EXHIBIT 10.11
February 10, 2000
Xx. Xxxxxx Xxxx
SiteSmith, Inc., A California Corporation
0000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
Re: Lease
Dear Xxxxxx:
Per Paragraph 3 of the Lease, this letter will serve to define the term of the
Lease starting February 1, 2000 and ending approximately sixty (60) months
thereafter on December 31, 2005.
The following is additional information regarding your lease.
BASIC LEASE CONFIRMATION
COMMENCEMENT DATE: February 1, 2000
EXPIRATION DATE: December 31, 2005
RENT SHALL BE AS FOLLOWS:
BASE RENT (3283/3281) OPERATING EXPENSES TOTAL RENT
--------------------- ------------------- ----------
(1/1/00-12/31/00)
2/1/00 - 12/31/00 $55,600.00 per month $5,843.00 per month $61,443.00 per month
1/1/01 - 12/31/01 $65,120.00 per month *pls. see below
1/1/02 - 12/31/02 $67,725.00 per month *pls. see below
1/1/03 - 12/31/03 $70,434.00 per month *pls. see below
1/1/04 - 12/31/04 $73,251.00 per month *pls. see below
1/1/05 - 12/31/05 $76,181.00 per month *pls. see below
* IN ADDITION TO THE BASE RENT ABOVE, TENANT SHALL ALSO PAY TENANT'S
PROPORTIONATE SHARE ESTIMATE OPERATING EXPENSES AS SET FORTH IN PARAGRAPH 29 OF
THE LEASE AGREEMENT. OPERATING EXPENSES THROUGH DECEMBER 31, 2000 ARE ESTIMATED
TO BE $5,843.00 PER MONTH ($1,859.00 PER MONTH FOR 3283 XXXXX AND $3,984.00 PER
MONTH FOR 3281 XXXXX). OPERATING EXPENSES ARE ESTIMATED A YEAR IN ADVANCE AND
COLLECTED ON A MONTHLY BASIS. ANY ADJUSTMENTS NECESSARY (UP OR DOWN) WILL BE
MADE AT THE END OF THE OPERATING YEAR.
Please be informed that you will not be invoiced for rent. Please notify your
accounting department that rent is due and payable on or before the first of
each month. Please reference your Lease Id # (SITE---01) on all checks sent to
Xxxxxxx Properties. All checks should be made payable to XXXXXXX PROPERTIES and
mailed to the following address:
Xxxxxxx Properties
P.O. Box 45587 (Dept. 10001)
San Francisco, CA 94145-0587
It is truly a pleasure having you as a Tenant at the Project and we wish you
every success at your new location.
Should you have any questions or require any additional information, please feel
free to call me at (000) 000-0000.
Sincerely,
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Project Director
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FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "FIRST AMENDMENT") is made this 7th day of
January 2000 between Xxxxxxx Properties, L.P., a California limited partnership
(the "LANDLORD"), and SiteSmith, Inc., a California corporation, (the "TENANT").
WHEREAS, Landlord and Xxxxxx entered into a Lease dated September 15, 1999, (the
"LEASE"), for those certain premises located at 0000 Xxxxx Xxxx, Xxxxx Xxxxx,
Xxxxxxxxxx (the "PREMISES"), as more fully described in the Lease. Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Lease; and
WHEREAS, Landlord and Tenant desire to modify the Lease as provided herein.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereby mutually agree as follows:
1) PREMISES: Effective February 1, 2000, the Premises shall be expanded to
include the adjacent portion of the building located at 0000/0000 Xxxxx
Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. Said expansion area shall consist of the
existing premises of approximately 11,200 square feet and the expansion
premises of approximately 24,000 square feet. Total Premises shall be
approximately 35,200 square feet of area. The Premises are approximately as
shown outlined on the attached Exhibit A.
2) TENANT'S PROPORTIONATE SHARE OF BUILDING: 73.33%
3) EXTENSION OF TERM AND SCHEDULED TERM EXPIRATION: The term of this Lease
shall be extended by an additional period of fourteen (14) months. The
Scheduled Term Expiration shall be December 31, 2005.
4) RENT: Total Base Rent for the new expanded Premises shall be as follows:
February 1, 2000 through December 31, 2000 $55,600.00 per month
January 1, 2001 through December 31, 2001 $65,120.00 per month
January 1, 2002 through December 31, 2002 $67,725.00 per month
January 1, 2003 through December 31, 2003 $70,434.00 per month
January 1, 2004 through December 31, 2004 $73,251.00 per month
January 1, 2005 through December 31, 2005 $76,181.00 per month
5) TENANT IMPROVEMENTS: Xxxxxxxx agrees to contribute a one-time tenant
improvement allowance in the amount of One Hundred Fifty Thousand Dollars
($150,000.00). Terms and conditions relating to the construction of
improvements and the disbursement of the tenant improvement allowance shall
be as defined in the attached Improvement Agreement (Exhibit B).
6) SECURITY DEPOSIT: The existing cash security deposit in the sum of Fifty
Eight Thousand Eight Hundred Dollars ($58,800.00) shall be increased to a
total cash security deposit of One Hundred Forty Seven Thousand Six Hundred
Dollars ($147,600). In addition, Tenant shall deliver an irrevocable letter
of credit in the amount of Three Hundred Ten Thousand Eight Hundred Dollars
($310,800) (the "LOC AMOUNT"). Total security deposit, including the LOC
Amount, shall be Four Hundred Fifty Eight Thousand Four Hundred Dollars
($458,400).
7) LETTER OF CREDIT:
A. In addition to the aforementioned cash security deposit, Tenant shall,
upon execution of this Lease Amendment, deliver to Landlord and cause
to be in effect during the Lease Term an unconditional, irrevocable
letter of credit ("LOC") in the amount of Three Hundred Ten Thousand
Eight Hundred Dollars ($310,800), for an initial term extending 30
days beyond the expiration date of this Lease. The LOC shall be in a
form acceptable to Landlord and shall be issued by an LOC bank
selected by Tenant and acceptable to Landlord. The text of the LOC
shall expressly state that the LOC shall survive the termination of
this Lease. An LOC bank is a bank that accepts deposits, maintains
accounts and has a local office that will negotiate a letter of credit
and the deposits of which are insured by the FDIC.
Tenant shall pay all expenses, points, or fees incurred by Xxxxxx in
obtaining the LOC. The LOC shall not be mortgaged, assigned or
encumbered in any manner whatsoever by Tenant without the prior
written consent of Landlord. Tenant acknowledges that Xxxxxxxx has the
right to transfer or mortgage its interest in the Project, the
Building and in this Lease and Xxxxxx agrees that in the event of any
such transfer or mortgage, Landlord shall have the right to transfer
or assign the LOC and/or the LOC Security Deposit (as defined below)
to the transferee or mortgagee, and in the event of such transfer,
Tenant shall look solely to such transferee or mortgagee for the
return of the LOC and/or the LOC Security Deposit.
B. REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time,
replace any existing LOC with a new LOC if the new LOC (a) becomes
effective at least thirty (30) days before expiration of the LOC that
it replaces; (b) is in the required LOC amount; (c) is issued by an
LOC bank acceptable to Landlord; and (d) otherwise complies with the
requirements of this Paragraph 7 of this First Amendment.
C. LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold the
LOC as security for the performance of Tenant's obligations under this
Lease. If, after notice and failure to cure within any applicable
period provided in this Lease, Tenant defaults on any provision of
this Lease, Landlord may, without prejudice to any other remedy it
has, draw on that portion of the LOC necessary to (i) pay Rent or
other sum in default; (ii) pay or reimburse Landlord for any amount
that Landlord may spend or become obligated to spend in exercising
Landlord's rights under Paragraph 7 (Improvements, Alterations,
Repairs and Maintenance); and/or
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(iii) compensate Landlord for any expense, loss, or damage that
Landlord may suffer because of Tenant's default. If Tenant fails to
renew or replace the LOC at least thirty (30) days before its
expiration, Landlord may, without prejudice to any other remedy it
has, draw on the entire amount of the LOC.
D. LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
Landlord but not applied by Landlord shall be held by Landlord as a
security deposit (the "LOC SECURITY DEPOSIT") in accordance with
Paragraph 5 of the Lease.
E. RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If Landlord
draws on any portion of the LOC and/or applies all or any portion of
such draw, Tenant shall, within five (5) business days after demand by
Landlord, either (i) deposit cash with Landlord in an amount that,
when added to the amount remaining under the LOC and the amount of any
LOC Security Deposit, shall equal the LOC Amount required under
Paragraph 5 of the this First Amendment; or (ii) reinstate the LOC to
the full LOC Amount.
F. REDUCTION OF LETTER OF CREDIT.
The LOC Amount may be reduced if each of the following conditions is
satisfied to Landlord's satisfaction: (i) Tenant is not and has not
been in material default under the terms of this Lease beyond any
applicable cure period, (ii) Tenant provides to Landlord ten (10) days
prior written notice of any such reduction; (iii) the LOC provides
that the issuing bank shall notify Landlord in writing at least five
(5) business days prior to any such reduction, and (iv) each of the
conditions precedent described in clauses A. through E., inclusive, is
satisfied to Landlord's satisfaction.
At any time after December 31, 2002, the LOC Amount may be reduced to
an amount equal to One Hundred Fifty Five Thousand Four Hundred
Dollars ($155,400) if the following conditions precedent are satisfied
to Landlord's satisfaction: (i) Tenant has a tangible net worth in
excess of Fifteen Million Dollars ($15,000,000), which amount shall be
determined by Landlord to its satisfaction prior to any reduction in
the LOC Amount, and in connection with such determination, "Tangible
net worth" shall be determined by Landlord in its sole discretion and
shall mean assets less intangible assets and total liabilities, with
intangible assets including nonmaterial benefits such as goodwill,
patents, copyrights, and trademarks. Tenant shall deliver to Landlord
for review Xxxxxx's financial statements prepared in accordance with
generally accepted accounting principles and audited by a nationally
recognized public accounting firm acceptable to Landlord, and any
other financial information requested by Landlord ("TENANT'S FINANCIAL
INFORMATION"); and (ii) Tenant's Financial Information reflects two
(2) consecutive calendar quarters of profitability, as determined by
Landlord, during the time period immediately preceding Tenant's
request for reduction in the LOC Amount.
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8) CONTINGENCY: This First Amendment, in its entirety, shall be contingent
upon the full termination of the existing Lease Agreement between Xxxxxxx
Properties, L.P. and DPSS Lasers, Inc. for the premises located at 0000
Xxxxx Xxxx., Xxxxx Xxxxx, XX.
Except as expressly modified above, all terms and conditions of the Lease
remain in full force and effect and are hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have entered into this First
Amendment as of the date first written above.
LANDLORD: TENANT:
XXXXXXX PROPERTIES, L.P., SITESMITH, INC.
A CALIFORNIA LIMITED PARTNERSHIP A CALIFORNIA CORPORATION
By: Xxxxxxx Properties, Inc.
a Maryland corporation
its General Partner
By: /S/ XXXXXX X. XXXXXXX, XX. By: /S/ XXXXXX XXXX
------------------------------------------ ---------------------------
Xxxxxx X. Xxxxxxx, Xx. Xxxxxx Xxxx
Its: PRESIDENT, SILICON VALLEY Its: CHIEF EXECUTIVE OFFICER
------------------------------------------ --------------------------
Date:1/31/00 Date: 1/14/00
------------------------------------------ --------------------------
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EXHIBIT "A"
[DIAGRAM OF PROPERTY]
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EXHIBIT B
LEASE IMPROVEMENT AGREEMENT
SITESMITH, INC.
This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT") sets forth
the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease (the
"LEASE") to which this Improvement Agreement is attached and forms a part.
1. PLANS AND SPECIFICATIONS.
1.1 Tenant shall retain the services of API DESIGN (the "SPACE
PLANNER") to prepare a detailed space plan (the "SPACE PLAN") mutually
satisfactory to Landlord and Tenant for the construction of the Tenant
Improvements in the Premises. Tenant shall submit the Space Plan and any
proposed revisions thereto to Landlord for Landlord's approval.
1.2 Based on the approved Space Plan, Tenant shall cause the
Space Planner to prepare detailed plans, specifications and working drawings
mutually satisfactory to Landlord and Tenant for the construction of the Tenant
Improvements (the "PLANS"). Landlord and Tenant shall diligently pursue the
preparation of the Plans. Tenant shall submit the Plans and any proposed
revisions thereto, including the estimated cost of the Tenant Improvements. All
necessary revisions to the Space Plan and the Plans shall be made within two (2)
business days after Landlord's response thereto. This procedure shall be
repeated until Landlord ultimately approves the Space Plan and Plans.
1.3 Tenant shall be responsible for ensuring that the Plans are
compatible with the design, construction and equipment of the Building, comply
with applicable Regulations and the Standards (defined below), and contain all
such information as may be required to show locations, types and requirements
for all heat loads, people loads, floor loads, power and plumbing, regular and
special HVAC needs, telephone communications, telephone and electrical outlets,
lighting, light fixtures and related power, and electrical and telephone
switches, B.T.U. calculations, electrical requirements and special receptacle
requirements. The Plans shall also include mechanical, electrical, plumbing,
structural and engineering drawings mutually satisfactory to Landlord and Tenant
which shall be prepared by API DESIGN. Notwithstanding Landlord's preparation,
review and approval of the Space Plan and the Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any errors or
omissions contained in the Space Plan or Plans or any revisions thereto, or to
verify dimensions or conditions, or for the quality, design or compliance with
applicable Regulations of any improvements described therein or constructed in
accordance therewith. Tenant hereby waives all claims against Landlord relating
to, or arising out of the design or construction of, the Tenant Improvements.
-6-
1.4 Landlord's criteria for approvals shall be based on
reasonable criteria established from time to time by Landlord, but Landlord will
be deemed to have acted reasonably if Landlord's disapproval is predicated upon
(i) effect on the structural integrity of the Building, (ii) possible damage to
the Building's mechanical, electrical, plumbing and HVAC systems, (iii)
non-compliance with applicable laws, codes and regulations, (iv) incompatibility
with the base building plans, (v) failure to use materials required by Schedule
2 pertaining to Standards, and (vi) effect on the exterior of the Building or
any of the Building's common areas. Landlord shall not be deemed to have
approved the Space Plan, the Plans, or any proposed revisions thereto, unless
approved by Landlord in writing. Landlord shall approve or disapprove any Space
Plan, Plans or proposed revisions thereto submitted to Landlord for Landlord's
approval within three (3) business days after Landlord's receipt thereof. If
Landlord has not approved in writing any Space Plan, or proposed revisions
thereto submitted to Landlord within five (5) business days after Xxxxxxxx's
receipt thereof, Landlord shall be deemed to have disapproved the same.
2. TENANT IMPROVEMENT COST.
2.1 The cost of the Tenant Improvements shall be paid for by
Tenant, including, without limitation, the cost of: Standards; space plans and
studies; architectural and engineering fees; permits, approvals and other
governmental fees; labor, material, equipment and supplies; construction fees
and other amounts payable to contractors or subcontractors; taxes; off-site
improvements; remediation and preparation of the Premises for construction of
the Tenant Improvements; taxes; filing and recording fees; premiums for
insurance and bonds; attorneys' fees; financing costs; and all other costs
expended or to be expended in the construction of the Tenant Improvements.
2.2 Provided Tenant is not in default under the Lease, including
this Improvement Agreement, Landlord shall contribute a one-time tenant
improvement allowance IN THE AMOUNT OF ONE HUNDRED FIFTY THOUSAND DOLLARS
($150,000) ("TENANT IMPROVEMENT ALLOWANCE") toward the cost of the initial
Tenant Improvements. Provided Tenant is not then in default under the Lease,
including this Improvement Agreement, Landlord shall disburse the Tenant
Improvement Allowance to Tenant upon THE RECEIPT OF APPROPRIATE BILLS AND
SUPPORTING DOCUMENTATION FOR THE WORK ORDERED BY TENANT OR ITS CONTRACTOR OR ANY
SUBCONTRACTOR.
2.3 Tenant shall be responsible for obtaining all governmental
approvals to the full extent necessary for the construction and installation of
the Tenant Improvements and for Tenant's occupancy of the Premises, in
compliance with all applicable Regulations. Tenant shall employ DSP CONSTRUCTION
as the contractor or such other contractor or contractors as shall be approved
by Landlord in writing to construct the Tenant Improvements in conformance with
the approved Space Plan and Plans. The construction contracts between Tenant and
the approved contractor shall be subject to Landlord's prior reasonable approval
and shall provide for progress payments. The contractor(s) shall be duly
licensed and Landlord's approval of the contractor(s) shall be conditioned,
among other things, upon the contractor's reputation for quality of work,
timeliness of performance, integrity and Xxxxxxxx's prior experience with such
contractor.
2.4 Landlord shall not be liable for any direct or indirect
damages suffered by Xxxxxx as a result of delays in construction beyond
Landlord's reasonable control, including, but
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not limited to, delays due to strikes or unavailability of materials or labor,
or delays caused by Tenant (including delays by the Space Planner, the
contractor or anyone else performing services on behalf of Landlord or Tenant).
2.5 All work to be performed on the Premises by Tenant or
Tenant's contractor or agents shall be subject to the following conditions:
(a) Such work shall proceed upon Xxxxxxxx's written approval
of Xxxxxx's contractor, and public liability and property damage insurance
carried by Xxxxxx's contractor.
(b) All work shall be done in conformity with a valid
building permit when required, a copy of which shall be furnished to Landlord
before such work is commenced, and in any case, all such work shall be performed
in a good and workmanlike and first-class manner, and in accordance with all
applicable Regulations and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the Premises
pursuant to the Lease. Notwithstanding any failure by Xxxxxxxx to object to any
such work, Landlord shall have no responsibility for Tenant's failure to comply
with all applicable Regulations. Tenant shall be responsible for ensuring that
construction and installation of the Tenant Improvements will not affect the
structural integrity of the Building.
(c) If required by Landlord or any lender of Landlord, all
work by Xxxxxx or Xxxxxx's contractor shall be done with union labor in
accordance with all union labor agreements applicable to the trades being
employed.
(d) Landlord or Xxxxxxxx's agents shall have the right to
inspect the construction of the Tenant Improvements by Tenant during the
progress thereof. If Landlord shall give notice of faulty construction or any
other deviation from the approved Space Plan or Plans, Tenant shall cause its
contractor to make corrections promptly. However, neither the privilege herein
granted to Landlord to make such inspections, nor the making of such inspections
by Landlord, shall operate as a waiver of any right of Landlord to require good
and workmanlike construction and improvements erected in accordance with the
approved Space Plan or Plans.
(e) Tenant's construction of the Tenant Improvements shall
comply with the following: (i) the Tenant Improvements shall be constructed in
strict accordance with the approved Space Plan or Plans; (ii) Tenant's and its
contractor shall submit schedules of all work relating to the Tenant
Improvements to Landlord for Landlord's approval within two (2) business days
following the selection of the contractor and the approval of the Plans.
Landlord shall within five (5) business days after receipt thereof inform Tenant
of any changes which are necessary and Xxxxxx's contractor shall adhere to such
corrected schedule; and (iii) Tenant shall abide by all rules made by Landlord
with respect to the use of freight, loading dock, and service elevators, storage
of materials, coordination of work with the contractors of other tenants, and
any other matter in connection with this Improvement Agreement, including,
without limitation, the construction of the Tenant Improvements.
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(f) Tenant shall promptly reimburse Landlord upon demand for
any reasonable expense actually incurred by the Landlord by reason of faulty
work done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.
(g) Tenant hereby indemnifies and holds Landlord harmless
with respect to any and all costs, losses, damages, injuries and liabilities
relating in any way to any act or omission of Tenant or Tenant's contractor or
agents, or anyone directly or indirectly employed by any of them, in connection
with the Tenant Improvements and any breach of Tenant's obligations under this
Improvement Agreement, or in connection with Xxxxxx's non-payment of any amount
arising out of the Tenant Improvements. Such indemnity by Xxxxxx, as set forth
above, shall also apply with respect to any and all costs, losses, damages,
injuries, and liabilities related in any way to Landlord's performance or any
ministerial acts reasonably necessary (i) to permit Tenant to complete the
Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or
certificate of occupancy for the Premises.
(h) Xxxxxx's contractor and the subcontractors utilized by
Xxxxxx's contractor shall guarantee to Tenant and for the benefit of Landlord
that the portion of the Tenant Improvements for which it is responsible shall be
free from any defects in workmanship and materials for a period of not less than
one (1) year from the date of completion thereof. Each of Tenant's contractor
and the subcontractors utilized by Xxxxxx's contractor shall be responsible for
the replacement or repair, without additional charge, of all work done or
furnished in accordance with its contract that shall become defective within one
(1) year after the later to occur of (i) completion of the work performed by
such contractor of subcontractors and (ii) the Term Commencement Date. The
correction of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or replacement of
all or any part of the Tenant Improvements, and/or the Building and/or common
areas that may be damaged or disturbed thereby. All such warranties or
guarantees as to materials or workmanship of or with respect to the Tenant
Improvements shall be contained in the construction contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such rights of
direct enforcement.
3. INSURANCE REQUIREMENTS. All of Tenant's contractors shall carry
workers' compensation insurance covering all of their respective employees, and
shall also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in Exhibit D to the Lease.
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