Exhibit 10.1.16
SECOND AMENDMENT TO LEASE
This SECOND AMENDMENT TO LEASE ("Second Amendment") is made and entered into as
of March 16, 1999 by and between Northern Trust Bank of California N.A., not
individually but as Special Trustee under agreement dated March 2, 1998 and
known as Trust Number 22-48166, The Northern Trust Company, as Custodian for the
Motion Picture Industry Individual Account Plan, First Hawaiian Bank, as
Custodian for the Hawaii Carpenters Pension Fund, Basis PRE, Inc., a California
corporation, Supplemental PRE, Inc., a California corporation, and Xxxxx Fargo
Bank, N.A. (successor by merger to First Interstate Bank of California), as
Corporate Co-Trustee for the Western States Office & Professional Employees
Pension Fund ("Landlord") and Komag Material Technology, Inc., a California
corporation ("Tenant").
I. Landlord's predecessor in interest and Tenant entered into that certain
lease ("Lease") dated May 2, 1989, and that certain Amendment to Lease dated
November 1, 1993 ("First Amendment") for certain property ("Premises') situated
at Stony Point West Business Park ("Park"), Santa Rosa, California, as more
particularly set forth in the Lease.
II. Landlord's predecessor in interest, owner of the Park, sold the
Premises to Landlord and as a consequence references to the Park in the Lease
are no longer applicable to the Lease obligations of Tenant.
III. The parties wish to extend the Term of the Lease and make other
modifications thereto.
IV. This Second Amendment supersedes the First Amendment.
Therefore, in consideration of the mutual covenants and agreements
contained in this Amendment, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant
agree as follows:
A. The First Amendment is hereby replaced with this Second Amendment
effective as of May 1, 1999. The Lease as amended by this Second Amendment shall
govern the rights and obligations of Landlord and Tenant for the New Term (as
defined below) and the First Amendment shall not be applicable to the New Term.
B. References to the "Park" in the Lease, unless intended to include the
"Premises", are to be disregarded and any Tenant obligations regarding the Park
or Park Operating Expenses are not applicable.
C. Unless otherwise stated, any capitalized term in this Second Amendment
is hereby given the same meaning as set forth in the Lease.
D. Tenant accepts the Premises in their "as is" condition on commencement
of the New Term.
E. Section 3.01 of the Lease is modified to provide as follows: The Term of
this Lease shall be for five (5) years commencing on May 1, 1999 and ending on
April 30, 2004 ("New Term").
F. Section 3.02(a) is deleted and replaced by: Provided that Tenant is not
in default under this Lease at the time of exercise of the right to extend and
on April 30, 2004, the expiration date of the New Term ("New Term Expiration
Date"), Tenant shall have the right, at its option, to extend this Lease for one
(1) period of five (5) years ("New Term Extension Term") commencing on May 1,
2004.
Section 3.02(b) is deleted and replaced by: If Tenant elects to extend this
Lease for the New Term Extension Term, Tenant shall give unequivocal written
notice ("New Term Extension Exercise Notice") of its exercise to Landlord not
less than one hundred eighty (180) days, nor more than three hundred sixty (360)
days prior to the New Term Expiration Date. Tenant's failure to give the New
Term Exercise Notice in a timely manner shall be deemed a waiver of Tenant's
right to extend. The terms, covenants and conditions applicable to the New Term
Extension Term shall be the same terms, covenants and conditions of this Lease
as amended by this Second Amendment, except that (i) Tenant shall not be
entitled to any further option to extend after the New Term Extension Term, and
(ii) the Base Rent for the Premises shall be increased (but not decreased) as
provided in this Amended Section 3.02.
Section 3.02(c) is amended to change the phrase "First Exercise Notice"
wherever it appears to "New Term Exercise Notice," and the phrase "First
Extension Term" is changed to "New Term Extension Term," wherever it appears,
and the phrase "Term" is changed to "New Term," wherever it appears, so that
Base Rent for the New Term Extension Term will be full market rent to be
determined as provided in Section 3.02(c)(i) through (iv).
Section 3.02(d) is deleted.
G. The following shall be added at the end of Section 4.01 of the Lease:
The monthly Base Rent for the New Term shall be as follows:
Months 1-12 (May 1, 1999-April 30, 2000): $44,538 per Month; $534,456 per Year
Months 13-24 (May 1, 2000-April 30, 2001):$46,231 per Month; $554,772 per Year
Months 25-36 (May 1, 2001-April 30, 2002):$47,998 per Month; $575,856 per Year
Months 37-48 (May 1, 2002-April 30, 2003):$49,811 per Month; $597,732 per Year
Months 49-60 (May 1, 2003-April 30, 2004):$51,704 per Month; $620,448 per Year
H. Section 4.03 is amended to add the following:
Base Rent for the New Term includes the following Operating Expenses: (a) real
estate taxes described in Section 5.01, (b) exterior landscaping repair and
maintenance, (c) the insurance specified in Sections 6.01 and 6.03, (d)
telephone lines for fire and life safety equipment for the Premises and (e)
Management Cost Recovery, which is limited to 3% of the Base Rent. Any other
Operating Expenses (defined below) arising after commencement of the New Term
are Tenant's responsibility and payable as Additional Rent.
I. Section 4.04 of the Lease is hereby deleted for the New Term.
J. Sections 5.01, 5.02, 5.03 of the Lease are hereby deleted for the New
Term except for purposes of reference.
K. Sections 6.01 and 6.03 of the Lease are hereby deleted for the New Term
except for purposes of reference.
L. Sections 7.01 through 7.05 are deleted for the New Term and replaced by:
Section 7.01. "Operating Expenses" are all reasonable costs and expenses
arising after commencement of the New Term of every kind and nature which
Landlord shall pay or become obligated to pay in connection with ownership and
operation of the Premises, surrounding property and supporting facilities which
Landlord has not previously incurred during Tenant's occupancy of the Premises
as of the commencement of the New Term which are incurred after commencement of
the New Term by Landlord, excluding:
(a) real estate taxes as specified in Section 5.01, (b) exterior
landscaping repair and maintenance, (c) the insurance specified in Sections 6.01
and 6.03, (d) telephone lines for fire and life safety equipment for the
Premises and (e) the Management Cost Recovery, which is limited to 3% of the
Base Rent.
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LANDLORD __________
TENANT __________
M. Section 8.01 of the Lease is amended as follows:
(a) Subsection 8.01(c) is modified to substitute "commencement of the NEW
TERM" for the term "Occupancy Date" in the third sentence.
(b) The existing Subsection 8.01(d) is deleted and replaced with the
following:
Tenant shall schedule annual inspections of the roof of the Building each
year and provide Landlord a roof inspection report from a qualified roofing
inspection company, mutually agreed upon by Landlord and Tenant, on the form
provided by Landlord and Tenant shall oversee and pay for all needed roof
repairs and maintenance, as reasonably determined necessary by such inspection.
Landlord reserves the right to perform its own inspection and Tenant shall pay
for all repairs reasonably determined necessary by such inspection. In the event
a roof replacement is necessary, the replacement will be the responsibility of
the Landlord, and no portion of the expense of replacement will be passed on to
the Tenant.
N. Section 10.01 of the Lease is hereby deleted and replaced with the
following:
10.01 Compliance with Laws and Regulations
Tenant's Obligations. Tenant, shall, at its sole cost and expense, comply
with all of the requirements of all municipal, state and federal authorities now
in force, or which may hereafter be in force, pertaining to Tenant's use of the
Premises, and shall faithfully observe in the use of the Premises all municipal
ordinances and state and federal statutes now in force or which may hereafter be
in force, provided, however, that in no event shall Tenant be responsible for
improvements to the Premises that are structural or capital in nature, unless
such alterations are required by law due to Tenant's particular use of the
Premises (as opposed to office uses generally). The judgment of any court of
competent jurisdiction, or the admission of Tenant in any action or proceeding
against Tenant, whether Landlord be a party thereto or not, that any such
ordinance or statute pertaining to the Premises has been violated, shall be
conclusive of that fact as between Landlord and Tenant.
O. Section 10.02 of the Lease is hereby deleted and replaced with the
following:
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LANDLORD __________
TENANT __________
10.02 Hazardous Materials. For purposes hereof, "Hazardous Materials" shall
mean any and all flammable explosives, radioactive material, hazardous waste,
toxic substance or related material, including but not limited to those
chemicals known to cause cancer or reproductive toxicity and those materials and
substances defined as "hazardous substances", "hazardous materials", "hazardous
wastes" or "toxic substances" in the Environmental Laws. For purposes hereof,
"Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq; the
Hazardous Materials Transportation Act, 39 U.S.C. Section 1801, et seq.; the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq.; the Federal Clean Water Act, 33 U.S.C.
Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the
Xxxxxx-Cologne Water Quality Act, California Water Code Section 13020 et seq.;
and the California Health and Safety Code, Section 25100 et seq., including all
amendments thereto, replacements thereof, and regulations adopted and
publications promulgated pursuant thereto.
(a) Tenant agrees that during the term of this Lease, Tenant shall not
violate any federal, state or local law, ordinance or regulation relating to
industrial hygiene, soil, water or environment conditions on, under or about the
Premises including, but not limited to the Environmental Laws.
(b) Tenant further agrees that, unless Tenant receives Landlord's prior
written consent, which may be withheld in Landlord's reasonable discretion,
during the Term of this Lease, there shall be no use, presence, disposal,
storage, generation, release or threatened release of Hazardous Materials on,
from or under the Premises by Tenant, its agents, employees, contractors or
invitees, except that Tenant may use incidental amounts of office and custodial
supplies on the Premises, provided they are used in compliance with
Environmental Laws.
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LANDLORD __________
TENANT __________
(c) Tenant shall advise Landlord in writing of any use, generation,
storage, release, threatened release or disposal of Hazardous Materials by
Tenant, its agents, employees, or contractors, of which it is aware. Tenant
shall immediately notify Landlord in writing of any violation, inspection or
enforcement proceeding under any environmental law concerning Tenant or the
Premises of which Tenant becomes aware. Tenant shall make available to Landlord
such information and records as Tenant may have and Landlord may request
concerning the matters described herein. Tenant shall permit Landlord, its
agents and engineers to inspect at reasonable times the Premises and any and all
governmental agency files and records relating to Tenant or the Premises
concerning Hazardous Materials and to conduct investigations and tests ("tests")
concerning Hazardous Materials, provided that: (i) Landlord shall provide Tenant
with written notice at least five (5) days in advance, (ii) all such tests shall
be performed in a manner using diligent efforts to minimize interruptions to
Tenant and Tenant's use of the Premises to the extent commercially reasonable,
and, (iii) Landlord shall give Tenant at least ten (10) days prior written
notification of the location of any drilling work to be performed, (iv) Tenant
shall be entitled to have a representative present for all such testing, and (v)
Landlord shall indemnify, defend, protect and hold Tenant harmless from any
loss, damage, injury, or liability to Tenant's property and employees in and
about the Premises caused by Landlord's agents, invitees, contractors, or
employees, related to such testing. The tests provided for herein may be
conducted by Landlord at or after termination or expiration of the Lease. In the
event such testing shall demonstrate that Tenant has caused such Hazardous
Materials to be present, Tenant shall pay Landlord within thirty (30) days after
Landlord sends to Tenant an invoice therefor, the reasonable amount of all costs
and expenses incurred by Landlord as a result thereof, including without
limitation, those set forth in subparagraph (d), and costs of testing. In the
event that such testing shall either not disclose the presence of any Hazardous
Materials on the Premises, or does not demonstrate the Tenant to be the cause of
the Hazardous Materials on the Premises, Landlord shall pay the costs of such
testing solely, without benefit of contribution thereof from Tenant.
(d) Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all claims, judgments, damages, penalties, fines, liabilities,
losses, suits, administrative proceedings and costs (including, but not limited
to, reasonable attorneys' and consultants' fees and all costs and expenses in
connection with any tests, evaluations or remediation or compliance arising from
or related to Hazardous Uses or Release of Hazardous Materials or violations of
Environmental Laws on or about the Premises due to the activities of Tenant or
Tenant's agents, invitees, contractors or employees.
(e) Notwithstanding anything to the contrary in this Lease, nothing herein
shall prevent Tenant from using materials other than Hazardous Materials on the
Premises that would be used in the ordinary course of its business as
contemplated by this Lease. If during the Term of this Lease, Tenant
contemplates utilizing Hazardous Materials (or assigns this Lease or sublease to
any assignee or subtenant who utilizes Hazardous Material), Tenant shall obtain
the prior written approval from Landlord to the use thereof, which approval
shall not be unreasonably withheld.
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LANDLORD __________
TENANT __________
P. Prior Agreements. This Second Amendment contains all of the agreements
of the parties hereto with respect to any matter covered or mentioned in this
Second Amendment, and no prior agreements or understanding pertaining to any
such matters shall be effective for any purpose. This Second Amendment shall not
be effective or binding on any party until fully executed by both parties
hereto.
Q. Effectiveness of Lease. Except as expressly amended hereby, all of the
terms, covenants, conditions, provisions and agreements of the Lease shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
a of the date first above written.
LANDLORD TENANT
NORTHERN TRUST BANK OF CALIFORNIA N.A., KOMAG MATERIAL
not individually but as Special Trustee TECHNOLOGY, INC.
under agreement dated March 2, 1998 a California corporation
and known as Trust Number 22-48166
THE NORTHERN TRUST COMPANY By:
as Custodian for the Motion Picture ----------------------------------
Industry Individual Account Plan Its:
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FIRST HAWAIIAN BANK,
as Custodian for the Hawaii
Carpenters Pension Fund
BASIC PRE, Inc.,
a California corporation
SUPPLEMENTAL PRE, Inc.,
a California corporation
XXXXX FARGO BANK, N.A.
(Successor by merger to
First Interstate Bank of California),
as Corporate Co-Trustee for the
Western States Office & Professional
Employees Pension Fund
By: McMorgan & Company
Its: Investment Manager
By:
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Xxxxxxx Xxxxxx
Vice President
Date:
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LANDLORD __________
TENANT __________
