EXHIBIT 10.16
FIRST AMENDMENT TO LEASE
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I. PARTIES AND DATE.
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THIS FIRST AMENDMENT TO LEASE (this "Amendment") dated as of July 23, 1997,
is entered into by and between LAKESIDE DRIVE, INC., a Massachusetts corporation
("Landlord"), and US WEB CORPORATION, a Utah corporation ("Tenant").
II. RECITALS.
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A. Landlord and Tenant entered into that certain Office Building Lease
dated as of December 16, 1996 (the "Lease"), for a portion of the building
commonly known as LAKESIDE ATRIUM at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, containing approximately 10,021 square feet of Net Rentable Area and
denominated as Suite 350 (the "Leased Premises"). The term of the Lease runs
through January 31, 2007 (the "Term Expiration Date"), unless extended pursuant
to Exhibit E of the Lease. Capitalized terms used and not otherwise defined
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herein shall have the same definitions as set forth in the Lease.
B. Tenant desires to expand the Leased Premises to incorporate an
additional 17,083 square feet of Net Rentable Area.
C. Accordingly, Landlord and Tenant desire to modify the Lease as set
forth below in this Amendment.
III. MODIFICATIONS.
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Landlord and Tenant hereby agree as follows:
A. Expansion of Premises. Upon the Expansion Commencement Date, as
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defined in paragraph C, the Leased Premises shall be expanded to include Suite
300 consisting of approximately 17,083 square feet of Net Rentable Area (the
"Expansion Space") as shown in Exhibit A, attached hereto.
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B. Base Rental. The Base Rental for the Expansion Space shall be:
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Expansion Commencement Date -
30th Month of Term of Lease $45,269.95 per month ($543,239.40 per year)
Months 31-60 of Lease $48,686.55 per month ($584,238.60 per year)
Months 61-90 of Lease $52,103.15 per month ($625,237.80 per year)
Months 91-120 of Lease $55,519.75 per month ($666,237.00 per year)
The Base Rental referenced above shall be subject to adjustment in accordance
with Section 6 of the Lease.
C. Term. The Expansion Commencement Date shall be the earlier of October
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1, 1997 or upon substantial completion of the Expansion Space Improvements
specified in Exhibit B to this Amendment, and shall terminate on the Term
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Expiration Date.
D. First Month's Rent. The first month's Base Rental for the Expansion
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Space shall be delivered to Landlord upon execution of this Amendment by Tenant.
E. Security Deposit. Upon execution of this Amendment by Tenant, Tenant
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shall deliver to Landlord an additional Security Deposit of $55,519.75
increasing the total Security Deposit to $82,075.40.
F. Tenant's Proportionate Share. Tenant's Proportionate Share shall be
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increased to 28.1396%, and the Base Year for the Expansion Space shall be 1997.
G. Option to Renew. Tenant's renewal option for the Expansion Space set
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forth in Exhibit E to the Lease shall expressly include the Expansion Space.
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H. Use. The Expansion Space may be used for general office, training,
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engineering, customer service, product demonstration and administration, and for
no other purpose whatsoever.
I. Parking. Exhibit D of the Lease is modified to provide that Tenant
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shall have a total of 100 parking spaces for its non-exclusive use, all other
terms of Exhibit D to remain in effect.
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J. Termination. This Amendment is conditional upon Landlord and Novell,
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Inc. executing a termination of Novell. Inc.'s existing lease for the Expansion
Space dated November, 1994.
K. Condition of Expansion Space. The Expansion Space shall be subject to
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all of the provisions of the Lease provided that Landlord's warranty contained
in Section 9 of the Lease shall be effective as to the Expansion Space for a
period of forty-five (45) days following the Expansion Commencement Date.
L. Signage. Tenant shall submit a request for Landlord's approval of
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building, directory and office signage which shall be subject to the
requirements of Exhibit B of the Lease. Subject to Landlord's approval (not to
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be unreasonably withheld) and at Tenant's expense, Tenant shall replace the
Novell building signage with its own signage and logo.
M. Tenant Improvement Allowance. Subject to Exhibit B attached hereto,
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Landlord shall provide Tenant with a tenant improvement allowance of $74,275.00
($5.00 per square foot) for the construction of the Expansion Space
Improvements. Landlord shall provide, at Tenant's request, an additional tenant
improvement allowance (the "Additional Allowance") of a maximum of $44,565.00
($3.00 per square foot) provided that the Additional Allowance, together with
interest thereon at the fixed rate of twelve percent (12%) per annum (to accrue
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upon disbursement thereof), shall be fully amortized over the period from
disbursement to the expiration of the initial Term, and shall be payable, as
additional rental, on a monthly basis, together with the payments of Base
Rental, during the initial Term. Landlord shall provide Tenant with regular
statements showing the disbursements made hereunder, the payments due from
Tenant thereunder, and how such payments were calculated. Absent manifest error,
Landlord's calculations of the payments due under this Paragraph M shall be
binding upon the parties.
N. Brokers' Commissions. Tenant and Landlord warrant that they have not
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had dealings with any broker or agent in connection with this Amendment, other
than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (of Colliers ▇▇▇▇▇▇▇ International, Inc.) ("Tenant's
Broker") and ▇▇▇▇ ▇▇▇▇▇▇▇ (of Insignia ▇'▇▇▇▇▇▇▇ Commercial Group) ("Landlord's
Representative"). Landlord shall pay a commission to Tenant's Broker pursuant to
an agreement between Tenant's Broker and Landlord's Representative. Tenant
agrees to hold harmless and indemnify Landlord from and against any and all
cost, expense or liability for any compensation, commissions or charges claimed
by any other broker or agent utilized by Tenant with respect to this Amendment
or the negotiation hereof.
O. Early Entry. Notwithstanding anything to the contrary in this
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Amendment, as of September 1, 1997, Tenant may enter the Expansion Space for the
purpose of installing telephones, electronic communication or related equipment,
cabling, fixtures and furniture, provided that Tenant shall be solely
responsible for any of such equipment, cabling, fixtures or furniture and for
any loss or damage thereto from any cause whatsoever, excluding only the gross
negligence or willful misconduct of Landlord or Landlord's contractors. Such
early access to the Expansion Space and such installation shall be permitted
only to the extent that Landlord determines that such early access and
installation activities will not delay Landlord's contractor's completion of the
construction of the Tenant Improvements. Landlord and Tenant shall cooperate in
the scheduling of Tenant's early access to the Expansion Space and of Tenant's
installation activities in an attempt to maximize the benefits to Tenant of this
Paragraph O without interfering with Landlord's completion of the construction
of the Tenant Improvements. Tenant shall (i) provide certificates of insurance
evidencing the existence and amounts of liability insurance carried by Tenant
and its agents and contractors, reasonably satisfactory to Landlord, prior to
such early entry, and (ii) comply with all applicable laws, regulations, permits
and other approvals applicable to such early entry work in the Expansion Space.
IV. GENERAL.
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A. Effect of Amendment: Ratification. Except to the extent the Lease is
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expressly modified by this Amendment, the terms and provisions of the Lease
shall remain unmodified and in full force and effect. In the event of conflict
between the terms of the Lease and the terms of this Amendment, the terms of
this Amendment shall prevail.
B. Attorneys' Fees. The provisions of the Lease respecting payment of
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attorneys' fees shall also apply to this Amendment.
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C. Counterparts. If this Amendment is executed in counterparts, each
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counterpart shall be deemed an original.
D. Authority to Execute Amendment. Each individual executing this
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Amendment on behalf of a corporation as Tenant represents that he or she is duly
authorized to execute and deliver this Amendment on behalf of such corporation
and agrees to deliver evidence of his or her authority to Landlord upon request
by Landlord.
E. Governing Law. This Amendment and any enforcement of the agreements
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and modifications set forth above shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date and year first above written.
"Landlord":
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LAKESIDE DRIVE, INC.,
a Massachusetts corporation
By: GE CAPITAL INVESTMENT ADVISORS, INC.,
Its Duly Authorized Agent
By: [ILLEGIBLE SIGNATURE]
Name: ________________________
Its: _________________________
"Tenant":
US WEB CORPORATION,
a Utah corporation
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
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Its: CFO
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Taxpayer Identification No.: ▇▇-▇▇▇▇▇▇▇
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EXHIBIT A
EXPANSION SPACE
[FLOOR PLAN APPEARS HERE]
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EXHIBIT B
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WORK LETTER
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It is agreed that Landlord will complete construction of improvements in
the Expansion Space in accordance with the following terms and provisions:
1. (a) No later than August 4, 1997, Tenant shall submit to Landlord
Tenant's proposed complete, architectural, electrical and mechanical plans and
specifications (the "Plans") for the construction of tenant improvements in the
Expansion Space. Landlord shall make available to Tenant the services of its
Architect to assist Tenant in the preparation of the Plans, which shall be
subject to Landlord's final approval. The cost of preparing the Plans shall be
applied against the Allowance (as hereinafter defined).
(b) Within five (5) days following the date of Landlord's receipt of
the Plans, Landlord will advise Tenant of Landlord's approval or disapproval of
the Plans. If Landlord disapproves any aspect of the Plans, Landlord shall so
notify Tenant and specify the reasons for such disapproval. Landlord may also
specify how any such disapproved item may be made reasonably acceptable to
Landlord, and Tenant shall, within five (5) days thereafter, deliver to Landlord
revised Plans incorporating the revisions required by Landlord.
2. Following the approval in writing by Landlord and Tenant of the Plans,
Landlord shall construct the tenant improvements contemplated hereby
(collectively, the "Expansion Space Improvements"), in accordance with the
Plans. The cost of the Expansion Space Improvements for the purpose of billing
shall equal the cost to Landlord of designing and constructing such Expansion
Space Improvements (including any contractor's fee and the cost of supervision
and coordination).
3. All costs and expenses incurred in the design and Construction of the
Expansion Space Improvements shall be borne by Tenant (and are hereinafter
referred to as "Tenant's Costs"); provided, however, that Tenant shall receive a
tenant improvement allowance (the "Allowance") of up to $74,275.00 (based on
$5.00 per square foot of Net Rentable Area contained in the Expansion Space), to
be credited against the billing costs of constructing all Expansion Space
Improvements in the Expansion Space. Any excess of Tenant's Costs up to a
maximum of an additional $44,565.00 ($3.00 per square foot) shall be paid as
provided in Paragraph M of this Amendment. As soon as the final accounting can
be prepared and submitted to Tenant, Tenant shall pay to Landlord, within five
(5) days from delivery of Landlord's invoice to Tenant therefor, the difference
between the actual cost of the Expansion Space Improvements as shown in the
audit and $118,840.00 (the "Excess").
The amounts payable hereunder shall constitute rent due pursuant to the
Lease at the times specified herein and failure to make any such payments when
due shall constitute an event of default under the Lease, entitling Landlord to
all of its remedies provided under the Lease as well as all remedies otherwise
available to Landlord.
4. If Tenant requests any changes in the Plans, Tenant shall present
Landlord with revised drawings and specifications for Landlord's approval, which
approval will not be unreasonably withheld. If Landlord approves such changes,
Landlord shall incorporate such changes in the Expansion Space Improvements
following Landlord's receipt of a change order therefor executed by Tenant.
Landlord, however, may require, prior to proceeding with any changes, additional
cash advances against the Excess in the event Landlord determines that Tenant's
proposed changes will increase the amount of the Excess.
5. Should Landlord be delayed in substantially completing the work to be
performed hereunder as a result of (i) Tenant's failure to submit the Plans to
Landlord as provided in Paragraph 1 hereof or (ii) Tenant's requests for changes
in the Plans which delay said work or (iii) the performance of any work
contemplated herein by a contractor or agent employed by Tenant (any such
contractor or agent being subject to the prior written approval of Landlord) or
(iv) any other delay caused by Tenant, its agents or employees, then Tenant's
obligation to pay rent under this Amendment shall nevertheless commence on the
date specified in Paragraph C of this Amendment and the Commencement Date under
this Amendment shall not be delayed pursuant to Paragraph C of this Amendment,
unless such delays for which Tenant is responsible are in addition to delays for
which Landlord is responsible, in which case the Commencement Date and rental
commencement date under this Amendment shall be extended for the period of
delays for which Landlord was responsible.
6. Landlord hereby agrees that to the extent it acts as contractor
hereunder, Landlord will commence or cause the commencement of the construction
of the Expansion Space Improvements as promptly as is reasonably possible and
will proceed with due diligence to perform or cause such work to be performed in
a good and workmanlike manner. Landlord warrants to Tenant that all materials
and equipment furnished in constructing the portion of the Expansion Space
Improvements constructed by Landlord will be of good quality, free from faults
and defects; provided, however, Tenant's sole remedy for any breach of the above
warranty shall be that Landlord, for a period of twelve (12) months after
substantial completion of such work, at its sole cost and expense, will make all
necessary repairs, replacements, and corrections of any nature or description as
may become necessary by reason of faulty construction, labor or materials in the
portion of the Expansion Space Improvements constructed by Landlord.
7. For the purposes of this Work Letter, the term "substantial
completion" of the Expansion Space Improvements or of the work of constructing
such Expansion Space Improvements shall mean completion of such Expansion Space
Improvements in all material respects excepting only minor finish and touch-up
work which does not interfere with the occupancy of the Expansion Space by
Tenant, as determined by the Architect, whose determination shall be binding
upon Landlord and Tenant. To the extent substantial completion is delayed by any
act or omission of Tenant or its employees, agents or contractors, the date of
substantial completion shall be the date determined by Landlord's space planner
or Architect when substantial completion would have been achieved if such Tenant
delay had not taken place.
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