1
EXHIBIT 10.24
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 VS
Trust 1999-1, a ___________ ("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
2
respects 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.
-2-
3
(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 of 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 with respect to the Excluded Area (exclusive of the
Main Building) contained within the
-3-
4
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 article reasonably required for
the operation of Subtenant's business in the Premises. Subtenant shall move its
property entirely at its own risk.
-4-
5
(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.
(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
-5-
6
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 rate 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 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 given 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 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
-6-
7
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.
(a) 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
effect 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, 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
-7-
8
the same for the conduct of the 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 acknowledge
that all of Subtenant's indemnity obligations set forth in this Sublease are
supplemental to Subtenant's 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
-8-
9
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 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 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 CRF 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
-9-
10
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 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
-10-
11
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,
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.
-11-
12
(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 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
-12-
13
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.
(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
-13-
14
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, 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.
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 Expenses, neither
Sublandlord nor Subtenant contemplate any other expenses incurred or to be
incurred by
-14-
15
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.
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
-15-
16
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 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.
-16-
17
(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 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
-17-
18
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 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:
-18-
19
(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;
(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:
-19-
20
(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;
(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
-20-
21
(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 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)
-21-
22
place the damaged improvements or Excluded Area, as the case may be, in safe
condition; provided, however, the 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 is 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 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 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
-22-
23
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.
(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
-23-
24
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.
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
-24-
25
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, 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 pay 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 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:
-25-
26
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.
with a copy to:
Berliner Xxxxx
00 Xxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxx, XX. 00000
Attn: Xxx Xxxx
22. Attorney's 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
-26-
27
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.
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
-27-
28
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 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.
-28-
29
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 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 Terms, 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
-29-
30
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 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 preclude 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,
-30-
31
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.
(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: [INIT] 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
-31-
32
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)(ii)
(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.
(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: /s/ [INITIALS]
------------------- -------------------
(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
-31-
33
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 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
-32-
34
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 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 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
Participant 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 forth (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.
(vi) 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
-33-
35
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 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
-34-
36
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. Sublandlord shall provide Sublandlord 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 Judgment. 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.
-35-
37
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 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: April 21, 1999 By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
------------------------------------
Title: Executive Vice President
-----------------------------------
SUBLANDLORD:
VERITAS SOFTWARE CORPORATION,
a Delaware Corporation
DATED:___________, 1999 By: /s/ Xxx X. Xxxxx
--------------------------------------
Name: Xxx X. Xxxxx
------------------------------------
Title: Vice President and General Counsel
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-36-
38
CONSENT OF LESSOR
The undersigned Lessor under that certain Sublease 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
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Owner Trustee under the
VS Trust 1999-1
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Xxx X. Xxxxx
----------------------------------
Title: Vice President
---------------------------------
39
EXHIBIT "A"
[EXHIBIT MAP]
40
EXHIBIT "B"
[XXXXX STREET MAP]
41
EXHIBIT "B"
[350 XXXXX STREET FLOOR PLAN]
42
EXHIBIT "B"
[540 PRICE AVENUE MAP]
