EXHIBIT 10.37
LEASE
(MULTI-TENANT; NET)
BETWEEN
THE IRVINE COMPANY
AND
BROADCOM CORPORATION
(48 DISCOVERY)
INDEX TO LEASE
ARTICLE I. BASIC LEASE PROVISIONS
ARTICLE II. PREMISES
Section 2.1 Leased Premises
Section 2.2 Acceptance of Premises
Section 2.3 Building Name and Address
Section 2.4 Landlord's Responsibilities
Section 2.5 Rights to Lease Additional Space
Section 2.6 Grant of License Rights
ARTICLE III. TERM
Section 3.1 General
Section 3.2 Delay in Possession
Section 3.3 Right to Extend the Lease Term
ARTICLE IV RENT AND OPERATING EXPENSES
Section 4.1 Basic Rent
Section 4.2 Operating Expenses
Section 4.3 Security Deposit
ARTICLE V. USES
Section 5.1 Use
Section 5.2 Signs
Section 5.3 Hazardous Materials
ARTICLE VI. COMMON AREAS; SERVICES
Section 6.1 Utilities and Services
Section 6.2 Operation and Maintenance of Common Areas
Section 6.3 Use of Common Areas
Section 6.4 Parking
Section 6.5 Changes and Additions by Landlord
Section 6.6 Outdoor Courtyard Area
ARTICLE VII. MAINTAINING THE PREMISES
Section 7.1 Tenant's Maintenance and Repair
Section 7.2 Landlord's Maintenance and Repair
Section 7.3 Alterations
Section 7.4 Mechanic's Liens
Section 7.5 Entry and Inspection
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Section 9.1 Rights of Parties
Section 9.2 Effect of Transfer
Section 9.3 Sublease Requirements
Section 9.4 Certain Transfers
Section 9.5 Colocation of Equipment
ARTICLE X. INSURANCE AND INDEMNITY
Section 10.1 Tenant's Insurance
Section 10.2 Landlord's Insurance
Section 10.3 Tenant's Indemnity
Section 10.4 Landlord's Nonliability
Section 10.5 Waiver of Subrogation
ARTICLE XI. DAMAGE OR DESTRUCTION
Section 11.1 Restoration
Section 11.2 Lease Governs
ARTICLE XII. EMINENT DOMAIN
Section 12.1 Total or Partial Taking
Section 12.2 Temporary Taking
Section 12.3 Taking of Parking Area
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
Section 13.1 Subordination
Section 13.2 Estoppel Certificate
Section 13.3 Financials
(i)
ARTICLE XIV. DEFAULTS AND REMEDIES
Section 14.1 Tenant's Defaults
Section 14.2 Landlord's Remedies
Section 14.3 Late Payments
Section 14.4 Right of Landlord to Perform
Section 14.5 Default by Landlord
Section 14.6 Expenses and Legal Fees
Section 14.7 Waiver of Jury Trial
Section 14.8 Satisfaction of Judgment
ARTICLE XV. END OF TERM
Section 15.1 Holding Over
Section 15.2 Merger on Termination
Section 15.3 Surrender of Premises; Removal of Property
ARTICLE XVI. PAYMENTS AND NOTICES
ARTICLE XVII. RULES AND REGULATIONS
ARTICLE XVIII. BROKER'S COMMISSION
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
ARTICLE XX. INTERPRETATION
Section 20.1 Gender and Number
Section 20.2 Headings
Section 20.3 Joint and Several Liability
Section 20.4 Successors
Section 20.5 Time of Essence
Section 20.6 Controlling Law
Section 20.7 Severability
Section 20.8 Waiver and Cumulative Remedies
Section 20.9 Inability to Perform
Section 20.10 Entire Agreement
Section 20.11 Quiet Enjoyment
Section 20.12 Survival
ARTICLE XXI. EXECUTION AND RECORDING
Section 21.1 Counterparts
Section 21.2 Corporate and Partnership Authority
Section 21.3 Execution of Lease; No Option or Offer
Section 21.4 Recording
Section 21.5 Amendments
Section 21.6 Executed Copy
Section 21.7 Attachments
ARTICLE XXII MISCELLANEOUS
Section 22.1 Nondisclosure of Lease Terms
Section 22.2 Guaranty
Section 22.3 Changes Requested by Lender
Section 22.4 Mortgagee Protection
Section 22.5 Covenants and Conditions
Section 22.6 Security Measures
Section 22.7 JAMS
EXHIBITS
Exhibit A Description of Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit X Work Letter
Exhibit Y Project Site Plan
(ii)
INDUSTRIAL LEASE
(MULTI-TENANT; NET)
THIS LEASE is made as of the 12th day of January, 2001, by and between
THE IRVINE COMPANY, hereafter called "Landlord," and Broadcom Corporation, a
California corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: All of one (1) two (2) story building known as 48 Discovery,
Irvine, California (the "Building").
2. Project Description: Discovery Business Center V.
3. Use of Premises: General office use and any other use which does not
violate applicable laws, rules and regulations or covenants, conditions
and restrictions.
4. Estimated Commencement Date: May 15, 2001.
5. Lease Term: Sixty (60) months, plus such additional days as may be
required to cause this Lease to expire on the final day of the last
calendar month.
6. Basic Rent: One Hundred Twenty One Thousand One Hundred Forty Dollars
($121,140.00) per month, based on $2.25 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing on the first day of the thirteenth (13th) month of the Lease
Term, the Basic Rent shall be One Hundred Twenty Three Thousand Eight
Hundred and Thirty Two Dollars ($123,832.00) per month, based on $2.30
per rentable square foot.
Commencing on the first day of the twenty-fifth (25th) month of the
Lease Term, the Basic Rent shall be One Hundred Twenty Six Thousand
Dollars Five Hundred Twenty Four Dollars ($126,524.00) per month, based
on $2.35 per rentable square foot.
Commencing on the first day of the thirty-seventh (37th) month of the
Lease Term, the Basic Rent shall be One Hundred Twenty Nine Thousand
Two Hundred Sixteen Dollars ($129,216.00) per month, based on $2.40 per
rentable square foot.
Commencing on the first day of the forty-ninth (49th) month of the
Lease Term, the Basic Rent shall be One Hundred Thirty One Thousand
Nine Hundred and Eight Dollars ($131,908.00) per month, based on $2.45
per rentable square foot.
7. Guarantor(s): None
8. Floor Area of Premises: Approximately 53,840 rentable square feet
9. Security Deposit: None
10. Broker(s): Real Estate & Logistics Technology, Inc. (Kim Josephson).
11. Additional Insureds: Insignia/ESG of California, Inc.
1
12. Address for Payments and Notices:
LANDLORD TENANT
THE IRVINE COMPANY Broadcom Corporation
c/o Insignia/ESG of California 16215 Alton Parkway
43 Discovery, Suite 120 Irvine, CA
Irvine, CA 92618 Attn: Director Corporate Services
With a copy of notices to: With an additional copy sent to the same address
to the attention of the Chief Financial Officer
THE IRVINE COMPANY
dba Irvine Industrial Company And with a copy of notices to:
P.O. Box 6370
Newport Beach, CA 92658-6370 Brobeck, Phleger & Harrison LLP
Attn: Vice President, Industrial Operations 12390 El Camino Real
San Diego, CA 92130
Attention: Scott Biel
13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: 215
2
ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions.
The Premises are located in the building identified in Item 1 of the Basic Lease
Provisions (which together with the underlying real property, is called the
"Building"), and is a portion of the project shown in Exhibit Y (the "Project").
Tenant understands that the floor area set forth in Item 8 of the Basic Lease
Provisions may include, at Landlord's option, a factor approximating the total
square footage of any common lobby or internal common features of the Building
times the ratio of the actual square footage of the Premises to the total square
footage of the Building. The parties agree that the Floor Area of the Premises
specified in Item 8 of the Basic Lease Provisions shall be the rentable area of
the Premises for all purposes under this Lease notwithstanding any later
determination or remeasure by either party. Landlord shall have no right to
relocate Tenant from the Premises at any time during the Term of this Lease or
any extension.
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that, except as
expressly provided in this Lease, neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, including,
without limitation, any representations or warranties regarding zoning or other
land use matters; and that neither Landlord nor any representative of Landlord
has made any representations or warranties regarding (i) what other tenants or
uses may be permitted or intended in the Building and the Project, or (ii) any
exclusivity of use by Tenant with respect to its permitted use of the Premises
as set forth in Item 3 of the Basic Lease Provisions. Tenant further
acknowledges that neither Landlord nor any representative of Landlord has agreed
to undertake any alterations or additions or construct any improvements to the
Premises except as expressly provided in this Lease. The taking of possession or
use of the Premises by Tenant for the conduct of Tenant's business therein (but
not for construction or early entry for fixturization in accordance with the
Work Letter) shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for: (i) those matters which Tenant brings to
Landlord's attention on a written punch list delivered to Landlord within thirty
(30) days after the Term of this Lease commences with respect to the Premises ,
and (ii) Landlord's other obligations specifically provided in this Lease,
including, without limitation, the responsibilities contained in Section 2.4
hereof. Nothing contained in this Section shall affect the commencement of the
Term or the obligation of Tenant to pay rent. Landlord shall diligently complete
all punch list items of which it is notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as
any part of Tenant's corporate or trade name. Landlord shall have the right to
change the name, address, number or designation of the Building or Project
without liability to Tenant; provided, however, if the address of the Building
and/or the Project is changed by Landlord, Landlord agrees to provide Tenant
with no less than sixty (60) days prior written notice and to reimburse Tenant
for all expenses reasonably incurred by Tenant in conjunction with such address
change (including, without limitation, the cost of changing Tenant's stationery
and of notifying Tenant's clients and customers of Tenant's new address of the
Building and/or the Project), not to exceed Five Thousand Dollars ($5,000.00) in
the aggregate.
SECTION 2.4 LANDLORD'S RESPONSIBILITIES.
(a) Landlord shall correct, repair or replace, at Landlord's sole cost
and expense and not as a Project Cost, any non-compliance of the Building
exterior and the Common Areas with all applicable building permits and codes in
effect as of the Commencement Date, including, without limitation, the
provisions of Title III of the Americans With Disabilities Act ("ADA") in effect
as of the Commencement Date. Said costs of compliance shall be Landlord's sole
cost and shall not be part of Project Costs. Landlord shall correct, repair or
replace any non-compliance of the Building exterior and the Common Areas with
any revisions or amendments to the ADA in effect after the Commencement Date,
provided that the amortized cost of such repairs or replacements (amortized over
the useful life thereof using a market cost of funds reasonably determined by
Landlord) shall be included as Project Costs payable by Tenant. All other ADA
compliance issues which pertain to the Premises, including, without limitation,
in connection with Tenant's construction of any alterations or other
improvements in the Premises (and any resulting ADA compliance requirements in
the Common Areas), the Tenant Improvements and the operation of Tenant's
business and employment practices in the Premises, shall be the responsibility
of Tenant at its sole cost and expense. Landlord shall, during the initial Lease
Term, correct, repair or replace, at Landlord's sole cost and expense and not as
a Project Cost, any failure of the structural components of the roof,
foundations, footings and load-bearing walls of the Building. The repairs,
corrections or replacements required of Landlord or of Tenant under the
foregoing provisions of this Section 2.4 shall be made promptly following notice
of non-compliance from any applicable governmental agency.
(b) Landlord warrants to Tenant that the Shell Building Improvements
as defined in the Discovery Outline Specifications (as defined in the Work
Letter) and the Tenant Improvements to be completed pursuant to the Work Letter
shall be free from defects in workmanship or materials for a period of twelve
(12) months from the Commencement Date. Landlord shall promptly rectify any
non-compliance at its sole cost and expense after receipt of written notice from
Tenant within such time setting forth the nature and extent of any such
non-compliance. Landlord shall obtain customary warranties and guaranties from
the contractor(s) performing the Tenant Improvement work and/or the
manufacturers of equipment installed but shall be under no obligation to incur
additional expense in order to obtain or extend such warranties. If after
expiration of the initial twelve (12) months of the Lease Term, Tenant is
required to make repairs to any component of the Premises or any of its systems
for which Landlord may have obtained
3
a warranty, Landlord shall, upon request by Tenant, use its good faith efforts
to pursue its rights under any such warranties for the benefit of Tenant.
Landlord shall be under no obligation to incur any expense in connection with
asserting rights under such warranties or guaranties against either the
contractor or the manufacturer, but shall use reasonable good faith efforts to
enforce such warranties and guaranties for Tenant's benefit.
(c) Notwithstanding the provisions of Section 7.2 of this Lease,
Landlord agrees to maintain and repair, at its sole cost and expense and not as
an Operating Expense the structural components of the roof and Building,
including floor/ceiling slabs, columns, beams, walls and the foundations and
footings of the Building during the initial Lease Term. If a non-compliance with
the foregoing warranty exists, Landlord shall, promptly after receipt of the
written notice from Tenant setting forth the nature and extent of such
non-compliance, rectify same at Landlord's sole cost and expense.
SECTION 2.5. RIGHTS TO LEASE ADDITIONAL SPACE. Provided Tenant is not then
in default of any monetary covenant of this Lease (including, without
limitation, the obligation to pay Basic Rent and/or Tenant's Share of Operating
Expenses), or any material non-monetary covenant, following written notice to
Tenant and the expiration of the applicable cure period, Landlord hereby grants
Tenant the rights described in this Section.
(a) TENANT'S EXPANSION RIGHT - 42 AND 46 DISCOVERY. Unless Tenant has
previously received from Landlord a notice pursuant to subparagraph (b) of this
Section with respect to Designated First Right Space, Tenant shall have the
right from the date of execution of this Lease to October 31, 2001 to expand the
area of the Premises (the "Expansion Right") by delivering written notice to
Landlord ("Expansion Notice") expressing Tenant's desire to lease all or a
leasable portion (in a configuration reasonably acceptable to Landlord) of any
space then available in the buildings owned by Landlord located at 42 and/or 46
Discovery (the "Expansion Space") upon the same terms and conditions as set
forth in this Lease. Tenant's Expansion Notice shall identify the amount of
space Tenant desires and, if less than a full floor, a depiction of the area
desired. Landlord shall have the right in its sole discretion reasonably
exercised to designate the final configuration of the Expansion Space if less
than a full floor is requested. In the event Tenant gives Landlord an Expansion
Notice prior to the Commencement Date, all terms and conditions of this Lease
including Base rent and additional rent shall apply with respect to the
Expansion Space so added to the Premises. In the event Tenant gives Landlord an
Expansion Notice on or after the Commencement Date but prior to August 1, 2001,
all terms and conditions of this Lease shall apply except that the Base Rent
applicable to the Expansion Space shall be $0.05 per square foot per month
greater than the rental rates set forth in Item 6 of the Basic Lease Provisions
with respect to the Premises. In the event Tenant gives Landlord an Expansion
Notice between August 1, 2001 and October 31, 2001, all terms and conditions of
the Lease shall apply except that the Base Rent applicable to the Expansion
Space shall be $0.15 per square foot per month greater than the rental rates set
forth in Item 6 of the Basic Lease Provisions. Tenant's rights under this
Section shall expire and be of no further force and effect unless exercised on
or before October 31, 2001. Notwithstanding the foregoing, Tenant's expansion
rights pursuant to this subparagraph shall terminate with respect to any
Designated First Right Space which Landlord has previously offered to Tenant
pursuant to the Right of First Refusal described below. The date any Expansion
Space is added to the Premises shall be the date which is fourteen (14) calendar
weeks after the date of the Expansion Notice and the termination date with
respect to such portion of the Premises shall be the date which is sixty (60)
months after the Commencement Date with respect to such space.
(b) RIGHT OF FIRST REFUSAL - 42 AND 46 DISCOVERY. In addition to the
Expansion Right set forth above, Landlord hereby grants to Tenant the one-time
right of first refusal applicable to the initial leasing only ("First Right") to
lease all or any portion equal to or larger than one full floor of space in the
buildings located at 42 and 46 Discovery ("First Right Space") in accordance
with and subject to the provisions of this subsection. At any time after the
date of this Lease, but prior to leasing the First Right Space, or any portion
thereof, to any third party, if Landlord has reached a tentative agreement
(which may be a nonbinding, tentative agreement) to lease any of the First Right
Space to a third party, Landlord shall give Tenant written notice describing the
space (the "Designated First Right Space") and the basic economic terms
including but not limited to the Basic Rent, term, operating expenses, and
tenant improvement allowance (collectively, the "Economic Terms"), tentatively
agreed upon for such lease. It is understood that should Landlord intend to
lease other space in addition to the First Right Space as part of a single
transaction, then Landlord's notice shall so provide and all such space shall
collectively be subject to the First Right provisions. If the Designated First
Refusal Space is less than one complete floor of the First Right Space, Tenant's
First Right shall be exercisable at a minimum with respect to the entire floor
which contains the Designated First Right Space but Tenant shall have the right
to exercise its First Refusal with respect to any of the First Right Space then
remaining unleased upon the Economic Terms set forth in Landlord' Notice.
Within five (5) business days after receipt of Landlord's notice, Tenant
shall give Landlord written notice ("Tenant's First Right Response Notice")
pursuant to which Tenant shall elect to: (i) lease the Designated First Right
Space (but in no event less than one complete floor of the First Right Space) or
to lease all remaining First Right Space upon the Economic Terms; or (ii)
decline to lease the Designated First Right Space, in which event Landlord may
lease the Designated First Right Space to any third party upon the Economic
Terms and such other terms as it deems appropriate. In the event that Tenant
fails to respond in writing to Landlord's notice within said five (5) business
day period, Tenant shall be deemed to have elected clause (ii) above. In the
event Tenant elects not to lease the Designated First Right Space or fails to
respond, Tenant's First Right as set forth in this subsection shall terminate as
to any remaining space in the building containing the Designated First Right
Space. In the event that Landlord shall not enter into a lease for the
Designated First Right Space, or a portion thereof, with a third party within
one hundred eighty (180) days following Landlord's notice described above, then
prior to leasing the Designated First Right Space to any third party thereafter,
Landlord shall repeat the procedures set forth in this subsection one final time
but no such event shall revive Tenant's Expansion Right as set forth above. The
term, commencement and expiration date for any First Right
4
Space added to the Premises shall be as set forth in the Economic Terms and such
dates shall not affect the Commencement Date or expiration date of this Lease
with respect to the Premises.
(c) ADDITIONAL FIRST RIGHT SPACE. In the event that Tenant leases all
of 42 Discovery or 46 Discovery, whether by exercise of an Expansion Right
pursuant to subparagraph (a) of this Section or by exercise of one or more
Rights of First Refusal pursuant to subparagraph (b) of this Section, then
Tenant shall have the one-time Right of First Refusal applicable to the initial
leasing only on space within the buildings currently under construction by
Landlord located at 36 Discovery and 38 Discovery (collectively the "Additional
First Right Space") upon all the terms and conditions set forth in subparagraph
(b) of this Section except that all references to First Right Space shall be
deemed to refer to the Additional First Right Space.
(d) DOCUMENTATION OF ADDITIONAL SPACE. In the event Tenant exercises
any or its rights under this Section to expand the Premises, then Landlord shall
promptly prepare and deliver to Tenant either an amendment to this Lease or a
new lease upon the same terms and conditions but which pertains only the
addition to the Premises and Tenant shall execute and return same to Landlord
within ten (10) business days. Tenant's failure to timely return the amendment
shall be a default under this Lease with the Premises expanded as set forth in
such amendment.
(e) RIGHTS LIMITED TO BROADCOM. Tenant's rights under this Section 2.5
shall belong solely to Broadcom Corporation, a California corporation, and may
not be assigned or transferred except in connection with the assignment of this
Lease to a "Tenant Affiliate" as hereinafter defined. Any attempted assignment
or transfer of such rights except to a Tenant Affiliate shall be void and of no
force or effect.
SECTION 2.6 GRANT OF LICENSE RIGHTS. Landlord hereby grants to Tenant a
non-exclusive license and permission to enter upon the areas described below
(the "Licensed Area") for the purposes and on the terms and conditions set forth
in this Section (the "License").The Licensed Area shall be considered to be a
part of the Premises for all purposes under the Lease but there shall be no
license fee or rent payable to Landlord with respect thereto, and except as
otherwise expressly provided in this Section, all provisions applicable to the
use of the Premises under the Lease shall apply to the Licensed Area and its use
by Tenant.
(a) License to Roof Areas for Telecommunication Equipment. Landlord grants
to Tenant the license and right to enter upon the areas of the roof to be
designated on a written plan approved by Landlord for the installation,
operation and maintenance of microwave and/or satellite antenna dishes and/or
global positioning satellite ("GPS") antenna and related wires, cables, conduits
(collectively the "Communications Equipment"). All such equipment shall be
screened from view in a manner consistent with Landlord's requirements for
screening such equipment elsewhere in the Project. Tenant shall at all times
operate and maintain the Communications Equipment so as to ensure that such
systems do not create electro-magnetic or other disturbances to existing systems
in the area in which the Project is located whether operated by Landlord, other
tenants or third parties. Tenant shall be solely responsible for any repair or
maintenance to the roof required as a result of Tenant's activities. Landlord
agrees that in the event it grants one or more licenses to third parties to
install, operate and/or maintain Communications Equipment on the roof of the
Building, Landlord shall obtain a covenant from such third parties that they
shall operate any such systems in a manner which will not create unreasonable
electro-magnetic or other disturbances to or with systems being operated by
Tenant on the roof of the Building in accordance with the terms of this License.
(b) License to Common Areas for Generator Equipment. Landlord grants Tenant
the license and right to enter upon and use an area to be designated on a
written plan approved by Landlord for the installation, operation and
maintenance of a backup power generator and associated fuel tank, the plans for
which shall be approved by Landlord. The License Area for use in connection with
the generator will include area for the passage of related wires, cables and
conduit between Tenant's electrical room and the generator itself, all is to be
more specifically defined in the proposed plan. Tenant shall have access to the
Licensed Area for the generator on a 24 hour per day/7 day per week basis;
provided, however, that Tenant shall not undertake any repairs or maintenance in
such Licensed Area which would interfere with the use of the Common Areas by
other tenants without the prior written consent of Landlord. Landlord shall not
unreasonably withhold its consent to any such repairs or maintenance, but may
impose reasonable conditions thereon and Tenant shall undertake any such work as
expeditiously as reasonably possible so as to cause as little interference with
the rights of other tenants of the Project as possible. Tenant has advised
Landlord that it intends to run the generator on a regular basis in order to
comply with maintenance specifications and requirements of law and that such
operation may be as often as one (1) thirty (30) minute period per week. Except
in cases of emergency, when no prior approval shall be required, Tenant shall
propose for Landlord's reasonable approval the schedule for operation of the
generator which will provide minimal interference with the use of the Project by
other tenants.
(c) License to Common Areas for Conduit. Tenant shall have the right, at
its sole cost and expense, to trench in the Common Areas within the boundaries
of the Project reasonably approved by Landlord (which approval may be withheld
or conditioned if such trenching adversely affects other tenants of the Project)
and, if necessary, to trench beneath Discovery Way, subject to Tenant's
obtaining all required governmental permits, consents and approvals, for the
purpose of "hard wiring" for voice, data and power transmissions between and
among the Buildings within the Project which are fully or partially occupied by
Tenant. Tenant shall be responsible for the operation and maintenance of any
such conduit installed throughout the Term of this Lease. Tenant shall not be
obligated to remove such conduit but Tenant shall be required to strip all
cabling from such conduit at its sole cost and expense upon expiration or
earlier termination of this Lease.
(d) Additional Terms and Conditions.
5
(1) The Term of the License shall be coterminous with this Lease and,
subject to the terms hereof, shall be irrevocable so long as the Lease remains
in effect;
(2) Tenant shall not be obligated to pay any license fee for the use
of the Licensed Areas pursuant to this Section during the Term of this Lease or
any extension thereof.
(3) Tenant shall use the Licensed Areas only for the installation,
operation, repair, replacement and maintenance of the referenced equipment and
the necessary mechanical and electrical equipment to service said equipment and
for no other use or purpose. The installation of all equipment and facilities
related thereto, including any required conduit from the Premises to the
Licensed Areas, shall be deemed to constitute an alteration subject to the
provisions of Section 7.3 of the Lease, provided that Landlord shall not
unreasonably withhold its approval of the same. Landlord may require appropriate
screening for any equipment installed within the Licensed Areas as a condition
of Landlord's approval of the plans submitted.
(4) The Communications Equipment shall be used only for transmitting
and/or receiving data, audio and/or video signals to and from Tenant's
facilities within the Premises for Tenant's business use, and shall not be used
or permitted to be used by Tenant for purposes of broadcasting signals to the
public or to provide telecommunications or other communications transmitting or
receiving services to the public. Notwithstanding the foregoing, Tenant shall
not be prohibited from transmitting or receiving broadcasting signals to and
from its customers, business affiliates and/or employees in connection with the
conduct of its business in the Premises.
(5) In the event Landlord reasonably determines that the presence or
operation of the equipment installed by Tenant is or will results in material
damage to the Building, Landlord reserves the right upon reasonable prior
written notice to Tenant to require either (a) the relocation of all equipment
installed by Tenant on the roof of the Building to another location on the roof
of the Building reasonably designated by Landlord, or (b) the removal of any and
all of such equipment unless Tenant makes satisfactory arrangements to protect
Landlord, the Building and its tenants therefrom;
(6) Tenant shall require its employees, when using the Licensed Areas,
to stay within the immediate vicinity thereof. In addition, in the event any
communications system or broadcast or receiving facilities are operating in the
area, Tenant shall at all times during the term of the License conduct its
operations so as to ensure that such system or facilities shall not be subjected
to harmful interference as a result of such operations by Tenant. Upon
notification from Landlord of any such interference, Tenant agrees to
immediately take the necessary steps to correct such situation, and Tenant's
failure to do so shall be deemed a default under the terms of this Lease subject
to the applicable cure right in accordance with Section 14.1 hereof.
(7) During the term of the License, Tenant shall comply with any
standards promulgated by applicable governmental authorities regarding the
installation, use or maintenance of the Communications Equipment or generator or
the generation of electromagnetic fields. In the event Landlord is advised by a
governmental agency that the Communications Equipment poses a health or safety
hazard to occupants of the Building, Landlord may require Tenant to make
arrangements reasonably satisfactory to Landlord to mitigate such hazard or, if
Tenant either fails or is unable to make such satisfactory arrangements, to
remove the Communications Equipment. Any claim or liability resulting from the
use of the Communications Equipment or the Licensed Areas by Tenant shall be
subject to the indemnification provisions of this Lease applicable to Tenant's
use of the Premises;
(8) During the term of the License, Tenant shall pay all taxes
attributable to the Communications Equipment and generator and other equipment
owned and installed by Tenant, and Tenant shall assure and provide Landlord with
evidence that the Licensed Area and Tenant's use thereof are subject to the
insurance coverages otherwise required to be maintained by Tenant as to the
Premises pursuant to Exhibit D;
(9) Upon the expiration or sooner termination of the Lease, Tenant
shall remove the Communications Equipment and generator and all related
equipment and facilities, including any conduit from the Premises to the
Licensed Areas and any other portions of the Building within or upon which the
same may be installed, and shall restore the Licensed Areas and all other areas
affected by such removal to their original condition, reasonable wear and tear
excepted, all at its sole cost and expense. Notwithstanding the foregoing,
Tenant shall not be obligated to remove underground conduit between the Building
and the Generator pad provided it removes all cabling and caps the conduit in a
manner reasonably satisfactory to Landlord; and
(10) The License is personal to Tenant and shall not be assignable in
whole or in part (except to a Tenant Affiliate which is occupying a portion of
the Building and any subtenant or assignee approved by Landlord in accordance
with the Terms of this Lease), and any attempted assignment thereof without the
consent of Landlord, which consent may be withheld by Landlord in its sole and
absolute discretion, shall immediately terminate the License. Notwithstanding
the foregoing, Landlord's consent shall not be required with respect to an
assignment of the License to any Tenant Affiliate.
ARTICLE III. TERM
SECTION 3.1. GENERAL. The term of this Lease (the "Term") for the Premises
shall be for the period shown in Item 5 of the Basic Lease Provisions. Subject
to the provisions of Section 3.2 below, the Term shall commence
6
("Commencement Date") on the earlier to occur of: (i) ten (10) business days
following the date that (A) Landlord notifies Tenant that Landlord has
substantially completed the construction of the Tenant Improvements in
accordance with the Work Letter attached as EXHIBIT X hereto, but for minor
"punch list" items identified by Landlord and Tenant in a walk-through of the
Premises prior to the Commencement Date, which items do not preclude or
materially impair Tenant from conducting its business from the Premises, and (B)
Landlord has provided Tenant with all parking required by this Lease in the
Common Area of the Project, and (C) Landlord has obtained and provided Tenant
with a certificate of occupancy or temporary certificate of occupancy for the
Premises from the City of Irvine or (ii) the date Tenant acquires possession or
commences use of such portion of the Premises for any purpose other than
construction or installation of equipment, furniture, fixtures or network and
telecommunications cabling. Within ten (10) days after the Commencement Date has
occurred, the parties shall memorialize on a form provided by Landlord the
actual Commencement Date and the expiration date ("Expiration Date") of this
Lease. Tenant's failure to execute that form shall not affect the validity of
Landlord's determination of those dates. The Term shall be for the period shown
in Item 5 of the Basic Lease Provisions.
SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant on or before the
Commencement Date, this Lease shall not be void or voidable nor shall Landlord
be liable to Tenant for any resulting loss or damage. Notwithstanding the
foregoing, if Landlord and Tenant have approved Plans and Specifications (as
defined in the Work Letter) and such Plans and Specifications have been
submitted to the City of Irvine for building permits on or before January 19,
2001 but Tenant is unable to occupy the Premises on or before October 31, 2001,
(the "Outside Date") because the City of Irvine refuses or is prevented from
issuing the permits required to construct the Tenant Improvements reasonably
consistent with the Plans and Specifications, and, provided that Tenant is not
then in default of its obligations under this Lease after expiration of the
applicable cure period, Tenant shall have the one-time right to terminate this
Lease by giving Landlord written notice to that effect after the Outside Date
but prior to November 15, 2001. In the event this Lease is terminated by Tenant,
pursuant to the provisions of this Section, Tenant shall pay to Landlord
concurrently with its notice of termination the unamortized portion of the real
estate brokerage commission paid by Landlord in connection with this Lease.
SECTION 3.3. RIGHT TO EXTEND THE LEASE TERM. Provided that Tenant is not in
default of any monetary covenant of this Lease (including, without limitation,
the obligation to pay Basic Rent and/or Tenant's Share of Operating Expenses) or
any material non-monetary covenant, following written notice and the expiration
of the applicable cure period, either at the time of exercise of the extension
right granted herein or at the time of the commencement of such extension, then
Tenant may extend the Term of this Lease for one (1) period of sixty (60)
months. Tenant shall exercise its right to extend the Term by and only by
delivering Landlord, not later than nine (9) months or sooner than twelve (12)
months prior to the expiration date of the then current Term, Tenant's
irrevocable written notice of its commitment to extend (the "Commitment
Notice"). The Basic Rent payable under the Lease during the extension of the
Term shall be at the fair market rental, including subsequent adjustments, for
comparable office space being leased by Landlord in the Irvine Spectrum.
Landlord will provide written notice to Tenant of Landlord's good faith
determination of the fair market rental rate not later than thirty (30) days
after the date upon which Tenant timely exercises its extension option. Tenant
will have thirty (30) days ("Tenant's Review Period") after receipt of
Landlord's notice of the fair market rental rate within which to accept such
fair market rental rate or to reasonably object thereto in writing. Tenant's
failure to object to the fair market rental rate submitted by Landlord in
writing within Tenant's Review Period will conclusively be deemed Tenant's
approval and acceptance thereof. If Tenant reasonably objects to the fair market
rental rate submitted by Landlord within Tenant's Review Period, Landlord and
Tenant will attempt in good faith to agree upon such fair market rental rate
using their best good faith efforts. If Landlord and Tenant fail to reach
agreement on such fair market rental rate within thirty (30) days following the
expiration of Tenant's Review Period (the "Outside Agreement Date"), then either
party may elect, by written notice to the other party, to cause said rental,
including subsequent adjustments, to be determined by appraisal as follows.
Within ten (10) business days following receipt of such appraisal
election, the parties shall attempt to agree on an appraiser to determine the
fair market rental. If the parties are unable to agree in that time, then each
party shall designate an appraiser within ten (10) business days thereafter.
Should either party fail to so designate an appraiser within that time, then the
appraiser designated by the other party shall determine the fair rental value.
Should each of the parties timely designate an appraiser, then the two
appraisers so designated shall appoint a third appraiser who shall, acting
alone, determine the fair rental value of the Premises. Any appraiser designated
hereunder shall have an M.A.I. certification with not less than five (5) years
experience in the valuation of commercial office buildings in Orange County,
California.
Within thirty (30) days following the selection of the appraiser, such
appraiser shall determine the fair market rental value of the Premises,
including subsequent adjustments of rent, if any. In determining such value, the
appraiser shall consider rental comparables for space in the Irvine Spectrum
(including, without limitation, the Project). In no event shall the appraiser
attribute factors for market tenant improvement allowances or brokerage
commissions to reduce said fair market rental. Landlord and Tenant shall each
pay for the services of their respective appraisers and shall share equally the
cost of the third appraiser.
Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare an amendment to this Lease reasonably reflecting
the extended term and rental rate for the extension period, and Tenant shall
execute and return same to Landlord within ten (10) days. Should the fair market
rental not be established by the commencement of the extension period, then
Tenant shall continue paying rent at the rate in effect during the last month of
the initial Term, and a lump sum adjustment shall be made promptly upon the
determination of such new rental.
7
If Tenant fails to timely comply with any of the provisions of this
Section (other than appointing an appraiser), Tenant's right to extend the Term
shall be extinguished and the Lease shall automatically terminate as of the
expiration date of the Term, without any extension and without any liability to
Landlord. Tenant shall have no other right to extend the Term beyond the sixty
(60) month extension created by this Section. Unless agreed to in a writing
signed by Landlord and Tenant, any extension of the Term, whether created by an
amendment to this Lease or by a holdover of the Premises by Tenant, or
otherwise, shall be deemed a part of, and not in addition to, any duly exercised
extension period permitted by this Section.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant shall
pay to Landlord without deduction or offset, Basic Rent for the Premises in the
total amount shown (including subsequent adjustments, if any) in Item 6 of the
Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be deemed to
occur on the specified monthly anniversary of the Commencement Date, whether or
not that date occurs at the end of a calendar month. The rent shall be due and
payable in advance commencing on the Commencement Date (as prorated for any
partial month) and continuing thereafter on the first day of each successive
calendar month of the Term. No demand, notice or invoice shall be required for
the payment of Basic Rent. An installment of rent in the amount of one (1) full
month's Basic Rent at the initial rate specified in Item 6 of the Basic Lease
Provisions shall be delivered to Landlord concurrently with Tenant's execution
of this Lease and shall be applied against the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, Tenant's Share
of "Operating Expenses", as defined below, incurred by Landlord in the operation
of the Building and the Project. The term "Tenant's Share" means that portion of
an Operating Expense determined by multiplying the cost of such item by a
fraction, the numerator of which is the floor area of the Premises and the
denominator of which is the total square footage of the floor area within all
buildings in the Project to which such Operating Expenses relate, as of the date
on which the computation is made. The rentable square footage of the Project may
be adjusted from time to time in the event new buildings are constructed within
or incorporated within the Project. Tenant may elect to assume responsibility
for the operation and maintenance of any Building comprising a portion of the
Premises which is one hundred percent (100%) leased by Tenant in which event,
the Operating Expenses for such Building shall be paid directly and completely
by Tenant and such expenses shall not be included within Landlord's
determination of Operating Expenses.
(b) Prior to the Commencement Date and prior to the start of each full
or partial Expense Recovery Period thereafter, Landlord shall give Tenant a
written estimate of the amount of Tenant's Share of Operating Expenses for the
Expense Recovery Period. Tenant shall pay the estimated amounts to Landlord in
equal monthly installments, in advance, with Basic Rent. If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time set
forth above, Tenant shall continue to pay cost reimbursements at the rates
established for the prior Expense Recovery Period, if any; provided that when
the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued cost reimbursements based upon the new estimate.
Notwithstanding the foregoing, if Landlord is more than three (3) months late in
the delivery of its written estimate for any Expense Recovery Period, Tenant
shall have the right to pay any accrued cost reimbursements in equal
installments over a six (6) month period rather than in one lump sum. For
purposes hereof, "Expense Recovery Period" shall mean every twelve month period
during the Term (or portion thereof for the first and last lease years)
commencing July 1 and ending June 30.
(c) Within one hundred twenty (120) days after the end of each Expense
Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to the actual Tenant's Share as shown by the annual statement. Any delay or
failure by Landlord in delivering any statement hereunder shall not constitute a
waiver of Landlord's right to require Tenant to pay Tenant's Share of Operating
Expenses pursuant hereto. Any amount due Tenant shall be credited against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by Tenant together with the next installment. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by
Tenant pursuant to subsection (a) above shall be paid to Landlord in accordance
with Article XVI. Should Tenant fail to object in writing to Landlord's
determination of actual Operating Expenses within one hundred twenty (120) days
following delivery of Landlord's expense statement, Landlord's determination of
actual Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred except to the extent that a future audit shall determine that a
particular category of expenses has been improperly included as Operating
Expenses.
Landlord agrees that it will maintain complete and accurate
records of all costs, expenses and disbursements paid or incurred by Landlord,
its employees, agents and/or contractors, with respect to the Operating Expenses
in accordance with generally accepted accounting principles, consistently
applied. Such records shall be kept until one (1) year after the termination of
this Lease. Landlord shall provide in reasonable detail the calculation of
Tenant's Share of the Operating Expenses. Provided Tenant is not then in default
of any monetary covenant of this Lease (including, without limitation, the
obligation to pay Basic Rent and/or Tenant's Share of Operating Expenses), or
any material non-monetary covenant, following written notice and the expiration
of the applicable cure period, then Tenant shall have the right to have Tenant's
financial officer or a certified public accountant audit Landlord's Operating
8
Expenses, subject to the terms and conditions hereof. In no event, however,
shall such auditor be compensated by Tenant on a "contingency" basis, or on any
other basis tied to the results of said audit. Tenant shall give notice to
Landlord of Tenant's intent to audit within one hundred twenty (120) days
following delivery of Landlord's expense statement for each of the Expense
Recovery Periods. Following at least ten (10) business days notice to Landlord,
such audit shall be conducted at a mutually agreeable time during normal
business hours at the office of Landlord or its management agent where the
records are maintained in Orange County, California. Landlord agrees to make
such personnel available to Tenant as is reasonably necessary for Tenant's
employees and agents, to conduct such audit. Landlord shall make such records
available to Tenant's employees and agents, for inspection during normal
business hours. Tenant's employees and agents shall be entitled to make
photostatic copies of such records, provided Tenant bears the expense of such
copying, and further provided that Tenant keeps such copies in a confidential
manner and does not discuss, display or distribute such copies to any other
third party. If Tenant's audit determines that actual Operating Expenses have
been overstated by more than four percent (4%), then subject to Landlord's right
to review and/or contest the audit results, Landlord shall reimburse Tenant for
the reasonable out-of-pocket costs of such audit. Tenant's Basic Rent shall be
appropriately adjusted to reflect any overstatement in Operating Expenses. In
the event of a dispute between Landlord and Tenant regarding the results of such
audit, such dispute shall be submitted to and resolved by JAMS as provided in
Section 22.7 of this Lease.
All of the information obtained by Tenant and/or its auditor in
connection with such audit, as well as any compromise, settlement, or adjustment
reached between Landlord and Tenant as a result thereof, shall be held in strict
confidence and, except as may be required pursuant to litigation and except for
inadvertent disclosures despite Tenant's reasonable efforts to keep the
disclosed information confidential, shall not be disclosed to any third party,
directly or indirectly, by Tenant or its auditor or any of their officers,
agents or employees. Landlord may require Tenant's auditor to execute a separate
confidentiality agreement affirming the foregoing as a condition precedent to
any audit.
(d) Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant's Share of
Operating Expenses for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid. Conversely, any overpayment made in the event expenses
decrease shall be rebated promptly by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then the estimate of Tenant's Share of Operating Expenses shall be
increased for the month in which such rate(s) or amount(s) becomes effective and
for all succeeding months by an amount equal to Tenant's Share of the increase.
Landlord shall give Tenant written notice of the amount or estimated amount of
the increase, the month in which the increase will become effective, Tenant's
Share thereof and the month for which the payments are due. Tenant shall pay the
increase to Landlord as a part of Tenant's monthly payments of estimated
expenses as provided in paragraph (b) above, commencing with the month in which
effective.
(f) The term "Operating Expenses" shall mean and include all "Project
Costs" (as hereafter defined) and "Property Taxes" (as hereafter defined).
(g) The term "Project Costs" shall include all reasonable costs and
expenses of operation and maintenance of the Building and the Project, together
with all appurtenant Common Areas (as defined in Section 6.2), and shall include
the following charges by way of illustration but not limitation: water and sewer
charges; insurance premiums or reasonable premium equivalents for the reasonable
cost of administering a self-insurance program should Landlord elect to
self-insure any risk that Landlord is authorized to insure hereunder as provided
in Section 10.2 below; license, permit, and inspection fees; heat; light; power;
air conditioning; janitorial services to any interior Common Areas; supplies;
materials; equipment; tools; the reasonable cost of any environmental,
insurance, tax or other consultant utilized by Landlord in connection with the
Premises and/or Project; establishment of reasonable reserves for replacements
and/or repair of the Building and Common Areas; the cost of any capital
investments, after application of previously established reserves for such
items, to the extent of the amortized cost thereof over the useful life of such
capital investment as reasonably determined by Landlord for each year of useful
life during the Term; subject to the express provisions of this Lease to the
contrary, costs incurred in connection with compliance of any laws or changes in
laws applicable to the Premises or the Project (except for laws or changes in
laws that pertain particularly to Tenant or to Tenant's particular use of the
Premises and/or only to the interior of the Premises which shall be the sole
responsibility of Tenant at its cost), to the extent such laws or change in laws
require expenditures of a "capital" nature (as determined by generally accepted
accounting principles consistently applied), then such "capital" expenditure
shall be amortized (using a market cost of funds as reasonably determined by
Landlord) over the useful life of such asset and only the amortized cost thereof
shall be included in Project Costs during the remaining Term of the Lease; costs
associated with the procurement and maintenance of an air conditioning, heating
and ventilation service agreement; labor; reasonably allocated wages and
salaries, fringe benefits, and payroll taxes for administrative and other
personnel directly applicable to the Premises and/or Project, including both
Landlord's personnel and outside personnel; any expense incurred pursuant to
Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a reasonable overhead/management fee
for the professional operation of the Project. Any such overhead management fee
charged to Tenant shall not be in excess of those being charged for other
comparable first-class office projects in the Irvine Spectrum area. It is
understood that Project Costs may include competitive charges for direct
services provided by any subsidiary or division of Landlord. Notwithstanding any
contrary provision herein, Landlord agrees that Tenant shall have access to and
use of after-hours air conditioning services to the Premises. For any Building
not wholly leased to Tenant, Tenant shall pay an hourly charge based on the
reasonable cost incurred by Landlord to supply such services and in any Building
wholly leased to Tenant, Tenant shall pay the cost for such services directly as
contemplated by Section 6.1 hereof.
9
Notwithstanding the provisions of this Section 4.2 to the
contrary, Operating Expenses shall not include any cost or expense identified as
the responsibility of Landlord and not an Operating Expense or a Project Cost by
the express terms of this Lease, and shall not include any of the following:
(1) Leasing commissions, attorneys' fees, costs,
disbursements and other expenses incurred by Landlord or its agents in
connection with negotiations for leases with tenants, other occupants or
prospective tenants or other occupants of the Project, and similar costs
incurred in connection with disputes with and/or enforcement of any lease with
tenants, other occupants, or prospective tenants or other occupants of the
Project;
(2) "Tenant allowances", "tenant concessions", work letter
payments, and other costs or expenses (including permit, license and inspection
fees) incurred in completing, fixturing, furnishing, renovating or otherwise
improving, decorating or redecorating space for tenants or other occupants of
the Project, or vacant, leasable space in the Project, including space
planning/interior design fees for same;
(3) Depreciation and other "non-cash" expense items;
(4) Services, items and benefits for which Tenant or any
other tenant or occupant of the Project specifically reimburses Landlord or for
which Tenant or any other tenant or occupant of the Project pays third persons
or services, items or benefits which are not generally made available to Tenant
as an occupant of the Building or the Project;
(5) Costs or expenses (including fines, penalties and legal
fees) incurred due to the violation by Landlord of any terms and conditions
(other than by Tenant) of this Lease or of the leases of other tenants in the
Project, that would not have incurred but for such violation by Landlord;
(6) Penalties for late payment of any Operating Expenses by
Landlord, including, without limitation, with respect to taxes, equipment
leases, etc.;
(7) Payments in respect of overhead and/or profit to any
subsidiary or Affiliate (hereinafter defined) of Landlord, as a result of a
non-competitive selection process for services (other than the management fee)
on or to the Project, or for goods, supplies or other materials, to the extent
that the costs of such services, goods, supplies or materials exceed the costs
that would have been paid if the services, goods, supplies or materials had been
provided by parties unaffiliated with Landlord, of similar skill, competence and
experience, on a competitive basis;
(8) Payments of principal, finance charges or interest on
debt or amortization on any deed of trust or other debt encumbering the Project,
and rental payments (or increases in same) under any ground or underlying lease
or leases encumbering the Project (except to the extent the same may be made to
pay or reimburse, or may be measured by Property Taxes);
(9) Except for a management fee which is reasonable and
commercially competitive for similar projects in the Irvine Spectrum area, costs
of Landlord's general overhead and general administrative expenses (individual,
partnership or corporate, as the case may be) and wages, salaries and other
compensation and benefits (as well as adjustments thereto) for all employees and
personnel of Landlord above the level of manager for the Project, which costs
would not be chargeable to Operating Expenses in accordance with generally
accepted accounting principles, consistently applied;
(10) Rentals and other related expenses, if any, incurred
in leasing air conditioning systems or other equipment ordinarily considered
to be of a capital nature, except equipment which is used in providing
janitorial services and which is not affixed to the Project and equipment which
is leased on a temporary basis in emergency situations;
(11) Advertising and promotional expenses;
(12) Costs or expenses for the acquisition of sculpture,
paintings or other works of art, but not the reasonable expenses of maintaining,
repairing and insuring same;
(13) Costs for which Landlord is compensated through or
reimbursed by insurance;
(14) Contributions to political or charitable
organizations;
(15) Costs incurred in removing the property of former
tenants and/or other occupants of the Project;
(16) The costs of any "tap fees" or one-time lump sum
sewer, water or other utility connection fees for the Project;
(17) Costs or fees relating to the defense of Landlord's
title to or interest in the Building and/or the Project, or any part thereof;
and
(18) Any other expense which, under generally accepted
accounting principles, consistently applied, would not be considered to be a
normal maintenance or operating expense of the Building and/or the Project.
10
As used herein, the term "Affiliate" shall mean and
refer to any person or entity controlling, controlled by, or under common
control with another such person or entity. "Control", as used herein, shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such controlled person or entity;
the ownership, directly or indirectly, of at least fifty-one percent (51%) of
the voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, at least fifty-one percent (51%) of the voting
interest in, any person or entity shall be presumed to constitute such control.
In the case of Landlord, the term "Affiliate" shall include any person or entity
controlling or controlled by or under common control with any general partner of
Landlord or any general partner of Landlord's general partner.
(h) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, except
that general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements, services,
and facilities and impacts thereon, including, without limitation, arising out
of any Community Facilities Districts, "Mello Roos" districts, similar
assessment districts, and any traffic impact mitigation assessments or fees
(except for assessments or fees under any Community Facilities District(s)
formed after the date of this Lease); (iv) any tax, surcharge or assessment
including, without limitation, taxes based on the receipt of rent (including
gross receipts or sales taxes applicable to the receipt of rent unless such are
required to be paid by Tenant) which shall be levied in addition to or in lieu
of real estate or personal property taxes, other than taxes covered by Article
VIII; and (v) costs and expenses incurred in contesting the amount or validity
of any Property Tax by appropriate proceedings ("Tax Contest Costs") shall be
included in Property Taxes in the year such expenses are paid. Tax refunds, if
any, shall be credited against Property Taxes for the year paid including any
interest which may be received thereon from the taxing authority. Landlord shall
refund to Tenant within thirty days (30) after receipt of any such tax refund,
the amount to which Tenant is entitled plus its pro-rata share of any interest
corresponding to such amount to the extent received from the taxing authority
provided Tenant paid Property Taxes for the year relating to such refund.
(i) The term "Property Taxes" shall not include personal property
taxes of any kind, which shall instead be governed by the provisions of Article
VIII of this Lease.
(j) If Tenant reasonably believes that the amount of any real property
tax is improper for any reason, Tenant may notify Landlord in writing of
Tenant's desire that such real property taxes be contested or challenged by
Landlord with the applicable taxing authority. Tenant shall indicate the basis
for Tenant's contention that such taxes are improper in Tenant's notice to
Landlord. Upon receipt of any such request from Tenant, Landlord shall promptly
meet with Tenant to discuss whether or not it is appropriate to initiate a
challenge or contest of such taxes or to take no action with respect thereto.
Landlord agrees that if Landlord is pursuing tax contests for other buildings
within the Project, Landlord will also pursue such a contest for the Building if
so requested by Tenant.
(k) Any assessment of real property taxes shall be deemed imposed in
the maximum number of installments permitted by applicable laws, whether or not
actually paid; provided, however, that if the prevailing practice in other
comparable projects in the vicinity of the Project is to pay such assessments on
an earlier basis, and Landlord pays the same on such basis, such assessments
shall be included in real property taxes as paid by Landlord. In no event,
however, shall Landlord impute any accrued interest (resulting from such
installment payments of real property taxes) in its computation of real property
taxes except as imposed by the taxing authority.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of
the Basic Lease Provisions, to be held by Landlord as security for the full and
faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord upon Landlord's
receipt thereof, and may be utilized by Landlord in its discretion towards the
payment of all prepaid expenses by Landlord for which Tenant would be required
to reimburse Landlord under this Lease, including, without limitation, brokerage
commissions and Tenant Improvement costs. Upon any default by Tenant, including
specifically Tenant's failure to pay rent or to abide by its obligations under
Sections 7.1 and 15.3 below, whether or not Landlord is informed of or has
knowledge of the default, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the default, as a
setoff for full or partial compensation for that default. If any portion of the
Security Deposit is applied after a default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. If Tenant fully performs its obligations under this Lease, the Security
Deposit shall be returned to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest in this Lease) after the expiration of the Term,
provided that Landlord may retain the Security Deposit to the extent and until
such time as all amounts due from Tenant in accordance with this Lease have been
determined and paid in full.
11
ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. Tenant, at its expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term, all
governmental approvals, licenses and permits required for the proper and lawful
conduct of Tenant's permitted use of the Premises. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way unreasonably
interfere with the rights of other occupants of the Building or the Project, or
use or allow the Premises to be used for any unlawful purpose, nor shall Tenant
permit any nuisance or commit any waste in the Premises or the Project. Tenant
shall not perform any work or conduct any business whatsoever in the Project
other than inside the Premises. Tenant shall not knowingly do or permit to be
done anything which will invalidate or increase the cost of any insurance
policy(ies) covering the Building, the Project and/or their contents, and shall
comply with all applicable and reasonable insurance underwriters rules and the
requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function to the extent such rules and requirements are
provided to Tenant. Subject to the express provisions of this Lease to the
contrary, Tenant shall comply at its expense with all present laws, ordinances,
restrictions, regulations, orders, rules and requirements of all governmental
authorities that pertain particularly to Tenant or its particular use of the
Premises and/or pertain only to the interior of the Premises, including, without
limitation, all federal and state occupational health and safety requirements,
whether or not Tenant's compliance will necessitate expenditures or interfere
with its use and enjoyment of the Premises. Tenant shall comply at its expense
with all present covenants, conditions, easements or restrictions now affecting
or encumbering the Building and/or Project, and any future covenants,
conditions, easements or restrictions, and any amendments or modifications
thereto which do not materially derogate the rights of Tenant or materially
increase the obligations of Tenant hereunder, including, without limitation, the
payment by Tenant of any periodic or special dues or assessments charged against
the Premises or Tenant which may be allocated to the Premises or Tenant in
accordance with the provisions thereof. Tenant shall promptly upon demand
reimburse Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provisions of this Section, and shall
indemnify Landlord from any liability and/or expense resulting from Tenant's
noncompliance.
SECTION 5.2. SIGNS. Provided Tenant continues to lease the all of the
Building, Tenant shall have the exclusive right to all exterior signage on the
Building and on any other building entirely leased by Broadcom Corporation,
subject to Landlord's right of prior approval that such exterior signage is in
compliance with the Signage Criteria (defined below) and Landlord's designation
of the location for two (2) exterior identification signs. Except as provided in
the foregoing, or as otherwise approved in writing by Landlord, in its sole
discretion, Tenant shall have no right to maintain identification signs of any
location in, on or about the Premises or the Building which are visible from the
exterior thereof and shall not place or erect any signs, displays or other
advertising materials that are visible from the exterior of the Building. The
size, design, graphics, material, style, color and other physical aspects of any
permitted sign shall be subject to any covenants, conditions or restrictions
encumbering the Premises, Landlord's signage program, if any, as in effect at
the time ("Signage Criteria"), and any applicable municipal or other
governmental permits and approvals. Tenant acknowledges having received and
reviewed a copy of the current Signage Criteria, if applicable. Tenant shall be
responsible for the cost of any permitted signs, including the fabrication,
installation, maintenance and removal thereof. If Tenant fails to maintain its
signs, or if Tenant fails to remove same upon termination of this Lease and
repair any damage caused by such removal, Landlord may do so at Tenant's
expense.
Tenant's sign rights described in this Section and may be assigned in
connection with an assignment of this Lease or a sublease for the remainder of
the Term of a portion of the Premises which sublease or assignment is completed
in accordance with the terms of this Lease; provided, however, that the size,
design, graphics, material, style, color and other physical aspects of any sign
proposed to be used by such transferee shall be subject to Landlord's prior
approval that such signage is in compliance with the Signage Criteria and that
such signage will not materially devalue the Building or the Project as
determined by Landlord in its sole and absolute discretion. Notwithstanding the
foregoing, in the event Tenant proposes to sublease or assign all or any portion
of its interest in the Premises and Landlord elects to recapture such space
pursuant to its right to do so set forth in Section 9.1(c) of this Lease, then:
(a) If the rentable floor area of the portion of the Premises to be
recaptured is seventy-five percent (75%) or more of the floor area of the
Premises, Tenant shall have the right to maintain one exterior (1) eyebrow sign
in a location designated by Landlord;
(b) If the rentable floor area of the portion of the Premises to be
recaptured is fifty percent (50%) or more of the floor area of the Premises but
less than seventy-five percent (75%) of the floor area of the Premises, Tenant
shall have the right to retain one (1) Building top sign in a location of its
choice. Tenant shall relinquish all other exterior sign rights to the Building;
and
(c) If the rentable floor area of the portion of the Premises to be
recaptured is less than fifty percent (50%) of the floor area of the Premises,
Tenant shall be entitled to retain two (2) building top signs and Landlord shall
have the right to any and all exterior signage at the eyebrow level of the
Building.
SECTION 5.3. HAZARDOUS MATERIALS.
12
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(o) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or knowingly permit any Hazardous Materials
to be brought upon, stored, used, generated, released or disposed of on, under,
from or about the Premises (including, without limitation, the soil and
groundwater thereunder) without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant shall have the right, without obtaining
prior written consent of Landlord, to utilize within the Premises standard
office products that may contain Hazardous Materials (such as photocopy toner,
"White Out", and the like), provided however, that (i) Tenant shall maintain
such products in their original retail packaging, shall follow all instructions
on such packaging with respect to the storage, use and disposal of such
products, and shall otherwise comply with all applicable laws with respect to
such products, and (ii) all of the other terms and provisions of this Section
5.3 shall apply with respect to Tenant's storage, use and disposal of all such
products. Landlord may, in its sole discretion, place such conditions as
Landlord deems appropriate with respect to any such Hazardous Materials, and may
further require that Tenant demonstrate that any such Hazardous Materials are
necessary or useful to Tenant's business and will be generated, stored, used and
disposed of in a manner that complies with all applicable laws and regulations
pertaining thereto and with good business practices. Tenant understands that
Landlord may utilize an environmental consultant to assist in determining
conditions of approval in connection with the storage, generation, release,
disposal or use of Hazardous Materials by Tenant on or about the Premises,
and/or to conduct periodic inspections of the storage, generation, use, release
and/or disposal of such Hazardous Materials by Tenant on and from the Premises,
and Tenant agrees that any costs reasonably incurred by Landlord in connection
therewith shall be reimbursed by Tenant to Landlord as additional rent hereunder
upon demand; however, Tenant shall have no obligation to reimburse Landlord for
any costs incurred in connection with any environmental consultant retained by
Landlord pursuant to this Section unless Tenant shall be in default under this
Section 5.3 and such costs are covered by Tenant's indemnity contained in this
Section 5.3.
(c) Prior to the execution of this Lease, Tenant shall complete,
execute and deliver to Landlord an Environmental Questionnaire and Disclosure
Statement (the "Environmental Questionnaire") in the form of EXHIBIT B attached
hereto. The completed Environmental Questionnaire shall be deemed incorporated
into this Lease for all purposes, and Landlord shall be entitled to rely fully
on the information contained therein. On each anniversary of the Commencement
Date until the expiration or sooner termination of this Lease, Tenant shall
disclose to Landlord in writing the names and amounts of all Hazardous
Materials, if any, which were stored, generated, used, released and/or disposed
of on, under or about the Premises for the twelve-month period prior thereto,
and which Tenant desires to store, generate, use, release and/or dispose of on,
under or about the Premises for the succeeding twelve-month period. In addition,
to the extent Tenant is permitted to utilize Hazardous Materials upon the
Premises, Tenant shall promptly provide Landlord with complete and legible
copies of all the following environmental documents relating thereto: reports
filed pursuant to any self-reporting requirements; permit applications, permits,
monitoring reports, workplace exposure and community exposure warnings or
notices and all other reports, disclosures, plans or documents (even those which
may be characterized as confidential) relating to water discharges, air
pollution, waste generation or disposal, and underground storage tanks for
Hazardous Materials; orders, reports, notices, listings and correspondence (even
those which may be considered confidential) of or concerning the release,
investigation of, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other legal
documents filed by or against Tenant related to Tenant's use, handling, storage,
release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under or about the
Premises caused or permitted by Tenant, its agents, employees, contractors,
licensees or invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises without notice and to
discharge Tenant's obligations under this Section 5.3 at Tenant's expense,
including, without limitation, the taking of emergency or long-term remedial
action. Landlord and its agents shall endeavor to minimize interference with
Tenant's business in connection therewith, but shall not be liable for any such
interference. In addition, Landlord, at Tenant's expense, shall have the right,
but not the obligation, to join and participate in any legal proceedings or
actions initiated in connection with any claims arising out of the storage,
generation, use, release and/or disposal by Tenant or its agents, employees,
contractors, licensees or invitees of Hazardous Materials on, under, from or
about the Premises.
(e) If the presence of any Hazardous Materials on, under, from or
about the Premises or the Project caused or permitted by Tenant or its agents,
employees, contractors, licensees or invitees results in (i) injury to any
person, (ii) injury to or any contamination of the Premises or the Project, or
(iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior to the introduction
of such Hazardous Materials and to remedy or repair any such injury or
contamination, including, without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such
13
Hazardous Materials. Notwithstanding the foregoing, Tenant shall not, without
Landlord's prior written consent, take any remedial action in response to the
presence of any Hazardous Materials on, under or about the Premises or the
Project or any other affected real or personal property owned by Landlord or
enter into any similar agreement, consent, decree or other compromise with any
governmental agency with respect to any Hazardous Materials claims; provided
however, Landlord's prior written consent shall not be necessary in the event
that the presence of Hazardous Materials on, under or about the Premises or the
Project or any other affected real or personal property owned by Landlord (i)
imposes an immediate threat to the health, safety or welfare of any individual
or (ii) is of such a nature that an immediate remedial response is necessary and
it is not possible to obtain Landlord's consent before taking such action. To
the fullest extent permitted by law, Tenant shall indemnify, hold harmless,
protect and defend (with attorneys acceptable to Landlord) Landlord and any
successors to all or any portion of Landlord's interest in the Premises and the
Project and any other real or personal property owned by Landlord from and
against any and all liabilities, losses, damages, diminution in value,
judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses
(including, without limitation, attorneys' fees, court costs and other
professional expenses), whether foreseeable or unforeseeable, arising directly
or indirectly out of the use, generation, storage, treatment, release, on- or
off-site disposal or transportation of Hazardous Materials on, into, from, under
or about the Premises, the Building and the Project and any other real or
personal property owned by Landlord caused or permitted by Tenant, its agents,
employees, contractors, licensees or invitees, specifically including, without
limitation, the cost of any required or necessary repair, restoration, cleanup
or detoxification of the Premises, the Building and the Project and any other
real or personal property owned by Landlord, and the preparation of any closure
or other required plans, whether or not such action is required or necessary
during the Term or after the expiration of this Lease. If Landlord at any time
discovers that Tenant or its agents, employees, contractors, licensees or
invitees have caused or knowingly permitted the release of a Hazardous Material
on, under, from or about the Premises or the Project or any other real or
personal property owned by Landlord, Tenant shall, at Landlord's request,
immediately prepare and submit to Landlord a comprehensive plan, subject to
Landlord's reasonable approval, specifying the actions to be taken by Tenant to
return the Premises or the Project or any other real or personal property owned
by Landlord to the condition required under all applicable environmental laws.
Upon Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to cleanup such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease. The provisions of this subsection (e) shall expressly
survive the expiration or sooner termination of this Lease.
(f) If the release of any Hazardous Materials on, under, from or about
the Premises or the Project caused by Landlord, its authorized agents or
employees, and not introduced by Tenant, its agents, employees, contractors,
licensees, or invitees results in (i) injury to any person, or (ii) injury to or
any contamination of the Premises or the Project at levels which require
clean-up or remediation under applicable laws, Landlord, at its expense (which
shall not be included in Operating Expenses), shall promptly take all actions
necessary to return the Premises and the Project to the condition existing prior
to the introduction of such Hazardous Materials, or to such condition as is
satisfactory to all governmental agencies asserting jurisdiction, and to remedy
or repair any such injury or contamination, including, without limitation, any
clean-up, remediation, removal, disposal, neutralization or other treatment of
any such Hazardous Materials.
(g) If the release of Hazardous Materials caused by Landlord, its
authorized agents or employees, renders the Premises untenantable in whole or in
part or results in Tenant being required to vacate the Premises in whole or in
part pursuant to an order or requirement of any governmental agency or
authority, then the Base Rent, Real Property Taxes, insurance premiums, and
other charges, if any, payable by Tenant hereunder for the period during which
the Premises (or a portion thereof) remain so impaired shall be abated in
proportion to the degree to which Tenant's use of the Premises is impaired and
for the period of such impairment. If the period of such impairment shall exceed
seven (7) months, Tenant shall have the right to terminate this Lease upon
written notice to Landlord given within ten (10) days following the passage of
such seven (7) month period. Tenant's termination of the Lease pursuant to this
Paragraph shall be effective as of the date of such notice.
(h) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly
described in EXHIBIT C attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts described in
EXHIBIT C, nor with respect to any Hazardous Materials which were not caused or
knowingly permitted by Tenant, its agents, employees, contractors, licensees or
invitees. Landlord shall take responsibility, at its sole cost and expense, for
any governmentally-ordered clean-up, remediation, removal, disposal,
neutralization or other treatment of Hazardous Materials conditions described in
this Section 5.3(h). The foregoing obligation on the part of Landlord shall
include the reasonable costs (including, without limitation, reasonable
attorney's fees) of defending Tenant (with attorneys reasonably acceptable to
Tenant) from and against any legal action or proceeding instituted by any
governmental agency in connection with such clean-up, remediation, removal,
disposal, neutralization or other treatment of such conditions, provided that
Tenant promptly tenders such defense to Landlord. Tenant agrees to notify its
agents, employees, contractors, licensees, and invitees of any exposure or
potential exposure to Hazardous Materials at the Premises that Landlord brings
to Tenant's attention.
(i) The obligations on the part of Landlord contained in Sections
5.3(f) and 5.3(h) above are personal to Landlord and shall not be binding on,
nor inure against any successor in interest to Landlord as of the owner of the
Premises, including, without limitation, any lender acquiring the Premises by
foreclosure of its mortgage or deed of trust or deed in lieu of foreclosure.
14
(j) Except as disclosed in Section 5.3(h) above (and/or as may
otherwise be disclosed to Tenant in writing), Landlord represents that, to the
best of its actual knowledge without duty of inquiry or investigation
whatsoever, there are no Hazardous Materials in or about the Premises which are
in violation of any applicable federal, state or local law, ordinance or
regulation.
ARTICLE VI. COMMON AREAS; SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for and
shall pay promptly, directly to the appropriate supplier, all charges for water,
gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon; provided, however, Tenant shall not be obligated to pay directly for
any utilities, water, gas, electricity, sewer, heat, light, power, janitorial
service, landscape maintenance, etc. to the extent such costs are billed to
Tenant as Operating Expenses for the Project. Tenant, at its sole cost, may
select and retain a janitorial service company to clean the Premises at such
times and in a manner consistent with the operation of a first class office
building. If any utilities or services are not separately metered or assessed to
Tenant, Landlord shall make a reasonable determination of Tenant's proportionate
share of the cost of such utilities and services and Tenant shall pay such
amount to Landlord, as an item of additional rent, within ten (10) days after
receipt of Landlord's statement or invoice therefor. Alternatively, Landlord may
elect to include such cost in the definition of Building Costs in which event
Tenant shall pay Tenant's proportionate share of such costs in the manner set
forth in Section 4.2. Landlord shall not be liable for damages or otherwise for
any failure or interruption of any utility or other service furnished to the
Premises, and no such failure or interruption shall be deemed an eviction or
entitle Tenant to terminate this Lease or withhold or abate any rent due
hereunder. Landlord shall at all reasonable times have free access to all
electrical and mechanical installations of Landlord. In exercising Landlord's
right of free access to all mechanical and electrical installations, Landlord
shall not unreasonably interfere with Tenant's use and enjoyment of the
Premises.
Notwithstanding the foregoing, if as a result of the actions of
Landlord, its authorized agents or employees, for more than three (3)
consecutive business days following written notice to Landlord there is no HVAC
or electricity services to all or a portion of the Premises, or such an
interruption of other essential utilities and building services, such as fire
protection or water, so that all or a portion of the Premises cannot be used by
Tenant, then Tenant's Basic Rent (or an equitable portion of such Basic Rent to
the extent that less than all of the Premises are affected) shall thereafter be
abated until the Premises are again usable by Tenant; provided, however, that if
Landlord is diligently pursuing the repair of such utilities or services and
Landlord provides substitute services reasonably suitable for Tenant's purposes,
as for example, bringing in portable air-conditioning equipment, then there
shall not be an abatement of Basic Rent. Any disputes concerning the foregoing
shall be submitted to and resolved by JAMS arbitration pursuant to Section 22.7
of this Lease. The foregoing provisions shall not apply in case of damage to, or
destruction of, the Premises, which shall be governed by the provisions of
Article XI of the Lease.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate, maintain and repair all Common Areas within any Building
comprising the Premises and the Project in a first-class manner comparable to
other Class A office buildings in the Irvine Spectrum area and in compliance
with all obligations of Landlord under this Lease. The term "Common Areas" shall
mean all areas within the exterior boundaries of the Building and other
buildings in the Project which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas outside the exterior
boundaries of the Building and other buildings in the Project provided by
Landlord for the common use of Landlord and tenants and their respective
employees and invitees, including, without limitation, parking areas and
structures, driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant, common
electrical rooms and roof access entries, common entrances and lobbies,
elevators, and restrooms not located within any tenantable premises of the
Building and/or other buildings in the Project. Building hours for any Building
not wholly leased by Tenant shall be Monday through Friday 7:00 a.m. to 6:00
p.m., and Saturday 9:00 a.m. to 1:00 p.m., President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day, New Year's Day and
Sundays excluded. Tenant shall have access to its Premises twenty-four (24)
hours per day, seven (7) days per week, fifty-two (52) weeks per year including
access to utilities and heating, ventilating and air conditioning services but
subject to Tenant's obligation to pay the reasonable costs of any such services
used other than during the Building hours described above; provided that
Landlord may install access control systems as it deems advisable for any
Building not wholly leased by Tenant. The reasonable cost of maintaining and
repairing any such access control systems (but not the cost of installation of,
or any "capital" cost of replacing, said systems) shall be included in Project
Costs under Section 4.2.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord in a reasonable and non-discriminatory
manner. Landlord shall operate and maintain the Common Areas in a first-class
manner consistent with comparable Class A office buildings in the Irvine
Spectrum as Landlord may determine to be appropriate. All reasonable costs
incurred by Landlord for the maintenance and operation of the Common Areas shall
be included in Project Costs unless excluded under Section 4.2 or unless any
particular cost incurred can be charged to a specific tenant of the Project.
Landlord shall at all times during the Term have exclusive control of the Common
Areas, and may restrain any use or occupancy, except as authorized by Landlord's
rules and regulations. Tenant shall keep the Common Areas clear of any
obstruction or unauthorized use related to Tenant's operations. Nothing in this
Lease shall be deemed to impose liability upon Landlord for any damage
15
to or loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed sufficient by
Landlord, without liability to Landlord. Tenant shall not be required to comply
with any rules and regulations for the Project other than those attached to this
Lease unless such rules and regulations are commercially reasonable and
nondiscriminatory in content and application. Landlord's exclusive control,
operation, maintenance and repair of the Common Area shall be subject to
Tenant's parking rights contained in Section 6.4 below and to all other
limitations contained in this Lease. Landlord agrees that any temporary closure
of any portion of the Common Areas shall not unreasonably interfere with
Tenant's intended use of the Premises, nor its reasonable access to or parking
for the Premises.
SECTION 6.4. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces
shall be located on those portions of the Common Areas designated by Landlord
for parking, and said parking spaces shall be provided at no charge to Tenant
during the Lease Term. Tenant shall not use more parking spaces than such
number. In the event the Premises is expanded at any time during the Term, the
number of spaces shall be increased by the number included in the Economic Terms
for such space. Landlord shall allow Tenant to mark the twenty (20) spaces
designated on Exhibit A-1 as "Broadcom Visitor" for use by Tenant's employees
and customers, provided Landlord shall have no obligation to monitor the use of
such stalls but such stalls shall be considered as part of the total number of
stalls to which Tenant is entitled. In the event the Premises is expanded and
Tenant leases a full floor or more of any other building, Tenant shall have the
right to mark a proportionate number of parking stalls, up to an additional
twenty (20) spaces for each additional building fully leased by Tenant, as
"Broadcom Visitor" in a location reasonably designated by Landlord. All vehicle
parking spaces shall be used only for parking by vehicles no larger than full
size passenger automobiles, vans, mini-vans or pickup trucks. Tenant shall not
knowingly permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be
loaded, unloaded, parked or stored in areas other than those designated by
Landlord for shipping and receiving activities. If Tenant permits or allows any
of the prohibited activities described above, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that
Landlord may have, to remove or tow away the vehicle involved and charge the
costs to Tenant; provided Landlord agrees not to cause or permit the towing of
any vehicle from parking within the Common Area without first attempting to
contact Tenant to identify the Owner of the vehicle in question. Parking within
the Common Areas shall be limited to striped parking stalls, and no parking
shall be permitted in any driveways, access ways or in any area which would
prohibit or impede the free flow of traffic within the Common Areas. There shall
be no extended overnight parking of any vehicles of any kind unless otherwise
authorized by Landlord (periodic, temporary overnight parking of employee
vehicles for up to seventy-two (72) hours and vehicles used in the ordinary
course of Tenant's business at the Premises shall be permitted), and vehicles
which have been abandoned or parked in violation of the terms hereof may be
towed away at the owner's expense. Nothing contained in this Lease shall be
deemed to create liability upon Landlord for any damage to motor vehicles of
visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless
ultimately determined to be caused by the sole active negligence or willful
misconduct of Landlord. Landlord shall have the right to establish, and from
time to time amend, and to enforce against all users all reasonable rules and
regulations (including the designation of areas for employee parking) that
Landlord may deem necessary and advisable for the proper and efficient operation
and maintenance of parking within the Common Areas. Landlord shall have the
right to construct, maintain and operate lighting facilities within the parking
areas; to change the area, level, location and arrangement of the parking areas
and improvements therein; to restrict parking by tenants, their officers, agents
and employees to employee parking areas and to do and perform such other acts in
and to the parking areas and improvements therein as, in the use of good
business judgment, Landlord shall determine to be advisable. Any person using
the parking area shall observe all directional signs and arrows and any posted
speed limits. In no event shall Tenant interfere with the use and enjoyment of
the parking area by other tenants of the Building or their employees or
invitees. Parking areas shall be used only for parking passenger vehicles.
Servicing of vehicles, or the parking or storage of shipping and receiving
vehicles in any area is prohibited unless otherwise authorized by Landlord.
Periodic washing and detailing of automobiles shall be permitted, subject to the
Landlord's reasonable rules and regulations and Landlord's reasonable standards
for such third party providers. Tenant shall be liable for any damage to the
parking areas caused by Tenant or Tenant's employees, suppliers, shippers,
customers or invitees, including, without limitation, damage from excess oil
leakage. Tenant shall have no right to install any fixtures, equipment or
personal property in the parking areas. Landlord agrees to enforce all parking
rights and restrictions and rules and regulations for the Project on an equal
and non-discriminatory basis. Tenant shall have no liability for non-compliance
with the provisions of the Lease regarding parking other than with respect to
Tenant's officers, directors and employees or persons under the control of
Tenant, except for Landlord's towing rights herein provided.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right
to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. Landlord may at any time
relocate or remove any of the various buildings, parking areas, and other Common
Areas, and may add buildings and areas to the Project from time to time. No
change shall entitle Tenant to any abatement of rent or other claim against
Landlord. In no event, however, shall Landlord (i) impair visibility of Tenant's
Exterior Signage; (ii) materially impair access to and from the Premises from
the parking areas; (iii) reduce the number or size of Tenant's parking spaces
granted under this Lease, or (iv) otherwise materially interfere with Tenant's
access to and use of the Premises, the parking areas and the Common Areas
adjacent to the Building in any material manner without Tenant's prior written
consent, which shall not be unreasonably withheld.
SECTION 6.6. OUTDOOR COURTYARD AREA. With at least ten (10) business days
prior written notice to Landlord and subject to availability, Tenant shall have
the right to use certain adjacent areas of the Common Areas for Tenant's social
and/or business functions with no additional rent for such use payable by
Tenant, on the following terms
16
and conditions: (i) Tenant may conduct up to twelve (12) such functions within
any calendar year; (ii) such functions shall be limited to a reasonable number
of people consistent with applicable fire, health and safety laws; (iii) Tenant
shall execute Landlord's standard form entry permit prior to any such function,
(iv) the insurance, indemnity and nonliability obligations and provisions
contained in Sections 10.1, 10.3 and 10.4 of this Lease, respectively (including
Tenant's obligation to carry liquor law liability insurance if alcoholic
beverages are served or consumed during such functions), shall apply to and
govern any claims, liabilities, costs or expenses arising from any such
function, (v) no such proposed function shall, in Landlord's reasonable
determination, unreasonably disrupt either other tenants of the Project, or the
operation or maintenance of the Common Areas, and (vi) Tenant shall pay any and
all Landlord's reasonable costs of preparation for, supervision of and/or
clean-up in connection with, such functions.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date (or on any later date that the improvements may
have been installed), excepting ordinary wear and tear, including, without
limitation, all glass, the interior surfaces of all windows, all doors, door
closures, hardware, fixtures, electrical, plumbing, fire extinguisher equipment
and other equipment; provided, however, Tenant shall have no obligation to
repair, maintain or replace the roof, foundations, footings, structural systems,
exterior glass, sky lights, sky light seals, window seals and vents, electrical,
plumbing, sewer and other utility lines outside the Premises, landscaping,
walkways, fencing, parking areas, exterior lighting or exterior surfaces of
exterior walls of the Building, and washing of exterior windows, all of which
obligations shall be the sole responsibility of Landlord as provided in and
subject to the terms of Section 7.2 below. Any damage or deterioration of the
Premises shall not be deemed ordinary wear and tear if the same could have been
prevented by good maintenance practices by Tenant. As part of its maintenance
obligations hereunder, Tenant shall, at Landlord's request, provide Landlord
with copies of all maintenance schedules, reports and notices prepared by, for
or on behalf of Tenant. As part of its maintenance obligations hereunder, Tenant
shall obtain a preventive maintenance contract from a licensed heating and air
conditioning ("HVAC") contractor to provide for regular inspection, maintenance
and repair of the HVAC system servicing the Premises all subject to Landlord's
reasonable approval; provided, however, that Tenant may elect to have its own
full-time qualified employees undertake such inspections and preventive
maintenance provided the preventive maintenance and inspections are the
equivalent of what would be provided by a licensed contractor in Landlord's
reasonable determination. Project Costs billed to Tenant pursuant to Section 4.2
of this Lease shall not include charges for normal maintenance of HVAC to the
extent Tenant fulfills its obligations under this Section but Project Costs
shall include the cost of annual inspections by Landlord's HVAC contractor. If,
as a result of annual or other inspections, Landlord determines that Tenant's
employees are not performing satisfactory inspection and maintenance, Tenant
shall obtain a third party maintenance contract for the HVAC system as set forth
above. All repairs shall be at least equal in quality to the original work,
shall be made only by a licensed contractor approved in writing in advance by
Landlord and shall be made only at the time or times approved by Landlord. Any
contractor utilized by Tenant shall be subject to Landlord's standard
requirements for contractors, as modified from time to time. Landlord may impose
reasonable restrictions and requirements with respect to repairs, as provided in
Section 7.3, and the provisions of Section 7.4 shall apply to all repairs. If
Tenant fails to properly maintain or repair any portion of the Premises as
required under this Section 7.1 following written notice to Tenant and a
reasonable opportunity to cure, Landlord may elect to make any such repair on
behalf of Tenant and at Tenant's expense, and Tenant shall promptly reimburse
Landlord for all costs incurred upon submission of an invoice. Landlord agrees
not to unreasonably withhold its approval of any preventive maintenance
contracts or licensed contractors selected by Tenant with respect to Tenant's
maintenance and repair obligations.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1 and
Article XI, Landlord shall provide service, maintenance and repair and shall
maintain in good repair in a manner consistent with the repair and maintenance
of comparable Class A office buildings in the Irvine Spectrum area, the roof,
foundations, and footings of the Building, the exterior surfaces of the exterior
walls of the Building, all exterior glass, sky lights, sky light seals, window
seals and vents of the Building, electrical, plumbing, sewer and other utility
lines outside the Premises, landscaping, walkways, fencing, parking areas,
exterior lighting and exterior surfaces of exterior walls of the Building, and
washing of exterior windows, and the structural, electrical and mechanical
systems of the Building and all Common Area improvements within the Project,
except that, subject to the waiver of subrogation contained in Section 10.5
below, Tenant at its expense shall make all repairs within the Premises only
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors (i.e., to
the extent such repairs are not or would not be covered by a standard policy of
property insurance or the property insurance actually maintained by Landlord).
Landlord shall have the right to employ or designate any reputable person or
firm, including any employee or agent of Landlord or any of Landlord's
affiliates or divisions, to perform any service, repair or maintenance function.
Landlord need not make any other improvements or repairs except as specifically
required under this Lease, and nothing contained in this Section shall limit
Landlord's right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease. Tenant understands that
it shall not make repairs at Landlord's expense except as specifically set forth
below. Tenant further understands that Landlord shall not be required to make
any repairs to the roof, foundations, footings, structural, electrical or
mechanical systems unless and until Tenant has notified Landlord in writing of
the need for such repair and Landlord shall have a reasonable period of time
thereafter to commence and complete said repair, if warranted. Subject to the
terms of Sections 2.4 and 4.2, all reasonable costs of any maintenance and
repairs on the part of Landlord provided hereunder shall be considered part of
Project Costs. Tenant shall have no obligation to maintain contracts for
landscaping and irrigation systems or for asphalt or parking lot maintenance.
Except in emergency situations, where prior notice is not reasonably possible,
17
Landlord agrees to provide Tenant with at least twenty-four (24) hours prior
notice before commencing any repairs, improvements or alterations to the
Building or the Project which are reasonably likely to materially impair
Tenant's use or enjoyment of the Premises, Tenant's parking areas or access to
the Project or the Premises.
If Landlord shall fail to perform any repair obligations required
under this Lease within thirty (30) days following Tenant's written request for
such repairs, or if Landlord shall fail to perform any repairs required under
this Lease of an emergency condition within forty-eight (48) hours' written
notice from Tenant, then Tenant may elect to make such repairs at Landlord's
expense by complying with the following provisions. Before making any such
repair, Tenant shall deliver to Landlord a notice for the need for such repair
("Self-Help Notice"), which notice shall specifically advise Landlord that
Tenant intends to exercise its self-help right hereunder. Should Landlord fail,
within ten (10) days following receipt of the Self-Help Notice (or within
twenty-four (24) hours following notice in the event of necessary emergency
repairs), to commence the necessary repair or to make other arrangements
reasonably satisfactory to Tenant, then Tenant shall have the right to make such
repair on behalf of Landlord. Landlord shall reimburse Tenant for the reasonable
costs of such repairs within thirty (30) days following receipt of Tenant's
invoice for such costs, provided that in no event shall Tenant have the right to
offset Basic Rent or any other charges payable by Tenant hereunder against such
costs. It is understood that such reimbursement obligation shall be personal to
Landlord, and in no event shall any lender or other deed of trust holder
succeeding to Landlord be liable for payment of any such amount. In the event
that the work could affect the Building's structural, mechanical, electrical,
heating, ventilating, air conditioning, life safety or plumbing components or
systems, then Tenant shall use only those contractors whose names are furnished
by Landlord for such work. If those contractors are unwilling or unable to
perform the work, or if Landlord fails to furnish the names of its contractors
to Tenant prior to the commencement of the work by Tenant, Tenant shall retain
the services of qualified, reputable and licensed, bonded contractors with like
experience in similar building systems. Tenant shall be responsible for
obtaining any necessary governmental permits before commencing the repair work.
Tenant shall be liable for any damage, loss or injury resulting from said work
to the extent of Tenant's or its agent's, employee's or contractor's negligence.
Any disputes regarding these self-help provisions shall be submitted to and
resolved by JAMS arbitration pursuant to Section 22.7 of this Lease.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, but subject to the following provisions of this
Section, Landlord's consent shall not be required for any alterations, additions
or improvements to the Premises during the initial Term which cost less than the
Alteration Cost Cap. Alteration Cost Cap means an amount equal to One Dollar and
05/00 ($1.05) per rentable square foot of Premises per lease year on a
cumulative basis but subject to an aggregate maximum over the initial Term of
Five Dollars Twenty-Five Cents ($5.25) per rentable square foot. Any such
alterations are subject to all other provisions of this Section. For example,
assuming Tenant continues to occupy all of the Building but made no alterations
during the first year of the Term, Tenant could make alterations without
Landlord's prior written consent during the second year of the Term in an amount
up to $114,912.00 (54,720 feet x .1.05 x 2 years). Under this example, Tenant's
ability to make further alterations during the remainder of the initial Term
without Landlord's consent would be subject to an annual cap of $57,456.00 and
an aggregate cap of $172,368.00. Notwithstanding anything to the contrary
contained in the preceding sentences of this Section, without the prior written
consent of Landlord, which may be withheld in Landlord's sole and absolute
discretion, in no event shall any alteration, addition or improvement: (i)
affect the exterior of the Building or outside areas (or be visible from
adjoining sites), or (ii) affect or penetrate any of the structural portions of
the Building, including but not limited to the roof, or (iii) require any
material change to the basic floor plan of the Premises, any change to any
structural or mechanical systems of the Premises, or any governmental permit as
a prerequisite to the construction thereof, or (iv) interfere in any manner with
the proper functioning of or Landlord's access to any mechanical, electrical,
plumbing or HVAC systems, facilities or equipment located in or serving the
Building. Landlord may impose, as a condition to its consent, any requirements
that Landlord in its discretion may deem reasonable or desirable, including but
not limited to requirements as to the manner, time, and contractor mutually
acceptable to Landlord and Tenant for performance of the work. Tenant shall
obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances, all covenants,
conditions and restrictions affecting the Project, and the Rules and Regulations
(hereafter defined). Tenant understands and agrees that Landlord shall be
entitled to a supervision fee in the amount of three percent (3%) of the cost of
any work which is both in excess of the Alteration Cost Cap, and which requires
a governmental permit. If any governmental entity requires, as a condition to
any proposed alterations, additions or improvements to the Premises by Tenant,
that improvements be made to the Common Areas, and if Landlord consents to such
improvements to the Common Areas, then Tenant shall, at Tenant's sole expense,
make such required improvements to the Common Areas in such manner, utilizing
such materials, and with such contractors (including, if required by Landlord,
Landlord's contractors) as Landlord may reasonably require. Under no
circumstances shall Tenant make any improvement which incorporates any Hazardous
Materials, including, without limitation, asbestos-containing construction
materials into the Premises. Any request for Landlord's consent shall be made in
writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Unless Landlord otherwise agrees in
writing, all alterations, additions or improvements affixed to the Premises
(excluding moveable trade fixtures and furniture) shall become the property of
Landlord and shall be surrendered with the Premises at the end of the Term,
except that Landlord may require Tenant to remove by the Expiration Date, or
sooner termination date of this Lease, all or any alterations, decorations,
fixtures, additions, improvements and the like installed either by Tenant or by
Landlord at Tenant's request and to repair any damage to the Premises arising
from that removal. Except as otherwise provided in this Lease or in any exhibit
to this Lease, should Landlord make any alteration or improvement to the
Premises for Tenant, Landlord shall be entitled to prompt reimbursement from
Tenant for all costs incurred.
18
Landlord shall have the right to require Tenant to remove (i) any of
the components of the initial Tenant Improvements to the Premises but only if
Landlord notifies Tenant that such removal will be required at the time of
Landlord's approval of the Preliminary Plan, and (ii) any subsequent
alterations, additions or improvements whether or not Landlord's consent was
required unless Landlord's written consent was obtained and unless at the time
of providing its consent Landlord notified Tenant in writing that Tenant would
not have to remove such items upon the expiration of the Lease Term. Landlord
and Tenant agree that Tenant shall have the right, upon expiration or
termination of this Lease, to remove any and all phone systems, furniture,
fixtures and other personal property which are not permanently affixed to the
Premises or which may be removed without significant change to the Premises
(including floor coverings, draperies, and/or removable shelves) that are
installed in the Premises at Tenant's sole expense; provided, however, that
Tenant shall, at its sole cost, repair any damage caused by such removal,
reasonable wear and tear excepted.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from any
liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it reasonably deems proper, including payment
of or defense against the claim giving rise to the lien. All reasonable and
actual expenses so incurred by Landlord, including Landlord's reasonable
attorneys' fees, and any foreseeable consequential or other damages incurred by
Landlord proximately caused by such lien, shall be reimbursed by Tenant promptly
following Landlord's demand, together with interest from the date of payment by
Landlord at the Interest Rate provided for in Section 14.3(a) below until paid.
Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. BUILDING ENTRY AND INSPECTION. Landlord shall, at all
reasonable times upon at least twenty-four (24) hours advance written notice
given in accordance with the provisions of Article XVI of this Lease or oral
notice to Tenant's building manager or head of security (except in emergencies,
when no notice shall be required), and provided that for security and
confidentiality purposes, Landlord's representatives are accompanied by a
representative of Tenant at all times (except in cases of emergency), have the
right to enter the Premises to inspect them, to supply services in accordance
with this Lease, to protect the interests of Landlord in the Premises, and to
submit the Premises to prospective or actual purchasers or encumbrance holders
(or, during the last one hundred and eighty (180) days of the Term or when a
Tenant default exists [which is not cured within the expiration of the
applicable cure period], to prospective tenants), all without being deemed to
have caused an eviction of Tenant and without abatement of rent except as
provided elsewhere in this Lease. Landlord shall have the right to use any and
all reasonable means which Landlord may deem proper under the circumstances to
open the doors in an emergency in order to obtain entry to the Premises, and any
entry to the Premises obtained by Landlord by such means shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or any eviction of Tenant from the Premises.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay before delinquency, all taxes
and assessments levied against all personal property of Tenant located in the
Premises, and against any alterations, additions or like improvements made to
the Premises by or on behalf of Tenant. When possible Tenant shall cause its
personal property, Above Standard Improvements and alterations to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property, and/or alterations are levied
against Landlord or Landlord's property and if Landlord pays the same, or if the
assessed value of Landlord's property is increased by the inclusion of a value
placed upon the personal property, and/or alterations of Tenant and if Landlord
pays the taxes based upon the increased assessment, Tenant shall pay to Landlord
the taxes so levied against Landlord or the proportion of the taxes resulting
from the increase in the assessment.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Tenant will not, either voluntarily or by operation of law,
assign, sublet, encumber, or otherwise transfer all or any part of Tenant's
interest in this lease, or permit the Premises to be occupied by anyone other
than Tenant, without Landlord's prior written consent, which consent shall not
be unreasonably withheld or conditioned in accordance with the provisions of
Section 9.1(b) and shall be delivered to Tenant within fifteen (15) business
days following Tenant's request. No assignment (whether voluntary, involuntary
or by operation of law) and no subletting shall be valid or effective without
Landlord's prior written consent and, at Landlord's election, any such
assignment or subletting or attempted assignment or subletting shall constitute
a material default of this Lease. Without limiting the foregoing, Landlord
agrees that the use and occupancy of not more than ten percent (10%) of the
floor area of the Premises in the aggregate by any person or entity performing
office support services (such as mail room, copy center, shipping or travel
services) or other services incidental to Tenant's permitted use on an outsource
basis shall not constitute a sublease or other prohibited transfer of the
Premises provided Tenant continues to occupy the remainder of the Premises.
Landlord
19
shall not be deemed to have given its consent to any assignment or subletting by
any other course of action, including its acceptance of any name for listing in
the Building directory. To the extent not prohibited by provisions of the
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"),
including Section 365(f)(1), Tenant on behalf of itself and its creditors,
administrators and assigns waives the applicability of Section 365(e) of the
Bankruptcy Code unless the proposed assignee of the Trustee for the estate of
the bankrupt meets Landlord's standard for consent as set forth in Section
9.1(b) of this Lease. If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.
(b) If Tenant desires to transfer an interest in this Lease, it shall
first notify Landlord of its desire and shall submit in writing to Landlord: (i)
the name and address of the proposed transferee; (ii) the nature of any proposed
subtenant's or assignee's business to be carried on in the Premises; (iii) the
terms and provisions of any proposed sublease or assignment, including a copy of
the proposed assignment or sublease form; (iv) evidence of insurance of the
proposed assignee or subtenant complying with the requirements of EXHIBIT D
hereto; (v) a completed Environmental Questionnaire from the proposed assignee
or subtenant; and (vi) any other information reasonably requested by Landlord
and reasonably related to the transfer. Except as provided in Subsection (c) of
this Section, Landlord shall not unreasonably withhold its consent, provided:
(1) the use of the Premises will be consistent with the provisions of this Lease
and with Landlord's written contractual commitments to other tenants of the
Building and/or Project; (2) at Landlord's election, insurance requirements
relating to such transferee's occupancy shall be brought into conformity with
Landlord's then current leasing practice; (3) any proposed subtenant or assignee
demonstrates that it is financially responsible by submission to Landlord of all
reasonable information as Landlord may request concerning the proposed subtenant
or assignee, including, but not limited to, a balance sheet of the proposed
subtenant or assignee as of a date within ninety (90) days of the request for
Landlord's consent, statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the request for
Landlord's consent; (4) any proposed subtenant or assignee demonstrates to
Landlord's reasonable satisfaction a record of successful experience in
business; and (5) the proposed transfer will not impose additional burdens or
adverse tax effects on Landlord.
If Landlord consents to the proposed transfer, Tenant may within
ninety (90) days after the date of the consent effect the transfer upon the
terms described in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord's consent as set forth
in this Section. Landlord shall approve or disapprove any requested transfer
within fifteen (15) business days following receipt of Tenant's written request,
the information set forth above, and the fee set forth below.
(c) In lieu of consenting to a proposed assignment or subletting of
thirty-seven percent (37%) or more of the rentable area of the Premises in the
aggregate taking into consideration prior subleases for the duration of the then
remaining Term, Landlord may elect to recapture the portion of the Premises
subject to the proposed subletting, and lease such recaptured Premises directly
to the proposed assignee or sublessee or to any third party, as provided in this
paragraph. In the event Tenant proposes to sublease any space in the Building,
such space proposed for sublease must be separately leaseable and tenantable, as
reasonably determined by Landlord. Tenant shall provide Landlord with notice of
its proposal to sublease (which notice shall include all material terms of the
proposed sublease, including rental rate, tenant improvements, base year, etc.).
Landlord shall have fifteen (15) business days within which to notify Tenant of
its intent to recapture the portion of the Premises designated for subletting.
If Landlord declines to exercise its right to recapture, Tenant shall have one
hundred eighty (180) days from the time Landlord notifies Tenant of its decision
not to recapture the space, to sublease said space to any party at terms
(inclusive of rental rate, tenant improvements, base year, etc.) not materially
different than those proposed to Landlord and, if Tenant is unsuccessful, Tenant
shall repeat the procedures set forth in this paragraph. In the event of any
such recapture by Landlord, this Lease shall terminate as to the recaptured
space and the rent payable under this Lease shall be proportionately reduced,
and Landlord shall be responsible for any brokerage commissions and other
leasing costs relating to such re-leasing of the recaptured space.
(d) Tenant agrees that fifty percent (50%) of any amounts paid by an
assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case of a sublease of a portion of the
Premises, in excess of the Basic Rent reasonably allocated to such portion, plus
(ii) Tenant's direct out-of-pocket costs such as tenant improvements, moving
costs or brokerage commissions which Tenant certifies to Landlord have been paid
to provide occupancy related services to such assignee or subtenant of a nature
commonly provided by landlords of similar space, shall be the property of
Landlord and such amounts shall be payable directly to Landlord by the assignee
or subtenant or, at Landlord's option, by Tenant. For the purpose of determining
Tenant's direct out-of -pocket costs for subparagraph (ii) of this paragraph,
Tenant shall be allowed to deduct the unamortized portion (assuming straight
line depreciation over the Lease Term) of Tenant's Contribution (as defined in
the Work Letter) provided that such subtenant or assignee is taking the Premises
"as-is" in its current configuration and no other tenant improvement costs are
included. At Landlord's request, a written agreement shall be entered into by
and among Tenant, Landlord and the proposed assignee or subtenant confirming the
requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant, except for
any transfer to a "Tenant Affiliate" (as hereinafter defined). Such fee is
hereby acknowledged as a reasonable amount to reimburse Landlord for all of its
costs of review and evaluation of a proposed
20
assignee/sublessee, and Landlord shall not be obligated to commence such review
and evaluation unless and until such fee is paid.
(f) Landlord agrees to execute and deliver to Tenant, within fifteen
(15) days following Tenant's request, a consent to lien waiver, including lease
estoppel language as may be requested by Tenant's lender (all in a form
reasonably acceptable to Tenant's lender and Landlord).
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its obligation to pay rent and to
perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act
or omission by an assignee or subtenant. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall
be liable jointly and severally with Tenant for the payment of all rent, and for
the due performance of all of Tenant's obligations, under this Lease. No
transfer shall be binding on Landlord unless any document memorializing the
transfer is delivered to Landlord and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument prepared by
Landlord and consistent with the requirements of this Article. The acceptance by
Landlord of any payment due under this Lease from any other person shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any transfer. Consent by Landlord to one or more transfers shall not
operate as a waiver or estoppel to the future enforcement by Landlord of its
rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:
(a) Each and every provision contained in this Lease (other than with
respect to the payment of rent hereunder) is incorporated by reference into and
made a part of such sublease, with "Landlord" hereunder meaning the sublandlord
therein and "Tenant" hereunder meaning the subtenant therein.
(b) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs in
the performance of Tenant's obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an uncured default exists
in the performance of Tenant's obligations under this Lease, to pay to Landlord
all sums then and thereafter due under the sublease. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.
(c) Except as permitted under Section 9.4 below, in the event of the
termination of this Lease, Landlord may, at its sole option, take over Tenant's
entire interest in any sublease and, upon notice from Landlord, the subtenant
shall attorn to Landlord. In no event, however, shall Landlord be liable for any
previous act or omission by Tenant under the sublease or for the return of any
advance rental payments or deposits under the sublease that have not been
actually delivered to Landlord, nor shall Landlord be bound by any sublease
modification executed without Landlord's consent or for any advance rental
payment by the subtenant in excess of one month's rent. The general provisions
of this Lease, including, without limitation, those pertaining to insurance and
indemnification, shall be deemed incorporated by reference into the sublease
despite the termination of this Lease.
SECTION 9.4. CERTAIN TRANSFERS. Notwithstanding anything to the contrary
contained in this Article IX, Landlord's consent shall not be required for the
assignment or transfer of this Lease to any parent or wholly owned subsidiary of
Tenant or in connection with the sale of all or substantially all of the assets
of Tenant or as a result of a merger by Tenant with or into another entity
controlling, under common control with, or controlled by Tenant (a "Tenant
Affiliate"); provided that (i) the financial ability of the persons and/or
entities remaining liable for Tenant's obligations under this Lease after such
transfer, when considered in the aggregate, shall not be materially and
adversely reduced or impaired when compared to the financial ability of Tenant
prior to such transfer, evidence of which, satisfactory to Landlord, shall be
presented to Landlord prior to such transfer unless such prior disclosure is
prohibited by applicable law in which event disclosure shall be made as soon as
reasonably possible after such transaction is disclosed to the public, (ii)
Tenant shall provide to Landlord prior to or contemporaneously with such
transfer, written notice of such transactions and such documentation and other
information as Landlord may reasonably request in connection therewith, (iii)
the terms of Section 9.2 shall be applicable to any such assignment, and (iv)
the use of the Premises by the Tenant Affiliate shall be as set forth in this
Lease. For purposes of this Section, a public or private refinancing or offering
of Tenant stock is a permitted transfer and the term "control" means possession,
directly or indirectly, of the power to direct or cause the direction of the
management, affairs and policies of anyone, whether through the ownership of
voting securities, by contract or otherwise. The provisions of Section 9.1 (c)
and (d) shall not apply to the assignment or transfer of Tenant's interest in
this Lease to a Tenant Affiliate pursuant to the provisions of this Section.
SECTION 9.5 COLOCATION OF EQUIPMENT. Tenant may from time to time
throughout the Lease Term provide services to or require services from
customers, suppliers, vendors or other persons or entities with whom Tenant has
a business relationship (the "Customers") which allows such Customers to locate
equipment owned by such Customers within the Premises and Tenant may grant such
Customers access to the Premises for the operation, maintenance repair and/or
replacement of such equipment ("Colocation"). The use of the Premises by such
Customers
21
for Colocation shall not be considered a sublease, assignment or other transfer
of Tenant's interest in this lease requiring Landlord's consent provided: (i)
there is no demising wall segregating any portion of the Building for solely for
use by such Customer; and (ii) no such Customer has exclusive use of or control
over a portion of the Building. Tenant shall be solely responsible for causing
such Customers to access and use the Premises in accordance with the terms of
this Lease. Landlord shall have no obligation to operate, maintain, insure or
otherwise be responsible for any such equipment whether owned by Tenant or any
such Customers.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in EXHIBIT D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord shall provide the following
types of insurance, in amounts and coverages as may be determined by Landlord in
its reasonable discretion provided such amounts, coverages and deductibles are
reasonable and comparable to coverages maintained on comparable properties in
the area: "all risk" property insurance, subject to standard exclusions covering
the Building and the Project, and commercial general liability coverage.
Further, Landlord may, in its sole and absolute discretion, obtain coverage for
such other risks as Landlord or its mortgagees may from time to time deem
appropriate, including, without limitation, coverage for leasehold improvements
and/or earthquake (provided, however, that the cost of earthquake insurance
shall not be included as an Operating Expense unless Landlord elects or is
required to carry such coverage on the entire Project). Landlord shall not be
required to carry insurance of any kind on Tenant's property, including
leasehold improvements, trade fixtures, furnishings, equipment, plate glass,
signs and all other items of personal property, and shall not be obligated to
repair or replace that property should damage occur. All proceeds of insurance
maintained by Landlord upon the Building and Project shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any repairs.
At Landlord's option, Landlord may self-insure all or any portion of the risks
for which Landlord is required or elects to provide insurance hereunder;
provided, however, that in the event that Landlord transfers its fee interest in
the Project including the Premises (other than to an entity affiliated with,
controlled, controlling or under common control with Landlord, or in which
Landlord retains an interest), such transferee shall demonstrate a financial net
worth of at least Fifty Million Dollars ($50,000,000.00) or cash reserves of Ten
Million Dollars ($10,000,000.00), and in the absence of such financial net worth
or cash reserves, such transferee shall instead maintain insurance coverage as
required by this Section 10.2 from third-party insurance carrier(s).
SECTION 10.3. JOINT INDEMNITY.
(a) To the fullest extent permitted by law, but subject to the express
limitations on liability contained in Section 10.5 of this Lease, Tenant shall
defend, indemnify, protect, save and hold harmless Landlord, its agents, and any
and all affiliates of Landlord, including, without limitation, any corporations
or other entities controlling, controlled by or under common control with
Landlord, from and against any and all claims, liabilities, costs or expenses
arising either before or after the Commencement Date from Tenant's use or
occupancy of the Premises, or from the conduct of its business, or from any
activity, work, or thing done, permitted or suffered by Tenant or its agents,
employees, invitees or licensees in or about the Premises, or from any
negligence or willful misconduct of Tenant or its agents, employees, visitors,
patrons, guests, invitees or licensees. In cases of alleged negligence asserted
by third parties against Landlord which arise out of, are occasioned by, or in
any way attributable to Tenant's, its agents, employees, contractors, licensees
or invitees use and occupancy of the Premises, or from the conduct of its
business or from any activity, work or thing done, permitted or suffered by
Tenant or its agents, employees, invitees or licensees on Tenant's part to be
performed under this Lease, or from any negligence or willful misconduct of
Tenant, its agents, employees, licensees or invitees, Tenant shall accept any
tender of defense for Landlord and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of the Landlord, defend Landlord
and protect and hold Landlord harmless and pay all costs, expenses and
attorneys' fees incurred in connection with such litigation, provided that
Tenant shall not be liable for any such injury or damage, and Landlord shall
reimburse Tenant for the reasonable attorney's fees and costs for the attorney
representing both parties, all to the extent and in the proportion that such
injury or damage is ultimately determined by a court of competent jurisdiction
(or in connection with any negotiated settlement agreed to by Landlord) to be
attributable to the negligence or willful misconduct of Landlord. Upon
Landlord's request, Tenant shall at Tenant's sole cost and expense, retain a
separate attorney reasonably selected by Landlord to represent Landlord in any
such suit if Landlord reasonably determines that the representation of both
Tenant and Landlord by the same attorney would cause a conflict of interest;
provided, however, that to the extent and in the proportion that the injury or
damage which is the subject of the suit is ultimately determined by a court of
competent jurisdiction (or in connection with any negotiated settlement agreed
to by Landlord) to be attributable to the negligence or willful misconduct of
Landlord, Landlord shall reimburse Tenant for the reasonable legal fees and
costs of the separate attorney retained by Tenant. The provisions of this
Subsection 10.3(a) shall expressly survive the expiration or sooner termination
of this Lease.
(b) To the fullest extent permitted by law, but subject to the express
limitations on liability contained in this Lease (including, without limitation,
the provisions of Sections 10.4, 10.5 and 14.8 of this Lease), Landlord shall
defend, indemnify, protect, save and hold harmless Tenant, its agents and any
and all affiliates of Tenant, including, without limitation, any corporations,
or other entities controlling, controlled by or under common control with
Tenant, from and against any and all claims, liabilities, costs or expenses
arising either before or after the Commencement Date from the operation,
maintenance or repair of the Common Areas, the Project and/or the Building by
Landlord or its employees
22
or authorized agents. In cases of alleged negligence asserted by third parties
against Tenant which arise out of, are occasioned by, or in any way attributable
to the maintenance or repair of the Common Areas, the Project or the Building by
Landlord or its authorized agents or employees, Landlord shall accept any tender
of defense for Tenant and shall, notwithstanding any allegation of negligence or
willful misconduct on the part of Tenant, defend Tenant and protect and hold
Tenant harmless and pay all cost, expense and attorneys' fees incurred in
connection with such litigation, provided that Landlord shall not be liable for
any such injury or damage, and Tenant shall reimburse Landlord for the
reasonable attorney's fees and costs for the attorney representing both parties,
all to the extent and in the proportion that such injury or damage is ultimately
determined by a court of competent jurisdiction (or in connection with any
negotiated settlement agreed to by Tenant) to be attributable to the negligence
or willful misconduct of Tenant. Upon Tenant's request, Landlord shall at
Landlord's sole cost and expense, retain a separate attorney reasonably selected
by Tenant to represent Tenant in any such suit if Tenant reasonably determines
that the representation of both Tenant and Landlord by the same attorney would
cause conflict of interest; provided, however, that to the extent and the
proportion that the injury or damage which is the subject of the suit is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Tenant) to be attributable to the
negligence or willful misconduct or Tenant, Tenant shall reimburse Landlord for
the reasonable legal fees and costs of the separate attorney retained by
Landlord. The provisions of this Subsection 10.3(b) shall expressly survive the
expiration or sooner termination of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY. Subject to the express indemnity
obligations contained in Section 10.3(b) of this Lease, Landlord shall not be
liable to Tenant, its employees, agents and invitees, and Tenant hereby waives
all claims against Landlord for loss of or damage to any property or personal
injury, or any other loss, cost, damage, injury or liability whatsoever
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak or flow from or into any part of the Premises or from the
breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building. Notwithstanding any provision
of this Lease to the contrary, including, without limitation, the provisions of
Section 10.3(b) of this Lease, Landlord shall in no event be liable to Tenant,
its employees, agents, and invitees, and Tenant hereby waives all claims against
Landlord, for loss or interruption of Tenant's business or income (including,
without limitation, any consequential damages and lost profit or opportunity
costs), or any other loss, cost, damage, injury or liability resulting from, but
not limited to, Acts of God (except with respect to restoration obligations
pursuant to Article XI below), acts of civil disobedience or insurrection, acts
or omissions (criminal or otherwise) of any third parties (other than Landlord's
employees or authorized agents), including, without limitation, any other
tenants within the Project or their agents, employees, contractors, guests or
invitees. It is understood that any such condition may require the temporary
evacuation or closure of all or a portion of the Building. Except as provided in
Sections 6.1, 11.1 and 12.1 below, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant's
business (including, without limitation, consequential damages and lost profit
or opportunity costs) arising from the making of any repairs, alterations or
improvements to any portion of the Building, including repairs to the Premises,
nor shall any related activity by Landlord constitute an actual or constructive
eviction; provided, however, that in making repairs, alterations or
improvements, Landlord shall interfere as little as reasonably practicable with
the conduct of Tenant's business in the Premises. Neither Landlord nor its
agents shall be liable for interference with light or other similar intangible
interests. Tenant shall immediately notify Landlord in case of fire or accident
in the Premises, the Building or the Project and of defects in any improvements
or equipment.
SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives
all rights of recovery against the other and the other's agents on account of
loss and damage occasioned to the property of such waiving party to the extent
only that such loss or damage would be covered under any "all risk" property
insurance policies required by this Article X; provided however, that (i) the
foregoing waiver shall not apply to the extent of Tenant's obligations to pay
deductibles under any such policies and this Lease, and (ii) if any loss is due
to the negligent act, omission or willful misconduct of Tenant or its agents,
employees, contractors, guests or invitees, Tenant's liability insurance shall
be primary and shall cover all losses and damages prior to any other insurance
hereunder. By this waiver it is the intent of the parties that neither Landlord
nor Tenant shall be liable to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage insured against under
any "all-risk" property insurance policies required by this Article, even though
such loss or damage might be occasioned by the negligence of such party, its
agents, employees, contractors, guests or invitees. The provisions of this
Section shall not limit the indemnification provisions elsewhere contained in
this Lease.
23
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building of which the Premises are a part is damaged,
Landlord shall diligently repair that damage as soon as reasonably possible, at
its expense, unless: (i) Landlord reasonably determines that the cost of repair
is not covered by Landlord's fire and extended coverage insurance then in place
(or if Landlord is self-insuring, would not be covered by a standard policy of
"all risk" fire insurance), plus such additional amounts Tenant elects, at its
option, to contribute, excluding however the deductible (for which Tenant shall
be responsible for Tenant's Share); (ii) Landlord reasonably determines that the
Premises cannot, with reasonable diligence, be fully repaired by Landlord (or
cannot be safely repaired because of the presence of hazardous factors,
including, without limitation, Hazardous Materials, earthquake faults, and other
similar dangers) within two hundred seventy (270) days after the date of the
damage; (iii) the damage occurs during the final twelve (12) months of the Term.
Should Landlord elect not to repair the damage for one of the preceding reasons,
Landlord shall so notify Tenant in writing within thirty (30) days after the
damage occurs and this Lease shall terminate as of the date of that notice.
(b) Unless Landlord elects to terminate this Lease in accordance with
subsection (a) above, this Lease shall continue in effect for the remainder of
the Term and Landlord shall promptly notify Tenant in writing of Landlord's
election to restore the Premises and of the time Landlord estimates to complete
such restoration; provided that so long as Tenant is not in default under this
Lease following the expiration of the applicable cure period, if the damage is
so extensive that Landlord reasonably determines that the Premises cannot, with
reasonable diligence, be repaired by Landlord (or cannot be safely repaired
because of the presence of hazardous factors, earthquake faults, and other
similar dangers) so as to allow Tenant's substantial use and enjoyment of the
Premises within two hundred seventy (270) days after the date of damage, then
Tenant may elect to terminate this Lease by written notice to Landlord within
the thirty (30) day period stated in subsection (a).
(c) Commencing on the date of any damage to the Building, and ending
on the sooner of the date the damage is repaired or the date this Lease is
terminated, the rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to the total floor area of the Premises, and if
as a result of any partial damage, Tenant reasonably determines that it cannot
conduct its business in the remaining portions of the Premises, the rent for the
entire Premises shall be abated. Any such abatement shall be conditioned upon
Tenant's then carrying the required business interruption insurance as described
in EXHIBIT D.
(d) Notwithstanding the provisions of subsections (a), (b) and (c) of
this Section, and subject to the provisions of Section 10.5 above, the cost of
any repairs shall be borne by Tenant, and Tenant shall not be entitled to rental
abatement or termination rights, if the damage is due to the fault or neglect of
Tenant or its employees, subtenants, invitees or representatives, but only to
the extent such damage is not covered by a standard policy of "all risk"
insurance (whether or not Landlord is self-insuring). In addition, the
provisions of this Section shall not be deemed to require Landlord to repair any
improvements or fixtures that Tenant is obligated to repair or insure pursuant
to any other provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing Tenant's
personal property and any nonstructural debris from the Premises to facilitate
all inspections of the Premises and the making of any repairs. Notwithstanding
anything to the contrary contained in this Lease, if Landlord in good faith
believes there is a risk of injury to persons or damage to property from entry
into the Building or Premises following any damage or destruction thereto,
Landlord may restrict entry into the Building or the Premises by Tenant, its
employees, agents and contractors in a non-discriminatory manner, without being
deemed to have violated Tenant's rights of quiet enjoyment to, or made an
unlawful detainer of, or evicted Tenant from, the Premises. Upon request,
Landlord shall consult with Tenant to determine if there are safe methods of
entry into the Building or the Premises solely in order to allow Tenant to
retrieve files, data in computers, and necessary inventory, subject however to
all indemnities and waivers of liability from Tenant to Landlord contained in
this Lease and any additional indemnities and waivers of liability which
Landlord may require. If damage or destruction rendering the Premises unusable
occurs during the final twelve (12) months of the Lease Term or the final twelve
(12) months of any extension period which cannot be repaired within sixty (60)
days following such damage or destruction, Tenant shall have the option to
terminate the Lease by providing Landlord written notification of Tenant's
election to terminate within thirty (30) days after the damage occurs. For all
purposes of this Section 11.1, damage to Tenant's parking areas and access to
the Premises shall be deemed damage to the Building.
SECTION 11.2. LEASE GOVERNS/JAMS. Tenant agrees that the provisions of this
Lease, including, without limitation, Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
Any disputes regarding the obligations of the parties under this Article XI
shall be submitted to and resolved by JAMS arbitration pursuant to Section 22.7
of this Lease.
24
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of the
Premises which materially impairs Tenant's ability to conduct business from the
Premises is taken by any lawful authority by exercise of the right of eminent
domain, or sold to prevent a taking, either Tenant or Landlord may terminate
this Lease effective as of the date possession is required to be surrendered to
the authority. In the event title to a portion of the Building or Project, other
than the Premises, is taken or sold in lieu of taking, and if Landlord elects to
restore the Building in such a way as to alter the Premises materially, either
party may terminate this Lease, by written notice to the other party, effective
on the date of vesting of title. In the event neither party has elected to
terminate this Lease as provided above, then Landlord shall promptly, after
receipt of a sufficient condemnation award, proceed to restore the Premises to
substantially their condition prior to the taking, and a proportionate allowance
shall be made to Tenant for the rent corresponding to the time during which, and
to the part of the Premises of which, Tenant is deprived on account of the
taking and restoration. In addition, Tenant's share of Operating Expenses and
all other elements of this Lease which are a function of the square footage of
the Premises shall be adjusted to reflect the taking. In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award
without deduction for any estate or interest of Tenant; provided that nothing in
this Section shall be deemed to give Landlord any interest in, or prevent Tenant
from seeking any award against the taking authority for, the taking of personal
property and fixtures belonging to Tenant or for relocation or business
interruption expenses recoverable from the taking authority.
SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.
SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a taking
of the parking area such that Landlord can no longer provide sufficient parking
to comply with this Lease, Landlord may substitute reasonably equivalent parking
in a location reasonably close to the Building; provided that if Landlord fails
to make that substitution within ninety (90) days following the taking and if
the taking materially impairs Tenant's use and enjoyment of the Premises, Tenant
may, at its option, terminate this Lease by written notice to Landlord. If this
Lease is not so terminated by Tenant, there shall be no abatement of rent and
this Lease shall continue in effect. Any dispute regarding the substitution of
parking spaces under this Section 12.3 shall be submitted to and resolved by
JAMS arbitration pursuant to Section 22.7 of this Lease.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease shall be
either superior or subordinate to all ground or underlying leases, mortgages and
deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in default under this Lease following
the expiration of the applicable cure period, this Lease shall not be terminated
or Tenant's quiet enjoyment of the Premises disturbed in the event of
termination of any such ground or underlying lease, or the foreclosure of any
such mortgage or deed of trust, to which Tenant has subordinated this Lease
pursuant to this Section. Any such subordination instrument presented for
Tenant's signature shall contain nondisturbance provisions for Tenant's benefit
substantially in accordance with the provisions for Tenant's benefit set forth
in this Section. In the event of a termination or foreclosure, Tenant shall
become a tenant of and attorn to the successor-in-interest to Landlord upon the
same terms and conditions as are contained in this Lease, and shall execute any
instrument reasonably required by Landlord's successor for that purpose. Tenant
shall also, upon written request of Landlord, execute and deliver all
instruments as may be required from time to time to subordinate the rights of
Tenant under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust (provided that such instruments include the
nondisturbance and attornment protections set forth above in form reasonably
acceptable to Tenant), or, if requested by Landlord, to subordinate, in whole or
in part, any ground or underlying lease or the lien of any mortgage or deed of
trust to this Lease.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than fifteen (15) days
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require. Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building or Project.
(b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within fifteen (15) days
following written notice therefor shall be conclusive upon Tenant that (i) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) there are no uncured defaults in Landlord's
performance, and (iii) not more than one month's rental has been paid in
advance.
25
SECTION 13.3. FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution of this
Lease and thereafter at any time within fifteen (15) days following Landlord's
request but not more than once in each calendar year, Tenant's current financial
statements, certified true, accurate and complete by the chief financial officer
of Tenant, including a balance sheet and profit and loss statement for the most
recent prior year (collectively, the "Statements"), which Statements shall
accurately and completely reflect the financial condition of Tenant. Landlord
agrees that it will keep the Statements confidential, except that Landlord shall
have the right to deliver the same to any proposed purchaser of the Building or
Project (provided that any such purchaser shall agree to keep said Statements
confidential), and to any encumbrancer of all or any portion of the Building or
Project (provided that Landlord shall request that any such encumbrancer keep
said Statements confidential).
(b) Tenant acknowledges that Landlord is relying on the Statements in
its determination to enter into this Lease, and Tenant represents to Landlord,
which representation shall be deemed made on the date of this Lease and again on
the Commencement Date, that no material change in the financial condition of
Tenant, as reflected in the Statements, has occurred since the date Tenant
delivered the Statements to Landlord. The Statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of submission by any Statements to
Landlord.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of default
set forth in this Lease, the occurrence of any one or more of the following
events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or additional
rent required to be made by Tenant, as and when due, where the failure continues
for a period of ten (10) days after written notice from Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure Section 1161
and 1161(a) as amended. For purposes of these default and remedies provisions,
the term "additional rent" shall be deemed to include all amounts of any type
whatsoever other than Basic Rent to be paid by Tenant pursuant to the terms of
this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the Lease
by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.
(c) The discovery by Landlord that any financial statement provided by
Tenant, or by any affiliate, successor or guarantor of Tenant, was materially
false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial statements in
accordance with the requirements of Article XIII.
(e) The failure or inability by Tenant to observe or perform any of
the express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in any other subsection of this
Section, where the failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended. However, if the nature
of the failure is such that more than thirty (30) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences the cure within thirty (30) days, and thereafter diligently pursues
the cure to completion.
(f) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within sixty (60) days; (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within sixty (60) days; or (v) Tenant's convening of a meeting of its
creditors for the purpose of effecting a moratorium upon or composition of its
debts. Landlord shall not be deemed to have knowledge of any event described in
this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:
26
(i) Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:
(1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;
(2) The worth at the time of award of the amount by which
the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that Tenant
proves could have been reasonably avoided;
(3) The worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;
(4) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's default, including, but not limited to, the cost
of recovering possession of the Premises, refurbishment of the Premises to the
condition required upon surrender under this Lease, marketing costs, commissions
and other expenses of reletting, including necessary repair, the unamortized
portion of any tenant improvements and brokerage commissions funded by Landlord
in connection with this Lease, reasonable attorneys' fees, and any other
reasonable costs (provided that the unamortized portion of any tenant
improvements shall not be computed separately from the rent which includes such
amounts); and
(5) At Landlord's election, all other amounts in addition
to or in lieu of the foregoing as may be permitted by law. The term "rent" as
used in this Lease shall be deemed to mean the Basic Rent and all other sums
required to be paid by Tenant to Landlord pursuant to the terms of this Lease.
Any sum, other than Basic Rent, shall be computed on the basis of the average
monthly amount accruing during the twenty-four (24) month period immediately
prior to default, except that if it becomes necessary to compute such rental
before the twenty-four (24) month period has occurred, then the computation
shall be on the basis of the average monthly amount during the shorter period.
As used in subparagraphs (1) and (2) above, the "worth at the time of award"
shall be computed by allowing interest at the rate of ten percent (10%) per
annum. As used in subparagraph (3) above, the "worth at the time of award" shall
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.
(b) The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.
(c) No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS. Any rent due under this Lease that is not
received by Landlord within ten (10) days of the date when due shall bear
interest at the rate of ten percent (10%) per annum not to exceed the maximum
rate permitted by law (the "Interest Rate") from the date due until fully paid.
The payment of interest shall not cure any default by Tenant under this Lease.
In addition, Tenant acknowledges that the late payment by Tenant to Landlord of
rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be
27
extremely difficult and impracticable to ascertain. Those costs may include, but
are not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any rent due from
Tenant shall not be received by Landlord or Landlord's designee within ten (10)
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest provided above, a late charge in a sum equal to the greater of five
percent (5%) of the amount overdue or Two Hundred Fifty Dollars ($250.00) for
each delinquent payment; provided that such late charge shall be waived for the
initial late rent payment during each calendar year during the Term and any
extension. Acceptance of a late charge by Landlord shall not constitute a waiver
of Tenant's default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to
be performed by Tenant under this Lease shall be performed at Tenant's sole cost
and expense and without any abatement of rent or right of set-off. If Tenant
fails to pay any sum of money, other than rent, or fails to perform any other
act on its part to be performed under this Lease, and the failure continues
beyond any applicable grace period set forth in Section 14.1, then in addition
to any other available remedies, Landlord may, at its election make the payment
or perform the other act on Tenant's part. Landlord's election to make the
payment or perform the act on Tenant's part shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or
performing the same or similar acts. Tenant shall, promptly upon demand by
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary
incidental costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord. Landlord shall have the same rights
and remedies if Tenant fails to pay those amounts as Landlord would have in the
event of a default by Tenant in the payment of rent. Landlord shall provide
Tenant with written notice and the appropriate cure period provided in the Lease
before performing any act on behalf of Tenant and will provide Tenant with
written request for any reimbursement payable under this Section 14.4.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion. If Landlord shall default in the performance of any of
its obligations under the Lease (after notice and an opportunity to cure as
provided herein), Tenant shall have the right to pursue any and all remedies
available to it as set forth in this Lease, at law, or in equity, subject to the
express limitations on liability contained in this Lease.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any event of default by Tenant under this Lease or
holding over of possession by Tenant after the expiration or earlier termination
of this Lease, including, without limitation, all costs, expenses and actual
accountants, appraisers, attorneys and other professional fees, and any
collection agency or other collection charges, shall be due and payable by
Tenant to Landlord on demand, and shall bear interest at the rate of ten percent
(10%) per annum. Should either Landlord or Tenant bring any action in connection
with this Lease, the prevailing party shall be entitled to recover as a part of
the action its reasonable attorneys' fees, and all other costs. The prevailing
party for the purpose of this paragraph shall be determined by the trier of the
facts.
SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND
KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of Landlord do not
constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners.
Should Tenant recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord in
the Project and out of the rent or other income from such property receivable by
Landlord or out of consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title or interest in the
Project and no action for any deficiency may be sought or obtained by Tenant.
28
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only; such holding over with
the prior written consent of Landlord shall constitute a month-to-month tenancy
commencing on the first (1st) day following the termination of this Lease. In
either of such events, possession shall be subject to all of the terms of this
Lease, except that the monthly Basic Rent shall be one hundred twenty percent
(120%) of the Basic Rent for the month immediately preceding the date of
termination for the initial two (2) months of holdover by Tenant and thereafter,
the monthly Basic Rent for the third (3rd) and each successive month of holdover
shall be the greater of one hundred fifty percent (150%) of the Basic Rent for
the month immediately preceding the date of termination or the then current
Basic Rent for comparable space in the Building or Project, as the case may be.
If Tenant fails to surrender the Premises upon the expiration of this Lease
despite Landlord's written demand to do so (which demand shall include notice to
Tenant of a succeeding tenant and the need for Tenant's immediate surrender),
then Tenant shall be liable for Landlord's foreseeable consequential and other
damages (including, without limitation, reasonable attorney's fees) proximately
caused by such failure to surrender. Acceptance by Landlord of rent after the
termination shall not constitute a consent to a holdover or result in a renewal
of this Lease. The foregoing provisions of this Section are in addition to and
do not affect Landlord's right of re-entry or any other rights of Landlord under
this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
from the Premises all personal property and debris, except for any items that
Landlord may by written authorization allow to remain. Tenant shall repair all
damage to the Premises resulting from such removal, which repair shall include
the patching and filling of holes (other than holes resulting from the hanging
of pictures or other items of decoration, which Tenant shall not be obligated to
patch and fill) and repair of structural damage, provided that Landlord may
instead elect to repair any structural damage at Tenant's expense. If Tenant
shall fail to comply with the provisions of this Section following ten (10) days
written notice to Tenant and failure to cure, Landlord may effect the removal
and/or make any repairs, and the cost to Landlord shall be additional rent
payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quit claiming to Landlord all right, title
and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction or
offset (except as otherwise expressly provided in this Lease), in lawful money
of the United States to Landlord at its address set forth in Item 12 of the
Basic Lease Provisions, or at any other place as Landlord may designate in
writing. Unless this Lease expressly provides otherwise, as for example in the
payment of rent pursuant to Section 4.1, all payments shall be due and payable
within five (5) days after demand. All payments requiring proration shall be
prorated on the basis of a thirty (30) day month and a three hundred sixty (360)
day year. Any notice, election, demand, consent, approval or other communication
to be given or other document to be delivered by either party to the other may
be delivered in person or by courier or overnight delivery service to the other
party, or may be deposited in the United States mail, duly registered or
certified, postage prepaid, return receipt requested, and addressed to the other
party at the address set forth in Item 12 of the Basic Lease Provisions. Either
party may, by written notice to the other, served in the manner provided in this
Article, designate a different address. If any notice or other document is sent
by mail, it shall be deemed served or delivered on the date actually received or
refused as indicated on the return receipt. If more than one person or entity is
named as Tenant under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them. Unless the Lease expressly provides
otherwise, all payments shall be due and payable within ten (10) days of demand.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as EXHIBIT E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Building, Project and Common Areas.
Landlord shall not be liable to Tenant for any violation of the Rules and
Regulations or the breach of any covenant or condition in any lease by any other
tenant or such tenant's agents, employees, contractors,
29
guests or invitees. One or more waivers by Landlord of any breach of the Rules
and Regulations by Tenant or by any other tenant(s) shall not be a waiver of any
subsequent breach of that rule or any other. Tenant's failure to keep and
observe the Rules and Regulations shall constitute a default under this Lease.
In the case of any conflict between the Rules and Regulations and this Lease,
this Lease shall be controlling. Tenant's agreement to abide by, keep and
observe all reasonable rules and regulations which Landlord may make shall be
limited to those rules and restrictions which are consistently applied by
Landlord to all tenants of the Project in a non-discriminatory manner.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) pursuant to Landlord's separate
agreement with said Broker. Tenant warrants that it has had no dealings with any
other real estate broker or agent in connection with the negotiation of this
Lease, and Tenant agrees to indemnify and hold Landlord harmless from any cost,
expense or liability (including reasonable attorneys' fees) for any
compensation, commissions or charges claimed by any other real estate broker or
agent employed or claiming to represent or to have been employed by Tenant in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease. To the fullest extent permitted by law,
Landlord agrees to indemnify, defend and hold harmless Tenant from and against
any and all costs, expenses and liabilities for any compensation claimed by any
broker, finder or agent employed or claiming to have been employed by Landlord
in connection with the negotiation of this Lease.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises,
Landlord agrees to transfer, by credit to the purchase price or otherwise,
Tenant's Security Deposit to the transferee, and the transferor shall thereupon
be automatically relieved of all obligations on the part of Landlord accruing
under this Lease from and after the date of the transfer, provided that: (i) any
other funds held by the transferor in which Tenant has an interest shall be
turned over, subject to that interest, to the transferee and Tenant is notified
of the transfer as required by law and (ii) any such transferee shall assume, in
writing, all non-accrued obligations of Landlord under this Lease
Notwithstanding the foregoing, no holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security Deposit,
unless the mortgagee or holder of the deed of trust or the landlord actually
receives the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.
ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
30
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have. The
failure of Tenant or Landlord to seek redress for violation of, or to insist
upon the strict performance of, any term, covenant or condition of the Lease
shall not be deemed a waiver of such violation or prevent a subsequent act which
would have originally constituted a violation from having all the force and
effect of the original violation, nor shall any custom or practice which may
become established between the parties in the administration of the terms hereof
be deemed a waiver of, or in any way affect, the right of a party to insist upon
the performance by the other party of its obligations in strict accordance with
said terms. Any payment of rents or other sums hereunder by Tenant shall not, in
and of itself, be deemed a waiver of any preceding breach by Landlord of any
term, covenant or condition of this Lease, regardless of Tenant's knowledge of
such preceding breach at the time of payment of such rent or other sums.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall be
delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant's reasonable control.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including, without limitation, any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. Tenant and Landlord each
represent and warrant that each individual executing this Lease on behalf of
Tenant or Landlord, respectively, is duly authorized to execute and deliver this
Lease on behalf of Tenant or Landlord, respectively, and that this Lease is
binding upon Tenant or Landlord, respectively, in accordance with its terms.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease shall
be effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions, policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.
SECTION 21.6. EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.
31
SECTION 21.7. ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Project, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease.
The provisions of this Section are not intended to prevent Tenant from
disclosing the existence or terms of this Lease as may be required of a public
company in its filings with regulatory agencies.
SECTION 22.2. GUARANTY. [INTENTIONALLY OMITTED]
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with obtaining
financing for the Project, the lender shall request reasonable modifications in
this Lease as a condition to the financing, Tenant will not unreasonably
withhold or delay its consent, provided that the modifications do not materially
increase the obligations of Tenant or materially and adversely affect the
leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part of
Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder or to terminate this Lease shall result in such a release or
termination unless (a) Tenant has given notice by registered or certified mail
to any beneficiary of a deed of trust or mortgage covering the Building whose
address has been furnished to Tenant and (b) such beneficiary is afforded a
reasonable opportunity to cure the default by Landlord (which in no event shall
be less than sixty (60) days), including, if necessary to effect the cure, time
to obtain possession of the Building by power of sale or judicial foreclosure
provided that such foreclosure remedy is commenced within such sixty (60) day
period and is thereafter diligently pursued. Tenant agrees that each beneficiary
of a deed of trust or mortgage covering the Building is an express third party
beneficiary hereof, Tenant shall have no right or claim for the collection of
any deposit from such beneficiary or from any purchaser at a foreclosure sale
unless such beneficiary or purchaser shall have actually received and not
refunded the deposit, and Tenant shall comply with any written directions by any
beneficiary to pay rent due hereunder directly to such beneficiary without
determining whether an event of default exists under such beneficiary's deed of
trust.
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this Lease
shall be construed to be conditions as well as covenants as though the words
specifically expressing or imparting covenants and conditions were used in each
separate provision.
SECTION 22.6. SECURITY MEASURES. Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, its agents, invitees and property
from acts of third parties. Nothing herein contained shall prevent Landlord, at
its sole option, from providing security protection for the Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Project Costs. Tenant shall have the right to install, maintain and operate a
security system on the interior and exterior of the Premises as it deems
appropriate. Any such system shall be subject to Landlord's reasonable approval
but shall be installed, maintained, operated and removed upon expiration or
earlier termination of the Lease at Tenant's sole cost and expense.
SECTION 22.7. JAMS ARBITRATION.
(a) All claims or disputes between Landlord and Tenant arising out of,
or relating to the Lease which either party is expressly authorized by a
provision hereof to submit to arbitration, shall be decided by the
JAMS/ENDISPUTE, or its successor, in Orange, California ("JAMS"), unless the
parties mutually agree otherwise. Within ten (10) business days following
submission to JAMS, JAMS shall designate three arbitrators and each party may,
within five (5) business days thereafter, veto one of the three persons so
designated. If two different designated arbitrators have been vetoed, the third
arbitrator shall hear and decide the matter. Any arbitration pursuant to this
Section shall be decided within thirty (30) days of submission of JAMS. The
decision of the arbitrator shall be final and binding on the parties. All costs
associated with arbitration shall be awarded to the prevailing party as
determined by the arbitrator.
(b) Notice of the demand for arbitration by either party to the Lease
shall be filed in writing with the other party to the Lease and with JAMS and
shall be made within a reasonable time after the dispute has arisen. The award
rendered by the arbitrators shall be final, and judgment may be entered upon it
in accordance with applicable law in any court having jurisdiction thereof.
Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Lease shall include, by
consolidation, joinder or in any other manner, any person or entity not a party
to the Lease under which such arbitration is filed if (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, or (3) the interest or responsibility of such person or entity in
the matter is not insubstantial.
32
(c) The agreement herein among the parties to the Lease and any other
written agreement to arbitrate referred to herein shall be specifically
enforceable under prevailing law.
LANDLORD: TENANT:
THE IRVINE COMPANY, BROADCOM CORPORATION
A DELAWARE CORPORATION A CALIFORNIA CORPORATION
By: /s/ Clarence W. Barker By: /s/ William J. Ruehle
----------------------------- ------------------------------------
Clarence W. Barker, President William J. Ruehle,
Investment Properties Group, Vice President and Chief Financial
Officer
By: Brian Schaefgen
-----------------------------
Brian Schaefgen,
Assistant Secretary
33
FOURTH AMENDMENT TO LEASE
I. PARTIES AND DATE.
This Fourth Amendment to Lease (the "Amendment") dated April 30, 2004, is
by and between THE IRVINE COMPANY ("Landlord"), and BROADCOM CORPORATION, a
California corporation ("Tenant").
II. RECITALS.
Landlord and Tenant have previously entered into that certain Lease
(Multi-Tenant; Net) dated January 12, 2001, as amended by that certain First
Amendment to Lease which was executed concurrently (the "Original Lease"), for
all of the space in those two (2) buildings commonly known as 46 Discovery and
48 Discovery, Irvine, California, ("Original Premises"). The Original Lease was
since modified by a Second Amendment to Lease dated June 30, 2001 and a Third
Amendment to Lease dated September 18, 2003. The Original Lease as amended is
referred to in this Agreement as the "Lease". All capitalized terms not defined
in this Amendment shall have the meanings given to them in the Lease.
Landlord and Tenant now desire to modify the Lease to terminate Tenant's
leasehold interest in approximately 53,840 rentable square feet of space in the
building located at 48 Discovery, Irvine, California (the "48 Discovery
Building") from the Premises and to incorporate into the Premises approximately
62,814 rentable square feet of space in the building located at 43 Discovery,
Irvine California (together with the underlying land, the "43 Discovery
Building") and to make such other modifications as are set forth in "III.
MODIFICATIONS" next below.
III. MODIFICATIONS.
A. Termination of Tenant's Leasehold Interest in the 48 Discovery
Building. The parties agree that subject to the terms and conditions of this
Amendment, Tenant's leasing of that portion of its Premises located in the 48
Discovery Building shall terminate on the "48 Discovery Termination Date" (as
hereinafter defined), provided that such termination shall not relieve Tenant of
(i) any rent or other charges owed by Tenant, or other obligations required of
Tenant, as are set forth in the Lease from and after the date of this Amendment
through and including the 48 Discovery Termination Date, (ii) any obligations
for the remaining Premises pursuant to the Lease as amended by this Amendment,
and (iii) any indemnity or hold harmless obligations set forth in the Lease
which by their express terms survive the termination of the Lease. Tenant's
obligation for payment of Basic Rent (but not Operating Expenses) with respect
to the 48 Discovery Building shall cease and terminate as of the 48 Discovery
Building Termination Date. Except for Tenant's obligation contained in Section
4.2(d) of the Lease and its obligation to continue to pay Operating Expenses
until the 43 Discovery Building Commencement Date, all liability of Tenant for
Basic Rent attributable to the 48 Discovery Building, shall cease and terminate
as of the 48 Discovery Termination Date. As used herein, the "48 Discovery
Termination Date" shall mean the end of the calendar month in which this
Amendment is fully executed and delivered by Landlord and Tenant.
B. Vacation and Surrender of the 48 Discovery Building. Tenant hereby
agrees to vacate the 48 Discovery Building and to surrender and deliver
exclusive possession of its Premises located in the 48 Discovery Building to
Landlord on or before the 48 Discovery Termination Date. Landlord hereby agrees
that, notwithstanding the terms and conditions of the Lease, the current
physical condition of the 48 Discovery Building is deemed to comply with the
surrender requirements of Section 15.3 of the Lease for the effective surrender
of the 48 Discovery Building, and Landlord hereby agrees to accept Tenant's
Premises in the 48 Discovery Building from Tenant in their current "as-is"
condition; provided that Tenant shall be obligated to remove all of Tenant's
personal property from the 48 Discovery Building as herein provided leaving said
Building in a "broom clean" condition, and shall repair any damages arising from
such removal.
-1-
C. Demise of 43 Discovery Building. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the premises shown on Exhibit A hereto, as an
additional portion of the Premises leased by Tenant pursuant to the Lease,
consisting of approximately 62,814 rentable square feet of space in the 43
Discovery Building. The occupancy by Tenant of the 43 Discovery Building shall
include the use of those Common Areas located in, on and about the 43 Discovery
Building in common with Landlord and with all others for whose convenience and
use such Common Areas may be provided by Landlord, subject, however, to
compliance with all rules and regulations as are prescribed from time to time by
Landlord. Tenant shall have the same signage rights with respect to the 43
Discovery Building as were made available to Tenant pursuant to its leasing of
the 48 Discovery Building under the Original Lease.
D. Right to Possession of the 43 Discovery Building. Notwithstanding the
termination of the Lease with respect to Tenant's Premises located in the 48
Discovery Building, and Landlord's agreement to lease to Tenant additional
premises in the 43 Discovery Building, and Tenant's obligation to commence
paying Basic Rent for the 43 Discovery Building on the 48 Discovery Termination
Date as set forth in Subparagraph III.G.2 below, Tenant's right to access and
occupy the 43 Discovery Building, its obligation to pay Tenant's Share of
Operating Expenses for the 43 Discovery Building and perform any of its
non-monetary Lease obligations with respect thereto not set forth in the Work
Letter attached hereto as Exhibit B shall commence only upon that date when the
following conditions precedent have been satisfied (the "43 Discovery Building
Commencement Date"):
1. Rational Software, the current tenant of Suite 200 of the 43
Discovery Building shall have vacated the space and returned possession thereof
to the Landlord;
2. Irvine Apartment Communities, the current tenant of the ground
floor of 43 Discovery shall have vacated the space and returned possession
thereof to the Landlord; and
3. The Tenant Improvements to be constructed by Landlord pursuant to
the Work Letter attached hereto as Exhibit B shall be substantially completed
and Landlord shall have provided Tenant with at least five (5) business days
following substantial completion to relocate its personal property and equipment
into the 43 Discovery Building.
Landlord shall notify Tenant in writing within three (3) business days
after the foregoing conditions have been satisfied. Notwithstanding the Tenant's
Basic Rent obligations for the 43 Discovery Building set forth in Subparagraph
III.G.2 below, in the event that the conditions precedent of Subparagraph
III.D.1. and Subparagraph III.D.2. above are not satisfied such that
construction of the Tenant Improvements can be commenced in the ground floor
portion of the Premises located in the 43 Discovery Building by August 31, 2004,
then fifty-percent (50%) of the Basic Rent otherwise due and payable on the 43
Discovery Building Commencement Date shall be abated on a day-to-day basis until
such conditions precedent are satisfied in order to permit construction of the
Tenant Improvements to commence; and further provided that if such conditions
precedent are not satisfied by November 30, 2004, then Tenant, at its option,
may, by written notice to Landlord, terminate this Amendment; provided Tenant
submits written notice to Landlord prior to November 30, 2004 of its intention
to so terminate this Amendment.
E. Tenant Improvements. As a condition to the commencement of the Lease
for that portion of the Premises located in the 43 Discovery Building, Landlord
hereby agrees to complete Tenant Improvements for the 43 Discovery Premises in
accordance with the provisions of the Work Letter attached hereto as Exhibit B.
Any Work Letter attached to the Original Lease or any prior Amendment is hereby
deleted in its entirety.
F. Release of Liability. With respect to the 48 Discovery Building
only, and conditioned on the performance by the parties of their respective
obligations under this Amendment:
(a) Except as provided in Paragraph III.(A) above, Landlord and
Tenant shall, as of the 48 Discovery Termination Date, be fully and
unconditionally released and discharged from their respective obligations for
the 48 Discovery Building arising after such date from or connected with the
Lease. Except as provided in Paragraph III.(A) above, such release shall
include, without
-2-
limitation, Tenant's monetary obligations for the 48 Discovery Building arising
under the Lease after such date, whether designated as "rent" or "additional
rent" or otherwise; provided, however, that such release shall not act as a
waiver of Tenant's ability to audit or review Landlord's books or records or to
contest any Operating Expenses relating to any payments for which Tenant,
remains liable pursuant to this Agreement (as expressly provided in Section
4.2(c) of the Lease), nor shall this Paragraph III.F(a) apply to the extent that
this Amendment makes Tenant liable for reimbursing Landlord for Tenant's Share
of Operating Expenses accruing until the 43 Discovery Building Commencement
Date. Landlord and Tenant shall settle and adjust any refund or additional
payment between them in good faith and as expeditiously as practicable. Except
as provided in Paragraph III.(A) above, this Amendment shall fully and finally
settle all other demands, charges, claims, accounts or causes of action of any
nature, including, without limitation, both known and unknown claims and causes
of action that may arise out of or in connection with the obligations of the
parties under the Lease for the 48 Discovery Building after the 48 Discovery
Building Termination Date.
(b) In connection with the release and discharge contained in
Paragraph III.(C)(a) above, each of the parties expressly, knowingly, and
voluntarily waives and relinquishes any and all rights and benefits that either
of them may have under California Civil Code Section 1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
WJR DSM
_________________ ____________________
Tenant's Initials Landlord's Initials
G. Basic Lease Provisions. The following Basic Lease Provisions are
amended as follows:
1. Item 1 is deleted in its entirety as of the 48 Discovery Termination
Date and the following shall be substituted therefor:
"1. Premises: The Premises includes all of Suites 100, 150, 200 and
250 building known as 43 Discovery, Irvine, California.
All references to the "Building" in the Lease shall be amended to
refer to the 43 Discovery Building only."
2. Item 6 is amended as of the 48 Discovery Termination Date by
deleting all reference to the 48 Discovery Building and the Basic
Rent payable therefor, and adding the following:
"Basic Rent for the 43 Discovery Building: Commencing on the 48
Discovery Termination Date, the Basic Rent shall be One Hundred
Twenty-Six Thousand Five Hundred Twenty-Four Dollars ($126,524.00)
per month.
Basic Rent for the 43 Discovery Building is subject to adjustment as
follows:
Unless the 43 Discovery Building Commencement Date occurs prior to
such date, commencing on July 1, 2004, the Basic Rent shall be One
Hundred Twenty-Nine Thousand Two Hundred Sixteen Dollars
($129,216.00) per month.
Subject to any rent abatement to which Tenant may be entitled
pursuant to Paragraph III.D. above, commencing on the 43 Discovery
Building Commencement Date, the Basic Rent shall be One Hundred
Forty-Four
-3-
Thousand Twenty-Three Dollars ($144,023.00) per month.
Commencing July 1, 2005, the Basic Rent shall be One Hundred
Forty-Six Thousand Seven Hundred Fifteen Dollars ($146,715.00) per
month."
3. Effective as of the 43 Discovery Building Commencement Date, Item 8
shall be deleted in its entirety and substituted therefor shall be
the following:
"8. Floor Area of Premises: Approximately 62,814 rentable square
feet"
4. Item 12 is hereby amended as of the 48 Discovery Termination Date by
deleting Landlord's address for payments and notices and substituted
therefor shall be the following:
"LANDLORD
THE IRVINE COMPANY
dba Office Properties
8105 Irvine Center Drive, Suite 300
Irvine, CA 92618
Attn: Vice President, Operations, Technology Portfolio
with a copy of notices to:
THE IRVINE COMPANY
dba Office Properties
8105 Irvine Center Drive, Suite 300
Irvine, CA 92618
Attn: Senior Vice President, Operations
Office Properties"
5. Effective as of the 43 Discovery Building Commencement Date, Item 14
shall be deleted in its entirety and substituted therefor shall be
the following:
"14. Vehicle Parking Spaces: Two hundred fifty-one (251)"
H. Rights to Lease Additional Space. The provisions of Section 2.5 of
the Lease entitled "Rights to Lease Additional Space" are hereby deleted in
their entirety and shall have no further force or effect.
I. Floor Plan of Premises. Effective as of the 48 Discovery Termination
Date, Exhibit A attached to the Lease, depicting the 48 Discovery Building,
shall be deleted therefrom and the Exhibit A attached hereto showing the 43
Discovery Building shall be substituted therefor.
IV. GENERAL.
A. Effect of Amendments. The Lease shall remain in full force and
effect except to the extent that it is modified by this Amendment.
B. Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to the modifications set forth in
"III. MODIFICATIONS" above and can be changed only by a writing signed by
Landlord and Tenant.
C. Counterparts. If this Amendment is executed in counterparts, each is
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic,
photostatic, or other copy of this Amendment may be introduced into evidence
without foundation.
D. Defined Terms. All words commencing with initial capital letters in
this Amendment
-4-
and defined in the Lease shall have the same meaning in this Amendment as in the
Lease, unless they are otherwise defined in this Amendment.
E. Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.
F. Attorneys' Fees. The provisions of the Lease respecting payment of
attorneys' fees shall also apply to this Amendment.
V. EXECUTION.
Landlord and Tenant executed this Amendment on the date as set forth in
"I. PARTIES AND DATE." above; provided, however, that if Landlord fails to
execute and return a fully-executed original of this Amendment to Tenant within
five (5) business days following Tenant's execution and delivery hereof to
Landlord, this Amendment shall become null and void.
LANDLORD: TENANT:
THE IRVINE COMPANY BROADCOM CORPORATION,
a California corporation
By: /s/ Donald S. McNutt By: /s/ William J. Ruehle
_______________________________ ________________________________
Donald S. McNutt, Senior Vice President William J. Ruehle
Leasing, Office Properties Vice President and
Chief Financial Officer
By: /s/ Steven E. Claton
____________________________________
Steven E. Claton, Vice President
Operations, Office Properties
-5-