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EXHIBIT 10.3
111 SUTTER STREET
SUBLEASE
(SHOPNOW.COM/FORT POINT PARTNERS)
THIS SUBLEASE is made and entered into as of April 6, 2000, to be
effective on the date on which this Sublease is fully executed and delivered by
the parties hereto and Landlord's written consent hereto is procured (the
"Effective Date"), by and between ShopNow.com, Inc., a Washington corporation
("ShopNow"), and Fort Point Partners, Inc., a California corporation
("Subtenant").
RECITALS
A. ShopNow entered into that certain Office Building Lease, dated
September 21, 1999 (the "Master Lease"), in which CEP Investors XII LLC
("Landlord") leased to ShopNow and ShopNow leased from Landlord certain premises
consisting approximately of 50,833 rentable square feet located on the 8th, 9th,
10th, and 11th floors of the building commonly known as 111 Sutter Street,
situated in the City of San Francisco, California, as more particularly
described in the Master Lease. A copy of the Master Lease is attached hereto as
Attachment 1. A complete copy of Tenant's Plans (as defined in the Master Lease)
is attached hereto as Attachment 2. All capitalized terms used herein, unless
otherwise provided herein, shall have the meanings ascribed to them in the
Master Lease.
B. ShopNow and Subtenant desire to enter into a sublease of a portion of
the Master Premises consisting approximately of 12,703 rentable square feet (the
"Premises") and consisting of the entire 9th floor portion of the Master
Premises, as shown on the floor plan attached hereto as Attachment 3, upon the
terms and conditions set forth herein.
AGREEMENTS
In consideration of the mutual promises and covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Premises. ShopNow leases to Subtenant and Subtenant leases from
ShopNow the Premises.
2. Term. The term of this Sublease shall commence as of the later (the
"Sublease Commencement Date") of the Effective Date or the Term Commencement
Date (as defined in the Master Lease), and expire upon the earlier of (i)
expiration or earlier termination of the Master Lease, or (ii) the last day of
the month that is fourteen (14) months after the Sublease Commencement Date.
ShopNow agrees to use reasonable efforts to request Landlord to cause the Term
Commencement Date to occur on or before May 1, 2000. In the event that the
Sublease Commencement Date has not occurred as to all portions of the Premises
on or before May 1, 2000, due to
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causes within ShopNow's reasonable control, Subtenant shall be entitled to a
reduction in Base Rent to $37.00 per annum per rentable square foot of the
Premises not timely delivered for each day that possession of any portion of the
Premises is not timely delivered. If the Sublease Commencement Date as to all
portions of the Premises has not occurred on or before July 1, 2000, each of
ShopNow and Subtenant may elect to terminate this Sublease (in which case
neither party shall have any further duties or liabilities hereunder) upon five
(5) days written notice to the other party unless the Sublease Commencement Date
occurs during such 5-day period. From and after the later of the Effective Date
or the Physical Possession Date (as defined in the Master Lease) until the
Sublease Commencement Date, subject to the terms hereof and of the Master Lease,
Subtenant and its consultants and contractors shall be permitted to enter the
Premises in order to install telephone networks, computer networks and the
Cabling (as defined below) in accordance with Tenant's Plans, provided that such
work does not interfere with the construction of the Tenant Improvements and the
Landlord Improvements.
3. Incorporation of Master Lease. Except for the Premises, rent, the
total percentage of Tenant's Proportionate Share, commencement and termination
dates, rent payment due date, security deposit, notice addresses and brokers,
this Sublease is made upon and shall be subject to all of the terms and
conditions set forth in the Master Lease, which terms and conditions are
incorporated herein by this reference, as if ShopNow were the landlord and
Subtenant were the tenant and the Premises hereunder were the "Leased Premises"
under the Master Lease; provided, however, that any other provisions of the
Master Lease which are inconsistent or contradictory with the provisions of this
Sublease, and the following provisions of the Master Lease, are not incorporated
herein: Sections 3.01, 3.03, 5.14, 5.16 (excepting the first, second, seventh
and eighth sentences thereof), 8.01, 9.02, 9.11, Exhibit A and Exhibit B
(excepting the first two sentences of Section 1 [excluding provisions relating
to approval by Tenant], first sentence of Section 4(a), Section 4(b) and Section
8 thereof) and Exhibit F (collectively, the "Excluded Obligations"). In case of
any default hereof by Subtenant, ShopNow shall have all rights against Subtenant
as would be available to Landlord against the tenant under the Master Lease if
such default were by the tenant thereunder. Subtenant acknowledges that it has
read and understands the Master Lease attached hereto as Attachment 1, which
ShopNow represents and warrants is a true and complete copy of the Master Lease.
Except as otherwise provided herein with respect to the Premises, rent, Tenant's
Proportionate Share, commencement and termination dates, rent payment due date,
security deposit, notice addresses, brokers and the Excluded Obligations,
Subtenant agrees to perform, observe, and be bound by all of the promises,
obligations, acknowledgments, terms, and conditions by, of, or applicable to
ShopNow (but solely to the extent applicable to the Premises) under the Master
Lease from and after the Sublease Commencement Date. ShopNow hereby grants to
Subtenant the right to receive all of the rights, services and benefits with
respect to the Premises which are to be provided by Landlord under the Master
Lease. Notwithstanding anything contained herein to the contrary, ShopNow does
not by this Sublease promise or agree to perform any obligation undertaken or
assumed by Landlord under the Master Lease. Subtenant agrees that Subtenant
shall look solely to Landlord to furnish all services and to perform all
obligations which Landlord has agreed
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to perform and observe under the Master Lease with respect to the Premises, and
ShopNow shall not be liable to Subtenant or deemed in default hereunder for
failure of Landlord to perform or observe the same. ShopNow will, however, use
ShopNow's good faith, reasonable efforts to obtain performance by Landlord for
Subtenant's benefit under the Master Lease. Such efforts shall include, without
limitation, upon Subtenant's written request to ShopNow therefor, if ShopNow
reasonably concurs with Subtenant regarding Landlord's nonperformance,
immediately notifying Landlord of its nonperformance under the Master Lease and
requesting Landlord to perform its obligations under the Master Lease. If
Landlord does not perform its obligations under the Master Lease, subject to
ShopNow's prior written consent and exercise of reasonable efforts to cause such
performance by Landlord, Subtenant shall be entitled to pursue, in the name of
ShopNow, all remedies against Landlord which are available to the tenant under
the Master Lease and ShopNow agrees to reasonably cooperate with Subtenant, at
the sole cost of Subtenant, in any such action.
4. Rent. Subtenant shall pay to ShopNow, without demand or offset
(except as provided herein) on or before the date which is five (5) days before
the applicable due date under the Master Lease the Gross Rent (including Base
Rent and Tenant's Proportionate Share of Increased Basic Operating Cost), and,
on or before the later of (i) five (5) days after ShopNow's or Landlord's
written demand therefor; or (ii) five (5) days before the date such sums are
due, any Additional Rent and all other amounts payable under the Master Lease
and attributable to the Premises; provided, however, the Base Rent payable
hereunder by Subtenant shall be $63,515 per month and Tenant's Proportionate
Share of Increased Basic Operating Cost for the Premises shall be four and 96/00
percent (4.96%) for the Premises.
5. Additional Charges. If ShopNow shall be charged for additional rent
or other sums arising during the term of this Sublease pursuant to the
provisions of the Master Lease, attributable to the Premises or Subtenant,
including without limitation provisions relating to extra services provided to
Subtenant at its request, for which ShopNow is responsible under the Master
Lease, Subtenant shall be liable for such additional rent or sums. Any rent or
other sums payable by Subtenant under this Section 5 shall be additional rent
and collectible as such.
6. Security Deposit. Subtenant has paid ShopNow the sum of Ninety-five
Thousand Dollars ($95,000), as security for the full and faithful performance of
the terms, covenants, and conditions of this Sublease on Subtenant's part to be
performed or observed, including without limitation payment of Gross Rent and
Additional Rent and all other amounts payable hereunder and under the Master
Lease in default or for any other sum which ShopNow may reasonably expend or be
required to expend by reason of Subtenant's default, including any damages or
deficiencies in reletting the Premises, in whole or in part, whether such
damages or deficiencies shall accrue before or after summary proceedings or
other re-entry by ShopNow. If ShopNow uses or applies all or any part of the
security deposit, Subtenant shall, on demand, pay to ShopNow a sum sufficient to
restore the security deposit to the full amount required by this Sublease. If
Subtenant shall fully and faithfully comply with all the terms, covenants, and
conditions of this Sublease on Subtenant's part to be performed or observed, the
security deposit,
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or any unapplied balance thereof, shall be returned to Subtenant within thirty
(30) days after the termination of the term of this Sublease and the removal of
Subtenant and surrender of possession of the Premises to ShopNow. ShopNow shall
have no obligation to segregate the security deposit from its general funds or
to pay interest in respect thereof. No part of the security deposit shall be
considered to be held in trust, or to be prepayment of any monies to be paid by
Subtenant under this Sublease.
7. Indemnity. Subtenant agrees to indemnify, defend and hold harmless
ShopNow from and against all liabilities, claims, causes of action, losses,
costs and expenses (including reasonable attorneys' fees and court costs)
arising during the term of this Sublease to the extent caused by the negligence,
willful misconduct, breach of this Sublease or breach of the Master Lease by
Subtenant, its employees, contractors, invitees, licensees or agents. Nothing
herein shall require Subtenant to protect ShopNow from and against any such
risks to the extent caused by the negligence or willful misconduct by ShopNow,
Landlord or their respective employees, contractors, invitees, licensees or
agents or ShopNow's violation of laws or breach of its obligations or
representations under this Sublease. ShopNow agrees to indemnify, defend and
hold harmless Subtenant from and against all liabilities, claims, causes of
action, losses, costs and expenses (including reasonable attorneys' fees and
court costs) arising during the term of this Sublease to the extent caused by
the negligence, willful misconduct, breach of this Sublease or breach of the
Master Lease by ShopNow, its employees, contractors, invitees, licensees or
agents. Nothing herein shall require ShopNow to protect Subtenant from and
against any such risks to the extent caused by the negligence or willful
misconduct by Subtenant, Landlord or their respective employees, contractors,
invitees, licensees or agents or Subtenant's violation of laws or breach of its
obligations or representations under this Sublease.
8. Insurance. All insurance required to be maintained by ShopNow
pursuant to the Master Lease shall be maintained by Subtenant (to the extent
applicable to the Premises) and shall name ShopNow, Landlord and others
designated in the Master Lease as additional insureds, in the same manner and
with the same coverage, notice requirements, and endorsements as set forth in
the Master Lease. Subject to Landlord's written agreement that the waiver set
forth in Section 7.05 of the Master Lease shall run in favor of ShopNow and
Subtenant and Landlord shall inform its insurer of such waiver in accordance
therewith such that Landlord's insurer shall not hold any right of subrogation,
Subtenant agrees that the waiver set forth in Section 7.05 of the Master Lease
shall run in favor of Landlord, and Subtenant shall inform its insurer of such
waiver in accordance therewith such that Subtenant's insurer shall not hold any
right of subrogation.
9. Acceptance of Premises; Alterations. Subtenant accepts the Premises
in the condition existing at the Sublease Commencement Date. Subtenant will not
demand that ShopNow make any improvement on the Premises or provide any
maintenance thereof. Subtenant may make alterations and improvements to the
Premises only in accordance with the provisions of the Master Lease.
Notwithstanding anything herein or in the Master Lease to the contrary,
Subtenant shall not be required to contribute, reimburse or otherwise pay for
any costs of initial construction of the
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Landlord Improvements, the Tenant Improvements or any portions thereof, pursuant
to Exhibit B to the Master Lease.
10. Default by Subtenant; Re-entry. If Subtenant fails to pay rent or
other sums due hereunder within three (3) days after written demand that the
same are due or if Subtenant violates, breaches, or fails to keep or perform any
covenant, agreement, term, or condition of this Sublease (other than payment of
rent and other sums), and does not remedy such default or violation within
twenty (20) days after notice in writing thereof given by ShopNow or Landlord to
Subtenant specifying the matter claimed to be in default, ShopNow, at ShopNow's
option, may pursue against Subtenant those remedies provided to Landlord in
Section 7.08 and other applicable provisions of the Master Lease.
11. Surrender of Premises. Subtenant shall promptly yield and deliver to
ShopNow possession of the Premises at the expiration or sooner termination of
the term of this Sublease. Any holding over by Subtenant after the expiration or
sooner termination of the term of this Sublease, with ShopNow's and Landlord's
written consent, shall be construed to be a tenancy from month to month, at the
rents and on all the terms and conditions set forth herein, to the extent not
inconsistent with a month-to-month tenancy.
12. Assignment. Subtenant shall not assign, mortgage, transfer, pledge
or otherwise encumber its interest in this Sublease, nor sublet the Premises or
permit the Premises to be occupied or used by any person other than Subtenant,
in whole or in part, without ShopNow's and Landlord's consent, which shall not
be unreasonably withheld, conditioned or delayed.
13. Notices. Any notice or communication that either party desires or is
required to give to the other party shall be in writing and either (i) served
personally, (ii) sent by reputable courier service providing proof of delivery;
or (iii) sent by return receipt requested, prepaid, first class registered or
certified mail, addressed to the other party at the address set forth below. Any
party may change its address by notifying the other party of the change of
address. Notice shall be deemed received upon delivery evidenced by proof of
delivery or return receipt.
ShopNow:
ShopNow.Com, Inc.
411 First Avenue South
Suite 200N
Seattle, WA 98104
Attn: General Counsel
Fax: (206) 652 3105
AND
Haggingroup.com
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489 Miller Avenue
Mill Valley, CA 94941
Attn: Controller
Fax: (415) 381 1164
Subtenant:
Fort Point Partners, Inc.
111 Sutter Street, Suite No. 2200
San Francisco, CA 94104
Attn: Kelly Green
Fax: (415) 395 4783
14. Successors or Assigns. Except as otherwise expressly provided in
this Sublease, all the terms, conditions, covenants, and agreements of this
Sublease shall extend to and be binding upon ShopNow and Subtenant and their
respective successors and assigns, and upon any person or persons coming into
ownership or possession of any interest in the Premises by operation of law or
otherwise.
15. Partial Invalidity. If any term, covenant, or condition of this
Sublease or the Master Lease, or the application thereof to any person or
circumstance is, to any extent, invalid or unenforceable, the remainder of this
Sublease and the Master Lease, or the application of such term, covenant, or
condition to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term,
covenant, or condition of this Sublease shall be valid and shall be enforced to
the fullest extent permitted by law.
16. Recordation. Neither ShopNow nor Subtenant shall record this
Sublease or a memorandum hereof.
17. Waiver. The waiver by either ShopNow or Subtenant of a breach of any
term or condition of this Sublease shall not be deemed to constitute the waiver
of any other breach of the same or any other term or condition hereof.
18. Entire Agreement. This Sublease and the Master Lease under which it
is entered set forth the entire agreement of ShopNow and Subtenant concerning
the lease of the Premises, and there are no other agreements or understandings,
oral or written, between ShopNow and Subtenant concerning the lease of the
Premises. Any subsequent modification or amendment of this Sublease shall be
binding upon ShopNow and Subtenant only if in writing and signed by both
parties.
19. Brokers. ShopNow has been represented in this transaction by
Colliers International ("ShopNow's Broker"), and Subtenant has been represented
in this transaction by Cushman & Wakefield ("Subtenant's Broker"). Upon full
execution of this Sublease by ShopNow and Subtenant, and Landlord's written
consent hereto, ShopNow shall pay to ShopNow's Broker and Subtenant's Broker a
fee for brokerage services rendered by them in this transaction provided for in
separate written
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agreements between ShopNow and ShopNow's Broker. Each party represents and
warrants to the other that ShopNow's Broker and Subtenant's Broker are the only
agents, brokers, finders or other similar parties with whom such party has had
any dealings in connection with the negotiation of this Sublease and the
consummation of the transaction contemplated hereby. Each party hereby agrees to
indemnify, defend and hold the other party free and harmless from and against
liability for compensation or charges which may be claimed by any agent, broker,
finder or other similar party by reason of any dealings with or actions of such
indemnifying party in connection with the negotiation of this Sublease and the
consummation of this transaction, including without limitation any costs,
expenses and attorneys' fees incurred with respect thereto. The parties'
obligations under this Section shall survive the expiration or earlier
termination of this Sublease.
20. Applicable Law. This Sublease shall be governed by and construed in
accordance with the laws of the State of California.
21. Time. Time is of the essence hereof.
22. Approval of Landlord. Notwithstanding anything contained herein to
the contrary, this Sublease shall not be effective until and unless Landlord
consents to this Sublease by signing below. In the event that Landlord's consent
is not obtained on or before the date that is thirty (30) days after the
execution and delivery hereof by ShopNow and Subtenant, each of ShopNow and
Subtenant may elect to terminate this Sublease (in which case neither party
shall have any further duties or liabilities hereunder) upon five (5) days
written notice to the other party unless Landlord's consent is obtained during
such 5-day period.
23. Signage. Subject to Section 4.4 and other applicable provisions of
the Master Lease, ShopNow agrees to use reasonable efforts to cause Landlord to
provide identification of Subtenant's name and suite numerals on a building
directory in the Building lobby, to reasonably consent to Subtenant's proposed
signage, and to assist Subtenant to receive Landlord's consent to the
installation and maintenance of signage identifying Subtenant at each entrance
to the Premises, at Subtenant's sole cost.
24. Reimbursement of Cabling Costs. Commencing on the first day of the
tenth (10th) full month of the term of this Sublease, Subtenant shall be
entitled to deduct from Base Rent fifty percent (50%) of the costs incurred by
Subtenant to install data, voice, telephone and other communications cabling in
the Premises ("Cabling"); provided, however, the total amount to be so deducted
from Base Rent shall not exceed the lesser of the amount of the final bid
referenced below or $15,000 (the "Total Cost"), and the amount to be so deducted
from Base Rent during any month shall not exceed $5,000. If this Sublease
terminates for any reason whatsoever prior to the time Subtenant has received a
full reimbursement of the Total Cost by way of deductions from Base Rent,
Subtenant shall have no further right to receive reimbursement from ShopNow for
the Cabling. Within five (5) business days after receipt of each of Subtenant's
plans for the Cabling and/or the final bid for the Cabling, ShopNow shall
provide its approval (not to be unreasonably withheld, conditioned or delayed)
or specify
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the reasons for its disapproval. If ShopNow fails to timely provide its approval
or disapproval, ShopNow shall be deemed to have provided its approval. Subtenant
shall not be required or entitled to remove the Cabling upon expiration or
earlier termination of this Sublease.
25. Preservation of Master Lease. ShopNow agrees not to make any
amendment or modification to the Master Lease (including, without limitation,
Exhibit B (Initial Improvement of the Leased Premises) thereto and Tenant's
Plans attached hereto as Attachment 2) which would materially increase
Subtenant's obligations hereunder or decrease Subtenant's rights hereunder,
without Subtenant's prior written consent. ShopNow represents and warrants that,
to the best of its knowledge, neither party to the Master Lease is currently in
default of its obligations thereunder and no event has occurred that, with the
giving of notice or the passage of time, or both, will constitute an event of
default thereunder.
26. Authority. ShopNow and Subtenant represent and warrant to the other
party that (i) they are corporations, duly formed, validly existing and in good
standing under the laws of the State of Washington, and the State of California,
respectively, (ii) they have the legal power, right and authority to enter into
this Sublease, (iii) the individuals executing this Sublease and the instruments
referenced herein on behalf of such party have the legal power, right and actual
authority to bind that party to the terms and conditions hereof.
27. Limitation of Liability. No present or future member, partner,
advisor, trustee, director, officer, employee, beneficiary, shareholder,
participant or agent of or in ShopNow or Subtenant shall have any personal
liability, directly or indirectly, under or in connection with this Sublease and
each of Subtenant and ShopNow shall look solely to the other party's assets for
the payment of any claim or for any performance.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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EXECUTED as of the day and year first above written.
SHOPNOW.COM, INC.,
a Washington corporation
By: /s/ ALAN KOSLON
-----------------------------------
Name: Alan Koslon
---------------------------------
Title: CFO
--------------------------------
Date: , 2000
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FORT POINT PARTNERS, INC.,
a California corporation
By: /s/ JAMES T. ROCHE
-----------------------------------
Name: James T. Roche
---------------------------------
Title: Co-CEO, Co-President
--------------------------------
Date: April 10 , 2000
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Attachment 1: Copy of Master Lease
Attachment 2: Copy of Tenant's Plans
Attachment 3: Copy of Premises Floor Plan
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LANDLORD'S CONSENT
The undersigned, Landlord under the Master Lease, has read and approved
the foregoing Sublease and hereby consents to the subleasing of the Premises, as
described in the foregoing Sublease, on the terms and conditions set forth in
the foregoing Sublease. Landlord hereby covenants that, during the term of the
Sublease, all notices to be issued by Landlord under or in connection with the
Master Lease shall be sent to ShopNow at the address below, with a simultaneous
copy to Subtenant at the Premises. Landlord agrees that the waiver set forth in
Section 7.05 of the Master Lease shall run in favor of ShopNow and Subtenant and
Landlord shall inform its insurer of such waiver in accordance therewith such
that Landlord's insurer shall not hold any right of subrogation. Landlord
further agrees that if the Master Lease is terminated, surrendered or cancelled
(unless as a result of an act or omission that is required to be performed or
refrained from by Subtenant under the Sublease or the Master Lease), Landlord
hereby elects to continue the Sublease in accordance with Section 9.08 of the
Master Lease, and Subtenant agrees to attorn to Landlord as the sublandlord
under the Sublease and the Sublease shall continue in full force and effect upon
the same terms and conditions; provided, however, ShopNow shall incur no
additional obligation to Landlord or Subtenant resulting from such election of
Landlord or continuation of the Sublease.
ShopNow.Com, Inc.
411 First Avenue South
Suite 200N
Seattle, WA 98104
Attn: General Counsel
Fax: (206) 652 3105
AND
Haggingroup.com
489 Miller Avenue
Mill Valley, CA 94941
Attn: Controller
Fax: (415) 381 1164
LANDLORD:
CEP INVESTORS XII LLC, a Delaware limited liability company
By: EPI Investors XII LLC, a California limited liability company
Its: Manager
By: Ellis Partners, Inc., a California corporation
Its: Manager
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Date: , 2000.
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