equipment, furniture, fixtures and other personal property located in the Premises or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant (other than (i) the Tenant Improvements excluding the Cafeteria improvements and (ii) standard office improvements), regardless of whether title to such improvements shall be in Tenant or Landlord. Impositions do not include income, franchise, transfer, inheritance or capital stock taxes, unless any such taxes are levied or assessed against Landlord as a substitute for, in whole or in part, any Imposition.
1.1.100 Indemnitees. The term Indemnitees shall have the meaning set forth in Section 16.1.1 below.
1.1.101 Independent Arbitrator. The term Independent Arbitrator shall have the meaning set forth in Section 3.4.6 (c) below.
1.1.102 Independent CPA. The term Independent CPA shall have the meaning set forth in Section 5.8.2 below.
1.1.103 Initial Deposit. The term Initial Deposit shall have the meaning set forth in Section 36.2.2 below.
1.1.104 Interest Rate. The term Interest Rate means the greater of (a) six percent (6%) per annum and (b) the Prime Rate plus four percent (4%); provided, however, that if such rate of interest shall exceed the maximum rate allowed by law, the Interest Rate shall be automatically reduced to the maximum rate of interest permitted by applicable law.
1.1.105 Janitorial Credit. The term Janitorial Credit shall have the meaning set forth in Section 8.8 below.
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1.1.106 Land. The term Land means the parcel of land shown as Lot 9, Assessors Block 3783, on that certain map entitled Parcel Map of a Portion of 100 VARA Block No. 412, Also Being a Portion of Assessors Block 3783, which map was filed November 29, 1988, at Page 36, in Book 38, of Parcel Maps, of the Official Records of the City and County of San Francisco, California.
1.1.107 Landlord Affiliate. The term Landlord Affiliate means (a) any corporation, limited liability company, limited partnership or other entity which Controls, is Controlled by or is under common Control with Landlord and (b) TMG Partners, a California corporation.
1.1.108 Landlord Delays. The term Landlord Delays shall have the meaning set forth in the Work Letter.
1.1.109 Landlord Parties. The term Landlord Parties means Landlord and its employees, agents, contractors, licensees, invitees, representatives, officers, directors, partners, and members and each of the foregoing is a Landlord Party.
1.1.110 Landlords Casualty Notice. The term Landlords Casualty Notice shall have the meaning set forth in Section 12.1 below.
1.1.111 Landlords Dispute Period. The term Landlords Dispute Period shall have the meaning set forth in Section 5.8.2 below.
1.1.112 Landlords Initial Proposal. The term Landlords Initial Proposal shall have the meaning set forth in Section 3.4.5 (a) below.
1.1.113 Landlords Lease Expenses. The term Landlords Lease Expenses shall have the meaning set forth in Section 3.3.1 below.
1.1.114 Landlords Market Rate Proposal. The term Landlords Market Rate Proposal shall have the meaning set forth in Section 3.4.5 (b) below.
1.1.115 Landlords Records. The term Landlords Records shall have the meaning set forth in Section 5.8.1 below.
1.1.116 LC Expiration Date. The term LC Expiration Date shall have the meaning set forth in Section 26.1 below.
1.1.117 Lease Terms Expansion Date. The term Lease Terms Expansion Date shall have the meaning set forth in Section 33.1.2 below.
1.1.118 Lease Terms Expansion Notice. The term Lease Terms Expansion Notice shall have the meaning set forth in Section 33.1.2 below.
1.1.119 Lease Terms Expansion Option. The term Lease Terms Expansion Option shall have the meaning set forth in Section 33.1.1 below.
1.1.120 Lease Year. The term Lease Year means each consecutive twelve (12) month period during the Term, commencing on the first day of the first full month following the Commencement Date, except that the first Lease Year shall include any partial month between the Commencement Date and the first day of the following month. For example, if the Commencement Date
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occurs on January 15, the first Lease Year will commence on January 15 and end on January 31 of the immediately succeeding calendar year, and each subsequent Lease Year shall commence on February 1 and end on January 31 of the immediately succeeding calendar year.
1.1.121 LED Signs. The term LED Signs shall have the meaning set forth in Section 44.3.1 below.
1.1.122 Letter of Credit. The term Letter of Credit shall have the meaning set forth in Section 26.1 below.
1.1.123 Letter of Credit Amount. The term Letter of Credit Amount shall have the meaning set forth in Section 26.1 below.
1.1.124 License. The term License shall have the meaning set forth in Section 38.1 below.
1.1.125 License Area. The term License Area shall have the meaning set forth in Section 38.1 below.
1.1.126 Line Problems. The term Line Problems shall have the meaning set forth in Section 31.3 below.
1.1.127 Lines. The term Lines shall have the meaning set forth in Section 31.1 below.
1.1.128 Mandatory Controls. The term Mandatory Controls shall have the meaning set forth in Section 8.10 below.
1.1.129 Market Terms Expansion Date. The term Market Terms Expansion Date shall have the meaning set forth in Section 33.3.2 below.
1.1.130 Market Terms Expansion Notice. The term Market Terms Expansion Notice shall have the meaning set forth in Section 33.3.2 below.
1.1.131 Market Terms Expansion Option. The term Market Terms Expansion Option shall have the meaning set forth in Section 33.3.1 below.
1.1.132 Material First Refusal Economic Terms. The term Material First Refusal Economic Terms shall have the meaning set forth in Section 34.2 below.
1.1.133 Material ROFO Economic Terms. The term Material ROFO Economic Terms shall have the meaning set forth in Section 35.2 below.
1.1.134 Minimum Credit Test. The term Minimum Credit Test shall have the meaning set forth in Section 26.6.1 below.
1.1.135 Minor Alterations. The term Minor Alterations means Alterations that are not visible from the exterior of the Premises and do not (i) affect the roof, walls, structural portions of the Building, Building Systems, or any Common Area or (ii) cost in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) with respect to any one project.
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1.1.136 Modified Lease Terms Expansion Date. The term Modified Lease Terms Expansion Date shall have the meaning set forth in Section 33.2.2 below.
1.1.137 Modified Lease Terms Expansion Notice. The term Modified Lease Terms Expansion Notice shall have the meaning set forth in Section 33.2.2 below.
1.1.138 Modified Lease Terms Expansion Option. The term Modified Lease Terms Expansion Option shall have the meaning set forth in Section 33.2.1 below.
1.1.139 Modified Tenant Allowance. The term Modified Tenant Allowance shall have the meaning set forth in Section 33.2.3 below.
1.1.140 Net Worth. The term Net Worth means the excess of total assets over total liabilities, determined in accordance with generally accepted accounting principles, excluding, however, from the determination of total assets, goodwill and other intangibles and deferred revenue (i.e. revenue for which a party has received cash not yet recognized for accounting purposes).
1.1.141 Notice of Proposed Transfer. The term Notice of Proposed Transfer shall have the meaning set forth in Section 17.2 below.
1.1.142 Occupancy Agreement. The term Occupancy Agreement shall have the meaning set forth in Section 41 below.
1.1.143 Offering Notice. The term Offering Notice shall have the meaning set forth in Section 35.2 below.
1.1.144 Operating Expenses.
(a) The term Operating Expenses means the total costs and expenses that are, subject to the provisions of Section 1.1.144(c) below, actually incurred by Landlord in connection with the ownership, management, operation, maintenance and repair of the Project, including, without limitation, the following costs: (1) salaries, wages, bonuses and other compensation (including hospitalization, medical, surgical, retirement plan, pension plan, union dues, parking privileges, life insurance, including group life insurance, welfare and other fringe benefits, and vacation, holidays and other paid absence benefits) relating to employees of Landlord or its agents engaged in the management, operation, repair, or maintenance of the Project and costs of training such employees; (2) payroll, social security, workers compensation, unemployment and similar taxes with respect to such employees of Landlord or its agents, and the cost of providing disability or other benefits imposed by law or otherwise, with respect to such employees; (3) uniforms (including the cleaning, replacement and pressing thereof) provided to such employees; (4) except as expressly excluded below, premiums and other charges incurred by Landlord with respect to fire, other casualty, boiler and machinery, theft, rent interruption and liability insurance, and any other insurance (including earthquake insurance) as may be deemed necessary or advisable in the reasonable judgment of Landlord, or as may be required by any Encumbrancer, all in such amounts as Landlord determines to be appropriate, and, after the Base Year, costs of repairing an insured casualty solely to the extent of the deductible amount under the applicable insurance policy; (5) water charges and sewer rents or fees; (6) license, permit and inspection fees and charges, the cost of contesting any governmental enactments that may affect Operating Expenses, and the costs incurred in connection with any transportation system management program or similar program, including the costs of operating any shuttle bus or similar program; (7) sales, use and excise taxes on goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Project and Building Systems; (8) telephone, facsimile, postage, courier, stationery supplies and other expenses
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incurred in connection with the operation, maintenance, or repair of the Project; (9) management fees and expenses (including fees and expenses for accounting, financial management, data processing and information services) and costs of tenant service programs; provided, however, that Tenants Percentage Share of the amounts set forth in this clause (9) for any calendar year shall not include any property management fees (A) payable to Landlord or an affiliate of Landlord to the extent that such amount exceeds the arms-length competitive price at Comparable Buildings for similar services and (B) in any case to the extent greater than three percent (3%) of the Buildings revenues plus expenses; (10) repairs to and physical maintenance of the Project (excluding any capital repairs or replacements, except as expressly provided below), including Building Systems and appurtenances thereto, and repair and replacement of worn out equipment, facilities and installations (excluding any capital repairs or replacements, except as expressly provided below); (11) janitorial, window cleaning, security services, extermination, water treatment, rubbish removal, plumbing, riser management and other services, and inspection or service contracts for elevator, electrical, mechanical, sanitary, HVAC, and other building equipment and systems; (12) supplies, tools, materials and equipment used in connection with the operation, maintenance or repair of the Project; (13) painting the exterior of the Building or the Common Areas and the cost of maintaining and repairing or replacing the sidewalks, landscaping and other Common Areas; (14) all costs and expenses for electricity, chilled or condenser water, air conditioning, water for heating, gas, fuel, steam, heat, lights, sewer service, communications service, power and other energy related utilities required in connection with the operation, maintenance and repair of the Project; (15) the cost of any capital improvements, repairs or replacements (as defined by the generally accepted accounting principals) made by Landlord to the Project after the Base Year or capital assets (as defined by the generally accepted accounting principals) acquired by Landlord after the Base Year, in each case only as required to comply with any Applicable Laws first enacted after the Commencement Date, such cost or allocable portion to be amortized over the useful life thereof as reasonably determined by Landlord in accordance with industry standard practices (commencing upon the completion of such capital improvement, repair or replacement), together with interest on the unamortized balance at the Amortization Rate; (16) the cost of any capital improvements made by Landlord to the Project or capital assets acquired by Landlord after the Base Year (each as defined by the generally accepted accounting principals) that are reasonably anticipated by Landlord to reduce other Operating Expenses, and only to the extent of such reasonably anticipated savings, such cost or allocable portion thereof to be amortized over the useful life thereof as reasonably determined by Landlord in accordance with industry standard practices (commencing upon the completion of such capital improvement), together with interest on the unamortized balance at the Amortization Rate; (17) the cost of furniture, window coverings, carpeting, decorations, landscaping and other customary and ordinary items of personal property provided by Landlord for use in the Common Areas or in the Building office (to the extent that such Building office is dedicated to the operation and management of the Building); (18) property management office rent or rental value (which rent or rental shall be subject to increases after the Base Year not to exceed $1.00 per Adjusted Rentable Square Foot per year); (19) payments under any Recorded Documents pertaining to the sharing of costs by the Building; and (20) the cost of operation, repair, maintenance and other expenses relating to the Parking Garage, including resurfacing, restriping and cleaning in excess of revenues payable to Landlord from the Parking Garage.
(b) To the extent costs and expenses described above relate to both the Project and other property or relate to the Common Areas, such costs and expenses shall, in determining the amount of Operating Expenses, be equitably allocated by Landlord in its reasonable discretion.
(c) Operating Expenses shall not include the following: (1) depreciation on the Building; (2) debt service, rental under any ground or underlying lease, or interest, principal, points and fees on any mortgage or other debt instrument encumbering the Building (except that, as provided in Section 1.1.144(a) above, Landlord may include interest in the amortization of certain
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capital expenditures); (3) Real Property Taxes; (4) attorneys fees and expenses, brokerage commissions, or other related expenses incurred in connection with leasing of the Project including lease concessions, rental abatements and construction allowances; (5) the cost of any improvements or equipment that would be properly classified as capital expenditures (except for any capital expenditures expressly included in Operating Expenses); (6) the cost of decorating, improving for tenant occupancy, painting or redecorating portions of the Building to be demised to tenants; (7) advertising expenses relating to vacant space; (8) real estate brokers or other leasing commissions; (9) rentals incurred in leasing HVAC systems, elevators or other equipment that if purchased rather than rented, would constitute a capital item that is excluded, except for (i) rental costs incurred in making repairs or in keeping Building Systems in operation while repairs are being made and (ii) rental costs of equipment not affixed to the Building that is used in providing janitorial or similar services; (10) costs for which Landlord is reimbursed by insurance carried by, or required to be carried by, Landlord or condemnation proceeds, other tenants or any other source, and Landlord shall use commercially reasonable efforts to pursue claims under insurance policies, existing warranties and/or guaranties or against other third parties, as applicable, to pay such costs; provided, that, the cost of pursuing such claims shall be included in Operating Expenses; (11) any bad debt loss, rent loss, or reserves for bad debt loss or rent loss; (12) costs incurred in connection with the operation of the business of the entity constituting Landlord, as distinguished from the costs of operating the Building, including accounting and legal matters, costs of defending any lawsuits with any mortgagee, costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlords interest in the Building; (13) overhead and profit increment paid to Landlord or its affiliates for goods and/or services in the Building to the extent the same materially exceed the cost of such goods and/or services of comparable quality rendered by unaffiliated third parties of similar skill, competence and experience in Comparable Buildings; (14) costs for which Landlord has been compensated by a management fee to the extent that the inclusion of such costs in Operating Expenses would result in a double charge; (15) Landlords political or charitable contributions; (16) the cost of any tenant relations parties, events or promotions; (17) costs attributable to an increase in the size of the Project management office or rent attributable to any such increase; (18) insurance which is not customarily carried by institutional owners of Comparable Buildings; (19) costs to repair or replace the Project resulting from any casualty (except commercially reasonable deductibles under Landlords insurance policies may be included in Operating Expenses); (20) repairs, alterations, additions, improvements or replacements made to rectify or correct any defect in the design, materials or workmanship of the Project (as opposed to the cost of normal repair, maintenance and replacement expected in light of the specifications of the applicable construction materials and equipment) or to comply with any Applicable Laws in effect as of the Phase 1 Substantial Completion Date (based on the current interpretation thereof by applicable governmental entity(ies) as of the Phase 1 Substantial Completion Date); (21) repairs, alterations, additions, improvements or replacements made to rectify or correct damage caused by the negligence or willful misconduct of Landlord or any Landlord Party; (22) costs incurred in installing, operating and maintaining any specialty improvement not normally installed, operated and maintained in projects comparable to the Project, including, without limitation, an observatory, luncheon club, or athletic or recreational facilities, if not generally available to all office tenants of the Project, including Tenant; (23) salaries, wages, bonuses and other compensation (including hospitalization, medical, surgical, retirement plan, pension plan, union dues, parking privileges, life insurance, including group life insurance, welfare and other fringe benefits, and vacation, holidays and other paid absence benefits) relating to asset managers, leasing agents, promotional directors, officers, directors, or executives of Landlord that are above the rank of senior property manager or the Building chief engineer; (24) fines, penalties or interest incurred due to violation by Landlord of the terms and conditions of any lease or any Applicable Laws or due to violation by any other tenant in the Project of the terms and conditions of any lease or any Applicable Laws; (25) interest, penalties or other costs arising out of Landlords failure to make timely payment of its obligations; (26) property management fees in excess of the amount set forth in clause (9) of Section 1.1.144(a) above; (27) costs incurred to test, survey, cleanup, contain, abate, remove, or otherwise remedy Hazardous Materials or mold from the Project (except that Operating Expenses shall include costs incurred in
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connection with the prudent operation and maintenance of the Project, such as monitoring air quality); (28) costs incurred to correct defective equipment installed in the Project (as opposed to the cost of normal repair, maintenance and replacement expected in light of the specifications of the applicable equipment); (29) sale or financing costs incurred in connection with any sale, financing or refinancing of the Project; (30) any reserves; (31) costs of any artwork; (32) the cost of operation, repair, maintenance and other expenses relating to the portions of the Building used for retail and restaurant use, to the extent that, in Landlords reasonable judgment, such costs exceed the costs that which would have been incurred by Landlord if the entirety of the Building had been office space (rather than a mixture of office and retail and restaurant space); (33) costs and expenses of providing HVAC service to other tenant spaces in the Building outside of Building Standard Hours; (34) costs and expenses of providing electricity to areas of the Building outside of the Common Areas; (35) costs and expenses to provide water, gas, fuel, steam, lights, sewer service and other utilities to other tenants or occupants of the Building materially in excess of amounts typically used in connection with ordinary office use; (36) costs relating to the repair of structural portions of the roof, foundations, floors and exterior walls; (37) costs incurred in connection with re-certification pursuant to one or more Green Rating Systems or to support achieving any energy and carbon reduction targets (except costs incurred pursuant to Section 7.6.2 below); (38) the cost of labor and employees with respect to personnel not located at the Building on a full-time basis unless such costs are appropriately allocated between the Building and the other responsibilities of such personnel; (39) any of the amounts set forth in clause (1) or clause (2) of Section 1.1.144(a) above to the extent paid to asset managers, leasing agents, promotional directors, officers, directors, or executives of Landlord that are above the rank of senior property manager or the Building chief engineer; (40) costs for janitorial services for any rentable area in the Project to the extent Tenant continues to provide such services to the Premises as set forth herein; and (41) the amount of any taxes imposed on the use of the parking spaces in the Parking Garage by any governmental or quasi-governmental authority. In addition, Operating Expenses for the Base Expense Year shall not include market-wide cost increases due to Force Majeure Events, boycotts, strikes, conservation surcharges, embargoes or other shortages, or market-wide security or insurance cost increases due to extraordinary circumstances, such as an act of terrorism.
1.1.145 Outside Phase 1 Premises Delivery Date. The term Outside Phase 1 Premises Delivery Date shall have the meaning set forth in Section 2.4.1 below.
1.1.146 Outside Phase 2 Premises Delivery Date. The term Outside Phase 2 Premises Delivery Date shall have the meaning set forth in Section 2.4.1 below.
1.1.147 Parking Charge. The term Parking Charge shall have the meaning set forth in Section 30.1 below.
1.1.148 Parking Garage. The term Parking Garage means the parking structure within the Building and the parking spaces located on the roof of the Building.
1.1.149 Parking Garage Roof Space. The term Parking Garage Roof Space shall have the meaning set forth in Section 37.1 below.
1.1.150 Parking Spaces. The term Parking Spaces shall have the meaning set forth in Section 30.1 below.
1.1.151 Permitted Assignee. The term Permitted Assignee shall have the meaning set forth in Section 17.7.1 below.
1.1.152 Permitted Expansion TI Items. The term Permitted Expansion TI Items shall have the meaning set forth in Section 33.1.3 below.
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1.1.153 Permitted Transfer Costs. The term Permitted Transfer Costs shall have the meaning set forth in Section 17.4 below.
1.1.154 Permitted Transferee. The term Permitted Transferee shall have the meaning set forth in Section 17.7.1 below, and collectively as Permitted Transferees.
1.1.155 Permitted Use. The term Permitted Use means general office and administrative use and any Ancillary Uses.
1.1.156 Phase 1 Premises. The term Phase 1 Premises means the Concourse Premises, the First Floor Premises, the Third Floor Premises, the Fifth Floor Premises and the Sixth Floor Premises (as those terms are defined in the Basic Lease Information), excepting the Suite 375 Premises.
1.1.157 Phase 1 Substantial Completion. The term Phase 1 Substantial Completion shall have the meaning set forth in the Work Letter.
1.1.158 Phase 1 Tenant Completion Date. The term Phase 1 Tenant Completion Date shall have the meaning set forth in Section 2.8 (b) below.
1.1.159 Phase 2 Premises. The term Phase 2 Premises means the Second Floor Premises as defined in the Basic Lease Information and the Suite 375 Premises.
1.1.160 Phase 2 Substantial Completion. The term Phase 2 Substantial Completion shall have the meaning set forth in the Work Letter.
1.1.161 Phase 2 Tenant Completion Date. The term Phase 2 Tenant Completion Date shall have the meaning set forth in Section 2.8 (b) below.
1.1.162 Phase 2 Termination. The term Phase 2 Termination shall have the meaning set forth in Section 2.4.1 below.
1.1.163 Preexisting Hazardous Materials. The term Preexisting Hazardous Materials shall have the meaning set forth in Section 7.5.4 below.
1.1.164 Premises. The term Premises shall have the meaning set forth in the Basic Lease Information.
1.1.165 Prime Rate. The term Prime Rate means the latest U.S. prime rate reported in the Money Rates column of The Wall Street Journal on the first day on which The Wall Street Journal is published in the month in which the applicable sums are payable or incurred. If the Wall Street Journal is no longer published, the Prime Rate shall mean the publicly announced prime rate or reference rate charged by the San Francisco Main Office of Bank of America, N.A. (or any successor bank) on the first day of the month in which the applicable sums are payable or incurred (or if there is no such publicly announced rate, the rate quoted by such bank in pricing ninety (90) day commercial loans to substantial commercial borrowers on said date).
1.1.166 Prohibited Person. The term Prohibited Person means (a) a person or entity that is listed in the Annex to Executive Order No. 13224, or a person or entity owned or controlled by an entity that is listed in the Annex to Executive Order No. 13224; (b) a person or entity with whom Landlord is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; or (c) a person or entity that is named as a specially designated national and blocked person on the most
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current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or other official publication of such list.
1.1.167 Project. The term Project means the Land, the Building and other improvements at any time located on the Land, and all appurtenances related thereto, including the loading dock area.
1.1.168 Protection Period. The term Protection Period shall have the meaning set forth in Section 5.7 below.
1.1.169 PSA Assignment Party. For purposes of this Lease, the term PSA Assignment Party shall mean (a) any Tenant Affiliate or (b) Mark Pincus or (c) any corporation, limited liability company, limited partnership or other entity which is Controlled by Mark Pincus.
1.1.170 PSA Negotiation Period. The term PSA Negotiation Period shall have the meaning set forth in Section 36.3 below.
1.1.171 Purchase Agreement. The term Purchase Agreement shall have the meaning set forth in Section 36.3 below.
1.1.172 Purchase Offer Notice. The term Purchase Offer Notice shall have the meaning set forth in Section 36.2.1 below.
1.1.173 Purchase Option. The term Purchase Option shall have the meaning set forth in Section 36.1 below.
1.1.174 Real Property Taxes. The term Real Property Taxes means all taxes, assessments (whether general or special), excises, transit charges, housing fund assessments or other housing charges, levies or fees, ordinary or extraordinary, unforeseen as well as foreseen, of any kind, which are assessed, levied, charged or imposed (1) on the Project or any part thereof, (2) on Landlord with respect to the Project, (3) on the act of entering into this Lease or any other lease of space in the Project, (4) on the use or occupancy of the Project or any part thereof, (5) with respect to services or utilities consumed in the use, occupancy or operation of the Project, (6) on or attributable to personal property used in connection with the Building, including the Common Areas, (7) related to any governmentally-mandated transportation plan, fund or system affecting the Building, and (8) relating to or on or measured by the rent payable under this Lease or in connection with the business of renting space in the Project, including, without limitation, any gross income tax, gross receipts tax or excise tax levied with respect to the receipt of such rent, by the United States of America, the State of California, the City and County of San Francisco, any political subdivision, public corporation, district or other political or public entity or public authority, and shall also include any other tax, fee or other excise, however described, which may be levied or assessed in lieu of, as a substitute (in whole or in part), for any other Real Property Taxes. Real Property Taxes shall include reasonable attorneys, accountants, and consultants fees, costs and disbursements incurred in connection with proceedings to contest, determine or reduce Real Property Taxes. Real Property Taxes shall not include (1) income, franchise, transfer, inheritance or capital stock taxes, unless levied or assessed in lieu of, as a substitute (in whole or in part), for any other Real Property Taxes; or (2) any taxes imposed on the use of the parking spaces in the Parking Garage by any governmental or quasi-governmental authority allocable to each calendar year that exceeds the amount of such taxes allocable to the Base Year.
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1.1.175 Reassessment. The term Reassessment shall have the meaning set forth in Section 5.7 below
1.1.176 Recorded Documents. The term Recorded Documents means all easement agreements, cost sharing agreements, covenants, conditions, and restrictions and all similar agreements affecting the Project, whether now or hereafter recorded against the Project.
1.1.177 Relocation. The term Relocation shall have the meaning set forth in Section 2.6.1 below.
1.1.178 Relocation Agreement. The term Relocation Agreement shall have the meaning set forth in Section 2.6.1 below.
1.1.179 Renewal Premises. The term Renewal Premises shall have the meaning set forth in Section 3.4.2 below.
1.1.180 Rent. The term Rent means the Base Rent, Escalation Rent, Parking Charges, and all other additional rent, additional charges and amounts payable by Tenant in accordance with this Lease.
1.1.181 Rent Abatement. The term Rent Abatement shall have the meaning set forth in Section 4.5 below.
1.1.182 Rent Abatement Period. The term Rent Abatement Period shall have the meaning set forth in Section 4.5 below.
1.1.183 Rent Payment Notice. The term Rent Payment Notice shall have the meaning set forth in Section 21.4 below.
1.1.184 Repairs to Generator Area. The term Repairs to Generator Area shall have the meaning set forth in Section 7.10.3 below.
1.1.185 Restore. The terms Restore or Restoration shall have the meaning set forth in Section 12.1 below.
1.1.186 Right of First Offer. The term Right of First Offer shall have the meaning set forth in Section 35.1 below.
1.1.187 Right of First Refusal. The term Right of First Refusal shall have the meaning set forth in Section 34.1 below.
1.1.188 ROFO Exercise Notice. The term ROFO Exercise Notice shall have the meaning set forth in Section 35.3.3 below.
1.1.189 ROFO Exercise Period. The term ROFO Exercise Period shall have the meaning set forth in Section 35.3.1 below.
1.1.190 ROFO Target Date. The term ROFO Target Date shall have the meaning set forth in Section 35.2 below.
1.1.191 ROFR Target Date. The term ROFR Target Date shall have the meaning set forth in Section 34.2 below.
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1.1.192 Roof Repairs. The term Roof Repairs shall have the meaning set forth in Section 38.3 below.
1.1.193 Rooftop Equipment. The term Rooftop Equipment shall have the meaning set forth in Section 38.1 below.
1.1.194 Sidewalk Area. The term Sidewalk Area shall have the meaning set forth in Section 39 below.
1.1.195 SNDA. The term SNDA shall have the meaning set forth in Section 21.5 below.
1.1.196 Standard Janitorial Services. The term Standard Janitorial Services shall have the meaning set forth in Section 8.8 below.
1.1.197 Storage Rent. The term Storage Rent shall have the meaning set forth in Section 43 below.
1.1.198 Storage Space. The term Storage Space shall have the meaning set forth in Section 43 below.
1.1.199 Subject Space. The term Subject Space shall have the meaning set forth in Section 17.2 below.
1.1.200 Suite 375 Premises. The term Suite 375 Premises means Suite 375 located on the third floor of the Building and containing approximately 14,163 Adjusted Rentable Square Feet, as shown on the floor plans attached hereto as Exhibit A-1.
1.1.201 Suite 375 Relocation Expenses. The term Suite 375 Relocation Expenses shall have the meaning set forth in Section 2.6.2 below.
1.1.202 Suite 375 Tenants New Premises. The term Suite 375 Tenants New Premises shall have the meaning set forth in Section 2.6.2 below.
1.1.203 Suite 460 Premises. The term Suite 460 Premises means Suite 460, located on the fourth floor of the Building and containing approximately 14,279 Adjusted Rentable Square Feet, as shown on the floor plans attached hereto as Exhibit A-2.
1.1.204 Suite 500 Premises. The term Suite 500 Premises means Suite 500 located on the fifth floor of the Building containing approximately 60,864 Adjusted Rentable Square Feet, as shown on the floor plans attached hereto as Exhibit A-3.
1.1.205 Suite 500/600 Parking Spaces. The term Suite 500/600 Parking Spaces shall have the meaning set forth in Section 30.1 below.
1.1.206 Superior Rights. The term Superior Rights means: (A) (i) the rights of the tenant under the existing lease of Suite 265, currently set to expire April 2, 2013; (ii) the rights of the tenant under the existing lease of Suite 380, currently set to expire April 30, 2012 with one (1) two (2)-year option to renew; (iii) the rights of the tenant under the existing lease of Suite 450, currently set to expire May 31, 2012 with two (2) three (3)-year options to renew; (iv) the rights of the tenant under the existing lease of Suite 475, currently set to expire September 30, 2015 with two (2) five (5)-year options
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to renew; (v) the right of the tenant under the existing lease of Suite 480, currently set to expire November 30, 2010; and (vi) the first refusal right of the tenant under the existing lease of Suite 450 with respect to Suite 460 (each such existing lease, an Existing Expansion Premises Lease) and (B) any renewal of an Existing Expansion Premises Lease, whether or not pursuant to an express written provision in such lease and without regard to whether such renewal is characterized by the parties thereto as a renewal or as a new lease.
1.1.207 Supplemental Cooling Equipment. The term Supplemental Cooling Equipment shall have the meaning set forth in Section 8.5 below.
1.1.208 Taken. The term Taken shall have the meaning set forth in Section 13.1 below.
1.1.209 Taking. The term Taking shall have the meaning set forth in Section 13.1 below.
1.1.210 Target Completion Date. The term Target Completion Date shall have the meaning set forth in Section 2.2.1 below.
1.1.211 Tax Increase. The term Tax Increase shall have the meaning set forth in Section 5.7 below.
1.1.212 Temporary OpEx Pass Through Payments. The term Temporary OpEx Pass Through Payments shall have the meaning set forth in Section 2.7.1 below.
1.1.213 Temporary Premises. The term Temporary Premises shall have the meaning set forth in Section 2.7.1 below.
1.1.214 Temporary Premises Expansion Notice. The term Temporary Premises Expansion Notice shall have the meaning set forth in Section 2.7.2 below.
1.1.215 Temporary Premises Expansion Option. The term Temporary Premises Expansion Option shall have the meaning set forth in Section 2.7.2 below.
1.1.216 Temporary Premises Term. The term Temporary Premises Term shall have the meaning set forth in Section 2.7.1 below.
1.1.217 Tenant Affiliate. The term Tenant Affiliate shall have the meaning set forth in Section 17.7.1 below.
1.1.218 Tenant Competitor. The term Tenant Competitor shall have the meaning set forth in Section 41 below.
1.1.219 Tenant Delay. The term Tenant Delay shall have the meaning set forth in the Work Letter.
1.1.220 Tenant Draw Package. The term Tenant Draw Package shall have the meaning set forth in Section 33.1.3 below.
1.1.221 Tenant Improvements. The term Tenant Improvements shall have the meaning set forth in the Work Letter.
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1.1.222 Tenant Parties. The term Tenant Parties means Tenant and Tenants Transferees and Business Affiliates, and their respective employees, agents, contractors, licensees, invitees, representatives, officers, directors, partners, members, and each of the foregoing is a Tenant Party.
1.1.223 Tenant Shuttle. The term Tenant Shuttle shall have the meaning set forth in Section 30.6 below.
1.1.224 Tenant Subsidiaries. The term Tenant Subsidiaries shall have the meaning set forth in Section 26.6.2 below.
1.1.225 Tenants Additional Signs. The term Tenants Additional Signs shall have the meaning set forth in Section 44.3.4 below.
1.1.226 Tenants Address Sign. The term Tenants Address Sign shall have the meaning set forth in Section 44.3.2 below.
1.1.227 Tenants Exterior Signs. The term Tenants Exterior Signs shall have the meaning set forth in Section 44.4 below
1.1.228 Tenants Construction Representative. The term Tenants Construction Representative shall have the meaning set forth in Section 3.2 below.
1.1.229 Tenants CPA. The term Tenants CPA shall have the meaning set forth in Section 5.8.1 below.
1.1.230 Tenants Expansion FF&E. The term Tenants Expansion FF&E shall have the meaning set forth in Section 33.1.3 below.
1.1.231 Tenants First Refusal Rejection. The term Tenants First Refusal Rejection shall have the meaning set forth in Section 34.2 below.
1.1.232 Tenants Fixturing Work. The term Tenants Fixturing Work shall have the meaning set forth in Section 3.2 below.
1.1.233 Tenants Percentage Share. The term Tenants Percentage Share means the percentage stated in the Basic Lease Information as Tenants Percentage Share, which may be adjusted pursuant to the terms of this Lease.
1.1.234 Tenants Review. The term Tenants Review shall have the meaning set forth in Section 5.8.1 below.
1.1.235 Tenants ROFO Rejection. The term Tenants ROFO Rejection shall have the meaning set forth in Section 35.3.3 below.
1.1.236 Tenants Security Equipment. The term Tenants Security Equipment shall have the meaning set forth in Section 8.9 below.
1.1.237 Termination Date. The term Termination Date shall have the meaning set forth in Section 3.3.1 below.
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1.1.238 Termination Fee. The term Termination Fee shall have the meaning set forth in Section 3.3.1 below.
1.1.239 Termination Notice. The term Termination Notice shall have the meaning set forth in Section 3.3.1 below.
1.1.240 Termination Space. The term Termination Space shall have the meaning set forth in Section 3.3.1 below.
1.1.241 Third Party Hazardous Materials. The term Third Part Hazardous Materials shall have the meaning set forth in Section 7.5.4 below.
1.1.242 Third Party Purchaser. The term Third Party Purchaser shall have the meaning set forth in Section 36.4 below.
1.1.243 Townsend Street Signage. The term Townsend Street Signage shall have the meaning set forth in Section 44.3.4 below.
1.1.244 Transfer. The term Transfer shall have the meaning set forth in Section 17.1 below.
1.1.245 Transfer Premium. The term Transfer Premium shall have the meaning set forth in Section 17.4 below.
1.1.246 Transferee. The term Transferee shall have the meaning set forth in Section 17.1 below.
1.1.247 Unused Parking Spaces. The term Unused Parking Spaces shall have the meaning set forth in Section 30.1 below.
1.1.248 USA Patriot Act. The term USA Patriot Act means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56), as may be amended from time to time.
1.1.249 Wattage Allowance. The term Wattage Allowance for electricity (demand load for general office, light and convenience power and for office equipment and supplemental air conditioning) means the product obtained by multiplying the Adjusted Rentable Square Feet of the Premises by eight (8) watts.
1.1.250 Weighted Average Abatement Period. The term Weighted Average Abatement Period means the average number of days in each Abatement Period for each Phase of the Premises delivered to Tenant taking into account and giving proportional relevance to each Abatement Period for each Phase based on the Adjusted Rentable Square Feet delivered in such Phase. An example of the calculation of the Weighted Average Abatement Period is attached hereto as Exhibit H.
1.1.251 Work Letter. The term Work Letter means the agreement attached hereto as Exhibit C and incorporated herein by reference.
1.2 Basic Lease Information. The Basic Lease Information is incorporated into and made a part of this Lease. Each reference in this Lease to any Basic Lease Information shall mean the
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applicable information set forth in the Basic Lease Information, except that in the event of any conflict between an item in the Basic Lease Information and this Lease, this Lease shall control.
2. Premises.
2.1 Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises described in the Basic Lease Information (the Premises). The parties acknowledge that Exhibit A-1 is intended only to show the approximate location of the Premises in the Building, and not to constitute an agreement, representation or warranty as to the construction or precise area of the Premises or as to the specific location or elements of the Common Areas or of the accessways to the Premises or the Project. The parties hereby stipulate that the Premises and the Project contain the number of Adjusted Rentable Square Feet set forth in the Basic Lease Information. The Adjusted Rentable Square Feet of the Building shall not be decreased at any time during the Term. If the Premises include an entire floor, all elevator lobbies, corridors and restroom facilities located on such floor shall be considered part of the Premises. All the outside walls and windows of the Premises and any space in the Premises used for shafts, stacks, pipes, conduits, ducts, electric or other utilities, or other Building facilities or equipment, and the use thereof and, subject to the restrictions set forth in Section 19.1 below, access thereto through the Premises for the purposes of operation, maintenance, improvements and repairs, are reserved to Landlord.
2.2 Delivery of Premises.
2.2.1 Delivery. Landlord shall deliver the Premises in two phases (each a Phase). Landlord shall use commercially reasonable efforts to cause (a) the Phase 1 Substantial Completion to occur on or before the Target Phase 1 Completion Date and (b) the Phase 2 Substantial Completion to occur on or before the Target Phase 2 Completion Date (each of the Target Phase 1 Completion Date and the Target Phase 2 Completion Date being referred to herein as a Target Completion Date); provided, however, that (i) a Target Completion Date shall be extended by the number of days that the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, is delayed due to Force Majeure Events and (ii) notwithstanding anything to the contrary set forth in this Lease or in the Work Letter and regardless of the actual Phase 1 Substantial Completion Date or the actual Phase 2 Substantial Completion Date hereunder, the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, shall be deemed to be the date the Phase 1 Substantial Completion Date or Phase 2 Substantial Completion Date would have occurred but for any Tenant Delay as determined in accordance with the Work Letter.
2.2.2 Phasing of Occupancy. Subject to the provisions of this Section 2.2.2, Tenant may elect (each such election, an Early Phase 2 Occupancy), in its sole and absolute discretion, prior to Phase 2 Substantial Completion with respect to the Phase 2 Premises only to occupy any portion of the Phase 2 Premises (each occupied portion of the Phase 2 Premises being an Early Phase 2 Occupancy Space) for which Landlord and its construction manager, in consultation with Tenant and Tenants Architect, mutually agree that the Tenant Improvement Work in such Early Phase 2 Occupancy Space has been completed in accordance with the Approved Working Drawings and any Change Orders, except for Punch-List Items (as such terms are defined in the Work Letter) and for which Tenant is legally permitted to occupy (as evidenced by a temporary or final certificate of occupancy, or final inspection and sign-off on the job card for the Tenant Improvement Work, or reasonable equivalent), provided that no Early Phase 2 Occupancy Space shall consist of less than an entire suite as shown on Exhibit A-1. Tenant shall provide Landlord reasonable prior notice before commencing any Early Phase 2 Occupancy. Tenants Early Phase 2 Occupancy shall be conditioned upon Landlords reasonable determination that such Early Phase 2 Occupancy is not likely to interfere with or delay the construction of the Ancillary Tenant Improvements, the Tenant Improvements or any other work in the Building. Any
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Early Phase 2 Occupancy shall be subject to all of the terms, covenants and conditions of this Lease, including, but not limited to, Tenants insurance obligations contained in Article 14 below and Tenants indemnity obligations contained in Section 16.1.1 below. Tenant shall pay Base Rent applicable to any Early Phase 2 Occupancy Space at the rate of $19.60 per Adjusted Rentable Square Foot per year from the period commencing on the date Tenant commences business operations in the applicable Early Phase 2 Occupancy Space until the Phase 2 Rent Commencement Date.
2.3 Delay Rent Credits. If the Phase 1 Substantial Completion Date has not occurred (or is not deemed to have occurred pursuant to Section 2.2 above due to any Tenant Delay) on or before the date that is forty five (45) days after the Target Phase 1 Completion Date (as such date may be extended pursuant to Section 2.2 above for any Force Majeure Event), then Tenant shall be entitled to a credit against Base Rent hereunder in addition to the Rent Abatement (as defined in Section 4.5 below) in the amount of one and one-half (1.5) days of Base Rent for every day that the Phase 1 Substantial Completion Date is actually delayed beyond the date that is forty-five (45) days after the Target Phase 1 Completion Date (the Delay Rent Credits). If the Phase 1 Substantial Completion Date does not occur (or is not deemed to have occurred) within one hundred fifty (150) days after the Target Phase 1 Completion Date, Tenant shall be entitled to no additional Delay Rent Credits with respect to the Phase 1 Premises, provided that the foregoing shall not limit Tenants rights or remedies pursuant to Sections 2.4 or 2.8 hereof. The parties agree that the actual damages to be suffered by Tenant in the event of a delay in the Phase 1 Substantial Completion Date would be extremely difficult if not impossible to ascertain and that the amount of Delay Rent Credits set forth in this Section 2.3 is a reasonable estimate of the actual damages to be suffered by Tenant if Tenant does not exercise its termination rights under Section 2.4 hereof and that such sum represents liquidated damages and not a penalty. By executing this provision where indicated below, each party specifically confirms the accuracy of the statements made above and the fact that each party fully understood the consequences of these liquidated damages provisions at the time this Lease was made.
Landlords Initials: MAC Tenants Initials: MV
2.4 Termination for Delay in Completion.
2.4.1 In the event that (a) the Phase 1 Substantial Completion Date has not occurred (or is not deemed to have occurred) on or before the date that is one hundred fifty (150) days after the Target Phase 1 Completion Date (the Outside Phase 1 Premises Delivery Date) or (b) the Phase 2 Substantial Completion Date has not occurred (or is not deemed to have occurred) on or before the date that is one hundred fifty (150) days after the Target Phase 2 Completion Date (the Outside Phase 2 Premises Delivery Date), then Tenant shall have the right to terminate this Lease either (i) in its entirety if the Phase 1 Substantial Completion Date has not occurred (or is not deemed to have occurred) on or before the Outside Phase 1 Premises Delivery Date (a Complete Termination) or (ii) with respect to the Phase 2 Premises only if the Phase 2 Substantial Completion Date has not occurred (or be deemed to have occurred) on or before the Outside Phase 2 Premises Delivery Date (a Phase 2 Termination), in each case by giving written notice of such termination to Landlord at any time (A) after the Outside Phase 1 Premises Delivery Date and prior to delivery of the Phase 1 Premises or (B) after the Outside Phase 2 Premises Delivery Date and prior to delivery of the Phase 2 Premises, as applicable; provided, however, that (x) the Outside Phase 1 Premises Delivery Date and the Outside Phase 2 Premises Delivery Date shall each be extended by the number of days that the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, is delayed due to Force Majeure Events and (y) notwithstanding anything to the contrary set forth in this Lease or in the Work Letter and regardless of the actual Phase 1 Substantial Completion Date or the actual Phase 2 Substantial Completion Date hereunder, the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, shall be deemed to be the date the Phase 1 Substantial Completion Date
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or Phase 2 Substantial Completion Date would have occurred but for any Tenant Delay as determined in accordance with the Work Letter. Tenants right to terminate this Lease with respect to the Phase 2 Premises pursuant to clause (ii) above shall automatically terminate and be of no further force or effect upon Tenants election under Section 2.2.2 to occupy any Early Phase 2 Occupancy.
2.4.2 In the event of a Complete Termination or a Phase 2 Termination, Tenant shall be entitled to seek payment from Landlord of such losses, costs, expenses or damages incurred by Tenant as a result of the termination of the Lease and exercise any other rights or remedies available to Tenant under Applicable Laws, in each case subject to the provisions set forth in Section 22.2 of the Lease.
2.5 Acceptance of the Premises. Tenant agrees to accept possession of (i) the Phase 1 Premises upon the Phase 1 Substantial Completion Date and (ii) the Phase 2 Premises on the Phase 2 Substantial Completion Date, without representation or warranty by Landlord, except as expressly provided herein, and with no obligation of Landlord to repaint, remodel, repair, improve or alter the Premises, or to perform any construction, remodeling or other work of improvement upon the Premises, or contribute to the cost of any of the foregoing, except as expressly set forth in this Lease (including the Work Letter). Without limiting the generality of the foregoing, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building, or the Project, the suitability of the Premises for Tenants use, the condition, capacity or performance of the Tenant Improvements or the Ancillary Tenant Improvements or Building Systems, or the identity of other tenants or potential tenants of the Project, except as expressly set forth in this Lease.
2.6 Conditions of Delivery of Certain Premises.
2.6.1 Relocation of Existing Tenants. Portions of the Premises as depicted on the floor plans attached hereto as Exhibit A-4 are currently leased to other tenants (Existing Tenants). Landlord has executed agreements prior to or concurrent with the date hereof (each a Relocation Agreement) to (a) relocate Existing Tenants to other premises in the Building or (b) terminate the leases with such Existing Tenants (each a Relocation). Each Relocation shall be at the sole cost and expense of Landlord, except as otherwise provided in Section 2.6.2 below. If Landlord is unable to cause the Relocation of any Existing Tenant on or before the date set forth in the Construction Schedule, except due to a default by Landlord under any applicable Relocation Agreement, then the Target Phase 2 Completion Date with respect solely to the Phase 2 Premises leased by such Existing Tenant (the Delayed Delivery Premises) shall be extended by the number of days that the Phase 2 Substantial Completion Date with respect to the Delayed Delivery Premises is actually delayed due to the lease or occupancy by the applicable Existing Tenant. If any portion of the Second Floor Premises becomes Delayed Delivery Premises, Landlord, at Tenants option, shall substantially complete (in accordance with the Work Letter) and deliver possession of those portions of the Second Floor Premises that are not Delayed Delivery Premises, but Tenants obligation to pay Base Rent with respect to any portion of the Second Floor Premises shall not commence until the Phase 2 Substantial Completion Date (as defined in the Work Letter). In no event shall Landlord be in default or liable to Tenant for any loss or damage resulting solely from any Existing Tenants default under any Relocation Agreement, provided that Landlord shall use commercially reasonable efforts to enforce the terms of such Relocation Agreements and shall use commercially reasonable efforts to cause the Phase 2 Substantial Completion Date to occur on or before the Target Phase 2 Commencement Date for those portions of the Second Floor Premises which are not Delayed Delivery Premises.
2.6.2 Suite 375 Premises. With respect to the Suite 375 Premises and notwithstanding anything to the contrary contained in Section 2.6.1 above, Tenant shall pay the Suite 375
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Relocation Expenses to Landlord as set forth in this Section 2.6.2. As used herein, the term Suite 375 Relocation Expenses means the difference between (i) the base rent payable by the Existing Tenant under the current lease for the Suite 375 Premises for the remaining term of such lease less (ii) the base rent payable by the Existing Tenant under a new lease or amended lease for the premises within the Building to which the Existing Tenant is relocated (the Suite 375 Tenants New Premises) for the equivalent term. The calculation of Suite 375 Relocation Expenses is subject to the following: (1) the annual base rent payable by Existing Tenant under the current lease is $33.70 (net of electrical) multiplied by 14,163 Adjusted Rentable Square Feet for the period from the Lease Date until February 3, 2011, $34.70 (net of electrical) multiplied by 14,163 Adjusted Rentable Square Feet for the period from February 4, 2011 to February 3, 2012, and $35.70 (net of electrical) multiplied by 14,163 Adjusted Rentable Square Feet for the period from February 4, 2012 to February 3, 2013; (2) the remaining term and the equivalent term shall mean the period from the effective date of the Relocation to February 3, 2013; (3) notwithstanding the actual base rent payable by the Existing Tenant under the new or amended lease, the base rent for purposes of calculating the Suite 375 Relocation Expenses shall not be less than $20.91 (net of electrical) multiplied by the Adjusted Rentable Square Feet of the Suite 375 Tenants New Premises; and (4) if Suite 375 Tenants New Premises is less than 14,163, the Suite 375 Relocation Expenses shall be calculated assuming that the Adjusted Rentable Square Feet of the Suite 375 Tenants New Premises is 14,163. Landlord shall provide to Tenant the amount of the Suite 375 Relocation Expenses on or prior to the effective date of the Relocation (along with reasonable supporting backup documentation). Subject to the application of any Delay Rent Credits or other offset rights of Tenant hereunder, Tenant shall pay the Suite 375 Relocation Expenses as the same accrue, in advance, on or before the first day of each successive calendar month during the Term and otherwise in accordance with Article 4 hereof; provided, however, that Tenant may elect at any time to pay the net present value of the Suite 375 Relocation Expenses, discounted at the Interest Rate.
2.7 Lease of Temporary Premises.
2.7.1 Temporary Lease of Suite 225 Premises. During the period commencing on the date which is ten (10) days after this Lease is executed and delivered by Landlord and Tenant and ending on the Phase 2 Rent Commencement Date (the Temporary Premises Term), Tenant shall lease from Landlord certain temporary premises commonly referred to as Suite 225, located on the second floor of the Building, containing approximately 16,257 Adjusted Rentable Square Feet and shown on the floor plans attached hereto as Exhibit A-2 (the Temporary Premises). Tenants lease of the Temporary Premises shall be on all of the terms and conditions of this Lease, except as modified by this Section 2.7. Landlord shall deliver the Temporary Premises broom-clean, free of furniture and equipment. Except as set forth in the immediately preceding sentence, Tenant acknowledges and agrees that Tenant accepts the Temporary Premises in its as-is condition, without any representations or warranties by Landlord, and with no obligation of Landlord to make any alterations or improvements to the Temporary Premises or to provide any tenant improvement allowance. Notwithstanding anything to the contrary contained herein, Tenants occupancy of the Temporary Premises during the Temporary Premises Term shall be subject to all of the terms, covenants and conditions of this Lease, including Tenants insurance obligations contained in Article 14 and Tenants indemnity obligations contained in Article 16; provided, however, that (a) Tenant shall not be obligated to pay Base Rent or Escalation Rent for the Temporary Premises during the Temporary Premises Term, (b) Tenant shall be obligated to pay the pro rata share (which is a fraction, the numerator of which is the Adjusted Rentable Square Feet of the Temporary Premises and the denominator of which is the Adjusted Rentable Square Feet of the Building) of all Operating Expenses and Real Property Taxes allocable to the pro rata portion of the calendar year and tax year, as applicable, during the Temporary Premises Term (the Temporary OpEx Pass Through Payment), (c) Tenant shall pay all costs of electrical consumption that is separately metered to the Temporary Premises, (d) Tenant shall have the right but not the obligation to perform the obligations set forth in Section 9.3 below with respect to the Temporary Premises, provided, that, Tenant shall repair any damage to the Temporary
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Premises resulting from the acts or omissions of Tenant, (e) at the end of the Temporary Premises Term, Tenant shall surrender the Temporary Premises broom-clean and free from furniture and equipment but shall have no other restoration obligations, (f) Tenant shall have the right to terminate the lease of the Temporary Premises with notice thereof after any casualty or condemnation materially affecting the Temporary Premises and (g) Landlord shall provide janitorial service to the Temporary Premises in accordance with the Standard Janitorial Services (as defined in Section 8.8). Landlord shall cause the entity providing janitorial services to the Temporary Premises to execute a confidentiality agreement in connection with the provision of such services in the form attached hereto as Exhibit R, but the individual employees of such service provider shall not be obligated to sign any confidentiality agreement. As of the date hereof, the Temporary OpEx Pass Through Payment is Eight Dollars and 81/100 ($8.81) per Adjusted Rentable Square Foot. On the first day of each month of the Temporary Premises Term, Tenant shall pay to Landlord the monthly estimate of Tenants pro rata share of Operating Expenses and Real Property Taxes as provided by Landlord. Within ninety (90) days after the termination of the Temporary Premises Term, Landlord shall provide Tenant a statement of the actual pro rata share of Operating Expenses and Real Property Taxes and adjustments with respect to the estimated pro rata share of Operating Expenses and Real Property Taxes paid by Tenant under this Section and appropriate credits and payments shall be made in the same manner as provided in Section 5.2 above. Notwithstanding anything to the contrary contained herein, beginning on the date that is three (3) months after the Phase 1 Rent Commencement Date, Tenants obligation to make the Temporary OpEx Pass Through Payments shall cease, but such cessation shall not prevent Tenants continued use and occupancy of the Temporary Premises for the duration of the Temporary Premises Term. Tenant shall bear all costs related to furnishing, equipping, and moving into and out of the Temporary Premises, including, without limitation, the installation of Lines. During the Temporary Premises Term, Tenant shall have the right, but not the obligation, to lease seventeen (17) Parking Spaces (as hereinafter defined) at the initial Parking Charge and otherwise in accordance with Article 30 hereof. Except as expressly provided above with respect to repair, restoration and maintenance obligations, on or before the expiration or earlier termination of the Temporary Premises Term, Tenant shall surrender the Temporary Premises in accordance with Section 32.13 of this Lease. If Tenant remains in possession of the Temporary Premises after the expiration of the Temporary Premises Term, Article 25 hereof shall apply. For purposes of calculating Base Rent payable with respect to the Temporary Premises after the Temporary Premises Term under Article 25, Tenant shall be deemed to have paid Base Rent during the Temporary Premises Term at the rate of $19.60 per Adjusted Rentable Square Foot. Notwithstanding the rights granted under Article 42, Tenant shall not be permitted to have dogs in the Temporary Premises.
2.7.2 Option to Temporarily Lease the Suite 460 Premises. Subject to the Superior Rights and the terms and conditions of this Section 2.7.2, Tenant shall have the right, in its sole discretion, to expand the Temporary Premises by leasing the Suite 460 Premises (Temporary Premises Expansion Option). Tenant may exercise the Temporary Expansion Option, if at all, by giving Landlord an unconditional, irrevocable written notice of such election (the Temporary Premises Expansion Notice) on or before December 31, 2010, the time of such exercise being of the essence. The Temporary Expansion Notice shall specify the date upon which Landlord shall deliver the Suite 460 Premises, which date shall be not less than fifteen (15) days and not more than forty five (45) days after the date of Tenants delivery of the Temporary Premises Expansion Notice. If Tenant delivers the Temporary Premises Expansion Notice, Landlord shall deliver the Suite 460 Premises on such date specified in the Temporary Premises Expansion Notice and Tenant shall lease the Suite 460 Premises on the same terms and conditions as set forth in Section 2.7.1 effective as of the delivery of the Suite 460 Premises until the expiration of the Temporary Premises Term, provided, however, that there shall be no cessation of the obligation to pay the Temporary OpEx Pass Through Payments at any time.
2.8 Tenant Construction.
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(a) Change in Terms. If Tenant elects to manage construction of the Ancillary Tenant Improvements and/or Tenant Improvements pursuant to Section 7.4.3 of the Work Letter, then the following shall apply: (i) all of Tenants termination rights as set forth in Section 2.4 above shall lapse and be of no further force and effect, (ii) notwithstanding that either the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date has not occurred (or is not deemed to have occurred), Landlord shall be deemed without further action to have immediately delivered possession of the Premises to Tenant as of the occurrence of such election, (iii) the Phase 1 Tenant Completion Date and the Phase 2 Tenant Completion Date (as defined in Section 2.8(b) below) shall each be determined in accordance with Section 2.8(b) below, (iv) the Expiration Date shall mean the last day of the eighty-fourth (84th) month after the Phase 1 Tenant Completion Date (or, if the Phase 1 Tenant Completion Date occurs on a date other than the first day of a calendar month, after the first day of the first full month occurring after the Phase 1 Tenant Completion Date), (v) all references to Commencement Date shall mean the Phase 1 Tenant Completion Date, (vi) subject to Sections 2.2.2, 4.1 and 4.5, Tenant shall commence paying Base Rent for the Phase 1 Premises as of the Phase 1 Tenant Completion Date and for the Phase 2 Premises as of the Phase 2 Tenant Completion Date, and (vii) Delay Rent Credits shall remain in effect and shall be determined assuming the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date occurred on the applicable Construction Completion Date (hereinafter defined).
(b) Tenant Completion Date; Delay Days. If Tenant elects to manage construction of the Ancillary Tenant Improvements and/or Tenant Improvements pursuant to Section 7.4.3 of the Work Letter, then within thirty (30) days thereafter, Tenants Architect, the General Contractor and Landlords construction manager shall reasonably determine the date construction of the Ancillary Tenant Improvements and/or Tenant Improvements with respect to each of the Phase 1 Premises and the Phase 2 Premises, as applicable, would likely be completed by Tenant using commercially reasonable efforts (without payment of overtime or premium time wages) as of the date Tenant elects the remedy set forth in Section 7.4.3 of the Work Letter (as applicable to either the Phase 1 Premises or the Phase 2 Premises, the Construction Completion Date). The Phase 1 Tenant Completion Date shall mean the earlier to occur of (i) the date which is thirty (30) days after the applicable Construction Completion Date for the Phase 1 Premises and (ii) the date Tenant commences business operations in at least one hundred nineteen thousand (119,000) Adjusted Rentable Square Feet of the Phase 1 Premises (provided, however, that the Phase 1 Tenant Completion Date shall be extended for delays resulting from Force Majeure Events and Landlord Delays). The Phase 2 Tenant Completion Date shall mean the earlier to occur of (A) the date which is thirty (30) days after the applicable Construction Completion Date for the Phase 2 Premises and (B) the date Tenant commences business operations in the entire Phase 2 Premises (provided, however, that the Phase 2 Tenant Completion Date shall be extended for delays resulting from Force Majeure Events and Landlord Delays). Any dispute between Landlord and Tenant regarding any Construction Completion Date shall be submitted to binding arbitration in accordance with Article 45 below; provided that, (x) until such arbitration is concluded, the Construction Completion Date as reasonably determined by Tenants Architect shall be deemed to be the Construction Completion Date for purposes of this Lease and (y) following the completion of such arbitration, the Construction Completion Date shall be the date determined by the Arbitrator. Except for any Landlord Delay resulting from Landlords failure to take any action prior to any deadline for taking such action, no Landlord Delay shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Landlord Delay, and Landlord shall fail to correct or cure such Landlord Delay within one (1) business day. There shall be excluded from the number of days of any Landlord Delay any days of delay which are primarily caused by Force Majeure Events. If any Construction Completion Date is actually delayed due to Landlord Delay, then Tenant and Tenants Architect shall reasonably determine in consultation with Landlord and Landlords construction
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manager the date on which the Tenant Improvements would have been completed but for such Landlord Delay and such certified date shall be the Construction Completion Date.
3. Term.
3.1 Term of Lease. The Term of this Lease shall commence as of the Lease Date and shall expire on the Expiration Date, unless sooner terminated or extended pursuant to the provisions of this Lease. After the Commencement Date and Expiration Date have been established, then within ten (10) business days following request by either party, the other party agrees to execute and deliver to the requesting party a Confirmation of Lease Term (Confirmation) in the form of Exhibit D attached hereto. This Lease shall be a binding contractual obligation effective upon execution and delivery hereof by Landlord and Tenant.
3.2 Early Access. Subject to the provisions of this Section 3.2, Landlord shall allow Tenant access to the Premises prior to the Commencement Date for purposes of installing Tenants furniture, fixtures, equipment, millwork and telephone/data cabling (Tenants Fixturing Work). Tenant and Tenants employees, agents, contractors, subcontractors, suppliers or any other person requiring access to the Premises in connection with the performance of Tenant Fixturing Work (each, Tenants Construction Representative and collectively, Tenants Construction Representatives) shall be subject to reasonable approval by Landlord prior to the commencement of their work, and Tenant shall cause Tenants Construction Representatives to engage only labor that is harmonious and compatible with other labor working in the Building. Tenant and Tenants Construction Representatives shall work cooperatively with Landlord to coordinate the scheduling and performance of Tenants Fixturing Work so as not to delay the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date. As a condition to entering the Building, each of Tenants Construction Representatives shall provide Landlord with satisfactory evidence of such commercially reasonable insurance as Landlord may reasonably require. Tenants Construction Representatives shall comply with Landlords current contractor rules and regulations, while in the Premises or elsewhere in the Project. Tenants Construction Representatives shall not interfere with or delay the construction of the Tenant Improvements or any other work in the Building. If at any time any of Tenants Construction Representatives hinders or delays construction of the Tenant Improvements or any other work in the Building or performs any work that impairs the quality, integrity or performance of the Tenant Improvements or other work in any portion of the Building, upon written notice from Landlord, Tenant shall promptly cause such Tenants Construction Representative to leave the Building and remove all of its tools, equipment and materials. Tenant shall reimburse Landlord for the cost of any repairs to the Premises or other portions of the Building or Common Areas to the extent necessitated by the acts or omissions of Tenants Construction Representatives. All entries into the Premises by Tenant or Tenants Construction Representatives prior to the Commencement Date shall be subject to all of the terms, covenants and conditions of this Lease, including, but not limited to, Tenants insurance obligations contained in Article 14 and Tenants indemnity obligations contained in Article 16, but excluding the obligation to pay Base Rent. In addition, Tenant shall not be charged for utilities or HVAC services, the use of freight elevators or loading docks, or security services during the periods of time that Tenant has access to the Premises solely for purposes of performing Tenants Fixturing Work or in connection with Tenants move into the Premises.
3.3 Tenants Early Termination Options.
3.3.1 Options; Exercise. Subject to the terms and conditions contained herein, Tenant shall have a one (1) time option to terminate the Lease as to each of the following portions of the Premises on the following dates: (a) the Sixth Floor Premises as of the last day of the sixtieth (60th) full calendar month after the Commencement Date, (b) the Fifth Floor Premises as of the last day of the seventy-second (72nd) full calendar month after the Commencement Date, and (c) the Third Floor
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Premises as of the last day of the seventy-second (72nd) full calendar month after the Commencement Date (each such option, a Early Termination Option, each such portion of the Premises, a Termination Space, and each such date a Early Termination Date). Each Termination Option shall be exercisable only by giving Landlord unconditional and irrevocable written notice (Termination Notice) thereof no earlier than three hundred sixty (360) days prior to, and no later than two hundred seventy (270) days prior to, the applicable Early Termination Date, time being of the essence. If Tenant elects to so terminate this Lease as to any Termination Space, Tenant shall pay to Landlord, concurrently with Tenants delivery to Landlord of any Termination Notice, a termination fee (the Termination Fee) equal to the unamortized amount, as of the applicable Early Termination Date, of Landlords Lease Expenses (as defined below) (such unamortized amount to be computed by amortizing such amounts over the initial Term, with interest at the rate of six percent (6%) per annum on a straight line basis from the Commencement Date) allocated to the applicable Termination Space. As used herein, Landlords Lease Expenses means the following: (A) all brokerage commissions paid by Landlord in connection with this Lease, plus (B) the amount of the Tenant Improvement Allowance paid by Landlord pursuant to the Work Letter, plus (C) the cost of the Ancillary Tenant Improvements plus (D) the amount of the Rent Abatement for the Weighted Average Abatement Period minus (E) the sum of the portions of the costs of the Ancillary Tenant Improvements funded by Tenant and the portions of the costs of improvements to restrooms that are funded by Tenant. An example of the calculation of the Termination Fee is set forth on Exhibit S attached hereto. For purposes of calculating the Termination Fee, Landlords Lease Expenses shall be allocated to a Termination Space by multiplying the Landlords Lease Expense by a fraction, the numerator of which is the Adjusted Rentable Square Feet of such Termination Space and the denominator of which is the Adjusted Rentable Square Feet of the Premises. Landlord shall provide to Tenant the total amount of Landlords Lease Expenses (along with reasonable supporting backup documentation) within thirty (30) days following Tenants request therefor; and if Landlord has not provided such amount and documentation prior to Tenants delivery of a Termination Notice hereunder, then, notwithstanding the foregoing, the Termination Fee shall be payable to Landlord within thirty (30) days following Tenants receipt of such amount and documentation. Effective on an Early Termination Date, this Lease shall terminate as though the Term of the Lease had expired as to the applicable Termination Space and all provisions herein applicable to the expiration of the Term of the Lease and the surrender of the Premises shall be applicable to such Termination Space. If Tenant fails to timely exercise the Termination Option, or fails to pay the Termination Fee as required herein, then, at Landlords sole option, Tenants exercise of the Termination Option shall be null and void and this Lease shall continue in full force and effect as to the entirety of the Premises.
3.3.2 Conditions. The following provisions apply to Tenants Termination Option:
(a) Surrender of Termination Space. If Tenant exercises a Termination Option and pays the applicable Termination Fee as provided above, Tenant shall surrender the applicable Termination Space to Landlord as required pursuant to Section 32.13 below on or before the applicable Early Termination Date. If Tenant fails to so vacate and surrender possession of the Termination Space on the Early Termination Date, then the provisions of Article 25 hereof shall apply to Tenants continued occupancy.
(b) Amendment. Within thirty (30) days after the date of a Termination Notice, Landlord and Tenant shall enter into modifications to this Lease which are necessary to (i) amend the schedule of Base Rent set forth in the Basic Lease Information to reduce the Base Rent applicable to the Termination Space, (ii) cause the separation and securing of the Termination Space from the remaining Premises and (iii) amend other provisions of the Lease (such as Tenants Percentage Share and the Letter of Credit Amount) to account for the reduced Adjusted Rentable Square Footage of the remaining Premises. The Letter of Credit Amount shall be reduced by multiplying the then current Letter
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of Credit Amount (as may have been previously increased in accordance with Articles 33, 34 and/or 35) by a fraction, the numerator of which shall be the Adjusted Rentable Square Feet of the applicable Termination Space and the denominator of which shall be the Adjusted Rentable Square Feet of the Premises immediately prior to the applicable Early Termination Date.
(c) No Subtenant Exercise. No subtenant shall have any right to exercise the Early Termination Option on behalf of Tenant.
3.4 Option to Extend.
3.4.1 Option to Extend Term. Landlord hereby grants to Tenant two (2) successive options (each a Extension Option and collectively, the Extension Options ) to extend the initial Term for additional periods of five (5) years each (each an Extension Term and collectively, the Extension Terms) commencing on the first day following the Expiration Date on the terms and subject to the conditions set forth in this Section 3.4; provided, however, that (a) Tenant may exercise each Extension Option with respect to all or a portion of the Premises then leased by Tenant hereunder, provided that (i) in the event Tenant exercises an Extension Option as to any of the Concourse Premises, the First Floor Premises or the Second Floor Premises, Tenant must exercise such Extension Option as to all of the Concourse Premises, the First Floor Premises and the Second Floor Premises and (ii) in all events Tenant must exercise an Extension Option with respect to a minimum of 100,000 Adjusted Rentable Square Feet that is contiguous and, if located on more than one floor, on adjacent floors and (b) the second Extension Option may be exercised only if the first Extension Option has been duly exercised.
3.4.2 Exercise. Tenant shall exercise an Extension Option, if at all, by giving Landlord unconditional, irrevocable written notice of such election no earlier than twelve (12) months and no later than nine (9) months prior to the scheduled Expiration Date, the time of such exercise being of the essence. Tenants notice shall specify the portions of the Premises which Tenant intends to exercise the Extension Option (the Renewal Premises). Subject to the provisions of this Section 3.4, upon the giving of such notice (which must specify the portion of the Premises to which the Extension Option shall apply), this Lease and the Term shall be extended without execution or delivery of any other or further documents, with the same force and effect as if the applicable Extension Term had originally been included in the initial Term.
3.4.3 Conditions. If Tenant exercises an Extension Option pursuant to Section 3.4.2 above, all of the terms, covenants and conditions of this Lease shall continue in full force and effect during the applicable Extension Term, except that: (a) the Base Rent during the applicable Extension Term shall be determined as set forth below; (b) the Base Year during the applicable Extension Term shall be the calendar year during which such Extension Term commences, provided that Tenant shall have no obligation to pay any Escalation Rent whatsoever during the first (1st) twelve (12) months of the applicable Extension Term; (c) Tenant shall continue to possess and occupy the Renewal Premises in their existing condition, as is, as of the commencement of the applicable Extension Term, and Landlord shall have no obligation to repair, remodel, improve or alter the Renewal Premises, to perform any other construction or other work of improvement upon the Renewal Premises, or to provide Tenant with any construction or refurbishing allowance whatsoever; (d) Tenant shall have no further rights to extend the Lease Term after the expiration of the second Extension Term; (e) the Parking Charge per the Parking Space shall be determined as provided in Section 3.4.4 below; (f) the term Premises as used in this Lease shall refer to the Renewal Premises; (g) the term Tenants Percentage Share shall mean the ratio of the Adjusted Rentable Square Feet of the Renewal Premises to the Adjusted Rentable Square Feet of the Project.
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3.4.4 Fair Market Rent. The Base Rent payable by Tenant for the Renewal Premises during the first Extension Term shall be ninety-five percent (95%) of the Fair Market Rent (as defined below) for the Renewal Premises, valued as of the commencement of the first Extension Term, determined in the manner set forth below. The Base Rent payable by Tenant for the Renewal Premises during the second Extension Term shall be ninety-five percent (95%) of the Fair Market Rent for the Renewal Premises, valued as of the commencement of the second Extension Term, determined in the manner set forth below. The Parking Charge payable by Tenant for the Parking Spaces during the first Extension Term shall be the lesser of Two Hundred Dollars ($200.00) per Parking Space per month and one hundred percent (100%) of the Fair Market Rent for the Parking Spaces, valued as of the commencement of the first Extension Term, determined in the manner set forth below. The Parking Charges payable by Tenant for the Parking Spaces during the second Extension Term shall be the lesser of Two Hundred Fifty Dollars ($250.00) per Parking Space per month and one hundred percent (100%) of the Fair Market Rent for the Parking Spaces, valued as of the commencement of the second Extension Term, determined in the manner set forth below. As used herein, the term Fair Market Rent means the annual Base Rent and Parking Charges that a willing tenant would pay, and that a willing landlord would accept, at arms length, as of the commencement of the applicable Extension Term, for space comparable to the Renewal Premises in Comparable Buildings and parking comparable to the Parking Spaces in Comparable Buildings, respectively, based upon binding lease transactions for tenants in the Building and Comparable Buildings that, where possible, commence or are to commence within six (6) months prior to or within six (6) months after the commencement of the applicable Extension Term (Comparison Leases) excluding the rental value attributable to any Alterations (but not the Tenant Improvements or Ancillary Tenant Improvements) paid for by Tenant. Comparison Leases shall include renewal and new non-renewal tenancies, but shall exclude subleases and leases of space subject to another tenants expansion rights. Rent rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to, among other things: (a) the length of the applicable Extension Term compared to the lease term of the Comparison Leases; (b) rental structure, including, without limitation, rental rates per rentable square foot (including type, gross or net, and if gross, adjusting for the base year or expense stop), and escalation provisions, (c) the size of the Renewal Premises compared to the size of the premises of the Comparison Leases; (d) location, floor levels, efficiencies and outlook of the floor(s) of the Renewal Premises compared to the premises of the Comparison Leases; (e) free rent, moving allowances and other cash payments affecting the rental rate; (f) the age and quality of construction of the Building (including compliance with applicable codes on the applicable floors) compared to the Comparable Buildings; (g) leasehold improvements and/or allowances, including the amounts thereof in renewal leases, and taking into account, in the case of renewal leases (including this Lease), the value of existing leasehold improvements to the renewal tenant; (h) access to public transit and the availability of parking; (i) the amenities available to tenants in the Building compared to amenities available to tenants in Comparable Buildings; (j) the energy efficiencies and environmental elements of the Building compared to Comparable Buildings, including current LEED certification; (k) the uses of the Comparison Leases as compared to the use of the Renewal Premises; (l) the type and quality of any base building work in the Comparable Buildings compared to the Building; (m) the type and quality of tenant improvements in the Renewal Premises as compared to Comparable Buildings; and (n) the fact that landlords are or are not paying real estate brokerage commissions in connection with such Comparison Leases. In determining the Market Rate, the most weight shall be given to Comparison Leases in the Building. The Fair Market Rent may include annual or other periodic increases and may be less or may be more than the Base Rent existing as of the exercise of the applicable Extension Option. The Fair Market Rent for (i) the Renewal Premises and (ii) for the Parking Charge per Parking Space (as defined below) shall be determined separately.
3.4.5 Determination of Base Rent and Parking Charges.
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(a) Without limiting any provision of Section 3.4.2 above, within thirty (30) days following Tenants written request, which may be given no earlier than thirteen (13) months and no later than ten (10) months prior to the scheduled Expiration Date, Landlord shall provide Tenant in writing with a good faith written proposal of the Fair Market Rent for the Renewal Premises and the Parking Spaces for the applicable Extension Term (Landlords Initial Proposal). Provided that Tenant subsequently give valid notice of exercise of the applicable Extension Option, Landlord agrees that neither Landlords Market Rent Proposal given pursuant to Section 3.4.5(b) below or Landlords Determination of the Fair Market Rent for the applicable Extension Term pursuant to Section 3.4.6(a) below shall be higher than Landlords Initial Proposal.
(b) Not later than six (6) months prior to the commencement of the applicable Extension Term, provided Tenant has given valid notice of exercise of the Extension Option, Landlord shall deliver to Tenant a good faith written proposal of the Fair Market Rent for the Renewal Premises and for the Parking Spaces for the applicable Extension Term (Landlords Market Rate Proposal), provided that in no event shall Landlords Market Rate Proposal be higher than Landlords Initial Proposal given pursuant to Section 3.4.5(a) above. Within thirty (30) days after receipt of Landlords Market Rate Proposal, Tenant shall notify Landlord in writing that Tenant accepts Landlords Market Rate Proposal or disputes Landlords Market Rate Proposal. If Tenant does not give Landlord a timely notice in response to Landlords proposal, Landlords Market Rate Proposal shall be binding upon Tenant.
3.4.6 Arbitration.
(a) If Tenant timely disputes Landlords Market Rate Proposal, the parties shall first negotiate in good faith to reach agreement upon the Fair Market Rent for the applicable Extension Term. If Landlord and Tenant are able to agree upon the Fair Market Rent within thirty (30) days after Tenants notice to Landlord disputing Landlords Market Rate Proposal (Impasse Date), then such agreement shall constitute a final determination of Fair Market Rent. If Landlord and Tenant are unable to agree upon the Fair Market Rent prior to the Impasse Date, then within fifteen (15) days after the Impasse Date, the parties shall meet and concurrently deliver to each other their respective written estimates of the Fair Market Rent for the applicable Extension Term, supported by the reasons therefor (each, a Determination). Landlords Determination may be more or less than Landlords Market Rent Proposal (but may be no more than Landlords Initial Proposal). If either party fails to deliver its Determination in a timely manner, then the Fair Market Rent shall be the Determination by the other party. If the higher Determination is no more than one hundred five percent (105%) of the lower Determination, then the Fair Market Rent shall be the average of the two. In every other case, the Fair Market Rent shall be determined as set forth below.
(b) Within ten (10) days after the parties exchange their respective Determinations, the parties shall each appoint an arbitrator who shall be a licensed California real estate broker with at least ten (10) years experience in leasing commercial office space similar to the Building in the San Francisco market immediately prior to his or her appointment, and be familiar with the rentals then being charged in the Building and in the Comparable Buildings. The parties may appoint the real estate brokers who assisted them in making their Determinations as their respective arbitrators. If either Landlord or Tenant fails to timely appoint an arbitrator, then the Fair Market Rent for the applicable Extension Term shall be the Determination of the other party.
(c) Within twenty (20) days following appointment of the second arbitrator to be appointed, the two arbitrators appointed by the parties shall appoint a third, similarly qualified, independent arbitrator (the Independent Arbitrator), and notify Landlord and Tenant of the identity of the Independent Arbitrator. If an Independent Arbitrator has not been so appointed by the end
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of such twenty (20) day period, then either party, on behalf of both, may request such appointment by the San Francisco office of the American Arbitration Association (or any successor thereto), or in the absence, failure, refusal or inability of such entity to act, then either party may apply to the presiding judge of the San Francisco Superior Court, for the appointment of such an Independent Arbitrator, and the other party shall not raise any question as to the courts full power and jurisdiction to make the appointment.
(d) Within five (5) days following notification of the identity of the Independent Arbitrator, Landlord and Tenant shall submit copies of Landlords Determination and Tenants Determination to the three arbitrators (the Arbitration Panel). The Arbitration Panel, by majority vote, shall select either Landlords Determination or Tenants Determination as the Base Rent for the Extension Term, and shall have no right to propose a middle ground or to modify either of the two Determinations or the provisions of this Lease. The Arbitration Panel shall attempt to render a decision within thirty (30) days after appointment of the Independent Arbitrator. In any case, the Arbitration Panel shall render a decision within forty five (45) days after appointment of the Independent Arbitrator.
(e) The decision of the Arbitration Panel shall be final and binding upon the parties, and may be enforced in accordance with the provisions of California law. In the event of the failure, refusal or inability of any member of the Arbitration Panel to act, a successor shall be appointed in the manner that applied to the selection of the member being replaced. Each party shall pay the fees and expenses of the arbitrator designated by such party, and one half of the fees and expenses of the Independent Arbitrator and the expenses incident to the proceedings (excluding attorneys fees and similar expenses of the parties which shall be borne separately by each of the parties).
(f) Each party may submit any written materials to the Arbitration Panel within five (5) business days of selection of the Independent Arbitrator. No witnesses or oral testimony (i.e. no hearing) shall be permitted in connection with the Arbitration Panels decision unless agreed to by both parties. No ex parte communications shall be permitted between any member of the Arbitration Panel and either Landlord or Tenant following appointment of the Arbitrator Panel until conclusion of the arbitration process. The members of the Arbitration Panel are authorized to walk both the Renewal Premises and any comparable space (to the extent access is made available).
3.4.7 Rent Payment Pending Resolution. Until the matter is resolved by agreement between the parties or a decision is rendered in any arbitration commenced pursuant to this Section 3.4, Tenants monthly payments of Base Rent for the Renewal Premises and the Parking Charge for the Parking Spaces as of the commencement of the Extension Term shall be in an amount equal to one hundred five percent (105%) of the monthly Base Rent and Parking Charge payable by Tenant immediately prior to the scheduled expiration of the Term on a per Adjusted Rentable Square Foot basis. Within thirty (30) business days following determination of the Fair Market Rent by agreement by the parties or the decision of the arbitrators, as applicable, Tenant shall pay to Landlord, or Landlord shall pay to Tenant, the amount of any deficiency or excess, as the case may be, in the Base Rent and Parking Charges previously paid.
3.4.8 General Provisions. The following general provisions shall apply to each Extension Option:
(a) Assignment. Tenants right to exercise each Extension Option is personal to, and may be exercised only by, the original named Tenant under this Lease (or a Permitted Assignee). If Tenant shall assign this Lease (other than to a Permitted Assignee), then immediately upon such assignment, Tenants right to exercise the Extension Option shall automatically terminate and be of
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no further force or effect. No assignee (other than to a Permitted Assignee) or subtenant shall have any right to exercise the Extension Option granted herein.
(b) Amendment to Lease. After the Base Rent payable during the applicable Extension Term is determined, the parties shall promptly execute an amendment to this Lease in a form reasonably acceptable to both parties extending the Term and stating the amount of the Base Rent payable during the applicable Extension Term. The Letter of Credit Amount shall be reduced by multiplying the then current Letter of Credit Amount (as may have been previously increased in accordance with Articles 33, 34 and/or 35) by a fraction, the numerator of which shall equal (i) the Adjusted Rentable Square Feet of the Premises immediately prior to the commencement of the applicable Extension Term minus (ii) the Adjusted Rentable Square Feet of the Renewal Premises and the denominator of which shall be the Adjusted Rentable Square Feet of the Premises immediately prior to the commencement of the applicable Extension Term.
(c) References to Term. Subject to the provisions of this Section 3.4, after exercise of an Extension Option, all references in this Lease to the Term shall be deemed to refer to the Term as extended, unless the context clearly provides to the contrary.
(d) Additional Condition. Notwithstanding anything to the contrary contained herein, Tenants exercise of an Extension Option shall, at Landlords election, be null and void if an Event of Default exists at the time of exercise of the applicable Extension Option.
(e) Impact of Lease Termination. If Tenant shall fail to properly exercise an Extension Option, the Extension Option shall terminate and be of no further force and effect. If this Lease shall terminate for any reason, then immediately upon such termination, the Extension Options shall automatically terminate and become null and void.
4. Rent.
4.1 Obligation to Pay Base Rent. Tenant agrees to pay to Landlord as Base Rent for the Premises, the sums specified in the Basic Lease Information. Base Rent shall be paid to Landlord, in advance, on or before the first day of each and every successive calendar month during the Term after the Phase 1 Rent Commencement Date; provided, however, that upon signing this Lease, Tenant shall pay to Landlord an amount equal to the Base Rent for the first full month of the Term, which amount shall be applied to the Base Rent owing for the first month of the Term after the Rent Abatement Period. If the Phase 1 Rent Commencement Date is other than the first day of a calendar month, the installment of prepaid Base Rent for the first month of the Term for which Base Rent is payable shall be prorated on the basis of a 360-day year consisting of twelve 30-day months, and the balance shall be credited to Base Rent owing for the following month of the Term. If the Expiration Date is other than the last day of a calendar month, or if this Lease shall be terminated as of a day other than the last day of a calendar month, the installment of Base Rent for the last fractional month of the Term shall be prorated on the basis of a 360-day year consisting of twelve 30-day months.
4.2 Manner of Rent Payment. All Rent shall be paid by Tenant without notice, demand, abatement, deduction or offset (except as expressly set forth in the Lease), in lawful money of the United States of America, that at the time of payment shall be legal tender for the payment of all obligations, in immediately available funds or by good check as described below, and if payable to Landlord, at Landlords Address for Payments in the Basic Lease Information, or to such other person or at such other place as Landlord may from time to time designate by notice to Tenant.
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4.3 Additional Rent. All Rent not characterized as Base Rent, Escalation Rent or Parking Charges shall constitute additional rent, and if payable to Landlord shall, unless otherwise specified in this Lease, be due and payable thirty (30) days after Tenants receipt of Landlords invoice therefor.
4.4 Late Payment of Rent; Interest. All amounts of Rent, if not paid within five (5) business days after the due date, shall bear interest from the due date until paid at the Interest Rate. In addition, Tenant acknowledges that late payment by Tenant to Landlord of Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult to fix. Such costs include, without limitation, processing and accounting charges, and late charges that may be imposed on Landlord under the terms of its loan documents. Therefore, if any installment of Rent is not received within five (5) business days after the due date, Tenant shall pay to Landlord an additional one-time sum of two percent (2%) of the delinquent Rent as a late charge. A late charge shall not be imposed more than once with respect to any particular payment not paid by Tenant when due. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment of Rent by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenants default with respect to the overdue amount, or prevent Landlord from exercising any of the other rights and remedies available to Landlord. Notwithstanding anything to the contrary set forth herein, Tenant shall not be liable for the late charge set forth in this Section 4.4 with respect to the first delinquency by Tenant in any calendar year, provided that Tenant shall pay any such delinquent amount within five (5) business days after receipt of notice of such delinquency from Landlord.
4.5 Abatement of Base Rent. Notwithstanding the provisions of the Basic Lease Information and Tenants obligation to pay monthly Base Rent pursuant to Section 4.1 above, Tenant shall be entitled to an abatement of Base Rent (the Rent Abatement) for the following periods after the Commencement Date (each a Rent Abatement Period) with respect to the following portions of the Premises: (a) from the Commencement Date to the date which is nine (9) months after the Commencement Date with respect to the Concourse Premises, (b) from the Commencement Date to the date which is fifteen (15) months after the Commencement Date with respect to the Sixth Floor Premises, (c) from the Commencement Date to the date which is twenty one (21) months after the Commencement Date with respect to the Fifth Floor Premises, (d) from the Commencement Date to the date which is twenty five (25) months after the Commencement Date with respect to the Second Floor Corridor Space; (e) from the Commencement Date to the date which is twenty seven (27) months after the Commencement Date with respect to the First Floor Premises and Third Floor Premises (other than the Suite 375 Premises), (f) from the Commencement Date to the date which is twenty nine (29) months after the Commencement Date with respect to the Second Floor Premises (other than the Second Floor Corridor Space), and (g) from the Commencement Date to the date which is twenty nine (29) months after the Commencement Date with respect to the Suite 375 Premises.
5. Calculation and Payments of Escalation Rent. Tenant shall pay to Landlord Escalation Rent in accordance with the following procedures:
5.1 Payment of Estimated Escalation Rent. During December of each calendar year, Landlord shall give Tenant notice of its commercially reasonable estimate of Escalation Rent due for the succeeding calendar year. On or before the first day of each month during the succeeding calendar year, Tenant shall pay to Landlord, as additional rent, one twelfth (1/12) of such estimated amounts. If Landlord fails to deliver such notice to Tenant in December, Tenant shall continue to pay Escalation Rent on the basis of the prior years estimate until the first day of the next calendar month after such notice is given, provided that within thirty (30) days after receipt of Landlords estimate, Tenant shall pay to Landlord the amount of such estimated adjustment payable to Landlord for prior months during the year in question, less any portion thereof previously paid by Tenant. If it reasonably appears to Landlord that
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the amounts payable under this Section 5.1 for the current calendar year will vary from Landlords estimate, Landlord may, by giving written notice to Tenant, but not more than two (2) times in any calendar year, revise Landlords estimate for such year, and subsequent payments by Tenant for such year shall be based on such revised estimate. Landlords failure or delay in providing Tenant with Landlords estimate of Escalation Rent for any calendar year shall not constitute a default by Landlord hereunder, or a waiver by Landlord of Tenants obligation to pay Escalation Rent for such calendar year or of Landlords right to send such an estimate to Tenant on a later date. Notwithstanding anything to the contrary set forth in this Lease (i) Tenant shall have no obligation to pay any Escalation Rent or portion thereof until the date that is twelve (12) months after the Commencement Date as to the Phase 1 Premises and until the date that is twelve (12) months after the Phase 2 Rent Commencement Date as to the Phase 2 Premises and (ii) Landlord shall operate the Building in a cost-conscious manner and shall use reasonable efforts to minimize increases in the Operating Expenses on an ongoing basis.
5.2 Escalation Rent Statement and Adjustment. On or before March 31 of each calendar year, Landlord shall deliver to Tenant a statement of the actual Escalation Rent for such calendar year, showing in reasonable detail (a) the Operating Expenses and the Real Property Taxes comprising the actual Escalation Rent, and (b) payments made by Tenant on account of Operating Expenses and Real Property Taxes for such calendar year (an Annual Statement). Landlords failure or delay in providing Tenant with an Annual Statement for any calendar year shall not constitute a default by Landlord hereunder, or a waiver by Landlord of Tenants obligation to pay Escalation Rent for such calendar year or of Landlords right to send such Annual Statement on a later date. If Landlord fails to deliver the Annual Statement on or before March 31 of a given calendar year and Tenant has paid to Landlord an amount in excess of the Escalation Rent paid for the preceding calendar year, then Tenant shall be entitled to interest on such overpayment at the Interest Rate after March 31 until such amount is refunded or credited in accordance with this Section 5.2. In addition, on or before March 31, 2012, Landlord shall deliver an Annual Statement listing the Operating Expenses and Real Property Taxes allocable to the Base Year, including any adjustments made pursuant to Section 5.3 below. If the Annual Statement shows that Tenant owes an amount that is more than the payments previously made by Tenant for such calendar year, Tenant shall pay the difference to Landlord within thirty (30) days after delivery of the Annual Statement. If the Annual Statement shows that Tenant owes an amount that is less than the payments previously made by Tenant for such calendar year, and Tenant is not in monetary default in the performance of any of its obligations under this Lease, Landlord shall credit the difference first against any sums then owed by Tenant to Landlord and then against the next payment or payments of Rent due Landlord, except that if a credit amount is due Tenant after the termination of this Lease, Landlord shall pay to Tenant any excess remaining after Landlord credits such amount against any sums owed by Tenant to Landlord. Tax refunds shall be credited against Real Property Taxes or refunded to Tenant regardless of when received, based on the calendar year to which the refund is applicable. If, after Landlords delivery of any Annual Statement, an increase or decrease in Real Property Taxes allocable to any calendar year (including the Base Year) occurs, whether by reason of reassessment, error, or otherwise, Real Property Taxes for such calendar year or the Base Year, as the case may be, shall be retroactively adjusted. If, as a result of such adjustment, Tenant has underpaid Escalation Rent, Tenant shall pay Landlord the amount of such underpayment within thirty (30) days after demand. If, as a result of such adjustment, Tenant has overpaid Escalation Rent, Landlord, at its election, shall either credit such overpayment against the Rent next due hereunder or refund the amount of the overpayment to Tenant within thirty (30) days after such adjustment is made; provided, however, that if this Lease has expired or terminated and Tenant has vacated the Premises, Landlord shall pay Tenant the amount of such overpayment (less any Rent due), within thirty (30) days after such adjustment is made. Tenant shall have two hundred seventy (270) days after receipt of an Annual Statement to notify Landlord in writing that Tenant disputes the correctness of the Annual Statement (Expense Claim). If Tenant does not object in writing to an Annual Statement within said two hundred seventy (270) day period, such Annual Statement shall be final and binding upon Tenant. If Tenant delivers an Expense Claim to Landlord
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within said two hundred seventy (270) day period, the parties shall promptly meet and attempt in good faith to resolve the matters set forth in the Expense Claim. If the parties are unable to resolve the matters set forth in the Expense Claim within thirty (30) days after Landlords receipt of the Expense Claim (Expense Resolution Period), then Tenant shall have the right to examine Landlords records, subject to the terms and conditions set forth in Section 5.8 below. This Section 5.2 shall survive the expiration or earlier termination of this Lease.
5.3 Adjustments to Operating Expenses.
5.3.1 If the Building is less than 100% occupied during any calendar year of the Term, including the Base Year, Operating Expenses for such calendar year shall be adjusted to the amount of Operating Expenses that would have been incurred if the Building had been 100% occupied. Notwithstanding anything to the contrary set forth in this Lease, if in any calendar year subsequent to the Base Year, the amount of Operating Expenses decreases below the amount of Operating Expenses allocable to the Base Year, Tenant shall not be entitled to receive any refund or credit. In no event shall any adjustments to Operating Expenses in any calendar year result in Landlord receiving from Tenant and other tenants more than one hundred percent (100%) of the cost of the actual Operating Expenses incurred by Landlord in any such calendar year.
5.3.2 In addition, the Operating Expenses for the Base Year shall be adjusted to include, when Building Systems are under warranty during the Base Year, an adjustment for the cost of service contracts that would have been incurred in the absence of such warranties. The purpose of the adjustments set forth in this Section 5.3 is to include in Operating Expenses for the Base Year all reasonable cost components that occur or are likely to occur in later years. If a new category of expense is incurred after the Base Year (including, without limitation, costs and expenses incurred in complying with or administering Landlords transportation demand management program), the first full years expense for such item shall be added to Operating Expenses for the Base Year, so that Tenant shall only be required to pay subsequent increases in such expense. Conversely, if, subsequent to the Base Year, Landlord no longer incurs a category of expense, then the Operating Expenses for the Base Year shall be deemed reduced by the amounts Landlord incurred during the Base Expense Year for such category of expense. Notwithstanding the preceding sentence, if Landlord fails to carry earthquake, flood or terrorism insurance, then there shall be no reduction of expenses for the Base Year resulting therefrom. If a new category of Real Property Taxes is incurred after the Base Year, the first full years expense for such item shall be added to Real Property Taxes for the Base Year, so that Tenant shall only be required to pay subsequent increases in such expense.
5.3.3 Landlord represents and warrants, to Landlords knowledge (as defined below) that there are no special assessments other than Real Property Taxes presently assessed, levied, charged or imposed on the Project or any part thereof. The phrase to Landlords knowledge shall mean, and be limited to, the current, actual knowledge (as distinguished from implied, imputed or constructive knowledge) of Michael A. Covarrubias, Brian Fleming and Sean Donnelly and without said person having any obligation to make independent inquiry or investigation. Landlord shall pay, without being entitled to reimbursement from Tenant under this or any other Section of this Lease, any and all one-time assessments, impositions, costs of mitigation, impact fees, connection fees, tap-in fees and similar one-time charges imposed as a condition of or in connection with development of the initial Project or any expansion thereof. Landlord shall pay when due all assessments for municipal improvements levied against the Project during the Term, which shall be paid in the maximum number of installments permitted by Applicable Law and shall be included in Real Property Taxes. Landlord shall pay subsequent special assessments for which it is entitled to obtain reimbursement from Tenant in the maximum number of installments permitted by Applicable Law.
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5.3.4 Landlord may revise the Annual Statement for any calendar year if Landlord first receives invoices from third parties, tax bills or other information relating to adjustments to Operating Expenses or Real Property Taxes allocable to such calendar year after the initial issuance of such Annual Statement. Notwithstanding the foregoing, in no event shall Tenant be obligated to pay for any Operating Expenses or Real Property Taxes that are not billed by Landlord within one (1) year of the date on which such Operating Expense or Real Property Taxes were incurred by Landlord and the recovery thereof shall be deemed waived by Landlord; provided that, the foregoing one (1) year limitation shall not apply to any Operating Expenses or Real Property Taxes as to which Landlord, operating in a commercially reasonable manner with respect to its management of the Project: (i) did not receive an invoice, bill or other notice thereof (except to the extent such Operating Expense or Real Property Tax amount was available to Landlord on an on-line electronic basis unless the Operation Expense or Real Property Tax was not posted thereon); and (ii) had no knowledge thereof, in each case prior to expiration of said one (1)-year period, as reasonably demonstrated to Tenants satisfaction, including by provision of invoices, bills or notices evidencing the date upon which such Operating Expense or Real Property Tax was first billed (or notice thereof provided) to Landlord.
5.4 Adjustments to Tenants Percentage Share. Landlord shall reasonably adjust Tenants Percentage Share to account for changes in the physical size of the Premises or the Project. Notwithstanding anything to the contrary contained in this Lease, Landlord shall equitably allocate Operating Expenses among the office and retail/restaurant portions or occupants of the Building, in Landlords reasonable discretion, if and to the extent such Operating Expenses are incurred exclusively for the benefit of the office or retail/restaurant portions or occupants of the Building. With respect to any Operating Expense item that Landlord allocates to only a portion of the Building, Tenants Percentage Share (assuming Tenant benefits from such Operating Expense item) shall be a percentage, the numerator of which is the Adjusted Rentable Square Feet of the Premises, and the denominator of which is the total Adjusted Rentable Square Feet of the space in the Building that benefits from the particular Operating Expense item, as determined by Landlord in its reasonable discretion.
5.5 Payment of Real Property Taxes in Installments. If, by law, any Real Property Taxes may be paid in installments (whether or not interest accrues on the unpaid balance), then, for any calendar year (including the Base Year), Landlord shall include in the calculation of such Real Property Taxes only the amount of the installments (with any interest) due and payable during such year had Landlord selected the longest permissible period of payment, provided that following the retirement or completed payment of any such Real Property Taxes, the amount of Real Property Taxes allocable to the Base Year shall be adjusted to eliminate that portion included therein, if any, that related to such retired or paid Real Property Taxes.
5.6 Proration for Partial Year. If this Lease terminates on a day other than the last day of a calendar year, the amounts of Escalation Rent payable by Tenant with respect to the calendar year in which such termination occurs shall be prorated on the basis of a 360-day year consisting of twelve 30-day months.
5.7 Certain Real Property Taxes Limited. Notwithstanding any other provision of this Lease to the contrary, if during the period commencing upon the Lease Date and ending on the fifth (5th) anniversary of the Commencement Date (the Protection Period), (a) there is any sale of all or a portion of the Project or of interests in Landlord, a refinancing or securitization of any interest in the Project, any ground or master lease of the Project or a change of ownership (as defined in California Revenue and Taxation Code Sections 60-62 or any amendments or successors to those sections) of the Project and/or (b) there are capital improvements made to the Project and, as a result, the Project is reassessed (Reassessment) for real estate tax purposes by the appropriate government authority higher than the previous amount of Real Property Taxes, the terms of this Section 5.7 shall apply to such
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Reassessment of the Project. For the purposes of this Section 5.7, the term Tax Increase (Tax Increase) shall mean that portion of the Real Property Taxes allocable to the Project that is attributable solely to the Reassessment. Accordingly, a Tax Increase shall not include any portion of the Taxes that is or would be (i) attributable to the initial assessment of the value of the Project or any portion thereof; (ii) attributable to assessments pending immediately before the Reassessment that were conducted during, and included in, that Reassessment or that were otherwise rendered unnecessary following the Reassessment; (iii) attributable to the annual inflationary increase in real estate taxes actually permitted under Proposition 13 (as adopted by the voters of the State of California in the June 1978 election); or (iv) attributable to any statutory increase in real estate taxes or other reassessment by any other Applicable Laws permitted for reasons other than those described hereinabove. If a Reassessment results from any change of ownership or a capital improvement that occurs during the Protection Period, the Tax Increase shall not be included in Real Property Taxes. The Tax Increase shall be paid by Landlord and not recouped from Tenant in any manner.
5.8 Inspection of Landlords Records.
5.8.1 Tenants Review. Provided that Tenant has timely delivered an Expense Claim to Landlord, Tenant or a certified public accountant engaged by Tenant (Tenants CPA) shall have the right, at Tenants cost and expense, to examine, inspect, and copy the records of Landlord concerning the components of Operating Expenses and/or Real Property Taxes (Landlords Records) for the calendar year in question that are disputed in the Expense Claim (Tenants Review). Any examination of Landlords Records shall take place upon reasonable prior written notice, at the offices of Landlord or Landlords property manager, during normal business hours. Tenant agrees to keep, and to cause Tenants CPA to keep, all information obtained by Tenant or Tenants CPA confidential, (except as required under Applicable Laws or disclosure to persons or entities who, because of their involvement with Tenants Review, need to know such information; provided, that, such parties shall be informed by Tenant of the confidential nature of such information and shall be directed by Tenant to keep all such information confidential), and Landlord may require all persons inspecting Landlords records to sign a commercially reasonable confidentiality agreement prior to making Landlords Records available to them. In no event shall Tenant be permitted to examine Landlords Records or dispute any Annual Statement unless Tenant has paid and continues to pay all Rent (excluding the amount disputed in the Expense Claim).
5.8.2 Landlords Dispute. If Landlord disputes the results of any Tenants Review, Landlord shall provide written notice of such dispute and Landlord and Tenant shall promptly thereafter work in good faith in an attempt to address Landlords dispute for a period of thirty (30) days after completion of Tenants Review (the Landlords Dispute Period). If Landlord and Tenant are unable to resolve Landlords dispute within Landlords Dispute Period, Landlord may provide Tenant written notice within fifteen (15) days after the Landlords Dispute Period of its election to seek resolution of the dispute by an Independent CPA (as defined below) together with a list of five (5) independent, certified public accounting firms that are not currently providing, and have not within the three (3) previous years provided, services to Landlord or Tenant or any entity Controlling, Controlled by or under common Control of Landlord or Tenant. All of the firms shall be nationally or regionally recognized firms with annual revenues in excess of Twenty Million Dollars ($20,000,000.00) during the preceding two (2) fiscal years and have experience in accounting related to commercial office buildings. In order to accommodate the foregoing, Tenant shall provide Landlord, within ten (10) business days after request, a complete list of all certified public accounting firms that are currently providing, or have within the three (3) previous years provided, services to Tenant or any entity Controlling, Controlled by or under common Control of Tenant. Landlords failure to deliver a notice of dispute and such list of accounting firms within thirty (30) days after Landlords Dispute Period shall be deemed to be Landlords acceptance of the results of Tenants Review. Within thirty (30) days after receipt of the list of accounting firms
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from Landlord, Tenant shall choose one of the five (5) firms by written notice to Landlord, which firm is referred to herein as the Independent CPA. The Independent CPA shall examine and inspect the records of Landlord concerning the components of Operating Expenses and/or Real Property Taxes for the calendar year in question and the results of Tenants Review and make a determination regarding the accuracy of Tenants Review. If the Independent CPAs determination shows that Tenant has overpaid with respect to Escalation Rent, by more than three percent (3%), then Landlord shall pay all costs associated with the Independent CPAs review and if less than three percent (3%) the costs shall be borne by Tenant. The determination of the Independent CPA shall be final and binding upon Landlord and Tenant.
5.8.3 Adjustments. If the Independent CPA (or, if Landlord does not dispute Tenants Review as provided in Section 5.8.2 above, Tenants Review) shows that the payments actually made by Tenant with respect to Escalation Rent for the calendar year in question exceeded Tenants Percentage Share of Operating Expenses or Real Property Taxes for such calendar year, Landlord shall at Landlords option either (a) credit the excess amount to the next succeeding installments of estimated Escalation Rent or (b) pay the excess to Tenant within thirty (30) days after delivery of the determination of the Independent CPA (or, if Landlord does not dispute Tenant Review, after delivery of Tenants Review), except that after the expiration or earlier termination of this Lease, Landlord shall pay the excess to Tenant. If the Independent CPA (or, if Landlord does not dispute Tenants Review as provided in Section 5.8.2 above, Tenants Review) shows that Tenants payment of Escalation Rent was less than Tenants Percentage Share of Operating Expenses or Real Property Taxes for such calendar year, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the determination of the Independent CPA (or, if Landlord does not dispute Tenant Review, after delivery of Tenants Review). If the Independent CPA (or, if Landlord does not dispute Tenants Review as provided in Section 5.8.2 above, Tenants Review) shows that Tenant has overpaid with respect to Operating Expenses and Real Property Taxes, in the aggregate, by more than three percent (3%), then Landlord shall reimburse Tenant for all costs incurred by Tenant for Tenants Review.
5.8.4 Records. Landlord shall retain Landlord Records for the greater of (x) two (2) years after the expiration of the applicable calendar year to which such Landlord Records relate and (y) the resolution of any dispute between Landlord and Tenant regarding Operating Expenses for the applicable calendar year. Tenant shall have a one-time right to perform Tenants Review of Landlords Records relating to the Base Year. Landlord shall retain Landlord Records related to the Base Year until Tenant has completed Tenants Review of Landlords Records relating to the Base Year. This Section 5.8 shall survive the expiration or earlier termination of this Lease.
6. Payments by Tenant.
6.1 Impositions. Tenant shall pay all Impositions prior to delinquency. If billed directly, Tenant shall pay such Impositions and concurrently present to Landlord satisfactory evidence of such payments. If any Impositions are billed to Landlord or included in bills to Landlord for Real Property Taxes, then Tenant shall pay to Landlord all such amounts within thirty (30) days after receipt of Landlords invoice therefor. If Applicable Law prohibits Tenant from reimbursing Landlord for an Imposition, but Landlord may lawfully increase the Base Rent to account for Landlords payment of such Imposition, the Base Rent payable to Landlord shall be increased to net to Landlord the same return without reimbursement of such Imposition as would have been received by Landlord with reimbursement of such Imposition.
6.2 Net of Electricity. Tenant acknowledges that in addition to the Base Rent and Escalation Rent, and other charges payable under this Lease, commencing on the Commencement Date, Tenant is responsible for paying for all electricity supplied to the Premises during the Term. Prior to the
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Commencement Date, Landlord, at Landlords expense, shall submeter the Premises in a manner satisfactory to Tenant. Landlord at Landlords expense shall submeter any Expansion Premises or First Refusal Space or First Offer Space in a manner satisfactory to Tenant, prior to the respective date any such space is added to the Premises. Tenant shall pay Landlord for all electricity supplied to the Premises, as additional rent, on a monthly basis, within thirty (30) days after delivering an invoice and reasonable supporting documentation to Tenant. Landlord shall not impose any administrative fee or other similar mark-up on such costs. Landlord acknowledges that certain of Tenants Permitted Uses shall utilize more than eight (8) watts per Adjusted Rentable Square Feet of electrical capacity and agrees that Tenant shall be permitted to install additional bus duct switches and other electrical systems in the Premises in order to allocate electricity among the various portions of the Premises in a fashion reasonably determined by Tenant; provided that this right of Tenant shall not expand Landlords obligation to provide electricity hereunder in an amount not less than the Wattage Allowance.
7. Use of Premises.
7.1 Permitted Use. The Premises shall be used solely for the Permitted Use, subject to Tenants compliance with the terms and conditions set forth in this Article 7 and in Article 40. Tenant shall not do anything in or about the Premises or the Building that (i) violates any Applicable Laws, any provision of the Recorded Documents, or any of the Building Rules; (ii) is prohibited by a standard form of fire insurance policy or that materially increases the rate of fire or other insurance on the Building or any of its contents (provided that this clause (ii) shall not prohibit the operation of the Cafeteria); or (iii) constitutes waste or a nuisance. Without limiting the generality of the foregoing, the Premises shall not be used for a call center, school, or medical or dental office. The provisions of this Section 7.1 are for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or occupant of the Building. Landlord shall use commercially reasonable efforts to ensure that other occupants of the Project do not create any nuisance.
7.2 Ancillary Uses. Tenants obligations under this Lease shall not be contingent on Tenants ability to obtain all or any of the governmental approvals or permits that may be required for use of the Premises for any Ancillary Use and the failure of Tenant to obtain such permits and approvals shall not delay the Commencement Date or release Tenant from any obligations under this Lease. In no event shall any approval or permit obtained by Tenant for any Ancillary Uses impose any conditions or restrictions on the Premises, the Building or the Project without Landlords consent, which may be withheld in its reasonable discretion. Tenant agrees that neither Landlord nor any agent or consultant of Landlord shall be responsible for obtaining any approvals or permits for or on behalf of Tenant with respect to the use of the Premises for the Ancillary Uses. Tenant also acknowledges that neither Landlord nor any agent or consultant of Landlord has made any representation or warranty regarding the ability to use the Premises for any of the Ancillary Uses, the likelihood of obtaining the required approvals or permits for any of the Ancillary Uses or the condition or suitability of the Premises for any Ancillary Uses.
7.3 Landlord Cooperation. Landlord, in its capacity as the owner of the Project, shall use diligent efforts to assist and cooperate with Tenant in Tenants efforts to apply for, receive and implement any permits, licenses or other approvals required by any governmental or quasi-governmental authority, department, agency, commission or board in order for Tenant to use the Premises and other areas of the Project as described in this Lease and in accordance with this Lease, including, without limitation, to (i) use of the Premises for the Permitted Uses, (ii) installation of signage as set forth in Article 44, (iii) bringing of dogs onto the Premises as set forth in Article 42, (iv) constructing (or causing to be constructed) and using the Premises for a Cafeteria as set forth in the Work Letter and Article 40, (v) utilizing the Sidewalk Area as set forth in Article 39, (vi) constructing improvements on and using the
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Parking Garage Roof Space as set forth in Article 37 and (vii) segregating the Parking Spaces and/or using a valet service as set forth in Article 30.
7.4 Compliance with Requirements.
7.4.1 Tenants Obligations. Tenant, at its expense, shall comply with all Applicable Laws, the occupancy certificate issued for the Premises, and the provisions of all Recorded Documents relating to (a) the operation of its business at the Project, or (b) the use, condition, configuration or occupancy of the Premises. In addition, if a change to the structural portions of the Building, the Building Systems or the Common Areas becomes required under any Applicable Laws as a result of any Alteration or use of the Premises other than for general office use, Tenant, at Landlords option, shall either (i) make such change pursuant to the provisions of Article 10 at Tenants cost or (ii) reimburse Landlord for the reasonable, out-of-pocket costs incurred by Landlord in making such change plus a supervision fee equal to five percent (5%) of the first $100,000 in costs of performing such work and one percent (1%) of costs in excess of $100,000. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of such Applicable Laws shall be conclusive of that fact as between Landlord and Tenant. Tenant shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Applicable Laws, and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Applicable Laws.
7.4.2 Landlords Obligation. Subject to reimbursement as an Operating Expense to the extent permitted pursuant to Article 5 and Tenants obligations under the Work Letter and Section 7.4.1 above, Landlord shall be responsible for (a) operating the Building in accordance with all Applicable Laws, the occupancy certificate issued for the Project, and the provisions of all Recorded Documents relating to (1) the operation of its business at the Project, or (2) the use, condition, configuration or occupancy of the Project and (b) causing the structure of the Building, the Building Systems, and the Common Areas to comply with all Applicable Laws. Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Applicable Laws, and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Applicable Laws.
7.5 Compliance With Environmental Laws; Use of Hazardous Materials.
7.5.1 Tenant shall not: (i) bring or keep, or permit to be brought or kept, in the Premises or in or on the Project any Hazardous Materials; (ii) manufacture, generate, treat, handle, store or dispose of any Hazardous Materials in the Premises or in or on the Project; or (iii) emit, release or discharge any Hazardous Materials into any air, soil, surface water or groundwater comprising the Premises or the Project, or permit any person using or occupying the Premises to do any of the foregoing; provided, however, that Tenant shall have the right, without providing notice to or obtaining the consent of Landlord, to store reasonable quantities of and use standard cleaning solvents and chemicals commonly found in offices, provided that Tenant complies with all Applicable Laws and prudent industry practice in connection with such use. In no event shall Landlord be designated as the generator on, nor shall Landlord be responsible for preparing, any manifest relating to Hazardous Materials generated or used by Tenant or any other Tenant Parties.
7.5.2 Tenant shall comply, and shall cause all persons using or occupying the Premises to comply, with all Environmental Laws applicable to the Premises, the use or occupancy of the Premises or any operation or activity therein. Tenant shall promptly furnish Landlord with any (i) notices
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received from any insurance company or governmental authority or inspection bureau regarding any unsafe or unlawful conditions within the Premises, and (ii) notices or other communications sent by or on behalf of Tenant to any person relating to Environmental Laws or Hazardous Materials. If, as a result of Tenants use, handling, storage, treatment, transportation, discharge or disposal of Hazardous Materials, any governmental agency shall require testing for Hazardous Materials in the Premises, Tenant shall pay for such testing. Tenant shall indemnify, defend and hold Landlord harmless from and against any Claims (including, but not limited to, diminution in the value of the Premises or the Project, damages for the loss of or restriction on use of rentable space or of any amenity of the Premises or the Project, remedial work, and sums paid in settlement of Claims), which result from or arise out of the use, storage, treatment, transportation, release, or disposal of any Hazardous Materials on or about the Project by Tenant or any other Tenant Parties. Tenants obligations under this Section shall survive the expiration or earlier termination of this Lease until all Claims within the scope of this Section are fully, finally, and absolutely barred by the applicable statutes of limitations.
7.5.3 If any remedial work is required under any Environmental Laws as a result of any act or omission of Tenant or any other Tenant Parties at the Project, then Tenant shall perform or cause the remedial work to be performed in compliance with Environmental Laws. All remedial work performed by Tenant shall be performed by one or more contractors, selected by Tenant and approved in advance in writing by Landlord, and under the supervision of a consulting engineer selected by Tenant and approved in advance in writing by Landlord. All costs and expenses of such remedial work shall be paid by Tenant, including, but not limited to, the charges of such contractor(s), the consulting engineer and Landlords reasonable attorneys and experts fees and costs incurred in connection with the monitoring or review of such remedial work. Notwithstanding the foregoing, Landlord may, at its option, perform any such remedial work and Tenant shall reimburse Landlord for Landlords reasonable, out-of-pocket expenses incurred in performing such work plus a supervision fee equal to five percent (5%) of the first $100,000 of such work, and one percent (1%) of amounts in excess of $100,000, within thirty (30) days after demand therefor.
7.5.4 If any Hazardous Materials are discovered to have been present in the Premises as of the Lease Date in violation of Environmental Laws (Preexisting Hazardous Materials), then, Landlord, at Landlords expense (without pass through as an Operating Expense), shall diligently remove or otherwise remediate such condition, as required by Environmental Laws. Further, in no event shall Tenant be required to abate, remediate and/or clean up any Hazardous Materials in, on, or about the Premises, that were not brought upon, produced, treated, stored, used, discharged or disposed of by Tenant or Tenant Parties (collectively, Third Party Hazardous Materials), except to the extent that any hazard posed by such Third Party Hazardous Materials is exacerbated by the negligent acts or omissions or willful misconduct of Tenant or Tenant Parties. For purposes hereof, Third Party Hazardous Materials shall include Hazardous Materials in, on, or about the Premises that were brought upon, produced, treated, stored, used, discharged or disposed of by Landlord. Landlord, at Landlords expense (without pass through as an Operating Expense), shall remove or otherwise remediate any Third Party Hazardous Materials, as required by Environmental Laws.
7.6 Sustainable Building Operations.
7.6.1 Operation of Building. The Building is or may in the future become certified under any one or more Green Rating Systems or operated pursuant to Landlords sustainable building practices. Landlords sustainability practices address whole-building operations and maintenance issues, including, but not limited to, chemical use, indoor air quality, energy efficiency, water efficiency, recycling programs, exterior maintenance programs, and systems upgrades to meet green building energy, water, indoor air quality, and lighting performance standards. All construction and maintenance methods and procedures, material purchases, and disposal of waste must be in compliance
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with minimum standards and specifications so as to conform with all Applicable Laws. Tenant shall cooperate, at no cost to Tenant (except as permitted pursuant to Section 7.5.2 above), with Landlord in causing recertification of the Building from time to time under one or more Green Rating Systems.
7.6.2 Rating of Premises. Upon Tenants request but not more often than once every twelve (12) months, Landlord shall use commercially reasonable efforts to provide to Tenant the data required to calculate benchmarks for the energy efficiency of the Premises using the ENERGY STAR® Portfolio Manager and, at Tenants cost and expense, cause a professional engineer to analyze the energy efficiency of the Premises and issue a Statement of Energy Performance as required by the ENERGY STAR® Portfolio Manager.
7.7 Recycling and Waste Management. Tenant agrees, at its sole cost and expense: (a) to comply with all Applicable Laws regarding the collection, sorting, separation, and recycling of garbage, trash, rubbish and other refuse; (b) endeavor to comply with Landlords recycling policy as part of Landlords sustainability practices where it may be more stringent than Applicable Laws, at no additional cost to Tenant; and (c) to sort and separate its trash and recycling into such categories as are required by Applicable Laws and to place each separately sorted category of trash and recycling in separate receptacles as directed by Landlord. Landlord reserves the right to refuse to collect or accept from Tenant any trash that is not separated and sorted as required by clause (c) above, and to require Tenant to arrange for such collection at Tenants sole cost and expense, utilizing a contractor reasonably satisfactory to Landlord. In addition, Tenant shall pay all costs, expenses, fines, penalties or damages that may be imposed on Landlord or Tenant by reason of Tenants failure to comply with the provisions of clause (c) above.
7.8 Landlord Covenants. Landlord will not use, generate, manufacture, produce, store, release, discharge or dispose of on, under or about the Premises and/or Project (or off-site of the Premises and/or Project that might affect the Premises and/or Project), or transport to or from the Premises, any Hazardous Material, except in compliance with Environmental Laws. Landlord will give prompt written notice to Tenant of:
(a) Any proceeding or inquiry by any governmental authority known to Landlord with respect to the presence of any Hazardous Material on the Premises or Project (or off-site of the Premises and/or the Project that might affect the Premises and/or the Project) or relating to any loss or injury resulting from any Hazardous Material not caused by Tenant; and
(b) All Claims made or threatened by any third party against Landlord or the Project relating to any loss or injury resulting from any Hazardous Material; and
(c) Landlords discovery of any occurrence or condition on the Premises and/or Project (or off-site of the Premises and/or the Project that might affect the Premises and/or the Project) that could cause the Premises and/or the Project or any part thereof to be subject to any restrictions on occupancy or use of the Premises and/or the Project under any Environmental Laws.
7.9 No Third Party Beneficiary. The provisions of this Article 7 are for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or occupant of the Building.
7.10 Generators.
7.10.1 Existing Generators. Tenant shall, at no additional cost to Tenant, have the sole and exclusive right to use, operate, maintain, repair and connect the Buildings two (2) existing generators (collectively, the Existing Generators) to the electrical power distribution system within the
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Premises for the benefit of equipment located within the Premises (as the same may be expanded or modified); provided, that all installation of any lines or equipment for purposes of connecting the Existing Generators to the Premises shall be governed by Article 10 hereof. Tenant may from time to time, at its sole cost and expense and for any reason, replace either of the Existing Generators, which replacement generator shall thereafter be deemed an Existing Generator. The location and specifications of the Existing Generators are set forth on Exhibit I attached hereto. The fuel tank which is part of the Existing Generator identified as Generator 1 on Exhibit I is connected to a separate fuel tank located at the Project (the Building Fuel Tank) and Tenant shall be permitted to use up to 500 gallons of fuel per fill of the Building Fuel Tank provided that Tenant shall reimburse Landlord for the cost of any such fuel used by Tenant and Tenants Percentage Share of Landlords costs for repairing and maintaining the Building Fuel Tank. The Existing Generator identified as Generator 2 on Exhibit I is not connected to the Building Fuel Tank and Tenant, at Tenants sole cost and expense, shall be responsible for supplying such Existing Generator with any required fuel. Tenant acknowledges that Landlord makes no representation or warranty regarding the condition, suitability, capacity or cost to operate, supply, maintain or repair the Existing Generators or of the condition of the Building Fuel Tank. Landlord shall maintain any and all permits, licenses or other approvals required by any governmental or quasi-governmental authority, department, agency, commission or board required for use of the Existing Generators, the Building Fuel Tank and any other fuel tank at the Building necessary for the operation of the Existing Generators. Tenant may at any time elect to terminate its use of an Existing Generator hereunder, following which Landlord shall be permitted to use such Existing Generator at its election.
7.10.2 Right to Install New Generator. Tenant shall, at no additional cost to Landlord, have the right but not the obligation to install, use, operate, maintain, and repair, at Tenants sole cost and expense, one (1) back-up generator of up to 500 KWH and required conduit and related equipment, including without limitation, uninterruptible power supply batteries, fuel tank and fuel lines (collectively, the Additional Generator and together with the Existing Generators, the Generators)), at a mutually agreeable location, and shall be permitted to connect such Additional Generator to the electrical power distribution system within the Premises (as described below) for the benefit of equipment located within the Premises (as the same may be expanded or modified), and subject to the terms and conditions of this Section 7.10 and provided that such Additional Generator shall comply with Applicable Laws and shall be installed subject to and in accordance with Article 10 (and, if the Additional Generator is also Rooftop Equipment, subject to and in accordance with Article 38). If the Additional Generator is also Rooftop Equipment located on the rooftop parking area of the Building and, as a result of such location any parking spaces are eliminated, Tenant shall pay all Parking Charges attributable to any such eliminated parking spaces, such Parking Charges shall constitute Rent hereunder and such Parking Charges shall be payable in advance, at the same time and in the same manner as provided in Section 30.1. The Additional Generator, if installed, shall be connected to electrical power distribution system within the Premises, and shall not be connected to the main electrical room of the Building or Building Systems. Tenant shall be permitted, but shall not be required, to remove the Additional Generator from time to time at its own expense, for any reason or no reason, including, without limitation, for purposes of replacing or upgrading such Additional Generator. Tenant shall repair any damage caused by such removal, including the patching of any holes to match, as closely as reasonably possible, the color surrounding the area where the equipment and appurtenances were attached. If Tenant does not remove the Additional Generator at the expiration of the Term, such Additional Generator shall become the personal property of Landlord.
7.10.3 Generally. Tenant, at Tenants sole cost and expense, shall maintain and repair the Generators in accordance with the requirements and recommendations prescribed by the manufacturer of each Generator. Tenant shall cause the Generators to be periodically inspected in accordance with the requirements and recommendations prescribed by the manufacturers of each Generator and Applicable Laws, and promptly following each inspection, Tenant shall provide to
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Landlord copies of all inspection reports. If Tenant fails to perform such periodic inspections, Landlord, at Tenants cost, shall have the right, but not the obligation, to conduct any such inspections but only at such times and in such a manner as to reasonably minimize the impact on Tenant. Tenant may utilize such security protocols, cameras, onsite surveillance and security patrolling as it deems reasonably necessary to monitor and secure the Generators. If Landlord desires to perform repairs, maintenance or other work in or about the space occupied by the Generators (the Repairs to Generator Area), Landlord shall give Tenant at least ten (10) business days prior written notice of the date Landlord intends to commence such Repairs to Generator Area (except in the case of emergency or an imminent threat to the health or safety of persons or damage to property), along with a description of the work scheduled to be performed and an estimate of the time frame required for that performance. Any of Tenants maintenance obligations in connection with the Generator identified as Generator 1 shall not include the obligation to maintain and repair the Building Fuel Tank to which the fuel lines supplying such Generator is connected.
8. Building Services.
8.1 Building-Standard Services. Subject to the terms of this Article 8, Applicable Laws and Force Majeure Events, Landlord shall furnish (or cause to be furnished) the following services to the Premises (twenty-four (24) hours a day, seven (7) days a week, unless indicated otherwise): (a) tepid and cold water; (b) electricity up to the Wattage Allowance; (c) HVAC in sufficient amounts to cause the portions of the Premises used for ordinary business office purposes (excluding, by way of example, the Cafeteria, computer server rooms or other hot spots resulting from the use of machines or equipment) to be heated and/or cooled to a temperature between 68 and 72 degrees Fahrenheit during Building Standard Hours, subject to temporary interruptions due to repairs and maintenance and provided that (i) the occupancy of the Premises shall not exceed one person per 150 square feet of Adjusted Rentable Square Feet and (ii) Tenant shall make proper use of window coverings to reduce solar load; (d) passenger elevator service; (e) freight elevator service, subject to the Building Rules; (f) lighting replacement, as necessary, for lights, fluorescent tubes, bulbs and ballasts, excluding any art or other specialty lighting; (g) window washing as reasonably determined by Landlord consistent with Comparable Buildings; (i) garbage removal from the Project on a weekly basis; and (j) fuel for the Building Fuel Tank (provided that Tenant shall reimburse Landlord for (i) Landlords charges for Tenants usage of any fuel contained in the Building Fuel Tank, and (ii) Tenants Percentage Share of Landlords charges for maintaining the Building Fuel Tank, each as set forth in Section 7.10.1 and within thirty (30) days after Tenants receipt of Landlords invoice). Tenants failure to make proper use of window coverings as provided in clause (c) above shall not constitute an Event of Default on behalf of Tenant hereunder; rather, such failure shall excuse Landlords obligation to furnish HVAC in an amount sufficient to cause the Premises to be heated or cooled within the temperature range provided in clause (c). In addition, Landlord shall furnish to the Common Areas (twenty-four (24) hours a day, seven (7) days a week, unless indicated otherwise): (1) tepid and cold water to restrooms; (2) lighting; (3) HVAC during Building Standard Hours; (4) security service; (5) restroom supplies on a daily basis Monday through Friday; and (6) janitorial service Monday through Friday (excluding Building Holidays) for the Common Areas only (and not for the Premises, the Parking Garage Roof Space or the Sidewalk Area) in a manner consistent with Comparable Buildings.
8.2 No Representation. Except as expressly set forth herein, Landlord makes no representation to Tenant regarding the adequacy or fitness of Building Systems for the Permitted Use.
8.3 Building Security Services and Access.
8.3.1 Security. Landlord shall have the right from time to time to adopt such reasonable policies, procedures and programs as Landlord shall, in its reasonable discretion, deem
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necessary or appropriate for the security of the Building, and Tenant shall cooperate with Landlord in the enforcement of, and shall comply with, the policies, procedures and programs adopted by Landlord. Landlord shall provide security services for the Project (but not individually for Tenant or the Premises, the Parking Garage Roof Space or the Sidewalk Area) in a manner consistent with Comparable Buildings and as more particularly described on Exhibit J. Tenant acknowledges that the safety and security devices, services and programs provided by Landlord from time to time, if any, may not prevent theft or other criminal acts, or insure the safety of persons or property, and Tenant expressly assumes the risk that any safety device, service or program may not be effective or may malfunction or be circumvented. In all events and notwithstanding any provision of this Lease to the contrary, Landlord and the other Landlord Parties shall not be liable to Tenant, and to the maximum extent permitted by law, Tenant hereby waives any claim against the Landlord Parties for any unauthorized or criminal entry of third parties into the Premises or the Building, any injury to or death of persons, or any loss of property in and about the Premises or the Building caused by or resulting from any unauthorized or criminal acts of third parties, regardless of any action, inaction, failure, breakdown, malfunction and/or insufficiency of the security services provided by Landlord, except to the extent caused by the negligence or willful misconduct of Landlord and/or any Landlord Parties. Tenant shall obtain insurance coverage to the extent Tenant desires protection against criminal acts and other losses. Upon learning of any material incident of Casualty, crime, theft, burglary, robbery, assault, trespass, unauthorized entry or vandalism occurring in the Premises or the Building and after notifying the police, fire department and/or emergency service providers, as appropriate, Landlord shall endeavor to provide notice to Tenant via telephone call and email to the following: (a) via telephone to (650) 303-1500 and (b) via email to Guard@Zynga.com, or such other number(s) and/or email address(es) as Tenant shall from time to time notify Landlord in writing. Tenant shall obtain insurance coverage to the extent Tenant desires protection against criminal acts and other losses.
8.3.2 Access Control. In the case of invasion, mob, riot, public demonstration or other circumstances rendering such action advisable in Landlords reasonable opinion, Landlord reserves the right to temporarily prevent access to the Building during the continuance of the same by such action as Landlord may reasonably deem appropriate.
8.3.3 Tenants Access. After the Commencement Date, subject to the provisions of Sections 8.3.1 and 8.3.2 above, Tenant shall have access to the Premises and the Common Areas twenty-four (24) hours per day, seven (7) days a week. The Building currently has a card key system for access to the Building. Elevators of the Building (other than the bank of elevators located on the westerly side of the Buildings atrium) may be programmed to require use of a card key to cause the elevators to stop on those floors of the Building in which the Premises are located, and Landlord and Tenant shall reasonably cooperate to coordinate such programming.
8.3.4 Non-Disturbance. In the event any threat to the security of the Building is attributable solely to Tenant, Tenant shall reimburse Landlord for any costs reasonably incurred by Landlord in connection therewith.
8.4 Interruption or Unavailability of Services. Notwithstanding anything to the contrary set forth herein, if Tenant is prevented from using, and does not use, the Premises or any portion thereof as a result of any failure of Landlord to provide utilities and services in accordance with this Article 8, then Tenant shall give Landlord written notice of such failure. If such failure continues for three (3) consecutive days after Landlords receipt of any such notice (the Eligibility Period) and is due to Landlords or any Landlord Partys acts or omissions (an Abatement Event), then Base Rent and Escalation Rent shall be abated or reduced, as the case may be, beginning on the first day the Abatement Event commenced, for such time that such Abatement Event continues (the Abatement Period), either (i) in the proportion that the Adjusted Rentable Square Feet of the portion of the Premises
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that Tenant is prevented from using, and does not use, bears to the total Adjusted Rentable Square Feet of the Premises or (ii) if Tenant is prevented from using a material portion of the Premises and if Tenant ceases using the entire Premises, then Base Rent and Escalation Rent shall be abated in its entirety. Landlord shall use its diligent efforts to promptly restore utilities and services to the extent the cause of such interruption or the means to restore same is within the reasonable control of Landlord. To the extent Tenant is entitled to abatement without regard to the Eligibility Period, because of an event covered by Article 12 or Article 13 of this Lease, then the Eligibility Period shall not be applicable.
8.5 Tenants Use of Excess Electricity and Water; Premises Occupancy Load. Tenant shall not, without Landlords prior consent: (a) install in the Premises (i) equipment, and/or machines which requires a voltage other than 110 volts single-phase (provided that Tenant may install copiers, Cafeteria equipment, supplemental HVAC equipment and other typical office machines which require a voltage in excess of 110 volts-single phase), or (ii) heat-generating or heat-sensitive lighting other than Building-standard lights. If Tenant permits occupancy levels in excess of one person per 150 Adjusted Rentable Square Feet in the Premises, and such occupancy levels cause Landlord to be unable to cause the portions of the Premises used for ordinary business office purposes (excluding, by way of example, the Cafeteria, computer server rooms or other hot spots resulting from the use of machines or equipment) to be cooled to a temperature between 68 and 72 degrees Fahrenheit (an Excess Cooling Problem), then Landlord shall notify Tenant. Upon receipt of such notice, Tenant may elect, in its sole and absolute discretion, to either (A) reduce occupancy levels in the Premises to one person per 150 Adjusted Rentable Square Feet in the Premises (or such lesser density as Tenant may elect) or (B) install supplementary air conditioning facilities in the Premises (Supplemental Cooling Equipment), or otherwise modify the HVAC system serving the Premises in order to remedy the Excess Cooling Problem to Landlords reasonable satisfaction. Tenant shall pay the cost of any transformers, additional risers, panel boards, and all other facilities if required to furnish power for any Supplemental Cooling Equipment, and all costs of supplying and maintaining, any Supplemental Cooling Equipment. The capital, maintenance and service costs of installing, supplying, and maintaining any Supplemental Cooling Equipment and modifications shall be paid by Tenant as additional rent. Landlord, at its election and at Landlords expense, may also install and maintain a water meter to measure water usage.
8.6 Provision of Additional Services; After-Hours HVAC Services. If Tenant desires services in amounts additional to or at times different from those set forth in Section 8.1 above, or any other services that are not provided for in this Lease, Tenant shall make a request for such services to Landlord with such advance notice as Landlord may reasonably require. Landlord shall use commercially reasonable efforts to accommodate Tenants request for such services. If Landlord provides such services to Tenant, Tenant shall pay Landlords actual costs and expense incurred in providing such services within thirty (30) days after Tenants receipt of Landlords invoice. Notwithstanding the foregoing, upon Tenants giving reasonable advance notice in making any request for air circulation, cooling and/or heating required outside of Building Standard Hours, Landlord shall provide the same. Tenant agrees to pay, as additional rent, within thirty (30) days after demand therefor, Landlords then standard charge for providing after-hours HVAC and fans, which charge shall be based on Landlords actual direct and indirect costs of providing such services (including utility costs, taxes, engineers costs, and a reasonable charge for wear and tear on the applicable Building System), provided that in no event shall Landlord impose any administrative fee or other similar mark-up on such costs. As of the date hereof, Landlords standard charge for providing after-hours (i) HVAC is $149.39 per hour for the first quadrant of the Building and $13.87 per hour for each additional quadrant of the Building for which after hours HVAC service is requested and (ii) air circulation is $20.94 per hour for the first quadrant of the Building and $13.87 per hour for each additional quadrant of the Building for which after hours air circulation is requested.
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8.7 Tenants Supplemental Air Conditioning. Notwithstanding anything to the contrary contained in this Lease, at any time during the Term, Tenant shall have the right but not the obligation to install in the Premises, at Tenants sole cost and expense, subject to the application of the Tenant Improvement Allowance, as applicable and to the extent available, Supplemental Cooling Equipment in order to provide Tenants computer rooms, data center and/or other area(s) in the Premises with additional heating and cooling capacity. The manner of Tenants installation of any such Supplemental Cooling Equipment shall be governed by Article 10 hereof. Tenant shall have access to and use of the Buildings condenser water up to and not to exceed fifty (50) tons for such Supplemental Cooling Equipment. Landlord shall have the right to install, at Landlords cost and expense, meters to measure Tenants usage hereunder for purposes of calculating the charges payable by Tenant for such condenser water. At the end of the Term, at Tenants option, Tenant shall either: (1) remove, at Tenants sole cost and expense, any Supplemental Cooling Equipment and restore all portions of the Premises and the Building affected by such removal to their condition immediately prior to the installation of such equipment, ordinary wear and tear excepted; or (2) leave any such Supplemental Cooling Equipment in place, in which event the Supplemental Cooling Equipment shall be owned by Landlord.
8.8 Janitorial Service. Tenant shall provide janitorial service to the Premises, which at minimum shall meet the standards set forth on Exhibit E attached hereto (Standard Janitorial Services). Landlord shall have no obligation to provide janitorial services to the Premises. Provided that Tenant performs the Standard Janitorial Services, (a) Base Rent shall be reduced by $0.08422 per Adjusted Rentable Square Feet of the Premises per month (the Janitorial Credit), (b) Operating Expenses shall exclude the cost of providing Standard Janitorial Services to portions of the Building intended for lease by tenants or occupants and (c) Operating Expenses allocable to the Base Year shall be adjusted to exclude the cost of providing Standard Janitorial Services to portions of the Building intended for lease by tenants or occupants. Tenant shall, at its option, use a janitorial contractor selected by Tenant (or its own employees) or shall contract directly with Landlords janitorial contractor for the Standard Janitorial Services to be provided to the Premises. Tenant may elect, from time to time upon thirty (30) days prior written notice to Landlord, to cease providing the Standard Janitorial Services to the Premises, in which case (i) Landlord shall be obligated to provide such services in accordance with the standards set forth on Exhibit E, (ii) Tenant shall have no further right to the Janitorial Credit, (iii) Operating Costs allocable to the Base Year shall be adjusted to include the annualized amount of the Janitorial Credit (iv) Operating Expenses shall include the increased cost over the Base Year amount to provide such janitorial services to the Building and (v) notwithstanding the requirements of Section 19.1 below, Landlords janitorial staff or janitorial contractor may enter the Premises without prior notice to perform janitorial services to the Premises. In no event shall Landlord be obligated to provide (A) any janitorial services required as a result of Tenants Ancillary Uses, including any services required for compliance with Article 40 relating to the Cafeteria and any services required in connection with the bringing of dogs onto the Premises pursuant to Article 42 and (B) any janitorial services in excess of the Standard Janitorial Services.
8.9 Tenant to Provide Security Services. Tenant shall have the right to (a) institute such security measures entirely within the Premises as it may determine in its sole discretion, at Tenants sole cost and expense and at no cost to Landlord, including, without limitation, the installation of key-card systems, access gates, security lighting and video monitoring equipment and (b) install video monitoring equipment in the ceilings and on the walls of the Common Areas adjacent to the Premises subject to Landlords reasonable approval of the locations of such monitoring equipment (collectively, Tenants Security Equipment); provided, that, Landlord approves, the installation of video monitoring equipment in the ceilings and on the walls (1) adjacent to the external doors of the Premises (as the same may be expanded or modified), (2) adjacent to the exterior Building entrances on 8th Street, (3) at the corners of the Building as necessary to view the exterior Building entrances on Townsend and Brannan and (4) adjacent to the areas in the Parking Garage designated for Tenants use. At Tenants sole
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cost, Tenant shall be permitted to tie Tenants Security Equipment into the Building Systems if requested by Tenant provided that (i) Tenants Security Equipment is compatible with the Building Systems and (ii) Tenants Security System does not materially and adversely interfere with the Building Systems. In addition, Tenant shall have the right to contract directly with Landlords security contractor as well as utilize its own employees or third parties to perform security services within the Premises. In no event shall Tenant be entitled to any credit against Rent (including Escalation Rent) or to any exclusions from Operating Expenses in the determination of Escalation Rent as a result of Tenants election to provide security services to its Premises.
8.10 Controls. In the event any governmental authority having jurisdiction over the Project or the Building promulgates or revises any law, ordinance or regulation or building, fire or other code or imposes mandatory controls or guidelines on Landlord or the Project or the Building relating to the use or conservation of energy or utilities or the reduction of automobile or other emissions (collectively Mandatory Controls) or in the event Landlord is required to make alterations to the Project or the Building in order to comply with such Mandatory Controls, Landlord may, in its sole discretion, comply with such Mandatory Controls or make such alterations to the Project or the Building related thereto. Such compliance and the making of such alterations shall not constitute an eviction of Tenant, constructive or otherwise, or impose upon Landlord any liability whatsoever, including, but not limited to, liability for consequential damages or loss of business by Tenant.
8.11 Service Providers. Tenant acknowledges that Landlord may, at Landlords sole option, to the extent permitted by Applicable Laws, elect to change, from time to time, the company or companies which provide services (including electrical service, gas service, water, telephone and technical services) to the Building, the Premises and/or its occupants, including, but not limited to, the right to purchase green or renewable energy. Further, Tenant acknowledges that Landlord has not and does not make any representations or warranties concerning the identity or identities of the company or companies which provide services to the Project and the Premises or its occupants, and that the choice of service providers and matters concerning the engagement and termination thereof shall be in Landlords sole discretion. The foregoing provision is not intended to modify, amend, change or otherwise derogate any provision of this Lease concerning the nature or type of service to be provided or any specific information concerning the amount thereof to be provided. Tenant agrees to cooperate, at no cost to Tenant, with Landlord and each of its service providers in connection with any change in service or service provider.
8.12 Property Management. Landlord shall provide on-site building management services during the Building Hours. During hours outside the Building Hours, Tenant may alert Landlord of any emergencies by contacting Landlords designated representative by calling the telephone number provided by Landlord for such purpose.
9. Maintenance and Repair.
9.1 Landlords Maintenance Obligations. Landlord shall be responsible for repairs to and maintenance of: (a) the Common Areas, (b) all exterior landscaping, (c) the exterior doors, walls and windows in the Building, (d) the windows within those walls demising the Premises from any Common Areas, (e) the Building Systems, including, but not limited to (i) the HVAC system, including the main distribution loop and portions of the system located throughout the Premises, (ii) the electrical systems until the point of connection with electrical panels exclusively serving the Premises and (iii) all plumbing systems (except any specialized plumbing for the Cafeteria, kitchens and fitness/health facilities), (f) the structural elements of the Building (including the structural elements located in the Premises), (g) the foundation and roof (except for improvements to the surface of the Parking Garage Roof Space made by or for Tenant) of the Building and (h) the elevators serving the Building, in a manner consistent with
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Comparable Buildings, except for ordinary wear and tear, damage by Casualty or condemnation. The cost of performing such repairs and maintenance shall be included in Operating Expenses, to the extent permitted pursuant to Article 5. Notwithstanding the foregoing, if any such repair or maintenance is necessary due to the act or omission of Tenant or any Tenant Party, Tenant shall pay the cost of such work.
9.2 Operable Building Systems upon Lease Commencement. Landlord shall deliver the Premises with the Building Systems in operable and good working condition. If it is determined that any of the Building Systems were not in the required condition as of the Commencement Date, then Landlord shall not be liable to Tenant for any damages, but as Tenants sole remedy, Landlord, at no cost to Tenant (including as Operating Expenses), shall perform such work or take such other action as may be necessary to place the applicable Building System in the operable and good working condition; provided, however, that if Tenant does not give Landlord written notice of any deficiency of any of the Building Systems within three (3) months after the Commencement Date, Landlord shall not be responsible for correcting such condition pursuant to this Section 9.2 but rather such condition shall be corrected as otherwise provided in the Lease and the cost of performing such correction shall be included in Operating Expenses, to the extent permitted pursuant to Article 5.
9.3 Tenants Obligations. Tenant shall, at Tenants cost and expense, perform all maintenance and repairs (including replacement) to the Premises that are not Landlords express responsibility hereunder, and shall keep the Premises in good condition and repair, reasonable wear and tear excepted. Tenants repair and maintenance obligations shall include, but not be limited to, repairs to and replacement of: (a) supplemental HVAC equipment installed in any server room or other specialty HVAC installations; (b) the electrical systems from the point of interconnection with those electrical panels exclusively serving the Premises; (c) plumbing for the Cafeteria, kitchens and fitness/health facilities; (d) raised flooring and floor coverings; (e) ceiling tiles; (f) interior partitions; (g) interior doors; (h) the interior side of demising walls; and (i) Tenant Improvements and Alterations (except to the extent such Tenant Improvements and Alterations are Landlords responsibility under Section 9.1 above). Except as specifically set forth in this Lease, Landlord (i) has no obligation to alter, remodel, improve, repair, decorate or paint the Premises, or any part thereof, and (ii) has no obligation respecting the condition, maintenance and repair of the Premises or any other portion of the Project. Except as expressly set forth in Sections 20.7.2 and 20.7.3 hereof or in the Work Letter, Tenant hereby waives all rights, including under Sections 1941 and 1942 of the California Civil Code and under any similar law now or hereafter in effect, to make repairs which are Landlords obligation under this Lease at the expense of Landlord or to receive any setoff or abatement of Rent.
10. Alterations to Premises.
10.1 Landlord Consent; Procedure.
10.1.1 Except to the extent set forth herein, Tenant shall not make any Alterations, without Landlords written consent. The term Alterations as used in this Lease shall not include the Tenant Improvements or Ancillary Tenant Improvements. Tenant shall submit complete and detailed architectural, mechanical and engineering plans and specifications for the proposed Alterations (to the extent that such plans and specifications would customarily be prepared given the nature of the proposed Alterations) to Landlord at least twenty (20) days prior to the commencement of the work. Landlord shall not unreasonably withhold or delay its consent to the proposed Alterations, provided that by way of example and without limitation, it shall be reasonable for Landlord to withhold its consent to any proposed Alteration that (i) would adversely affect the structural portions of the Building or Building Systems, (ii) require work to be performed in portions of the Building outside the Premises in order to comply with Applicable Laws (unless Tenant agrees to pay for such work) or (iii) would materially
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adversely affect the cooling of the Premises. Landlord shall grant or withhold its approval of any Alterations within eight (8) business days from receipt of Tenants request accompanied by all documentation reasonably necessary to evaluate the proposed Alterations, provided that Landlord must notify Tenant of any additional information Landlord deems reasonably necessary to evaluate the proposed Alterations within five (5) business days after receipt of Tenants submittal, or the information submitted by Tenant shall be deemed sufficient. If Landlord fails to respond to Tenants request within such eight (8) business day period, Tenant may provide a second request for approval to Landlord, and if Landlord fails to respond within two (2) business days after receipt of Tenants second request, then Landlords approval shall be deemed given. If Landlord reasonably disapproves of proposed Alterations, or requests additional information regarding such Alterations, Tenant shall revise the plans and specifications for those Alterations reasonably disapproved by Landlord and resubmit such plans to Landlord or otherwise provide such additional information to Landlord. Landlord shall, within five (5) business days after receipt of Tenants revised plans and specifications for proposed Alterations, approve or reasonably disapprove such Alterations, and if reasonably disapproved, Landlord shall advise Tenant of any additional changes which may be required to obtain Landlords approval. If Landlord fails to respond within such five (5) business day period, then such revised plans and specifications shall be deemed approved. This process shall continue until Landlord has approved (or been deemed to have approved) the applicable Alterations or Tenant has withdrawn its request for Landlords approval. Notwithstanding the preceding, Landlord may not subsequently disapprove of proposed Alterations or any portion thereof that it has previously approved. No review or approval by Landlord of such plans and specifications shall be deemed to create any liability of any kind on the part of Landlord or to constitute a representation on the part of Landlord or any professional consulted by Landlord in connection with such review and approval, that such plans and specifications are correct or accurate, or comply with Applicable Laws.
10.1.2 Subject to the terms and conditions of this Article 10, Tenant shall have the right to install supplemental HVAC units within the Premises. Landlord hereby consents to the installation of supplemental HVAC units within the Premises by Tenant (provided, that, Landlord shall have the right to reasonably approve plans and specifications and the manner in which such supplemental HVAC units will be installed in the Premises in accordance with Section 10.1.1 above).
10.2 General Requirements.
(a) All Alterations shall be constructed or installed by Tenant, at Tenants expense (including all expenses incurred in complying with Applicable Laws).
(b) All Alterations shall be designed and performed by Tenant at Tenants cost and expense. All Alterations shall be performed only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; provided that: (i) Landlord may, in its sole discretion, specify engineers, general contractors, subcontractors, and architects to perform work affecting the Building Systems; and (ii) if Landlord consents to any Alteration that requires work to be performed outside the Premises, Landlord may elect to perform such work at Tenants expense.
(c) All contractors, subcontractors, and materialmen of Tenant shall, while in the Premises or elsewhere in the Project, be subject to and under the control and direction of the Building manager (but not as an agent of the Building manager or Landlord) and shall comply with Landlords then current construction rules and regulations.
(d) Tenant shall carry Builders All Risk insurance in a commercially reasonable amount reasonably approved by Landlord covering the construction of any Alteration, and
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require its general contractor and subcontractors to carry such insurance as Landlord may reasonably require.
(e) Prior to commencement of any Alteration, Tenant shall deliver to Landlord: (i) any building or other permit required by Applicable Laws in connection with the Alteration, (ii) a construction schedule, which shall be delivered for informational purposes only, and (iii) satisfactory evidence of required insurance.
(f) All Alterations shall be diligently constructed in a good and workmanlike manner and in compliance with the plans and specifications approved by Landlord, all Applicable Laws, and the Buildings reasonable construction rules and regulations, as revised from time to time. Tenant shall cause all Alterations to be made in such a manner and at such times so that any such work shall not unreasonably disrupt or interfere with the use or occupancy of other tenants or occupants of the Building. All trash that may accumulate in connection with Tenants construction activities shall be stored within the Premises and removed by Tenant, at its expense, from the Premises and the Building. If any part of the Building Systems or Common Areas shall be damaged during the performance of any Alteration, Tenant shall promptly notify Landlord, and Landlord may elect either to repair such damage at Tenants expense or to require Tenant to repair such damage at Tenants expense, using contractors approved by Landlord.
(g) Tenant acknowledges that the San Francisco Green Building Ordinance applies to certain Alterations involving significant upgrades to structural and mechanical, electrical and/or plumbing systems. Landlord makes no representation or warranty as to the interpretation or application of the San Francisco Green Building Ordinance, and Tenant shall be responsible for determining and satisfying all requirements that may be imposed by the San Francisco Green Building Ordinance in connection with Alterations undertaken by Tenant.
10.3 Landlords Right to Inspect. Subject to the restrictions set forth in Section 19.1 below, Landlord may, at its election, inspect the Alteration during construction, and require corrections of faulty construction or any material deviation from the plans and specifications approved by Landlord, provided that no such inspection shall be deemed to create any liability on the part of Landlord, or constitute a representation by Landlord or any person hired to perform such inspection that the work so inspected conforms with such plans and specifications or complies with any Applicable Laws, and no such inspection shall give rise to a waiver of, or estoppel with respect to, Landlords continuing right at any time or from time to time to require the correction of any faulty work or any material deviation from such plans and specifications.
10.4 Tenants Obligations Upon Completion. Upon completion of any Alteration, Tenant shall (a) cause a timely notice of completion to be recorded in the Office of the Recorder of the City and County of San Francisco in accordance with Civil Code Section 3093 or any successor statute and (b) deliver to Landlord the following documentation relating to such Alteration: (i) evidence of full payment and unconditional final waivers of all liens for labor, services, or materials; (ii) all governmental permits and approvals; and (iii) if plans were initially prepared for such Alteration, as built plans prepared on an AutoCAD Computer Assisted Drafting and Design System.
10.5 Ownership and Removal of Alterations.
10.5.1 Alterations made by Tenant, including without limitation, any partitions (movable or otherwise) or carpeting, shall become a part of the Building and belong to Landlord (subject to Tenants right to use the Alteration during the Term); provided, however, that equipment, trade fixtures and movable furniture shall remain the property of Tenant.
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10.5.2 Tenant, prior to the expiration or earlier termination of this Lease, shall, at Tenants sole cost and expense: (i) remove any or all Alterations (except any Alterations that are customary for general office use, provided that Landlord may require Tenant to remove any demising walls and corridors that are not constructed as part of the Tenant Improvements), (ii) restore the Premises to the condition existing prior to the installation of such Alterations, and (iii) repair all damage to the Premises, the Building, or the Project caused by the removal of such Alterations. Tenant shall use a contractor reasonably approved by Landlord for such removal and repair. Notwithstanding the foregoing, Landlord may elect to waive all or any portion of such removal and restoration requirements by giving written notice of such waiver to Tenant at least one hundred eighty (180) days prior to the Expiration Date or within ten (10) business days after any earlier termination of this Lease. If Tenant fails to remove such Alterations and perform such restoration and repair, then Landlord may perform such work, and Tenant shall reimburse Landlord for costs and expenses incurred by Landlord in performing such removal, restoration and repair.
10.5.3 Notwithstanding Section 10.5.2 above, if Tenants request for Landlords approval of any Alteration contains a request that Landlord identify whether Landlord intends to require Tenant to remove all or any portion of such Alteration on the expiration or earlier termination of this Lease, then Landlord agrees to identify, at the time it approves such Alteration, whether Landlord intends to require Tenant to remove all or any portion of such Alteration on the expiration or earlier termination of this Lease. Tenant shall have no obligation to remove any Alteration on the expiration or earlier termination of this Lease not so identified by Landlord to be removed or any Alterations that are customary for general office use, except that Landlord may require Tenant to remove any demising walls and corridors that are not constructed as part of the Tenant Improvements; provided, that, Landlord gives notice to Tenant requiring such removal at least one hundred eighty (180) days prior to the Expiration Date or within ten (10) business days after any earlier termination of this Lease.
10.6 Minor Alterations. Notwithstanding any provision in the foregoing to the contrary, Tenant may construct Minor Alterations in the Premises without Landlords prior written consent, but with prior notification to Landlord. Tenant shall provide Landlord with at least ten (10) business days notice prior to commencing any Minor Alterations, which notice shall include a general description of the nature and estimated cost of the proposed Minor Alteration, and the anticipated completion dates for such work. The provisions of this Article 10 shall apply to the performance of Minor Alterations, except for the requirement to obtain Landlords prior written consent. All references in this Lease to Alterations shall mean and include Minor Alterations, unless specified to the contrary.
10.7 Landlords Fee. Tenant shall pay Landlord, within thirty (30) days after receipt of invoice and reasonable supporting documentation, Landlords reasonable, actual out-of-pocket expenses incurred in reviewing the plans and specifications for the proposed Alteration, and a fee equal to five percent (5%) of the first $100,000 in hard costs of the Alteration and one percent (1%) of hard costs of the Alteration in excess of $100,000, for Landlords coordination of such work.
11. Liens. Tenant agrees to keep the Premises and the Project free from any liens or encumbrances arising out of any work performed, materials furnished or obligations incurred by Tenant. Tenant shall remove any such lien or encumbrance by bond or otherwise within thirty (30) days after notice by Landlord (or within ten (10) business days if required in connection with any pending financing or sale of the Project), and if Tenant fails to do so, Landlord may cause the lien to be released by any means it deems proper, including by payment of the amount necessary to remove such lien or encumbrance, without responsibility for investigating the validity thereof. All sums paid by Landlord for such purpose, and all expenses incurred by it in connection therewith, shall be payable to Landlord by Tenant, as additional rent, within thirty (30) days after receipt of invoice.
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12. Damage or Destruction.
12.1 Repair Obligations. If the Premises or any portions of the Project affecting Tenants use and enjoyment of the Premises are damaged by Casualty following the Lease Date, then (a) Landlord shall notify Tenant in writing (a Landlords Casualty Notice) within sixty (60) days after discovery of such damage as to the amount of time (the Estimated Restoration Period) Landlord reasonably estimates it will take to restore the Project and/or the Premises and (b) Landlord shall, subject to the provisions of Sections 12.2 and 12.3 below, proceed with reasonable promptness to repair such damage and restore the Premises (including Tenant Improvements and Alterations (to the extent Landlord receives insurance proceeds pursuant to Section 12.3 below to repair and restore such Alterations)) and such portions of the Project to substantially the same condition as existed before the Casualty (collectively, Restore or Restoration); provided, however, that any such Restoration shall be subject to (i) modifications required by zoning or building codes and other Applicable Laws and, in the case of Restoration to the Common Areas, to modifications then considered desirable by Landlord; and (ii) delays resulting from a failure to promptly receive insurance proceeds or Force Majeure Events. Notwithstanding the foregoing, Landlord shall have no obligation with respect to, and if Landlord elects or is required to perform any Restoration hereunder, Tenant shall be responsible for and shall, repair and replace at its sole cost all of Tenants equipment, furniture, fixtures and other personal property in the Premises, including, without limitation, any telecommunication cables and related devices located in or serving the Premises.
12.2 Termination Rights.
12.2.1 Landlords Termination Rights. In any of the following circumstances, Landlord may elect to terminate this Lease:
(a) The Estimated Restoration Period set forth in Landlords Casualty Notice exceeds two hundred seventy (270) days following the date of the Casualty (when such Restoration is made without the payment of overtime or other premiums); or
(b) If the Casualty occurs during the last twelve (12) months of the Term, and the Estimated Restoration Period set forth in Landlords Casualty Notice exceeds two (2) months following the date of the Casualty; or
(c) If the uninsured portion of costs to Restore the Project (excluding deductibles) exceeds One Million Dollars ($1,000,000.00) and Landlord does not actually proceed to Restore the Building; or
(d) If insurance proceeds sufficient to complete the Restoration in excess of One Million Dollars ($1,000,000.00) are not available due to the exercise of rights of any Encumbrancer to collect such proceeds, provided that Landlord does not actually proceed to Restore the Building.
Any election by Landlord to terminate this Lease shall be given to Tenant concurrently with Landlords Casualty Notice.
Notwithstanding the foregoing, if Landlord elects to terminate this Lease pursuant to Sections 12.2.1(a) or 12.2.1(b) and Tenant has one or more unexercised Extension Options remaining, then Tenant may elect within thirty (30) after Landlord terminates this Lease, to immediately exercise its next available Extension Option, in which case Landlords termination of this Lease pursuant to Section 12.2.1(a) or 12.2.1(b) shall be rendered null and void and of no further force and effect and
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Landlord shall proceed to Restore the Premises and/or the Project, subject to the other provisions of Section 12.2.1.
12.2.2 Tenants Termination Rights. In any of the following circumstances, Tenant may elect to terminate this Lease by delivering written notice to Landlord within thirty (30) days after receipt of Landlords Casualty Notice:
(a) The Estimated Restoration Period set forth in Landlords Casualty Notice exceeds two hundred seventy (270) days following the date of the Casualty (when such Restoration is made without the payment of overtime or other premiums); or
(b) If the Casualty occurs during the last twelve (12) months of the Term and the Estimated Restoration Period set forth in Landlords Casualty Notice exceeds two (2) months following the date of the Casualty.
12.2.3 Late Delivery. If Restoration of the Premises and/or the Project is not substantially complete as of the end of the later of (i) two hundred seventy (270) days following the date of the Casualty or (ii) the Estimated Restoration Period as extended for delays resulting from a failure to promptly receive insurance proceeds or Force Majeure Events or Tenant Delays (as defined in the Work Letter), then Tenant may deliver written notice to Landlord that Landlord has thirty (30) days to complete the Restoration of the Premises and/or the Project. If after the expiration of such thirty (30) day period Landlord has not completed Restoration of the Premises and/or the Project, then Tenant may, in its sole and absolute discretion, elect to terminate this Lease by delivering written notice to Landlord at any time thereafter until repair or restoration of the Premises is substantially completed.
12.2.4 Consequences of Termination. If Landlord or Tenant elects to terminate this Lease as provided above, this Lease and all interest of Tenant in the Premises shall terminate thirty (30) days after (i) delivery of Landlords termination notice given concurrently with Landlords Casualty Notice or (ii) delivery of Tenants termination notice given pursuant to Section 12.2.2 above, and the Base Rent and Escalation Rent (reduced to the extent set forth in Section 12.4 below) shall be paid up to the date of such termination.
12.3 Completion of Repairs. If neither party elects to terminate this Lease, then Landlord shall diligently complete the Restoration. If Landlord is required to or elects to perform the Restoration, Tenant shall assign or otherwise make available to Landlord all proceeds of insurance carried by Tenant with respect to the Alterations to the extent actually received by Tenant. Landlord shall have no liability to Tenant, if the Restoration is not in fact completed within the Estimated Restoration Period set forth in Landlords Casualty Notice, so long as Landlord proceeds with reasonable diligence to complete the Restoration.
12.4 Rent Abatement. If neither party elects to terminate this Lease under Section 12.2 above, this Lease shall remain in full force and effect, provided that Tenant shall be entitled to a reduction of Base Rent and Escalation Rent in the proportion that the area of the Premises rendered untenantable (and not occupied by Tenant) by such damage bears to the total area of the Premises. Tenant shall be entitled to such rent abatement from the date of the Casualty for as long as any portion of the Premises remains untenantable (and not occupied by Tenant) due to the Casualty.
12.5 Waiver of Statutory Provisions. The provisions of this Lease, including this Article 12, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises or the Building resulting from a Casualty, and any common law or statute of the State of California, including, without limitation, subsection 2 of
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Section 1932, subsection 4 of Section 1933, and Sections 1941 and 1942 of the California Civil Code, with respect to any rights or obligations concerning damage or destruction resulting from a Casualty in the absence of an express agreement between the parties, and common law or any other statute, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises or the Building resulting from a Casualty.
12.6 Casualty Following Exercise of Purchase Option. The provisions of Article 12 shall be unaffected by any Tenant exercise of the Purchase Option under Article 36.
13. Eminent Domain.
13.1 Lease Termination. If all or part of the Premises shall be taken by any public or quasi public authority under the power of eminent domain or conveyance in lieu thereof (Taken or Taking), this Lease shall terminate as to any portion of the Premises so Taken or conveyed on the date when title or the right to possession vests in the condemnor.
13.2 Partial Taking. If (a) a part of the Premises or the Project shall be Taken and (b) in Tenants reasonable business judgment such Taking would neither prevent nor materially interfere with Tenants use of the Premises, then subject to Landlords termination right pursuant to Section 13.3 below, this Lease shall remain in effect as to said portion of the Premises remaining, with Landlord, at Landlords cost, restoring the Building to an architectural whole and the Base Rent payable from the date of the Taking shall be reduced in the same proportion as the area of the Premises Taken bears to the total area of the Premises. If, in Tenants reasonable business judgment, such Taking would prevent or materially interfere with Tenants use of the Premises, this Lease may be terminated by Tenant by giving written notice to Landlord within thirty (30) days of the date of the Taking. Such notice shall specify the date of termination which shall be not more than sixty (60) days after the date of said notice.
13.3 Landlords Termination Right. If twenty percent (20%) or more of the Building is Taken, whether or not any portion of the Premises is Taken, and in Landlords reasonable business judgment it is not economically feasible to continue operating the portion of the Building remaining, then Landlord shall have the option for a period of thirty (30) days after such determination to terminate this Lease. If in Landlords reasonable business judgment it is economically feasible to continue operating the portion of the Building remaining after such Taking, then this Lease shall remain in effect, with Landlord, at Landlords cost, restoring the Building to an architectural whole, and the Base Rent payable from the date of the Taking shall be reduced in the same proportion as the area of the Premises Taken bears to the total area of the Premises.
13.4 Compensation. All compensation awarded or received in connection with a Taking or conveyance described in this Article 13 shall be the property of Landlord, and Tenant hereby assigns to Landlord any and all elements of said compensation which Tenant would, in the absence of said assignment, have been entitled to receive. Specifically, and without limiting the generality of the foregoing, said assignment is intended to include: (a) the bonus value represented by the difference, if any, between Rent under this Lease and market rent for the unexpired Term, (b) the value of improvements to the Premises, (c) the value of any trade fixtures paid for by Landlord, and (d) the value of any and all other items and categories of property for which payment of compensation may be made in any such proceeding. Notwithstanding the foregoing, Tenant shall be entitled to receive any award of compensation for loss of or damage to the goodwill of Tenants business (but only to the extent the same does not constitute bonus value), Tenants trade fixtures, the value of improvements to the Premises paid for by Tenant, and for any moving or relocation expenses which Tenant is entitled under Applicable Laws to recover directly from the public agency which acquires the Premises.
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13.5 Waiver. Tenant hereby waives Sections 1265.110 through 1265.160 of the California Code of Civil Procedure.
14. Insurance.
14.1 Liability Insurance. Tenant, at its cost and expense, shall procure and maintain, from the Lease Date and throughout the Term, the following insurance:
(a) Commercial General Liability Insurance. Tenant shall maintain a policy(ies) of commercial general liability insurance written on an occurrence basis, with limits of liability, in the aggregate, of not less than Five Million Dollars ($5,000,000.00). Such policy(ies) shall cover bodily injury, property damage arising out of or relating directly to Tenants business operations, conduct, assumed liabilities, or use or occupancy of the Premises or the Project, and shall include all the coverages typically provided by the Commercial General Liability Endorsement CG0001 (10/04), including property damage coverage and completed operations. Tenants liability coverage shall further include premises-operations coverage, products liability coverage (if applicable), and products-completed operations coverage.
(b) Tenants Workers Compensation and Employer Liability Coverage. Tenant shall maintain workers compensation insurance as required by law and employers liability insurance with limits of no less than One Million Dollars ($1,000,000.00) per occurrence.
(c) Tenants Property Insurance. Tenant shall maintain property insurance coverage, extended coverage and special extended coverage insurance for all office furniture, trade fixtures, office equipment, merchandise, and all other items of Tenants personal property in, on, at, or about the Premises and the Project. Such policy shall (i) be written on the broadest available (special-causes-of-loss) policy form or an equivalent form acceptable to Landlord, (ii) be for no less than the full replacement cost (new without deduction for depreciation) of the covered items and property, and (iii) include vandalism and malicious mischief coverage.
(d) Business Interruption, Loss of Income, and Extra Expense Coverage. Tenant shall maintain business interruption, loss of income, and extra expense insurance covering all direct loss of income and charges and costs incurred arising out of all perils, failures, or interruptions, including any failure or interruption of Tenants business equipment (including, without limitation, telecommunications equipment), and the prevention of, or denial of use of or access to, all or part of the Premises or the Project, as a result of those perils, failures, or interruptions. The business interruption, loss of income, and extra expense coverage shall provide coverage for no less than twelve (12) months and shall be carried in amounts necessary to avoid any coinsurance penalty that could apply. The business interruption, loss of income and extra expense coverage shall be issued by the insurer that issues Tenants property insurance under Section 14.1(c) above.
14.2 Form of Policies. The minimum limits of policies and Tenants procurement and maintenance of such policies described in Section 14.1 above shall in no event limit the liability of Tenant under this Lease. All insurance required by this Article 14 shall be issued on an occurrence basis by solvent companies qualified to do business in the State of California, and with a Best & Company rating of A-:VIII or better. Any insurance policy under this Article 14 may be maintained under a blanket policy, insuring other parties and other locations, so long as the amount and coverage required to be provided hereunder is not thereby diminished. No policy maintained by Tenant under this Article 14 shall contain a deductible which is not commercially reasonable. Tenant shall provide Landlord a certificate of each policy of insurance required hereunder evidencing that the policies contain the provisions required. Tenant shall deliver such certificates to Landlord within thirty (30) days after the Lease Date, but in no
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event later than the date that Tenant or any other Tenant Parties first enter the Premises and, upon renewal, not fewer than ten (10) days prior to the expiration of such coverage. All Tenants liability insurance shall provide (i) that Landlord, Landlords managing agent and any Encumbrancer is designated as an additional insured as to coverage afforded under such policy pursuant to an endorsement providing coverage at least as broad as ISO form CG 20 37 10 01 or its equivalent; (ii) for severability of interests or that acts or omissions of one of the insureds or additional insureds shall not reduce or affect coverage available to any other insured or additional insured (if available); and (iii) that Tenants insurance is primary and noncontributory with any insurance carried by Landlord. Tenant shall endeavor to cause all Tenants insurance to provide that the insurer agrees not to cancel the policy without at least thirty (30) days prior written notice to all additional insureds (except in the event of a cancellation as a result of nonpayment, in which event the insurer shall give all additional insureds at least ten (10) days prior notice). Tenant shall notify Landlord within ten (10) days after any material modification of any policy of insurance required under this Article. Any self insurance or self insured retention provisions under, or with respect to, any insurance policies maintained by Tenant hereunder shall be subject to Landlords prior written approval, which Landlord may give or withhold in its reasonable discretion.
14.3 Landlords Insurance. Landlord shall procure and maintain in effect throughout the Term, property insurance at least as broad as the most commonly available ISO Special Form Causes of Loss (all risk) policy form CP 1030 with an agreed amount endorsement, and including coverage for vandalism and malicious mischief, in an amount equal to one hundred percent (100%) of the replacement cost of the Building (including the Tenant Improvements, but excluding any Alterations), which shall include loss of rent coverage. Landlord shall maintain a policy(ies) of commercial general liability insurance written on an occurrence basis, with limits of liability, in the aggregate, of not less than Five Million Dollars ($5,000,000.00). Such policy(ies) shall cover bodily injury, property damage arising out of or relating directly to Landlords business operations, conduct, assumed liabilities, or use or occupancy of the Premises or the Project, and shall include all the coverages typically provided by the Commercial General Liability Endorsement CG0001 (10/04), including property damage coverage and completed operations. Landlords liability coverage shall further include premises-operations coverage, products liability coverage (if applicable), and products-completed operations coverage. Notwithstanding the foregoing provisions of this Section 14.3, the coverage and amounts of insurance carried by Landlord in connection with the Project shall, at a minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of buildings comparable to and in the vicinity of the Project. The premiums for all such insurance shall be included as an Operating Expense. If such insurance policies cover other assets owned by Landlord or its affiliate in addition to the Project, the cost of such insurance shall be equitably allocated. Upon request, Landlord shall deliver to Tenant certificates of insurance evidencing compliance with the insurance requirements hereunder.
15. Waiver of Subrogation Rights. Each party, for itself and, without affecting any insurance maintained by such party, on behalf of its insurer, releases and waives any right to recover against the other party, including officers, employees, agents and authorized representatives (whether in contract or tort) of such other party, that arise or result from any and all loss of or damage to any property of the waiving party located within or constituting part of the Project, including the Premises, to the extent of amounts payable under a standard ISO Commercial Property insurance policy, or such additional property coverage as the waiving party may carry (with a commercially reasonable deductible), whether or not the party suffering the loss or damage actually carries any insurance, recovers under any insurance or self-insures the loss or damage. Each party shall have their property insurance policies issued in such form as to waive any right of subrogation as might otherwise exist. This mutual waiver is in addition to any other waiver or release contained in this Lease.
16. Waiver of Liability and Indemnification.
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16.1 Indemnification.
16.1.1 By Tenant. Subject to Article 15, Tenant agrees to indemnify and hold Landlord, any Encumbrancers, and the Landlord Parties (together, the Indemnitees) harmless from and to protect and defend the Indemnitees against any and all Claims, incurred in connection with or arising from any of the following: (i) the use or occupancy or manner of use or occupancy of the Premises (including the Parking Garage Roof Space) and the Sidewalk Area by Tenant or any Tenant Party; or (ii) any injury or death of any person or damage to or destruction of property occurring in the Premises (including the Parking Garage Roof Space), from any cause whatsoever; or (iii) any injury or death of any person or damage to or destruction of property occurring in, on or about any Common Areas, or elsewhere in or about the Project or in the vicinity of the Project, including the Parking Garage, to the extent such injury, death or damage is caused by the negligence or willful misconduct of Tenant or any Tenant Parties; or (iv) Tenants use of the roof of the Building pursuant to Article 37; or (v) the presence of dogs brought into the Project by Tenant or Tenant Parties, including, but not limited to, any Claims arising in or about the Parking Garage. Tenants obligations under this Section 16.1.1 shall be inapplicable to the extent such Claims arise from the negligence or willful misconduct of any Indemnitee or to the extent such obligations are limited or prohibited by Applicable Laws. If any action or proceeding is brought against any Indemnitee by reason of any such claim or liability, Tenant, upon notice from Landlord, covenants to resist and defend at Tenants sole expense such action or proceeding by counsel reasonably satisfactory to Landlord or the applicable Landlord Party or Encumbrancer. Tenants obligations under this Article 16 shall not be construed as in any way restricting, limiting, or modifying Tenants insurance or other obligations under this Lease. Further, Tenants compliance with the insurance requirements and other obligations of this Lease shall not in any way restrict, limit or modify Tenants obligations under this Article 16.
16.1.2 By Landlord. Subject to Article 15, Landlord agrees to indemnify and hold Tenant and the Tenant Parties harmless from and to protect and defend Tenant and the Tenant Parties against any and all Claims incurred by Tenant and the Tenant Parties (i) to the extent caused by the negligence or willful misconduct of Landlord or a Landlord Party or (ii) in connection with any injury or death of any person or damage to or destruction of property occurring in, on or about any Common Areas, the Parking Garage or elsewhere in or about the Project or in the vicinity of the Project, except to the extent such Claims arise from the negligence or willful misconduct of Tenant or any Tenant Party. If any action or proceeding is brought against Tenant or any of the Tenant Parties by reason of any such claim or liability, Landlord, upon notice from Tenant, covenants to resist and defend at Landlords sole expense such action or proceeding by counsel reasonably satisfactory to Tenant. Landlords obligations under this Article 16 shall not be construed as in any way restricting, limiting, or modifying Landlords insurance or other obligations under this Lease. Further, Landlords compliance with the insurance requirements and other obligations of this Lease shall not in any way restrict, limit or modify Landlords obligations under this Article 16.
16.2 Duty to Defend. Each partys duty to defend as set forth in this Article 16 is separate and independent of such partys duty to indemnify. The duty to defend applies immediately, regardless of whether the applicable party has paid any sums or incurred any detriment arising out of or relating (directly or indirectly) to any Claims.
16.3 Survival. The provisions of this Article 16 shall survive the expiration or earlier termination of this Lease.
17. Assignment and Subletting.
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17.1 Restriction on Transfers. Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld: (a) assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, by operation of law or otherwise; (b) sublet the Premises or any part thereof; or (c) permit the use of the Premises by any persons other than Tenant and its employees (each of the foregoing is referred to herein as a Transfer and are collectively referred to as Transfers and any person to whom any Transfer is made or sought to be made is referred to as a Transferee). Any Transfer made without complying with this Article 17 shall, at Landlords option, be null, void and of no effect. For purposes of this Lease, the term Transfer shall include: (a) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of a general partner or a majority of the partners, or a transfer of a majority of partnership interests, or the dissolution of the partnership; (b) if Tenant is a limited liability company, the withdrawal or change, voluntary, involuntary, or by operation of law, of a majority of members, or a transfer of a majority of the membership interests, or the dissolution of the limited liability company; (c) if Tenant is a corporation, the dissolution, merger, consolidation or other reorganization of Tenant, or the sale or other transfer of more than an aggregate of fifty percent (50%) of the voting shares of Tenant (other than transfers to immediate family members by reason of gift or death), and (d) the sale, mortgage, hypothecation or pledge of more than an aggregate of fifty percent (50%) of Tenants assets (each of (a) through (d), a Change of Ownership Transaction). No issuing of stock of Tenant or a Tenant Affiliate (hereinafter defined) in a public offering or sale on a public stock exchange of Tenants stock shall be deemed to be a Transfer for purposes of this Lease or subject to the terms and conditions of this Article 17.
17.2 Notice of Proposed Transfer. If Tenant shall desire Landlords consent to any Transfer, Tenant shall notify Landlord in writing (Notice of Proposed Transfer). Any such Notice of Proposed Transfer shall include: (a) the proposed effective date (which shall not be less than thirty (30) nor more than two hundred seventy (270) days after the date of Tenants Notice of Proposed Transfer); (b) the portion of the Premises to be Transferred (the Subject Space); and (c) the name and address of the proposed Transferee, a description of the nature of such Transferees business and proposed use of the Subject Space, a copy of the assignment or sublease pertaining to the proposed Transfer, and an estimated calculation of the Transfer Premium (as defined in Section 17.4 below) in connection with such Transfer. Whether or not Landlord shall grant consent, Tenant shall pay, within thirty (30) days after written request by Landlord, all reasonable, actual out-of-pocket legal fees incurred by Landlord in connection with any proposed Transfer, not to exceed Three Thousand Dollars ($3,000.00) in connection with any proposed Transfer. Within fifteen (15) days after receipt of a Notice of Proposed Transfer (with all required information), Landlord shall approve or disapprove a proposed Transfer. If Landlord fails to respond to a Notice of Proposed Transfer within such fifteen (15) day period, then Landlord shall be deemed to have approved the proposed Transfer. Landlords consent or refusal of consent shall be in writing and, if Landlord refuses consent, the reasons for refusal shall be stated with reasonable particularity. Landlords consent to a Transfer of this Lease shall, if requested by Tenant in writing, be accompanied by a statement addressed to Tenant and the Transferee, upon which statement Tenant and the Transferee may conclusively rely, stating that Landlord has not delivered any notice of default to Tenant under the Lease, which default remains uncured (or setting forth in what respects Tenant is in default), that this Lease has not been amended or modified (or setting forth such amendments or modifications), the expiration date of this Lease, and the date to which Base Rent and Escalation Rent have been paid. Furthermore, for Permitted Transfers of all of Tenants right, title and interest in this Lease and for all assignments to which Landlord has given its consent under this Article 17, Landlord agrees, upon request by Tenant, (a) to amend the notice address for Tenant to add the assignee, and (b) to deliver to Tenant or its successor concurrently with the delivery thereof to such assignee, copies of any notices of default delivered pursuant to the terms of this Lease.
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17.3 Reasonable Conditions. By way of example and without limitation, the parties hereby agree that it shall be deemed to be reasonable under this Lease and under any Applicable Laws for Landlord to withhold consent to any proposed Transfer if, in the good faith judgment of Landlord, one or more of the following apply:
(a) The proposed use of or operation in the Premises by the proposed Transferee (i) would be unlawful; or (ii) would likely cause an increase in insurance premiums for insurance policies applicable to the Building (unless Tenant agrees to pay such increased costs); or
(b) The proposed Transferee is a governmental entity, or is entitled, directly or indirectly, to diplomatic or sovereign immunity, or is not subject to the service of process in, or the jurisdiction of the courts of, the State of California, or holds any exemption from the payment of ad valorem or other taxes which would prohibit Landlord from collecting from such Transferee any amounts otherwise payable under this Lease.
By way of example and without limitation, the parties hereby agree that it shall be deemed to be unreasonable under this Lease and under any Applicable Laws for Landlord to withhold consent to any proposed Transfer based on one or more of the following:
(A) Either the proposed Transferee, or any person or entity that directly or indirectly, Controls, is Controlled by, or is under common Control with, the proposed Transferee: (i) occupies space in the Building at the time of the request for consent, (ii) is negotiating with Landlord to lease space in the Building at such time, or (iii) has negotiated with Landlord during the six (6) month period immediately preceding Tenants request for consent; or
(B) The effective rent charged by Tenant to such proposed Transferee during the term of such Transfer, calculated using a present value analysis, is less than the effective rent being quoted by Landlord at the time of such Transfer for comparable space in the Building for a comparable term, calculated using a present value analysis; or
(C) If the effective rent charged by Tenant to such proposed Transferee is less than the fair market rental value of the Subject Space as of the date of the proposed Transfer.
17.4 Transfer Premium. If Landlord consents to a Transfer, Tenant shall pay Landlord fifty percent (50%) of any Transfer Premium to the extent actually received by Tenant from such Transfer. No Transfer Premium shall be owed in connection with any Permitted Transfer or occupancy by any Business Affiliate. The term Transfer Premium means all rent, additional rent or other consideration paid by such Transferee (including, but not limited to, payments in excess of fair market value for Tenants assets, trade fixtures, equipment and other personal property), in excess of the Rent payable by Tenant under this Lease (on a monthly basis during the Term, and on a per Adjusted Rentable Square Foot basis, if less than all of the Premises is Transferred), after deducting Permitted Transfer Costs. As used herein, Permitted Transfer Costs means the actual costs incurred and paid by Tenant for (a) any leasing commissions, (b) reasonable legal fees and expenses in connection with the Transfer, (c) any Alterations to the Subject Space made by Tenant in connection with the Transfer, (d) marketing expenses, and (e) improvement allowances, moving allowances, out-of-pocket leasing concessions, and any other reasonable out-of-pocket expenses reasonably incurred by Tenant in connection with the Transfer, provided that Tenant shall furnish Landlord with copies of bills or other documentation reasonably substantiating such costs. If Tenant shall enter into multiple Transfers, the Transfer Premium payable to Landlord shall be calculated independently with respect to each Transfer. The Transfer Premium due Landlord hereunder shall be paid within thirty (30) days after Tenant receives any Transfer Premium from the Transferee. Landlord or its authorized representatives shall have the right at all
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reasonable times to audit the books and records of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found to be understated, Tenant shall pay the deficiency within thirty (30) days after demand, and if understated by more than three percent (3%), Tenant shall pay the costs of Landlords audit.
17.5 Terms of Consent. If Landlord consents to a Transfer: (a) the terms and conditions of this Lease, including among other things, Tenants liability for the Subject Space, and Rent with respect thereto, shall in no way be deemed to have been released, waived or modified; (b) such consent shall not be deemed consent to any further Transfer by either Tenant or the Transferee; (c) no Transferee (other than a Permitted Assignee) shall succeed to any rights provided in this Lease or any amendment hereto to extend the Term, expand the Premises, or lease additional space, any such rights being deemed personal to Tenant (other than a Permitted Assignee); (d) Tenant shall deliver to Landlord promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord; and (e) Tenant shall furnish upon Landlords request, a complete statement, setting forth in detail the computation of any Transfer Premium Tenant has derived and will derive from such Transfer. In addition, if Landlord consents to a Transfer, but applicable sublease and assignment documents are not executed within one hundred eighty (180) days after Tenants Notice of Proposed Transfer, or if the terms of the proposed Transfer materially change from those set forth in Tenants Notice of Proposed Transfer, Tenant shall submit a new Notice of Proposed Transfer, requesting Landlords consent. Each Transferee under an assignment of this Lease, other than Landlord, must expressly assume all of the provisions, covenants and conditions of this Lease on the part of Tenant to be kept and performed. If an Event of Default occurs under this Lease, Tenant hereby authorizes Landlord to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenants obligations under this Lease) until such Event of Default is cured. Notwithstanding anything to the contrary contained herein and without limiting the rights of Tenant that may be transferred to any Transferee, Tenants rights to use the Parking Spaces under Article 30 and Tenants signage rights under Article 44 may be Transferred to an assignee or sublessee of the Premises. Each Transferee under a sublease may be permitted to use the 650 Townsend address for its subleased premises.
17.6 Subsequent Consents. Consent by Landlord to any Transfer made pursuant to this Lease shall not operate to relieve Tenant from any covenant or obligation hereunder or be deemed to be a consent to or relieve Tenant from obtaining Landlords consent to any subsequent Transfer by Tenant or anyone claiming by, through or under Tenant. No subtenant shall have the right to further Transfer its interest in the Subject Space without complying with this Article 17.
17.7 Permitted Transfers.
17.7.1 Notwithstanding anything to the contrary contained in this Article 17, Tenant shall have the right, without the prior written consent of Landlord, but subject to the other provisions of this Section 17.7, to assign this Lease or to sublease all or any portion of the Premises to the following (each, a Permitted Transferee and, collectively, Permitted Transferees): (a) an entity which is Controlled by, Controls, or is under common Control with, Tenant (a Tenant Affiliate), (b) any successor entity to Tenant by way of merger, consolidation or other non bankruptcy corporate reorganization, (c) an entity which acquires all or substantially all (i.e., at least eighty-five percent (85%)) of Tenants assets or stock, (d) an entity acquiring and continuing Tenants business operations at or from the Premises, or (e) in connection with any Change in Ownership Transaction (collectively, Permitted Transferees, and, individually, a Permitted Transferee). In the case of a transaction pursuant to clauses (b), (c), (d) or (e) above, if the surviving entity or transferee shall have a Net Worth less than the lesser of (A) the Net Worth of Tenant immediately prior to the proposed transaction and (B) Fifty Million Dollars ($50,000,000), then within ten (10) business days after the consummation of such transaction,
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Tenant shall cause the Letter of Credit to be increased to an amount equal to twenty five percent (25%) of Base Rent due for the remainder of the Term as of the consummation of such transaction (if higher than the amount of the Letter of Credit as of such date). For purposes of this Lease, the term Permitted Assignee shall mean a Permitted Transferee to whom Tenant assigns all of its right, title and interest in and to this Lease, and which assumes all of Tenants obligations under this Lease.
17.7.2 Any Transfer pursuant to Section 17.7.1 above must comply with each of the following additional conditions: (i) Tenant shall not be in default (beyond applicable notice and cure periods) in the performance of any of its obligations under this Lease at the time of the Transfer; (ii) within ten (10) days after the Transfer, Tenant shall give Landlord written notice of the Transfer, which notice shall be accompanied by such documents or information as is reasonably necessary to substantiate that the proposed Transfer falls within the parameters of Section 17.7.1 above, including financial statements of the proposed Transferee; (iii) Landlord receives no later than the tenth (10th) business day after effective date of the Transfer a fully executed duplicate original assignment or sublease (if applicable), in a commercially reasonable form; (iv) any such Transfers shall not, whether in a single transaction or in a series of transactions, be entered into as a subterfuge to evade the obligations and restrictions relating to Transfers set forth in this Article 17; (v) no Transfer to a Permitted Transferee shall release Tenant from its obligations under this Lease; and (vi) Tenant shall pay Landlords reasonable out-of-pocket attorneys fees and costs incurred in connection with any Transfer to a Permitted Transferee not to exceed Two Thousand Dollars ($2,000.00) in connection with any proposed Transfer to a Permitted Transferee.
17.8 Permitted Occupancy by Certain Business Affiliates. Tenant shall have the right, from time to time, to allow one or more persons or entities with whom Tenant has a previously existing and continuing business relationship (Business Affiliates) to occupy with Tenant up to 15,000 Adjusted Rentable Square Feet on a shared basis with Tenant, subject to the following terms and conditions: (a) at least ten (10) business days before a Business Affiliate takes occupancy, Tenant shall provide Landlord with the name and address of such Business Affiliate; (b) Tenant shall exercise a reasonable degree of supervision over all activity occurring in the Premises; (c) the Business Affiliates use and occupancy of the Premises shall be subject to the terms, covenants and conditions of this Lease, including, without limitation, the Building Rules, and Tenant shall cause such Business Affiliate to observe or perform each of the provisions of this Lease which the Business Affiliate is obligated to observe or perform, including, without limitation, the Building Rules; (d) The Business Affiliate shall direct to Tenant (and not Landlord) any and all requests, concerns, complaints and other communications regarding the Premises; (e) Tenants occupancy arrangements with the Business Affiliates shall not, whether in a single transaction or in a series of transactions, be entered into as a subterfuge to avoid the obligations and restrictions relating to Transfers set forth in this Article 17. Nothing set forth in this Section 17.8 is intended to or shall relieve Tenant of any obligation to be performed by Tenant under this Lease, including the obligation to obtain Landlords consent to any other Transfer.
17.9 Arbitration. If Landlord has the right pursuant to this Article 17 to reasonably disapprove a particular proposed Transfer and Landlord disapproves such proposed Transfer and Tenant disputes Landlords failure to approve such Transfer, then the dispute shall be submitted to arbitration in accordance with Article 45 below.
18. Rules and Regulations. Tenant agrees to diligently observe and comply with, and to cause all Tenant Parties to diligently observe and comply with, the Building Rules and Regulations (Building Rules) set forth in Exhibit B-1 attached hereto, and all modifications of and additions thereto adopted from time to time by Landlord; provided, that, such modifications and additions do not have a material adverse effect on the operation of Tenants business at or access to the Premises. No modifications of or additions to the Building Rules shall be effective until thirty (30) days after delivery
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to Tenant. The Building Rules are in addition to, and shall not be construed in any way to modify, in whole or in part, any of the provisions of this Lease. If any of the Building Rules conflict with any express provisions of this Lease, the provisions of this Lease shall govern. Landlord shall enforce the Building Rules in a nondiscriminatory manner. Landlord shall use commercially reasonable efforts (but not requiring the initiation of any legal action) to enforce the Building Rules against other occupants of the Project in order to ensure that the Project is operated in manner consistent with Comparable Buildings.
19. Entry of Premises by Landlord; Modification to Common Areas.
19.1 Entry of Premises. Landlord reserves the right, during Building Standard Hours and upon at least twenty-four (24) hours notice to Tenant (except in the case of an emergency), to enter the Premises to (a) inspect the Premises; (b) show the Premises to governmental or utility representatives, prospective purchasers, to current or prospective Encumbrancers or insurers, or, during the last nine (9) months of the Term, to prospective tenants; (c) post notices of nonresponsibility; (d) perform maintenance, repairs or alterations. Landlord shall at all times have a key with which to unlock all the doors in the Premises. In an emergency, Landlord shall have the right to use any means Landlord may reasonably deem proper to open the doors in and to the Premises and such entry shall not be deemed to be a forcible entry or unlawful entry into or detainer of the Premises, or any portion thereof. Access by Landlord shall be in accordance with the security, safety and confidentiality requirements that Tenant may reasonably adopt from time to time, including, without limitation, a requirement that persons (including Landlord and Landlord Parties) having access to the Premises shall sign and deliver to Tenant a confidentiality agreement in form attached hereto as Exhibit R. Tenant may reasonably restrict access by any visitor whom Landlord intends to bring onto the Premises who is, or may reasonably be suspected by Tenant to be or represent a competitor of Tenant. Landlords entry shall cause the least interference to Tenants business as commercially reasonable. Landlord shall use commercially reasonable efforts to promptly finish any work for which it entered. Tenant shall at all times, except in the case of emergencies, have the right to escort Landlord or its agents, representatives, contractors or guests while the same are in the Premises.
19.2 Modifications to Common Areas. Landlord shall have the right, in its sole discretion, from time to time, to: (a) make changes to the Common Areas and/or the Project, including, without limitation, changes in the location, size, shape and number of any Common Area amenity, installation or improvement, such as the driveways, entrances, parking spaces, parking areas, ingress, direction of driveways, hallways, corridors, lobby areas and walkways; provided, that, such changes do not have a material adverse effect on the operation of Tenants business at or access to the Premises; (b) add additional improvements to the Common Areas and/or the Project or remove existing improvements therefrom; provided, that, such changes do not have a material adverse effect on the operation of Tenants business at or access to the Premises; (c) close temporarily any of the Common Areas and/or the Project while engaged in making additional improvements, repairs or alterations to the Project or any portion thereof; and (d) do and perform any other acts, alter or expand, or make any other changes in, to or with respect to the Common Areas and/or the Project as Landlord may, in its sole discretion, deem to be appropriate; provided, that, the same do not have a material adverse effect on the operation of Tenants business at or access to the Premises. Without limiting the foregoing, such changes may include, without limitation, (i) installing monitoring, repairing, relocating and replacing pipes, ducts, conduits, wires, meters and equipment, including those located above the ceiling surfaces, below the floor surfaces, and within the walls of the Premises, (ii) modifying the Common Areas to comply with Applicable Laws, including regulations relating to the physically disabled, seismic conditions, and building safety and security, and (iii) installing new floor covering, lighting, and wall coverings in the Common Areas; provided, that, in each such case, such changes do not have a material adverse effect on the operation of Tenants business at or access to the Premises or (y) the continued exercise by Tenant of its rights with
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respect to the Parking Garage Roof Space, the License Area, the Sidewalk Area, the Cafeteria, having dogs in the Building or Building or Premises signage, each as set forth herein. Landlord shall have the right to utilize the atrium portion of the Common Areas located near the 650 Townsend entrance to the Building for entertainment or events not more than two (2) times per year. Landlord shall have the right to utilize the atrium portion of the Common Areas located near the 650 Townsend entrance to the Building for displays, leasing of food and beverage kiosks or other such similar uses; provided, however, that Landlord shall not be permitted to locate (and shall not allow to be located) within such Common Area any advertisement.
19.3 Waiver of Claims. Tenant acknowledges that Landlord, in connection with Landlords activities under this Article 19, may, among other things, erect scaffolding or other necessary structures in the Premises and/or the Project, limit or eliminate access to portions of the Project, including portions of the Common Areas, or perform work in the Premises and/or the Project, which work may create noise, dust, vibration, odors or leave debris in the Premises and/or the Project. Landlord shall exercise commercially reasonable efforts to minimize interference with the conduct of Tenants business in the Premises in performing activities under this Article 19, but Tenant hereby agrees that such activities shall not: constitute an actual or constructive eviction of Tenant; entitle Tenant to any abatement of Rent; make Landlord liable to Tenant for any direct or indirect injury to or interference with Tenants business; or entitle Tenant to any compensation or damages for loss of the use of the whole or any part of the Premises or of Tenants personal property or improvements, or for any inconvenience or annoyance resulting from such activities.
20. Default and Remedies.
20.1 Events of Default. The occurrence of any one or more of the following events (each, an Event of Default) shall constitute a breach of this Lease by Tenant:
20.1.1 Tenant fails to pay any Rent when due, and such failure continues for more than five (5) business days after written notice; or
20.1.2 Tenant fails to obtain Landlords prior written consent to any Transfer in violation of Article 17, and such failure continues for more than thirty (30) days after written notice; or
20.1.3 Tenant fails to deliver evidence of insurance, an estoppel certificate, or financial statements to Landlord within the time periods required by Article 14 and Sections 23.1 and 32.19, respectively; or
20.1.4 Tenant fails to remove any lien or encumbrance arising out of any work performed, materials furnished or obligations incurred by Tenant within the time period required by Article 11; or
20.1.5 Tenant fails to increase the Letter of Credit as required pursuant to Section 26.6 below or elsewhere in this Lease, and such failure continues for more than ten (10) business days after written notice; or
20.1.6 Tenant fails to observe or perform any other agreement or covenant of this Lease, and such failure continues for more than thirty (30) days after written notice from Landlord; provided that if such failure cannot reasonably be cured within a thirty (30) day period, an Event of Default shall not be deemed to have occurred if Tenant promptly commences such cure within said period of thirty (30) days, thereafter diligently pursues and completes such cure; or
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20.1.7 Tenant (i) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors relief law of any jurisdiction, (ii) makes an assignment for the benefit of its creditors, or (iii) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to such person or entity or with respect to any substantial part of their respective property; or
20.1.8 Without consent by Tenant, a court or government authority enters an order, and such order is not vacated within ninety (90) days, (i) appointing a custodian, receiver, trustee or other officer with similar powers with respect to such person or entity or with respect to any substantial part of their respective property, or (ii) constituting an order for relief or approving a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors relief law of any jurisdiction, or (iii) ordering the dissolution, winding-up or liquidation of such person or entity; or
20.1.9 This Lease or any estate of Tenant hereunder is levied upon under any attachment or execution and such attachment or execution is not vacated within thirty (30) days.
20.2 Landlords Remedies Upon Occurrence of Event of Default. Even though Tenant has breached this Lease and abandoned the Premises, this Lease shall continue in effect for so long as Landlord does not terminate Tenants right to possession, and Landlord, in addition to all other rights and remedies, shall have the right described in California Civil Code Section 1951.4 (Landlord may continue this Lease in effect after Tenants breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations). Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of Landlord to protect Landlords interest under this Lease shall not constitute a termination of Tenants right to possession unless written notice of termination is given by Landlord to Tenant.
20.3 Damages Upon Termination. If an Event of Default occurs, Landlord shall have the right at any time to give a written termination notice to Tenant and, on the date specified in such notice, Tenants right to possession shall terminate and this Lease shall terminate. Upon such termination, Landlord shall have the right to recover from Tenant:
20.3.1 The worth at the time of award of all unpaid Rent which had been earned at the time of termination;
20.3.2 The worth at the time of award of the amount by which all unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided;
20.3.3 The worth at the time of award of the amount by which all unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; and
20.3.4 All other amounts necessary to compensate Landlord for all the detriment proximately caused by Tenants failure to perform all of Tenants obligations under this Lease or which in the ordinary course of things would be likely to result therefrom.
The worth at the time of award of the amounts referred to in Sections 20.3.1 and 20.3.2 above shall be computed by allowing interest at the Interest Rate. The worth at the time of award of the amount
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referred to in Section 20.3.3 above shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
20.4 Computation of Certain Rent for Purposes of Default. For the purpose of determining unpaid Rent under Sections 20.3.1, 20.3.2 and 20.3.3 above, the Rent reserved in this Lease shall be deemed to be the total Rent payable by Tenant under Articles 4 and 5 above, including the benefit to Tenant of the Rent Abatement Periods. For purposes of computing the amount of Rent hereunder that would have accrued after the time of award, the amount of increases in Escalation Rent shall be projected based upon the average rate of increase, if any, in Escalation Rent from the Commencement Date through the time of award.
20.5 Landlords Right to Cure Defaults. Upon the occurrence of an Event of Default, Landlord may, at its option, take any reasonable action to cure the Event of Default, without waiving its rights and remedies against Tenant or releasing Tenant from any of its obligations hereunder. Notwithstanding the preceding sentence, in the event of an emergency or other circumstance in which Tenants failure to take immediate action may result in injury to persons or damage to property, Landlord may, at its option, take any reasonable action to perform any obligation of Tenant, after first giving such prior notice to Tenant as may be reasonable under the circumstances. All reasonable out-of-pocket costs actually paid by Landlord in performing Tenants obligations as set forth in this Section 20.5 plus a supervision fee equal to five percent (5%) of the first $100,000 in costs of performing the obligation and one percent (1%) of costs in excess of $100,000, shall be paid by Tenant to Landlord within thirty (30) days after demand.
20.6 Remedies Cumulative. The remedies provided for in this Lease are in addition to all other remedies available to Landlord at law or in equity by statute or otherwise.
20.7 Landlords Default.
20.7.1 General. Notwithstanding anything to the contrary set forth in this Lease, Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt by Landlord of written notice from Tenant specifying in detail Landlords alleged failure to perform; provided, however, if the nature of Landlords obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if it commences such performance within such thirty (30) day period and thereafter diligently pursues the same to completion. Nothing contained in this Section 20.7.1 shall affect Tenants rights to self-help set forth in Section 20.7.2 below.
20.7.2 Tenants Cure Right. If Landlord fails to comply with any of Landlords obligations set forth in this Lease, including, without limitation, the failure to pay monetary sums owing to any party, which failure adversely affects Tenants ability to conduct business in the Premises, and such failure continues for eight (8) business days (or such lesser period of time as is reasonable under the circumstances), following written notice from Tenant to Landlord and any Encumbrancer, then, following an additional two (2) business days notice to Landlord and any Encumbrancer specifying that Tenant intends to exercise its self-help rights pursuant to this Section (provided, however, that such additional notice shall not be required in the event of an emergency), Tenant may, but shall not be obligated to, proceed to take the required action on behalf of, and for the account of, Landlord (including payment of monetary sums), and Landlord shall promptly reimburse Tenant for all reasonable costs and expenses paid or incurred on behalf of Landlord in connection with performing the obligations set forth herein plus a supervision fee equal to five percent (5%) of the first $100,000 in costs of performing or payment of the obligation and one percent (1%) of costs in excess of $100,000. Any work performed by Tenant pursuant
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to the foregoing shall be conducted in accordance with the terms of Article 10 below (excluding any requirement to obtain Landlords consent as provided in Article 10). Notwithstanding the foregoing, Landlord may deliver to Tenant a good faith written objection before the expiration of the required notice periods above, (i) setting forth with reasonable particularity Landlords reasons for its claim that Tenant is not entitled to exercise its rights pursuant to this Section and (ii) submitting the dispute to binding arbitration in accordance with Article 45 below. If and to the extent Landlord properly objects and submits the dispute to arbitration in accordance with the preceding sentence, then Tenant shall not exercise its rights pursuant to this Section unless and until the Arbitrator determines Tenant is entitled to exercise its rights pursuant to this Section.
20.7.3 Tenants Off-Set Rights. Subject to any express limitations set forth herein to the contrary, the remedies provided for in this Lease are in addition to all other remedies available to Tenant at law or in equity by statute or otherwise. Without limiting the generality of the foregoing, if Landlord fails to pay or reimburse Tenant when due any amount owed to Tenant under this Lease, including, without limitation: (i) Tenant fails to receive any Tenant Improvement Allowance (as defined in the Work Letter) or other amounts owed to Tenant in connection with construction of the Tenant Improvements or Ancillary Tenant Improvements after submission of all required documents and information as required by this Lease, either in connection with the initial Premises demised hereunder and/or any Expansion Premises and/or First Refusal Space and/or First Offer Space; (ii) Landlord fails to reimburse Tenant in connection with the exercise of Tenants rights pursuant to Section 20.7.2 above; (iii) Landlord fails to pay when due any brokerage commissions payable to Tenants Broker in connection with this Lease pursuant to that certain Commission Agreement dated September 15, 2010 by and between Landlord and Tenants Broker; or (iv) monetary damages awarded to Tenant in any arbitration proceeding or by a court in any legal proceeding, then Tenant shall have the right, in addition to all other remedies available to Tenant at law or in equity by statute or otherwise, to either off-set against Rent due under this Lease or otherwise abate payments of Base Rent, Escalation Rent or other Rent an amount equal to (a) the applicable amounts owed to Tenant plus (b) interest on the amounts owed to Tenant from the date incurred until such off-set occurs at the Interest Rate plus (c) a supervision fee equal to five percent (5%) of the first $100,000 off-set and one percent (1%) of amounts in excess of $100,000. Notwithstanding the foregoing, Tenant shall deliver notice to Landlord of Tenants intent to off-set against Rent under clauses (i) and (iii) of this Section 20.7.3 at least ten (10) business days prior to exercising its right of off-set. If Landlord delivers to Tenant a written good faith objection to Tenants right of off-set before the expiration of such notice period, (A) setting forth with reasonable particularity Landlords reasons for its claim that Tenant is not entitled to exercise its rights pursuant to this Section and (B) submitting the dispute to binding arbitration in accordance with Article 45 below, then Tenant shall not then be entitled to such off-set unless and until the Arbitrator determines that Tenant has the right to exercise such set-off rights (but Tenant may exercise such set-off rights as to any amount not in dispute). If Tenant prevails in the arbitration, the amount of the award (which shall include interest at the Interest Rate from the time of delivery of Tenants notice of its intent to off-set Rent until the date Tenant is entitled to off-set and attorneys fees and related costs) may be deducted by Tenant from the Rent next due and owing under this Lease. The foregoing two (2) sentences shall not apply with respect to a set-off following Tenants rightful exercise of its self-help rights pursuant to the terms of Section 20.7.2 above. Notwithstanding anything to the contrary contained above in this Section 20.7.3, Tenant shall have no right under this Section 20.7.3 to off-set from Rent payable by Tenant under this Lease, nor to proceed to arbitration as provided above in this Section 20.7.3, so long as an Event of Default of Tenant under this Lease has occurred and remains uncured.
21. Subordination, Attornment and Nondisturbance.
21.1 Subordination and Attornment. Landlords interest herein may be assigned as security at any time to any Encumbrancer. This Lease and all of Tenants rights hereunder shall be
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subject and subordinate to any and all Encumbrances, and to any and all advances made or hereafter made on the security thereof or Landlords interest therein, all without the necessity of any further instrument executed or delivered by or on the part of Tenant for the purpose of effectuating such subordination, unless an Encumbrancer requires in writing that this Lease be superior to its Encumbrance. Upon any termination or foreclosure (or any delivery of a deed in lieu of foreclosure) of any Encumbrance, Tenant, upon request, shall attorn to the Encumbrancer or purchaser or any successor thereto and shall recognize such party as Landlord hereunder; provided, however that Landlord shall have obtained for the benefit of Tenant from any Encumbrancer of a future Encumbrance a commercially reasonable non-disturbance agreement which provides, among other things, that so long as there is no Event of Default hereunder, this Lease shall not be terminated and Tenant shall be entitled to the benefit of each of the agreements, terms, covenants and conditions set forth herein. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver, upon demand, such further commercially reasonable instruments evidencing such subordination or superiority of this Lease to any such Encumbrance, and such attornment, as may be required by Landlord or by the Encumbrancer of such Encumbrance. Landlord shall pay all costs and expenses charged by any Encumbrancer in connection with obtaining any subordination, non-disturbance and attornment agreement required to be delivered pursuant to this Section 21.1.
21.2 Mortgage Subordination. Notwithstanding anything to the contrary in this Article 21 or otherwise in this Lease, any Encumbrancer may at any time subordinate such mortgage or deed of trust to this Lease in whole or in part, without any need to obtain Tenants consent, by execution of a written document subordinating such mortgage or deed of trust to this Lease to the extent set forth in such document and thereupon this Lease shall be deemed prior to such mortgage or deed of trust to the extent set forth in such document without regard to this Lease, such mortgage or deed of trust, or their respective dates of execution, delivery and/or recording.
21.3 Notice to Encumbrancer. Tenant agrees to give any Encumbrancer, by certified mail, a copy of any notice of default served upon Landlord by Tenant, including pursuant to the Work Letter, provided that prior to such notice Tenant has received notice (by way of service on Tenant of a copy of an assignment of rents and leases, or otherwise) of the address of such Encumbrancer.
21.4 Rent Payment Direction. From and after Tenants receipt of written notice from a Encumbrancer or from a receiver appointed pursuant to the terms of such Encumbrancers Encumbrance (a Rent Payment Notice), Tenant shall pay all Rent under this Lease to such Encumbrancer or as such Encumbrancer shall direct in writing. Tenant shall comply with any Rent Payment Notice notwithstanding any contrary instruction, direction or assertion from Landlord. An Encumbrancers delivery to Tenant of a Rent Payment Notice, or Tenants compliance therewith, shall not be deemed to: (a) cause such Encumbrancer to succeed to or to assume any obligations or responsibilities of Landlord under this Lease, all of which shall continue to be performed and discharged solely by Landlord unless and until such Encumbrancer or a foreclosure sale purchaser succeeds to Landlords interest hereunder, or (b) relieve Landlord of any obligations under this Lease. Landlord irrevocably directs Tenant to comply with any Rent Payment Notice, notwithstanding any contrary direction, instruction, or assertion by Landlord. Tenant shall be entitled to rely on any Rent Payment Notice.
21.5 SNDA. Concurrently with its execution of this Lease, Tenant shall execute and deliver to Landlord the subordination, nondisturbance and attornment agreement (SNDA) in the form attached hereto as Exhibit F, and concurrently with its execution of this Lease, Landlord shall deliver such SNDA, executed by Landlord and Wells Fargo Bank, N.A. (Existing Security Holder). Landlord shall pay all costs and expenses charged by any Existing Security Holder in connection with obtaining any subordination, non-disturbance and attornment agreement required to be delivered pursuant to this Section 21.5.
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22. Sale or Transfer by Landlord; Lease Non-Recourse.
22.1 Release of Landlord on Transfer. Landlord may at any time transfer, in whole or in part, its right, title and interest under this Lease and in the Project, or any portion thereof. Landlord shall not transfer its interest in the Project without also transferring its interest in this Lease. Upon such a transfer, Landlord shall automatically be released from all further liability accruing under this Lease from and after such transfer, and, provided the transferee assumes Landlords obligations under this Lease, Tenant agrees to attorn to the transferee and to look solely to the transferee for the performance of Landlords obligations under this Lease after the date of transfer; provided, however, that if Tenant provides Landlord with a Letter of Credit or other security for Tenants performance of its obligations hereunder, and Landlord does not transfer, or provide a credit with respect to, such security to the grantee or transferee of Landlords interest in the Building, Landlord shall remain liable to Tenant for such security, and Tenant shall not be obligated to deliver additional security or a new Letter of Credit to the grantee or transferee of Landlords interest in the Project in substitution for the Letter of Credit not so transferred by Landlord.
22.2 Lease Nonrecourse to Landlord; Limitation of Liability. Any liability of Landlord (including, without limitation, Landlords direct or indirect partners, shareholders, members, affiliates, or agents, and the officers, directors, members and employees of Landlord or any such other person) (collectively, Landlord Parties) to Tenant under this Lease shall be limited to the equity interest of Landlord in the Project, and Tenant agrees to look solely to such interest for the recovery of any judgment, it being intended that Landlord and such other persons shall not be personally liable for any deficiency or judgment. In no event shall any of Landlord, Landlord Parties, Tenant or Tenant Parties be liable under any circumstances for any consequential damages or for injury or damage to, or interference with the other partys business, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill, or loss of use, however occurring.
23. Estoppel Certificate.
23.1 Tenant Estoppel. Tenant shall, from time to time, within fifteen (15) business days following request from Landlord, execute, acknowledge and deliver to Landlord an estoppel certificate, which shall be substantially in the form of Exhibit Q attached hereto, indicating therein any exceptions thereto that may exist at that time, and shall also contain any other factual information reasonably requested by Landlord or Landlords prospective lender or mortgagee. Any such certificate may be relied upon by, and shall upon Landlords request be addressed to, any such prospective lender or purchaser. If Tenant fails to execute, acknowledge and deliver any such estoppel certificate within such fifteen (15) business day period, Landlord may deliver a written notice (the Estoppel Reminder Notice) to Tenant stating that Tenant has failed to deliver such estoppel certificate within the required time period. Failure of Tenant to execute, acknowledge and deliver an estoppel certificate to Landlord within five (5) business days after delivery of an Estoppel Reminder Notice, shall, at Landlords option, constitute (i) an acknowledgment by Tenant that statements included in good faith by Landlord in the estoppel certificate are true and correct or (ii) an Event of Default.
23.2 Landlord Estoppel. Landlord shall, from time to time, within fifteen (15) business days following request from Tenant, execute, acknowledge and deliver to Tenant an estoppel certificate, (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which the rental and other charges are paid in advance, if any, (b) acknowledging that to Landlords actual knowledge without duty of investigation there are not any uncured defaults on the part of Tenant or Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth such further factual information with respect to the status of this Lease or the Premises as may reasonably be
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requested thereon. Any such certificate may be relied upon by, and shall upon Tenants request be addressed to, any parties reasonably requested by Tenant. If Landlord fails to execute, acknowledge and deliver any such estoppel certificate within such fifteen (15) business day period, Tenant may deliver an Estoppel Reminder Notice to Landlord stating that Landlord has failed to deliver such estoppel certificate within the required time period. Failure of Landlord to execute, acknowledge and deliver an estoppel certificate to Tenant within five (5) business days after delivery of an Estoppel Reminder Notice, shall, at Tenants option, constitute (i) an acknowledgment by Landlord that statements included in good faith by Tenant in the estoppel certificate are true and correct and (ii) a default by Landlord under this Lease without additional cure periods.
24. No Light, Air, or View Easement. Tenant agrees that no diminution or shutting off of light, air or view by any structure which may be erected (whether or not by Landlord) on property adjacent to the Building shall in any way affect this Lease, entitle Tenant to any reduction of Rent hereunder or result in any liability of Landlord to Tenant.
25. Holding Over. Any holding over after the expiration or earlier termination of this Lease with the written consent of Landlord shall be a tenancy from month to month on the terms set forth herein. Any holding over after the expiration or earlier termination of this Lease without the written consent of Landlord shall be a tenancy at sufferance on all the terms set forth herein, except that the Base Rent for the first three (3) months of such holdover shall be an amount equal to one hundred twenty-five percent (125%) of the Base Rent payable by Tenant immediately prior to such holding over, and thereafter an amount equal to one hundred fifty percent (150%) of the Base Rent payable by Tenant immediately prior to such holding over. Acceptance by Landlord of Rent after the expiration or termination of this Lease shall not constitute a consent by Landlord to any such tenancy from month to month or result in any other tenancy or any renewal of the term hereof. The provisions of this Article 25 are in addition to, and do not affect, Landlords right of re entry or other rights hereunder or provided by Applicable Laws.
26. Letter Of Credit.
26.1 Delivery of Letter of Credit. Within five (5) business days after the execution and delivery of this Lease, Tenant shall deliver to Landlord, as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer as a result of any breach or default by Tenant under this Lease, an irrevocable and unconditional negotiable standby letter of credit (the Letter of Credit) in the form attached hereto as Exhibit G and containing the terms required herein, payable upon presentation to an operating retail branch located in San Francisco, California, running in favor of Landlord and issued by a bank with a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, under the supervision of the Superintendent of Banks of the State of California, or a national banking association, in an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000,00) (the Letter of Credit Amount). Landlord agrees that Wells Fargo Bank, N.A. meets all the requirements set forth in this Lease for the bank issuing the Letter of Credit as of the Lease Date and if selected by Tenant is deemed approved by Landlord to issue the Letter of Credit. The Letter of Credit shall (a) be callable at sight, irrevocable and unconditional, (b) be maintained in effect, whether through renewal or extension, for the period from the Lease Date and continuing until the date (the LC Expiration Date) that is sixty (60) days after the expiration of the Term (provided, however, that, if Landlord terminates this Lease as a result of an Event of Default by Tenant pursuant to Section 20.3 above, and thereafter proceeds to bring an action or proceeding for damages pursuant to Section 1951.2 of the California Civil Code, then the LC Expiration Date shall be extended to the date that is sixty (60) days after the final adjudication of such action or proceeding (after all appeals and the expiration of time to appeal) of a court of competent jurisdiction), and Tenant shall
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deliver a new Letter of Credit, or certificate of renewal or extension amendment to Landlord at least sixty (60) days prior to the expiration of the Letter of Credit then held by Landlord, without any action whatsoever on the part of Landlord, (c) be fully assignable by Landlord, its successors and assigns, upon delivery of any assignment documents required by the issuing bank and payment by Landlord of any charge, fee or premium charged by the issuing bank in connection with such assignment, (d) permit partial draws and multiple presentations and drawings, and (e) be otherwise subject to the Uniform Customs and Practices for Documentary Credits (2007-Rev), International Chamber of Commerce Publication #600, or the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. In addition to the foregoing, the bank issuing the Letter of Credit (the Bank) shall be acceptable to Landlord, in Landlords reasonable discretion. If Landlord notifies Tenant in writing that the Bank (w) no longer maintains an operating retail branch located in San Francisco, California, (x) no longer has a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, (y) is no longer under the supervision of the Superintendent of Banks of the State of California or a national banking association, or (z) has filed bankruptcy or reorganization proceedings or is placed into a receivership or conservatorship, then Tenant shall have thirty (30) days to provide Landlord with a substitute Letter of Credit complying with all of the requirements of this Article 26. If Tenant does not so provide Landlord with a substitute Letter of Credit within such thirty (30) day period, then Landlord, or its then managing agent, shall have the right to draw upon the then current Letter of Credit. In addition to Landlords rights to draw upon the Letter of Credit in Section 26.4 below and as otherwise described in this Article 26, Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable: (A) Tenant has filed a voluntary petition under any Bankruptcy Code, (B) an involuntary petition has been filed against Tenant under any Bankruptcy Code, or (C) the Bank has notified Landlord that the Letter of Credit will not be renewed or extended through the LC Expiration Date, and Tenant fails to deliver a new Letter of Credit or certificate of renewal or extension to Landlord at least thirty (30) days prior to the expiration of the Letter of Credit then held by Landlord. The Letter of Credit will be honored by the Bank regardless of whether Tenant disputes Landlords right to draw upon the Letter of Credit.
26.2 Transfer of Letter of Credit. The Letter of Credit shall provide that Landlord, its successors and assigns, may, at any time and without first obtaining Tenants consent thereto, transfer (one or more times) all or any portion of its interest in and to the Letter of Credit to another party, person or entity; provided, that, in each case, Landlord provides Tenant written notice of such transfer. In the event of a transfer of Landlords interest in the Building, Landlord shall transfer the Letter of Credit, in whole or in part, to the transferee and provide written notice of such transfer to Tenant and upon such transfer and notice Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor arising after such transfer, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said Letter of Credit to a new landlord. In connection with any such transfer of the Letter of Credit, Landlord shall execute and submit to the Bank such applications, documents and instruments, each in commercially reasonable form, as may be necessary to effectuate such transfer, and Landlord shall be responsible for paying the Banks transfer and processing fees in connection therewith.
26.3 In General. If, (a) as a result of any drawing by Landlord on the Letter of Credit in which the proceeds are applied towards a default or breach of Tenant in accordance with this Article 26, the amount of the Letter of Credit shall be less than the Letter of Credit Amount or (b) the Letter of Credit Amount is required to be increased due to an increase in the Adjusted Rentable Square Feet of the Premises or (c) the Letter of Credit Amount is required to be increased as otherwise required under Section 26.6, Tenant shall, within ten (10) business days following notice that Landlord has drawn down the Letter of Credit with respect to clause (a) or within the applicable time frame provided elsewhere in this Lease with respect to clauses (b) and (c), either provide Landlord with a cash security deposit equal to
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such difference or provide Landlord with additional letter(s) of credit in an amount equal to the deficiency (or a replacement letter of credit in the total Letter of Credit Amount), and any such additional (or replacement) letter of credit shall comply with all of the provisions of this Article 26. If Tenant fails to comply with the foregoing, then, notwithstanding anything to the contrary contained in Section 20.1 above, the same shall constitute an incurable default by Tenant under this Lease (without the need for any additional notice and/or cure period). Tenant further covenants and warrants that it will neither assign nor encumber the Letter of Credit or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. Without limiting the generality of the foregoing, if the Letter of Credit expires earlier than the LC Expiration Date, Landlord will accept a renewal thereof (such renewal letter of credit to be in effect and delivered to Landlord, as applicable, not later than thirty (30) days prior to the expiration of the Letter of Credit), which shall be irrevocable and automatically renewable as above provided through the LC Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be acceptable to Landlord in its reasonable discretion. However, if the Letter of Credit is not timely renewed, or if Tenant fails to maintain the Letter of Credit in the amount and in accordance with the terms set forth in this Article 26, Landlord shall have the right to present the Letter of Credit to the Bank in accordance with the terms of this Article 26, and the proceeds of the Letter of Credit may be applied by Landlord against any Rent payable by Tenant under this Lease that is not paid when due (subject to applicable notice and cure periods) and/or to pay for all losses and damages that Landlord has suffered as a result of any breach or default by Tenant under this Lease (subject to applicable notice and cure periods), including, but not limited to, all damages or rent due upon termination of this Lease pursuant to Section 1951.2 of the California Civil Code. Any unused proceeds need not be segregated from Landlords other assets. Landlord agrees to pay to Tenant within thirty (30) days after the LC Expiration Date the amount of any proceeds of the Letter of Credit received by Landlord and not applied against any Rent payable by Tenant under this Lease that was not paid when due or used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will suffer) as a result of any breach or default by Tenant under this Lease (including, but not limited to, all damages or rent due upon termination of this Lease pursuant to Section 1951.2 of the California Civil Code); provided, however, that if prior to the LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenants creditors, under the Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the unused Letter of Credit proceeds until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed.
26.4 Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the Letter of Credit upon the occurrence of any breach or default on the part of Tenant under this Lease. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder, in each case beyond applicable notice and cure periods, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the Letter of Credit, in part or in whole, to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained resulting from Tenants breach or default, including, but not limited to, all damages or rent due upon termination of this Lease pursuant to Section 1951.2 of the California Civil Code. The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any Applicable Laws, it being intended that Landlord shall not first be required to proceed against the Letter of Credit, and the use, application or retention of the Letter of Credit shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the Letter of Credit, either prior to or following a draw by Landlord of any portion of the Letter of Credit, regardless of whether any dispute exists between Tenant and Landlord as to Landlords right to draw upon the Letter of Credit; provided, however, that nothing contained herein shall be deemed to prohibit Tenant from
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challenging the validity or amount of such draw following the occurrence thereof. No condition or term of this Lease shall be deemed to render the Letter of Credit conditional to justify the issuer of the Letter of Credit in failing to honor a drawing upon such Letter of Credit in a timely manner. Tenant agrees and acknowledges that (i) the Letter of Credit constitutes a separate and independent contract between Landlord and the Bank, (ii) Tenant is not a third party beneficiary of such contract, (iii) Tenant has no property interest whatsoever in the Letter of Credit, and (iv) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenants bankruptcy estate shall have any right to restrict or limit Landlords claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise.
26.5 Security Deposit. Any proceeds drawn under the Letter of Credit and not applied as set forth above shall be held by Landlord as a security deposit (the Deposit). No trust relationship is created herein between Landlord and Tenant with respect to the Deposit, and Landlord shall not be required to keep the Deposit separate from its general accounts. The Deposit shall be held by Landlord as security for the faithful performance by Tenant of all of the provisions of this Lease to be performed or observed by Tenant. If Tenant fails to pay any Rent, or otherwise defaults with respect to any provision of this Lease, Landlord may (but shall not be obligated to), and without prejudice to any other remedy available to Landlord, use, apply or retain all or any portion of the Deposit for the payment of any Rent in default or for the payment of any other sum to which Landlord may become obligated by reason of Tenants default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby, including, without limitation, prospective damages and damages recoverable pursuant to California Civil Code Section 1951.2. Tenant waives the provisions of California Civil Code Section 1950.7, or any similar or successor laws now or hereinafter in effect, that restrict Landlords use or application of the Deposit, or that provide specific time periods for return of the Deposit. Without limiting the generality of the foregoing, Tenant expressly agrees that if Landlord terminates this Lease due to an Event of Default or if Tenant terminates this Lease in a bankruptcy proceeding, Landlord shall be entitled to hold the Deposit until the amount of damages recoverable pursuant to California Civil Code Section 1951.2 is finally determined. If Landlord uses or applies all or any portion of the Deposit as provided above, Tenant shall within ten (10) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the Deposit to the full amount thereof, and Tenants failure to do so shall, at Landlords option, be an Event of Default under this Lease. At any time that Landlord is holding proceeds of the Letter of Credit pursuant to this Section 26.5, Tenant may deposit a Letter of Credit that complies with all requirements of this Article 26, in which event Landlord shall return the Deposit to Tenant within ten (10) days after receipt of the Letter of Credit. If Tenant performs all of Tenants obligations hereunder, the Deposit, or so much thereof as has not previously been applied by Landlord, shall be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlords option, to the last assignee, if any, of Tenants interest hereunder) within sixty (60) days following the later of the expiration of the Term or Tenants vacation and surrender of the Premises in accordance with the requirements of this Lease. Landlords return of the Deposit or any part thereof shall not be construed as an admission that Tenant has performed all of its obligations under this Lease. Upon termination of Landlords interest in this Lease, if Landlord transfers the Deposit (or the amount of the Deposit remaining after any permitted deductions) to Landlords successor in interest, and thereafter notifies Tenant of such transfer and the name and address of the transferee, then Landlord shall be relieved of any further liability with respect to the Deposit.
26.6 Increase in Letter of Credit Amount. The Letter of Credit Amount shall be increased as provided in this Section 26.6. On or before the thirtieth (30th) day following the end of each calendar quarter, commencing with the first full calendar quarter following the Commencement Date and continuing until the earlier of (A) last full calendar quarter preceding the fifth (5th) anniversary of the Commencement Date and (B) the issuance of stock of Tenant or any Tenant Subsidiary in a public offering or sale on a public stock exchange of Tenants or any Tenant Subsidiarys stock, Tenant shall
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provide a certification that it has satisfied the Minimum Credit Test (defined below) for the preceding calendar quarter. Such quarterly certification shall be accompanied by Tenants financial statements for the immediately preceding calendar quarter certified as accurate, complete and correct in all material respects by the President or Chief Financial Officer of Tenant. If, in any quarter, Tenant has not satisfied the Minimum Credit Test, the Letter of Credit Amount shall be increased by Two Million Dollars ($2,000,000.00). Within twenty (20) business days from Tenants failure to satisfy the Minimum Credit Test, Tenant shall deliver to Landlord a new Letter of Credit (or amendment to the existing Letter of Credit) to increase the stated amount of the Letter of Credit to the increased Letter of Credit Amount as required by the preceding sentence and in compliance with Section 26.3 above. Notwithstanding the foregoing, if Tenant delivers a certification (accompanied by Tenants financial statements and twelve-month operating statement projections certified as accurate, complete and correct in all material respects by the President or Chief Financial Officer of Tenant) certifying that it has met the Minimum Credit Test for any two (2) consecutive calendar quarters after any calendar quarter in which Tenant fails to satisfy the Minimum Credit Test, (i) the Letter of Credit Amount shall be reduced by Two Million Dollars ($2,000,000.00), (ii) Tenant may deliver to Landlord a new Letter of Credit (or amendment to the existing Letter of Credit) to decrease the amount thereof to equal such new Letter of Credit Amount, and (iii) if Tenant delivers to Landlord a new Letter of Credit in accordance with the preceding clause (ii), then within ten (10) days after receipt of such new Letter of Credit, Landlord shall return to Tenant the existing Letter of Credit. Thereafter, if Tenant again fails to satisfy the Minimum Credit Test, the Letter of Credit shall again be increased in accordance with this Section 26.6.
For purposes hereof, the following terms shall have the meanings specified:
26.6.1 Minimum Credit Test shall mean at any date of determination (a) Tenants and Tenant Subsidiaries cash and cash equivalent investments shall equal at least Four Hundred Million Dollars ($400,000,000.00) and (b) the ratio of the Current Assets of Tenant to the Current Liabilities of Tenant shall be no less than 3 to 1.
26.6.2 Tenant Subsidiaries shall mean any subsidiary of Tenant for which the business and activities of such subsidiary are carried on the books of Tenant and reported on Tenants consolidated financial statements and presented on a United States generally accepted accounting principles basis.
26.6.3 Current Assets shall mean at any date of determination (a) cash available for current operations and items that are cash equivalents, (b) inventories of merchandise, raw materials, goods in progress, finished goods, operating supplies and ordinary maintenance material and parts; (c) trade accounts and notes; (d) receivables from officers, employees, affiliates and others, if collectible in the ordinary course of business within one year, (e) installments of deferred accounts and notes if they conform generally to normal trade practices and terms within Tenants business; (f) marketable securities representing the investment of cash available for current operations, including investments in debt and equity securities classified as trading securities; and (g) prepaid insurance, interest, rents, and taxes, unused royalties, paid advertising services not yet received, and operating supplies, and as otherwise determined in accordance with FASB Codification of Accounting Standards Sections 210-10-45-1 to 210-10-45-4.
26.6.4 Current Liabilities shall mean at any date of determination the estimated or accrued amounts that are expected to be required to cover expenditures within the ensuing twelve (12) months for known obligations, including notes payable, dividends and interest payable, deposits, accounts payable, accrued royalties, accrued salaries and wages, accrued employee benefits, and sales and income taxes payable, and as otherwise determined in accordance with FASB Codification of
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Accounting Standards Sections 210-10-45-5 to 210-10-45-12, but excluding deferred revenues (namely, collections received in advance of the delivery of goods or performance of services).
26.7 Reduction in Letter of Credit. If, on the fifth (5th) anniversary of the Commencement Date, (a) the stock of Tenant or any Tenant Subsidiary has been issued in a public offering and is sold on a public stock exchange, (b) the Minimum Credit Test is satisfied as of such date and (c) no Event of Default of Tenant under this Lease has occurred and is continuing, then (i) the Letter of Credit Amount (as may have been previously increased in accordance with Articles 33, 34 and/or 35) shall be reduced by fifty percent (50%) of the then current Letter of Credit Amount for the remaining term of the Lease, subject to subsequent increases in accordance with Articles 33, 34 and/or 35, (ii) the term Letter of Credit Amount shall be deemed to be such reduced amount for all purposes of this Lease, (iii) Tenant may deliver to Landlord a new Letter of Credit (or amendment to the existing Letter of Credit) to decrease the stated amount thereof to equal such new Letter of Credit Amount, (iv) if Tenant delivers to Landlord a new Letter of Credit in accordance with the preceding clause (iii), then within ten (10) days after receipt of such new Letter of Credit, Landlord shall return to Tenant the existing Letter of Credit and (v) the requirements set forth in Section 26.6 above shall no longer be applicable.
27. Waiver. The failure of either party to object to or to assert any remedy by reason of the other partys failure to perform or observe any covenant or term hereof or its failure to assert any rights by reason of the happening or non happening of any condition hereof shall not be deemed a waiver of its right to assert and enforce any remedy it may have by reason of such failure on the part of the other party or the happening or non happening of such condition or a waiver of its rights to enforce any of its rights by reason of any subsequent failure of the other party to perform or observe the same or any other term or covenant or by reason of the subsequent happening or non happening of the same or any other condition. No custom or practice which may develop between the parties hereto during the Term shall be deemed a waiver of, or in any way affect, the right of either party to insist upon performance and observance by the other party in strict accordance with the terms hereof. The acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding failure of Tenant to perform or observe any term or covenant of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, irrespective of any knowledge on the part of Landlord of such preceding failure at the time of acceptance of such Rent, and no endorsement or statement on any check or any letter accompanying any check or payment of Rent shall be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlords right to recover the balance of such installment or payment of Rent or pursue any other remedies available to Landlord. No receipt of money by Landlord from Tenant after the termination of this Lease or Tenants right of possession of the Premises shall reinstate, continue or extend the Term. Receipt or acceptance of payment from anyone other than Tenant, including a Transferee, is not a waiver of any breach of Article 17, and Landlord may accept such payment on account of the amount due without prejudice to Landlords right to pursue any remedies available to Landlord.
28. Notices; Tenants Agent for Service. Except in circumstances in which oral notice is expressly permitted in this Lease, all notices, demands, requests or other communications that may be or are required to be given by either party to the other hereunder shall be in writing. All notices by Landlord to Tenant shall be sufficiently given, made or delivered if hand delivered (which may be by messenger service) to the address for notices set forth in the Basic Lease Information, or if sent by United States certified return receipt requested, postage prepaid, or by a reputable overnight courier service addressed to Tenant at Tenants address for notices set forth in the Basic Lease Information. All notices by Tenant to Landlord shall be sufficiently given, made or delivered if hand delivered (which may be by messenger service) to Landlord, or sent by United States certified mail, return receipt requested, postage prepaid, or by a reputable overnight courier service addressed to Landlord at Landlords addresses for notices specified in the Basic Lease Information. Each notice shall be deemed received upon the earlier of receipt
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or three (3) days after the date it was mailed as provided in this Article 28, if sent by certified mail, or, one (1) business day after delivery to the overnight courier specifying next business day delivery, or upon the date delivery is made; provided, however, that any refusal to accept delivery shall be deemed to constitute receipt. Any approval, consent or other notice under this Lease may be given on behalf of a party by the attorney for such party.
29. Authority.
29.1.1 If Tenant is a corporation (or other business organization), Tenant and each person executing this Lease on behalf of Tenant represents and warrants to Landlord that (i) Tenant is duly incorporated (or organized) and validly existing under the laws of its state of incorporation (or organization), (ii) Tenant is qualified to do business in California, (iii) Tenant has full right, power and authority to enter into this Lease and to perform all of Tenants obligations hereunder, and (iv) the execution, delivery and performance of this Lease has been duly authorized by Tenant and each person signing this Lease on behalf of the Tenant is duly and validly authorized to do so.
29.1.2 If Landlord is a corporation (or other business organization), Landlord and each person executing this Lease on behalf of Landlord represents and warrants to Tenant that (i) Landlord is duly incorporated (or organized) and validly existing under the laws of its state of incorporation (or organization), (ii) Landlord is qualified to do business in California, (iii) Landlord has full right, power and authority to enter into this Lease and to perform all of Landlords obligations hereunder, and (iv) the execution, delivery and performance of this Lease has been duly authorized by Landlord and each person signing this Lease on behalf of the Landlord is duly and validly authorized to do so.
30. Parking; Transportation.
30.1 Lease of Parking Spaces. Tenant shall be obligated to lease the number of reserved parking spaces in the Parking Garage as specified in the Basic Lease Information as generally shown on Exhibit K and as may be increased as provided below in this Section 30.1 (Parking Spaces) throughout the Term and any extension thereof, subject, however, to the provisions of this Article 30. Landlord and Tenant shall agree upon a site plan depicting the exact number and location of the Parking Spaces to be leased by Tenant and such site plan shall be attached to the Confirmation of Lease Term. The parking charges for such Parking Spaces (a) shall be One Hundred Twenty Dollars ($120.00) per parking space per month during the initial Term, and (b) shall be determined as provided in Section 3.4 during the Extension Term (the Parking Charge). The Parking Charge shall be subject to increase from time to time solely as set forth above and by the amount that any taxes imposed on the use of the parking spaces in the Parking Garage by any governmental or quasi-governmental authority allocable to each calendar year exceeds the amount of such taxes allocable to the Base Year. The increase in the Parking Charge per Parking Space shall be calculated by dividing such increase by the total number of parking spaces within the Parking Garage. Parking Charges shall constitute Rent hereunder and shall be payable in advance, at the same time and in the same manner as Base Rent (but shall not be subject to abatement as provided in Section 4.5 above). From time to time throughout the Term, upon thirty (30) days prior written notice, Tenant may reduce the number of Parking Spaces leased by Tenant, in whole or in part. As a condition to the right to reduce the number of Parking Spaces leased by Tenant, Tenant, at its sole costs, shall within such thirty-day period relocate any gate and/or security fence installed by Tenant pursuant to Section 30.2 to a location and in a configuration acceptable to Landlord. Any Parking Spaces which Tenant had the right to lease (i.e. a total number of Parking Spaces calculated by dividing the Adjusted Rentable Square Feet of the Premises by One Thousand Eight Hundred (1,800)), but which Tenant elects not to lease, shall be referred to herein as Unused Parking Spaces. Landlord shall have the right to lease any Unused Parking Spaces to any third party. Upon Tenants request, from time to
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time, Landlord shall inform Tenant how many Unused Parking Spaces have not been currently leased to third parties. Tenant shall have the right, by delivering written notice(s) to Landlord from time to time, to lease any Unused Parking Spaces which Landlord has not leased to third parties at the then current Parking Charge. Subject to availability, Tenant shall also have the right to rent on a month-to-month basis additional unreserved parking spaces in the Parking Garage at the rate of the then current Parking Charge. The Parking Spaces shall be available to Tenant twenty-four (24) hours a day, seven (7) days a week. Upon exercise of any right to expand the Premises pursuant to Articles 33, 34 and/or 35 with respect to the Suite 500 Premises or Suite 600, Tenant shall be obligated to rent a number of parking spaces within the area of the Parking Garage located on the fifth or sixth floor thereof, as applicable, and adjacent to such Expansion Premises calculated by multiplying the total number of parking spaces located in such area of the Parking Garage by a ratio, the numerator of which is the Adjusted Rentable Square Feet of the applicable Expansion Premises, and the denominator of which is the total Adjusted Rentable Square Feet of the Suite 500 Premises or Suite 600, as applicable (the Suite 500/600 Parking Spaces). The Suite 500/600 Parking Spaces shall be leased on a reserved basis and at the rate of the Parking Charge. Upon Tenants exercise of either Extension Option, Tenant shall have the right, but not the obligation, to lease the maximum number of Parking Spaces as specified in the Basic Lease Information regardless of whether or not Tenant elected prior to such exercise of an Extension Option to lease fewer than such maximum number of Parking Spaces (or to reduce the number of Parking Spaces leased by Tenant) but provided that any additional number of parking spaces required by Tenant have not been previously leased to third parties. Tenant shall make such election in Tenants notice to Landlord exercising the applicable Extension Option. After making such election, Tenant shall again have the same rights as set forth in this Section 30.1 to either reduce the number of Parking Spaces Tenant leases or to lease any Unused Parking Spaces. At no time shall the total number of Parking Spaces leased by Tenant pursuant to this Section 30.1 together with the total number of parking spaces that are eliminated by the use of the Parking Garage Roof Space pursuant to Article 37 exceed the maximum number of Parking Spaces as provided in the Basic Lease Information (i.e. a total number of Parking Spaces calculated by dividing the Adjusted Rentable Square Feet of the Premises by One Thousand Eight Hundred (1,800)).
30.2 Tenants Right to Secure Parking. Subject to compliance with Applicable Law and obtaining any necessary approvals and permits, Tenant, at its sole cost and expense, shall have the right to install a gate and security fence to secure a portion of the Parking Spaces located on the roof of the Parking Garage in the area along the Eighth Street side of the Building. Tenant shall obtain Landlords prior written consent to the design and installation of the gate and fence and comply with all of the other provisions of Article 10 with respect to the construction and installation of the same. Tenant shall pay all Parking Charges attributable to any parking spaces that are eliminated to accommodate installation of the gate and fence on the same terms and in the same manner as provided in Section 30.1 above. If such gate and fence are installed pursuant to the terms of this Section 30.2, at Tenants sole cost and expense and without affecting Tenants obligations to pay Parking Charges, Tenant shall be permitted to contract for valet service from the Eighth Street entrance to the Premises for parking within such gated area subject to Landlords reasonable approval of the terms and conditions of such services, including weight, safety and maintenance concerns.
30.3 Use of the Parking Spaces. The use of the Parking Spaces shall be for the parking of motor vehicles used by Tenant or Tenant Parties, and shall be subject to Applicable Laws. Parking Spaces may not be assigned or transferred separate and apart from this Lease but may be assigned, sublet or licensed in connection with any Transfer permitted hereunder and fifty percent (50%) of the parking fees, rent or other consideration paid by any Transferee for such Parking Space in excess of the Parking Charge for such Parking Spaces shall be paid by Tenant to Landlord. Upon the expiration or earlier termination of this Lease, Tenants rights with respect to all leased Parking Spaces shall immediately terminate. If Tenants rights to Parking Spaces terminate, or if Tenant relinquishes its rights
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to any parking, Tenant shall not have any right to any such terminated or relinquished parking for the remainder of the Term, except as expressly set forth herein, and Landlord shall have no obligation to procure substitute parking for Tenant.
30.4 Management of Parking Garage. The Parking Garage shall be subject to the reasonable control and management of Landlord, which may, from time to time, establish, modify and enforce reasonable rules and regulations with respect thereto not in conflict with the express terms of this Lease. If parking spaces are not assigned pursuant to the terms of this Lease, Landlord reserves the right at any time to assign parking spaces, and Tenant shall thereafter be responsible to insure that Tenant Parties park in the designated areas. Landlord reserves the right to change, reconfigure, or rearrange any portion of the Parking Garage (other than the Suite 500/600 Parking Spaces if Tenant has expanded into the applicable Expansion Premises and that portion of the Parking Garage controlled by Tenant pursuant to Section 30.2 above) to reconstruct or repair any portion of the Parking Garage, and to restrict or eliminate the use of any portion of the Parking Garage (other than the Suite 500/600 Parking Spaces if Tenant has expanded into the applicable Expansion Premises and that portion of the Parking Garage controlled by Tenant pursuant to Section 30.2 above) and do such other acts in and to such areas as Landlord deems necessary or desirable, without such actions being deemed an eviction of Tenant or a disturbance of Tenants use of the Premises, and without Landlord being deemed in default hereunder, provided that Landlord shall use commercially reasonable efforts (without any obligation to engage overtime labor or commence any litigation) to minimize the extent and duration of any resulting interference with Tenants parking. Landlord may, in its sole discretion, convert the Parking Garage to a reserved and/or controlled parking facility, or operate the Parking Garage (or a portion thereof) as a tandem, attendant assisted and/or valet parking facility. Landlord may delegate its responsibilities with respect to the Parking Garage to a parking operator, in which case such parking operator shall have all the rights of control and management granted to Landlord. In such event, Landlord may direct Tenant, in writing, to enter into a parking agreement directly with the operator of the Parking Garage, which parking agreement shall be subject to the reasonable approval of Tenant, and to pay some or all of the Parking Charges directly to such operator.
30.5 Abatement. Notwithstanding anything to the contrary set forth herein, if Tenant is prevented from using all or any parking stall(s) in the Parking Garage for any reason whatsoever, then the Parking Charge shall be proportionately abated based upon the number of parking stalls Tenant is prevented from using and the length of time Tenant is prevented for using such stalls. If Tenant is prevented from using all or any parking stalls in the Parking Garage for any reason whatsoever, then Landlord shall use commercially reasonable efforts to assist Tenant in locating alternate parking.
30.6 Shuttle Service. Landlord, as part of Operating Expenses, shall provide shuttle service to and from BART and Caltrain from 7:00 a.m. to 7:00 p.m. Monday through Friday (excluding Building Holidays). Two (2) buses shall operate during the hours of 7:00 a.m. and 9:00 a.m. and during the hours of 4:00 p.m. and 6:00 p.m. If Tenant requires additional shuttle service continuing until 12:00 a.m. on Monday through Friday (excluding Business Holidays), Tenant shall pay for such extra service, which is currently Sixty Dollars ($60.00) per hour for a 21 passenger shuttle bus. Landlord shall not be entitled to any mark up costs on such additional charges to Tenant. To the extent Tenant elects to operate its own shuttle service (Tenant Shuttle), the same shall have no impact on Tenants obligation to pay Escalation Rent hereunder.
31. Communications and Computer Lines.
31.1 Tenants Rights. Subject to the terms and conditions of this Article 31, and at no additional cost or expense to Tenant, Tenant and/or Tenants telecommunications provider shall be permitted access to the Buildings riser system or alternative space in the Building (which alternative
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space shall be reasonably acceptable to Tenant and its telecommunications provider) for the installation of telecommunications cabling and other equipment, and, in order to install, maintain, operate and remove telecommunications cabling or other equipment to the Premises. AT&T has installed telecommunications service to the Building terminating in the Buildings MPOE room. Landlord shall allow access to the Building (including the Buildings riser system and MPOE room) to all other telecommunications carriers requested by Tenant (including ATT, MFS (Verizon), Time Warner, Above Net Comm, and Wi Line) for the installation of telecommunications service, at no additional cost to Tenant. Tenant may install, maintain, replace, remove or use any communications or computer wires, cables and related devices (collectively the Lines) at the Building in or serving the Premises, provided: (a) Tenant shall obtain Landlords prior written consent, such consent not to be unreasonably withheld, conditioned or delayed, and use an experienced and qualified contractor approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and comply with all of the other provisions of Article 10, (b) any such installation, maintenance, replacement, removal or use shall be coordinated with any riser management company designated by Landlord and shall comply with all Applicable Laws and good work practices, and shall not interfere with the use of any then existing Lines at the Building, (c) an acceptable number of spare Lines and space for additional Lines shall be maintained for existing and future occupants of the Building, as determined in Landlords reasonable discretion, (d) if Tenant at any time uses any equipment that may create an electromagnetic field exceeding the normal insulation ratings of ordinary twisted pair riser cable or cause radiation higher than normal background radiation, the Lines therefor (including riser cables) shall be appropriately insulated to prevent such excessive electromagnetic fields or radiation, (e) as a condition to permitting the installation of new Lines, Landlord may require that Tenant remove existing Lines located in or serving the Premises and installed by or on behalf of Tenant or any Tenant Party, (f) Tenants rights shall be subject to the rights of any regulated telephone company, and (g) Tenant shall pay all costs in connection therewith. Landlord reserves the right to require that Tenant remove any Lines located in or serving the Premises which are installed in violation of these provisions, or which are at any time in violation of any Applicable Laws, within thirty (30) days after notice.
31.2 Landlords Rights. Landlord may (but shall not have the obligation to): (a) install new Lines at the Building, (b) create additional space for Lines at the Building, and (c) reasonably direct, monitor and/or supervise the installation, maintenance, replacement and removal of, the allocation and periodic re-allocation of available space (if any) for, and the allocation of excess capacity (if any) on, any Lines now or hereafter installed at the Building by Landlord, Tenant or any other party (but Landlord shall have no right to monitor or control the information transmitted through such Lines); provided, that, in each case, such actions shall not have a material adverse effect on Tenants existing use of Lines or business at the Premises. Such rights shall not be in limitation of other rights that may be available to Landlord pursuant to this Lease or by law or otherwise.
31.3 Removal; Line Problems. Notwithstanding anything to the contrary contained in Article 10, Tenant shall remove all Lines installed by or for Tenant within or serving the Premises upon expiration or sooner termination of this Lease, unless Landlord notifies Tenant at least thirty (30) days prior to expiration of this Lease or within ten (10) days after the earlier termination of this Lease that Tenant may leave all or any portion of the Lines in place. Any Lines not required to be removed pursuant to this Section 31.3 shall, at Landlords option, become the property of Landlord (without payment by Landlord). If Tenant fails to remove such Lines as required hereunder, Landlord may, after five (5) days written notice to Tenant, remove such Lines or remedy such other violation, at Tenants expense (without limiting Landlords other remedies available under this Lease or Applicable Laws). Landlord shall have no liability for damages arising from, and Landlord does not warrant that the Tenants use of any Lines will be free from the following (collectively called Line Problems): (a) any eavesdropping or wire tapping by unauthorized parties, (b) any failure of any Lines to satisfy Tenants requirements, or (c) any shortages, failures, variations, interruptions, disconnections, loss or damage caused by the installation,
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maintenance, replacement, use or removal of Lines, by any failure of the environmental conditions or the power supply for the Building to conform to any requirements for the Lines. Under no circumstances shall any Line Problems be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant for abatement of Rent, or relieve Tenant from performance of Tenants obligations under this Lease. In addition, in no event shall Landlord be liable for damages by reason of loss of profits, business interruption or other consequential damage arising from any Line Problems.
32. Miscellaneous.
32.1 No Joint Venture. This Lease does not create any partnership or joint venture or similar relationship between Landlord and Tenant.
32.2 Successors and Assigns. Subject to the provisions of Article 17 regarding assignment, all of the provisions, terms, covenants and conditions contained in this Lease shall bind, and inure to the benefit of, the parties and their respective successors and assigns.
32.3 Construction and Interpretation. The words Landlord and Tenant include the plural as well as the singular. If there is more than one person comprising Tenant, the obligations under this Lease imposed on Tenant are joint and several. References to a party or parties refer to Landlord or Tenant, or both, as the context may require. The captions preceding the Articles, Sections and subsections of this Lease are inserted solely for convenience of reference and shall have no effect upon, and shall be disregarded in connection with, the construction and interpretation of this Lease. Use in this Lease of the words including, such as, or words of similar import, when following a general matter, shall not be construed to limit such matter to the enumerated items or matters whether or not language of nonlimitation (such as without limitation) is used with reference thereto. The term person includes the plural as well as the singular and individuals, firms, associations, partnerships and corporations. The term Lease means this Lease, and the exhibits and any addenda attached hereto, as the same may from time to time be supplemented, amended or modified. The term business days means Monday through Friday, excluding legal holidays in the State of California. Words used in any gender include other genders. All provisions of this Lease have been negotiated at arms length between the parties and after advice by counsel and other representatives chosen by each party and the parties are fully informed with respect thereto. Therefore, this Lease shall not be construed for or against either party by reason of the authorship or alleged authorship of any provision hereof, or by reason of the status of the parties as Landlord or Tenant, and the provisions of this Lease and the Exhibits hereto shall be construed as a whole according to their common meaning in order to effectuate the intent of the parties under the terms of this Lease. The language in all parts of this Lease shall be construed according to its normal and usual meaning and not strictly for or against either Landlord or Tenant.
32.4 Severability. If any provision of this Lease, or the application thereof to any person or circumstance, is determined to be illegal, invalid or unenforceable, the remainder of this Lease, or its application to persons or circumstances other than those as to which it is illegal, invalid or unenforceable, shall not be affected thereby and shall remain in full force and effect.
32.5 Entire Agreement. This Lease is the entire and integrated agreement between Landlord and Tenant with respect to the subject matter of this Lease, the Premises, the Building, and the Project. There are no oral agreements between Landlord and Tenant affecting this Lease, and this Lease supersedes and cancels any and all previous negotiations, arrangements, brochures, offers, agreements and understandings, oral or written, if any, between Landlord and Tenant or displayed by Landlord to Tenant with respect to the subject matter of this Lease, the Premises or the Building. There are no representations between Landlord and Tenant or between any real estate broker and Tenant other than
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those expressly set forth in this Lease and all reliance with respect to any representations is solely upon representations expressly set forth in this Lease.
32.6 Governing Law. This Lease shall be governed by and construed pursuant to the laws of the State of California.
32.7 Costs and Expenses. In any lawsuit, action, arbitration, quasi-judicial proceeding, administrative proceeding, or any other proceeding brought by either party to enforce any of such partys rights or remedies under this Lease, including, without limitation, any action or proceeding for declaratory relief, the prevailing party shall be entitled to reasonable attorneys fees and all costs, expenses and disbursements in connection with such action or proceeding, including, but not limited to, all costs of reasonable investigation, and all costs associated with expert witnesses and consultants, which sums may be included in any judgment or decree entered in such action in favor of the prevailing party. The non-prevailing party shall also be obligated to pay attorneys fees and costs incurred in any post-judgment proceedings to enforce and collect the judgment, which obligation shall survive the merger of this Lease into any judgment on this Lease. In addition, if either party utilizes the services of an attorney for the purpose of collecting any delinquent amounts owed to such party or in connection with any other breach of this Lease, the other party agrees to pay the reasonable attorneys fees and costs incurred by such party in enforcing this Lease, irrespective of whether an action is filed. Each party also shall pay all attorneys fees and other fees and costs, including but not limited to, investigative costs and expert witness and consultant fees and costs, that the other party incurs in enforcing, defending, or interpreting this Lease, or otherwise protecting such partys rights under this Lease, in any voluntary or involuntary bankruptcy case, assignment for the benefit of creditors, or other insolvency, liquidation, or reorganization proceeding involving the other party or this Lease, including, but not limited to, all motions and proceedings related to relief from the automatic stay, lease assumption or rejection and/or extensions of time related thereto, lease designation, use of cash collateral, claim objections, and disclosure statements and plans of reorganization.
32.8 Standards of Performance and Approvals. Unless otherwise provided in this Lease, whenever approval, consent or satisfaction (collectively, an approval) is required of a party pursuant to this Lease or an Exhibit hereto, such approval shall not be unreasonably withheld or delayed. Unless provision is made for a specific time period, approval (or disapproval) shall be given within thirty (30) days after receipt of the request for approval. Nothing contained in this Lease shall limit the right of a party to act or exercise its business judgment in a subjective manner with respect to any matter as to which it has been (i) specifically granted such right, (ii) granted the right to act in its sole discretion or sole judgment, or (iii) granted the right to make a subjective judgment hereunder, whether objectively reasonable under the circumstances, and any such exercise shall not be deemed inconsistent with any covenant of good faith and fair dealing implied by law to be part of this Lease. The parties have set forth in this Lease their entire understanding with respect to the terms, covenants, conditions and standards pursuant to which their obligations are to be judged and their performance measured, including the provisions of Article 17 with respect to assignments and sublettings.
32.9 Brokers. Landlord shall pay to each of Landlords Broker and Tenants Broker a commission in connection with such Brokers negotiation of this Lease with respect to the initial Premises pursuant to a separate written agreement. Other than such Brokers, Landlord and Tenant each represent and warrant to the other that no broker, agent, or finder has procured, or was involved in the negotiation of, this Lease and no such broker, agent or finder is or may be entitled to a fee, commission or other compensation in connection with this Lease. Landlord and Tenant shall each indemnify, defend, protect and hold the other harmless from and against Claims that may be asserted against the indemnified party in breach of the foregoing warranty and representation. Landlord shall also pay a market standard brokerage commission in regard to Tenants leasing of any Expansion Space, First Refusal Space or First Offer
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Space to Tenants broker at the time of Tenants leasing of such Expansion Space, First Refusal Space or First Offer Space as evidenced by written notice of Tenant to Landlord.
32.10 Memorandum of Lease. This Lease shall not be recorded except as permitted in this Section 32.10. Concurrently with the execution and delivery of this Lease, the parties shall promptly execute and Landlord shall record, at its sole cost and expense, a short form memorandum in substantially the form attached hereto as Exhibit L. Within ten (10) business days after Landlords written request following the expiration or earlier termination of this Lease, Tenant shall execute and deliver to Landlord in recordable form, a quitclaim deed designating Landlord as the transferee.
32.11 Quiet Enjoyment. Landlord covenants, in lieu of any implied covenant of quiet possession or quiet enjoyment, that so long as Tenant is in compliance with the covenants and conditions set forth in this Lease, Tenant shall have the right to quiet enjoyment of the Premises, the Storage Space, Parking Garage Roof Space, Sidewalk Area and the Parking Garage without hindrance or interference from Landlord or those claiming through Landlord, subject to the covenants and conditions set forth in this Lease and the Recorded Documents.
32.12 Force Majeure. Notwithstanding anything contained in this Lease to the contrary, if either party is unable to perform or delayed in performing any of its obligations under this Lease on account of strikes, lockouts, inclement weather, labor disputes, inability to obtain labor, materials, fuels, energy or reasonable substitutes therefor, governmental restrictions, regulations, controls, actions or inaction, civil commotion, fire or other acts of God, national emergency, acts of war or terrorism or any other similar cause of any kind beyond the reasonable control of such party (except financial inability) (each a Force Majeure Event), such party shall not be in default under this Lease.
32.13 Surrender of Premises.
32.13.1 Condition of Premises. Subject to Tenants removal, restoration and repair obligations under Section 32.13.2 below, upon the expiration or sooner termination of this Lease, Tenant shall surrender the Premises to Landlord in the same condition as existed upon delivery thereof to Tenant (or, in the case of Alterations, in the same condition as existed when first constructed), ordinary wear and tear and damage thereto by fire or other casualty excepted. Tenant expressly agrees that ordinary wear and tear does not include damage caused by the presence of dogs in the Premises, including, but not limited to, carpet stains or odors, chewing or clawing of doors or other improvements, or infestation by fleas or other pests, and Landlord shall be entitled to draw under the Letter of Credit to remedy any such conditions at the expiration or earlier termination of this Lease.
32.13.2 Restoration Obligations.
(a) Rooftop Equipment. Prior to the expiration or upon earlier termination of this Lease, Tenant, at Tenants expense, shall remove all Rooftop Equipment and restore the roof to the condition existing prior to the installation of such equipment, or, at Landlords option, Landlord shall perform all or any portion of such removal and restoration, at Tenants reasonable expense. Notwithstanding the foregoing, Landlord may elect to waive all or any portion of such removal and restoration requirements with respect to Rooftop Equipment by giving written notice of such waiver to Tenant at least one hundred eighty (180) days prior to the Expiration Date or within ten (10) business days after any earlier termination of this Lease.
(b) Parking Garage Roof Space Improvements. Prior to the expiration or upon earlier termination of this Lease, Tenant, at Tenants expense, shall remove all improvements to the Parking Garage Roof Space installed by Tenant pursuant to Article 37 and restore
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the roof to the condition existing prior to the installation of such improvements, or, at Landlords option, Landlord shall perform all or any portion of such removal and restoration, at Tenants reasonable expense.
(c) General Restoration Obligations. Tenant shall not be required to remove any of the Tenant Improvements or Ancillary Tenant Improvements constructed pursuant to the Work Letter or any other initial improvements to the Premises, including, without limitation, the Cafeteria, except as set forth in Sections 32.13.2(a) and 32.13.2(b) above or elsewhere in this Lease. Landlord reserves the right, however, to require removal of Alterations pursuant to the provisions of Article 10, and Tenant may be required to remove all Lines in accordance with Section 31.3 above. Tenant shall be deemed to be in holdover in the Premises without Landlords consent until Tenants removal and restoration obligation are complete.
32.13.3 Abandoned Property. After the Expiration Date or earlier termination of this Lease, any movable furniture, equipment, trade fixtures, or other personal property left on the Premises shall, at the option of Landlord, be deemed to be abandoned and, whether or not the property is deemed abandoned, Landlord shall have the right to remove such property from the Premises and charge Tenant for the removal and any restoration of the Premises. Landlord may charge Tenant for the storage of Tenants property left on the Premises at such rates as Landlord may from time to time reasonably determine (not to exceed the cost of storing Tenants property in a public warehouse), or, Landlord may, at its option, store Tenants property in a public warehouse at Tenants expense. Notwithstanding the foregoing, neither the provisions of this Section 32.13.3 nor any other provision of this Lease shall impose upon Landlord any obligation to care for or preserve any of Tenants property left upon the Premises, and Tenant hereby waives and releases Landlord from any claim or liability in connection with the removal of such property from the Premises and the storage thereof and specifically waives the provisions of California Civil Code Section 1542 with respect to such release. Landlords action or inaction with regard to the provisions of this Section 32.13.3 shall not be construed as a waiver of Landlords right to require Tenant to remove its property, restore any damage to the Building caused by such removal, and make any restoration required pursuant to this Lease.
32.14 Exhibits. The Exhibits referenced in the Basic Lease Information are a part of this Lease and are incorporated herein by this reference. Unless the applicable Exhibit expressly provides to the contrary, in the event of any discrepancy between this Lease and any such Exhibit, the provisions of this Lease shall control.
32.15 Survival of Obligations. The waivers of claims or rights, the releases, and the obligations of either party under this Lease to pay any sums to the other party and to indemnify, protect, defend and hold harmless the other party (and/or Landlord Parties or Tenant Parties, as applicable), shall survive the expiration or termination of this Lease, and so shall all other obligations or agreements of Landlord or Tenant which by their terms survive expiration or termination of this Lease.
32.16 Time of the Essence. Time is of the essence of this Lease and of the performance of each of the provisions contained in this Lease.
32.17 Waiver of Trial By Jury; Waiver of Counterclaim. IN GRAFTON PARTNERS L.P. v. SUPERIOR COURT, 36 CAL.4TH 944 (2005), THE CALIFORNIA SUPREME COURT RULED THAT CONTRACTUAL, PRE-DISPUTE JURY TRIAL WAIVERS ARE UNENFORCEABLE. THE PARTIES, HOWEVER, ANTICIPATE THAT THE CALIFORNIA LEGISLATURE WILL ENACT LEGISLATION TO PERMIT SUCH WAIVERS IN CERTAIN CASES. IN ANTICIPATION OF SUCH LEGISLATION, LANDLORD AND TENANT HEREBY WAIVE, AS OF THE EFFECTIVE DATE OF SUCH LEGISLATION AND TO THE EXTENT
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PERMITTED BY APPLICABLE REQUIREMENTS, TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANTS USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE OR ANY EMERGENCY OR STATUTORY REMEDY.
32.18 Consent to Venue. Each party stipulates and agrees that the State and Federal courts of the State of California shall have personal jurisdiction over each of them for the purpose of litigating any action or proceeding arising out of or in any way connected with this Lease. Each party further stipulates that any action or proceeding arising out of or in any way connected with this Lease shall be filed and litigated exclusively in the State and Federal courts located in the City and County of San Francisco. Each party hereby waives its right to assert the doctrine of forum non conveniens or to object to venue in the State and Federal courts of the City and County of San Francisco in any action or proceeding arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenants use or occupancy of the Premises, or any claim of injury or damage, or the enforcement of any remedy under any statute, emergency or otherwise, whether any of the foregoing is based on this Lease or on tort law. The provisions of this Section 32.18 shall survive the expiration or earlier termination of this Lease.
32.19 Financial Statements. Within fifteen (15) business days after Landlords written request, but not more often than once in any given Lease Year (except in connection with a bona fide sale, financing or other similar transaction involving the Building, in which case, Landlord may make one additional request in a given Lease Year), Tenant shall deliver to Landlord the financial statements of Tenant (including a balance sheet and profit and loss statement) for the most recent prior fiscal year and for interim periods following the end of the last fiscal year for which financial statements are available. Such statements shall be certified by Tenants chief financial officer (if unaudited financial statements are not available); provided, however, that Tenant shall submit financial statements that are audited by a certified public accountant if such statements are available. If Tenant fails to respond to Landlords request within such fifteen (15) business day period, then Landlord may deliver a second written request to Tenant. If Tenant fails to respond within five (5) business days after receipt of such second written request, then such failure shall be an Event of Default. Landlord shall keep the content of Tenants financial statements confidential, provided that Landlord may disclose such financial statements to Landlords accountants, attorneys, advisors, lenders and prospective lenders and prospective buyers, provided that Landlord advises such persons of the confidential nature of such financial statements. Landlord agrees to keep Tenants financial statements strictly confidential (except as required under Applicable Laws or disclosure to persons or entities who, because of their involvement with a proposed sale or loan transaction involving the Building, need to know such information; provided, that, such parties shall be informed by Landlord of the confidential nature of such information and shall be directed by Landlord to keep all such information confidential), and Tenant may require Landlord and all other persons receiving Tenants financial statements to sign a commercially reasonable confidentiality agreement prior to making Tenants financial statements available to them. Tenant shall have no obligation to deliver financial statements of Tenant pursuant to this Section 32.19 following the issuance of stock of Tenant or any Tenant Subsidiary in a public offering or sale on a public stock exchange of Tenants or any Tenant Subsidiarys stock.
32.20 Subdivision; Future Ownership. Landlord reserves the right to (A) subdivide all or a portion of the Project and (B) if the Building or the Parking Garage, or other portions of the Project are at any time owned by an entity other than Landlord, enter into agreements with such other owners to provide for (i) reciprocal rights of access and/or use, including in connection with repairs, maintenance, construction and/or excavation (ii) common management, operation, maintenance, improvement and/or
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repairs, and (iii) the allocation of operating expenses and taxes; provided in each case that the same shall not materially adversely affect Tenants business at or access to the Premises or result in any increase to Operating Expenses or Real Property Taxes. Subject to Section 22.1 and Articles 36 and 41, nothing contained herein shall be deemed or construed to limit or otherwise affect Landlords right to sell all or any portion of the Building or any other of Landlords rights described in this Lease.
32.21 Modification of Lease. This Lease may be modified or amended only by an agreement in writing signed by both parties.
32.22 No Option. The submission of this Lease to Tenant for review or execution does not create an option or constitute an offer to Tenant to lease the Premises on the terms and conditions contained herein, and this Lease shall not become effective unless and until it has been executed and delivered by both Landlord and Tenant.
32.23 Reserved.
32.24 Compliance with Anti-Terrorism Law.
32.24.1 Tenant represents, warrants and covenants to Landlord that: (a) Tenant is, nor at any time during the Term will be, (1) in violation of any Anti Terrorism Law (defined below); (2) conducting any business or engaging in any transaction or dealing with any Prohibited Person (defined below), including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (3) dealing in, or otherwise engaging in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 (defined below); or (4) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in, any Anti-Terrorism Law; and (b) Tenant is not, nor at any time during the Term will be, a Prohibited Person.
32.24.2 Landlord represents, warrants and covenants to Tenant that: (a) Landlord is, nor at any time during the Term will be, (1) in violation of any Anti Terrorism Law; (2) conducting any business or engaging in any transaction or dealing with any Prohibited Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (3) dealing in, or otherwise engaging in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224; or (4) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in, any Anti-Terrorism Law; and (b) Landlord is not, nor at any time during the Term will be, a Prohibited Person.
32.25 First Source Hiring Program. The City and County of San Francisco adopted a City-wide First Source Hiring Program on August 3, 1998 by Ordinance No. 264-98, codified at San Francisco Administrative Code Sections 83.1-83.18. The First Source Hiring Program (FSHP) is designed to identify entry level positions associated with commercial activities and provide first interview opportunities to graduates of City-sponsored training programs. Tenant acknowledges that its activities on the Premises is or may be subject to FSHP. Although Landlord makes no representation or warranty as to the interpretation or application of FSHP to the Premises, or to Tenants activities thereon, Tenant acknowledges that (i) FSHP may impose obligations on Tenant, including good faith efforts to meet requirements and goals regarding interviewing, recruiting, hiring and retention of individuals for entry level positions; (ii) FSHP requirements could also apply to certain contracts and subcontracts entered into by Tenant regarding the Premises, including construction contracts; and (iii) FSHP requirements, if applicable, may be imposed as a condition of permits, including building permits, issued for construction or occupancy of the Premises.
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32.26 Landlord Lien Waiver. Within fifteen (15) business days after request therefor by Tenant, Landlord shall execute and deliver a commercially reasonable agreement in favor of Tenants lender(s) waiving Landlords security interest in Tenants equipment and other personal property and providing such lender(s) limited access to the Premises following the occurrence of an uncured default under the applicable loan documents for the sole purpose of removing such equipment and other personal property.
32.27 Rent Not Based on Income. No Rent or other payment in respect of the Premises shall be based in any way upon net income or profits from the Premises.
32.28 Counterparts. This Lease may be executed in counterpart. All such executed counterparts shall constitute the same agreement, and the signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.
33. Expansion Options.
33.1 Expansion Option at Lease Terms.
33.1.1 Expansion Premises. Subject to the Superior Rights and the terms and conditions of this Article 33, during the period from the Lease Date to and including the date which is six (6) months following the Commencement Date (Expansion at Lease Terms Period), Tenant shall have an ongoing, continuous right, in its sole discretion, to expand the Premises by leasing any portion of the Available Expansion Premises comprising one or more entire suite for which Tenant has not received a First Refusal Notice pursuant to Section 34.2 below (Lease Terms Expansion Option). If any portion of the Expansion Premises is not Available Expansion Premises at the commencement of the Expansion at Lease Terms Period, Landlord shall notify Tenant in writing within seven (7) business days after Landlord determines to make any such Expansion Premises Available for Lease during the Expansion at Lease Terms Period, specifying the availability date for such Expansion Premises and the date by which Landlord anticipates Landlord could deliver such Expansion Premises to Tenant (the Anticipated Delivery Date). In no event shall Tenant be entitled to exercise the Lease Terms Expansion Option as to a partial suite within any applicable Available Expansion Premises.
33.1.2 Expansion Notice. Tenant shall exercise the Lease Terms Expansion Option, if at all, by giving Landlord one or more unconditional, irrevocable written notices of such election (each, a Lease Terms Expansion Notice) no later than the final day of the Expansion at Lease Terms Period, the time of such exercise being of the essence. Each Lease Terms Expansion Notice shall specify the (i) Available Expansion Premises that Tenant desires to lease pursuant to this Section 33.1 and (ii) the date (the Lease Terms Expansion Date) upon which Landlord shall deliver and Tenant shall take possession of such space, which date shall be the later of (A) the applicable Anticipated Delivery Date and (B) a date selected by Tenant that is not less than fifteen (15) and not more than forty five (45) days after the date of Tenants delivery of the Lease Terms Expansion Notice.
33.1.3 Lease of Available Expansion Premises. If Tenant delivers a Lease Terms Expansion Notice to Landlord as to any then Available Expansion Premises during Tenants Expansion at Lease Terms Period, then, subject to Section 33.4 below, Landlord shall lease the applicable Available Expansion Premises to Tenant on the terms and conditions set forth in this Lease including the same Expiration Date, provided, however, that (a) the Base Rent (per Adjusted Rentable Square Foot) for the applicable Available Expansion Premises shall be the same as the Base Rent (per Adjusted Rentable Square Foot) payable with respect to the Premises (other than the Concourse Premises), (b) Tenant shall receive a tenant improvement allowance not to exceed $35.00 per Adjusted Rentable Square Foot of the applicable Available Expansion Premises, (c) Tenant shall receive a period of rent abatement for the
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applicable Available Expansion Premises equal to the Weighted Average Abatement Period, (d) the required Letter of Credit Amount pursuant to Article 26 shall increase by the amount, if any, necessary to cause the amount of such Letter of Credit to equal seven percent (7%) of Tenants total obligation to pay Base Rent for the period between Landlords delivery of the applicable Available Expansion Premises and the end of the initial Term and in no event shall the Letter of Credit Amount be less than Two Million Five Hundred Thousand Dollars ($2,500,000) (or twelve and sixty three one-hundredths percent (12.63%) of such total Base Rent if Tenant has failed a Minimum Credit Test and in no event shall the Letter of Credit Amount in such event be less than Four Million Five Hundred Thousand Dollars ($4,500,000) unless Tenant subsequently satisfies the requirements set forth in Section 26.6 to reduce the Letter of Credit Amount after a failure of the Minimum Credit Test), (e) Tenant shall construct the tenant improvements for the applicable Available Expansion Premises, which tenant improvements shall be considered an Alteration subject to the terms and conditions of Article 10 above (but shall be considered Tenant Improvements for purposes of Articles 12 and 14 above), (f) Landlord shall deliver possession of the applicable Available Expansion Premises to Tenant on the applicable Lease Terms Expansion Date, (g) Tenant shall use commercially reasonable efforts to diligently prosecute construction of the tenant improvements in the applicable Available Expansion Premises (provided that Tenant shall not be required to pay for overtime or premium time labor in connection therewith unless Tenant elects to do so in its sole and absolute discretion), (h) Tenant shall commence paying Base Rent with respect to the applicable Available Expansion Premises on the earlier to occur of (i) the date which is four (4) months after Landlord delivers possession of the applicable Available Expansion Premises to Tenant (provided, however, that such date shall be extended for delays in constructing improvements to be constructed by Tenant pursuant to this Section 33.1.3 resulting from (A) Force Majeure Events or (B) subject to the provisions below, any actual delay in the construction of the tenant improvements caused by or attributable to (1) Landlords failure to take any action prior to any deadline for taking such action (including the failure to timely pay any amounts owed to Tenant), (2) Landlords failure to act reasonably where Landlord is required to act reasonably under the terms of this Lease or (3) any other act or omission of Landlord or any Landlord Parties which materially interferes with Tenants ability to perform such tenant improvements (collectively Expansion Delays)) and (ii) the date Tenant commences business operations in the entire applicable Available Expansion Premises, (i) during the course of design and construction of the tenant improvements in the applicable Available Expansion Premises, Landlord shall reimburse Tenant for the costs of preparing the construction documents, the cost of obtaining permits, and the cost of performing the tenant improvement work (excluding all costs of furnishings, fixtures, equipment, signage and other personal property, including switches, servers, routers and similar data and telecommunications equipment, except as provided below) (Permitted Expansion TI Items) in an amount not to exceed the tenant improvement allowance upon delivery of an Application and Certificate for Payment (AIA Document G702) signed by Tenants architect, invoices from all of Tenants contractors and suppliers for labor rendered and materials delivered to the Premises. and executed mechanics lien releases from all of Tenants contractors and suppliers (each, a Tenant Draw Package), (j) if Tenant desires periodic disbursements of the tenant improvement allowance and delivers all items required in the Tenant Draw Package to Landlord on or before the fifteenth (15th) day of a calendar month, Landlord shall disburse on or before the fifteenth (15) day of the month following Landlords receipt of the Tenant Draw Package the lesser of (i) the amount requested for reimbursement by Tenant in Tenants Draw Package multiplied by a fraction, the numerator of which is the total tenant improvement allowance and the denominator of which is the aggregate cost of Permitted Expansion TI Items and (ii) the balance of any remaining available tenant improvement allowance, (k) if Landlord fails to timely pay Tenant the amounts set forth in a properly submitted Tenant Draw Package, then, in addition to all other remedies set forth in this Lease or available at law or in equity, Tenant shall have the remedy set forth in Section 20.7.3 above and (l) if Landlord fails to deliver possession of the applicable Available Expansion Premises on the applicable Lease Terms Expansion Date, Sections 2.3 and 2.4 above shall apply only with respect to the applicable Available Expansion Premises. As to clause (h)(i)(B) above regarding Expansion Delays, (x) no Expansion Delay (except for any Expansion Delay resulting
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from Landlords failure to take any action prior to any deadline for taking such action) shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Expansion Delay, and Landlord shall fail to correct or cure such Expansion Delay within one (1) business day and (x) there shall be excluded from the number of days of any Expansion Delay any days of delay which are primarily caused by Force Majeure. If the construction of the tenant improvements is actually delayed due to any Expansion Delay, then Tenant and Tenants architect shall reasonably determine in consultation with Landlord the date on which the tenant improvements would have been completed but for such Expansion Delay. If the amounts reimbursed to (or paid out on behalf of) Tenant in connection with the construction of tenant improvements in any applicable Available Expansion Premises under this Section 33.1.3 do not exceed the tenant improvement allowance given or made available to Tenant therefor, a portion of such unused tenant improvement allowance, in an amount not to exceed Seven and 50/100 Dollars ($7.50) per Adjusted Rentable Square Feet in the applicable Available Expansion Premises, may be disbursed to Tenant and applied to the cost of Tenants furnishings, fixtures, equipment and other personal property, including switches, servers, routers and similar data and telecommunications equipment, and/or Tenants moving expenses related to the applicable Available Expansion Premises (Tenants Expansion FF&E). Disbursements of such unused tenant improvement allowance shall be made on or before the fifteenth (15th) day of a calendar month following the month in which Tenant submits a written request therefor, provided such request is accompanied by reasonable supporting evidence setting forth costs and expenses incurred by Tenant and such request is made on or before the fifteenth (15th) day of the preceding calendar month.
33.2 Expansion Option at Modified Lease Terms.
33.2.1 Expansion Premises. Subject to the Superior Rights and the terms and conditions of this Article 33, during the period from the date which is the day after the expiration of the Expansion at Lease Terms Period to and including the date which is twelve (12) months following the Commencement Date (Expansion at Modified Lease Terms Period), Tenant shall have an ongoing, continuous right, in its sole discretion, to expand the Premises by leasing any portion of the Available Expansion Premises comprising one or more entire suite for which Tenant has not received a First Refusal Notice pursuant to Section 34.2 (Modified Lease Terms Expansion Option). If any portion of the Expansion Premises is not Available Expansion Premises at the commencement of the Expansion at Modified Lease Terms Period, Landlord shall notify Tenant in writing within seven (7) business days after Landlord determines to make any such Expansion Premises Available for Lease during the Expansion at Modified Lease Terms Period, specifying the Anticipated Delivery Date. In no event shall Tenant be entitled to exercise the Modified Lease Terms Expansion Option as to a partial suite within the Expansion Premises.
33.2.2 Expansion Notice. Tenant shall exercise the Modified Lease Terms Expansion Option, if at all, by giving Landlord one or more unconditional, irrevocable written notices of such election (each, a Modified Lease Terms Expansion Notice) no later than the final day of the Expansion at Modified Lease Terms Period, the time of such exercise being of the essence. Each Modified Lease Terms Expansion Notice shall specify (i) Available Expansion Premises that Tenant desires to lease pursuant to this Section 33.2 and (ii) the date (the Modified Lease Terms Expansion Date) upon which Landlord shall deliver and Tenant shall take possession of such space, which date shall be the later of (A) the applicable Anticipated Delivery Date and (B) a date selected by Tenant that is not less than fifteen (15) and not more than forty five (45) days after the date of Tenants delivery of the Modified Lease Terms Expansion Notice.
33.2.3 Lease of Available Expansion Premises. If Tenant delivers a Modified Lease Terms Expansion Notice to Landlord as to any then Available Expansion Premises during Tenants
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Expansion at Modified Lease Terms Period, then, subject to Section 33.4 below, Landlord shall lease the applicable Available Expansion Premises to Tenant on the terms and conditions set forth in this Lease including the same Expiration Date, provided, however, that (a) the Base Rent (per Adjusted Rentable Square Foot) for the applicable Available Expansion Premises shall be the same as the Base Rent (per Adjusted Rentable Square Foot) payable with respect to the Premises (other than the Concourse Premises), (b) Tenant shall receive a tenant improvement allowance not to exceed $35.00 per Adjusted Rentable Square Foot of the applicable Available Expansion Premises adjusted as provided below, (c) Tenant shall receive a period of rent abatement for the applicable Available Expansion Premises equal to the Weighted Average Abatement Period adjusted as provided below, (d) the required Letter of Credit Amount pursuant to Article 26 shall increase by the amount, if any, necessary to cause the amount of such Letter of Credit to equal seven percent (7%) of Tenants total obligation to pay Base Rent for the period between Landlords delivery of the applicable Available Expansion Premises and the end of the initial Term but in no event shall the Letter of Credit Amount be less than Two Million Five Hundred Thousand Dollars ($2,500,000) (or twelve and sixty three one-hundredths percent (12.63%) of such total Base Rent if Tenant has failed a Minimum Credit Test and in no event shall the Letter of Credit Amount in such event be less than Four Million Five Hundred Thousand Dollars ($4,500,000) unless Tenant subsequently satisfies the requirements set forth in Section 26.6 to reduce the Letter of Credit Amount after a failure of the Minimum Credit Test), (e) Tenant shall construct the tenant improvements for the applicable Available Expansion Premises, which tenant improvements shall be considered an Alteration subject to the terms and conditions of Article 10 above (but shall be considered Tenant Improvements for purposes of Articles 12 and 14 above), (f) Landlord shall deliver possession of the applicable Available Expansion Premises to Tenant on the applicable Modified Lease Terms Expansion Date, (g) Tenant shall use commercially reasonable efforts to diligently prosecute construction of the tenant improvements in the applicable Available Expansion Premises (provided that Tenant shall not be required to pay for overtime or premium time labor in connection therewith unless Tenant elects to do so in its sole and absolute discretion), (h) Tenant shall commence paying Base Rent with respect to the applicable Available Expansion Premises on the earlier to occur of (i) the date which is four (4) months after Landlord delivers possession of the applicable Available Expansion Premises to Tenant (provided, however, that such date shall be extended for delays in constructing improvements to be constructed by Tenant pursuant to this Section 33.2.3 resulting from any Expansion Delays) and (ii) the date Tenant commences business operations in the entire applicable Available Expansion Premises, (i) during the course of design and construction of the tenant improvements in the applicable Available Expansion Premises, Landlord shall reimburse Tenant for Permitted Expansion TI Items in an amount not to exceed the Modified Tenant Allowance (as defined below) upon delivery of a Tenant Draw Package, (j) if Tenant desires periodic disbursements of the Modified Tenant Allowance and delivers all items required in the Tenant Draw Package to Landlord on or before the fifteenth (15th) day of a calendar month, Landlord shall disburse on or before the fifteenth (15) day of the month following Landlords receipt of the Tenant Draw Package the lesser of (i) the amount requested for reimbursement by Tenant in Tenants Draw Package multiplied by a fraction, the numerator of which is the Modified Tenant Allowance and the denominator of which is the aggregate cost of Permitted Expansion TI Items and (ii) the balance of any remaining available Modified Tenant Allowance, (k) if Landlord fails to timely pay Tenant the amounts set forth in a properly submitted Tenant Draw Package, then, in addition to all other remedies set forth in this Lease or available at law or in equity, Tenant shall have the remedy set forth in Section 20.7.3 above and (l) if Landlord fails to deliver possession of the applicable Available Expansion Premises on the applicable Modified Lease Terms Expansion Date, Sections 2.3 and 2.4 above shall apply only with respect to the applicable Available Expansion Premises; provided, however, that the amount of the tenant improvement allowance payable under this Section 33.2 and the period of rent abatement equal to the Weighted Average Abatement Period shall each be prorated to reflect the shorter term of the Lease for the applicable Available Expansion Premises leased pursuant to this Section 33.2. For the sake of clarity, the tenant improvement allowance per Adjusted Rentable Square Foot of the Expansion Premises shall be Thirty Five Dollars ($35.00) multiplied by a fraction, the numerator of which is the number of months in
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the term of the Lease for the Expansion Premises (beginning with the date upon which Tenant commences paying Base Rent) and the denominator of which is eighty-four (84). The prorated amount of the tenant improvement allowance shall be referred to in this Section 33.2 as the Modified Tenant Allowance. As to clause (h)(i) above regarding Expansion Delay, (x) no Expansion Delay (except for any Expansion Delay resulting from Landlords failure to take any action prior to any deadline for taking such action) shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Expansion Delay, and Landlord shall fail to correct or cure such Expansion Delay within one (1) business day and (x) there shall be excluded from the number of days of any Expansion Delay any days of delay which are primarily caused by Force Majeure. If the construction of the tenant improvements is actually delayed due to any Expansion Delay, then Tenant and Tenants architect shall reasonably determine in consultation with Landlord the date on which the tenant improvements would have been completed but for such Expansion Delay. If the amounts reimbursed to (or paid out on behalf of) Tenant in connection with the construction of tenant improvements in any applicable Available Expansion Premises under this Section 33.2.3 do not exceed the tenant improvement allowance given or made available to Tenant therefor, a portion of such unused tenant improvement allowance, in an amount not to exceed Seven and 50/100 Dollars ($7.50) per Adjusted Rentable Square Feet in the applicable Available Expansion Premises, may be disbursed to Tenant and applied to the cost of Tenants Expansion FF&E. Disbursements of such unused tenant improvement allowance shall be made on or before the fifteenth (15th) day of a calendar month following the month in which Tenant submits a written request therefor, provided such request is accompanied by reasonable supporting evidence setting forth costs and expenses incurred by Tenant and such request is made on or before the fifteenth (15th) day of the preceding calendar month.
33.3 Expansion Option at Market Terms.
33.3.1 Expansion Premises. Subject to the Superior Rights and the terms and conditions of this Article 33, during the period from the date which is the day after the expiration of the Expansion at Modified Lease Terms Period to and including the date which is thirty-six (36) months following the Commencement Date (Expansion at Market Terms Period), Tenant shall have an ongoing, continuous right, in its sole discretion, to expand the Premises by leasing any portion of the Available Expansion Premises (other than the Suite 500 Premises) comprising one or more suites for which Tenant has not received a First Refusal Notice pursuant to Section 34.2 (Market Terms Expansion Option and collectively with the Lease Terms Expansion Option and the Modified Lease Terms Expansion Option or, individually as applicable, Expansion Options). If any portion of the Expansion Premises is not Available Expansion Premises at the commencement of the Expansion at Market Terms Period, Landlord shall notify Tenant in writing within seven (7) business days after Landlord determines to make any such Expansion Premises Available for Lease during the Expansion at Market Terms Period, specifying the Anticipated Delivery Date. In no event shall Tenant be entitled to exercise the Market Terms Expansion Option as to a partial suite within the Expansion Premises.
33.3.2 Expansion Notice. Tenant shall exercise the Market Terms Expansion Option, if at all, by giving Landlord one or more unconditional, irrevocable written notices of such election (each, a Market Terms Expansion Notice) no later than the final day of the Expansion at Market Terms Period, the time of such exercise being of the essence. Each Market Terms Expansion Notice shall specify (i) Available Expansion Premises that Tenant desires to lease pursuant to this Section 33.3 and (ii) the date (the Market Terms Expansion Date) upon which Landlord shall deliver and Tenant shall take possession of such space, which date shall be the later of (A) the applicable Anticipated Delivery Date and (B) a date selected by Tenant that is not less than fifteen (15) and not more than forty five (45) days after the date of Tenants delivery of the Market Terms Expansion Notice.
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33.3.3 Lease of Available Expansion Premises. If Tenant delivers a Market Terms Expansion Notice to Landlord as to any then Available Expansion Premises during Tenants Expansion at Market Terms Period, then, subject to Section 33.4 below, Landlord shall lease the applicable Available Expansion Premises to Tenant on the terms and conditions set forth in this Lease including the same Expiration Date, provided, however, that (a) the Base Rent (per Adjusted Rentable Square Foot) shall be one hundred percent (100%) of the Fair Market Rent as determined in accordance with Sections 3.4.4 through 3.4.7 above, (b) any monetary concessions (including rent abatement, moving allowances and tenant improvement allowances) affecting the rental rate shall be determined in accordance with Sections 3.4.4 through 3.4.7 above, and adjusted to reflect the length of the term, (c) Tenant shall construct any tenant improvements for the applicable Available Expansion Premises, which tenant improvements shall be considered an Alteration subject to the terms and conditions of Article 10 above (but shall be considered Tenant Improvements for purposes of Articles 12 and 14 above), (d) the required Letter of Credit Amount pursuant to Article 26 shall increase by the amount, if any, necessary to cause the amount of such Letter of Credit to equal seven percent (7%) of Tenants total obligation to pay Base Rent for the period between Landlords delivery of the applicable Available Expansion Premises and the end of the initial Term and in no event shall the Letter of Credit Amount be less than Two Million Five Hundred Thousand Dollars ($2,500,000) (or twelve and sixty three one-hundredths percent (12.63%) of such total Base Rent if Tenant has failed a Minimum Credit Test and in no event shall the Letter of Credit Amount in such event be less than Four Million Five Hundred Thousand Dollars ($4,500,000) unless Tenant subsequently satisfies the requirements set forth in Section 26.6 to reduce the Letter of Credit Amount after a failure of the Minimum Credit Test), (e) Landlord shall deliver possession of the applicable Available Expansion Premises to Tenant on the applicable Market Terms Expansion Date, (f) Tenant shall use commercially reasonable efforts to diligently prosecute construction of any tenant improvements in the applicable Available Expansion Premises (provided that Tenant shall not be required to pay for overtime or premium time labor in connection therewith unless Tenant elects to do so in its sole and absolute discretion), (g) Tenant shall commence paying Base Rent with respect to the applicable Available Expansion Premises on the earlier to occur of (i) the date which is four (4) months after Landlord delivers possession of the applicable Available Expansion Premises to Tenant (provided, however, that such date shall be extended for delays in constructing improvements to be constructed by Tenant pursuant to this Section 33.3.3 resulting from any Expansion Delays) and (ii) the date Tenant commences business operations in the entire applicable Available Expansion Premises, (h) during the course of design and construction of any tenant improvements in the applicable Available Expansion Premises, Landlord shall reimburse Tenant for Permitted Expansion TI Items in an amount not to exceed any tenant improvement allowance upon delivery of a Tenant Draw Package, (i) if Tenant desires periodic disbursements of any tenant improvement allowance and delivers all items required in the Tenant Draw Package to Landlord on or before the fifteenth (15th) day of a calendar month, Landlord shall disburse on or before the fifteenth (15) day of the month following Landlords receipt of the Tenant Draw Package the lesser of (i) the amount requested for reimbursement by Tenant in Tenants Draw Package multiplied by a fraction, the numerator of which is the tenant improvement allowance and the denominator of which is the aggregate cost of Permitted Expansion TI Items and (ii) the balance of any remaining available tenant improvement allowance, (j) if Landlord fails to timely pay Tenant the amounts set forth in a properly submitted Tenant Draw Package, then, in addition to all other remedies set forth in this Lease or available at law or in equity, Tenant shall have the remedy set forth in Section 20.7.3 above and (k) if Landlord fails to deliver possession of the applicable Available Expansion Premises on the applicable Market Lease Terms Expansion Date, Sections 2.3 and 2.4 above shall apply only with respect to the applicable Available Expansion Premises. As to clause (g)(i) above regarding Expansion Delays, (x) no Expansion Delay (except for any Expansion Delay resulting from Landlords failure to take any action prior to any deadline for taking such action) shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Expansion Delay, and Landlord shall fail to correct or cure such Expansion Delay within one (1) business day and (x) there shall
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be excluded from the number of days of any Expansion Delay any days of delay which are primarily caused by Force Majeure. If the construction of the tenant improvements is actually delayed due to any Expansion Delay, then Tenant and Tenants architect shall reasonably determine in consultation with Landlord the date on which the tenant improvements would have been completed but for such Expansion Delay.
33.4 Conditions of Exercise. Notwithstanding any provision of this Article 33 to the contrary, if at the time a Lease Terms Expansion Notice, a Modified Lease Terms Expansion Notice or a Market Terms Expansion Notice (each an Expansion Notice) is received by Landlord Tenant is in default beyond applicable notice and cure periods under any of the terms, covenants or conditions of this Lease, Landlord shall have, in addition to all of Landlords other rights and remedies provided in this Lease, the right (but not the obligation) to terminate Tenants rights under this Article 33, and in such event Landlord shall not be required to deliver possession of any applicable Available Expansion Premises to Tenant. In addition, if at any time the Adjusted Rentable Square Feet of the Premises is less than one hundred nineteen thousand (119,000), Tenants rights under this Article 33 shall automatically terminate and be of no further force or effect. In addition, if (i) Landlord delivers a First Refusal Notice with respect to any Available Expansion Premises, (ii) Tenant does not timely elect to exercise its Right of First Refusal pursuant to Article 34 with respect to such Available Expansion Premises and (iii) Landlord enters into a lease with respect to a third party tenant which made the applicable Bona Fide Offer with respect to such Available Expansion Premises within (A) five (5) months after the date of the applicable First Refusal Notice where such First Refusal Notice was delivered with respect to one hundred thousand (100,000) Adjusted Rentable Square Feet or more of Available Expansion Premises and (B) four (4) months after the date of the applicable First Refusal Notice where such First Refusal Notice was delivered with respect to less than one hundred thousand (100,000) Adjusted Rentable Square Feet of Available Expansion Premises, then the Expansion Options granted under this Article 33 shall automatically terminate and the Expansions Options shall be of no further force and effect with respect to such Available Expansion Premises.
33.5 Expansion Premises Tenant Improvement Allowance. If the amounts reimbursed to (or paid out on behalf of) Tenant in connection with the construction of tenant improvements in any applicable Available Expansion Premises do not exceed the tenant improvement allowance given or made available to Tenant in accordance with this Article 33, the following shall apply: (i) any such unused tenant improvement allowance may be disbursed to Tenant as a reimbursement of any Tenants Contribution (as defined in the Work Letter) previously paid to Landlord; or (ii) if there is any remaining unused tenant improvement allowance after the application of clause (i) above, such remaining unused tenant improvement allowance may be drawn upon by Tenant in connection with future Alterations within the Premises or future Tenant Improvements constructed in any Expansion Premises or First Refusal Space or First Offer Space. Disbursements of such unused tenant improvement allowance shall be made on or before the fifteenth (15th) day of a calendar month following the month in which Tenant submits a written request therefor, provided such request is accompanied by reasonable supporting evidence setting forth costs and expenses incurred by Tenant and such request is made on or before the fifteenth (15th) day of the preceding calendar month.
33.6 Letter of Credit Amendment; Commissions. Within ten (10) business days following delivery by Landlord of the applicable Available Expansion Premises, Tenant shall deliver a replacement or amended Letter of Credit to Landlord in the form required by Article 26 reflecting the increase required under this Article 33 and any commissions due any brokers in connection with the leasing of such Available Expansion Premises shall not be due or payable until receipt by Landlord of such amended or replacement Letter of Credit.
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33.7 Amendment to Lease. If at any time following the Lease Date Tenant leases any Available Expansion Premises pursuant to this Article 33, Landlord shall prepare, subject to Tenants reasonable approval thereof, and Tenant shall promptly execute an amendment to this Lease to add any applicable Available Expansion Premises to the Premises on the terms and conditions set forth in this Article 33.
33.8 Expansion Rent Adjustment. If the Adjusted Rentable Square Feet of the Premises exceeds 300,000 as a result of Tenants exercise of any Expansion Options (other than as a result of a Market Terms Expansion) or Rights of First Refusal, then, upon such increase to the Adjusted Rentable Square Feet and throughout the balance of the initial term, the annual Base Rent payable for that portion of the Premises that exceeds the 300,000 Adjusted Rentable Square Feet threshold (and for any subsequent expansions of the Premises pursuant to Article 33) shall be reduced by One Dollar ($1.00) per Adjusted Rentable Square Feet. There shall be no adjustment under this Section 33.8 to the Fair Market Rent (or the determination of Fair Market Rent) with respect to the Expansion Premises leased pursuant to the exercise of a Market Terms Expansion Option.
33.9 Rights Personal to Original Tenant. Tenant right to exercise any one of Tenants Expansion Options pursuant to this Article 33 is personal to, and may be exercised only by, the original named Tenant under this Lease (or any Permitted Assignee). If Tenant shall assign this Lease (other than to a Permitted Assignee), then immediately upon such assignment, Tenants Expansion Options pursuant to this Article 33 shall automatically terminate and be of no further force or effect. No assignee (other than a Permitted Assignee) or subtenant shall have any right to lease Available Expansion Premises pursuant to this Article 33.
34. Right of First Refusal.
34.1 First Refusal Space. Subject to the Superior Rights and the terms and conditions of this Article 34, Tenant shall have an ongoing, continuous right of first refusal (Right of First Refusal) during the Term (as the same may be extended) to lease the Available Expansion Premises (any such space is referred to as First Refusal Space).
34.2 First Refusal Notice. Upon Landlords receipt of a bona fide offer, whether or not in the form of a letter of intent, from a third party to lease the First Refusal Space that Landlord desires to accept (a Bona Fide Offer), Landlord shall provide notice (First Refusal Notice) to Tenant of such receipt together with the material terms and conditions of such Bona Fide Offer, including the following: (a) the location and approximate Adjusted Rentable Square Footage of the First Refusal Space to be leased, (b) the anticipated date upon which possession of the First Refusal Space shall be available (the ROFR Target Date); (c) the term for which Landlord shall lease the First Refusal Space, (d) the net effective base rent (expressed on a per Adjustable Rentable Square Footage basis), (e) the period of rent abatement, if any; (f) the tenant improvements, if any, that Landlord shall be obligated to install and/or any tenant improvement allowance, if any, that Landlord shall be obligated to pay, and (g) the type (gross or net) of operating expense charges and if gross, setting forth the base year. Tenant shall have seven (7) business days after Tenants receipt of First Refusal Notice (First Refusal Election Period) to exercise its Right of First Refusal to lease the First Refusal Space on the terms and conditions set forth in Landlords First Refusal Notice. If Tenant does not deliver its notice of exercise of its right to lease the First Refusal Space (First Refusal Exercise Notice) on or prior to the end of the First Refusal Election Period, then Tenants First Refusal Right will lapse with respect to the applicable First Refusal Space, Tenant shall be deemed to have rejected Landlords offer (Tenants First Refusal Rejection), and the First Refusal Right with respect to the applicable First Refusal Space will be of no further force and effect (unless and until again effective pursuant to this Section). Any qualified or conditional acceptance by Tenant of the Bona Fide Offer accompanying Landlords First Refusal Notice shall be
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deemed a Tenant First Refusal Rejection of the Bona Fide Offer. Upon Tenants First Refusal Rejection, Landlord shall have the right to lease the First Refusal Space to a third party on the same or any other terms and conditions to the third party tenant, as set forth in the Bona Fide Offer accompanying Landlords First Refusal Notice; provided, however, that if the base rent, tenant improvement allowance (or Landlords obligation to install any tenant improvements), rent abatement or other material economic term (collectively, the Material First Refusal Economic Terms) to be paid by or provided to such third party for the First Refusal Space are more favorable to the tenant than the corresponding Material First Refusal Economic Term initially offered in the Bona Fide Offer by seven and one-half percent (7 1/2%), or no lease is executed between Landlord and a third party within (A) five (5) months after the date of the applicable First Refusal Notice where such First Refusal Notice was delivered with respect to one hundred thousand (100,000) Adjusted Rentable Square Feet or more of Available Expansion Premises and (B) four (4) months after the date of the applicable First Refusal Notice where such First Refusal Notice was delivered with respect to less than one hundred thousand (100,000) Adjusted Rentable Square Feet of Available Expansion Premises, then Landlord shall reoffer the First Refusal Space to Tenant, at such varying Material First Refusal Economic Terms (as applicable) and in accordance with the procedure contained in this Section 34 before leasing the First Refusal Space to any such third party. Time is of the essence with respect to the provisions of this Section 34.2.
34.3 Lease of First Refusal Space. If Tenant delivers Tenants First Refusal Notice to Landlord on or prior to the end of the First Refusal Election Period, then, subject to Section 34.4, the First Refusal Spaces shall become a portion of the Premises on the terms set forth in the First Refusal Notice and otherwise on the terms and conditions set forth in this Lease. In addition, Tenant shall increase the required amount of the Letter of Credit as set forth in Section 34.5 below. The general manner of construction of the any tenant improvements in any First Refusal Space (e.g., Landlord-build or Tenant-build) shall be determined by the First Refusal Notice. If the First Refusal Notice specifies a Landlord-build, then the terms and conditions of the Work Letter shall generally apply with modifications as necessary to conform with (i) any differences between the initial Premises hereunder and the First Refusal Space (such modifications to be reasonably approved by Landlord and Tenant), and (ii) any differences in such terms and conditions as may be expressly set forth in the First Refusal Notice. If the First Refusal Notice specifies a Tenant-build, then the terms and conditions set forth in Section 33.1.3 above with regards to Available Expansion Premises shall apply with modifications as necessary to conform with the differences described in clauses (i) and (ii) of the preceding sentence.
34.4 Conditions of Exercise. Notwithstanding any provision of this Article 34 to the contrary, if at the time Landlord is required to deliver a First Refusal Notice, Tenant is in default beyond applicable notice and cure periods under any of the terms, covenants or conditions of this Lease, Landlord shall have, in addition to all of Landlords other rights and remedies provided in this Lease, the right (but not the obligation) to terminate Tenants rights under this Article 34, and in such event Landlord shall not be required to deliver possession of any First Refusal Space to Tenant. In addition, if at any time the Adjusted Rentable Square Feet of the Premises is less than one hundred nineteen thousand (119,000), Tenants rights under this Article 34 shall automatically terminate and be of no further force or effect. Nothing contained in this Article 34 shall be deemed to impose any obligation on Landlord to refrain from negotiating with the existing tenant(s) of the First Refusal Space, to withhold the First Refusal Space from the market, or to take any other action or omit to take any other action in order to make the First Refusal Space available to Tenant.
34.5 Letter of Credit Amendment; Commissions. Within ten (10) business days after (a) delivery by Landlord of the applicable First Refusal Space, if construction of the Tenant Improvements shall be a Tenant-build or (b) delivery of Tenants First Refusal Exercise Notice if construction of the tenant improvements shall be a Landlord-build, Tenant shall deliver a replacement or amendment Letter of Credit to Landlord in the form required by Article 26 reflecting an increase by the
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amount, if any, necessary to cause the amount of such Letter of Credit to equal seven percent (7%) of Tenants total obligation to pay Base Rent for the period between Landlords delivery of the applicable First Refusal Space and the end of the initial Term and in no event shall the Letter of Credit Amount be less than Two Million Five Hundred Thousand Dollars ($2,500,000) (or twelve and sixty three one-hundredths percent (12.63%) of such total Base Rent if Tenant has failed a Minimum Credit Test and in no event shall the Letter of Credit Amount in such event be less than Four Million Five Hundred Thousand Dollars ($4,500,000) unless Tenant subsequently satisfies the requirements set forth in Section 26.6 to reduce the Letter of Credit Amount after a failure of the Minimum Credit Test); provided, however, that the foregoing minimum Letter of Credit Amounts shall not apply if the Letter of Credit Amount has previously been reduced pursuant to Section 3.3.2(b) or Section 3.4.8(b) below such minimum Letter of Credit Amounts, in which case the terms of such Sections shall control. In no event shall any commission be due or payable to any brokers in connection with the leasing of the First Refusal Space until receipt by Landlord of such amended or replacement Letter of Credit.
34.6 Amendment to Lease. If Tenant leases any First Refusal Space pursuant to this Article 34, Landlord shall prepare, subject to Tenants reasonable approval thereof, and Tenant shall promptly execute an amendment to this Lease to add any applicable First Refusal Space to the Premises on the terms and conditions set forth in this Article 34.
34.7 Suite 500 Premises Limited Rights. Notwithstanding anything to the contrary contained in this Article 34, any obligation of Landlord to deliver a First Refusal Notice with respect to the Suite 500 Premises and any right of Tenant to deliver a First Refusal Exercise Notice to Landlord with respect to the Suite 500 Premises shall automatically terminate, and the Right of First Refusal with respect to the Suite 500 Premises shall be of no further force and effect, as of the first anniversary of the Commencement Date.
34.8 Rights Personal to Original Tenant. Tenants right to lease the First Refusal Space pursuant to this Article 34 is personal to, and may be exercised only by, the original named Tenant under this Lease (or any Permitted Assignee). If Tenant shall assign this Lease (other than to a Permitted Assignee), then immediately upon such assignment, Tenants right to lease the First Refusal Space pursuant to this Article 34 shall automatically terminate and be of no further force or effect. No assignee (other than a Permitted Assignee) or subtenant shall have any right to lease First Refusal Space pursuant to this Article 34.
35. Right of First Offer.
35.1 First Offer Space. If, at any time after the first anniversary of the Commencement Date, Landlord determines to make all or any portion of the Suite 500 Premises (First Offer Space) Available for Lease to third parties, Tenant shall have a right of first offer to lease such First Offer Space, subject to Superior Rights and the terms and conditions set forth in this Article 35 (the Right of First Offer).
35.2 Offering Notice. Prior to leasing any First Offer Space to a third party, Landlord shall give notice to Tenant (an Offering Notice) specifying Landlords reasonable good faith estimate of (a) the base rent (which may include periodic increases) that Landlord proposes to charge for the First Offer Space, based upon Landlords assessment of current market conditions, and which amount may be more or less than the Base Rent set forth in this Lease and shall be expressed on a per Adjusted Rentable Square Footage basis; (b) the tenant improvements, if any, Landlord proposes to install and/or any tenant improvement allowance, if any, that Landlord proposes to pay to a tenant in connection with a lease of the First Offer Space; (c) the anticipated date upon which possession of the First Offer Space will be available (the ROFO Target Date); (d) the period of rent abatement, if any; (e) the term for which
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Landlord proposes to lease the First Offer Space; (f) the location and approximate Adjusted Rentable Square Footage of the First Offer Space to be leased; and (g) any other material conditions or provisions relating to the leasing of the First Offer Space which vary from the provisions of this Lease (the terms in the foregoing clauses (a), (b), (c) and (d) being herein collectively referred to as Material ROFO Economic Terms).
35.3 Lease of First Offer Space.
35.3.1 Tenants Notice. If Tenant wishes to lease the First Offer Space on the terms specified by Landlord in the Offering Notice, Tenant shall so notify Landlord within seven (7) business days after receipt thereof (the ROFO Exercise Period), which notice shall be unconditional and irrevocable. Tenant may exercise its Right of First Offer only with respect to all of the First Offer Space identified in any Offering Notice.
35.3.2 Terms of Lease of First Offer Space. If Tenant timely exercises its Right of First Offer, then, subject to Section 35.4 below, the First Offer Space shall become a portion of the Premises on all of the terms and conditions set forth in the Offering Notice and otherwise on the terms and conditions of this Lease. The general manner of construction of any tenant improvements in any First Offer Space (e.g., Landlord-build or Tenant-build) shall be determined by the Offering Notice. If the Offering Notice specifies a Landlord-build, then the terms and conditions of the Work Letter shall generally apply with modifications as necessary to conform with (i) any differences between the initial Premises hereunder and the First Offer Space (such modifications to be reasonably approved by Landlord and Tenant), and (ii) any differences in such terms and conditions as may be expressly set forth in the Offering Notice. If the Offering Notice specifies a Tenant-build, then the terms and conditions set forth in Section 33.1.3 above with regards to Available Expansion Premises shall apply with modifications as necessary to conform with the differences described in clauses (i) and (ii) of the preceding sentence. If Landlord fails to deliver possession of the applicable First Offer Space on the applicable ROFO Target Date, Sections 2.3 and 2.4 above shall apply only with respect to the applicable First Offer Space.
35.3.3 Failure to Lease First Offer Space. If Tenant does not deliver its notice of exercise of its right to lease the First Offer Space (ROFO Exercise Notice) on or prior to the end of the ROFO Exercise Period, then Tenants Right of First Offer will lapse with respect to the applicable First Offer Space, Tenant shall be deemed to have rejected Landlords offer (Tenants ROFO Rejection), and the Right of First Offer will be of no further force and effect (unless and until again effective pursuant to this Section). Upon Tenants ROFO Rejection, Landlord shall have the right to lease the First Offer Space to any third party on the same or any other terms and conditions; provided, however, that if any of the Material ROFO Economic Terms to be paid by or provided to such third party for the First Offer Space are better from a tenants perspective than the corresponding Material ROFO Economic Terms initially offered to Tenant in the Offering Notice by seven and one-half percent (7 1/2%), or no lease is executed between Landlord and any third party within six (6) months after the date of the initial Tenants ROFO Rejection, Landlord shall reoffer the First Offer Space to Tenant, at such varying Material ROFO Economic Terms (as applicable) and in accordance with the procedure contained in this Article 35 before leasing the First Offer Space to any third party. Time is of the essence with respect to the provisions of this Section 35.3.
35.4 Conditions of Exercise. Notwithstanding any provision of this Article 35 to the contrary, if at the time Landlord intends to lease any First Offer Space, Tenant is in default beyond applicable notice and cure periods under any of the terms, covenants or conditions of this Lease, Landlord shall have, in addition to all of Landlords other rights and remedies provided in this Lease, the right (but not the obligation) to terminate Tenants rights under this Article 35, and in such event Landlord shall not be required to deliver possession of any First Offer Space to Tenant. In addition, if at any time the
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Adjusted Rentable Square Feet of the Premises is less than one hundred nineteen thousand (119,000), Tenants rights under this Article 35 shall automatically terminate and be of no further force or effect. Nothing contained in this Article 35 shall be deemed to impose any obligation on Landlord to refrain from negotiating with the existing tenant(s) of the First Offer Space, to withhold the First Offer Space from the market, or to take any other action or omit to take any other action in order to make the First Offer Space available to Tenant.
35.5 Letter of Credit Amendment; Commissions. Within ten (10) business days after (a) delivery by Landlord of the applicable First Offer Space, if construction of the Tenant Improvements shall b a Tenant-build or (b) delivery of Tenants ROFO Exercise Notice if construction of the tenant improvements shall be a Landlord-build, Tenant shall deliver a replacement or amendment Letter of Credit to Landlord in the form required by Article 26 reflecting an increase by the amount, if any, necessary to cause the amount of such Letter of Credit to equal seven percent (7%) of Tenants total obligation to pay Base Rent for the period between Landlords delivery of the applicable First Offer Space and the end of the initial Term and in no event shall the Letter of Credit Amount be less than Two Million Five Hundred Thousand Dollars ($2,500,000) (or twelve and sixty three one-hundredths percent (12.63%) of such total Base Rent if Tenant has failed a Minimum Credit Test and in no event shall the Letter of Credit Amount in such event be less than Four Million Five Hundred Thousand Dollars ($4,500,000) unless Tenant subsequently satisfies the requirements set forth in Section 26.6 to reduce the Letter of Credit Amount after a failure of the Minimum Credit Test); provided, however, that the foregoing minimum Letter of Credit Amounts shall not apply if the Letter of Credit Amount has previously been reduced pursuant to Section 3.3.2(b) or Section 3.4.8(b) below such minimum Letter of Credit Amounts, in which case the terms of such Sections shall control. In no event shall any commission be due or payable to any brokers in connection with the leasing of the First Offer Space until receipt by Landlord of such amended or replacement Letter of Credit
35.6 Amendment to Lease. If Tenant leases any First Offer Space pursuant to this Article 35, Landlord shall prepare, subject to Tenants reasonable approval thereof, and Tenant shall promptly execute an amendment to this Lease to add any applicable First Offer Space to the Premises on the terms and conditions set forth in this Article 35.
35.7 Rights Personal to Original Tenant. Tenants right to lease the First Offer Space pursuant to this Article 35 is personal to, and may be exercised only by, the original named Tenant under this Lease (or any Permitted Assignee). If Tenant shall assign this Lease (other than to a Permitted Assignee), then immediately upon such assignment, Tenants right to lease the First Offer Space pursuant to this Article 35 shall automatically terminate and be of no further force or effect. No assignee (other than a Permitted Assignee) or subtenant shall have any right to lease First Offer Space pursuant to this Article 35.
36. Purchase Option.
36.1 Grant of Purchase Option. Landlord hereby grants Tenant a one-time right to purchase (the Purchase Option) the Project in accordance with the terms and conditions of this Article 36.
36.2 Offer Procedure.
36.2.1 If at any time during the Term of this Lease (as the same may be extended), Landlord desires to sell, convey or otherwise transfer the Project or any part thereof or interest therein, including, without limitation, any ground lease of the Project or any sale, conveyance or other transfer of interests in the entity constituting Landlord (collectively, a Fee Transfer), Landlord shall
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first give written notice (the Purchase Offer Notice) to Tenant of such proposed Fee Transfer. The Purchase Offer Notice shall state (a) the purchase price, (b) the amount of any earnest money deposit (which shall not be greater than five percent (5%) of the purchase price), (c) the length of any due diligence period (which shall not be less than thirty (30) days), pursuant to which Tenant may terminate the Purchase Agreement (defined below) for any reason in its sole discretion and receive its earnest money deposit, (d) the date of closing (which shall not be earlier than fifteen (15) days after waiver or expiration of the due diligence period), (e) the place for close of escrow, (f) the allocation of the expenses of closing between Landlord and Tenant, (g) the responsibilities for examination of the title to the Project and for issuance of title insurance to Tenant, (h) the responsibility for delivery of a survey of the Project, and (i) other material terms and conditions of the proposed Fee Transfer.
36.2.2 Upon receipt of the Purchase Offer Notice, Tenant shall have the right, for a period of fifteen (15) days (the Acceptance Period) to exercise the Purchase Option by giving Landlord written notice (Acceptance Notice) that Tenant desires to purchase the Project upon the terms and conditions contained in the Offer Notice. Tenant shall pay to Landlord or Landlords escrow officer designated in the Purchase Offer Notice, concurrently with Tenants of the Acceptance Notice, a refundable initial deposit in the amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the Initial Deposit). Any qualified or conditional acceptance by Tenant of the offer set forth in the Purchase Offer Notice shall be deemed a rejection of the offer. If Tenant fails to timely exercise the Purchase Option, or fails to timely pay the Initial Deposit as required herein, then, at Landlords sole option, Tenants exercise of the Purchase Option shall be null and void.
36.2.3 Tenant shall have no Purchase Option and Landlord need not provide Tenant with a Purchase Offer Notice, if (a) an Event of Default by Tenant under this Lease exists at the time a Purchase Offer Notice would otherwise be required to be sent under this Article 36 or (b) Tenant (or a Permitted Assignee) is not occupying at least 400,000 Adjusted Rentable Square Feet within the Building at the time a Purchase Offer Notice would otherwise be required to be sent under this Article 36.
36.3 Purchase Agreement. If, within such fifteen (15) day period, Tenant gives the Acceptance Notice, then Landlord and Tenant shall enter into a purchase and sale agreement (Purchase Agreement) that incorporates the terms and conditions set forth in the Offer Notice, is mutually acceptable to the parties and that is otherwise in a commercially reasonable form consistent with custom and practice for the sale of commercial properties in the City of San Francisco, State of California. Landlord will deliver a proposed Purchase Agreement within ten (10) days after receipt of the Acceptance Notice. The Purchase Agreement shall permit termination by Tenant at any time following a Casualty affecting the Premises, and a reasonable extension of the closing date following a casualty so that Tenant may assess the length of time needed to repair the Project for Tenants Permitted Use. In addition, the Purchase Agreement shall provide that Tenant (or a Permitted Assignee, if applicable) may assign the Purchase Agreement to a PSA Assignment Party or nominate or designate a PSA Assignment Party to take title to the Project at closing without the approval or consent of Landlord. Landlord and Tenant will execute and deliver the Purchase Agreement within thirty (30) days after delivery by Landlord of the proposed Purchase Agreement (the PSA Negotiation Period), with each of them being obligated to negotiate in good faith and having no right to request or otherwise seek any change in the terms set forth in the Offer Notice.
36.4 Rejection of Offer. If, within the Acceptance Period, Tenant declines or fails to give the Acceptance Notice, or Landlord and Tenant fail within the PSA Negotiation Period to enter in the Purchase Agreement notwithstanding good faith negotiation of the same, Landlord shall then (i) return or cause to be returned to Tenant the Initial Deposit and (ii) have the right, at any time thereafter for a period of nine (9) months, to consummate a Fee Transfer of the Project to any third party, unrelated to and unaffiliated with Landlord (Third Party Purchaser), without regard to the restrictions in the Purchase
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Option set forth in this Article 36 and on whatever terms and conditions Landlord may decide in its sole discretion to be acceptable, with the exception that the purchase price may not be less than ninety percent (90%) of the purchase price specified in the Offer Notice. So long as the purchase price paid by the Third Party Purchaser is not less than ninety percent (90%) of the purchase price specified in the Offer Notice, nothing contained in this Article 36 will require Landlord to give any notice of any kind to Tenant if the terms of the sale to the Third Party Purchaser are not the same as the terms of the Offer Notice. If the purchase price to be paid by the Third Party Purchaser is less than ninety percent (90%) of the purchase price specified in the Offer Notice or nine (9) months shall have passed since the Offer Notice, then Landlord shall deliver to Tenant an updated Offer Notice before selling the Project to a Third Party Purchaser, provided that Tenant shall deliver its Acceptance Notice within seven (7) days after receipt of Landlords updated Offer Notice.
36.5 Excluded Transfers. The Purchase Option and the terms of this Article 36 shall not apply to (a) any sales, transfers, conveyances, or encumbrances of the Project, or any part thereof, in connection with the financing or refinancing thereof, by Landlord, including, without limitation, any sale by foreclosure or deed in lieu of foreclosure, (b) any sales, transfer, conveyances of the Project, or any part thereof, to or from Landlord and any Landlord Affiliate, (c) any sales, transfers, conveyances, assignments, financing, refinancing or restructuring of any direct or indirect interest in Landlord to or from any Landlord Affiliate or (d) any sales, transfers, conveyances or encumbrances of the Project, or any part thereof, in connection with a sale by Landlord of multiple properties of which the Project, or any part thereof, is only a portion; provided that any of the foregoing sales, transfers, conveyances, financings, refinancings, restructurings or encumbrances are made for a good faith business purpose and not, whether in a single transaction or in a series of transactions, entered into as a subterfuge to evade Landlords obligations set forth in this Article 36.
36.6 Condition of Title. If Tenant gives an Acceptance Notice, title to the Project shall be conveyed from Landlord to Tenant by grant deed (the Deed), in a form reasonably satisfactory to the parties, subject to: (i) a lien to secure payment of real estate taxes and assessments not delinquent; (ii) this Lease, if not terminated by the purchase of the Project by Tenant hereunder, and any sublease made pursuant thereto; and (iii) any exceptions, reservations, easements or encumbrances of record which are approved by Tenant in accordance with the Purchase Agreement. Notwithstanding anything to the contrary contained herein, in no event shall Landlord have any obligation to remove any title exceptions disapproved by Tenant other than (a) liens or encumbrances affecting the Project which secure an obligation to pay money (including any financing obtained by Landlord and any taxes or assessments due prior to the closing of the sale); and (b) any exceptions to title and survey created by Landlord on or after the date of the Purchase Agreement without the prior written consent of Tenant.
36.7 Right to Effect a Like Kind Exchange. At the option of either party, the electing party may elect to consummate the purchase and sale as a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code of 1954, as amended. If a party so elects, the other party shall cooperate with the electing party, executing such documents and taking such action as may be reasonably necessary in order to effectuate this transaction as a like-kind exchange; provided, however, that (i) the other partys cooperation hereunder shall be without cost or expense to such party; (ii) the electing party shall bear all costs and expenses in connection with any such exchange transaction in excess of the costs and expenses which would have otherwise been incurred in acquiring the Project by means of a straight purchase, so that the net effect to the other party shall be identical to that which would have resulted had the transaction closed on a purchase and sale basis; (iii) the other party shall not be required to acquire or take title to (or agree to acquire to take title to) any other property in connection with such exchange; and (iv) the electing party shall indemnify, defend and hold the other party harmless from any and all Claims which the other party may incur or sustain, directly or indirectly, related to or in connection with, or arising out of, the consummation of the transaction as a like-kind exchange as contemplated hereunder.
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36.8 Brokers Commission. Each party warrants and represents that it has not engaged the services of or had contacts with any licensed real estate broker or finder in connection with the Purchase Option in a manner sufficient to provide any such real estate broker or finder with a basis for claiming to be the procuring cause of the transactions contemplated by this Article 36, and each party shall indemnify, defend and hold the other harmless of and from any obligation to pay a commission or finders fee to any such broker or finder based upon contacts between any such person and the indemnifying party, together with any other costs or expenses, including reasonable attorneys fees, incurred by the indemnified party in connection with such claim.
36.9 No Implied Obligation. Nothing contained in this Article 36 is intended to imply or create any obligation of Landlord to sell any portion of or all of the Project to any person at any time. The Purchase Option will be exercisable by Tenant if, and only if, Landlord elects in its discretion to sell all or any portion of the Project.
36.10 Personal to Original Tenant. Notwithstanding anything set forth in this Lease to the contrary, the Purchase Option shall be personal to the original named Tenant herein (or a Permitted Assignee) and may only be exercised by the Tenant (or a Permitted Assignee), and may not be exercised by any other assignee, sublessee or other transferee of the Original Tenants interest in this Lease.
36.11 Time of Essence. Time is of the essence with respect to the provisions of this Article 36.
37. Rooftop Parking Area; Terrace and Dog Run.
37.1 Use. Subject to the applicable terms and conditions contained in this Lease (including Article 10 and this Article 37), Tenant shall have the right to use a portion of the rooftop level of the Parking Garage for an outside terrace, including a dog run, within an area not to exceed Two Thousand (2,000) square feet and in a location mutually acceptable to Landlord and Tenant (the Parking Garage Roof Space), provided that the change in use of the Parking Garage Roof Space as an outside terrace or dog run does not impair or diminish (now or in the future) (a) the use of the Parking Garage (including the roof top level) for parking under Applicable Laws or governmental approvals or permits in effect as of the Lease Date or (b) the total number of parking spaces permitted within the Project as of the Lease Date. The Parking Garage Roof Space shall be used solely by Tenant and Tenant Parties, and in no event shall it be open to the public.
37.2 Improvements to Parking Garage Roof Space. Subject to obtaining all governmental approvals and permits and compliance with Applicable Laws, Tenant, at Tenants expense (with no right to apply the Tenant Improvement Allowance to such expense) may improve the Parking Garage Roof Space for Tenants intended use thereof as a terrace and dog run. The plans and specifications for improvements to the Parking Garage Roof Space shall be subject to the prior written approval of Landlord, not to be unreasonably withheld, conditioned or delayed, and Tenant shall comply with the provisions of Article 10 in designing and constructing such improvements. Tenant acknowledges that Landlord may withhold its approval of any proposed plans that, in Landlords reasonable discretion, would impair the structural elements of the Parking Garage. Landlord makes no representations or warranties regarding the suitability of the Parking for construction of the improvements, the likelihood of or conditions to obtaining permits therefor, or the estimated costs of construction or maintenance, and Tenant shall conduct its own investigation with respect to such matters.
37.3 Protection of Project. Tenant shall protect the Building from damage, and shall perform all installations, repairs and maintenance and use the Parking Garage Roof Space in a manner so as to keep in full force and effect any warranties concerning the Project. In all cases, Tenant shall use the
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contractor reasonably approved by Landlord to perform any penetration or other work that may affect the integrity of the Project. Tenant shall not at any time exceed the maximum load capacity of the Parking Garage Roof Space, and any damage to the Parking Garage Roof Space or any other portions of the Project resulting from Tenants installation, construction, maintenance, or use of the terrace and dog run on the Parking Garage Roof Space, shall be repaired by Tenant at Tenants expense. Landlord reserves the right to temporarily deny or restrict access to the Parking Garage Roof Space from time to time as is reasonably necessary or appropriate in connection with the repair, replacement, alteration or improvement of the Project.
37.4 Use and Maintenance.
37.4.1 Restrictions on Use. Tenant, at Tenants expense, shall comply with all Applicable Laws relating to the construction, installation, maintenance, operation and use of the Parking Garage Roof Space and the Building Rules. Tenant agrees not to (i) cause, maintain or permit any nuisance in, on, or about the Parking Garage Roof Space, (ii) create any safety hazard or (iii) permit music, noises, odors, lights, or other installations or activities that would unreasonably annoy or interfere with any other occupants of the Building or otherwise be inconsistent with Comparable Buildings. Without limiting the generality of the foregoing, Tenant expressly agrees not to permit any cooking on the Parking Garage Roof Space. Smoking shall be permitted within the Parking Garage Roof Space if and to the extent permitted by Applicable Laws.
37.4.2 Scope of Approvals. All furniture and other personal property shall be adequately attached or otherwise installed so as not to create a safety hazard.
37.4.3 Maintenance and Furnishings. Tenant, at Tenants expense, shall at all times maintain the Parking Garage Roof Space and all elements thereof in good, clean and sightly condition and repair. Tenant shall provide suitable receptacles for collecting trash on the Parking Garage Roof Space.
37.4.4 Performance of Other Obligations. In no event shall Tenants obligation to pay Rent or to perform any of its other obligations under this Lease unrelated to the Parking Garage Roof Space be affected by requirements imposed by governmental authorities or the Building Rules imposed by Landlord with respect to the Parking Garage Roof Space or Tenants inability to use or restricted use of the Parking Garage Roof Space for any reason.
37.5 Costs.
37.5.1 Charges for Parking Roof Space. Tenant shall pay all Parking Charges attributable to any parking spaces that are eliminated by use of the Parking Garage Roof Space pursuant to this Article 37. Such Parking Charges shall constitute Rent hereunder and shall be payable in advance, at the same time and in the same manner as provided in Section 30.1 above.
37.5.2 Reimbursement of Costs. In addition to other costs specified herein, Tenant shall reimburse Landlord within thirty (30) days after request (together with reasonable supporting documentation) for any incremental increase in trash removal costs incurred by Landlord above Landlords normal trash removal costs in connection with the remainder of the Premises as a result of or in connection with the Parking Garage Roof Space.
37.6 Conditions to Continued Use. Tenants right to use the Parking Garage Roof Space pursuant to this Article 37 shall not be separately assigned or subleased other than in connection with an assignment of the Lease or a sublease of all or any portion of the Premises. In addition, if at any
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time the Adjusted Rentable Square Feet of the Premises is less than one hundred nineteen thousand (119,000), Tenants rights under this Article 37 shall automatically terminate and be of no further force or effect.
37.7 Lease Provisions. The term Premises shall include the Parking Garage Roof Space for all purposes of this Lease (other than the payment of Base Rent and the calculation of percentages and figures based upon the Adjusted Rentable Square Footage of the Premises, including Tenants Percentage Share and the Tenant Improvement Allowance). Without limiting the generality of the foregoing, Tenant shall comply with Article 10 in designing and constructing any improvements to the Parking Garage Roof Space, Tenant shall cause the insurance required pursuant to Article 14 to cover its use of the Parking Garage Roof Space, and Tenant agrees that the waiver and indemnification contained in Articles 15 and 16 shall apply to the use, installation, repair and maintenance of the Parking Garage Roof Space. Tenant assumes all liability and risk related to its use of the Parking Garage Roof Space and damage to the Parking Garage Roof Space or personal property thereon from any cause whatsoever, including, but not limited to, theft, vandalism or damage by the elements, except to the extent caused by the negligence or willful misconduct of Landlord or any Landlord Parties (which liability shall be subject to Article 15).
38. Tenants Rooftop and Other Equipment.
38.1 Grant of License. Subject to the applicable terms and conditions contained in this Lease (including Article 10 above and this Article 38), Tenant shall have a license (the License), at no additional charge to Tenant, to install, operate, maintain and use, during the Term: (a) telecommunications antennae, microwave dishes, satellite dishes, cell phone boosters, an Additional Generator (in accordance with Section 7.10) and other communications equipment to serve Tenants business in the Premises (collectively, Rooftop Equipment) on the roof or other setback areas of the Building, in a location mutually agreeable to Landlord and Tenant in their reasonable discretion (the License Area); and (b) connections for the Rooftop Equipment for (i) electrical wiring to the Buildings existing electrical supply and (ii) cable or similar connection necessary to connect the Rooftop Equipment with Tenants related equipment located in the Premises. The routes or paths for such wiring and connections shall be through the Buildings existing risers, conduits and shafts, subject to reasonable space limitations and Landlords Building Rules for use of such areas, and in all events subject to Landlords reasonable approval of plans and installation pursuant to other provisions of this Lease, including Article 10 above (such routes or paths are collectively referred to as the Cable Path and all such electrical and other connections are referred to, collectively, as the Connections). The Rooftop Equipment and Connections are collectively referred to as the Equipment. All costs associated with the design, fabrication, engineering, permitting, installation, screening, maintenance, repair and removal of the Rooftop Equipment shall be borne solely by Tenant. Tenant shall not utilize the Equipment or the License Area as a direct means of generating revenue (as distinguished from utilizing the Equipment to generate revenue through the conduct of Tenants business, which shall be permitted).
38.2 Interference. Without limiting the generality of any other provision hereof, Tenant shall install, maintain and operate the Equipment in a manner so as to not cause any material adverse electrical, electromagnetic, radio frequency or other material adverse interference with the use and operation of any: (a) television or radio equipment in or about the Project; (b) transmitting, receiving or master television, telecommunications or microwave antennae equipment currently or hereafter located in any portion of the Project; or (c) radio communication system now or hereafter used or desired to be used by Landlord or any current licensee or tenant of Landlord (and, to the extent commercially reasonable, any future licensee or tenant of Landlord, but only provided that the same does not impair the
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functionality of Tenants Equipment). Upon notice of any such interference, Tenant shall promptly cooperate with Landlord to (i) promptly identify the source of the interference and (ii) promptly correct the interference to the reasonable satisfaction of Landlord. If any such interference caused by Tenant has not been corrected within thirty (30) days after notice to Tenant, or such longer period as may be reasonably necessary to correct the interference provided Tenant commences to cure such interference within such thirty (30) day period and thereafter diligently prosecutes such cure to completion, then Landlord may (A) require Tenant to remove the specific Equipment causing such interference, or (B) eliminate the interference at Tenants expense. If the equipment of any other party causes interference with the Equipment, Tenant shall reasonably cooperate with such other party to resolve such interference in a mutually acceptable manner.
38.3 Roof Repairs. If Landlord desires to perform roof repairs and/or roof replacements to the Building (the Roof Repairs), Landlord shall give Tenant at least ten (10) business days prior written notice of the date Landlord intends to commence such Roof Repairs (except in the event of an emergency, in which event Landlord shall furnish Tenant with reasonable notice in light of the circumstances), along with a description of the work scheduled to be performed, where it is scheduled to be performed on the roof, and an estimate of the time frame required for that performance. Tenant shall, within ten (10) business days following receipt of such notice, undertake such measures as it deems suitable to protect the Equipment from interference by Landlord, its agents, contractors or employees, in the course of any Roof Repairs.
38.4 Rules and Regulations. Without limiting the applicable provisions of this Lease, Tenants use of the roof or setback areas of the Building for the installation, operation, maintenance and use of the Equipment shall be subject to the terms and conditions contained in the Rooftop Work Rules and Regulations attached hereto as Exhibit B-2.
38.5 Transfer of Rights. Tenants rights under this Article 38 may be assigned or transferred to Permitted Transferees or other Transferees approved by Landlord pursuant to Article 17 in connection with an assignment or sublease so long as the total License Area used by Tenant, Permitted Transferees or such other approved Transferees does not exceed Tenants Percentage Share of the total roof area that may be used for Rooftop Equipment.
39. Sidewalk Areas. Subject to the applicable terms and conditions of this Article 39, Tenant shall be allowed to create an outdoor seating area for use by Tenants employees on the sidewalk contiguous to the Eighth Street side of the Building in the location depicted on Exhibit A-6 (the Sidewalk Area). Tenants use of the Sidewalk Area is subject to Tenants compliance, at its sole cost and expenses, with all Applicable Laws, at all times. Tenant shall not be obligated to pay Rent for the use of the Sidewalk Area. Tenant may, at Tenants option, make modifications to the Sidewalk Area (including, but not limited to, the addition of planters) and may place in the Sidewalk Area tables, chairs, umbrellas, and planters provided Tenant obtains the prior approval of Landlord and any governmental approvals and permits to such modifications. Landlord shall have reasonable rights of approval and control over all visual and esthetic elements of the Sidewalk Area. Without limiting the generality of the foregoing, the furniture used within the Sidewalk Area to the extent visible from the exterior of the Project, shall be subject to the prior approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. All furniture and other personal property shall be adequately attached or otherwise installed so as not to create a safety hazard. Tenant, at its cost and expense, shall keep the Sidewalk Area and the sidewalk area immediately surrounding it neat and clean of all trash, debris and food stains for a neat, clean and presentable appearance. In the event Tenant fails to so maintain the Sidewalk Area and the sidewalk area immediately surrounding it, then Landlord shall notify Tenant, and Tenant shall promptly remedy the issue without cost to the Landlord. Tenants failure to remedy the issue to Landlords reasonable satisfaction within five (5) days of notice thereof shall permit Landlord to
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thereafter remedy the issue at Tenants expense, which shall be payable to Landlord within thirty (30) days after Landlords demand for reimbursement for the reasonable cost thereof. Tenant shall cause the insurance required pursuant to Article 14 to cover its use of the Sidewalk Area, and Tenant and Landlord agree that the waiver and indemnification contained in Articles 15 and 16 shall apply to the use, installation, repair and maintenance of the Sidewalk Area. Tenant assumes all liability and risk related to its use of the Sidewalk Area and damage to personal property thereon from any cause whatsoever, including, but not limited to, theft, vandalism or damage by the elements.
40. Cafeteria.
40.1 Construction and Use. Subject to the terms and conditions of this Article 40 and the Work Letter as part of Tenants design of the initial Tenant Improvements, Tenant may include a cafeteria or kitchen with commercial grade equipment (Cafeteria) in the Premises; provided, however, that Tenant, at Tenants sole cost and expense (subject to application of the Tenant Improvement Allowance), shall pay for the purchase and installation of all fixtures in the Cafeteria that are not customary office fixtures, including stoves and ovens. The location of the Cafeteria shall be in the location set forth in the space plan attached as Schedule 2 to the Work Letter. Tenant, at Tenants expense, shall obtain and maintain all governmental permits and licenses necessary to operate the Cafeteria and shall comply with all Applicable Laws relating to the maintenance, operation and use thereof and the Building Rules.
40.2 Operation. Tenant acknowledges that, in the absence of adequate preventive measures, the Cafeteria could create objectionable fumes, vapors or odors, pests, unreasonable noise and other conditions that would cause annoyance to and disruption of the other tenants and occupants of the Project. Accordingly, as a material inducement to Landlord to enter into this Lease, Tenant agrees as follows:
40.2.1 Tenant shall: (i) furnish, install and maintain ventilation, exhaust and drainage systems serving the Cafeteria to the extent required by Applicable Laws and provide such other exhaust, cleaning or similar systems necessary to prevent any offensive smoke, fumes, vapors, offensive odors or other offensive substances from emanating from the Cafeteria as more fully set forth below; (ii) fireproof all window treatments in the Cafeteria, including, without limitation, draperies and curtains to the extent required by Applicable Laws, and submit to Landlord, upon Landlords request, current certificates evidencing such fireproofing; and (iii) operate the Cafeteria in a clean and sanitary manner so as to prevent infestation by pests, and, in addition, whenever there shall be evidence of any infestation, employ contractors reasonably approved by Landlord to eliminate the infestation.
40.2.2 Tenant shall install grease traps/interceptors located within the Cafeteria as required by Applicable Laws for all food preparation areas having pot sinks or any grease-producing appliances that discharge into the waste system. Tenant shall be responsible for the proper care, cleaning and maintenance of the grease traps located within the Cafeteria and any piping required therefor in accordance with all Applicable Laws. Tenant shall follow all reasonable recommendations of Tenants grease trap maintenance provider regarding the maintenance of the grease traps, including any recommended chemical treatments and any recommended intervals for the emptying and/or hydrojetting of the grease traps and connecting pipes. Landlord shall have the right to oversee any work performed by such grease trap maintenance provider. Tenant, as additional rent, shall be liable for the cost of any maintenance to or repairs of any of the Building pumps and pipes reasonably documented by Landlord to the extent necessitated by Tenants failure to comply with the terms and conditions of this provision.
40.2.3 If, in the reasonable opinion of Landlord, offensive odors are escaping from the Cafeteria into the Project or Common Areas, Landlord shall promptly notify Tenant and Tenant
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shall use diligent efforts to cure such situation. If such objectionable odors continue to escape from the Cafeteria into the Project or Common Areas after notice from Landlord, then Tenant shall have thirty (30) days to commence to cure such situation and thereafter shall diligently prosecute such cure to completion.
40.2.4 Tenant shall install such filters and shafts as required by Applicable Laws. Tenant shall be responsible for the proper care, cleaning and maintenance of the filters and shafts located within the Cafeteria, or exclusively serving the Cafeteria, in accordance with all Applicable Laws, and shall procure a qualified maintenance contractor reasonably approved by Landlord under a commercially reasonable maintenance contract for regular maintenance of the shafts. Tenant shall, at its own expense, cause any such filters to be cleaned on a monthly basis and any such shafts on an annual basis. Tenant shall follow all reasonable recommendations of Tenants shaft maintenance provider regarding the maintenance of the shafts.
40.2.5 If Tenant shall at any time serve alcoholic beverages in the Cafeteria, Tenant shall, at its sole cost and expense, provide and maintain all licenses and/or permits required by Applicable Laws and shall at all times comply with Applicable Law related to the service of alcoholic beverages. At all times during the Lease Term during which Tenant serves alcoholic beverages of any kind, Tenant, at its expense, shall maintain an insurance policy or endorsement covering liability related to the serving of alcoholic beverages, which policy or endorsement shall be in form and content reasonably acceptable to Landlord. All alcohol served at the Premises shall be consumed within the Premises only, and in no event may Tenant serve or permit the consumption of alcohol outside of the Premises.
40.2.6 Notwithstanding anything to the contrary set forth herein, Tenant may at any time, cease operating the Cafeteria, and subject to the provisions of Article 10, (i) remove the improvements in the Cafeteria and (ii) install improvements customary for general office use in the former Cafeteria.
40.3 Costs. In addition to other costs specified herein, Tenant shall reimburse Landlord within thirty (30) days after request (together with reasonable supporting documentation) for any incremental increase in trash removal costs incurred by Landlord above Landlords normal trash removal costs in connection with the remainder of the Premises as a result of or in connection with the Cafeteria.
41. Tenant Competitors. Without Tenants prior written consent, which consent Tenant may withhold in its sole and absolute discretion, during the Term, (i) Landlord shall not enter into a new lease, license or other agreement for space in the Project to any entity listed on Exhibit M attached hereto (each a Tenant Competitor), (ii) with respect to any lease entered into by Landlord on or before the Lease Date, permit any tenant or other occupant to assign its lease, license or other agreement for space in the Project or sublet any portion of its premises (an Occupancy Agreement) to any Tenant Competitor, if Landlord has the right under such lease to disapprove or withhold its consent to the same, or (iii) with respect to any lease entered into by Landlord following the Lease Date, permit any tenant or other occupant to enter into any Occupancy Agreement with any Tenant Competitor. The determination of whether any person or entity is a Tenant Competitor shall be made at the time Landlord proposes to enter into the applicable Occupancy Agreement. Landlord shall not be deemed to have violated this Section if any tenant, licensee or other occupant of the Project assigns its rights under any Occupancy Agreement to a Tenant Competitor by merger, acquisition or other similar corporate transaction over which Landlord has no approval rights. The restriction set forth in this Article 41 shall automatically terminate if the original named Tenant under this Lease shall assign this Lease other than to a Permitted Assignee. Once terminated, the restriction set forth in this Article 41 shall be of no force or effect for the balance of the Term, notwithstanding any subsequent change in circumstance with respect to Tenant or any Permitted
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Assignee, any Tenant Competitor, or otherwise. Once each Lease Year, during the thirty (30)-day period prior to the expiration of such Lease Year, Tenant shall be entitled to change up to two (2) of the entities listed on Exhibit M upon thirty (30) days prior written notice to Landlord, but the list shall in no event exceed a total of five (5) entities at any given time and all entities on the list shall be direct competitors of Tenant whose primary business involves online social gaming. Any change in the entities list on Exhibit M shall be effective only on a prospective basis and Landlord shall not be liable to Tenant for any Occupancy Agreement entered into by Landlord with respect to such new entity prior to receipt of Tenants notice adding such entity to Exhibit M. If at the time Landlord receives Tenants notice proposing that any new entity be added to Exhibit M Landlord is negotiating an Occupancy Agreement with any new entity who Tenant proposes to add to Exhibit M, then Landlord may nonetheless enter into such Occupancy Agreement without liability to Tenant. In addition to any other rights and remedies available at law or in equity, if Landlord defaults in the performance of its obligations set forth in this Section 41, then Tenant shall have the right to terminate this Lease upon written notice to Landlord.
42. Dogs.
42.1 General Conditions. Subject to the provisions of this Article 42, and the Building Rules, Tenant shall be permitted to have dogs in the Premises. Dogs may be brought into the Building only through (a) the entrance located at the Eighth Street entrance or (b) the elevator designated for Tenants exclusive use and shall immediately be taken to the Premises via the most westerly elevator. All dogs shall be under the physical control and supervision of Tenants employees at all times and must be on leashes while in any area of the Project outside of the Premises, including, but not limited to, interior and exterior Common Areas. All dogs brought into the Premises shall have been properly vaccinated, and Tenant shall provide Landlord with satisfactory evidence of such vaccinations within one (1) business day after request, or Tenant will not be permitted to bring the applicable dog for which Tenant cannot provide such evidence into the Premises. Tenant shall diligently endeavor to prevent any objectionable dog-related noises or odors to emanate from the Premises. Tenant shall diligently endeavor to prevent dogs from relieving themselves of bodily waste inside the Building or any landscaped area of the Project. Tenant shall immediately cause all bodily waste from dogs brought into the Project by Tenant Parties to be placed in plastic bags and disposed of in trash receptacles designated by Landlord. Tenant shall not allow any dog in the Premises or the Project if such dog has previously exhibited dangerously aggressive behavior. Tenant shall diligently endeavor to prevent any dogs to unreasonably interfere with other tenants or those having business in the Building.
42.2 Costs and Expenses. In addition to other costs specified herein, Tenant shall reimburse Landlord within thirty (30) days after request (together with reasonable supporting documentation) for any incremental increase in janitorial or trash removal costs incurred by Landlord above Landlords normal janitorial expenses in connection with the remainder of the Building as the result of allowing dogs into the Project.
42.3 Insurance; Indemnity. Tenant shall cause the insurance policies required to be maintained pursuant to Article 14 above to contain specific coverage for any Claims arising from or in connection with dogs brought into the Premises, the Project or the Parking Garage by Tenant Parties, and Tenant shall provide Landlord with satisfactory evidence of such coverage within one (1) business day after request. Without limiting the provisions of Article 16 above, Tenant hereby agrees to protect, defend, indemnify and hold Landlord and the other Indemnitees, and each of them, harmless from and against any and all Claims arising from or connected in any way with dogs brought into the Premises, the Project or the Parking Garage by Tenant Parties (except, with respect to any Indemnitee, to the extent caused by the gross negligence or willful misconduct of such Indemnitee and not covered by the insurance required to be carried by Tenant under this Lease or except to the extent such limitation on liability is prohibited by Applicable Laws), including (a) any violation of Applicable Laws, (b) any
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personal injuries or property damage and (c) any maintenance or repair costs. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.
42.4 Rights Personal to Original Tenant. Tenants right to bring dogs into the Premises pursuant to this Article 42 is personal to the original named Tenant under this Lease (or any Permitted Assignee), and shall apply only to the portions of the Premises occupied by Tenant or a Permitted Assignee. If Tenant shall assign this Lease (other than to a Permitted Assignee) or sublet all or any portion of the Premises (other than to a Permitted Assignee), then immediately upon such assignment or subletting, the right to bring dogs into the Premises or such subleased space shall automatically terminate and be of no further force or effect.
43. Storage Premises. Tenant shall rent four hundred seventy-five (475) Adjusted Rentable Square Feet of storage space during the Term, as more particularly set forth on Exhibit A-1 (the Storage Space). The Storage Space shall be leased at a gross rental rate of $12.00 per Adjusted Rentable Square Feet per year (the Storage Rent). Tenant shall pay Storage Rent on a monthly basis at the same time and in the same manner as Base Rent, and shall constitute Rent under the Lease. All Storage Space leased by Tenant shall be leased in its existing, as is condition, and Tenant shall be fully responsible for repairing any damage to the Storage Space resulting from or relating to Tenants use thereof. Tenant acknowledges that Landlord shall have no obligation to provide security for the Storage Space beyond Landlords general security obligations set forth in Section 8.3 hereof. Tenant shall comply with such reasonable rules and regulations as promulgated by Landlord from time to time pertaining to the use of such Storage Space, provided they do not conflict with this Lease. Tenants insurance and indemnification obligations under the Lease shall also pertain to Tenants use of the Storage Space.
44. Signs.
44.1 Building Directory. Landlord shall, at no cost to Tenant, reserve a pro-rata share of space on the computerized Building directory displaying the name of tenants for purposes of identifying Tenants name. Tenant shall have the right, from time to time, to change the name or names set forth in such directories.
44.2 Interior Signage.
44.2.1 Landlord, at its cost, shall provide and install initial identifying signage for Tenant in the elevator lobby of each floor of the Building on which the Premises is located, which signage shall (at Tenants option) incorporate Tenants name, logo or other identifying marks and shall otherwise comply with the Buildings standard signage program. Any subsequent identifying signage shall be procured and installed by Landlord at Tenants expense. Tenant, at its sole cost, may provide and install signage at any entrance to the Premises, provided that: (a) Tenant shall obtain Landlords prior approval of the material, typeface, graphic format, proportions, precise location, size, design, and method of attachment of such signage, which shall not be unreasonably withheld, conditioned or delayed and (b) such signage shall comply with the Buildings standard signage program and all Applicable Laws.
44.2.2 Tenant shall not place on any portion of the Premises (excluding the door to any suite within the Premises) any sign, poster, placard, lettering, banner, displays, graphic, advertising, or other material that is visible from the exterior of the Premises without Landlords prior written approval, which approval may be withheld in Landlords sole and absolute discretion. If Tenant violates any provision of this Section 44.2.2, Landlord shall have the immediate right to remove any non-complying sign without notice to and at the expense of Tenant.
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44.3 Exterior Signs. Except as provided in this Section 44.3, Tenant shall not place on any portion of the exterior of the Building any sign, placard, lettering, banner, displays, graphic, decor or other advertising or communicative material without Landlords prior written approval, which approval may be withheld in Landlords sole and absolute discretion.
44.3.1 LED Signage. Beginning as of the Lease Date, Tenant shall have the exclusive right to use, control and display messages, graphics or other displays on the two (2) LED electronic message boards currently located on the exterior of the Building (LED Signs) to display advertisements and other non-offensive messages, graphics or other displays. Subject to the foregoing, Landlord shall have no prior approval rights with respect to the content, design or format of Tenants messages on the LED Signs. Tenants use of the LED Signs as provided in this Section 44.3.1 shall be at no cost to Tenant and shall at all times be in accordance with Applicable Laws. Landlord makes no representations or warranties as to the operation of the LED Signs or as to the quality of the electronic display of the LED Signs. Tenant shall have the right, at its cost, but not the obligation, to update or upgrade the LED Signs, including the software therefor, subject to Tenants compliance with Applicable Laws with respect to such updates and upgrades. Notwithstanding anything to the contrary contained herein (i) the LED Signs shall remain the property of Landlord for all purposes, (ii) Tenant shall maintain the LED Signs in good and sightly condition and repair throughout the Term, (iii) Landlord shall not remove the LED Signs from the Building or otherwise deactivate or reduce or eliminate any functionality of the LED Signs (except in the case of an emergency) and (iv) Landlord shall insure the LED Signs in accordance with Section 14.3 above and repair or replace the LED Signs after any Casualty. Landlord shall grant Tenant exclusive access to and use of all apparatus, devices and equipment necessary to program, operate, use and maintain the LED Signs and access to the portions of the Project wherein such apparatus, devices and equipment are or may be located. Subject to the requirements of Applicable Laws, Tenant shall not permit any third parties to post advertisements or other messages on the LED Signs except in connection with Tenants or any Tenant Affiliates business or the business of any direct or indirect subtenant of Tenant.
44.3.2 Building Address Signage. Subject to the terms and conditions set forth in this Article 44, beginning as of the date which is ninety (90) days prior to the Target Phase 1 Completion Date, Tenant shall have the right but not the obligation to replace the existing portion of the LED Signs bearing the address of 650 Townsend with a sign bearing the address of 699 Eighth Street and/or Tenants name, logo or other identifying marks (Tenants Address Sign) provided that any such change or replacement shall not result in any diminishment or impairment of the existing approvals and permits for the LED Signs. Tenant shall have the exclusive right to use the 699 Eighth Street address for its Premises so long as the Premises is comprised of at least one hundred nineteen thousand (119,000) Adjusted Rentable Square Feet.
44.3.3 8th Street Signage. Subject to the terms and conditions set forth in this Article 44, beginning as of the of the date which is ninety (90) days prior to the Target Phase 1 Completion Date and throughout the Term, Tenant shall have the exclusive right, at Tenants sole cost and expense, to install any additional signage (including monument signage) on the 8th Street side of the exterior of the Building to the extent permitted by Applicable Laws (8th Street Signage). For avoidance of doubt, Tenants right to install 8th Street Signage shall include, without limitation, the right to install new monument signage, utilize existing monument signage or install signage on any parapet on the 8th Street side of the Building to the extent permitted by Applicable Laws. Landlord shall have the right to approve the material, typeface, graphic format, proportions, precise location, size and design of any 8th Street Signage, such approval not to be unreasonably withheld, conditioned or delayed. Landlord shall have the right to reasonably approve the location of all penetrations and runs, cabling installations, and means of affixing or mounting the 8th Street Signage. Landlord shall grant or withhold any approval of the 8th Street Signage set forth in this Section 44.3.3 within eight (8) business days after receipt of
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request. If Landlord fails to respond to Tenants request within such eight (8) business day period, Tenant may provide a second request for approval to Landlord, and if Landlord fails to respond within two (2) business days after receipt of Tenants second request, then Landlords approval shall be deemed given. The exact location, size, design, material, graphic format, and proportions of the 8th Street Signage shall be subject to the limitations set forth under Applicable Laws and the permits and approvals obtained by Tenant for the 8th Street Signage. Subject to the terms and conditions set forth in this Section 44.3.3 and the limitations set forth under Applicable Laws and the permits and approvals obtained by Tenant for the 8th Street Signage, Tenant shall have the right from time to time to change the name, size, design, material, graphic formation and proportions of any 8th Street Signage.
44.3.4 Townsend Street Signage. Subject to the terms and conditions set forth in this Article 44, beginning as of the date which is ninety (90) days prior to the Target Phase 1 Completion Date and throughout the Term, Tenant shall have the exclusive right, at Tenants sole cost and expenses, to install any additional signage on the Townsend Street side of the exterior of the Building to the extent permitted by Applicable Laws (Townsend Street Signage). For avoidance of doubt, Tenants right to install Townsend Street Signage shall include, without limitation, the right to install signage on any parapet on the Townsend Street side of the Building to the extent permitted by Applicable Laws. Landlord shall have the right to approve the material, graphic format, proportions, precise location, size and design of any Townsend Street Signage, such approval not to be unreasonably withheld, conditioned or delayed. Landlord shall have the right to reasonably approve the location of all penetrations and runs, cabling installations, and means of affixing or mounting any Townsend Street Signage to the Building. Landlord shall grant or withhold any approval of any Townsend Street Signage set forth in this Section 44.3.4 within eight (8) business days after receipt of request. If Landlord fails to respond to Tenants request within such eight (8) business day period, Tenant may provide a second request for approval to Landlord, and if Landlord fails to respond within two (2) business days after receipt of Tenants second request, then Landlords approval shall be deemed given. The exact location, size, design, material, graphic format, and proportions of any Townsend Street Signage shall be subject to the limitations set forth under Applicable Laws and the permits and approvals obtained by Tenant for such Townsend Street Signage. Subject to the terms and conditions set forth in this Section 44.3.4 and the limitations set forth under Applicable Laws and the permits and approvals obtained by Tenant for any Townsend Street Signage, Tenant shall have the right from time to time to change the name, size, design, material, graphic formation and proportions of any Townsend Street Signage.
44.4 Approvals. Tenant, at Tenants expense, shall be responsible for obtaining all required permits and approvals for each of Tenants Address Sign, any 8th Street Signage and any Townsend Street Signage (collectively, Tenants Exterior Signs). Tenants Exterior Signs must comply with all Applicable Laws. Landlord, at not cost to Landlord, shall cooperate with Tenant to obtain all required permits and approvals for Tenants Exterior Signs and any updates, upgrades or permitted modifications of the LED Signs.
44.5 Maintenance and Removal. Any signs, once approved by Landlord in accordance with this Article 44, shall be installed and removed only in strict compliance with Landlords approval and Applicable Laws, at Tenants expense, using a contractor reasonably approved by Landlord. Tenant, at its sole expense, shall maintain such sign in good condition and repair during the Term. Landlord shall allow reasonable access to those portions of the Project outside the Premises, including the exterior of the Building, necessary or convenient to install, remove, repair and maintain Tenants Exterior Signs. Any electrical power required for Tenants Exterior Signs shall be charged to Tenant. Tenant shall pay all federal, state and local taxes applicable to Tenants Exterior Signs. Landlord may remove any signs (not first approved by Landlord in accordance with this Article 44), advertisements, banners, placards or pictures so placed by Tenant on or within the Building (excluding the interior of the Premises), the Common Areas or the Project and charge to Tenant the cost of such removal, together with
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any costs incurred by Landlord to repair any damage caused thereby (ordinary wear and tear excluded), including any cost incurred to restore the surface upon which such sign was so affixed to its original condition (ordinary wear and tear excluded). Tenant shall remove all of Tenants signs, including Tenants Exterior Signs but excluding the LED Signs, repair any damage caused thereby (ordinary wear and tear excluded), restore the surface upon which the sign was affixed to its original condition (ordinary wear and tear excluded), and restore the building address sign to 650 Townsend if changed by Tenant pursuant to Section 44.3.2 above, all to Landlords reasonable satisfaction, upon the expiration or earlier termination of this Lease. Landlord may request that Tenant surrender the Premises without removing the sign cabinets, hardware, mounting and/or electrical power source of or connected to the Tenants Exterior Signs (but not any elements of Tenants signage relating to Tenants trademarks or trade dress which Tenant shall be permitted to remove notwithstanding Landlords request to surrender the Premises with such signage intact).
44.6 Restriction on Competitor Signage.
Landlord agrees that it shall not place, or allow the placement of, signage upon or visible from the Buildings exterior which bears the name or logo or any other identifying marks of any of the Tenant Competitors.
44.7 Assignment and Subleasing. The right to install Tenants Exterior Signs granted in Section 44.3 above shall not be separately assigned or subleased other than in connection with an assignment of the Lease or a sublease of all or any portion of the Premises. In addition, if at any time the Adjusted Rentable Square Feet of the Premises is less than one hundred nineteen thousand (119,000), Tenants rights under Section 44.3 above shall automatically terminate.
45. JAMS ARBITRATION.
45.1 General Submittals to Arbitration. The submittal of all matters to binding arbitration in accordance with the terms of this Article 45 as expressly set forth in any Section of this Lease or the Work Letter (the Arbitration of Disputes provision) is the sole and exclusive method, means and procedure to resolve any and all claims, disputes or disagreements arising under those particular Sections of this Lease or the Work Letter. The parties hereby irrevocably waive any and all rights to the contrary and shall at all times conduct themselves in strict, full, complete and timely accordance with this Arbitration of Disputes provision and all attempts to circumvent the terms of the Arbitration of Disputes provision shall be absolutely null and void and of no force or effect whatsoever.
45.2 JAMS. All disputes to be arbitrated pursuant to the Arbitration of Disputes provision shall be determined by binding arbitration before a retired judge of the Superior Court of the State of California (the Arbitrator) under the auspices of JAMS in San Francisco, California. Such arbitration shall be initiated by the parties, or either of them, within ten (10) days after either party sends written notice (the Arbitration Notice) of a demand to arbitrate by registered or certified mail to the other party and to JAMS. In the event that JAMS no longer exists or if JAMS fails or refuses to accept submission of such dispute, then the dispute shall be resolved by binding arbitration before the American Arbitration Association (AAA) in San Francisco, California. Regardless of the alternative dispute resolution provider used (i.e., either JAMS or AAA), the arbitration shall be administered and conducted pursuant to the JAMS Streamlined Arbitration Rules & Procedures (the Arbitration Rules), effective March 26, 2007. Even if the Rules in effect on the date of the commencement of an arbitration have been amended, the version dated March 26, 2007 shall be used; provided, however, that the following modifications shall take precedence over the Rules:
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45.2.1 Unless the parties otherwise agree, the Arbitrator must be a retired judge of the Superior Court of the State of California.
45.2.2 The scope and duration of discovery will be determined by the Arbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing parties and the witness; provided, however, that there shall be a presumption in favor of depositions of expected percipient witnesses (of approximately 3 1/2 hours each on the record) and expert witnesses (of no more than 6 hours each on the record).
45.2.3 The Arbitrator may grant any remedy or relief that is just and equitable and within the scope of the Parties agreement, including but not limited to specific performance, injunctive relief, damages, and interest (at such rate and from such date as the Arbitrator may deem appropriate).
45.2.4 The Arbitrator shall award reasonable attorneys fees, experts fees, and costs to the prevailing Party, including without limitation the prevailing Partys share of the Arbitrators and Arbitration providers fees and costs.
45.2.5 The Arbitrator shall be empowered to adjudicate whether the party submitting the dispute to the Arbitrator acted in good faith.
45.3 Provisional Remedies. This Section shall not preclude the Parties from seeking provisional remedies in aid of the Arbitration of Disputes from a court of appropriate jurisdiction.
45.4 Waiver of Rights to Litigate in a Court or Jury Trial. NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ARBITRATION OF DISPUTES PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLY IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ARBITRATION OF DISPUTES PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ARBITRATION OF DISPUTES PROVISION TO NEUTRAL ARBITRATION.
/s/ MAC |
/s/ MV | |||
Landlord Initials | Tenants Initials |
46. Representations and Warranties. Landlord warrants and represents that:
46.1 No Other Third-Party Rights. Other than the Existing Tenants and Tenant, as of the date hereof, Landlord has not leased the Premises to any third party or granted to any third party the right to occupy or possess the Premises or any portion thereof.
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46.2 Encumbrances.
To Landlords knowledge (i) Landlords title insurance policy (a copy of which is attached hereto as Exhibit P) is true, correct and complete as of the date hereof, and (ii) Landlord has good and marketable title to the Project, free and clear of liens, easements, restrictions or encumbrances thereupon or the income accruing therefrom, except those shown on Exhibit P. Landlord has not granted any liens, easements, restriction or encumbrances on the Project or the income accruing therefrom except as set forth on Exhibit P.
Signatures follow on next page.
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IN WITNESS WHEREOF, the parties have executed this Lease as of the Lease Date.
LANDLORD: | ||||||||||||||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company | ||||||||||||||||||||
By: | Townsend Member LLC, | |||||||||||||||||||
a Delaware limited liability company | ||||||||||||||||||||
Its: Sole Member | ||||||||||||||||||||
By: | TMG 650 Townsend LLC, | |||||||||||||||||||
a Delaware limited liability company | ||||||||||||||||||||
Its: Administrative Manager | ||||||||||||||||||||
By: | TMG Partners, | |||||||||||||||||||
a California corporation | ||||||||||||||||||||
Its: Managing Member | ||||||||||||||||||||
By: | /s/ Michael Covarrubias |
|||||||||||||||||||
Name: | Michael Covarrubias |
|||||||||||||||||||
Its: | CEO |
|||||||||||||||||||
TENANT: | ||||||||||||||||||||
ZYNGA GAME NETWORK INC., a Delaware corporation |
||||||||||||||||||||
By: | /s/ Mark Vranesh |
|||||||||||||||||||
Name: | Mark Vranesh |
|||||||||||||||||||
Its: | CAO |
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EXHIBIT A-1
FLOOR PLANS OF PREMISES AND STORAGE SPACE
[see attached]
Exhibit A-1, Page 1
EXHIBIT A-2
FLOOR PLANS OF TEMPORARY PREMISES
[see attached]
Exhibit A-2, Page 1
EXHIBIT A-3
FLOOR PLANS OF EXPANSION PREMISES
[see attached]
Exhibit A-3, Page 1
EXHIBIT A-4
FLOOR PLANS DEPICTING RELOCATION TENANTS
[see attached]
Exhibit A-4, Page 1
EXHIBIT A-5
RESERVED
Exhibit A-5, Page 1
EXHIBIT A-6
PLAN DEPICTING LOCATION OF SIDEWALK AREA
[see attached]
Exhibit A-6, Page 1
EXHIBIT B-1
RULES AND REGULATIONS
BUILDING RULES AND REGULATIONS
1. | SIGNS: No movable or fixed sign, placard, banner, picture, advertisement, name or notice visible from the exterior of the Premises shall be inscribed, displayed, printed, painted, affixed or otherwise displayed by Tenant in or on the Premises or any part of the Building, without the prior written consent of Landlord. Landlord shall have the right to remove any objectionable sign, placard, banner, picture, advertisement, name or notice, without notice to, and at the expense of Tenant. Landlord reserves the right to impose uniform signage for all Common Areas and to change said signage standards from time to time. |
2. | DIRECTORY: The directory of the Building will be provided for display of the name and location of tenants and subtenants only, and Landlord reserves the right to exclude any other names therefrom. The initial charge to include Tenant (and the names designated by Tenant) in the building directory shall be paid by Landlord. Thereafter, Landlord may charge Tenant for each name, in addition to the name of Tenant, listed in such directory. |
3. | LOCKS: Tenant shall not alter any lock or install a new or additional lock on any door of the Premises, without providing a copy of keys to Landlord. |
4. | WIRING: When wiring of any kind is introduced, it must be connected as directed by Landlord, and no boring or cutting for wires will be allowed, except with the prior written consent of Landlord, not to be unreasonably withheld, conditioned or delayed. |
5. | WINDOWS: No curtains, draperies, blinds, shutters, shades, screens or other coverings, hangings or decorations shall be attached to, hung or placed in, or used in connection with, any window in the Premises, without the prior written consent of Landlord. If Landlord consents, all such items shall be installed inside of Landlords standard draperies or blinds and shall in no way be visible from the exterior of the Building. Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. No article shall be placed on window sills. |
7. | HALLS AND STAIRWAYS: Tenant shall keep the doors to the Building corridors closed at all times, except when in actual use for ingress or egress. Sidewalks, halls, passages, exits, entrances, elevators and stairways shall not be obstructed by Tenant, or used for any purpose other than for ingress to and egress from the Premises. The halls, passages, exits, entrances, elevators and stairways are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the reasonable judgment of Landlord, would be prejudicial to the safety of the Building and its tenants. |
8. | PLUMBING: The toilet rooms, toilets, urinals, wash bowls and other fixtures shall not be used for any purpose other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule by Tenant or any Tenant Party, shall be borne by Tenant. |
Exhibit B-1, Page 1
9. | ELECTRICITY: Tenant may operate a reasonable number of typical small office machines, including adding machines, calculators, clocks, coffee machines, facsimile machines, personal computers and small copy machines. All electrical ceiling fixtures, bulbs and tubes must be of a type, quality, design and color approved in advance in writing by Landlord, not to be unreasonably withheld, conditioned or delayed. All electrical appliances must be grounded and must meet Underwriters Laboratory standards. |
11. | HEATING: Tenant shall not permit space heaters or use any method of heating other than that supplied or approved by Landlord. |
12. | FLOOR COVERINGS AND WALLS: Tenant shall not lay linoleum, tile, carpet or any other floor covering so that the same shall be affixed to the floor of the Premises in any manner except as approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. The expense of repairing any damage resulting from a violation of this rule or the removal of any floor covering shall be borne by Tenant. |
13. | MOVING FURNITURE, SAFES, ETC.: No furniture, freight or equipment of any kind shall be brought into or removed from the Building without the consent of Landlord, and all moving of same, into or out of the Building, by Tenant, shall be done at such times and such manner as Landlord shall reasonably designate. Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy property brought into the Building, as well as the times and manner of moving the same into and out of the Building. All damage done to the Building by moving or maintaining any such safe, furniture, freight, equipment or property shall be repaired at the expense of Tenant. |
14. | FREIGHT ELEVATOR: The Building freight elevator must be used for all deliveries of supplies, packages, equipment, furniture and other deliveries. |
17. | TRASH: Tenant shall store all its trash within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash in the City of San Francisco without violation of any law or ordinance governing such disposal. All trash disposal shall be made only through entryways and elevators provided for such purposes. |
20. | VENDING MACHINES: No vending machine of any kind shall be installed, maintained or operated in the Premises without the written permission of Landlord, except vending machines exclusively serving the Premises. |
21. | NO ANIMALS OR VEHICLES: Except as expressly provided in the Lease, Tenant shall not bring into or keep within the Building or the Premises any animal (except for seeing eye dogs), bird, or aquarium. Tenant shall not permit any skateboards, rollerblades or scooters to be used on the Property. So long as Landlord maintains sufficient bike rakes and bike lockers for the Building, Tenant shall not bring into or keep within the Building or the Premises any bicycles or other vehicles, except that bicycles may be parked at the risk of the owner in the areas, if any, designated for such purpose by Landlord. |
22. | COMMON AREAS: Areas used in common by tenants, including mall areas, elevators, restrooms, corridors and exterior plazas shall be subject to these Rules and Regulations, to the extent applicable, and to any special regulations posted therein, including any no smoking regulations. |
Exhibit B-1, Page 2
23. | CLOSING PRECAUTIONS: Tenant shall diligently endeavor to cause (i) the doors of the Premises to be closed and securely locked before leaving the Building, and (ii) all water faucets or water apparatus and electricity to be shut off before Tenant or its employees leave the Building, so as to prevent waste or damage. |
24. | SAFETY PROCEDURES: Tenant shall comply with all safety, fire protection and evacuation procedures and regulations reasonably established by Landlord or any governmental agency. |
25. | NO SOLICITATION: Solicitations or promotions to other tenants in the Building are prohibited, except with the prior written approval of Landlord. If so approved, solicitations and promotions shall only be done by and through Landlord, at Tenants sole cost. |
26. | ACCESS: Landlord reserves the right to exclude from the Building during the hours which are not Building Standard Hours, all persons who do not present a pass to the Building. Tenant shall be responsible for all persons for whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord also reserves the right to exclude or expel from the Building any person who, in Landlords good faith opinion, is intoxicated or under the influence of alcohol or drugs or poses a danger to persons or property. |
Exhibit B-1, Page 3
EXHIBIT B-2
ROOFTOP RULES
This Exhibit is attached to and forms a part of the Office Lease dated September 24, 2010 (the Lease), by and between 650 Townsend Associates LLC, a Delaware limited liability company (Landlord), and Zynga Game Network Inc., a Delaware corporation (Tenant), pertaining to certain premises located at 699 Eighth Street, San Francisco, California. The capitalized terms used without being defined in this Exhibit B-2 shall have the meanings given them in the Lease. The provisions of this Exhibit shall prevail over any inconsistent or conflicting provisions of the Lease.
1. Roof Area. Tenant shall accept the License Area and Cable Path in their condition and as-built configuration existing on the date of Lease. Landlord has made no representations or promise as to the suitability or effectiveness of any part of the roof for Tenants proposed use, or as to any Applicable Laws relating to Tenants proposed use, or as to the condition of (or alteration or improvement of) the License Area or the Cable Path.
2. Rooftop Installation Work. Installation of the Equipment (Rooftop Installation Work) must be performed in a good and workmanlike manner and in accordance with all Applicable Laws, and shall be subject to: (a) obtaining Landlords prior written approval of plans and specifications, which approval shall not be unreasonably withheld, conditioned or delayed, and Tenant acknowledges and agrees that, without limiting the generality of the foregoing, it shall be reasonable for Landlord to disapprove any Equipment if it exceeds roof load limitations; (b) obtaining Landlords prior written approval of Tenants contractor for the Rooftop Installation Work, which approval shall not be unreasonably withheld, conditioned or delayed, and such contractor must provide evidence of commercially reasonable insurance reasonably satisfactory to Landlord prior to commencing work in or about the Building; and (c) all additional requirements under the Lease that apply to Alterations by Tenant. In addition, Landlord may impose reasonable screening or other reasonable requirements to minimize the visibility of the Equipment. The plans and specifications for the Equipment shall include the design, size and features thereof and mounting structure, floor and power load requirements, cabling installations, the means of affixing or mounting the Equipment, and the means of connecting the Equipment to the Buildings electrical system and to the interior of the Premises. The giving of any approval by Landlord shall not eliminate any of Tenants obligations under the Lease, including Tenants obligation to obtain all required permits and to comply with all Applicable Laws. The failure of Tenant to obtain such permits or any other governmental approvals relating to the Equipment shall not release Tenant from any of its obligations under the Lease. Tenant shall pay to Landlord all of Landlords actual out-of-pocket costs incurred in connection with the review and approval of the plans and specifications within thirty (30) days after receipt of an invoice therefor.
3. General Requirements. In addition to the applicable provisions of the Lease, Tenants use of the roof of the Building is subject to the following general requirements:
(a) Tenant shall provide Landlord with reasonable advance notice prior to commencing installation of the Equipment or other work on or to the Equipment from time to time, and agrees to afford Landlord the opportunity to be present for all such work, provided that only subsequent notice within a reasonable time shall be required in the case of an emergency that presents an immediate danger.
(b) After the initial installation of any Equipment, Tenant shall not make any material alteration, addition or improvement thereto, without first obtaining Landlords prior written
Exhibit B-2, Page 1
approval; and any such material alterations, additions or improvements shall be subject to all the conditions and restrictions that apply to the original Equipment, including the requirement that Tenant furnish Landlord with detailed plans and specifications relating to the proposed alterations, additions or improvements.
(c) Landlord shall allow Tenant full access to the roof for the purposes of installation, maintenance and repair of the Equipment twenty-four (24) hours a day, seven (7) days a week, subject to reasonable rules and restrictions of Landlord.
(d) Tenant, at its expense, shall at all times keep the Equipment in good order, condition and repair, and the Equipment location and the areas immediately surrounding same neat and clean. With respect to all operations relating to the Equipment, Tenant shall conduct its business and control other Tenant Parties in such manner as not to create any nuisance.
4. Services. Tenant shall be responsible for the cost of supplying electricity to the Equipment, including electricity usage, installation, maintenance and repair of any Connections and of any separate meter required by Landlord. Electric usage shall be determined by meter installed by Landlord at Landlords sole cost and expense. Tenant shall pay Landlord monthly, within thirty (30) days after being billed therefor, for all electricity used by Tenant or any Tenant Parties in connection with the operation of the Equipment.
5. Roof Damage. Tenant shall, at Tenants sole cost and expense, protect the roof from damage, and shall perform all installations, repairs and maintenance and use the roof in a manner so as to keep in full force and effect any warranty concerning the roof. In all cases, Tenant shall use a roofing contractor reasonably approved by Landlord to perform any roof penetration or other work that may affect the integrity of the roof or the roof warranty. Any damage to the roof or any other portion of the Building resulting from Tenants installation, operation, use, maintenance or removal of the Equipment, including leakage, water damage or damage to the roof membrane shall be repaired by Tenant at Tenants sole cost and expense.
6. Compliance With Applicable Requirements. Tenant, at its sole cost and expense, shall comply with all Applicable Laws relating to the installation, maintenance, operation, use and removal of the Equipment. Without limiting the generality of the foregoing, Tenant, at its sole cost and expense, shall be responsible for obtaining, if required, any building permits, and any licenses or permits which may be required by the Federal Communications Commission (FCC), the Federal Aviation Administration (FAA) or any other governmental authority having jurisdiction over the Equipment or the Building and shall provide copies of the same to Landlord. If necessary, Landlord agrees reasonably to cooperate with Tenant, at no out-of-pocket expense to Landlord, to obtain any appropriate licenses or permits.
7. Radio Frequency Emitting Equipment. To the extent Tenant is operating radio frequency (RF) emitting equipment on the roof of or inside the Building, Tenant shall cooperate generally with Landlord and other carriers such that the Buildings rooftop shall be and remain in compliance with all rules and regulations of the U.S. Occupational Safety and Health Administration (OSHA) and the FCC relating to guidelines for human exposure to radio frequency or electromagnetic emission levels, as may be issued from time to time, including the rules and regulations adopted in FCC document OET 65 (which rules and regulations have also been adopted by OSHA).
8. Temporary Removal; Relocation. Tenant, at its sole expense, shall remove or relocate the Equipment on a temporary basis and upon thirty (30) days written notice from Landlord at any time Landlord reasonably determines such removal or relocation is reasonably necessary or appropriate for the
Exhibit B-2, Page 2
expeditious repair or replacement to or of the roof or any area of the Cable Path, or to access any such areas for Project needs.
9. Termination; Equipment As Property of Tenant. Upon the expiration or earlier termination of the Lease, Tenant shall immediately cease using the License Area and Cable Path and shall, at its own cost and expense, remove the Equipment and restore the License Area and areas affected by the cabling installations to the condition in which they were found prior to the installation of the Equipment, reasonable wear and tear excepted. The Equipment shall be considered personal property of Tenant; provided, however, if Tenant fails to remove the Equipment within thirty (30) days following the expiration or earlier termination of the Lease, it shall be deemed abandoned and may be claimed by Landlord or removed and disposed of by Landlord at Tenants expense.
10. Landlord Exculpation. Tenant assumes full responsibility for protecting from theft or damage the Equipment and any other tools or equipment that Tenant may use in connection with the installation, operation, use, repair, maintenance or removal of the Equipment, assumes all risk of theft, loss or damage, and waives all Claims with respect thereto against Landlord and the other Landlord Parties, including any Claims caused by any active or passive act, omission or neglect of any Landlord Party or by any act or omission for which liability without fault or strict liability may be imposed, except to the extent such injury, death or damage is caused by the gross negligence or willful misconduct of Landlord or any Landlord Party. Further, in no event shall Landlord or any Landlord Parties be liable under any circumstances for any consequential damages or for injury or damage to, or interference with, Tenants business, including loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, resulting from damage to or any failure or interruption of use of the Equipment, however occurring.
11. Insurance. Tenant shall cause the insurance policies required to be maintained pursuant to Article 14 of the Lease to cover the Equipment and any Claims arising in connection with the presence, use, operation, installation, repair, maintenance, or removal of the Equipment.
Exhibit B-2, Page 3
EXHIBIT C
WORK LETTER
Exhibit C, Page 1
EXHIBIT C
WORK LETTER
This Work Letter is attached to and forms a part of the Office Lease dated as of September , 2010 (the Lease), by and between 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord), and ZYNGA GAME NETWORK INC., a Delaware corporation (Tenant), pertaining to certain premises located at 699 Eighth Street, San Francisco, California. Except where clearly inconsistent or inapplicable, the provisions of the Lease are incorporated into this Work Letter, and capitalized terms used without being defined in this Work Letter shall have the meanings given them in the Lease.
The purpose of this Work Letter is to set forth the respective responsibilities of Landlord and Tenant with respect to the design and construction of (i) all alterations, additions and improvements that Tenant may deem necessary or appropriate to prepare the Premises for initial occupancy by Tenant under the Lease and (ii) the Ancillary Tenant Improvements (as hereinafter defined). Such alterations, additions and improvements to the Premises (other than the Ancillary Tenant Improvements) are referred to in this Work Letter as the Tenant Improvements and the work of constructing the Tenant Improvements is referred to as the Tenant Improvement Work.
Landlord and Tenant agree as follows:
1. Ancillary Tenant Improvements.
1.1 Construction of Ancillary Tenant Improvements. Prior to or concurrently with the construction of the Tenant Improvements, Landlord shall perform or caused to be performed the improvements (the Ancillary Tenant Improvements) described in the plans and specifications entitled 699 Eighth Street Ancillary Tenant Improvements, dated September 15, 2010, prepared by Studios Architecture (Landlords Architect) and attached hereto as Schedule 1 (the Ancillary Tenant Improvement Plans). The estimated cost of the Ancillary Tenant Improvements is Five Million Two Hundred Sixty Thousand Seven Hundred Fifty and 00/100 Dollars ($5,260,750.00) (the Estimated ATI Costs) based on the budget attached as Schedule 2 (the Ancillary TI Budget). Landlord shall pay the costs of such Ancillary Tenant Improvements, subject to Tenants contributions as provided in Section 1.3. Landlord shall cause the Ancillary Tenant Improvements to be constructed in accordance with the Ancillary Tenant Improvement Plans and in compliance in all material respects with all Applicable Laws. The Ancillary Tenant Improvements shall not be deemed to be Tenant Improvements nor shall the design and construction of the Ancillary Tenant Improvements be deemed to be Tenant Improvement Work. Tenant shall have the right to reasonably monitor and confirm Landlords completion of the Ancillary Tenant Improvements in accordance with the Ancillary Tenant Improvement Plans, and if any Ancillary Tenant Improvements have not been completed as required herein, Landlord shall promptly remedy the same, at its sole cost. With respect to the requirement that the Ancillary Tenant Improvements comply in all material respects with all Applicable Laws, the following shall apply: if Landlord or Tenant receives written notice from any governmental or quasi-governmental authority that the Ancillary Tenant Improvements violated any Applicable Laws as of the Commencement Date, then Landlord shall not be liable to Tenant for any damages, but Landlord, at no cost to Tenant, shall, as Tenants sole remedy, promptly and diligently perform such work or take such other action as may be necessary to cure such violation. Notwithstanding the foregoing, Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Applicable Laws, and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Applicable Laws, provided, that, in each case, such contest or appeal does not impose any imminent and material liability on Tenant or
Exhibit C, Page 1
materially interfere with Tenants ability to access or conduct its business in any portion of the Premises. Landlords obligation to perform work or take such other action to cure a violation under this Section 1.1 shall apply after the exhaustion of any and all rights to appeal or contest, provided, that, Landlord shall perform such work or take such action to cure the violation prior to the exhaustion of any right to appeal or contest if the failure to perform such work or take such action would impose any imminent and material liability on Tenant or materially interfere with Tenants ability to access or conduct its business in any portion of the Premises.
1.2 Modifications to Ancillary Tenant Improvements.
1.2.1 ATI Change Orders. No changes or modifications to the Ancillary Tenant Improvement Plans or the Ancillary Tenant Improvements (individually or collectively, ATI Change Orders) shall be made unless by written ATI Change Orders signed by Landlord and Tenant; provided, however, that Tenants approval shall not be required for, and Landlord may make, any ATI Change Order that may be necessary to obtain any Permits (as defined in Section 3.2.5), or that may be required by city officials or inspectors to comply with code rulings or interpretations, and ATI Change Orders relating to minor variations in the Ancillary Tenant Improvement Plans (namely, variations which are not inconsistent with the intent of the Ancillary Tenant Improvement Plans).
1.2.2 Tenants Proposed ATI Change Orders. Tenant may notify Landlord in writing of any ATI Change Orders which Tenant desires to make to the Ancillary Tenant Improvement Plans or the Ancillary Tenant Improvements provided that such proposed ATI Change Orders (a) do not materially, adversely affect the structural portions of the Building and (b) do not materially, adversely affect or materially, adversely interfere with the Buildings roof, elevators or bridges or the Building Systems. Tenants notice must be sufficiently detailed to permit Landlord to determine the impact on the Ancillary TI Budget (whether cost or savings) of making the proposed ATI Change Order. Landlord shall provide Tenant with a notice and description (Landlords ATI Change Notice) of any changes arising from Tenants proposed ATI Change Orders to (i) the Ancillary TI Budget and (ii) the Construction Schedule (as defined in Section 3.2.6); provided, however, that prior to any inquiry into the impact on the Ancillary TI Budget or Construction Schedule of the proposed ATI Change Order, and within two (2) business days after Tenants notice of a proposed ATI Change Order, Landlord shall provide Tenant with a preliminary estimate of the time required to investigate the proposed ATI Change Order and a request to expend funds required to undertake such investigation (an ATI Investigation Notice) whereupon Tenant may elect to withdraw the applicable proposed ATI Change Order and Landlord shall have no further obligation to process or consider Tenants proposed ATI Change Order until Tenant affirmatively elects in writing to continue. Landlord shall not unreasonably withhold or delay its approval of the proposed ATI Change Order and shall approve or reasonably disapprove any proposed ATI Change Order submitted by Tenant in a reasonable time period given the nature of such ATI Change Order and the circumstances under which such ATI Change Order is proposed, which time period shall in no event exceed five (5) business days (or such longer time as provided in an ATI Investigation Notice if Landlord has delivered an ATI Investigation Notice and Tenant has authorized Landlord to investigate the proposed ATI Change Order). If Landlord disapproves any ATI Change Order, Landlord shall return the ATI Change Order to Tenant with a statement of Landlords reasons for disapproval and/or specifying in reasonable detail any required corrections or revisions. Landlord shall approve or disapprove of any such revisions or corrections to an ATI Change Order made by Tenant within three (3) business days after receipt of such revisions or corrections. Upon receipt of the applicable Landlords ATI Change Notice and Landlords approval of the proposed ATI Change Order, Tenant may authorize Landlord in writing to proceed with such ATI Change Order and, upon such written authorization, Landlord shall proceed with construction of the Ancillary Tenant Improvements as so modified, and, subject to Section 1.3, any additional design and construction costs to be incurred by Landlord as a result of such ATI Change Order shall be paid by Tenant as part of Tenants ATI Contribution (hereinafter defined). If Tenant fails to
Exhibit C, Page 2
authorize Landlord to proceed with the ATI Change Order within three (3) business days after receipt of Landlords approval of the proposed ATI Change Order, Tenant shall be deemed to have withdrawn its request to so modify the Ancillary Tenant Improvements, and Landlord shall proceed with the construction of the Ancillary Tenant Improvements as provided in Section 1.1 without any ATI Change Order.
1.3 Landlords and Tenants Contributions to ATI Costs. Landlord will contribute to the costs of designing and constructing the Ancillary Tenant Improvements, as depicted on the Ancillary Tenant Improvement Plans and any approved ATI Change Order to the extent of Four Million One Hundred Fifty Two Thousand Five Hundred and 00/100 Dollars ($4,152,500.00) (Landlords ATI Contribution). Tenant shall pay all costs (other than ATI Excluded Costs as hereinafter defined) in excess of the Landlords ATI Contribution for (a) the costs of designing and constructing the Ancillary Tenant Improvements, as depicted on the Ancillary Tenant Improvement Plans, (b) charges and expenses for ATI Change Orders requested and authorized by Tenant (other than the cost of preparing an ATI Investigation Notice) and approved by Landlord and (c) changes and expenses for ATI Change Orders requested by Tenant but not authorized by Tenant where Tenant approved the expenditure of funds by Landlord as set forth in an ATI Investigation Notice (but not the cost of preparing such ATI Investigation Notice) (such excess being referred to herein as the Tenants ATI Contribution). Notwithstanding anything to the contrary set forth herein, to the extent that the costs of designing and constructing the Ancillary Tenant Improvements after deducting any ATI Excluded Costs, is less than Landlords ATI Contribution as determined on the ATI Final Reconciliation Statement (hereinafter defined), then such amounts shall be added to the Tenant Improvement Allowance (hereinafter defined).
1.3.1 Monthly ATI Budget Package. Landlord shall submit to Tenant monthly, during the performance of the Ancillary Tenant Improvements, a report setting forth in reasonable detail with respect to the prior calendar month: (a) a computation of the total costs of designing and constructing the Ancillary Tenant Improvements incurred by Landlord during the prior month other than the ATI Excluded Costs (collectively, ATI Design/Construction Costs) compared with the Ancillary TI Budget, accompanied by reasonable supporting evidence of the amounts shown thereon and (b) the cumulative ATI Design/Construction Costs incurred through the end of such month compared with the Ancillary TI Budget (each such submittal, a Monthly ATI Budget Package). Such report shall be submitted by the twentieth (20th) day of each month (or as soon thereafter as is reasonably practicable) and shall be accompanied by invoices for costs incurred during the previous month for the Ancillary Tenant Improvements and unconditional lien releases demonstrating that all previously invoiced Ancillary Tenant Improvement costs as of such date have been duly paid or reasonable evidence that such costs are being disputed in accordance with the express terms of the applicable written agreement.
1.3.2 Funding Ancillary Tenant Improvement Costs. Landlord shall pay the Landlords ATI Contribution in its entirety to parties entitled thereto prior to Landlord invoicing Tenant for Tenants ATI Contribution. Subject to the foregoing requirement that Landlord first fund Landlords ATI Contribution and following funding of the entire Landlords ATI Contribution, Landlord shall submit to Tenant, along with the Monthly Budget Package, a written invoice setting forth Tenants ATI Contribution required to pay costs incurred during the previous month for the Ancillary Tenant Improvements, which invoice shall be accompanied by reasonable supporting evidence of the amounts shown thereon (collectively, an ATI Payment Request), and Tenant shall pay the amount of the ATI Payment Request within fifteen (15) business days. If at any time Tenant disputes the amount of any ATI Payment Request, then Tenant may make the required payment under protest, in which event Landlord and Tenant shall proceed in good faith to resolve such dispute; and, if the dispute has not been resolved within fifteen (15) business days thereafter, then the dispute shall be resolved pursuant to binding
Exhibit C, Page 3
arbitration in accordance with Article 45 of the Lease. In no event shall Tenant have the right to withhold timely payment of any ATI Payment Request.
1.3.3 ATI Letter of Credit.
(a) ATI Letter of Credit. Within five (5) business days after the execution and delivery of this Lease, Tenant shall deliver to Landlord, an irrevocable and unconditional negotiable standby letter of credit (the ATI Letter of Credit) in the form attached hereto as Schedule 5 and containing the terms required herein, payable upon presentation to an operating retail branch located in San Francisco, California, running in favor of Landlord and issued by a bank with a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, in the amount of One Million One Hundred Eight Thousand Two Hundred Fifty and 00/100 Dollars ($1,108,250.00), which amount is equal to the estimated amount of Tenants ATI Contribution. Landlord agrees that Wells Fargo Bank, N.A. meets all requirements set forth in this Work Letter for the bank issuing the ATI Letter of Credit and if selected by Tenant is deemed approved by Landlord to issue the ATI Letter of Credit. The ATI Letter of Credit shall (i) be callable at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through renewal or extension, for the period from the date of issuance and continuing until the earlier of (A) the first anniversary of the Lease Date and (B) the date of Tenants payment in full of Tenants ATI Contribution (the ATI LC Expiration Date), (iii) permit partial draws and multiple presentations and drawings, and (iv) be otherwise subject to the Uniform Customs and Practices for Documentary Credits (2007-Rev), International Chamber of Commerce Publication #600, or the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. In addition to the foregoing, the bank issuing the ATI Letter of Credit (the ATI Bank) shall be acceptable to Landlord, in Landlords reasonable discretion. If Landlord notifies Tenant in writing that the ATI Bank (w) no longer maintains an operating retail branch located in San Francisco, California, (x) no longer has a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, (y) is no longer under the supervision of the Superintendent of Banks of the State of California or a national banking association, or (z) has filed bankruptcy or reorganization proceedings or is placed into a receivership or conservatorship, then Tenant shall have thirty (30) days to provide Landlord with a substitute ATI Letter of Credit complying with all of the requirements of this Section 1.3.3(a). If Tenant does not so provide Landlord with a substitute ATI Letter of Credit within such thirty (30) day period, then Landlord, or its then managing agent, shall have the right to draw upon the then current ATI Letter of Credit, and the proceeds of the ATI Letter of Credit shall be held by Landlord and may only be applied by Landlord in accordance with the terms of this Work Letter. If the final reconciliation of the Ancillary Tenant Improvements (as provided in Section 1.4 below) has not been completed (and Tenant has not terminated the Lease in compliance with Section 2.4 of the Lease or Section 7.4.2 of this Work Letter) prior to the first anniversary of the Lease Date and Tenant fails to deliver a new ATI Letter of Credit or certificate of renewal or extension to Landlord at least thirty (30) days prior to the expiration of the ATI Letter of Credit then held by Landlord, then Landlord, or its then managing agent, shall have the right to draw upon the then current ATI Letter of Credit, and the proceeds of the ATI Letter of Credit shall be held by Landlord and may be applied by Landlord in accordance with the terms of this Work Letter. The ATI Letter of Credit will be honored by the ATI Bank regardless of whether Tenant disputes Landlords right to draw upon the ATI Letter of Credit. No condition or term of the Lease shall be deemed to render the ATI Letter of Credit conditional to justify the issuer of the ATI Letter of Credit in failing to honor a drawing upon such ATI Letter of Credit in a timely manner. Tenant agrees and acknowledges that (x) the ATI Letter of Credit constitutes a separate and independent contract between Landlord and the ATI Bank, (y) Tenant is not a third party beneficiary of such contract, and (z) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenants bankruptcy estate shall have any right to restrict or limit Landlords claim and/or rights to the ATI Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the
Exhibit C, Page 4
U.S. Bankruptcy Code or otherwise; provided, however, that nothing contained herein shall be deemed to prohibit Tenant from challenging the validity or amount of any draw on the ATI Letter of Credit following the occurrence thereof. The ATI Letter of Credit shall provide that Landlord, its successors and assigns, may, at any time and without first obtaining Tenants consent thereto, transfer (one or more times) all or any portion of its interest in and to the ATI Letter of Credit to another party, person or entity; provided, that, in each case Landlord provides Tenant written notice of such transfer. In the event of a transfer of Landlords interest in the Building, Landlord shall transfer the ATI Letter of Credit, in whole or in part, to the transferee, shall provide written notice of such transfer to Tenant and, upon such transfer and notice, shall, without any further agreement between the parties, be released by Tenant from all liability therefor arising after such transfer, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said ATI Letter of Credit to a new landlord. In connection with any such transfer of the ATI Letter of Credit by Landlord, Landlord shall, at Landlords sole cost and expense, execute and submit to the ATI Bank such applications, documents and instruments, each in commercially reasonable form, as may be necessary to effectuate such transfer, and Landlord shall be responsible for the ATI Banks transfer and processing fees in connection therewith.
(b) Increase in ATI Letter of Credit. In addition, if at any time prior to the ATI Substantial Completion (hereinafter defined), but not more often then once per month, Tenants ATI Contribution increases by greater than ten percent (10%) of the original amount thereof, and the remaining unpaid Tenants ATI Contribution amount following the increase as of such date is greater than the amount of the existing ATI Letter of Credit, then Tenant shall, within ten (10) business days following notice thereof, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency (or amend the existing ATI Letter of Credit to increase the amount thereof to equal the deficiency), and any such additional letter(s) of credit shall comply with all of the provisions of Section 1.3.3(a).
(c) Draws on Letter of Credit. If Tenant fails to timely pay any portion of Tenants ATI Contribution required to be paid by Tenant pursuant to Section 1.3.2 above, then Landlord shall give Tenant notice thereof and five (5) business days after such notice to cure such failure. After the expiration of such cure period, Landlord may make a draw on the ATI Letter of Credit up to such unpaid amount, which shall be deemed a satisfaction of the ATI Payment Request to the extent of such draw on the ATI Letter of Credit. Within ten (10) business days following the earlier of (i) Tenants payment in full of Tenants ATI Contribution and (ii) Tenants termination of the Lease in compliance with Section 2.4 of the Lease or Section 7.4.2 of this Work Letter, Landlord shall deliver to Tenant any remaining ATI Letter of Credit in Landlords possession and any unapplied funds previously drawn on the ATI Letter of Credit in accordance with Section 1.3.3 (a) or (c).
(d) Letter of Credit. In lieu of delivering an ATI Letter of Credit as required by Section 1.3.3(a) or any increase pursuant to Section 1.3.3(b), Tenant may elect in its sole and absolute discretion to cause the amount of the Letter of Credit (as defined in the Lease) to be increased by the amount of Tenants ATI Contribution or by the amount of any increase required by Section 1.3.3(b). If Tenant elects to do so, then the following shall apply:
(i) If Tenant fails to timely pay any portion of Tenants ATI Contribution required to be paid by Tenant pursuant to Section 1.3.2 above, then Landlord shall give Tenant notice thereof and five (5) business days after such notice to cure such failure. After the expiration of such cure period, Landlord may make a draw on the Letter of Credit up to such unpaid amount.
Exhibit C, Page 5
(ii) Upon the ATI LC Expiration Date, Tenant may, subject to Tenants obligations under Section 3.1.6(d) below, cause the Letter of Credit to be decreased to equal the Letter of Credit Amount (as defined in the Lease).
(iii) Within ten (10) business days following the ATI LC Expiration Date, Landlord shall deliver to Tenant any unapplied funds previously drawn on the Letter of Credit in accordance with this Section 1.3.3(d).
1.3.4 ATI Excluded Costs. The following costs and expenses relating to the design and construction of the Ancillary Tenant Improvement shall be borne by Landlord at no cost to Tenant in addition to Landlords ATI Contribution (collectively, the ATI Excluded Costs): (a) charges and expenses for ATI Change Orders requested by Landlord, whether or not approved by Tenant, except for (i) ATI Change Orders that may be necessary to obtain any Permits or that may be required by city officials or inspectors to comply with code rulings or interpretations, and (ii) ATI Change Orders relating to minor variations in the Ancillary Tenant Improvement Plans (namely, variations which are not inconsistent with the intent of the Ancillary Tenant Improvement Plans); (b) costs for which Landlord receives reimbursement from others, including, without limitation, insurers, bonding companies or sureties (if any), and warrantors (Landlord shall use commercially reasonable efforts to maximize the amount of all such reimbursements to which it is entitled); (c) wages, labor and overhead for overtime or premium time (unless expressly approved by Tenant in the Ancillary TI Budget or in any ATI Change Order); (d) additional costs and expenses incurred by Landlord on account of any contractors or subcontractors construction defects, to the extent covered by any applicable warranties; (e) costs arising from or in connection with the presence of Hazardous Materials in, on or under the Project; (f) liens, penalties and late charges attributable to Landlords failure to pay any costs or fees required to be paid by Landlord pursuant to the Ancillary TI Construction Agreement (as hereinafter defined) or any other contract or agreement to which Landlord is a party, except to the extent the foregoing are attributable to Tenants failure to perform any of Tenants obligations pursuant to this Work Letter; (g) restoration costs in excess of insurance proceeds as a consequence of casualties; (h) costs associated with bonding any contractors, subcontractors or vendors; (i) costs of utilizing freight elevators, parking, access to loading docks, security, utilities and HVAC at the Building in connection with construction of the Ancillary Tenant Improvements or otherwise prior to the Commencement Date; (j) attorneys, experts and other fees and costs in connection with disputes attributable to Landlords failure to timely perform its covenants, obligations and agreements pursuant to the Ancillary TI Construction Agreement or any other contract or agreement to which Landlord is a party, except to the extent the foregoing are attributable to Tenants failure to perform any of Tenants obligations pursuant to this Work Letter; (k) the cost of any changes necessary to cause the Building Systems to be operational and in good condition or repair or to correct violations of the base, shell or core of the Premises or the Building or the Ancillary Tenant Improvements with Applicable Laws, unless the same are necessitated by reason of the installation of any of Tenants specialized personal property in the Premises, or by Tenants particular use or proposed use of the Premises, other than customary general office use; (l) any cost or expense arising in connection with the removal of any Lines located in the Building; (m) any other management, engineering, outside consulting and construction fees incurred by or on behalf of Landlord for the coordination of the Ancillary Tenant Improvements or Ancillary Tenant Improvement Plans (as opposed to the fees for the design of the Ancillary Tenant Improvements or the preparation of the Ancillary Tenant Improvement Plans); and (n) the cost of preparing any ATI Investigation Notice.
1.4 ATI Cost Reconciliation. Within thirty (30) days following final completion of the Ancillary Tenant Improvements, or as soon thereafter as is reasonably practicable, Landlord shall prepare for Tenants review and approval a final reconciliation of the total costs of the Ancillary Tenant Improvements setting forth the application of (a) Landlords ATI Contribution, (b) ATI Payment Requests paid by Tenant, and (c) any prior draws on the ATI Letter of Credit or, if applicable, the Letter
Exhibit C, Page 6
of Credit, together with conditional lien releases from the General Contractor and all subcontractors who have filed a preliminary 20-day notice (the ATI Final Reconciliation Statement). The ATI Final Reconciliation Statement shall also set forth the remaining unpaid amount of Tenants ATI Contribution (if any) or any overpayment by Tenant in connection with construction of the Ancillary Tenant Improvements. If Tenant has overpaid, then within thirty (30) days after delivery of the ATI Final Reconciliation Statement, Landlord shall refund any overpayment to Tenant. If Tenant has underpaid, then, within thirty (30) days after delivery of the ATI Final Reconciliation Statement, Tenant shall (i) either pay to Landlord the remaining unpaid amount of Tenants ATI Contribution (if any) set forth in the ATI Final Reconciliation Statement or (ii) deliver written notice to Landlord that Tenant disputes in whole or in part the remaining unpaid amount of Tenants ATI Contribution set forth in the ATI Final Reconciliation Statement. Landlord and Tenant shall proceed in good faith to resolve any dispute regarding the remaining unpaid amount of Tenants ATI Contribution for a period of twenty (20) days, at which time, if the dispute has not been resolved (as evidenced in a writing signed by Landlord and Tenant), the dispute shall be submitted to binding arbitration in accordance with Article 45 of the Lease. Tenant shall not be required to pay Landlord any disputed amount until such dispute is so resolved (Tenant shall, however, timely pay all amounts not in dispute). Landlord shall deliver unconditional lien releases from the General Contractor and all subcontractors who have filed a preliminary 20-day notice promptly following final payment of the General Contractor and such subcontractors.
1.5 No Liability of Tenant. Tenant shall have no liability for the completeness or accuracy of the Ancillary Tenant Improvement Plans (as the same may be modified or supplemented), and Landlord (or Landlords Architect) shall be responsible for performing all necessary field measurements and confirming the completeness and accuracy of such drawings. Tenants sole interest in reviewing the Ancillary Tenant Improvement Plans and monitoring the construction of the Ancillary Tenant Improvements is to protect Tenants interests, and no such review or any approval by Tenant shall be deemed to (a) create any liability of any kind on the part of Tenant, including, but not limited to, liability for design, engineering or fitness for a particular purpose, or (b) constitute a representation on the part of Tenant or any person consulted by Tenant in connection with such review and approval that the Ancillary Tenant Improvement Plans are correct or accurate or are in compliance with any Applicable Laws or the requirements of this Work Letter.
2. Design of the Tenant Improvements.
2.1 Tenants Architect and Designated Consultants. Tenant shall retain Nichols Booth Architects (Tenants Architect) to design the Tenant Improvements and prepare and coordinate Final Working Drawings (as defined in Section 2.2.3 below). Tenant shall retain such other engineers and consultants (Tenants Consultants) to prepare all plans and engineering working drawings relating to structural work, code compliance work or other specialized work in connection with the Tenant Improvements (excluding the MEP Drawings (hereinafter defined) which shall be Landlords responsibility), which Tenants Consultants shall be subject to Landlords approval, which shall not be unreasonably withheld. Tenant shall pay directly to Tenants Architect and Tenants Consultants all fees and costs of Tenants Architect and Tenants Consultants, including, without limitation, the cost of preparing the Final Working Drawings (as defined in Section 2.2.3), provided that Landlord shall contribute the Space Plan Allowance to reimburse Tenant for architectural costs as provided in Section 3.1.1. Tenant shall pay as a portion of Tenants Contribution (as defined hereinafter) the cost of all Tenant Permits (as defined in Section 3.2.5(a)).
2.2 Design of the Tenant Improvements.
2.2.1 Space Plan. Tenants final space plan for the Premises as approved by Landlord (the Space Plan) is attached hereto as Schedule 3.
Exhibit C, Page 7
2.2.2 Design Parameters. Within the period set forth in the Construction Schedule, Tenant shall (or shall cause Tenants Consultants) to prepare and submit for Landlords approval detailed parameters with respect to Tenants occupancy, programming and equipment for the Premises (Design Parameters) in sufficient detail to permit the MEP Subcontractors (hereinafter defined) to prepare the MEP Drawings.
2.2.3 Final Working Drawings. Within the period set forth in the Construction Schedule, Tenant shall cause Tenants Architect and Tenants Consultants to prepare and submit for Landlords approval complete and detailed construction plans and specifications in a format reasonably acceptable to Landlord, including a fully coordinated set of architectural and structural drawings for the Tenant Improvement Work (excluding the MEP Drawings which will be prepared by the MEP Subcontractors as provided in Section 2.2.5), in a form that is, when taken together with the MEP Drawings, sufficiently complete to bid on the work, obtain all required Permits and commence construction (the Final Working Drawings). Tenant shall furnish Landlord with four (4) copies of the Final Working Drawings. Tenant shall be permitted to deliver to Landlord for review the Final Working Drawings for portions of the Premises as opposed to the entire Premises at once at Tenants election, and Landlord shall review such partial delivery in the same manner per portion as if the delivery was related to the entire Premises. Landlord shall approve or disapprove of the Final Working Drawings by giving written notice to Tenant within ten (10) business days after receipt thereof. Landlord shall not unreasonably withhold or delay its approval of the Final Working Drawings, provided that, without limiting the generality of the foregoing, Landlord shall be entitled to withhold its consent to the Final Working Drawings if, in Landlords good faith judgment, the Final Working Drawings are materially inconsistent with, or do not materially conform to, the Space Plan and/or the Design Parameters. If Landlord disapproves the Final Working Drawings, Landlord shall return the Final Working Drawings to Tenant with a statement of Landlords reasons for disapproval and/or specifying in reasonable detail any required corrections and/or revisions. Landlord shall approve or disapprove of any such revisions to the Final Working Drawings within five (5) business days after receipt of such revisions. Landlord may not disapprove of any matter set forth in the Final Working Drawings which has been previously approved by Landlord or that is logically consistent with the Space Plan or the Design Parameters. This procedure shall be repeated until Landlord approves the Final Working Drawings. The Final Working Drawings, as so approved, together with the MEP Drawings, are herein referred to as the Approved Working Drawings. If any dispute regarding the design of the Tenant Improvements arises, which is not settled within ten (10) business days after notice of such dispute is delivered by one party to the other, Tenant may make the final decision regarding the design of the Tenant Improvements, provided (a) Tenant acts reasonably, (b) Tenants decision will not adversely affect the Buildings structural components or Building Systems, (c) the applicable Tenant Improvements in dispute (i) are customary office improvements, (ii) comply with Applicable Laws and (iii) do not affect the exterior appearance of the Building and (d) Tenants decision will not delay either Phase 1 Substantial Completion or Phase 2 Substantial Completion. If the Final Working Drawings have not been approved by Landlord within forty (40) business days after the delivery of the Final Working Drawings to Landlord, then, unless such delay is caused by Landlords failure to timely approve or disapprove the Final Working Drawings (or revisions thereto) pursuant to this Section 2.2.3 or Landlords unreasonable withholding of approval of such Final Working Drawings (or revisions thereto), each day that the Phase 1 Substantial Completion Date (as hereinafter defined) or the Phase 2 Substantial Completion Date (as hereinafter defined), as applicable, is actually delayed by reason of such failure shall count as one (1) day of Tenant Delay.
2.2.4 No Liability of Landlord. Landlord shall have no liability for the completeness or accuracy of the set of drawings of the Building previously delivered by Landlord to Tenant, and Tenants Architect shall be responsible for performing all necessary field measurements and confirming the completeness and accuracy of such drawings. Landlords sole interest in reviewing and approving the Space Plan and the Final Working Drawings is to protect the Building and Landlords
Exhibit C, Page 8
interests, and no such review or approval by Landlord shall be deemed to (a) create any liability of any kind on the part of Landlord, including, but not limited to, liability for design, engineering or fitness for a particular purpose, or (b) constitute a representation on the part of Landlord or any person consulted by Landlord in connection with such review and approval that the Space Plan or the Final Working Drawings are correct or accurate, or are in compliance with any Applicable Laws or the requirements of this Work Letter. Without limiting the foregoing, Tenant shall be responsible for ensuring that (i) all elements of the Design Parameters and the design of the Approved Working Drawings (excluding the MEP Drawings which shall be Landlords responsibility) comply with Applicable Laws and are otherwise suitable for Tenants use of the Premises, and (ii) no element of the Design Parameters or the design of the Approved Working Drawings (excluding the MEP Drawings which shall be Landlords responsibility) materially impairs any Building Systems and Landlords approval of the Final Working Drawings shall not relieve Tenant from such responsibility. Further, if Landlord incurs any cost as a result of any failure of the Approved Working Drawings (excluding the MEP Drawings which shall be Landlords responsibility) or the Design Parameters to comply with Applicable Laws or as a result of any impairment of any Building Systems or resulting from any defect in the Approved Working Drawings (excluding the MEP Drawings which shall be Landlords responsibility), then Tenant, upon written notice and request from Landlord, shall, at Landlords option, either (A) assign to Landlord any right Tenant may have under the Design Professional Agreements (defined below) to recover such cost from Tenants Architect and/or Tenants Consultants, as the case may be, or (B) at Tenants expense, use reasonable efforts to enforce such right directly against Tenants Architect and/or Tenants Consultants, as the case may be, for Landlords benefit. As used herein, Design Professional Agreements means the agreements between Tenant and Tenants Architect and Tenants Consultants pursuant to which the Design Parameters and the Approved Working Drawings (excluding the MEP Drawings) have been or will be prepared.
2.2.5 MEP Drawings. Within the period set forth in the Construction Schedule, Landlord shall cause (or shall cause the General Contractor to cause) the MEP Subcontractors (as hereinafter defined) to prepare and submit for Tenants approval, in a format reasonably acceptable to Tenant, complete and detailed construction plans, specifications and engineering working drawings related to mechanical, electrical, plumbing, elevator, fire protection, and life safety work to be completed in connection with the Tenant Improvements (including any code compliance work with respect to such mechanical, electrical, plumbing, elevator, fire protection, and life safety work), in a form that is sufficiently complete to obtain all required Permits and commence construction (the Draft MEP Drawings). The Draft MEP Drawings shall be based on the Final Working Drawings and the Design Parameters. Landlord shall furnish Tenant with four (4) copies of the Draft MEP Drawings. Tenant shall approve or disapprove of the Draft MEP Drawings by giving written notice to Landlord within the period set forth in the Construction Schedule after receipt thereof. Tenant shall not unreasonably withhold or delay its approval of the Draft MEP Drawings, provided that, without limiting the generality of the foregoing, Tenant shall be entitled to withhold its consent to the Draft MEP Drawings if, in Tenants good faith judgment, the Draft MEP Drawings are materially inconsistent with, or do not materially conform to, the Final Working Drawings or the Design Parameters. If Tenant disapproves the Draft MEP Drawings, Tenant shall return the Draft MEP Drawings to Landlord with a statement of Tenants reasons for disapproval and/or specifying in reasonable detail any required corrections and/or revisions. Tenant shall approve or disapprove of any such revisions to the Draft MEP Drawings within the period set forth in the Construction Schedule after receipt of such revisions. Tenant may not disapprove of any matter set forth in the Draft MEP Drawings which has been previously approved by Tenant or that is logically consistent with the Final Working Drawings and the Design Parameters. This procedure shall be repeated until Tenant approves the Draft MEP Drawings (such approved drawings, shall be referred to herein as the MEP Drawings). If the Draft MEP Drawings have not been approved by Tenant within the period set forth in the Construction Schedule after delivery of the Draft MEP Drawings to Tenant, then, unless such delay is caused by (a) Landlords failure to timely submit to Tenant for approval the Draft MEP Drawings (or revisions thereto) pursuant to this Section 2.2.5 or (b) the Draft MEP Drawings being, in Tenants
Exhibit C, Page 9
good faith judgment, materially inconsistent with, or failing to materially conform to, the Final Working Drawings or the Design Parameters, each day that the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, is actually delayed by reason of such failure shall count as one (1) day of Tenant Delay.
2.2.6 No Liability of Tenant. Tenant shall have no liability for the completeness or accuracy of the Draft MEP Drawings (as the same may be modified or supplemented), and Landlord (or the MEP Subcontractors) shall be responsible for performing all necessary field measurements and confirming the completeness and accuracy of such drawings. Tenants sole interest in reviewing the Draft MEP Drawings is to protect Tenants interests, and no such review or any approval by Tenant shall be deemed to (a) create any liability of any kind on the part of Tenant, including, but not limited to, liability for design, engineering or fitness for a particular purpose, or (b) constitute a representation on the part of Tenant or any person consulted by Tenant in connection with such review and approval that the Draft MEP Drawings are correct or accurate, or are in compliance with any Applicable Laws or the requirements of this Work Letter. Without limiting the foregoing, Landlord shall be responsible for ensuring that all elements of the design of the Draft MEP Drawings comply with Applicable Laws and any Tenant approval of the Draft MEP Drawings shall not relieve Landlord from such responsibility.
3. Construction of Tenant Improvements.
3.1 Responsibility for Design and Construction Costs.
3.1.1 Space Plan Allowance. Landlord agrees to reimburse Tenant for architectural costs incurred in connection with preparation of the Space Plan in an amount not to exceed Forty Thousand One Hundred Seventy Nine and 90/100 Dollars ($40,179.90) (calculated at the rate of $0.15 per Adjusted Rentable Square Foot within the Premises) (the Space Plan Allowance). Tenant may submit invoices to Landlord for payment of the Space Plan Allowance to reimburse Tenant or to pay Tenants Architect directly (if so requested by Tenant) for the Space Plan prepared by Tenants Architect. Following Landlords receipt of such invoices, Landlord shall within thirty (30) days thereafter pay Tenant for the amount requested in such invoice; provided in no event shall Landlord be obligated to make disbursements for the Space Plan in an amount which exceeds the Space Plan Allowance. The Space Plan Allowance shall not be deducted from the Tenant Improvement Allowance.
3.1.2 Tenant Improvement Allowance.
(a) Allowance. Subject to the conditions set forth in Section 3.1.2(b), Landlord will contribute to the costs of preparing the MEP Drawings and performing the Tenant Improvement Work, as depicted on the Approved Working Drawings and any approved Change Orders (as defined in Section 4 hereof), to the extent of the lesser of (a) Nine Million Four Hundred Seventy One Thousand Three Hundred Ten and 00/100 Dollars ($9,471,310.00) (calculated at the rate of $35.00 per Adjusted Rentable Square Foot in the Premises plus a credit against the commission due Tenants Broker in the amount of Ninety Six Thousand and 00/100 Dollars ($96,000.00)) or (b) the actual cost for the Permitted Allowance Items (hereinafter defined) (the Tenant Improvement Allowance). Tenant shall not be entitled to a credit for any unused portion of the Tenant Improvement Allowance in form of rent credit, rent abatement or otherwise, except as provided in Section 3.1.2(b).
(b) Permitted Allowance Items. Except as otherwise specified in this Work Letter, the Tenant Improvement Allowance may be applied only to the payment or reimbursement of the following (Permitted Allowance Items): (i) the cost of preparing the MEP Drawings, (ii) the cost of obtaining Permits, (iii) the Construction Administration Costs (as defined in
Exhibit C, Page 10
Section 3.3), (iv) the cost of performing the Tenant Improvement Work, including insurance, bonds, testing and inspection costs, hoisting and trash removal costs, contractors fees and general conditions, and sales and use taxes; (v) all costs of data and telephone cabling, kitchen equipment and signage (excluding all costs of other furnishings, fixtures, equipment and other personal property, including switches, servers, routers and similar data and telecommunications equipment except as provided below in this Section 3.1.2(b)); (vi) the cost of any change to the base, shell or core of the Premises or Building, including changes to the Ancillary Tenant Improvements, required by the Approved Working Drawings or the Design Parameters, including all direct architectural and/or engineering fees and expenses incurred in connection therewith; (vii) the cost of any change to the Approved Working Drawings or Tenant Improvements required by Applicable Laws; and (viii) the costs of any extended warranties requested by Tenant and obtained by Landlord pursuant to Section 3.2.8 below. From time to time during the course of construction, Landlord may charge against the Tenant Improvement Allowance any and all Permitted Allowance Items incurred by Landlord (except any Excluded Costs) as set forth in the then-approved Budget, including, without limitation, any increased costs incurred by Landlord as a result of, or in connection with Change Orders (except if such costs are Excluded Costs) or any reasonable and actual third-party costs and expenses to the extent incurred by Landlord in connection with, or as a consequence of, any Tenant Delay, as well as any reasonable and actual increase in the cost of construction of the Tenant Improvements to the extent attributable to Tenant Delay. If the actual cost of the Permitted Allowance Items shall be less than the Tenant Improvement Allowance, such unused portion of the Tenant Improvement Allowance in an amount not to exceed Two Million Eight Thousand Nine Hundred Ninety Five and 00/100 Dollars ($2,008,995.00) (calculated at the rate of $7.50 per Adjusted Rentable Square Foot in the Premises) (the Unused Allowance Amount) may be disbursed to Tenant and applied to the cost of Tenants furnishings, fixtures, equipment, and other personal property, including switches, servers, routers and similar data and telecommunications equipment, and /or Tenants moving expenses. If Tenant fails to submit reasonably satisfactory documentation requesting disbursement of the Unused Allowance Amount on or before the second (2nd) anniversary of the Commencement Date, Landlord shall have no further obligation to provide the Unused Allowance Amount or any remaining balance thereof to Tenant, nor shall Tenant be entitled to any rent credit or rent abatement for any unused portion of the Unused Allowance Amount.
(c) Suite 375 Premises Reduction. Notwithstanding anything to the contrary set forth in Section 3.1.2(a) regarding the amount and the calculation of the Tenant Improvement Allowance, the Tenant Improvement Allowance allocable to the Suite 375 Premises shall be reduced in connection with the Relocation of the Existing Tenant thereof. The Tenant Improvement Allowance set forth in Section 3.1.2(a) shall be reduced by an amount resulting from the following calculation: (1) the multiplication of (A) the Adjusted Rentable Square Feet of the Suite 375 Premises by (B) the rate of $35.00 and (2) the further multiplication of the foregoing product by a fraction, the numerator of which is the number of days from the Commencement Date to and including February 3, 2013 and the denominator of which is the number of days in the initial Term (such amount the Suite 375 Reduction). Upon the occurrence of the Commencement Date, Landlord and Tenant shall reconcile the actual Suite 375 Reduction in connection with preparation of the Final Reconciliation Statement (as defined in Section 3.1.7).
3.1.3 Budget.
(a) Budget. Attached hereto as Schedule 6 is a detailed breakdown by trade of the costs incurred or that will be incurred in connection with the preparation of the MEP Drawings and the construction of the Tenant Improvements, which Landlord may update from time to time (including to reflect any increase in costs resulting from any approved Change Order) (the most recently approved such budget, the Budget). The estimated cost of the preparation of the MEP
Exhibit C, Page 11
Drawings and the construction of the Tenant Improvements as of the Lease Date based on the Budget attached as Schedule 6 is Sixteen Million Five Hundred Thousand and 00/100 Dollars ($16,500,000.00).
(b) Excluded Costs. Notwithstanding the provisions of Section 3.1.2, the following costs and expenses relating to the Tenant Improvement Work shall be borne by Landlord at no cost to Tenant (collectively, the Excluded Costs): (i) charges and expenses for Change Orders requested by Landlord, whether or not approved by Tenant, except for (A) Change Orders that may be necessary to obtain any Permits or that may be required by city officials or inspectors to comply with code rulings or interpretations, (B) any change to the base, shell or core of the Premises or Building, including the Ancillary Tenant Improvements, required by the Approved Working Drawings or Design Parameters, and (C) Change Orders relating to minor variations in the Approved Working Drawings (namely, variations which are not inconsistent with the intent of the Approved Working Drawings); (ii) costs for which Landlord receives reimbursement from others, including, without limitation, insurers, bonding companies or sureties (if any), and warrantors (Landlord shall use commercially reasonable efforts to maximize the amount of all such reimbursements to which it is entitled); (iii) wages, labor and overhead for overtime or premium time (unless expressly approved by Tenant in the Budget or in any Change Order); (iv) additional costs and expenses incurred by Landlord on account of any contractors or subcontractors construction defects, to the extent covered by any applicable warranties; (v) costs arising from or in connection with the presence of Hazardous Materials in, on or under the Project; (vi) liens, penalties and late charges attributable to Landlords failure to pay any costs or fees required to be paid by Landlord pursuant to the TI Agreements (as hereinafter defined) or any other contract or agreement to which Landlord is a party, except to the extent the foregoing are attributable to Tenants failure to perform any of Tenants obligations pursuant to this Work Letter; (vii) restoration costs in excess of insurance proceeds as a consequence of casualties; (viii) costs associated with bonding any contractors, subcontractors or vendors; (ix) costs of utilizing freight elevators, parking, access to loading docks, security, and utilities or HVAC at the Building in connection with construction of the Tenant Improvements or Ancillary Tenant Improvements or otherwise prior to the Commencement Date; (x) attorneys, experts and other fees and costs in connection with disputes attributable to Landlords failure to timely perform its covenants, obligations and agreements pursuant to the TI Agreements or any other contract or agreement to which Landlord is a party, except to the extent the foregoing are attributable to Tenants failure to perform any of Tenants obligations pursuant to this Work Letter; (xi) the cost of any changes necessary to cause the Building Systems to be operational and in condition or repair or to correct violations of the base, shell or core of the Premises or the Building or the Ancillary Tenant Improvements with Applicable Laws, unless the same are necessitated by reason of the installation of any of Tenants specialized personal property in the Premises, or by Tenants particular use or proposed use of the Premises other than customary general office use; (xii) except as set forth in Section 2.6.2 of the Lease, any cost or expense arising in connection with a Relocation; (xiii) any cost or expense arising in connection with the removal of any Lines located in the Premises or connecting the Premises to the Buildings riser system or MPOE Room as of the Lease Date; (xiv) other than the Construction Administration Costs (as hereinafter defined), any other management, engineering, outside consulting and construction fees incurred by or on behalf of Landlord for the coordination of the Tenant Improvement Work (as opposed to the fees for the design of the Tenant Improvements or the preparation of the Space Plan or the Approved Working Drawings); and (xv) the cost of preparing any Investigation Notice (as defined in Section 4 below).
3.1.4 Tenants Contribution. Except for the Excluded Costs and subject to Landlords obligation to disburse the Space Plan Allowance and the Tenant Improvement Allowance in accordance with Section 3.1, Tenant shall pay all costs in excess of the Tenant Improvement Allowance as set forth in the approved Budget for the costs of preparing the MEP Drawings and performance of the Tenant Improvement Work (such difference being referred to herein as the Tenants Contribution).
Exhibit C, Page 12
Notwithstanding anything to the contrary set forth herein, to the extent that there exists any unused contingency amounts in the Budget, then such amounts shall be used to offset Tenants Contribution.
3.1.5 Budget Package; Funding of Tenants and Landlords Contributions.
(a) Monthly Budget Package. Landlord shall submit to Tenant monthly, during the performance of the Tenant Improvements, a report setting forth in reasonable detail with respect to the prior calendar month: (i) a computation of the total costs of preparing the MEP Drawings and performing the Tenant Improvement Work incurred by Landlord during the prior month other than the Excluded Costs(collectively, MEP Design/TI Construction Costs) compared with the Budget, accompanied by reasonable supporting evidence of the amounts shown thereon, and (ii) the cumulative MEP Design/TI Construction Costs incurred through the end of such month compared with the Budget (each such submittal, a Monthly Budget Package). Such report shall be submitted by the twentieth (20th) day of each month (or as soon thereafter as is reasonably practicable) and shall be accompanied by invoices for costs incurred during the previous month for Tenant Improvements and unconditional lien releases demonstrating that all previously invoiced Tenant Improvement costs as of such date have been duly paid or reasonable evidence that such costs are being disputed in accordance with the express terms of the applicable written agreement. Tenant shall pay directly all costs and expenses incurred by Tenant under agreements between Tenant and Tenants Architect, Tenants Consultants and other consultants hired by Tenant in connection with the Tenant Improvements and the cost and expenses of other Permitted Allowance Items incurred directly by Tenant.
(b) Funding Tenant Improvement Costs. Landlord shall pay the Space Plan Allowance for the Space Plan and the Tenant Improvement Allowance for the Permitted Allowance Items in their entirety to parties entitled thereto prior to Landlord invoicing Tenant for Tenants Contribution; provided, however, that, if any MEP Design/TI Construction Costs incurred prior to the funding of the entire Space Plan Allowance and the Tenant Improvement Allowance are not either Permitted Allowance Items or Excluded Costs, then, notwithstanding the foregoing, Tenant shall pay such amounts within fifteen (15) business days following receipt of a Payment Request (hereinafter defined). Subject to the foregoing requirement that Landlord first fund Landlords Contribution and following the funding of Landlords Contribution, Landlord shall submit to Tenant, along with the Monthly Budget Package, a written invoice setting forth Tenants Contribution required to pay costs incurred during the previous month for the Tenant Improvements which invoice shall be accompanied by reasonable supporting evidence of the amounts shown thereon (collectively, a Payment Request), and Tenant shall pay the amount of the Payment Request within fifteen (15) business days. If at any time Tenant disputes the amount of any Payment Request, then Tenant may make the required payment under protest, in which event Landlord and Tenant shall proceed in good faith to resolve such dispute; and, if the dispute has not been resolved within fifteen (15) days thereafter, then the dispute shall be resolved pursuant to binding arbitration in accordance with Article 45 of the Lease. In no event shall Tenant have the right to withhold timely payment of any Payment Request.
3.1.6 TI Letter of Credit.
(a) TI Letter of Credit. Within five (5) business days after the execution and delivery of this Lease, Tenant shall deliver to Landlord, an irrevocable and unconditional negotiable standby letter of credit (the TI Letter of Credit) in the form attached hereto as Schedule 7 and containing the terms required herein, payable upon presentation to an operating retail branch located in San Francisco, California, running in favor of Landlord and issued by a bank with a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, in the amount of Seven Million Twenty Eight Thousand Six Hundred Ninety and 00/100 Dollars ($7,028,690.00) which amount is equal to the estimated amount of
Exhibit C, Page 13
Tenants Contribution. Landlord agrees that Wells Fargo Bank, N.A. meets all requirements set forth in this Work Letter for the bank issuing the TI Letter of Credit and if selected by Tenant is deemed approved by Landlord to issue the TI Letter of Credit. The TI Letter of Credit shall (i) be callable at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through renewal or extension, for the period from the date of issuance and continuing until the earlier of (A) the first anniversary of the Lease Date and (B) the date of Tenants payment in full of Tenants ATI Contribution (the TI LC Expiration Date), (iii) permit partial draws and multiple presentations and drawings, and (iv) be otherwise subject to the Uniform Customs and Practices for Documentary Credits (2007-Rev), International Chamber of Commerce Publication #600, or the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. In addition to the foregoing, the bank issuing the TI Letter of Credit (the TI Bank) shall be acceptable to Landlord, in Landlords reasonable discretion. If Landlord notifies Tenant in writing that the TI Bank (w) no longer maintains an operating retail branch located in San Francisco, California, (x) no longer has a long term rating from Standard and Poors Professional Rating Service of A or a comparable rating from Moodys Professional Rating Service or higher, (y) is no longer under the supervision of the Superintendent of Banks of the State of California or a national banking association, or (z) has filed bankruptcy or reorganization proceedings or is placed into a receivership or conservatorship, then Tenant shall have thirty (30) days to provide Landlord with a substitute TI Letter of Credit complying with all of the requirements of this Section 3.1.6. If Tenant does not so provide Landlord with a substitute TI Letter of Credit within such thirty (30) day period, then Landlord, or its then managing agent, shall have the right to draw upon the then current TI Letter of Credit, and the proceeds of the TI Letter of Credit shall be held by Landlord and may be applied by Landlord in accordance with the terms of this Work Letter. If the final reconciliation of the Tenant Improvements (as provided in Section 3.1.7 below) has not been completed (and Tenant has not terminated the Lease in compliance with Section 2.4 of the Lease or Section 7.4.2 of this Work Letter) prior to the first anniversary of the Lease Date and Tenant fails to deliver a new TI Letter of Credit or certificate of renewal or extension to Landlord at least thirty (30) days prior to the expiration of the TI Letter of Credit then held by Landlord, then Landlord, or its then managing agent, shall have the right to draw upon the then current TI Letter of Credit, and the proceeds of the TI Letter of Credit shall be held by Landlord and may be applied by Landlord in accordance with the terms of this Work Letter. The TI Letter of Credit will be honored by the TI Bank regardless of whether Tenant disputes Landlords right to draw upon the TI Letter of Credit. No condition or term of the Lease shall be deemed to render the TI Letter of Credit conditional to justify the issuer of the TI Letter of Credit in failing to honor a drawing upon such TI Letter of Credit in a timely manner. Tenant agrees and acknowledges that (x) the TI Letter of Credit constitutes a separate and independent contract between Landlord and the TI Bank, (y) Tenant is not a third party beneficiary of such contract, and (z) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenants bankruptcy estate shall have any right to restrict or limit Landlords claim and/or rights to the TI Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise provided, however, that nothing contained herein shall be deemed to prohibit Tenant from challenging the validity or amount of any draw on the TI Letter of Credit following the occurrence thereof. The TI Letter of Credit shall provide that Landlord, its successors and assigns, may, at any time and without first obtaining Tenants consent thereto, transfer (one or more times) all or any portion of its interest in and to the TI Letter of Credit to another party, person or entity; provided, that, in each case, Landlord provides Tenant written notice of such transfer. In the event of a transfer of Landlords interest in the Building, Landlord shall transfer the TI Letter of Credit, in whole or in part, to the transferee, shall provide written of such transfer to Tenant and, upon such transfer and notice, shall, without any further agreement between the parties, be released by Tenant from all liability therefor arising after such transfer, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said TI Letter of Credit to a new landlord. In connection with any such transfer of the TI Letter of Credit by Landlord, Landlord shall, at Landlords sole cost and expense, execute and submit to the TI Bank such applications, documents and instruments,
Exhibit C, Page 14
each in commercially reasonable form, as may be necessary to effectuate such transfer, and Landlord shall be responsible for the TI Banks transfer and processing fees in connection therewith.
(b) Increases and Decreases in TI Letter of Credit.
(i) In addition, if at any time prior to the Phase 2 Substantial Completion Date, but not more often then once per month, Tenants Contribution increases by more than ten percent (10%) of the original amount thereof, and the remaining Tenants Contribution amount following the increase as of such date is greater than the amount of the existing TI Letter of Credit, as set forth in the then-approved Budget, then Tenant shall, within ten (10) business days following notice thereof, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency (or amend the existing TI Letter of Credit to increase the amount thereof to equal the deficiency), if any, and any such additional letter(s) of credit shall comply with all of the provisions of this Section 3.1.6.
(ii) Notwithstanding anything to the contrary contained in this Section 3.1.6, at any time after the Phase 1 Substantial Completion Date, Tenant shall have the one-time right to provide a substitute or amended TI Letter of Credit in an amount equal to the remaining Tenants Contribution, as set forth in the then-approved Budget, and any such substitute or amended letter(s) of credit shall comply with all of the provisions of this Section 3.1.6. Within five (5) business days following Tenants delivery of such a substitute TI Letter of Credit, Landlord shall deliver to Tenant any TI Letter of Credit in Landlords possession, along with any unapplied funds previously drawn on such existing TI Letter of Credit in accordance with Section 3.1.6(a) or (c).
(c) Draws on Letter of Credit. If Tenant fails to timely pay any portion of Tenants Contribution required to be paid by Tenant pursuant to this Section 3.1.5(b), then Landlord shall give Tenant notice thereof and five (5) business days after such notice to cure such failure. After the expiration of such cure period, Landlord may make a draw on the TI Letter of Credit up to such unpaid amount, which shall be deemed a satisfaction of the Payment Request to the extent of such draw on the TI Letter of Credit. Within ten (10) business days following the earlier of (i) Tenants payment in full of Tenants Contribution and (ii) Tenants termination of the Lease in compliance with Section 2.4 of the Lease or Section 7.4.2 of this Work Letter, Landlord shall deliver any remaining TI Letter of Credits in Landlords possession and any unapplied funds previously drawn on the TI Letter of Credit in accordance with Section 3.1.6 (a) or (c).
(d) Letter of Credit. In lieu of delivering a TI Letter of Credit as required by this Section 3.1.6 (or any increase pursuant to Section 3.1.6(b) above), Tenant may elect in its sole and absolute discretion to cause the amount of the Letter of Credit (as defined in the Lease) to be increased by Tenants Contribution or by the amount of any increase pursuant to Section 3.1.6(b) above. If Tenant elects to do so, then the following shall apply:
(i) If Tenant fails to timely pay any portion of Tenants Contribution required to be paid by Tenant pursuant to Section 3.1.5(b) above, then Landlord shall give Tenant notice thereof and five (5) business days after such notice to cure such failure. After the expiration of such cure period, Landlord may make a draw on the Letter of Credit up to such unpaid amount.
(ii) Upon the TI LC Expiration Date, Tenant may, subject to Tenants obligations under Section 1.3.3(d) above, cause the Letter of Credit to be decreased to equal the Letter of Credit Amount (as defined in the Lease).
Exhibit C, Page 15
(iii) Within ten (10) business days following the TI LC Expiration Date, Landlord shall deliver to Tenant any unapplied funds previously drawn on the Letter of Credit in accordance with this Section 3.1.6(d).
3.1.7 TI Costs Reconciliation. Within thirty (30) days following final completion of the Tenant Improvement Work (including any Punch-List Items as hereinafter defined) for the Phase 1 Premises or the Phase 2 Premises, as applicable, and acceptance thereof by Tenant, or as soon thereafter as is reasonably practicable, Landlord shall prepare for Tenants review and approval a final reconciliation of the total costs of the Tenant Improvements setting forth the application of (a) the Tenant Improvement Allowance, (b) Payment Requests paid by Tenant, and (c) any prior draws on the TI Letter of Credit or, if applicable, the Letter of Credit, together with conditional lien releases from the General Contractor and all subcontractors who have filed a preliminary 20-day notice (the Final Reconciliation Statement). The Final Reconciliation Statement shall also set forth the remaining unpaid amount of Tenants Contribution (if any) or any overpayment by Tenant in connection with construction of the Tenant Improvements. If Tenant has overpaid, then within thirty (30) days after delivery of the Final Reconciliation Statement, Landlord shall refund any overpayment to Tenant. If Tenant has underpaid, then within thirty (30) days after delivery of the Final Reconciliation Statement, Tenant shall (i) either pay to Landlord the remaining unpaid amount of Tenants Contribution (if any) set forth in the Final Reconciliation Statement or (ii) deliver written notice to Landlord that Tenant disputes in whole or in part the remaining unpaid amount of Tenants Contribution set forth in the Final Reconciliation Statement. Landlord and Tenant shall proceed in good faith to resolve any dispute regarding the remaining unpaid amount of Tenants Contribution for a period of twenty (20) days, at which time, if the dispute has not been resolved (as evidenced in a writing signed by Landlord and Tenant), the dispute shall be submitted to binding arbitration in accordance with Article 45 of the Lease. Tenant shall not be required to pay Landlord any disputed amount until such dispute is so resolved (Tenant shall, however, timely pay all amounts not in dispute). Landlord shall deliver unconditional lien releases from the General Contractor and all subcontractors who have filed a preliminary 20-day notice promptly following final payment of the General Contractor and such subcontractors.
3.2 Construction.
3.2.1 General Contractor. Landlord has selected Plant Construction (General Contractor) to construct the Tenant Improvements and the Ancillary Tenant Improvements. General Contractor has delivered to Landlord and Tenant a final proposal setting forth key terms of the TI Construction Contract (as defined in Section 3.2.2) (the Final Proposal).
3.2.2 Construction Contracts.
(a) Tenant Improvements. Landlord shall, within five (5) business days after the Lease Date, enter into a construction contract with the General Contractor to perform the Tenant Improvement Work, as shown on the Approved Working Drawings, excepting only minor variations (namely, variations which are not inconsistent with the intent of the Approved Working Drawings) and any Change Orders made pursuant to Section 4 below (the TI Construction Contract). The TI Construction Contract shall include, without limitation, the Required Terms (hereinafter defined). Prior to entering into the TI Construction Contract, Landlord shall deliver the final form of TI Construction Contract to Tenant. Tenant shall have three (3) business days after receipt of the form of TI Construction Contract to confirm that the TI Construction Contract conforms to the terms set forth in the Final Proposal and includes the Required Terms. Landlord shall not execute and deliver the TI Construction Contract prior to the earlier of (a) the expiration of such three (3) business day period or (b) Tenants earlier approval of the form of TI Construction Contract. Tenants failure to respond within such three (3) business day period shall be deemed to be Tenants approval of the form of TI Construction
Exhibit C, Page 16
Contract. If the TI Construction Contract conforms in all material respects to the terms set forth in the Final Proposal and includes the Required Terms, then Tenant shall have no further right to approve the form of the TI Construction Contract. If the TI Construction Contract does not conform in all material respects to the terms set forth in the Final Proposal and include all of the Required Terms, then Tenant may disapprove the form of TI Construction Contract, in which case, Landlord may not execute and deliver the TI Construction Contract until such conditions are satisfied. After the TI Construction Contract is initially executed and delivered, Landlord may not amend, modify or supplement the TI Construction Contract in any way which would cause the TI Construction Contract not to conform in all material respects to the terms set forth in the Final Proposal or not to include the Required Terms without Tenants prior written consent, which consent Tenant may withhold in its sole and absolute discretion. For purposes of this Work Letter, the Required Terms shall mean the following terms: (i) for the sole purpose of enforcing Tenants remedy set forth in Section 7.4.3 below, Tenant shall be an express third-party beneficiary of the TI Agreements (and any subcontracts to which Landlord is a third-party beneficiary) and may enforce the covenants, conditions and agreements set forth therein directly against the General Contractor (or the applicable subcontractor) (subject to any defenses the General Contractor or any subcontractors may have in the event of any continuing default by the Owner thereunder), (ii) Tenant shall be made a third-party beneficiary of all warranties set forth in the TI Agreements, (iii) General Contractor shall comply with the terms and conditions set forth in Section 2.2.5, above and Sections 3.2.4, 3.2.6 and 7.4.3 below, (iv) General Contractor shall provide notices to Tenant of any default under either of the TI Agreements (or any subcontracts) simultaneously with delivery of such notices to Landlord and Tenant may cure any default under the TI Agreements by Landlord after exercising the remedy set forth in Section 7.4.3 below, (v) General Contractor shall warrant for a period of at least one (1) year that the Ancillary Tenant Improvements and the Tenant Improvements will be constructed in accordance with, as applicable, the Ancillary Tenant Improvements Plans (and any duly made ATI Change Orders) or the Approved Working Drawings (and duly made Change Orders) and free from defects in workmanship and materials, (vi) no costs or fees shall be included that are duplicative of costs and fees included in the other TI Agreement, (vii) as to the TI Construction Contract only, the General Contractors fee shall reflect a market fee not to exceed three percent (3%) of the total hard construction costs and MEP/FLSS design build costs and, as to the Ancillary TI Construction Agreement, the General Contractors fee shall reflect a market fee not to exceed three and seventy-five hundredths percent (3.75%) of the total hard construction costs and MEP/FLSS design build costs; (viii) include a representation of the General Contractor that (A) it has not colluded with any other contractor or subcontractor to refrain from bidding in connection with the TI Construction Contract or has in any manner, directly or indirectly sought by agreement or collusion with any other contractor or subcontractor to fix prices, overhead, profit or costs in connection with bidding relating to the Tenant Improvement Work and (B) it will properly apportion costs and expenses between the Tenant Improvements and the Ancillary Tenant Improvements; (ix) each payment to the General Contractor shall be subject to a ten percent (10%) retention, which retention shall be payable to the General Contractor upon the final completion, as applicable, of the Tenant Improvement Work for the Phase 2 Premises (including Punch-List Items) and the construction of the Ancillary Tenant Improvements (including Punch-List Items).
(b) Ancillary Tenant Improvements. Landlord shall, within five (5) business days after the Lease Date, enter into a separate construction contract with the General Contractor to construct the Ancillary Tenant Improvement Work, as shown on the Ancillary Tenant Improvement Plans, excepting only minor variations (namely, variations which are not inconsistent with the intent of the Ancillary Tenant Improvement Plans) (the Ancillary TI Construction Agreement and together with the TI Construction Contract, the TI Agreements). The Ancillary TI Construction Agreement shall include, without limitation, the Required Terms. Prior to entering into the Ancillary TI Construction Agreement, Landlord shall deliver the final form of Ancillary TI Construction Agreement to Tenant. Tenant shall have three (3) business days after receipt of the form of Ancillary TI Construction Agreement to confirm that the Ancillary TI Construction Agreement conforms to the terms set forth in the
Exhibit C, Page 17
Final Proposal and includes the Required Terms. Landlord shall not execute and deliver the Ancillary TI Construction Agreement prior to the earlier of (A) the expiration of such three (3) business day period or (B) Tenants earlier approval of the form of Ancillary TI Construction Agreement. Tenants failure to respond within such three (3) business day period shall be deemed to be Tenants approval of the form of Ancillary TI Construction Agreement. If the Ancillary TI Construction Agreement conforms in all material respects to the terms set forth in the Final Proposal and includes the Required Terms, then Tenant shall have no further right to approve the form of the Ancillary TI Construction Agreement. If the Ancillary TI Construction Agreement does not conform in all material respects to the terms set forth in the Final Proposal and the Required Terms, then Tenant may disapprove the form of Ancillary TI Construction Agreement, in which case, Landlord may not execute and deliver the Ancillary TI Construction Agreement until such conditions are satisfied. After the Ancillary TI Construction Agreement is initially executed and delivered, Landlord may not amend, modify or supplement the Ancillary TI Construction Agreement in any way which would cause the Ancillary TI Construction Agreement not to conform in all material respects to the terms set forth in the Final Proposal or not to include the Required Terms without Tenants prior written consent, which consent Tenant may withhold in its sole and absolute discretion.
3.2.3 Selection of MEP Subcontractors. Prior to the Lease Date, Landlord, Tenant and the General Contractor agreed upon the list of qualified, licensed and reputable subcontractors and have selected the subcontractors set forth in Schedule 9 based upon proposals previously submitted to Landlord, Tenant and the General Contractor for the preparation of the MEP Drawings and the performance of Tenant Improvement Work relating to the mechanical, electrical, plumbing, life safety, and sprinkler systems in accordance with the MEP Drawings (the MEP Work). The subcontractors jointly selected by Landlord, Tenant and the General Contractor to perform the MEP Work are collectively referred to herein as the MEP Subcontractors.
3.2.4 Selection of Other Subcontractors. All subcontractors performing the Ancillary Tenant Improvements and the Tenant Improvement Work other than the MEP Subcontractors shall be referred to herein as the Other Subcontractors. In regard to all work to be performed by Other Subcontractors, Landlord, Tenant and the General Contractor shall compile a list of three (3) to five (5) qualified, licensed and reputable subcontractors per trade to submit bids to Landlord and the General Contractor for such work (the Pre-Approved Other Subcontractors). Tenant shall be entitled to designate not less than one (1) Pre-Approved Other Subcontractors per trade on each such list. Thereafter, Landlord and the General Contractor shall solicit bids from Pre-Approved Other Subcontractors set forth on each list, reconcile the bids to adjust for incorrect or inconsistent assumptions so a like kind comparison can be made and deliver the bids and such reconciliation to Tenant. The lowest responsible bidder in each case that commits to complete the Tenant Improvements in accordance with the Construction Schedule shall be selected; provided, however, that (i) Landlord may elect to select a higher bidder, in which case the amount of such increase shall be an Excluded Cost and (ii) Tenant may elect to select a higher cost proposal, in which case the amount of such increase shall be a Permitted Allowance Item; provided further, however, that if a higher bidder is required to be selected by Landlord pursuant to Applicable Laws, then the incremental increase in costs shall not be an Excluded Cost, but rather shall be a Permitted Allowance Item.
3.2.5 Permits.
(a) Tenant Permits. Tenant shall cause Tenants Architect to coordinate with the General Contractor to promptly submit the Approved Working Drawings (exclusive of the MEP Drawings) to the appropriate authorities to obtain city, county and state permits (the Tenant Permits) necessary to allow the General Contractor to commence and fully complete the construction of the Tenant Improvements described in the Approved Working Drawings. Landlord, in its capacity as the
Exhibit C, Page 18
owner of the Project, shall use diligent efforts to assist and cooperate with Tenant, Tenants Architect and the General Contractor in Tenants, Tenants Architects and General Contractors efforts to apply for, receive and implement the Permits and any other permits, licenses or other approvals required by any governmental or quasi-governmental authority, department agency, commission or board in order to construct the Tenant Improvements, Ancillary Tenant Improvements and MEP Work, as set forth in the Space Plan, Approved Working Drawings, Ancillary Tenant Improvement Plans, Design Parameters and MEP Drawings, as applicable. The General Contractor shall pick up the Tenant Permits upon issuance of the same. Neither Landlord nor Landlords consultants shall be responsible for submitting the Approved Working Drawings (exclusive of the MEP Drawings) to the appropriate governmental authorities for plan check in order to obtain any Tenant Permits and that submission of code compliant Approved Working Drawings (exclusive of the MEP Drawings) shall be Tenants responsibility. Any amendments or revisions to the Approved Working Drawings that may be necessary to obtain any such Tenant Permits, or which may be required by governmental officials or inspectors to comply with code rulings or interpretations, shall be prepared by (i) with respect to the Final Working Drawings, Tenants Architect, at Tenants expense (provided that to the extent funds are available, such expense may be reimbursed from the Tenant Improvement Allowance), and submitted to Landlord for Landlords review and approval, which review and approval shall be given in accordance with Section 2.2.3 hereof, except that Landlord shall approve or disapprove as set forth therein within three (3) business days or (ii) with respect to the MEP Drawings, an MEP Subcontractor, and submitted to Tenant for Tenants review and approval, which review and approval shall be given in accordance with Section 2.2.5 hereof, except that Tenant shall approve or disapprove as set forth therein within three (3) business days. If the Tenant Permits have not been issued within the period set forth on the Construction Schedule for obtaining such Tenant Permits after submission of the Approved Working Drawings to the appropriate authorities as provided above, then, unless such delay is caused by the failure of the Approved Working Drawings (exclusive of the MEP Drawings) to comply with Applicable Laws, then (A) any actual delay in the Phase 1 Substantial Completion beyond the later of (1) the Target Phase 1 Completion Date and (2) the date set forth for Phase 1 Substantial Completion on the then current Construction Schedule, caused by or attributable to actual delays in obtaining such Tenant Permits within such period set forth in the Construction Schedule shall constitute a Force Majeure Event with respect to the Phase 1 Premises only and (B) any actual delay in Phase 2 Substantial Completion beyond the later of (y) the Target Phase 2 Completion Date and (z) the date set forth for Phase 2 Substantial Completion on the then current Construction Schedule, caused by or attributable to actual delays in obtaining such Tenant Permits within such period set forth in the Construction Schedule shall constitute a Force Majeure Event with respect to the Phase 2 Premises only.
(b) Landlord Permits. Landlord shall cause the MEP Subcontractors to promptly submit the MEP Drawings to the appropriate authorities to obtain the city, county and state permits (the Landlord Permits and, together with the Tenant Permits, the Permits) necessary to allow the General Contractor to commence and fully complete the Tenant Improvement Work relating to the mechanical, electrical, plumbing, elevator, life safety, and sprinkler systems. The General Contractor will pick up the Landlord Permits upon issuance of same. Landlord shall be responsible for causing the submission of the MEP Drawings to the appropriate municipal authorities for plan check in order to obtain any Landlord Permits.
3.2.6 Construction; Access and Meetings; Open Book Basis.
(a) Construction; Access and Meetings. Attached hereto as Schedule 4 is a schedule setting forth milestone dates for the performance of all key actions to design, permit and construct the Ancillary Tenant Improvements and the Tenant Improvements and to otherwise reach Phase 1 Substantial Completion and Phase 2 Substantial Completion (the Construction Schedule). Until the Phase 2 Substantial Completion Date, if Landlord reasonably estimates that the milestone dates set forth in the Construction Schedule last delivered to Tenant are inaccurate, then
Exhibit C, Page 19
Landlord shall promptly revise the Construction Schedule and promptly deliver such revised Construction Schedule to Tenant. Landlord shall commence and diligently prosecute to completion construction of the Tenant Improvements described in the Approved Working Drawings following receipt of the Permits. Landlord shall use commercially reasonable efforts to cause (a) Phase 1 Substantial Completion to occur on or before the Target Phase 1 Completion Date and (b) Phase 2 Substantial Completion to occur on or before the Target Phase 2 Completion Date. During construction of the Ancillary Tenant Improvements and Tenant Improvements, Landlord shall carry Builders All Risk insurance covering the full replacement cost of the Ancillary Tenant Improvements and Tenant Improvements. Landlord shall obtain and deliver to Tenant a temporary or final certificate of occupancy, or final inspection and sign-off on the job card for the Ancillary Tenant Improvements and the Tenant Improvements or reasonable equivalent. Tenants representatives shall be entitled to attend the regular weekly construction meetings. Landlord shall provide Tenant at least seventy-two (72) hours notice of the time and place of such weekly construction meetings. In addition, Tenant may request one additional one (1) hour meeting with Landlord and General Contractor per week to discuss the status of the Tenant Improvements and the Ancillary Tenant Improvements. Tenant shall not communicate directly with the General Contractor outside of the scheduled construction meetings without Landlords prior approval. Landlord shall keep Tenant informed as to all material governmental inspections and shall permit Tenant or its representatives to be present thereat. Landlord hereby agrees to permit Tenant reasonable access to the Building throughout the designing, permitting and construction of the Tenant Improvements and the Ancillary Tenant Improvements, to inspect and observe work in progress, at all reasonable times. Any entry by Tenant shall comply with all established safety practices of the General Contractor.
(b) Open Book Basis. Landlord and Tenant shall have access to each others records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and similar data relating to this Work Letter, the Tenant Improvements and the Ancillary Tenant Improvements (collectively, the Records), and General Contractor shall preserve all such Records in its custody or control, for a period of one (1) year following the Phase 2 Substantial Completion Date. Landlord shall keep (and cause the General Contractor to keep) the Records in a manner to reasonably segregate costs, expenses and other items related to the Ancillary Tenant Improvements from costs, expenses and other items related to the Tenant Improvements. All Records shall be available to Landlord and Tenant on an open book basis promptly upon request but in no event later than two (2) business days after such request.
3.2.7 Substantial Completion.
(a) For purposes of the Lease, Phase 1 Substantial Completion shall mean the satisfaction of all of the following: (i) Landlord and its construction manager, in consultation with Tenant and Tenants Architect, mutually agree that the Tenant Improvement Work (exclusive of any improvements for the Cafeteria or any other kitchen in the Premises, any improvements to the Sidewalk Area, any improvements to the Parking Garage Roof Space and the installation of the Cafeteria/kitchen elevators/lifts) in the Phase 1 Premises has been completed in accordance with the Approved Working Drawings and any Change Orders, except for (A) finishing details, decorative items, minor omissions, mechanical adjustments, and similar items of the type customarily found on an architectural punch-list, the correction or completion of which items collectively will not substantially interfere with Tenants occupancy and use of the Phase 1 Premises (such items generally, Punch-List Items), and (B) any trade fixtures, workstations, telecommunications or computer cabling or built-in furniture or equipment to be installed by Tenant; and (ii) Tenant is legally permitted to occupy the Phase 1 Premises (as evidenced by a temporary or final certificate of occupancy, or final inspection and sign-off on the job card for the Tenant Improvement Work, or reasonable equivalent), provided, that, Tenant acknowledges that such a certificate of occupancy will not necessarily permit Tenant to operate every portion of such Phase 1 Premises for its intended Ancillary Uses at such date; (iii) the ATI Substantial
Exhibit C, Page 20
Completion (hereinafter defined) has occurred; and (iv) all material components of the Building Systems serving the Phase 1 Premises that are required for Tenants operation of its business within the Premises are in good order and operating condition. The ATI Substantial Completion shall mean the satisfaction of all of the following: (1) Landlord and Landlords Architect, in consultation with Tenant and Tenants Architect, mutually agree that the construction of the Ancillary Tenant Improvements has been completed in accordance with the Ancillary Tenant Improvement Plans and any ATI Change Orders, except for Punch-List Items; and (2) Tenant is legally permitted to occupy the portion of the Building improved or otherwise modified by the Ancillary Tenant Improvements (as evidenced by a temporary or final certificate of occupancy, or final inspection and sign-off on the job card for the Ancillary Tenant Improvements, or reasonable equivalent).
(b) For purposes of the Lease, Phase 2 Substantial Completion shall mean the satisfaction of all of the following: (A) Landlord and its construction manager, in consultation with Tenant and Tenants Architect, mutually agree that the Tenant Improvement Work in the Phase 2 Premises has been completed in accordance with the Approved Working Drawings and any Change Orders, except for Punch-List Items; (B) Tenant is legally permitted to occupy the Phase 2 Premises (as evidenced by a temporary or final certificate of occupancy, or final inspection and sign-off on the job card for the Tenant Improvement Work, or reasonable equivalent); (C) the Commencement Date has occurred; and (D) the Building Systems serving the Phase 2 Premises are in good order and operating condition.
(c) The Phase 1 Substantial Completion Date shall mean the date when Phase 1 Substantial Completion has occurred, and the Phase 2 Substantial Completion Date shall mean the date when Phase 2 Substantial Completion has occurred. Landlord shall notify Tenant of its belief that either Phase 1 Substantial Completion or Phase 2 Substantial Completion has occurred and provide Tenant reasonable documents and information regarding the satisfaction of the requirements thereof, and, promptly thereafter, Landlord and Tenant shall set a mutually convenient time for Tenant, Tenants Architect, Landlord and the General Contractor to inspect the applicable portion of the Tenant Improvement Work (and the Ancillary Tenant Improvements if ATI Substantial Completion has not yet been agreed upon by Landlord and Tenant) during which they shall confirm the occurrence of Phase 1 Substantial Completion or Phase 2 Substantial Completion and develop a mutually agreeable list of Punch List Items to be completed by Landlord. Landlord shall use commercially reasonable efforts to complete the Punch-List Items within thirty (30) calendar days after the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable. Tenant shall cooperate with Landlord to facilitate completion of any Punch-List Items as quickly as possible.
3.2.8 Contractors Warranties. Except as expressly provided in the Lease or in this Work Letter, Tenant waives all Claims against Landlord relating to any construction defects in the Tenant Improvement Work; provided, however, that (a) the foregoing shall not affect, nor shall Tenants taking possession and acceptance of the Premises constitute a waiver of (i) any warranty by the General Contractor with respect to workmanship (including installation of equipment) or material, or (ii) any non-compliance of the base, shell or core of the Premises or the Building or the Ancillary Tenant Improvements with Applicable Laws; and (b) Tenant shall be entitled to receive the benefit of all construction warranties and manufacturers equipment warranties relating to equipment installed in the Premises. If requested by Tenant, Landlord shall attempt to obtain extended warranties from manufacturers and suppliers of such equipment, and the cost of any such extended warranties shall be a Permitted Allowance Item.
3.3 Construction Administration Costs. Tenant shall pay to Landlord (a) a fee in the amount of Seventy Five Thousand and 00/100 Dollars ($75,000.00) to compensate Landlord for coordinating the Tenant Improvement Work, plus (b) fifty percent (50%) of all reasonable out of pocket
Exhibit C, Page 21
costs paid by Landlord to any third-party consultant to review and approve the Space Plan, the Final Working Drawings, the Design Parameters or any portion of the Tenant Improvement Work, each to the extent relating solely to the design or construction of specialty improvements in the Cafeteria (the other fifty percent (50%) of such costs shall be paid solely by Landlord and shall be Excluded Costs) (collectively, the Construction Administration Costs).
4. Change Orders. If (i) prior to the Phase 1 Substantial Completion Date Tenant shall request improvements or changes to the Phase 1 Premises in addition to, revision of or substitution for the Tenant Improvements identified on the Space Plan or the Approved Working Drawings or (ii) prior to the Phase 2 Substantial Completion Date Tenant shall request improvements or changes to the Phase 2 Premises in addition to, revision of or substitution for the Tenant Improvements identified on the Space Plan or the Approved Working Drawings (any such improvements or changes, individually or collectively, Change Orders), Tenant shall deliver to Landlord a request for such Change Order together with documents showing the applicable improvements or changes in reasonably sufficient detail given the circumstances and nature of the applicable improvements or changes for Landlord to evaluate the feasibility thereof and determine the impact on the Budget (whether cost or savings) of making the proposed Change Order. Landlord shall provide Tenant with a notice and description (Landlords Change Notice) of any changes arising from Tenants proposed Change Orders to (a) the Budget and (b) the Construction Schedule; provided, however, that prior to any inquiry into the impact on the Budget or Construction Schedule of the proposed Change Order, and within two (2) business days after Tenants notice of a proposed Change Order, Landlord may provide Tenant with a preliminary estimate of the time required to investigate the proposed Change Order and a request to expend funds required to undertake such investigation (an Investigation Notice), whereupon Tenant may elect to withdraw the applicable proposed Change Order and Landlord shall have no further obligation to process or consider Tenants proposed Change Order until Tenant affirmatively elects in writing to continue. Landlord shall not unreasonably withhold or delay its approval of the proposed Change Order and shall approve or reasonably disapprove any proposed Change Order submitted by Tenant in a reasonable time period given the nature of such Change Order and the circumstances under which such Change Order is proposed, which time period shall in no event exceed five (5) business days (or such longer time as provided in an Investigation Notice if Landlord has delivered an Investigation Notice and Tenant has authorized Landlord to investigate the proposed Change Order). If Landlord disapproves any Change Order, Landlord shall return the Change Order to Tenant with a statement of Landlords reasons for disapproval and/or specifying in reasonable detail any required corrections or revisions. Landlord shall approve or disapprove of any such revisions or corrections to a Change Order made by Tenant within three (3) business days after receipt of such revisions or corrections. No changes or modifications to the Approved Working Drawings shall be made unless by written Change Orders signed by Landlord and Tenant; provided, however, that Tenants approval shall not be required for, and Landlord may make, any Change Order that may be necessary to obtain any Permits, or that may be required by city officials or inspectors to comply with code rulings or interpretations, and Change Orders relating to minor variations in the Approved Working Drawings (namely, variations which are not inconsistent with the intent of the Approved Working Drawings. Upon receipt of the applicable Landlords Change Notice and Landlords approval of the proposed Change Order, Tenant may authorize Landlord in writing to proceed with such Change Order and, upon such written authorization, Landlord shall proceed with construction of the Tenant Improvements as so modified, and, subject to Section 3.1.4, any additional design and construction costs to be incurred by Landlord as a result of such Change Order shall be paid by Tenant as part of Tenants Contribution. If Tenant fails to authorize Landlord to proceed with the Change Order within three (3) business days after receipt of Landlords approval of the proposed Change Order, Tenant shall be deemed to have withdrawn its request to so modify the Tenant Improvements, and Landlord shall proceed with the construction of the Tenant Improvements without any Change Order.
Exhibit C, Page 22
5. Delays.
5.1 Tenant Delay. To the extent any actual delay in the Phase 1 Substantial Completion Date (including the ATI Substantial Completion) or the Phase 2 Substantial Completion Date is caused by or is attributable to: (a) any Change Order or ATI Change Order (y) requested and subsequently authorized by Tenant and approved by Landlord or (z) requested by Tenant but not authorized by Tenant where Tenant approved a period of delay set forth in a Landlords ATI Change Notice or Landlords Change Notice for the investigation by Landlord of a Change Order or ATI Change Order, as applicable, but excluding (1) in each case, any period of time taken to prepare an Investigation Notice or ATI Investigation Notice, as applicable and (2) with respect to delays described in clause (y), any period of delay (except due to other Tenant Delays) beyond the period described in the Landlords ATI Change Notice or Landlords Change Notice, as applicable; (b) Tenants requirement for materials, components, finishes or improvements that are not (i) readily available within industry-standard lead times (for instance, items which must be custom-made or specially ordered) to the extent such items require time to procure beyond that taken for standard items or (ii) available in a commercially reasonable time given the Target Phase 1 Completion Date and the Target Phase 2 Completion Date, provided, that Landlord delivered written notice to Tenant prior to Landlords approval of the Final Working Drawings if any such materials, components, finishes or improvements would be long lead time items; (c) Tenants failure to comply with the deadlines for delivery to Landlord of the Design Parameters or the Final Working Drawings, (d) Tenants failure to take any action prior to any deadlines set forth in the Construction Schedule or this Work Letter; (e) failure of the Approved Working Drawings (other than the MEP Drawings) to comply with Applicable Laws, including, but not limited to, actual delays in the issuance of Tenant Permits and/or delays in the issuance of a temporary or final certificate of occupancy or final inspection and sign-off on the job card for the Tenant Improvements solely as a result of such failure; (f) any other act or omission of Tenant or of any other Tenant Party which materially interferes with Landlords ability to perform the Tenant Improvement Work; (g) any required change to the base, shell or core of the Premises or the Building, including the Ancillary Tenant Improvements, required by the Approved Working Drawings (excluding any changes necessary to cause the Building Systems to be operational and in good condition and repair or to correct violations of the base, shell or core of the Premises or the Building, the Building Systems or the Ancillary Tenant Improvements with Applicable Laws), (h) Tenants failure to act reasonably where Tenant is required to act reasonably under the terms of this Work Letter, and (i) Tenants failure to timely pay any amounts owed to Tenants Architect, Tenants Consultant and other consultants hired by Tenant in connection with the Tenant Improvements, such delay shall constitute a Tenant Delay; and, notwithstanding anything to the contrary set forth in the Lease or in this Work Letter and regardless of the actual Phase 1 Substantial Completion Date (including actual ATI Substantial Completion) or Phase 2 Substantial Completion Date hereunder, the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable, shall be deemed to be the date the Phase 1 Substantial Completion Date (and/or ATI Substantial Completion) or Phase 2 Substantial Completion Date that would have occurred but for Tenant Delay(s). Notwithstanding the foregoing, to the extent any Tenant Delay only delays Phase 2 Substantial Completion and/or ATI Substantial Completion (as opposed to the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date), then there shall be no deemed change to the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable. For example, if a Tenant Delay occurs which causes the ATI Substantial Completion to be delayed by ten (10) days, but notwithstanding the Tenant Delay the ATI Substantial Completion still occurs prior to the Phase 1 Substantial Completion Date, then there shall be no deemed change in the Phase 1 Substantial Completion Date. Notwithstanding anything to the contrary contained herein, in no event shall either (A) failure by Tenant to timely pay any amounts owed to Landlord hereunder or (B) any delay of any kind in connection with improvements for the Cafeteria or any other kitchen in the Premises, any improvements to the Sidewalk Area, any improvements to the Parking Garage Roof Space or the installation of the Cafeteria/kitchen elevators/lifts, constitute a Tenant Delay; provided, however, that if
Exhibit C, Page 23
(i) Tenant fails to timely pay any amounts owed to Landlord hereunder, (ii) the amount of either the TI Letter of Credit or the ATI Letter of Credit, as applicable, is less than the amount Tenant fails to timely pay and (iii) an actual delay in the Phase 1 Substantial Completion Date (including the ATI Substantial Completion) or the Phase 2 Substantial Completion Date is caused by or is attributable to Tenants failure to timely pay, then such failure to timely pay shall constitute a Tenant Delay hereunder. Landlord may increase the Budget to pay any reasonable and actual third-party costs and expenses to the extent incurred by Landlord in connection with, or as a consequence of, any Tenant Delay, as well as any reasonable and actual increase in the cost of construction of the Tenant Improvements to the extent attributable to Tenant Delay. Except for any Tenant Delay resulting from Tenants failure to comply with the deadline for delivery of the Final Working Drawings, or failure to take any other action prior to any deadline specifically set forth in this Work Letter, no Tenant Delay shall be deemed to have occurred unless Landlord gives Tenant prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Tenant Delay, and Tenant shall fail to correct or cure such Tenant Delay within one (1) business day. There shall be excluded from the number of days of any Tenant Delay any days of delay which are primarily caused by a Force Majeure Event. If either the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date is actually delayed due to Tenant Delay, then Landlord and Landlords construction manager shall reasonably determine in consultation with Tenant and the Tenant Architect the date on which the applicable Tenant Improvements would have been completed but for such Tenant Delay and such certified date shall be the Phase 1 Substantial Completion Date or Phase 2 Substantial Completion Date, as applicable.
5.2 Landlord Delay. To the extent any actual delay in the Phase 1 Substantial Completion Date, the Phase 2 Substantial Completion Date or any Construction Completion Date is caused by or is attributable to: (a) Landlords failure to take any action prior to any deadline for taking such action (including the failure to timely pay any amounts owed to Tenant), (b) failure of the MEP Drawings to comply with Applicable Laws, including, but not limited to, actual delays in the issuance of Tenant Permits and/or delays in the issuance of a temporary or final certificate of occupancy or final inspection and sign-off on the job card for the Tenant Improvements solely as a result of such failure; (c) any required change to correct violations of the base, shell or core of the Premises or the Building or the Building Systems or the Ancillary Tenant Improvements with Applicable Laws), and (d)Landlords failure to act reasonably where Landlord is required to act reasonably under the terms of this Lease, such delay shall constitute a Landlord Delay. Except for any Landlord Delay resulting from Landlords failure to take any action prior to any deadline for taking such action, no Landlord Delay shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Landlord Delay, and Landlord shall fail to correct or cure such Landlord Delay within one (1) business day. There shall be excluded from the number of days of any Landlord Delay any days of delay which are primarily caused by a Force Majeure Event. If any of the Phase 1 Substantial Completion Date, the Phase 2 Substantial Completion Date or any Construction Completion Date is actually delayed due to Landlord Delay, then Tenant and Tenants Architect shall reasonably determine in consultation with Landlord and Landlords construction manager the date on which the Tenant Improvements would have been completed but for such Landlord Delay and such certified date shall be the Phase 1 Substantial Completion Date or the Phase 2 Substantial Completion Date, as applicable.
6. Ownership of Tenant Improvements. The Tenant Improvements shall be deemed, effective upon installation, to be a part of the Premises and the Building and shall be deemed to be the property of Landlord (subject to Tenants right to use the same during the Lease Term), and shall be surrendered at the expiration or earlier termination of the Lease Term, except as provided in Section 32.13.2 of the Lease.
Exhibit C, Page 24
7. Miscellaneous.
7.1 Tenants Representative. Tenant has designated Peter Schaffer (Tenants Representative) as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Landlord, shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter. Tenant may change Tenants Representative at any time upon not less than five (5) business days advance written notice to Landlord.
7.2 Landlords Representative. Landlord has designated Sean Donnelly (Landlords Representative) as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Work Letter. Landlord may change Landlords Representative at any time upon not less than five (5) business days advance written notice to Tenant.
7.3 Delinquent Payments. All amounts payable by Tenant under this Work Letter constitute Additional Rent, and if not paid when due, shall be subject to late charges, interest, and collection expenses as set forth in the Lease.
7.4 Tenants Remedies.
7.4.1 Default. The following shall be deemed to be a material default of Landlord if such failure continues for more than thirty (30) days after written notice from Tenant to Landlord and any Encumbrancer; provided that if such failure is not due to the default of Tenant hereunder (including Tenants failure to timely pay Tenants ATI Contribution or Tenants Contribution) or a Force Majeure Event and if such failure cannot reasonably be cured within a thirty (30) day period, a material default shall not be deemed to have occurred if Landlord (or any Encumbrancer or other successor to Landlord) promptly commences such cure within said period of thirty (30) days, and thereafter diligently pursues the same to completion: (a) Landlords failure to perform its material obligations under this Work Letter, (b) Landlords failure to respond to requests for approvals under this Work Letter, (c) Landlords failure to diligently prosecute the construction of the Ancillary Tenant Improvements and the Tenant Improvement Work, (d) Landlords failure to pay the General Contractor or other parties involved in the construction of the Ancillary Tenant Improvements and the Tenant Improvement Work in accordance with the applicable TI Agreements (or other contract applicable to such party) other than failure to pay due to a good faith protest to the extent permitted under the applicable TI Agreements, (e) Landlords material default under any of the TI Agreements or any other contracts in connection with construction of the Ancillary Tenant Improvements and the Tenant Improvement Work to which Landlord is a party which would allow the General Contractor to either terminate the applicable TI Agreement or cease work, or (f) the cessation of construction of the Ancillary Tenant Improvements and the Tenant Improvement Work after commencement thereof for reasons other than a Force Majeure Event or Tenant Delay (a Cessation of Work).
7.4.2 Termination following 45 Day Cessation. If any Cessation of Work continues for more than forty five (45) days after written notice from Tenant to Landlord and any Encumbrancer (the Forty Five Day Period), then Tenant shall have the right to terminate this Lease (Cessation Termination Right); provided that if such Cessation of Work cannot reasonably be cured before the expiration of the Forty Five Day Period, then Tenant may not exercise the Cessation Termination Right if Landlord (or any Encumbrancer or other successor to Landlord) promptly commences to cure such Cessation of Work before the expiration of the Forty Five Day Period, and thereafter diligently pursues the same to completion; provided, further, that if Encumbrancer cannot reasonably cure such Cessation of Work without obtaining possession of the Project or appointment of a receiver, then Tenant may not exercise the Cessation Termination Right, if before the expiration of the
Exhibit C, Page 25
Forty Five Day Period, Encumbrancer commences proceedings to obtain possession of the Project or appointment of a receiver and thereafter diligently prosecutes such proceedings to completion and promptly after obtaining possession of the Project or appointment of a receiver, Encumbrancer (or such receiver) promptly commences to cure such Cessation of Work, and thereafter diligently pursues the same to completion. Tenant shall have the right to terminate this Lease by giving written notice of such termination to Landlord at any time after such Cessation of Work and prior to the recommencement of the Tenant Improvement Work and the Ancillary Tenant Improvements. In the event of such termination, Tenant shall be entitled to seek payment from Landlord of such losses, costs, expenses or damages incurred by Tenant as a result of the termination of the Lease and exercise any other rights and remedies available to Tenant under Applicable Laws, subject to the provisions set forth in Section 22.2 of the Lease. If so terminated, (a) neither Landlord nor Tenant shall have any further rights, duties or obligations under the Lease, except with respect to provisions which expressly survive termination of the Lease, and (b) Landlord shall promptly return to Tenant the first months Base Rent payment delivered by Tenant to Landlord pursuant to Section 4.1 of the Lease, the TI Letter of Credit, the ATI Letter of Credit and the Letter of Credit.
7.4.3 Construction Management. If Landlord materially defaults in the performance of its obligations under this Work Letter as set forth in Section 7.4.1 above, then Tenant may, after notice to Landlord and any Encumbrancer (which notice must specify that Tenant intends to exercise its rights pursuant to this Section 7.4.3), elect to manage construction of the Ancillary Tenant Improvements and/or the Tenant Improvements by delivering written notice to Landlord and the General Contractor, in which case, without limiting the provisions of Section 2.8 of the Lease, the following shall apply: (a) Tenant shall be responsible for all aspects of the management of the construction of the Ancillary Tenant Improvements and/or the Tenant Improvements, (b) Tenant shall no longer be required to seek the approval of Landlord for any matters for which Landlords approval is required under this Work Letter, (c) Landlord shall not be entitled to the portion of the Construction Administration Costs set forth in clause (a) of Section 3.3, (d) the General Contractor shall reasonably cooperate with Tenant to transition management of construction of the Ancillary Tenant Improvements and/or Tenant Improvements to Tenant, (e) within thirty (30) days after receipt of a reasonably detailed invoice, Landlord shall reimburse Tenant for any reasonable costs and expenses incurred by Tenant associated with the design and construction of the Ancillary Tenant Improvements and/or Tenant Improvements which are Landlords responsibility under the terms and conditions set forth in this Work Letter, and (f) promptly upon request therefor from Tenant, Landlord will assign to Tenant the TI Agreements.
7.4.4 Remedies Cumulative. Except as otherwise expressly provided in the Lease or this Work Letter, the rights and remedies set forth in this Section 7.4 are cumulative and, in addition to the rights and remedies set forth herein, Tenant shall have other rights and remedies available at law or in equity.
7.5 Notices of Non-Responsibility. Tenant may post one or more written notices at the Project in conspicuous locations indicating that Tenant is not liable for payment of the General Contractor or any subcontractors.
7.6 Approvals. Unless otherwise provided in this Work Letter, whenever approval, consent or satisfaction (collectively, an approval) is required of a party pursuant to this Work Letter or a Schedule hereto, such approval shall not be unreasonably withheld, conditioned or delayed. Unless provision is made for a specific time period, approval (or disapproval) shall be given within five (5) business days after receipt of the request for approval. Nothing contained in this Work Letter shall limit the right of a party to act or exercise its business judgment in a subjective manner with respect to any matter as to which it has been (a) specifically granted such right, (b) granted the right to act in its sole discretion or sole judgment, or (c) granted the right to make a subjective judgment hereunder, whether
Exhibit C, Page 26
objectively reasonable under the circumstances, and any such exercise shall not be deemed inconsistent with any covenant of good faith and fair dealing implied by law to be part of this Work Letter or the Lease.
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Exhibit C, Page 27
SCHEDULE 1
ANCILLARY TENANT IMPROVEMENTS PLANS
[attached]
Exhibit C, Schedule 1
SCHEDULE 2
ANCILLARY TI BUDGET
[attached]
Exhibit C, Schedule 2
Exhibit C, Schedule 2
Ancillary TI Budget, Page 1 of 26
699 Eighth St Ancillary TI Conceptual Estimate #8 Summary; 9-15-10
Plant Construction Conceptual Estimate #8 9/15/10 based on architectural drawings entitled 699 - 8th Street - Ancillary Tenant Improvements 20 sheets dated 9/15/10 as prepared by Studios Architecture, structural drawings 14 sheets dated 9/15/10 as prepared by Tipping-Mar and Associates.
Base Budget | ||||||||||
Level |
Line Item # |
Title |
Budget Amount* |
General Notes | ||||||
Concourse |
I | Concourse Level Soft Demolition | 65,000 | Soft demolition of concourse area per plan to combine suites 120 and 140. | ||||||
II | Concourse Level - Exit Corridor | 75,000 | New code required concourse level exit corridor as necessitated by eliminating the existing corridor between suites 120 and 140. | |||||||
III | Concourse Level - Remove Escalators, Infill Opening, and New Stair | 320,000 | Demo escalators, infill floor opening between concourse and street level, new staircase going from street to concourse level. | |||||||
Street |
IV | Remove Escalators to Atrium Level | 155,000 | Demo escalators from street level to level 2, install railing. | ||||||
V | Street Level - Union Bank Modifications | | Not required at this time pending the outcome of the Pre-App meeting with DBI and of the plan check results with DBI. | |||||||
2 |
VI | Atrium Level - Demising Wall | 150,000 | Demise level 2 near the existing shuttle elevators including power operated doors tied into life safety for smoke control purposes. | ||||||
3 |
VII | Level 3 - Demising Wall, Bridge, and Glass Rail | 1,100,000 | Demise per plan for existing level three tenant separation, construct new bridge and elevator stop, includes new elevator controls (allows for level 5 and 6 stops too). | ||||||
VII.A.1 | Remove existing escalators Level 3 to Level 6 | 600,000 | Remove existing escalators between level 3 and level 6 including post-tensioned concrete balconies, rails, drywall enclosures, fire sprinklers and lighting. Estimate assumes installation of new rails all levels will proceed concurrently. | |||||||
4 |
VIII | Level 4 - Perimeter Glazing & Misc. Work | 265,000 | Installation of new full height obscure glazing at Level 4 west atrium. Demo existing east & west balconies and install one steel plate guardrail at west balcony location. Install elevator door and frame, cover with MDF for future use. | ||||||
5 |
IX | Level 5 - Demising Wall, Bridge, and Glass Rail | 575,000 | Install new bridge landing and elevator stop (elevator controls included in level 3 bridge estimate). Demise level 5 near the existing four elevator set including power operated doors tied into life safety for smoke control purposes. | ||||||
6 |
X | Level 6 - Demising Wall, Bridge, and Glass Rail | 550,000 | Install new bridge landing and elevator stop (elevator controls included in level 3 bridge estimate). Demise level 6 near the existing four elevator set including power operated doors tied into life safely for smoke control purposes. | ||||||
XI | New Operable Skylight Level 6 | 220,000 | Demo existing glass block skylight and install fully operable skylight in lieu of fixed. Estimate includes perimeter safety railings, electrical power and controls. | |||||||
Misc. |
XII | Remove West Atrium Balcony | | Included with applicable floor above. | ||||||
XIII | Modify West Atrium Ceiling | 150,000 | Demolition of existing ceiling area between balconies and construction of new sloped suspended drywall ceiling with cove and exposed concrete surface at perimeter of skylight. | |||||||
XIV | New Interior Tenant Stair | 345,000 | Construct new interior tenant communicating stair on east side of existing elevators from level 2 to level 6. Estimate includes steel columns to support future glazed wall. | |||||||
XV | Upgrade Bridge Rails | 22,500 | Upgrade bridge rails from building standard glass with stainless rail to steel lube and angle rails with glass infill panels. Included for floors 3, 5, and 6 ($7.5K Per Floor). | |||||||
XVIII | Elevator Shaft Cladding | 190,000 | Clad existing shuttle elevators with corrugated perforated metal panels full height on all exposed elevations. | |||||||
XIX | Kitchen Lift | TBD | Install a freight lift for moving food carts from concourse to street level. | |||||||
Estimated Hard Cost Total: |
4,782,500 | |||||||||
Est. Soft Cost Total (10% of Hard Cost): |
478,250 | |||||||||
Estimated Ancillary TI Project Total: |
5,260,750 | |||||||||
* | All Plant Construction Budget Estimates include permit fees & 10% contingency but dont included the costs of architectural and structural design special inspection & testing, or full smoke evacuation test. |
Exhibit C, Schedule 2
Ancillary TI Budget, Page 2 of 26
ESTIMATE #8 PRELIMINARY BUDGET ESTIMATE |
PLANT CONSTRUCTION COMPANY, L.P. 300 NEWHALL STREET SAN FRANCISCO, CA 94124-1426 TEL 415.285.0500 FAX 415.550.1357 LICENSE NUMBER 830764 www.plantconstructioncompany.com |
Date: | September 15, 2010 |
To: | TMG Partners |
100 Bush Street, 26th Floor
San Francisco, CA 94104
Attn: | Sean Donnelly |
Via: | E-mail and Mail |
Re: | Ancillary Tenant Improvements |
699 Eighth Street
San Francisco, California
PCC Project #2010060
SCOPE OF WORK
Estimates based on architectural drawings entitled 699 - 8th Street - Ancillary Tenant Improvements 20 sheets dated 9/15/10 as prepared by Studios Architecture, and structural drawings 14 sheets dated 9/15/10 as prepared by Tipping-Mar and Associates.
I. | Concourse Level - Soft Demolition |
Demolition and removal of existing concourse level Suites #120 and #140 corridor demising walls to create one large tenant suite. Estimate includes removal of existing corridor ceilings, and includes allowance for demo scar repairs. Excludes demolition and removal of interior tenant finishes or floor covering in corridor area.
ESTIMATED COST: $65,000
II. | Concourse Level - Exit Corridor |
Construct new exit corridor along column line H from existing common central corridor to existing north exit stair. Estimate assumes existing demising wall along column line H is fire rated, new full height fire rated wall to be constructed parallel and includes (2) new exit doors. Work includes fire taping new partition both sides, touch-up painting at main corridor walls and new door. Repairs to existing floor covering, fire sprinkler modifications including engineering fees, ventilation, lighting and life safety modifications and additions. Estimate assumes soft demolition work completed prior to new exit corridor construction.
ESTIMATED COST: $75,000
[ILLEGIBLE]
Exhibit C, Schedule 2
Ancillary TI Budget, Page 3 of 26
ESTIMATE #8 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Ancillary Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 2 | San Francisco, California |
III. | Concourse Level - Remove Escalators, Infill Opening and New Stair |
Demolition of existing step planter shelf structure, demolition and removal of existing concourse level escalators, infill floor opening to concourse level by approximately 420 square feet and install new folded steel plate stair to concourse level. Estimate includes infill of escalator pits, drywall enclosure with access doors under stair, new drywall fascia and ceiling infill, premium time allowance for noise producing operations, fire sprinkler and HVAC system modifications, electrical and life safety system modifications. Estimate excludes any work within existing toilet rooms below escalators on concourse level, new lighting, stair or stair opening rails, painting or floor finishes. Estimate also excludes temporary rails/walls shown for building permit purposes.
ESTIMATED COST: $320,000
IV. | Remove Escalators and Bridge to Atrium Level |
Demolition of existing escalators from street level to atrium level. Estimate includes infill of escalator pits both levels, allowance for new slab edge building standard glass railing, drywall fascia/ceiling repairs, premium time allowance for noise producing operations, fire sprinkler system modifications, lighting and life safety system modifications. Estimate excludes painting or floor finishes.
ESTIMATED COST: $155,000
V. | Street Level - Union Bank Modifications |
(Not required at this time)
VI. | Atrium Level - Demising Wall and Tenant Walls |
Construct new demising walls adjacent to elevators column line F on atrium level to provide west tenant privacy, new demising wall to include (2) pair and (2) single power operated doors on life safety system control to assist in atrium smoke evacuation. Estimate includes finishing of atrium side of new demising wall and doors, new tenant area glazed demising walls with (2) pair entrance doors, fire sprinkler modifications and additions, lighting and life safety system modifications. Estimate excludes painting or finishes within the tenant areas, film on new glazing.
ESTIMATED COST: $150,000
VII. | Level 3 - Demising Wall Bridge and Glass Rail |
Construct new demising wall adjacent to elevators level 3 to provide west tenant privacy, new demising wall to include (3) pair power operated doors on life safety system control to assist in atrium smoke evacuation. Estimate includes finishing of atrium side of new demising wall and doors, new building standard glass rail at perimeter of tenant (west) atrium, removal of east west balcony extensions, new bridge structure with building standard glass rails, steel plate guardrail, elevator entrances level 3 with elevator control modifications for all floors, reconstruction of balcony fascia, intumescent paint at bridge structure, premium time allowance
Exhibit C, Schedule 2
Ancillary TI Budget, Page 4 of 26
ESTIMATE #8 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Ancillary Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 3 | San Francisco, California |
for noise producing operations, fire sprinkler modifications and additions, lighting and life safety system modifications. Estimate excludes painting, finishes or new lighting within tenant area.
ESTIMATED COST: $1,100,000
VII.A1 | Remove Escalators |
Remove existing escalators between level 3 and level 6 including post-tensioned concrete balconies, rails, drywall enclosures, fire sprinklers and lighting. Estimate assumes installation of new rails all levels will proceed concurrently.
ESTIMATED COST: $600,000
VIII. | Level 4 - Perimeter Glazing |
Demolition and removal of existing atrium railing system and installation of new full height obscure glazing in clear finish anodized aluminum frames at level 4 west atrium. Estimate includes demolition and removal of existing non post-tensioned concrete balconies (2 locations), installation of unpainted steel plate guardrail (1 location), horizontal aluminum safety rail at interior of glazing, installation of new painted elevator doors and frames (2 each) with blank panel cover for future use. Estimate excludes new bridge on level 4.
ESTIMATED COST: $265,000
IX. | Level 5 - Demising Wall, Bridge, and Glass Rail |
Construct new demising wall adjacent to elevators level 5 to provide west tenant privacy, new demising wall to include (2) pair and (2) single power operated doors on life safety system control to assist in atrium smoke evacuation. Estimate includes finishing of atrium side of new demising wall and doors, new building standard glass rail at perimeter of tenant (west) atrium, removal of east/west balcony extensions, new bridge structure with building standard glass rails, steel plate guardrail, elevator entrances, reconstruction of balcony fascia, intumescent paint at bridge structure, premium time allowance for noise producing operations, fire sprinkler modifications and additions, lighting and life safety system modifications. Estimate excludes painting or finishes within tenant area.
ESTIMATED COST: $575,000
X. | Level 6 - Demising Wall, Bridge, and Glass Rail |
Construct new demising wall adjacent to elevators level 6 to provide west tenant privacy, new demising wall to include (2) pair and (2) single power operated doors on life safety system control to assist in atrium smoke evacuation. Estimate includes finishing of atrium side of new demising wall and doors, new building standard glass rail at perimeter of tenant (west) atrium, removal of east west balcony extensions, new bridge structure with building standard glass rails, steel plate guardrail, elevator entrances, reconstruction of balcony fascia, intumescent paint at bridge structure, premium time allowance for noise producing operations, fire sprinkler modifications and additions, lighting and life safety system modifications. Estimate excludes painting or finishes within tenant area.
ESTIMATED COST: $550,000
Exhibit C, Schedule 2
Ancillary TI Budget, Page 5 of 26
ESTIMATE #8 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Ancillary Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 4 | San Francisco, California |
XI. | New Skylight Level 6 |
Remove existing glass block paving at roof parking level and install new fully operable skylight in existing opening. Estimate includes bollards and perimeter safety railings at roof level, exterior painting, scaffolding for access, and electrical power and controls, estimate excludes relocation of existing parking attendant booth on roof level.
ESTIMATED COST: $220,000
XII. | Remove West Atrium Balcony |
(Included with applicable floor)
XIII. | Modify West Atrium Ceiling |
Demolition of existing ceiling area between balconies and construction of new sloped suspended drywall ceiling with cove and exposed concrete surface at perimeter of skylight. Estimate includes allowance for cleaning of exposed ceiling surface, new fire sprinklers, electrical safe-offs and modifications. Estimate excludes painting or new lighting (assumed included with tenant improvements).
ESTIMATED COST: $150,000
XIV. | New Interior Tenant Stair |
Construct new interior tenant communicating stair on east side of existing elevators from level 2 to level 6. Estimate includes allowance to reinforce 2nd floor structure to support new stair ($25,000) and (5) each steel columns for glazed wall ($75,000). Estimate excludes finish painting, temporary rails/walls shown for building department purposes, new rails or lighting.
ESTIMATED COST: $345,000
XV. | Upgrade Bridge Rails |
Upgrade bridge rails from building standard glass with stainless rail to steel tube and angle rails with glass infill panels on levels 3. 5 and 6. Estimate excludes finish painting.
ESTIMATED COST: $22,500
XVI. | Perforated Metal Atrium Rails - DELETED |
XVII. | Woven Fabric Atrium Rails - DELETED |
Exhibit C, Schedule 2
Ancillary TI Budget, Page 6 of 26
ESTIMATE #8 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Ancillary Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 5 | San Francisco, California |
XVIII. | Elevator Shaft Cladding |
Clad existing shuttle elevators with corrugated perforated metal panels full height on all exposed elevations. Estimate includes custom cut corner plates, and elevator door trims, custom cut elevator appliance trim boxes, relocation of existing elevator controls on 3 levels.
ESTIMATED COST: $190,000
XIX. | Kitchen Lift |
Insufficient information at this time.
ESTIMATED COST: To Be Determined
ESTIMATE INCLUDES
1. | Allowance for contractors general expenses, i.e. project management, jobsite supervision, layout of the work, field office, jobsite supplies, plans and printing costs, messenger services, estimating, purchasing, submittals, project administration, site security, traffic control, progressive clean up, debris boxes, tools and equipment, pick up and deliveries, parking fees, etc. |
2. | Allowance for temporary construction i.e. pedestrian protection, temporary barricades, safety rails, temporary power/water/lighting, dust control, finish protection, interior scaffolding, weather protection, etc. |
3. | Allowance for building permit fees. |
4. | Contractors fee at 3.75%. |
5. | Insurance at 1%. |
6. | Contractors contingency at 10%. |
ESTIMATE EXCLUDES
1. | Architectural, engineering or consultants fees other than design-build trades. |
2 | Cost of testing and inspections. |
3 | ADA upgrades to existing restrooms, path of travel, exitways, elevators, etc. |
4. | Modifications to existing fire sprinkler control zones |
5. | Modifications to existing smoke evacuation system other than adding power operated doors at new atrium privacy walls |
6 | Building smoke evacuation testing or certification costs |
Exhibit C, Schedule 2
Ancillary TI Budget, Page 7 of 26
ESTIMATE #8 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Ancillary Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 6 | San Francisco, California |
7. | Building envelope Title 24 calculations if required. |
8. | Tenant area improvements or finishes within new tenant areas at all levels. |
9. | Soft demolition and removal of existing tenant improvements on upper floor levels. |
10. | Relocation of existing fire control room at street level. |
11. | Upgrade of existing shuttle elevator interiors. |
12. | Sandblasting of existing painted concrete surfaces. |
13. | Roof deck of parking area enclosure. |
14. | Window coverings. |
15. | Upgrade of finishes in existing restrooms. |
16. | Cost of performance/completion or payment bonds on general contractor or subcontractors. |
This is a conceptual estimate made in advance of plans, specifications, subcontractors bids, or review by the various city agencies. It is based on work proceeding at this time and is intended for preliminary budgeting purposes only.
DD:mbm
Enclosures
cc: | Mark Howard, Plant Construction Co. |
Jeff Van DeWyngaerde, Plant Construction Co.
Plant Construction |
Company, L.P. |
|
Don Davella, As Agent |
Exhibit C, Schedule 2
Ancillary TI Budget, Page 8 of 26
PLANT CONSTRUCTION COMPANY | 7:03 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
CONCOURSE LEVEL LIMITED SOFT DEMOLITION |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||||
2. | 2100 | WALL DEMOLITION |
14,124 | SF | 1.50 | 21,186 | 21,186 | |||||||||||||||||||||||||
3. | 2100 | CEILING DEMOLITION - GYP. BD. |
1,510 | SF | 2.50 | 3,775 | 3,775 | |||||||||||||||||||||||||
4. | 2100 | CEILING DEMOLITION - ACT |
1,120 | SF | 1.00 | 1,120 | 1,120 | |||||||||||||||||||||||||
5. | 2100 | DEMO CABINETRY/SINK/ETC. |
40 | MH | 51.50 | 2,060 | 2,060 | |||||||||||||||||||||||||
6. | 2100 | DEBRIS BOXES |
12 | EA | 430.00 | 5,160 | 5,160 | |||||||||||||||||||||||||
7. | 2100 | DEMO SCAR / FLOOR REPAIRS |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||||
8. | 15400 | PLUMBING SAFE OFF/MODIFY/RELOCATE |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||||
9. | 15500 | FIRE SPRINKLER SAFE OFF/MODIFY/RELOC. |
1 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||||
10. | 15800 | HVAC DISCONNECT & DROP |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||||
11. | 15800 | DUCT WORK DISPOSAL |
24 | MH | 51.50 | 1,236 | 1,236 | |||||||||||||||||||||||||
12. | 16100 | ELECTRICAL & LIFE SAFETY SAFE OFF |
1 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||||
23. | NOTES: | |||||||||||||||||||||||||||||||
24. | 1. ASSUMES NORMAL WORKING HOURS |
| ||||||||||||||||||||||||||||||
25. | 2. ASSUMES THIS WORK TO PROCEED CONCURRRENTLY WITH MAIN PROJECT | |||||||||||||||||||||||||||||||
26. | 3. ASSUMES EXISTING FLOOR FINISH TO REMAIN | |||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||||
31. | ||||||||||||||||||||||||||||||||
SUBTOTAL | 43,877 | 5,160 | 49,037 | |||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | 6,130 | ||||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 43,877 | 5,160 | 55,167 | |||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 2,069 | |||||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 572 | |||||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 5,781 | |||||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 636 | |||||||||||||||||||||||||||
TOTAL AMOUNT | 64,224 | |||||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 9 of 26
PLANT CONSTRUCTION COMPANY | 7:04 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
CONCOURSE LEVEL NEW EXIT CORRIDOR |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 9250 | REPAIR EXISTING DRYWALL PARTITION | 2,520 | SF | 0.50 | 1,260 | 1,260 | |||||||||||||||||||||||
3. | 9250 | NEW WEST WALL CONSTRUCTION | 3,150 | SF | 10.00 | 31,500 | 31,500 | |||||||||||||||||||||||
4. | 9900 | TOUCH UP PAINT MAIN CORRIDOR ONLY | 550 | SF | 1.25 | 688 | 688 | |||||||||||||||||||||||
5. | 9680 | REPAIR EXTG. CARPET | 1 | ALW | 1,250.00 | 1,250 | 1,250 | |||||||||||||||||||||||
6. | 9680 | NEW BASE @ MAIN CORRIDOR ONLY | 50 | LF | 3.50 | 175 | 175 | |||||||||||||||||||||||
7. | 8010 | EXIT DOORS | 1 | EA | 1,250.00 | 1,250 | 1,250 | |||||||||||||||||||||||
8. | 8010 | EXIT DOORS | 1 | PR | 1,750.00 | 1,750 | 1,750 | |||||||||||||||||||||||
9. | 10370 | FIRE EXTINGUISHERS | 2 | EA | 350.00 | 700 | 700 | |||||||||||||||||||||||
10. | 10430 | EVACUATION SIGNAGE | 1 | ALW | 500.00 | 500 | 500 | |||||||||||||||||||||||
11. | 15500 | FIRE SPRINKLERS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
12. | 15800 | VENTILATION | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
13. | 16100 | LIGHTING - SURFACE MOUNTED STRIP LTS. | 7 | EA | 500.00 | 3,500 | 3,500 | |||||||||||||||||||||||
14. | 16100 | POWER OUTLETS | 2 | EA | 375.00 | 750 | 750 | |||||||||||||||||||||||
15. | 16100 | LIFE SAFETY | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | NOTES: | |||||||||||||||||||||||||||||
21. | 1. ASSUMES SOFT DEMOLITION COMPLETED | |||||||||||||||||||||||||||||
22. | 2. NEW VINYL BASE & PAINT AT NEW MAIN CORRIDOR WALLS ONLY | |||||||||||||||||||||||||||||
23. | 3. ASSUMES THIS WORK TO PROCEED CONCURRENTLY WITH MAIN PROJECT | |||||||||||||||||||||||||||||
24. | 4. ASSUMES NORMAL WORKING HOURS | |||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 55,823 | 55,823 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST |
12.50 | % | % | 6,976 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
55,823 | 62,800 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 2,355 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 652 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 6,581 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 724 | |||||||||||||||||||||||||
TOTAL AMOUNT | 73,111 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 10 of 26
PLANT CONSTRUCTION COMPANY | 7:06 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
CONCOURSE LEVEL - DEMO ESCALATORS TO CONCOURSE LEVEL, INFILL OPENING & NEW STAIR |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 2100 | DEMO STEP PLANTER SHELF STRUCTURE | 40 | MH | 51.50 | 2,060 | 2,060 | |||||||||||||||||||||||
3. | 2100 | DEMO OPENING FASCIA FOR ACCESS | 1,250 | SF | 2.50 | 3,125 | 3,125 | |||||||||||||||||||||||
4. | 2100 | DEMO EXTG. GLASS RAILS @ STREET LEVEL | 86 | LF | 20.00 | 1,720 | 1,720 | |||||||||||||||||||||||
5. | 2100 | DEMO ESCALATORS UP/DOWN | 1 | ALW | 45,000.00 | 45,000 | 45,000 | |||||||||||||||||||||||
6. | 2100 | STRUCTURE FLR INFILL (420SF) - METALSET | 1 | BUD | 23,000.00 | 23,000 | 23,000 | |||||||||||||||||||||||
7. | 3030 | CONCRETE DECK FILL | 420 | SF | 15.00 | 6,300 | 6,300 | |||||||||||||||||||||||
8. | 3030 | INFILL ESCALATOR PITS CONCOURSE LVL. | 150 | SF | 25.00 | 3,750 | 3,750 | |||||||||||||||||||||||
9. | 3030 | INFILL ESCALATOR PITS STREET LVL. | 80 | SF | 75.00 | 6,000 | 6,000 | |||||||||||||||||||||||
10. | 15500 | FIRE SPRINKLER SAFE OFF | 1 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||
11. | 16100 | ELECTRICAL SAFE OFF | 1 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||
12. | 3030 | CONCRETE PADS PER S DWGS | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
13. | 5100 | RAIL SUPPORT ANGLE - METALSET BUD. | 100 | LF | 125.00 | 12,500 | 12,500 | |||||||||||||||||||||||
14. | 5100 | NEW STAIR ST / C LVL - METALSET BUD. | 1 | BUD | 88,000.00 | 88,000 | 88,000 | |||||||||||||||||||||||
15. | 8010 | ACCESS DOORS UNDER STAIR | 3 | EA | 750.00 | 2,250 | 2,250 | |||||||||||||||||||||||
16. | 9250 | ENCLOSURE UNDER STAIR | 400 | SF | 10.00 | 4,000 | 4,000 | |||||||||||||||||||||||
17. | 9250 | NEW PERIMETER FASCIA | 240 | SF | 15.00 | 3,600 | 3,600 | |||||||||||||||||||||||
18. | 9250 | NEW CEILING AREA | 640 | SF | 15.00 | 9,600 | 9,600 | |||||||||||||||||||||||
19. | 13500 | PREMIUM TIME ALLOWANCE | 1 | ALW | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
20. | 15500 | FIRE SPRINKLER MODIFICATIONS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
21. | 15800 | HVAC RELOCATIONS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
22. | 16100 | ELECTRICAL, LIFE SAFETY & LIGHTING RELOC. | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | NOTES: | |||||||||||||||||||||||||||||
28. | 1. ASSUMES 8TH STREET ENTRANCE WILL BE CLOSED | |||||||||||||||||||||||||||||
29. | 2. ASSUMES PREMIUM TIME FOR EXCESSIVE NOISE PRODUCING OPERATIONS | |||||||||||||||||||||||||||||
30. | 3. ASSUMES FLOOR STRUCTURE NOT POST TENSIONED CONCRETE | |||||||||||||||||||||||||||||
SUBTOTAL | 242,905 | 242,905 | ||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | 30,363 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 242,905 | 273,268 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 10,248 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 2,835 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 28,635 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 3,150 | |||||||||||||||||||||||||
TOTAL AMOUNT | 318,136 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 11 of 26
PLANT CONSTRUCTION COMPANY | 7:07 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
STREET LEVEL - DEMO ESCALATORS TO ATRIUM LEVEL |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 2100 | DEMO EXTG GLASS RAILS | 40 | MH | 51.50 | 2,060 | 2,060 | |||||||||||||||||||||||
3. | 2100 | DEMO FASCIA FOR NEW RAILS | 460 | SF | 2.50 | 1,150 | 1,150 | |||||||||||||||||||||||
4. | 2100 | DEMO ESCALATORS UP/DOWN | 1 | ALW | 45,000.00 | 45,000 | 45,000 | |||||||||||||||||||||||
5. | 3030 | INFILL ESCALATOR PITS STREET LVL. | 80 | SF | 75.00 | 6,000 | 6,000 | |||||||||||||||||||||||
6. | 3030 | INFILL ESCALATOR PITS ATRIUM LVL. | 80 | SF | 75.00 | 6,000 | 6,000 | |||||||||||||||||||||||
7. | 5100 | RAIL SUPPORT ANGLE - METALSET BUD. | 60 | LF | 125.00 | 7,500 | 7,500 | |||||||||||||||||||||||
8. | 9250 | PERIMETER FASCIA REPAIRS | 240 | SF | 15.00 | 3,600 | 3,600 | |||||||||||||||||||||||
9. | 9250 | CEILING REPAIRS | 150 | SF | 15.00 | 2,250 | 2,250 | |||||||||||||||||||||||
10. | 13500 | NEW STAINLESS STEEL & GLASS RAIL | 60 | LF | 525.00 | 31,500 | 31,500 | |||||||||||||||||||||||
11. | 13500 | PREMIUM TIME ALLOWANCE | 1 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||
12. | 15500 | FIRE SPRINKLER SAFE OFF/DISCONNECTS | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
13. | 16100 | ELECTRICAL SAFE OFF | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
14. | 2,500 | 2,500 | ||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | NOTES. | |||||||||||||||||||||||||||||
23. | 1. ASSUMES 8TH STREET ENTRANCE WILL BE CLOSED | |||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 116,060 | 116,060 | ||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | 14,508 | |||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | |||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 116,060 | 130,568 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 4,896 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 1,355 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 13,682 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 1,505 | |||||||||||||||||||||||||
TOTAL AMOUNT | 152,005 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 12 of 26
PLANT CONSTRUCTION COMPANY | 7:07 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 2 (ATRIUM) - DEMISING WALL |
PHASE |
QUANTITY/UNIT | MATERIAL |
SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 2100 | DEMO EXISTING DEMISING WALLS | 1,500 | SF | 2.50 | 3,750 | 3,750 | |||||||||||||||||||||||
3. | 2100 | DEMO CEILING/CARPET | 225 | SF | 5.00 | 1,125 | 1,125 | |||||||||||||||||||||||
4. | 15500 | FIRE SPRINKLER SAFE OFF | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
5. | 16100 | POWER/LIGHTING SAFE OFF & REMOVE | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
6. | 8010 | NEW TENANT AREA DOORS | 2 | PR | 1,750.00 | 3,500 | 3,500 | |||||||||||||||||||||||
7. | 8010 | POWER OPERATED DOORS | |
6 |
|
EA | 5,000.00 | 30,000 | 30,000 | |||||||||||||||||||||
8. | 8800 | GLAZED TENANT PARTITION | 840 | SF | 45.00 | 37,800 | 37,800 | |||||||||||||||||||||||
9. | 8800 | FILM AT GLAZED PARTITION - DELETED | 450 | SF | 10.00 | 4,500 | 4,500 | |||||||||||||||||||||||
10. | 9250 | NEW TENANT DRYWALL DEMISING WALL | ||||||||||||||||||||||||||||
11. | 9250 | DRYWALL DEMISING WALL AT ATRIUM | 320 | SF | 10.00 | 3,200 | 3,200 | |||||||||||||||||||||||
12. | 9680 | VINYL BASE ATRIUM SIDE | 50 | LF | 3.50 | 175 | 175 | |||||||||||||||||||||||
13. | 9900 | PAINT ATRIUM SIDE ONLY | 500 | SF | 1.25 | 625 | 625 | |||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||
15. | 15500 | FIRE SPRINKLER MODIFICATIONS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
16. | 16100 | MODIFY EXTG LT FIXTURES @ NEW WALL | 2 | ALW | 2,500.00 | 5,000 | 5,000 | |||||||||||||||||||||||
17. | 16100 | LIGHTING RELOC. & LIFE SAFETY | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
18. | 16100 | LIFE SAFETY DOOR OPERATION | 1 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | NOTE: | 1. ASSUMES CARD READER ACCESS UNDER TENANT IMPROVEMENTS | ||||||||||||||||||||||||||||
26. | 2. EXCLUDES SMOKE EVACUATION TESTING OR REPORT | |||||||||||||||||||||||||||||
27. | 3. ASSUMES NORMAL WORKING HOURS | |||||||||||||||||||||||||||||
28. | 4. ASSUMES THIS WORK TO PROCEED CONCURRENTLY WITH MAIN PROJECT | |||||||||||||||||||||||||||||
29. | 5. EXCLUDES FILM ON NEW GLAZING |
|||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 33,500 | 114,675 | ||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
|
12.50 |
% |
% | 14,334 | |||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 33,500 | 129,009 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 4,838 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 1,338 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 13,519 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 1,487 | |||||||||||||||||||||||||
TOTAL AMOUNT | 150,191 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 13 of 26
PLANT CONSTRUCTION COMPANY | 7:09 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 3 MODIFICATIONS |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST |
LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
1860 | SCAFFOLD TO 3RD FLOOR |
3,600,00 | SF | 3.50 | 12,600 | 12,600 | |||||||||||||||||||||||
3. |
2100 | DEMO FASCIA FOR NEW RAILS |
1,200.00 | SF | 2.50 | 3,000 | 3,000 | |||||||||||||||||||||||
4. |
2100 | DEMO EXISTING ATRIUM RAILS |
320.00 | LF | 25.00 | 8,000 | 8,000 | |||||||||||||||||||||||
5. |
2100 | DEMO & REFRAME FOR ELEVATOR OPNGS. |
2.00 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
6. |
2100 | DEMO SOFFIT & CARPET AT BALCONIES |
150.00 | SF | 5.00 | 750 | 750 | |||||||||||||||||||||||
7. |
2100 | ELECTRICAL / LS SAFE OFF |
1.00 | ALW | 3,500.00 | 3,500 | 3,500 | |||||||||||||||||||||||
8. |
2300 | SAWCUT AT BALCONY EXTENSION |
24.00 | LF | 15.00 | 360 | 360 | |||||||||||||||||||||||
9. |
2300 | DEMO NON-POST TENSION BALCONIES |
150.00 | SF | 50.00 | 7,500 | 7,500 | |||||||||||||||||||||||
10. |
3030 | CONCRETE AT BRIDGE DECK |
260.00 | SF | 15.00 | 3,900 | 3,900 | |||||||||||||||||||||||
11. |
5100 | BRIDGE STRUCTURE - METALSET BUD. |
1.00 | BUD | 50,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
12. |
5100 | PLATE GUARDRAIL - METALSET BUD. |
1.00 | EA | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
13. |
5100 | RAIL SUPPORT ANGLE - METALSET BUD. |
255.00 | LF | 125.00 | 31,875 | 31,875 | |||||||||||||||||||||||
14. |
8010 | POWER OPERATED DOORS |
6.00 | EA | 5,000.00 | 30,000 | 30,000 | |||||||||||||||||||||||
15. |
8800 | BLDG STD. GLASS RAIL |
255.00 | LF | 525.00 | 133,875 | 133,875 | |||||||||||||||||||||||
16. |
8800 | ADD FOR (3) CURVED CORNERS |
30.00 | LF | 350.00 | 10,500 | 10,500 | |||||||||||||||||||||||
17. |
9250 | ATRIUM DEMISING WALL |
450.00 | SF | 10.00 | 4,500 | 4,500 | |||||||||||||||||||||||
18. |
9250 | REFRAME & DRYWALL AT FASCIA |
1,200.00 | SF | 15.00 | 18,000 | 18,000 | |||||||||||||||||||||||
19. |
9250 | DRYWALL REPAIRS AT ELEV. OPNGS. |
2.00 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
20. |
9680 | VINYL BASE ATRIUM SIDE |
40.00 | LF | 3.50 | 140 | 140 | |||||||||||||||||||||||
21. |
9900 | PAINT ATRIUM SIDE DEMISE (NOT FASCIA) |
450.00 | SF | 1.25 | 563 | 563 | |||||||||||||||||||||||
22 |
9900 | INTUMESCENT PAINT AT BRIDGE |
1.00 | ALW | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
23. |
13500 | PREMIUM TIME ALLOWANCE |
1.00 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
24. |
14200 | NEW ELEVATOR CONTROLS - GVK BUDGET |
2.00 | ALW | 210,000.00 | 420,000 | 420,000 | |||||||||||||||||||||||
25. |
14200 | NEW ELEVATOR ENTRANCES - GVK BUDGET |
2.00 | ALW | 25,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
26. |
15500 | FIRE SPKLER MODS AT BRIDGE & DEMISE |
1.00 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
27. |
16100 | LTG MODS / LS AT BRIDGE & DEMISE |
1.00 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
28. |
16100 | LIFE SAFETY DOOR OPERATION |
1.00 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
746,953 | 839,063 | ||||||||||||||||||||||||||||
SALES TAX |
9.50 | % | % | |||||||||||||||||||||||||||
20250 | GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 104,883 | |||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
746,953 | 943,945 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 35,398 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 9,793 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 98,914 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 10,881 | |||||||||||||||||||||||||
TOTAL AMOUNT | 1,098,931 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 14 of 26
PLANT CONSTRUCTION COMPANY | 7:09 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 3 - DEMO ESCALATORS LEVEL 3 TO LEVEL 6 |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST |
LABOR | OTHER | ||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||
2. |
1860 | MODIFY SCAFFOLD LVLS. 2 THRU 6TH FLRS |
8 | ALW | 3,500.00 | 28,000 | 28,000 | |||||||||||||||||||||
3. |
2100 | DEMO EXISTING DRYWALL ENCLOSURES |
360 | MH | 75.00 | 27,000 | 27,000 | |||||||||||||||||||||
4. |
2300 | DEMO ESCALATORS |
6 | ALW | 25,000.00 | 150,000 | 150,000 | |||||||||||||||||||||
5. |
2300 | POST TENSION CABLE MODIFICATIONS |
6 | ALW | 25,000.00 | 150,000 | 150,000 | |||||||||||||||||||||
6. |
2300 | DEMO CONCRETE EXTENSIONS & RAILS |
720 | SF | 50.00 | 36,000 | 36,000 | |||||||||||||||||||||
7. |
3030 | RECAST EDGE FOR CABLES |
12 | LOC | 1,500.00 | 18,000 | 18,000 | |||||||||||||||||||||
8. |
13500 | PREMIUM TIME ALLOWANCE |
1 | ALW | 15,000.00 | 15,000 | 15,000 | |||||||||||||||||||||
9. |
15500 | FIRE SPRINKLER MODIFICATIONS |
3 | ALW | 5,000.00 | 15,000 | 15,000 | |||||||||||||||||||||
10. |
16100 | ELECTRICAL SAFE OFF & DEMO |
3 | ALW | 3,500.00 | 10,500 | 10,500 | |||||||||||||||||||||
11. |
||||||||||||||||||||||||||||
12. |
||||||||||||||||||||||||||||
13. |
||||||||||||||||||||||||||||
14. |
||||||||||||||||||||||||||||
15. |
||||||||||||||||||||||||||||
16. |
||||||||||||||||||||||||||||
17. |
||||||||||||||||||||||||||||
18. |
||||||||||||||||||||||||||||
19. |
||||||||||||||||||||||||||||
20. |
||||||||||||||||||||||||||||
21. |
||||||||||||||||||||||||||||
22. |
||||||||||||||||||||||||||||
23. |
||||||||||||||||||||||||||||
24. |
||||||||||||||||||||||||||||
25. |
||||||||||||||||||||||||||||
26. |
||||||||||||||||||||||||||||
27. |
||||||||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||
31. |
||||||||||||||||||||||||||||
SUBTOTAL |
394,500 | 449,500 | ||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 56,188 | ||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
394,500 | 505,688 | ||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 18,963 | |||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 5,247 | |||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 52,990 | |||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 5,829 | |||||||||||||||||||||||
TOTAL AMOUNT | 588,716 | |||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 15 of 26
PLANT CONSTRUCTION COMPANY | 7:15 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 4 - NEW PERIMETER GLAZING |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 8800 | BALCONY GLAZING | 2,080 | SF | 50.00 | 104,000 | 104,000 | |||||||||||||||||||||||
3. | 8800 | NO FILM AT GLASS - ASSUMED OBSCURE GLASS | ||||||||||||||||||||||||||||
4. | 9900 | PAINT REPAIR ALLOWANCE (TENANT SIDE) | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
5. | 9680 | CUT / REPAIR CARPET AT GLAZING | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
6. | ||||||||||||||||||||||||||||||
7. | ||||||||||||||||||||||||||||||
8. | ||||||||||||||||||||||||||||||
9. | ||||||||||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||
11 | ||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||
16. | NOTE. | 1. ASSUMES LEAVE EXISTING RAIL IN PLACE AND INSTALL GLASS BEHIND | ||||||||||||||||||||||||||||
17. | 2. ASSUMES NORMAL BUSINESS HOURS | |||||||||||||||||||||||||||||
18. | 3. ASSUMES NO ADDITIONAL SUPPORT FOR GLAZING NEEDED AT CEILING LINE | |||||||||||||||||||||||||||||
19. | 4. EXCLUDES SMOKE EVACUATION THIS LEVEL? | |||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 5,000 | 114,000 | ||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | 14,250 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 5,000 | 128,250 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 4,809 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 1,331 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 13,439 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 1,478 | |||||||||||||||||||||||||
TOTAL AMOUNT | 149,307 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 16 of 26
PLANT CONSTRUCTION COMPANY | 7:11 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 4 - REMOVE EXISTING RAILING AT NEW PERIMETER GLAZING |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||||||
2. | 2100 | REMOVE EXISTING METAL ATRIUM RAILING |
275 | LF | 20.00 | 5,500 |
|
450 |
|
5,950 | ||||||||||||||||||||||||
3. | 8800 | ADD INTERIOR RAIL TO GLAZING SYSTEM |
275 | LF | 15.00 | 4,125 | 4,125 | |||||||||||||||||||||||||||
4. | ||||||||||||||||||||||||||||||||||
5. | ||||||||||||||||||||||||||||||||||
6. | ||||||||||||||||||||||||||||||||||
7. | ||||||||||||||||||||||||||||||||||
8. | ||||||||||||||||||||||||||||||||||
9. | ||||||||||||||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||||||
19. | NOTES: |
|||||||||||||||||||||||||||||||||
20. | 1. CUT VERTICALS AT FLOOR LINE ONLY, NO FASCIA REMOVAL FOR ACCESS. |
|
||||||||||||||||||||||||||||||||
21. | 2. EXCLUDES CARPET PATCH. |
|
||||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||||||
SUBTOTAL |
10,075 | |||||||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 1,259 | ||||||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
11,334 | |||||||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 425 | |||||||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 118 | |||||||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 1,188 | |||||||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 131 | |||||||||||||||||||||||||||||
|
TOTAL AMOUNT |
|
13,195 | |||||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 17 of 26
PLANT CONSTRUCTION COMPANY | 7:17 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 4 - INSTALL ELEVATOR DOORS |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
2100 | DEMO & REFRAME FOR ELEV. OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
3. |
9250 | DRYWALL REPAIRS AT ELEV. OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
4. |
9250 | TEMP. MDF DOOR COVER PANELS |
2 | ALW | 750.00 | 1,500 | 1,500 | |||||||||||||||||||||||
5. |
14200 | NEW ELEVATOR ENTRANCES - GVK BUDGET |
2 | ALW | 25,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
6. |
||||||||||||||||||||||||||||||
7. |
||||||||||||||||||||||||||||||
8. |
||||||||||||||||||||||||||||||
9. |
||||||||||||||||||||||||||||||
10. |
||||||||||||||||||||||||||||||
11. |
||||||||||||||||||||||||||||||
12. |
||||||||||||||||||||||||||||||
13. |
||||||||||||||||||||||||||||||
14. |
||||||||||||||||||||||||||||||
15. |
||||||||||||||||||||||||||||||
16. |
||||||||||||||||||||||||||||||
17. |
||||||||||||||||||||||||||||||
18. |
||||||||||||||||||||||||||||||
19. |
||||||||||||||||||||||||||||||
20. |
||||||||||||||||||||||||||||||
21. |
NOTES |
|||||||||||||||||||||||||||||
22. |
||||||||||||||||||||||||||||||
23. |
||||||||||||||||||||||||||||||
24. |
||||||||||||||||||||||||||||||
25. |
||||||||||||||||||||||||||||||
26. |
||||||||||||||||||||||||||||||
27. |
||||||||||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
51,500 | 56,500 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 7,063 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
51,500 | 63,563 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 2,384 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 659 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 6,661 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 733 | |||||||||||||||||||||||||
|
TOTAL AMOUNT |
|
73,999 | |||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 18 of 26
PLANT CONSTRUCTION COMPANY | 7:25 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 4 - REMOVE NON-POST TENSIONED BALCONIES(2) & INSTALL PLATE GUARD RAIL(1) |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
2300 | DEMO SOFFIT & CARPET AT BALCONIES |
150 | SF | 5.00 | 750 | 750 | |||||||||||||||||||||||
3. |
2300 | SAWCUT AT BALCONY EXTENSIONS |
24 | LF | 15.00 | 360 | 360 | |||||||||||||||||||||||
4. |
2300 | DEMO NON POST TENSION BALCONIES |
150 | SF | 50.00 | 7,500 | 7,500 | |||||||||||||||||||||||
5. |
5100 | PLATE GUARDRAIL - METALSET BUDGET |
1 | BUD | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
6. |
9250 | REPAIR DRYWALL AT GUARDRAIL & TAPE |
1 | ALW | 1,500.00 | 1,500 | 1,500 | |||||||||||||||||||||||
7. |
13500 | PREMIUM TIME ALLOWANCE |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
8. |
16100 | ELEC/LS SAFE OFF AT BALCONY EXT. |
1 | ALW | 1,500.00 | 1,500 | 1,500 | |||||||||||||||||||||||
9. |
||||||||||||||||||||||||||||||
10. |
||||||||||||||||||||||||||||||
11. |
||||||||||||||||||||||||||||||
12. |
||||||||||||||||||||||||||||||
13. |
||||||||||||||||||||||||||||||
14. |
||||||||||||||||||||||||||||||
15. |
||||||||||||||||||||||||||||||
16. |
||||||||||||||||||||||||||||||
17. |
||||||||||||||||||||||||||||||
18. |
||||||||||||||||||||||||||||||
19. |
||||||||||||||||||||||||||||||
20. |
||||||||||||||||||||||||||||||
21. |
||||||||||||||||||||||||||||||
22. |
||||||||||||||||||||||||||||||
23. |
||||||||||||||||||||||||||||||
24. |
||||||||||||||||||||||||||||||
25. |
||||||||||||||||||||||||||||||
26. |
||||||||||||||||||||||||||||||
27. |
||||||||||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
20,500 | 21,610 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 2,701 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
20,500 | 24,311 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 912 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 252 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 2,548 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 280 | |||||||||||||||||||||||||
|
TOTAL AMOUNT |
28,303 | ||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 19 of 26
PLANT CONSTRUCTION COMPANY | 7:29 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 5 MODIFICATIONS |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
1860 | SCAFFOLD TO 3RD TO 5TH FLOOR |
7,200 | SF | 3.50 | 25,200 | 25,200 | |||||||||||||||||||||||
3. |
2100 | DEMO FASCIA FOR NEW RAILS |
1,200 | SF | 2.50 | 3,000 | 3,000 | |||||||||||||||||||||||
4. |
2100 | DEMO EXISTING ATRIUM RAILS |
320 | LF | 25.00 | 8,000 | 8,000 | |||||||||||||||||||||||
5. |
2100 | DEMO & REFRAME FOR ELEVATOR OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
6. |
2100 | DEMO SOFFIT & CARPET AT BALCONIES |
150 | SF | 5.00 | 750 | 750 | |||||||||||||||||||||||
7. |
16100 | ELECTRICALS SAFE OFF |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
8. |
2300 | SAWCUT AT BALCONY EXTENSION |
24 | LF | 15.00 | 360 | 360 | |||||||||||||||||||||||
9. |
2300 | DEMO NON-POST TENSION BALCONIES |
150 | SF | 50.00 | 7,500 | 7,500 | |||||||||||||||||||||||
10. |
3030 | CONCRETE AT BRIDGE DECK |
260 | SF | 15.00 | 3,900 | 3,900 | |||||||||||||||||||||||
11. |
5100 | BRIDGE STRUCTURE - METALSET BUD. |
1 | BUD | 50,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
12. |
5100 | PLATE GUARDRAIL - METALSET BUD. |
1 | EA | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
13. |
5100 | RAIL SUPPORT ANGLE - METALSET BUD. |
255 | LF | 125.00 | 31,875 | 31,875 | |||||||||||||||||||||||
14. |
8010 | POWER OPERATED DOORS |
6 | EA | 5,000.00 | 30,000 | 30,000 | |||||||||||||||||||||||
15. |
8800 | BLDG STD. GLASS RAIL |
255 | LF | 525.00 | 133,875 | 133,875 | |||||||||||||||||||||||
16. |
8800 | ADD FOR (4) CURVED CORNERS |
40 | LF | 350.00 | 14,000 | 14,000 | |||||||||||||||||||||||
17. |
9250 | ATRIUM DEMISING WALL |
350 | SF | 10.00 | 3,500 | 3,500 | |||||||||||||||||||||||
18. |
9250 | REFRAME & DRYWALL AT FASCIA |
1,200 | SF | 15.00 | 18,000 | 18,000 | |||||||||||||||||||||||
19. |
9250 | DRYWALL REPAIRS AT ELEV. OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
20. |
9680 | VINYL BASE ATRIUM SIDE |
50 | LF | 3.50 | 175 | 175 | |||||||||||||||||||||||
21. |
9900 | PAINT ATRIUM SIDE DEMISE (NOT FASCIA) |
500 | SF | 1.25 | 625 | 625 | |||||||||||||||||||||||
22. |
9900 | INTUMESCENT PAINT AT BRIDGE |
1 | ALW | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
23. |
13500 | PREMIUM TIME ALLOWANCE |
1 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
24. |
14200 | NEW ELEVATOR ENTRANCES - GVK BUDGET |
2 | ALW | 25,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
25. |
15500 | FIRE SPKLER MODS AT BRIDGE & DEMISE |
1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
26. |
16100 | LTG MODS/LS AT BRIDGE & DEMISE |
1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
27. |
16100 | LIFE SAFETY DOOR OPERATION |
1 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
329,550 | 433,260 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 54,158 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
329,550 | 487,418 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 18,278 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 5,057 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 51,075 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 5,618 | |||||||||||||||||||||||||
|
TOTAL AMOUNT |
567,446 | ||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 20 of 26
PLANT CONSTRUCTION COMPANY | 7:30 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 6 MODIFICATIONS |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
1860 | SCAFFOLD TO 5TH TO 6TH FLOOR |
3,600 | SF | 3.50 | 12,600 | 12,600 | |||||||||||||||||||||||
3. |
2100 | DEMO FASCIA FOR NEW RAILS |
1,200 | SF | 2.50 | 3,000 | 3,000 | |||||||||||||||||||||||
4. |
2100 | DEMO EXISTING ATRIUM RAILS |
320 | LF | 25.00 | 8,000 | 8,000 | |||||||||||||||||||||||
5. |
2100 | DEMO & REFRAME FOR ELEVATOR OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
6. |
2100 | DEMO SOFFIT & CARPET AT BALCONIES |
150 | SF | 5.00 | 750 | 750 | |||||||||||||||||||||||
7. |
16100 | ELECTRIC/LIFE SAFETY SAFE OFF |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
8. |
2300 | SAWCUT AT BALCONY EXTENSION |
24 | LF | 15.00 | 360 | 360 | |||||||||||||||||||||||
9. |
2300 | DEMO NON-POST TENSION BALCONIES |
150 | SF | 50.00 | 7,500 | 7,500 | |||||||||||||||||||||||
10. |
3030 | CONCRETE AT BRIDGE DECK |
260 | SF | 15.00 | 3,900 | 3,900 | |||||||||||||||||||||||
11. |
5100 | BRIDGE STRUCTURE - METALSET BUD. |
1 | BUD | 50,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
12. |
5100 | PLATE GUARDRAIL - METALSET BUD. |
1 | EA | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
13. |
5100 | RAIL SUPPORT ANGLE - METALSET BUD. |
255 | LF | 75.00 | 19,125 | 19,125 | |||||||||||||||||||||||
14. |
8010 | POWER OPERATED DOORS |
6 | EA | 5,000.00 | 30,000 | 30,000 | |||||||||||||||||||||||
15. |
8800 | BLDG STD. GLASS RAIL |
255 | LF | 575.00 | 146,625 | 146,625 | |||||||||||||||||||||||
16. |
8800 | ADD FOR (4) CURVED CORNERS |
40 | LF | 350.00 | 14,000 | 14,000 | |||||||||||||||||||||||
17. |
9250 | ATRIUM DEMISING WALL |
350 | SF | 10.00 | 3,500 | 3,500 | |||||||||||||||||||||||
18. |
9250 | REFRAME & DRYWALL AT FASCIA |
1,200 | SF | 15.00 | 18,000 | 18,000 | |||||||||||||||||||||||
19. |
9250 | DRYWALL REPAIRS AT ELEV. OPNGS. |
2 | LOC | 1,250.00 | 2,500 | 2,500 | |||||||||||||||||||||||
20. |
9680 | VINYL BASE ATRIUM SIDE |
50 | LF | 3.50 | 175 | 175 | |||||||||||||||||||||||
21. |
9900 | PAINT ATRIUM SIDE DEMISE (NOT FASCIA) |
500 | SF | 1.25 | 625 | 625 | |||||||||||||||||||||||
22. |
9900 | INTUMESCENT PAINT AT BRIDGE |
1 | ALW | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
23. |
13500 | PREMIUM TIME ALLOWANCE |
1 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
24. |
14200 | NEW ELEVATOR ENTRANCES - GVK BUDGET |
2 | ALW | 25,000.00 | 50,000 | 50,000 | |||||||||||||||||||||||
25. |
15500 | FIRE SPKLER MODS AT BRIDGE & DEMISE |
1 | ALW |
5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
26. |
16100 | LTG MODS / LS AT BRIDGE & DEMISE |
1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
27. |
16100 | LIFE SAFETY DOOR OPERATION |
1 | ALW | 10,000.00 | 10,000 | 10,000 | |||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
329,550 | 420,660 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 52,583 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
329,550 | 473,243 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 17,747 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 4,910 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 49,590 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % |
5,455 | |||||||||||||||||||||||||
|
TOTAL AMOUNT |
550,944 | ||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 21 of 26
PLANT CONSTRUCTION COMPANY | 7:31 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 6 - NEW SKYLIGHT |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
1860 | SCAFFOLD TO ROOF AT SKYLIGHT |
1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
3. |
2100 | DEMO DRYWALL AT CEILING |
40 | MH | 51.50 | 2,060 | 2,060 | |||||||||||||||||||||||
4. |
2300 | DEMO GLASS BLOCK & CONCRETE INSERT |
300 | SF | 15.00 | 4,500 | 4,500 | |||||||||||||||||||||||
5. |
3030 | NEW CONCRETE RAISED CURB |
75 | LF | 75.00 | 5,625 | 5,625 | |||||||||||||||||||||||
6. |
3030 | CLEAN/REPAIR EXPOSED CONCRETE EDGE |
225 | SF | 5.00 | 1,125 | 1,125 | |||||||||||||||||||||||
7. |
7500 | WATERPROOFING AT SLAB |
1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
8. |
7800 | NEW SKYLIGHT |
286 | SF | 175.00 | 50,050 | 50,050 | |||||||||||||||||||||||
9. |
9900 | EXTERIOR PAINTING |
1 | ALW | 1,500.00 | 1,500 | 1,500 | |||||||||||||||||||||||
10 |
5500 | STEEL BOLLARDS AT PERIMETER |
20 | EA | 500.00 | 10,000 | 10,000 | |||||||||||||||||||||||
11. |
9250 | REPAIR INTERIOR DRYWALL |
250 | SF | 15.00 | 3,750 | 3,750 | |||||||||||||||||||||||
12. |
13500 | PREMIUM TIME ALLOWANCE |
1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
13. |
||||||||||||||||||||||||||||||
14. |
||||||||||||||||||||||||||||||
15. |
||||||||||||||||||||||||||||||
16. |
||||||||||||||||||||||||||||||
17. |
||||||||||||||||||||||||||||||
18. |
||||||||||||||||||||||||||||||
19. |
||||||||||||||||||||||||||||||
20. |
||||||||||||||||||||||||||||||
21. |
||||||||||||||||||||||||||||||
22. |
||||||||||||||||||||||||||||||
23. |
||||||||||||||||||||||||||||||
24. |
||||||||||||||||||||||||||||||
25. |
||||||||||||||||||||||||||||||
26. |
||||||||||||||||||||||||||||||
27. |
||||||||||||||||||||||||||||||
28. |
||||||||||||||||||||||||||||||
29. |
||||||||||||||||||||||||||||||
30. |
||||||||||||||||||||||||||||||
SUBTOTAL |
84.050 | 91,110 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST |
12.50 | % | % | 11,389 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
84.050 | 102,499 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 3,844 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 1,063 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 10,741 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 1,181 | |||||||||||||||||||||||||
TOTAL AMOUNT | 119,328 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 22 of 26
PLANT CONSTRUCTION COMPANY | 7:31 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVEL 6 - ADDITIONAL COST FOR OPERABLE SKYLIGHT IN LIEU OF FIXED |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 7800 | DELETE FIXED SKYLIGHT | -286 | SF | 175.00 | |||||||||||||||||||||||||
3. | 7800 | OPERABLE SKYLIGHT - ROLLAMATIC ROOFS | 1 | BUD | 78,000.00 | 78,000 | 78,000 | |||||||||||||||||||||||
4. | 3030 | EXTEND CONCRETE CURB FOR RAILS | 50 | LF | 75.00 | 3,750 | 3,750 | |||||||||||||||||||||||
5. | 5500 | PERIMETER SAFETY RAILING | 110 | LF | 350.00 | 38,500 | 38,500 | |||||||||||||||||||||||
6. | 9900 | PAINT NEW RAILS | 1 | ALW | 800.00 | 800 | 800 | |||||||||||||||||||||||
7. | 16100 | ELECTRIC POWER & CONTROLS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
8. | ||||||||||||||||||||||||||||||
9. | ||||||||||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 76,000 | |||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | 9,500 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 85,500 | |||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 3,206 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 887 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 8,959 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 986 | |||||||||||||||||||||||||
TOTAL AMOUNT | 99,538 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 23 of 26
PLANT CONSTRUCTION COMPANY | 7:36 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
LEVELS 6 - RAISE ATRIUM CEILING IN SKYLIGHT AREA - CENTER ONLY |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. |
||||||||||||||||||||||||||||||
2. |
1850 | EXTEND SCAFFOLD TO ATRIUM CLG | 1 | ALW | 7,500.00 | 7,500 | 7,500 | |||||||||||||||||||||||
3. | 2100 | CUT & REMOVE EXISTING CEILING | 4,500 | SF | 5.00 | 22,500 | 22,500 | |||||||||||||||||||||||
4. | 2100 | CLEAN EXPOSED CONCRETE AREA | 2,580 | SF | 1.00 | 2,580 | 2,580 | |||||||||||||||||||||||
5. | 9250 | NEW SUSPENDED DRYWALL CEILING | 2,480 | SF | 20.00 | 49,600 | 49,600 | |||||||||||||||||||||||
6. | 15500 | FIRE SPRINKLER MODIFICATIONS | 5,500 | SF | 3.25 | 17,875 | 17,875 | |||||||||||||||||||||||
7. | 16100 | ELECTRICAL SAFE OFF / MODIFICATIONS | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
8. | 16100 | LIFE SAFETY MODIFICATIONS | 1 | ALW | 2,500.00 | 2,500 | 2,500 | |||||||||||||||||||||||
9. | 16100 | LIFE SAFETY ALLOWANCE | 1 | ALW | 5,000.00 | 5,000 | 5,000 | |||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL | 112,555 | |||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. | 12.50 | % | % | 14,069 | ||||||||||||||||||||||||||
TOTAL CONSTRACTORS COST | 126,624 | |||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 4,748 | |||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 1,314 | |||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 13,269 | |||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 1,460 | |||||||||||||||||||||||||
|
TOTAL AMOUNT |
147,415 | ||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 24 of 26
PLANT CONSTRUCTION COMPANY | 7:48 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
NEW TENANT STAIR LEVELS 2 THROUGH 6 |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 2100 | CEILING DEMO/REFRM FOR COL. ATTACH | 8 | LOC | 750.00 | 6,000 | 6,000 | |||||||||||||||||||||||
3. | 5100 | STRUCT. SUPPORT FOR NEW STAIR | 1 | ALW | 25,000.00 | 25,000 | 25,000 | |||||||||||||||||||||||
4. | 5510 | NEW STAIR EXCL. RAILS - METALSET BUD. | 1 | BUD | 60,000.00 | 60,000 | 60,000 | |||||||||||||||||||||||
5. | 3030 | PRECAST TREADS/RISERS - METALSET | 80 | EA | 500.00 | 40,000 | 40,000 | |||||||||||||||||||||||
6. | 3030 | PRECAST LANDINGS - METALSET | 900 | SF | 50.00 | 45,000 | 45,000 | |||||||||||||||||||||||
7. | 9250 | REPAIR CEILING | 8 | LOC | 750.00 | 6,000 | 6,000 | |||||||||||||||||||||||
8. | 15500 | FIRE SPRINKLERS UNDER STAIR | 8 | LOC | 750.00 | 6,000 | 6,000 | |||||||||||||||||||||||
9. | ||||||||||||||||||||||||||||||
10. | 5100 | COLUMNS FOR FUTURE GLAZING WALL | 15,000 | LBS | 5.00 | 75,000 | 75,000 | |||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||
14. | NOTES: |
|||||||||||||||||||||||||||||
15. | 1. INCLUDES VERTICAL STEEL COLUMNS FOR GLAZING WALL (5 EACH) |
| ||||||||||||||||||||||||||||
16. | 2. EXCLUDES TEMPORARY WALLS & RAILS FOR PERMIT APPROVAL |
| ||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL |
75,000 | 263,000 | ||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 32,875 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
75,000 | 295,875 | ||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 11,095 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 3,070 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 31,004 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 3,410 | |||||||||||||||||||||||||
TOTAL AMOUNT | 344,454 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 25 of 26
PLANT CONSTRUCTION COMPANY | 7:52 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
UPGRADE BRIDGE RAILS FROM BLDG. STD. GLASS LEVELS 3, 5 & 6 |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||
2. | 8800 | DELETE BLDG. STD. GLASS RAIL |
-132 | LF | 525.00 | -69,300 | ||||||||||||||||||||||||
3. | 5100 | METAL X RAILS - METALSET BUDGET |
132 | LF | 450.00 | 59,400 | 59,400 | |||||||||||||||||||||||
4. | 8800 | GLASS INFILL PANELS |
528 | SF | 50.00 | 26,400 | 26,400 | |||||||||||||||||||||||
5. | ||||||||||||||||||||||||||||||
6. | ||||||||||||||||||||||||||||||
7. | ||||||||||||||||||||||||||||||
8. | ||||||||||||||||||||||||||||||
9. | ||||||||||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||
13 | ||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||
SUBTOTAL |
16,500 | |||||||||||||||||||||||||||||
20250 | SALES TAX |
9.50 | % | % | ||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST. |
12.50 | % | % | 2,063 | ||||||||||||||||||||||||||
TOTAL CONTRACTORS COST |
18,563 | |||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE |
3.75 | % | % | 696 | |||||||||||||||||||||||||
1240 | INSURANCE |
1.00 | % | % | 193 | |||||||||||||||||||||||||
20400 | CONTINGENCY |
10.00 | % | % | 1,945 | |||||||||||||||||||||||||
1200 | PERMIT FEES |
1.00 | % | % | 214 | |||||||||||||||||||||||||
TOTAL AMOUNT | 21,610 | |||||||||||||||||||||||||||||
Exhibit C, Schedule 2
Ancillary TI Budget, Page 26 of 26
PLANT CONSTRUCTION COMPANY | 7:54 PM | 9/13/2010 | PAGE 1 | |||||
ESTIMATE SUMMARY | ||||||||
699 EIGHTH STREET SAN FRANCISCO | PCC JOB NO [ILLEGIBLE] | |||||||
ELEVATOR SHAFT PERFORATED METAL CLADDING |
PHASE | QUANTITY/UNIT | MATERIAL | SUBCONTRACT | TOTAL | ||||||||||||||||||||||||||||||
LINE |
ITEM DESCRIPTION |
UNIT COST | LABOR | OTHER | ||||||||||||||||||||||||||||||
1. | ||||||||||||||||||||||||||||||||||
2. | 5100 | CORNER PLATES PER DETAIL A2 | 300 | LF | 35.00 | 10,500 | 10,500 | |||||||||||||||||||||||||||
3. | 5100 | INSTALLATION | 300 | LF | 15.00 | 4,500 | 4,500 | |||||||||||||||||||||||||||
4. | 5100 | TRIM PLATES AT ELEV. DOORS | 280 | LF | 35.00 | 9,800 | 9,800 | |||||||||||||||||||||||||||
5. | 5100 | INSTALLATION | 280 | LF | 20.00 | 5,600 | 5,600 | |||||||||||||||||||||||||||
6. | 5100 | TRIM PLATES AT ELEV. CONTROLS & LTS. | 28 | ALW | 175.00 | 4,900 | 4,900 | |||||||||||||||||||||||||||
7. | 5100 | PERFORATED METAL | 3,740 | SF | 25.00 | 93,500 | 93,500 | |||||||||||||||||||||||||||
8. | 5100 | TRIM AT BASE & CEILING? | 360 | LF | 15.00 | 5,400 | 5,400 | |||||||||||||||||||||||||||
9. | 14200 | RESET (E) ELEVATOR CONTROLS | 9 | LOC | 1,250.00 | 11,250 | 11,250 | |||||||||||||||||||||||||||
10. | ||||||||||||||||||||||||||||||||||
11. | ||||||||||||||||||||||||||||||||||
12. | ||||||||||||||||||||||||||||||||||
13. | ||||||||||||||||||||||||||||||||||
14. | ||||||||||||||||||||||||||||||||||
15. | ||||||||||||||||||||||||||||||||||
16. | ||||||||||||||||||||||||||||||||||
17. | ||||||||||||||||||||||||||||||||||
18. | ||||||||||||||||||||||||||||||||||
19. | ||||||||||||||||||||||||||||||||||
20. | ||||||||||||||||||||||||||||||||||
21. | ||||||||||||||||||||||||||||||||||
22. | ||||||||||||||||||||||||||||||||||
23. | ||||||||||||||||||||||||||||||||||
24. | ||||||||||||||||||||||||||||||||||
25. | ||||||||||||||||||||||||||||||||||
26. | ||||||||||||||||||||||||||||||||||
27. | ||||||||||||||||||||||||||||||||||
28. | ||||||||||||||||||||||||||||||||||
29. | ||||||||||||||||||||||||||||||||||
30. | ||||||||||||||||||||||||||||||||||
SUBTOTAL | 145,450 | |||||||||||||||||||||||||||||||||
20250 | SALES TAX | 9.50 | % | % | ||||||||||||||||||||||||||||||
GENERAL EXPENSES & TEMP. CONST | 12.50 | % | % | 18,181 | ||||||||||||||||||||||||||||||
TOTAL CONTRACTORS COST | 163,631 | |||||||||||||||||||||||||||||||||
20100 | CONTRACTORS FEE | 3.75 | % | % | 6,136 | |||||||||||||||||||||||||||||
1240 | INSURANCE | 1.00 | % | % | 1,698 | |||||||||||||||||||||||||||||
20400 | CONTINGENCY | 10.00 | % | % | 17,147 | |||||||||||||||||||||||||||||
1200 | PERMIT FEES | 1.00 | % | % | 1,886 | |||||||||||||||||||||||||||||
TOTAL AMOUNT | 190,498 | |||||||||||||||||||||||||||||||||
SCHEDULE 3
SPACE PLAN
[attached]
Exhibit C, Schedule 3
EXHIBIT C
SCHEDULE 3
Page 7 has been intentionally deleted
by agreement of the parties
See also Exhibit K
SCHEDULE 4
CONSTRUCTION SCHEDULE
[attached]
Exhibit C, Schedule 4
SCHEDULE 5
FORM OF ATI LETTER OF CREDIT
[attached]
Exhibit C, Schedule 5
**REVISED 9-20-10**
**REVISED 9-15-10**
Exhibit A to Standby Letter of Credit
Application dated September , 2010
DRAFT COPY ONL- FOR REVIEW AND ACCEPTANCE BY ALL PARTIES
DRAFTED BY JAMES SINGH OF WELLS BANK N.A - (9/10/10)
WELLS FARGO BANK, N.A.
U.S. TRADE SERVICES - STANDBY LETTER OF CREDIT UNIT
One Front Street, 21st Floor, San Francisco, California 94111
Phone: (800) 798-2815 Option 1. E-Mail: sftrade@wellsfargo.com
IRREVOCABLE LETTER OF CREDIT
BENEFICIARY: | ||||
650 Townsend Associates LLC | Letter of Credit No.: NZS | |||
c/o TMG Partners | Date: September , 2010 | |||
100 Bush Street, 26th Floor | ||||
San Francisco, CA 94104 |
Attn: Lynn Tolin
At the request and for the account of Zynga Game Network Inc., 444 De Haro Street, Ste 132, San Francisco, CA 94107, we hereby establish our irrevocable Letter of Credit in your favor in the amount of One Million One Hundred Eight Thousand Two Hundred Fifty and NO/100 United States Dollars (US $1,108,250.00). This Letter of Credit is available with us at our above office by payment of your draft(s) drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N. A. Letter of Credit number (the Letter of Credit), hereby certifies that (1) Zynga Game Networks Inc. (the Applicant) failed beyond applicable notice and cure periods to timely pay a portion of Tenants ATI Contribution required to be paid by Tenant under the Work Letter attached as Exhibit C of that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary, as may be amended from time to time, and (2) the amount of the accompanying draft drawn under Wells Fargo Bank, N.A. Letter of Credit number represents the amount the Beneficiary is entitled to draw on the Letter of Credit as a result of the occurrence of such breach or default.
Each draft must also be accompanied by the original of this Letter of Credit for our endorsement on this Letter of Credit of our payment of such draft.
Partial and multiple drawings are permitted under this Letter of Credit.
Each draft must be marked DRAWN UNDER WELLS FARGO BANK, N. A. LETTER OF CREDIT NO. NZS .
This Letter of Credit expires at our above office on September 30, 2011 but shall be automatically extended, without written amendment to September 30, 2012 unless on or before August 31, 2011, we have sent written notice to you at your address above (or such other address as you may specify in writing) by registered mail or express courier that we elect not to renew this Letter of Credit beyond September 30, 2011
Upon our sending you such notice of the non-renewal of the expiration date of this Letter of Credit, you may also draw under this Letter of Credit by presentation to us at our above address, on or before the expiration date specified in such notice, of your draft drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N.A. Letter of Credit number (the Letter of Credit) hereby certifies that (1) the
1
Beneficiary has received notice from Wells Fargo Bank, N.A. that the Letter of Credit will not be renewed beyond its current expiration date and (2) Zynga Game Networks Inc. (the Applicant) has failed to secure and deliver to the Beneficiary a replacement letter of credit in the form and substance required under the Work Letter attached as Exhibit C of that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary, as may be amended from time to time.
This Letter of Credit is transferable one or more times, but in each instance to a single transferee and only in the full amount available to be drawn under this Letter of Credit at the time of each transfer. Any such transfer may be affected only through ourselves and only upon presentation to us at our above-specified office of a duly executed instrument of transfer in the format attached hereto as Exhibit A together with the original of this Letter of Credit. Any transfer of this Letter of Credit may not change the place of expiration of this Letter of Credit from our above-specified office. Each transfer shall be evidenced by our endorsement on the reverse of the original of this Letter of Credit, and we shall deliver the original of this Letter of Credit so endorsed to the transferee. Any transfer fee of 1/4 of 1 % of the transfer amount (minimum US$250.00) to be paid to us for a transfer will be payable solely by you, but the payment of any such transfer fee will not be a condition to the validity or effectiveness of such transfer or this Letter of Credit.
If any instructions accompanying a drawing under this Letter of Credit request that payment is to be made by transfer to an account with us or at another bank, we and/or such other bank may rely on an account number specified in such instructions even if the number identifies a person or entity different from the intended payee.
Documents may be delivered to us during regular business hours on a business day or forwarded to us by overnight delivery service to our above office. As used herein, the term business day means a day on which we are open at our above office to conduct our letter of credit business. Notwithstanding any provision to the contrary in the ISP98 (as hereinafter defined), if the expiration date or the final expiration date is not a business day then such date shall be automatically extended to the next succeeding date which is a business day.
CANCELLATION PRIOR TO EXPIRATION: You may return this Letter of Credit to us for cancellation prior to its expiration provided that this Letter of Credit is accompanied by your written agreement to its cancellation. Such written agreement to cancellation should specifically reference this Letter of Credit by number, clearly indicate that it is being returned for cancellation and be signed by an authorized representative of the beneficiary.
This Letter of Credit is subject to the International Standby Practices ISP98, International Chamber of Commerce Publication No. 590 (ISP98)
We hereby engage with you that each draft drawn and presented to us in compliance with the terms and provisions of this Letter of Credit will be duly honored upon presentation by payment to you of the amount requested.
Very truly yours, | ||
WELLS FARGO BANK, N. A. | ||
By: |
| |
(Authorized Signature) |
2
Annex A to Wells Fargo Bank, N.A.
Irrevocable Letter of Credit
No. NZS
TO: |
WELLS FARGO BANK, N. A. Northern California Trade Services Division One Front Street, 21st Floor San Francisco, California 94111 |
Date: |
LETTER OF CREDIT INFORMATION | Wells Fargo Bank, N. A. Letter of Credit No.: NZS |
For value received, the undersigned beneficiary of the above described Letter of Credit (the Transferor) hereby irrevocably assigns and transfers all its rights under the Letter of Credit as heretofore and hereafter amended, extended or increased (the Credit) to the following transferee (the Transferee):
Name of Transferee
Address
By this transfer all of our rights in the Credit are transferred to the Transferee, and the Transferee shall have sole rights as beneficiary under the Credit, including, but not limited to, sole rights relating to any amendments, whether increases or extensions or other amendments, and whether such amendments are now existing or hereafter made.
ADVICE OF FUTURE AMENDMENTS: You are hereby irrevocably instructed to advise future amendment(s) of the Credit to the Transferee without the Transferors consent or notice to the Transferor.
Enclosed are the original of the Credit and the original of all amendments to this date. Please notify the Transferee of this transfer and of the terms and conditions of the Credit as transferred. This transfer will not become effective until the Transferee is so notified.
TRANSFERORS SIGNATURE GUARANTEED BY: | ||||
|
| |||
[Banks Name] | [Transferors Name] |
By: |
|
By: |
|
Printed Name: |
|
Printed Name: |
|
Title: |
|
Title: |
|
We hereby agree with the format/language of the above drafted letter of credit, and we request Wells Fargo Bank, N.A. to issue the Letter of Credit as above drafted. | ||
Zynga Game Network Inc. | ||
By: |
| |
Name and Title: |
1
SCHEDULE 6
BUDGET
[attached]
Exhibit C, Schedule 6
Exhibit 10.14
Exhibit C, Schedule 6 Tenant Improvement Budget, Page 1 of 18 |
ESTIMATE #7 | PLANT CONSTRUCTION COMPANY L.P. | |||
PRELIMINARY BUDGET ESTIMATE | 300 NEWHALL STREET | |||
SAN FRANCISCO, CA 94124-1426 | ||||
TEL. 415.285.0500 FAX 415.550.1357 | ||||
LICENSE NUMBER 830764 | ||||
www.plantconstructioncompany.com |
Date: | August 9, 2010 | |
To: | TMG Partners | |
100 Bush Street, 26th Floor | ||
San Francisco, CA 94104 | ||
Attn: | Sean Donnelly | |
Via: | E-mail and Mail | |
Re: | Tenant Improvements | |
699 Eighth Street | ||
San Francisco, California | ||
PCC Project #2010060 |
SCOPE OF WORK
Tenant improvements to 699 Eighth Street based on preliminary floor plans entitled ZYNGA 7 sheets dated 7/29/10 as prepared by Nichols Booth Architects.
ESTIMATED COST: $16,500,000
NOTES & QUALIFICATIONS
1. | Estimate assumes no reuse of existing interior tenant area partitions, finishes or lighting. Existing main duct runs and VAV boxes only to be reused with installation of new round unpainted distribution ductwork all areas. |
2. | All work assumed to be performed during normal working hours. |
3. | It is assumed on site parking for General Contractor staff will be provided on site at no cost. |
4. | Estimate assumes existing doors at toilet rooms, exit stairs and base building common areas, etc. to remain and be repainted tenant side only. |
ESTIMATE INCLUDES
1. | Contractors general expenses including project management, full time jobsite supervision, project administration and submittal processing, project accounting, jobsite supplies, temporary toilets, jobsite telephone and fax, jobsite safety, progressive clean up, debris boxes, miscellaneous small tools and equipment, pick up and deliveries, offsite parking fees, messenger services, plans and printing, etc. |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 2 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 2 | San Francisco, California |
2. | Preconstruction services allowance for planning and estimating. ($25,000) |
3. | Cost of radar testing post tensioned concrete in advance of cutting or coring operations. |
4. | Building permit application and permit fee allowance. ($185,500) |
5. | Temporary construction including field office, finish protection, dust protection, barricades, hoisting and final clean up. |
6. | All required soft demolition and removals. |
7. | All required hard demolition and removals including slab demolition for new kitchen lift pit, cutting of concourse level floor for new plumbing and electrical, coring of post tensioned floor slabs for floor mounted electric/data outlets in conference rooms and large offices, coring of post tensioned floor slabs for new data risers serving IT closets, demolition and removal of existing street level floor tile. |
8. | Allowance for parking striping and signage at roof level. ($2,500) |
9. | Allowance for undefined privacy fencing at 8th Street exterior seating area. ($35,000) |
10. | Allowance for chain link security fence at roof level with (2) locally controlled power operated gates. |
11. | Allowance for landscaping at 8th Street exterior seating and entrance area. ($10,000) |
12. | Allowance for new gas service to building to support kitchens at concourse and street levels ($25,000). Allowance includes all cutting, excavation, patching and piping, etc. |
13. | Allowance for modifications to existing under floor drainage system at new kitchen lift pit and underfloor plumbing lines. |
14. | New recessed kitchen concrete lift pit and patching of concourse level floor slabs at new underfloor plumbing and electrical. |
15. | Allowance to remove miscellaneous debris and patch existing concrete exposed ceiling surfaces. |
16. | New steel stair from concourse kitchen to street level. |
17. | New steel stair from concourse to raised auditorium floor level. |
18. | Rough carpentry and backing for kitchen area wall mounted cabinets, raised auditorium stepped floor and wall mounted display monitors (190 locations assumed). |
19. | Reception desk allowance. ($50,000) |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 3 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 3 | San Francisco, California |
20. | Finish carpentry allowance: |
| Plastic laminate base and overhead cabinetry with laminate top at concourse level small kitchen and kitchen/commons areas on levels 3, 5 and 6. |
| Plastic laminate base cabinetry at coffee/snack and tea free standing units levels 3, 5 and 6. |
| Wall mounted counter tops and free standing cabinetry units at concourse level sports cafe and small kitchen areas. |
21. | Water proof membranes at street level kitchen, dishwashing and serving area floors. |
22. | Water proof membranes at all walls and ceiling of steam rooms concourse level. |
23. | New door and hardware assemblies, doors assumed to be 3-0 x 8-0 x 1 3/4 solid core prefinished maple with clear finish anodized aluminum frames and Schlage L series polished chrome mortise passage sets at all interior openings. |
24. | Electric lock hardware at exterior bike storage door, reception door and north elevation exit doors. |
25. | Glass and glazing: |
| All office area and small conference room doors assumed to have 2-0 wide x 8-0 high side light in clear finish anodized aluminum frame. |
| All medium and large conference rooms assumed to have 8-0 high x 10-0 wide 3/8 thick frameless glazing in concealed top track and exposed clear finish anodized aluminum bottom U track. |
| Concourse level observation rooms assumed to have 4 high one way glass vision panels. |
| Concourse level glazed enclosures of elevators including frameless glass doors (1 pair). |
| Modifications to existing double door entrance to bike storage area and doors adjacent to fire control entrance. |
| Modifications to existing entrance glazing at new main building entrance and dining area entrance. |
| Allowance for new undefined entrance glazing to dining area at locations noted roll up door on street level plan. ($30,000) |
| Allowance for (4) each custom windows at Atrium level. ($10,000) |
| Allowance to remove and replace existing storefront glass film at glazing adjacent to Public Atrium. |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 4 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 4 | San Francisco, California |
| Allowance to remove existing storefront glass film at glazing adjacent to ZYNGA Private Atrium. |
| Allowance for glass interior walls levels 5 and 6 including (2) pair and (1) single frameless glass door. |
26. | New interior metal framed drywall partitions including full thick acoustic insulation/caulking and level 4 finish taping at all offices and conferences rooms etc. All partitions full height at levels 2, 3, 5 and 6, partitions at street level and concourse to be full height at face with 10 high common walls between offices in acoustic ceiling areas. |
27. | New full height double wall acoustic metal framed drywall partitions at auditorium and dance rooms. |
28. | Allowance for repairs to existing base building drywall partitions to remain. |
29. | Allowance for acoustic upgrade of existing common tenant demising wall concourse level. |
30. | Allowance for construction of curved acoustic game room walls on concourse, level 5 and level 6 ($17.50/sf). |
31. | Allowance for existing aluminum store front paint touch up and repairs. |
32. | Allowance for upgrade of existing stairs to remain between street and Atrium level. |
33. | Ceramic tile floor and wall surfaces (10 high) at concourse level kitchen area. |
34. | Ceramic tile floor and wall surfaces (10 high) at street level kitchen, serving and dishwashing area. |
35. | Ceramic tile floor at main entrance reception area and awards corridor. |
36. | Suspended acoustic ceilings at concourse level offices, auditorium, and conference and meeting areas. |
37. | Suspended washable ceiling system at concourse kitchen area, street level kitchen/serving and dishwashing area. |
38. | Cushion wood flooring at Yoga, Dance and Zen areas. |
39. | VCT flooring at concourse level kitchen office areas, and levels 2, 3, 5 and 6 IT rooms and kitchen areas. |
40. | Anti static VCT flooring at concourse level server room. |
41. | Linoleum floor covering at street level dining area including allowance for cut in color pattern. |
42. | Carpet floor covering in office conference and common areas, carpet assumed to be cushion backed carpet tile ($35/sy installed allowance including 4 vinyl base). |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 5 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 5 | San Francisco, California |
43. | Rubber flooring at concourse level weight room. |
44. | Clean and clear seal of utility and storage rooms concourse and street levels. |
45. | Allowance for minor floor preparation and leveling. |
46. | New painting of all new and existing wall surfaces including touch up/repainting of existing painted ceiling areas. |
47. | Allowance for recessed walk off mat at main entrance. |
48. | Allowance to furnish and install new white boards (115 each) and install owner furnished white boards (115 each). |
49. | Code required signage. |
50. | Plastic laminate 2 tier lockers in kitchen area, security office and concourse level locker rooms. |
51. | Bicycle racks. |
52. | Tenant area kitchen/cafe/snack bar appliance allowance. ($24,500) |
53. | Allowance to repair existing exterior window coverings all levels. |
54. | Allowance to furnish and install fixed seating in auditorium area. |
55. | Allowance for new concourse level restrooms/steam rooms. ($200,000) |
56. | Allowance for cosmetic and fixture up grade of existing restrooms all levels. ($50,000 each) |
57. | Allowance for kitchen lift including equipment room. ($155,000) |
58. | Plumbing system allowance: |
| Concourse and street level kitchen systems including above floor grease trap, ejector pumps, floor sinks, floor drains, water heating and equipment connections. |
| Stainless steel double sinks complete with all required fittings and connections including local water heater at concourse level small kitchen and cafe areas, kitchen/commons areas on levels 3, 5 and 6. |
| New ADA drinking fountains concourse level (2 each). |
| Condensate drain allowance for concourse level HVAC units. |
59. | Fire sprinkler system modifications and additions including design build engineering and permit fees. |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 6 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 6 | San Francisco, California |
60. | Allowance for kitchen hood fire suppression systems. ($25,000) |
61. | HVAC system allowance: |
| 10 tons redundant 24 hour cooling for concourse level server room. |
| New exposed round unpainted distribution ductwork all areas. |
| Modifications, alterations and additions to existing VAV and fan powered HVAC boxes including repair allowance. |
| New HVAC system for concourse level weight room, Yoga, Auditorium and Dance areas. |
| New kitchen grease exhaust system to roof level. |
| Pizza oven exhaust system. |
| Roof platforms, curbs, weather proofing, etc. |
| Design build engineering fees. |
62. | Electrical system allowance: |
| New interior pendant mounted lighting including title 24 control system at all open ceiling areas. |
| Electrical power outlets including connections for future workstations (power poles furnished by others). |
| Kitchen lift, plumbing and HVAC power and connections. |
| Life safety system modifications and additions including permit fees. |
| Security system, data and telephone rough in conduits. |
| Server room and conduit rough in to IT closets all levels. |
| Auditorium audio visual power, lighting and dimming system. |
| Kitchen area power and equipment connections. |
| Conference room audio visual rough in. |
| Floor mounted telephone/data outlets in medium and large conference rooms and large office areas. |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 7 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 7 | San Francisco, California |
| Audio visual conduit for wall mounted display screens. |
| Exterior lighting. |
| Design build life safety system engineering fees. |
| Design build electrical and lighting system engineering fees. |
| Contractors fee @ 3.0%. |
| Contractors contingency @ 5%. |
| Insurance @ 1%. |
ESTIMATE EXCLUDES
1. | Architectural, engineering or consultant fees other than design build plumbing, fire sprinkler, HVAC, electrical and life safety systems. |
2. | Cost of special inspections. |
3. | Security guard costs or building engineering department costs for normal or premium time construction operations. |
4. | Security system equipment or wiring. |
5. | Telephone, data or computer system equipment or wiring. |
6. | Cable trays, server room or IT room equipment racks. |
7. | Any work within the existing base building mechanical or stair areas. |
8. | Sandblasting, sealing or special treatments on existing exposed concrete wall or ceiling surfaces. |
9. | Wall coverings or special wall finishes. |
10. | Cost of utilities during construction. |
11. | Interior window coverings or films. |
12. | Open area work stations, work surfaces or furniture. |
13. | Privacy booths. |
14. | Office area or conference room furniture. |
15. | Exterior signage. |
Exhibit C, Schedule 6
Tenant Improvement Budget, Page 8 of 18
ESTIMATE #7 | PCC Project #2010060 | |||||
PRELIMINARY BUDGET ESTIMATE | Tenant Improvements | |||||
TMG Partners | 699 Eighth Street | |||||
Page 8 | San Francisco, California |
16. | Weight room exercise equipment. |
17. | Kitchen equipment, hoods, walk-in coolers, refrigeration or appliances. |
18. | Dining area furniture, dispensers, food service counters, refrigeration or appliances. |
19. | Relocation, removal or new exterior building entrance canopy. |
20. | Upgrade or existing Atrium railing system. |
21. | Replacement of existing exterior sidewalk at new seating area. |
22. | Roof decks. |
23. | Accessibility modifications to existing restrooms, elevators, path of travel or exiting, etc. |
24. | Projection screens or audio visual equipment. |
25. | Relocation of parking booth, upgrade of skylight to operable, new interior stair level 2 to level 6, etc. These items are estimated as separate work scopes. |
26. | Floor mounted electrical or data to open area work stations on upper floor levels. |
This is a preliminary budget estimate made in advance of plans, specifications, subcontractors bids, or review by the various city agencies. It is based on work proceeding at this time and is intended for budgeting purposes only.
DD: smj
Enclosures
cc: | Peter Schaffer | |
Mark Howard, Plant Construction Co. | ||
Jeff Van DeWyngaerde, Plant Construction Co. |
PLANT CONSTRUCTION COMPANY, LP | ||
By: |
| |
Don Davella, As Agent |
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 9 of 18 |
Project name | 7-27-10 Tenant Plans | |
699 Eighth Street | ||
San Francisco | ||
Ca | ||
Estimator | D.Davella | |
Job size | 259866 ARSF | |
Bid date | 8/9/2010 | |
Report format | Sorted by Group phase/Phase | |
Detail summary |
Page 1
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 10 of 18 |
description |
quantity | unit cost | total | |||||||||
1001 General Requirements |
||||||||||||
Construction Manager (8mh/wk) |
42.00 wks | 1,056 00 /wks | 44,352 | |||||||||
Senior Project Manager (FT) |
30.00 wks | 4,400.00 /wks | 132,000 | |||||||||
Assistant Project Manager (FT x 2) |
20.00 wks | 7,600.00 /wks | 152,000 | |||||||||
Sile Superintendent (FT) |
30.00 wks | 3,800.00 /wks | 114,000 | |||||||||
Foreman Concourse, Street & Atrium Levels (FT) |
18.00 wks | 3,400.00 /wks | 61,200 | |||||||||
Foreman Levels 3,4 & 5 (FT) |
14.00 wks | 3,400.00 /wks | 47,600 | |||||||||
Project Administration & Submittals (12hr/wk) |
28.00 wks | 624.00 /wks | 17,472 | |||||||||
Project Accounting (8hr/wk) |
28.00 wks | 464.00 /wks | 12,992 | |||||||||
Jobsite Supplies |
30.00 wks | 2,500.00 /wks | 75,000 | |||||||||
Temporary Toilets |
30.00 wks | 250.00 /wks | 7,500 | |||||||||
Jobsite Telephone & Ffax |
30.00 wks | 150.00 /wks | 4,500 | |||||||||
Jobsite Safety |
30.00 wks | 500.00 /wks | 15,000 | |||||||||
Progressive Cleanup (80mh/wk) |
30.00 wks | 4,160.00 /wks | 124,800 | |||||||||
Debris Boxes (2/wk) |
30.00 wks | 900.00 /wks | 27,000 | |||||||||
Miscel. Small Tools |
30.00 wks | 1,500.00 /wks | 45,000 | |||||||||
Pickup & Deliveries (8mh/wk) |
30.00 wks | 440.00 /wks | 13,200 | |||||||||
Parking Fees (Offsite Meetings Only) |
30.00 wks | 50.00 /wks | 1,500 | |||||||||
Messenger/Overnight Services |
30.00 wks | 50.00 /wks | 1,500 | |||||||||
Plans & Printing |
1.00 bud | 5,000.00 /bud | 5,000 | |||||||||
General Requirements |
901,616 | |||||||||||
1005 Pre-Construction Services |
||||||||||||
Preconstruction Planning & Estimating |
1.00 bud | 25,000.00 /bud | 25,000 | |||||||||
Pre-Construction Services |
25,000 | |||||||||||
1150 Testing and Inspection |
||||||||||||
Radar Post Tension Slab at Cores |
40.00 mh | 175.00 /mh | 7,000 | |||||||||
Assist at Testing |
40.00 mh | 72.00 /mh | 2,880 | |||||||||
Testing and Inspection |
9,880 | |||||||||||
1200 Permits and Licenses |
||||||||||||
Permit Fee Allowance |
1.00 alw | 175,000.00 /alw | 175,000 | |||||||||
Building Permit Application |
80.00 mh | 132.00 /mh | 10,560 | |||||||||
Permits and Licenses |
185,560 | |||||||||||
1500 Temporary Construction |
||||||||||||
Field Office |
30.00 wks | 500.00 /wks | 15,000 | |||||||||
Finish Protection (40mh/wk) |
30.00 wks | 2,080.00 /wks | 62,400 | |||||||||
Dust Control (40mh/wk) |
30.00 wks | 2,080.00 Ms | 62,400 | |||||||||
Barricades at 8th Street Exterior |
120.00 If | 55.00 /If | 6,600 | |||||||||
Hoisting |
1.00 alw | 7,500.00 /alw | 7,500 | |||||||||
Remove Replace Glazing for Access Levels 3, 5 & 6 |
3.00 alw | 2,500.00 /alw | 7,500 | |||||||||
Final Clean Up |
210,000.00 sf | 0.25 /sf | 52,500 | |||||||||
Temporary Construction |
213,900 | |||||||||||
2100 Soft Demolition |
Page 2
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 11 of 18 |
description |
quantity | unit cost | total | |||||||||
2100 Soft Demolition |
||||||||||||
Interior Demolition & Removals |
210,000.00 sf | 3.25 /sf | 682,500 | |||||||||
Soft Demolition |
682,500 | |||||||||||
2300 Hard Demo and Sawcuttinq |
||||||||||||
Demo for Lift Pit |
140.00 sf | 15.00 /sf | 2,100 | |||||||||
Concourse - Cut floor for Electrical - Allow 500lf |
500.00 sf | 15.00 /sf | 7,500 | |||||||||
Concourse - Cut Floor for Plumbing - Allow 750lf |
750.00 sf | 15.00 /sf | 11,250 | |||||||||
Concourse - Demo Floor for New Restrooms |
1,060.00 sf | 15.00 /sf | 15,900 | |||||||||
Street Level - Core Floor for Elec/Data Assume 15 loc. |
15.00 ea | 150.00 /ea | 2,250 | |||||||||
Street Level - Core Floor for Plumbing Assume 20 loc. |
20.00 ea | 150.00 /ea | 3,000 | |||||||||
Atrium Level - Core Flr. for Elec/Data Assume 25 loc. |
25.00 ea | 150.00 /ea | 3,750 | |||||||||
Level 3 - Core Flr. for Elec/Data Assume 20 loc. |
20.00 ea | 150.00 /ea | 3,000 | |||||||||
Level 5 - Core Flr. for Elec/Data Assume 25 loc. |
25.00 ea | 150.00 /ea | 3,750 | |||||||||
Level 6 - Core Flr. for Elec/Data Assume 20 loc. |
20.00 ea | 150.00 /ea | 3,000 | |||||||||
Data Riser Cores - Assume 2/IDF Closet |
20.00 loc | 150.00 /loc | 3,000 | |||||||||
Demo Street Level Floor Tile |
10,500.00 sf | 5.00 /sf | 52,500 | |||||||||
Hard Demo and Sawcuttinq |
111,000 | |||||||||||
2560 Paving |
||||||||||||
Modify Striping add Signage at Roof Level |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Paving |
2,500 | |||||||||||
2610 Fencing |
||||||||||||
Fence at 8th Street Seating Area |
140.00 If | 250.00 /If | 35,000 | |||||||||
Chain Link Fence at Roof |
200.00 If | 25.00 /If | 5,000 | |||||||||
Operating Gates at Roof |
2.00 loc | 3,500.00 /loc | 7,000 | |||||||||
Fencing |
47,000 | |||||||||||
2630 Landscaping and Irrigation |
||||||||||||
8th Street Elevation |
1.00 alw | 10,000.00 /alw | 10,000 | |||||||||
Landscaping and Irrigation |
10,000 | |||||||||||
2800 Site Utilities |
||||||||||||
New Gas Service to Building |
1.00 alw | 25,000.00 /alw | 25,000 | |||||||||
Site Utilities |
25,000 | |||||||||||
2850 Foundation Drainage |
||||||||||||
Sub Slab Drainage Modify at New Pit |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Sub Slab Drainage Modify at New Plumbing |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Foundation Drainage |
5,000 | |||||||||||
3030 Concrete |
||||||||||||
Concourse Level - Kitchen Lift Pit |
1.00 alw | 7,500.00 /alw | 7,500 | |||||||||
Concourse Level Floor Slab Repairs from Trenching |
2,450.00 sf | 10.00 /sf | 24,500 | |||||||||
Concrete |
32,000 | |||||||||||
3860 Concrete Patching and Repairs |
Page 3
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 12 of 18 |
description |
quantity | unit cost | total | |||||||||
3860 Concrete Patching and Repairs |
||||||||||||
Clean & Repair Exposed Concrete Ceilings |
117,000.00 sf | 0.25 /sf | 29,250 | |||||||||
Concrete Patching and Repairs |
29,250 | |||||||||||
5510 Metal Stairs |
||||||||||||
Kitchen to Street Level incl. Rails |
20.00 rsr | 750.00 /rsr | 15,000 | |||||||||
Auditorium Stairs incl. Rails |
7.00 rsr | 750.00 /rsr | 5,250 | |||||||||
Metal Stairs |
20,250 | |||||||||||
6400 Rough Carpentry |
||||||||||||
Backing for Wall Cabinetry at Main Kitchens |
425.00 If | 12.50 /If | 5,313 | |||||||||
Backing for Wall Cabinetry Kitchen/Commons |
250.00 If | 12.50 /If | 3,125 | |||||||||
Backing for Wall Mounted Displays - Concourse Lvl |
38.00 loc | 150.00 /loc | 5,700 | |||||||||
Backing for Wall Mounted Displays - Street Lvl. |
4.00 loc | 150.00 /loc | 600 | |||||||||
Backing for Wall Mounted Displays - Atrium Lvl. |
25.00 loc | 150.00 /loc | 3,750 | |||||||||
Backing for Wall Mounted Displays - Level 3 |
32.00 loc | 150.00 /loc | 4,800 | |||||||||
Backing for Wall Mounted Displays - Level 5 |
40.00 loc | 150.00 /loc | 6,000 | |||||||||
Backing for Wall Mounted Displays - Level 6 |
50.00 loc | 150.00 /loc | 7,500 | |||||||||
Raised Floor at Concourse Auditorium |
960.00 sf | 25.00 /sf | 24,000 | |||||||||
Rough Carpentry |
60,788 | |||||||||||
6700 Finish Carpentry |
||||||||||||
Concourse Level - Plam Base w/Overhead Cabinets |
25.00 If | 500.00 /If | 12,500 | |||||||||
Concourse Level - Wall Mounted PlamCountertop |
85.00 If | 250.00 /If | 21,250 | |||||||||
Concourse Level - Freestanding Plam Countertop |
52.00 If | 350.00 /If | 18,200 | |||||||||
Street Level - Reception Desk |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Street Level - Conference Room Cabinet |
12.00 If | 1,500.00 /If | 18,000 | |||||||||
Atrium Level - Freestanding Plam Coffee/Snack |
34.00 If | 350.00 /If | 11,900 | |||||||||
Level 3 - Freestanding Plam Coffee/Snack |
4.00 ea | 350.00 /ea | 1,400 | |||||||||
Level 3 - Kitchen Plam Base w/Overhead Cabinets |
15.00 If | 500.00 /If | 7,500 | |||||||||
Level 5 - Freestanding Plam Coffee/Snack |
65.00 If | 350.00 /If | 22,750 | |||||||||
Level 5 - Kitchen Plam Base w/Overhead Cabinets |
12.00 If | 500.00 /If | 6,000 | |||||||||
Level 5 - Tea Room Freestanding Plam Cabinet |
10.00 If | 350.00 /If | 3,500 | |||||||||
Level 6 - Freestanding Plam Coffee/Snack |
70.00 If | 350.00 /If | 24,500 | |||||||||
Level 6 - Kitchen Plam Base w/Overhead Cabinets |
12.00 If | 500.00 /If | 6,000 | |||||||||
Finish Carpentry |
203,500 | |||||||||||
7100 Waterproofing |
||||||||||||
Concourse - Steam Room Walls/Ceiling |
800.00 sf | 10.00 /sf | 8,000 | |||||||||
Street Level - Kitchen, DW & Serving Floors |
2,675.00 sf | 7.50 /sf | 20,063 | |||||||||
Waterproofing |
28,063 | |||||||||||
Page 4
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 13 of 18 |
description |
quantity | unit cost | total | |||||||||
8010 Door Assemblies |
||||||||||||
Concourse - Office Door Assbly. |
56.00 ea | 1,250.00 /ea | 70,000 | |||||||||
Concourse - Rated Door w/Electric Lock |
1.00 ea | 1,750.00 /ea | 1,750 | |||||||||
Concourse - Double Door Assbly. |
9.00 ea | 1,750.00 /ea | 15,750 | |||||||||
Concourse - New Restroom Doors |
2.00 ea | 1,250.00 /ea | 2,500 | |||||||||
Street Lvl - Office Door Assbly. |
9.00 ea | 1,250 00 /ea | 11,250 | |||||||||
Street Lvl. - Door w/Electric Lock |
3.00 ea | 1,750.00 /ea | 5,250 | |||||||||
Street Lvl. - Double Door Assbly. |
2.00 pr | 1,750 00 /pr | 3,500 | |||||||||
Atrium Lvl. - Office Door Assbly. |
35.00 ea | 1,250.00 /ea | 43,750 | |||||||||
Atrium Lvl. - Double Door Assbly. |
3.00 pr | 1,750.00 /pr | 5,250 | |||||||||
Level 3 - Office Door Assbly. |
48.00 ea | 1,250.00 /ea | 60,000 | |||||||||
Level 3 - Double Door Assbly. |
4.00 pr | 1,750.00 /pr | 7,000 | |||||||||
Level 3 - Double Door W/HO |
1.00 pr | 2,750.00 /pr | 2,750 | |||||||||
Level 5 - Office Door Assbly. |
60.00 ea | 1,250.00 /ea | 75,000 | |||||||||
Level 5 - Double Door Assbly. |
4.00 pr | 1,750.00 /pr | 7,000 | |||||||||
Level 5 - Double Door W/HO |
2.00 pr | 2,750.00 /pr | 5,500 | |||||||||
Level 6 - Office Door Assbly. |
68.00 ea | 1,250.00 /ea | 85,000 | |||||||||
Level 6 - Double Door Assbly. |
4.00 pr | 1,750.00 /pr | 7,000 | |||||||||
Level 6 - Double Door w/HO |
2.00 pr | 2,750.00 /pr | 5,500 | |||||||||
Door Assemblies |
413.750 | |||||||||||
8800 Glazing |
||||||||||||
Concourse - Glazing at Yoga x 8h |
160.00 sf | 25.00 /sf | 4,000 | |||||||||
Concourse - Glazing at Elevators x 10h |
480.00 sf | 45.00 /sf | 21,600 | |||||||||
Concourse - Glass doors at Elevators |
1.00 pr | 4,500,00 /pr | 4,500 | |||||||||
Concourse - Glazing at Observe x 4h |
104.00 sf | 30.00 /sf | 3,120 | |||||||||
Concourse - Office Glazing - Assume 2 Sidelight? |
40.00 ea | 500.00 /ea | 20,000 | |||||||||
Concourse - Conference Glazing - Assume 10w |
960.00 sf | 25.00 /sf | 24,000 | |||||||||
Street Lvl. - Conference Glazing x 10h |
80.00 sf | 25.00 /sf | 2,000 | |||||||||
Street Lvl. - Rework at Bike Storage x 1 loc. |
1.00 alw | 5,000.00 /alw | 5,000 | |||||||||
Street Lvl. - Rework adj. Fire Control x 1 loc. |
1.00 alw | 5,000.00 /alw | 5,000 | |||||||||
Street Lvl. - Rework at Main Entrance x 1 loc. |
1.00 alw | 10,000.00 /alw | 10,000 | |||||||||
Street Lvl. - Rework at Lunch Area x 1 loc. |
1.00 alw | 10,000.00 /alw | 10,000 | |||||||||
Street Lvl. - New to Exterior Seating |
400.00 sf | 75.00 /sf | 30,000 | |||||||||
Street Lvl. - Sidelight at Recept. & Security |
3.00 ea | 500,00 /ea | 1,500 | |||||||||
Atrium Lvl. - Special Windows |
4.00 ea | 2,500.00 /ea | 10,000 | |||||||||
Atrium Lvl. - New Storefront |
640.00 sf | 45.00 /sf | 28,800 | |||||||||
Atrium Lvl. - Remove Replace Film at Main Atrium |
1,800.00 sf | 10.00 /sf | 18,000 | |||||||||
Atrium Lvl. - Office Glazing - Assume 2 Sidelight |
20.00 ea | 500.00 /ea | 10,000 | |||||||||
Atrium Lvl. - Conference Glazing x 10w |
960.00 sf | 25.00 /sf | 24,000 | |||||||||
Level 3 - Remove Replace Film at Main Atrium |
750.00 sf | 10.00 /sf | 7,500 | |||||||||
Level 3 - Remove Film from Extg. Glazing |
1,850.00 sf | 3.50 /sf | 6,475 | |||||||||
Level 3 - Office Glazing - Assume 2 Sidelight |
15.00 ea | 500.00 /ea | 7,500 | |||||||||
Level 3 - Conference Glazing x 10w |
2,000.00 sf | 25.00 /sf | 50,000 | |||||||||
Level 5 - Remove Replace Film al Main Atrium |
1,610.00 sf | 10.00 /sf | 16,100 | |||||||||
Level 5 - Remove Film from Extg. Glazing |
1,995.00 sf | 3.50 /sf | 6,983 | |||||||||
Level 5 - Office Glazing - Assume 2 Sidelight |
33.00 ea | 500.00 /ea | 16,500 | |||||||||
Level 5 - Conference Glazing x 10w |
1,280.00 sf | 25.00 /sf | 32,000 | |||||||||
Level 6 - Remove Replace Film at Main Atrium |
1,610.00 sf | 10.00 /st | 16,100 | |||||||||
Level 6 - Remove Film from extg. Glazing |
1,995.00 sf | 3.50 /sf | 6,983 | |||||||||
Level 6 - Office Glazing - Assume 2 Sidelight |
39.00 ea | 500.00 /ea | 19,500 |
Page 5
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 14 of 18 |
description |
quantity | unit cost | total | |||||||||
8800 Glazing |
||||||||||||
Level 6 - Conference Glazing x 10w |
880.00 sf | 25.00 /sf | 22,000 | |||||||||
Level 5 - Glass Interior Wall |
780.00 sf | 25.00 /sf | 19,500 | |||||||||
Level 5 - Glass Interior Doors |
1.00 pr | 4,500.00 /pr | 4,500 | |||||||||
Level 6 - Glass Interior Wall |
800.00 sf | 25.00 /sf | 20,000 | |||||||||
Level 6 - Glass Interior Doors |
1.00 pr | 3,500.00 /pr | 3,500 | |||||||||
Level 6 - Glass Interior Door |
1.00 ea | 2,500 00 /ea | 2,500 | |||||||||
Glazing |
489,160 | |||||||||||
9005 Miscellaneous Finishes |
||||||||||||
Concourse - Game Room Walls |
1,200.00 sf | 17.50 /sf | 21,000 | |||||||||
Level 5 - Game Room Walls - 2 loc. |
1,425.00 sf | 17.50 /sf | 24,938 | |||||||||
Level 6 - Game Room Walls - 2 loc. |
1,425.00 sf | 17.50 /sf | 24,938 | |||||||||
Alum. Storefront Touchup & Repairs Lvls. 2, 3,5 & 6 |
4.00 lvl | 2,500.00 /lvl | 10,000 | |||||||||
Upgrade Street/Atrium Stair Finishes |
28.00 rsr | 500.00 /rsr | 14,000 | |||||||||
Miscellaneous Finishes |
94.875 | |||||||||||
9250 Drywall |
||||||||||||
Concourse - Upgrade Acoustic to Adjacent tenant |
1,800.00 sf | 5.00 /sf | 9,000 | |||||||||
Concourse - Full Height Front Walls |
39,000.00 sf | 10.00 /sf | 390,000 | |||||||||
Concourse - Partial Hgt. Common Walls |
9,880.00 sf | 9,50 /sf | 93,860 | |||||||||
Concourse - FH Acoustic Dance Room Walls |
1,500.00 sf | 17.50 /sf | 26,250 | |||||||||
Concourse - FH Acoustic Auditorium Walls |
3,200.00 sf | 17.50 /sf | 56,000 | |||||||||
Street Lvl. - Full Height Front Walls |
10,320.00 sf | 9,50 /sf | 98,040 | |||||||||
Street Lvl. - Partial Hgt. Common Walls |
1,150.00 sf | 9.50 /sf | 10,925 | |||||||||
Street Lvl. - Repair Extg. walls to Remain |
4,500.00 sf | 1.50 /sf | 6,750 | |||||||||
Street Lvl. - Furring at Exterior Walls? |
5,400.00 sf | 5.00 /sf | 27,000 | |||||||||
Atrium Lvl. - Full Height Walls |
13,800.00 sf | 9.50 /sf | 131,100 | |||||||||
Atrium Lvl. - Repair Extg. Walls to Remain |
3,780.00 sf | 1.50 /sf | 5,670 | |||||||||
Level 3 - Full Height Walls |
19,800.00 sf | 9.50 /sf | 188,100 | |||||||||
Level 3 - Repair Extg. Walls to Remain |
5,800.00 sf | 1.50 /sf | 8,700 | |||||||||
Level 5 - Full Height Walls |
27,300.00 sf | 9.50 /sf | 259,350 | |||||||||
Level 5 - Repair Extg. Walls to Remain |
6,600.00 sf | 1.50 /sf | 9,900 | |||||||||
Level 6 - Full Height Walls |
25,900.00 sf | 9.50 /sf | 246,050 | |||||||||
Level 6 - Repair Extg. Walls to Remain |
6,100.00 sf | 1.50 /sf | 9,150 | |||||||||
Drywall |
1.575.845 | |||||||||||
9300 Tile |
||||||||||||
Concourse Level - Kitchen Floor |
1,450.00 sf | 25.00 /sf | 36,250 | |||||||||
Concourse Level - Kitchen Walls x 10h |
1,800.00 sf | 18.00 /sf | 32,400 | |||||||||
Street Level - Kitchen, DW & Serving Area Floor |
2,675.00 sf | 25.00 /sf | 66,875 | |||||||||
Street Level - Kitchen, DW & Serving Walls x 10h |
3,000.00 sf | 18.00 /sf | 54,000 | |||||||||
Street Level - Reception & Awards |
1,500.00 sf | 20.00 /sf | 30,000 | |||||||||
Tile |
219,525 | |||||||||||
9510 Acoustic Ceilings |
||||||||||||
Concourse - Office, Conf, Test, Meet Areas |
10,500.00 sf | 5.00 /sf | 52,500 | |||||||||
Concourse - Auditorium Ceiling |
1,440.00 sf | 5.00 /sf | 7,200 |
Page 6
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 15 of 18 |
description |
quantity | unit cost | total | |||||||||
9510 Acoustic Ceilings |
||||||||||||
Concourse - Kitchen Ceiling |
1,440.00 sf | 7.50 /sf | 10,800 | |||||||||
Street Lvl - Security, Conf, Wait, INT Areas |
1,500.00 sf | 5.00 /sf | 7,500 | |||||||||
Street Lvl. - Kitchen/ Pizza Area Ceiling |
2,000.00 sf | 7.50 /sf | 15,000 | |||||||||
Acoustic Ceilings |
93,000 | |||||||||||
9550 Wood Flooring |
||||||||||||
Concourse - Yoga, Zen & Dance Areas |
3,625.00 sf | 25.00 /sf | 90,625 | |||||||||
Wood Flooring |
90,625 | |||||||||||
9680 Carpet and Resilient Floors |
||||||||||||
Concourse - VCT at Kitchen Office Areas |
460.00 sf | 4.00 /sf | 1,840 | |||||||||
Concourse - Anti Static VCT at Server |
700.00 sf | 9.50 /sf | 6,650 | |||||||||
Street Lvl. - Linoleum w/ Pattern at Dining Areas |
9,200.00 sf | 10.00 /sf | 92,000 | |||||||||
Atrium Lvl. - VCT Floor at IT Closets |
450.00 sf | 4.00 /sf | 1,800 | |||||||||
Level 3 - VCT Floor at IT Closets/Kitchen |
1,045.00 sf | 4.00 /sf | 4,180 | |||||||||
Level 5 - VCT Floor at IT Closets/Kitchen |
800.00 sf | 4.00 /sf | 3,200 | |||||||||
Level 6 - VCT Floor al IT Closets/Kitchen |
800.00 sf | 4.00 /sf | 3,200 | |||||||||
Concourse - Carpet Tile Flooring |
3,000.00 sy | 35.00 /sy | 105,000 | |||||||||
Street Lvl. - Carpet Tile Flooring |
350.00 sy | 35.00 /sy | 12,250 | |||||||||
Atrium Lvl. - Carpet Tile Flooring |
2,100.00 sy | 35.00 /sy | 73,500 | |||||||||
Level 3 - Carpet Tile Flooring |
3,750.00 sy | 35,00 /sy | 131,250 | |||||||||
Level 5 - Carpet Tile Flooring |
5,050.00 sy | 35.00 /sy | 176,750 | |||||||||
Level 6 - Carpet Tile Flooring |
5,050.00 sy | 35.00 /sy | 176,750 | |||||||||
Carpet and Resilient Floors |
788,370 | |||||||||||
9700 Special Flooring |
||||||||||||
Concourse - Weight Room Rubber Floor |
2,200.00 sf | 17.50 /sf | 38,500 | |||||||||
Concourse - Clean & Seal Storage, Shipping, Cold Areas |
7,325.00 sf | 2.50 /sf | 18,313 | |||||||||
Street Lvl. - Clean & Seal Storage & Ref. Areas |
775.00 sf | 2.50 /sf | 1,938 | |||||||||
Street Lvl. - Clean & Seal Bike Area |
430.00 sf | 2.50 /sf | 1,075 | |||||||||
Special Flooring |
59,825 | |||||||||||
9750 Floor Preparartion and Leveling |
||||||||||||
Concourse - Minor Floor Prep at Carpet/VCT |
27,506.00 sf | 0.25 /sf | 6,877 | |||||||||
Street Lvl. - Minor Floor Prep at Carpet/VCT |
12,225.00 sf | 0.25 /sf | 3,056 | |||||||||
Atrium Lvl. - Minor Floor Prep at Carpet/VCT |
19,311.00 sf | 0.25 /sf | 4,828 | |||||||||
Level 3 - Minor Floor Prep at Carpet/VCT |
34,662.00 sf | 0.25 /sf | 8,666 | |||||||||
Level 5 - Minor Floor Prep at Carpet/VCT |
46,362.00 sf | 0.25 /sf | 11,591 | |||||||||
Level 6 - Minor Floor Prep at Carpet/VCT |
46,362.00 sf | 0.25 /sf | 11,591 | |||||||||
Floor Preparartion and Leveling |
46,607 | |||||||||||
9900 Paint and Wall Covering |
||||||||||||
Concourse - New Wall Surfaces |
118,500.00 sf | 1.25 /sf | 148,125 | |||||||||
Concourse - Existing Wall Surfaces |
26,250.00 sf | 1.25 /sf | 32,813 | |||||||||
Concourse - Exposed Ceilings |
31,500.00 sf | 1.50/sf | 47,250 | |||||||||
Street Lvl. - New Wall Surfaces |
23,000.00 sf | 1.25/sf | 28,750 | |||||||||
Street Lvl. - Existing Wall Surfaces |
9,900.00 sf | 1.25 /sf | 12,375 | |||||||||
Street Lvl. - Exposed Ceilings - Toilet Corridor/Storage |
725.00 sf | 1.00 /sf | 725 |
Page 7
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 16 of 18 |
description |
quantity | unit cost | total | |||||||||
9900 Paint and Wall Covering |
||||||||||||
Atrium Lvl. - New Wall Surfaces |
50,500.00 sf | 1.25 /sf | 63,125 | |||||||||
Atrium Lvl. - Existing Wall Surfaces |
10,80000 sf | 1 25 /sf | 13,500 | |||||||||
Atrium Lvl. - Touch Up Exposed Ceilings |
19,311.00 sf | 1.00 /sf | 19,311 | |||||||||
Level 3 - New Wall Surfaces |
39,600.00 sf | 1.25 /sf | 49,500 | |||||||||
Level 3 - Existing Wall Surfaces |
12,775.00 sf | 1 25 /sf | 15,969 | |||||||||
Level 3 - Touch Up Exposed Ceilings |
34,662.00 sf | 1.00 /sf | 34,662 | |||||||||
Level 5 - New Wall Surfaces |
54,600.00 sf | 1.25 /sf | 68,250 | |||||||||
Level 5 - Existing Wall Surfaces |
13,500.00 sf | 1.25 /sf | 16,875 | |||||||||
Level 5 - Touch Up Exposed Ceiling |
46,362.00 sf | 1.00 /sf | 46,362 | |||||||||
Level 6 - New Wall Surfaces |
51,800.00 sf | 1.25 /sf | 64,750 | |||||||||
Level 6 - Existing Wall Surfaces |
13,500.00 sf | 1.25 /sf | 16,875 | |||||||||
Level 6 - Touch Up Exposed Ceilings |
46,362.00 sf | 1.00 /sf | 46,362 | |||||||||
Paint and Wall Covering |
725,578 | |||||||||||
10010 Miscellaneous Specialties |
||||||||||||
Semi Recessed Fire Extinguishers - Allow 4/Lvl |
24.00 ea | 350.00 /ea | 8,400 | |||||||||
New White Boards - Allow 1/Office & 2/Lg. Confer, x 50% |
115.00 ea | 500.00 /ea | 57,500 | |||||||||
Resel Tenant White Bds. - Allow 1/Office & 2/Lg. Confer, x 50% |
115.00 ea | 175.00 /ea | 20,125 | |||||||||
Walk Off Mat at Entrance |
1.00 alw | 3,500.00 /alw | 3,500 | |||||||||
Miscellaneous Specialties |
89,525 | |||||||||||
10430 Signage |
||||||||||||
Code Required Signage Allowance |
6.00 lvl | 750.00 /lvl | 4,500 | |||||||||
Signage |
4,500 | |||||||||||
10500 Lockers |
||||||||||||
Concourse - New Locker Rooms |
48.00 ea | 275.00 /ea | 13,200 | |||||||||
Concourse - Kitchen Area |
12.00 ea | 275.00 /ea | 3,300 | |||||||||
Street Lvl. - Security Office |
6.00 ea | 275.00 /ea | 1,650 | |||||||||
Lockers |
18.150 | |||||||||||
11005 Miscellaneous Equipment |
||||||||||||
Street Lvl. - Bike Racks |
50.00 ea | 75.00 /ea | 3,750 | |||||||||
Miscellaneous Equipment |
3,750 | |||||||||||
11450 Appliances |
||||||||||||
Concourse - Small Kitchen |
1.00 alw | 3,500.00 /alw | 3,500 | |||||||||
Concourse - Sports Cafe |
1.00 alw | 1,500.00 /alw | 1,500 | |||||||||
Atrium Lvl. - Coffee/Snack |
2.00 alw | 500.00 /alw | 1,000 | |||||||||
Level 3 - Coffee/Snack |
4.00 alw | 500.00 /alw | 2,000 | |||||||||
Level 3 - Kitchen/Commons |
1.00 alw | 3,500.00 /alw | 3,500 | |||||||||
Level 5 - Tea Room |
1.00 alw | 1,500.00 /alw | 1,500 | |||||||||
Level 5 - Coffee/Snack |
4.00 alw | 500.00 /alw | 2,000 |
Page 8
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 17 of 18 |
description |
quantity | unit cost | total | |||||||||
11450 Appliances |
||||||||||||
Level 5 - Kitchen/Commons |
1.00 alw | 3,500.00 /alw | 3,500 | |||||||||
Level 6 - Coffee/Snack |
5.00 alw | 500.00 /alw | 2,500 | |||||||||
Level 6 - Kitchen/Commons |
1.00 alw | 3,500.00 /alw | 3,500 | |||||||||
Appliances |
24,500 | |||||||||||
12500 Window Coverings |
||||||||||||
Concourse - Repair/Replace Existing |
1.00 alw | 750.00 /alw | 750 | |||||||||
Atrium Lvl. - Repair/Replace Existing |
1.00 alw | 750.00 /alw | 750 | |||||||||
Level 3 - Repair/Replace Existing |
1.00 alw | 2,000.00 /alw | 2,000 | |||||||||
Level 5 - Repair/Replace Existing |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Level 6 - Repair/Replace Existing |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Window Coverings |
8,500 | |||||||||||
12700 Multiple Seating |
||||||||||||
Auditorium Seating |
110.00 ea | 350.00 /ea | 38,500 | |||||||||
Multiple Seating |
38,500 | |||||||||||
13005 Allowances |
||||||||||||
Concourse Level - New Restrooms w/Steam |
1.00 alw | 200,000.00 /alw | 200,000 | |||||||||
Concourse level - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Street Level - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Atrium Level - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Level 3 - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Level 5 - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Level 6 - Upgrade Existing Restrooms |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Allowances |
500,000 | |||||||||||
14200 Vertical Transportation |
||||||||||||
Kitchen Lift System -GVK Budget |
1.00 alw | 150,000.00 /alw | 150,000 | |||||||||
Elevator Equipment Room |
1.00 alw | 5,000.00 /alw | 5,000 | |||||||||
Vertical Transportation |
155,000 | |||||||||||
15400 Plumbing |
||||||||||||
Concourse & Street Lvl. - Main Kitchen Areas |
1.00 alw | 225,000.00 /alw | 225,000 | |||||||||
Concourse - Small Kitchen Sink w/WH |
1.00 alw | 8,500.00 /alw | 8,500 | |||||||||
Concourse - Sports Cafe Sink w/WH |
1.00 alw | 8,500.00 /alw | 8,500 | |||||||||
Concourse - Condensate Drains |
1.00 alw | 2,500.00 /alw | 2,500 | |||||||||
Concourse - New Drinking Fountains |
2.00 alw | 3,500.00 /alw | 7,000 | |||||||||
Level 3 - Kitchen/Commons Sinks w/WH |
1.00 alw | 8,500.00 /alw | 8,500 | |||||||||
Level 5 - Kitchen/Commons Sinks w/WH |
1.00 alw | 8,500.00 /alw | 8,500 | |||||||||
Level 6 - Kitchen/Commons Sinks w/WH |
1.00 alw | 8,500.00 /alw | 8,500 |
Page 9
PCC Job# | ||||
7-27-10 Tenant Plans.pee (vers 9.41) | Exhibit C, Schedule 6 | |||
3:21 PM on 8/9/2010 | Tenant Improvement Budget, Page 18 of 18 |
description |
quantity | unit cost | total | |||||||||
Plumbing |
277.000 | |||||||||||
15500 Fire Protection |
||||||||||||
Fire Sprinkler Modification Allowance |
210,000.00 sf | 1.00 /sf | 210,000 | |||||||||
Fire Sprinkler Design Build Engineering Fee |
1.00 alw | 15,000.00 /alw | 15,000 | |||||||||
Fire Sprinkler Permit Fee Allowance |
1.00 alw | 7,500.00 /alw | 7,500 | |||||||||
Fire Protection |
232,500 | |||||||||||
15550 Fire Suppression Systems |
||||||||||||
Kitchen Hood Fire Suppression Systems incl. Engr. & Fees |
1.00 alw | 25,000.00 /alw | 25,000 | |||||||||
Fire Suppression Systems |
25,000 | |||||||||||
15800 HVAC |
||||||||||||
HVAC System Modications & Additions |
210,000.00 sf | 12.50 /sf | 2,625,000 | |||||||||
Kitchen Exhaust /MU Air Systems, Pizza Exhaust |
1.00 alw | 150,000.00 /alw | 150,000 | |||||||||
Concourse Server Room 24/7 Cooling - Assume 10 tons |
1.00 alw | 70,000.00 /alw | 70,000 | |||||||||
Roof Platforms/Curbs at New Equipment |
1.00 alw | 15,000.00 /alw | 15,000 | |||||||||
Design Build HVAC Engineering |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
HVAC |
2,910,000 | |||||||||||
16100 Electrical Systems |
||||||||||||
Electrical Power |
210,000.00 sf | 3.25 /sf | 682,500 | |||||||||
New Lighting & Controls |
210,000.00 sf | 7.50 /sf | 1,575,000 | |||||||||
HVAC/Elevator System Power |
1.00 alw | 100,000.00 /alw | 100,000 | |||||||||
Plumbing Sump Pump/Ejector/Etc. Power |
1.00 alw | 25,000.00 /alw | 25,000 | |||||||||
Life Safety System Modifications & Additions |
210,000.00 sf | 2.25 /sf | 472,500 | |||||||||
Security/Telephone Rough Ins |
210,000.00 sf | 0.50 /sf | 105,000 | |||||||||
Server & IT Closet Rough Ins |
210,000.00 sf | 0.50 /sf | 105,000 | |||||||||
Auditorium Power, Lighting & Dimming System |
1.00 alw | 50,000.00 /alw | 50,000 | |||||||||
Kitchen Areas Power & Equipment Connections |
1.00 alw | 75,000.00 /alw | 75,000 | |||||||||
Conference Room AV Rough Ins |
75.00 alw | 1,750.00 /alw | 131,250 | |||||||||
Exterior Lighting |
1.00 alw | 15,000.00 /alw | 15,000 | |||||||||
Design Build Electrical/Life Safety Engineering & Permit |
1.00 alw | 150,000.00 /alw | 150,000 | |||||||||
Electrical Systems |
3,486,250 | |||||||||||
Description |
Amount | Totals | Hours | Rate | ||||||||
Subtotal |
||||||||||||
Contractors Fee @ 3.0%: |
448,894 | |||||||||||
Contractors Contingency @ 5%: |
770,602 | |||||||||||
Insurance @ 1%: |
161,826 | |||||||||||
Total |
16,344,463 |
Page 10
SCHEDULE 7
FORM OF TI LETTER OF CREDIT
[attached]
Exhibit C, Schedule 7
**REVISED 9/20/10**
Exhibit A to Standby Letter of Credit
Application dated September , 2010
DRAFT COPY ONLY FOR REVIEW AND ACCEPTANCE BY ALL PARTIES
DRAFTED BY JAMES SINGH OF WELLS BANK N.A - (9/10/10)
WELLS FARGO BANK, N.A.
U.S. TRADE SERVICES - STANDBY LETTER OF CREDIT UNIT
One Front Street, 21st Floor, San Francisco, California 94111
Phone: (800) 798-2815 Option 1. E-Mail: sftrade@wellsfarqo.com
IRREVOCABLE LETTER OF CREDIT
BENEFICIARY: | ||||||
650 Townsend Associates LLC |
Letter of Credit No.: NZS | |||||
c/o TMG Partners |
Date: September , 2010 | |||||
100 Bush Street, 26th Floor |
||||||
San Francisco, CA94104 |
Attn: Lynn Tolin
At the request and for the account of Zynga Game Network Inc., 444 De Haro Street, Ste 132, San Francisco, CA 94107, we hereby establish our irrevocable Letter of Credit in your favor in the amount of Seven Million Twenty Eight Thousand Six Hundred Ninety and 00/100 Dollars (US $7,028,690.00). This Letter of Credit is available with us at our above office by payment of your draft(s) drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N. A. Letter of Credit number (the Letter of Credit), hereby certifies that (1) Zynga Game Networks Inc. (the Applicant) failed beyond applicable notice and cure periods to timely pay a portion of Tenants Contribution required to be paid by Tenant under the Work Letter attached as Exhibit C of that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary, as may be amended from time to time and (2) the amount of the accompanying draft drawn under Wells Fargo Bank, N.A. Letter of Credit number represents the amount the Beneficiary is entitled to draw on the Letter of Credit as a result of the occurrence of such breach or default.
Each draft must also be accompanied by the original of this Letter of Credit for our endorsement on this Letter of Credit of our payment of such draft.
Partial and multiple drawings are permitted under this Letter of Credit.
Each draft must be marked DRAWN UNDER WELLS FARGO BANK, N. A. LETTER OF CREDIT NO. NZS .
This Letter of Credit expires at our above office on September 30, 2011, but shall be automatically extended, without written amendment to September 30, 2012 unless on or before August 31, 2011 we have sent written notice to you at your address above (or such other address as you may specify in writing) by registered mail or express courier that we elect not to renew this Letter of Credit beyond September 30, 2011
Upon our sending you such notice of the non-renewal of the expiration date of this Letter of Credit, you may also draw under this Letter of Credit by presentation to us at our above address, on or before the expiration date specified in such notice, of your draft drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N.A. Letter of Credit number (the Letter of Credit) hereby certifies that (1) the Beneficiary has received notice
1
from Wells Fargo Bank, N.A. that the Letter of Credit will not be renewed beyond its current expiration date and (2) Zynga Game Networks Inc. (the Applicant) has failed to secure and deliver to the Beneficiary a replacement letter of credit in the form and substance required under the Work Letter attached as Exhibit C of that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary, as may be amended from time to time."
This Letter of Credit is transferable one or more times, but in each instance to a single transferee and only in the full amount available to be drawn under this Letter of Credit at the time of each transfer. Any such transfer may be affected only through ourselves and only upon presentation to us at our above-specified office of a duly executed instrument of transfer in the format attached hereto as Exhibit A together with the original of this Letter of Credit. Any transfer of this Letter of Credit may not change the place of expiration of this Letter of Credit from our above-specified office. Each transfer shall be evidenced by our endorsement on the reverse of the original of this Letter of Credit, and we shall deliver the original of this Letter of Credit so endorsed to the transferee. Any transfer fee of 1/4 of 1 % of the transfer amount (minimum US$250.00) to be paid to us for a transfer will be payable solely by you, but the payment of any such transfer fee will not be a condition to the validity or effectiveness of such transfer or this Letter of Credit.
If any instructions accompanying a drawing under this Letter of Credit request that payment is to be made by transfer to an account with us or at another bank, we and/or such other bank may rely on an account number specified in such instructions even if the number identifies a person or entity different from the intended payee.
Documents may be delivered to us during regular business hours on a business day or forwarded to us by overnight delivery service to our above office. As used herein, the term business day means a day on which we are open at our above office to conduct our letter of credit business. Notwithstanding any provision to the contrary in the ISP98 (as hereinafter defined), if the expiration date or the final expiration date is not a business day then such date shall be automatically extended to the next succeeding date which is a business day.
CANCELLATION PRIOR TO EXPIRATION: You may return this Letter of Credit to us for cancellation prior to its expiration provided that this Letter of Credit is accompanied by your written agreement to its cancellation. Such written agreement to cancellation should specifically reference this Letter of Credit by number, clearly indicate that it is being returned for cancellation and be signed by an authorized representative of the beneficiary.
This Letter of Credit is subject to the International Standby Practices ISP98, International Chamber of Commerce Publication No. 590 (ISP98)
We hereby engage with you that each draft drawn and presented to us in compliance with the terms and provisions of this Letter of Credit will be duly honored upon presentation by payment to you of the amount requested.
Very truly yours, | ||
WELLS FARGO BANK, N. A. | ||
By: |
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(Authorized Signature) |
2
Annex A to Wells Fargo Bank, N.A.
Irrevocable Letter of Credit
No. NZS
TO: |
WELLS FARGO BANK, N. A. Northern California Trade Services Division One Front Street, 21st Floor San Francisco, California 94111 |
Date: |
LETTER OF CREDIT INFORMATION |
Wells Fargo Bank, N. A. Letter of Credit No.: NZS |
For value received, the undersigned beneficiary of the above described Letter of Credit (the Transferor) hereby irrevocably assigns and transfers all its rights under the Letter of Credit as heretofore and hereafter amended, extended or increased (the Credit) to the following transferee (the Transferee):
Name of Transferee
Address
By this transfer all of our rights in the Credit are transferred to the Transferee, and the Transferee shall have sole rights as beneficiary under the Credit, including, but not limited to, sole rights relating to any amendments, whether increases or extensions or other amendments, and whether such amendments are now existing or hereafter made.
ADVICE OF FUTURE AMENDMENTS: You are hereby irrevocably instructed to advise future amendment(s) of the Credit to the Transferee without the Transferors consent or notice to the Transferor.
Enclosed are the original of the Credit and the original of all amendments to this date. Please notify the Transferee of this transfer and of the terms and conditions of the Credit as transferred. This transfer will not become effective until the Transferee is so notified.
TRANSFERORS SIGNATURE GUARANTEED BY:
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[Banks Name] | [Transferors Name] | |||||||
By: |
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By: |
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Printed Name: |
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Printed Name: |
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Title: |
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Title: |
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We hereby agree with the format/language
of the above drafted letter of credit, and we
request Wells Fargo Bank, N.A. to issue the
Letter of Credit as above drafted.
Zynga Game Network Inc. | ||
By: |
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Name and Title: | ||
1
SCHEDULE 8
LIST OF MEP CONTRACTORS
[attached]
Exhibit C, Schedule 8
Exhibit C, Schedule 8
List of MEP Contractors
Plumbing Systems: | DPW, Inc. 203 East Harris Avenue South San Francisco, CA 94080 Contact: Don Wood |
Telephone: (650)588-8482 ext 25 Fax: (650)588-8481 E-mail: dw@dpwinc.com | ||
Fire Sprinkler System: | Pribuss Engineering, Inc. 523 Mayfair Avenue South San Francisco, CA 94080 Contact: Leonard Camuso |
Telephone: (650)588-0447 Fax: (650)588-8592 E-mail: leonard@pribuss.com | ||
HVAC Systems: | Critchfield Mechanical, Inc. 1901 Junction Avenue San Jose, CA 95131 Contact: Jennifer Fraser |
Telephone: (408)437-7019 Fax: (408)437-7199 E-mail: jfraser@cmihvac.com | ||
Electrical/Life Safety Systems: | Decker Electric Company, Inc. 1282 Folsom Street San Francisco, CA 94103 Contact: Dan Boas |
Telephone: (415)252-4763 Fax: (415)861-4257 E-mail: dboas@deckerelectric.com |
EXHIBIT D
CONFIRMATION OF LEASE TERM
THIS CONFIRMATION OF LEASE TERM is made this day of , 20 between 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord), and ZYNGA GAME NETWORK INC., a Delaware corporation (Tenant).
W I T N E S S E T H:
WHEREAS, by Office Lease dated the day of September, 2010, between the parties hereto (the Lease), Landlord leased to Tenant and Tenant leased from Landlord for the Term and upon the terms and conditions set forth therein the Premises containing approximately Adjusted Rentable Square Feet situated in , located at 699 Eighth Street, San Francisco, California, said Premises being more particularly designated in the Lease; and
WHEREAS, the parties hereto wish to confirm and memorialize the Commencement Date, the Phase 2 Rent Commencement Date and Expiration Date of the Term.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. All terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings designated for such terms in the Lease.
2. The Commencement Date shall, for all purposes under the Lease be, deemed to be , . The Term shall expire at midnight on , 20 , unless sooner terminated as provided in the Lease.
3. Any work required to be performed by Landlord in connection with the Phase 1 Premises has been completed in the manner required under the Lease as of the Commencement Date.
4. The Phase 2 Rent Commencement Date shall, for all purposes under the Lease, be deemed to be , .
5. Any work required to be performed by Landlord in connection with the Phase 2 Premises has been completed in the manner required under the Lease as of the Commencement Date.
6. Tenants Early Termination Option as to the Sixth Floor Premises shall expire on , as to the Fifth Floor Premises shall expire on and as to the Third Floor Premises shall expire on .
7. The Expansion as Lease Terms Period shall end on , the Expansion at Modified Lease Terms Period shall end on and the Expansion at Market Terms Period shall end on .
8. Attached hereto is a site plan depicting the exact number and location of the Parking Spaces as required pursuant to Section 30.1 of the Lease.
Exhibit D, Page 1
IN WITNESS WHEREOF, the parties hereto have caused this Confirmation of Lease Term to be executed as the day and year first above written.
LANDLORD:
650 TOWNSEND ASSOCIATES LLC,
a Delaware limited liability company
By: | Townsend Member LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Sole Member | ||||||||
By: | TMG 650 Townsend LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Administrative Manager | ||||||||
By: | TMG Partners, | |||||||
a California corporation | ||||||||
Its: Managing Member | ||||||||
By: |
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Name: |
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Its: |
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TENANT: | ||
ZYNGA GAME NETWORK INC., a Delaware corporation | ||
By: |
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Name: |
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Its: |
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Exhibit D, Page 2
EXHIBIT E
JANITORIAL SPECIFICATIONS
Exhibit E, Page 1
JANITORIAL SPECIFICATIONS
A. | Janitorial Service Specifications for Day Porter |
Day Porter shall be on duty from 8:30am to 5pm, Monday through Friday; Saturdays, Sundays and holidays excepted. The duties of the Day Porter, who is under the exclusive direction of the Chief Engineer/Operations Manager and Property Manager, shall be, but is not limited to, the following:
1. | Entrance Lobby |
The entrance lobby is to be kept neat and clean at all times and the following minimum cleaning operations shall be maintained to attain this effect:
a. | Wipe down metal surfaces daily. |
b. | Clean cigarette urns as necessary. |
c. | Wash glass doors and mirrored surfaces daily and as needed. |
d. | Empty garbage receptacles as necessary. |
2. | Elevators/Escalators |
a. | Vacuum carpets daily and as needed. Include spot cleaning as required in base contract. |
b. | Spot clean lobby elevator saddles, doors and frames daily. |
c. | Spot clean sides of elevator cars daily. |
d. | Spot clean sides of escalators daily. |
3. | Toilets Daily |
a. | Fill soap dispensers and paper towel dispensers (towels and soap to be furnished by Lessor) |
b. | Report all mechanical deficiencies (i.e., dripping faucets, etc.) to the Property Manager. |
c. | Wash all mirrors, powder shelves and lavatory tops. |
d. | Empty paper towel receptacles and debris as needed but not less than once daily. |
e. | Stock and maintain all sanitary product machines. |
4. | Public Areas |
a. | Remove all foreign matter and debris from all public corridors as necessary. |
b. | Handles special requests as directed by Manager (i.e., unplug toilets, remove trash, etc.) |
5. | Building Service Areas |
a. | Remove foreign matter and debris from planters and sidewalks along 8th and Townsend Streets daily. |
b. | Lay down and remove lobby runners, as necessary. |
c. | Ensure that the loading dock area, including the Mail Room, is free of debris. |
B. | Janitorial Service Specifications for Common Areas and Tenant Suites |
1. | Nightly Services: Sunday through Thursday. |
a. | Secure all lights as soon as possible each night excepting security lighting. |
b. | Vacuum and spot clean all Common Area carpets and tenanted carpet areas. |
c. | Dust mop all resilient and composition floors with treated dust mops. Damp mop to remove spills and water stains as required. |
d. | Feather dust all clear desks and office furniture, excluding chairs. |
e. | Papers and folders on desks are not to be moved. |
f. | Empty all ash trays and ash urns. Clean and sanitize as required. |
g. | Empty all waste paper baskets and other trash containers. |
h. | Remove all trash from floors to designated trash areas. |
i. | Remove fingerprints, dirt smudges, graffiti, etc., from all doors, frames, glass partitions, windows, light switches, walls and elevator interiors. |
j. | Return chairs and waste baskets to proper positions. |
k. | Clean, sanitize and polish drinking fountains. |
2. | Weekly Services |
a. | Dust all low reach and high reach areas, including but not limited to, structural ledges, mirror tops, partition tops and edges, air conditioning diffusers and return air grilles. |
3. | Monthly Services |
a. | Wipe down all walls and metal partitions. Partitions shall be left clean and not streaked after this work. |
b. | Clean all ventilation grilles. |
c. | Dust all doors and door jambs. |
4. | Quarterly Services |
a. | Thoroughly clean and reseal all ceramic tile floors, using approved sealers. |
C. | Main Floor Elevator/Escalator Lobbies and Public Corridors Specifications |
1. | Nightly Services |
a. | Thoroughly wash all swinging glass doors exclusive of tenant door. |
b. | Spot clean all glass including low partitions and the corridor side of all windows and glass doors to tenant premises. |
c. | Spot clean all chrome brightwork including swinging door hardware, kick plates, base, partition tops, handrails, waste paper receptacles, planters, elevator call button plates, hose cabinets and visible hardware on the corridor side of tenant entry doors. |
d. | Spot clean all interior architectural finishes including the cooridor side of all tenant area window and door frames and bases. |
e. | Thoroughly clean all door saddles of dirt and debris. |
f. | Spot clean and dust directory boards and ledges. |
g. | Empty, clean and sanitize as required all waste paperbaskets and refuse receptacles. |
h. | Vacuum all carpets and minor spot clean, as necessary. |
i. | Spot clean all elevator doors and frames. |
j. | Police all areas for debris at lease once during day time operating hours. |
2. | Monthly Services |
a. | Thoroughly clean all chrome and architectural interior finishes. |
D. | Basement Corridors, Service Office (Engineering, Security, Cleaning) Store Rooms, Service Corridors, Roof and Service Sink Closets: |
1. | Nightly Services |
a. | Remove trash from all the above areas. |
b. | Maintain an orderly arrangement of all janitorial supplies and paper products in the storage rooms and service sink closets. |
c. | Maintain an orderly arrangement of all equipment stored in these areas such as mops, buckets, brooms, vacuum cleaners, scrubbers, etc. |
d. | Clean and disinfect service sinks. |
e. | Sweep and damp mop service sink closet floors; deodorize and disinfect as required. |
f. | Sweep store room floors. |
g. | Receive and store all janitorial supplies in an orderly manner. |
2. | Weekly Services |
a. | Damp mop all composition floors in store rooms; deodorize and disinfect as required. |
b. | High dusting of these areas, including all pipes, ducts, conduits, ventilating diffusers and grills, mechanical, electrical equipment exposed beneath the hung ceilings outside of the mechanical equipment rooms. |
E. | Passenger Elevator/Escalator Cleaning Specifications. |
1. | Nightly Services |
a. | Spot clean walls and interior door. |
b. | Spot clean outside surfaces of all doors and frames. |
c. | Clean all floors thoroughly. Edge thoroughly. |
d. | Vacuum all thresholds. |
e. | Spot clean elevator carpets. |
2. | Weekly Services |
a. | Thoroughly clean entire interior surfaces and finish of all doors and frames and outside surfaces of all doors and frames. |
b. | Steel wool clean all thresholds. |
c. | Wipe thoroughly all handrails. |
3. | Monthly Services |
a. | Shampoo all elevator cab floor carpets. |
b. | Wipe clean elevator cab lamps. |
c. | Wipe clean entire cab ceiling. |
F. | Trash Area and Service Entrance Specifications |
1. | Nightly Services |
a. | Place all miscellaneous trash and debris except construction material, in the Propertys trash receptacles or compactor. |
b. | Neatly stack all trash in the designated area. |
c. | Sweep entire area. |
G. | Exterior Structure and Grounds Services Specifications |
1. | Nightly Services |
a. | Police entire perimeter of Property including landscaped areas, storm drain grills and public sidewalks |
b. | Spot sweep accumulations of dirt, papers and leaves in all corner areas where winds tend to cause collection of debris |
NOTE THAT THE TIMES OF SERVICE WILL VARY DEPENDING ON THE BUILDINGS CLEANING POLICY. WHICH WILL BE DESIGNED TO PROMOTE COST-CONSCIOUSNESS. BUILDING MANAGEMENT AND JANITORIAL STAFF SHALL USE REASONABLE EFFORTS TO MINIMIZE INCREASES IN JANITORIAL COSTS ON AN ONGOING BASIS
EXHIBIT F
FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
Exhibit F, Page 1
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: Jesse Sharf
SPACE ABOVE THIS LINE FOR RECORDERS USE
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance and Attornment Agreement (the Agreement) is dated as of September , 2010, between WELLS FARGO BANK, N.A., successor-by-merger to Wachovia Bank, National Association, a national banking association (Lender), ZYNGA GAME NETWORK INC., a Delaware corporation (Tenant), and 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord).
RECITALS
A. Tenant is the tenant and Landlord is the landlord under a certain Office Lease by and between Tenant and Landlord dated September , 2010 (the Lease), of premises described in the Lease (as the same may be expanded, contracted or otherwise modified in accordance with the Lease, the Premises) and located in a certain office building located in San Francisco, California, and more particularly described in Exhibit A attached hereto and made a part hereof (such office building, including the Premises, is hereinafter referred to as the Property).
B. This Agreement is being entered into in connection with a mortgage loan (the Loan) made by Lender to Landlord, which is secured by, among other things: (a) a first deed of trust to secure debt on and of the Property (the Security Instrument) recorded with the registry or clerk of the county in which the Property is located (the Official Records); and (b) a first assignment of leases and rents on the Property (the Assignment of Leases and Rents) recorded in the Official Records. The Security Instrument and the Assignment of Leases and Rents are hereinafter collectively referred to as the Security Documents.
C. Tenant acknowledges that Lender will rely on this Agreement in connection with any transactions with Landlord relating to the Loan. Lender acknowledges that Tenant has relied on this Agreement in connection with its execution of the Lease.
AGREEMENT
For good and valuable consideration, including the mutual covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
I. | Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Lease. |
II. | Tenant agrees that the Lease and all of its terms (including, but not limited to, any purchase options or rights of first offer or refusal to purchase) are and shall be subject and subordinate to the Security Documents and to all present or future advances under the obligations secured thereby and all renewals, amendments, modifications, consolidations, replacements, refinancings and extensions of such obligations and the Security Documents, to the full extent of all amounts secured by the Security Documents from time to time. Said subordination is to have the same force and effect as if the Security Documents and such renewals, modifications, consolidations, replacements and extensions thereof had been executed, acknowledged, delivered and recorded prior to the Lease, any amendments or modifications thereof and any notice thereof. At the option of Lender, upon notice to Tenant, at any time and from time to time, the Lease shall be superior to the Security Documents. |
III. | Lender agrees that, if Lender commences any action or proceeding to exercise any of its rights under the Security Documents, including an entry by Lender pursuant to the Security Instrument or a foreclosure of the Security Instrument or the acceptance of a deed in lieu of foreclosure by Lender or any other succession of Lender to fee ownership (collectively, a Foreclosure Event), Lender shall not, so long as Tenant is not in default beyond any applicable notice and grace period of any term, covenant or condition of the Lease (1) disturb Tenants right of quiet possession of the Premises under the terms of the Lease or (2) name Tenant as a party in such action or proceeding unless such joinder is required by law. |
IV. | Lender and Tenant agree that, in the event of a Foreclosure Event (1) the Lease shall not be terminated or, subject to Section V below, affected thereby but shall continue in full force and effect as a direct lease between Lender and Tenant, (2) Tenant will attorn to and recognize Lender as its landlord under the Lease for the remainder of the term of the Lease (including all extension periods which have been or are hereafter exercised) upon the same terms and conditions as are set forth in the Lease and (3) Tenant hereby agrees to pay and perform all of the obligations of Tenant pursuant to the Lease, whereupon, subject to Section V below, Lender shall recognize the leasehold estate of Tenant under all of the terms, covenants and conditions of the Lease for the remaining balance of the term of the Lease with the same force and effect as if Lender were the original landlord under the Lease. In the event such Foreclosure Event results in the termination of the Lease, Tenant and Lender agree to execute and deliver to the other a new lease upon the same terms, covenants and conditions as are set forth in the Lease for the unexpired term of the Lease which remained prior to such termination. |
V. | Tenant agrees that, in the event Lender succeeds to the interest of Landlord under the Lease pursuant to a Foreclosure Event, Lender shall not be: |
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A. | liable for any act or omission of any prior Landlord (including, without limitation, the then defaulting Landlord), except to the extent such act or omission continues after the Foreclosure Event, or |
B. | subject to any defense or offsets which Tenant may have against any prior Landlord (including, without limitation, the then defaulting Landlord), or |
C. | except for the first installment of Base Rent payable in accordance with Section 4.1 of the Lease, bound by any payment of Base Rent, Escalation Rent or Parking Charges which Tenant might have paid for more than one month in advance of the due date under the Lease to any prior Landlord (including, without limitation, the then defaulting Landlord), or |
D. | accountable for any security deposit or letter of credit, if any, paid by Tenant to any prior Landlord, except to the extent such monies are actually received by Lender or, in the case of any Zynga Letter of Credit (as defined in Section X), except to the extent such Zynga Letter of Credit is (x) delivered to Lender as beneficiary, and/or (y) drawn by Lender, or |
E. | bound by any amendment or modification of the Lease made without Lenders written consent. |
Notwithstanding anything to the contrary contained in this Agreement, and regardless of whether relating to any occurrence arising before, during or after any Foreclosure Event, Landlord (including any Lender who succeeds to the interest of Landlord under the Lease) shall remain liable for and bound by the following (collectively, the Continuing Obligations): (1) Tenants off-set rights as set forth in Section 20.7.3 of the Lease, provided that Tenant has provided and maintained the Letter of Credit, the ATI Letter of Credit and the TI Letter of Credit and any amendments, additions or replacements thereto required by the Lease in compliance with the terms and conditions set forth in the Lease; (2) any Delay Rent Credits offsets pursuant to Section 2.3 of the Lease; and (3) any right of Tenant to an abatement of Base Rent, Escalation Rent or Parking Charges under Sections 2.3, 2.7, 3.4, 5.2, 4.5, 8.4, 12.4, 30.5, 33, 34 or 35 of the Lease, including, without limitation, rent abatements arising during any Rent Abatement Period or Weighted Average Abatement Period, during the continuation of any Abatement Event not cured within the Eligibility Period, in connection with any Casualty or due to inaccessibility of any of Tenants Parking Spaces in the Parking Garage.
VI. | Tenant agrees that, notwithstanding any provision hereof to the contrary, following a Foreclosure Event, the terms of the Security Instrument shall continue to govern with respect to the disposition of any insurance proceeds or eminent domain awards, and any obligations of Landlord to restore the real estate of which the Premises are a part shall, insofar as they apply to Lender, be limited to insurance proceeds or eminent domain awards received by Lender after the deduction of all costs and expenses incurred in obtaining such proceeds or awards. |
VII. | Tenant hereby agrees to give to Lender copies of all notices of Landlord default(s) under the Lease, including, without limitation any default which would entitle Tenant to cancel or terminate the Lease, exercise any self-help or offset rights or take over construction of any improvements required to be constructed by Landlord, or to abate or reduce the rent payable thereunder, in the same manner |
290
as, and whenever, Tenant shall give any such notice of default to Landlord, and no notice of default shall be deemed given to Landlord unless and until such notice is delivered to Lender in accordance with Section IX hereof Lender shall have the right to remedy any Landlord default under the Lease, or to cause any default of Landlord under the Lease to be remedied, during the period of time that is concurrent with any period of time given to Landlord under the Lease to cure any such default. Prior to Tenants exercise of any right to terminate the Lease as a result of a default thereunder, Lender shall have an additional period in which to remedy any such default, or to cause any such default to be remedied, that is five (5) days longer than the period of time that is given to Landlord under the Lease to cure any such default. Tenant shall accept performance by Lender of any term, covenant, condition or agreement to be performed by Landlord under the Lease with the same force and effect as though performed by Landlord. Lender shall have the right, without Tenants consent, to foreclose the Security Instrument or to accept a deed in lieu of foreclosure of the Security Instrument or to exercise any other remedies under the Security Documents. |
VIII. | Tenant hereby consents to the Assignment of Leases and Rents from Landlord to Lender in connection with the Loan. Tenant acknowledges that the interest of the Landlord under the Lease is to be assigned to Lender solely as security for the purposes specified in said assignments, and Lender shall have no duty, liability or obligation whatsoever under the Lease or any extension or renewal thereof, either by virtue of said assignments or by any subsequent receipt or collection of rents thereunder, unless Lender shall specifically undertake such liability in writing or unless Lender or its designee or nominee becomes, and then only with respect to periods in which Lender or its designee or nominee becomes, the fee owner of the Premises. Tenant agrees that upon receipt of a written notice from Lender of a default by Landlord under the Loan, Tenant will thereafter, if requested by Lender, pay rent to Lender in accordance with the terms of the Lease. Landlord hereby expressly and irrevocably authorizes and directs Tenant to make such payment to Lender in accordance with such notice and hereby releases and discharges Tenant from, and shall indemnify, defend and hold Tenant harmless from and against, any liability, loss, claim, damage or expense on account of any such payments. Landlord hereby expressly and irrevocably authorizes and directs Tenant to cause each of the Zynga Letters of Credit to be issued in favor of the Lender named herein as beneficiary thereunder and hereby releases and discharges Tenant from, and shall indemnify, defend and hold Tenant harmless from and against, any liability, loss, claim, damage or expense on account of the Zynga Letters of Credit having been issued in favor of Lender named herein. |
IX. | Any notice, election, communication, request or other document or demand required or permitted under this Agreement shall be in writing and shall be deemed delivered on the earlier to occur of (a) receipt, (b) the date of delivery, refusal or nondelivery indicated on the return receipt, if deposited in a United States postal service depository, postage prepaid, sent certified or registered mail, return receipt requested, or if sent via a recognized commercial courier service providing for a receipt or (c) if by Federal Express or other reliable overnight courier service, on the next Business Day (as defined below) after delivered to such courier service, addressed to Tenant or Lender, as the case may be, at the following addresses: |
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If to Tenant:
Before the Commencement Date:
Zynga Game Network Inc.
365 Vermont Street
San Francisco, CA 94103
Attention: Director of Real Estate
with a copy to:
Zynga Game Network Inc.
365 Vermont Street
San Francisco, CA 94103
Attention: General Counsel
and a copy to:
Paul, Hastings, Janofsky & Walker LLP
55 Second Street, 24th Floor
San Francisco, CA 94105
Attention: Stephen I. Berkman, Esq.
From and after the Commencement Date:
Zynga Game Network Inc.
699 Eighth Street
San Francisco, California 94103
Attention: Director of Real Estate
with a copy to:
Zynga Game Network Inc.
699 Eighth Street
San Francisco, California 94103
Attention: General Counsel
and a copy to:
Paul, Hastings, Janofsky & Walker LLP
55 Second Street, 24th Floor
San Francisco, CA 94105
Attention: Stephen I. Berkman, Esq.
292
If to Lender:
Wells Fargo Bank, N.A.
One First Union Center, TW-16
301 South College Street
Loan Number 505850265
Charlotte, North Carolina 28288-0122
Attention: Real Estate Capital Markets Structured Finance
With a copy to:
Stephanie B. Parsons
Relationship Associate
Wells Fargo Bank, N.A.
SSG-Institutional Clients Group
999 Waterside Drive, 6th floor
Norfolk, VA 23510
Mail Code VA-5247
And a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: Jesse Sharf
For purposes of this Section IX, the term Business Day shall mean a day on which commercial banks are not authorized or required by law to close in the state in which the Property is located.
X. | Regarding the Letter of Credit, the ATI Letter of Credit and the TI Letter of Credit and any amendments, additions or replacements thereto required by the Lease (collectively, the Zynga Letters of Credit): |
A. | Landlord acknowledges and agrees that the delivery of the Zynga Letters of Credit to the Lender named herein as of the date hereof shall satisfy the delivery requirements therefor under the Lease. |
B. | Landlord acknowledges and agrees that Lenders draws under any of the Zynga Letters of Credit will be deemed to be draws made by Landlord for the purposes of the Lease, and will satisfy Tenants requirements to provide the applicable funds under the Lease. |
C. | Lender agrees that for so long as Lender is the named beneficiary of any of the Zynga Letters of Credit, Lender will comply with Landlords obligations under the Lease regarding any draws under, amendments to (including without limitation executing any required amendments), assignments of, reductions of or returns of such Zynga Letter of Credit. |
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D. | Lenders failure to comply with Landlords obligations under the Lease regarding any draws under, amendments to (including without limitation executing any required amendments), assignments of, reductions of or returns of such Zynga Letter of Credit shall be a Landlord default under the Lease, after applicable notice and cure periods. |
XI. | The term Lender as used herein includes any successor or assign of the named Lender herein, including, without limitation, any co-lender at the time of making the Loan, any purchaser at a foreclosure sale and any transferee pursuant to a deed in lieu of foreclosure or other Foreclosure Event, and their successors and assigns. The term Tenant as used herein shall include any successor and assign of the named Tenant herein. The term Landlord as used herein shall include any successor and assign of the named Landlord herein, including, without limitation, any Lender taking title to the Premises in connection with any Foreclosure Event or otherwise. |
XII. | If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be deemed deleted from this Agreement, and the other provisions of this Agreement shall remain in full force and effect. |
XIII. | Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought. This Agreement constitutes the entire agreement between Lender, Landlord and Tenant regarding the subordination of the Lease to the Security Documents. |
XIV. | This Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. |
XV. | This Agreement shall be construed in accordance with the laws of the state of in which the Property is located. Each of Tenant, Lender and Landlord represents and warrants that the person executing this Agreement its behalf is authorized to do so and execution hereof is the binding act of such party and enforceable against such party. |
[BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
294
Witness the execution hereof as of the date first above written.
LENDER:
WELLS FARGO BANK, N.A.,
successor-by-merger to Wachovia Bank, National Association
By: |
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Name: |
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Its: |
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LANDLORD: | ||||||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company |
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By: | Townsend Member LLC, a Delaware limited liability company Its: Sole Member |
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By: | TMG 650 Townsend LLC, a Delaware limited liability company Its: Administrative Manager |
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By: | TMG Partners, a California corporation Its: Managing Member |
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By: |
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Name: |
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Its: |
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TENANT: | ||||||||||||
ZYNGA GAME NETWORK INC., a Delaware corporation |
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By: |
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Name: |
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Its: |
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[SIGNATURE PAGE TO SUBORDINATION NON-DISTURBANCE AND ATTORNMENT AGREEMENT]
STATE OF NORTH CAROLINA | ) | |||
) | SS. | |||
COUNTY OF MECKLENBURG | ) |
On , 200 , personally appeared the above named , a of Wells Fargo Bank, N.A., a national banking association, and acknowledged the foregoing to be the free act and deed of said association, before me.
|
Notary Public |
My commission expires: |
State of California | ) | |
County of | ) |
On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature |
|
(Seal) |
State of California | ) | |
County of | ) |
On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature |
|
(Seal) |
EXHIBIT A
Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel 1:
All of Lot 9, Assessors Block 3783, as shown on that certain map entitled, Parcel Map of a Portion of 100 Vara Block No. 412. Also Being a Portion of Assessors Block 3783, which map was filed in the Office of the Recorder of the City and County of San Francisco, State of California on November 29, 1988 in Book 38 of Parcel Maps at Page 36.
Parcel 2:
Non-exclusive easements as set forth in that certain Grant of Easement: With Covenants and Restrictions Affecting Land dated as of December 29, 1988, by and between Bay West Showplace Investors, a California limited partnership, and Portman/Bay West Apparel Partners, a California partnership, recorded on December 30, 1988 in Reel E775, Image 1598, Series No. E296406, Official Records, and as amended by the First Amendment thereto dated June 19, 1998, by and between Bay West Showplace Investors, a California limited partnership, and Zoro, LLC, a California limited liability company, recorded on June 25, 1998, Reel H162, Image 291, Series No. 98-G376431, Official Records.
APN: 3783-009
A-1
EXHIBIT G
FORM OF LETTER OF CREDIT
Exhibit G, Page 1
**REVISED 9-20-10**
**September 15, 2010**
Exhibit A to Standby Letter of Credit
Application dated September , 2010
DRAFT COPY ONL- FOR REVIEW AND ACCEPTANCE BY ALL PARTIES
DRAFTED BY JAMES SINGH OF WELLS BANK N.A - (9/10/10)
WELLS FARGO BANK, N.A.
U.S. TRADE SERVICES - STANDBY LETTER OF CREDIT UNIT
One Front Street, 21st Floor, San Francisco, California 94111
Phone: (800) 798-2815 Option 1. E-Mail: sftrade@wellsfargo.com
IRREVOCABLE LETTER OF CREDIT
BENEFICIARY: 650 Townsend Associates LLC c/o TMG Partners 100 Bush Street, 26th Floor San Francisco, CA 94104 |
Letter of Credit No.: NZS Date: September , 2010 |
Attn: Lynn Tolin
At the request and for the account of Zynga Game Network Inc., 444 De Haro Street, Ste 132, San Francisco, CA 94107, we hereby establish our irrevocable Letter of Credit in your favor in the amount of Two Million Five Hundred Thousand and NO/100 United States Dollars (US $2,500,000.00). This Letter of Credit is available with us at our above office by payment of your draft(s) drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N. A. Letter of Credit number (the Letter of Credit), hereby certifies that (1) Zynga Game Networks Inc. (the Applicant) has breached or is otherwise in default under that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary as amended from time to time, in each case beyond applicable notice and cure periods, if any and (2) the amount of the accompanying draft drawn under Wells Fargo Bank, N.A. Letter of Credit number represents the amount the Beneficiary is entitled to draw on the Letter of Credit as a result of the occurrence of such breach or default.
OR
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N. A. Letter of Credit number (the Letter of Credit), hereby certifies that (1) Zynga Game Networks Inc. (the Applicant) or its successor has filed a voluntary petition under the United States Bankruptcy Code or any state bankruptcy code and (2) the amount of the accompanying draft drawn under Wells Fargo Bank, N.A. Letter of Credit number represents the amount the Beneficiary is entitled to draw on the Letter of Credit as a result of the occurrence of filing.
OR
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N. A. Letter of Credit number (the Letter of Credit), hereby certifies that (1) an involuntary petition has been filed against Zynga Game Networks Inc. (the Applicant) or its successor under the United States Bankruptcy Code or any state bankruptcy code and (2) the amount of the accompanying draft drawn under Wells Fargo Bank, N.A. Letter of Credit number represents the amount the Beneficiary is entitled to draw on the Letter of Credit as a result of the occurrence of filing.
Each draft must also be accompanied by the original of this Letter of Credit for our endorsement on this Letter of Credit of our payment of such draft.
Partial and multiple drawings are permitted under this Letter of Credit.
301
Each draft must be marked DRAWN UNDER WELLS FARGO BANK, N. A. LETTER OF CREDIT NO. NZS .
This Letter of Credit expires at our above office on September 30, 2011, but shall be automatically extended, without written amendment, to September 30 in each succeeding calendar year unless we have sent written notice to you at your address above (or such other address as you may specify in writing) by registered mail or express courier that we elect not to renew this Letter of Credit beyond the date specified in such notice, which expiration date will be at least thirty (30) calendar days after the date we send you such notice. Notwithstanding the foregoing, this Letter of Credit shall not be extended beyond July 31, 2018.
Upon our sending you such notice of the non-renewal of the expiration date of this Letter of Credit, you may also draw under this Letter of Credit by presentation to us at our above address, on or before the expiration date specified in such notice, of your draft drawn on us at sight accompanied by your signed and dated statement worded as follows:
The undersigned, an authorized representative of the beneficiary (the Beneficiary) of Wells Fargo Bank, N.A. Letter of Credit number (the Letter of Credit) hereby certifies that (1) the Beneficiary has received notice from Wells Fargo Bank, N.A. that the Letter of Credit will not be renewed beyond its current expiration date and (2) Zynga Game Networks Inc. (the Applicant) has failed to secure and deliver to the Beneficiary a replacement letter of credit in the form and substance required under that certain Office Lease dated September , 2010 by and between the Applicant and the Beneficiary, as may be amended from time to time.
This Letter of Credit is transferable one or more times, but in each instance to a single transferee and only in the full amount available to be drawn under this Letter of Credit at the time of each transfer. Any such transfer may be affected only through ourselves and only upon presentation to us at our above-specified office of a duly executed instrument of transfer in the format attached hereto as Exhibit A together with the original of this Letter of Credit. Any transfer of this Letter of Credit may not change the place of expiration of this Letter of Credit from our above-specified office. Each transfer shall be evidenced by our endorsement on the reverse of the original of this Letter of Credit, and we shall deliver the original of this Letter of Credit so endorsed to the transferee. Any transfer fee of 1/4 of 1% of the transfer amount (minimum US$250.00) to be paid to us for a transfer will be payable solely by you, but the payment of any such transfer fee-will not be a condition to the validity or effectiveness of such transfer or this Letter of Credit.
If any instructions accompanying a drawing under this Letter of Credit request that payment is to be made by transfer to an account with us or at another bank, we and/or such other bank may rely on an account number specified in such instructions even if the number identifies a person or entity different from the intended payee.
Documents may be delivered to us during regular business hours on a business day or forwarded to us by overnight delivery service to our above office. As used herein, the term business day means a day on which we are open at our above office to conduct our letter of credit business. Notwithstanding any provision to the contrary in the ISP98 (as hereinafter defined), if the expiration date or the final expiration date is not a business day then such date shall be automatically extended to the next succeeding date which is a business day.
CANCELLATION PRIOR TO EXPIRATION: You may return this Letter of Credit to us for cancellation prior to its expiration provided that this Letter of Credit is accompanied by your written agreement to its cancellation. Such written agreement to cancellation should specifically reference this Letter of Credit by number, clearly indicate that it is being returned for cancellation and be signed by an authorized representative of the beneficiary.
This Letter of Credit is subject to the International Standby Practices ISP98, International Chamber of Commerce Publication No. 590 (ISP98)
We hereby engage with you that each draft drawn and presented to us in compliance with the terms and provisions of this Letter of Credit will be duly honored upon presentation by payment to you of the amount requested.
Very truly yours, |
WELLS FARGO BANK, N. A. |
302
By: |
| |
(Authorized Signature) |
303
Annex A to Wells Fargo Bank, N.A.
Irrevocable Letter of Credit
No. NZS
TO: | WELLS FARGO BANK, N. A. | Date: |
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Northern California Trade Services Division One Front Street, 21st Floor San Francisco, California 94111 |
LETTER OF CREDIT INFORMATION | Wells Fargo Bank, N. A. Letter of Credit No.: NZS |
For value received, the undersigned beneficiary of the above described Letter of Credit (the Transferor) hereby irrevocably assigns and transfers all its rights under the Letter of Credit as heretofore and hereafter amended, extended or increased (the Credit) to the following transferee (the Transferee):
Name of Transferee
Address
By this transfer all of our rights in the Credit are transferred to the Transferee, and the Transferee shall have sole rights as beneficiary under the Credit, including, but not limited to, sole rights relating to any amendments, whether increases or extensions or other amendments, and whether such amendments are now existing or hereafter made.
ADVICE OF FUTURE AMENDMENTS: You are hereby irrevocably instructed to advise future amendment(s) of the Credit to the Transferee without the Transferors consent or notice to the Transferor.
Enclosed are the original of the Credit and the original of all amendments to this date. Please notify the Transferee of this transfer and of the terms and conditions of the Credit as transferred. This transfer will not become effective until the Transferee is so notified.
TRANSFERORS SIGNATURE GUARANTEED BY:
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[Banks Name] |
[Transferors Name] | |||||||
By: |
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By: |
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Printed Name: |
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Printed Name: |
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Title: |
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Title: |
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We hereby agree with the format/language of the above drafted letter of credit, and we request Wells Fargo Bank, N.A. to issue the Letter of Credit as above drafted. | ||
Zynga Game Network Inc. | ||
By: |
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Name and Title: |
1
EXHIBIT H
CALCULATION OF WEIGHTED AVERAGE ABATEMENT PERIOD
[attached]
Exhibit H, Page 1
Exhibit H
Weighted Average Abatement Period
Revised September 13, 2010
Phase |
Premises |
ARSF | % of total Premises |
Commencement Date |
Rent Start |
Days of Abatement |
Weighted Days of Abatement |
|||||||||||||||||||
1 |
Concourse |
75,000 | 28.0 | % | 4/1/2011 | 1/1/2012 | 275 | 77 | ||||||||||||||||||
1 |
6th Floor |
51,812 | 19.3 | % | 4/1/2011 | 7/1/2012 | 457 | 88 | ||||||||||||||||||
1 |
5th Floor |
52,071 | 19.4 | % | 4/1/2011 | 1/1/2013 | 641 | 125 | ||||||||||||||||||
1 |
3rd Floor excl Suite 375 |
22,329 | 8.3 | % | 4/1/2011 | 7/1/2013 | 822 | 69 | ||||||||||||||||||
1 |
1st Floor |
20,425 | 7.6 | % | 4/1/2011 | 7/1/2013 | 822 | 63 | ||||||||||||||||||
2 |
2nd Floor24,066 sq ft |
24,066 | 9.0 | % | 6/1/2011 | 9/1/2013 | 823 | 74 | ||||||||||||||||||
2 |
2nd Floor8,000 sq ft |
8,000 | 3.0 | % | 6/1/2011 | 5/1/2013 | 700 | 21 | ||||||||||||||||||
2 |
3rd FloorSuite 375 |
14,163 | 5.3 | % | 6/1/2011 | 9/1/2013 | 823 | 44 | ||||||||||||||||||
Total |
267,866 | 100.0 | % | 560 | ||||||||||||||||||||||
h
Weighted Average Abatement Period
EXHIBIT I
SPECIFICATIONS OF EXISTING GENERATORS
There are currently two Existing Generators located at the Building. The specifications for the Existing Generators are as follows:
Make: | Onan | |
Model: | 200 DGFC | |
KW: | 200 | |
KVA: | 250 | |
Amps: | 300 | |
Voltage /Phase: | HZ 277/480/60 | |
Fuel: | Diesel | |
Make: | Generac | |
Model: | 99A 08632-S | |
KW: | 155 | |
KVA: | 193.7 | |
Amps: | 233 | |
Voltage/Phase: | HZ 277/480/60 | |
Fuel: | Diesel |
Note: See attached diagrams showing the location of the two Existing Generators.
Exhibit I, Page 1
EXHIBIT J
LANDLORD SECURITY PROGRAM
699 Eighth Street/650 Townsend Street Security Specifications
Security Staffing Monday through Friday Excluding Building Holidays:
Day Shift 7:00AM-3:00PM: 3 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level, one officer moving between the Townsend and Eighth Street lobbies, and one officer roving the entire building from concourse to rooftop.
Swing Shift 3:00PM-11:000PM: 3 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level, one officer moving between the Townsend and Eighth Street lobbies, and one officer roving the entire building from concourse to rooftop.
Graveyard Shift 11:00PM-7:00AM: 2 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level and one officer roving the entire building from concourse to rooftop.
Saturday, Sunday and Building Holidays:
Day Shift 7:00AM-3:00PM: 2 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level and one officer roving the entire building from concourse to rooftop.
Swing Shift 3:00PM-11:000PM: 2 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level and one officer roving the entire building from concourse to rooftop
Graveyard Shift 11:00PM-7:00AM: 2 Security Officers on site, one officer monitoring the cameras in the control room located on the concourse level, and one officer roving the entire building from concourse to rooftop.
Perimeter Controls:
Honeywell Northern Access control system card keys at entry/exit doors (except emergency exits). The card readers are Inbala (owned by Honeywell).
Note: specific brands/manufacturers of equipment noted here may change from time to time
Exhibit J, Page 1
EXHIBIT K
LOCATION OF PARKING SPACES
[attached]
Exhibit K, Page 1
EXHIBIT L
MEMORANDUM OF LEASE
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
ZYNGA GAME NETWORK INC.
365 Vermont Street
San Francisco, CA 94103
Attention: General Counsel
MEMORANDUM OF LEASE
(699 Eight Street, San Francisco, California)
THIS MEMORANDUM OF LEASE (this Memorandum) is made and entered into as of , 2010 by and between 650 TOWNSEND ASSOCIATES, LLC, a Delaware limited liability company (Landlord), and ZYNGA GAME NETWORK INC., a Delaware corporation (Tenant).
W I T N E S S E T H:
WHEREAS, Landlord owns that certain real property in the City of and County of San Francisco, State of California commonly known as 699 Eight Street being more particularly described on Exhibit A attached hereto and made a part hereof (the Property);
WHEREAS, Landlord and Tenant entered into that certain Office Lease dated September , 2010 (the Lease) whereby Tenant leased a portion of the Property (the Premises) from Landlord; and
WHEREAS, Landlord and Tenant desire to evidence the Lease in the official records maintained by the Office of the County Recorder for the County of San Francisco, State of California by this Memorandum.
NOW, THEREFORE, for good and sufficient consideration acknowledged in the Lease, Landlord has demised, leased and let unto Tenant the Premises, as follows:
Section 1. Defined Terms. Initially capitalized terms used but not defined herein shall have the meanings set forth in the Lease.
Section 2. Term. The Term of the Lease shall begin on the Lease Date and end on the day preceding the seventh (7th) year anniversary of the first full month following the Commencement Date. Subject to the terms and conditions set forth in the Lease, Tenant has two (2) Extension Options to extend the Term of the Lease for five (5) years each.
Section 3. Expansion Option. Subject to the terms and conditions set forth in the Lease, Tenant has certain Expansion Options to lease additional space at the Property.
Section 4. Right of First Refusal. Subject to the terms and conditions set forth in the Lease, Tenant has certain Rights of First Refusal to lease additional space at the Property.
Exhibit L, Page 1
Section 5. Right of First Offer. Subject to the terms and conditions set forth in the Lease, Tenant has certain Right of First Offer to lease additional space at the Property.
Section 6. Purchase Option. Subject to the terms and conditions set forth in the Lease, Tenant has a one-time right to purchase the Property.
Section 7. Lease Incorporation; Purpose of Memorandum. This Memorandum is subject to all conditions, terms and provisions of the Lease, which agreement is hereby adopted and made a part hereof by reference to the same, in the same manner as if all the provisions thereof were set forth herein in full. This Memorandum has been executed for the purpose of recordation in order to give notice of all of the terms, provisions and conditions of the Lease, and is not intended, and shall not be construed, to define, limit, or modify the Lease. This Memorandum is not a complete summary of the Lease, nor shall any provisions of this Memorandum be used in interpreting the provisions of the Lease.
Section 7. Conflict. In the event of a conflict between the terms of the Lease and this Memorandum, the Lease shall prevail. Reference should be made to the Lease for a more detailed description of all matters contained in this Memorandum.
Section 8. Exhibits and Recitals. Each exhibit attached to and referred to in this Memorandum is hereby incorporated by reference. The recitals are incorporated herein by reference as matters of contract and not mere recital.
Section 9. Counterparts. This Memorandum may be executed in as many counterparts as may be deemed necessary and convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument.
[SIGNATURES ON NEXT PAGE]
Exhibit L, Page 2
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum effective as of the date first written above.
LANDLORD: | ||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company | ||||||||
By: | Townsend Member LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Sole Member | ||||||||
By: | TMG 650 Townsend LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Administrative Manager | ||||||||
By: | TMG Partners, | |||||||
a California corporation | ||||||||
Its: Managing Member | ||||||||
By: |
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Name: |
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Its: |
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TENANT: | ||
ZYNGA GAME NETWORK INC., a Delaware corporation | ||
By: |
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Name: |
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Its: |
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Exhibit L, Page 3
State of California
County of
On before me, ,
Date Here Insert Name and Title of Officer
personally appeared
Name(s) of Signer(s)
,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. | ||||||
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. | Place Notary Seal Above | |||||
WITNESS my hand and official seal. | ||||||
Signature |
|
|||||
Signature of Notary Public |
Exhibit L, Page 4
State of California
County of
On before me, ,
Date Here Insert Name and Title of Officer
personally appeared
Name(s) of Signer(s)
,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. | ||||||
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. | Place Notary Seal Above | |||||
WITNESS my hand and official seal. | ||||||
Signature |
|
|||||
Signature of Notary Public |
Exhibit L, Page 5
EXHIBIT A TO MEMORANDUM OF LEASE
LEGAL DESCRIPTION OF PROPERTY
Exhibit L, Page 6
EXHIBIT A
Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel 1:
All of Lot 9, Assessors Block 3783, as shown on that certain map entitled, Parcel Map of a Portion of 100 Vara Block No. 412, Also Being a Portion of Assessors Block 3783, which map was filed in the Office of the Recorder of the City and County of San Francisco, State of California on November 29, 1988 in Book 38 of Parcel Maps at Page 36.
Parcel 2:
Non-exclusive easements as set forth in that certain Grant of Easement With Covenants and Restrictions Affecting Land dated as of December 29, 1988, by and between Bay West Showplace Investors, a California limited partnership, and Portman/Bay West Apparel Partners, a California partnership, recorded on December 30, 1988 in Reel E775, Image 1598, Series No. E296406, Official Records, and as amended by the First Amendment thereto dated June 19, 1998, by and between Bay West Showplace Investors, a California limited partnership, and Zoro, LLC, a California limited liability company, recorded on June 25, 1998, Reel H162, Image 291, Series No. 98-G376431, Official Records.
APN: 3783-009
A-1
EXHIBIT M
TENANT COMPETITORS
EA/Playfish
Disney/Playdom
Rockyou
Crowdstar
Activision
Exhibit M, Page 1
EXHIBIT N
RESERVED
Exhibit N, Page 1
EXHIBIT O
RESERVED
Exhibit O, Page 1
EXHIBIT P
EXISTING ENCUMBRANCES
Attached hereto is Landlords Owners Policy of Title Insurance August 30, 2006. To Landlords knowledge, the following are items recorded in the public records subsequent to the date of such Owners Policy:
A. | Notice of Non-Responsibility disclosing a work of improvement by the tenant named below |
Tenant | Sega of America, Inc. | |
Recorded: | July 20, 2007, Instrument No. 2007-1424711, of Official Records |
B. | Notice of Non-Responsibility disclosing a work of improvement by the tenant named below |
Tenant | G4 Media, Inc. | |
Recorded: | July 20, 2007, Instrument No. 2007-1424712, of Official Records |
C. | Notice of Special Restrictions under the City Planning Code of the City and County of San Francisco upon the terms and conditions contained therein |
Recorded: | November 1, 2007, Instrument No. 2007-1484173, Book 3509, Page 673, of Official Records |
D. | Matters contained in that certain document entitled Agreement Imposing Restrictions dated December 31, 2007, executed by BW Brannan Street, LLC and 650 Townsend Associates, LLC |
Recorded: | January 31, 2008, Instrument No. 2008I530188, Book J568, Page 488, of Official Records. |
E. | Covenants, conditions and restrictions in the declaration of restrictions but omitting any covenants or restrictions, if any, including, but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, or source of income, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law. |
Recorded: | January 31, 2008, Instrument No. 2008-1530189, Book J568, Page 489, of Official Records |
F. | Matters contained in that certain document entitled, Notice of Special Restrictions Under the Planning Code dated June 9, 2008, executed by and between 650 Townsend Associates LLC and the City and County of San Francisco. |
Recorded: | June 11, 2008, Instrument No. 2008-1595965, Book 3660, Page 471, of Official Records. |
G. | A Notice of Non-Responsibility disclosing a work of improvement by the tenant named below |
Tenant | Dun & Bradstreet, Inc. | |
Recorded: | February 20, 2009, Instrument No. 2009-1724553, of Official Records |
H. | A Notice of Non-Responsibility disclosing a work of improvement by the tenant named below |
Tenant | Arrow Sign Company | |
Recorded: | July 29, 2009, Instrument No. 2009-1807643, of Official Records |
I. | A Notice of Completion which states that a work of improvement was completed on the Land on October 21, 2009 |
Recorded: | October 23, 2009, Instrument No. 2009-1863797, of Official Records |
J. | Modification Agreement pertaining to the Deed Of Trust as disclosed by a Memorandum thereof executed by 650 Townsend Associates LLC and Wachovia Bank, National Association |
Recorded: | December 3, 2009, Instrument No. 2009-1881229, of Official Records |
POLICY NO.: CACTI7738-7701-5582-0036902632-CTIC-2006-42
OWNERS POLICY OF TITLE INSURANCE
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE PROVISIONS OF THE CONDITIONS AND STIPULATIONS HEREOF, CHICAGO TITLE INSURANCE COMPANY, a corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the amount of insurance stated in Schedule A, and costs, attorneys fees and expenses which the Company may become obligated to pay hereunder, sustained or incurred by the insured by reason of:
1. | Title to the estate or interest described in Schedule A being vested otherwise than as stated herein; |
2. | Any defect in or lien or encumbrance on such title; |
3. | Lack of a right of access to and from the land; |
Unmarketability of such title;
IN WITNESS WHEREOF, CHICAGO TITLE INSURANCE COMPANY has caused this policy to be signed and sealed by its duly authorized officers.
Chicago Title Insurance Company | ||||||||||
BY | President | |||||||||
|
ATTEST |
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Countersigned | Secretary |
(11/00) | FORMERLY ALTA Owners Policy 1970 (10/17/70 & 10/17/84) |
SCHEDULE A
Policy No.: CACTI7738-7701-5582-0036902632-CTIC-2006-42
Amount of Insurance: | $ 116,954,747.00 | |||
Premium Amount: | $70,173.00 |
Date of Policy: August 30, 2006 at 11:54 AM
1. | Name of Insured: |
650 Townsend Associates LLC, a Delaware limited liability company
2. | The estate or interest in the land which is covered by this policy is: |
A FEE as to Parcel(s) 1;
AN EASEMENT more fully described below as to Parcel(s) 2
3. | Title to the estate or interest in the land is vested in: |
650 Townsend Associates LLC, a Delaware limited liability company
4. | The land referred to in this policy is described as follows: |
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
THIS POLICY VALID ONLY IF SCHEDULE B IS ATTACHED
1
Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
LEGAL DESCRIPTION
EXHIBIT A
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel 1:
All of Lot 9, Assessors Block 3783, as shown on that certain map entitled, Parcel Map of a Portion of 100 Vara Block No. 412, Also Being a Portion of Assessors Block 3783, which map was filed in the Office of the Recorder of the City and County of San Francisco, State of California on November 29, 1988 in Book 38 of Parcel Maps at Page 36.
Parcel 2:
Non-exclusive easements as set forth in that certain Grant of Easement With Covenants and Restrictions Affecting Land dated as of December 29,1988, by and between Bay West Showplace Investors, a California limited partnership, and Portman/Bay West Apparel Partners, a California partnership, recorded on December 30, 1988 in Reel E775, Image 1598, Series No. E296406, Official Records, and as amended by the First Amendment thereto dated June 19, 1998, by and between Bay West Showplace Investors, a California limited partnership, and Zoro, LLC, a California limited liability company, recorded on June 25, 1998, Reel H162, Image 291, Series No. 98-G376431, Official Records.
APN: 3783-009
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
2
Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
SCHEDULE B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys fees or expenses) which arise by reason of:
1. | Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2006-2007. |
2. | The lien of supplemental taxes, if any, assessed as a result of changes in ownership or completion of new construction occurring on or after Date of Policy, pursuant to the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California. |
3. | Special taxes, collected with county real property taxes, assessed by the San Francisco Unified School District for Community Facilities District No. 90-1, pursuant to the Mello-Roos Community Facilities District Act (Section 53311, et seq., California Government Code). |
4. | Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document. |
Granted to: | Bay West Contract, Ltd. | |
Purpose: | Parking of motor vehicles, ingress and egress, truck loading and unloading, location and operation of trash compactor or similar device, placement of an electrical transformer, maintenance of property, installation and maintenance of plantings, signs, gates and fences, installation and maintenance of utility facilities above and below grade | |
Recorded: | June 21, 1984, Instrument No. D513127; Book D693, Page 650, of Official Records | |
Affects: | A portion of Easement Parcel 2 herein |
An agreement to modify the terms and provisions of said easement as therein provided
Executed by: | Bay West Showplace Investors and Bay West Contract, Ltd. | |
Recorded: | June 29, 1995, Instrument No. 95-F810990, Reel G413, Image 284, of Official Records |
An agreement to modify the terms and provisions of said easement as therein provided
Executed by: | Bay West Showplace Investors and Bay West Contract, Ltd. | |
Recorded: | April 4, 1996, Instrument No. 96-F952434, Reel G604, Image 371, of Official Records |
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
3
SCHEDULE B (continued) | Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42 |
5. | Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document. |
Granted to: | Bay West Showplace Investors | |
Purpose: | Loading docks, electrical transformers, trash compactors, wires, pipes, conduits or other means of transmission or conveyance of utilities, pedestrian and motor vehicle ingress and egress | |
Recorded: | December 19, 1986, Instrument No. D916989, Reel E238, Image 2385, of Official Records | |
Affects: | A portion of Easement Parcel 2 herein |
The easement declared in said instrument was subsequently incorporated in the Grant Deed
From: | Bay West Showplace Investors, a California limited partnership | |
To: | Toda Development, Inc., a California corporation | |
Recorded: | June 27, 1991, Instrument No. E929861, Reel F406, Image 261, of Official Records |
6. | Notice of Special Restrictions under the City Planning Code of the City and County of San Francisco upon the terms and conditions contained therein |
Recorded: | August 29, 1988, Instrument No. E230413, Reel E668, Image 753, of Official Records |
Reference is made to said document for full particulars.
7. | Matters contained in that certain document entitled Grant of Easement With Covenants and Restrictions Affecting Land dated December 29, 1988, executed by Bay West Showplace Investors and Portman/Bay West Apparel Partners recorded December 30, 1988, Instrument No. E296406, Reel E775, Image 1598, of Official Records. |
Reference is hereby made to said document for full particulars.
Affects: |
Easement Parcel 2 herein |
An agreement to modify the terms and provisions of said grant of easement as therein provided
Executed by: | Bay West Showplace Investors and Zoro, LLC | |
Recorded: | June 25, 1998, Instrument No. 98-G376431, Reel H162, Image 291, of Official Records |
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
4
SCHEDULE B (continued) | Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42 |
8. | Notice of Special Restrictions under the City Planning Code of the City and County of San Francisco upon the terms and conditions contained therein |
Recorded: | February 14, 1989, Instrument No. E321015, Reel E807, Image 1318, of Official Records |
Reference is made to said document for full particulars.
9. | Conditions and restrictions as set forth in a document recorded by the City and County of San Francisco, Department of Public Works. |
Type of Permit: | Minor Sidewalk Encroachment, Permit No. 90MSE-054 | |
Recorded: | May 18, 1990, Instrument No. E550686, Reel F128, Image 1375, of Official Records |
Reference is made to said document for full particulars.
10. | Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document. |
Granted to: | Bay West Showplace Investors | |
Purpose: | Sanitary sewer | |
Recorded: | December 6, 1990, Instrument No. E830756, Reel F266, Image 56, of Official Records | |
Affects: | The northeasterly 1 foot of the southeasterly 60 feet of Parcel 1 herein |
11. | Notice of Special Restrictions under the City Planning Code of the City and County of San Francisco upon the terms and conditions contained therein |
Recorded: | September 29, 1998, Instrument No. 98-G442615, Reel H229, Image 383, of Official Records |
Reference is made to said document for full particulars.
12. | Conditions and restrictions as set forth in a document recorded by the City and County of San Francisco, Department of Public Works. |
Type of Permit: Recorded: |
Minor Sidewalk Encroachment, Permit No. 01MSE-233 June 6, 2001, Instrument No. 2001-G959962, Reel H903, Image 279, of Official Records |
Reference is made to said document for full particulars.
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
5
SCHEDULE B (continued) | Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42 |
13. | Conditions and restrictions as set forth in a document recorded by the City and County of San Francisco, Department of Public Works. |
Type of Permit: | Minor Sidewalk Encroachment, Permit No. 02MSE-355 | |
Recorded: | August 6, 2002, Instrument No. 2002-H215831, Reel I195, Image 312, of Official Records |
Reference is made to said document for full particulars.
14. | Rights of those certain tenants and licensees identified in the List of Leases and License Agreements attached hereto as Exhibit 1 and made a part hereof, as tenants or licensees only, without the option to purchase or right of first refusal to purchase all or any portion of the land, under unrecorded leases and licenses. |
15. | Any facts, rights, interests, or claims which may exist or arise by reason of the following facts disclosed by survey, Job No. 7333, dated July 12, 2006 prepared by Tronoff Associates - Land Surveyors: |
(a) | Encroachments of flagpoles at 2nd story into Townsend Street by 13.5 feet |
(b) | Encroachments of lights at 2nd story and top into Townsend Street by 0.5 feet |
(c) | Encroachments of decorative concrete semi-circles at 2nd story and top into Townsend Street by 1.9 feet |
(d) | Encroachments of irrigated planters into Townsend Street by 4.0 feet |
(e) | Encroachment of an unidentified sign into Townsend Street by 8.9 feet |
(f) | Encroachments of planters into Townsend Street by 5.5 feet |
(g) | Encroachment of a sign reading, Sega into Townsend Street by 1.0 foot |
(h) | Encroachments of two signs at 1st story reading, Poggen Pohl into Townsend Street by 0.6 feet |
(i) | Encroachment of a sign at 1st story reading, Union Bank of California into Townsend Street by 1.6 feet |
(j) | Encroachment of an automated teller machine into Townsend Street by 0.25 feet |
(k) | Encroachments of two vents into 8th Street by 0.3 feet |
(l) | Encroachments of two basement vents in plexiglass enclosure into 8th Street by 0.3 feet |
(m) | Encroachments of five concrete landings onto adjoining private land to the northwest by varying amounts up to 4.9 feet |
(n) | Encroachment of the building located at 800 Brannan Street by 1.4 feet into the easement described in paragraph 1(a) of that certain Grant of Easement With Covenants and Restrictions Affecting Land referred to in Parcel Two of Schedule A herein |
(o) | Encroachments of mechanical equipment on a concrete slab, a 16-foot chain link fence, guard posts and a temporary construction fence into the easement described in paragraph 1(a) of that certain Grant of Easement With Covenants and Restrictions Affecting Land referred to in Parcel Two of Schedule A herein |
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
6
SCHEDULE B (continued) | Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42 |
End of Schedule B
American Land Title Association Owners Policy - 1970 (Revised 10/17/70 and 10/17/84)
Endorsements: 100.10, 103.1 Modified, 103.3 Modified, 103.4, 103.9 Modified, 103.9 Modified, 103.11 Modified, 116 Modified, 116.1, 116.7, 123.2, 129, 3032 Fairway-LLC
MG 08/30/2006
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
7
SCHEDULE B (continued) | Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42 |
Exhibit 1
List of Leases and License Agreements
Leases
Advanced Resources of Illinois
Aplix U.S.A.
Bank of America
Broadwing (formerly Focal Communications Corp.)
Caffe Moda
Doll Capital Management
Federal Home Loan Bank of San Francisco
G4 Media, Inc. (formerly ZDTV, LLC and TechTV, LLC)
Intershop Communications, Inc.
Kennedy Wilson Properties Ltd.
Kimberlite, dba Sonitrol of San Francisco
Lewerenz Company, Inc.
MDE North, Inc.
Micromuse Inc.
NaviSite, Inc.
Parking Concepts, Inc.
Pharmacy TV Network, Inc.
Poggenpohl U.S., Inc.
Preferred Building Service
Rabin Worldwide, Inc.
San Francisco Traditional Jazz Foundation
Sega Enterprises, Inc. (U.S.A.), (formerly Sega of America Dreamcast)
Sputnik, Inc.
Twin Captial Mortgage
Union Bank of California (formerly Metro Commerce Bank & Business Bank of Calif.)
License Agreements
AboveNet Communications, Inc.
Time Warner Telecom of Calif. (formerly GST Telecom Calif., Inc.)
Metropolitan Fiber Systems of Calif., Inc.
AT&T Corp.
Level 3 Communications
Level 3 Communications, Inc.
FORMERLY ALTA Owners Policy 1970
(10/17/70 & 10/17/84)
8
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued By
Chicago Title Insurance Company
The Company insures the insured against loss or damage sustained by reason of:
1. | The existence, at Date of Policy, of any of the following unless expressly excepted in Schedule B: |
(a) | Present violations on the land of any enforceable covenants, conditions or restrictions, or any existing improvements on the land which violate any building setback lines shown on a plat of subdivision recorded or filed in the public records. |
(b) | Any instrument referred to in Schedule B as containing covenants, conditions or restrictions on the land which, in addition, (i) establishes an easement on the land; (ii) provides for an option to purchase, a right of first refusal or the prior approval of a future purchaser or occupant; or (iii) provides a right of reentry, possibility of reverter or right of forfeiture because of violations on the land of any enforceable covenants, conditions or restrictions. |
(c) | Any encroachment of existing improvements located on the land onto adjoining land, or any encroachment onto the land of existing improvements located on adjoining land. |
(d) | Any encroachment of existing improvements located on the land onto that portion of the land subject to any easement excepted in Schedule B. |
(e) | Any notices of violation of covenants, conditions and restrictions relating to environmental protection recorded or filed in the public records. |
2. | Damage to existing buildings: |
(a) | Which are located on or encroach upon that portion of the land subject to any easement excepted in Schedule B, which damage results from the exercise of the right to maintain the easement for the purpose for which it was granted or reserved; |
(b) | Resulting from the future exercise of any right existing at Date of Policy to use the surface of the land for the extraction or development of minerals excepted from the description of the land or excepted in Schedule B. |
3. | Any final court order or judgment requiring the removal from any land adjoining the land of any encroachment, other than fences, landscaping or driveway, excepted in Schedule B. |
4. | Any final court order or judgment denying the right to maintain any existing improvements on the land because of any violation of covenants, conditions or restrictions or building setback lines shown on a plat of subdivision recorded or filed in the public records. |
Wherever in this endorsement the words covenants, conditions or restrictions appear, they shall not be deemed to refer to or include the terms, covenants, conditions or limitations contained in an instrument creating a lease.
As used in paragraphs 1(a) and 4, the words covenants, conditions or restrictions shall not be deemed to refer to or include any covenants, conditions or restrictions relating to environmental protection.
ALTA Form 9.2
Washington Form W-100.10
CLTA Form 100.10 (1/17/04)
1 of 13
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
ALTA Form 9.2
Washington Form W-100.10
CLTA Form 100.10 (1/17/04)
1 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 103.1 (Rev. 9-10-93) Modified
The Company hereby insures the insured against loss which the insured shall sustain by reason of any impairment of the right to use the easement described in paragraph 1(a) of that certain Grant of Easement With Covenants and Restrictions Affecting Land referred to in Parcel Two of Schedule A herein as a result of:
(i) any exercise of the right of use or maintenance of the easement described as the Facilities Area in that certain Amended and Restated Grant of Easements With Covenants and Restrictions Affecting Land recorded April 4, 1996 as Instrument No. 96-F952434 In Reel G604 at Image 371 of Official Records and referred to in paragraph 4 of Schedule B; or
(ii) the matters described in paragraph 15(n) of Schedule B; or
(iii) the matters described in paragraph 15(o) of Schedule B.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
2 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 103.3 (Rev. 9-10-93) Modified
The Company hereby insures the insured against loss which the Insured shall sustain in the event that the owner of the easement referred to in paragraph 10 of Schedule B shall, for the purpose of exercising the right of use or maintenance of said easement, compel the removal of any portion of the improvements on the land which encroach upon said easement.
This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
3 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
The Company hereby insures the insured against loss or damage which the insured shall sustain by reason of the failure of the easement described as Parcel Two in Schedule A to provide the owner of the estate or interest referred to in Schedule A with ingress and egress to and from a public street, known as 8th Street.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
Washington Form W-103.4
CLTA Form 103.4 (6/3/05)
4 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTTC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 103.9 (Rev. 9-10-93) Modified
The Company hereby insures the insured against loss which the insured shall sustain in the event that any governmental agency having jurisdiction over Townsend Street or 8th Street shall, for the purpose of exercising the right of use or maintenance of said streets, compel the removal of any portion of the improvements identified in paragraphs 15(a) through 15(l), inclusive, of Schedule B which may encroach on said street.
This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
5 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 103.9 (Rev. 9-10-93) Modified
The Company hereby insures the insured against loss which the insured shall sustain in the event that the owner of the land identified as Assessors Lot 1, Block 3783 to the northwest of the land described in Parcel One of Schedule A shall compel the removal of any portion of the improvements identified in paragraph 15(m) of Schedule B.
This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
6 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 103.11 (Rev. 10-22-03) Modified
The Company insures against loss or damage sustained by the insured if, at Date of Policy: (i) the land does not abut and have both actual vehicular and pedestrian access to and from Townsend Street; (ii) the land does not abut and have actual pedestrian access to and from 8th Street; (iii) Townsend Street and 8th Street are not physically open and publicly maintained; or (iv) the insured has no right to use existing curb cuts or entries along that portion of Townsend Street abutting the land.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
7 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CLTA Form 116 (Rev. 6-14-96) Modified
The Company hereby insures the insured against loss or damage which the insured shall sustain by reason of the failure of (i) a commercial office building known as 650 Townsend Street and 699 8th Street to be located on the land at Date of Policy, or (ii) the map attached to this policy to correctly show the location and dimensions of the land according to the public records.
This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
8 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
The Company hereby insures the insured against loss or damage that the insured shall sustain by reason of the failure of the land to be the same as that delineated on the plat of a survey made by Tronoff Associates - Land Surveyors, dated July 12, 2006, 7333.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
Washington Form W-116.1
CLTA Form 116.1 (9/8/05)
9 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
The Company hereby insures the insured against loss or damage which the insured shall sustain by reason of the failure of the land described as Parcel(s) One in Schedule A to constitute a lawfully created parcel according to the Subdivision Map Act (Section 66410, et seq., of the California Government Code) and local ordinances adopted pursuant thereto.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
CLTA Form 116.7 (6/3/05)
10 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
1. | The Company insures the insured against loss or damage sustained in the event that, at Date of Policy: |
(a) | According to applicable zoning ordinances and amendments thereto, the land is not classified Zone M-2 (Heavy Industrial District). |
(b) | The following use or uses are not allowed under that classification: |
Commercial office building
and there shall be no liability under this paragraph 1(b) if the use or uses are not allowed as the result of any lack of compliance with any conditions, restrictions or requirements contained in the zoning ordinances and amendments thereto mentioned above, including but not limited to the failure to secure necessary consents or authorizations as a prerequisite to the use or uses.
2. | The Company further insures the Insured against loss or damage arising from a final decree of a court of competent jurisdiction |
(a) | prohibiting the use of the land, with any structure presently located thereon, as insured in paragraph 1(b); or |
(b) | requiring the removal or alteration of the structure on the basis that, at Date of Policy, the ordinances and amendments thereto have been violated with respect to any of the following matters: |
(i) | Area, width or depth of the land as a building site for the structure; |
(ii) | Floor space area of the structure; |
(iii) | Setback of the structure from the property lines of the land; |
(iv) | Height of the structure; or |
(v) | Number of parking spaces. |
There shall be no liability under this endorsement based on:
(a) | The invalidity of the ordinances and amendments thereto mentioned above until after a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses. |
(b) | The refusal of any person to purchase, lease or lend money on the estate or interest covered by this policy. |
ALTA Form-3.1
LTAA No. 17
Colorado Form 123.2
Washington Form W-123.2
(4/99) | CLTA Form 123.2 (1/17/04) |
11 of 13
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
ALTA Form-3.1
LTAA No. 17
Colorado Form 123.2
Washington Form W-123.2
(4/99) | CLTA Form 123.2 (1/17/04) |
11 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
The Company insures against loss or damage sustained by the insured by reason of the Land being taxed as part of a larger parcel of Land or failing to constitute a separate tax parcel for real estate tax purposes.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
ALTA Form 18
CLTA Form 129 (10/22/03)
12 of 13
ENDORSEMENT
Attached to Policy No. CACTI7738-7701-5582-0036902632-CTIC-2006-42
Issued by
Chicago Title Insurance Company
CTI Form 3032 Modified - Fairway (LLC)
The Company agrees that in the event of an occurrence of loss insured against by this policy, the Company will not deny liability hereunder on the ground that a dissolution of the limited liability company has occurred or a new limited liability company has been formed by reason of one or more of the members transferring their interest to another person or entity; by reason of a withdrawal of one or more of the members from the limited liability company; or by reason of the addition of one or more persons or entities as members.
Nothing contained herein shall be construed as extending the insurance hereunder as to matters attaching or created subsequent to the date hereof, or insuring the status of the insured as limited liability company after the transfer of the member interest, the withdrawal of members or the addition of new members.
This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements.
Dated: August 30, 2006
|
Countersigned |
Custom Endorsement
SE-55
13 of 13
SCHEDULE OF EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy:
1. | (a) Governmental police power; (b) Any law, ordinance or governmental regulation relating to environmental protection; (c) Any law, ordinance or governmental regulation (including but not limited to building or zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoyment of the land, or regulating the character, dimensions or location of any improvement now or hereafter erected on the land, or prohibiting a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; (d) The effect of any violation of the matters excluded under (a), (b) or (c) above, unless notice of a defect, lien or encumbrance resulting from a violation has been recorded at Date of Policy in those records in which under state statutes deeds, mortgages, judgment liens or lis pendens must be recorded in order to impart constructive notice to purchasers of the land for value and without knowledge. |
2. | Rights of eminent domain unless notice of the exercise of such rights appears in the public records at Date of Policy. |
3. | Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed or agreed to by the insured claimant, (b) not known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy and not disclosed in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder, (c) resulting in no loss or damage to the insured claimant, (d) attaching or created subsequent to Date of Policy, or (c) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. |
CONDITIONS AND STIPULATIONS
(11/00) | FORMERLY ALTA Owners Policy 1970 (10/17/70 & 10/17/84) |
(11/00) | FORMERLY ALTA Owners Policy 1970 (10/17/70 & 10/17/84) |
EXHIBIT Q
FORM OF ESTOPPEL CERTIFICATE
, 2
TO: |
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and | ||||||
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Lease at 699 Eighth Street, San Francisco (the Property)
(Tenant) hereby certifies to and as follows:
1. Tenant leases from (Landlord) office space (the Premises) pursuant to that certain Office Lease dated by and between Landlord and Tenant, as amended by (collectively, the Lease). A true, complete and accurate copy of the Lease (together with all addenda, riders, amendments and supplements thereto) is attached hereto as Exhibit A.
2. The Lease is in full force and effect and has not been modified, supplemented or amended, except as set forth in paragraph 1 above. The Lease represents the entire agreement between the parties with respect to Tenants right to use and occupy the Premises.
3. The Premises have been delivered to Tenant in accordance with the terms of the Lease, Tenant has accepted the Premises, and Landlord has fully completed all construction and improvements to the Premises required to be completed by Landlord under the Lease and funded all construction allowances, except as follows: [If none, insert None.]
4. The term of the Lease commenced on , and will expire on , . Tenant has the rights to renew or extend the term of the Lease as set forth in the Lease.
5. Base Rent payable under the Lease is currently per month. Base Rent has been paid through , . Tenant has not paid any Base Rent or other payments more than one (1) month in advance.
6. Tenant is required to pay percent ( %) of the increases in operating expenses over a Base Expense Year of . Tenant is required to pay percent ( %) of the increases in property taxes over a Base Tax Year of . Tenant is currently paying $ per month for estimated operating expenses and property taxes under the Lease. Tenant is owed no refund of operating expense or property tax payments made for prior calendar years, except as follows: [If none, insert None.]
Exhibit Q, Page 1
7. Landlord currently holds a letter of credit under the Lease in the amount of $ .
8. As of the date hereof, Tenant has no existing right to free rent, partial rent, rent rebate, credit for improvements, rent abatement, or other rental concessions or any right to payments from Landlord, except as follows: [If none, insert None.]
9. To Tenants actual knowledge without duty of investigation, neither Tenant nor Landlord is in default under any provision of the Lease, nor has any event occurred that with the passage of time or giving of notice, or both, would constitute a default on the part of Tenant or Landlord, both parties having fully performed the obligations required to be performed by each party thereunder through the date hereof, except as follows: [If none, insert None.]
10. Tenant asserts no offsets, counterclaims or credits against rents, except as follows: [If none, insert None.]
11. Tenant has not assigned it rights under the Lease or sublet any portion of the Premises. No person or entity other than Tenant and its employees is in possession of the Premises or any portion thereof, except as follows: [If none, insert None.]
12. Tenant has no right of first refusal or offer to lease additional space, option to expand, option to terminate, or right of first refusal or offer or option to purchase the Property or any interest therein, except as set forth in the Lease.
13. There are no actions, voluntary or involuntary, pending against Tenant under any bankruptcy, insolvency, or other debtor relief laws of the United States or any state.
14. Tenants current address for notices is:
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The person(s) executing this Estoppel Certificate have been duly authorized to do so on behalf of Tenant. Tenant acknowledges that each of the parties to whom this Estoppel Certificate is addressed will be relying upon the accuracy of this Estoppel Certificate in connection with its [acquisition of the Property] [making a loan secured by a deed of trust on the Property]. The statements made herein shall be binding upon Tenant, our successors and assigns, and shall inure to your benefit and the benefit of your successors and assigns.
Exhibit Q, Page 2
IN WITNESS WHEREOF, Tenant has caused this Estoppel Certificate to be executed as of the date set forth below.
TENANT | ||
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a | ||
By: |
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(type or print name) | ||
Title: |
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Date:
Exhibit Q, Page 3
EXHIBIT R
FORM OF CONFIDENTIALITY AGREEMENT
MUTUAL NON-DISCLOSURE AGREEMENT
This Mutual Non-Disclosure Agreement (this Agreement) is made as of the day of , 20 , between Zynga Game Network Inc., a Delaware corporation, whose address is (Zynga), and , a , whose address is: (Company).
Zynga and Company desire to begin discussions regarding a business opportunity of mutual interest (the Business Purpose). In connection with such discussions, Zynga and Company recognize that there is a need to disclose to each other certain confidential information to be used only for the Business Purpose and to protect such confidential information from unauthorized use and disclosure.
In consideration of the other partys disclosure of such confidential information, each party agrees as follows:
1. For purposes of this Agreement, Confidential Information means any technical or business information disclosed by one party to the other party that: (i) if disclosed in writing, is marked confidential or proprietary at the time of such disclosure; (ii) if disclosed orally, is identified as confidential or proprietary at the time of such disclosure, and is summarized in a writing sent by the disclosing party to the receiving party within thirty (30) days after any such disclosure; or (iii) under the circumstances, a person exercising reasonable business judgment would understand to be confidential or proprietary.
2. Confidential Information will not include information that:
(i) is now or thereafter becomes generally known or available to the public, through no act or omission on the part of the receiving party;
(ii) was known by the receiving party prior to receiving such information from the disclosing party and without restriction as to use or disclosure;
(iii) is rightfully acquired by the receiving party from a third party who has the right to disclose it and who provides it without restriction as to use or disclosure; or
(iv) is independently developed by the receiving party without access to any Confidential Information of the disclosing party.
3. Each party agrees: (i) to maintain the other partys Confidential Information in strict confidence; (ii) not to disclose such Confidential Information to any third parties; and (iii) not to use any such Confidential Information for any purpose except for the Business Purpose. Each party may disclose the Confidential Information of the other party to its employees and consultants who have a bona fide need to know such Confidential Information for the Business Purpose, but solely to the extent necessary to pursue the Business Purpose and for no other purpose; provided that each such employee, consultant or other third party shall be advised that such information is confidential (and, in the case of Company, Company shall be responsible to ensure that each such employee, consultant or third party complies with the confidentiality restrictions in this Agreement). The provisions of this Section 3 will not restrict a
Exhibit R, Page 1
party from disclosing the other partys Confidential Information to the extent required by any law or regulation; provided that the party required to make such a disclosure uses reasonable efforts to give the other party reasonable advance notice of such required disclosure in order to enable the other party to prevent or limit such disclosure.
4. Upon the disclosing partys request, the receiving party will promptly return to the disclosing party all tangible items and embodiments containing or consisting of the disclosing partys Confidential Information and all copies thereof (including electronic copies).
5. All Confidential Information remains the sole and exclusive property of the disclosing party. Each party acknowledges and agrees that nothing in this Agreement will be construed as granting any rights to the receiving party, by license or otherwise, in or to any Confidential Information of the disclosing party, or any patent, copyright or other intellectual property or proprietary rights of the disclosing party, except as specified in this Agreement.
6. ALL CONFIDENTIAL INFORMATION IS PROVIDED BY THE DISCLOSING PARTY AS IS.
7. Each party acknowledges that the unauthorized use or disclosure of the disclosing partys Confidential Information would cause the disclosing party to incur irreparable harm and significant damages, the degree of which may be difficult to ascertain. Accordingly, each party agrees that the disclosing party will have the right to obtain immediate equitable relief to enjoin any unauthorized use or disclosure of its Confidential Information, in addition to any other rights and remedies that it may have at law or otherwise.
8. This Agreement will be construed, interpreted, and applied in accordance with the internal laws of the State of California (excluding its body of law controlling conflicts of law). This Agreement is the complete and exclusive statement regarding the subject matter of this Agreement and supersedes all prior agreements, understandings and communications, oral or written, between the parties regarding the subject matter of this Agreement. Neither party may assign this Agreement, in whole or in part, without the other partys prior written consent, and any attempted assignment without such consent will be void.
9. This Agreement will commence on the date first set forth above and will remain in effect for five (5) years from the date of last disclosure of Confidential Information by either party, at which time it will terminate; provided, however, if Company enters into a binding lease agreement with Zynga, this Agreement shall be superseded by the confidentiality provisions of such lease agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Mutual Non-Disclosure Agreement by their duly authorized officers or representatives.
[SIGNATURE BLOCK ON NEXT PAGE]
Exhibit R, Page 2
ZYNGA GAME NETWORK INC.: | ||
By: |
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Name: |
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Title: |
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COMPANY: | ||
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a | ||
By: |
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Name: |
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Its: |
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Exhibit R, Page 3
EXHIBIT S
EARLY TERMINATION EXAMPLE CALCULATIONS
[attached]
Exhibit S, Page 1
Exhibit S
Section 3.3 Early Termination Sample Calculation
Revised September 16, 2010
ARSF |
267,866 | |||||||||||||||||||||||||||
Unamortized Landlord Lease Expenses as of Termination ($) |
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Premises |
ARSF | Portion of ARSF |
Commencement Date |
Termination as of (months) |
Termination as of Date |
Initial Term Remaining (months) |
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6th Floor |
51,812 | 19.34 | % | 4/1/2011 | 60 | 3/31/2016 | 24 | 1,662,672 | ||||||||||||||||||||
5th Floor |
52,071 | 19.44 | % | 4/1/2011 | 72 | 3/31/2017 | 12 | 860,487 | ||||||||||||||||||||
3rd Floor |
36,492 | 13.62 | % | 4/1/2011 | 72 | 3/31/2017 | 12 | 603,040 | ||||||||||||||||||||
Total |
140,375 | 52.40 | % | 3,126,198 | ||||||||||||||||||||||||
Landlords Lease Expenses |
Total Lease Expense ($) |
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(A) Brokerage commissions paid by Landlord |
4,352,823 | |||
(B) Tenant Improvement Allowance paid by Landlord ($96K included in (A), above) |
9,375,310 | |||
(C) Cost of Ancillary Tenant Improvements |
4,152,500 | |||
(D) Rent Abatement |
9,698,448 | |||
(E) Portion of cost of Ancillary Tenant Improvements funded by Tenant (estimate) |
(1,300,000 | ) | ||
(F) Tenant upgrades to restrooms (estimate) |
(200,000 | ) | ||
Total Landlords Lease Expenses |
26,079,081 | |||
Portion to 6th Floor |
5,044,348 | |||
Portion to 5th Floor |
5,069,564 | |||
Portion to 3rd Floor |
3,552,813 | |||
Exhibit S
Section 3.3 Early Termination Sample Calculation
Sixth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,044,348 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
73,691 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
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1 | Apr-11 | 5,044,348 | 48,469 | 25,222 | 4,995,879 | |||||||||||||
2 | May-11 | 4,995,879 | 48,711 | 24,979 | 4,947,168 | |||||||||||||
3 | Jun-11 | 4,947,168 | 48,955 | 24,736 | 4,898,213 | |||||||||||||
4 | Jul-11 | 4,898,213 | 49,200 | 24,491 | 4,849,014 | |||||||||||||
5 | Aug-11 | 4,849,014 | 49,446 | 24,245 | 4,799,568 | |||||||||||||
6 | Sep-11 | 4,799,568 | 49,693 | 23,998 | 4,749,875 | |||||||||||||
7 | Oct-11 | 4,749,875 | 49,941 | 23,749 | 4,699,934 | |||||||||||||
8 | Nov-11 | 4,699,934 | 50,191 | 23,500 | 4,649,743 | |||||||||||||
9 | Dec-11 | 4,649,743 | 50,442 | 23,249 | 4,599,301 | |||||||||||||
10 | Jan-12 | 4,599,301 | 50,694 | 22,997 | 4,548,607 | |||||||||||||
11 | Feb-12 | 4,548,607 | 50,948 | 22,743 | 4,497,659 | |||||||||||||
12 | Mar-12 | 4,497,659 | 51,202 | 22,488 | 4,446,457 | |||||||||||||
13 | Apr-12 | 4,446,457 | 51,458 | 22,232 | 4,394,999 | |||||||||||||
14 | May-12 | 4,394,999 | 51,716 | 21,975 | 4,343,283 | |||||||||||||
15 | Jun-12 | 4,343,283 | 51,974 | 21,716 | 4,291,309 | |||||||||||||
16 | Jul-12 | 4,291,309 | 52,234 | 21,457 | 4,239,075 | |||||||||||||
17 | Aug-12 | 4,239,075 | 52,495 | 21,195 | 4,186,580 | |||||||||||||
18 | Sep-12 | 4,186,580 | 52,758 | 20,933 | 4,133,822 | |||||||||||||
19 | Oct-12 | 4,133,822 | 53,022 | 20,669 | 4,080,800 | |||||||||||||
20 | Nov-12 | 4,080,800 | 53,287 | 20,404 | 4,027,514 | |||||||||||||
21 | Dec-12 | 4,027,514 | 53,553 | 20,138 | 3,973,961 | |||||||||||||
22 | Jan-13 | 3,973,961 | 53,821 | 19,870 | 3,920,140 | |||||||||||||
23 | Feb-13 | 3,920,140 | 54,090 | 19,601 | 3,866,050 | |||||||||||||
24 | Mar-13 | 3,866,050 | 54,360 | 19,330 | 3,811,689 | |||||||||||||
25 | Apr-13 | 3,811,689 | 54,632 | 19,058 | 3,757,057 | |||||||||||||
26 | May-13 | 3,757,057 | 54,905 | 18,785 | 3,702,152 | |||||||||||||
27 | Jun-13 | 3,702,152 | 55,180 | 18,511 | 3,646,972 | |||||||||||||
28 | Jul-13 | 3,646,972 | 55,456 | 18,235 | 3,591,516 | |||||||||||||
29 | Aug-13 | 3,591,516 | 55,733 | 17,958 | 3,535,783 | |||||||||||||
30 | Sep-13 | 3,535,783 | 56,012 | 17,679 | 3,479,771 | |||||||||||||
31 | Oct-13 | 3,479,771 | 56,292 | 17,399 | 3,423,480 | |||||||||||||
32 | Nov-13 | 3,423,480 | 56,573 | 17,117 | 3,366,906 | |||||||||||||
33 | Dec-13 | 3,366,906 | 56,856 | 16,835 | 3,310,050 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Sixth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,044,348 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
73,691 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
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34 | Jan-14 | 3,310,050 | 57,140 | 16,550 | 3,252,910 | |||||||||||||||
35 | Feb-14 | 3,252,910 | 57,426 | 16,265 | 3,195,484 | |||||||||||||||
36 | Mar-14 | 3,195,484 | 57,713 | 15,977 | 3,137,771 | |||||||||||||||
37 | Apr-14 | 3,137,771 | 58,002 | 15,689 | 3,079,769 | |||||||||||||||
38 | May-14 | 3,079,769 | 58,292 | 15,399 | 3,021,477 | |||||||||||||||
39 | Jun-14 | 3,021,477 | 58,583 | 15,107 | 2,962,894 | |||||||||||||||
40 | Jul-14 | 2,962,894 | 58,876 | 14,814 | 2,904,018 | |||||||||||||||
41 | Aug-14 | 2,904,018 | 59,171 | 14,520 | 2,844,847 | |||||||||||||||
42 | Sep-14 | 2,844,847 | 59,466 | 14,224 | 2,785,381 | |||||||||||||||
43 | Oct-14 | 2,785,381 | 59,764 | 13,927 | 2,725,617 | |||||||||||||||
44 | Nov-14 | 2,725,617 | 60,063 | 13,628 | 2,665,554 | |||||||||||||||
45 | Dec-14 | 2,665,554 | 60,363 | 13,328 | 2,605,192 | |||||||||||||||
46 | Jan-15 | 2,605,192 | 60,665 | 13,026 | 2,544,527 | |||||||||||||||
47 | Feb-15 | 2,544,527 | 60,968 | 12,723 | 2,483,559 | |||||||||||||||
48 | Mar-15 | 2,483,559 | 61,273 | 12,418 | 2,422,286 | |||||||||||||||
49 | Apr-15 | 2,422,286 | 61,579 | 12,111 | 2,360,707 | |||||||||||||||
50 | May-15 | 2,360,707 | 61,887 | 11,804 | 2,298,820 | |||||||||||||||
51 | Jun-15 | 2,298,820 | 62,197 | 11,494 | 2,236,623 | |||||||||||||||
52 | Jul-15 | 2,236,623 | 62,508 | 11,183 | 2,174,116 | |||||||||||||||
53 | Aug-15 | 2,174,116 | 62,820 | 10,871 | 2,111,296 | |||||||||||||||
54 | Sep-15 | 2,111,296 | 63,134 | 10,556 | 2,048,161 | |||||||||||||||
55 | Oct-15 | 2,048,161 | 63,450 | 10,241 | 1,984,712 | |||||||||||||||
56 | Nov-15 | 1,984,712 | 63,767 | 9,924 | 1,920,945 | |||||||||||||||
57 | Dec-15 | 1,920,945 | 64,086 | 9,605 | 1,856,859 | |||||||||||||||
58 | Jan-16 | 1,856,859 | 64,406 | 9,284 | 1,792,452 | |||||||||||||||
59 | Feb-16 | 1,792,452 | 64,728 | 8,962 | 1,727,724 | |||||||||||||||
60 | Mar-16 | 1,727,724 | 65,052 | 8,639 | 1,662,672 | Termination effective | ||||||||||||||
61 | Apr-16 | 1,662,672 | 65,377 | 8,313 | 1,597,295 | |||||||||||||||
62 | May-16 | 1,597,295 | 65,704 | 7,986 | 1,531,590 | |||||||||||||||
63 | Jun-16 | 1,531,590 | 66,033 | 7,658 | 1,465,558 | |||||||||||||||
64 | Jul-16 | 1,465,558 | 66,363 | 7,328 | 1,399,195 | |||||||||||||||
65 | Aug-16 | 1,399,195 | 66,695 | 6,996 | 1,332,500 | |||||||||||||||
66 | Sep-16 | 1,332,500 | 67,028 | 6,663 | 1,265,472 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Sixth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,044,348 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
73,691 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||
67 | Oct-16 | 1,265,472 | 67,363 | 6,327 | 1,198,109 | |||||||||||||
68 | Nov-16 | 1,198,109 | 67,700 | 5,991 | 1,130,409 | |||||||||||||
69 | Dec-16 | 1,130,409 | 68,039 | 5,652 | 1,062,370 | |||||||||||||
70 | Jan-17 | 1,062,370 | 68,379 | 5,312 | 993,991 | |||||||||||||
71 | Feb-17 | 993,991 | 68,721 | 4,970 | 925,271 | |||||||||||||
72 | Mar-17 | 925,271 | 69,064 | 4,626 | 856,206 | |||||||||||||
73 | Apr-17 | 856,206 | 69,410 | 4,281 | 786,797 | |||||||||||||
74 | May-17 | 786,797 | 69,757 | 3,934 | 717,040 | |||||||||||||
75 | Jun-17 | 717,040 | 70,105 | 3,585 | 646,935 | |||||||||||||
76 | Jul-17 | 646,935 | 70,456 | 3,235 | 576,479 | |||||||||||||
77 | Aug-17 | 576,479 | 70,808 | 2,882 | 505,671 | |||||||||||||
78 | Sep-17 | 505,671 | 71,162 | 2,528 | 434,508 | |||||||||||||
79 | Oct-17 | 434,508 | 71,518 | 2,173 | 362,990 | |||||||||||||
80 | Nov-17 | 362,990 | 71,876 | 1,815 | 291,115 | |||||||||||||
81 | Dec-17 | 291,115 | 72,235 | 1,456 | 218,879 | |||||||||||||
82 | Jan-18 | 218,879 | 72,596 | 1,094 | 146,283 | |||||||||||||
83 | Feb-18 | 146,283 | 72,959 | 731 | 73,324 | |||||||||||||
84 | Mar-18 | 73,324 | 73,324 | 367 | (0 | ) |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Fifth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,069,564 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
74,059 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||
1 | Apr-11 | 5,069,564 | 48,711 | 25,348 | 5,020,853 | |||||||||||||
2 | May-11 | 5,020,853 | 48,955 | 25,104 | 4,971,898 | |||||||||||||
3 | Jun-11 | 4,971,898 | 49,200 | 24,859 | 4,922,699 | |||||||||||||
4 | Jul-11 | 4,922,699 | 49,446 | 24,613 | 4,873,253 | |||||||||||||
5 | Aug-11 | 4,873,253 | 49,693 | 24,366 | 4,823,560 | |||||||||||||
6 | Sep-11 | 4,823,560 | 49,941 | 24,118 | 4,773,619 | |||||||||||||
7 | Oct-11 | 4,773,619 | 50,191 | 23,868 | 4,723,428 | |||||||||||||
8 | Nov-11 | 4,723,428 | 50,442 | 23,617 | 4,672,986 | |||||||||||||
9 | Dec-11 | 4,672,986 | 50,694 | 23,365 | 4,622,292 | |||||||||||||
10 | Jan-12 | 4,622,292 | 50,948 | 23,111 | 4,571,345 | |||||||||||||
11 | Feb-12 | 4,571,345 | 51,202 | 22,857 | 4,520,142 | |||||||||||||
12 | Mar-12 | 4,520,142 | 51,458 | 22,601 | 4,468,684 | |||||||||||||
13 | Apr-12 | 4,468,684 | 51,716 | 22,343 | 4,416,969 | |||||||||||||
14 | May-12 | 4,416,969 | 51,974 | 22,085 | 4,364,994 | |||||||||||||
15 | Jun-12 | 4,364,994 | 52,234 | 21,825 | 4,312,760 | |||||||||||||
16 | Jul-12 | 4,312,760 | 52,495 | 21,564 | 4,260,265 | |||||||||||||
17 | Aug-12 | 4,260,265 | 52,758 | 21,301 | 4,207,508 | |||||||||||||
18 | Sep-12 | 4,207,508 | 53,021 | 21,038 | 4,154,486 | |||||||||||||
19 | Oct-12 | 4,154,486 | 53,287 | 20,772 | 4,101,200 | |||||||||||||
20 | Nov-12 | 4,101,200 | 53,553 | 20,506 | 4,047,647 | |||||||||||||
21 | Dec-12 | 4,047,647 | 53,821 | 20,238 | 3,993,826 | |||||||||||||
22 | Jan-13 | 3,993,826 | 54,090 | 19,969 | 3,939,736 | |||||||||||||
23 | Feb-13 | 3,939,736 | 54,360 | 19,699 | 3,885,376 | |||||||||||||
24 | Mar-13 | 3,885,376 | 54,632 | 19,427 | 3,830,743 | |||||||||||||
25 | Apr-13 | 3,830,743 | 54,905 | 19,154 | 3,775,838 | |||||||||||||
26 | May-13 | 3,775,838 | 55,180 | 18,879 | 3,720,658 | |||||||||||||
27 | Jun-13 | 3,720,658 | 55,456 | 18,603 | 3,665,203 | |||||||||||||
28 | Jul-13 | 3,665,203 | 55,733 | 18,326 | 3,609,470 | |||||||||||||
29 | Aug-13 | 3,609,470 | 56,012 | 18,047 | 3,553,458 | |||||||||||||
30 | Sep-13 | 3,553,458 | 56,292 | 17,767 | 3,497,166 | |||||||||||||
31 | Oct-13 | 3,497,166 | 56,573 | 17,486 | 3,440,593 | |||||||||||||
32 | Nov-13 | 3,440,593 | 56,856 | 17,203 | 3,383,737 | |||||||||||||
33 | Dec-13 | 3,383,737 | 57,140 | 16,919 | 3,326,597 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Fifth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,069,564 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
74,059 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||
34 | Jan-14 | 3,326,597 | 57,426 | 16,633 | 3,269,171 | |||||||||||||
35 | Feb-14 | 3,269,171 | 57,713 | 16,346 | 3,211,458 | |||||||||||||
36 | Mar-14 | 3,211,458 | 58,002 | 16,057 | 3,153,456 | |||||||||||||
37 | Apr-14 | 3,153,456 | 58,292 | 15,767 | 3,095,164 | |||||||||||||
38 | May-14 | 3,095,164 | 58,583 | 15,476 | 3,036,581 | |||||||||||||
39 | Jun-14 | 3,036,581 | 58,876 | 15,183 | 2,977,705 | |||||||||||||
40 | Jul-14 | 2,977,705 | 59,170 | 14,889 | 2,918,534 | |||||||||||||
41 | Aug-14 | 2,918,534 | 59,466 | 14,593 | 2,859,068 | |||||||||||||
42 | Sep-14 | 2,859,068 | 59,764 | 14,295 | 2,799,304 | |||||||||||||
43 | Oct-14 | 2,799,304 | 60,062 | 13,997 | 2,739,242 | |||||||||||||
44 | Nov-14 | 2,739,242 | 60,363 | 13,696 | 2,678,879 | |||||||||||||
45 | Dec-14 | 2,678,879 | 60,665 | 13,394 | 2,618,215 | |||||||||||||
46 | Jan-15 | 2,618,215 | 60,968 | 13,091 | 2,557,247 | |||||||||||||
47 | Feb-15 | 2,557,247 | 61,273 | 12,786 | 2,495,974 | |||||||||||||
48 | Mar-15 | 2,495,974 | 61,579 | 12,480 | 2,434,395 | |||||||||||||
49 | Apr-15 | 2,434,395 | 61,887 | 12,172 | 2,372,508 | |||||||||||||
50 | May-15 | 2,372,508 | 62,196 | 11,863 | 2,310,311 | |||||||||||||
51 | Jun-15 | 2,310,311 | 62,507 | 11,552 | 2,247,804 | |||||||||||||
52 | Jul-15 | 2,247,804 | 62,820 | 11,239 | 2,184,984 | |||||||||||||
53 | Aug-15 | 2,184,984 | 63,134 | 10,925 | 2,121,850 | |||||||||||||
54 | Sep-15 | 2,121,850 | 63,450 | 10,609 | 2,058,400 | |||||||||||||
55 | Oct-15 | 2,058,400 | 63,767 | 10,292 | 1,994,633 | |||||||||||||
56 | Nov-15 | 1,994,633 | 64,086 | 9,973 | 1,930,547 | |||||||||||||
57 | Dec-15 | 1,930,547 | 64,406 | 9,653 | 1,866,141 | |||||||||||||
58 | Jan-16 | 1,866,141 | 64,728 | 9,331 | 1,801,413 | |||||||||||||
59 | Feb-16 | 1,801,413 | 65,052 | 9,007 | 1,736,361 | |||||||||||||
60 | Mar-16 | 1,736,361 | 65,377 | 8,682 | 1,670,983 | |||||||||||||
61 | Apr-16 | 1,670,983 | 65,704 | 8,355 | 1,605,279 | |||||||||||||
62 | May-16 | 1,605,279 | 66,033 | 8,026 | 1,539,247 | |||||||||||||
63 | Jun-16 | 1,539,247 | 66,363 | 7,696 | 1,472,884 | |||||||||||||
64 | Jul-16 | 1,472,884 | 66,695 | 7,364 | 1,406,189 | |||||||||||||
65 | Aug-16 | 1,406,189 | 67,028 | 7,031 | 1,339,161 | |||||||||||||
66 | Sep-16 | 1,339,161 | 67,363 | 6,696 | 1,271,798 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Fifth Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
5,069,564 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
74,059 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||||
67 | Oct-16 | 1,271,798 | 67,700 | 6,359 | 1,204,098 | |||||||||||||||
68 | Nov-16 | 1,204,098 | 68,039 | 6,020 | 1,136,060 | |||||||||||||||
69 | Dec-16 | 1,136,060 | 68,379 | 5,680 | 1,067,681 | |||||||||||||||
70 | Jan-17 | 1,067,681 | 68,721 | 5,338 | 998,960 | |||||||||||||||
71 | Feb-17 | 998,960 | 69,064 | 4,995 | 929,896 | |||||||||||||||
72 | Mar-17 | 929,896 | 69,410 | 4,649 | 860,487 | Termination effective | ||||||||||||||
73 | Apr-17 | 860,487 | 69,757 | 4,302 | 790,730 | |||||||||||||||
74 | May-17 | 790,730 | 70,105 | 3,954 | 720,625 | |||||||||||||||
75 | Jun-17 | 720,625 | 70,456 | 3,603 | 650,169 | |||||||||||||||
76 | Jul-17 | 650,169 | 70,808 | 3,251 | 579,361 | |||||||||||||||
77 | Aug-17 | 579,361 | 71,162 | 2,897 | 508,198 | |||||||||||||||
78 | Sep-17 | 508,198 | 71,518 | 2,541 | 436,680 | |||||||||||||||
79 | Oct-17 | 436,680 | 71,876 | 2,183 | 364,805 | |||||||||||||||
80 | Nov-17 | 364,805 | 72,235 | 1,824 | 292,570 | |||||||||||||||
81 | Dec-17 | 292,570 | 72,596 | 1,463 | 219,974 | |||||||||||||||
82 | Jan-18 | 219,974 | 72,959 | 1,100 | 147,014 | |||||||||||||||
83 | Feb-18 | 147,014 | 73,324 | 735 | 73,691 | |||||||||||||||
84 | Mar-18 | 73,691 | 73,691 | 368 | (0 | ) |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Third Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
3,552,813 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
51,901 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||
1 | Apr-11 | 3,552,813 | 34,137 | 17,764 | 3,518,676 | |||||||||||||
2 | May-11 | 3,518,676 | 34,308 | 17,593 | 3,484,368 | |||||||||||||
3 | Jun-11 | 3,484,368 | 34,480 | 17,422 | 3,449,888 | |||||||||||||
4 | Jul-11 | 3,449,888 | 34,652 | 17,249 | 3,415,236 | |||||||||||||
5 | Aug-11 | 3,415,236 | 34,825 | 17,076 | 3,380,411 | |||||||||||||
6 | Sep-11 | 3,380,411 | 34,999 | 16,902 | 3,345,411 | |||||||||||||
7 | Oct-11 | 3,345,411 | 35,174 | 16,727 | 3,310,237 | |||||||||||||
8 | Nov-11 | 3,310,237 | 35,350 | 16,551 | 3,274,887 | |||||||||||||
9 | Dec-11 | 3,274,887 | 35,527 | 16,374 | 3,239,360 | |||||||||||||
10 | Jan-12 | 3,239,360 | 35,705 | 16,197 | 3,203,655 | |||||||||||||
11 | Feb-12 | 3,203,655 | 35,883 | 16,018 | 3,167,772 | |||||||||||||
12 | Mar-12 | 3,167,772 | 36,063 | 15,839 | 3,131,709 | |||||||||||||
13 | Apr-12 | 3,131,709 | 36,243 | 15,659 | 3,095,466 | |||||||||||||
14 | May-12 | 3,095,466 | 36,424 | 15,477 | 3,059,042 | |||||||||||||
15 | Jun-12 | 3,059,042 | 36,606 | 15,295 | 3,022,436 | |||||||||||||
16 | Jul-12 | 3,022,436 | 36,789 | 15,112 | 2,985,647 | |||||||||||||
17 | Aug-12 | 2,985,647 | 36,973 | 14,928 | 2,948,673 | |||||||||||||
18 | Sep-12 | 2,948,673 | 37,158 | 14,743 | 2,911,515 | |||||||||||||
19 | Oct-12 | 2,911,515 | 37,344 | 14,558 | 2,874,171 | |||||||||||||
20 | Nov-12 | 2,874,171 | 37,531 | 14,371 | 2,836,641 | |||||||||||||
21 | Dec-12 | 2,836,641 | 37,718 | 14,183 | 2,798,922 | |||||||||||||
22 | Jan-13 | 2,798,922 | 37,907 | 13,995 | 2,761,016 | |||||||||||||
23 | Feb-13 | 2,761,016 | 38,096 | 13,805 | 2,722,919 | |||||||||||||
24 | Mar-13 | 2,722,919 | 38,287 | 13,615 | 2,684,632 | |||||||||||||
25 | Apr-13 | 2,684,632 | 38,478 | 13,423 | 2,646,154 | |||||||||||||
26 | May-13 | 2,646,154 | 38,671 | 13,231 | 2,607,483 | |||||||||||||
27 | Jun-13 | 2,607,483 | 38,864 | 13,037 | 2,568,619 | |||||||||||||
28 | Jul-13 | 2,568,619 | 39,058 | 12,843 | 2,529,561 | |||||||||||||
29 | Aug-13 | 2,529,561 | 39,254 | 12,648 | 2,490,307 | |||||||||||||
30 | Sep-13 | 2,490,307 | 39,450 | 12,452 | 2,450,857 | |||||||||||||
31 | Oct-13 | 2,450,857 | 39,647 | 12,254 | 2,411,210 | |||||||||||||
32 | Nov-13 | 2,411,210 | 39,845 | 12,056 | 2,371,365 | |||||||||||||
33 | Dec-13 | 2,371,365 | 40,045 | 11,857 | 2,331,320 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Third Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
3,552,813 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
51,901 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||
34 | Jan-14 | 2,331,320 | 40,245 | 11,657 | 2,291,075 | |||||||||||||
35 | Feb-14 | 2,291,075 | 40,446 | 11,455 | 2,250,629 | |||||||||||||
36 | Mar-14 | 2,250,629 | 40,648 | 11,253 | 2,209,981 | |||||||||||||
37 | Apr-14 | 2,209,981 | 40,852 | 11,050 | 2,169,129 | |||||||||||||
38 | May-14 | 2,169,129 | 41,056 | 10,846 | 2,128,073 | |||||||||||||
39 | Jun-14 | 2,128,073 | 41,261 | 10,640 | 2,086,812 | |||||||||||||
40 | Jul-14 | 2,086,812 | 41,467 | 10,434 | 2,045,345 | |||||||||||||
41 | Aug-14 | 2,045,345 | 41,675 | 10,227 | 2,003,670 | |||||||||||||
42 | Sep-14 | 2,003,670 | 41,883 | 10,018 | 1,961,787 | |||||||||||||
43 | Oct-14 | 1,961,787 | 42,093 | 9,809 | 1,919,695 | |||||||||||||
44 | Nov-14 | 1,919,695 | 42,303 | 9,598 | 1,877,392 | |||||||||||||
45 | Dec-14 | 1,877,392 | 42,515 | 9,387 | 1,834,877 | |||||||||||||
46 | Jan-15 | 1,834,877 | 42,727 | 9,174 | 1,792,150 | |||||||||||||
47 | Feb-15 | 1,792,150 | 42,941 | 8,961 | 1,749,209 | |||||||||||||
48 | Mar-15 | 1,749,209 | 43,155 | 8,746 | 1,706,054 | |||||||||||||
49 | Apr-15 | 1,706,054 | 43,371 | 8,530 | 1,662,683 | |||||||||||||
50 | May-15 | 1,662,683 | 43,588 | 8,313 | 1,619,095 | |||||||||||||
51 | Jun.-15 | 1,619,095 | 43,806 | 8,095 | 1,575,289 | |||||||||||||
52 | Jul-15 | 1,575,289 | 44,025 | 7,876 | 1,531,264 | |||||||||||||
53 | Aug-15 | 1,531,264 | 44,245 | 7,656 | 1,487,018 | |||||||||||||
54 | Sep-15 | 1,487,018 | 44,466 | 7,435 | 1,442,552 | |||||||||||||
55 | Oct-15 | 1,442,552 | 44,689 | 7,213 | 1,397,863 | |||||||||||||
56 | Nov-15 | 1,397,863 | 44,912 | 6,989 | 1,352,951 | |||||||||||||
57 | Dec-15 | 1,352,951 | 45,137 | 6,765 | 1,307,815 | |||||||||||||
58 | Jan-16 | 1,307,815 | 45,362 | 6,539 | 1,262,452 | |||||||||||||
59 | Feb-16 | 1,262,452 | 45,589 | 6,312 | 1,216,863 | |||||||||||||
60 | Mar-16 | 1,216,863 | 45,817 | 6,084 | 1,171,046 | |||||||||||||
61 | Apr-16 | 1,171,046 | 46,046 | 5,855 | 1,125,000 | |||||||||||||
62 | May-16 | 1,125,000 | 46,276 | 5,625 | 1,078,723 | |||||||||||||
63 | Jun-16 | 1,078,723 | 46,508 | 5,394 | 1,032,215 | |||||||||||||
64 | Jul-16 | 1,032,215 | 46,740 | 5,161 | 985,475 | |||||||||||||
65 | Aug-16 | 985,475 | 46,974 | 4,927 | 938,501 | |||||||||||||
66 | Sep-16 | 938,501 | 47,209 | 4,693 | 891,292 |
Exhibit S
Section 3.3 Early Termination Sample Calculation
Third Floor Amortization
Revised September 16, 2010
Amortized principal ($) |
3,552,813 | |||
Period (years) |
7 | |||
Interest rate |
6.0 | % | ||
Monthly payment |
51,901 |
Month # |
Month | Beginning Balance ($) |
Principal ($) |
Interest ($) |
Ending Balance ($) |
|||||||||||||||
67 | Oct-16 | 891,292 | 47,445 | 4,456 | 843,847 | |||||||||||||||
68 | Nov-16 | 843,847 | 47,682 | 4,219 | 796,165 | |||||||||||||||
69 | Dec-16 | 796,165 | 47,921 | 3,981 | 748,244 | |||||||||||||||
70 | Jan-17 | 748,244 | 48,160 | 3,741 | 700,084 | |||||||||||||||
71 | Feb-17 | 700,084 | 48,401 | 3,500 | 651,683 | |||||||||||||||
72 | Mar-17 | 651,683 | 48,643 | 3,258 | 603,040 | Termination effective | ||||||||||||||
73 | Apr-17 | 603,040 | 48,886 | 3,015 | 554,153 | |||||||||||||||
74 | May-17 | 554,153 | 49,131 | 2,771 | 505,023 | |||||||||||||||
75 | Jun-17 | 505,023 | 49,376 | 2,525 | 455,646 | |||||||||||||||
76 | Jul-17 | 455,646 | 49,623 | 2,278 | 406,023 | |||||||||||||||
77 | Aug-17 | 406,023 | 49,871 | 2,030 | 356,152 | |||||||||||||||
78 | Sep-17 | 356,152 | 50,121 | 1,781 | 306,031 | |||||||||||||||
79 | Oct-17 | 306,031 | 50,371 | 1,530 | 255,660 | |||||||||||||||
80 | Nov-17 | 255,660 | 50,623 | 1,278 | 205,037 | |||||||||||||||
81 | Dec-17 | 205,037 | 50,876 | 1,025 | 154,160 | |||||||||||||||
82 | Jan-18 | 154,160 | 51,131 | 771 | 103,030 | |||||||||||||||
83 | Feb-18 | 103,030 | 51,386 | 515 | 51,643 | |||||||||||||||
84 | Mar-18 | 51,643 | 51,643 | 258 | (0 | ) |
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this First Amendment) is dated for reference purposes only as of January 28, 2011, by and between 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord), and ZYNGA INC. (formerly known as Zynga Game Network Inc.), a Delaware corporation (Tenant).
RECITALS
A. Pursuant to that certain Office Lease dated as of September 24, 2010 (the Existing Lease), Tenant leases certain premises containing approximately 267,866 Adjusted Rentable Square Feet (the Existing Premises) in the building located at 699 Eighth Street, San Francisco, California (the Building).
B. Pursuant to Section 33.1.2 of the Existing Lease, Tenant sent to Landlord a certain Lease Terms Expansion Notice dated December 9, 2010 (Expansion Notice).
C. Landlord and Tenant desire to memorialize the expansion contemplated by the Expansion Notice and amend the Existing Lease to (i) add to the Existing Premises that space in the Building commonly known as Suite 460, containing approximately 14,279 Adjusted Rentable Square Feet, and Suite 480, containing approximately 4,703 Adjusted Rentable Square Feet, (collectively, the First Expansion Premises), as more particularly shown on Exhibit A attached hereto, and (ii) make certain other amendments to the Existing Lease, all subject to, and on the basis of, the terms, covenants and conditions hereinafter set forth. The Existing Lease, as amended by this First Amendment, is referred to as the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Use of Defined Terms; Recitals; Effective Date.
1.1 Definitions; Recitals. Unless otherwise defined herein or unless the context clearly requires otherwise, all capitalized terms used herein shall have the defined meanings ascribed to them in the Existing Lease. The provisions of the Recitals above are fully incorporated herein by this reference.
1.2 Effective Date. Unless otherwise specifically provided herein, the provisions of this First Amendment shall be effective as of the date that this First Amendment has been (a) fully executed and delivered by both Tenant and Landlord and (b) consented to by the Existing Security Holder (the Effective Date).
2. First Expansion Premises.
2.1 Commencement Date. For purposes of this First Amendment, the First Expansion Commencement Date means the date upon which (a) Landlord shall have delivered possession of the First Expansion Premises to Tenant and (b) the Effective Date shall have occurred. It is anticipated that the First Expansion Commencement Date will occur three (3) business days after the
-1-
Effective Date. As of the First Expansion Commencement Date, all terms and provisions of the Lease shall be applicable to the First Expansion Premises, except as otherwise provided herein.
2.2 Termination Date. The termination date for the First Expansion Premises shall be the Expiration Date under the Lease for the Existing Premises, unless the term of the Lease is sooner terminated or extended pursuant to the Lease.
2.3 Confirmation. After the First Expansion Rent Commencement Date (as defined in Paragraph 3.2(a) below) has been established, then within ten (10) business days following request by either party, the other party agrees to execute and deliver to the requesting party the Expansion Confirmation of Lease Term in the form of Exhibit B attached hereto.
3. Amendments to Lease.
3.1 Premises. Effective as of the First Expansion Premises Commencement Date, all terms and provisions of the Lease shall become applicable to the First Expansion Premises, the Premises shall include and mean both the Existing Premises and the First Expansion Premises, and, except to the extent inconsistent with the express terms of this First Amendment, all references in the Lease to the Premises shall be construed to refer to both the Existing Premises and the First Expansion Premises. Accordingly, effective as of the First Expansion Commencement Date, (a) the total Adjusted Rentable Square Feet in the definition of Premises as set forth in the Basic Lease Information is hereby amended to delete 267,866 Adjusted Rentable Square Feet and insert in place thereof 286,848 Adjusted Rentable Square Feet and (b) the definition of Premises in the Basic Lease Information shall be further amended to insert the following after clause (vi) thereof:
(vii) | Suites 460 and 480 located on the fourth floor containing approximately 18,982 Adjusted Rentable Square Feet. |
3.2 Base Rent.
(a) Rent Commencement; Expansion Delay. Pursuant to Sections 4.1 and 33.1.3 of the Existing Lease, and subject to Paragraph 3.2(d) of this First Amendment, Tenant shall pay Base Rent for the First Expansion Premises in the sum set forth in Paragraph 3.2(b) of this First Amendment, commencing on the earlier to occur of (i) the date which is four (4) months after the First Expansion Commencement Date (provided, however, that such date shall be extended for delays in constructing improvements to be constructed by Tenant pursuant to Paragraph 4 of this First Amendment resulting from any Expansion Delays (as defined in Section 33.1.3 of the Lease) and (ii) the date Tenant commences business operations in the entire First Expansion Premises (First Expansion Rent Commencement Date). As set forth in Section 33.1.3 of the Existing Lease, (x) no Expansion Delay (except for any Expansion Delay resulting from Landlords failure to take any action prior to any deadline for taking such action) shall be deemed to have occurred unless Tenant gives Landlord prior written notice or written notice within five (5) business days of the occurrence, as may be reasonable under the circumstances, specifying the claimed reasons for such Expansion Delay, and Landlord shall fail to correct or cure such Expansion Delay within one (1) business day and (y) there shall be excluded from the number of days of any Expansion Delay any days of delay which are primarily caused by Force Majeure. If the construction of the tenant improvements is actually delayed due to any Expansion Delay, then Tenant and Tenants architect shall reasonably determine in consultation with Landlord the date on which the tenant improvements would have been completed but for such Expansion Delay.
-2-
(b) Base Rent for First Expansion Premises. Effective as of the First Expansion Commencement Date, the Basic Lease Information shall be amended to insert the following as Base Rent for the First Expansion Premises, which is in addition to Base Rent for the Existing Premises:
Base Rent (Net of Electrical) for First Expansion Premises:
Time Period |
Annual Base Rent/ARSF for First Expansion Premises |
Annual Base Rent for First Expansion Premises |
Monthly Base Rent for First Expansion Premises |
|||||||||
First Expansion Rent Commencement Date to the first anniversary of the Phase 1 Rent Commencement Date |
$ | 24.50 | $ | 465,059.00 | $ | 38,754.92 | ||||||
First anniversary of the Phase 1 Rent Commencement Date to the second anniversary of the Phase 1 Rent Commencement Date |
$ | 25.50 | $ | 484,041.00 | $ | 40,336.75 | ||||||
Second anniversary of the Phase 1 Rent Commencement Date to the third anniversary of the Phase 1 Rent Commencement Date |
$ | 26.50 | $ | 503,023.00 | $ | 41,918.58 | ||||||
Third anniversary of the Phase 1 Rent Commencement Date to the fourth anniversary of the Phase 1 Rent Commencement Date |
$ | 27.50 | $ | 522,005.00 | $ | 43,500.42 | ||||||
Fourth anniversary of the Phase 1 Rent Commencement Date to the fifth anniversary of the Phase 1 Rent Commencement Date |
$ | 28.50 | $ | 540,987.00 | $ | 45,082.25 | ||||||
Fifth anniversary of the Phase 1 Rent Commencement Date to the sixth anniversary of the Phase 1 Rent Commencement Date |
$ | 29.50 | $ | 559,969.00 | $ | 46,664.08 | ||||||
Sixth anniversary of the Phase 1 Rent Commencement Date to the Expiration Date |
$ | 30.50 | $ | 578,951.00 | $ | 48,245.92 | ||||||
Extension Terms |
See Section 3.4 of the Lease |
(c) First Months Rent. Upon the Effective Date, Tenant shall pay to Landlord the amount of Thirty Eight Thousand Seven Hundred Fifty Four and 92/100 Dollars ($38,754.92), for the first full month of Base Rent for the First Expansion Premises, which amount shall be applied to the Base Rent owing for the first month after the First Expansion Rent Abatement Period (as defined in Paragraph 3.2(d) below).
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(d) Abatement of Base Rent for the First Expansion Premises. Notwithstanding the provisions of the amended Basic Lease Information as set forth in Paragraph 3.2(b) of this First Amendment and Tenants obligation to pay monthly Base Rent pursuant to Section 4.1 of the Existing Lease and Paragraph 3.2(a) of this First Amendment, effective as of the First Expansion Commencement Date, Tenant shall be entitled to an abatement of Base Rent with respect to the First Expansion Premises (the First Expansion Rent Abatement) for a period of five hundred sixty (560) days after the First Expansion Rent Commencement Date (such period, the First Expansion Rent Abatement Period).
3.3 Tenants Percentage Share. Effective as of the First Expansion Commencement Date, the definition of Tenants Percentage Share in the Basic Lease Information shall be deleted in its entirety and replaced by the following:
Tenants Percentage Share: | 2.84% as of the First Expansion Rent Commencement Date (initially being the quotient of 18,982 Adjusted Rentable Square Feet of the First Expansion Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100); | |||
35.96% as of the Phase 1 Commencement Date (initially being the quotient of 240,619 Adjusted Rentable Square Feet of the First Expansion Premises and the Phase 1 Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100); and | ||||
42.87% as of the Phase 2 Commencement Date (initially being the quotient of 286,848 Adjusted Rentable Square Feet of the Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100). |
3.4 Security Deposit. Within ten (10) business days after the First Expansion Commencement Date, pursuant to clause (d) of Section 33.1.3 and to Section 33.6 of the Existing Lease, Tenant shall deliver a replacement or amended Letter of Credit to Landlord in the form required by Article 26 of the Existing Lease increasing the Letter of Credit Amount to Two Million Seven Hundred Seventy Three Thousand Three Hundred Ninety and 70/100 Dollars ($2,773,390.70), such that the Letter of Credit Amount shall equal seven percent (7%) of Tenants total obligation to pay Base Rent as of the First Expansion Commencement Date.
3.5 Expansion Premises. The definition of Available Expansion Premises in Section 1.1.22 of the Existing Lease is hereby amended to delete the reference to Suite 460 and the definition of Expansion Premises in Section 1.1.81 is hereby amended to delete the references to Suite 460 and Suite 480.
3.6 Temporary Space. Section 2.7.2 of the Existing Lease is hereby deleted in its entirety.
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4. Alterations to First Expansion Premises.
4.1 Delivery. Notwithstanding the date specified in the Expansion Notice as the Lease Terms Expansion Date, Landlord and Tenant agree that Landlord shall deliver possession of the First Expansion Premises to Tenant within three (3) business days after the Effective Date. Pursuant to clause (l) of Section 33.1.3 of the Existing Lease, if Landlord fails to deliver possession of the First Expansion Premises within such three business day period, Sections 2.3 and 2.4 of the Existing Lease shall apply only with respect to the First Expansion Premises. Tenant agrees to accept possession of the First Expansion Premises on the First Expansion Commencement Date, without representation or warranty by Landlord, and with no obligation of Landlord to repaint, remodel, repair, improve or alter the First Expansion Premises, or to perform any construction, remodeling or other work of improvement upon the First Expansion Premises, or contribute to the cost of any of the foregoing, except as expressly set forth Paragraph 4.3 of this First Amendment. Without limiting the generality of the foregoing, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the First Expansion Premises, the suitability of the First Expansion Premises for Tenants use, the condition, capacity or performance of the tenant improvements to be made to the First Expansion Premises.
4.2 Tenants Alterations to First Expansion Premises. As provided in clause (e) of Section 33.1.3 of the Existing Lease, Tenant shall construct the tenant improvements for the First Expansion Premises, which tenant improvements shall be considered an Alteration subject to the terms and conditions of Article 10 of the Existing Lease (but shall be considered Tenant Improvements for purposes of Articles 12 and 14 of the Existing Lease). As provided in clause (g) of Section 33.1.3 of the Existing Lease, Tenant shall use commercially reasonable efforts to diligently prosecute construction of the tenant improvements in the First Expansion Premises (provided that Tenant shall not be required to pay for overtime or premium time labor in connection therewith unless Tenant elects to do so in its sole and absolute discretion).
4.3 First Expansion Premises Allowance.
(a) Allowance. Subject to the conditions set forth in this Paragraph 4.3, as provided in clause (b) of Section 33.1.3 of the Existing Lease, Landlord shall reimburse Tenant for the costs of the Permitted Expansion TI Items (as defined in Section 33.1.3 of the Existing Lease) for the First Expansion Premises, in an amount not to exceed Six Hundred Sixty Four Thousand Three Hundred Seventy and 00/100 Dollars ($664,370.00)(calculated at the rate of $35.00 per Adjusted Rentable Square Foot in the First Expansion Premises) (the First Expansion Allowance).
(b) Disbursement of First Expansion Allowance. The First Expansion Allowance shall be disbursed to Tenant in accordance with clauses (i), (j) and (k) of Section 33.1.3 and Section 33.5 of the Existing Lease.
(c) First Expansion Premises FF&E. If the actual cost of the Permitted Expansion TI Items for the First Expansion Premises shall be less than the First Expansion Allowance, a portion of such unused First Expansion Allowance, in an amount not to exceed One Hundred Forty Two Thousand Three Hundred Sixty Five and 00/100 Dollars ($142,365.00) (calculated at the rate of $7.50 per Adjusted Rentable Square Foot in the First Expansion Premises), may be disbursed to Tenant and applied to the cost of Tenants Expansion FF&E for the First Expansion Premises in accordance with Section 33.1.3 of the Existing Lease.
5. Real Estate Broker. Tenant represents and warrants to Landlord that no broker, agent, or finder, other than Colliers International (Jay Sternberg and Philip Arnautou) (Tenants Broker), has
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procured, or was involved in the negotiation of, this First Amendment, and, other than Tenants Broker, no such other broker, agent or finder is or may be entitled to a fee, commission or other compensation in connection with this First Amendment. Tenant agrees to indemnify Landlord and hold Landlord harmless from any and all costs (including attorneys fees), expenses or liability for commissions or other compensation claimed by any broker or agent, other than Tenants Broker, claiming to have had dealings with Tenant in connection with this First Amendment. Landlord represents and warrants to Tenant that no broker, agent, or finder, other than The CAC Group (Bruce A. Wilson and Steve Anderson) (Landlords Broker), has procured, or was involved in the negotiation of, this First Amendment, and, other than Landlords Broker, no such other broker, agent or finder is or may be entitled to a fee, commission or other compensation in connection with this First Amendment. Landlord agrees to indemnify Tenant and hold Tenant harmless from any and all costs (including attorneys fees), expenses or liability for commissions or other compensation claimed by any broker or agent, other than Landlords Broker, claiming to have had dealings with Landlord in connection with this First Amendment.
6. Notice Address for Tenant. Effective as of the Effective Date, Tenants Address in the Basic Lease Information for the period prior to the Commencement Date shall be deleted in its entirety and replaced by the following:
Tenants Address: | Prior to Commencement Date: | |||
Zynga Inc. | ||||
444 De Haro Street, Suite 132 | ||||
San Francisco, CA 94107 | ||||
Attention: Director of Real Estate | ||||
with a copy to: | Zynga Inc. | |||
444 De Haro Street, Suite 132 | ||||
San Francisco, CA 94107 | ||||
Attention: General Counsel | ||||
and a copy to: | Paul, Hastings, Janofsky & Walker LLP | |||
55 Second Street, 24th Floor | ||||
San Francisco, CA 94105 | ||||
Attention: Stephen I. Berkman, Esq. |
Tenants Address on and after the Commencement Date remains as provided in the Existing Lease.
7. Representation. Landlord warrants and represents that, other than Tenant, Landlord has not leased the First Expansion Premises to any third party or granted to any third party the right to occupy or possess the First Expansion Premises or any portion thereof.
8. Miscellaneous.
8.1 Except as modified by this First Amendment, all of the terms, conditions and provisions of the Existing Lease shall remain in full force and effect and are hereby ratified and confirmed. This First Amendment may be amended only by an agreement in writing, signed by the parties hereto. This First Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.
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8.2 Whether or not specifically amended by this First Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this First Amendment.
8.3 The submission of this First Amendment to Tenant for examination or execution does not create an option or constitute an offer to Tenant to amend the Existing Lease on the terms and conditions contained herein, and this First Amendment shall not become effective as an amendment to the Existing Lease unless and until the Effective Date.
8.4 This First Amendment contains the entire agreement of Landlord and Tenant with respect to the subject matter hereof. It is understood that there are no oral agreements between Landlord and Tenant affecting the Existing Lease as hereby amended, and this First Amendment supersedes and cancels any and all previous negotiations, representations, agreements and understandings, if any, between Landlord and Tenant and their respective agents with respect to the subject matter thereof, and none shall be used to interpret or construe the Lease. Tenant acknowledges that all prior communications from Landlord or its agents are not and were not, and shall not be construed to be, representations or warranties of Landlord or its agents as to the matters communicated, and have not and will not be relied upon by Tenant.
8.5 This First Amendment may be executed in two counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same agreement. This First Amendment may be executed by a partys signature transmitted by facsimile (fax) or by electronic mail in portable document format (pdf), and copies of this First Amendment executed and delivered by means of faxed or pdf signatures shall have the same force and effect as copies hereof executed and delivered with original signatures. All parties hereto may rely upon faxed or pdf signatures as if such signatures were originals. Any party executing and delivering this First Amendment by fax or pdf shall promptly thereafter deliver a counterpart of this First Amendment containing said partys original signature. All parties hereto agree that a faxed or pdf signature page may be introduced into evidence in any proceeding arising out of or related to this First Amendment as if it were an original signature page.
[signatures follow on next page]
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IN WITNESS WHEREOF, the parties have caused this First Amendment to Lease to be executed as of the date first written above.
LANDLORD: | ||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company | ||||||||
By: | Townsend Member LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Sole Member | ||||||||
By: | TMG 650 Townsend LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Administrative Manager | ||||||||
By: | TMG Partners, | |||||||
a California corporation | ||||||||
Its: Managing Member | ||||||||
By: | /s/ Lynn Tolin | |||||||
Name: | Lynn Tolin | |||||||
Its: | S.V.P. | |||||||
By: | /s/ Cathy Greenwold | |||||||
Name: | Cathy Greenwold | |||||||
Its: | Executive Vice President |
TENANT: | ||
ZYNGA INC., a Delaware corporation | ||
By: | /s/ David Wehner | |
Name: | David Wehner | |
Its: | CFO | |
By: | /s/ Mark Vranesh | |
Name: | Mark Vranesh | |
Its: | CAO |
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EXHIBIT A
FIRST EXPANSION PREMISES
See Attached
2 Pages
Exhibit A
EXHIBIT B
EXPANSION CONFIRMATION OF LEASE TERM
(FIRST EXPANSION PREMISES)
THIS EXPANSION CONFIRMATION OF LEASE TERM is made this day of , 2011 between 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord), and ZYNGA INC., a Delaware corporation (Tenant).
W I T N E S S E T H:
WHEREAS, by Office Lease dated the 24th day of September, 2010, as amended by that certain First Amendment to Lease dated the 27 th day of January, 2011, between the parties hereto (collectively, the Lease), Landlord leased to Tenant and Tenant leased from Landlord for the Term and upon the terms and conditions set forth therein the Premises containing approximately 286,848 Adjusted Rentable Square Feet, located at 699 Eighth Street, San Francisco, California, said Premises being more particularly designated in the Lease; and
WHEREAS, the parties hereto wish to confirm and memorialize, among other things, the First Expansion Commencement Date of the Term.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. All terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings designated for such terms in the Lease.
2. The First Expansion Commencement Date for the First Expansion Premises shall, for all purposes under the Lease, be deemed to be , 2011.
3. The First Expansion Rent Commencement Date shall, for all purposes under the Lease, be deemed to be , 2011.
4. The Term shall expire at midnight on , 20 , unless sooner terminated as provided in the Lease.
[signatures follow on next page]
Exhibit B
IN WITNESS WHEREOF, the parties hereto have caused this Confirmation of Lease Term to be executed as the day and year first above written.
LANDLORD: | ||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company | ||||||||
By: | Townsend Member LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Sole Member | ||||||||
By: | TMG 650 Townsend LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Administrative Manager | ||||||||
By: | TMG Partners, | |||||||
a California corporation | ||||||||
Its: Managing Member | ||||||||
By: |
| |||||||
Name: |
| |||||||
Its: |
|
TENANT: | ||
ZYNGA INC., a Delaware corporation | ||
By: | /s/ David Wehner | |
Name: | David Wehner | |
Its: | CFO | |
/s/ Mark Vranesh |
Exhibit B
TABLE OF CONTENTS
Page | ||||||
1. |
Use of Defined Terms; Recitals; Effective Date | 1 | ||||
2. |
First Expansion Premises | 1 | ||||
3. |
Amendments to Lease | 2 | ||||
4. |
Alterations to First Expansion Premises | 5 | ||||
5. |
Real Estate Broker | 5 | ||||
6. |
Miscellaneous | 6 |
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this Second Amendment) is dated for reference purposes only as of March 25, 2011, by and between 650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company (Landlord), and ZYNGA INC. (formerly known as Zynga Game Network Inc.), a Delaware corporation (Tenant).
RECITALS
A. Pursuant to that certain Office Lease dated as of September 24, 2010 (the Original Lease), as amended by that certain First Amendment to Lease dated as of January 28, 2011 (the First Amendment and, together with the Original Lease, the Existing Lease), Tenant leases certain premises containing approximately 286,848 Adjusted Rentable Square Feet (the Existing Premises) in the building located at 699 Eighth Street, San Francisco, California (the Building).
B. Pursuant to Section 33 of the Existing Lease, Landlord granted Tenant certain rights to expand its Premises by leasing certain Expansion Premises (as defined in the Lease).
C. In lieu of exercising its rights under Section 33.1.1, Tenant desires to expand its Premises with respect to the Expansion Premises comprised of Suite 600 on terms different than those provided in Article 33 of the Existing Lease, including the right to immediately occupy Suite 600 and postpone construction of the tenant improvements to Suite 600 to a date later than contemplated in the Existing Lease. Landlord is willing to agree to such modified terms, as set forth herein.
D. Landlord and Tenant desire to amend the Existing Lease to (i) add to the Existing Premises that space in the Building commonly known as Suite 600, containing approximately 59,056 Adjusted Rentable Square Feet (the Second Expansion Premises), as more particularly shown on Exhibit A attached hereto, and (ii) make certain other amendments to the Existing Lease, all subject to, and on the basis of, the terms, covenants and conditions hereinafter set forth. The Existing Lease, as amended by this Second Amendment, is referred to as the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Use of Defined Terms; Recitals; Effective Date.
1.1 Definitions; Recitals. Unless otherwise defined herein or unless the context clearly requires otherwise, all capitalized terms used herein shall have the defined meanings ascribed to them in the Existing Lease. The provisions of the Recitals above are fully incorporated herein by this reference.
1.2 Effective Date. Unless otherwise specifically provided herein, the provisions of this Second Amendment shall be effective as of the date that this Second Amendment has been (a) fully executed and delivered by both Tenant and Landlord and (b) consented to by the Existing Security Holder (the Effective Date).
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2. Second Expansion Premises.
2.1 Commencement Date. For purposes of this Second Amendment, the Second Expansion Commencement Date means February 22, 2011. As of the Second Expansion Commencement Date, all terms and provisions of the Lease shall be applicable to the Second Expansion Premises, except as otherwise provided herein.
2.2 Termination Date. The termination date for the Second Expansion Premises shall be the Expiration Date under the Lease for the Existing Premises, unless the term of the Lease is sooner terminated or extended pursuant to the Lease.
3. Amendments to Lease.
3.1 Premises. Effective as of the Second Expansion Commencement Date, all terms and provisions of the Lease shall become applicable to the Second Expansion Premises, the Premises shall include and mean both the Existing Premises and the Second Expansion Premises, and, except to the extent inconsistent with the express terms of this Second Amendment, all references in the Lease to the Premises shall be construed to refer to both the Existing Premises and the Second Expansion Premises. Accordingly, effective as of the Second Expansion Commencement Date, (a) the total Adjusted Rentable Square Feet in the definition of Premises as set forth in the Basic Lease Information is hereby amended to delete 286,848 Adjusted Rentable Square Feet and insert in place thereof 345,904 Adjusted Rentable Square Feet and (b) the definition of Premises in the Basic Lease Information shall be further amended to insert the following after clause (vii) thereof:
(vii) | Suite 600 located on the sixth floor containing approximately 59,056 Adjusted Rentable Square Feet. |
3.2 Base Rent.
(a) Rent Commencement; Expansion Delay. Notwithstanding the provisions of Section 33.1.3 of the Existing Lease regarding commencement of rent, pursuant to Section 4.1 of the Existing Lease and subject to Paragraphs 3.2(d) and 3.2(e) of this Second Amendment, Tenant shall pay Base Rent for the Second Expansion Premises in the sum set forth in Paragraph 3.2(b) of this Second Amendment commencing on the Second Expansion Commencement Date (the Second Expansion Rent Commencement Date).
(b) Base Rent for Second Expansion Premises. Effective as of the Second Expansion Commencement Date, the Basic Lease Information shall be amended to insert the following as Base Rent for the Second Expansion Premises, which is in addition to Base Rent for the Existing Premises:
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Base Rent (Net of Electrical) for Second Expansion Premises:
Time Period |
Annual Base Rent/ARSF for Second Expansion Premises |
Annual Base Rent for Second Expansion Premises |
Monthly Base Rent for Second Expansion Premises |
|||||||
Second Expansion Rent Commencement Date to the first anniversary of the Phase 1 Rent Commencement Date |
$24.50 as to 13,152 ARSF and $23.50 as to 45,904 ARSF |
$ | 1,400,968.00 | $ | 116,747.33 | |||||
First anniversary of the Phase 1 Rent Commencement Date to the second anniversary of the Phase 1 Rent Commencement Date |
$25.50 as to 13,152 ARSF and $24.50 as to 45,904 ARSF |
$ | 1,460,024.00 | $ | 121,668.67 | |||||
Second anniversary of the Phase 1 Rent Commencement Date to the third anniversary of the Phase 1 Rent Commencement Date |
$26.50 as to 13,152 ARSF and $25.50 as to 45,904 ARSF |
$ | 1,519,080.00 | $ | 126,590.00 | |||||
Third anniversary of the Phase 1 Rent Commencement Date to the fourth anniversary of the Phase 1 Rent Commencement Date |
$27.50 as to 13,152 ARSF and $26.50 as to 45,904 ARSF |
$ | 1,578,136.00 | $ | 131,511.33 | |||||
Fourth anniversary of the Phase 1 Rent Commencement Date to the fifth anniversary of the Phase 1 Rent Commencement Date |
$28.50 as to 13,152 ARSF and $27.50 as to 45,904 ARSF |
$ | 1,637,192.00 | $ | 136,432.67 | |||||
Fifth anniversary of the Phase 1 Rent Commencement Date to the sixth anniversary of the Phase 1 Rent Commencement Date |
$29.50 as to 13,152 ARSF and $28.50 as to 45,904 ARSF |
$ | 1,696,248.00 | $ | 141,354.00 | |||||
Sixth anniversary of the Phase 1 Rent Commencement Date to the Expiration Date |
$30.50 as to 13,152 ARSF and $29.50 as to 45,904 ARSF |
$ | 1,755,304.00 | $ | 146,275.33 | |||||
Extension Terms |
See Section 3.4 of the Lease |
(c) First Months Rent. Upon the Effective Date, Tenant shall pay to Landlord the amount of One Hundred Sixteen Thousand Seven Hundred Forty Seven and 33/100 Dollars
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($116,747.33), for the first full month of Base Rent for the Second Expansion Premises, which amount shall be applied to the Base Rent owing for the first month after the Additional Second Expansion Rent Abatement Period (as defined in Paragraph 3.2(e) below).
(d) Abatement of Base Rent for the Second Expansion Premises pursuant to Existing Lease. Notwithstanding the provisions of the amended Basic Lease Information as set forth in Paragraph 3.2(b) of this Second Amendment and Tenants obligation to pay monthly Base Rent pursuant to Section 4.1 of the Existing Lease and Paragraph 3.2(a) of this Second Amendment, effective as of the Second Expansion Rent Commencement Date, Tenant shall be entitled to an abatement of Base Rent with respect to the Second Expansion Premises (the Second Expansion Rent Abatement) for a period of five hundred sixty (560) days after the Second Expansion Rent Commencement Date (such period, the Second Expansion Rent Abatement Period) as provided in clause (c) of Section 33.1.3 of the Existing Lease.
(e) Abatement of Base Rent Equivalent to Construction Period. Notwithstanding the provisions of the amended Basic Lease Information as set forth in Paragraph 3.2(b) of this Second Amendment and Tenants obligation to pay monthly Base Rent pursuant to Section 4.1 of the Existing Lease and Paragraph 3.2(a) of this Second Amendment, in addition to the Second Expansion Rent Abatement, Tenant shall be entitled to an additional abatement of Base Rent with respect to the Second Expansion Premises (the Additional Second Expansion Rent Abatement) for a period of one hundred twenty (120) days immediately following the Second Expansion Rent Abatement Period (such period, the Additional Second Expansion Rent Abatement Period), as described further in Paragraph 4.3 of this Second Amendment.
3.3 Tenants Percentage Share. Effective as of the Second Expansion Commencement Date, the definition of Tenants Percentage Share in the Basic Lease Information shall be deleted in its entirety and replaced by the following:
Tenants Percentage Share: | 11.66% as of the Second Expansion Commencement Date (initially being the quotient of the sum of 18,982 Adjusted Rentable Square Feet of the First Expansion Premises plus 59,056 Adjusted Rentable Square Feet of the Second Expansion Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100); | |||
44.78% as of the Phase 1 Commencement Date (initially being the quotient of the sum of 18,982 Adjusted Rentable Square Feet of the First Expansion Premises, plus 59,056 Adjusted Rentable Square Feet of the Second Expansion Premises plus 221,637 Adjusted Rentable Square Feet of the Phase 1 Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100); and | ||||
51.69% as of the Phase 2 Commencement Date (initially being the |
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quotient of 345,904 Adjusted Rentable Square Feet of the Premises divided by 669,166 Adjusted Rentable Square Feet multiplied by 100). |
3.4 Security Deposit. Within ten (10) business days after the Second Expansion Commencement Date, pursuant to clause (d) of Section 33.1.3 and to Section 33.6 of the Existing Lease, Tenant shall deliver a replacement or amended Letter of Credit to Landlord in the form required by Article 26 of the Existing Lease increasing the Letter of Credit Amount to Three Million Three Hundred Sixty Thousand Four Hundred Eight and 13/100 Dollars ($3,360,408.13), such that the Letter of Credit Amount shall equal seven percent (7%) of Tenants total obligation to pay Base Rent as of the Second Expansion Commencement Date.
3.5 Expansion Premises. The definition of Available Expansion Premises in Section 1.1.22 of the Existing Lease is hereby amended to delete the reference to Suite 600 and the definition Expansion Premises in Section 1.1.81 of the Existing Lease is hereby amended to delete the reference to Suite 600.
4. Delivery of and Alterations to Second Expansion Premises.
4.1 Delivery. Pursuant to the terms of that certain Access and Indemnity Agreement dated as of February 22, 2011 between Landlord and Tenant (the Early Access Agreement), Landlord has granted Tenant exclusive access rights to the Second Expansion Premises. Tenant has not delivered a Lease Terms Expansion Notice for the Second Expansion Premises. Rather, Landlord and Tenant agree that Landlord shall be deemed to have delivered possession of the Second Expansion Premises to Tenant as of the Second Expansion Commencement Date, notwithstanding the terms of Section 33.1.2 and clause (f) of Section 33.1.3 of the Existing Lease. Sections 2.3 and 2.4 of the Existing Lease shall not apply with respect to the Second Expansion Premises in that the parties acknowledge delivery of the Second Expansion Premises as of the Second Expansion Premises pursuant to this Second Amendment, and not as contemplated by a Lease Terms Expansion Notice. Tenant shall be deemed to have accepted possession of the Second Expansion Premises as of the Second Expansion Commencement Date, without representation or warranty by Landlord, and with no obligation of Landlord to repaint, remodel, repair, improve or alter the Second Expansion Premises, or to perform any construction, remodeling or other work of improvement upon the Second Expansion Premises, or contribute to the cost of any of the foregoing, except as expressly set forth in Paragraph 4.4 of this Second Amendment. Without limiting the generality of the foregoing, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Second Expansion Premises, the suitability of the Second Expansion Premises for Tenants use, the condition, capacity or performance of the tenant improvements to be made to the Second Expansion Premises.
4.2 Tenants Immediate Occupancy Improvements to Second Expansion Premises. Pursuant to the Early Access Agreement, Tenant previously commenced construction of certain alterations to the Second Expansion Premises as described in the plans and specifications attached hereto as Exhibit B to facilitate Tenants immediate occupancy of the Second Expansion Premises (the Immediate Occupancy Improvements). Landlord approves such plans and specifications attached hereto as Exhibit B and the Immediate Occupancy Improvements described therein. The Immediate Occupancy Improvements shall be constructed by Tenant in accordance with Article 10 of the Existing Lease. The Immediate Occupancy Improvements are not intended by Landlord or Tenant to be tenant improvements as contemplated by clause (e) of Section 33.1.3 of the Existing Lease.
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4.3 Tenant Improvements to Second Expansion Premises. Tenant desires to postpone construction of the tenant improvements to Second Expansion Premises. Notwithstanding the obligations set forth in clauses (e) and (g) of Section 33.1.3 of the Existing Lease, Tenant shall construct, at such later date to be reasonably determined by Tenant, tenant improvements for the Second Expansion Premises, which tenant improvements shall be considered an Alteration subject to the terms and conditions of Article 10 of the Existing Lease (but shall be considered Tenant Improvements for purposes of Articles 12 and 14 of the Existing Lease). Tenant shall give Landlord at least fifteen (15) days prior written notice of the date (the Suite 600 TI Start Date) on which Tenant intends to commence such tenant improvements. Upon commencement of such tenant improvements, Tenant shall use commercially reasonable efforts to diligently prosecute construction of the tenant improvements in the Second Expansion Premises (provided that Tenant shall not be required to pay for overtime or premium time labor in connection therewith unless Tenant elects to do so in its sole and absolute discretion). Other than the Second Expansion Rent Abatement, the Additional Second Expansion Rent Abatement and as expressly provided in this paragraph below, Tenant shall not be entitled to rent abatement during the period of Tenants construction of the tenant improvements to the Second Expansion Premises. Tenant is receiving, pursuant to Paragraph 3.2(e) above, the equivalent benefit of rent abatement during the four-month construction period as originally contemplated in clause (h) of Section 33.1.3 of the Existing Lease. If the Suite 600 TI Start Date occurs after the date which is two hundred twenty five (225) days following the Commencement Date, Tenant waives any right to further rent abatement that Tenant would have been entitled for delays in constructing tenant improvements pursuant to clause (i)(A) of Section 33.1.3 of the Existing Lease resulting from Force Majeure Events had Tenant exercised its Lease Terms Expansion Option in accordance with Section 33.1 of the Existing Lease and commenced construction of the tenant improvements upon delivery of the Second Expansion Premises. For the avoidance of doubt, nothing in this Amendment shall be construed or deemed to be a waiver or limitation of Tenants right to an extended period of Additional Second Expansion Rent Abatement to the extent arising from any Expansion Delays pursuant to clause (i)(B) of Section 33.1.3 of the Existing Lease.
4.4 Second Expansion Premises Allowance.
(a) Tenant Improvement Allowance. Subject to the conditions set forth in this Paragraph 4.3, as provided in clause (b) of Section 33.1.3 of the Existing Lease, Landlord shall reimburse Tenant for the costs of the Permitted Expansion TI Items (as defined in Section 33.1.3 of the Existing Lease) for the Second Expansion Premises, in an amount not to exceed Two Million Sixty Six Thousand Nine Hundred Sixty and 00/100 Dollars ($2,066,960.00) (calculated at the rate of $35.00 per Adjusted Rentable Square Foot in the Second Expansion Premises) (the Second Expansion Allowance). The Permitted Expansion TI Items shall not include any cost relating to the Immediate Occupancy Improvements and the Second Expansion Allowance shall not be disbursed to reimburse Tenant for any cost relating to the Immediate Occupancy Improvements.
(b) Disbursement of Second Expansion Allowance. The Second Expansion Allowance shall be disbursed to Tenant in accordance with clauses (i), (j) and (k) of Section 33.1.3 and Section 33.5 of the Existing Lease.
(c) Second Expansion Premises FF&E. If the actual cost of the Permitted Expansion TI Items for the Second Expansion Premises shall be less than the Second Expansion Allowance, a portion of such unused Second Expansion Allowance, in an amount not to exceed Four Hundred Forty Two Thousand Nine Hundred Twenty and 00/100 Dollars ($442,920.00) (calculated at the rate of $7.50 per Adjusted Rentable Square Foot in the Second Expansion Premises), may be disbursed to Tenant and applied to the cost of Tenants Expansion FF&E for the Second Expansion Premises in accordance with Section 33.1.3 of the Existing Lease.
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5. Parking. Effective as of the Second Expansion Commencement Date, pursuant to Section 30.1 of the Existing Lease, Tenant shall lease the twenty six (26) parking spaces within the area of the Parking Garage located on the sixth floor and adjacent to the Second Expansion Premises. Such additional parking spaces shall be leased on a reserved basis and at the rate of the Parking Charge as provided in Section 30.1 of the Existing Lease and shall otherwise be deemed Parking Spaces under the Existing Lease, provided, however, that the twenty six (26) parking spaces located on the sixth floor shall not be included in the number of leased Parking Spaces that may be reduced by Tenant under Section 30.1 of the Existing Lease.
6. Roof Noise.
6.1 Generator Testing. Landlord and Tenant agree that any testing, repair or maintenance of any of the (i) generators at the Project by Landlord that could reasonably be anticipated to cause a disruption in the operation of Tenants business in the Premises or (ii) Generators by Tenant that could reasonably be anticipated to cause a disruption in the operation of the business of any other tenant of the Building, shall be performed either (a) outside of Building Standard Hours or (b) after consultation between Tenant and Landlord to determine how to reasonably schedule such testing, repair or maintenance in order to minimize any such disruption. For the avoidance of doubt, nothing contained in this Paragraph 6.1 is intended, nor shall it be deemed, to incur upon either Landlord or Tenant any generator testing, repair or maintenance obligations other than those, if any, expressly described in the Existing Lease.
6.2 Parking Garage Drains. At Landlords sole cost and expense, Landlord shall install a certain fiberglass reinforced plastic (FRP) grating product manufactured by Fibergrate within each of the drain grates on the rooftop portion of the Parking Garage in a manner consistent with the pilot modification to two of such drain grates as previously approved by Tenant. The installation of such FRP grating products shall be completed by Landlord on or before July 31, 2011.
7. Real Estate Broker. Tenant represents and warrants to Landlord that no broker, agent, or finder, other than Colliers International (Jay Sternberg and Philip Arnautou) (Tenants Broker), has procured, or was involved in the negotiation of, this Second Amendment, and, other than Tenants Broker, no such other broker, agent or finder is or may be entitled to a fee, commission or other compensation in connection with this Second Amendment. Tenant agrees to indemnify Landlord and hold Landlord harmless from any and all costs (including attorneys fees), expenses or liability for commissions or other compensation claimed by any broker or agent, other than Tenants Broker, claiming to have had dealings with Tenant in connection with this Second Amendment. Landlord represents and warrants to Tenant that no broker, agent, or finder, other than The CAC Group (Bruce A. Wilson and Steve Anderson) (Landlords Broker), has procured, or was involved in the negotiation of, this Second Amendment, and, other than Landlords Broker, no such other broker, agent or finder is or may be entitled to a fee, commission or other compensation in connection with this Second Amendment. Landlord agrees to indemnify Tenant and hold Tenant harmless from any and all costs (including attorneys fees), expenses or liability for commissions or other compensation claimed by any broker or agent, other than Landlords Broker, claiming to have had dealings with Landlord in connection with this Second Amendment. Tenant acknowledges the second payment in the amount of fifty percent (50%) of the commission due Tenants Broker under the separate agreement between Landlord and Tenants Broker shall not be earned, due or payable until thirty (30) days after the date on which Tenant has substantially completed the tenant improvements to the Second Expansion Premises, as described in Paragraph 4.3. Landlord shall enter into an amendment to the separate agreement between Landlord and Tenants Broker confirming the same. For the sake of clarity, no portion of the commission shall be earned, due or payable with respect to the completion of the Immediate Occupancy Improvements.
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8. Representation. Landlord warrants and represents that, other than Tenant, Landlord has not leased the Second Expansion Premises to any third party or granted to any third party the right to occupy or possess the Second Expansion Premises or any portion thereof.
9. Miscellaneous.
9.1 Except as modified by this Second Amendment, all of the terms, conditions and provisions of the Existing Lease shall remain in full force and effect and are hereby ratified and confirmed. For the avoidance of doubt, except as expressly described in this Second Amendment, Section 33.1.3 of the Existing Lease shall apply to Tenants occupancy of and construction of tenant improvements in the Second Expansion Premises. This Second Amendment may be amended only by an agreement in writing, signed by the parties hereto. This Second Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.
9.2 Whether or not specifically amended by this Second Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Second Amendment.
9.3 The submission of this Second Amendment to Tenant for examination or execution does not create an option or constitute an offer to Tenant to amend the Existing Lease on the terms and conditions contained herein, and this Second Amendment shall not become effective as an amendment to the Existing Lease unless and until the Effective Date.
9.4 This Second Amendment contains the entire agreement of Landlord and Tenant with respect to the subject matter hereof. It is understood that there are no oral agreements between Landlord and Tenant affecting the Existing Lease as hereby amended, and this Second Amendment supersedes and cancels any and all previous negotiations, representations, agreements and understandings, if any, between Landlord and Tenant and their respective agents with respect to the subject matter thereof, and none shall be used to interpret or construe the Lease. Tenant acknowledges that all prior communications from Landlord or its agents are not and were not, and shall not be construed to be, representations or warranties of Landlord or its agents as to the matters communicated, and have not and will not be relied upon by Tenant.
9.5 Effective as of the Effective Date, the Early Access Agreement shall be null and void ab initio and of no further force and effect. The Early Access Agreement is superseded and replaced in its entirety by this Second Amendment.
9.6 This Second Amendment may be executed in two counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same agreement. This Second Amendment may be executed by a partys signature transmitted by facsimile (fax) or by electronic mail in portable document format (pdf), and copies of this Second Amendment executed and delivered by means of faxed or pdf signatures shall have the same force and effect as copies hereof executed and delivered with original signatures. All parties hereto may rely upon faxed or pdf signatures as if such signatures were originals. Any party executing and delivering this Second Amendment by fax or pdf shall promptly thereafter deliver a counterpart of this Second Amendment containing said partys original signature. All parties hereto agree that a faxed or pdf signature page may be introduced into evidence in any proceeding arising out of or related to this Second Amendment as if it were an original signature page.
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IN WITNESS WHEREOF, the parties have caused this Second Amendment to Lease to be executed as of the date first written above.
LANDLORD: | ||||||||
650 TOWNSEND ASSOCIATES LLC, a Delaware limited liability company | ||||||||
By: | Townsend Member LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Sole Member | ||||||||
By: | TMG 650 Townsend LLC, | |||||||
a Delaware limited liability company | ||||||||
Its: Administrative Manager | ||||||||
By: | TMG Partners, | |||||||
a California corporation | ||||||||
Its: Managing Member | ||||||||
By: | /s/ Michael Covarrubias | |||||||
Name: | Michael Covarrubias | |||||||
Its: | CEO | |||||||
By: | /s/ Scott C. Verges | |||||||
Name: | Scott C. Verges | |||||||
Its: | Secretary |
[signatures continue on next page]
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TENANT: | ||
ZYNGA INC., a Delaware corporation | ||
By: | /s/ David Wehner | |
Name: | David Wehner | |
Its: | Chief Financial Officer | |
By: | /s/ Mark Vranesh | |
Name: |
| |
Its: |
|
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EXHIBIT A
SECOND EXPANSION PREMISES
See Attached Page
Exhibit A
EXHIBIT B
PLANS FOR IMMEDIATE OCCUPANCY AGREEMENT
See Attached Page
Exhibit 10.15
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Developer Addendum
This Developer Addendum (this Addendum) is effective as of May 14, 2010 (the Effective Date) and is made between Facebook, Inc. (we or us) and Zynga Game Network Inc. (you or your). We and you are sometimes referred to in this Addendum individually as a party and collectively as the parties. The parties hereby agree as follows:
Recitals
A. | We and you are parties to our then-current standard online Statement of Rights and Responsibilities (together with all referenced policies, terms and guidelines, including without limitation, the online Developer Principles and Policies and the Facebook Credits Terms, the SRR) which set forth the terms and conditions for your use of Facebook. The SRR is located at http://www.facebook.com/terms.php?ref=pf, or some other such URL designated by us in writing; |
B. | As a high-volume user of Facebook, your use of Platform far exceeds some or all of the thresholds in Section II.11 of the Developer Principles and Policies; |
C. | You acknowledge that supporting your use of Facebook requires significant operational, technical infrastructure, performance, employee and financial resources. Accordingly, in order to be able to continue to support your use of Facebook, we need to invest significant additional resources to help ensure the continued stability and reliability of our services. |
D. | You wish to assist us in our effort to help us provide our users with a safe, secure, simple and efficient experience on Facebook. In furtherance of such efforts, you agree to comply with the terms of this Addendum and cooperate with us in our efforts to encourage the adoption of Facebook Credits. |
E. | Accordingly, the parties mutually agree to the terms and conditions of this Addendum. This Addendum supplements the SRR as set forth herein. |
F. | Capitalized terms not defined in this Addendum or its Exhibits have the meanings given to them in the SRR. |
For mutual and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, we and you agree as follows:
Agreement
1. API. Subject to your continued compliance with this Addendum and the SRR, during the Term, we will provide you with access to our public APIs that we generally make available to all other developers. For purposes of clarity, nothing herein obligates us to provide you with access to any distribution channels (e.g., requests, bookmarks, streams) for any Zynga Services or Covered Zynga Services.
2. Facebook Ad Units.
a. Implementation of Facebook Ad Units. Subject to the terms herein, beginning on a date to be determined by us (the Facebook Ad Unit Launch Date) and continuing for so long as we wish to utilize Facebook Ad Units (defined below) during the remainder of the Term, you will enable us to display advertising purchased by a third party or other advertising purchased by us (Content) through an iFrame (or some other functionality or technology that is mutually agreed upon by the parties in writing) provided by us that shall appear on Zynga Game Pages (and only Zynga Game Pages) on which you decide to implement such iFrame (the Facebook Ad Unit) (all such Zynga Game Pages, Properties).
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We will provide you with ninety (90) days prior written notice in the event that we elect to cease serving Content through Facebook Ad Units for display on the Properties.
b. Conditions and Restrictions Relating to Facebook Ad Units. The following conditions and restrictions apply to Facebook Ad Units on Properties:
(i) Each Facebook Ad Unit you implement shall (1) appear on the right hand side of the web page of all Properties so the user is not required to scroll horizontally to see the Facebook Ad Unit, and (2) be subject to and comply with the same dimension and substantially the same position and placement requirements that we use for and apply to third party advertisements placed on Canvas Pages as of the Effective Date, as such dimension, positioning and placement requirements are depicted and described in Exhibit F. You acknowledge and agree that we will be the executive producer of all Facebook Ad Units. Accordingly, and subject to Section 2.b (vii) below, you agree that we will have sole control over the appearance, design, layout, look-and-feel, Content (including adding, changing or removing Content), advertisers whose Content appear within, features, and functionality of all Facebook Ad Units and the methods and means used to monetize Facebook Ad Units.
(ii) You must have and abide by an appropriate privacy policy. Your privacy policy should also include information about user options for cookie management.
(iii) You agree to comply with commercially reasonable specifications provided by us from time to time to enable proper delivery, display, tracking, and reporting of Content and to enable proper tracking and reporting of impressions, clicks and other actions taken in connection with Content.
(iv) You agree to direct to us, and not to any advertiser, any communication regarding any Content displayed in connection with Facebook Ad Units.
(v) You are solely responsible for the Properties, including all content and materials, maintenance and operation thereof and the proper implementation of our specifications. We are not responsible for anything related to Properties except for the serving of Content that appears in the Facebook Ad Units implemented on such Properties.
(vi) You will not (a) directly or indirectly generate impressions, clicks, or any other user engagement with Content through any automated, deceptive, fraudulent or other invalid means, including through repeated manual clicks, the use of robots or other automated tools or software; (b) modify or change in any way any Content; (c) use any interstitial, pop-up windows, other intermediate steps or any other technology or content which acts as a barrier to the transition of a user from any Facebook Ad Unit to any web page or other location accessed by an end user after clicking on any Content (Page); (d) remove, minimize, frame, or otherwise inhibit the full and complete display of any Page; (e) display any Content on any web page or web site that contains pornographic, hate-related, violent or illegal content; (f) redirect an end user away from any Page or provide a version of any Page that is different from the page an end user would access by going directly to the Page, intersperse any content between the Content and the Page; or otherwise provide anything other than a direct link from Content to a Page; (g) directly or indirectly access, launch, and/or activate Content through or from any software application, web site, or other means other than Properties and then only to the extent expressly permitted by this Section 2.b(vii); and (h) index, crawl, spider or in any non-transitory manner store or cache information obtained from any Content. In addition, you will not facilitate or encourage any of the foregoing. Notwithstanding anything to the contrary herein, we acknowledge that you may offer users the option to play games that are Covered Zynga Services in full screen mode, so long as such option shall be presented to a user in a manner that is not materially more prominent than the implementation of such option on Covered Zynga Services as of the Effective Date and as reflected in Exhibit G.
(vii) You agree not to display on the same web page on which any Facebook Ad Unit or Content is displayed, any advertisement(s) or content that an end user of any Properties would reasonably confuse
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
with one of our advertisements or otherwise associate with us (e.g., by utilizing our branding or using the same font or branding elements used in the Facebook Ad Unit).
(viii) We will not serve any advertisement (A) for any Named Entity or (B) that disparages you or (C) that contains pornographic, hate-related, violent or illegal content, or (D) that contains animation, in each case within any Facebook Ad Unit displayed on any Properties. In the event we do serve any such advertisement described in the foregoing (A) (D), you will notify us and, as your sole and exclusive remedy, we will promptly remove the advertisement, but in no event within more than [*] following receipt of such notification. In the event that we serve any Facebook Ad Unit that causes a material degradation in or otherwise materially impedes the functionality of any of your Properties, as your sole and exclusive remedy, you will be entitled to remove the Facebook Ad Unit and you will notify us immediately of such removal. You will reinstate the removed Facebook Ad Unit within 12 hours of us notifying you that we have cured the issue giving rise to the applicable material degradation or material impediment.
(ix) We represent and warrant that, for the calendar month of April 2010, the average RPM for advertisements shown in connection with Covered Zynga Services on your Canvas Pages is [*].
(x) [*] Notwithstanding the foregoing, we may allow advertisers to choose not to place ads on your Properties or third party websites in general. You acknowledge and agree that if we offer any third party the ability to display advertising on its website as part of an official advertising network using iFrames that are larger than the Facebook Ad Unit, doing so shall not be deemed a breach of this Section 2.(x), and we agree to offer you the same larger iFrame format.
(xi) We will provide advertisement partner management support to drive advertising revenue derived from Facebook Ad Units.
(xii) You acknowledge and agree that certain Content may, when clicked upon or otherwise engaged with by a user, render or generate an overlay, pop-up, or interactive functionality (collectively, an Overlay), and you hereby agree not to block, inhibit, impede, or interfere with the rendering, performance, or use of any such Overlay. You acknowledge and agree that the rendering of an Overlay in and of itself does not constitute a material degradation in, or a material impediment of, the functionality of any of your Properties.
3. Fees.
a. Within 15 days of the end of each month of the Term you shall send us a report that (1) identifies the specific Properties on which you implemented the Facebook Ad Unit during the previous month and (2) the number of Page Views generated during the previous month of all Zynga Game Pages on which a Facebook Ad Unit was not implemented (Monthly Page View Count).
b. Each month during the Term, for all Properties on which you implemented, during the previous month, the Facebook Ad Unit, we will pay you a percentage of Net Revenue (Ad Share) arising from such Properties for the previous month. Such Ad Share will be [*]. Notwithstanding anything to the contrary in this Addendum, we shall not be liable for any payment identified by us within [*] after the date of such payment as having been based on: (a) any amounts which result from fraud, invalid queries or invalid clicks or impressions on Content generated by any person, bot, automated program or similar device, as reasonably determined by us, including without limitation through any clicks or impressions (i) originating from your IP addresses or computers under your control, (ii) solicited by payment of money, false representation, or request for end users to click on Content, or (iii) solicited by payment of money, false representation, or any illegal or otherwise invalid request for end users to complete events; (b) Content delivered to end users whose browsers have JavaScript disabled; (c) placeholder or transparent Content that we may deliver; or (d) clicks co-mingled with a significant number of invalid clicks described in (a) above, or as a result of any breach of this Addendum by you for any applicable pay period. We reserve the right to withhold payment or charge back your account due to any of the foregoing pending our reasonable investigation of any of the foregoing (provided that such investigation shall not exceed [*],
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
or in the event that an advertiser whose Content is displayed in connection with Properties defaults on payment for such Content to us. Our records and figures, as determined by us using our tracking methodologies will be used to determine all Ad Share payments and will govern in all circumstances.
c. For each month during the Term after the Facebook Ad Unit Launch Date in which we served Content for display on the Properties, for all Zynga Game Pages on which you did not, during the previous month, implement the Facebook Ad Unit (other than as a result of the removals made pursuant to Section 2.b(viii)), you will pay us an amount equal to [*]. In no event shall the foregoing monthly payment exceed [*] for any given month. Each payment made by you pursuant to this Section 3.c will be accompanied by a detailed report verifying amounts paid and the manner in which payments were calculated. Each such report shall include such categories of data and level of detail as mutually agreed upon by the parties. Within fourteen (14) days of the date of any written request by us, you shall verify and certify in a writing signed by one of your senior executives your compliance with your payment obligations under Section 3.c. We may request any such certification no more than once each quarter during the Term.
d. Each month during the Term, you shall have the right, but not the obligation, to display Facebook Ad Units on game-related forums and game related web pages that are owned and operated by Zynga or its Affiliates that are not Zynga Game Pages. Your display of Facebook Ad Units on any other web pages that are not Zynga Game Pages shall be subject to our prior written approval on a case by case basis (which we may withhold at our sole discretion). For the sake of clarity, in the event that Facebook Ad Units are displayed on any such web pages, the provisions of Sections 2, 3.a and 3.b shall apply.
e. Each payment made by us pursuant to Section 3.b will be accompanied by a detailed report verifying amounts paid and the manner in which such amounts were calculated. Each such report shall include such categories of data and level of detail as mutually agreed upon by the parties. Within fourteen (14) days of the date of any written request by you, we shall verify and certify in a writing signed by one of our senior executives our compliance with our payment obligations under Section 3.b. You may request any such certification no more than once each quarter during the Term.
4. Implementation of Facebook Credits.
a. Implementation of Facebook Credits in Covered Zynga Services. You shall begin implementing (and you shall cause your Affiliates to begin implementing) Facebook Credits in all Covered Zynga Services commencing on the Implementation Start Date set forth in Exhibit B for each such Covered Zynga Service. You shall complete implementation (and you shall cause your Affiliates to complete implementation) of Facebook Credits in all Covered Zynga Services by no later than the Exclusivity Start Date set forth in Exhibit B for each such Covered Zynga Service. Within thirty (30) days after the Effective Date, the parties will mutually agree on a detailed written implementation plan that is consistent with the dates set forth on Exhibit B (Implementation Plan); provided, however, you acknowledge and agree that any failure by the parties to agree on the Implementation Plan will not affect or reduce any of your obligations under this Addendum including, without limitation, your obligations under Section 4.b. The Implementation Plan may only be accelerated upon mutual agreement of the parties. Notwithstanding anything to the contrary in this Addendum, you acknowledge and agree that we reserve the right to slow down the pace at which you implement Facebook Credits in any or all Covered Zynga Services by pushing back the Exclusivity Start Dates or the staging set forth in the Implementation Plan, with the understanding that the Exclusivity Start Date for each such Covered Zynga Service will be extended by the number of days by which we extend the staging of the implementation of Facebook Credits. Except as set forth in the foregoing sentence, any changes to Exhibit B must be mutually agreed upon by the parties in writing. Without limiting Section 4.b. of this Addendum, once you (or your Affiliates) begin implementing Facebook Credits in any Covered Zynga Service, you shall not (and you shall cause your Affiliates not to) remove Facebook Credits from such Covered Zynga Service unless we request otherwise in writing. Notwithstanding anything to the contrary in this Addendum, you acknowledge and agree that, no more frequently than [*] (the Removal Cap), we may request you (or any of your Affiliates) to remove Facebook Credits from, and to cease using Facebook Credits in connection with, any
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Covered Zynga Services at any time at our sole discretion upon written notice to you, and you shall comply with (and you shall cause your Affiliates to comply with) each such request within [*] of any such request. In the event of any request by us to remove Facebook Credits completely from any Covered Zynga Services, Section 4.b shall no longer apply to such Covered Zynga Service, and you shall be entitled to use any alternative Payment Method in place of Facebook Credits, until the date on which we instruct you in writing to once again include Facebook Credits in such Covered Zynga Service(s), which we may do at our sole discretion, at which point Section 4.b will once again apply in full force and effect to said Covered Zynga Service(s) within twenty four (24) hours of such instruction being made. Notwithstanding anything to the contrary herein, you acknowledge and agree that the Removal Cap shall not apply to any requests by us for you to remove Facebook Credits from any Covered Zynga Services for breaches or violations by you (or any of your Affiliates) of this Addendum or the SRR.
b. Facebook Credits Exclusivity for Covered Zynga Services.
(i) You acknowledge and agree that Facebook Credits will be the sole and exclusive Payment Method that is used, accepted or otherwise made available on or in connection with all Covered Zynga Services during the Term. Subject to Section 4.a, this exclusivity obligation will commence with respect to each of the Covered Zynga Services set forth in Exhibit B on the Exclusivity Start Date set forth therein and will continue for the remainder of the Term for so long as such Covered Zynga Service remains a Covered Zynga Service. For each Covered Zynga Service that is created after the Effective Date or offered or otherwise made available to any third party for the first time after the Effective Date, the exclusivity obligations set forth in this Section 4.b. will commence for such Covered Zynga Service on the date such Covered Zynga Service is first offered or otherwise made available (or some other date as mutually agreed by you and us by way of a written amendment to this Addendum) and will continue for the remainder of the Term, provided that in the event that you acquire a Covered Zynga Service from a third party (whether by merger, stock purchase, asset acquisition or otherwise), you will provide us written notice thereof, and the exclusivity obligations set forth in this Section 4.b will commence for such Covered Zynga Service on that date that is [*] after the closing date of the applicable transaction. Within fourteen (14) days of the date of any written request by us, you shall verify and certify in a writing signed by one of your senior executives your (and your Affiliates) compliance with the terms of this Section 4.b. We may request such certification no more than once per each quarter of the Term.
(ii) Notwithstanding anything to the contrary in Section 4.b(i), the parties acknowledge and agree that Section 4.b(i) shall be subject only to the following limited exceptions set forth in this Section 4.b(ii):
(1) | If, for any individual Covered Zynga Service, Facebook Credits cannot be used by users of such Covered Zynga Service (an Impacted Covered Zynga Service) for a period of [*] due to a technical error and such inability to use Facebook Credits is not caused by any acts or omissions of you or any of your Affiliates or the systems or technology of you or any of your Affiliates (such [*] outage a Facebook Credits Outage), as your sole and exclusive remedy, you shall notify us of the Facebook Credits Outage by sending a screenshot of the outage via email to an email address designated by us to enable us to verify the Facebook Credits Outage, and, beginning on [*] and continuing only for so long as Facebook Credits cannot be used by users of an Impacted Covered Zynga Service due to such Facebook Credits Outage, you may use any alternative Payment Method in place of Facebook Credits (a Substitute Payment Method) to complete purchases made by users within all Impacted Covered Zynga Services. You shall replace the Substitute Payment Method with Facebook Credits within [*] following your receipt of notice (email acceptable) from us that Facebook Credits is capable of being used (such notice, the Replacement Notice); provided, however, if you are unable to do so within such time period, you will notify us (email acceptable) and you shall complete such replacement within [*] of your receipt of the Replacement Notice during normal business hours, and within [*] of your receipt of the Replacement Notice outside of normal business hours. You shall comply with the requirements set forth herein for each Facebook Credits Outage that occurs. The messaging you display or send to users related to Facebook Credits Outages shall be subject to our prior review and written approval, not to be unreasonably withheld or delayed, |
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provided that you may display or send to users any messaging that is substantially similar to messaging already approved by us in accordance with this Section 4.b.(ii)(1) without seeking our prior review and approval. Such messaging may only be displayed to users of the Impacted Covered Zynga Service who have attempted or are attempting to make a purchase while a Facebook Credits Outage is occurring and who experience the Facebook Credits Outage.
(2) | You may use a Payment Method that is not Facebook Credits to complete purchases made within Covered Zynga Services by users of such Covered Zynga Services that reside in any country in which we prohibit, pursuant to the SRR, residents of such country to purchase Facebook Credits from us (a Restricted Country). In the event we remove any such prohibition, without limiting Section 4.b(i), you will use Facebook Credits as the sole and exclusive Payment Method for purchases made by users of Covered Zynga Services that that reside in any Restricted Country in accordance with Section 4.b(i) above within thirty (30) days of receipt of written notice from us. |
(3) | Notwithstanding anything to the contrary in Section 4.b(i): |
(a) | Your Gift Cards. Subject to the terms herein, we acknowledge that your distribution of Gift Cards [*] is not a violation of Section 4.b(i), provided that all Gift Cards that are redeemable on Covered Zynga Services may be redeemed only for Facebook Credits. |
As used herein, Gift Card(s) mean a stored value gift card that is redeemable on Covered Zynga Services and/or Other Zynga Services.
Subject to Section 4.b(ii)(3)(d) below, to enable you to use Gift Cards as a Payment Method for Facebook Credits in Covered Zynga Services in accordance with this Section 4.b(ii)(3)(a), we will sell you Facebook Credits [*]. You shall then resell to users [*] in transactions using such Gift Cards on Covered Zynga Services. You assume all risk of loss for and shall be solely responsible for, all fraud, returns, refunds, reversals, fines, chargebacks and other such fees arising from or relating to the resale by you of Facebook Credits pursuant to this Section 4.b(ii)(3)(a) or Section 4.b(ii)(3)(b).
For the avoidance of doubt, this Section 4.b(ii)(3)(a) is not intended to and shall not preclude you from offering and redeeming Gift Cards that are redeemable only on Other Zynga Services [*].
(b) | Permitted Third Party Payment Options. In the event we do not offer, and only until such time as we begin to offer, Wire Transfers or any of the payment options set forth on Exhibit D hereto (Permitted Third Party Payment Options) as a Payment Method for Facebook Credits, we will allow you to offer within Covered Zynga Services such Permitted Third Party Payment Option to end users directly for the sole and exclusive purpose of enabling such end users to purchase Facebook Credits from you using such Permitted Third Party Payment Option; provided, however, you acknowledge and agree that Wire Transfers may be used solely to complete individual purchases from you of Facebook Credits that are in excess of [*]. |
Subject to Section 4.b(ii)(3)(d) below, if applicable, to enable you to use Permitted Third Party Payment Options as a Payment Method for Facebook Credits in Covered Zynga Services in accordance with this Section 4.b(ii)(3(a), we will sell you Facebook Credits [*] which you shall then resell to users [*] using Permitted Third Party Payment Option. We agree that we will, within a commercially practicable time period, implement and maintain a high volume mechanized process in order to implement the applicable provisions of this Section 4.b(ii)(3)(b). We acknowledge that use of Permitted Third Party Payment Options in accordance with this Section 4.b(ii)(3)(b) is not a violation of Section 4.b(i). As used herein, Wire Transfer means a same day irrevocable electronic transfer of funds between banks by electronic means.
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Notwithstanding anything to the contrary herein, you acknowledge and agree that we may restrict or limit your ability to offer or use Permitted Third Party Options to the extent we reasonably believe necessary to prevent or respond to fraudulent activity or money laundering, or as required by law.
(c) | [*]. |
(d) | Zynga In-Game Currency. We acknowledge and agree that (i) you are entitled to use Zynga In-Game Currency in accordance with this Addendum and all applicable laws, provided that to the extent Zynga In-Game Currency is sold or purchased in or in connection with Covered Zynga Services, such Zynga In-Game Currency must be sold and purchased via Facebook Credits and will be subject to Section 4.b(i); (ii) your continued use of Zynga In-Game Currency in Covered Zynga Services in accordance with this Addendum during the Term is not a violation of Section 4.b(i); and (iii) we will not require you to denominate items sold in Covered Zynga Services in Facebook Credits (for purposes of clarity, and subject to Section 4.b(ii), Zynga In-Game Currency used in Covered Zynga Services must be purchasable using Facebook Credits only). Zynga In-Game Currency means any currency that is developed and maintained solely by or on behalf of you and offered solely by you or any of your Affiliates. For purposes of clarity, no third party currencies will be Zynga In-Game Currencies. You acknowledge and agree that each Zynga In-Game Currency that is used in a Covered Zynga Service: (a) may not be used in any other Covered Zynga Service, with the exception of experience points that are earned only through game play and are not purchased with any Payment Method; (b) may not be converted into or redeemed for any other Zynga In-Game Currency or any other currency including, without limitation, cash, any cash equivalents, or the experience points described in (a) of this subsection; (c) may not be given by a user to another user within any Covered Zynga Services, provided that the limitation in this subsection (c) shall not apply to the winning and losing of poker chips in a poker game play or to any gift that is not deducted from the gifting users balance; (d) may not be used or accepted by any third party. For purposes of clarity, experience points described in Section 4.b(ii)(3)(d) of this section are subject to subsection (b), (c) and (d) of this Section 4.b(ii)(3)(d). |
(e) | Special Provisions Related to Reselling Facebook Credits. You acknowledge and agree that: (i) you shall not resell any Facebook Credits other than those purchased from us pursuant to and resold in accordance with Sections 4.b(ii)(3)(b) or 4.b(ii)(3)(c); (ii) you must segregate all Facebook Credits that you purchase from us to resell to users from all other Facebook Credits you receive from users and redeem with us; and (iii) at our sole discretion, Facebook Credits that are resold by you may move directly from us into the applicable users account and may never be stored by you. |
(f) | Co-Marketing. We acknowledge and agree that you have the right to issue up to [*] of the value of your paid Zynga In-Game Currency per Covered Zynga Service per month through advertising co-marketing relationships with third parties. |
(g) | Payment Terms for Facebook Credits Resold by You. There will be [*] payment periods [*] for all Facebook Credits sold by you pursuant to Section 4.b(ii)(3)(a) or Section 4.b(ii)(3)(b): [*]. You will pay out to us for each period within [*] days after the end of each period. |
(4) | The amount of the service fee described in the Facebook Credits Terms that we charge to you at any given time to redeem Facebook Credits shall be [*]. |
(5) | Section 4.b shall not apply to Payment Methods used, accepted or otherwise made available to sell physical goods that are not Payment Methods. |
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5. Other Agreements. The parties acknowledge and agree to the following:
a. Intentionally Left Blank.
b. The parties will engage in the activities described on Exhibit H regarding operational requirements that are necessary to implement Facebook Credits.
c. On a mutually agreed upon date after the Effective Date, the parties shall issue a joint press release, with the wording of such press release to be mutually agreed to by the parties in writing (the Press Release). Except as expressly set forth in this Section 5.c, neither party will make any press release regarding the terms of this Addendum without the prior written approval of the other party, provided that to the extent such disclosure is required by law, rule, regulation, or governmental or court order, the party requesting disclosure will furnish the counter-party with sufficient time to address such request with any such governmental agency and seek confidential treatment.
d. We will not [*] to the extent such efforts are permitted under the SRR in effect as of the time of collection unless any such actions are generally applicable to developers or required by law.
e. We acknowledge and agree that you are entitled to promote Other Zynga Services from within Covered Zynga Services.
f. We acknowledge and agree that the Excluded Zynga Games shall not be considered Covered Zynga Services for the purposes of this Addendum, provided that in the event that any of the following Excluded Zynga Games on [*] access or use the Facebook API, then such game shall become a Covered Zynga Service for the purposes of this Addendum: [*]
6. Operating Guidelines. Without limiting any of our rights under the SRR, in an effort to minimize the strain you place on our systems, from time to time we may, at our sole discretion, establish restrictions or operating guidelines and procedures governing your use of Facebook provided such guidelines and procedures are generally applicable to other developers (collectively, Operating Guidelines). All Operating Guidelines will be provided to you in writing, will be effective thirty (30) days after the date provided, and may be changed by us at our sole discretion upon thirty (30) days prior written notice to you. You shall comply with (and to cause your Affiliates to comply with) all Operating Guidelines, and you acknowledge and agree that a material breach by you or any of your Affiliates of any Operating Guidelines will be deemed a material breach by you of the SRR and this Addendum.
7. SRR. You acknowledge and agree that your use of or access to Facebook (including, without limitation, your use of Facebook Credits) shall be subject to the SRR and you hereby agree to comply with (and to cause your Affiliates to comply with) the SRR. This Addendum is part of and is hereby incorporated by this reference into the SRR. In the event of a conflict between the SRR and this Addendum, this Addendum shall govern to the extent of the conflict. Except as supplemented or expressly modified by this Addendum, the SRR shall remain unmodified and in full force and effect and you hereby ratify your obligations thereunder. Any changes made by us to the SRR [*]. The definition of application(s), data, information and content in the SRR will not apply to any uses of such terms in this Addendum, and solely in this Addendum. For purposes of clarity, you acknowledge and agree that the foregoing shall not modify the meaning of such terms as they apply to the SRR or your obligations with respect to data, content, and information as defined in the SRR and pursuant to the SRR. Unless defined otherwise or noted herein, all definitions included in the SRR will apply to this Addendum. The definitions in Exhibit A shall apply to the terms of this Addendum only, and shall not modify such terms as used in and as they apply to, the SRR.
8. Term; Termination.
a. This Addendum shall commence on the Effective Date and shall continue for five (5) years after the Effective Date (the Term), unless terminated earlier in accordance with this Addendum.
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b. Either party may terminate (without penalty to the terminating party arising from such termination) this Addendum or the SRR upon written notice to the other party if the other party materially breaches any term of this Addendum or materially breaches or materially violates any term or provision of the SRR and such party fails to cure any such breach or violation within 30 days of receipt of written notice of such breach from the non-breaching party (such thirty (30) day period, the Breach Cure Period). You acknowledge that if any such breach or violation by you is a breach or violation of any term or provision of the SRR or Addendum relating to the storing, caching, deletion, transferring, acquiring, disclosing, selling or displaying of user data or is a violation of any term or provision of the SRR that requires you to comply with applicable laws, then we may, in addition to our termination remedy, at our sole discretion, cease providing you with access to Facebook (including, without limitation, our APIs) during the Breach Cure Period, provided that [*] in a good faith attempt to resolve the issue that gave rise to such breach, provided, further if [*], we may so notify your General Counsel via email and thereafter and immediately cease providing you with access to Facebook (including, without limitation, our APIs).
c. Within two (2) days after a partys receipt of notice of a breach or violation described in Section 8.b the appropriate parties identified on Exhibit E will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (Level 1 Escalation). If the parties are unable to resolve such issue via the Level 1 Escalation within five (5) days after such issue was referred to Level 1 Escalation, then senior executives of the parties will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (Level 2 Escalation). If the parties are unable to resolve such issue via the Level 2 Escalation, then the CEOs of the parties will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (Level 3 Escalation). A party may only terminate this Addendum if the parties have been unable to resolve the issue via the Level 3 Escalation within thirty (30) days of written notice of the breach. Any deletion by you (or your Affiliates) of your account (or the accounts of your Affiliates) or any disabling by you (or any of your Affiliates) of any Covered Zynga Services will not limit or affect your obligations under this Addendum.
(i) In the event that either party: (i) becomes insolvent; (ii) files a petition in bankruptcy or reorganization or has such a petition filed against it (and fails to lift any stay imposed thereby within sixty (60) days after such stay becomes effective); (iii) has a receiver appointed with respect to all or substantially all of its assets; (iv) makes an assignment for the benefit of creditors; (v) ceases to do business in the ordinary course; or (vi) takes any corporate action for your winding-up, dissolution or administration, the other party may terminate this Addendum immediately upon written notice.
d. Sections 7, 8(c), 8(e) (for the time period set forth therein), 9 and 10 shall survive the early termination or natural expiration of this Addendum. In addition to the foregoing, in the event of any termination of this Addendum or the SRR by us pursuant to this Addendum, Sections 2, 3 and 4 shall survive any such early termination for 5 years after the Effective Date if we so choose at our sole discretion, provided that in such event we will continue to provide you with access to Facebook to the extent necessary to enable performance of the obligations set forth in such Sections.
e. Transition Services. In the event of any termination by you due to a breach of this Addendum by us, and provided you are not in breach of this Addendum or in violation of the SRR, the parties shall operate under the following guidelines for no more than [*] following the effective date of such termination (the Transition Period)
(i) We shall continue to provide you with access to the APIs in accordance with this Addendum.
(ii) You shall continue to abide by the terms of this Addendum.
9. Confidentiality. Confidential Information means the existence of this Addendum, the specific terms of this Addendum, any information, data, or other materials provided by one party to the other in the course of discussions and negotiations relating to this Addendum. In addition, Confidential information means any information, data or other materials provided by one party to the other under or in connection with this Addendum that is (a) clearly and conspicuously marked as confidential or with a similar
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designation; (b) is identified by the disclosing party (Discloser) as confidential and/or proprietary before, during, or promptly after presentation or communication; or (c) is disclosed in a manner which the Discloser reasonably communicated, or the receiving party (Recipient) should reasonably have understood under the circumstances that the disclosure should be treated as confidential, whether or not the specific designation confidential or any similar designation is used. Except with the prior written consent of the disclosing party, neither party shall (i) use or disclose any Confidential Information other than (A) to employees and contractors who have a need to know and any disclosure to contractors may only be to contractors who have signed a non-disclosure agreement to protect the confidential information of third parties, (B) the terms of this Addendum to investors or potential investors in connection with the sale of such partys securities, including any disclosure required by state or federal securities laws, pursuant to an agreement imposing confidentiality obligations substantially similar to those set forth herein (except as prohibited or otherwise required by state or federal securities laws)or (C) the terms of this Addendum to acquirors or potential acquirors and their advisors in connection with a Change of Control of such party, pursuant to an agreement imposing confidentiality obligations substantially similar to those set forth herein or (ii) make copies or allow others to make copies of such Confidential Information except as is necessary for internal business purposes. In addition, nothing in this Agreement shall prohibit or limit either partys use or disclosure of information (a) previously known to it without obligation of confidence (excluding, for clarity, any information, data, or other materials provided by one party to the other in the course of negotiations relating to this Agreement); (b) independently developed by or for it without use of or access to the other partys Confidential Information; (c) acquired by it from a third party which is not under an obligation of confidence with respect to such information; (d) which is or becomes publicly available through no breach of this Addendum; or (e) is required to be disclosed by operation of law, court order or other governmental demand. Notwithstanding the foregoing provisions, any disclosure made by you to your investors as of the Effective Date, Board members, or advisors prior to the execution of this Addendum shall not be deemed to be a breach of this Section 9. The parties acknowledge and agree that the Press Release will not be deemed a breach of this Section 9.
10. General. Your obligations under this Addendum shall apply in the Territory. You will cause all of your Affiliates to comply with this Addendum, and you will be liable for any failure of any of your Affiliates to comply with this Addendum. You will not, and you will cause all of your Affiliates not to, allow or enable any third party to engage in any activity that violates, contravenes, or is inconsistent with the terms Addendum. This Addendum supersedes any other prior or collateral agreements, whether oral or written, with respect to the subject matter of this Addendum. This Addendum (including the SRR and the Exhibits attached to this Addendum) sets forth the entire understanding and agreement between the parties with respect to the subject matter of this Addendum. This Addendum may be amended only in a writing signed by both parties; provided, however, for clarity, and notwithstanding anything to the contrary in this Addendum, nothing in this Addendum restricts our right to change, modify, or amend the SRR or any aspect thereof in accordance with its terms. Capitalized terms that are not defined herein shall have the meaning assigned to them in Exhibit A. This Addendum shall be construed as if jointly drafted by the parties. The parties are entering this Agreement as independent contractors, and this Addendum will not be construed to create a partnership, joint venture or employment relationship between them. This Addendum will not be effective unless and until signed by both parties. You may not assign or otherwise transfer your rights or obligations under this Addendum without the prior written permission of us except in the event of a Change of Control where the assignee agrees to be bound by the terms of this Addendum.
IN WITNESS WHEREOF, this Addendum has been duly executed by the parties as of the Effective Date.
Facebook, Inc. | Zynga Game Network Inc. | |||||||
BY: [*] | BY: [*] | |||||||
NAME: [*] |
NAME: [*] |
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TITLE: [*] |
TITLE: [*] |
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DATE: [*] |
DATE: [*] |
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Exhibit A
Certain Definitions
Affiliate(s) means, as to a party hereto, any Downstream Affiliate(s) or any Internal Reorg Affiliate(s)
Average RPM means the average total ad revenue earned by us per every 1000 Page Views for advertising inventory displayed on the top twenty (20) most trafficked third party social games on which our advertising inventory appears, as calculated based on data maintained by us.
Canvas Page(s) means a page on www.facebook.com where the majority of the content of such page is provided by a developer.
Change of Control means a third party acquires, directly or indirectly, through merger, stock purchase, or otherwise: (i) beneficial ownership of more than fifty percent (50%) of the voting power of the issued and outstanding shares of you, (ii) the ability to nominate a majority of your board of directors, or (iii) all or substantially all of your assets.
Cost of Goods Sold means [*].
Covered Zynga Services means all Zynga Services where (a) such Zynga Services are accessing or using any aspect of Facebook or (b) such Zynga Services utilize, incorporate, or contain any Facebook Data.
Downstream Affiliate(s) means, as to any party hereto, any corporation, firm, partnership, person or other entity, whether de jure or de facto, directly or indirectly controlled by such party, where control means (a) beneficial ownership of greater than fifty percent (50%) of the equity interests in such entity (based on either economic ownership or voting power) or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
Exclusivity Start Date means the date on which the obligations in Section 4.b(i) of this Addendum begin applying to each of the Covered Zynga Services, as such dates or the process for determining such dates are set forth in Exhibit B or Section 4.b(i) of this Addendum.
Excluded Zynga Games mean the current (as of the Effective Date) and successor versions of the following (and only the following) games on [*], provided the successor version of any such game (i) is branded and offered under the same product name as the original version (i.e., a future successor version of [*] must be branded and offered as [*]) and (ii) uses substantially the same game play mechanics and user experience as the original version: [*].
Facebook means the products, services and technology we make available, including, without limitation, through (a) the website at www.facebook.com and any other Facebook branded or co-branded websites (including sub-domains, international versions, widgets, and mobile versions); (b) the Platform; and (c) other media, software (such as a toolbar), devices, or networks now existing or later developed.
Facebook Data means all data or information (including, without limitation, data or information received from or about Facebook Users) you or any of your Affiliates receive or received directly from or through Facebook (including, without limitation, any data or information that you or any of your Affiliates knowingly receive or received directly from a third party that received, directly, such data or information from or through Facebook), or any data or information derived therefrom (including, without limitation, data or information that can be reversed engineered to data or information that you received from or through Facebook). By way of example only, and without limitation, a friend list that originated from or through
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Facebook would constitute Facebook Data and your use of such friend list would result in all Zynga Services containing, incorporating, or utilizing such Facebook Data being a Covered Zynga Service. For purposes of clarity and illustration (but without limitation), the utilization, incorporation or containment of the following game-derived data for a user in a Zynga Service would not constitute Facebook Data and would not, in and of itself, cause such Zynga Service to be deemed a Covered Zynga Service: such users experience points with you, any of your virtual goods purchased by such user, and the game level achieved by such user in your game.
Facebook Credits means any of our Payment Methods we elect to make available at our sole discretion.
Facebook User is a human user of any aspect of Facebook.
Implementation Start Date means the date on which you and your Affiliates must begin implementing Facebook Credits in each of the Covered Zynga Services, as such dates are set forth in Exhibit B and may be changed in accordance with this Addendum.
Internal Reorg Affiliate(s) means, as to any party hereto, any Downstream Affiliate(s) of any direct or indirect parent or successor of such party (whether such parent or successor shall be a corporation, firm, partnership, person or other entity), whether de jure or de facto, that arises in connection with any reorganization of such party (whether by sale of all or substantially all of the assets, merger, consolidation or otherwise) in which (a) a majority of the members of the board of directors of such party prior to such reorganization represent a majority of the members of the board of directors of such parent or successor following the reorganization, or (b) the holders of shares or other ownership interests of such party prior to the reorganization continue to hold at least a majority of the shares or other ownership interests (based on either economic ownership or voting power) of such parent or successor following the reorganization.
Named Entity individually and collectively means the social game properties owned by the companies identified in Exhibit C. Once each quarter during the Term or more frequently as may be agreed by the parties, you may update the list of Named Entities in Exhibit C upon no less than fourteen (14) days prior written notice to us by adding additional companies and removing the same number of companies, such that in no event shall there be more than [*] separate Named Entities at any given time.
Net Revenue means revenue actually collected by us from third party advertisers (excluding our Affiliates or any of our other corporate affiliates or subsidiaries) [*], net of our Cost of Goods Sold.
Other Zynga Services mean all Zynga Services that are not Covered Zynga Services.
Page View means a request to load a web page that is seen by a user.
Payment Method means any solution, functionality, platform, method, wallet, item, product, checkout process, currency (either virtual or real world currency), resource, means, or mechanism (a) used to fund or process purchases of any kind or (b) used to give or receive anything of value including, but not limited to, third party funded offers.
Platform means a set of APIs and services that enable services and others including, without limitation, application (including, without limitation, applications or websites that use or access Platform, as well as anything else that receives data from Facebook) developers and website operators to retrieve or access data from Facebook or provide data to Facebook.
Territory means worldwide.
Zynga Other Page mean any web page that is owned and operated by you or any of your Affiliates that is not a Zynga Game Page.
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Zynga Game Page means any web page on which a Covered Zynga Service is playable (including, without limitation, loading pages and landing pages) and that is accessible or made available on any websites that are owned and operated by you or any of your Affiliates. For the purposes of clarification, Zynga Game Pages do not include Canvas Pages or any other pages on www.faceboook.com.
Zynga Services means all games, game-related technology, game-related applications, and/or game-related platforms, now existing or later developed, that are made available, offered or provided by you or any of your Affiliates, either directly or indirectly through a third party (including, without limitation as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates).
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Exhibit B
Implementation Schedule
Covered Zynga Services |
Implementation Start Date |
Exclusivity Start Date | ||
PetVille | Effective Date | June 30, 2010 | ||
FishVille | Effective Date | June 30, 2010 | ||
Treasure Isle | Effective Date | July 15, 2010 | ||
Café World | Effective Date | July 15, 2010 | ||
Mafia Wars | Effective Date | July 31, 2010 | ||
YoVille | Effective Date | August 15, 2010 | ||
Live Poker by Zynga | Effective Date | August 31, 2010 | ||
FarmVille | Effective Date | August 31, 2010 | ||
All other Covered Zynga Services* | Effective Date | August 31, 2010, or as set forth in Section 4.b(i) for all Covered Zynga Services that are created after the Effective Date or offered or made available for the first time after the Effective Date |
* | For purposes of clarity, for each Covered Zynga Service that is created after the Effective Date or offered or otherwise made available to any third party for the first time after the Effective Date, the Implementation Start Date shall be the same as the Exclusivity Start Date. |
You shall provide us with prior written notice of any Covered Zynga Services you intend to offer or make available no later than seven (7) days prior to it being offered or otherwise made available to any third party.
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Exhibit C
Named Entities
[*]
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Exhibit D
Permitted Third Party Payment Options
[*]
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Exhibit E
Escalation Personnel
For operational or business issues:
Zynga: [*]
Facebook: [*]
For technical issues:
Zynga: [*]
Facebook: [*]
In the event that either party appoints a successor to any of the above personnel, such party shall notify the other party and, upon the other partys receipt of such notice, this Exhibit E shall be deemed amended to reflect such successor.
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Exhibit F
[*]
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Exhibit G
[*]
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Exhibit H
Operational Requirements
Compliance
We will become PCI Level 1 certified compliant by [*].
Fraud
The parties will work together in good faith to identify and implement procedures to (i) manage fraud issues; (ii) effect appropriate overrides of fraud triggers and velocity limits; and (iii) provide reason codes to you describing the reason for any rejections.
For the avoidance of doubt, until such time as we implement user flow for transactions that are greater than $1,000.00, you may maintain your own high value transaction flow.
Financial Reporting
Within ten (10) days after the Effective Date, you will provide [*] (Your Reporting Requirements).
We will use commercially reasonable efforts to enable the settlement of funds to multiple accounts by July 31, 2010 for all transactions occurring on or after July 1, 2010.
We will use commercially reasonable efforts to provide detailed API reporting that meets your Reporting Requirements no later than July 31, 2010 for all transactions occurring on or after July 1, 2010.
We will use commercially reasonable efforts to provide detailed flat file reporting that meets Your Reporting Requirements no later than July 31, 2010 for all transactions occurring on or after July 1, 2010.
Customer Service
The parties will work together in good faith to identify and implement procedures to offer satisfactory customer service in connection with the use of Facebook Credits on Covered Zynga Services.
Payment Terms
There will be [*] payment periods [*] for all Facebook Credits you have accepted for transactions and redeemed by you: [*]. We will pay out for each period within [*] days after the end of each period.
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Exhibit 10.16
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Developer Addendum No. 2
This Developer Addendum No. 2 (this Addendum No. 2) is effective as of December 26, 2010 (the Addendum No. 2 Effective Date), and is made by and between Facebook, Inc. and Facebook Ireland Limited (collectively, FB, we, us or our) and Zynga Inc. (Zynga, you or your). We and you are sometimes referred to in this Addendum No. 2 individually as a party or collectively as the parties.
Recitals
A. FB and Zynga are parties to the Statement of Rights and Responsibilities (together with all referenced policies, terms and guidelines, including without limitation, the online Facebook Platform Policies, the SRR) which set forth the terms and conditions for Zyngas use of the Facebook Service. The SRR is incorporated herein by this reference and the current version is attached hereto as Annex 1.
B. Facebook, Inc. and Zynga previously entered into that certain Developer Addendum effective as of May 14, 2010 (the Addendum No. 1) which supplemented the SRR with certain additional terms and conditions as set forth therein. For clarity, references to Agreement include the SRR, as supplemented by Addendum No. 1.
C. The parties acknowledge that FB desires to enable Zynga to build the Zynga Platform on top of the Facebook Platform, and the parties desire to, amongst other goals set forth herein, work together to increase the number of users of each partys products and services. [*] The parties further acknowledge that Zynga is making a significant commitment to the Facebook Platform (i.e., using Facebook as the exclusive Social Platform on the Zynga Properties and granting FB certain title exclusivities to Zynga games on the Facebook Platform). In exchange for such commitment, [*] the parties have committed to set certain growth targets for monthly unique users of Covered Zynga Games.
D. The parties now wish to enter into this Addendum No. 2 to further supplement the SRR with certain additional terms and conditions as set forth herein.
E. Unless otherwise designated herein, all defined terms used in this Addendum No. 2 are set forth in Exhibit A.
For mutual and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:
Agreement
1. | Use of Terms; Conflicts; Changes to the SRR. |
1.1 | The lower case definitions of the defined terms in the SRR shall not apply to this Addendum No. 2 as such defined terms are used in this Addendum No. 2; however, all defined terms in the SRR shall continue to apply to the SRR. |
1.2 | In the event of any conflict between the terms and conditions of the Agreement and the terms and conditions of this Addendum No. 2, the terms of this Addendum No. 2 shall control to the extent of the conflict. |
1.3 | Except as expressly set forth in this Section 1.3, no amendment or modification of the Agreement or this Addendum No. 2 will be binding without the written agreement of both parties. Notwithstanding the foregoing, nothing herein shall restrict FB from making any changes to its online Facebook Platform Policies (including any policies and guidelines |
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Facebook/Zynga Confidential Information
referenced therein or in the SRR) and any such changes shall apply to Zynga without Zyngas written consent; provided, however, that [*], Zynga may invoke the Escalation Process, in which case [*]. In addition, if FB determines, in its reasonable discretion, that a change to the SRR is needed in order to protect the integrity or security of the Facebook Platform, user security or user privacy, or to protect FB from material legal liability (Urgent Change), FB may make such Urgent Change and it will notify Zynga, which notice may be sent via email to Zyngas Designated Manager. Except as expressly set forth herein, [*]. Zynga will not be in breach of the Agreement or this Addendum No. 2 with respect to (a) any failure to comply with any such [*] until at least [*] after its receipt of such notice; (b) any Covered Zynga Game or Zynga Property that Zynga discontinues and that ceases to access the Facebook Platform within [*] after its receipt of such notice; provided, however, that if Zynga determines, in its reasonable discretion, that any such Urgent Changes have a material negative impact on any Covered Zynga Game or a Zynga Property, and Zynga invokes the Escalation Process within [*] after Zyngas receipt of such notice, Zynga will not be in breach of the Agreement or this Addendum No. 2 with respect to any such impacted Covered Zynga Games or Zynga Properties that Zynga discontinues or brings into compliance with such [*] within [*] following Zyngas receipt of such notice. |
2. | Target Growth Schedule. During the Term, FB and Zynga desire to increase the number of Zynga MUUs to [*] over [*] at a linear weekly growth rate as set forth on Exhibit B1 attached hereto (Web Target Growth Schedule) and to increase the number of Mobile MUUs to [*] over [*] as set forth on Exhibit B2 attached hereto (Mobile Target Growth Schedule). |
2.1 | Within 15 days following the end of each three month period designated in the Web Target Growth Schedule as a quarter (e.g. Q1, Q2, Q3, etc.) (each, a Quarterly Period), Zynga will provide FB with a report detailing the number of MUUs for the immediately preceding Quarterly Period. In the event FB disagrees with such numbers by [*], the parties shall use the Escalation Process to determine whether the parties have met, missed or exceeded the Target MUU number specified in the Web Target Growth Schedule for the applicable Quarterly Period or the Mobile Target Growth Schedule, as applicable. No later than thirty (30) days following the end of each Quarterly Period, the Designated Managers shall meet in person to review the MUUs for the preceding Quarterly Period and review the overall health of the parties relationship. |
2.2 | (a) In the event Zynga acquires a Social Game from a third party (whether by merger, stock purchase, asset acquisition or otherwise) during the Term that operates only on the Facebook Platform (Acquired Covered Zynga Game) or that operates on both the Facebook Platform and any other Social Platform(s), Zynga shall provide FB, within [*] following the closing date of such acquisition, with written notice of the acquisition and the number of MUUs of such Social Game (Acquisition Notice). Either as part of such written notice or thereafter, but in no case more than [*] following the closing date of any acquisition, Zynga shall also provide FB with an accurate list of all Facebook User IDs for users that have at any time before any acquisition granted permission (implicitly or explicitly) for the Acquired Covered Zynga Game to access their basic information, but that have never granted such permission (implicitly or explicitly) for any other Covered Zynga Game (Acquired Users). |
(b) This Section 2.2(b) shall apply to Acquired Users who are using an Acquired Covered Zynga Game. During the Term, [*] Acquired Users (whether from a single transaction or series of transactions) acquired in any single calendar year shall not be included in the calculation of MUUs in any Quarterly Period (Excluded Users). Except for Excluded
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Facebook/Zynga Confidential Information
Users, if an Acquired User later grants such permission to another Covered Zynga Game, then such Acquired User will be included in the calculation of MUUs for the applicable Quarterly Period for the purposes of the Web Target Growth Schedule. MUUs (excluding Acquired Users and Excluded Users) of Acquired Covered Zynga Games shall be included in the MUU calculation for the Quarterly Period in which the acquisition of such game closed. For the avoidance of doubt, Acquired Users who do not grant permission (implicitly or explicitly) to another Covered Zynga Game shall not be included in the calculation of MUUs in any Quarterly Period. In the event FB disagrees with any numbers in an Acquisition Notice by [*], the parties shall use the Escalation Process to reconcile the number of users that will be included in the calculation of MUUs for the applicable Quarterly Period for the purposes of the Web Target Growth Schedule.
(c) This Section 2.2(c) shall apply to Acquired Users who are using an Acquired Zynga Mobile Game. [*] Mobile Acquired Users (Excluded Mobile Users), whether from a single acquisition or a series of acquisitions (including Mobile Acquired Users of the Words with Friends game acquired as a result of the acquisition of Newtoy, Inc. prior to the Addendum 2 Effective Date), shall not be included in the calculation of Mobile MUUs for the purposes of the Mobile Target Growth Schedule. Except for Excluded Mobile Users, if a Mobile Acquired User later grants permission (implicitly or explicitly) for another Zynga Mobile Game to access its basic information, then such Mobile Acquired User will be included in the calculation of Mobile MUUs for purposes of the Mobile Target Growth Schedule. In the event FB disagrees with any user numbers by [*], the parties shall use the Escalation Process to reconcile the number of users that will be included in the calculation of Mobile MUUs for the purposes of the Mobile Target Growth Schedule.
2.3 | In the territories mutually agreed in writing by the parties (if any), FB will pre-install a bookmark linking to [*] in the bookmark section of the Facebook Site, provided that Zynga confirms in writing that [*] will not be enabled, offered, displayed, distributed and/or otherwise made available on, in, by, or through any other Social Platform in such mutually agreed territories for a period of [*] following the date on which such bookmark is pre-installed on the Facebook Site. After the bookmark has been initially pre-installed, the subsequent location of such bookmark for a given Facebook User will be determined in accordance with FBs general practices. |
2.4 | Failure to meet any of the Target MUU numbers set forth in the Target Growth Schedule [*], and (except for each partys termination right set forth in Section 3.1.1 and Section 3.1.2) [*]. |
3. | Exclusivity. |
3.1 | Throughout the Term, the Facebook Platform will be integrated into the Zynga Mobile Games and Zynga Properties and FB will be the sole and exclusive Social Platform that [*] (Platform Exclusivity). For the avoidance of doubt, the parties acknowledge and agree that this Section 3.1 does not prohibit Zynga from developing a platform on top of the Facebook Platform provided that such platform complies with the requirements set forth on Exhibit G (Zynga Platform). Zynga shall not be in breach of this Section 3.1 if Zynga Users utilize the Zynga Platform to perform actions in connection with the Covered Zynga Games or the Zynga Properties that are not required to use the Facebook Platform as described in more detail in this Addendum No. 2 and on Exhibit G. |
3.1.1 | If, at the end of the [*] Quarterly Period set forth in the Web Target Growth Schedule, the number of MUUs (subject to the calculations set forth in Section |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
2) does not meet or exceed the [*] Target Growth number specified in the Web Target Growth Schedule, either party may elect to terminate this Addendum No. 2 upon written notice to the other party prior to [*]. |
3.1.2 | If, at the end of the [*] Quarterly Period set forth in the Mobile Target Growth Schedule, the number of Mobile MUUs (subject to the calculations set forth in Section 2.2) does not meet or exceed the [*] Mobile Target Growth number specified in the Mobile Target Growth Schedule, either party may elect to terminate this Addendum No. 2 upon written notice to the other party prior to [*]. |
3.2 | Subject to subsection 3.2.1 below, any Covered Zynga Game or Substantially Similar Game that is first offered and/or otherwise made available during the Term will not [*] (Title Exclusivity) for a period of [*] following the date such Covered Zynga Game is first offered or otherwise made available. For the purposes of clarity, Covered Zynga Game, as used in this Section 3.2, shall not include Zynga Mobile Games (which, for the avoidance of doubt, are subject to Platform Exclusivity per Section 3.1). |
3.2.1 | If, at the end of [*] and each Quarterly Period thereafter set forth in the Web Target Growth Schedule, (a) the number of MUUs (subject to the calculations set forth in Section 2) meets or exceeds the Target Growth Ceiling for such Quarterly Period set forth in the Web Target Growth Schedule, the period of Title Exclusivity will [*]; or (b) the number of MUUs (subject to the calculations set forth in Section 2) does not meet the Target Growth Floor number for the applicable Quarterly Period set forth in the Web Target Growth Schedule, the period of Title Exclusivity will [*]. Any change to the Title Exclusivity period shall take effect on the first day of the next Quarterly Period and any such new exclusivity period shall apply to all Covered Zynga Games first offered and/or otherwise made available in the next Quarterly Period. |
3.2.2 | FB shall provide Zynga with written notice if it reasonably believes that Zynga has violated any of the provisions set forth in Section 3.2 and Zynga will not be in breach of this Addendum No. 2 with respect to any acts, omissions, terms, or agreements that it modifies or corrects to remain compliant with Section 3.2 within [*] after its receipt of such notice. |
3.3 | Neither any non-Covered Zynga Game that Zynga first offers or otherwise makes available on any other Social Platform during the Term nor any Eligible Zynga Mobile Game shall use or access the Facebook Service without FBs prior written approval. |
3.4 | FB shall not offer or otherwise make available on the Facebook Site or the Facebook Platform any Facebook Game. Zynga may terminate this Addendum No. 2 if, at any time during the Term, FB offers or otherwise makes a Facebook Game available on the Facebook Site or the Facebook Platform (except for non-production servers and other internal development and beta testing environments); provided, however, that Zynga will provide FB with notice if it reasonably believes FB is in breach of this Section 3.4, and FB will not be in breach of this Addendum No. 2 if it ceases to distribute such Facebook Game within fourteen (14) days after receipt of such notice. |
3.5 | Section 4.b.(ii)(3)(c) of the Addendum is hereby deleted in its entirety and replaced as follows: |
(c) [*].
(A) We acknowledge that [*] as a Payment Method for purchases from you by users within
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Facebook/Zynga Confidential Information
the Covered Zynga Services [*] is not a violation of Section 4.(b)(i) of the Addendum. As used herein, [*] means [*].
(B) Notwithstanding anything to the contrary set forth in Section 4.(b)(i) of Addendum No. 1, you may opt not to use Facebook Credits as a Payment Method (and [*] use the Payment Method of [*]) for purchases from you by users within the Covered Zynga Services [*], so long as (1) [*], or (2) [*]. The foregoing exception shall no longer be valid if you: (x) agree upon any terms [*] related to Payment Methods that circumvent, intentionally or otherwise, your obligation to use Facebook Credits as set forth in Addendum No. 1 or that ensure you are able to satisfy one of the exceptions set forth in subsections (1)-(3) above, or (y) encourage, promote or otherwise incentivize users to use Payment Methods other than Facebook Credits (including, but not limited to, making available better offers or special incentives [*] as compared to the offers or incentives made available on the Covered Zynga Services offering Facebook Credits). As used herein, [*] means any [*] that are owned or operated [*] and that power/support [*]. For the avoidance of doubt, [*] shall not include [*] running on or powering/supporting [*], including but not limited to, [*], irrespective of whether such other [*]). Notwithstanding anything to the contrary set forth herein, the exception to using Facebook Credits set forth in this section shall in no event apply to web pages, web sites and/or HTML 5 applications.
3.6 | Exceptions. |
3.6.1 | Notwithstanding anything to the contrary set forth in Section 3.1, this Addendum No. 2 shall not apply to Zyngas activities [*]; provided, however, that Zynga shall not, without FBs prior written consent: (i) incorporate the Facebook Platform into any versions of the Zynga Properties [*]; or (ii) access or otherwise use the Facebook Service [*] in connection with Zyngas games, websites or other properties. |
3.6.2 | (a) Notwithstanding anything to the contrary set forth in Section 3.1, Zynga may use (i) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games; (ii) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games; and (iii) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games. As used herein, Eligible Zynga Mobile Game means a Zynga Mobile Game that is a companion to a non-Covered Zynga Game or a Covered Zynga Game (excluding Zynga Mobile Games) that is not subject to Title Exclusivity and that is launched on a third party Social Platform at or before the time the Eligible Zynga Mobile Game uses the third partys Mobile Platform APIs. Zynga will provide FB with written notice if it offers or otherwise makes available an Eligible Zynga Mobile Game and such notice shall be delivered via email to FBs Designated Manager within no more than fifteen (15) days following the availability of any such Eligible Zynga Mobile Game. |
(b) Notwithstanding anything to the contrary set forth in this Addendum No. 2, Zynga may offer or otherwise make available Solo Zynga Mobile Games. As used herein, Solo Zynga Mobile Game means a non-Zynga Mobile Game offered or otherwise made available on a Mobile Platform that has no user account (i.e. the user is not prompted to log-in or otherwise enter any identifying information, including username, email address, password, demographic information, etc.) and does not allow
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Facebook/Zynga Confidential Information
users to establish connections, interact and/or collaborate with other users. |
3.6.3 | Notwithstanding anything to the contrary set forth in Section 3.1 and without limiting Section 3.6.2, Zynga may use third party Mobile Platform APIs solely to enable the actions/functionality set forth in subsections (a) (d) below and solely in connection with Zynga Mobile Games; [*]: (a) push notifications, (b) sending Stories or posting game scores to a game center hosted on a third party Mobile Platform API (provided that such Stories link back to the Zynga Mobile Game that was the subject of the Story), (c) integrate with and/or access hardware features of the phone (e.g., camera, accelerometer); and (d) pull contact data from the native local address book application on a phone, provided that Zynga delivers to FB (using the Game Friends Protocol) any such contact data it uses or collects. Prior to sending such contact data to FB, Zynga will notify and obtain clear, conspicuous and express consent from Facebook Users. In no case may Zynga use such Mobile Platform APIs to link user identities to one another, populate game friends data on a social graph other than FBs social graph, or link gameboard(s) to user IDs. |
3.6.4 | Section 3.2 and FBs obligations hereunder shall not apply at the time of Zyngas acquisition of such game to a Social Game (which Social Game, for the avoidance of doubt, excludes any property, or game or property operating on a Mobile Platform) that Zynga acquires during the Term that operates both on the Facebook Platform and any other Social Platform(s); provided, however, that Zynga shall use commercially reasonable efforts to ensure that at the end of ninety (90) days following the closing of such acquisition, no user of such game shall be permitted to utilize both the Facebook Platform and any other Social Platform, and provided further that in no event shall any user of such game be permitted to use both the Facebook Platform and any other Social Platform at the end of the one hundred-eighty (180) day period following the closing date of such acquisition. For the purposes of clarity, once any such game utilizes only the Facebook Platform, Section 3.2 and FBs obligations hereunder shall apply to such game. |
3.6.5 | Section 3.2 of this Addendum No. 2 shall not apply to the Words with Friends game and shall not apply to any existing Covered Zynga Games offered by Zynga as of the Addendum No. 2 Effective Date and any successor versions thereof, provided that such successor version (i) is branded and offered under a substantially similar product name as the original version (i.e., a future successor version of Taxiville is branded and offered as Taxiville 2 or Taxiville: Limited Addition or KingTaxi); and (ii) uses substantially the same game play mechanics and user experience as the original version. |
4. | Integration on Zynga Properties. |
4.1 | Registration. |
4.1.1 | All Zynga Users must have a valid (e.g. real; not suspended) FB account. Zynga will require all Zynga Users to connect their Zynga account to |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
their FB account. In addition, Zynga will require all Zynga Users to be logged-in to their FB account with an active session to use or access any Covered Zynga Game, Zynga Mobile Game or any Zynga Property, except: (a) during the Registration Flow; or (b) in a non-social portion of a Zynga Property that (i) does not involve a Covered Zynga Game and (ii) that is not required to use the Facebook Platform per this Addendum No. 2, or (iii) is related solely to corporate or charitable information or to help and support forums, including but not limited to, blogs, documentation or FAQs. For the avoidance of doubt, if a Zynga User does not connect their Zynga account with their FB account and/or is not logged-in to their FB account with an active session, such user will not be able to use or access any Covered Zynga Games. |
4.1.2 | Zynga Users who are not Facebook Users must create a FB account. Zynga will implement the FB-provided APIs to create a registration flow, as described in more detail on Exhibit F (Registration Flow). FB and Zynga (as described in Section 4.1.3 below) will be the only mechanism by which Zynga Users can register for, authenticate or log into their Zynga account, or otherwise access the Zynga Properties. |
4.1.3 | Without limiting the FB account creation and log-in requirements set forth in this Section 4.1 and on Exhibit F, Zynga may require Zynga Users to create a Zynga username and password (Zynga Credentials) on the Zynga Properties. For the avoidance of doubt, Zynga may not prompt any users on the Facebook Site to create, log-in with, register for or otherwise use Zynga Credentials on the Facebook Site. |
4.1.4 | If Zynga implements Instant Personalization on the Zynga Properties, Zynga may use the Instant Personalization product in accordance with Section 4.6 and Exhibit H of this Addendum No. 2 to enable a single authentication experience for Zynga Users of Covered Zynga Games. |
4.1.5 | [*]. Single Sign On (SSO) means an authentication method that permits a Facebook User that is logged-in to the Facebook Service with an active session through the most current version of a Facebook mobile application to authenticate their basic user information to a Zynga Mobile Game with a single-click of a dialog. For the purposes of clarity, SSO will not be deemed unavailable for the purposes of this Section if a Facebook User (a) does not have a Facebook mobile application on one of the SSO Mobile Platforms, (b) is not logged-in to a Facebook mobile application with an active session, or (c) does not have an Internet connection. SSO Mobile Platforms are Apples iPhone operating system and Googles Android Mobile Platform (SSO Mobile Platform). As used herein, Trial Use means that Zynga may allow Zynga Users of Zynga Mobile Games to find and/or invite friends through the phones local address book, email, or phone number and play with friends [*]. Notwithstanding anything to the contrary in this Section, Zynga does not have to require registration for an active Game Session in which a Zynga User exclusively connects to random people (i.e., non-friends) or chooses to play against a non-human computer player. Game Session means the period of time during which a Zynga |
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Facebook/Zynga Confidential Information
User of a Zynga Mobile Game is continuously playing such game, but in no case more than twenty-four (24) hours. |
4.1.6 | Solely with respect to (a) users of the [*] game existing as of the Addendum No. 2 Effective Date, Zynga shall implement the requirements of this Section 4.1 no later than [*]; (b) new users of the [*] game, Zynga shall implement the requirements of this Section 4.1 no later than [*]; and (c) existing Zynga Social Games that have less than [*] monthly active users (MAUs) as of the Addendum No. 2 Effective Date (except as set forth below), Zynga shall use diligent efforts to implement the requirements of this Section 4.1, but will in no case implement such requirements later than [*]. For so long as (x) the [*] and [*] Zynga Social Games have less than [*] MAUs, and (y) the [*] and [*] Zynga Social Games have less than [*] MAUs, Zynga shall not have to implement the requirements set forth in Sections 4.1.1 and 4.1.2; provided, however, that as soon as any one of such games has, (in the case of [*] or [*])[*] or more MAUs, or (in the case of [*] or [*])[*] or more MAUs, Zynga shall implement the requirements of this Section 4.1 for any such game within [*] following the date in which such game met or exceeded the applicable MAU threshold set forth in subsections (x) and (y) above. |
4.1.7 | FB will use commercially reasonable efforts to implement a solution by the end of [*] (designated in the target Growth Schedule) that [*]. If, by the end of [*] (designated in the target Growth Schedule), FB has not implemented such a solution, the parties will work together in good faith for a period of thirty (30) days to mutually agree upon an alternative approach that addresses [*]. If FB does not implement a solution as described above and the parties are unable to agree upon an alternative approach during the thirty (30) day period, (a) except as otherwise expressly set forth in this Section, Zyngas sole remedy under this Section shall be to invoke the Escalation Process, and (b) Zynga shall be entitled to launch its own website(s) [*] to play Zynga games, provided that such website(s) and such games shall (i) [*]; and (ii) not use or access any other Social Platform, the Facebook Platform, the Zynga Platform (including, for the avoidance of doubt, Zyngas account system(s)), or other Zynga Properties, or utilize, incorporate, receive or contain any Facebook User Data. If Zynga acquires a game (which game, for the avoidance of doubt, includes any property, or game or property operating on a Mobile Platform) that [*], such [*] may not use or access the Zynga Platform (including, for the avoidance of doubt, Zyngas account system(s)), the Facebook Platform, or other Zynga Properties, or utilize, incorporate, receive, or contain any Facebook User Data. In the event Zynga acquires a [*], Zynga may continue to operate and maintain the account system of such acquired [*] that existed as of the closing date of the acquisition. |
4.2 | Game Friends. At such time that FB makes generally available to third party developers a game friends API that enables developers to associate game friends and publish such associations to the open graph protocol (Game Friends Protocol) Zynga will incorporate |
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Facebook/Zynga Confidential Information
into the Zynga Properties and Zynga Mobile Games such Game Friends Protocol for all Covered Zynga Games. For avoidance of doubt, users may be game friends on Zynga Properties, yet not be Facebook friends. |
4.3 | Authentic FB Account. If Facebook identifies as inauthentic a FB account, and such account is linked to a Zynga User, FB will notify Zynga of such inauthentic FB account and Zynga may subsequently prompt the Zynga User to either authenticate his FB account or set-up a new FB account using the registration process set forth in Section 4.1 and on Exhibit F. |
4.4 | Zynga User and Profile Pages. Zynga Users may have one or more pages within each Covered Zynga Game that contain information and data related to the applicable Covered Zynga Game (Zynga User Pages), including one or many profile pages that contain personal information (e.g. common name, hometown, profile picture) (Zynga Profile Pages). Zynga Profile Pages shall primarily contain information and data that is related to applicable Covered Zynga Games. All real names and profile pictures on Zynga Profile Pages will link to such Zynga Users Facebook Service profile. In addition, for those Zynga Users who have populated their Zynga Profile Page with a profile picture that was obtained directly from FB connect, Zynga will include in the users profile picture on the Zynga Profile Page the FB fav icon per the specifications provided by FB to Zynga. |
4.5 | Data Ownership. As between the parties, Game Data and Zynga User IDs associated with each Zynga User that a Facebook User provides directly to Zynga shall be owned by Zynga. Any other data that a Facebook User provides directly to Zynga (Independent Data) shall not be subject to the data restrictions set forth in the SRR or any other restrictions imposed by FB. If Zynga collects Game Data, User IDs, or Independent Data, Zynga must make it clear to the Facebook User that the collection is being carried out by Zynga and not Facebook and make sure that the Facebook User has the opportunity to review Zyngas privacy policy, which will govern Zyngas use of such Independent Data. |
4.6 | Instant Personalization. Zynga may provide a personalized experience to Facebook Users who use the Zynga Service through a Developer Application (a Personalized Developer Application) in accordance with Exhibit H. Instant Personalization will enable a single authorization at Zynga Properties such that a Zynga User on a Zynga Property will not get a Facebook connect authorization prompt for a Covered Zynga Game that such Zynga User has already installed on the Facebook Site. For the purposes of clarity, as of the Addendum No. 2 Effective Date, the parties acknowledge that Instant Personalization is not enabled on Mobile Platforms. |
4.7 | Indemnity. FB shall indemnify Zynga with respect to any and all third party claims arising on or after the Addendum No. 2 Effective Date brought against Zynga resulting from [*], so long as such [*] was not caused by any action or inaction on the part of Zynga. |
5. | User Experience. |
5.1 | All Covered Zynga Games (irrespective of whether the Covered Zynga Game is offered or otherwise made available on a Zynga Property, the Facebook Site or both) will be interoperable such that any instantiation of a Covered Zynga Game on one property will automatically be instantiated on the other property(ies). For the purposes of illustration only, game play (e.g. game board layout, game levels, game mechanics, etc.) of Taxiville on www.zynga.com, will be substantially similar on the Facebook Site and all other Zynga Properties so that such user will be able to simultaneously engage in the same game play of Taxiville on the Facebook Site and Zynga Properties. |
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Facebook/Zynga Confidential Information
5.2 | Any Stories generated by Zynga in connection with a Covered Zynga Game that are displayed in a FB communication channel may contain links but any such link must be a local link that links Zynga Users to the instantiation of the Covered Zynga Game on the site on which such Story is read by friends of such Zynga User, irrespective of where such Story originated (e.g. Stories in a newsfeed on FB must link to the Covered Zynga Game on the Facebook Site and Stories in a newsfeed on a Zynga Property must link to the Covered Zynga Game on the Zynga Property). Any Stories generated by Zynga within a Covered Zynga Game (e.g. on the canvas page of a Covered Zynga Game) may contain links that link Zynga Users off of the Facebook Site; provided, however, that such links must comply with subsections (a)-(c) in Section 7 (Promotions). |
5.3 | Subject to the terms set forth in Section 2.b. of Addendum No. 1 and in Facebooks Advertising Guidelines, advertisements generated by the parties and appearing on the Facebook Site or the Zynga Properties may contain links that transition users to any site; provided, however, that advertisements containing social content must only include links that transition a user to the site on which such advertisement is read or viewed. |
5.4 | In the event that one or more of the points of interconnectivity between the Zynga Properties and the Facebook Platform contemplated by Sections 4.1.1, 4.1.2, 4.2, 4.4 or 5.1 above are unavailable (and such interconnectivity is required for Zynga to obtain a users active Facebook session) due to a technical error for a period of [*] and such unavailability is not caused by any acts or omission of Zynga or any of its Affiliates (such [*] outage, a Facebook Outage), as Zyngas sole and exclusive remedy, Zynga shall notify FB of the Facebook Outage by sending a screenshot of the outage via email to FBs Designated Manager to enable FB to verify the Facebook Outage and, beginning on the [*] and continuing only for so long as such point of interconnectivity is unavailable due to a Facebook Outage, Zynga shall be permitted to enable Zynga Users to log-in to a Zynga Property without an active Facebook session. If there are [*] Facebook Outages during a [*] period, Zynga may invoke the Escalation Process. |
6. | Facebook Platform Enhancements. |
6.1 | Within the number of days following the Addendum No. 2 Effective Date that are specified in Exhibit D, FB will deploy each of the platform enhancements set forth on Exhibit D. Zynga shall invoke the Escalation Process if it reasonably believes that FB has failed to perform its obligations under this Section 6.1. |
6.2 | In addition, FB will use commercially reasonable efforts to deploy within [*] following the deployment of the last platform enhancement set forth on Exhibit D at least [*] of the APIs and/or features set forth on Exhibit E. Zynga may invoke the Escalation Process if it reasonably believes that FB has failed to perform its obligations under this Section 6.2. If Zynga refers such matter to the Escalation Process and this does not result in the matter being resolved by agreement between the parties, then Zynga may terminate this Amendment No. 2 and termination shall be Zyngas sole and exclusive remedy for FBs breach of this Section 6.2. |
7. | Promotions. During the Term, Zynga (including its Affiliates) may promote on the Facebook Site the Zynga Properties and/or Covered Zynga Games; provided, however, that such promotions must (a) link directly and only to the Zynga Properties; (b) not interrupt game play or display any modal dialogs or interstitial screens; and (c) not link to any other Social Platforms. Without limiting the foregoing and provided that the requirements in (a) (c) above are met, Zynga can (as permitted under the SRR) enable a Zynga message center that provides Zynga level communications and information to users such as messages, points, requests, wishlists and stats. |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
8. | Preferred Terms. |
8.1 | FB will not apply or develop its general policies (including, but not limited to, the SRR) and algorithms for the purpose of [*] on the Facebook Platform. |
8.2 | Throughout the Term, FB will make available to Zynga (excluding games on the Zynga Platform developed by third parties) [*], provided that such requirements were imposed by FB in good faith, and provided further that Zynga shall have thirty (30) days to comply with such requirements (except as set forth below in the last sentence of this Section 8.2), measured from the date on which [*] in connection therewith. Notwithstanding the foregoing notice requirement, in no case will FB be required to [*]. FB will not intentionally withhold requirements with the primary purpose of avoiding its obligations under this Section 8.2. FB shall not be in breach of this Section 8.2 in the event a [*]. |
8.3 | Notwithstanding anything to the contrary set forth in Section 4.b.(ii)(4) of Addendum No. 1, the amount of the service fee described in the Facebook Credits Terms that FB charges to Zynga at any given time to redeem Facebook Credits shall be [*]. |
8.4 | Zynga shall provide FB with notice if it reasonably believes that FB has violated any of the provisions set forth in this Section 8, and FB will have fifteen (15) days after its receipt of such notice to cure such breach (unless FB invokes the Escalation Process during such time period in which case FB shall have thirty (30) days after its receipt of such notice to cure such breach) and will not be liable for any damages related to such breach during such period. [*]. FB agrees that it shall not intentionally and repeatedly breach Section 8.2 with the primary purpose of avoiding its obligations under this Addendum No. 2. |
8.5 | Notwithstanding anything to the contrary set forth in the SRR (whether as of the Addendum No. 2 Effective Date or thereafter) or this Addendum No. 2, but without limiting Zyngas obligations under Addendum No. 1 and subject to FBs generally applicable policies, procedures and payment terms related to advertisements and Sections 5.3 and 7 of this Addendum No. 2, Zynga may include sponsored game elements (e.g. a virtual good or promotion that is sponsored by a third party, such as a McDonalds blimp within the game board) on the Facebook Site, but solely in a Covered Zynga Game (unless otherwise permitted under the SRR); provided, however, that a substantially similar sponsored game element is already included in the instantiation of such Covered Zynga Game available on the Zynga Property. [*]. For the avoidance of doubt, the foregoing sentence shall not prevent Zynga from offering advertisements as may be permitted by and in accordance with the SRR. As used herein, Social Ad means any advertising creative that uses or displays data Zynga receives from FB concerning a user, even if a user consents to such use. |
9. | Term and Termination. |
9.1 | Unless earlier terminated as provided elsewhere in this Addendum No. 2, the term of this Addendum No. 2 will be for a period of five (5) years from the Effective Date (Term). |
9.2 | Either party may terminate this Addendum No. 2 upon written notice to the other party if the other party materially breaches any term of this Addendum No. 2 and such party fails to cure any such breach or violation within thirty (30) days of receipt of written notice of such breach from the non-breaching party (such thirty (30) day period, the Breach Cure Period). In addition, each party acknowledges that if any such breach or violation is, in the other partys reasonable discretion, likely (a) to jeopardize the integrity or security of such partys platform, or such partys user security or user privacy, or (b) to give rise to material liability of such other party, then such other party may, in addition to its termination remedy and prior to completion of the Escalation Process, at its sole discretion, cease providing the breaching or violating party with access to the Facebook Platform or the Zynga Properties, as applicable, during the Breach |
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Facebook/Zynga Confidential Information
Cure Period, provided that [*] in a good faith attempt to resolve the issue that gave rise to such breach, provided, further, that if [*], such other party may so notify the General Counsel of the breaching or violating party via email and thereafter and immediately cease providing access to the Facebook Platform or the Zynga Properties, as applicable. |
9.3 | In the event of a termination of this Addendum No. 2 (except in the case of a termination pursuant to Section 9.2), the parties shall operate under the following guidelines for a period of (a) [*] following the effective date of such termination if this Addendum No. 2 is terminated at or before [*]; or (b) [*] following the effective date of such termination if this Addendum No. 2 is terminated any time after [*] (User Continuity Period): (x) FB will provide to Zynga continued access to the Facebook Platform; and (y) Zynga will continue to integrate and display the Facebook Platform on the Zynga Properties for the User Continuity Period, and each party will continue to comply with the Agreement and this Addendum No. 2; provided, however, that in the case of subsections (x) and (y), none of the [*] provisions of this Addendum No. 2 shall apply following the expiration or effective date of termination of this Addendum No. 2. |
9.4 | Except as specifically set forth in this Addendum No. 2 (including, for the avoidance of doubt, the Sections of this Addendum No. 2 that survive per Section 9.5), neither party will have any liability or obligation under this Addendum No. 2 upon any termination in accordance with the terms of this Addendum No. 2, other than with respect to any liabilities under this Addendum No. 2 that accrued from events that occurred prior to termination. |
9.5 | The following Sections of this Addendum No. 2 will survive any termination or expiration of the Agreement or this Addendum No. 2: 1.1, 1.3, 4.7, 9.2, 9.3, 10, 11.1 and 12. |
10. | Confidentiality; Publicity. Section 9 of Addendum No. 1 is incorporated herein by reference and shall govern the confidentiality of this Addendum No. 2. Notwithstanding anything to the contrary set forth in the Agreement or this Addendum No. 2, if either party is required to disclose all or any part of the Agreement and/or this Addendum No. 2 pursuant to applicable laws or regulations, then prior to any such required disclosure, such party shall: (a) promptly notify the other party of the obligation to disclose the Agreement and/or this Addendum No. 2; (b) obtain confidential treatment (or the equivalent thereof) for such disclosure; and (c) allow the other party to participate in such protective process and provide all reasonable cooperation in connection therewith. For a period of forty-five (45) days following the Addendum No. 2 Effective Date, the parties will work together to agree upon a product announcement-related joint media event in which the parties CEOs will participate. If the parties are unable to mutually agree upon such an event, the parties CEOs shall meet in person to discuss the matter. Neither party shall be in breach of this Section 10 if the parties and their respective CEOs are unable to reach agreement on such media event; provided, however, that in lieu of such an event, the parties will issue a joint press release (which release shall include quotes of each partys CEO) in the form mutually agreed by the parties. |
11. | Escalation Process; Executive Business Review. |
11.1 | Each party will designate an employee (the Designated Manager) who will liaise with the other party from time-to-time. Each party may change its Designated Manager(s) from time-to-time and will inform the other party of such a change. The initial Designated Managers will be: |
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Facebook/Zynga Confidential Information
Zynga Designated Manager |
Facebook Designated Manager | |
Name: [*] | Name: [*] | |
Title: [*] | Title: [*] | |
Email: [*] | Email: [*] |
If a dispute, claim, question or difference between the parties (a Dispute) arises regarding this Addendum No.2, the Designated Managers will consult and negotiate for at least [*] to resolve such Dispute. If the Designated Managers are unable to resolve the Dispute, the matter will be escalated to the following senior executives, for resolution for at least another [*]. Each party may change its Designated Senior Executive(s) from time-to-time:
Zynga Senior Executive |
Facebook Senior Executive | |
Name: [*] | Name: [*] | |
Title: [*] | Title: [*] | |
Email: [*] | Email: [*] | |
cc: [*] | cc: [*] |
11.2 | During the Term, the CEOs of each party shall meet in person no less frequently than every [*] in order to discuss and review the health of the parties relationship. |
12. | General. This Addendum No. 2 supersedes any other prior or collateral agreements, whether oral or written, with respect to the subject matter of this Addendum No. 2. This Addendum No. 2 (including the SRR, Addendum No. 1 and the Exhibits attached to each) sets forth the entire understanding and agreement between the parties with respect to the subject matter of this Addendum No. 2. This Addendum No. 2 may be amended only in a writing signed by both parties. Except for notice to the other party for a breach of this Addendum No. 2 or a Change of Control (unless expressly indicated otherwise in this Addendum No. 2), any other written notice required to be delivered pursuant to this Addendum No. 2 shall be permitted to be delivered via email, provided that any such email notice is sent to the other partys Designated Manager, with a copy sent to the Designated Senior Executive and their respective ccs. Any notice to a party for a breach of this Addendum No. 2 or a Change of Control must be delivered in writing via certified mail, FedEx or other delivery service with proof of delivery, and shall be delivered to the address set forth on the signature page of this Addendum No. 2. This Addendum No. 2 shall be construed as if jointly drafted by the parties. The parties are entering this Addendum No. 2 as independent contractors, and this Addendum No. 2 will not be construed to create a partnership, joint venture or employment relationship between them. This Addendum No. 2 will not be effective unless and until signed by both parties. Neither party may assign this Addendum No. 2 or its rights or obligations hereunder without the other partys prior written consent, except in connection with a Change of Control where the assignee agrees to be bound by the terms of this Addendum No. 2. Notwithstanding the preceding sentence, solely in the event of a Change of Control [*], (a) the party subject to such Change of Control (Acquired Party) shall provide the other party (Non-Acquired Party) with reasonable advance written notice of the closing of any such Change of Control, which advance notice shall in no case be less |
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Facebook/Zynga Confidential Information
than fifteen (15) days in advance of such closing, and (b) the Non-Acquired Party shall have the right to terminate this Addendum No. 2 upon written notice to the other party within thirty (30) days, or some other period of time mutually agreed in writing by the parties, following the Non-Acquired Partys receipt of such notice. In no case may Zynga transfer or assign any Facebook User Data obtained under the Agreement or this Addendum No. 2 to any third party, except in connection with a Change of Control as permitted by the SRR; provided, however, that in the event of a Change of Control of Zynga [*], (a) that results in Zynga remaining a separate legal entity following the closing of such transaction, Zynga shall ensure that [*], or (b) that results in Zynga not remaining a separate legal entity following the closing of the transaction, Zynga shall ensure that [*], in each case (i) without FBs prior written consent; but (ii) provided that in no case may [*] (notwithstanding anything to the contrary set forth in the Agreement) [*]. Zynga shall not, at any time following any Change of Control or assignment (permitted or otherwise) of this Addendum No. 2 or its rights or obligations hereunder, without FBs prior written consent: (a) intentionally stifle or block growth of MUUs or (b) perform any other action or fail to take an action that directly results in a decrease of MUUs. Subject to the foregoing limitation on assignment, this Addendum No. 2 will be binding upon, enforceable by and inure to the benefit of the parties and each of their successors and permitted assigns. |
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Facebook/Zynga Confidential Information
IN WITNESS WHEREOF, this Addendum No. 2 has been duly executed by the parties as of the Addendum No. 2 Effective Date.
FACEBOOK, INC. | ZYNGA INC. | |||||||
BY: [*] | BY: [*] | |||||||
NAME: [*] | NAME: [*] | |||||||
TITLE: [*] | TITLE: [*] | |||||||
DATE: [*] | DATE: [*] |
FACEBOOK IRELAND LIMITED | ||||
BY: [*] | ||||
NAME: [*] | ||||
TITLE: [*] | ||||
DATE: [*] | ||||
Address for written notice of breach: | ||||
Facebook, Inc. 1601 S. California Ave. Palo Alto, CA 94304 Attn: General Counsel |
Zynga Inc. 444 De Haro Street, Suite 132 San Francisco, CA 94107 Attn: General Counsel |
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Facebook/Zynga Confidential Information
Exhibit A
Definitions
Acquired Zynga Mobile Game means a Social Game offered or otherwise made available on a Mobile Platform that Zynga acquires from a third party (whether by merger, stock purchase, asset acquisition or otherwise) that operates only on the Facebook Platform or that operates on both the Facebook Platform and any other Social Platform(s).
Affiliates has the meaning set forth in Addendum No. 1.
API(s) means application programming interface(s).
Change of Control means a third party acquires, directly or indirectly, through merger, stock purchase, or otherwise: (i) beneficial ownership of more than fifty percent (50%) of the voting power of the issued and outstanding shares of a party, (ii) the ability to nominate a majority of a partys board of directors, or (iii) all or substantially all of a partys assets.
Covered Zynga Game means any Social Games or Zynga Mobile Games now existing or later developed, offered or provided by Zynga or any of its Affiliates, either directly or indirectly through a third party (including, without limitation, as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates) that [*].
Escalation Process means the dispute resolution process set forth in Section 11.
Facebook Game means any game owned or developed by or on behalf of FB or any of its Affiliates that (a) has game play as its primary purpose; and (b) has a user account (i.e., a user is prompted to log-in or otherwise enter identifying information, including but not limited to, username, email address, password, demographic information, etc.), generates Stories to be shared with Facebook Users, or maintains a dependency on interactions and/or collaborations with other Facebook Users. In the event that FB or any of its Affiliates acquires a company that owns or offers games, then FB shall use commercially reasonable efforts to cease the offering or otherwise making available such game at the end of ninety (90) days following the closing of such acquisition. For the avoidance of doubt, (y) an application that merely contains game mechanics (e.g. leader boards, incentives, points, etc.) will not be considered a Facebook Game; and (z) Facebook Games shall not include FBs chess game or other games or applications that have the primary purpose of demonstrating to FB developers how to use the Facebook Platform.
Facebook Platform means Facebooks APIs, tools and services that enable others to retrieve data, information and content from FB and transmit data, information and content to FB.
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Facebook Service means the features and services made available through (a) the Facebook Site; (b) the Facebook Platform; and (c) other media, software (such as toolbar), devices or networks now existing or later developed.
Facebook Site means www.facebook.com and any other FB branded or co-branded websites, including, without limitation, sub-domains, international versions, widgets, and versions made available through applications and mobile versions.
Facebook User means a human user of the Facebook Service.
Facebook User Data means: (a) any data, content, code or other materials received by Zynga from FB through the Facebook Platform in connection with this Addendum No. 2; and (b) any information that Zynga would not have if Zynga did not access such data, content, code or other materials through the Facebook Platform. Facebook User Data does not include Game Data or Independent Data.
Game Data means any game-derived data for a Zynga User including, but not limited to, such users experience points, users game-related interactions with other users, any Zynga virtual goods purchased by such user, and the game level achieved by such user.
Independent Data has the meaning set forth in Section 4.5.
Instant Personalization means the pilot Facebook Service program that allows certain Facebook Platform developers to access, use, and display the data defined as General Information in the FB Privacy Policy to personalize a Facebook Users experience on such developers website or service as soon as the Facebook User arrives to the website or service.
Mobile Acquired User means a Facebook User of an Acquired Zynga Mobile Game that has granted permission (implicitly or explicitly) for such Acquired Zynga Mobile Game to access their basic information, but that has never granted such permission for any other Covered Zynga Game.
Mobile MUUs means the number of de-duplicated monthly unique users that are playing at least one Covered Zynga Game that is a Zynga Mobile Game.
Mobile Platform means a mobile platform, including but not limited to, Symbian, Brew, Android, iOS, Windows Phone and RIM.
MUU means de-duplicated monthly unique users across all Covered Zynga Games.
Social Game Company means a third party developer or provider of Social Games that is primarily in the business of developing, distributing and/or publishing Social Games.
Social Game means a game that [*]. For the purposes of clarity, Social Game shall not include solo games that do not have user accounts and do not allow users to connect with friends as described in subsection (b) above.
Social Platform means [*]. As of the Addendum No. 2 Effective Date, Social Platforms include (but are not limited to) the following companies and their acquirers or successors: [*]. For the avoidance of
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Facebook/Zynga Confidential Information
doubt, nothing herein shall prohibit Zynga from sending communications to Zynga Users via electronic mail or SMS or providing an email- or SMS-based game that works across email providers (e.g. Gmail, Yahoo, Hotmail). Social Platform shall not include a platform that is used primarily to provide customer support to Zynga Users or maintain user forums in which Zynga Users communicate directly with one another primarily to discuss support issues related to the Zynga Properties or Zynga games.
Story means a story, status update, event, comment, rating, review, blog post, photo, video, or other information shared by or generated about a user for communication with other users.
Substantially Similar Game means a Social Game offered by Zynga that has a substantially similar theme as a Covered Zynga Game or an Acquired Covered Zynga Game (i.e. Cabville and Taxiville would be substantially similar games, but Taxiville and Yachtville would not be). For purposes of this definition, theme shall mean the environment or objectives of the Social Game.
Zynga ID means an identification assigned by Zynga to any Zynga User who sets up an account with Zynga.
Zynga Mobile Game means a Social Game that Zynga offers or otherwise makes available on a Mobile Platform.
Zynga Platform has the meaning set forth in Section 3.1.
Zynga Property means any sites and applications (except as expressly set forth below), now existing or later developed, that are owned or operated by Zynga or any of its Affiliates, either directly or indirectly through a third party (including, without limitation, as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates), including but not limited to, www.zynga.com and any other Zynga branded or co-branded websites, including, without limitation, sub-domains, international versions, versions developed for other form factors and for Mobile Platforms (excluding Zyngas activities [*] as set forth in Section 3.6.1). Zynga Property does not include (a) non-Covered Zynga Games that Zynga offers or otherwise makes available (as permitted under this Addendum No. 2) through iFrames, embedded java script, or API calls on a page on third party web sites (including but not limited to other Social Platforms) that are not owned or operated by Zynga or any of its Affiliates, either directly or indirectly through a third party and where the user navigated domain is not a Zynga domain, or (b) Solo Mobile Games.
Zynga User means a human user of a Covered Zynga Game or a Zynga Property.
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Facebook/Zynga Confidential Information
Exhibit B1
Web Target Growth Schedule
All MUU numbers in mm (millions) | ||||||||||||||||||
Starting MUU for Web = [*] | ||||||||||||||||||
Y2 Ending MUU = [*] | ||||||||||||||||||
Y5 Ending MUU = [*] | ||||||||||||||||||
[*] | [*] | [*] | ||||||||||||||||
Quarterly Growth Rate (Y0 to Y2): | [*] | [*] | [*] | |||||||||||||||
Quarterly Growth Rate (Y3 to Y5): | [*] | [*] | [*] | |||||||||||||||
(calendar quarters) | [*] | [*] | [*] | |||||||||||||||
[*] | [*] | [*] | ||||||||||||||||
Y1: | 2011 | Q1 | [*] | [*] | [*] | |||||||||||||
Q2 | [*] | [*] | [*] | |||||||||||||||
Q3 | [*] | [*] | [*] | |||||||||||||||
Q4 | [*] | [*] | [*] | |||||||||||||||
Y2: | 2012 | Q1 | [*] | [*] | [*] | |||||||||||||
Q2 | [*] | [*] | [*] | |||||||||||||||
Q3 | [*] | [*] | [*] | |||||||||||||||
Q4 | [*] | [*] | [*] | |||||||||||||||
Y3: | 2013 | Q1 | [*] | [*] | [*] | |||||||||||||
Q2 | [*] | [*] | [*] | |||||||||||||||
Q3 | [*] | [*] | [*] | |||||||||||||||
Q4 | [*] | [*] | [*] | |||||||||||||||
Y4: | 2014 | Q1 | [*] | [*] | [*] | |||||||||||||
Q2 | [*] | [*] | [*] | |||||||||||||||
Q3 | [*] | [*] | [*] | |||||||||||||||
Q4 | [*] | [*] | [*] | |||||||||||||||
Y5: | 2015 | Q1 | [*] | [*] | [*] | |||||||||||||
Q2 | [*] | [*] | [*] | |||||||||||||||
Q3 | [*] | [*] | [*] | |||||||||||||||
Q4 | [*] | [*] | [*] |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit B2
Mobile Target Growth Schedule
Q4Y2 (2012) Ending Mobile MUU: [*]
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit C
[Intentionally left blank]
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit D
Product Enhancements
1. Within sixty (60) days following the Addendum No. 2 Effective Date, FB will create a type of discovery Story that is generated based on a Facebook Users usage of a game or application. Such Story will be generated at least one (1) time if and when a Facebook User has (a) within a calendar year, logged more than 50 hours of playing time of a game or application; or (b) played a game or application for more than 40 days. Such Stories will also appear to Facebook Users non-gamer friends. Facebook may replace this product enhancement at any time with an alternative solution that drives more game or application installs or re-activation of inactive users. If Zynga reasonably believes that such alternative solution is not driving more game or application installs or re-activation of inactive users, Zynga shall provide FB with notice and FB shall have forty-five (45) days to remedy such problem.
2. Within forty-five (45) days following the Addendum No. 2 Effective Date, FB will surface Stories in the recent stories feed related to Covered Zynga Games that are generated by Facebook Users to such Facebook Users friends that have played such Covered Zynga Game at least once in the sixty (60) days immediately preceding the generation of such Story. FB will continue to surface such Stories for a period that is the greater of: (x) ninety (90) days following the first day that this enhancement is made available, or (y) until FB makes a change to and/or discontinues such Stories.
3. Within ninety (90) days following the Addendum No. 2 Effective Date, FB will provide API access for sending requests that does not require FB confirmation dialogs. FB must approve all flows which use such APIs and such APIs will be subject to continued quality control reviews (including generally applied algorithmic-based limitations) to ensure good user experience.
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit E
Facebook Platform Enhancements
[*]
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit F
Registration Flow
| Facebook will enable a registration API which allows Zynga Users to create a new FB account on the Zynga Properties. |
| FB will provide Zynga with the data fields necessary to create a new FB account (Data Fields) (e.g., First Name, Last Name, Email Address, Password, Gender, Date of Birth). Data Fields may be changed by FB from time-to-time. Promptly following receipt of notice from FB, Zynga will implement and update the Data Fields in the registration flow. |
| FB will provide Zynga with the security information fields necessary to create a new FB account (Security Information Fields) (e.g., URL referrer that the user had when they hit the registration page, the IP address of the user, the length of time the user spent filling out a registration form, the facebook.com cookies present on the users machine, the User Agent of the users browser). Security Information may be changed by FB from time-to-time. Promptly following receipt of notice from FB, Zynga will implement and update the Security Information Fields that must be passed to Facebook. |
| Zynga will store and use the Data Fields and Security Information Fields for the purpose of providing users with the Registration Flow. |
| Zynga will pass to FB all information Zynga collects using the then-current Data Fields and Security Information Fields designated by FB. |
| Prior to linking a Facebook Users Zynga account to their FB account, Zynga will notify and obtain clear, conspicuous and express consent from such Facebook User. Zynga will be solely responsible for obtaining such consent from such Facebook Users. |
| If a users attempted registration is deemed by FB to be invalid or an error has occurred, the registration API will generate an error message (e.g., if a user enters an email address that has already been used to create an existing FB account, then FB will provide a notice that an account for such email address already exists). |
| Zynga will include in the Registration Flow any and all legal, privacy, security and/or regulatory-related language (including links to web applications or web pages) that FB provides to Zynga from time-to-time (e.g. terms of use, privacy policy) and Zynga will promptly implement any FB-provided changes to such language, the Data Fields or Security Information. |
| Zynga will submit the initial Registration Flow to FBs Designated Manager for review and approval of FB Elements prior to making it available to users. As used herein, FB Elements includes but is not limited to, Data Fields and Security Information Fields, messaging to users, FB assets and legal, regulatory, security and/or privacy language and other related requirements. If FB does not respond within 3 business days following FBs receipt of such Registration Flow with a detailed summary of unapproved elements of the Registration Flow, then Zynga may, as its sole remedy, invoke the Escalation Process. |
| Zynga may make modifications to those portions of the Registration Flow that do not impact the FB Elements. Notwithstanding the foregoing, if Zynga makes any modifications that have a substantial impact on the Registration Flow, Zynga will re-submit such modified Registration Flow to FBs Designated Manager for review and approval prior to making the modified Registration Flow available to users. If FB does not respond within 3 days with a detailed summary of the unapproved elements of the Registration Flow, then Zynga may, as its sole remedy, invoke the Escalation Process. |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit G
Zynga Platform
(1) All games on the Zynga Platform developed by third parties must be registered for the Facebook API and have a unique application identifier that is different from any application ID used by Zynga or any Zynga games.
(2) All games on the Zynga Platform must make all API requests related to login, identity, friends and game friends (Core Social APIs) directly and solely to FB. Notwithstanding the preceding sentence, Zynga may develop the Facebook Zynga SDK. As used herein, Facebook Zynga SDK means a software development kit that Zynga develops for distribution on the Facebook Site in accordance with all the SDK Requirements solely (1) to facilitate the development of games on the Zynga Platform that use the Core Social APIs and (2) for the purpose of caching, instrumentation, graceful degradation, performance, security, logging, infrastructure or statistics related solely to the Core Social APIs. Zynga hereby grants FB all rights necessary to use, copy, modify, sublicense and distribute on the Facebook Site the Facebook Zynga SDK and Documentation. SDK Requirements means the Facebook Zynga SDK (a) [*]: (i) API methods, (ii) signatures (i.e. the same inputs/outputs for all method calls), (iii) API names, (iv) functionality and (v) semantics, as the Core Social APIs; (b) shall remain current and reflect any changes, updates, modifications, etc. that FB makes to the Core Social APIs from time-to-time; (c) must comply with the SRR; (d) include accompanying documentation (Documentation); and (e) may include Zynga-developed API methods related to game friends (Zynga Game Friends Equivalents) only until FB makes available the Game Friends Protocol, at which time Zynga shall remove the Zynga Game Friends Equivalents from the Facebook Zynga SDK and incorporate the Game Friends Protocol per FBs requirements. As between the parties, Facebook retains the sole right to distribute the Facebook Zynga SDK to third parties, and Facebook will provide a summary description of the Facebook Zynga SDK in the developer section of the Facebook Site with a download link to the developer portion of a Zynga Property for the Documentation. The Zynga Platform may make calls to Core Social APIs on behalf of games, provided that the Zynga API provides only substantially different functionality than the Core Social APIs and does not combine any such functionality(ies) to serve as a replacement for any of the Core Social APIs (e.g., the Zynga API may provide a leaderboard API method that retrieves the top 10 scores of users friends such that the Zynga Platform could call getFriends in order to determine which users to rank).
(3) To the extent that games on the Zynga Platform integrate with FB communication channels, such integration must happen through the standard Facebook Platform APIs for the application. For the avoidance of doubt, Zynga cannot publish activity about a third party game to FB via Zyngas application identifier; such activity must be published directly via the application identifier of such third party game.
(4) To the extent that games on the Zynga Platform generate Stories, such Stories shall be subject to the requirements set forth in Section 5.2 of this Addendum No. 2.
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Exhibit H
Instant Personalization
1. | Availability and Access to Instant Personalization. If Zynga desires to make Instant Personalization available on the Zynga Properties, Zynga will consult with FB and FB will assist Zynga in developing an Instant Personalization experience on the Zynga Properties. |
2. | Use of Facebook User Data for Instant Personalization. If Zynga makes the Instant Personalization service available, then when a Facebook User (or a Facebook Users friends or other category of user as approved in writing by FB) visits the Zynga Properties, so long as such Facebook User has not exercised an Opt-Out (as defined in Section 4.5.3.6 below) and subject to the SRR and the Facebook Platform Policies, Zynga may use the data defined as General Information in the Facebook Privacy Policy to improve the users experience on the Zynga Properties through Instant Personalization. As of the Addendum No. 2 Effective Date, General Information includes a Facebook Users and the Facebook Users friends names, profile pictures, gender, user IDs, connections and publicly viewable Facebook User Data. In addition, Instant Personalization will provide a session key for every user that is substantially equivalent to a session key obtained on FB canvas for an installed user. For the avoidance of doubt and notwithstanding anything to the contrary set forth in the Agreement or this Addendum No. 2, Zyngas ability to use Facebook User Data as part of a Personalized Developer Application is subject to the generally applicable requirements and restrictions specified in the SRR and the Facebook Platform Policies. |
3. | Requirements of Use of Instant Personalization Product. Zyngas access to and use of the Instant Personalization product is subject to the following requirements: |
3.1 | FB launching the Instant Personalization service in a particular territory before Instant Personalization can be used by Zynga in that specific territory. |
3.2 | FBs written approval of each Personalized Developer Application prior to the launch of such Personalized Developer Application. Zynga must launch such Personalization Developer Application within a reasonable time period after receiving the written approval from FB. |
3.3 | Zynga will specify to FB in writing (which may be provided by email) the data Zynga will access in providing such Personalized Developer Applications and an explanation of how Zynga will use such data. |
3.4 | With respect to every Facebook User for whom Zynga receives Facebook User Data who has not formally connected, Zynga agrees to display, with the frequency specified by FB, the dialog specified or approved by FB in writing (for example, the blue bar), which dialog gives such user the opportunity to opt out of Zyngas use of such Facebook User Data. If such Facebook User opts out in such dialog, Zynga will delete that Facebook User Data immediately. |
3.5 | For as long as Zynga has Personalized Developer Applications, Zynga will also provide an easy and prominent method for (a) Facebook Users to opt out of Zyngas use of their Facebook User Data and (b) Facebook Users to request the deletion of all information Zynga received from FB about such Facebook Users. In addition, Zynga will provide an email address to FB, which may be provided to Facebook Users, so that FB may enable any Facebook User who |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
has never visited Zyngas Personalized Developer Applications to request that Zynga delete all information Zynga received from FB about such Facebook User. Zynga agrees to comply with all such requests as promptly as possible, but in any case within twenty-four (24) hours of receiving such request. |
3.6 | If a Facebook User at any time opts out of: (a) Instant Personalization for the Zynga Properties; (b) Instant Personalization in general; and/or (c) the Facebook Platform in general (any such action, an Opt-Out), Zynga will discontinue use of the Facebook User Data of such Facebook User in connection with Instant Personalization as soon as the Facebook User exercises such Opt-Out. |
3.7 | Zynga is fully responsible for Facebook User Data in Zyngas possession or control. As such, Zynga will deploy administrative, technical and physical safeguards that prevent the unauthorized access, processing, use or disclosure of Facebook User Data. Zynga promptly will notify FB of any unauthorized access, processing, use or disclosure of Facebook User Data and will cooperate with FB to address any problems or concerns resulting from such unauthorized access. If FB requests to review Zyngas security program, Zynga will grant FB full and complete access and will cooperate with FB to address any security concerns. |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
Annex 1
Statement of Rights and Responsibilities
This agreement was written in English (US). To the extent any translated version of this agreement conflicts with the English version, the English version controls. Please note that Section 16 contains certain changes to the general terms for users outside the United States.
Date of Last Revision: October 4, 2010.
Statement of Rights and Responsibilities
This Statement of Rights and Responsibilities (Statement) derives from the Facebook Principles, and governs our relationship with users and others who interact with Facebook. By using or accessing Facebook, you agree to this Statement.
1. | Privacy |
Your privacy is very important to us. We designed our Privacy Policy to make important disclosures about how you can use Facebook to share with others and how we collect and can use your content and information. We encourage you to read the Privacy Policy, and to use it to help make informed decisions.
2. | Sharing Your Content and Information |
You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:
1. | For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it. |
2. | When you delete IP content, it is deleted in a manner similar to emptying the recycle bin on a computer. However, you understand that removed content may persist in backup copies for a reasonable period of time (but will not be available to others). |
3. | When you use an application, your content and information is shared with the application. We require applications to respect your privacy, and your agreement with that application will control how the application can use, store, and transfer that content and information. (To learn more about Platform, read our Privacy Policy and Platform Page.) |
4. | When you publish content or information using the everyone setting, it means that you are allowing everyone, including people off of Facebook, to access and use that information, and to associate it with you (i.e., your name and profile picture). |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
5. | We always appreciate your feedback or other suggestions about Facebook, but you understand that we may use them without any obligation to compensate you for them (just as you have no obligation to offer them). |
3. | Safety |
We do our best to keep Facebook safe, but we cannot guarantee it. We need your help to do that, which includes the following commitments:
1. | You will not send or otherwise post unauthorized commercial communications (such as spam) on Facebook. |
2. | You will not collect users content or information, or otherwise access Facebook, using automated means (such as harvesting bots, robots, spiders, or scrapers) without our permission. |
3. | You will not engage in unlawful multi-level marketing, such as a pyramid scheme, on Facebook. |
4. | You will not upload viruses or other malicious code. |
5. | You will not solicit login information or access an account belonging to someone else. |
6. | You will not bully, intimidate, or harass any user. |
7. | You will not post content that: is hateful, threatening, or pornographic; incites violence; or contains nudity or graphic or gratuitous violence. |
8. | You will not develop or operate a third-party application containing alcohol-related or other mature content (including advertisements) without appropriate age-based restrictions. |
9. | You will not offer any contest, giveaway, or sweepstakes (promotion) on Facebook without our prior written consent. If we consent, you take full responsibility for the promotion, and will follow our Promotions Guidelines and all applicable laws. |
10. | You will not use Facebook to do anything unlawful, misleading, malicious, or discriminatory. |
11. | You will not do anything that could disable, overburden, or impair the proper working of Facebook, such as a denial of service attack. |
12. | You will not facilitate or encourage any violations of this Statement. |
4. | Registration and Account Security |
Facebook users provide their real names and information, and we need your help to keep it that way. Here are some commitments you make to us relating to registering and maintaining the security of your account:
1. | You will not provide any false personal information on Facebook, or create an account for anyone other than yourself without permission. |
2. | You will not create more than one personal profile. |
3. | If we disable your account, you will not create another one without our permission. |
4. | You will not use your personal profile for your own commercial gain (such as selling your status update to an advertiser). |
5. | You will not use Facebook if you are under 13. |
6. | You will not use Facebook if you are a convicted sex offender. |
7. | You will keep your contact information accurate and up-to-date. |
8. | You will not share your password, (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account. |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
9. | You will not transfer your account (including any page or application you administer) to anyone without first getting our written permission. |
10. | If you select a username for your account we reserve the right to remove or reclaim it if we believe appropriate (such as when a trademark owner complains about a username that does not closely relate to a users actual name). |
5. | Protecting Other Peoples Rights |
We respect other peoples rights, and expect you to do the same.
1. | You will not post content or take any action on Facebook that infringes or violates someone elses rights or otherwise violates the law. |
2. | We can remove any content or information you post on Facebook if we believe that it violates this Statement. |
3. | We will provide you with tools to help you protect your intellectual property rights. To learn more, visit our How to Report Claims of Intellectual Property Infringement page. |
4. | If we remove your content for infringing someone elses copyright, and you believe we removed it by mistake, we will provide you with an opportunity to appeal. |
5. | If you repeatedly infringe other peoples intellectual property rights, we will disable your account when appropriate. |
6. | You will not use our copyrights or trademarks (including Facebook, the Facebook and F Logos, FB, Face, Poke, Wall and 32665), or any confusingly similar marks, without our written permission. |
7. | If you collect information from users, you will: obtain their consent, make it clear you (and not Facebook) are the one collecting their information, and post a privacy policy explaining what information you collect and how you will use it. |
8. | You will not post anyones identification documents or sensitive financial information on Facebook. |
9. | You will not tag users or send email invitations to non-users without their consent. |
6. | Mobile |
1. | We currently provide our mobile services for free, but please be aware that your carriers normal rates and fees, such as text messaging fees, will still apply. |
2. | In the event you change or deactivate your mobile telephone number, you will update your account information on Facebook within 48 hours to ensure that your messages are not sent to the person who acquires your old number. |
3. | You provide all rights necessary to enable users to sync (including through an application) their contact lists with any basic information and contact information that is visible to them on Facebook, as well as your name and profile picture. |
7. | Payments |
If you make a payment on Facebook or use Facebook Credits, you agree to our Payments Terms.
8. | Special Provisions Applicable to Share Links |
If you include our Share Link button on your website, the following additional terms apply to you:
1. | We give you permission to use Facebooks Share Link button so that users can post links or content from your website on Facebook. |
2. | You give us permission to use and allow others to use such links and content on Facebook. |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
3. | You will not place a Share Link button on any page containing content that would violate this Statement if posted on Facebook. |
9. | Special Provisions Applicable to Developers/Operators of Applications and Websites |
If you are a developer or operator of a Platform application or website, the following additional terms apply to you:
1. | You are responsible for your application and its content and all uses you make of Platform. This includes ensuring your application or use of Platform meets our Facebook Platform Policies and our Advertising Guidelines. |
2. | Your access to and use of data you receive from Facebook, will be limited as follows: |
1. | You will only request data you need to operate your application. |
2. | You will have a privacy policy that tells users what user data you are going to use and how you will use, display, share, or transfer that data and you will include your privacy policy URL in the Developer Application. |
3. | You will not use, display, share, or transfer a users data in a manner inconsistent with your privacy policy. |
4. | You will delete all data you receive from us concerning a user if the user asks you to do so, and will provide a mechanism for users to make such a request. |
5. | You will not include data you receive from us concerning a user in any advertising creative. |
6. | You will not directly or indirectly transfer any data you receive from us to (or use such data in connection with) any ad network, ad exchange, data broker, or other advertising related toolset, even if a user consents to that transfer or use. |
7. | You will not sell user data. If you are acquired by or merge with a third party, you can continue to use user data within your application, but you cannot transfer user data outside of your application. |
8. | We can require you to delete user data if you use it in a way that we determine is inconsistent with users expectations. |
9. | We can limit your access to data. |
10. | You will comply with all other restrictions contained in our Facebook Platform Policies. |
3. | You will not give us information that you independently collect from a user or a users content without that users consent. |
4. | You will make it easy for users to remove or disconnect from your application. |
5. | You will make it easy for users to contact you. We can also share your email address with users and others claiming that you have infringed or otherwise violated their rights. |
6. | You will provide customer support for your application. |
7. | You will not show third party ads or web search boxes on Facebook. |
8. | We give you all rights necessary to use the code, APIs, data, and tools you receive from us. |
9. | You will not sell, transfer, or sublicense our code, APIs, or tools to anyone. |
10. | You will not misrepresent your relationship with Facebook to others. |
11. | You may use the logos we make available to developers or issue a press release or other public statement so long as you follow our Facebook Platform Policies. |
12. | We can issue a press release describing our relationship with you. |
13. | You will comply with all applicable laws. In particular you will (if applicable): |
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Facebook/Zynga Confidential Information
1. | have a policy for removing infringing content and terminating repeat infringers that complies with the Digital Millennium Copyright Act. |
2. | comply with the Video Privacy Protection Act (VPPA), and obtain any opt-in consent necessary from users so that user data subject to the VPPA may be shared on Facebook. You represent that any disclosure to us will not be incidental to the ordinary course of your business. |
14. | We do not guarantee that Platform will always be free. |
15. | You give us all rights necessary to enable your application to work with Facebook, including the right to incorporate content and information you provide to us into streams, profiles, and user action stories. |
16. | You give us the right to link to or frame your application, and place content, including ads, around your application. |
17. | We can analyze your application, content, and data for any purpose, including commercial (such as for targeting the delivery of advertisements and indexing content for search). |
18. | To ensure your application is safe for users, we can audit it. |
19. | We can create applications that offer similar features and services to, or otherwise compete with, your application. |
10. | About Advertisements and Other Commercial Content Served or Enhanced by Facebook |
Our goal is to deliver ads that are not only valuable to advertisers, but also valuable to you. In order to do that, you agree to the following:
1. | You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place. |
2. | We do not give your content or information to advertisers without your consent. |
3. | You understand that we may not always identify paid services and communications as such. |
11. | Special Provisions Applicable to Advertisers |
You can target your specific audience by buying ads on Facebook or our publisher network. The following additional terms apply to you if you place an order through our online advertising portal (Order):
1. | When you place an Order, you will tell us the type of advertising you want to buy, the amount you want to spend, and your bid. If we accept your Order, we will deliver your ads as inventory becomes available. When serving your ad, we do our best to deliver the ads to the audience you specify, although we cannot guarantee in every instance that your ad will reach its intended target. |
2. | In instances where we believe doing so will enhance the effectiveness of your advertising campaign, we may broaden the targeting criteria you specify. |
3. | You will pay for your Orders in accordance with our Payments Terms. The amount you owe will be calculated based on our tracking mechanisms. |
4. | Your ads will comply with our Advertising Guidelines. |
5. | We will determine the size, placement, and positioning of your ads. |
6. | We do not guarantee the activity that your ads will receive, such as the number of clicks you will get. |
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Facebook/Zynga Confidential Information
7. | We cannot control how people interact with your ads, and are not responsible for click fraud or other improper actions that affect the cost of running ads. We do, however, have systems to detect and filter certain suspicious activity, learn more here. |
8. | You can cancel your Order at any time through our online portal, but it may take up to 24 hours before the ad stops running. You are responsible for paying for those ads. |
9. | Our license to run your ad will end when we have completed your Order. You understand, however, that if users have interacted with your ad, your ad may remain until the users delete it. |
10. | We can use your ads and related content and information for marketing or promotional purposes. |
11. | You will not issue any press release or make public statements about your relationship with Facebook without written permission. |
12. | We may reject or remove any ad for any reason. |
13. | If you are placing ads on someone elses behalf, we need to make sure you have permission to place those ads, including the following: |
1. | You warrant that you have the legal authority to bind the advertiser to this Statement. |
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Facebook/Zynga Confidential Information
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Facebook/Zynga Confidential Information
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[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Exhibit 10.17
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO A 180 DAY MARKET STAND-OFF RESTRICTION AS SET FORTH HEREIN. AS A RESULT OF SUCH RESTRICTION, THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF A REGISTERED PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER.
WARRANT TO PURCHASE CLASS A COMMON STOCK
Corporation: | Zynga Game Network Inc., a Delaware corporation | |
Number of Shares: | 1,135,000 Shares | |
Class of Stock: | Class A Common Stock | |
Exercise Price: | Equal to the Exercise Price (as defined below) | |
Issue Date: | July 18, 2008 | |
Expiration Date: | July 17, 2018 |
This Warrant to Purchase Stock (this Warrant) certifies that, for good and valuable consideration, KPCB Holdings, Inc., as nominee or its registered and permitted assigns (Holder) is entitled from and after the Issue Date to purchase from the corporation named above (the Company) until 5:00 p.m. Pacific time, on the Expiration Date set forth above (the Expiration Date), up to (i) the number of fully paid and nonassessable shares of Warrant Stock of the Company equal to the Number of Shares of Warrant Stock (as defined below), at an exercise price per share equal to the Exercise Price (as defined below) all as adjusted pursuant to Section 3 of this Warrant and all subject to the provisions and upon the terms and conditions set forth in this Warrant.
1. DEFINITIONS. The following definitions shall apply for purposes of this Warrant:
1.1 Exercise Price means an amount equal to $0.10 per share.
1.2 IPO means the effective date of a firm commitment underwritten public offering pursuant to an effective registration statement of the Company filed under the 1933 Act.
1.3 Number of Shares of Warrant Stock means 1,135,000 shares of Warrant Stock of the Company.
1.4 Shares means shares of Warrant Stock issuable upon the exercise of the Warrant.
1.5 Warrant Stock means shares of Class A Common Stock.
2. EXERCISE.
2.1 Method of Exercise. Subject to the terms and conditions of this Warrant, the Holder may exercise this Warrant in whole or in part, at any time or from time to time on any business day before the earlier of (a) the Expiration Date, (b) the IPO or (c) an Acquisition, by delivering a duly executed Notice of Exercise in substantially the form attached as Exhibit A to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 2.2, Holder shall also deliver to the Company a check for the aggregate Exercise Price for the Shares being purchased.
2.2 Net Exercise Election. Subject to the terms and conditions of this Warrant, the Holder may elect to convert all or a portion of this Warrant, without the payment by the Holder of any additional consideration, at any time or from time to time, on any business day before the Expiration Date and on or after the Issue Date, by the surrender of this Warrant or such portion of this Warrant to the Company, with the net exercise election selected in the Notice of Exercise attached hereto as Exhibit A duly executed by the Holder, into up to the number of Shares that is obtained under the following formula:
X = Y (A-B)
A
Where: | X | = | the number of Shares to be issued to the Holder pursuant to this Section 2.2. | |||||||
Y | = | the number of Shares as to which this Warrant is then being net exercised. | ||||||||
A | = | the fair market value of one Share. | ||||||||
B | = | the Exercise Price. |
For purposes of the above calculation, if the Companys Class A Common Stock is traded in a public market, the fair market value of one Share shall be the closing price of a Share reported for the business day immediately before the Holder delivers its Notice of Exercise to the Company (or in the instance where the Warrant is exercised immediately prior to the IPO, the price to public per share specified in the final prospectus relating to such offering). If the Companys Class A Common Stock is not traded in a public market, the fair market value of one Share shall be determined by the Companys Board of Directors in good faith. The Company will promptly respond in writing to an inquiry by the Holder as to the then current fair market
2
value of one Share.
2.3 Delivery of Certificate and New Warrant. Promptly after Holder exercises this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, this Warrant shall automatically be reduced by the number of Shares issued and remain exercisable for such remaining Shares not so acquired, and all other terms of the Warrant shall otherwise remain in full force and effect as so adjusted. Upon final exercise of this Warrant for any such remaining number of Shares, this Warrant shall be surrendered by the Holder to the Company for cancellation.
2.4 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
2.5 Treatment of Warrant Upon Acquisition of Company.
(a) Acquisition. For the purpose of this Warrant, Acquisition means (i) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of this corporation immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of this corporation or the surviving or acquiring entity), (ii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporations securities), of the Companys securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company (or the surviving or acquiring entity) or (iii) a sale of all or substantially all of the assets of the Company.
(b) Treatment of Warrant at Acquisition.
(i) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition, either (A) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (B) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information as Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than twenty (20) days prior to the closing of the proposed Acquisition.
(ii) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that is an arms length sale of all or substantially all of the Companys assets (and only its assets) to a third party that is not an Affiliate (as defined below)
3
of the Company (a True Asset Sale), either (a) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date if the Company continues as a going concern following the closing of any such True Asset Sale. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information as Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than twenty (20) days prior to the closing of the proposed Acquisition.
As used herein Affiliate shall mean any person or entity that owns or controls directly or indirectly ten (10) percent or more of the stock of Company, any person or entity that controls or is controlled by or is under common control with such persons or entities, and each of such persons or entitys officers, directors, joint venturers or partners, as applicable.
3. ADJUSTMENTS TO THE SHARES.
3.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the outstanding shares of the Companys Warrant Stock payable in shares of the Companys Warrant Stock or other securities of the Company or subdivides or combines the outstanding shares of the Companys Warrant Stock subsequent to the Issue Date, then upon exercise or conversion of this Warrant, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend, subdivision or combination occurred.
3.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant (other than pursuant to an Acquisition described in Sections 2.5(b)(i) and (ii) above or a stock dividend, split, etc. described in Section 3.1 above) that occurs subsequent to the Issue Date, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution or other event. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3 including, without limitation, appropriate adjustments to the Exercise Price and to the number of securities or property issuable upon exercise or conversion of the new Warrant.
3.3 Adjustments of Exercise Price. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, subsequent to the Issue Date, the Exercise Price shall be proportionately increased. If the outstanding Shares are divided, by reclassification or otherwise, into a greater number of shares, the Exercise Price shall be proportionately decreased.
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3.4 Adjustment is Cumulative. The provisions of this Section 3 shall similarly apply to successive, stock dividends, stock splits or combinations, reclassifications, exchanges, substitutions, or other events.
3.5 No Impairment. The Company shall not through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, intentionally avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Section 3 and in taking all such action as may be necessary or appropriate to protect Holders rights under this Section against such impairment.
3.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder an amount by check computed by multiplying the fractional interest by the fair market value of a full Share.
3.7 Certificate as to Adjustments. Upon each adjustment of the Exercise Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Exercise Price in effect upon the date thereof, and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof, and the series of adjustments leading to such Exercise Price and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof.
4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1 Issuance of Shares. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this Warrant and all shares of Common Stock issuable upon conversion of the Warrant Stock shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein and under applicable federal and state securities laws.
4.2 Reservation of Shares. For so long as this Warrant remains outstanding, the Company shall at all times keep reserved from its authorized but unissued shares of capital stock the full number of shares of Warrant Stock and all shares of Common Stock issuable upon conversion of the Warrant Stock.
5. REPRESENTATIONS OF HOLDER; TRANSFER.
5.1 Representations. Holder hereby represents and warrants to the Company as follows. Holder is a sophisticated investor having such knowledge and experience in business and investment matters that Holder is capable of protecting Holders own interests in connection with the acquisition, exercise or disposition of this Warrant. Holder is aware that this Warrant
5
and the Shares are being, or will be, issued to Holder in reliance upon Holders representation in this Section 5 and that such securities are restricted securities that cannot be publicly sold except in certain prescribed situations. Holder is aware of the provisions of Rule 144 promulgated under the Securities Act of 1933, as amended (the 1933 Act) and of the conditions under which sales may be made thereunder. Holder has received such information about the Company as Holder deems reasonable, has had the opportunity to ask questions and receive answers from the Company with respect to its business, assets, prospects and financial condition and has verified any answers Holder has received from the Company with independent third parties to the extent Holder deems necessary. The Holder of this Warrant, by acceptance hereof, acknowledges this Warrant and the Shares to be issued upon exercise hereof or conversion thereof are being acquired solely for the Holders own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof or conversion thereof except under circumstances that will not result in a violation of the 1933 Act or any state securities laws.
5.2 Legends. The Shares shall be imprinted with legends in substantially the following form, as well as any other legends required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code or any other state securities laws or by any agreement under which the Company is obligated:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND QUALIFICATION UNDER SUCH LAWS, OR PURSUANT TO RULE 144 AND ANY STATE EXEMPTION FROM REGISTRATION AND QUALIFICATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.
5.3 Transfer Restrictions. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with the restrictions contained herein and with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if (i) the transfer is to the stockholders, members or partners of Holder by way of dividend or distribution to all of the same or (ii) there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holders notice of proposed sale and/or transfer. Notwithstanding anything herein to the contrary, this Warrant is not transferable without the prior written consent of the Company, which shall not be unreasonably withheld; provided, that the Companys election to withhold its consent to the
6
transfer of this Warrant to any direct or indirect competitor of the Company shall not be deemed unreasonable.
5.4 Transfer Procedure. Subject to the restrictions on transfer described Section 5 of this Warrant, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant by giving the Company a written notice of the portion of the Warrant being transferred, such notice setting forth the name, address and taxpayer identification number of the transferee, and surrendering this Warrant to the Company for reissuance to the transferee(s).
5.5 Market Standoff. Holder hereby agrees that it will not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Shares for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided, however, that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the sixteen-day period beginning on the last day of the restricted period and if the Companys securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 5.5 shall continue to apply until the expiration of the eighteen-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event shall the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement and the restrictions imposed by this Section 5.5 shall not apply unless all stockholders then holding more than one percent (1%) of the total equity of the Company on a fully diluted basis and all of the Companys then-current executive officers and directors enter into similar agreements. For purposes of this Section 5.5, the term Company shall include any wholly owned subsidiary of the Company into which the Company merges or consolidates. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section and to impose stop transfer instructions with respect to the Shares until the end of such period. Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.
6. GENERAL PROVISIONS.
6.1 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Warrant will be in writing and will be effective and deemed to provide such party sufficient notice under this Warrant on the earliest of the following: (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries.
7
All notices for delivery outside the United States will be sent by facsimile or by express courier. All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number set forth below the signature lines to this Warrant, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked Attention: President.
6.2 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys fees.
6.3 Governing Law. This Warrant will be governed by and construed under the internal laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California, without reference to principles of conflict of laws or choice of laws.
6.4 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Warrant.
6.5 Counterparts. This Warrant may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.
6.6 Amendment and Waivers. This Warrant may be amended and provisions may be waived upon the written consent of the Holder and the Company.
6.7 Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 2.2 above is greater than the Warrant Price in effect on such date, this Warrant shall automatically be deemed on and as of such date to be converted pursuant to Section 2.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other securities) issued upon such conversion to Holder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized representative and Holder has executed this Warrant as of the Issue Date indicated on the first page of this Warrant.
COMPANY:
ZYNGA GAME NETWORK INC. | ||
By: | /s/ Mark Pincus | |
Name: |
| |
Title: |
|
Address: | 365 Vermont Street | |
San Francisco, CA 94103 | ||
Facsimile: | (415) |
WARRANT HOLDER:
KPCB HOLDINGS, INC., AS NOMINEE | ||
By: | ||
Name: |
| |
Title: |
|
Address: | 2750 Sand Hill Road | |
Menlo Park, CA 94025 | ||
Facsimile: | (650) 233-0300 |
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized representative and Holder has executed this Warrant as of the Issue Date indicated on the first page of this Warrant.
COMPANY:
ZYNGA GAME NETWORK INC.
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By: | ||
Name: |
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Title: |
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Address: | 365 Vermont Street | |
San Francisco, CA 94103 | ||
Facsimile: | (415) |
WARRANT HOLDER:
KPCB HOLDINGS, INC., AS NOMINEE | ||
By: | /s/ Ted Schlein | |
Name: | Ted Schlein | |
Title: | Senior Vice President |
Address: | 2750 Sand Hill Road | |
Menlo Park, CA 94025 | ||
Facsimile: | (650) 233-0300 |
EXHIBIT A
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
1. The undersigned hereby elects to purchase shares of the Class A Common Stock (the Shares) of Zynga Game Network Inc., a Delaware corporation, pursuant to the terms of the attached Warrant to Purchase Class A Common Stock with an issue date of July 18, 2008 (the Warrant), as follows:
(Initial applicable method:)
a. | The undersigned tenders herewith payment of the total purchase price of such Shares in full, pursuant to a check or wire transfer, in the amount of $ . |
b. | This exercise or conversion [is] [is not] contingent upon the closing of the Acquisition or other event specified in the Company Notice to Holder in accordance with Section 2.5(b)(i) or (ii) of the Warrant received by Holder. |
c. | The undersigned hereby elects to convert the Warrant into Shares by the net exercise election pursuant to Section 2.2 of the Warrant. This conversion is exercised with respect to [ ] [all of the] shares of Warrant Stock covered by the Warrant resulting in a net total of Shares being issued to the undersigned. |
2. Please issue a certificate or certificates representing said Shares in the name of the undersigned. The undersigned represents that it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws and hereby repeats the representations and warranties of the undersigned that are set forth in Section 5.1 of the attached Warrant.
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(Signature of Holder and, if applicable, Title) |
Exhibit 10.18
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, INCLUDING RIGHTS OF REPURCHASE AND RIGHTS OF FIRST REFUSAL, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, AND IN ACCORDANCE WITH ALL APPLICABLE RESTRICTIONS ON TRANSFER. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE CLASS A COMMON STOCK
Corporation: | Zynga Game Network Inc., a Delaware corporation | |
Number of Shares: | 86,856 Shares | |
Class of Stock: | Class A Common Stock | |
Exercise Price: | Equal to the Exercise Price (as defined below) | |
Issue Date: | July 31, 2009 | |
Expiration Date: | July 30, 2019 |
This Warrant to Purchase Class A Common Stock (this Warrant) certifies that, for good and valuable consideration, Allen & Company LLC, as nominee or its registered and permitted assigns (Holder) is entitled from and after the Issue Date to purchase from the corporation named above (the Company) until 5:00 p.m. Pacific time, on the Expiration Date set forth above (the Expiration Date), up to (i) the number of fully paid and nonassessable shares of Warrant Stock of the Company equal to the Number of Shares of Warrant Stock (as defined below), at an exercise price per share equal to the Exercise Price (as defined below) all as adjusted pursuant to Section 3 of this Warrant and all subject to the provisions and upon the terms and conditions set forth in this Warrant.
1. DEFINITIONS. The following definitions shall apply for purposes of this Warrant:
1.1 Exercise Price means an amount equal to $4.03 per share.
1.2 IPO means the effective date of a firm commitment underwritten public offering pursuant to an effective registration statement of the Company filed under the Securities Act.
1.3 Number of Shares of Warrant Stock means 86,856 shares of Warrant Stock of the Company.
1.4 Shares means shares of Warrant Stock issuable upon the exercise of the Warrant.
1.5 Warrant Stock means shares of Class A Common Stock.
2. EXERCISE.
2.1 Method of Exercise. Subject to the terms and conditions of this Warrant, the Holder may exercise this Warrant in whole or in part, at any time or from time to time on any business day before the earlier of (a) the Expiration Date or (b) an Acquisition, by delivering a duly executed Notice of Exercise in substantially the form attached as Exhibit A to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 2.2, Holder shall also deliver to the Company a check for the aggregate Exercise Price for the Shares being purchased.
2.2 Net Exercise Election. Subject to the terms and conditions of this Warrant, the Holder may elect to convert all or a portion of this Warrant, without the payment by the Holder of any additional consideration, at any time or from time to time, on any business day before the Expiration Date and on or after the Issue Date, by the surrender of this Warrant or such portion of this Warrant to the Company, with the net exercise election selected in the Notice of Exercise attached hereto as Exhibit A duly executed by the Holder, into up to the number of Shares that is obtained under the following formula:
X = Y (A-B)
A
Where: | X | = | the number of Shares to be issued to the Holder pursuant to this Section 2.2. | |||
Y | = | the number of Shares as to which this Warrant is then being net exercised. | ||||
A | = | the fair market value of one Share. | ||||
B | = | the Exercise Price. |
For purposes of the above calculation, if the Companys Class A Common Stock is traded in a public market, the fair market value of one Share shall be the closing price of a Share reported for the business day immediately before the Holder delivers its Notice of Exercise to the Company (or in the instance where the Warrant is exercised immediately prior to the IPO, the price to public per share specified in the final prospectus relating to such offering). If the Companys Class A Common Stock is not traded in a public market, the fair market value of one Share shall be determined by the Companys Board of Directors in good faith. The Company will promptly respond in writing to an inquiry by the Holder as to the then-current fair market value of one Share.
2.3 Delivery of Certificate and New Warrant. Promptly after Holder exercises this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, this Warrant shall automatically be reduced by the number of Shares issued and remain exercisable for such
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remaining Shares not so acquired, and all other terms of the Warrant shall otherwise remain in full force and effect as so adjusted. Upon final exercise of this Warrant for any such remaining number of Shares, this Warrant shall be surrendered by the Holder to the Company for cancellation.
2.4 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
2.5 Treatment of Warrant Upon Acquisition of Company.
(a) Acquisition. For the purpose of this Warrant, Acquisition means (i) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of this corporation immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of this corporation or the surviving or acquiring entity), (ii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporations securities), of the Companys securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company (or the surviving or acquiring entity) or (iii) a sale of all or substantially all of the assets of the Company.
(b) Treatment of Warrant at Acquisition.
(i) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition, either (A) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (B) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information as Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than twenty (20) days prior to the closing of the proposed Acquisition.
(ii) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that is an arms length sale of all or substantially all of the Companys assets (and only its assets) to a third party that is not an Affiliate (as defined below) of the Company (a True Asset Sale), either (a) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date if the Company continues as a going concern following the closing of any such True Asset Sale. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information
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as Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than twenty (20) days prior to the closing of the proposed Acquisition.
As used herein Affiliate shall mean any person or entity that owns or controls directly or indirectly ten (10) percent or more of the stock of Company, any person or entity that controls or is controlled by or is under common control with such persons or entities, and each of such persons or entitys officers, directors, joint venturers or partners, as applicable.
3. ADJUSTMENTS TO THE SHARES.
3.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the outstanding shares of the Companys Warrant Stock payable in shares of the Companys Warrant Stock or other securities of the Company or subdivides or combines the outstanding shares of the Companys Warrant Stock subsequent to the Issue Date, then upon exercise or conversion of this Warrant, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend, subdivision or combination occurred.
3.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant (other than pursuant to an Acquisition described in Sections 2.5(b)(i) and (ii) above or a stock dividend, split, etc. described in Section 3.1 above) that occurs subsequent to the Issue Date, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution or other event. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3 including, without limitation, appropriate adjustments to the Exercise Price and to the number of securities or property issuable upon exercise or conversion of the new Warrant.
3.3 Adjustments of Exercise Price. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, subsequent to the Issue Date, the Exercise Price shall be proportionately increased. If the outstanding Shares are divided, by reclassification or otherwise, into a greater number of shares, the Exercise Price shall be proportionately decreased.
3.4 Adjustment is Cumulative. The provisions of this Section 3 shall similarly apply to successive, stock dividends, stock splits or combinations, reclassifications, exchanges, substitutions, or other events.
3.5 No Impairment. The Company shall not through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, intentionally avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times
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in good faith assist in carrying out of all the provisions of this Section 3 and in taking all such action as may be necessary or appropriate to protect Holders rights under this Section against such impairment.
3.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder an amount by check computed by multiplying the fractional interest by the fair market value of a full Share.
3.7 Certificate as to Adjustments. Upon each adjustment of the Exercise Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Exercise Price in effect upon the date thereof, and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof, and the series of adjustments leading to such Exercise Price and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof.
4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1 Issuance of Shares. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein and under applicable federal and state securities laws.
4.2 Reservation of Shares. For so long as this Warrant remains outstanding, the Company shall at all times keep reserved from its authorized but unissued shares of capital stock the full number of shares of Warrant Stock.
5. REPRESENTATIONS OF HOLDER; TRANSFER.
5.1 Representations. Holder hereby represents and warrants to the Company as follows. Holder is a sophisticated investor having such knowledge and experience in business and investment matters that Holder is capable of protecting Holders own interests in connection with the acquisition, exercise or disposition of this Warrant. Holder is aware that this Warrant and the Shares are being, or will be, issued to Holder in reliance upon Holders representation in this Section 5 and that such securities are restricted securities that cannot be publicly sold except in certain prescribed situations. Holder is aware of the provisions of Rule 144 promulgated under the Securities Act and of the conditions under which sales may be made thereunder. Holder has received such information about the Company as Holder deems reasonable, has had the opportunity to ask questions and receive answers from the Company with respect to its business, assets, prospects and financial condition and has verified any answers Holder has received from the Company with independent third parties to the extent Holder deems necessary. The Holder of this Warrant, by acceptance hereof, acknowledges this Warrant and the Shares to
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be issued upon exercise hereof are being acquired solely for the Holders own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act or any state securities laws.
5.2 Transfer Restrictions. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with the restrictions contained herein and with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if (i) the transfer is to the stockholders, members or partners of Holder by way of dividend or distribution to all of the same or (ii) there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holders notice of proposed sale and/or transfer. Notwithstanding anything herein to the contrary, this Warrant is not transferable without the prior written consent of the Company.
5.3 Market Standoff. Holder hereby agrees that it will not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Shares for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided, however, that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period and if the Companys securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 5.3 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event shall the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement. For purposes of this Section 5.3, the term Company shall include any wholly owned subsidiary of the Company into which the Company merges or consolidates. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the Shares and to impose stop transfer instructions with respect to the Shares until the end of such period. Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.
6. COMPANYS REPURCHASE OPTION. The Company or its assignees shall have the option to repurchase all or a portion of the Unvested Shares (as defined below) on the terms and conditions set forth in this Section 6 (the Repurchase Option) if Holder ceases to provide services to the Company (as defined herein) for any reason, or no reason.
6.1 Definition of Provide Services to the Company; Termination Date. For purposes of this Warrant, Holder will be considered to be providing services to the Company if the Board of Directors of the Company determines that Holder is rendering substantial services to the
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Company in accordance with the terms of that Advisory Agreement dated July 31, 2009. In case of any dispute as to whether Holder is providing services to the Company, the Board of Directors of the Company shall have sole discretion to determine whether Holder has ceased to provide services to the Company and the effective date on which Holders services terminated (the Termination Date).
6.2 Unvested and Vested Shares. Shares that are vested pursuant to the schedule set forth herein are Vested Shares. Shares that are not vested pursuant to the schedule set forth herein are Unvested Shares. Unvested Shares may not be sold or otherwise transferred by Holder without the Companys prior written consent. As of the Issue Date, all of the Shares shall initially be Unvested Shares; thereafter, for so long (and only for so long) as Holder continues to provide services to the Company, 3,619 Unvested Shares (as adjusted to reflect any stock dividend, stock split, reverse stock split or recapitalization of the common stock of the Company occurring after the Issue Date) will become Vested Shares upon the expiration of each full month elapsed after July 31, 2009. No Shares will become Vested Shares after the Termination Date. If the application of the vesting percentage results in a fractional share, such share shall be rounded down to the nearest whole share for each month except for the last month in such vesting period, at the end of which last month the balance of Unvested Shares shall become fully Vested Shares.
6.3 Adjustments. The number of Shares that are Vested Shares or Unvested Shares will be proportionally adjusted to reflect any stock dividend, stock split, reverse stock split or recapitalization of the Class A Common Stock of the Company occurring after the Issue Date.
6.4 Exercise of Repurchase Option at Original Price. At any time within ninety (90) days after the Termination Date, the Company may elect to repurchase any or all of the Unvested Shares by giving Holder written notice of exercise of the Repurchase Option. The Company and/or its assignee(s) will then have the option to repurchase from Holder (or from Holders personal representative as the case may be) any or all of the Unvested Shares at $4.03 per share, as adjusted to reflect any stock dividend, stock split, reverse stock split or recapitalization of the Class A Common Stock of the Company occurring after the Issue Date (the Repurchase Option Price).
6.5 Payment of Repurchase Price. The Repurchase Option Price will be payable, at the option of the Company or its assignee(s), by check or by cancellation of all or a portion of any outstanding indebtedness owed by Holder to the Company (or to such assignee) or by any combination thereof. The Repurchase Option Price will be paid without interest within ninety (90) days after the Company gives the Holder written notice of the exercise of its Repurchase Option.
7. RIGHT OF FIRST REFUSAL. Unless Holder receives the Companys prior written consent, any sale, hypothecation, encumbrance or other transfer of any Unvested Share is strictly prohibited and shall be void. Before any Vested Shares held by Holder or any transferee of such Vested Shares (either sometimes referred to herein as the Holder) may be sold or otherwise transferred (including without limitation a transfer by gift or operation of law), the Company and/or its assignee(s) will have a right of first refusal to purchase the Shares to be sold or transferred (the Offered Shares) on the terms and conditions set forth in this Section 7 (the Right of First Refusal).
7.1 Notice of Proposed Transfer. The Holder of the Offered Shares will deliver to the Company a written notice (the Notice) stating: (i) the Holders bona fide intention to sell or otherwise transfer the Offered Shares; (ii) the name and address of each proposed holder or other transferee (the Proposed Transferee); (iii) the number of Offered Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Offered Shares (the Offered Price); and (v) that the Holder acknowledges this Notice is an
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offer to sell the Offered Shares to the Company and/or its assignee(s) pursuant to the Companys Right of First Refusal at the Offered Price as provided for in this Warrant.
7.2 Exercise of Right of First Refusal. At any time within thirty (30) days after the date of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all (or, with the consent of the Holder, less than all) the Offered Shares proposed to be transferred to any one or more of the Proposed Transferees named in the Notice, at the purchase price determined in accordance with Section 7.3 below.
7.3 Purchase Price. The purchase price for the Offered Shares purchased under this Section will be the Offered Price (subject to any lower price to which the Company is entitled pursuant to the Repurchase Option to the extent applicable), provided that if the Offered Price consists of no legal consideration (as, for example, in the case of a transfer by gift), the purchase price will be the fair market value of the Offered Shares as determined in good faith by the Companys Board of Directors. If the Offered Price includes consideration other than cash, then the value of the non-cash consideration, as determined in good faith by the Companys Board of Directors, will conclusively be deemed to be the cash equivalent value of such non-cash consideration.
7.4 Payment. Payment of the purchase price for the Offered Shares will be payable, at the option of the Company and/or its assignee(s) (as applicable), by check or by cancellation of all or a portion of any outstanding indebtedness owed by the Holder to the Company (or to such assignee, in the case of a purchase of Offered Shares by such assignee) or by any combination thereof. The purchase price will be paid without interest within sixty (60) days after the Companys receipt of the Notice, or, at the option of the Company and/or its assignee(s), in the manner and at the time(s) set forth in the Notice.
7.5 Holders Right to Transfer. If Holder has not consented to the purchase of less than all of the Offered Shares proposed in the Notice to be transferred to a given Proposed Transferee by the Company and/or its assignee(s) as provided in this Section 7 and the Company has not otherwise timely elected to purchase all of the Offered Shares, then the Holder may sell or otherwise transfer all such Offered Shares to each Proposed Transferee at the Offered Price or at a higher price (and if Holder consented to the purchase of less than all the Offered Shares proposed in the Notice to be transferred to a given Proposed Transferee by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer any remaining Offered Shares to each Proposed Transferee at the Offered Price or at a higher price), provided that (i) such sale or other transfer is consummated within one hundred twenty (120) days after the date of the Notice, (ii) any such sale or other transfer is effected in compliance with all applicable securities laws, and (iii) each Proposed Transferee agrees in writing that the provisions of this Section will continue to apply to the Offered Shares in the hands of such Proposed Transferee. If the Offered Shares described in the Notice are not transferred to each Proposed Transferee within such one hundred twenty (120) day period, then a new Notice must be given to the Company, pursuant to which the Company will again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
(a) Exempt Transfers. Notwithstanding anything to the contrary in this Section, transfers of Vested Shares to an Affiliate (as defined below) will be exempt from the Right of First Refusal; provided that any such Affiliate agrees in a writing satisfactory to the Company that the provisions of this Section 7 will continue to apply to the transferred Vested Shares in the hands of such Affiliate. An Affiliate means a legal entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Holder.
7.6 Termination of Right of First Refusal. The Right of First Refusal will terminate as to all Shares (a) on the effective date of the first sale of Common Stock of the Company to
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the general public pursuant to a registration statement filed with and declared effective by the SEC under the Securities Act (other than a registration statement relating solely to the issuance of Common Stock pursuant to a business combination or an employee incentive or benefit plan) or (b) on any transfer or conversion of Shares made pursuant to a statutory merger or statutory consolidation of the Company with or into another corporation or corporations if the common stock of the surviving corporation or any direct or indirect parent corporation thereof is registered under the Securities Exchange Act of 1934, as amended.
7.7 Encumbrances on Vested Shares. Holder may grant a lien or security interest in, or pledge, hypothecate or encumber Vested Shares only if each party to whom such lien or security interest is granted, or to whom such pledge, hypothecation or other encumbrance is made, agrees in a writing satisfactory to the Company that: (i) such lien, security interest, pledge, hypothecation or encumbrance will not apply to such Vested Shares after they are acquired by the Company and/or its assignees under this Section; and (ii) the provisions of this Section will continue to apply to such Vested Shares in the hands of such party and any transferee of such party. Holder may not grant a lien or security interest in, or pledge, hypothecate or encumber, any Unvested Shares.
8. RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of this Warrant, Holder will have all of the rights of a stockholder of the Company with respect to the Shares from and after the date that Holder delivers payment of the Purchase Price until such time as Holder disposes of the Shares or the Company and/or its assignee(s) exercise(s) the Repurchase Option or Right of First Refusal. Upon an exercise of the Repurchase Option or the Right of First Refusal, Holder will have no further rights as a holder of the Shares so purchased upon such exercise, except the right to receive payment for the Shares so purchased in accordance with the provisions of this Warrant, and Holder will promptly surrender the stock certificate(s) evidencing the Shares so purchased to the Company for transfer or cancellation.
9. ESCROW. As security for Holders faithful performance of this Warrant, Holder agrees, immediately upon receipt of the stock certificate(s) evidencing the Shares, to deliver such certificate(s), together with the stock powers executed by Holder (with the date and number of Shares left blank), to the Secretary of the Company or other designee of the Company (the Escrow Holder), who is hereby appointed to hold such certificate(s) and stock powers in escrow and to take all such actions and to effectuate all such transfers and/or releases of such Shares as are in accordance with the terms of this Warrant. Escrow Holder will act solely for the Company as its agent and not as a fiduciary. Holder and the Company agree that Escrow Holder will not be liable to any party to this Warrant (or to any other party) for any actions or omissions unless Escrow Holder is grossly negligent or intentionally fraudulent in carrying out the duties of Escrow Holder under this Warrant. Escrow Holder may rely upon any letter, notice or other document executed with any signature purported to be genuine and may rely on the advice of counsel and obey any order of any court with respect to the transactions contemplated by this Warrant. The Shares will be released from escrow upon termination of the Repurchase Option and the Right of First Refusal.
10. TAX CONSEQUENCES. HOLDER UNDERSTANDS AND ACKNOWLEDGES THAT HOLDER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF HOLDERS PURCHASE OR DISPOSITION OF THE SHARES AND THAT HOLDER, AND NOT THE COMPANY, SHALL BE SOLELY RESPONSIBLE FOR ALL SUCH TAX CONSEQUENCES. HOLDER REPRESENTS (i) THAT HOLDER HAS CONSULTED WITH A TAX ADVISER THAT HOLDER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT HOLDER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Holder hereby acknowledges that Holder has been informed that, unless an election is filed by the Holder with the Internal Revenue Service (and, if
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necessary, the proper state taxing authorities) within 30 days of the purchase of the Shares to be effective, electing pursuant to Section 83(b) of the Internal Revenue Code (and similar state tax provisions, if applicable) to be taxed currently on any difference between the Purchase Price of the Shares and their fair market value on the date of purchase, there will be a recognition of taxable income to the Holder, measured by the excess, if any, of the fair market value of the Shares, at the time they cease to be Unvested Shares, over the Purchase Price for such Shares. Holder represents that Holder has consulted any tax advisors Holder deems advisable in connection with Holders purchase of the Shares and the filing of the election under Section 83(b) and similar tax provisions. HOLDER HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH ELECTION OR FROM FAILURE TO FILE THE ELECTION AND PAYING TAXES RESULTING FROM THE LAPSE OF THE REPURCHASE RESTRICTIONS ON THE UNVESTED SHARES.
11. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
11.1 Legends. Holder understands and agrees that the Company will place the legends set forth below or similar legends on any stock certificate(s) evidencing the Shares, together with any other legends that may be required by state or federal securities laws, the Companys Certificate of Incorporation or Bylaws, any other agreement between Holder and the Company or any agreement between Holder and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, INCLUDING RIGHTS OF REPURCHASE AND RIGHTS OF FIRST REFUSAL HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF REPURCHASE AND RIGHTS OF FIRST REFUSAL, ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
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HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.
11.2 Stop-Transfer Instructions. Holder agrees that, to ensure compliance with the restrictions imposed by this Warrant, the Company may issue appropriate stop-transfer instructions to its transfer agent, if any, and if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
11.3 Refusal to Transfer. The Company will not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Warrant or (ii) to treat as owner of such Shares, or to accord the right to vote or pay dividends, to any Holder or other transferee to whom such Shares have been so transferred.
12. GENERAL PROVISIONS.
12.1 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Warrant will be in writing and will be effective and deemed to provide such party sufficient notice under this Warrant on the earliest of the following: (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile or email, addressed to the other party at its facsimile number or email address specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt; (iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries.
All notices for delivery outside the United States will be sent by facsimile, email or by express courier. All notices not delivered personally or by facsimile or email will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address, facsimile number or email address set forth below the signature lines to this Warrant, or at such other address, facsimile number or email address as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked Attention: General Counsel.
12.2 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys fees.
12.3 Governing Law. This Warrant will be governed by and construed under the internal laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California, without reference to principles of conflict of laws or choice of laws.
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12.4 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Warrant.
12.5 Counterparts. This Warrant may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.
12.6 Amendment and Waivers. This Warrant may be amended and provisions may be waived upon the written consent of the Holder and the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized representative and Holder has executed this Warrant as of the Issue Date indicated on the first page of this Warrant.
COMPANY:
ZYNGA GAME NETWORK INC.
By: | /s/ Reginald D. Davis | |
Name: | Reginald D. Davis | |
Title: | Secretary, General Counsel |
Address: | 444 De Haro Street, Suite 132 | |
San Francisco, CA 94107 | ||
Facsimile: | (415) 358-5665 | |
Email: | legal@zynga.com |
WARRANT HOLDER:
ALLEN AND COMPANY LLC
By: | /s/ David Wehner | |
Name: | David Wehner | |
Title: | Managing Director |
Address: | 711 Fifth Avenue | |
New York, NY 10022 | ||
Facsimile: | 212-339-2235 | |
Email: | pdiiorio@allenco.com |
EXHIBIT A
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
1. The undersigned hereby elects to purchase shares of the Class A Common Stock (the Shares) of Zynga Game Network Inc., a Delaware corporation, pursuant to the terms of the attached Warrant to Purchase Class A Common Stock with an issue date of July 31, 2009 (the Warrant), as follows:
(Initial applicable method:)
a. | The undersigned tenders herewith payment of the total purchase price of such Shares in full, pursuant to a check or wire transfer, in the amount of $ . |
b. | This exercise or conversion [is] [is not] contingent upon the closing of the Acquisition or other event specified in the Company Notice to Holder in accordance with Section 2.5(b)(i) or (ii) of the Warrant received by Holder. |
c. | The undersigned hereby elects to convert the Warrant into Shares by the net exercise election pursuant to Section 2.2 of the Warrant. This conversion is exercised with respect to [ ] [all of the] shares of Warrant Stock covered by the Warrant resulting in a net total of Shares being issued to the undersigned. |
2. Please issue a certificate or certificates representing said Shares in the name of the undersigned. The undersigned represents that it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws and hereby repeats the representations and warranties of the undersigned that are set forth in Section 5.1 of the attached Warrant.
(Name) |
(Address) |
(City, State, Zip Code) |
(Federal Tax Identification Number) |
(Signature of Holder and, if applicable, Title) |
Exhibit 10.19
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO A 180 DAY MARKET STAND-OFF RESTRICTION AS SET FORTH HEREIN. AS A RESULT OF SUCH RESTRICTION, THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF A REGISTERED PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER.
THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE COMPANYS BYLAWS AS IN EFFECT AS OF THE ISSUE DATE.
WARRANT TO PURCHASE CLASS A COMMON STOCK
Corporation: | Zynga Inc., a Delaware corporation (the Company) | |
Number of Shares: | 1,000,000 Shares | |
Class of Stock: | Class A Common Stock | |
Exercise Price: | $0.05 per share (the Exercise Price) | |
Issue Date: | June 16, 2011 (the Issue Date) | |
Vesting Start Date: | April 1, 2010 (the Vesting Start Date) | |
Expiration Date: | December 31, 2011 (the Expiration Date) |
This Warrant to Purchase Stock (this Warrant) certifies that, for good and valuable consideration, Kleiner Perkins Caufield & Byers, LLC (Holder) is entitled, as set forth in Section 2.1, to purchase from the Company until 5:00 p.m. Pacific time, on the Expiration Date, up
to the number of fully paid and nonassessable Shares equal to the Number of Shares of Warrant Stock (as defined below), at an exercise price per share equal to the Exercise Price all as adjusted pursuant to Section 3 of this Warrant and all subject to the provisions and upon the terms and conditions set forth in this Warrant.
1. DEFINITIONS. The following definitions shall apply for purposes of this Warrant:
1.1 Acquisition means (i) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), (ii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporations securities), of the Companys securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company (or the surviving or acquiring entity) or (iii) a sale of all or substantially all of the assets of the Company.
1.2 IPO means the effective date of a firm commitment underwritten public offering pursuant to an effective registration statement of the Company filed under the 1933 Act.
1.3 Number of Shares of Warrant Stock means 1,000,000 Shares.
1.4 Shares means shares of Warrant Stock issuable upon the exercise of the Warrant.
1.5 Unvested Shares means those Shares that have not vested pursuant to Section 2.2.
1.6 Vested Shares means those Shares that have vested pursuant to Section 2.2.
1.7 Warrant Stock means shares of the Companys Class A Common Stock.
2. EXERCISE.
2.1 Method of Exercise. Subject to the terms and conditions of this Warrant, the Holder may exercise this Warrant in whole or in part, at any time or from time to time, with respect to any Shares (whether vested or unvested). In no event shall this Warrant be exercisable following the Expiration Date. This Warrant may be exercised by delivering a duly executed Notice of Exercise in substantially the form attached as Exhibit A to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 2.3, Holder shall also deliver to the Company a check for the aggregate Exercise Price for the Shares being purchased.
2.2 Vesting. So long as an individual designated by the Holder and acceptable to the Company in its sole discretion, initially Mr. William Bing Gordon (the Service
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Provider), continues to serve as the Acting Chief Creative Officer of the Company or otherwise continues to provide services to the Company other than in his role as a member of the Companys Board of Directors (as reasonably determined by the other members of the Companys Board of Directors) (such services, together with his role as Acting Chief Creative Officer, Services), the Shares will become Vested Shares at the rate of 12.5% of the Shares on each three-month anniversary of the Vesting Start Date, with all Shares becoming vested on the two-year anniversary of the Vesting Start Date. If application of the vesting percentage set forth above causes a fractional Share to vest, such Share shall be rounded down to the nearest whole Share for each three-month period except for the last three-month period of vesting in which it shall be rounded up. In no event shall any additional Shares vest following the date the Service Provider no longer provides Services to the Company and in no event shall any partial vesting credit be given for any fraction of a three-month period that the Service Provider provides Services to the Company. For the avoidance of doubt, if the Warrant were exercised on the Issue Date, 500,000 of the Shares would be Vested Shares and 500,000 Shares would remain unvested.
2.3 Net Exercise Election. Subject to the terms and conditions of this Warrant, the Holder may elect to convert all or a portion of this Warrant representing Shares, without the payment by the Holder of any additional consideration, at any time or from time to time, on any business day before the Expiration Date, by the surrender of this Warrant or such portion of this Warrant to the Company, with the net exercise election selected in the Notice of Exercise attached hereto as Exhibit A duly executed by the Holder, into up to the number of Shares that is obtained under the following formula:
X = Y (A-B)
A
Where: | X | = | the number of Shares to be issued to the Holder pursuant to this Section 2.2. | |||
Y | = | the number of Shares as to which this Warrant is then being net exercised. | ||||
A | = | the fair market value of one Share. | ||||
B | = | the Exercise Price. |
For purposes of the above calculation, if the Companys Class A Common Stock is traded in a public market, the fair market value of one Share shall be the closing price of a Share reported for the business day immediately before the Holder delivers its Notice of Exercise to the Company (or in the instance where this Warrant is exercised immediately prior to the IPO, the price to public per share specified in the final prospectus relating to such offering). In the instance where this Warrant is exercised immediately prior to an Acquisition, the fair market value of one Share shall be the fair market value of the consideration paid in such Acquisition by the acquirer for each share of the Companys Class A Common Stock. If the Companys Class A Common Stock is not traded in a public market, and except as provided above, the fair market value of one Share shall be determined by the Companys Board of Directors in good faith. The Company will promptly respond in writing to an inquiry by the Holder as to the then current fair market value of one Share.
2.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises this Warrant, the Company shall deliver to Holder certificates for the Shares acquired
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and, if this Warrant has not been fully exercised or converted and has not expired, this Warrant shall automatically be reduced by the number of Shares issued and remain exercisable for such remaining Shares not so acquired, and all other terms of the Warrant shall otherwise remain in full force and effect as so adjusted. Upon final exercise of this Warrant for any such remaining number of Shares, this Warrant shall be surrendered by the Holder to the Company for cancellation.
2.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
2.6 Repurchase of Unvested Shares.
(a) Repurchase Right. If the Service Provider ceases to provide Services for any reason, including, without limitation, termination of Services by the Company, any Unvested Shares held by Holder may be repurchased by the Company within 180 days of such occurrence. If the right of repurchase is exercised, the Company shall pay the Holder an amount in cash equal to the Exercise Price of each Unvested Share being repurchased and the Holder shall cooperate with Company in connection with such repurchase.
(b) Termination of Rights as Stockholder. If the right of repurchase is exercised in accordance with this Section 2.6 and the Company makes available the consideration for the Unvested Shares being repurchased, then the person from whom the Unvested Shares are repurchased shall no longer have any rights as a holder of the Unvested Shares (other than the right to receive payment of such consideration). Such Unvested Shares shall be deemed to have been repurchased pursuant to this Section 2.6, whether or not the certificate(s) for such Unvested Shares have been delivered to the Company or the consideration for such Unvested Shares has been accepted.
3. ADJUSTMENTS TO THE SHARES.
3.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the outstanding shares of the Warrant Stock payable in shares of the Warrant Stock or other securities of the Company or subdivides or combines the outstanding shares of the Warrant Stock subsequent to the Issue Date, then upon exercise or conversion of this Warrant, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend, subdivision or combination occurred.
3.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant (other than pursuant to an Acquisition or a stock dividend, split, etc. described in Section 3.1 above) that occurs subsequent to the Issue Date, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if
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this Warrant had been exercised immediately before such reclassification, exchange, substitution or other event. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3 including, without limitation, appropriate adjustments to the Exercise Price and to the number of securities or property issuable upon exercise or conversion of the new Warrant.
3.3 Adjustments of Exercise Price. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, subsequent to the Issue Date, the Exercise Price shall be proportionately increased. If the outstanding Shares are divided, by reclassification or otherwise, into a greater number of shares, the Exercise Price shall be proportionately decreased.
3.4 Adjustment is Cumulative. The provisions of this Section 3 shall similarly apply to successive, stock dividends, stock splits or combinations, reclassifications, exchanges, substitutions, or other events.
3.5 No Impairment. The Company shall not through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, intentionally avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Section 3 and in taking all such action as may be necessary or appropriate to protect Holders rights under this Section against such impairment.
3.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder an amount by check computed by multiplying the fractional interest by the fair market value of a full Share.
3.7 Certificate as to Adjustments. Upon each adjustment of the Exercise Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Exercise Price in effect upon the date thereof, and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof, and the series of adjustments leading to such Exercise Price and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof.
4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1 Issuance of Shares. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein and under applicable federal and state securities laws.
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4.2 Reservation of Shares. For so long as this Warrant remains outstanding, the Company shall at all times keep reserved from its authorized but unissued shares of capital stock the full number of Shares.
5. REPRESENTATIONS OF HOLDER; TRANSFER.
5.1 Representations. Holder hereby represents and warrants to the Company as follows. Holder is a sophisticated investor having such knowledge and experience in business and investment matters that Holder is capable of protecting Holders own interests in connection with the acquisition, exercise or disposition of this Warrant. Holder is aware that this Warrant and the Shares are being, or will be, issued to Holder in reliance upon Holders representation in this Section 5 and that such securities are restricted securities that cannot be publicly sold except in certain prescribed situations. Holder is aware of the provisions of Rule 144 promulgated under the Securities Act of 1933, as amended (the 1933 Act) and of the conditions under which sales may be made thereunder. Holder has received such information about the Company as Holder deems reasonable, has had the opportunity to ask questions and receive answers from the Company with respect to its business, assets, prospects and financial condition and has verified any answers Holder has received from the Company with independent third parties to the extent Holder deems necessary. The Holder of this Warrant, by acceptance hereof, acknowledges this Warrant and the Shares to be issued upon exercise hereof or conversion thereof are being acquired solely for the Holders own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof or conversion thereof except under circumstances that will not result in a violation of the 1933 Act or any state securities laws.
5.2 Legends. The Shares shall be imprinted with legends in substantially the following form, as well as any other legends required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code or any other state securities laws or by any agreement under which the Company is obligated:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN
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AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE COMPANYS BYLAWS AS IN EFFECT AS OF THE ISSUE DATE.
5.3 Transfer Restrictions. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with the restrictions contained herein, contained in the Companys Certificate of Incorporation and Bylaws, as may be amended from time to time, and with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if (i) the transfer is to the stockholders, members or partners of Holder by way of dividend or distribution to all of the same or (ii) there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holders notice of proposed sale and/or transfer. Notwithstanding anything herein to the contrary, this Warrant and the Unvested Shares are not transferable without the prior written consent of the Company. Notwithstanding the foregoing, the Holder may sell, transfer or assign this Warrant and Shares issuable upon exercise of this Warrant, including Unvested Shares, without the Companys consent to KPCB Holdings, Inc., as nominee, to be held for the benefit of Kleiner Perkins Caufield & Byers XIII, LLC, and certain affiliated individuals and entities; provided, that any purchaser, transferee or assignee of the Warrant and Shares issuable upon exercise of this Warrant shall comply with and agree in writing both to the Holder and the Company to be bound by all of the restrictions contained herein, contained in the Companys Certificate of Incorporation and Bylaws, as may be amended from time to time, and with applicable federal and state securities laws and any Unvested Shares shall be subject to the vesting and other restrictions contained herein.
5.4 Transfer Procedure. Subject to the restrictions on transfer described in Section 5 of this Warrant and any restrictions set forth in the Companys bylaws, certificate of incorporation or other agreement to which this Warrant or the Shares is subject, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant by giving the Company a written notice of the portion of the Warrant being transferred, such notice setting forth the name, address and taxpayer identification number of the transferee, and surrendering this Warrant to the Company for reissuance to the transferee(s).
5.5 Market Standoff. Holder hereby agrees that it will not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Shares for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided,
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however, that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the sixteen-day period beginning on the last day of the restricted period and if the Companys securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 5.5 shall continue to apply until the expiration of the eighteen-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event shall the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement and the restrictions imposed by this Section 5.5 shall not apply unless all stockholders then holding more than one percent (1%) of the total equity of the Company on a fully diluted basis and all of the Companys then-current executive officers and directors enter into similar agreements. For purposes of this Section 5.5, the term Company shall include any wholly owned subsidiary of the Company into which the Company merges or consolidates. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section and to impose stop transfer instructions with respect to the Shares until the end of such period. Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.
6. GENERAL PROVISIONS.
6.1 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Warrant will be in writing and will be effective and deemed to provide such party sufficient notice under this Warrant on the earliest of the following: (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. The Company agrees to issue any applicable IRS Form 1099 to Holder and acknowledges that an election may be made under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to Unvested Shares.
All notices for delivery outside the United States will be sent by facsimile or by express courier. All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number set forth below the signature lines to this Warrant, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked Attention: President.
6.2 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys fees.
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6.3 Governing Law. This Warrant will be governed by and construed under the internal laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California, without reference to principles of conflict of laws or choice of laws.
6.4 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Warrant.
6.5 Counterparts. This Warrant may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.
6.6 Amendment and Waivers. This Warrant may be amended and provisions may be waived upon the written consent of the Holder and the Company.
6.7 Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 2.3 above is greater than the Warrant Price in effect on such date, this Warrant shall automatically be deemed on and as of such date to be converted pursuant to Section 2.3 above as to all Shares (or such other securities) for which it shall not previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other securities) issued upon such conversion to Holder
6.8 Term of Agreement. For the avoidance of doubt, the provisions of the foregoing agreement applicable to Unvested Shares shall continue to apply until April 1, 2012. Thereafter, the transfer restrictions contained in the Companys Certificate of Incorporation and Bylaws, as may be amended from time to time, and the market standoff requested by the Company or an underwriter of securities of the Company, as described in Section 5.5, above, shall continue to apply to the Shares.
6.9 Independent Contractor. Service Provider is an independent contractor and is not an agent or employee of, and has no authority to bind, the Company by contract or otherwise.
[Remainder of Page Intentionally Left Blank]
9
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized representative and Holder has executed this Warrant as of the Issue Date indicated on the first page of this Warrant.
COMPANY:
ZYNGA INC.
By: |
/s/ David Wehner | |
Name: |
David Wehner | |
Title: |
Chief Financial Officer |
Address: |
||
Facsimile: |
WARRANT HOLDER:
KLEINER PERKINS CAUFIELD & BYERS, LLC
By: |
/s/ Ted Schlein | |
Name: |
Ted Schlein | |
Title: |
SR Vice President |
Address: |
2750 Sand Hill Road Menlo Park, CA 94025 | |
Facsimile: |
(650) 233-0300 |
EXHIBIT A
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
1. The undersigned hereby elects to purchase 1,000,000 shares of the Class A Common Stock (the Shares) of Zynga Inc., a Delaware corporation, pursuant to the terms of the attached Warrant to Purchase Class A Common Stock with an issue date of June 16, 2011 (the Warrant), as follows:
(Initial applicable method:)
X a. | The undersigned tenders herewith payment of the total purchase price of such Shares in full, pursuant to a check or wire transfer, in the amount of $50,000. |
b. | The undersigned hereby elects to convert the Warrant into Shares by the net exercise election pursuant to Section 2.3 of the Warrant. This conversion is exercised with respect to [ ] [all of the] shares of Warrant Stock covered by the Warrant resulting in a net total of Shares being issued to the undersigned. |
2. Please issue a certificate or certificates representing said Shares in the name of the undersigned. The undersigned represents that it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws and hereby repeats the representations and warranties of the undersigned that are set forth in Section 5.1 of the attached Warrant.
Kleiner Perkins Caufield & Byers, LLC |
(Name) |
2750 Sand Hill Road |
(Address) |
Menlo Park, CA 94025 |
(City, State, Zip Code) |
|
(Federal Tax Identification Number) |
|
(Signature of Holder and, if applicable, Title) |
Exhibit 21.1
SUBSIDIARIES OF ZYNGA INC.
Zynga with Friends LLC (US) (Delaware)
Zynga Game Network U.K. LTD (United Kingdom)
DNA Games LLC (Delaware)
Presidio Media Canada Inc. (Canada)
XPD Media Inc. (Cayman)
XPD Information Technology (Beijing) Co., Ltd (China)
Zynga Game Network KK (Japan)
Zynga Game International Limited (Jersey)
Zynga Game Ireland Limited (Ireland)
Zynga Luxembourg S.à r.l. (Luxembourg)
Zynga Game Holdings Limited (Ireland)
Zynga Japan K.K. (Japan)
Zynga Game Network India Private Limited (India)
Zynga Germany GmbH (Germany)
Wonderland Software Limited (United Kingdom)
Zynga Game Canada Ltd. (Canada)
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