Exhibit 10.23
FIRST LEASE AMENDMENT
This First Lease Amendment (this "AMENDMENT") is made and entered into as
of May 5, 2003, by and between SAN XXXXX PROPERTIES, LLC, a Delaware limited
liability company ("LANDLORD"), and AKAMAI TECHNOLOGIES, INC., a Delaware
corporation ("TENANT"), with reference to the following facts.
A. Landlord and Tenant entered into that certain Office Lease dated as of
June 30, 2000 (the "ORIGINAL LEASE"), as supplemented by that certain Notice of
Lease Term Dates dated December 21, 2000 (the "NOTICE OF LEASE TERM DATES") (the
Original Lease and the Notice of Lease Term Dates together shall be referred to
herein as the "LEASE"), for the lease by Tenant of certain premises located at
2800 and 0000 Xxx Xxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, as such leased
premises are more particularly described in the Lease. All capitalized terms
referred to herein shall have the same meaning provided in the Original Lease,
except where expressly provided to the contrary in this Amendment.
B. The parties desire to amend the Lease to make certain modifications to
the rent payable thereunder from and after January 1, 2004 (the "EFFECTIVE
DATE") and to shorten the Lease Term and make certain other changes on the terms
and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows.
1. Change in Base Rent. Section 4 of the Summary of Basic Lease Information
in the Original Lease is hereby amended, for the period from and after the
Effective Date, to provide that the annual Base Rent shall be $1,445,649.96, and
the monthly Base Rent shall be $120,470.83, which Tenant agrees to pay in
advance on the first day of each month from and after the Effective Date for the
remainder of the Lease Term in accordance with the Lease, as amended hereby.
Prior to the Effective Date, Tenant shall continue to pay monthly Base Rent as
provided in the Lease.
2. Direct Expenses. For the period commencing on the Effective Date, Tenant
shall not have to pay Tenant's Share of Direct Expenses as required under
Sections 4.1, 4.3, 4.3.1, 4.4, 4.4.1, and 4.4.2 of the Original Lease. For the
period prior to the Effective Date, Tenant shall continue to pay Tenant's Share
of Direct Expenses as provided in the Lease. With respect to the period from and
after the Effective Date, Tenant's right to inspect Landlord's books and records
regarding the Direct Expenses is deleted and of no force and effect. Tenant
acknowledges and agrees that it will not have any right to inspect, examine or
review Landlord's books and records including, without limitation, any books and
records regarding Direct Expenses, with respect to the period from and after the
Effective Date. With respect to the period from and after the Effective Date,
Landlord will not have to provide Tenant with any annual Statement of Direct
Expenses under Section 4.4.1 of the Original Lease or with any Estimated
Statement of Direct Expenses under Section 4.4.2 of the Original Lease.
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3. Reduction of Term. The Lease Term was scheduled to expire September 30,
2010. The Lease is hereby amended to provide that the Lease Term shall expire
August 31, 2007 and that the term "Lease Expiration Date" shall mean August 31,
2007. Tenant acknowledges and agrees that it does not have any right or option
to extend or renew the Lease Term beyond August 31, 2007.
4. Landlord's Early Termination. Landlord shall have the right, at any time
and from time to time, to accelerate the expiration of the Lease Term, as
amended hereby, without cause, default or breach by Tenant and without any
payment or other consideration to Tenant, as to all or any part of the Premises,
after not less than thirty (30) days prior written notice to Tenant, unless the
early termination would include any portion of that portion of the existing
Premises located at the first floor of 2800 San Xxxxx Expressway consisting of
approximately 6,000 square feet where Tenant's data center is currently located,
as outlined in Exhibit A attached hereto (the "DATA CENTER PORTION"), in which
case Landlord must provide at least ninety (90) days prior written notice to
accelerate the expiration of the Lease Term for any portion of the Data Center
Portion; provided, however, that for any such notice to be effective, Landlord
must also deliver to Tenant, concurrently with any such notice, a copy of the
consent of Landlord's lender, Xxxxx Fargo Bank Minnesota, N.A., as Trustee for
the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2000-Fl1 ("LENDER") to
such early termination. If Landlord accelerates the expiration of the Lease Term
for a portion but not all of the Premises, Landlord shall still have the right
to accelerate the expiration of the Lease Term for all or part of the remaining
portion of the Premises one or more occasions as provided above. If the
expiration of the Lease Term for less than all of the Premises is accelerated by
Landlord as provided above, the monthly Base Rent shall be lowered to reflect
the reduced size of the Premises with the reduced monthly Base Rent calculated
at the monthly rate of $1.25 per square foot of rentable area in the then
reduced size of the Premises effective as of the date of such partial
termination. Upon the request of any party or Lender, the parties shall enter
into an amendment of the Lease, as amended hereby, in a form reasonably
satisfactory to the parties and Lender, to reflect such change, but the failure
of the parties to execute such amendment shall not impair or delay Landlord's
right to accelerate the expiration of the Lease Term as to all or any part of
the Premises. Nothing herein shall limit or impair Landlord's right to terminate
the Lease, as amended hereby, or exercise any other right or remedy, in
connection with any default by Tenant under the Lease, pursuant to the terms and
conditions of the Lease, as amended hereby
5. Modification Fee. The parties acknowledge that signed but undated
originals of this Amendment are being delivered into escrow on the date hereof
with Chicago Title Insurance Company, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (212) 880-1203 ("ESCROW AGENT"), and that this Amendment shall only
be deemed effective and binding upon the parties in the event that all
conditions to the delivery of this Amendment set forth in Section 12 below are
fully satisfied on or before 5:00 p.m. Eastern Standard Time, on April 28, 2003
(the "OUTSIDE Date"). As a material inducement for Landlord to enter into this
Amendment, Tenant shall deliver to Escrow Agent, for delivery as set forth in
Section 12 below, a lump sum of $8,804,307.00 (the "MODIFICATION FEE") as
provided in Sections 5.1 and 5.2 below. In consideration for Landlord's
willingness to enter into this Amendment, effective upon satisfaction of each
the conditions set forth in Section 12 (the "CLOSING"), Tenant hereby releases
any and all claims to the Modification Fee. Tenant acknowledges that the
Modification Fee will
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not be applied or credited against any other sums due under the Lease, as
amended hereby. IN CONSIDERATION FOR LANDLORD'S WILLINGNESS TO ENTER INTO THIS
AMENDMENT AND SPECIFICALLY FOR LANDLORD'S WILLINGNESS TO SHORTEN THE TERM AND
FORGIVE A PORTION OF TENANT'S RENTAL OBLIGATION FROM AND AFTER THE EFFECTIVE
DATE AS PROVIDED HEREIN, EFFECTIVE AS OF THE CLOSING, TENANT HEREBY RELEASES ANY
AND ALL CLAIMS TO THE "MODIFICATION FEE."
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TENANT'S INITIALS
5.1 Cash Payment. On or before the Outside Date, Tenant shall deliver to
Escrow Agent, for delivery pursuant to Section 12 below, the sum of
$3,022,467.00 by a cashier's check made payable to Landlord or a wire transfer
in accordance with instructions from Landlord (the "CASH PAYMENT").
5.2 Original Letter of Credit. Tenant has previously delivered to Landlord
a L-C (as defined in Section 21.1 of the Original Lease) in the amount of
$5,781,840 issued by Chase Manhattan Bank (the "ORIGINAL L-C"), which has not
yet been drawn upon by Landlord. As part of the Modification Fee, effective upon
the Closing, Tenant hereby releases, any and all claims to the Original L-C made
by Tenant under the Lease. Tenant authorizes Lender to draw upon the Original
L-C prior to the Outside Date in full and retain the proceeds thereof as a
portion of the Modification Fee; provided, however, that if for any reason the
conditions set forth in Section 12 below are not satisfied prior to the Outside
Date and the Closing does not occur, then Landlord and Lender shall continue to
hold the cash proceeds of the Original L-C as the deposit under the Lease.
Notwithstanding anything to the contrary in the Lease including, without
limitation, Section 21.1.2 of the Original Lease, the Original L-C may be drawn
in full at any time and the proceeds retained by Landlord and Lender as its
property in partial consideration of its agreement to amend the Lease under the
terms of this Amendment. Tenant covenants and agrees to cooperate with Landlord
and Lender its efforts to draw on the Original L-C and to execute any other
documents or instruments requested by Landlord or Lender or the issuer of the
Original L-C to drawn and release the full amount of the Original L-C to
Landlord; provided, however, that if for any reason the conditions set forth in
Section 12 below are not satisfied prior to the Outside Date, the Closing does
not occur and this Amendment is not effective, then Landlord and Lender shall
continue to hold the cash proceeds of the Original L-C as the deposit under the
Lease.
6. New Letter of Credit. As a further material inducement for Landlord to
enter into this Amendment, Tenant, at its expense, shall deliver to Escrow
Agent, on or before the Outside Date, an unconditional, clean, irrevocable new
letter of credit in the amount of $722,730.00 (the "NEW L-C"), in favor of
Lender. The New L-C shall be issued by same issuing bank and in the form of the
Original L-C described in Section 21.1.1 of the Original Lease (modified to
accommodate the new amount). Landlord (and Lender) shall hold and use the New
L-C as security for the faithful performance by Tenant of all of the terms,
covenants, and conditions of the Lease, as amended hereby, to be kept and
perform by Tenant during the Lease Term, as amended hereby. All of the
provisions of Section 21.1.2 of the Original Lease shall apply to the New L-C
with all references in the Original Lease to L-C to mean the New L-C.
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7. Events of Bankruptcy. In the event that an "Event of Bankruptcy," as
that term is defined below, shall occur within ninety (90) days following the
Outside Date and Landlord is thereafter required to disgorge to Tenant any
portion of the Modification Fee or New L-C received pursuant to this Amendment
for any reason, including, without limitation, an action brought under the
Bankruptcy Code, the Landlord shall have the choice of either: (i) treating the
Amendment as void ab initio, and restoring the parties to their respective
positions as if this Amendment had never been entered into (including the
Landlord refunding to Tenant any portion of the Modification Fee not otherwise
disgorged, but less an amount necessary for Landlord to hold an amount equal to
the Original L-C), or (ii)retaining the portion of the Modification Fee not
disgorged and treating the Amendment as fully in effect. Landlord shall make
such election within thirty (30) days of receipt of written notice of an Event
of Bankruptcy. For purposes of this Amendment, an "EVENT OF BANKRUPTCY" shall
mean a general assignment by Tenant for the benefit of creditors, or the filing
by or against Tenant under an insolvency or bankruptcy law (including, without
limitation, a filing of any voluntary or involuntary petition for relief under
any chapter of the United States Bankruptcy Code), or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant, or any execution or other judicially authorized seizure of all or
substantially all of Tenant's assets located upon the Leased Premises or of
Tenant's interest in the Lease, as amended hereby. Landlord and Tenant agree
that the disgorgement of any portion of the Modification Fee or New L-C received
pursuant to this Amendment for any reason or the avoidance in whole or in part
of this Amendment, under any applicable law, including, but not limited to,
chapter 5 of title 11 of the United States Code, shall be considered a breach of
this Amendment by Tenant and shall entitle Landlord to seek the full amount of
the Obligations (as defined below) from Tenant as damages resulting from the
breach of this Amendment. "OBLIGATIONS" shall mean the full amount of damages
which Landlord is entitled to in accordance with Article 19 of the Original
Lease less any portion of the Modification Fee or New L-C which Landlord is
irrevocably and unconditionally entitled to keep.
8. Early Defaults. If Tenant defaults (after notice of such default and the
expiration of the applicable cure period under the Lease, as amended hereby)
under any monetary obligation under the Lease, as amended by this Amendment,
prior to the Effective Date, then Landlord reserves the right, in its sole and
absolute discretion, in addition to any other rights and remedies, to cancel
this Amendment but not the Lease and restore the parties to their respective
positions prior to this Amendment, including refunding any portion of the
Modification Fee, less an amount necessary for Landlord to hold an amount equal
to the Original L-C and any amount disgorged by any party due to an Event of
Bankruptcy. Landlord shall make such election within thirty (30) days after the
occurrence of any such monetary default and the expiration of the applicable
cure period under the Lease, as amended hereby. If Landlord fails to exercise
such right within said thirty (30) day period, then Landlord shall be deemed to
have waived such right with respect to the applicable default, but not any other
right or remedy.
9. Miscellaneous.
9.1 Advice of Counsel. Each of the parties to this Amendment
acknowledges, represents and declares that, in executing this Amendment, it has
relied solely upon its own judgment, belief and knowledge, and the advice and
recommendation of its own independently selected counsel, concerning the nature,
extent and duration of its rights and claims, and that
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neither has been influenced to any extent whatsoever in executing the same by
any representations or statements made by any other Party or by a representative
of another party. Further, each party acknowledges, represents and declares that
it has carefully read this Amendment, knows the contents and executes the same
voluntarily and without fraud, duress or undue influence. Each of the parties
and their respective counsel have reviewed this Amendment, and the rule of
construction to the effect that any ambiguities in an agreement are to be
resolved against the drafting party shall not be employed in the interpretation
of this Amendment.
9.2 No Warranty. Each of the parties to this Amendment acknowledge
that no representation or promise of any kind or character has been made by
anyone to induce the execution of this Amendment, except as stated within this
Amendment, except as expressly provided in this Amendment.
9.3 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties to this Amendment and their successors
and/or assigns.
9.4 Governing Law. This Amendment shall be governed under and
interpreted in accordance with the laws of the State of California, without
regard to any conflicts of laws provisions thereto. In the event any lawsuit is
brought to enforce the terms of this Agreement, the parties hereby submit to the
exclusive jurisdiction of, and waive any venue objections against, the United
States District Court for the Northern District of California, and the Superior
and Municipal Courts of the State of California, Santa Xxxxx County.
9.5 Attorneys' Fees. If either party to the Amendment obtains a
judgment against the other party in connection with a dispute arising under or
in connection with this Amendment (whether in an action or through arbitration),
such party shall be entitled to recover its court (or arbitration) costs, and
reasonable attorneys' fees (including the reasonable value of in-house attorney
services) and disbursements incurred in connection therewith and in any appeal
or enforcement proceeding thereafter, in addition to all other recoverable
costs. Any such attorneys' fees and other expenses incurred by a party in
enforcing a judgment in its favor under this Amendment shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Amendment and to survive and not be merged into any such
judgment.
9.6 Confirmation. Tenant acknowledges and agrees that: (a) Tenant is
in sole possession of the Premises demised under the Lease; (b) all work,
improvements and furnishings required by Landlord under the Lease have been
completed and accepted by Tenant; (c) all free rent and any other concession
required under the Lease have been granted, used and otherwise satisfied; and
(d) there are no defaults by Landlord and it has no offset, claim, recoupment or
defense against the payment of rent and other sums and the performance of all
obligations of Tenant under the Lease.
9.7 Counterparts. This Amendment may be execute one or more
counterparts, including any facsimile of same, each of which shall constitute an
original, but all of which when
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taken together shall constitute one agreement. Any facsimile signature shall
constitute a valid and binding method for a party to sign this Amendment.
9.8 No Further Modification. Except as specifically set forth in this
Amendment, all of the terms and provisions of the Lease shall remain unmodified
and in full force and effect. In the event of any conflict between the terms and
conditions of the Lease and the terms and conditions of this Amendment, the
terms and conditions of this Amendment shall prevail.
10. Authority. Each party to this Amendment represents and warrants to the
other that it is duly authorized to enter into this Amendment and perform its
obligations and that the person signing on its behalf is duly authorized to sign
on behalf of such party.
11. Real Estate Brokers.
11.1 Tenant represents and warrants to Landlord that it has not
authorized or employed, or acted by implication to authorize or employ, any real
estate broker or salesman to act for it in connection with this Amendment other
than The Columbia Group ("TENANT'S BROKER"). Tenant agrees to pay Tenant's
Broker a commission or other compensation due Tenant's Broker pursuant to a
separate agreement between Tenant and Tenant's Broker. Tenant agrees to
indemnify, defend and hold harmless Landlord from and against any and all claims
by any real estate broker or salesman (including Tenant's Broker) whom the
Tenant authorized or employed, or acted by implication to authorize or employ,
to act for Tenant in connection with this Amendment.
11.2 Landlord represents and warrants to Tenant that it has not
authorized or employed, or acted by implication to authorize or employ, any real
estate broker or salesman to act for it in connection with this Amendment.
Landlord agrees to indemnify, defend and hold harmless Tenant from and against
any and all claims by any real estate broker or salesman (other than Tenant's
Broker) whom the Landlord authorized or employed, or acted by implication to
authorize or employ, to act for Landlord in connection with this Amendment.
12. Escrow. Landlord and Tenant acknowledge and agree that the
effectiveness and delivery of this Amendment are subject to receipt by Escrow
Agent, on or prior to the Outside Date, of the following: (1) four fully
executed counterpart originals of this Amendment, executed by Landlord and
Tenant; (2) the Cash Payment, in immediately available federal funds, (3) the
New L-C, (4) four fully executed counterpart originals of the documents in the
form attached as Exhibit "B" to this Amendment, evidencing Landlord's lender's
consent to this Amendment (collectively, the "LOAN AMENDMENTS"); (5) a letter
from The Columbia Group to Landlord to the effect that it will look solely to
Tenant in connection with any compensation or commission which may be owed to it
in connection with this Amendment (the "BROKER LETTER"); and (6) confirmation by
Landlord's lender that it has successfully drawn upon the Original L-C in full.
If items (1) through (6) above have been received by Escrow Agent prior to 5:00
p.m. Eastern Standard Time on the Outside Date, then Escrow Agent is hereby
irrevocably authorized, without the consent or further instruction from any
other party, to do the following: (1) date the Amendment as of the date that the
conditions set forth in clauses (1) through (6) above are satisfied and deliver
two fully executed originals of this Amendment to Tenant, and one fully executed
original of this Amendment to each of Landlord and Lender; (2) deliver the New
L-C to
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Lender, (3) deliver two fully executed originals of the Loan Amendments to each
of Landlord and Lender, (4) deliver the Broker Letter to Landlord, and (5)
deliver the Cash Payment as follows: (i) $76,076 to Borrower, in accordance with
wiring instructions from Borrower, and (ii) $2,946,391 to Lender in accordance
with wiring instructions delivered by Lender If for any reason the items set
forth in clauses (1) through (6) are not received by Escrow Holder on or before
5:00 p.m. Eastern Standard Time on the Outside Date, then Escrow Holder shall
destroy this Amendment and the Loan Agreement Amendments, Escrow Agent shall
return the New L-C and the Cash Payment to Tenant, Landlord and Lender shall
continue to hold the Original L-C or the proceeds thereof as the security
deposit under the Lease, and this Amendment shall be void ab initio, and the
parties shall be restored to their respective positions as if this Amendment had
never been entered into.
[This Space Intentionally Left Blank]
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IN WITNESS WHEREOF, this Amendment has been executed as of the day and year
first above written.
LANDLORD: TENANT:
SAN XXXXX PROPERTIES, LLC, a AKAMAI TECHNOLOGIES, INC., a
Delaware limited liability company Delaware corporation
By: Divco West Group, LLC By: /s/ Xxxxxx Xxxxxxx
a Delaware limited liability Name: Xxxxxx Xxxxxxx
company Its Agent Its: Chief Financial Officer
By: /s/ Xxxxxxx X. Single By: /s/ Xxxxx Xxxxxxx
Name: Xxxxxxx X. Single Name: Xxxxx Xxxxxxx
Its: Authorized Signatory Its: VP of Finance
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EXHIBIT A
OUTLINE OF DATA CENTER PORTION OF THE PREMISES
EXHIBIT B
FORM OF LOAN AGREEMENT AMENDMENTS
