NetScreen Technologies Inc. Contracts
Sample Business Contracts
California-Sunnyvale-350 Oakmead Parkway Consent to Sublease - Oakmead Parkway Properties, Philips Semiconductors Inc. and NetScreen Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
Consent to Sublease
This Consent to Sublease, dated September 29, 2000, is made and entered
into by and among Oakmead Parkway Properties, a California general partnership
("Landlord"), Philips Semiconductors, Inc., a Delaware corporation
("Sublessor"), and Netscreen, Inc., a Delaware corporation ("Sublessee").
R E C I T A L S
A. Landlord and Sublessor entered into a Lease dated December 20, 1994, and
amended by a First Amendment to Lease dated August 20, 1996 and a Second
Amendment to Lease dated November 1, 1999 (collectively, the "Lease") for the
premises located at 350 Oakmead Parkway, Sunnyvale, California (the "Premises").
B. Sublessor and Sublessee have entered into a Sublease Agreement dated
September 29, 2000 pursuant to which Sublessor has agreed to sublease the
Premises to Sublessee for the period from January 1, 2001 through February 14,
2003 (the "Sublease").
C. Sublessor and Sublessee desire to obtain Landlord's consent to the
Sublease and Landlord is willing to grant such consent subject to the terms and
conditions set forth herein.
1. Consent. Landlord consents to the subletting of the Premises by
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Sublessor to Sublessee as set forth in the Sublease, subject to the mutual
agreements between Landlord, Sublessor, and Sublessee set forth herein. This
Consent is not, and will not be deemed or construed as, a consent to any future
sublease, a consent to any other assignment, subletting, or other transfer, a
consent to a sublease terms beyond the term of the Lease, or a renewal or
extension of the Sublease. This Consent is not, and will not be deemed or
construed to modify, waive, or affect any of the provisions, covenants, or
conditions of the Lease, waive any breach of the Lease or any of the rights of
Landlord, or enlarge or increase Landlord's obligations under the Lease.
2. Scope and Conditions of Consent. In granting this Consent, it is
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understood and agreed that (a) Landlord does not consent to or approve of any
term, provision, covenant, or condition in the Sublease, and Landlord will not
be bound by the Sublease, (b) no rights will be granted to Sublessee under the
Sublease that are greater than those granted to Sublessor under the Lease, and
(c) the Sublease will be subordinate to the Lease and this Consent; in the event
of any conflict between the terms and provisions of the Lease or this Consent
and the terms and provisions of the Sublease, the terms and provisions of the
Master Lease or the Consent, as applicable, will prevail.
3. Assumption of Sublessor's Obligations. For the benefit of Landlord and
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Sublessor, Sublessee expressly assumes and agrees to perform and comply with
every obligation of Sublessor under the Lease, including, without limitation,
Sublessor's obligation to indemnify Landlord pursuant to Section 8.7 of the
Lease. Neither this assumption by Sublessee, the Sublease, nor this Consent will
release or discharge Sublessor from any liability under the Lease, including,
without limitation, the payment of rent and other amounts when due under the
Lease,
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and Sublessor will remain liable and responsible for the full performance and
observance of all the provisions, covenants, and conditions in the Lease to be
performed and observed by Sublessor. Sublessor will not be released from any
liability under the Lease because of Landlord's failure to give notice of
default under or in respect of any of the terms, covenants, conditions,
provisions, or agreements by the Lease. Any breach or violation of any provision
of the Lease by Sublessor or Sublessee, or both, constitutes a default by
Sublessor under the Lease. Landlord may proceed directly against Sublessor
without first exhausting Landlord's remedies against Sublessee, or Landlord may
proceed directly against Sublessee without exhausting Landlord's remedies
against Sublessor.
4. Obligations of Landlord. Landlord will not be liable for any cost or
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obligation of any kind arising in connection with the Sublease, including,
without limitation, brokerage commissions, improvements to the Premises, or the
security deposit required to be made by Sublessee under the Sublease. Sublessor
and Sublessee jointly and severally agree to indemnify, protect, defend, and
hold Landlord harmless from all claims, losses, liabilities, costs and expenses
(including attorneys' fees) that Landlord may incur as a result of any claim to
pay any person or entity any commission, finder's fee, or other charge in
connection with the Sublease. Further, Sublessee warrants that Sublessee has
dealt with no brokers in this transaction, other than The Staubach Company and
Colliers International.
5. Termination of Sublease. On the effective date of the expiration of the
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terms of the Lease, or Sublessor's surrender of the Premises under the Lease to
Landlord, the Sublease and its term will immediately terminate, and Sublessee
must vacate the Premises on or before the effective date of the termination. If
Sublessee fails to vacate the Premises, Landlord will be entitled to all of the
rights and remedies available to a landlord against a tenant wrongfully holding
over after expiration of the term of a lease without the Landlord's consent,
including, without limitation, the rights and remedies available to Landlord
under the Lease. Landlord will not be liable to Sublessor or Sublessee for any
claim or damage because of the termination.
6. Continuation of Sublease. Regardless of anything stated in paragraph 5
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above, if the Lease expires or terminates for any reason during the term of the
Sublease, or if the Sublessor surrenders the Lease to Landlord during the term
of the Sublease, Landlord has the option, on written notice delivered to
Sublessee not more than thirty (30) days after the effective date of the
expiration, termination, or surrender, and without any additional or further
agreement of any kind by Sublessee, to elect to continue the Sublease with the
same effect as if Landlord and Sublessee had entered into a lease for the date
and for a term equal to the then unexpired term of the Sublease, and on the same
terms and conditions in the Sublease. In that event, Sublessee will attorn to
Landlord, and Landlord and Sublessee will have the same rights, obligations, and
remedies under the Sublease as were had by Sublessor and Sublessee. However, in
no event will Landlord (a) be liable for any act or omission of Sublessor, (b)
be subject to any offsets or defenses that Sublessee had or might have against
Sublessor, (c) be obligated to cure any default of Sublessor that occurred prior
to the time that Landlord succeeded to the interest of Sublessor under the
Sublease, (d) be bound by any payment of rent or other payment paid by Sublessee
to Sublessor in advance of any periods reserved for that in the Sublease, (e) be
bound by any modification or amendment of the Sublease made without the written
consent of Landlord, or (f) be liable for the return of any security deposit not
actually received by Landlord. Neither
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Landlord's election under this paragraph nor its acceptance of any rent from
Sublessee will be deemed a waiver by Landlord of any provisions of the Lease and
this Consent.
7. Compliance with Sublease. If Landlord elects to continue the Sublease
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pursuant to paragraph 6, Sublessee will observe and perform (a) each of the
terms, covenants, and conditions of the Sublease that Landlord designates to be
observed and performed, and (b) any other terms, covenants, and conditions to
which the parties may agree.
8. Insurance. Sublessee will carry the insurance policies required to be
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carried by Sublessor pursuant to Sections 8.2(a) and 8.4 of the Lease and will
deliver evidence of that to Landlord prior to occupancy. The insurance will (a)
name Landlord and Sublessor as additional insureds; and (b) provide that the
policy will not be subject to cancellation or change except after thirty (30)
days' prior written notice to Landlord and Sublessor.
9. Absolute Assignment of Rents. Sublessor unconditionally assigns to
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landlord all rents now due, or which may later become due, under the Sublease
(collectively "Rents"). Sublessor acknowledges that the assignment is present,
absolute, and unconditional. Accordingly, Landlord will have the right to
collect the Rents and to apply them in payment of any sums payable by Sublessor
under the Lease. However, Sublessor will have a license to collect the Rents
until the occurrence of an act of default by Sublessor under the Lease. If an
act of default occurs, and if such default is not cured by Sublessor within the
applicable cure period set forth in Section 13.1 of the Lease, Sublessor's right
to collect the Rent will be suspended until the default is cured. During the
period in which Sublessor's right to collect the Rents is suspended, Landlord,
as assignee and attorney-in-fact for Sublessor under the Lease, or a receiver
for Sublessor appointed pursuant to Landlord's application, will have the right
to collect the Rents and apply them toward Sublessor's obligations under the
Lease. To the extent Landlord is not made whole by the acceptance of any payment
on account of Rent from Sublessee as a result of an act of default, such
acceptance does not release Sublessor from any liability under the terms,
covenants, conditions, provisions, or agreement under the Lease.
10. No Consent to Alterations. Sublessor and Sublessee acknowledge: (a)
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that Landlord's consent is not a consent to any improvement or alteration work
being performed in the Premises; and (b) that Landlord's consent must be
separately sought and will not necessarily be given with regard to alteration
work being performed in the Premises.
11. Attorney Fees. Pursuant to paragraph 36 of the Lease, Sublessor shall
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pay to Landlord the actual reasonable fees of Landlord's attorney incurred in
the review of the Sublease and the preparation and negotiation of this Consent.
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This Consent to Sublease is executed effective as of the date first
above written.
Landlord:
OAKMEAD PARKWAY PROPERTIES,
a California general partnership
By: MacMillan Partnership,
a California general partnership,
General Partner
By: /s/ Donald H. MacMillan
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Donald H. MacMillan,
Trustee of the Donald
H. MacMillan Trust UTA
Dated September 12, 1986,
General Partner
Sublessor:
PHILIPS SEMICONDUCTORS, INC.,
a Delaware corporation
By: /s/ Illegible
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Its: Executive Vice President
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Sublessee:
NETSCREEN, INC.,
A Delaware corporation
By: /s/ Charles R. Clark
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Its: VP Operations
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SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease"), dated as of September 29, 2000,
is made by and between Philips Electronics North America Corporation, a Delaware
corporation through its division Philips Semiconductors ("Philips" or
"Sublessor"), and Netscreen, Inc. a Delaware corporation with offices located
at 2860 San Tomas Expressway, Santa Clara, California 95051 ("Netscreen" or
"Sublessee"), with reference to the following facts:
A. Philips is Lessee under that certain Standard Industrial/Commercial
Single-Tenant Lease dated December 20, 1994, by and between Philips and Oakmead
Parkway Properties, a California general partnership as Lessor, together with
two amendments to said lease, attached hereto as Exhibit A and incorporated
herein by this reference ("Master Lease").
B. Under the Master Lease, Philips leases from Lessor the Premises (as
defined therein) consisting of a building containing approximately 51,367 square
feet, situated on a parcel of land described as Parcel 2 on the Parcel Map
recorded in Book 353 of Maps, at page 14, Santa Clara County Records, defined
therein as the Premises.
C. Netscreen now desires to sublease from Philips, and Philips now
desires to sublease to Netscreen, the Subleased Premises known as 350 Oakmead
Parkway, Sunnyvale, California comprising approximately 51,367 square feet, in
accordance with the terms and conditions of the Master Lease and the terms and
conditions set forth below.
AGREEMENT
NOW, THEREFORE, Philips and Netscreen hereby agree as follows:
1. Master Lease Obligations. Philips and Netscreen will at all times
perform according to the terms and conditions of the Master Lease and its
Amendments that are incorporated into this Sublease Agreement except where this
Sublease conflicts, then the Sublease will control.
2. Sublease. Philips hereby subleases to Netscreen, and Netscreen hereby
subleases from Philips, the Subleased Premises according to Section 1.2 of the
Master Lease as well as those non-exclusive rights granted Philips in the Master
Lease, subject to the limitations therein.
3. Definitions. In addition to those terms defined elsewhere in this
Sublease (including those definitions incorporated by reference to the Master
Lease), the following definitions shall apply to this Sublease. Any capitalized
terms not otherwise defined herein shall have the meaning ascribed thereto in
the Master Lease.
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3.1 Effective Date. The later of (i) the date on which the second of
Philips and Netscreen delivers an executed copy of this Sublease to the other of
them and (ii) the date on which Landlord consents to this Sublease as provided
in Section 12 of the Master Lease.
4. Term and Earlier Termination.
4.1 Term. The term of this Sublease ("the Term") is coextensive with the
term of the Master Lease and will commence on January 1, 2001 ("the Commencement
Date") and will expire on February 14, 2003, unless the Master Lease or the
Sublease terminate earlier pursuant to their terms.
4.2 Master Lease. Philips shall take no voluntary action to terminate or
amend the Master lease without the prior written consent of Netscreen. Philips
shall make commercially reasonable efforts to obtain from Lessor a
non-disturbance agreement for the benefit of Netscreen.
4.3 Delay in Delivery of Possession. Notwithstanding the provisions of
Section 3.1 above, if for any reason Philips cannot deliver possession of the
Subleased Premises to Netscreen on the Commencement Date, Philips shall not be
subject to any liability on account of said failure to deliver, nor shall such
failure affect the validity of this Sublease or the obligations of Netscreen
hereunder or extend the term hereof, but in such event Netscreen shall not be
obligated to pay Rent (other than the amount due at execution of this Sublease)
until possession of the Subleased Premises is tendered to Netscreen.
Notwithstanding the foregoing, if possession of the Subleased Premises has not
been delivered to Netscreen on or before February 1, 2001, Netscreen may
terminate this Sublease upon written notice to Philips, which termination shall
be effective upon Philips' receipt of such written notice. Upon such termination
Philips shall promptly refund all monies previously paid by Netscreen. If
delivery of possession of the Subleased Premises is delayed as a result of any
act or omission of Netscreen or its agents or contractors, Philips shall be
deemed to have delivered possession of the Subleased Premises as of the
Commencement Date or such later date as Philips would have delivered possession
if no such act or omission had occurred provided that Philips subsequently
tenders possession to Netscreen.
4.4 Early Entry. During the period from December 1, 2000 but prior to the
Commencement Date ("Early Entry Period"), if Netscreen has secured the necessary
insurance coverage in Section 9.1 herein, Netscreen shall be permitted by
Philips to enter the Subleased Premises for the sole purpose of preparing to
use, installing fixtures and not using, the Subleased Premises. Notwithstanding
anything herein to the contrary, Netscreen's entry onto the Subleased Premises
during the Early Entry Period shall be subject to all of the terms, covenants
and conditions of this Sublease (including, but not limited to, all of
Netscreen's obligations regarding indemnity and insurance), provided, however,
that Netscreen's obligation to pay Base Rent (defined below) during the Early
Entry Period shall be waived.
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5. Rent.
5.1 Base Rent. Netscreen shall pay to Philips, for each calendar month of
the Term, the following amounts as the base rent for the Subleased Premises
("Base Rent") per square foot:
January 1, 2001 to December 31, 2001 $5.25
January 1, 2002 to December 31, 2002 $5.46
January 1, 2003 to February 14, 2003 $5.69
An amount in cash equal to 23.5 months' rent, plus an amount equal to two (2)
additional months' rent ("Deposit"), shall be posted in the form of a Letter of
Credit satisfactory to Philips. The monthly rent shall first be paid by
crediting the good faith deposit of $269,676.75 and then shall be drawn from the
Letter of Credit thereby reducing the Letter of Credit monthly.
Rent for the final month of the term shall be due on January 15, 2003, so that a
balance shall remain at the end of the Sublease term equivalent to two months'
rent, which shall be used as a Security Deposit.
5.2 Additional Rent. In addition to Base Rent, and except as otherwise
expressly provided herein, Netscreen shall be obligated to pay to Philips (or to
such other party as Philips may direct, on Philips' behalf) all sums due from
Philips under the Master Lease other than amounts attributable to Philips'
failure to fully and in a timely manner satisfy its obligations thereunder
("Additional Rent"). Additional Rent includes, but is in no way limited to, the
following:
5.2.1 Operating Rent. No more than ten (10) days from the date Philips
provides Netscreen with written notice thereof and copies of all statements
received to date by Philips from Landlord relating thereto (at the address for
providing notices under Section 13.3), Netscreen shall pay to Philips,
calculated on a per square foot basis, (or to Landlord directly at Philips'
request and on Philips' behalf) such amounts as are due from Philips under
Sections 11 and 21 of the Master Lease for operating expenses including but not
limited to utilities, telephone, trash disposal and other services supplied on
the premises together with any taxes thereon ("Operating Rent"). Philips shall
provide to Netscreen copies of all statements received by Philips from Landlord
or third parties relating to Operating Rent reasonably soon after their receipt
(at the address for providing notices under Section 13.3). Philips shall credit
or repay Netscreen for any excess payment for which Philips receives credit or
repayment from Landlord.
5.2.2 Tax Rent. No more than five (5) days from the date Philips
provides Netscreen with written notice thereof and copies of all statements
received to date by Philips from Landlord relating thereto (at the address for
providing notices under Section 13.3), Netscreen shall pay to Philips,
calculated on a per square foot basis (or to Landlord directly at Philips'
request and on Philips' behalf) such amounts as are due from Philips under
Section 10 of the Master Lease ("Tax Rent"). Philips shall provide to Netscreen
copies of all
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statements received by Philips from Landlord relating to Tax Rent reasonably
soon after their receipt (at the address for providing notices under Section
13.3); in no event may Netscreen withhold payment of Tax Rent pending receipt of
such statements.
6. Security Deposit. In accordance with the above section 5.1, Netscreen
shall deposit with Philips, in the form of a Letter of Credit, a security
deposit in the amount of two (2) month's rent as security for the prompt and
complete performance by Netscreen of the obligations and terms of this Sublease
to be performed by Netscreen and not as prepayment of Rent (the "Deposit").
Philips may apply such portion or portions of the Deposit as are reasonably
necessary for the following purposes: (i) to remedy any default by Netscreen in
the payment of Rent under this Sublease; (ii) to clean, restore, and repair the
Subleased Premises following their surrender to Philips and/or Landlord, if not
surrendered in the condition required by this Sublease; and (iii) to remedy any
other default of Netscreen hereunder. Upon demand after any application of all
or a portion of the Deposit by Philips, Netscreen shall restore the Deposit to
its full original amount. No application of all or a portion of the Deposit may
be deemed a waiver of, or be deemed to have cured, any default by Netscreen
under this Sublease except to the extent directly applied to cure such default.
Philips shall not be deemed a trustee of the Deposit. Philips may use the
Deposit in Philips' ordinary business and shall not be required to segregate it
from Philips' general accounts. Netscreen shall not be entitled to any interest
on the Deposit. The Deposit, less any portion thereof which Philips is entitled
to retain, shall be returned to Netscreen (or, at Philips' option, to the last
assignee of Netscreen's interest hereunder, if any) within thirty (30) days
after the later of the expiration of the Term or the date on which Netscreen
vacates the Subleased Premises.
7. Condition of Premises. Philips warrants that upon delivery of possession
of the Subleased Premises to Netscreen the building systems (including, but not
limited to, HVAC, plumbing, roof, electrical, fire protection, landscaping, and
parking areas) of the Subleased Premises, or portions thereof, for which Philips
has sole repair and maintenance responsibility under the Master Lease, will be
in good working order and repair. Subject to the foregoing, by taking possession
of the Subleased Premises, Netscreen shall be deemed to have accepted the
Subleased Premises in good, clean and completed condition and repair, subject to
all applicable laws, codes and ordinances. Any damage to the Subleased Premises
caused by Netscreen's move-in shall be repaired or corrected by Netscreen at its
expense. Except for the foregoing warranties, Netscreen acknowledges that
neither Philips nor its agents have made any representations or warranties as to
the suitability or fitness of the Subleased Premises for the conduct of
Netscreen's business or for any other purpose.
7.1 Tenant Improvement Allowance. Philips will not provide a tenant
improvement allowance of any kind or amount.
8. Other Obligations of Philips.
8.1 Furniture. Philips will make available to Netscreen for purchase
the existing furniture systems in the 350 Oakmead Parkway building per market
standards.
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8.2 Satellite. Philips shall not unreasonably withhold or delay
its consent with regard to Netscreen's installation of a satellite dish(es) on
the roof or building site in a location satisfactory to both Philips and
Netscreen, provided such installation meets the requirements of the Master
Lease.
8.3 Subleasing and Assignment. After one year of occupancy,
Netscreen shall have the right to sublet or assign the space in whole or in part
under the initial term, subject to Philips written consent, which shall not be
unreasonably withheld or delayed, and subject to the terms and conditions
contained in the Master Lease.
9. Other Obligations of Netscreen.
9.1 Insurance. Netscreen will secure all necessary insurance
coverage as required in the Master Lease and as reasonably required by Philips
prior to the early entry date of December 1, 2000.
9.2 Structural Changes. Netscreen will provide Philips with all
plans and proposals regarding any structural changes to be made within the
Subleased Premises, in accordance with Section 7 of the Master Lease, and will
not begin any changes without the prior written consent of Philips.
9.3 Removal of Fixtures. Before December 1, 2000 Netscreen will
advise Philips of any requested removal of existing fixtures within the
Subleased Premises.
9.4 Indemnification. Netscreen expressly agrees to defend,
indemnify and hold Philips harmless of and from any and all claims of any kind
or nature arising from Netscreen's use of the Subleased Premises during the term
of this sublease. Netscreen further agrees to abide by the Master Lease Section
8.7 where "Philips" is substituted for "Lessor" and "Netscreen" is substituted
for "Lessee" according to Section 12.2 herein.
9.5 Use Restriction. Use shall be limited by the terms of the Master
Lease, including, but not limited to Section 1.8 and Section 6.
10. Hazardous Material.
10.1 Warranties and Representations. During the sublease, the use
and operation by Netscreen of the subject property, shall be in compliance with
all applicable Environmental Laws. Netscreen will secure all licenses, permits,
approvals and authorizations from the applicable government authorities needed
for the conduct of its business and shall use the subject property and all such
permits so to maintain itself in good standing with subject governmental
authorities.
10.2 "Environmental Laws" shall mean and refer to all applicable
foreign, federal, state and local laws for the protection of public or human
health and the environment (including without limitation, regulations, rules,
standards, requirements, order and permits
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issued thereunder), including but not limited to the Comprehensive Environmental
Response Compensation and Liability Act (42 USC (S) 9601 et seq.), the Hazardous
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Material Transportation Act (49 USC (S) 1801 et seq.), the Clean Water Act (33
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USC (S) 7401 et seq.), the Resource Conversation and Recovery Act (42 USC
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(S) 6901 et seq.) the Clean Air Act (42 USC (S) 1251 et seq.), the Toxic
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Substances Control Act, as amended (15 USC (S) 2601 et seq.), and the Federal
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Insecticide, Fungicide and Rodenticide Act (7 USC (S) 136 et seq.).
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10.3 "Hazardous Substances" shall have the meaning as provided in the
Comprehensive Environmental Response, Compensation and Liability Act (42 USC (S)
9601 et seq.), including but not limited to asbestos and polychlorinated
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biphenyls, and shall also include petroleum or petroleum-derived substances or
wastes.
10.4 Indemnity. For all matters caused by an act or omission of Netscreen,
or its agents, during the lease term, Netscreen agrees to protect, indemnify,
defend, reimburse and hold harmless: (1) Philips and Landlord; (2) any other
person who acquires an interest in the sublease whether by an assignment of
Philips and Landlord's interest in the sublease, or otherwise, or as an
Landlord of the Subleased Premises; (3) any other person who acquires all or a
portion of the Subleased Premises at a foreclosure sale or by a conveyance in
lieu of foreclosure or otherwise through the exercise of the rights and remedies
of Philips and Landlord under this sublease; and (4) the principals, directors,
agents, contractors, subcontractors, experts, licensees and invitees of such
persons listed in (1) through (3) above (any or all of which are referred to
herein as an "Indemnitee") from and against any and all loss, cost, penalty,
fine, liability, damage or expense (including, without limitation, attorney's
fees and costs) arising or resulting from or in any way connected with:
10.4.1 investigation, monitoring, cleanup obligations, response or
remedial actions that may be required by governmental or quasi-governmental
authorities because of soil or groundwater contamination, or an actual or
threatened release of Hazardous Materials in, on, or about the Subleased
Premises when such contamination, release, or threatened release is or was
caused by the use, generation, storage, release, abatement, removal, disposal,
handling or transportation by Sublessee or its agents, employees, contractors,
or invitees of any Hazardous Materials, in, at, on, under or about the Subleased
Premises;
10.4.2 the breach of any warranty or covenant or the inaccuracy of any
representation of Sublessee contained in this Agreement; or
10.4.3 any claim, demand or cause of action, or any action, or other
proceeding, whether meritorious or not, brought or asserted against any
Indemnitee which directly or indirectly relates to, arises from or is based upon
any of the matters described in this Section 10.
10.5 Survival. Netscreen's obligations under this Section 10 shall survive
the expiration or early termination of the sublease term, the discharge of all
other
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obligations owed by the parties to each other and any termination of the
sublease term, the discharge of all or other obligations owed by the parties to
each other and any transfer of title to property (whether by sale, foreclosure,
deed in lieu of foreclosure, or otherwise).
10.6 Philips hereby represents and warrants that, to the best of Philips'
actual knowledge and reasonable belief, without independent investigation or
inquiry, no "Hazardous Substance" is located on or beneath the Subleased
Premises.
10.7 For all matters caused by an act or omission of Philips, or its
agents, during the lease term for which it used and conducted business on the
Subleased Premises, Philips agrees to protect, indemnify, defend, reimburse and
hold harmless:
(1) Netscreen; (2) any other person who acquires an interest in the
sublease whether by an assignment of Netscreen's interest in the sublease,
or otherwise, or as an Landlord of the Subleased Premises; (3) any
other person who acquires all or a portion of the Subleased Premises at a
foreclosure sale or by a conveyance in lieu of foreclosure or otherwise
through the exercise of the rights and remedies of Netscreen and Lessor
under this sublease; and (4) the principals, directors, agents,
contractors, subcontractors, experts, licensees and invitees of such
persons listed in (1) through (3) above (any or all of which are referred
to herein as an "Indemnitee") from and against any and all loss, cost
penalty, fine, liability, damage or expense (including, without limitation,
attorney's fees and costs) arising or resulting from or in any way
connected with:
10.7.1 investigation, monitoring, cleanup obligations, response or
remedial actions that may be required by governmental or quasi-governmental
authorities because of soil or groundwater contamination, or an actual or
threatened release of Hazardous Materials in, on, or about the Subleased
Premises when such contamination, release is or was caused by the use,
generation, storage, release, abatement, removal, disposal, handling or
transportation by Philips or its agents, employees, contractors, or invitees of
any Hazardous Materials, in, at, on, under or about the Subleased Premises;
10.7.2 the breach of any warrant or covenant or the inaccuracy of any
representation of Philips contained in this Agreement; or
10.7.3 any claim, demand or cause of action, or any action, or other
proceeding, whether meritorious or not, brought or asserted any Indemnitee which
directly or indirectly relates to, arises from or is based upon any of the
matters described in this Section D.
10.8 Philip's obligations under this section shall survive the expiration
or early termination of this sublease, the discharge of all other obligations
owed by the parties to each other and any transfer or title to the property
(whether by sale, foreclosure, deed in lieu of foreclosure or otherwise).
11. Other Obligations of Both Philips and Netscreen.
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11.1 Time of the Essence. Philips and Netscreen agree that time is of the
essence in this Sublease Agreement.
11.2 Restoration. Notwithstanding anything herein to the contrary,
Netscreen's sole restoration obligation shall be with respect to items that
Netscreen installed in or on the Subleased Premises.
12. Master Lease.
12.1 General Duties. Netscreen acknowledges and agrees that this Sublease
is subject and subordinate to the Master Lease (including all Exhibits and
Amendments thereto) and all of its terms and conditions, and Netscreen shall not
cause or permit any violation of any term thereof. Netscreen hereby expressly
assumes and agrees to perform and comply with, for the benefit of Philips, each
and every obligation of Tenant under the Master Lease, to the extent
incorporated herein. Philips hereby agrees that it will not default under the
Master Lease, to the extent such default is not the result of Netscreen's
failure to comply with its obligations hereunder. Netscreen hereby agrees to
indemnify, defend and hold Philips free and harmless from any loss, cost or
other liability that Philips may incur if any default by Netscreen under this
Sublease results in a default by Philips under the Master Lease. Philips hereby
agrees to indemnify, defend and hold Netscreen free and harmless from any loss,
cost or other liability that Netscreen may incur as a direct result of the
termination of this Sublease caused solely by an early termination of the Master
Lease which is the result of a default by Philips under the Master Lease, which
default neither occurs at a time when Netscreen is in a related default
hereunder, nor is caused by a default of Netscreen hereunder. Netscreen agrees
that it shall notify Philips of any default by Landlord under the Master Lease
of which Netscreen becomes aware. In the event of Landlord's failure to perform
its obligations under the Master Lease that inure to the benefit of Netscreen
hereunder, Philips shall, after written request from Netscreen, take
commercially-reasonable steps to secure Landlord's performance of such
obligations, provided Netscreen pays, in advance, all costs and expenses of
Philips associated therewith and also provided Netscreen is not in default under
this Sublease. Netscreen's only remedy for Philips' failure to perform as called
for in the preceding sentence is that Netscreen shall have the right to become
subrogated to Philips' right, under the Master Lease, to demand such performance
by Landlord.
12.2 Incorporation by Reference. The terms and conditions of this Sublease
shall include all of the following provisions of the Master Lease (headings
excepted), which are hereby incorporated into this Sublease as if fully set
forth herein, as modified herein. Except as otherwise provided below and in
addition to the modifications described below, all such incorporated provisions
shall be modified by replacing all references to "Lessor" with "Philips",
"Lessee" with "Netscreen", "Lease" with "Sublease", "Lease Term" with "Term",
and "rent" with "Rent"; such references are changed to the corresponding
possessive form (e.g., "Landlord's" is changed to "Philips'"), where
appropriate.
12.2.1 Master Lease Section 1.2 (Premises Description).
12.2.2 Master Lease Section 1.8 (Permitted Use).
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12.2.3 Master Lease Section 2 (Premises Obligations).
12.2.4 Master Lease Section 3.3 (Delay in Possession).
12.2.5 Master Lease Section 6 (Use).
12.2.6 Master Lease Section 7 (Maintenance and Alterations).
12.2.7 Master Lease Section 8 (Insurance).
12.2.8 Master Lease Section 9 (Damage or Destruction).
12.2.9 Master Lease Section 10 (Real Property Taxes).
12.2.10 Master Lease Section 11 (Utilities).
12.2.11 Master Lease Section 12 (Assignment and Subletting).
12.2.12 Master Lease Section 13 (Default, Breach, Remedies).
12.2.13 Master Lease Section 14 (Condemnation).
12.2.14 Master Lease Section 16 (Tenancy Statement).
12.2.15 Master Lease Section 19 (Interest).
12.2.16 Master Lease Section 24 (Waivers).
12.2.17 Master Lease Section 26 (No Holdover Right).
12.2.18 Master Lease Section 27 (Cumulative Remedies).
12.2.19 Master Lease Section 28 (Covenants and Conditions).
12.2.20 Master Lease Section 29 (Binding Effect, Choice of Law).
12.2.21 Master Lease Section 30 (Subordination).
12.2.22 Master Lease Section 31 (Attorney's Fees).
12.2.23 Master Lease Section 32 (Lessor's Access).
12.2.24 Master Lease Section 33 (Actions).
12.2.25 Master Lease Section 34 (Signs).
12.2.26 Master Lease Section 35 (Termination, Merger).
12.2.27 Master Lease Section 36 (Consent).
12.2.28 Master Lease Section 41 (Security Measures).
12.2.29 Master Lease Section 43 (Performance Under Protest).
12.2.30 Master Lease Section 47 (Amendments).
12.3 References. All references in an incorporated Master Lease provision
to a provision, exhibit or other portion of the Master Lease not incorporated
shall be deemed valid and enforceable as though the unincorporated provision
were incorporated for the limited purpose of the reference, in order to make the
incorporated provision fully enforceable. All references in an incorporated
Master Lease provision to a provision, exhibit or other portion of the Master
Lease that is also incorporated shall be deemed references to such provision,
exhibit or other portion of the Master Lease as incorporated.
12.4 Defined Terms. Notwithstanding anything herein to the contrary, all
defined terms in an incorporated Master Lease provision shall be defined as in
the Master Lease if, but only if, no definition of such term is provided in this
Sublease; if a definition is provided in this Sublease, the Sublease definition
shall apply.
12.5 Representation. Philips hereby represents and warrants that, as of the
Effective Date, (i) the document attached as Exhibit A to this Sublease is a
complete copy of
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the Master Lease and that the Master Lease represents the entire agreement
between Philips and Landlord with respect to the lease of the Subleased
Premises, (ii) to the actual knowledge of Philips, as of the date hereof, there
is no default, or any condition which with the passage of time or the giving of
notice, or both, would constitute a default, on the part of either party to the
Master Lease, (iii) Philips has not assigned, encumbered or otherwise
transferred any interest of Tenant under the Master Lease, and (iv) the term of
the Master Lease is not scheduled to expire prior to the expiration of the Term.
12.6 Amendment and Modification. Philips shall neither amend nor modify the
Master Lease in such a manner as to materially adversely affect Netscreen's use
of the Subleased Premises or increase the obligations or decrease the rights of
Netscreen hereunder, without the prior written consent of Netscreen, which
consent shall not be unreasonably withheld, conditioned or deferred. If Philips
requests reasonable amendment or modification to the Master Lease that does not
materially adversely affect Netscreen's rights under this Sublease, Netscreen
shall not unreasonably withhold, delay or defer its consent thereto.
13. Miscellaneous.
13.1 Attorneys' Fees. If either Philips or Netscreen brings any action or
proceeding, whether legal, equitable or administrative, to enforce rights and
obligations under this Sublease, or to declare rights hereunder, the prevailing
party in any such action or proceeding shall be entitled to recover from the
other party reasonable attorneys' fees and costs of suit, in addition to any
other relief allowed by the court or administrative adjudicator.
13.2 Authority to Execute. Netscreen and Philips each represent and warrant
to the other that the person(s) executing this Sublease on behalf of each party
is (are) duly authorized to execute and deliver this Sublease on that party's
behalf.
13.3 Notices. Any notice required or permitted to be given under this
Sublease, including any change of address for purpose of giving notice, shall be
in writing, and shall be personally served or given by mail. If given by mail,
such notice shall be deemed to have been given when seventy-two (72) hours have
elapsed from the time when such notice was deposited in the United States mail,
registered or certified, and postage prepaid, addressed to the party to be
served at the following address(es) (to both addresses, in the case of Philips):
Philips
Philips Electronics North America Corporation
Attention: Director of Real Estate
1251 Avenue of the Americas
New York, NY 10020-1104
and
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Philips Semiconductors Inc.
Attention: General Counsel
811 E. Arques Ave. m/s 54
Sunnyvale, CA 94088
Netscreen
---------------
---------------
---------------
---------------
13.4 Incorporation of Prior Agreements. This Sublease incorporates all
agreements of Philips and Netscreen with respect to the subject matter hereof,
and supersedes all prior agreements and understandings of the parties, whether
oral or written, pertaining to the subject matter hereof.
13.5 Modifications. This Sublease may be modified or amended only by an
instrument in writing executed by Philips and Netscreen.
13.6 Governing Law, Severability. This Sublease shall be governed by and
construed in accordance with the laws of the State of California. If any term or
provision of this Sublease is found by a court of competent jurisdiction to be
void or unenforceable, such term or provision shall be deemed severed from the
remainder of the terms and provisions of this Sublease, and said remainder shall
remain in full force and effect, according to its terms and provisions, to the
extent permitted by law.
13.7 Sublease Controlling. In the event of a conflict between the
provisions of this Sublease and the provisions of the Master Lease, as between
Philips and Netscreen the provisions of this Sublease shall control.
13.8 Counterparts. This Sublease may be executed in several counterparts,
each of which shall be an original but all of which shall constitute but one and
the same instrument.
13.9 Brokers. Colliers International, is the exclusive broker of Philips in
connection with this Sublease and The Staubach Company is the exclusive broker
of Netscreen in connection with this Sublease. Philips shall pay a commission in
connection with this Sublease to both brokers, in accordance with the terms and
conditions of a separate agreement by and between Philips and Colliers
International. The parties agree that no other brokers have been involved in
this transaction, and they each agree to indemnify and hold harmless each other
from and against any damage or expense incurred by reason of any other broker
claiming a right to any commission or compensation as a result of its dealings
with the indemnifying party.
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IN WITNESS WHEREOF, Philips and Netscreen have executed this Sublease
on the dates set forth below, to be effective as of the Effective Date.
Philips Semiconductors, Inc., Colliers International
a Delaware corporation
Dated: October 2, 2000 Dated: October 2, 2000
By: /s/ Ross Anderson By: /s/ Greg Galasso
-------------------------------------- ---------------------------
Name: Ross Anderson Name: Greg Galasso
-------------------------
Its: Executive Vice President Its: Sr. Vice President
--------------------------
Chief Information Officer
Netscreen, Inc.,
a Delaware corporation
Dated: October 2, 2000
By: /s/ Charles R. Clark
--------------------------------------
Name: Charles Clark
Its: VP Operations
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[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
(Do not use this from for Multi-Tenant Property)
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
December 20, 1994 is made by and between OAKMEAD PARKWAY PROPERTIES, a
California general partnership ("Lessor") and PHILIPS SEMICONDUCTORS, a Delaware
Corporation ("Lessee"), (collectively the "Parties," or individually a "Party").
1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, are commonly
known by the street address of 350 Oakmead Parkway, Sunnyvale located in the
County of Santa Clara State of California and generally described as (describe
briefly the nature of the property) more particularly described on EXHIBIT A-1
attached hereto including the office building situated thereon consisting of
approximately 51,367 rentable source feet as shown on EXHIBIT A-2 ("Premises").
(See Paragraph 2 for further provisions.)
1.3 Term: Five (5) years and no months ("Original Term") commencing
February 15, 1995 ("Commencement Date") and ending February 14, 2000
("Expiration Date"). (See Paragraph 3 for further provisions.)
1.4 Early Possession: December 21, 1994 ("Early Possession Date"). (See
Paragraph 3.2 and 3.3 for further provisions.)
1.5 Base Rent: 38,525.00 per month ("Base Rent"), payable on the first day
of each month commencing March 1, 1995 (prorated for the period from March 15 -
March 31, 1995). Base Rent for the period from February 15, 1995 - March 14,
1995 to be paid upon execution hereof. (See Paragraph 4 for further provisions.)
[ ] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
1.6 Base Rent Paid Upon Execution: 38,525.00 as Base Rent for the period
February 15, 1995 - March 14, 1995.
1.7 Security Deposit: None required ("Security Deposit"). (See Paragraph 5
for further provisions.)
1.8 Permitted Use: General office purposes. (See Paragraph 6 for further
provisions.)
1.9 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)
1.10 Real Estate Brokers: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes):
CPS, A Commercial Real Estate Company represents [X] Lessor exclusively
("Lessor's Broker"); [ ] both Lessor and Lessee, and Colliers Parrish
International represents [X] Lessee exclusively ("Lessee's Broker"); [ ] both
Lessee and Lessor. (See Paragraph 15 for further provisions.)
1.11 Guarantor: The obligations of the Lessee under this Lease are to be
guaranteed by Philips Electronics North America Corp. ("Guarantor"). (See
Paragraph 37 for further provisions.)
1.12 Addenda: Attached hereto is an Addendum or Addenda consisting of
Paragraphs ____ through ____ and Exhibits ____ all of which constitute a part of
this Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental, is an approximation which Lessor and
Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 Condition: Lessor shall deliver the Premises to Lessee clean and free
of debris on the Date and warrants to Lessee that the existing plumbing, fire
sprinkler system, lighting, air conditioning, heating, and loading doors, if
any, on the Premises, other than those constructed by Lessee shall be in good
operating condition on the Date. If a non-compliance with said warranty exists
as of the Date, Lessor shall except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within thirty (30) days after the Date,
correction of that non-compliance shall be the obligation of Lessee at Lessees
sole cost and expense.
2.3 Compliance with Covenant, Restrictions and Building Code. Lessor
warrants to Lessee that to the best of Lessor's knowledge the improvements on
the Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances in effect on the Date.
Said warranty does not apply to the use to which Lessee will put the Premises or
to any Alterations or Utility installations (as defined in Paragraph 7.3(a))
made or to be made by Lessee. If the Premises do not comply with said warranty,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Lessor's expense. If Lessee
does not give Lessor written notice of a non-compliance with this warranty
within six (6) months following the Commencement Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee's sale cost and
expense.
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environment aspects, compliance with Applicable Law as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written representations of warranties with respect to the said
matters other than as set forth in this Lease.
2.5 Lessee Prior Owner/Occupant. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner of occupant of the Premises. In such
event, Lessee shall, at Lessees sole cost and expense, correct any
non-compliance of the Premises with said warranties.
3. Term.
3.1 Term. The Commencement Date. Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease, however,
(including but not limited to the obligations to pay, Real Property Taxes and
insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such early possession shall not affect nor advance the Expiration
Date of the Original Term.
Page 1
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3.3 Delay in Possession. If there is any reason Lessor cannot deliver
possession of the Premises to Lessee, addressed herein by the Early Possession
Date, if one is specified in Paragraph 1.4, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the obligations of Lessee hereunder, or extend the term hereof, but in such
case, Lessee shall not, except as otherwise provided herein, be obligated to pay
rent or perform any other obligation of Lessee under the terms of this Lease
until Lessor delivers possession of the Premises to Lessee. If possession of the
Premises is not delivered to Lessee within sixty (60) days after the Early
Possession Date, Lessee may, at its option, by notice in writing to Lessor
within ten (10) days thereafter, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder; provided, however, that if
such written notice by Lessee is not received by Lessor within said ten (10) day
period. Lessee's right to cancel this Lease shall terminate and be of no further
force or effect.
4. Rent.
4.1 Base Rent. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rent and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month involved. Payment of Base rent and other charges
shall be made to Lessor at its address stated herein or to such other persons
or at such other addresses as Lessor may from time to time designate in writing
to Lessee.
5. Security Deposit.
(info deleted on hard copy)
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties. Lessor
hereby agrees to not unreasonably withhold or delay its consent to any written
request by Lessee. Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee, its assignees and subtenants, for a modification
of said permitted purpose for which the premises may be used or occupied, so
long as the same will not impair the structural integrity of the improvements on
the Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements thereon, and is otherwise
permissible pursuant to this Paragraph 6. If Lessor elects to withhold such
consent, Lessor shall within five (5) business days give a written notification
of same, which notice shall include an explanation of Lessor's reasonable
objections to the change in use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety
or welfare, the environment or the Premises, (ii) regulated or monitored by
any governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common
law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products, by-products
or fractions thereof. Lessee shall not engage in any activity in, on or
about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent
of Lessor and compliance in a timely manner (at Lessee's sole cost and
expense) with all Applicable Law (as defined in Paragraph 6.3). "Reportable
Use" shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business
plan is required to be filed with, any governmental authority. Reportable
Use shall also include Lessee's being responsible for the presence in, on
or about the Premises of a Hazardous Substance with respect to which any
Applicable Law requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may, without Lessor's prior consent, but in compliance
with all Applicable Law, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of Lessee's
business permitted on the Premises, so long as such use is not a Reportable
Use and does not expose the Premises of neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous
Substance, activity or storage tank by Lessee upon Lessee's giving Lessor
such additional assurances as Lessor, in its reasonable discretion, deems
necessary to protect itself, the public, the Premises and the environment
against damage, contamination or injury and/or liability therefrom or
therefor, including, but not limited to, the installation (and removal on
or before Lease expiration or earlier termination) or reasonably necessary
protective modifications to the Premises (such as concrete encasements)
and/or the deposit of an additional Security Deposit under Paragraph 5
hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting
from same, has come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor, Lessee shall immediately
give written notice of such fact to Lessor. Lessee shall also immediately
give Lessor a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action or proceeding
given to, or received from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, spill,
release, discharge of, or exposure to, any Hazardous Substance or
contamination in, on, or about the Premises, including but not limited to
all such documents as may be involved in any Reportable Uses involving the
Premises.
(c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground Lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits and attorney's and consultant's fees arising out of or involving
any Hazardous Substance or storage tank brought onto the Premises by or for
Lessee or under Lessee's control. Lessee's obligations under this Paragraph
6 shall include, but not be limited to, the effects of any contamination or
injury to person, property or the environment created or suffered by
Lessee, and the cost of investigation (including consultant's and
attorney's fees and testing), removal, remediation, restoration and/or
abatement thereof, or of any contamination therein involved, and shall
survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and
Lessee shall release Lessee from its obligations under this Lease with
respect to Hazardous Substances or storage tanks, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 Lessee's Compliance with Law. Except as otherwise provided in this
Lease, Lessee, shall at Lessee's sole cost and expense, fully, diligently and in
a timely manner, comply with all "Applicable Law," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, assessments and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any manner
to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee shall,
within five (5) days after receipt of Lessor's written request, provide Lessor
with copies of all documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice citation, warning,
complaint or report pertaining to or involving failure by Lessee or the Premises
to comply with any Applicable Law. See Addendum, Paragraph 6.3.
6.4 Inspection; Compliance. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease and all Applicable Laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessees activities, including but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Lessee shall upon request reimburse
Lessor or Lessor's Lender, as the case may be, for the costs and expenses of
such inspections.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition). 2.3 (Lessor's warranty as to compliance with covenants,
etc).
<PAGE>
7.2 (a) Lessor's obligations to repair _______ damage and destruction), and 14
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, structural and non-structural (whether or not such portion of the
Premises requiring repairs, or the means of repairing the same, are reasonably
or readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of Lessee's use, any prior use, the elements or the age of
such portion of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as pumping,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing system, including fire alarm and/or
smoke detection systems and equipment, fire hydrants, fixtures, walls (interior
and exterior), ceilings, roof membrane, floors, windows, doors, plate glass,
skylights, landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, about, or adjacent to the Premises.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including through the plumbing or
sanitary sewer system) and shall promptly, at Lessee's expense, take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of the Premises, the elements
surrounding same, or neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any Hazardous Substance
and/or storage tank brought onto the Premises by or for Lessee or under its
control. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. If Lessee occupies the Premises for seven (7) years or
more, Lessor may require Lessee to repaint the exterior of the buildings on the
Premises as reasonably required, but not more frequently than once every seven
(7) years.
(b) Lessee shall, at Lessee's sole cost and expense, procure and maintain
contracts, with copies to Lessor, in customary form and substance for, and with
contractors specializing and experienced in, the inspection, maintenance and
service of the following equipment and improvement, if any, located on the
Premises: (i) heating, air conditioning and ventilation equipment, (ii) boiler,
fired or unfired pressure vessels, (iii) fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing systems, including fire alarm and/or
smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and
drain maintenance and (vi) asphalt and parking lot maintenance. SEE ADDENDUM,
PARAGRAPH 7.1(b)
7.2 Lessor's Obligations. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to the
maintenance and repair of the Premises. Lessee and Lessor expressly waive the
benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease with respect to, or which affords
Lessee the right to make repairs at the expense of Lessor or to terminate this
Lease by reason of any needed repairs. SEE ADDENDUM, PARAGRAPH 7.2
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility Installations" is used
in this Lease to refer to all carpeting, window coverings, air lines, power
panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises. The
term "Trade Fixture" shall mean Lessees machinery and equipment that can be
removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor as defined
in Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations in, on, under or about the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility Installations to the
interior of the Premises (excluding the roof), as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof or
any existing walls, and the cost thereof does not exceed $10,000 per Utility
Installation.
(b) Consent. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with proposed detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon, and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and in compliance with all Applicable Law.
Lessee shall promptly upon completion thereof furnish Lessor with as-built plans
and specifications therefor. Lessor may (but without obligation to do so)
condition its consent to any requested Alteration or Utility Installation that
costs $10,000 or more upon Lessee's providing Lessor with a lien and completion
bond in an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an additional
Security Deposit with Lessor under Paragraph 36 hereof.
(c) Indemnification. Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one-half
times the amount of such contested lien claim or demand, indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal or become
the owner thereof as hereinafter provided in this Paragraph 7.4, all Alterations
and Utility Additions made to the Premises by Lessee shall be the property of
and owned by Lessee, but considered a part of the Premises. Lessor may, at any
time and at its option, elect in writing to Lessee to be the owner of all or any
specified part of the Lessee Owned Alterations and Utility Installations. Unless
otherwise instructed per subparagraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or earlier
termination of this Lease, become the property of Lessor and remain upon and be
surrendered by Lessee with the Premises.
(b) Removal. Unless otherwise agreed in writing, Lessor may require that
any or all Lessee Owned Alterations or Utility Installations be removed by the
expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor. Lessor may require the
removal at any time on all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises by the end
of the last day of the Lease term or any earlier termination date, with all of
the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice or by Lessee
performing all of its obligations under this Lease. Except as otherwise agreed
or specified in writing by Lessor, the Premises, as surrendered, shall include
the Utility Installations. The obligation of Lessee shall include the repair of
any damage occasioned by the installation, maintenance or removal of Lessee's
Trade Fixtures, furnishings, equipment, and Alterations and/or Utility
Installations, as well as the removal of any storage tank installed by or for
Lessee, and the removal, replacement, or remediation of any soil, material or
ground water contaminated by Lessee, all as may then be required by Applicable
Law and/or good service practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to its obligation to
repair and restore the Premises per this Lease.
8. Insurance; Indemnity
8.1 Payment for Insurance. Regardless of whether the Lessor or Lessee is
the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per occurrence. Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term. Payment shall be made by Lessee to Lessor
within ten (10) days following receipt or an invoice for any amount due.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force during the
term of this Lease a Commercial General Liability policy of insurance protecting
Lessee and Lessor (as an additional insured) against claims for bodily injury,
personal injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000 per occurrence with
an "Additional Insured-Managers or Lessors of Premises" Endorsement and contain
the "Amendment of the Pollution Exclusion" for damage caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an "insured contract" for the
performance of Lessee's indemnity obligations under this Lease. The limits of
said insurance required by this Lease or as carried by Lessee shall not,
however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by Lessee shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only.
(b) Carried by Lessor. In the event Lessor is the Insuring Party, Lessor
shall also maintain liability insurance described in Paragraph 8.2(a) above, in
addition to, and not in lieu of, the insurance required to be maintained by
Lessee. Lessee shall not be named as an additional insured therein.
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8.3 Property Insurance -- Building, Improvements and Rental Value.
(a) Building and Improvements. The Insuring Party shall obtain
and keep in force during the term of this Lease a policy or policies
in the name of Lessor, with loss payable to Lessor and to the holders
of any mortgages, deeds or trust or ground leases on the Premises
("Lender(s)"), insuring loss or damage to the Premises. The amount of
such insurance shall be equal to the full replacement cost of the
Premises, as the same shall exist from time to time, or the amount
required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the
unique nature or age of the improvements involved, such latter amount
is less than full replacement cost. If Lessor is the insuring Party,
however, Lessee Owned Alterations and Utility Installations shall be
insured by Lessee under Paragraph 8.4 rather than by Lessor. If the
coverage is available and commercially appropriate, such policy or
policies shall insure against all risks of direct physical loss or
damage (except the perils of flood and/or earthquake unless required
by a Lender), including coverage for any additional costs resulting
from debris removal. Said policy or policies shall also contain waiver
of subrogation, and inflation guard protection causing an increase in
the annual property insurance coverage amount by a factor of not less
than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are
located. If such insurance coverage has a deductible clause, the
deductible amount shall not exceed $5,000 per occurrence, and Lessee
shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1(c).
(b) Rental Value. The Insuring Party shall, in addition, obtain
and keep in force during the term of this Lease a policy or policies
in the name of Lessor, with loss payable to Lessor and Lender(s),
insuring the loss of the full rental and other charges payable by
Lessee to Lessor under this Lease for one (1) year (including all real
estate taxes, insurance costs, and any scheduled rental increases).
Said insurance shall provide that in the event the Lease is terminated
by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of
repairs or replacement of the Premises, to provide for one full year's
loss of rental revenues from the date of any such loss. The amount of
coverage shall be adjusted annually to reflect the projected rental
income, property taxes, insurance premium costs and other expenses, if
any, otherwise payable by Lessee, for the next twelve (12) month
period. Lessee shall be liable for any deductible amount in the event
of such loss.
(c) Adjacent Premises. [OMITTED FROM ORIGINAL.]
(d) Tenant's Improvements. If the Lessor is the Insuring Party,
the Lessor shall not be required to insure Lessee Owned Alterations
and Utility Installations unless the item in question has become the
property of Lessor under the terms of this Lease. If Lessee is the
Insuring Party, the policy carried by Lessee under this Paragraph 8.3
shall insure Lessee Owned Alterations and Utility Installations.
8.4 Lessee's Property Insurance. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Lessee Owned Alterations and Utility
Installations in, on, or about the Premises similar in coverage to that carried
by the Insuring Party under Paragraph 8.3. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property or the restoration of Lessee Owned Alterations
and Utility Installations. Lessee shall be the Insuring Party with respect to
the insurance required by this Paragraph 8.4 and shall provide Lessor with
written evidence that such insurance is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least B+, V, or such other rating as may be required by a Lender having a lien
on the Premises, as set forth in the most current issue of "Best's Insurance
Guide." Lessee shall not do or permit to be done anything which shall invalidate
the insurance policies referred to in this Paragraph 8. If Lessee is the
Insuring Party, Lessee shall cause to be delivered to Lessor certified copies of
policies of such insurance or certificates evidencing the existence and amounts
of such insurance with the insureds and loss payable clauses as required by this
Lease. No such policy shall be cancellable or subject to modification except
after thirty (30) days prior written notice to Lessor. Lessee shall at least
thirty (30) days prior to the expiration of such policies, furnish Lessor with
evidence of renewals or "insurance binders" evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee to Lessor upon demand. If the Insuring Party
shall fail to procure and maintain the insurance required to be carried by the
Insuring Party under this Paragraph 8, the other Party may, but shall not be
required to, procure and maintain the same, but at Lessee's expense.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor ("Waiving Party") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 Indemnity. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground leasor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultants's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
occupancy of the Premises by Lessee, the conduct of Lessee's business, any act,
omission or neglect of Lessee, its agents, contractors, employees or invitees,
and out of any Default or Breach by Lessee in the performance in a timely manner
of any obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Lessor) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding be brought against
Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee. Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit, therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is
less than 50% of the then Replacement Cost of the Premises immediately
prior to such damage or destruction, excluding from such calculation the
value of the land and Lessee Owned Alterations and Utility Installations.
(b) "Premises Total Destruction" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is 50% or
more of the then Replacement Cost of the Premises immediately prior to such
damage or destruction, excluding from such calculation the value of the
land and Lessee Owned Alterations and Utility Installations.
(c) "Insured Loss" shall mean damage or destruction to improvements on
the Premises, other than Lessee Owned Alterations and Utility
Installations, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible
amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building
codes, ordinances or laws, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 Partial Damage -- Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs,
provided that such shortage in proceeds does not exceed $100,000.00. In the
event, however, the shortage in proceeds was due to the fact that, by reason of
the unique nature of the improvements, full replacement cost insurance coverage
was not commercially reasonable and available, Lessor shall have no obligation
to pay for the shortage in insurance proceeds or to fully restore the unique
aspects of the Premises unless Lessee provides Lessor with the funds to cover
same, or adequate assurance thereof, within ten (10) days following receipt of
written notice of such shortage and request therefor. If Lessor receives said
funds or adequate assurance thereof within said ten (10) day period, the party
responsible for making the repairs shall complete them a soon as reasonably
possible and this Lease shall remain in full force and effect. If Lessor does
not receive such funds or assurance within said period, Lessor may nevertheless
elect by written notice to Lessee within ten (10) days thereafter to make such
restoration and repair as is commercially reasonable with Lessor paying any
shortage in proceeds, in which case this Lease shall remain in full force and
effect. If in such case Lessor does not so elect, then this Lease shall
terminate sixty (60) days following the occurrence of the damage or destruction.
Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for
[Illegible] [Illegible]
[Illegible]
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any funds contributed by Lessee to repair any such damage or destruction,
Premises Partial Damage during flood or earthquake shall be subject to Paragraph
9.3 rather than Paragraph 9.2, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee in which event Lessee shall make the repairs at Lessee's expense and this
Lease shall continue in full force and effect, but subject to Lessor's rights
under Paragraph 13). Lessor may at Lessor's option, either: (i) repair such
damage as soon as reasonably possible at Lessor's expense, in which event this
Lease shall continue in full force and effect, or (ii) give written notice to
Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage or Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessees commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6.
9.5 Damages Near End of Term. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an insured Loss. Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee or Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration or the time provided in such option for its exercise,
whichever is earlier ("Exercise Period"), (i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty (60) day
period following the occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within ten (10) days after the expiration
of the Exercise Period, notwithstanding any term or provision in the grant of
option to the contrary.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage--insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, insurance premiums, and other
charges, if any, payable by Lessee hereunder for the period during which
such damage, its repair or the restoration continues (not to exceed the
period for which rental value insurance is required under Paragraph
8.3(b)), shall be abated in proportion to the degree to which Lessee's use
of the Premises is impaired. Except for abatement of Base Rent, Real
Property Taxes, insurance premiums, and other charges, if any, as
aforesaid, all other obligations of Lessee hereunder shall be performed by
Lessee, and Lessee shall have no claim against Lessor for any damage
suffered by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall accrue. Lessee may, at
any time prior to the commencement of such repair or restoration, give
written notice to Lessor and to any Lenders of which Lessee has actual
notice of Lessee's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such
notice to Lessor and such Lenders and such repair or restoration is not
commenced within thirty (30) days after receipt of such notice, this Lease
shall terminate as of the date specified in said notice. If Lessor or a
Lender commences the repair or restoration of the Premises within thirty
(30) days after receipt of such notice, this Lease shall continue in full
force and effect. "Commence" as used in this Paragraph shall mean either
the unconditional authorization of the preparation of the required plans,
or the beginning of the actual work on the Premises, whichever first
occurs.
9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable Law
and this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease as of
the date sixty (60) days following the giving of such notice. In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee's commitment to pay for the
investigation and remediation of such Hazardous Substance Condition totally at
Lessee's expense and without reimbursement from Lessor except to the extent of
an amount equal to twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with the funds required of
Lessee or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full force
and effect and Lessor shall proceed to make such investigation and remediation
as soon as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligations under this Lease to the same extent as provided in
Paragraph 9.6(a) for a period of not to exceed twelve (12) months.
9.8 Termination--Advance Payment. Upon termination of this Lease pursuant
to this Paragraph 9, an equitable adjustment shall be made concerning advance
Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,
in addition, return to Lessee so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waive Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 (a) Payment of Taxes. Lessee shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Premises during the term of this
Lease. Subject to Paragraph 10.1(b), all such payments shall be made at least
ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such proration. If Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor
therefor upon demand.
(b) Advance Payment. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right,
at Lessor's option, to estimate the current Real Property Taxes applicable
to the Premises and to require such current year's Real Property Taxes to
be paid in advance to Lessor by Lessee, either: (i) in a lump sum amount
equal to the installment due, at least twenty (20) days prior to the
applicable delinquency date, or (ii) monthly in advance with the payment of
the Base Rent. If Lessor elects to require payment monthly in advance, the
monthly payment shall be that equal monthly amount which, over the number
of months remaining before the month in which the applicable tax
installment would become delinquent (and without interest thereon), would
provide a fund large enough to fully discharge before delinquency the
estimated installment of taxes to be paid. When the actual amount of the
applicable tax bill is known, the amount of such equal monthly advance
payment shall be adjusted as required to provide the fund needed to pay the
applicable taxes before delinquency. If the amounts paid to Lessor by
Lessee under the provisions of this Paragraph are insufficient to discharge
the obligations of Lessee to pay such Real Property Taxes as the same
become due, Lessee shall pay to Lessor, upon Lessor's demand, such
additional sums as are necessary to pay such obligations. All moneys paid
to Lessor under this Paragraph may be intermingled with other moneys of
Lessor and shall not bear interest. In the event of a Breach by Lessee in
the performance of the obligations of Lessee under this Lease, then any
balance of funds paid to Lessor under the provisions of this Paragraph may,
subject to proration as provided in Paragraph 10.1(a), at the option of
Lessor, be treated as an additional Security Deposit under Paragraph 5.
10.2 Definition of "Real Property Taxes." As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in applicable law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Premises or in the improvements thereon, the execution of
this Lease, or any modification, amendment or transfer thereof, and whether or
not contemplated by the Parties.
10.3 Joint Assessment. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuations
[Illegible] [Illegible]
[Illegible]
Page 5
<PAGE>
assigned in the assessor's work _______ or such other information as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.4 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b).
11. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"assignment") or sublet all or any part of Lessee's interest in this Lease
or in the Premises without Lessor's prior written consent given under and
subject to the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of
twenty-five percent (25%) or more of the voting control of Lessee shall
constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a
formal assignment or hypothecation of this Lease or Lessee's assets occurs,
when results or will result in a reduction of the Net Worth of Lessee, as
hereinafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Lessee as it was represented to Lessor
at the time of the execution by Lessor of this Lease or at the time of the
most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, at whichever time said Net Worth of Lessee was or is greater,
shall be considered an assignment of this Lease by Lessee to which Lessor
may reasonably withhold its consent. "Net Worth of Lessee" for purposes of
this Lease shall be the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles consistently
applied.
(d) An assignment of subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor
elects to treat such unconsented to assignment or subletting as a
noncurable Breach. Lessor shall have the right to either: (i) terminate
this Lease, or (ii) upon thirty (30) days written notice ("Lessor's
Notice"), increase the monthly Base Rent to fair market value or one
hundred ten percent (110%) of the Base Rent then in effect, whichever is
greater. Pending determination of the new fair market rental value, if
disputed by Lessee, Lessee shall pay the amount set forth in Lessor's
Notice, with any overpayment credited against the next installment(s) of
Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon
the determination thereof. Further, in the event of such Breach and market
value adjustment, (i) the purchase price of any option to purchase the
Premises held by Lessee shall be subject to similar adjustment to the then
fair market value (without the Lease being considered an encumbrance or any
deduction for depreciation or obsolescence, and considering the Premises at
its highest and best use and in good condition), or one hundred ten percent
(110%) of the price previously in effect, whichever is greater, (ii) any
index-oriented rental or price adjustment formulas contained in this Lease
shall be adjusted to require that the base index be determined with
reference to the index applicable to the time of such adjustment, and (iii)
any fixed rental adjustments scheduled during the remainder of the Lease
term shall be increased in the same ratio as the new market rental bears to
the Base Rent in effect immediately prior to the market value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed
by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such
assignment nor the acceptance of any rent or performance shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the
Default or Breach by Lessee of any of the terms, covenants or conditions of
this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee
or to any subsequent or successive assignment or subletting by the
sublessee. However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable on the Lease or sublease and
without obtaining their consent, and such action shall not relieve such
persons from liability under this Lease or sublease.
(d) In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or any one else responsible for the performance of the Lessee's
obligations under this Lease, including the sublessee, without first
exhausting Lessor's remedies against any other person or entity responsible
therefor to Lessor, or any security held by Lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination
as to the financial and operational responsibility and appropriateness of
the proposed assignee or sublessee, including but not limited to the
intended use and/or required modification of the Premises, if any, together
with a non-refundable deposit of $1,000 or ten percent (10%) of the current
monthly Base Rent, whichever is greater, as reasonable consideration for
Lessor's considering and processing the request for consent. Lessee agrees
to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for
the benefit of Lessor, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said assignment or
sublease, other than such obligations as are contrary to or inconsistent
with provisions of an assignment or sublease to which Lessor has
specifically consented in writing.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a
portion of the Premises heretofore or hereafter made by Lessee, and Lessor
may collect such rent and income and apply same toward Lessee's obligations
under this Lease, provided, however, that until a Breach (as defined in
Paragraph 13.1) shall occur in the performance of Lessee's obligations
under this Lease, Lessee may, except as otherwise provided in this Lease,
receive, collect and enjoy the rents accruing under such sublease. Lessor
shall not, by reason of this or any other assignment of such sublease to
Lessor, nor by reason of the collection of the rents from a sublessee, be
deemed liable to the sublessee for any failure of Lessee to perform and
comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a
Breach exists in the performance of Lessee's obligations under this Lease,
to pay to Lessor the rents and other charges due and to become due under
the sublease. Sublessee shall rely upon any such statement and request from
Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary,
Lessee shall have no right or claim against said sublessee, or, until the
Breach has been cured, against Lessor, for any such rents and other charges
so paid by said sublessee to Lessor.*
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in
which event Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not be liable
for any prepaid rents or security deposit paid by such sublessee to such
sublessor or for any other prior Defaults or Breaches of such sublessor
under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of
Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "Default" is defined as a
failure by the Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "Breach"
* SEE ADDENDUM, PARAGRAPH 12.3(a).
<PAGE>
is defined as the occurrence of ______ one or more of the following Defaults,
and, where a grace period for cure after notice is specified herein, the failure
by Lessee to cure such Default prior to the expiration of the applicable grace
period, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy
same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent or any other monetary payment
required to be made by Lessee hereunder, whether to Lessor or to a third
party, as and when due, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required under this Lease,
or the failure of Lessee to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a
period of three (3) days following written notice thereof by or on behalf
of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with Applicable
Law per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the recission of an
unauthorized assignment or subletting per Paragraph 12.1(b), (iv) a Tenancy
Statement per Paragraphs 15 or 37, (v) the subordination or
non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Lessee's obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information
which Lessor may reasonably require or Lessee under the terms of this
Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40
hereof, that are to be observed, complied with or performed by Lessee,
other than those described in subparagraphs (a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written
notice thereof by or on behalf of Lessor to Lessee; provided, however, that
if the nature of Lessee's Default is such that more than thirty (30) days
are reasonably required for its cure, then it shall not be deemed to be a
Breach of this Lease by Lessee if Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(e) The occurrence of any of the following events: (i) The making by
lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. (S)101
or any successor statute thereto (unless in the case of a petition filed
against Lessee, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially
all of Lessee's assets located at the Premises or of Lessee's interest in
this Lease, where possession is not restored to Lessee within thirty (30)
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty
(30) days; provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such provision shall be
of no force or effect, and not affect the validity of the remaining
provisions.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a
guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a guarantor's becoming insolvent or
the subject of a bankruptcy filing, (iv) a guarantor's refusal to honor the
guaranty, or (v) a guarantor's breach of its guaranty obligation on an
anticipatory breach basis, and Lessee's failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such
event, to provide Lessor with written alternative assurance or security,
which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the guarantors that
existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice). Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's check. In the event of a Breach of this Lease by Lessee, as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee: (i) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
prior sentence shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). Efforts by Lessor to mitigate damages caused by Lessee's Default
or Breach of this Lease shall not waive Lessor's right to recover damages under
this Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve therein the right to recover all or any part thereof in a separate suit
for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1(b), (c) or (d) was not previously given, a notice to pay rent
or quit, or to perform or quit, as the case may be, given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(b), (c) or (d). In such case, the applicable grace period
under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer statute
shall run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture in Event Of Breach. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions," shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph shall not be deemed a waiver by Lessor of the provisions of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due. Then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by the holders of any ground lease, mortgage or deed of trust covering the
Premises whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor
has not been performed; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days after such notice are
reasonably required for its performance, then Lessor shall not be in breach of
this Lease if performance is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes
<PAGE>
title or possession, whichever first occurs. If more than ten percent (10%) of
the floor area of the Premises ___________ than twenty-five percent (25%) of the
land area not occupied by any building, is taken by condemnation, Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days after Lessor
shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation, except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment or any amount in excess of such net severance damages required to
complete such repair.
15. Broker's Fee.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this
Lease.
15.2 [OMITTED FROM ORIGINAL.]
15.3 [OMITTED FROM ORIGINAL.]
15.4 [OMITTED FROM ORIGINAL.]
15.5 Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder (other than the Brokers,
if any named in Paragraph 1.10) in connection with the negotiation of this Lease
and/or the consummation of the transaction contemplated hereby, and that no
broker or other person, firm or entity other than said named Brokers is entitled
to any commission or finder's fee in connection with said transaction. Lessee
and Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.
16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within ten (10) days after
written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Tenancy Statement" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. Lessor's Liability: The term "Lessor" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises, or, if this is
a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined. SEE ADDENDUM,
PARAGRAPH 17
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No prior or Other Agreements: Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character or the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either party.
23. Notices.
23.1 All notices required or permitted by this Lease shall be in writing
and may be delivered in person (by hand or by messenger or courier service) or
may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for the purpose of mailing or delivering notices to
Lessee. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any preceding Default or Breach by
Lessee of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted. Any payment given Lessor by Lessee may be accepted
by Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. SEE ADDENDUM, PARAGRAPH 26.
PAGE 8
<PAGE>
27. Cumulative Remedies. Note _______________ election hereunder shall be deemed
exclusive but shall wherever _______________ be cumulative with all other
remedies at law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. Subordination: Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device") now or
hereafter placed by Lessor upon the real property of which the Premises are a
part to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof Lessee agrees
that the Lenders holding any such Security Device shall have no duty, liability
or obligation to perform any of the obligations of Lessor under this Lease, but
that in the event of Lessor's default with respect to any such obligation,
Lessee will give any Lender whose name and address have been furnished Lessee in
writing for such purpose notice of Lessor's default and allow such Lender thirty
(30) days following receipt of such notice for the cure of said default before
invoking any remedies Lessee may have by reason thereto. If any Lender shall
elect to have this Lease and/or any Option granted hereby superior to the lien
of its Security Device and shall give written notice thereof to Lessee this
Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure or a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission or any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior Lessor or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. Attorney's Fees. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term, "Prevailing Party"
shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorney's fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the preparation and service of notices or
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the building of which
they are a part, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or building any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred twenty (120) days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first
having obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. [OMITTED FROM ORIGINAL.] SEE ADDENDUM, PARAGRAPH 34.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act
by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor's actual reasonable costs and expenses (including but
not limited to architects', attorneys', engineers' or other consultants'
fees) incurred in the consideration of, or response to, a request by Lessee
for any Lessor consent pertaining to this Lease or the Premises, including
but not limited to consents to an assignment, a subletting or the presence
or use of a Hazardous Substance, practice or storage tank, shall be paid by
Lessee to Lessor upon receipt of an invoice and supporting documentation
therefore. Subject to Paragraph 12.2(e) (applicable to assignment or
subletting), Lessor may, as a condition to considering any such request by
Lessee, require that Lessee deposit with Lessor an amount of money (in
addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will incur in considering
and responding to Lessee's request. Except as otherwise provided, any
unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or
subletting of the Premises by Lessee shall not constitute an
acknowledgement that no Default or Breach by Lessee of this Lease exists,
nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein
any particular condition to Lessor's consent shall not preclude the
imposition by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter
for which consent is being given.
37. Guarantor. [OMITTED FROM ORIGINAL.]
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease.
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other property of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 Options Personal To Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercise by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
<PAGE>
39.3 Multiple Options. In the event that Lessee has any Multiple Options to
extend or renew this Lease _______________ Option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary; (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1
and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due the Lessor from Lessee is unpaid
(without regard to whether notice thereof is given Lessee), or (iii) during
the time Lessee is in Breach of this Lease, or (iv) in the event that
Lessor has given to Lessee three (3) or more notices of Default under
Paragraph 13.1, whether or not the Defaults are cured, during the twelve
(12) month period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of the Option, if, after such exercise and during
the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to
Lessee), or (ii) Lessor gives to Lessee three (3) or more notices of
Default under Paragraph 13.1 during any twelve (12) month period, whether
or not the Defaults are cured, or (iii) if Lessee commits a Breach of this
Lease.
40. [OMITTED FROM ORIGINAL.]
41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. Offer. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY
IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE
WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this lease at the place or the dates specified
above to their respective signatures.
<TABLE>
<CAPTION>
<S> <C>
Executed at San Jose, California Executed at: Sunnyvale, California
-------------------------------- --------------------
On December 21, 1994 On December 20, 1994
----------------------------------------- -----------------------------
by LESSOR: by LESSEE:
OAKMEAD PARKWAY PROPERTIES, a California general PHILIPS SEMICONDUCTORS INC.
-------------------------- --------------------
partnership a Delaware corporation
-----------
By: MacMillan Partnership, a By:/s/ Ross Anderson
-------------------------
California general partnership, Name: Printed: Ross Anderson
-------------
Its general partner Title: Vice President
--------------
By: /s/ Donald H. MacMillan
---------------------------------------- By:
DONALD H. MACMILLAN, as Trustee for the ---------------------------
Donald H. MacMillan 1986 Trust UTA dated
September 12, 1986, Name Printed:
its general partner ----------------
Title:
-----------------------
Address:
---------------------
Tel. No. (___) Fax No.
------ ---
</TABLE>
Page 10
NOTICE: These forms are often modified to meet changing requirements of law
and industry needs. Always write or call to make sure you are
utilizing the most current form: American Industrial
Real Estate Association, 345 South Figueroa Street,
Suite M-1 Los Angeles, CA 90071.(213)687-8777. Fax No. (213)687-8616.
(C) Copyright 1990 - By American Industrial Real Estate Association.
All rights reserved. No part of these works may be reproduced in any
form without permission in writing.
<PAGE>
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET DATED
DECEMBER 20, 1994 BETWEEN OAKMEAD PARKWAY PROPERTIES, A CALIFORNIA GENERAL
PARTNERSHIP ("LESSOR") AND PHILIPS SEMICONDUCTORS, A DIVISION OF PHILIPS
ELECTRONICS NORTH AMERICA CORPORATION, A DELAWARE CORPORATION ("LESSEE").
2. Premises.
2.2 Condition. (continued) In addition to the foregoing, Lessor shall
warrant the good working condition of the existing heating, ventilating and air
conditioning ("HVAC") equipment in the Premises for the first six (6) months
following the Early Possession Date, except that Lessee shall remain responsible
for all routine maintenance and repair of the HVAC equipment during such period,
and Lessor's warranty shall not apply to any repairs and/or replacements of the
HVAC equipment which are required due to Lessee's failure to properly maintain
such equipment. Lessor shall remove an existing 40-ton air conditioning unit
from the roof of the building and shall repair at Lessor's expense any damage to
the roof caused by such removal. Lessor shall not unreasonably interfere with
Lessee's use of the Premises in removing such unit from the roof of the
building.
3. Term.
3.1 Term. (continued) Notwithstanding the provisions of Paragraph 3.1 to
the contrary, if the Tenant Improvements to be completed by Lessee pursuant to
the Work Letter Agreement attached as EXHIBIT B to the Lease are substantially
---------
completed prior to February 15, 1995, the Commencement Date shall be the date of
substantial completion of the Tenant Improvements and the Expiration Date shall
be five (5) years from the Commencement Date; in no event, however, shall the
Commencement Date be later than February 15, 1995. For purposes of this Lease,
the date of substantial completion shall be the date the City of Sunnyvale has
approved the Tenant Improvements constructed by Lessee pursuant to EXHIBIT B in
---------
accordance with its building code, evidenced by its completion of a final
inspection and written approval of such improvements as so completed in
accordance with the building permit issued for such improvements. If the
Commencement Date of this Lease is any date other February 15, 1995, Lessor and
Lessee shall execute a memorandum confirming the actual Commencement Date and
Expiration Date of this Lease.
4. Rent.
4.2 Base Rent Adjustments. Commencing with the first day of the
thirty-first (31st) month of the term, the Base Rent shall be increased to Forty
Thousand Sixty-Six and no/100ths Dollars ($40,066.00) per month.
6. Use.
6.2 Hazardous Substances. (continued)
(d) Lessee acknowledges receipt of a copy of that certain Ground Water
Grab Sample Date Report dated September 13, 1994 that was prepared for
Lessor by Environ. Lessor shall indemnify, defend, protect and hold Lessee,
its officers, directors, agents and employees harmless from and against any
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits and attorneys' fees and consultants' fees arising out of or
involving any Hazardous Substances in, on or about the Premises prior to
the Early Possession Date. Lessor's obligations shall include the effects
of any contamination or injury to person, property or the environment, and
the cost of investigation (including consultants' and attorneys' fees and
testing), removal, restoration, and/or abatement thereof, or of any
contamination therein involved and shall survive the expiration or earlier
termination of this Lease. Lessor's indemnification obligations under this
paragraph shall extend only to Lessee's out-of-pocket costs, expenses and
fees and third party claims made against Lessee, but shall not include any
consequential or incidental damages such as lost profits or any loss of
rental value of the Premises suffered or allegedly suffered by Lessee or
anyone claiming under Lessee.
6.3 Lessee's Compliance with Law. (continued) Lessee acknowledges that the
Premises are subject and this Lease is subordinate to the terms and conditions
of the Declaration of Covenants, Conditions and Restrictions for Oakmead
Village, recorded December 28, 1973, at Book 0704, Page 601, Official Records of
Santa Clara County, as amended (the "CC&R's"). Lessee acknowledges that it has
read the CC&R's and knows the contents thereof. Throughout the term, Lessee
shall faithfully and timely perform and comply with the CC&R's and any
modification or amendments thereof.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(b) Lessee shall have the right, at Lessee's election, to maintain the
HVAC equipment in the Premises through its own facilities department
provided that (i) the HVAC equipment shall be maintained in accordance with
manufacturer recommendations, including replacement of filters, oiling and
lubricating of machinery, parts replacement, adjustment of drive belts, oil
changes
-1-
<PAGE>
and other preventive maintenance, including annual maintenance of duct work,
interior unit drains and caulking at sheet metal, and recaulking or jacks and
vents on an annual basis, and (ii) the HVAC equipment shall be inspected
annually by a reputable HVAC contractor approved by Lessor and Lessee shall
submit a copy of the contractor's report and recommendations to Lessor upon
receipt thereof.
7.2 Lessor's Obligations. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3
(relating to compliance with covenants, restrictions and building codes), 9
(relating to destruction of the Premises), and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that, other than the
foundation, subflooring, the structural elements of the exterior walls and
interior load-bearing walls, and the structural elements of the roof, Lessor
shall have no obligation, in any manner whatsoever, to repair and maintain the
Premises, the improvements located thereon, or the equipment therein, all of
which obligations are intended to be that of the Lessee under Paragraph 7.1
hereof. If, however, any repairs or replacements of the roof, the HVAC
equipment, or the parking lot, are required during the term of this Lease for
any reason other than the negligence or willful misconduct of Lessee, its
agents, employees or contractors, and such repair or replacement constitutes a
capital expenditure under generally accepted accounting principles, the cost of
such repair or replacement shall be paid initially by Lessor. The cost of such
repair or replacement shall be amortized over the useful life of the improvement
which is repaired or replaced, with interest thereon at an annual rate equal to
Lessor's cost of obtaining such funds, and Lessee shall pay Lessor, as
Additional Rent, the monthly amortized cost of such repair or replacement.
12. Assignment and Subletting.
12.3 Additional Terms and Conditions Applicable to Subletting.
(a) (continued) Notwithstanding the foregoing to the contrary, Lessee
shall pay to Lessor fifty percent (50%) of any rent or other consideration
paid to Lessee by any assignee or sublessee that is in excess of the Base
Rent payable by Lessee under this Lease, after deducting therefrom,
reasonable brokerage commissions, attorneys fees, and advertising costs
incurred by Lessee to procure such assignment or sublease.
17. Lessor's Liability. (continued) If, as a consequence of a default by Lessor
under this Lease, Lessee recovers a money judgment against Lessor, 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 Lessor
in the Premises and out of rent or other income from such property received by
Lessor or out of consideration received by Lessor from the sale or other
disposition of all or any part of Lessor's right, title or interest in the
Premises, and neither Lessor nor its agents shall be liable for any deficiency.
26. No Right to Holdover. (continued) If, however, Lessee remains in possession
of all or any part of the Premises after the expiration of the term, without the
express consent of Lessor, such tenancy shall be month-to-month only and shall
not constitute a renewal or extension for any further term. Any such holdover
shall be subject to the terms, conditions, and covenants contained in this Lease
except that Base Rent shall be increased to an amount equal to one hundred
twenty-five percent (125%) of the Base Rent payable during the last month of the
term; any other sums due under this Lease shall be payable in the amount and at
the times specified in the Lease. If Lessee fails to surrender the Premises upon
the expiration of the term despite demand to do so by Lessor, Lessee shall
indemnify and hold Lessor harmless from all loss or liability, including without
limitation any claim made by a succeeding tenant, resulting from Lessee's
failure to surrender.
30. Subordination; Attornment; Non-Disturbance.
30.3 Non-Disturbance. (continued) Lessor shall use diligent efforts to
obtain a non-disturbance agreement from any Lender holding a Security Device
upon the Premises as of the date of this Lease.
34. Signs. (continued) The size, design, color and other physical aspects of any
Lessee identification sign shall be subject to the CC&R's and any appropriate
municipal or other governmental approvals. Prior to installing Lessee's signage
Lessee shall deliver to Lessor copies of all plans and specifications submitted
to the City of Sunnyvale in connection with obtaining the City's approval of
Lessee's signage, together with copies of the approval(s) granted by the City.
Lessee shall be solely responsible for the repair and maintenance of any signage
installed on the Premises by or at Lessee's request. The cost of any approved
signage, its installation, maintenance, repair and removal shall be paid by
Lessee. If Lessee fails to remove the signage from the Premises upon termination
of this Lease, Lessor may do so at Lessee's expense and Lessee's reimbursement
to Lessor for such amounts shall be deemed Additional Rent.
-2-
<PAGE>
49. Option to Extend.
49.1 Option Periods. Provided that Lessee is not in default hereunder,
either at the time of exercise or at the time the extended term commences,
Lessee shall have the option to extend the Original Term of this Lease for three
(3) additional periods of three (3) years each ("Option Periods") on the same
terms, covenants and conditions provided herein, except that upon each such
renewal the Base Rent due hereunder shall be determined pursuant to Paragraph
49.2. Lessee shall exercise each option by giving Lessor written notice ("Option
Notice") at least one hundred eighty (180) days but not more than two hundred
seventy (270) days prior to the Expiration Date of the Original Term of this
Lease, or the then current Option Period, as the case may be.
49.2 Option Period Base Rent. The Base Rent for each Option Period shall be
determined as follows:
(a) The parties shall have fifteen (15) days after Lessor
receives each Option Notice within which to agree on Base Rent for the
Option Period in question based upon ninety-five percent (95%) of then
fair market rental value of the Premises as defined in Paragraph
49.2(b). If the parties agree on the Base Rent for that Option Period
within fifteen (15) days, they shall immediately execute an amendment
to this Lease stating the Base Rent for that Option Period. If the
parties are unable to agree on the Base Rent for an Option Period
within such fifteen (15) day period, then, the Base Rent for that
Option Period shall be the greater of ninety-five percent (95%) or
then current fair market rental value of the Premises as determined in
accordance with Paragraph 49.2(e) or the Base Rent payable under the
Lease for the last month of the Original Term or the prior Option
Period, as applicable.
(b) The "then fair market rental value of the Premises" shall be
defined to mean the fair market rental value of the Premises as of the
commencement of the Option Period in question, taking into
consideration the uses permitted under this Lease, the quality, size,
design and location of the Premises, and the rent for comparable
buildings located in the City of Sunnyvale.
(c) Within seven (7) days after the expiration of the fifteen
(15) day period set forth in Paragraph 49.2(a), each party, at its
cost and by giving notice to the other party, shall appoint a real
estate appraiser with at least five (5) years' full-time commercial
appraisal experience in the area in which the Premises are located to
appraise and set the then fair market rental value of the Premises for
the Option Period in question. If a party does not appoint an
appraiser within ten (10) days after the other party has given notice
of the name of is appraiser, the single appraiser appointed shall be
the sole appraiser and shall set the then fair market rental value of
the Premises. If the two (2) appraisers are appointed by the parties
as stated in this paragraph, they shall meet promptly and attempt to
set the then fair market rental value of the Premises. If they are
unable to agree within thirty (30) days after the second appraiser has
been appointed, they shall attempt to elect a third appraiser meeting
the qualifications stated in this paragraph within ten (10) days after
the last day the two (2) appraisers are given to set the then fair
market rental value of the Premises. If they are unable to agree on
the third appraiser, either of the parties to this Lease, by giving
ten (10) days' notice to the other party, can apply to the then
Presiding Judge of the Santa Clara County Superior Court, for the
selection of a third appraiser who meets the qualifications stated in
this paragraph. Each of the parties shall bear one-half (1/2) of the
cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either party.
Within thirty (30) days after the selection of the third appraiser, a
majority of the appraisers shall set the then fair market rental value of the
Premises. If a majority of the appraisers are unable to set the then fair market
rental value of the Premises within the stipulated period of time, the three (3)
appraisals shall be added together and their total divided by three (3); the
resulting quotient shall be the then fair market rental value of the Premises.
If, however, the low appraisal and/or the high appraisal are/is more than
ten percent (10%) lower and/or higher than the middle appraisal, the low
appraisal and/or the high appraisal shall be disregarded. If only one appraisal
is disregarded, the remaining two (2) appraisals shall be added together and
their total divided by two (2); the resulting quotient shall be the then fair
market rental value of the Premises. If both the low appraisal and the high
appraisal are disregarded as stated in this paragraph, the middle appraisal
shall be the then fair market rental value of the Premises.
After the then fair market rental value of the Premises has been set, the
appraisals shall immediately notify the parties and the parties shall amend this
lease within fifteen (15) days of such notice to set forth the Base Rent for the
Option Period in question.
50. Parking. To accommodate Lessee's request for additional parking, Lessor is
currently negotiating with the Santa Clara Valley Water District (the
"District") for the lease or other right to use lands adjacent to the Premises
for the construction of approximately forty six (46) additional parking spaces
for Lessee's use. Lessor shall use reasonable best efforts to obtain such
parking rights for Lessee's use, however Lessor's failure to obtain such rights
shall not be deemed a breach of this
<PAGE>
Lease. The cost to construct the surface parking facilities shall be amortized
over the Original Term, with interest thereon at the rate of ten percent (10%)
per annum, and paid by Lessee monthly as Additional Rent provided, however, that
any construction costs in excess of $35,000.00 shall be paid by Lessor and shall
not be billed to Lessee as Additional Rent. Lessor shall provide Lessee with an
itemized statement of the actual costs incurred by Lessor to construct the
surface parking facilities and Lessor's calculation of the Additional Rent to be
paid by Lessee on a monthly basis. Lessee shall have the right to review and
verify the costs incurred by Lessor to construct such additional parking
facilities. Upon Lessee's receipt thereof, Lessor and Lessee shall amend this
Lease to confirm the Additional Rent to be paid by Lessee. In addition, if the
District requires any rent or other consideration in payment for the right to
use these adjacent lands, such rent or other consideration shall be paid by
Lessee as Additional Rent. If the District will require the payment of rent or
other consideration for the right to use the adjacent lands, Lessor shall notify
Lessee as soon as possible of the rent or other consideration required by the
District. Lessee shall have ten (10) days after receipt of such notice to notify
Lessor that, due to the rent or other consideration required by the District,
Lessee has elected to forego such additional parking spaces and Lessor may
discontinue negotiations with the District.
LESSOR LESSEE
------ ------
Oakmead Parkway Properties, a Philips Semiconductors, Inc.
California general partnership a Delaware corporation
By MacMillan Partnership, a By: /s/ Ross Anderson
California general partnership, -----------------------------
General Partner
Its: Executive Vice President
-----------------------------
By /s/ Donald H. MacMillan
-------------------------
Donald H. MacMillan, Trustee
of the Donald H. MacMillan
1986 Trust UTA dated
September 12, 1986,
General Partner
<PAGE>
THE PREMISES
------------
All that certain real property situated in the City of Sunnyvale, County of
Santa Clara, State of California, described as follows:
ALL OF PARCEL 2, as shown upon the Parcel Map entitled, "Parcel Map, being all
of Parcel A, as shown on the Parcel Map recorded in Book 353 of Maps, at page
14, Santa Clara County Records", filed for record in the office of the Recorder
of the County of Santa Clara, State of California, on July 27, 1977 in Book 401
of Maps, at page 8.
EXCEPTING FROM THE ABOVE DESCRIBED PARCEL, that portion of said property lying
below a depth of 500 feet, measured vertically from the contour of the surface
thereof, as reserved in the Deed Southern Pacific Realco, a partnership,
recorded March 2, 1973 in Book 0260 at page 419 of Official Records of Santa
Clara County provided however, that said Grantor, its successors and assigns,
shall not have the right for any and all purposes to enter upon, into or through
the surface or that portion of said property lying above 500 feet, measured
vertically from the contour of the surface of said property.
EXHIBIT A-1
-----------
<PAGE>
THE PREMISES
[ DIAGRAM OF PREMISES ]
EXHIBIT A-2
-----------
<PAGE>
Exhibit B
WORK LETTER AGREEMENT
---------------------
In connection with the Tenant Improvements to be installed in the Premises
the parties hereby agree as follows:
1. Plans and Specifications. Lessee shall prepare and submit to Lessor for
------------------------
Lessor's review and approval a space plan for Lessee's proposed Tenant
Improvements to the Premises. Within five (5) business days after receipt of
Lessee's space plan, Lessor shall notify Lessee of Lessor's approval or
disapproval thereof, specifying in reasonable detail the basis for Lessor's
disapproval, if applicable. Lessee shall retain a licensed architect for the
completion of final working architectural and engineering plans and
specifications for the interior improvements based upon the approved space plan
("Final Plans and Specifications"). Lessor shall have the right to approve the
architect selected by Lessee, which approval shall not be unreasonably withheld
or delayed. Within ten (10) business days after Lessor's receipt of the Final
Plans and Specifications, Lessor shall notify Lessee of Lessor's approval or
disapproval thereof, specifying in reasonable detail the basis for Lessor's
disapproval, if applicable. No revisions to the approved Final Plans and
Specifications shall be made by Lessee unless approved in writing by Lessor.
2. Permits and Approvals. Lessee shall be responsible for obtaining all
---------------------
necessary permits and approvals (including the building and occupancy permits)
and other authorizations from the City of Sunnyvale or other governmental
agencies in connection with the construction of the Tenant Improvements. The
cost of all such permits and approvals, including inspection, outside plan
check, and other building fees required to obtain any such permits, shall be
paid from the Tenant Improvements Allowance. Upon completion of the Tenant
Improvements, Lessee shall provide Lessor with copies of all building, occupancy
and other permits obtained by Lessee in connection with the construction of the
Tenant Improvements.
3. Construction and Work Quality. The Tenant Improvements shall be
-----------------------------
constructed by Lessee in a good and workmanlike manner, in accordance with the
Final Plans and Specifications approved by Lessor, and in compliance with all
applicable laws, pursuant to a construction contract with a general contractor
approved by Lessor, which approval shall not be unreasonably withheld or
delayed. Lessee shall keep Lessor fully informed of all progress and shall allow
representatives of Lessor to observe, inspect and monitor the construction of
the Tenant Improvements. Lessee shall arrange for the Tenant Improvements to be
fully warranted (labor and materials) by the general contractor, sub-contractor,
or appropriate supplier, as the case may be, for a period of one (1) year after
the completion thereof.
4. Tenant Improvements Cost. The Tenant Improvements cost ("Tenant
------------------------
Improvements Costs") to be paid from the Tenant Improvements Allowance shall
include, but not be limited to:
(a) All space planning fees and costs of preliminary and final
architectural and engineering plans and specifications for the Tenant
Improvements, and engineering costs associated with completion of the State
of California energy utilization calculations under Title 24 legislation;
(b) All costs of obtaining building permits and other necessary
authorizations from the City of Sunnyvale;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings; and
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not
limited to, a construction management fee payable to Lessor's managing
agent for supervision of construction of the Tenant Improvements, the
construction fee for overhead and profit and the cost of all on-site
supervisory and administrative staff, office, equipment and temporary
services rendered by Lessee's contractor in connection with construction of
the Tenant Improvements.
In no event, however, shall the Tenant Improvements Allowance be used for any
costs of procuring, constructing or installing in the Premises any of Lessee's
personal property.
5. Payment of Tenant Improvements Costs.
-------------------------------------
(a) Lessor shall provide an allowance for the planning and
construction of the Tenant Improvements in the amount of Two Hundred
Eighty-Six Thousand Four Hundred Sixty-Eight and no/100ths Dollars
($286,468.00) (the "Tenant Improvements Allowance"). The Tenant
Improvements Allowance shall be the maximum contribution by Lessor for the
Tenant Improvements Cost, as defined in Paragraph 4; any Tenant
Improvements Costs in excess of the Tenant Improvements Allowance shall be
paid directly by Lessee.
EXHIBIT B
---------
<PAGE>
(b) The Tenant Improvements Allowance shall be paid to Lessee on a
progress payment basis within thirty (30) days after Lessor's receipt of
(i) itemized invoices for the Tenant Improvements cost to be paid, and (ii)
a conditional waiver and release upon progress payment from the general
contractor and the applicable subcontractors. Lessor shall pay its pro rata
share of each progress payment based upon the ratio of the Tenant
Improvements Allowance to the total Tenant Improvements Cost, as such ratio
may be adjusted from time to time to account for any increase in the total
Tenant Improvements Cost. Lessee shall be responsible for the balance of
the progress payment due to the general contractor. A ten percent (10%)
retainage shall be withheld from each progress payment. Lessor shall pay
Lessor's pro rata share of such retainage within thirty (30) days after a
Notice of Completion has been recorded for the Tenant Improvements and
Lessor has received an unconditional release and waiver upon final payment
from the general contractor and each subcontractor and supplier engaged in
connection with the Tenant Improvements.
6. Insurance. During construction of the Tenant Improvements, Lessee shall
---------
be required to carry workers' compensation insurance in the statutory limits,
builder's all -risk insurance, and liability insurance satisfying the
requirements of Paragraphs 8.2(a) and 8.5 of the Lease.
EXHIBIT B
---------
<PAGE>
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE is entered into between OAKMEAD PARKWAY
PROPERTIES, a California general partnership, ("Lessor"), and PHILIPS
SEMICONDUCTORS, INC., a Delaware corporation ("Lessee").
R E C I T A L S
A. Pursuant to that certain Standard Industrial/Commercial Single Tenant Lease
dated December 20, 1994, the parties hereto entered into a Lease agreement (the
"Lease") for a five (5) year term with an expiration date of February 14, 2000
and pursuant to the First Amendment to Lease dated August 20, 1996, Lessee
assumed the obligations of Lessor under the Parking Lease with the Santa Clara
Valley Water District (the "District") to lease such adjacent lands for
approximately four (4) years, expiring February 15, 2000.
B. Pursuant to paragraph 49, Option to Extend, the parties hereto desire to
amend the Lease to extend the tenancy for a thirty-six (36) month term to expire
on February 14, 2003 at a monthly rental as shown in paragraph 2 below. Also,
the parties hereto now desire to amend the First Amendment to Lease to extend
the Lease with the Santa Clara Valley Water District for a thirty-six (36) month
term to expire on February 15, 2003.
NOW, THEREFORE, in consideration for the terms, covenants and conditions
contained herein, the parties hereto agree as follows:
1. Paragraph 1.3 of the Lease is hereby modified to read as follows:
"1.3 Term: Thirty-six (36) months commencing on February 15, 2000 and
ending February 14, 2003."
2. Paragraph 1.5 of the Lease is hereby modified to read as follows:
"1.5 Base Rent: The Base rent is as follows, payable on the first day
of each month commencing February 15, 2000:
Months 1-12 $92,403.00
Months 13-24 $95,166.00
Months 25-36 $98,011.00
<PAGE>
3. Reference First Amendment. Lessor has extended the term of the Lease
Agreement between the Santa Clara Valley Water District and Oakmead
Parkway Properties to expire February 15, 2003 per Exhibit "A". Lessee
shall assume the obligations of Lessor under said Parking Lease.
4. As-Is. Tenant hereby acknowledges that:
-----
A. Landlord has no obligation to improve or modify Premises pursuant
to the terms of this Second Amendment and Landlord has fully performed all
of Landlord's obligations to improve or modify the Premises in accordance
with the terms of the Lease; and
B. Tenant shall continue in possession of the Premises "As-Is" subject
to the terms and conditions of the Lease without any representation or
warranty by Landlord, either expressed or implied, concerning the
condition, suitability or fitness for any purpose.
5. Brokers. Tenant warrants and represents that, except for CPS
-------
representing Landlord and Colliers representing Tenant, Tenant has had
no dealings with any real estate broker or agent in connection with
the negotiation of this Second Amendment and that it knows of no other
real estate broker, agent or other person who is or might be entitled
to a commission or fee in connection with this Second Amendment.
Tenant shall indemnify and hold harmless Landlord from and against any
and all liabilities or expenses arising out of claims made by any
broker or individual for commissions or fees arising out of or
resulting from representation of Tenant's interest in connection with
the negotiation of this Second Amendment.
6. General
A. Effect of Second Amendment; Ratification: Except to the extent the
-----------------------------------------
Lease is modified by this Second Amendment, the terms and provisions of the
Lease shall remain unmodified and in full force and effect. In the event of
conflict between the terms of the Lease and the terms of this Second
Amendment, the terms of this Second Amendment shall prevail.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to
Lease the respective dates set forth below.
LESSOR LESSEE
OAKMEAD PARKWAY PROPERTIES, PHILIPS SEMICONDUCTORS
A California general partnership A Delaware corporation
By MacMillan Partnership, By /s/ [ILLEGIBLE]
A California general partnership,
Its general partner Printed Name Mike Hamper
Title: Vice President NARSO
By /s/ Donald H. MacMillan
DONALD H. MACMILLAN, Trustee of the
Donald H. MacMillan Trust UTA dated
September 12, 1986, general partner
GUARANTOR'S CONSENT
-------------------
The undersigned, PHILIPS ELECTRONICS NORTH AMERICA CORPORATION, hereby (i)
acknowledges this Second Amendment, (ii) consents to the changes and additions
to the Lease referenced herein and (iii) agrees to guarantee performance by
Lessee of the provisions of the Lease as modified by this Second Amendment in
accordance with the terms of that Lease Guaranty dated December 28, 1994,
executed by the undersigned.
PHILIPS ELECTRONICS NORTH AMERICA
CORPORATION, A Delaware Corporation
By: /s/ Illegible
---------------------------
Its: Regional Executive
--------------------------
<PAGE>
File: A/C Leases
Oakmead Parkway
Properties
X-File: 2010-174
LEASE AGREEMENT
(Nonresidential)
THIS Lease is made this 1st day of November 1999 at San Jose,
California, by and between the SANTA CLARA VALLEY WATER DISTRICT, hereinafter
referred to as "District," and OAKMEAD PARKWAY PROPERTIES, a General
Partnership, hereinafter referred to as "Lessee."
IT IS AGREED between the parties hereto as follows:
1. Premises: District hereby leases to Lessee, and Lessee hires from District,
on the terms and conditions hereinafter set forth, that certain piece or
parcel of real property (hereinafter "the premises") shown on "Exhibit A,"
attached hereto, situated in the City of Sunnyvale, County of Santa Clara,
State of California.
2. Term: This Lease shall commence February 15, 2000 and terminate February
14, 2003.
3. Rental Amount: The rental for the term of this Lease shall be paid by
Lessee to District as follows:
Annual rent in the amount of $13,284.00 shall be paid in quarterly
installments of $3,321.00 in advance of March 1, 2000, June 1, 2000,
September 1, 2000, and December 1, 2000. Rent for the period February 15,
2000 through February 29, 2000 is included in the rental payment made
December 1, 1999 under the existing lease as this Lease is the exercise of
an option to extend said existing lease for an additional three-year term.
Thereafter, rent, as adjusted below, shall be paid quarterly in advance of
each March 1, June 1, September 1 and December 1.
The rent for the period September 1, 2000 through February 14, 2003, shall
be subject to automatic adjustment each September 1, in proportion to
changes in the 1982-84 = 100 Base Consumer Price Index for San
Francisco--Oakland--San Jose, All Urban Consumers, All Items (hereinafter
"Index"), compiled and published by the U.S. Department of Labor, Bureau of
Labor Statistics, or any replacement index thereto.
The automatic adjustment shall be calculated by means of the following
formula:
C - B
X = A + A(-----)
B
Where: X = Adjusted Rent
A = Quarterly Rent
B = Index for June, prior year
C = Index for June, current year
Provided that in no event will rental be less than $3,321.00 per
quarter.
<PAGE>
4. Use of Premises: The premises are leased to Lessee for use as a parking
area for motor vehicles. Lessee shall not use or permit said premises or
any part thereof to be used for any purpose other than as hereinabove
stated. Lessee agrees to comply with all state laws and local ordinances
concerning the premises and the use thereof. Lessee further agrees to
permit District and its agents to enter said premises at any reasonable
time to inspect the same.
5. Commercial Charges and Utilities: Lessee agrees to pay District said rent
as hereinbefore provided and to pay when due all utility charges,
groundwater extraction charges, and all other charges accruing and payable
in connection with Lessee's use of the leased premises during the term of
this Lease.
6. Termination: District reserves the right, consistent with the public
interest, to terminate this Lease upon provision of 90 days' written notice
if in the discretion of the District such termination is reasonably
necessary for the performance of the District's flood control, water
supply, or other functions. In the event of such termination, any unearned
rental paid by Lessee shall be returned to Lessee.
7. Safety Measures: Lessee will be responsible, in Lessee's uncontrolled
discretion (but consistent with the right of District hereinafter
described, and without substantial or hazardous diminution of the flood
control or conservation function of the premises as now existing or as may
hereafter be altered), for taking such measures including, but not limited
to, the posting of warning signs and the installation of guardrails or
safety devices of every kind as may in the opinion of Lessee be necessary
for the safety of the users of the premises. Further, Lessee shall have the
sole responsibility for the maintenance in usable and safe condition of
every facility provided upon the premises for purposes of this Lease.
8. Assignment and Sublease Prohibited: Lessee shall not assign this Lease or
any interest therein and shall not sublet said premises or any part
thereof. Any such assignment or subletting shall be void and shall, at the
option of the District, terminate this Lease. Notwithstanding the
foregoing, at the option of Lessee, Lessee's current tenant, Philips
Semiconductors Inc., may use the premises for parking in accordance with
the terms of this Lease.
9. Alterations: Lessee shall not make, nor suffer to be made, any physical
alteration in or on said premises other than as specified herein, without
the prior written consent of District. Lessee, upon termination of this
Agreement, shall remove all of its improvements from the premises and shall
restore premises to its condition at the commencement of this Lease.
10. Repairs: District shall not be called upon to make any repairs or
improvements on said premises, nor shall it be at any expense for same.
11. Attorney's Fees: In any action brought by District to recover any rent due
and unpaid hereunder, or for the breach of any of the covenants or
agreements contained in this Lease, or to recover possession of said
property, whether such action proceeds to judgment or not, the prevailing
party will pay all costs and expenses, including reasonable attorneys fees.
12. Default: If any rent shall be due and unpaid, or if default shall be made
in any of the covenants or agreements on the part of the Lessee contained
in this Lease, District may, at its option, at any time after such default
or breach, and without any demand on or any notice to Lessee or to any
other person, reenter and take possession of said property.
<PAGE>
13. Possessory Use Tax: Lessee recognizes and understands in accepting this
Lease that Lessee's interest therein may be subject to a possible
possessory interest tax which a city or the county may impose on such
interest, and that such tax payment shall not reduce any rent due District
hereunder, and any such tax shall be the liability of and be paid by
Lessee.
14. Nondiscrimination: Lessee, for himself or herself, his or her personal
representatives, successors in interest and assignees, as a part of the
consideration hereof, does hereby covenant and agree that no person on the
grounds of race, color, religion, sex, ancestry, or national origin shall
be subjected to discrimination in the use of said facilities. In the event
of breach of the above nondiscrimination covenant or of any applicable
nondiscrimination law or regulation, District shall have the right to
terminate this Lease and to reenter and repossess said land and facilities
thereon, and hold the same as if said Lease had never been made or issued.
15. Hazardous Substances: No goods, merchandise, chemical or material shall be
kept, stored or sold in said premises which are in any way explosive or
hazardous; and no offensive or dangerous trade, business or occupation
shall be carried on therein or thereon, and nothing shall be done on said
premises which will increase the rate of or suspend the insurance upon the
structures hereby assigned to Lessee or upon adjacent buildings or other
structures and no machinery or apparatus shall be used or operated on said
assigned premises which will in any way injure said premises or adjacent
buildings. Provided, however, that nothing in this agreement shall restrict
Lessee from using the premises as a parking lot for motor vehicles. Lessee
acknowledges that a Hazardous Substances Liability Assessment of the
premises was conducted by the District and no evidence of contamination was
observed on or near the premises prior to this Lease. A copy of the
assessment is attached hereto marked Exhibit B and incorporated by this
reference. At the termination of this Lease, a further Hazardous Substance
Liability Assessment of the premises will be conducted by the District and
if evidence of contamination is found costs of sampling shall be paid for
by Lessee. Any evidence of contamination found on the premises shall be
rebuttably presumed to be caused by Lessee. Lessee shall be responsible for
the cost of any investigation, removal, cleanup, remediation, and/or
monitoring required or mandated by any governmental agencies, authorities,
or regulatory bodies in connection with any hazardous substances detected
in the further Hazardous Substance Liability Assessment of the premises
completed at the termination of the Lease. Provided, however, that
notwithstanding the above, if the contamination is determined, by competent
evidence, to have been caused by circumstances unrelated to Lessee's use of
the premises, Lessee shall not be held responsible in any way for the
contamination.
16. Indemnification: District, its officers, agents and employees shall be free
from all liability and claim for damage by reason of any injury to any
person or persons, including Lessee and Lessee's tenant, Philips
Semiconductors Inc., or any property of any kind whatsoever and to
whomsoever belonging, including Lessee and Lessee's tenant, Philips
Semiconductors Inc., from any causes whatsoever while in, upon, or in any
way connected with the premises or the sidewalks adjacent thereto during
the term of this Agreement or any extension hereof or any occupancy
hereunder; provided, that such freedom from liability, shall not extend to
acts of District done improperly or the District's failure to act when it
was under a legal duty to do so. Lessee shall defend, indemnify, and save
harmless District, its Directors, officers, agents, and employees from and
against all claims, actions, demands, judgments, damages, liabilities, and
expenses, including reasonable attorney fees, that may be asserted against
any of them or that any of them may sustain as a result of any personal
injury or property damage arising from Lessee's use of the premises, except
to the extent that they arise from the negligence or intentional misconduct
of District, its Directors, officers, agents, employees, or contractors.
3 of 5
<PAGE>
17. Insurance: Lessee shall at Lessee's own expense keep in force at all times
during the term of this Lease the following minimum insurance coverages in
a form and to limits satisfactory to District:
COMPREHENSIVE OR COMMERCIAL GENERAL LIABILITY INSURANCE written by a
company or companies to be approved by District to protect District against
any liability to the public, incident to the use of, or resulting from any
occurrence happening in or about said premises, including any and all
liability of District for damage to vehicles parked on the leased premises.
Bodily Injury $1,000,000 per occurrence
$1,000,000 aggregate
Property Damage $1,000,000 per occurrence
These policies shall insure the contingent liability of District, naming
District, its Directors, officers, employees, and agents as additional
insured and shall obligate the insurance carriers to notify District in
writing not less than thirty (30) days prior to the cancellation of the
policies. If the standard ISO form wording for "OTHER INSURANCE" is not
contained in the insurance policy, an endorsement must be provided that
said insurance will be primary insurance and that no insurance of District,
as additional insurers shall be called upon to contribute to a loss. If
said policies contain any exclusion concerning property in the care,
custody or control of the insured, an endorsement shall be attached thereto
stating that such exclusion shall not apply with regard to any liability of
District, its Directors, officers, agents, or employees. The certificate(s)
of liability insurance shall indicate that Broad Form property damage and
contractual liability, as required, are provided, and shall have attached
thereto an executed copy of the additional insured endorsement.
Lessee agrees to deposit with District at or before the effective date of
this Lease, certificates of insurance and endorsements as specified
hereinabove to the satisfaction of District indicating that the insurance
provisions of this Lease have been complied with, and to keep such
insurance in effect and keep the certificates current therefor during the
entire term of this Lease or any extensions thereof.
18. Notification: All notices herein required to be given or which may be given
by either party to the other shall be deemed to have been fully given when
served personally on District or Lessee, or when made in writing and
deposited in the United States mail, certified and postage prepaid and
addressed as follows:
To the District at: Real Estate Services Unit
5750 Almaden Expressway
San Jose, CA 95118
To the Lessee at: Oakmead Parkway Properties
c/o Macanan Marketing
333 West Santa Clara Street, Suite 280
San Jose, CA 95113
cc: Facilities Planning Department
Philips Semiconductor, Inc. M/S 58
Also copy to: Paul Bernaciak, Accounts Payable, M/S 6
P.O. Box 3409
Sunnyvale, CA 94088-3409
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<PAGE>
19. Relocation: This tenancy is of temporary nature, and no Relocation Payment
or Advisory Assistance will be sought or provided in any form as a
consequence of this tenancy.
20. Whole Agreement: This Lease Agreement expresses the whole agreement between
the parties. All parts of this Agreement will remain in force unless
modifications are in writing on this Agreement or attached to it, and
signed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Lease Agreement the day and
year first above written.
OAKMEAD PARKWAY PROPERTIES
By: /s/ Donald MacMillan
-----------------------------------------
Donald MacMillan, General Partner
"Lessee"
SANTA CLARA VALLEY WATER DISTRICT
By: /s/ Vincent Leuw
-----------------------------------------
Real Estate Services Unit Manager
"District"
Recommended for approval:
/s/ Margaret Hastings
----------------------
Real Estate Agent
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<PAGE>
Oakmead Parkway
Calabazas Creek
2010-174
EXHIBIT A
[DIAGRAM OF PARCEL]
EXHIBIT A
<PAGE>
MEMORANDUM
TO: Margaret Hastings FROM: Carol Presley
SUBJECT: Preliminary Site Assessment, APN 216-35-019 DATE: April 11, 1996
(Adjacent to 216-35-028)
This responds to your April 1, 1995, request for a Hazardous Substance Liability
Assessment of the subject parcel and presents the results of the site
reconnaissance performed of the property. In addition to the field
reconnaissance, the District's Fuel Leak database was consulted to identify fuel
leak cases within 1/4-mile radius of the parcel. The objective of this
assessment was to document the present condition of the parcel and to observe
noticeable indications of hazardous materials along the ground surface. The
owner of the adjacent property has requested to lease the parcel from the
District in order to provide for additional parking spaces.
This parcel is located between 350 Oakmead Parkway and Calabazas Creek,
immediately north of Central Expressway in Sunnyvale, California (Figure 1). The
parcel is approximately [555] feet long and 16 feet wide. The immediately
adjacent land use is an office building which is leased to the Philips
Semiconductor Company. The property owner is Oakmead Parkway Properties.
Surrounding land is also primarily office buildings and light industry. The
parcel is owned by the Santa Clara Valley Water District and has been operated
as a maintenance/access road for the west side of Calabazas Creek. Office
workers taking walking breaks and joggers have been observed traversing the
parcel.
A field reconnaissance of the parcel was performed on April 9, 1996, by District
staff Carol Presley and Margaret Hastings. The parcel was accessed from the
Philips Semiconductor parking area. The parcel is unfenced and easily accessed
along its western border which abuts the office building and parking lots. The
parcel is fenced along the creek's top of bank and at the sidewalk's edge at
Central Expressway to prevent vehicular access. The ground surface appears to be
highly compacted and covered with aggregate rock. The vertical profile of the
ground surface shows very gradual sloping away from the building and away from
the top of bank towards a center ditch which runs longitudinally along the
entire length of the parcel. Weedy growth was observed growing in the ditch. No
signs of dumping, spillage, or staining were observed. Photographs of the
parcel were taken and are attached.
The Fuel Leak database identified one site within 1/4 mile of the subject
parcel. The fuel leak site is the Amdahl facility which is located approximately
300 feet to the west of the subject parcel. This fuel leak site is currently on
self-directed status. The site was originally entered on the database due to
small quantity leakage from tank piping when a 1,000-gallon diesel tank was
removed in August 1994. Confirmation soil samples collected from within the
excavated tank pit did not contain detectable levels of petroleum hydrocarbons.
A Geoprobe boring was installed immediately downgradient of the former tank pit
to assess impacts to groundwater. No petroleum hydrocarbons were detected in the
groundwater sample collected from this boring or in groundwater samples
collected from three nearby monitoring wells which were also sampled for
petroleum hydrocarbons. Therefore, this fuel tank site does not present
significant impacts to the subject parcel.
No evidence of visual contamination was observed on or near the parcel on the
day it was reconnoitered. There is no present indication that the parcel has
been affected by subsurface migration of petroleum products from nearby fuel
leak sites.
If you have any questions, please contact me at extension 2691.
/s/ Chris Mosely
----------------
Associate Civil Engineer
Project Support Services
Attachments
cc: HSLA File (w/original), B. Goldie (2), C. Presley
EXHIBIT B
<PAGE>
[PHOTO]
4-9-96 Calabazas Creek
looking south along west side of creek
APN 216-35-019
Looking south along west side of creek
Philips Semiconductor is shown in the upper right hand corner
[PHOTO]
4-9-96 Calabazas Creek
looking north along west side of creek
APN 216-35-019
Looking north along west side of creek