EXHIBIT 10.18
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (the "Amendment") is made and
entered into as of the 7th day of February, 2001, by and between X. X.
XXXXXXXXXX & SONS, a California general partnership ("Landlord"), and EMULEX
CORPORATION, a California corporation ("Tenant"), with respect to the following:
RECITALS
A. Landlord is the landlord and Tenant is the tenant pursuant to
that certain Lease dated June 30, 1999 (the "Original Lease") as amended by that
certain First Amendment to Lease dated January 21, 2000 (the "First Amendment,"
and together with the Original Lease, the "Lease"). The Lease covers certain
premises (the "Premises") in the Harbor Gateway Business Center, Costa Mesa,
California (the "Center") as more particularly described in the Lease.
B. Landlord and Tenant desire to enter into this Amendment to add
to the Premises upon the terms and conditions set forth herein those certain
premises consisting of 5,880 square feet of Rentable Area commonly known as
Suite 124 (the "1580 Premises") in that certain building commonly known as
Research and Development Building No. 8, located at 0000 Xxxxxxxxx Xxxxx in the
Center (the "1580 Building"). The 1580 Building contains 13,706 square feet of
Rentable Area. The 1580 Premises and 1580 Building are shown cross-hatched on
Exhibit "A" attached hereto.
C. Tenant also desires to obtain certain rights to adjacent Suite
123 in the 1580 Building (the "Expansion Space"). The Expansion Space consists
of 2,992 square feet of Rentable Area and is depicted on Exhibit "A" attached
hereto. Landlord is willing to grant such rights to Tenant, but only upon the
terms set forth in this Amendment.
AGREEMENT
IN CONSIDERATION OF the foregoing recitals and the mutual
promises and covenants contained herein, the parties hereto agree as follows:
1. Leasing of 1580 Premises. Landlord hereby leases to Tenant,
and Tenant hereby hires from Landlord, the 1580 Premises upon all of the terms
and conditions of the Lease, as hereby amended. Tenant shall hold and occupy the
1580 Premises as part of the Premises upon all the terms and conditions of the
Lease, as hereby amended, except that:
(a) The commencement date of the Lease with respect to the
1580 Premises (the "1580 Premises Commencement Date") shall be the date upon
which Landlord delivers possession of the 1580 Premises to Tenant broom clean
and with all mechanical systems therein in good working order as of the date of
such delivery. The target 1580 Premises Commencement Date shall be February 14,
2001. Tender of delivery of possession of the 1580 Premises shall be upon
written notice to Tenant stating that the 1580 Premises are in the condition
stated above. From and after the 1580 Premises Commencement Date, Tenant shall
lease the 1580 Premises as part of the Premises upon all the terms and
conditions of the Lease, as hereby amended, and shall otherwise perform or
observe all obligations of the tenant under the Lease, as hereby amended, with
respect to the 1580 Premises, other than the payment of all Monthly Basic Rent
and Tenant's Proportionate Share of Total Operating Expenses with respect to the
1580 Premises and 1580 Building as herein provided. If Landlord is unable to
tender delivery of possession of the 1580 Premises to Tenant on or before the
target 1580 Premises Commencement Date, the Lease, as hereby amended, shall not
be void or voidable with respect to the 1580 Premises nor shall Landlord be
liable for any loss or damage resulting therefrom; provided, however, that
Landlord shall use reasonable efforts to deliver possession of the 1580 Premises
to Tenant as close to the target 1580 Premises Commencement Date as practicable.
From and after the 1580 Premises Commencement Date (i) the term of the Lease
with respect to the 1580 Premises shall be coterminous with the term of the
Lease for the balance of the Premises, and (ii) except as otherwise expressly
provided in this Amendment, (A) the term "Premises" as used herein and in the
Lease (including, without limitation, in Section 48.4 of the Lease) shall mean
and include, respectively, both the Premises (as defined in the Original Lease
EXHIBIT "A"
and the First Amendment) and the 1580 Premises (as defined in this Amendment),
(B) the terms "Building" and/or "Building A" as used in the Lease shall mean and
include each of Building A (as defined in the Original Lease), the New Building
(as defined in the First Amendment) and the 1580 Building (as defined in this
Amendment). The actual 1580 Premises Commencement Date shall be confirmed by a
letter agreement prepared by Landlord and executed by Landlord and Tenant;
provided, however, that failure of either party to execute and deliver such
letter agreement shall not invalidate the determination of the 1580 Premises
Commencement Date in accordance with the provisions of this subparagraph (a).
(b) The "1580 Premises Rent Commencement Date" shall be
thirty (30) days following the 1580 Premises Commencement Date. From and after
the 1580 Premises Rent Commencement Date Tenant shall perform and observe all
obligations of the tenant under the Lease, as hereby amended, with respect to
the 1580 Premises, including the payment of all Monthly Basic Rent and Tenant's
Proportionate Share of Total Operating Expenses with respect to the 1580
Premises and 1580 Building as herein provided. From and after the 1580 Premises
Rent Commencement Date and continuing through the balance of the initial stated
term of the Lease (i.e., August 31, 2001), Tenant shall pay Monthly Basic Rent
for the 1580 Premises in accordance with the provisions of paragraph 3 below. In
addition, Tenant shall also pay at the times and in the manner provided
paragraph 4 below and Exhibit "B" attached to the First Amendment, Tenant's
Proportionate Share of Total Operating Expenses with respect to and based upon
the Rentable Area of the 1580 Premises, as well as all other charges and
additional rent provided for in the Lease with respect to the 1580 Premises.
(c) The provisions of Articles/Sections 7, 8, 32, 41,
48.1(b), 48.1(d), 48.1(g), 48.1(h), 48.3(a) through 48.3(c), inclusive, 48.5,
48.6(a), 48.7, 48.8, 48.9(c) (i.e., under no circumstances shall Tenant paint
the exterior of the 1580 Building or make any alterations of the type specified
in such Section with respect to the 1580 Building or the 1580 Premises),
48.9(f), 48.9(g), 48.11, 48.19, 48.23 and 48.27 of the Original Lease shall have
no application with respect to the 1580 Premises or 1580 Building.
(d) For purposes of Section 48.25 of the Original Lease,
the phrase "or the 1580 Premises" shall be added directly after the phrase
"Building A Area" wherever such later phrase appears in such Section 48.25.
(e) Those provisions of the Lease superseded or modified
by the provisions of this Amendment shall have no application (if superseded) or
shall apply only as modified (if modified) with respect to the 1580 Premises.
2. Condition of the 1580 Premises.
(a) On the 1580 Premises Commencement Date, Landlord shall
deliver the 1580 Premises to Tenant broom clean and with all mechanical systems
therein in good working order.
(b) Within three (3) days after the 1580 Premises
Commencement Date, Landlord and Tenant shall conduct a joint inspection of the
1580 Premises. The purpose of such inspection shall be to establish the
condition of the 1580 Premises as of the 1580 Premises Commencement Date.
(c) Except as expressly provided in subsection (a) above,
Landlord shall deliver the 1580 Premises to Tenant "AS IS," and Landlord shall
have no responsibility, either as to performance or payment of costs, to improve
the 1580 Premises for Tenant. Any work of remodeling or improvement of the 1580
Premises by Tenant shall be the sole responsibility of Tenant and shall be in
accordance with the applicable provisions of the Lease.
(d) Notwithstanding anything to the contrary in the
Original Lease, as hereby amended, Landlord may reasonably require restoration
of the 1580 Premises as to any improvements and alterations by Tenant (i.e.,
alterations and improvements by Tenant following the 1580 Premises Commencement
Date), but only as to such alterations and improvements (i) as to which Landlord
gives written notice as to the requirement of such removal at the time of
Landlord's approval of such alterations or improvements or (ii) which are
installed without the prior written approval of Landlord.
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3. Monthly Basic Rent. For the period from the 1580 Premises Rent
Commencement Date through and including the expiration of the initial stated
term of the Lease (i.e., August 31, 2001), Tenant shall pay Monthly Basic Rent
for the 1580 Premises in the sum of $5,586.90 (i.e., $0.95 per square foot of
Rentable Area per month). All such Monthly Basic Rent for the 1580 Premises
shall be paid at the times and in the manner provided in Section 3.1 of the
Original Lease.
4. Additional Rent and Other Charges.
(a) From and after the 1580 Premises Rent Commencement
Date, Tenant shall also pay at the times and in the manner provided in this
subparagraph (a) and Exhibit "B" attached to the First Amendment, Tenant's
Proportionate Share of Total Operating Expenses for the 1580 Premises in
accordance with the following:
(i) Tenant's Proportionate Share of Total
Operating Expenses for the 1580 Premises shall be forty-two and nine-tenths
percent (42.9%) (i.e., the Rentable Area of the 1580 Premises/the Rentable Area
of the 1580 Building).
(ii) Notwithstanding anything to the contrary in
Exhibit "B" to the First Amendment, Tenant's Total Operating Expenses for each
full year or partial lease year during the initial stated term of the Lease
(i.e., through and including August 31, 2001) shall be $0.265 per square foot
per month (which amount is not included in the Monthly Basic Rent for the 1580
Premises) and shall be paid at the times and in the manner provided in Exhibit
"B" to the First Amendment. Actual Total Operating Expenses for the year
immediately preceding any extended or additional term shall be determined and
used as the basis for adjustments for future years as described in Section 4 of
Exhibit "B" to the First Amendment.
(iii) With respect to each full or partial lease
year during the initial stated term, Tenant shall pay the amount set forth in
clause (ii) above. With respect to each full or partial lease year during any
extended or additional term, Tenant shall pay an amount equal to Tenant's
Proportionate Share of Landlord's estimate of Total Operating Expenses for such
full year or partial lease year. Thereafter, at the end of each lease year
during any such extended or additional term, an adjustment shall be made by
Landlord, and Tenant shall pay such amount or receive a credit of such amount as
is necessary to adjust Tenant's payments to Tenant's actual Proportionate Share
of Total Operating Expenses for such lease year during any such extended or
additional term. Such payments and adjustments shall be made as provided in
Exhibit "B" to the First Amendment. "Total Operating Expenses" and "Tenant's
Proportionate Share" are each defined in Exhibit "B" to the First Amendment.
(b) The payment by Tenant of Tenant's Proportionate Share
of Total Operating Expenses for the 1580 Premises shall be in addition to the
payment of Monthly Basic Rent for the 1580 Premises. All Monthly Basic Rent paid
for the Premises and the 1580 Premises together with all such expenses are
hereinafter sometimes referred to herein and in the Lease, as hereby amended,
collectively, as the "rent."
(c) In addition to Monthly Basic Rent and Tenant's
Proportionate Share of Total Operating Expenses for the 1580 Premises, Tenant
shall also pay all other charges and additional rent provided for in the Lease,
as hereby amended, with respect to the 1580 Premises and based (to the extent
applicable) upon the Rentable Area thereof.
5. Utilities. Notwithstanding anything to the contrary in Section
6.1 or Section 48.6(a) of the Original Lease, it is acknowledged and agreed
that:
(a) Electrical Service to the 1580 Premises shall be
directly metered to Tenant and Tenant shall pay the charge for such service
directly to the purveyor.
(b) Water and sewer service is not separately metered to
Tenant and the cost of such service shall be allocated between Tenant and the
other occupant(s) of the 1580 Building based upon their respective Rentable
Areas.
6. Taxes on Tenant's Property.
(a) Tenant shall pay not later than ten (10) days before
delinquency, all taxes, levies, assessments, fees and other governmental charges
of every kind or nature
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(hereinafter, collectively called "taxes") levied against personal property or
trade fixtures placed by Tenant in the 1580 Premises. If any such taxes are
levied against Landlord or Landlord's property, Landlord, after written notice
to Tenant, may pay the same regardless of the validity of such levy, but only
under proper protest if requested by Tenant. If the assessed value of Landlord's
property is increased by inclusion of a value placed upon such personal property
or trade fixtures of Tenant, Landlord, after written notice to Tenant, may pay
the taxes based upon such increased assessment regardless of the validity
thereof, but only under proper protest if requested by Tenant. In either such
event, Tenant shall upon demand repay to Landlord the taxes so levied against
Landlord, or the proportion of such taxes resulting from such increase in the
assessment; provided that, in any such event Tenant shall have the right, in the
name of Landlord and with Landlord's full cooperation, but at no cost to
Landlord, to bring suit to recover the amount of any such taxes so paid under
protest.
(b) If any tenant improvements constructed or installed by
Tenant in the 1580 Premises, whether or not affixed to the real property so as
to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which tenant improvements conforming to
Landlord's Building standard materials are assessed, then the real property
taxes and assessments levied against Landlord or Landlord's property by reason
of such excess assessed valuation shall be deemed to be taxes levied against
personal property of Tenant and shall be governed by subparagraph (a) above. If
the County Assessor's records are available and sufficient to determine whether
said Tenant improvements are assessed at a higher valuation than Landlord's
Building standard materials, such records shall be binding on Landlord and
Tenant; otherwise the actual cost of construction shall be the basis for such
determination. Whether and the extent to which any of the improvements in the
1580 Premises constitute non-Building standard or otherwise exceed Building
standard shall be reasonably determined by Landlord's architect or engineer,
which determination shall be conclusive.
7. Maintenance and Repair.
(a) Except as provided in subparagraphs (b) and (c) below
and Articles 17 and 18 of the Original Lease, Tenant at its expense shall keep
in good order, condition, and repair (including replacement of parts and
equipment, if necessary) the 1580 Premises and every part thereof, and all
equipment (other than main plumbing and electrical systems and the main heating,
ventilating and air conditioning equipment), trade fixtures, furnishings and
other personal property in the 1580 Premises or serving the 1580 Premises, and
shall furnish and repair all expendables (soap, towels, etc.). Tenant shall
promptly at Tenant's cost make all repairs necessary to maintain the 1580
Premises in good condition. Tenant shall provide whatever treatment may be
necessary, as often as may be required, to keep the 1580 Premises neat and
attractive. On the last day of the term hereof, or on any sooner termination of
the Lease, as hereby amended, Tenant shall, subject to the provisions of
Articles 17 and 18 of the Original Lease, surrender the 1580 Premises to
Landlord in good condition, ordinary wear and tear to the wall covering, carpet
and other floor covering in the 1580 Premises excepted.
(b) Landlord shall repair and maintain the exterior walls
of the 1580 Building and the roof and foundations of the 1580 Building. Landlord
shall also use commercially reasonable efforts to provide maintenance and repair
with respect to the main plumbing and electrical systems and the main heating,
ventilating and air conditioning equipment serving the 1580 Premises. Landlord
shall not be liable for failure to make any repairs or maintenance unless such
failure persists for an unreasonable time after written notice of the need
therefor is given to Landlord by Tenant. Except as provided in Articles 17 and
18 of the Original Lease, there shall be no abatement of rent and no liability
of Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to the
1580 Premises or to the fixtures, appurtenances and equipment therein or to the
Common Facilities (as defined in Exhibit "B" to the First Amendment) or the
improvements thereon; provided, however, that in taking such actions, Landlord
shall use its best efforts not to interfere with Tenant's business operations in
the 1580 Premises. Landlord's costs incurred in repair and maintenance of the
1580 Building and all equipment described in this Section and serving the 1580
Building, including heating, ventilating and air-conditioning equipment, shall
be included in Total Operating Expenses as defined in Exhibit "B" to the First
Amendment. Except as provided in this subparagraph and Articles 17 and 18 of the
Original Lease, Landlord shall not be obligated to repair or maintain the 1580
Premises or to bear any part of the expense of the 1580 Premises. Tenant
expressly waives and
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releases its right to make repairs at Landlord's expense under Sections 1932(1)
and 1942 of the California Civil Code or any other statute or rule of law now or
hereafter in effect.
(c) Tenant shall also be responsible to insure that all
truck loading areas and loading doors which constitute a part of the 1580
Premises, if any, are not unreasonably damaged and do not accumulate litter or
debris as a result of deliveries to and pickups from Tenant. Any unreasonable
costs borne by Landlord (i.e., any costs of work performed by Landlord over and
above Landlord's standard work with respect to the Common Facilities) to keep
such areas clean and in working order shall be billed by Landlord to Tenant and
Tenant shall pay the same within ten (10) days after receipt of an invoice from
Landlord.
8. Common Facilities. All references in Paragraph 8 of the First
Amendment to the "New Building" and the "New Premises" shall mean and include
both the "New Building" and 1580 Building and "New Premises" and 1580 Premises.
9. Parking Spaces for 1580 Premises. From and after the 1580
Premises Commencement Date, the following shall apply:
(a) Tenant's "Allocated Parking Spaces" within the Parking
Areas (as defined in Section 48.26 of the Original Lease) for the 1580 Premises
is 23 spaces.
(b) Except as otherwise provided in the Lease, as hereby
amended, with respect to the Tenant's existing rights to use the Parking Areas
in connection with Tenant's occupancy of Building A, neither Tenant nor its
agents, employees, customers and invitees shall utilize in connection with
Tenant's occupancy of the 1580 Premises in the aggregate at any time a number of
parking spaces in the Common Facilities in excess of the Allocated Parking
Spaces set forth above. In addition to any other remedies granted to Landlord in
the Lease, as hereby amended, or by law, upon default by Tenant under the terms
of this paragraph, Landlord shall have the right to tow away any vehicles
belonging to Tenant or Tenant's agents, employees, customers or invitees as
necessary to reduce the number of parking spaces used by Tenant and such persons
to that number of Allocated Parking Spaces set forth above.
(c) All costs of cleaning, maintaining, operating,
repairing, holding and making available the Parking Area shall be included
within Common Facilities Expenses, as defined in Exhibit "B" to the First
Amendment and a portion thereof shall be included in Tenant's Proportionate
Share as defined in Exhibit "B" to the First Amendment with respect to the 1580
Premises.
(d) Landlord may authorize persons other than tenants of
the Center, their agents, employees, customers and invitees to utilize the
Parking Area; provided, however, that in no event shall the number of spaces
available for Tenant with respect to the 1580 Premises be less than that number
of Allocated Parking Spaces set forth above. The terms of such usage shall be as
determined by Landlord in its sole discretion and may include the right to use
the Parking Area without charge.
10. Rights with Respect to the Expansion Space. Landlord and
Tenant acknowledge that the Expansion Space is currently occupied by another
tenant ("Existing Tenant"). Promptly upon learning of the date that Existing
Tenant intends to vacate (or has vacated) the Expansion Space, Landlord shall
notify Tenant of the date upon which the Expansion Space shall become (or has
become) available. Tenant shall have the right (the "First Right") to add the
Expansion Space to the Premises. Such First Right shall be exercised, if at all,
by written notice from Tenant to Landlord given within ten (10) business days
after the date of Landlord's notice.
If Tenant does not exercise the First Right, or declines the
Expansion Space, Landlord shall attempt to locate another tenant for the
Expansion Space. Upon locating another tenant, Landlord shall so notify Tenant
in writing. Tenant shall again have the right (the "Second Right") to add the
Expansion Space to the Premises. Such Second Right shall be exercised, if at
all, by written notice from Tenant to Landlord given within five (5) business
days after the date of Landlord's notice.
If Tenant exercises neither the First Right nor the Second Right
(or declines the Expansion Space on both occasions described herein), Tenant
shall have no further rights with
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respect to the Expansion Space and Landlord shall be free to offer the Expansion
Space to third parties upon such terms as are acceptable to Landlord. Moreover,
and notwithstanding anything to the contrary set forth in this paragraph,
neither the First Right nor the Second Right shall be exercisable during any
period during which Tenant is in default pursuant to the Lease beyond any
applicable grace period. The existence of any such default shall not extend the
ten (10) business day period or the five (5) business day period provided for in
this paragraph.
11. Terms as to Expansion Space. If Tenant is entitled to
exercise (i.e., Tenant is not in default pursuant to the Lease beyond any
applicable grace period and Landlord has noticed Tenant pursuant to Paragraph 10
above of either the First Right or the Second Right) and timely and properly
exercises the First Right or the Second Right, the Expansion Space shall be
added to the Premises pursuant to the Lease. The terms of such holding by Tenant
shall be as follows:
(a) The commencement date of the Lease and the Rent
Commencement Date of the Lease as to the Expansion Space (the "ES Commencement
Date") shall each be the later of (i) the date Tenant exercises the First Right
or Second Right, as applicable, and (ii) the date upon which the Expansion Space
is vacant and available for occupancy by Tenant. Landlord shall deliver
possession of the Expansion Space and the keys thereto to Tenant on such ES
Commencement Date.
(b) The term of the Lease as to the Expansion Space shall
be coterminous with the term of the Lease as to the balance of the Premises,
including any extensions of such term. From and after the ES Commencement Date,
all references in the Lease to the "Premises" shall, except as otherwise
expressly provided in this Amendment, include the Expansion Space.
(c) The ES Commencement Date shall be confirmed by a
letter agreement prepared by Landlord and executed and delivered by Landlord and
Tenant. However, failure of either party to so execute and deliver shall not
affect the ES Commencement Date determined pursuant to subparagraph (a) above.
(d) Paragraphs 1(b), (c), (d) and (e) and 2(a), (b), (c)
and (d) shall all apply with respect to the Expansion Space, substituting the
term "Expansion Space" for the term "1580 Premises" and the term "ES
Commencement Date" for the term "1580 Premises Rent Commencement Date."
(e) Monthly Basic Rent for the Expansion Space shall be
$2,842.40 ($0.95 per square foot of Rentable Area per month). Such Monthly Basic
Rent for the Expansion Space shall be paid at the times and in the manner
provided in Section 3.1 of the Original Lease.
(f) Paragraphs 4, 5, 6 and 7 hereof shall also apply with
respect to the Expansion Space except that Tenant's Proportionate Share of Total
Operating Expenses for the Expansion Space shall be 21.83%.
(g) For the purposes of paragraph 8 above, all references
in Paragraph 8 of the First Amendment to the "New Premises" shall also include
the Expansion Space.
(h) From and after the ES Commencement Date, paragraph 9
above shall apply with respect to the Expansion Space, except that the Allocated
Parking Spaces for the Expansion Space shall be eight (8) spaces.
12. Defined Terms. Any term used in this Amendment and not
otherwise defined herein shall have the meaning assigned to such term in the
Lease.
13. Lease in Effect. Landlord and Tenant acknowledge and agree
that the Lease, as hereby amended, remains in full force and effect in
accordance with its terms. In the event of any conflict between the terms of
this Amendment and the terms of the Lease, the terms of this Amendment shall
control.
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IN WITNESS WHEREOF, the parties have executed this Second
Amendment to Lease as of the day and year first above written.
"Tenant" "Landlord"
EMULEX CORPORATION, X. X. XXXXXXXXXX & SONS,
a California corporation a California general partnership
By /s/ Xxxx X. Xxxxxx By /s/ Xxxxx Xxxxxxxxxx
------------------------------ ----------------------------------
Title President/CEO Manager
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxxxxxx X. Xxxxxxxxxx
------------------------------ ----------------------------------
Title EVP HR/Facilities Manager
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EXHIBIT "A" DEPICTION OF PREMISES
EXHIBIT "A"
