Item 1.01 Entry into a Material Definitive Agreement.
On May 9, 2017, Glu Mobile Inc. (“
Glu
”) entered into a lease (the “
Lease
”) with Howard Street Associates LLC (“
Landlord
”) for office space at 875 Howard Street, San Francisco, California covering the first and second floors of the building (the “
Premises
”). The size of the Premises is approximately 57,074 square feet. Glu intends to use the Premises as its new corporate headquarters.
The term of the Lease begins on July 1, 2017 and Glu’s obligation to pay rent will begin on the earlier to occur of (1) the date Glu begins conducting business in the Premises or (2) 14 days following the date of Substantial Completion of the Tenant Improvements (as such terms are defined in the Lease) in the entire Premises (the “
Rent Commencement Date
”). The term will expire on the tenth anniversary of the Rent Commencement Date (the “
Expiration Date
”); provided, however, that if the Rent Commencement Date is a date other than the first day of a month, the Expiration Date shall instead be the last day of the month which is 120 months after the month in which the Rent Commencement Date falls.
Glu will pay Landlord monthly base rent as set forth below:
|
|
|
|
Period of Term
|
Annual Base Rent/PSF/Year
|
Monthly Base Rent
|
Annual Base Rent
|
Months 1-12
|
$72.00
|
$342,444.00
|
$4,109,328.00
|
Months 13-24
|
$74.16
|
$352,717.32
|
$4,232,607.84
|
Months 25-36
|
$76.38
|
$363,298.84
|
$4,359,586.08
|
Months 37-48
|
$78.68
|
$374,197.80
|
$4,490,373.66
|
Months 49-60
|
$81.04
|
$385,423.74
|
$4,625,084.87
|
Months 61-72
|
$83.47
|
$396,986.45
|
$4,763,837.41
|
Months 73-84
|
$85.97
|
$408,896.04
|
$4,906,752.54
|
Months 85-96
|
$88.55
|
$421,162.93
|
$5,053,955.12
|
Months 97-108
|
$91.21
|
$433,797.81
|
$5,205,573.77
|
Months 109-120
|
$93.94
|
$446,811.75
|
$5,361,740.98
|
The Lease also calls for additional payments for Glu’s proportionate share of all increases in taxes and operating expenses above the specified baseline for such expenses. Provided that no event of default is occurring and continuing beyond any applicable notice and cure period during the first and the thirteenth full calendar months following the Rent Commencement Date, Glu shall not be obligated to pay any monthly base rent for such first and thirteenth calendar months; such rent abatement equals $695,161.32.
Glu is entitled to a one-time Tenant Improvement Allowance (as such term is defined in the Lease) in an amount equal to $4,280,550.00, which is equal to $75.00 per rentable square foot of the Premises. Glu will utilize this Tenant Improvement Allowance in order to build out the Premises prior to occupancy.
Glu will pay Landlord a security deposit of $1,541,694.96. The security deposit will be reduced to $1,000,000 on or after April 1, 2019, provided Glu has generated annual bookings of at least $250,000,000 for two consecutive fiscal years and is otherwise not in default under the Lease.
Glu has a one-time right of availability to lease any office space that may become available on the 3
rd
floor of the building in which the Premises are located during the term of the Lease. In addition, Glu has the option to extend the term of the Lease for five additional years beyond the Expiration Date provided it satisfies certain conditions specified in the Lease.