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Exhibit 10.50
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease"), dated for reference purposes as
of April 23, 1999, is made by and between VERITAS SOFTWARE CORPORATION, a
Delaware corporation ("Sublandlord"), and XXXXXXXXX SEMICONDUCTOR CORPORATION OF
CALIFORNIA, a Delaware corporation ("Subtenant").
R E C I T A L S
WHEREAS, Subtenant has agreed to sell fee title of certain real
property consisting of approximately 19.61 acres located at 000 Xxxxx Xxxxxx in
the City of Mountain View, County of Santa Xxxxx, State of California (the
"Land") together with certain improvements thereon consisting of an
approximately one hundred nineteen thousand (119,000) square foot building (and
certain leasehold improvements situated therein) (the "Main Building") and that
certain machine/equipment area located adjacent to the Main Building (the
"Equipment Area") in the approximate location shown on the site plan attached
hereto as Exhibit "A" (the Main Building and the Equipment Area (but not the
Subtenant Improvements described in Section 2(a) of this Sublease) are
collectively referred to herein as the "Premises" and the Land and the Premises
are collectively referred to as the "Property") to Sublandlord pursuant to that
certain Agreement of Purchase and Sale dated as of March 22, 1999 by and between
Subtenant and Lessor (the "Purchase Agreement").
WHEREAS, Sublandlord has agreed to (i) assign all of its rights and
benefits (but none of its liabilities or obligations as further set forth in
Section 11.1 of the Purchase Agreement) pursuant to the Purchase Agreement to
First Security Bank, National Association, not individually, but solely as Owner
Trustee under the VS Trust 1999-1 ("Lessor"), and, (ii) upon Lessor's purchase
of the Property, lease the Property from Lessor.
WHEREAS, Lessor, Sublandlord and Subtenant have agreed that certain
leasehold improvements located in and about the Main Building and Equipment Area
are to remain the property of the Subtenant (or Raytheon Company) following the
close of escrow under the Purchase Agreement, and not withstanding such sale
shall be Subtenant's (or Raytheon Company's) sole and exclusive property under
this Sublease for the duration hereof and thereafter as indicated, consisting of
the Subtenant Improvements, as defined in Section 2(a) of this Sublease.
WHEREAS, Subtenant desires to sublease the Premises from Sublandlord on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for all other
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, Sublandlord and Subtenant agree as follows:
1. Re-Affirmation and Incorporation of Recitals. Each of Sublandlord
and Subtenant acknowledges and agrees that the Recitals set forth above (a) are
true and correct in all respects
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Exhibit 10.48
and (b) are hereby incorporated herein by this references as if said Recitals
were set forth herein as representations and warranties of the Sublandlord and
Subtenant.
2. Demise of Premises. Sublandlord hereby subleases to Subtenant and
Subtenant hereby leases from Sublandlord the Premises and Subtenant Improvements
(as defined herein):
(a) Exclusive Use of Subtenant Improvements. Sublandlord and
Subtenant hereby acknowledge and agree that the Premises include certain
improvements owned by Subtenant or Raytheon Company, which shall remain
Subtenant's (or Raytheon Company's) sole and exclusive property during the term
of this Sublease and which shall be removed (except for the items identified in
subparagraphs (viii), (x) and (xvi) below) by Subtenant upon the expiration or
earlier termination of this Sublease in accordance with Section 32 of this
Sublease, and consisting of the following (the "Subtenant Improvements"),
situated on or under the Land in the areas designated as areas A through S,
inclusive, on the site plan attached hereto as Exhibit "B": (i) storage tanks on
a concrete pad, (ii) process wastewater treatment plant with tanks within cement
vault, (iii) electric boxes on concrete pad, (iii) incinerator on a concrete
pad, (iv) diesel tank and emergency electrical generator on concrete pad, (v)
concrete pads, (vi) concrete block chemical storage building, (vi) hazardous
waste tank in steel vault, (vii) two (2) metal buildings (it being understood
and agreed that Subtenant shall have the right to relocate the northwestern most
metal building in one of the areas designated as "I" on the aforementioned site
plan to a location within the dotted "Excluded Area" shown on Exhibit "A"
attached hereto), (viii) groundwater treatment system, (ix) cooling towers on
concrete pad, (x) soil vapor extraction system (fenced area), (xi) metal sheds,
(xii) refrigeration unit on concrete pad, (xiii) groundwater office trailer
(portable), (xiv) metal covers over concrete pads, (xv) PH meters for process
wastewater treatment plant, (xvi) electrical for soil vapor extraction system on
concrete pad, and (xvii) concrete block storage building. The parties hereto
acknowledge that a hydrogen tank is situated on the Developable Land (as defined
below) in the northwest corner of the Developable Land, which is also included
as part of the Subtenant Improvements. During the term of this Sublease,
Subtenant shall have access over the Developable Land to use, maintain and
repair, if necessary, the Subtenant's hydrogen tank and related piping. In
addition, Sublandlord's leasehold estate includes the rights of Lessor to that
certain Air Products pipeline containing gaseous nitrogen exists on or under the
Developable Land and during the term of this Sublease, Subtenant shall have the
exclusive right to use such pipeline and shall have access over the Developable
Land to use, maintain and repair, if necessary, the Air Products pipeline and
related piping. All of the foregoing rights of Subtenant shall be exercised at
Subtenant's sole cost and expense, and Subtenant shall indemnify, defend (with
counsel acceptable to Sublandlord) and hold Sublandlord and Sublandlord's Agents
and the Lenders and Lenders' Agents harmless from and against any and all
claims, damages, losses, causes of action, judgments, obligations and
liabilities, and all reasonable expenses incurred in investigating or resisting
the same (including, without limitation, reasonable attorneys fees and costs),
on account of or arising out of the Subtenant's use, ownership, maintenance,
repair, alteration or removal of any of the Subtenant Improvements (except for
the items identified in subparagraphs (viii), (x) and (xvi) above), the hydrogen
tank or the Air Products pipeline and related piping and improvements on or
following the Commencement Date of this Sublease. Subtenant's obligations under
the preceding sentence shall survive the expiration or earlier termination of
this Sublease.
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(b) Exclusive Use of Excluded Area. Subject to the terms and
conditions set forth in Paragraph 3 below, Subtenant shall have the exclusive
right, during the term of this Sublease, to use that portion of the Land,
consisting of eleven and forty-nine hundredths (11.49) acres (the "Excluded
Area"), that is bounded by the dotted lines shown on Exhibit "A" and which is
referred to as the "Excluded Area" on such Exhibit "A". (The Main Building and
the Equipment Area are located within the Excluded Area). Subject to the terms
and conditions hereof, Subtenant shall have the right to use that portion of the
Excluded Area which does not have buildings, structures, improvements or other
property on it for parking, ingress and egress and other uses reasonably related
to Subtenant's business. The balance of the Land that is located outside of the
dotted lines shown on Exhibit "A" and which is not part of the Excluded Area,
consisting of eight and twelve one hundredths (8.12) acres, is referred to
herein as the "Developable Land." Subtenant shall have no rights to use or
occupy any portion of the Developable Land during the Term hereof without
Sublandlord's prior written approval in each instance, except as permitted under
Section 2(a) above.
(c) Acceptance of Premises and Subtenant Improvements.
Subtenant acknowledges that prior to the Commencement Date of this Sublease (as
defined below), Subtenant owned the Premises, the Land and certain of the
Subtenant Improvements. Subtenant is familiar with the condition of the
Premises, the Subtenant Improvements, the Land and the Subtenant Improvements
and, as of the Commencement Date of this Sublease, Subtenant accepts the
Premises, the Excluded Area and the Subtenant Improvements in their "as is"
condition. As of the Commencement Date, Subtenant shall be deemed to have
accepted the Premises, the Subtenant Improvements and the Excluded Area subject
to all applicable laws and other matters of public record governing the use of
the Premises, the Subtenant Improvements and the Excluded Area. Subtenant
acknowledges that neither Sublandlord nor Sublandlord's agents have made any
representation or warranty as to the suitability of the Premises, the Subtenant
Improvements or the Excluded Area for the conduct of Subtenant's business, the
condition of the Premises or the Subtenant Improvements, or the use or occupancy
which may be made thereof and Subtenant has independently investigated and is
satisfied that the Premises and the Excluded Area is and will be suitable for
Subtenant's intended use. Any agreements, warranties or representations not
expressly contained herein (or in the Exhibits attached hereto) shall in no way
bind either Sublandlord or Subtenant, and Sublandlord and Subtenant expressly
waive all claims for damages by reason of any statement, representation,
warranty, promise or agreement, if any, not contained in this Sublease (or in
the Exhibits attached hereto). This Sublease constitutes the entire
understanding between the parties hereto and no addition to, or modification of,
any term or provision of this Sublease shall be effective until set forth in a
writing signed by both Sublandlord and Subtenant.
(d) Lessor Inspection. Notwithstanding the other terms of this
Sublease, Lessor and any Lender shall have and retain the right to inspect any
portion of the Premises from time to time upon no less than twenty-four hours
prior written notice to Subtenant.
3. Excluded Area.
(a) Subtenant's Rights in Excluded Area. In addition to
Subtenant's lease of the Premises described above, during the Sublease Term,
Subtenant shall have the following rights
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with respect to the Excluded Area (exclusive of the Main Building) contained
within the dotted lines shown on Exhibit "A" attached hereto: (i) the exclusive
right to use all of the parking spaces within the Excluded Area; (ii) the
exclusive right to use the Excluded Area (exclusive of the Main Building for
ingress and egress, and (ii) such other rights as are reasonably necessary and
convenient to Subtenant's possession and use of the Premises and/or Subtenant
Improvements or performance of Subtenant's rights and obligations under this
Sublease (including, without limitation, the right to use the access roads,
sidewalks and landscaped areas and other facilities on the Excluded Area).
(b) Reserved Rights of Sublandlord.
(i) The provisions of Paragraph 2(b) to the contrary
notwithstanding, Sublandlord reserves unto itself (as owner of the Developable
Land for federal income tax purposes, as lessee of the Developable Land for
financial accounting purposes and as Lessor's Construction Agent), to Lessor (as
owner of the Developable Land) and to tenants of any building which may be
constructed on the Developable Land, and to the agents, employees, servants,
invitees, contractors, guests, employees, customers and representatives of such
tenants, the non-exclusive right to use an approximately twenty-four (24) foot
wide strip of land along the northern border of the Excluded Area (wide enough
to accommodate one lane of traffic in each direction), for pedestrian and
vehicular ingress and egress (but not parking) and access to and from the
Developable Land and Xxxxx Street.
(ii) During the Sublease Term, Sublandlord agrees not
to make any material changes in the size, shape, location, amount and extent of
the Excluded Area or materially or adversely impair use of or access to the Main
Building, Equipment Area or Subtenant Improvements.
(iii) Provided that Subtenant's use, occupancy and
enjoyment of the Premises, the Equipment Area and the Excluded Area or access to
the same is not unreasonably interfered with, Sublandlord shall have the right
to close, at reasonable times and upon reasonable prior notice (except in the
case of an emergency), all or any portion of the Excluded Area for the
prevention of a dedication thereof, or the accrual of rights of any person or
public therein.
(iv) Sublandlord further reserves, for itself, Lessor
and their respective agents, the right to:
(A) Retain and use in the event of an
emergency only (with immediate telephonic notice to Subtenant), one set of
passkeys to enter the Premises but no keys shall be required to be given to
Sublandlord to provide access to any areas reasonably reserved by Subtenant from
Sublandlord access based upon the proprietary nature of any work being performed
therein.
(B) Approve the weight, size, placement and
time and manner of movement within the Building of any safe, central filing
system or other heavy article of Subtenant's property; provided that such
approval shall not be unreasonably withheld for any such
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article reasonably required for the operation of Subtenant's business in the
Premises. Subtenant shall move its property entirely at its own risk.
(C) Show the Premises to prospective
purchasers, subtenants, brokers, lenders, investors, rating agencies or others
at any reasonable time, provided that Sublandlord gives at least 24 hours prior
written notice to Subtenant, agrees to be escorted by an employee of Subtenant
and does not materially interfere with Subtenant's use of the Premises.
(D) To take any other reasonable action in
connection with the operation, maintenance, preservation and/or development of
the Property provided the same shall not interfere with Subtenant's rights under
this Sublease.
(c) Maintenance by Subtenant. During the Sublease Term,
Subtenant shall be responsible, at its sole cost, for maintaining the Excluded
Area (and Main Building, the Equipment Area and the Subtenant Improvements) in
such manner as is suitable to satisfy Subtenant's business needs.
(d) Parcelization of Land. Subtenant acknowledges and agrees
that, at any time following the Commencement Date of this Sublease, Sublandlord
shall have the right, in its sole and absolute discretion, subject to obtaining
any necessary governmental approvals required, to subdivide or parcelize the
Land into two or more separate, legal parcels (one of which shall consist of the
Excluded Area) so long as (i) Subtenant's use, occupancy, and enjoyment of the
Premises and the Subtenant Improvements, and (ii) its rights hereunder,
including, without limitation, its parking rights, are not materially
diminished.
4. Sublease Term.
(a) Sublease Term. The term of this Sublease ("Sublease Term")
shall be for the period commencing on the date on which escrow closes on the
acquisition of fee title to the Land (and the Premises) from Subtenant (the
"Commencement Date") and ending (unless sooner terminated in accordance with the
terms of this Sublease) on December 31, 2000.
(b) Early Termination. Subtenant shall have the right to
terminate or cancel this Sublease at any time prior to the expiration of the
Sublease Term provided Subtenant delivers to Sublandlord not less than twelve
(12) months' prior written notice of such termination. Based on the foregoing,
in no event shall the effective date of any early termination of this Sublease
pursuant to this Subparagraph 4(b) occur prior to the date twelve (12) months
following the Commencement Date of this Sublease. Upon the effective date of
such early termination of the Sublease, all rights and obligations of the
parties hereunder (excepting therefrom the rights and obligations that expressly
survive the termination of this Sublease including Subtenant's and Sublandlord's
(or Lessor's, as the case may be) obligations under Paragraph 32 below) shall
cease.
5. Rent.
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(a) Time of Payment. Subtenant shall pay to Sublandlord as
base rent for the Premises the sum specified in Subparagraph 5(b) below (the
"Monthly Installment") each month in advance on the first day of each calendar
month, without deduction or offset, except as expressly provided hereunder, and
without prior notice or demand, commencing on the Commencement Date (as defined
above) and continuing through the Sublease Term, together with such additional
rents as are payable by Subtenant to Sublandlord under the terms of this
Sublease. The Monthly Installment for any period during the Sublease Term which
is less than one (1) full month shall be a pro rata portion of the Monthly
Installment based upon a thirty (30) day month.
(b) Monthly Installment. The Monthly Installment of rent to be
paid each month by Subtenant to Sublandlord during the Sublease Term, subject to
adjustment as provided below, shall be equal to one-twelfth (1/12th) of an
amount that will yield Sublandlord an eight percent (8%) annual return on the
portion of the Purchase Price paid by Sublandlord that is allocable to the
Excluded Area and the improvements thereon. The acreage of the Excluded Area
shall be deemed to be 11.49 acres, and the acreage of the Land shall be deemed
to be 19.61 acres. The portion of the Purchase Price that is allocable to the
Excluded Area and the improvements thereon shall be determined by multiplying
$32,200,000 by a fraction, the numerator of which is the acreage included in the
Excluded Area (11.49 acres) and the denominator of which is the total acreage
included in the entire Land (19.61 acres). Thus, the Monthly Installment shall
be equal to $125,778.68 per month. Once the allocation of FAR Funds (as defined
in the Purchase Agreement) has been determined pursuant to Section 6.3(j) of the
Purchase Agreement, the Purchase Price used to calculate the Monthly
Installment, and thus the Monthly Installment, shall be adjusted accordingly.
(c) Additional Rent. All taxes, utilities, services, insurance
premiums, late charges, costs, expenses and other sums which Subtenant is
required to pay under this Sublease, and all reasonable damages, costs, and
attorneys' fees and expenses which Sublandlord may incur by reason of any
default of Subtenant or failure on Subtenant's part to comply with the terms of
this Sublease, shall be deemed to be additional rent ("Additional Rent") and
shall be paid, commencing on the Commencement Date, in addition to the Monthly
Installment of rent, and, in the event of nonpayment by Subtenant, Sublandlord
shall have all of the rights and remedies with respect thereto as Sublandlord
has for the nonpayment of the Monthly Installment of rent. Monthly Installments
of rent and Additional Rent are collectively referred to herein as "Rent".
(d) Place of Payment. Rent shall be payable in lawful money of
the United States of America to Sublandlord at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxxxx 00000, Attn: ____________ or to such other person(s) or at such
other place(s) as Sublandlord may designate in writing. Upon designation of
another person to receive the Rent, all subsequent payments of Rent shall be
directed to such other person until such other person gives written notice to
direct such payments elsewhere.
(e) Late Payments. Any Monthly Installment of rent and
Additional Rent due under this Sublease that is not received by Sublandlord
within five (5) days after written notice that such sum is past due shall bear
interest at the Permitted Rate (as defined in Paragraph 31) from the date due
until fully paid. The payment of interest shall not cure any default by
Subtenant
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under this Sublease. In addition, Subtenant acknowledges that the late payment
by Subtenant to Sublandlord of rent will cause Sublandlord to incur costs not
contemplated by this Sublease, the exact amount of which will be extremely
difficult and impracticable to ascertain. Those costs may include, but are not
limited to, administrative, processing and accounting charges, and late charges
which may be imposed on Sublandlord by the terms of any ground lease, mortgage
or trust deed covering the Premises. Accordingly, if any Monthly Installment of
rent and Additional Rent due from Subtenant shall not be received by Sublandlord
or Sublandlord's designee within five (5) days after written notice that such
sum is past due, then Subtenant shall pay to Sublandlord, in addition to the
interest provided above, a late charge in a sum equal to Two Hundred Fifty
Dollars ($250.00) for each delinquent payment. Acceptance of a late charge by
Sublandlord shall not constitute a waiver of Subtenant's default with respect to
the overdue amount, nor shall it prevent Sublandlord from exercising any of its
other rights and remedies.
(f) Holdover Rent. If Subtenant fails to vacate the Premises
or commence demolition of the Main Building and related improvements (the
removal of any asbestos and all other Hazardous Materials, if any, in the Main
Building shall constitute, among other things, demolition for purposes of this
paragraph) as set forth in more detail in Paragraphs 32(b)-(d) on or before the
earlier of January 1, 2001 or the date thirty (30) days after the effective date
of the earlier termination of this Sublease, as such earlier date may be
extended pursuant to the terms below, Subtenant shall pay to Sublandlord an
amount equal to two hundred percent (200%) of the daily Rent due under this
Sublease immediately prior to such date for each day that Subtenant fails to
vacate the Premises or commence demolition of the Main Building and related
improvements as set forth above. For the purposes of the immediately preceding
sentence, Subtenant shall be deemed to have commenced demolition of the Main
Building and related improvements or commenced removal of asbestos and all other
Hazardous Materials, if any, in the Main Building if Subtenant has undertaken
activity in such regards which evidences Subtenant's clear and good faith
intention to complete such demolition and remediation in an expeditious manner.
Sublandlord's acceptance of any payments pursuant to this Paragraph shall not
constitute a consent to Subtenant's holdover or result in any renewal of this
Sublease. The provisions set forth herein are in addition to and do not affect
Sublandlord's right of re-entry or any other rights of Sublandlord under this
Sublease or at law.
6. Use of Premises.
(a) Restrictions on Use. Subtenant shall use the Premises (and
the Subtenant Improvements) for research and development, manufacturing, general
office purposes, and any other legally permitted use, provided such use is in
conformance and compliance with all applicable governmental laws, regulations,
rules and ordinances including, without limitation, all applicable environmental
and zoning and land use laws, regulations, rules, and ordinances (collectively,
"Law" or "Laws"). Except as required under Section 32 hereof, Subtenant shall
not commit or suffer to be committed, any waste upon the Premises, the Subtenant
Improvements or the Excluded Area, or any nuisance, or allow the Premises, the
Subtenant Improvements or the Excluded Area to be used for any unlawful purpose
or any purpose not permitted by this Sublease. Subtenant, at its sole cost and
expense, shall procure, maintain and make available for Sublandlord's reasonable
inspection throughout the Lease Term, all governmental approvals,
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licenses and permits required for the proper and lawful conduct of Subtenant's
permitted uses of the Premises.
(b) Suitability. Subtenant acknowledges that neither
Sublandlord nor any agent or employee of Sublandlord has made any representation
or warranty with respect to the Premises, the Subtenant Improvements or the
Excluded Area or with respect to the suitability of the same for the conduct of
Subtenant's business, nor has Sublandlord agreed to undertake any modification,
alteration or improvement to the Premises, except as provided in this Sublease.
Subtenant acknowledges that Sublandlord makes no representations regarding the
use of the Premises, the Subtenant Improvements or the Excluded Area by
Subtenant or that the uses permitted by Subparagraph 6(a) are allowed by
governmental or quasi-governmental agencies having jurisdiction or applicable
laws, statutes, ordinances, rules, regulations, orders or requirements now or
hereafter in effect.
7. Hazardous Materials. Subtenant and Subtenant's agents,
employees, contractors, assignees and subtenants may not use, place, store or
transport (collectively, "Use") Hazardous Material(s) (defined below) on or
about any portion of the Premises or Excluded Area or any other part of the Land
(or in connection with the use or operation of the Subtenant Improvements)
unless Subtenant complies with all applicable Laws with respect to the Use by
Subtenant, its agents, employees, contractors, assignees or subtenants of such
Hazardous Materials. Nothing herein shall be construed to allow Subtenant to
release or dispose of (collectively, "Release") Hazardous Materials in or about
any portion of the Premises or Excluded Area unless such Release is in
compliance with applicable Laws. Any Use of the Hazardous Materials beyond the
scope allowed in this Paragraph and any Release of Hazardous Materials shall be
subject to Sublandlord's and Lessor's prior written consent, which may be
withheld in Sublandlord's or Lessor's sole and absolute discretion, and shall
require an amendment to the Sublease in the event Sublandlord and Lessor do
consent which shall set forth the materials, scope of use, indemnification and
any other matter required by Sublandlord and Lessor in Sublandlord's and
Lessor's sole and absolute discretion. Subtenant shall indemnify, defend and
hold Sublandlord and Sublandlord's agents harmless from and against any and all
claims, losses, damages, liabilities, or expenses arising in connection with the
Use or Release of Hazardous Materials on or following the Commencement Date of
this Sublease in violation of Law by Subtenant, Subtenant's agents, employees,
contractors, assignees or subtenants using the Premises or Excluded Area.
Subtenant's obligation to defend, hold harmless and indemnify pursuant to this
Paragraph 7 shall survive the expiration or earlier termination of this
Sublease.
The foregoing indemnity shall not apply to, and Subtenant shall not be
responsible hereunder for, the presence of Hazardous Materials on, under, or
about the Premises or Excluded Area to the extent caused by Sublandlord, its
agents, employees, contractors, assignees or subtenants (other than Subtenant);
provided that Sublandlord hereby acknowledges and agrees that the foregoing
indemnity is intended to supplement that certain Indemnity Agreement between
Subtenant and Sublandlord in the form of Exhibit C to the Purchase Agreement
(the "Indemnity Agreement"), and to the extent the foregoing indemnity
contradicts Subtenant's obligations under the Indemnity Agreement, the Indemnity
Agreement shall prevail. The parties hereto agree and
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acknowledge that all of Subtenant's indemnity obligations set forth in this
Sublease are supplemental to Subtenant's indemnity obligations set forth in the
Indemnity Agreement.
Sublandlord shall have the right, upon reasonable advance notice to
Subtenant, to inspect, investigate, sample and/or monitor the Premises and
Excluded Area, including any soil, water, groundwater, or other sampling, to the
extent reasonably necessary to determine whether Subtenant is complying with the
terms of this Sublease with respect to Hazardous Materials. In connection
therewith, Subtenant shall provide Sublandlord with reasonable access to all
portions of the Premises, the Subtenant Improvements and the Excluded Area
(subject to reasonable security measures imposed by Subtenant); provided,
however, that Sublandlord shall avoid any unreasonable interference with the
operation of Subtenant's business on or in the Premises or the Excluded Area.
All costs reasonably incurred by Sublandlord in performing such inspections,
investigation, sampling and/or monitoring shall be reimbursed by Subtenant to
Sublandlord as Additional Rent within thirty (30) days after Sublandlord's
demand for payment if it is determined that Hazardous Materials have been Used
by Subtenant or Subtenant's Agents on or after the Commencement Date of this
Sublease in violation of Laws or a Release of Hazardous Materials in violation
of Laws has occurred on, in or under the Premises or the Excluded Area, or any
portion thereof.
Notwithstanding anything to the contrary contained in this Sublease,
Sublandlord and Subtenant acknowledges that (i) the Environmental Protection
Agency is currently overseeing cleanup measures that are being conducted at the
Land and at surrounding parcels of real property, (ii) the Land is part of a
regional Superfund site known as the Middlefield-Xxxxx-Xxxxxxx (MEW) site, (iii)
Raytheon, a former owner of the Land, is under a Consent Decree that provides
that Raytheon will perform groundwater and soil remediation for the property it
occupied and operated within the MEW area, (iv) in 1987, a soil-bentonite,
subsurface, slurry wall was installed by Raytheon around the perimeter of the
Land enclosing the soil and water bearing zones as part of the remedial measures
conducted by Raytheon, (v) a groundwater extraction and treatment system was
installed in 1987 on the Land and, as a long term remedial measure, groundwater
is extracted from several xxxxx located both within the boundaries of the Land
and from adjacent property, (vi) a soil vapor extraction system (covering
approximately a surface area of four acres and going to a depth of approximately
15 to 18 feet) was installed by Raytheon in 1996 to remediate the contaminated
soils in the Land and Raytheon has petitioned and obtained approval from the
Environmental Protection Agency for closure for part of the soil vapor remedial
system, and (vii) the groundwater and soil treatment facilities referred to
above are maintained by Raytheon and Raytheon has provided an indemnification to
Subtenant to protect it from clean up or other liability related to
contamination existing prior to the date Subtenant acquired title to the Land
and the improvements then located thereon.
As used in this Sublease, the term "Hazardous Materials" means any
chemical, substance, waste or material which has been or is hereafter determined
by any federal, state or local governmental authority to be capable of posing
risk of injury to health or safety, including without limitation, those
substances included within the definitions of "hazardous substances," "hazardous
materials," "toxic substances," or "solid waste" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery
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Act of 1976, and the Hazardous Materials Transportation Act, as amended, and in
the regulations promulgated pursuant to said laws; those substances defined as
"hazardous wastes" in section 25117 of the California Health & Safety Code, or
as "hazardous substances" in section 25316 of the California Health & Safety
Code, as amended, and in the regulations promulgated pursuant to said laws;
those substances listed in the United States Department of Transportation Table
(49 CFR 172.101 and amendments thereto) or designated by the Environmental
Protection Agency (or any successor agency) as hazardous substances (see, e.g.,
40 CFR Part 302 and amendments thereto); such other substances, materials and
wastes which are or become regulated or become classified as hazardous or toxic
under any Laws, including without limitation the California Health & Safety
Code, Division 20, and Title 26 of the California Code of Regulations; and any
material, waste or substance which is (i) petroleum, (ii) asbestos, (iii)
polychlorinated biphenyls, (iv) designated as a "hazardous substance" pursuant
to section 311 of the Clean Water Act of 1977, 33 U.S.C. sections 1251 et seq.
(33 U.S.C. Section 1321) or listed pursuant to section 307 of the Clean Water
Act of 1977 (33 U.S.C. Section 1317), as amended; (v) flammable explosives; (vi)
radioactive materials; or (vii) radon gas.
8. Taxes and Assessments.
(a) Subtenant's Property. Subtenant shall pay before
delinquency any and all taxes and assessments, license fees and public charges
levied, assessed or imposed upon or against Subtenant's trade fixtures,
equipment, furnishings, furniture, inventory, appliances and other personal
property installed or located on or within the Premises or Excluded Area,
including, without limitation, the Subtenant Improvements (except for the
Subtenant Improvements described in subparagraphs (viii), (x) and (xvi) of
Section 2(a) above) to the extent any such improvements are separately assessed
(collectively, the "personal property"). Subtenant shall use its commercially
reasonable efforts to cause said personal property to be assessed and billed
separately from the real property of Sublandlord. If any of Subtenant's said
personal property shall be assessed with Sublandlord's real property, Subtenant
shall pay Sublandlord, as Additional Rent, the taxes attributable to Subtenant's
personal property within thirty (30) days after receipt of a written statement
from Sublandlord setting forth the taxes applicable to Subtenant's property.
Subtenant shall comply with the provisions of any law, ordinance, rule or
regulation of taxing authorities which require Subtenant to file a report of
Subtenant's personal property located on or within the Premises or the Excluded
Area.
(b) Definition of Taxes. The term "Taxes" as used in this
Sublease shall collectively mean (to the extent any of the following are not
paid by Subtenant pursuant to Paragraphs 8(a) above, all real estate taxes and
general and special assessments (including, but not limited to, assessments for
public improvements or benefit); taxes based on vehicles utilizing parking areas
on the Excluded Area; environmental surcharges; gross rental receipts taxes;
water and sewer taxes, levies, assessments and other charges in the nature of
real property taxes or assessments (including, but not limited to, assessments
for public improvements or benefit); and all other governmental,
quasi-governmental or special district impositions of any kind and nature
whatsoever; regardless of whether any of the foregoing are now customary or
within the contemplation of the parties hereto and regardless of whether
resulting from increased rate and/or valuation, or whether extraordinary or
ordinary, general or special, unforeseen or foreseen, or
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similar or dissimilar to any of the foregoing and which during the Sublease Term
are laid, levied, assessed or imposed upon or which become a lien upon or
chargeable against the Premises and/or the Excluded Area under or by virtue of
any present or future laws, statutes, ordinances, regulations, or other
requirements of any governmental, quasi-governmental or special district
authority whatsoever, excluding net income, succession, transfer, gift,
franchise, estate or inheritance taxes. The term "environmental surcharges"
shall include any and all expenses, taxes, charges or penalties imposed by the
Federal Department of Energy, Federal Environmental Protection Agency, the
Federal Clean Air Act, or any regulations promulgated thereunder, or imposed by
any other local, state or federal governmental agency or entity now or hereafter
vested with the power to impose taxes, assessments or other types of surcharges
as a means of controlling or abating environmental pollution or the use of
energy or any natural resource in regard to the use, operation or occupancy of
the Premises and/or the Excluded Area. The term "Taxes" shall include (to the
extent the same are not paid by Subtenant pursuant to Paragraph 8(a)), without
limitation, all taxes, assessments, levies, fees, impositions or charges levied,
imposed, assessed, measured, or based in any manner whatsoever upon or with
respect to the use, possession, occupancy, leasing, operation or management of
the Premises and/or the Excluded Area or in lieu of or equivalent to any Taxes
set forth in this Paragraph 8(b). In the event any such Taxes are payable by
Sublandlord as lessee of the Property and it shall not be lawful for Subtenant
to reimburse Sublandlord for such Taxes, then the Rentals payable hereunder
shall be increased to net Sublandlord the same net Rental after imposition of
any such Tax upon Sublandlord as would have been payable to Sublandlord prior to
the imposition of any such Tax.
(c) Taxes as Operating Expense. All Taxes which are levied or
assessed or which become a lien upon the Premises and/or the Excluded Area or
which become due or accrue during the Sublease Term shall be an Operating
Expense, and Subtenant shall pay as Additional Rent each month during the
Sublease Term, commencing on the Commencement Date, 1/12th of such Taxes, based
on Sublandlord's estimate thereof, pursuant to Paragraph 11 below. Taxes during
any partial tax fiscal year(s) within the Sublease Term shall be prorated
according to the ratio which the number of days during the Sublease Term or of
actual occupancy of the Premises by Subtenant, whichever is greater, during such
year bears to 365. In calculating Subtenant's share of Taxes to be paid under
this Sublease, during the period of the Sublease Term that the Excluded Area is
not a separate, legal parcel, the Taxes allocable to the Excluded Area shall be
based on the ratio that the acreage included within the Excluded Area bears to
the total acreage included within that portion of the Land (plus the assessed
value of any improvements and building located thereon) that is covered by the
tax xxxx covering the Excluded Area. Notwithstanding the foregoing, in no event
shall Subtenant's Share of Taxes include taxes assessed on any new improvements
constructed on the Developable Land.
9. Indemnity; Insurance.
(a) Indemnity. Subtenant agrees to indemnify, protect, defend
(with counsel selected by Subtenant and reasonably acceptable to Sublandlord)
and hold harmless Sublandlord, each Lender and their respective Agents (except
to the extent arising from the active negligence or willful misconduct of, or
breach of this Sublease by, Sublandlord, such Lender or their respective Agents)
against any and all claims, damages, losses, causes of action, judgments,
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obligations and liabilities, and all reasonable expenses incurred in
investigating or resisting the same (including, without limitation, reasonable
attorneys' fees and costs), on account of, or arising out of (i) the operation,
use, or occupancy of the Premises and Excluded Area (and any and all of the
Subtenant Improvements except for the items set forth in subparagraphs (viii),
(x) and (xvi) of Paragraph 2(a)), or any part thereof, by Subtenant and/or its
Agents during the term of this Sublease, (ii) any occurrence in, on or about the
Premises and/or the Excluded Area during the term of this Sublease, or (iii) any
occurrence in, on or about the Premises or Excluded Area or Land, to the extent
caused by or contributed to by Subtenant and/or its Agents during the term of
this Sublease. The obligations of Subtenant under this Paragraph 9(a) shall
survive the expiration or earlier termination of this Sublease.
(b) Insurance by Sublandlord. Sublandlord shall, during the
Sublease Term, procure and keep in force the following insurance, the cost of
which shall be an Operating Expense, payable by Subtenant pursuant to Paragraph
11 below:
(i) Liability Insurance. Commercial general liability
or comprehensive general liability insurance against any and all claims for
personal injury, death or property damage occurring in or about the Premises or
the Excluded Area in an initial amount of $2,000,000 per occurrence and
$2,000,000 in the aggregate with umbrella coverage of at least $5,000,000 per
occurrence and in the aggregate. Such insurance shall have such increased limits
of coverage as Sublandlord or Lessor may from time to time determine are
reasonably necessary for its protection, provided that in no event shall such
increased coverage exceed the coverage which is customary for similar buildings
in the South Bay area.
(c) Insurance by Subtenant. Subtenant shall, during the
Sublease Term, at Subtenant's sole cost and expense, procure and keep in force
the insurance set forth in Paragraphs 9(c)(i), 9(c)(ii), 9(c)(iii) and 9(c)(iv)
below. All insurance that Subtenant is required to procure and maintain shall
provide that it may not be cancelled or materially modified without thirty (30)
days prior written notice to Sublandlord and Lessor.
(i) Liability Insurance. Commercial general liability
or comprehensive general liability insurance and naming Subtenant as insured and
Sublandlord and each Lender as additional insured, against any and all claims
for personal injury, death or property damage occurring in or about the Premises
or the Excluded Area, or arising out of Subtenant's or Subtenant's Agents' use
of the Excluded Area, use or occupancy of the Premises or Excluded Area or
Subtenant's operations on the Premises and Excluded Area. Such insurance shall
have a combined single limit of not less than $2,000,000 per occurrence and
$5,000,000 in the aggregate. Such insurance shall contain a cross-liability
(severability of interests) clause and an extended ("broad form") liability
endorsement, including blanket contractual coverage and motor vehicle liability
coverage. Such insurance shall name Lessor and Sublandlord as additional
insureds. Such liability insurance shall be primary and not contributing to any
insurance available to Lessor, Sublandlord or each Lender, and Lessor's,
Sublandlord's and each Lender's insurance (if any) shall be in excess thereto.
Such insurance shall specifically insure Subtenant's performance of the
indemnity, defense and hold harmless agreements contained in Paragraph 9(a),
although Subtenant's obligations pursuant to Paragraph 9(a) shall not be limited
to the amount of any insurance required of or carried by Subtenant under this
Paragraph 9(c)(i). Subtenant shall be
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responsible for insuring that the amount of insurance maintained by Subtenant is
sufficient for Subtenant's purposes. Such liability insurance shall be primary
and non-contributing to any insurance available to Lessor and Sublandlord, but
only as respects Subtenant's negligence for bodily injury or property damage
arising out of their business operations.
(ii) Business Interruption Insurance. Business
interruption insurance naming Sublandlord, Lessor and each Lender as additional
insureds in an amount sufficient to cover twelve (12) months of Subtenant's Rent
obligation under this Sublease.
(iii) Property Insurance. "All risk" property
insurance, providing protection against those perils included within the
classification of "all risk" insurance, on the Premises and Excluded Area,
including any improvements or fixtures constructed or installed on the Premises
and Excluded Area by Sublandlord or Lessor.
(iv) Other. Such other insurance as required by law,
including, without limitation, workers' compensation insurance.
(v) Optional Insurance. Subtenant may, but shall not
be obligated to, during the Sublease Term, at Subtenant's sole cost and expense,
procure and keep in force the following insurance:
(A) Personal Property Insurance. "All risk"
property insurance, providing protection against those perils included within
the classification of "all risk" insurance, on all leasehold improvements and
Subtenant installed in the Premises or on the Excluded Area by Subtenant at its
expense (if any), and on all equipment, trade fixtures, inventory, fixtures and
personal property located on or in the Premises or the Excluded Area, including
improvements or fixtures hereinafter constructed or installed on the Premises or
the Excluded Area. Sublandlord shall have no interest in nor any right to the
proceeds of any insurance procured by Subtenant pursuant to this Subparagraph
9(c)(v)(A). Subtenant acknowledges and agrees that Sublandlord shall not be
obligated under this Sublease to maintain all risk or property insurance
covering the leasehold improvements or any equipment, trade fixtures, inventory,
fixtures or personal property referred to in this Subparagraph 9(c)(v)(A). If
Sublandlord elects to so obtain insurance covering Subtenant's obligations under
this Subparagraph 9(c)(v)(A), the cost of such insurance shall not be an
Operating Expense and Subtenant shall be liable for the cost of any deductible
amount relating to such insurance.
(d) Failure by Subtenant to Obtain Insurance. If Subtenant
does not take out the insurance required pursuant to Paragraph 9(c)(i),
9(c)(ii), 9(c)(iii) or 9(c)(iv) or keep the same in full force and effect,
without prior notice to Subtenant, Sublandlord may, but shall not be obligated
to, take out the necessary insurance and pay the premium therefor, and Subtenant
shall repay to Sublandlord, as Additional Rent, the amount so paid promptly upon
demand. In addition, Sublandlord may recover from Subtenant and Subtenant agrees
to pay, as Additional Rent, any and all reasonable expenses (including
reasonable deductibles and attorneys' fees) and damages which Sublandlord may
sustain by reason of the failure of Subtenant to obtain and maintain such
insurance, it being expressly declared that the expenses and damages of
Sublandlord shall not be limited to the amount of the premiums thereon.
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(e) Claims by Subtenant. Except to the extent arising out of
the active negligence or willful misconduct of Lessor, any Lender or Sublandlord
or any of their respective Agents, neither Lessor, any Lender nor Sublandlord
shall be liable to Subtenant, and Subtenant waives all claims against Lessor,
each Lender and Sublandlord, for injury or death to any person, damage to any
property, or loss of use of any property in the Premises or the Excluded Area by
and from all causes, including without limitation, any defect in the Premises or
the Excluded Area and/or any damage or injury resulting from fire, steam,
electricity, gas, water or rain, which may leak or flow from or into any part of
the Premises or the Excluded Area, or from breakage, leakage, obstruction or
other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether the damage or injury results from
conditions arising upon the Premises or the Excluded Area or from other sources.
The preceding to the contrary notwithstanding, under no circumstances shall
Lessor, any Lender or Sublandlord be liable to Subtenant for any claim by
Subtenant of lost profits, loss of income or loss of business.
(f) Mutual Waiver of Subrogation. Sublandlord hereby releases
Subtenant, and Subtenant hereby releases Sublandlord (and, to the extent Lessor
carries any insurance on the Property or any furnishings, fixtures, equipment,
inventory or other property in, on or about the Premises, Sublandlord shall use
its reasonable best efforts to cause Lessor to release Subtenant), and their
respective officers, agents, employees and servants, from any and all claims or
demands of damages, loss, expense or injury to the Premises or the Excluded Area
(or the Land), or to the furnishings, fixtures, equipment, inventory or other
property of either Sublandlord or Subtenant in, about or upon the Premises or
the Excluded Area (or the Land) (collectively, a "Claim"), which is caused by or
results from perils, events or happenings which are the subject of insurance
carried by the respective parties pursuant to this Paragraph 9 or otherwise and
in force at the time of any such loss, whether due to the negligence of the
other party or its agents and regardless of cause or origin; provided, however,
that such waiver shall be effective only to the extent permitted by the
insurance covering such loss, to the extent such insurance is not prejudiced
thereby, to the extent insured against and to the extent each such Claim is
fully satisfied by proceeds from such insurance. In the event of a Claim
concerning Subtenant's Use or Release of Hazardous Materials in, on or about the
Premises, the Excluded Area or the Land, Subtenant shall use any proceeds from
insurance received by Subtenant in connection with such Claim to remove and/or
remediate the Hazardous Materials.
10. Utilities. Subtenant shall pay during the Sublease Term and
prior to delinquency all charges for water, gas, light, heat, power,
electricity, telephone or other communication service, janitorial service, trash
pick-up, sewer and all other services supplied to Subtenant or consumed by
Subtenant or any of Subtenant's agents, contractors or invitees on the Premises
or the Excluded Area (collectively, the "Services") and all taxes, levies, fees
or surcharges therefor. Subtenant shall arrange for Services to be supplied to
the Premises and the Excluded Area and shall contract for all of the Services in
Subtenant's name prior to the Commencement Date. In the event that any of the
Services cannot be separately billed or metered to the Premises or the Excluded
Area, or if any of the Services are not separately metered as of the
Commencement Date, the cost of such Services shall be an Operating Expense and
Subtenant shall pay such cost to Sublandlord, as Additional Rent, as provided in
Paragraph 11 below.
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11. Operating Expenses.
(a) Definition. "Operating Expense" or "Operating Expenses,"
as used in this Sublease, shall mean and include all items identified in other
paragraphs of this Sublease as an Operating Expense and the reasonable and
necessary cost paid or incurred by Sublandlord for the operation, maintenance,
and repair of the Premises and Excluded Area, which costs shall include, without
limitation: the cost of any necessary Services and utilities supplied to the
Premises and Excluded Area (to the extent the same are not separately incurred
by, or charged or metered to, Subtenant). Sublandlord and Subtenant acknowledge
that, during the Sublease Term, the Premises and Excluded Area will be managed,
maintained and operated by Subtenant, at Subtenant's cost, in a continuation of
its present operations. Consequently, other than those costs or expenses that
are expressly identified in this Sublease as an Operating Expense, neither
Sublandlord nor Subtenant contemplate any other expenses incurred or to be
incurred by Sublandlord to be passed through to Subtenant under this Sublease as
an Operating Expense or otherwise. Because Subtenant is responsible, pursuant to
the terms of Paragraph 12(b) of this Sublease, for repair and maintenance of the
Premises (and the interior improvements located therein) and all buildings,
structures and improvements located on the Excluded Area, Sublandlord should not
be incurring any repair or maintenance expenses with respect to the same (and
Sublandlord shall not be incurring any Operating Expenses to be passed through
to Subtenant with respect to the same except to the extent that Sublandlord is
reasonably likely to be exposed to criminal or civil liability for any failure
by Subtenant to perform any maintenance or repairs as determined in
Sublandlord's reasonable discretion, in which case Sublandlord may perform such
repairs or maintenance following five (5) days advance written notice to
Subtenant if such repairs or maintenance have not been performed within such
5-day period). If any Operating Expenses incurred by Sublandlord are incurred
with respect to the entire Land (and not just the Excluded Area), then
Subtenant's share of such Operating Expenses shall be in the ratio that the
acreage included within the Excluded Area bears to the acreage included within
the entire Land; provided, however, if the Premises, the Subtenant Improvements
and other buildings, structures or improvements located on the Excluded Area are
separately assessed from any other buildings, structures or improvements
situated on the Land, then Subtenant shall be obligated to pay one hundred
percent (100%) of all Taxes levied or assessed with respect to the Premises and
other buildings, structures or improvements located on the Excluded Area and
which become due or accrue during the term of this Sublease. If Sublandlord
subdivides or parcelizes the Land into two or more legal parcels (one of which
is the Excluded Area), and the Excluded Area and the buildings, structures and
improvements situated thereon are assessed separately from the balance of the
Land and the buildings, structures or improvements situated on such balance of
the Land, then Subtenant shall pay, as an Operating Expense, one hundred percent
(100%) of all necessary Operating Expenses incurred by Sublandlord in connection
with the Premises and the buildings, structures and other improvements located
on the Excluded Area and the Excluded Area (including, without limitation, Taxes
levied or assessed with respect to or against the Excluded Area and Taxes
allocable to the Premises, Subtenant Improvements and all leasehold
improvements, constructed or installed therein) and the buildings, structures,
and other improvements located on the Excluded Area.
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Notwithstanding anything to the contrary contained in this
Sublease, within one hundred eighty (180) days after receipt by Subtenant of
Sublandlord's statement of Operating Expenses prepared pursuant to Paragraph
10(a) hereof for any prior annual period during the Sublease Term, Subtenant or
its authorized representative shall have the right to inspect the books of
Sublandlord during the business hours of Sublandlord at Sublandlord's office or,
at Sublandlord's option, such other location as Sublandlord reasonably may
specify, for the purpose of verifying the information contained in the
statement. Unless Subtenant asserts specific errors within one hundred eighty
(180) days after receipt of the statement, the statement shall be deemed correct
as between Sublandlord and Subtenant, except as to individual components
subsequently determined within one (1) year to be in error by future audit.
(b) Payment of Operating Expenses by Subtenant. Prior to the
Commencement Date, and annually thereafter, Sublandlord shall deliver to
Subtenant an estimate of necessary Operating Expenses incurred by Sublandlord
(and not otherwise incurred by Subtenant) for the succeeding year. Subtenant's
payment of Operating Expenses shall be based upon Sublandlord's estimate of
Operating Expenses and shall be payable in equal monthly installments in advance
on the first day of each calendar month commencing on the Commencement Date and
continuing throughout the Sublease Term.
(c) Exclusions From Operating Expenses. Notwithstanding
anything to the contrary contained in this Sublease, in no event shall Subtenant
have any obligation to perform, to pay directly, or to reimburse Sublandlord
for, all or any portion of the following costs and expenses (collectively,
"Costs"): (i) the cost of any work performed (such as preparing a tenant's space
for occupancy, for renovating an existing tenant's premises, including painting
and decorating) or services provided (such as separately metered electricity)
for any tenant (including Subtenant) at such tenant's cost or provided by
Sublandlord without charge; (ii) the expenses and salaries of Sublandlord's
officers, partners, agents and employees or any general corporate overhead and
administrative expense of Sublandlord; (iii) the cost of any items for which
Sublandlord is actually reimbursed by insurance proceeds, condemnation awards,
or another tenant or occupant of another building located on the Land; (iv) any
advertising or promotional expenses; (v) any costs representing an amount paid
to a related or affiliated person of Sublandlord which is in excess of the
amount which would have been paid in the absence of such relationship; (vi) any
expenses for repairs or maintenance unless permitted under Paragraph 11(a)
hereof or unless otherwise agreed to in writing by Subtenant or which are
actually reimbursed through warranties or guaranties (excluding any mandatory
deductibles); (vii) any electric power or other utility costs or expenses for
which Subtenant directly contracts with the local public service company; (viii)
any costs, including without limitation, attorneys' fees associated with the
operation of the business of the entity which constitutes Sublandlord, including
accounting and legal matters, costs of selling, syndicating, financing,
mortgaging or hypothecating any of Sublandlord's interest in the Premises or the
Land or any part thereof, costs of any dispute between Sublandlord and its
employees, disputes of Sublandlord with project management or personnel or
outside fees paid in connection with disputes with other tenants; (ix) the cost
of any work or services performed for any tenant (including Subtenant) at such
tenant's cost; (x) any reserves of any kind, including without limitation,
replacement reserves or reserves for bad debts or lost rent; (xi) depreciation
of the Premises or any improvements, buildings or structures on the
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Land; (xii) cost of repairs, replacements or other work occasioned by the
exercise by governmental authorities of the right of eminent domain; (xiii) the
cost of repairs arising out of the gross negligence or willful misconduct of
Sublandlord or any of its agents, employees or contractors; (xiv) any management
fees, costs, or expenses incurred by Sublandlord; (xv) costs of selling,
syndicating, financing, mortgaging or hypothecating any of Lessor's interest in
the Premises or any other buildings, structures or improvements on the Land; and
(xvi) costs incurred for the investigation and remediation of a Release of
Hazardous Materials occurring prior to the Commencement Date.
(d) Inspection of Records. Sublandlord agrees that any
Operating Expense statements submitted by Sublandlord shall be reasonably
detailed and certified as true and correct by Sublandlord. Sublandlord further
agrees to make available its books and records relating to Operating Expenses
for Subtenant's audit, upon reasonable notice, at Sublandlord's office. If such
audit discloses any errors, appropriate adjustments shall be made, and if such
errors are in excess of five percent (5%) of the amount charged to Subtenant,
Sublandlord shall pay for the reasonable costs of such audit within thirty (30)
days of demand.
(e) Betterments. With respect to betterments or other
extraordinary or special assessments that may be included in the definition of
Taxes, Subtenant's obligations shall apply only to the extent such assessments
are payable during and in respect of the Sublease Term if paid over the longest
period permitted by law.
(f) Right to Contest. Subtenant at its cost shall have the
right, at any time, to seek a reduction in the assessed valuation of the
Premises, or other improvements located on the Excluded Area, and/or the
Excluded Area, or to contest any Taxes that are to be paid by Subtenant. If
Subtenant seeks a reduction or contests the Taxes, Subtenant shall continue to
pay its share of any such Taxes during such proceedings.
Sublandlord shall not be required to join in any proceedings
or contest brought by the Subtenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Sublandlord or
any owner of the premises. In that case Sublandlord shall join in the proceeding
or contest or permit it to be brought in Sublandlord's name as long as
Sublandlord is not required to bear any cost. Subtenant, on final determination
of the proceeding or contest, shall immediately pay or discharge all costs,
charges, interest, and penalties incidental to the decision or judgment.
12. Repairs and Maintenance.
(a) [Intentionally Omitted]
(b) Subtenant's Repairs. Subtenant shall, at its sole cost, be
responsible for the repair and maintenance of the Premises (and the interior
improvements located therein) and all buildings, structures and improvements
located on the Excluded Area. Subtenant shall not allow the Premises or the
other buildings, structures or improvements located on the Excluded Area to fall
into such disrepair as to constitute a health or safety risk. Subtenant's
obligation shall extend to all alterations, additions and improvements to the
Premises, and all fixtures and appurtenances
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therein and thereto. Sublandlord acknowledges that it is the responsibility of
Subtenant (subject to the provisions of Paragraph 32 below) to demolish the
Premises and the other buildings, structures and improvements located on the
Excluded Area at or following the expiration of the Sublease Term and,
therefore, Sublandlord shall not require Subtenant to maintain the Premises or
other buildings, structures or improvements located on the Excluded Area in good
condition or repair during the Sublease Term, except to the extent (1)
Sublandlord reasonably determines any maintenance to be necessary to avoid
criminal or civil liability for any failure by Subtenant to maintain or repair
the Premises or any improvements thereto, in which case Subtenant shall be
obligated to take all actions reasonably required by Landlord to address such
potential liability arising therefrom or (2) Subtenant's failure to maintain or
repair the Premises exacerbates any environmental condition or contamination in,
on or about the Premises or the Excluded Property.
Should Subtenant fail to keep the Premises or any other
buildings, structures or improvements located on the Excluded Area in safe
condition within fifteen (15) days after notice from Sublandlord or should
Subtenant fail thereafter to diligently perform its obligations under this
Xxxxxxxxx 00(x), Xxxxxxxxxxx, in addition to all other remedies available
hereunder or by law and without waiving any alternative remedies, may take such
reasonable steps as to make the Premises or other buildings, structures or
improvements on the Excluded Area safe, and in that event, Subtenant shall
reimburse Sublandlord as Additional Rent for the reasonable costs so incurred by
Sublandlord within fifteen (15) days of written demand by Sublandlord.
Sublandlord shall have no maintenance or repair obligations
whatsoever with respect to the Premises or any buildings, structures or
improvements located thereon. Subtenant hereby expressly waives the provisions
of Subsection 1 of Section 1932 and Sections 1941 and 1942 of the Civil Code of
California and all rights to make repairs at the expense of Sublandlord as
provided in Section 1942 of said Civil Code.
13. Alterations.
(a) Limitations. Subtenant shall not make, or suffer to be
made, any structural alterations, improvements or additions in, on, about or to
the Premises or any other buildings, structure or improvements located on the
Excluded Area, or any part thereof, without the prior consent of Sublandlord
(which consent shall not be unreasonably withheld, conditioned or delayed as
long as Subtenant provides Sublandlord with additional rent in an amount equal
to the additional costs of demolition and removal associated with such
improvements valued in excess of Ten Thousand Dollars ($10,000)) and without a
valid building permit issued by the appropriate governmental authority.
Sublandlord's consent shall not be required for interior non-structural
alterations within the Premises or any other buildings, structures or
improvements located on the Excluded Area as long as subtenant provides
Sublandlord with additional rent in an amount equal to the additional cost of
demolition and removal associated with such improvements valued in excess of Ten
Thousand Dollars ($10,000). Subtenant shall give written notice to Sublandlord
five (5) business days prior to employing any laborer or contractor to perform
services related to, or receiving materials for use upon the Premises or any
other buildings, structures or improvements located on the Excluded Area, and
prior to the commencement of any work of improvement on the Premises or any
other buildings, structures or improvements located on the
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Excluded Area. All alterations or improvements made to the Premises by Subtenant
shall be made in accordance with applicable Laws and in a workmanlike manner.
At the time Subtenant requests Sublandlord's consent to any
structural alterations or improvements, Sublandlord shall notify Subtenant in
writing whether Sublandlord will require Subtenant, at Subtenant's expense, to
remove any such structural alterations or improvements and restore the Premises
or other improvements located on the Excluded Area to their prior condition at
the expiration or earlier termination of this Sublease. All non-structural
alteration or improvements made by Subtenant to the Premises or other
improvements located on the Excluded Area during the Sublease Term, including,
without limitation, movable furniture and trade fixtures not affixed to the
Premises or other improvements located on the Excluded Area, shall be removed
from the Excluded Area by Subtenant, at Subtenant's sole cost and expense, upon
the expiration or earlier termination of the Sublease.
14. Default.
(a) Events of Default. A breach of this Sublease by Subtenant
shall exist if any of the following events (hereinafter referred to as "Event of
Default") shall occur:
(i) Default in the payment when due of any Monthly
Installment of rent, Additional Rent or other payment required to be made by
Subtenant hereunder, where such default shall not have been cured within ten
(10) days after written notice of its default is given to Subtenant;
(ii) Subtenant's failure to perform any other term,
covenant or condition contained in this Sublease where such failure shall have
continued for thirty (30) days after written notice of such failure is given to
Subtenant; provided, however, Subtenant shall not be deemed in default if
Subtenant commences to cure such failure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion within a period not to
exceed six (6) months thereafter;
(iii) Subtenant's assignment of its assets for the
benefit of its creditors;
(iv) The sequestration of, attachment of, or
execution on, any substantial part of the property of Subtenant or on any
property essential to the conduct of Subtenant's business, shall have occurred
and Subtenant shall have failed to obtain a return or release of such property
within sixty (60) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier;
(v) Subtenant hereunder shall commence any case,
proceeding or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or seek
appointment of a receiver, trustee, custodian, or other similar official for it
or for all or any substantial part of its property;
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(vi) Subtenant shall take any corporate action to
authorize any of the actions set forth in clause (v) above;
(vii) Any case, proceeding or other action against
Subtenant shall be commenced seeking to have an order for relief entered against
it as debtor, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property, and such case, proceeding or
other action (a) results in the entry of an order for relief against it which is
not fully stayed within ten (10) business days after the entry thereof or (b)
remains undismissed for a period of sixty (60) days; or
(viii) Subtenant's failure to maintain any of the
insurance it is required to maintain pursuant to Section 9(c) above where such
failure has not been cured within three (3) business days after written notice
is given to Subtenant.
(b) Remedies. Upon any Event of Default, Sublandlord shall
have the following remedies, in addition to all other rights and remedies
provided by law, to which Sublandlord may resort cumulatively, or in the
alternative:
(i) Recovery of Rent. Sublandlord shall be entitled
to keep this Sublease in full force and effect (whether or not Subtenant shall
have abandoned the Premises) and to enforce all of its rights and remedies under
this Sublease, including the right to recover rent and other sums as they become
due, plus interest at the Permitted Rate (as defined in Paragraph 31 below) from
the due date of each installment of rent or other sum until paid.
(ii) Termination. Sublandlord may terminate this
Sublease by giving Subtenant written notice of termination. On the giving of the
notice all of Subtenant's rights in the Premises and the Excluded Area shall
terminate. Upon the giving of the notice of termination, Subtenant shall
surrender and vacate the Premises and the Excluded Area in the condition
required by Paragraph 32, and Sublandlord may reenter and take possession of the
Premises and all the remaining improvements or property and eject Subtenant or
any of Subtenant's subtenants, assignees or other person or persons claiming any
right under or through Subtenant or eject some and not others or eject none.
This Sublease may also be terminated by a judgment specifically providing for
termination. Any termination under this Paragraph shall not release Subtenant
from the payment of any sum then due Sublandlord or from any claim for damages
or rent previously accrued or then accruing against Subtenant. In no event shall
any one or more of the following actions by Sublandlord constitute a termination
of this Sublease:
(A) Maintenance and preservation of the
Premises (or any other improvements, buildings, or structures located on the
Excluded Area) or the Excluded Area;
(B) Efforts to relet the Premises;
(C) Appointment of a receiver in order to
protect Sublandlord's interest hereunder;
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(D) Consent to any subletting of the
Premises or any other buildings, structures or improvements located thereon or
assignment of this Sublease by Subtenant, whether pursuant to provisions hereof
concerning subletting and assignment or otherwise; or
(E) Any other action by Sublandlord or
Sublandlord's agents intended to mitigate the adverse effects from any breach of
this Sublease by Subtenant.
(iii) Damages. In the event this Sublease is
terminated pursuant to Subparagraph 14(b)(ii) above, or otherwise, Sublandlord
shall be entitled to damages in the following sums:
(A) The worth at the time of award of the
unpaid rent which has been earned at the time of termination; plus
(B) 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 Subtenant
proves could have been reasonably avoided; plus
(C) 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 Subtenant proves could be
reasonably avoided; and
(D) Any other amount necessary to compensate
Sublandlord for all detriment proximately caused by Subtenant's failure to
perform Subtenant's obligations under this Sublease, or which in the ordinary
course of things would be likely to result therefrom.
(E) The "worth at the time of award" of the
amounts referred to in Subparagraphs (A) and (B) of this Subparagraph
14(b)(iii), is computed by allowing interest at the Permitted Rate. The "worth
at the time of award" of the amounts referred to in Subparagraph (C) of this
Subparagraph 14(b)(iii) is computed by discounting such amount at the discount
rate of the Federal Reserve Board of San Francisco at the time of award plus one
percent (1%). The term "rent," as used in this Paragraph 14, shall include all
sums required to be paid by Subtenant to Sublandlord pursuant to the terms of
this Sublease.
(c) Sublandlord shall be in default under this Sublease
hereunder if Sublandlord breaches an agreement, or fails to perform an
obligation required of Sublandlord within ten (10) days after notice in the case
of a monetary obligation, or thirty (30) days after notice in the case of a
nonmonetary obligation; provided, however, that if the nature of a nonmonetary
obligation of Sublandlord is such that more than thirty (30) days are reasonably
required for performance, then Sublandlord shall not be in default if
Sublandlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
If Sublandlord breaches any agreement in this Sublease or
fails to make any payment or perform any other act on its part to be performed
under this Sublease, provided that Subtenant has delivered to Sublandlord (and
Sublandlord's Lender, if required) written notice of
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such default and Sublandlord (or Sublandlord's Lender, if required) has failed
to cure such default within the time period required under this Section 14(c),
Subtenant may make such payment or cure such performance or breach to the extent
Subtenant deems desirable and, in connection therewith, pay reasonable expenses
and employ counsel. All sums reasonably advanced by Subtenant on Sublandlord's
behalf, any delinquent sums owed by Sublandlord to Subtenant under any provision
of this Sublease, and all penalties, interest and other costs in connection
therewith, including reasonable attorneys' fees and collection costs, shall be
due and payable by Sublandlord on written demand, together with interest thereon
from the date of delinquency at the Permitted Rate.
15. Destruction.
(a) Restoration or Maintain in Safe Condition. If the Premises
or Subtenant Improvements is damaged by any peril after the Commencement Date of
this Sublease such that Subtenant cannot reasonably run its normal business
operations in the Premises, Subtenant shall either (i) restore the same, or,
(ii) as reasonably agreed upon by Sublandlord and Subtenant, either (A) remove
the Main Building and related leasehold improvements in accordance with the
terms and conditions of Paragraph 32 hereof, and all Subtenant Improvements
(except for those Subtenant Improvements described in subparagraphs (viii), (x)
and (xvi) of Section 2(a)), or (B) place the damaged improvements or Excluded
Area, as the case may be, in safe condition; provided, however, that
Sublandlord's and Subtenant's election under clause (B) of the preceding
sentence shall not be permitted unless the Sublease is terminated by Tenant
pursuant to Subparagraph 15(b). If a Release of Hazardous Materials placed,
stored, transported or used by Subtenant and/or Subtenant's Agents in, on or
about the Property occurs as a result of such peril, Subtenant shall investigate
and clean up any contaminated soil and/or groundwater contaminated by such
Release to levels established by all appropriate governmental agencies. All
insurance proceeds available from the property damage insurance carried by
Subtenant pursuant to Paragraph 9(c)(v) of this Sublease shall be paid to and
become the property of Subtenant. If this Sublease is not terminated by
Subtenant as provided in Subparagraph 15(b), then upon the issuance of all
necessary governmental permits, Subtenant shall either commence and diligently
prosecute to completion the restoration of the damaged Premises or Subtenant
Improvements, to the extent then allowed by Law, to substantially the same
condition in which the damaged Premises or Subtenant Improvements was
immediately prior to such damage, or remove the rubble generated from such
damage, if any, from the Excluded Area and cause such Excluded Area to be placed
in a safe condition. In the event of such damage to the Premises or the
Subtenant Improvements, Sublandlord shall have no obligation to rebuild or
restore the same (unless such damage was caused by the acts, negligence or
willful misconduct of Sublandlord) and Sublandlord shall have no obligation to
rebuild or restore any trade fixtures and/or personal property and/or
alterations, additions or other improvements constructed or installed by
Subtenant in the Premises.
(b) Subtenant's Right to Terminate. If the Premises or
Subtenant Improvements, or any portion thereof, is damaged by any peril, then as
soon as reasonably practicable, Subtenant shall obtain and deliver to
Sublandlord an opinion of Subtenant's architect or construction consultant as to
when the restoration work may be completed. Subtenant shall
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have the option to terminate this Sublease in the event any of the following
occurs, which option may be exercised only by delivery to Sublandlord of a
written notice of election to terminate within sixty (60) days after Subtenant
receives from Sublandlord the estimate of the time needed to complete such
restoration:
(i) The Premises or Subtenant Improvements, or any
portion thereof, is damaged by any peril and, in the reasonable opinion of
Subtenant's architect or construction consultant, the restoration of the damaged
improvements cannot be substantially completed within one hundred twenty (120)
days of the peril causing such damage.
(ii) The Premises or Subtenant Improvements is
damaged by any peril within twelve (12) months of the last day of the Sublease
Term, and, in the reasonable opinion of Subtenant's architect or construction
consultant, the restoration work cannot be substantially completed within the
earlier of (1) ninety (90) days after the date of such damage, or (2) sixty (60)
days prior to the expiration of the Sublease Term.
(c) Abatement of Rent. In the event of damage to the Premises
or Subtenant Improvements which does not result in the termination of this
Sublease, all Rentals shall be temporarily abated, but only to the extent such
amount is covered and paid for from the proceeds of business interruption
insurance carried by Subtenant, during the period of restoration, in proportion
to the degree to which Subtenant's use of the Premises and Subtenant
Improvements is impaired by such damage. All other Rentals due hereunder shall
continue unaffected during such period. Subtenant shall not be entitled to any
compensation from Sublandlord for loss of Subtenant's property or leasehold
improvements or loss to Subtenant's business or income caused by such damage or
restoration. Subtenant hereby waives the provisions of Section 1932, Subdivision
2, and Section 1933, Subdivision 4, of the California Civil Code, and the
provisions of any similar law, hereinafter enacted.
16. Condemnation.
(a) Definition of Terms. For the purposes of this Sublease,
the term (1) "Taking" means a taking of the Premises or Excluded Area or damage
to the Premises related to the exercise of the power of eminent domain and
includes a voluntary conveyance, in lieu of court proceedings, to any agency,
authority, public utility, person or corporate entity empowered to condemn
property; (2) "Total Taking" means the taking of the entire Premises or entire
Excluded Area or so much of the Premises or Excluded Area as to prevent or
substantially impair the use thereof by Subtenant for the uses herein specified;
(3) "Partial Taking" means a Taking which does not constitute a Total Taking;
(4) "Date of Taking" means the date upon which the title to the Premises or
Excluded Area, or a portion thereof, passes to and vests in the condemnor or the
effective date of any order for possession if issued prior to the date title
vests in the condemnor; and (5) "Award" means the amount of any award made,
consideration paid, or damages ordered as a result of a Taking.
(b) Rights. The parties agree that in the event of a Taking
all rights between them or in and to an Award shall be as set forth herein and
Subtenant shall have no right to any Award except as set forth herein.
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(c) Total Taking. In the event of a Total Taking during the
term hereof, (1) the rights of Subtenant under the Sublease and the leasehold
estate of Subtenant in and to the Premises and the Excluded Area (and the
Subtenant Improvements) shall cease and terminate as of the Date of Taking; (2)
Sublandlord shall refund to Subtenant any prepaid rent; (3) Subtenant shall pay
Sublandlord any rent or charges due Sublandlord under the Sublease, each
prorated as of the Date of Taking; (4) Subtenant shall satisfy all obligations
of Sublandlord with respect to Subtenant's Use of Hazardous Materials, as may be
imposed by the condemning authority pursuant to such taking (provided that
Lessor or Sublandlord, as Lessor's agent, uses its good faith efforts to include
Subtenant in any negotiations or discussions about the Total Taking with the
applicable authority); (5) Subtenant shall receive from the Award those portions
of the Award attributable to trade fixtures of Subtenant and for moving expenses
of Subtenant; and (6) the remainder of the Award shall be paid to and be the
property of Sublandlord.
(d) Partial Taking. In the event of a Partial Taking during
the term hereof, (1) at Subtenant's election, either (A) the rights of Subtenant
under this Sublease and the leasehold estate of Subtenant in and to the portion
of the Premises or Excluded Area taken shall cease and terminate as of the Date
of Taking or (B) Subtenant may terminate this Sublease in accordance with
Section 32; (2) from and after the Date of Taking the Monthly Installment of
Basic Rent shall be an amount equal to the product obtained by multiplying the
Monthly Installment of rent immediately prior to the Taking by a fraction, the
numerator of which is the number of square feet contained in the Premises after
the Taking and the denominator of which is the number of square feet contained
in the Premises prior to the Taking; (3) Subtenant shall receive from the Award
the portions of the Award attributable to the Subtenant Improvements and other
Subtenant trade fixtures of Subtenant; and (4) the remainder of the Award shall
be paid to and be the property of Landlord and Sublandlord. In the event of a
Partial Taking, Subtenant shall, unless Subtenant elects to terminate this
Sublease in accordance with Section 32 hereof and to the extent solely from any
severance award received by Sublandlord, promptly commence repairing or
restoring the Premises to an architecturally completed unit and diligently
prosecute such repair or restoration to completion.
17. Mechanics' Liens. Subtenant shall (A) pay for all labor and
services performed for, materials used by or furnished to, Subtenant or any
contractor employed by Subtenant with respect to the Premises or the Subtenant
Improvements (or any leasehold improvements constructed or installed by or for
Subtenant); (B) indemnify, defend, protect and hold Lessor and Sublandlord, the
Premises and the Excluded Area harmless and free from any liens, claims,
liabilities, demands, encumbrances, or judgments created or suffered by reason
of any labor or services performed for, materials used by or furnished to,
Subtenant or any contractor employed by Subtenant with respect to the Premises
(and/or any leasehold improvements constructed or installed by or for
Subtenant); and (C) permit Sublandlord to post a notice of nonresponsibility in
accordance with the statutory requirements of California Civil Code Section 3094
or any amendment thereof. In the event Subtenant is required to post an
improvement bond with a public agency in connection with the above, Subtenant
agrees to include Lessor and Sublandlord as an additional obligee.
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18. Inspection of the Premises. Subtenant shall permit Lessor,
Sublandlord and their respective agents to enter the Premises or Excluded Area
at any reasonable time for the purpose of inspecting the same, protecting the
interests of Sublandlord in the Premises, performing Sublandlord's maintenance
and repair responsibilities, if any (upon one (1) business day's prior notice
except in an emergency), posting a notice of non-responsibility for alterations,
additions or repairs, posting a "For Sale" sign or signs, and at any time within
nine (9) months prior to expiration of this Sublease, to place upon the Premises
or Excluded Area, ordinary "For Sublease" signs. Sublandlord shall have the
right to use any and all reasonable means under the circumstance to open the
doors in an emergency in order to obtain entry to the Premises, and any entry to
the Premises obtained by Sublandlord in an emergency shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or any eviction of Subtenant from the Premises.
19. Compliance With Laws. Subtenant covenants and agrees to
conform and comply with all Laws and with all requirements of any public body or
officers having jurisdiction over the Premises and with the requirements or
regulations of any Board of Fire Underwriters or insurance company insuring the
Premises, all at Subtenant's own expense without reimbursement from Sublandlord.
Subtenant need not, however, comply with any such Law or requirement of public
authority so long as Subtenant shall be contesting the validity thereof, or the
applicability thereof to the Premises.
20. Subordination. This Sublease is subject and subordinate to any
and all underlying leases, deeds of trust, assignments of leases and rents or
other security instruments existing as of the date of execution of this Sublease
and disclosed to Subtenant or which hereafter may be made and/or to any renewal,
modification, replacement, extension or expansion hereafter or any consolidation
or spreader thereof theretofore or hereinafter made (collectively, a "Security
Instrument"); provided, however, that notwithstanding any provisions with
respect to the subordination of this Sublease to any Security Instrument which
now exists or may hereafter be made or to any renewal, modification, replacement
or extension hereafter of any Security Instrument, or to any consolidation or
spreader of any Security Instrument, heretofore or hereafter made, any such
subordination is subject to the express conditions that so long as this Sublease
is in full force and effect and no Event of Default by Subtenant exists under
this Sublease, (a) Subtenant shall not be evicted from the Premises or the
Excluded Area, nor shall Subtenant's continuing use and occupancy of the
Premises or the Excluded Area be interrupted, restricted or impaired, nor shall
any of Subtenant's rights under this Sublease be affected in any way by reason
of any default under such Security Instrument; and (b) Subtenant's leasehold
estate under the Sublease shall not be terminated or disturbed by reason of any
default under such Security Instrument which does not arise from a default by
Subtenant hereunder, and this Sublease and Subtenant's rights hereunder,
including any rights of offset, shall be recognized by the lender or Lessor.
Sublandlord agrees to procure, execute and deliver to
Subtenant and Subtenant agrees to execute the same, all concurrently with the
execution of this Sublease, the written agreement of Lessor and Agent, on behalf
of each Lender, substantially in the form of Exhibit "C" attached hereto (the
"SNDA"). In the event of a default under any Security Instrument,
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Subtenant shall become a subtenant of and attorn to the successor-in-interest to
Sublandlord upon the same terms and conditions contained in this Sublease and
shall execute any instrument reasonably required by Sublandlord's successor for
that purpose provided such successor in interest assumes the Sublandlord's
obligations under this Sublease accruing from and after the date such party
becomes the successor in interest. Subtenant shall also, upon written request of
Sublandlord, execute and deliver all instruments as may be reasonably required
from time to time to subordinate the rights of Subtenant under this Sublease to
any underlying lease or any deed of trust (provided that such instruments
include the nondisturbance and attornment provisions set forth above).
If the SNDA is not tendered to Subtenant, in addition to any
other rights and remedies available to Subtenant, Subtenant may, at its option,
cancel this Sublease on the date ten (10) days following such notice, and the
Sublease and the term and estate hereby granted shall then terminate at noon of
such cancellation date as if such cancellation date were the expiration date,
unless all of such agreements shall have been tendered meanwhile. Upon any such
cancellation, Sublandlord shall have no further obligation to Subtenant
hereunder except to return any moneys theretofore paid by Subtenant to
Sublandlord as Rent under this Sublease.
21. Notices. Any notice required or desired to be given under this
Sublease shall be in writing with copies directed as indicated below and shall
be personally served or given by mail. Any notice given by mail shall be deemed
to have been given when seventy-two (72) hours have elapsed from the time such
notice was deposited in the United States mails, certified and postage prepaid,
return receipt requested, addressed to the party to be served with a copy as
indicated herein at the last address given by that party to the other party
under the provisions of this paragraph. At the date of execution of this
Sublease, the address of Sublandlord is:
Veritas Software Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxx
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxx "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx, Esq.
and the address of Subtenant is:
Xxxxxxxxx Semiconductor Corporation of California
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
Attn: Xxx Xxxxx, Esq.
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with copy to:
Berliner Xxxxx
00 Xxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxx, XX. 00000
Attn: Xxx Xxxx
22. Attorneys' Fees. In the event either party shall bring any
action or legal proceeding for damages for any alleged breach of any provision
of this Sublease, to recover rent or possession of the Premises or the Excluded
Area, to terminate this Sublease, or to enforce, interpret, protect or establish
any term or covenant of this Sublease or right or remedy of either party, the
prevailing party shall be entitled to recover as a part of such action or
proceeding, reasonable attorneys' fees and court costs, including reasonable
attorneys' fees and costs for appeal, as may be fixed by the court or jury. The
term "prevailing party" shall mean the party who received substantially the
relief requested, whether by settlement, dismissal, summary judgment, judgment,
or otherwise.
23. Subleasing and Assignment.
(a) Sublandlord's Consent Required. Subtenant's interest in
this Sublease is not assignable, by operation of law or otherwise (except as may
be required for security purposes), nor shall Subtenant have the right to sublet
the Premises or the Excluded Area, transfer any interest of Subtenant therein or
permit any use of the Premises by another party, without the prior written
consent of Lessor and Sublandlord to each such assignment, subletting, transfer
or use, which consent Sublandlord may withhold in its sole discretion. A consent
to one assignment, subletting, occupancy or use by another party shall not be
deemed to be a consent to any subsequent assignment, subletting, occupancy or
use by another party. Any assignment or subletting without such consent shall be
void and shall, at the option of Sublandlord, terminate this Sublease.
Lessor's or Sublandlord's waiver or consent to any assignment
or subletting hereunder shall not relieve Subtenant from any obligation under
this Sublease unless the consent shall so expressly provide in writing.
(b) Transfers to an Affiliate. Notwithstanding the foregoing,
Subtenant may, without Lessor's or Sublandlord's prior written consent, assign
its interest in the Sublease or sublet the Premises or Excluded Area, or a
portion thereof to (i) a subsidiary, affiliate, division or corporation
controlled by or under common control with Subtenant; provided that (a)
Sublandlord receives written notice of the name and address of the proposed
transferee, (b) the transferee assumes the obligations of the Subtenant under
this Sublease in a written instrument, in form and substance reasonably
satisfactory to Sublandlord, which shall be delivered to Sublandlord as a
condition precedent to the effectiveness of such assignment; and (c) the
transferor tenant remains liable as a primary obligor for the obligations of
Subtenant under this Sublease.
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24. Successors. The covenants and agreements contained in this
Sublease shall be binding on the parties hereto and on their respective heirs,
successors and assigns (to the extent the Sublease is assignable).
25. Mortgagee Protection. In the event of any default on the part
of Sublandlord, Subtenant will give notice by registered or certified mail to
any beneficiary of a deed of trust or mortgagee of a mortgage encumbering the
Premises, whose address shall have been previously furnished to Subtenant. So
long as such beneficiary or mortgagee is making reasonable efforts to cure the
default, including, but not limited to, obtaining possession of the Premises by
power of sale or judicial foreclosure, if such should prove necessary to effect
a cure, Subtenant shall not have the right to terminate this Sublease.
26. Estoppel Certificate. Subtenant agrees within fifteen (15)
business days following reasonable request by Sublandlord to execute and deliver
to Sublandlord any documents, including estoppel certificates presented to
Subtenant by Sublandlord, (1) certifying that this Sublease is unmodified and in
full force and effect and the date to which the rent and other charges are paid
in advance, if any, and (2) acknowledging that there are not, to Subtenant's
knowledge, any uncured defaults on the part of Sublandlord hereunder, or
specifying the defaults, if any, and (3) evidencing the status of the Sublease
as may be required either by a Lender making a loan or any other advance to
Sublandlord to be secured by a deed of trust or mortgage covering the Premises
or a purchaser of the Premises from Sublandlord.
27. Surrender of Sublease Not Merger. The voluntary or other
surrender of this Sublease by Subtenant, or a mutual cancellation thereof, shall
not work a merger and shall, at the option of Sublandlord, terminate all or any
existing subleases or subtenants, or operate as an assignment to Sublandlord of
any or all such subleases or subtenants.
28. Waiver. The waiver by Sublandlord or Subtenant of any breach
of any term, covenant or condition herein contained shall not be deemed to be a
waiver of such term, covenant or condition or any subsequent breach of the same
or any other term, covenant or condition herein contained. Any waiver shall be
in writing and signed by both Sublandlord and Subtenant.
29. General.
(a) Captions. The captions and Paragraph headings used in this
Sublease are for the purposes of convenience only. They shall not be construed
to limit or extend the meaning of any part of this Sublease, or be used to
interpret specific sections. The word(s) enclosed in quotation marks shall be
construed as defined terms for purposes of this Sublease. As used in this
Sublease, the masculine, feminine and neuter and the singular or plural number
shall each be deemed to include the other whenever the context so requires.
(b) Time of Essence. Time is of the essence for the
performance of each term, covenant and condition of this Sublease.
(c) Severability. In case any one or more of the provisions
contained herein, except for the payment of rent, shall for any reason be held
to be invalid, illegal or unenforceable
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in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Sublease, but this Sublease shall be construed as if
such invalid, illegal or unenforceable provision had not been contained herein.
This Sublease shall be construed and enforced in accordance with the laws of the
State of California.
(d) Quiet Enjoyment. Upon Subtenant paying the rent for the
Premises (and the use of the Excluded Area) observing and performing all of the
covenants, conditions and provisions on Subtenant's part to be observed and
performed hereunder, Subtenant shall have quiet possession of the Premises (and
the use of the Excluded Area) for the entire term hereof subject to all of the
provisions of this Sublease.
(e) Law. As used in this Sublease, the term "Law" or "Laws"
shall mean any judicial decision, statute, constitution, ordinance, resolution,
regulation, rule, administrative order, or other requirement of any government
agency or authority having jurisdiction over the parties to this Sublease or the
Premises or both, in effect at the Commencement Date of this Sublease or any
time during the Sublease Term, including, without limitation, any regulation,
order, or policy of any quasi-official entity or body (e.g., board of fire
examiners, public utility or special district).
(f) Agent. As used in this Sublease, the term "Agent" shall
mean, with respect to either Sublandlord, Subtenant or any Lender, its
respective agents, employees, contractors (and their subcontractors), and
invitees (and in the case of Subtenant, its subtenants).
(g) Lender. As used in this Sublease, the term "Lender" shall
mean any beneficiary, mortgagee, secured party or other holder of any Security
Instrument.
30. Sign. Subtenant shall have the right at its cost to maintain
its name on signage within or on the Premises or on the Excluded Area, provided
any such signage placed by Subtenant on the Main Building or on the Excluded
Area shall be in compliance with all applicable laws, ordinances, rules and
regulations.
31. Interest on Past Due Obligations. Any Monthly Installment of
Rent due from Subtenant, or any other sum due under this Sublease from
Subtenant, which is received by Sublandlord after the date ten (10) days
following the date written notice is given by Sublandlord to Subtenant that such
sum has not been paid when due, shall bear interest from said due date until
paid, at an annual rate equal to the greater of (the "Permitted Rate"): (1) ten
percent (10%); or (2) five percent (5%) plus the rate established by the Federal
Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the month
immediately preceding the due date, on advances to member banks under Sections
13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter from time
to time amended. Payment of such interest shall not excuse or cure any default
by Subtenant. In addition, Subtenant shall pay all costs and attorneys' fees
incurred by Sublandlord in collection of such amounts.
32. Surrender of the Premises.
(a) Removal of Property. On the last day of the Sublease Term,
or on the sooner termination of this Sublease, Subtenant shall surrender the
Premises and the Excluded Area to
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Sublandlord in their then existing condition existing except as otherwise
provided in this Paragraph 32. Not later than the expiration or earlier
termination of the Sublease Term, Subtenant shall remove all of Subtenant's
personal property and trade fixtures (including, without limitation, all
machinery and equipment) from the Main Building, and all property not so removed
shall be deemed abandoned by Subtenant and may be removed by Sublandlord at
Subtenant's sole cost and expense. Anything herein to the contrary
notwithstanding, at the expiration or earlier termination of the Sublease Term,
Subtenant shall not be obligated to remove from the Excluded Area any
"Remediation Equipment" as such term is defined in that certain Grant of
Easements, Restriction and Indemnity Agreement dated December 24, 1997, executed
by Raytheon Semiconductor, Inc., a Delaware corporation, as grantor, and
Raytheon Company, as grantee, and recorded in the Official Records of Santa
Xxxxx County on December 30, 1997, as Document No.: 13994862 (the "Easements
Agreement").
(b) Demolition of Main Building and Related Improvements.
(i) The parties hereto agree that Subtenant shall (A)
complete the demolition of the Main Building and related structures and
improvements including, without limitation, the Subtenant Improvements (except
for those items set forth in subparagraphs (viii), (x) and (xvi) of Paragraph
2(a) of this Sublease) on the Excluded Area and the Main Building foundation,
(B) complete, at Subtenant's cost, the remediation of any contaminated soil
underlying the Main Building or related improvements (as further discussed in
Paragraph 32(d) below) either (i) to levels at or below the cleanup level or
standards established by the United States Environmental Protection Agency
Record of Decision for the Raytheon facility, or (ii) to levels acceptable to
the environmental agency or agencies having jurisdiction over such cleanup or
remediation (such levels described in clauses (i) or (ii) above being referred
to hereinafter as the "Soil Remediation Standard") and (C) obtain, at
Subtenant's cost, an "environmental closure" pertaining to the operations of
Subtenant within the Main Building and related facilities, as required by all
applicable governmental agencies having jurisdiction over such closure (the
items set forth in subparagraphs (A), (B) and (C) of this subparagraph are
collectively referred to as the "Demolition") on or before January 1, 2001 (such
date is referred to herein as the "Departure Deadline"), without any liability
of Sublandlord or Lessor, as the case may be, for overtime or additional labor
resulting from Subtenant's failure, if applicable, to correctly estimate the
time necessary for completion of the Demolition. For purposes of this Paragraph
32(b), Subtenant shall be deemed to have completed the soil contamination
remediation referred to above, if applicable, at such time as (Y) Subtenant's
environmental consultant overseeing such remediation confirms or states in
writing that soil contamination under the Main Building, if any, has been
remediated to levels that meet the Soil Remediation Standard, or (Z) Subtenant
causes, at Subtenant's cost, an environmental assessment of the soil under the
demolished Main Building to be performed by an environmental consultant and such
assessment indicates that the soil under the demolished Main Building and
related improvements does not contain Hazardous Materials in violation of the
Soil Remediation Standard. The environmental consultant referred to in the
preceding sentence shall be selected by Subtenant and approved by Sublandlord
and Lessor, which approval shall not be unreasonably withheld. Sublandlord and
Lessor shall approve or disapprove of the environmental consultant selected by
Subtenant within five (5) days of receipt of such contractor's identity as well
as written information about the contractor's experience and
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credentials. If Sublandlord or Lessor fail to disapprove such contractor within
such five(5) day period, Sublandlord and Lessor shall be deemed to have approved
such contractor. Any report prepared by such contractor shall be addressed to
the Financing Parties. Alternatively, such contractor shall provide the
Financing Parties with a signed statement that they may rely on such report.
(ii) Subtenant shall use commercially reasonable
efforts to complete the Demolition in an expeditious manner following the
expiration or earlier termination of the Sublease Term in order to permit
Sublandlord or Lessor, as the case may be, to commence development of the
Excluded Area. Sublandlord, in its own capacity or as construction agent of
Lessor, agrees to reasonably cooperate with Subtenant in Subtenant's efforts to
cause the applicable governmental agency or agencies to respond in a timely
manner to Subtenant's plan for removal of any contaminated soil from under the
Main Building or the related improvements. Sublandlord and Lessor agree to
reasonably cooperate with Subtenant with regard to the Demolition and not to
unreasonably interfere with, delay or impair Subtenant's efforts to complete the
Demolition in an expeditious manner. If, however, Subtenant fails to complete
the Demolition on or before the Departure Deadline, then Subtenant shall pay to
Sublandlord, as Sublandlord's sole and exclusive remedy for such delay in the
completion of the Demolition, liquidated damages in a per day amount equal to
the Monthly Installment of rent paid by Subtenant for the month immediately
preceding the expiration or earlier termination of the Sublease Term divided by
thirty (30) for each day from and after the Departure Deadline until the
Demolition is completed. Nothing within the preceding sentence shall prelude
Sublandlord or Lessor from exercising any rights or remedies against Subtenant
under the Purchase Agreement (to the extent such remedies survive the close of
escrow thereunder) or that certain Environmental Indemnity Agreement by and
between Sublandlord and Subtenant (the "Indemnity Agreement").
(iii) Notwithstanding the provisions of subparagraph
32(b)(ii) above, if Subtenant fails to complete the Demolition on or before the
Departure Deadline due to Subtenant's failure to use commercially reasonable
efforts to complete the Demolition in an expeditious manner, Subtenant shall pay
Sublandlord, as Sublandlord's sole and exclusive remedy for Subtenant's failure
to complete the Demolition on or before the Departure Deadline, liquidated
damages in the amount of Seven Thousand Five Hundred Dollars ($7,500) per day
for each day that Subtenant fails to complete the Demolition by or after the
Departure Deadline due to Subtenant's breach of its obligation under the first
sentence of subparagraph 32(b)(ii). Nothing within the preceding sentence shall
preclude Sublandlord from exercising any remedies against Subtenant under the
Purchase Agreement (to the extent such remedies survive the close of escrow
thereunder) or the Indemnity Agreement. Notwithstanding the foregoing, Subtenant
shall only be obligated to pay liquidated damages in the amount set forth in
this subparagraph 32(b)(iii) (instead of the amount set forth in subparagraph
32(b)(ii) above) for each day after the Departure Deadline that the Demolition
has not been completed and Sublandlord or Lessor, as the case may be, is ready
to commence grading or the construction of improvements on the Excluded Area or
any portion thereof; provided, however, that if the condition of the Excluded
Area prevents or delays the Sublandlord's ability to commence grading or
construction thereon, the condition set forth in this sentence shall not apply.
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(iv) The parties hereto acknowledge and agree that
Sublandlord's carrying costs, lost opportunity costs and other expenses incurred
by Sublandlord as a result of not having full and unrestricted access to the
Excluded Area by the Departure Deadline are impracticable or extremely difficult
to ascertain. The parties hereto agree that the amounts of liquidated damages
set forth in subparagraph 32(b)(ii) and 32(b)(iii) are reasonable estimates of
the damages that will be incurred by Sublandlord in the event Subtenant is not
able to complete the Demolition by the Departure Deadline. By executing this
paragraph below, the parties hereto agree to the provisions of these liquidated
damages provisions.
Subtenant: ____________ Sublandlord: ______________
(c) Remediation of Contaminated Soil. If contaminated soil is
discovered under the approximately 119,000 square foot Main Building and/or
related improvements following the demolition of the same by Subtenant, then
such contaminated soil shall not be treated or remediated by Subtenant on the
Excluded Area after the Departure Deadline. If Subtenant has not disposed of or
remediated any such contaminated soil underlying the Main Building and/or
related improvements by the Departure Deadline, then Subtenant agrees to dispose
or treat, or cause to be disposed or treated, such soil contamination off-site
at a registered hazardous waste disposal site (if legally required) or off-site
as required by applicable environmental Laws, with Subtenant or Raytheon Company
named on all permits and manifests with respect to such contaminated soil as the
party responsible for such disposal or treatment (i.e., the generator).
Sublandlord acknowledges and agrees that if contaminated soil is discovered
under the Main Building and/or related improvements following the demolition of
such Main Building and related improvements, and if Subtenant reasonably
believes that Raytheon Company is responsible for the clean up or remediation of
such contaminated soil (or for the cost of clean up or remediation), then
Subtenant will promptly notify Raytheon Company of such contamination and
request that Raytheon Company undertake the disposal or treatment of such
contaminated soil as provided above. Subtenant shall have no liability to
Sublandlord or Lessor for the clean up or remediation of such contaminated soil
if Raytheon Company accepts responsibility for the clean up or remediation of
such contaminated soil in accordance with the terms set forth above and disposes
of or treats such contamination such that it is removed or remediated in
accordance with applicable environmental laws and regulations by the Departure
Deadline. The parties agree that any contaminated soil discovered under the Main
Building or the related improvements shall be remediated or treated by
Subtenant, at Subtenant's sole cost (except as set forth in the preceding
sentence), to levels that meet the Soils Remediation Standard. Subtenant shall
not be obligated to remove any contaminated soil or other Hazardous Materials
discovered under the Main Building or related improvements (or on or under the
Excluded Area) if the same is remediated or treated to levels that meet the Soil
Remediation Standard.
(d) Costs of Demolition.
(i) Prior to vacating the Main Building (which shall
occur not later than December 31, 2000), Subtenant shall contract with a
licensed contractor to demolish, at Lessor's cost (to the extent the funding
requirements set forth in that certain Participation Agreement dated April ___,
1999 among Lessor, Sublandlord and others (the "Participation
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Agreement") and that certain Agency Agreement dated April __, 1999 between
Lessor and Sublandlord (the "Agency Agreement") are satisfied), the Main
Building (and certain related structures and improvements located on the
Excluded Area), including, without limitation, the foundation of the Main
Building. If the funding requirements set forth in the Participation Agreement
and the Agency Agreement are not satisfied, the items identified in the
preceding sentence as being at Lessor's costs shall be at Sublandlord's cost.
Subtenant shall have the right to select the contractor to perform such
demolition work. The contractor shall be selected through a bid process in which
Subtenant shall obtain bids from not less than three licensed contractors
selected by Subtenant and approved by Sublandlord, as Lessor's agent, which such
approval shall not be unreasonably withheld. Based on such bids and any other
information that the Subtenant may reasonably consider, Subtenant shall select
the contractor to perform the demolition and such contractor selected by
Subtenant shall be subject to the approval of Sublandlord and Lessor (which such
approval shall not be unreasonably withheld). Subtenant's contract with such
contractor shall contain terms that are commercially reasonable for such a
contract. Sublandlord and Lessor shall provide the approvals or disapprovals set
forth in this subparagraph within five (5) days of receipt of the information
about the contractors selected by Subtenant to make bids or the bids and the
identity of the contractor selected by Subtenant to perform the work. If
Sublandlord or Lessor fails to disapprove such contractor(s) within such five(5)
day period, Sublandlord and Lessor shall be deemed to have approved such
contractor(s). If Sublandlord or Lessor reasonably disapproves any bidders or
contractor selected by Subtenant, then, concurrently with notifying Subtenant of
its disapproval, Sublandlord or lessor, as the case may be, shall provide
Subtenant in writing with the name, address and telephone number of a
replacement bidder or contractor, as the case may be, acceptable to Sublandlord
and Lessor.
(ii) Lessor shall pay (to the extent the funding
requirements set forth in the Participation Agreement and the Agency Agreement
are satisfied) one hundred percent (100%) of the cost of demolishing and
removing from the Property the Main Building and related structures and
improvements located on the Excluded Area, including the foundation of the Main
Building (and the cost of removing such demolished Main Building, foundations,
structures and improvements from the Property). If the funding requirements set
forth in the Participation Agreement and the Agency Agreement are not satisfied,
the items identified in the preceding sentence as being paid by Lessor shall be
paid by Sublandlord, except as set forth below. Notwithstanding the foregoing,
Subtenant shall be responsible for (A) the cost of removal of any Hazardous
Materials, including asbestos, located within the Main Building, (B) the cost of
removal (or remediation as provided above) in compliance with applicable Laws of
any asbestos or other Hazardous Materials located under the Main Building to
levels that meet the Soils Remediation Standard (except Subtenant shall not be
responsible hereunder for removal of any groundwater contamination under the
Main Building) and (C) the cost of demolishing/removing the improvements
constructed after the Commencement Date of this Sublease by or on behalf of
Subtenant identified in Paragraph 13(a) above. The cost to be borne by Lessor
(the "Cost to Lessor") (to the extent the funding requirements set forth in the
Participation Agreement and the Agency Agreement are satisfied) for demolishing
the Main Building and related structures and improvements on the Excluded Area
shall be net of the cost of health and safety plans and procedures incurred by
Subtenant and/or Subtenant's affiliates, agents, employees or contractors for
demolition and removal of the improvements, and the cost of protective measures
for
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construction workers incurred by Subtenant and/or Subtenant's affiliates,
agents, employees or contractors relating to any Hazardous Materials within or
under the Main Building, which shall be at Subtenant's (or Raytheon's) cost. If
the funding requirements set forth in the Participation Agreement and the Agency
Agreement are not satisfied, the items identified in the preceding sentence as
being at Lessor's costs shall be at Sublandlord's cost. Except as provided in
this Paragraph 32(d)(ii), all costs of Demolition shall be borne by Subtenant.
(iii) Upon Sublandlord's selection of a contractor,
Sublandlord shall cause Lessor (to the extent the funding requirements set forth
in the Participation Agreement and the Agency Agreement are satisfied) to
deposit into an interest bearing escrow account as quickly as practicable under
the Financing Documents, but in no event more than forty (40) days after
Sublandlord's approval of the contractor as set forth in subparagraph 32(d)(ii)
above, an amount equal to such contractor's estimated Cost to Lessor. If
Sublandlord or Lessor fails to cause such amount to be deposited into the escrow
account as provided herein, Subtenant shall not be required to demolish the Main
Building and related improvements or remediate any soil contamination under the
Main Building, if any, or remove any asbestos from the Main Building or any of
the related improvements. Upon Subtenant's submission to the escrow holder of
reasonably detailed documentation with respect to costs actually incurred with
respect to the Demolition which are Costs to Lessor, the escrow holder shall
promptly disburse from the escrow account to Subtenant or Subtenant's designees
funds sufficient to pay such Costs to Lessor. In the event the total Costs to
Lessor are less than the amount held in escrow, all remaining amounts held in
the escrow account shall be returned to Sublandlord, as agent for Lessor. In the
event the total Costs to Lessor exceed the amount held in escrow, Lessor shall
promptly reimburse Subtenant (to the extent the funding requirements set forth
in the Participation Agreement and the Agency Agreement are satisfied) such
additional costs. If the funding requirements set forth in the Participation
Agreement and the Agency Agreement are not satisfied, the items identified in
the preceding sentence as being reimbursed by Lessor shall be reimbursed by
Sublandlord.
(iv) The parties hereto agree that Subtenant or
Raytheon Company shall be identified as the party responsible for the proper
disposal of any Hazardous Materials within the Main Building (e.g., asbestos) or
contaminated soil to be removed from the Excluded Area as part of the demolition
and removal obligations referred to in this paragraph, and in the event
Subtenant or Raytheon Company fails to timely and completely perform such
asbestos and contaminated soil removal or remediation as provided above,
Sublandlord, in addition to Sublandlord's other remedies under this Sublease,
may, as Lessor's agent, elect to do so (with Subtenant named on all permits and
manifests relating to such asbestos and contaminated soil removal) and, in such
event, Subtenant shall reimburse, or cause Raytheon Company to reimburse, Lessor
for its reasonable costs incurred in removing such asbestos and contaminated
soil from or under the Main Building and related structures as provided above.
Such reimbursement shall be required to be made within thirty (30) days
following receipt of a written notice or statement setting forth in reasonable
detail such costs to be reimbursed.
(e) Relocation of Remediation Well Sites and Equipment.
Subtenant agrees to reasonably cooperate with Sublandlord, as Lessor's agent,
promptly to engineer and relocate, on Sublandlord's reasonable request and at
Subtenant's cost, any existing soil or water remediation
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well sites and equipment (as further set forth in Section 9.1(g) of the Purchase
Agreement) which Subtenant is not required to remove pursuant to Paragraph 32
herein. Sublandlord agrees to reasonably cooperate with Subtenant with respect
to the engineering and relocation of such items. Such cooperation shall include,
without limitation, the prompt delivery to Subtenant of any development plans
for the Property and Sublandlord's participation in good faith and timely
discussions with Subtenant regarding the relocation of such items.
(f) Survival. The obligations of Lessor, Subtenant and
Sublandlord under this Paragraph 32 shall survive the expiration or earlier
termination of this Sublease.
33. Authority. The undersigned parties hereby warrant that they
have proper authority and are empowered to execute this Sublease on behalf of
Sublandlord and Subtenant, respectively.
34. Brokers. Sublandlord and Subtenant each represent and warrant
to the other that it has not dealt with any broker respecting this transaction
other than Cornish & Xxxxx Commercial ("C&C"); however, no commission shall be
owing to C&C based on the parties hereto entering into this Sublease. Each party
hereto agrees to indemnify and hold the other harmless from and against damages,
losses, liabilities, claims, demands, costs or expenses suffered or incurred by
the other in the event of any breach by such party of any representation,
warranty or covenant set forth in this Paragraph 34.
35. Consent. Wherever in this Sublease it is provided that either
party shall not unreasonably withhold consent or approval, such consent or
approval (collectively referred to as "consent") shall also not be unreasonably
withheld, conditioned or delayed. If a party considers that the other party has
unreasonably withheld or delayed a consent, it shall so notify the other party
within ten (10) days after receipt of notice of denial of the requested consent
or, in case notice of denial is not received, within twenty (20) days after
giving the first-mentioned notice, may submit the question of whether the
withholding or delaying of such consent is unreasonable to determination by
arbitration.
36. Right of Sublandlord to Perform. Except as provided otherwise
herein, all covenants and agreements to be performed by Subtenant under this
Sublease shall be performed at Subtenant's sole cost and expense and without any
abatement of rent or right of set-off. If Subtenant fails to pay any sum of
money, other than rent, or fails to perform any other act on its part to be
performed under this Sublease, and the failure continues beyond any applicable
grace or cure period set forth herein then in addition to any other available
remedies, Sublandlord may, at its election make the payment or perform the other
act on Subtenant's part. Sublandlord's election to make the payment or perform
the act on Subtenant's part shall not give rise to any responsibility of
Sublandlord to continue making the same or similar payments or performing the
same or similar acts. Subtenant shall, promptly upon demand by Sublandlord,
reimburse Sublandlord for all reasonable sums paid by Sublandlord and all
necessary incidental costs, together with interest at the Permitted Rate or two
percent (2%) above the prime rate announced by Bank of America from time to
time, whichever is greater from the date of payment by Sublandlord. Sublandlord
shall have the same rights and remedies if Subtenant fails to pay those amounts
as Sublandlord would have in the event of a default by Subtenant in the payment
of rent.
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Sublandlord shall provide Subtenant with written notice and the appropriate cure
period provided in the Lease before performing any act on behalf of Subtenant
and will provide Subtenant with written request for any reimbursement payable
hereunder.
37. Expenses and Legal Fees. All sums reasonably incurred by
Sublandlord in connection with any Event of Default by Subtenant under this
Sublease or holding over of possession by Subtenant after the expiration or
earlier termination of this Sublease, including without limitation all
reasonable costs, expenses and reasonable accountants, appraisers, attorneys and
other professional fees, and any collection agency or other collection charges,
shall be due and payable by Subtenant to Sublandlord on demand, and shall bear
interest at the Permitted Rate. Should either Sublandlord or Subtenant bring any
action in connection with this Sublease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all other
costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
38. WAIVER OF JURY TRIAL. SUBLANDLORD AND SUBTENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND
KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.
39. Satisfaction of Judgement. The obligations of Sublandlord and
Subtenant do not constitute the personal obligations of the directors, officers
or shareholders of Sublandlord or its constituent partners. Should Subtenant
recover a money judgment against Sublandlord, 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 Sublandlord in the
Property and out of the rent, insurance proceeds or other income from such
property receivable by Sublandlord or out of consideration received by
Sublandlord from the sale or other disposition of all or any part of
Sublandlord's right, title or interest in the Property, and no action for any
deficiency may be sought or obtained by Subtenant.
40. Changes Required by Accounting Rules. If, in connection with
obtaining synthetic lease financing for the acquisition and development of the
Property, Sublandlord is required to make modifications to this Sublease in
order to comply with all applicable accounting requirements for such financing,
Subtenant will not unreasonably withhold or delay its consent, provided that the
modifications do not increase the obligations of Subtenant or impair Subtenant's
rights under this Sublease.
41. Security Measures. Subtenant hereby acknowledges that Sublandlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of
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the Premises or the Property. Subtenant assumes all responsibility for the
protection of Subtenant, its agents, invitees and property from acts of third
parties.
IN WITNESS WHEREOF, the parties have executed this Sublease on the
dates set forth below.
SUBTENANT:
XXXXXXXXX SEMICONDUCTOR CORPORATION
OF CALIFORNIA,
a Delaware corporation
DATED: , 1999 By:
---------------------------------------
Name:
-------------------------------------
Title:
--------------------------------------
SUBLANDLORD:
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
DATED: , 1999 By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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CONSENT OF LESSOR
The undersigned Lessor under that certain Lease Agreement dated as of April __,
1999 by and between Lessor and Lessee hereby consents to the subletting of the
Premises by Subtenant on the terms and conditions contained in this Sublease
including, without limitation, the terms and conditions set forth in Paragraph
32, and Lessor agrees to be bound by its obligations under Paragraph 32. This
consent shall apply only to this Sublease and shall not be deemed to be a
consent to any other subleases.
LESSOR
---------------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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EXHIBIT "A"
SITE PLAN ILLUSTRATING MAIN BUILDING, EQUIPMENT AREA
AND EXCLUDED AREA BOUNDED BY DOTTED LINES
[to be attached]
A-1
40
EXHIBIT "B"
SITE PLAN ILLUSTRATING SUBTENANT IMPROVEMENTS
DESIGNATED AS AREAS A THROUGH S
[to be attached]
B-1
41
EXHIBIT "C"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY, AND )
WHEN RECORDED, RETURN TO: )
)
Berliner Xxxxx )
Ten Almaden Boulevard, 11th Floor )
Xxx Xxxx, Xxxxxxxxxx 00000-0000 )
(000) 000-0000 )
Attn: Xxxxxx X. Xxxx, Esq. )
)
--------------------------------------------------------------------------------
(Space Above for Recorder's Use)
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into this ____
day of April, 1999, by and among (1) XXXXXXXXX SEMICONDUCTOR CORPORATION OF
CALIFORNIA, a Delaware corporation ("Subtenant"), (2) VERITAS SOFTWARE
CORPORATION, a Delaware corporation ("Sublandlord"), (3) VS TRUST 1999-1, a
___________________ ("Owner") and (3) __________________________________ , as
agent for the Financing Parties (as defined below) ("Agent"). The defined term
"Agent" shall include any successors and assigns of Agent.
R E C I T A L S:
WHEREAS, Sublandlord executed a Sublease (the "Sublease") dated as of
April __, 1999, in favor of Subtenant, covering a certain premises therein
described (the "Premises") and (2) a portion of certain real property legally
described on Exhibit A attached hereon (the "Land").
WHEREAS, Sublandlord has entered into a financing and lease transaction
(the "Financing Transaction") with Owner and the other parties to that certain
Participation Agreement dated as of April __, 1999 (such other parties are
referred to herein as the "Financing Parties") pursuant to which (1) Owner has
purchased the Land and all improvements thereon, (2) Owner has leased the Land
to Sublandlord pursuant to that certain Lease Agreement dated April __, 1999
among Owner and Sublandlord (the "Lease"), (3) Sublandlord, as Owner's agent,
has
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agreed to manage the construction of certain improvements on the Land and
(4) Owner and Sublandlord have each entered into various other agreements to
secure their respective obligations under the Financing Transaction.
WHEREAS, in order to induce the Financing Parties to provide the
financing called for by the Financing Transaction, the Financing Parties have
requested that the Sublease be subordinate to any and all underlying leases,
deeds of trust or other security instruments existing as of the date of
execution of this Agreement or which hereafter may be made and/or to any
renewal, modification, replacement, extension or expansion hereafter or any
consolidation or spreader thereof heretofore or hereinafter made (collectively,
the "Security Instruments").
WHEREAS, in order to induce Subtenant to subordinate its interest in
the Sublease to the Security Instruments, the parties hereto desire to assure
Subtenant's possession and control of the Premises under the Sublease upon the
terms and conditions therein contained;
NOW, THEREFORE, for and in consideration of the mutual covenants and
premises herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed by the parties hereto,
the parties hereto do hereby agree as follows:
A G R E E M E N T:
1. Subject to the non-disturbance covenants set forth herein, the
Sublease is and shall be subordinate to the Security Instruments.
2. Should default under the Security Instruments occur such that (a)
Sublandlord's rights under the Sublease are assigned to the Agent, (b) the Agent
becomes the owner of the Land or any portion thereof and/or (c) the Land or any
portion thereof is sold by reason of foreclosure, transferred by deed in lieu of
foreclosure, or sold under a trustee's sale, (x) Subtenant shall not be evicted
from the Premises or the Excluded Area, nor shall Subtenant's continuing use and
occupancy of the Premises or the Excluded Area be interrupted, restricted or
impaired, nor shall any of Subtenant's rights under this Sublease be affected in
any way by reason of any default under such Security Instrument; and (y)
Subtenant's leasehold estate under the Sublease shall not be terminated or
disturbed by reason of any default under such Security Instrument which does not
arise from a default by Subtenant hereunder, and this Sublease and Subtenant's
rights hereunder, including any rights of offset, shall be recognized by the
Agent or Lessor. Subtenant does hereby agree to attorn to Agent or to any such
owner as its Sublandlord after Subtenant's receipt of written notice from Agent
provided Agent or Lessor, as the case may be, assume the obligations of
Sublandlord under the Sublease, and Agent or any such owner hereby agree that it
will accept such attornment.
3. In the event the Lease terminates prior to the date (a) the Sublease
term expires or earlier terminates or (b) Subtenant completes Demolition as
described in Paragraph 32(b) of the Sublease, then Sections 2(x) and (y) above
shall apply, and Subtenant shall attorn to Owner as its
C-2
43
Sublandlord after Subtenant's receipt of written notice provided Owner assumes
the obligations of Sublandlord under the Sublease, and Owner hereby agrees that
it will accept such attornment.
4. Notwithstanding any other provision of this Agreement, Agent shall
not be (a) liable for any default of any sublandlord under the Sublease
(including Sublandlord), (b) subject to any offsets or defenses which have
accrued prior to the date of foreclosure which shall be the earliest to occur of
(1) delivery of a trustee's deed following a non-judicial foreclosure, (2)
delivery of a marshal's deed upon sale of the property following entry of
judgment in a judicial foreclosure and/or (3) delivery of a deed in lieu of
foreclosure, unless Subtenant shall have delivered to Agent written notice of
the default which gave rise to such offset or defense and permitted Agent the
same right to cure such default as permitted Sublandlord under the Sublease; (c)
bound by any rent that Subtenant may have paid under the Sublease more than one
month in advance; (d) bound by any amendment or modification of the Sublease
hereafter made without Agent' prior written consent which shall be Sublandlord's
obligation to request and obtain; or (e) responsible for the return of any
security deposit delivered to Sublandlord under the Sublease and not
subsequently received by Agent.
5. If Agent sends written notice to Subtenant to direct its rent
payments under the Sublease to Agent instead of Sublandlord, then Subtenant
agrees to follow the instructions set forth in such written instructions and
deliver rent payments to Agent; however, Sublandlord and Agent agrees that
Subtenant shall be credited under the Sublease for any rent payments sent to
Agent pursuant to such written notice.
6. Subtenant shall give Agent or any successor in interest of Agent
such notices and cure rights as are required under Section 14(c) of the
Sublease.
7. If any legal action, arbitration or other proceeding is commenced to
enforce any provision of this Agreement, the prevailing party shall be entitled
to an award of its actual expenses, including without limitation, expert witness
fees, actual attorneys' fees and disbursements.
8. This Agreement may not be modified other than by an agreement in
writing, signed by the parties hereto or by their respective successors in
interest. Except as herein modified all of the terms and provisions of the
Sublease shall remain in full force and effect. Nothing in this Agreement shall
in any way impair or affect the lien created by the Security Instruments or the
other lien rights of Agent.
9. All notices which may or are required to be sent under this
Agreement shall be in writing and shall be sent by Federal Express (or similar
overnight delivery service) or first-class, certified U.S. mail, postage
prepaid, return receipt requested, and sent to the party at the address
appearing below or such other address as any party shall hereafter inform the
other party by written notice given as set forth below:
C-3
44
SUBTENANT: OWNER
------------------------- --------------------------------
------------------------- --------------------------------
------------------------- --------------------------------
Attn: Attn:
------------------- --------------------------
AGENT: SUBLANDLORD:
------------------------- --------------------------------
------------------------- --------------------------------
------------------------- --------------------------------
Attn: Attn:
------------------- --------------------------
10. This Agreement shall inure to the benefit of and be binding upon
the parties hereto, their successors in interest, heirs and assigns and any
subsequent owner of the Property.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
OWNER: SUBTENANT:
--------------------------- ------------------------------
By: By:
------------------------ ---------------------------
Its: Its:
------------------------ --------------------------
AGENT: SUBLANDLORD:
--------------------------- ------------------------------
By: By:
------------------------ ---------------------------
Its: Its:
------------------------ --------------------------
X-0
00
XXXXX XX XXXXXXXXXX )
) ss
COUNTY OF SAN DIEGO )
On ________________________, before me, ___________________________,
Notary Public, personally appeared __________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________ [SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On ________________________, before me, ___________________________,
Notary Public, personally appeared __________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________ [SEAL]
X-0
00
XXXXX XX XXXXXXXXXX )
) ss
COUNTY OF SAN DIEGO )
On ________________________, before me, ___________________________,
Notary Public, personally appeared __________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________ [SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On ________________________, before me, ___________________________,
Notary Public, personally appeared __________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________ [SEAL]
C-6
47
EXHIBIT A
All that certain Real Property in the City of Mountain View, County of Santa
Xxxxx, State of California, described as follows:
All of Lot 23, as shown upon that certain Map entitled, "Tract No. 2724
Xxxxx-Middlefield Industrial Park", which Map was filed for Record in the Office
of the Recorder of the County of Santa Xxxxx, State of California, on June 16,
1960 in Book 121 of Maps, at Pages 40, 41, 42, 43 and 44.
C-A-1
