EXHIBIT 10.43
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "Amendment") is made this 24th day
of May, 2002 by and between ARASTRADERO PROPERTY, a California general
partnership ("Landlord") and ALTAVISTA COMPANY, a Delaware corporation
("Tenant").
R E C I T A L S
A. Tenant currently leases from Landlord approximately seventy-five
thousand four hundred twenty (75,420) square feet of space located at 0000
Xxxxxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx (the "Current Premises") pursuant to
that certain Lease dated September 17, 1999 (the "Lease"). The Current Premises
are shown on Exhibit A attached hereto.
B. The Lease currently provides for a termination date of December 15,
2009. Tenant desires to reduce the term of the Lease. Tenant also desires to
reduce the size of the Premises by subtracting (i) that certain space consisting
of approximately twenty thousand four hundred twenty (20,420) rentable square
feet (the "Third Floor Reduction Space") and those portions of the second and
third floors consisting of the main lobbies, mechanical rooms, common halls,
stairways and other Common Areas, all as shown on Exhibit A (which shall become
part of the Common Area) (collectively, the "Common Area Space"), and (ii) if
Landlord enters into a lease with Ingenuity Systems, Inc., a Delaware
corporation ("Ingenuity") for space on the second floor, that certain space
consisting of approximately eight thousand forty-nine (8,049) rentable square
feet (the "Second Floor Reduction Space") and the additional restroom core on
the second floor as shown on Exhibit B attached hereto which restroom core shall
become part of the Common Area (collectively, the "Additional Common Area
Space"). The Third Floor Reduction Space and the Common Area Space and, subject
to the condition specified in the preceding sentence, the Second Floor Reduction
Space and the Additional Common Area Space are together referred to herein as
the "Reduction Space".
C. Landlord is willing to reduce the term of the Lease and
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reduce the size of the Premises on the terms and conditions specified herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants and agreements contained herein, the parties hereto agree to amend the
Lease as follows:
1. Term. The term of the Lease shall expire on August 31, 2005.
2. Premises. Commencing on June 1, 2002, the Third Floor Reduction
Space and the Common Area Space shall be subtracted from the Current Premises
and thereafter, the Premises shall include only the space on the first and
second floors (excluding the Common Area Space), consisting of approximately
fifty-five thousand (55,000) rentable square feet, as shown on Exhibit B. If, on
or before June 30, 2002, Landlord enters into a lease with Ingenuity for the
Second Floor Reduction Space, the Premises shall be further reduced by
subtracting the Second Floor Reduction Space and the Additional Common Area
Space as of the later of (i) June 1, 2002 or (ii) the date of execution of the
lease with Ingenuity, and thereafter the Premises shall include only the first
floor and the remaining space on the second floor together consisting of
approximately forty-six thousand nine hundred fifty-one (46,951) rentable square
feet as shown on Exhibit B. The parties hereby stipulate as to the rentable
square footage of the Modified Premises as stated above, and agree that the
Modified Premises shall not be subject to remeasurement by either party. The
Premises as modified above is referred to herein as the "Modified Premises".
3. Basic Rent. The amount of basic rent payable by Tenant pursuant to
paragraphs 4(a) and 5 of the Lease shall be modified as follows:
(a) If the Modified Premises consists of 55,000 square feet,
then:
Commencing on June 1, 2002 through
August 31, 2002 $110,000 per month
If Tenant has not filed bankruptcy and no involuntary
bankruptcy proceeding has been commenced against Tenant on or before
ninety (90) days after the payment of the Modification Fee, then:
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Commencing on September 1, 2002
through August 31, 2003 $ 110,000 per month
September 1, 2003 through
August 31, 2004 $ 113,850 per month
September 1, 2004 through
August 31, 2005 $ 117,835 per month
(b) If the Modified Premises consists of 46,951 square feet,
then:
Commencing on June 1, 2002 through
August 31, 2002 $ 93,902 per month
If Tenant has not filed bankruptcy and no involuntary
bankruptcy proceeding has been commenced against Tenant on or before
ninety (90) days after payment of the Modification Fee, then:
Commencing on September 1, 2002
through August 31, 2003 $ 93,902 per month
September 1, 2003 through
August 31, 2004 $ 97,189 per month
September 1, 2004 through
August 31, 2005 $ 100,590 per month
(c) In either case under (a) or (b) above, if Tenant has filed
bankruptcy or an involuntary bankruptcy proceeding has been commenced
against Tenant on or before ninety (90) days after payment of the
Modification Fee, then the basic rent shall continue to be due and
payable as set forth in the lease without modification, as follows:
September 1, 2002 through
December 15, 2002 $ 276,307.92 per month
December 16, 2002 through
December 15, 2003 $ 285,978.70 per month
December 16, 2003 through
December 15, 2004 $ 306,347.53 per month
December 16, 2004 through
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the Modified Lease Expiration
Date $ 317,069.69 per month
4. Surrender of Reduction Space. On or before May 31, 2002, Tenant will
vacate and surrender the Third Floor Reduction Space and the Common Area Space
and if Landlord enters into a lease with Ingenuity, upon five (5) days advance
written notice from Landlord, Tenant shall also vacate and surrender the Second
Floor Reduction Space and the Additional Common Area Space, in accordance with
the terms of paragraph 23 of the Lease. Tenant shall indemnify Landlord for any
loss or expense resulting from Tenant's failure to so surrender the Reduction
Space, including any claims made by any succeeding tenants. If Tenant fails to
surrender the applicable Reduction Space on or before the applicable dates,
Tenant shall be deemed a holdover tenant without Landlord's consent with respect
to the unsurrendered Reduction Space and the provisions of paragraph 25 of the
Lease regarding holding over shall apply on a pro rata basis.
5. Common Area Charges. Commencing on June 1, 2002, Paragraph 16 shall
be amended to provide that Tenant's percentage share of common area charges
shall be adjusted based on the reduced square footage of the Modified Premises
as follows: (i) seventy-two and nine-tenths percent (72.9%) if the square
footage of the Modified Premises is reduced to 55,000 square feet, and (ii)
sixty-two and two-tenth percent (62.2%) if the square footage of the Modified
Premises is reduced to 46,951 square feet. Commencing as of June 1, 2002,
Tenant's estimated monthly payment of its percentage share of common area
charges shall be (i) $44,905.24 per month if the square footage of the Modified
Premises is reduced to 55,000 square feet, and (ii) $38,333.56 per month if the
square footage of the Modified Premises is reduced to 46,951 square feet,
subject to adjustment in accordance with Paragraph 16 of the Lease.
6. Premises Taken "As Is". Tenant accepts the Modified Premises "as is"
in their current condition and Landlord shall have no obligation to alter,
modify or improve the Modified Premises in any way, except that Landlord shall,
at Tenant's sole cost and as reasonably pre-approved by Tenant, finish out the
demising wall between the Reduction Space and the Modified Premises as shown on
Exhibit C attached hereto.
7. Repair and Maintenance. From and after June 1, 2002, paragraph 9 of
the Lease is hereby amended and restated in its entirety as follows:
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"Tenant has inspected the Premises and accepts the Premises in its
current condition and acknowledges that the Premises are in good and sanitary
order, condition and repair. Except as expressly provided below, Tenant shall at
its sole cost keep and maintain the entire Premises and every part thereof
including, without limitation, the windows, window frames, plate glass, glazing,
elevators within the Premises, truck doors, doors and all door hardware, the
interior walls and partitions, lighting and the electrical, mechanical, and
plumbing systems.
Subject to the provisions of paragraph 17, Landlord shall keep and
maintain the roof, structural elements, exterior walls of the building
constituting the Project, the heating and air conditioning systems, the building
access/security system, the fire-life safety system and the Common Area
(including, without limitation, the parking areas, landscaping and all amenities
located outside the building and the Common Areas in the building) in good order
and repair.
Tenant waives all rights under and benefits of California Civil Code
Sections 1932(1), 1941, and 1942 and under any similar law, statute or ordinance
now or hereafter in effect. The cost of the repairs and maintenance which are
the obligation of Landlord hereunder, including without limitation, maintenance
contracts and supplies, materials, equipment and tools used in such repairs and
maintenance shall be a common area charge and Tenant shall pay its percentage
share of such costs to Landlord as provided in paragraph 16; provided, however,
that if any repairs or maintenance is required because of the negligence or
willful misconduct of Tenant, or its agents, employees or invitees, Tenant shall
pay to Landlord upon demand the full cost of such repairs or maintenance.
Notwithstanding the above, the cost of roof replacement and structural repairs
to the building shall be amortized over its useful life (including interest at a
rate of two percent (2%) over the then current Prime Rate as published by the
Wall Street Journal) and the amortized cost shall be included within common area
charges and Tenant shall pay its proportionate share thereof as provided in
paragraph 16 of this lease."
8. Utilities and Services. From and after June 1, 2002, Paragraph 12 of
the Lease is hereby amended and restated in its entirety as follows:
"Landlord shall furnish to the Premises and to the Project, the
following utilities and services: (i) water, gas and electricity reasonably
suitable for the intended use of the Premises and the Project, twenty-four (24)
hours every day of the
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week, (ii) heat and air conditioning reasonably suitable for the comfortable use
and occupation of the Premises and the Project during business hours, and (iii)
refuse collection and janitorial services. Tenant agrees that at all times it
will cooperate fully with Landlord and abide by all reasonable regulations and
requirements that Landlord may prescribe for the proper functioning and
protection of the heating, ventilating and air conditioning systems. Landlord
shall cooperate with Tenant to provide heating, ventilating and air conditioning
to all or any portion of the Premises outside of Business Hours if requested by
Tenant, and Tenant shall reimburse Landlord for its actual costs in so providing
such service as reasonably estimated by Landlord. Business Hours shall mean:
Monday through Friday, excluding generally observed national holidays, from 7:00
a.m. to 7:00 p.m. Tenant shall arrange for and pay for all telephone, and all
other services supplied to or consumed on the Premises and not provided by
Landlord. In the event that any service is not separately metered or billed to
the Premises, the cost of such utility service or other service shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16. In addition, the cost of all utilities and
services furnished by Landlord to the Premises and to the Project shall be a
common area charge and Tenant shall pay its percentage share of such costs to
Landlord as provided in paragraph 16, except as such costs may be specifically
allocated otherwise herein. Tenant shall pay directly to Landlord (and such
amount shall not be included as a common area charge) for any water, gas,
electricity or HVAC usage that is separately metered to the Premises or any part
thereof.
If Tenant's use of any such utility or service is materially in excess
of the average furnished to the other tenants of the Project, and such utility
or service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess use, as reasonably
determined by Landlord, or Landlord may cause such utility or service to be
separately metered, in which case Tenant shall pay the full cost of such utility
or service and reimburse Landlord upon demand for the cost of installing the
separate meter.
Notwithstanding any provision to the contrary, (i) the Palo Alto
utility xxxx will be transferred into Landlord's name on June 1, 2002; (ii) the
existing separate electric meter for the third floor will be segregated into a
separate electricity xxxx [this meter will track the electricity consumption on
the third floor (excluding the air conditioning unit) and none of this xxxx will
be charged to Tenant]; (iii) Landlord will cause to be installed, at Landlord's
expense, a private meter measuring the kilowatt-hours
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used by the air conditioning unit serving the third floor; (iv) Landlord will
cause to be installed, at Landlord's expense, a private meter measuring the
kilowatt-hours used for the outside lights; (v) the cost of electricity used by
the third floor air conditioning unit (to be charged to the third floor tenants)
and the outside lights (to be charged as a common area charge on a percentage
basis) will be deducted from the main electricity xxxx and the remaining balance
after such deductions will be allocated to Tenant; (vi) if Ingenuity enters into
a lease with Landlord for a portion of the second floor, a monthly amount for
electrical usage shall be established based on a standard usage of electricity
for office space of $.15/sf/mo of rentable area, based on Business Hours of 7:00
a.m. to 7:00 p.m., plus an after hours charge of $25/hr. and such amount shall
be charged to Ingenuity with a corresponding deduction from the main electricity
xxxx for which Tenant is responsible in clause (v) above. Landlord may revise
the estimated utility charges from time to time, as reasonably required to fully
cover such costs in advance.
Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.
Notwithstanding anything to the contrary in this lease, if: (a) any
services or utilities are interrupted or discontinued due to Landlord's
negligence or willful misconduct and the Premises are untenantable as a result
of such interruption or discontinuance, and (b) Tenant shall have given written
notice respecting such interruption or discontinuance to Landlord, and Landlord
shall have failed to cure such interruption or discontinuance within three (3)
business days after receiving such notice, then Tenant shall be entitled to an
equitable abatement of rent to the extent that Tenant's use of the Premises is
thereafter prevented by such interruption or discontinuance."
9. Common Area; Parking. Paragraph 15 of the Lease is hereby amended to
add the Common Area Space (and the Additional Common Area Space if the square
footage is reduced to 46,951 square feet) as Common Area under the Lease.
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From and after June 1, 2002, the first sentence of the third
subparagraph of paragraph 15 of the Lease is hereby amended to read as follows:
"Tenant shall have the non exclusive use of (i) one hundred
seventy-nine (179) parking spaces in the common area of the Project if the
Modified Premises consist of 55,000 square feet, and (ii) one hundred
fifty-three (153) parking spaces in the common area of the Project if the
Modified Premises consist of 46,951 square feet, as designated by Landlord from
time to time; provided that Landlord and Landlord's agents, contractors and
employees shall have the right to use such parking areas as reasonably necessary
to fulfill Landlord's obligations under this lease."
10. Common Area Charges. A new subparagraph is added to the end of
paragraph 16 as follows:
"If the occupancy of the Project, during any part of any calendar year
is less than one hundred percent (100%), Landlord may make an appropriate
adjustment of the variable components of common area charges for that year, as
reasonably determined by Landlord using sound accounting and management
principles, to determine the amount of common area charges that would have been
incurred had the Project been one hundred percent (100%) occupied. This amount
shall be considered to have been the amount of common area charges for that
calendar year. For purposes of this subparagraph, "variable components" include
only those component expenses that are affected by variations in occupancy
levels."
11. Security Deposit. Commencing on June 1, 2002 the amount of the
Letter of Credit required under paragraph 4(e) of the Lease shall be reduced to:
(i) Eight Hundred Ninety-Three Thousand Two Hundred Seventy-Nine and 16/100
Dollars ($893,279.16) if the Modified Premises consist of 55,000 square feet,
and (ii) Seven Hundred Sixty-Two Thousand Five Hundred Fifty-One and 82/100
Dollars ($762,551.82) if the Modified Premises consist of 46,951 square feet.
12. Lease Modification Fee. Tenant acknowledges and agrees that
Landlord's entering into this Amendment, reducing the lease term, reducing the
size of the Premises and terminating future rent obligations for the period
after the Modified Lease Termination Date shall result in a significant
financial benefit to Tenant in excess of the consideration specified below. As
consideration therefor, Tenant shall:
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(a) Concurrent with Tenant's execution of this Amendment:
(1) Pay to Landlord the sum of Six Million Dollars
($6,000,000) (consisting of the $4,000,000 cash security deposit currently held
by Landlord and an additional $2,000,000 in immediately available funds);
(2) Transfer to Landlord 275,412 shares of CMGI stock
(subject to existing restrictions) at no cost or charge to Landlord;
(3) Issue and deliver a common stock purchase warrant for
1,000,000 shares of stock in AltaVista Company in substantially the form
attached hereto as Exhibit D;
(4) Transfer title to and ownership of any and all
furniture, fixtures and data cabling in the Current Premises (i.e., the entire
building) as listed on Exhibit E attached hereto to Landlord free of all liens
by Xxxx of Sale in substantially the form attached hereto as Exhibit F;
(b) Pay to Landlord within five (5) days after Landlord's
request (i) the costs incurred by Landlord to demise the space leased to
Ingenuity on the second floor (excluding specific tenant improvements for
Ingenuity within the Ingenuity leased space) and (ii) brokers' commissions/fees
payable in connection with the Ingenuity lease.
13. Cancellation of Option to Extend Term. Tenant's option to extend
the term of the Lease pursuant to paragraph 57 of the Lease is hereby cancelled
and deleted in its entirety and of no further force or effect. Tenant has no
right to extend the term of the Lease.
14. Brokers' Commissions. Each party represents and warrants to the
other party that it has not had dealings in any manner with any real estate
broker, finder or other person with respect to the Premises and the negotiation
and execution of this Amendment except CRF Partners and CB Xxxxxxx Xxxxx
("Tenant's Brokers") and XxXxxxxxxx Management Corporation ("Landlord's
Broker"). Except for the commissions and fees to be paid to Tenant's Broker by
Tenant pursuant to separate agreement, each party shall indemnify and hold
harmless the other party from all damage, loss, liability and expense (including
attorneys' fees and related costs) arising out of or resulting from any claims
for commissions or fees that have been or may be asserted against the other
party by any broker,
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finder or other person representing or purporting to represent Tenant or
Landlord, respectively, in connection with the Premises and the negotiation and
execution of this Amendment. Tenant shall be responsible for and pay any and all
broker commissions payable to Tenant's Broker. Landlord's Broker is not
receiving a commission in connection with this transaction.
15. Use of Personal Property. Tenant shall have the right to use the
personal property currently located in the Modified Premises and listed on
Exhibit E attached ("Personal Property") and such Personal Property is deemed
part of the Premises leased to Tenant hereunder. Tenant shall maintain the
Personal Property in good condition and repair and Tenant's insurance
obligations under paragraph 11 of the Lease shall apply to and over the Personal
Property and Tenant's use thereof.
16. Building Systems. Commencing June 1, 2002, Landlord shall own,
control and operate the existing building security system, provided that each
Tenant will have the ability to control access to its Premises. Secured doors
with alarm monitoring and controlled by access card readers and panic hardware
alarms (as shown on Exhibit G) will be installed by Landlord (as part of
demising the Premises), at Tenant's cost. Each Tenant will pay for their own
access cards. Tenant shall deliver any surplus cards to Landlord. Commencing on
June 1, 2002, Landlord will be responsible for the RFI fire monitoring contracts
and maintenance of the fire monitoring system. All costs incurred by Landlord to
maintain and operate the building systems, including without limitation, the
security system, panic hardware alarm system and fire monitoring system shall be
included in common area charges and Tenant shall pay its percentage share
thereof.
17. Waiver of Prior Rent Payment Defaults. Landlord hereby waives any
rights or remedies it may have against Tenant for the defaults in payment of
rent and failure to restore security deposit that occurred prior to June 1,
2002.
18. Signage. The face of the existing monument sign is to be replaced
giving 50% of the signage to other tenant(s) in the Project as determined by
Landlord, in a configuration and method reasonably approved by Landlord. Tenant
shall pay for the cost of the site and monument sign alterations related to its
own signage. Other tenants in the Project will pay for the costs of their own
signage. The lobby sign reading "AltaVista" shall be removed by Tenant and all
damage to the wall shall be repaired and the wall shall be restored by Tenant,
at Tenant's expense. Tenant may add a
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new sign on the first level of the main lobby in a location and with a design
approved by Landlord subject to paragraph 50 of the Lease. If Ingenuity occupies
a portion of the second floor, Tenant shall not install its sign by Ingenuity's
second floor entry door. Landlord may allow an additional sign for Ingenuity on
the first level of the main lobby. Any site signage and window signage shall be
altered to accommodate a new tenant(s) in the building. Landlord will have the
right to install a leasing sign on the property for any available space. Tenant
will not be allowed to install a sub-lease sign on the Project during any period
that Landlord has space available for lease in the Project.
19. Food Service. Tenant shall continue to retain, at its expense, the
existing or comparable quality food service operator to provide a menu similar
to the currently existing operation. Such service shall include breakfast
service (8:00 a.m. - 10:00 a.m.) and lunch service (11:00 a.m. - 2:00 p.m.) at a
minimum. The food services shall be available to all other tenants in the
building (including their employers, clients, guests and invitees) at the same
prices charged to Tenant's employees and on a non-discriminatory basis.
20. Corporate Authority. If any party hereto is a corporation, (i) each
individual executing this Amendment on behalf of the corporation represents and
warrants that he/she is duly authorized to execute and deliver this Amendment on
behalf of the corporation in accordance with a duly adopted resolution of the
Board of Directors of said corporation and that this Amendment is binding upon
said corporation in accordance with its terms, and (ii) upon Landlord's request,
Tenant shall deliver to Landlord, within ten (10) days of the execution of this
Amendment, a copy of the resolution of the Board of Directors of Tenant
authorizing the execution of this Amendment and naming the officers that are
authorized to execute this Amendment on behalf of Tenant, which copy shall be
certified by Tenant's President or Secretary as correct and in full force and
effect.
21. Counterparts. This Amendment may be executed in any number of
counterparts and each of such counterparts shall, for all purposes, be deemed to
be an original; and all such counterparts shall together constitute but one and
the same amendment.
22. Acceptance of Facsimile Signatures. The parties agree that this
Amendment, agreements ancillary to this Amendment, and related documents to be
entered into in connection with this Amendment, will be considered signed when
the signature of a party
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is delivered by facsimile transmission. Such facsimile signature shall be
treated in all respects as having the same effect as an original signature.
23. Restatement of Other Lease Terms. Except as specifically modified
herein, all terms, covenants and conditions of the Lease shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto execute this Amendment as of the
date first set forth above.
Landlord: Tenant:
ARASTRADERO PROPERTY, ALTAVISTA COMPANY,
a California general a Delaware corporation
partnership
By: XxXxxxxxxx-Triad, a
California general By: /s/ Xxxxx X. Xxxxxxx
--------------------
partnership, a General
Partner Name: Xxxxx X. Xxxxxxx
Title: President
By: /s/ Xxxx X. XxXxxxxxxx
----------------------
Date: May 24, 2002
Xxxx X. XxXxxxxxxx,
as Trustee under the
Xxxx X. XxXxxxxxxx
and Xxxx XxXxxxxxxx By: /s/ Xxxxxx X. Rosedale
Inter Vivos Trust ----------------------
Agreement dated Name: Xxxxxx X. Rosedale
February 17, 1982,
a General Partner Title: Assistant Secretary
Date: May 29, 2002 Date: May 24, 2002
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