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EXHIBIT 10.27
AGREEMENT OF PURCHASE AND SALE
000 XXXXX XXXXXX, XXXXXXXX XXXX, XX
ARTICLE 1
PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Seller and Notice Address:
XXXXXXXXX SEMICONDUCTOR CORPORATION
OF CALIFORNIA,
a Delaware Corporation
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
Attn: Xxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to: Berliner Xxxxx
00 Xxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(b) Purchaser and Notice Address:
VERITAS SOFTWARE CORPORATION
a Delaware corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to: Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
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With a copy to: EY\Xxxxxxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(c) Date of this Agreement: The later date of execution by the
Seller or the Purchaser, as indicated on
the signature page.
(d) Purchase Price: $35,700,000 (subject to $3,500,000
holdback as provided in Section 6.3(j)
below).
(e) Xxxxxxx Money: $1,000,000, plus interest accrued
thereon while in escrow.
(f) Closing Date: Time is of the essence of this
Agreement. As designated by the
Purchaser upon not less than five (5)
days' prior notice, but not later than
April 15, 1999 (except as provided in
Section 6.1).
(g) Title Company and Chicago Title Company
Escrow Agent: 000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxx, XX. 00000
(h) Broker: Cornish & Xxxxx
1.2 Property. Subject to the terms and conditions of this Agreement,
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, the following:
(a) the land located in the City of Mountain View, County of Santa
Xxxxx, State of California, as described in Exhibit A attached hereto,
consisting of approximately nineteen and sixty-one hundredths (19.61 acres) (the
"Land"), commonly referred to as 000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx;
(b) all buildings and improvements located on the Land, including,
without limitation, that certain approximately 119,000 square foot building
located on the Land (collectively, the "Improvements"), together with all
rights, benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereunto belonging or appertaining thereto, and Seller's rights,
easements or other interests, if any, in and to adjacent streets, alleys and
rights-of-way, or other property abutting such Land (including, without
limitation, all rights owned by Seller to any minerals and mineral rights,
water and water rights, xxxxx (excluding groundwater monitoring xxxxx), well
rights and well permits, water and sewer taps, sanitary or storm sewer
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capacity or reservations and rights under utility agreements with any applicable
governmental or quasi-governmental entities or agencies with respect to the
providing of utility services to such Land or the Improvements located thereon
(the "Appurtenances");
(c) With respect to the Land or any other property or interest included
within the term "Property", any pending or future award made in condemnation
thereof, or any payment made in lieu of such condemnation, any award or payment
for damage thereto, and any proceeds of insurance or claim or cause of action
for damage, injury, or loss thereto or thereof; provided, however, Seller
reserves all of its rights, claims and causes of action under the Easements
Agreement referred to in Section 9.1(g) (it being understood and agreed that the
indemnification obligation of Raytheon Company under paragraph 4 of such
Easements Agreement runs with the Property);
(d) All licenses, permits, certificates of occupancy and franchises issued
by any governmental authority relating to the use, maintenance, occupancy or
operation of the Land and/or the Improvements to the extent allocable to the
Land and/or Improvements; provided, however, such licenses, permits and
certificates of occupancy shall not include, until termination or expiration of
the Sublease referred to herein (at which time the same shall be assigned to
Purchaser if so desired by Purchaser), those licenses and permits that are
necessary or reasonably required by Seller in connection with the business
operations of Seller to be undertaken on the Property following the close of
escrow hereunder pursuant to, or under, the Sublease referred to below;
provided, however, such reservation on licenses and permits shall be voided to
the extent such reservation impairs the construction or development work of
Purchaser on the Property (excluding therefrom the Excluded Area) during the
term of the Sublease referred to below; and
(e) All service contracts which are in force and pertain to the Land or
Improvements (as amended through the Closing Date, individually, a "Service
Contract" and collectively, "Service Contracts") to the extent assignable by
Seller and to the extent which Purchaser shall elect to have assigned to it
pursuant to the provisions of this Agreement; provided, however, such Service
Contracts shall not include, until termination or expiration of the Sublease
referred to herein (at which time the same shall be assigned to Purchaser if so
desired by Purchaser), any Service Contract that is necessary or reasonably
required by Seller in connection with the business operations of Seller to be
undertaken on the Property following the close of escrow hereunder pursuant to,
or under, the Sublease referred to below; provided, however, such reservation of
Service Contracts shall be voided to the extent such reservation impairs the
construction or development work of Purchaser on the Property (excluding
therefrom the Excluded Area) during the term of the Sublease referred to below.
For purposes of this Agreement, the Land, Improvements and Appurtenances
are collectively referred to herein as the "Property." Anything herein to the
contrary notwithstanding, the Property shall not include the groundwater
monitoring xxxxx, extraction or treatment systems and soil vapor extraction
systems located on the Property or any other Remediation Equipment (as defined
in the Easements Agreement referred to in Section 9.1(g) below), which shall
continue to be owned by Raytheon Company subject to the terms of the Easements
Agreement referred to in Section 9.1(g) below.
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1.3 Xxxxxxx Money.
(a) On or about February 19, 1999, Purchaser deposited into an
escrow account with Escrow Agent a deposit in the amount of Two Hundred Fifty
Thousand Dollars ($250,000) (the "First Deposit"). The First Deposit is
currently being held in an interest bearing account (with interest accruing for
the benefit of Purchaser). Such First Deposit shall be fully refundable to
Purchaser until the conditions set forth in Sections 3.1(a) and 3.1(b) below
are satisfied or deemed satisfied by Purchaser. Upon the conditions set forth
in Sections 3.1(a) and 3.1(b) being satisfied or deemed satisfied by Purchaser,
the First Deposit shall become non-refundable to Purchaser (except in the event
of a material breach or default by Seller under this Agreement, Seller's breach
of its obligation to execute and deliver the Sublease referred to in Section
2.5 below or a failure of any of the other Closing conditions set forth in
Section 3.1). In the event Purchaser materially breaches any of its obligations
under this Agreement (for any reason other than a material breach or default by
Seller) prior to the Closing hereunder (but after the conditions set forth in
Sections 3.1(a) and 3.1(b) have been satisfied or deemed satisfied or have been
waived by Purchaser), Seller shall be entitled to the First Deposit and the
Second Deposit referred to below, together with all interest accrued thereon
while in escrow, as liquidated damages. The First Deposit, together with all
interest accrued thereon while in escrow, shall be credited against the
Purchase Price for the Property as of the close of escrow hereunder.
(b) Not later than three (3) business days following the
satisfaction or deemed satisfaction of the conditions set forth in Section
3.1(a) and 3.1(b) below (or Purchaser's waiver of such conditions) and full
execution of this Agreement and delivery of a fully-executed copy of this
Agreement into Escrow, but in no event later than 4:00 p.m., PST, on March 26,
1999, Purchaser shall deposit into escrow with Escrow Agent, in an interest
bearing account (with interest to accrue to the Purchaser), an additional Seven
Hundred Fifty Thousand Dollars ($750,000) (the "Second Deposit"). The Second
Deposit, together with all interest accrued thereon while in escrow, shall be
non-refundable to Purchaser upon deposit of the same into escrow with Escrow
Agent as provided in the immediately preceding sentence (except in the event of
a material breach or default by Seller under this Agreement or any other
failure to close escrow not arising from the Purchaser's material breach or
default under this Agreement). In the event Purchaser materially breaches any
of its obligations under this Agreement (for any reason other than a breach or
default by Seller hereunder) prior to the Closing hereunder (but after
satisfaction or deemed satisfaction (or Purchaser's waiver) of the conditions
set forth in Sections 3.1(a) and 3.1(b) below), then Seller shall be entitled
to the Second Deposit referred to above (and the First Deposit), together with
all interest accrued thereon while in escrow, as liquidated damages. The Second
Deposit, together with all interest accrued thereon while in escrow, shall be
credited against the Purchase Price for the Property as of the close of escrow
hereunder.
The First Deposit and the Second Deposit (together with the interest
accrued thereon while in escrow) is collectively referred to herein as the
"Xxxxxxx Money." The Escrow Agent shall pay the Xxxxxxx Money to Seller at and
upon the Closing, or otherwise, to the party entitled to receive the Xxxxxxx
Money in accordance with this Agreement. The Xxxxxxx Money
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shall be held and disbursed by the Escrow Agent pursuant to Article 10 and
Sections 1.3 and 1.4 of this Agreement.
1.4 Remedies.
(a) PURCHASER AND SELLER AGREE THAT SELLER'S ECONOMIC DETRIMENT
RESULTING FROM THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET FOR AN
EXTENDED PERIOD OF TIME AND ANY CARRYING AND OTHER COSTS INCURRED AFTER THE
REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET ARE IMPRACTICABLE OR
EXTREMELY DIFFICULT TO ASCERTAIN. PURCHASER AND SELLER AGREE THAT THE AMOUNT OF
THE XXXXXXX MONEY IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED
BY SELLER IN THE EVENT ESCROW FAILS TO CLOSE ON THE PROPERTY AS A RESULT OF A
BREACH OR DEFAULT OF THIS AGREEMENT BY PURCHASER. PURCHASER AGREES THAT IN THE
EVENT OF A BREACH OR DEFAULT BY PURCHASER FOR ANY REASON OTHER THAN A BREACH OR
DEFAULT BY SELLER, SELLER'S SOLE REMEDY FOR PURCHASER'S FAILURE TO PURCHASE THE
PROPERTY IN LIEU OF ALL OTHER REMEDIES SELLER MIGHT OTHERWISE HAVE HEREUNDER OR
BY APPLICABLE LAW, INCLUDING WITHOUT LIMITATION, AN ACTION FOR SPECIFIC
PERFORMANCE OF THIS AGREEMENT, SHALL BE TO TERMINATE THIS AGREEMENT AND RECEIVE
THE XXXXXXX MONEY AS LIQUIDATED DAMAGES AND NOT AS A PENALTY. PURCHASER AND
SELLER ACKNOWLEDGE AND AGREE THAT THE LIMITATION ON DAMAGES SET FORTH IN THIS
LIQUIDATED DAMAGES PROVISION SHALL NOT BE APPLICABLE TO ANY BREACH BY PURCHASER
OF ANY INDEMNIFICATION OBLIGATION OF PURCHASER UNDER THIS AGREEMENT OR A BREACH
BY PURCHASER OF ITS OBLIGATIONS UNDER SECTIONS 6.3(i) AND 6.3(j) BELOW. BY
INITIALING THIS SECTION 1.4(a) BELOW, PURCHASER AND SELLER AGREE TO THE TERMS OF
THIS SECTION 1.4(a).
SELLER'S INITIALS: /s/ BB PURCHASER'S INITIALS: /s/ [ILLEGIBLE]
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(b) If escrow fails to close under this Agreement as a result of
Seller's default, then, without prejudice to Purchaser's remedies against Seller
arising from a willful or knowing breach by Seller of any of its obligations
under Section 2.2 or Article 5 of this Agreement or any of Seller's
representations or warranties hereunder, Purchaser shall either (i) bring an
action for specific performance to enforce this Agreement, or (ii) terminate
this Agreement, and in the event of such termination, Seller shall promptly
cause the Xxxxxxx Money to be returned to Purchaser and shall reimburse
Purchaser for the cost of the Survey (provided Purchaser provides Seller with a
copy of the Survey).
(c) If this Agreement is terminated due to the default of a party,
then the defaulting party shall pay any fees due to the Escrow Agent for holding
the Xxxxxxx Money and
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any fees due to the Title Company for cancellation of the escrow and/or the
Title Commitment referred to below.
ARTICLE 2
TITLE REVIEW
2.1 Delivery of Title Commitment and Survey. Not later than the close of
escrow on the Property, Purchaser shall cause to be prepared: (i) a current,
effective commitment for title insurance (the "Title Commitment") issued by the
Title Company, in the amount of the Purchase Price with Purchaser as the
proposed insured, and accompanied by true, complete, and legible copies of all
documents referred to in the Title Commitment; and (ii) a current ALTA-ACSM
Urban survey of the Property (the "Survey"). The Survey shall determine the
total acreage included with the Land and the total acreage included within the
Excluded Area (as defined in the Sublease referred to in Section 2.5 below).
2.2 Title Review and Approval. Purchaser acknowledges that it has
received and reviewed a preliminary title report (Second Amended) dated as of
March 10, 1999, prepared by Chicago Title Company, Order No. 804852
("Preliminary Title Report") showing the state of the title of the Property.
Purchaser accepts and approves of title exception numbers 1-15 as shown on the
Preliminary Title Report. For purposes of this Agreement, the term "Permitted
Exceptions" shall mean (i) those title exceptions applicable to the Property
which are accepted by Purchaser in accordance with the terms of this Section
2.2, (ii) the Sublease, and (iii) all title matters to the extent arising from
the acts of Purchaser or its agents, employees or representatives.
Seller shall have no obligation to cure or cause to be removed any title
objections except any deed of trust or mortgage entered into by Seller
encumbering the Property and any exceptions or encumbrances to title which are
created or caused voluntarily by Seller after the date of this Agreement, which
liens, exceptions or encumbrances Seller shall cause to be released or
effectively insured over at the Closing. If Seller fails or refuses to remove
or cure any title matter that Seller expressly agrees to remove or cure, then
Seller shall be in material breach of its obligations under this Agreement.
2.3 Title Policy. A condition to Purchaser's obligation to close shall be
that as of the Closing, (i) title to the Property shall be insurable under an
ALTA Form B (or other form required by state law) Owner's Policy of Title
Insurance ("Title Policy") issued by the Title Company, dated the date and time
of the recording of the Deed in the amount of the Purchase Price, insuring
Purchaser as owner of fee simple title to the Property, subject to the
Permitted Exceptions. If a current survey of the Property is required in order
for Title Company to issue the ALTA Title Policy to Purchaser and Purchaser has
not obtained such ALTA survey by the scheduled Closing date, then the condition
set forth herein shall be satisfied if Title Company is prepared to issue to
Purchaser at Closing a CLTA Standard Form Owner's Policy of Title Insurance
dated the date and time of the recording of the Deed in the amount of the
Purchase Price, insuring Purchaser as owner of fee simple title to the
Property, subject to the Permitted Exceptions. In connection with Purchaser's
contemplated off-balance sheet financing of the acquisition of the Property,
the trustee with respect to such financing may desire to obtain an
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owner's policy of title insurance, at no cost to Seller, and/or the agent with
respect to such financing may elect to obtain a lender's policy of title
insurance, at no cost to Seller.
2.4 Title and Survey Costs. Subject to Section 1.4(b) above, the cost of
the Survey, including any necessary revisions, and the premium for any
endorsements requested by Purchaser, shall be paid by the Purchaser. The
premium for a CLTA Title Policy, excluding Purchaser's endorsements, shall be
paid by Seller, and the cost of any title insurance policy or endorsements
requested by Purchaser in excess of the premium of a CLTA Title Policy shall
be borne by Purchaser.
2.5 Sublease. Concurrent with the Closing hereunder, and as an additional
condition to Purchaser's obligation to close escrow, Seller and Purchaser shall
enter into a written lease agreement or, in the event the acquisition of the
Property is financed through a synthetic lease structure, Seller and Veritas
Software Corporation (or any wholly owned subsidiary of Veritas Software
Corporation) shall enter into a written sublease agreement (such lease or
sublease is referred to herein as the "Sublease") under which, as of the date
of Closing, Seller shall lease from Purchaser or sublease from Veritas Software
Corporation (or any wholly-owned subsidiary of Veritas Software Corporation)
the existing approximately 119,000 square foot building located on the Land and
Seller shall be granted the right to use the existing parking areas and other
related facilities and/or equipment to utilize the premises as needed for
Seller's business, located at 000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx. The
term of the Sublease shall be for a minimum term of twelve (12) months and
shall expire, if not earlier terminated, no later than December 31, 2000.
Seller may elect in its sole discretion to terminate the Sublease early upon not
less than twelve (12) months notice to the landlord thereunder. Said Sublease
shall be in the form and content of Exhibit B attached hereto. Seller agrees
that such Sublease may be subordinated to the terms of a master lease or
off-balance sheet financing operating lease to be entered into by Purchaser, as
lessee, and a third party, as part of Purchaser's financing of the acquisition
of the Property, provided that Seller is granted non-disturbance rights (on
terms and conditions reasonably acceptable to Seller and providing that a
termination of such master lease shall not cause a termination of Seller's
rights under the Sublease) and that such master lease shall not adversely
affect Seller's rights under the Sublease and/or increase Seller's obligations
under this Agreement or the Sublease. The Sublease shall not be subordinated to
any master lease or off-balance sheet financing operating lease as referred to
above (or any other financing secured by the Premises described in the Sublease)
unless Seller is granted such non-disturbance rights as provided above.
ARTICLE 3
CONDITIONS TO CLOSING
3.1 Purchaser's Conditions to Closing. The close of escrow on the Property
and Purchaser's obligation under this Agreement to purchase the Property shall
be subject to the satisfaction, at or prior to the time stated herein, of the
following conditions, with Purchaser to retain the right to waive in writing, in
whole or in part, any of the following conditions at or prior to the time stated
herein for satisfaction of such conditions or for approval or disapproval by
Purchaser.
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(a) Feasibility Period. Purchaser shall have until 4:00 p.m. PST, on
March 5, 1999 (the "Feasibility Period") (i) to conduct such studies or
investigations of the Property (including, without limitation, environmental
testing) or matters pertaining thereto as Purchaser may deem appropriate to
ascertain whether the Property is suited to Purchaser's intended purposes, and
(ii) to determine in Purchaser's sole discretion whether the development of the
Property is economically feasible, and to deliver to Seller its written notice
of approval or disapproval of the feasibility of the Property. If Purchaser does
not give Seller written notice of disapproval on or before the expiration of the
Feasibility Period, then the conditions set forth in this Section 3.1(a) shall
be deemed satisfied and Purchaser shall be deemed to have approved the Property.
Purchaser acknowledges and agrees that the purchase and sale of the Property as
described herein, and the close of escrow hereunder, shall not be conditioned
upon Purchaser obtaining or achieving approval of a .50 FAR for the Property.
Purchaser hereby approves the feasibility of the Property and acknowledges
and agrees that the conditions set forth in this Section 3.1(a) are satisfied.
(b) Off Balance Sheet Financing. Not later than the expiration of the
Feasibility Period, Purchaser shall have satisfied itself, in its reasonable
discretion, that the acquisition of the Property under this Agreement can be
successfully achieved through off-balance sheet financing (or other financing
acceptable to Purchaser). If, prior to the expiration of the Feasibility Period,
Purchaser does not give Seller written notice that the condition set forth in
this Section 3.1(b) has not been satisfied, then the condition set forth in
this Section 3.1(b) shall be deemed satisfied.
Purchaser hereby acknowledges and agrees that the condition set forth in
this Section 3.1(b) is satisfied. Purchaser further acknowledges and agrees
that Purchaser obtaining off-balance sheet financing (or other financing
acceptable to Purchaser) is not a condition to Purchaser's obligations under
this Agreement.
Seller agrees to reasonably cooperate with Purchaser, at de minimis cost to
Seller, in Purchaser's efforts to finance the acquisition and development of the
Property (including, without limitation, the demolition costs described in
Section 2.5 of this Agreement) with off-balance sheet financing (typically
known as synthetic lease financing), including cooperating with Purchaser in
assigning its rights under this Agreement for the purpose of such financing.
Upon the assignment by Purchaser of this Agreement to the ultimate buyer of the
Property (other than an Affiliate as set forth in Section 11.1(c) below) as
permitted by this Agreement, Veritas Software Corporation ("Veritas") shall (as
set forth in Section 11.1(d) of this Agreement) retain all obligations and
liabilities of Purchaser hereunder (including, without limitation, its
indemnification obligations under this Agreement).
(c) Title Policy. As of the Closing, Title Company shall be prepared and
willing to issue to Purchaser the Title Policy referred to in Section 2.3 above
in the amount of the Purchase Price. Purchaser may desire to obtain, at
Purchaser's sole cost, various endorsements to such Title Policy, including,
without limitation, (i) an endorsement to provide Purchaser with assurance that
the Property is the same as shown on a survey plat attached to or made part of
the Title Policy, (ii) an endorsement to provide Purchaser with assurance that
the Property is situated
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within a designated zone classification and to confirm that Purchaser's
proposed use or uses of the Property as office/light industrial/research and
development are allowed under such classification, (iii) an endorsement to
provide Purchaser with assurance that the policy limits will be increased, upon
payment of an additional premium, to reflect the value of any improvements
constructed by Purchaser on the Property, (iv) an endorsement to provide
Purchaser with assurances that there are no mechanic's liens on the Property,
and (v) an endorsement assuring Purchaser that there are no enforceable
violations of covenants, conditions or restrictions against the Property;
provided, however, the issuance of such endorsements shall not be a condition
to Purchaser's obligation to close escrow hereunder. To the extent Title
Company requires an indemnity from Seller in order to issue any mechanic's lien
endorsement to Purchaser at Closing, Seller agrees to so indemnify the Title
Company against damage or loss that may arise from the filing of any mechanic's
lien claims in connection with work performed on the Property prior to the
Close of Escrow by Seller or any of its agents, employees or contractors.
(d) Performance by Seller. Seller shall have performed, observed and
complied in all material respects with all of the covenants and agreements
required by this Agreement to be performed, observed and complied with by it
within the applicable time period set forth herein for performance of such
covenants and agreements. In addition, the representations and warranties of
Seller set forth in Section 8.1 shall be true and correct as of the date of
this Agreement and as of the close of escrow.
(e) Insolvency. During the period commencing on the date of this
Agreement and ending on the date escrow closes hereunder, no action or
proceeding shall have been commenced by or against Seller under the federal
bankruptcy code or any state law for the relief of debtors or for the
enforcement of the rights of creditors and no attachment, execution, or levy
shall have attached to or been issued with respect to the Property or any
portion thereof.
(f) Moratorium. During the period commencing on the date of this
Agreement through the Close of Escrow, no moratorium, statute, regulation,
ordinance or federal, state, county or local legislation, or order, judgment,
ruling or decree of any governmental agency or of any court having jurisdiction
over the Property shall have been enacted, adopted, passed, issued, or entered
into which would preclude Purchaser from developing the Property as a corporate
headquarters facility at an FAR of less than .35.
3.2 Failure of Purchaser's Conditions to Closing. If any of the
conditions in Sections 3.1(a) or 3.1(b) is not satisfied or deemed satisfied
(or waived in writing by Purchaser) at or prior to the time prescribed herein,
then this Agreement shall terminate and the First Deposit, together with all
interest accrued thereon while held in escrow, shall be promptly refunded by
Escrow Agent to Purchaser and all rights, obligations and liabilities of Seller
and Purchaser under this Agreement (except those that expressly survive
termination of this Agreement) shall terminate. If any of the conditions
described in Sections 3.1(c), 3.1(d), 3.1(e) or 3.1(f) above or any other
condition to Purchaser's obligation to close escrow expressly set forth in this
Agreement is not satisfied or deemed satisfied (or waived in writing by
Purchaser) on or prior to the time prescribed herein, then Purchaser shall be
entitled to the return of its Xxxxxxx Money deposits and all interest accrued
thereon while in escrow and, in the event of Seller's default or breach of any
of its
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covenants or agreements set forth in this Agreement, the provisions of Section
1.4(b) above and 10.5 below shall control.
3.3 Seller's Conditions to Closing. The close of escrow on the Property
and Seller's obligation under this Agreement to sell the Property shall be
subject to the satisfaction, at or prior to the time stated herein, of the
following condition, with Seller to retain the right to waive in writing, in
whole or in part, the condition set forth in Section 3.3(a) at or prior to the
time stated herein for satisfaction of such condition or:
(a) Performance by Purchaser. Purchaser shall have performed,
observed and complied in all material respects with all of the covenants and
agreements required by this Agreement to be performed, observed and complied
with by it within the applicable time period set forth herein for performance of
such covenants and agreements. In addition, the representations and warranties
of Purchaser set forth in Section 8.2 shall be true and correct as of the
Closing.
3.4 Failure of Seller's Conditions to Closing. If the condition in Section
3.3(a) is not satisfied or waived in writing by Seller at or prior to the time
prescribed herein, then Seller may terminate this Agreement by written notice
to Purchaser and the Xxxxxxx Money shall be paid to Seller as liquidated
damages and all rights, obligations and liabilities of Seller and Purchaser
under this Agreement (excepting therefrom those that expressly survive
termination of this Agreement) shall terminate.
ARTICLE 4
RIGHT OF ENTRY AND DELIVERY OF DOCUMENTS
4.1 Right of Entry. During the Feasibility Period (and at all reasonable
times thereafter until the Closing or earlier termination of this Agreement), at
normal business hours, Purchaser and its designated agents, employees,
consultants and other representatives shall be granted a right of entry on the
Property to perform, at Purchaser's sole cost, such soil, groundwater,
engineering and geological tests, environmental and architectural studies, and
other physical inspections and to make such other reports as Purchaser shall
deem appropriate and for any other purpose related to Purchaser's investigation
or proposed development of the Property; provided, however, that Purchaser shall
repair any damage to the Property caused by Purchaser's entry and activities
thereon. Purchaser agrees to provide Seller with not less than twenty-four (24)
hours notice prior to entering onto the Property. In connection with the entry
onto the Property by Purchaser or its designated agents, employees, consultants
and other representatives, all reasonable steps shall be taken by Purchaser (and
such persons entering onto the Property) to minimize any interference with
Seller's business operations on the Property, and Purchaser agrees to comply
with Seller's reasonable security measures.
Prior to any entry onto the Property by Purchaser of its designated agents,
employees, consultants or other representatives at any time prior to the close
of escrow hereunder, Purchaser shall procure and maintain in effect during the
executory period of this Agreement, worker's compensation insurance in such
amount as required by law and commercial general liability or comprehensive
general liability insurance covering Purchaser and the Property. Seller shall be
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named as an additional insured on such liability insurance policy, and such
liability insurance shall be for a combined single limit in the minimum amount
of Two Million Dollars ($2,000,000) per occurrence. Prior to any entry onto the
Property by Purchaser or any of its agents, employees, consultants or other
representatives, Purchaser shall present to Seller a copy of the liability
insurance policy maintained by Purchaser in accordance with the terms hereof
(or a certificate of such insurance). Seller shall be given written notice at
least thirty (30) days prior to cancellation, material amendment or reduction
of any coverage under such liability policy referred to above.
Purchaser shall indemnify and hold Seller harmless from any and all liens,
losses, claims, demands, causes of action, damages, liabilities, costs or
expenses arising out of or connected with Purchaser's and/or any of its
agents', employees', consultants', or other representatives' activities on the
Property; provided, however, that Purchaser shall have no liability to Seller
for any lien, loss, claim, demand, cause of action, damage, liability, cost or
expense arising as a result of (a) Purchaser merely discovering any Hazardous
Materials (as defined below) on or about the Property in connection with its
investigation of the Property; or (b) the acts of Seller or Seller's employees,
agents, contractors or invitees (other than Purchaser and its agents,
employees, contractors and invitees); and further that Purchaser shall have no
liability for the repair of any damage caused by Seller's negligence or willful
misconduct or for the remediation, containment, abatement or control of any
hazardous material (or any defect) that existed in the Property prior to
Purchaser's entry thereon. As used in this Agreement, the term "Hazardous
Materials" shall mean 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 wastes
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 CFR 172.101 and amendments
thereto) or designated by the Environmental Protection Agency (or any successor
agency) as hazardous substances (see, e.g., 40 CFR Part 302 and amendments
thereto); such other substances, materials and wastes which are or become
regulated or become classified as hazardous or toxic under any Laws, including
without limitation, the California Health & Safety Code, Division 20, and Title
26 of the California Code of Regulations; and any material, waste, 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.
During the Feasibility Period and at all reasonable times thereafter until
the Closing or earlier termination of this Agreement, Purchaser shall have the
right to examine, during normal business hours (and upon at least 48 hours
prior notice to Seller), all of the books and financial records of Seller
related solely to the ownership, management and operation of the Property
(except
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that Seller shall not be obligated to provide or make available to Purchaser
any appraisals or financial projections with respect to the Property, any prior
offers on the Property, or any other proprietary information or information
protected by the attorney-client privilege), and to interview any persons
involved in the management or operation of the Property. Seller shall act in
good faith, at de minimis expense to Seller, to try to make such persons
available to Purchaser for interviewing and to cooperate with Purchaser in such
interviews and investigations; provided, however, Purchaser acknowledges that
some former employees of Seller who previously were involved in the management
or operation of the Property are no longer employed by Seller and consequently
may be difficult to make such former employees available to Purchaser.
4.2 Delivery of Documents. Prior to the execution of this Agreement (or
concurrently herewith), Seller delivered or made available to Purchaser, without
representation as to accuracy or completeness, the following documents
("Property Information"):
(a) a copy of an updated preliminary title report or title policy for
the Property, together with a copy of all documents referred to in the
preliminary title report or policy;
(b) a copy of property tax assessments and tax bills with respect to
the Property for calendar years 1996, 1997 and 1998, and current year-to-date;
(c) copies of management contracts, maintenance and repair contracts
and all service supply contracts or agreements currently related to the Property
and in Seller's possession;
(d) copies of all present insurance policies covering the Property;
(e) to the extent in Seller's possession, an ALTA survey, including a
current legal description;
(f) monthly and annual operating statements for the Property for
calendar year ending 1996 and 1997 (and part of 1998);
(g) to the extent in Seller's possession, a list and copies of all
licenses, permits, maps, certificates of occupancy, building inspection
approvals, and covenants, conditions and restrictions with respect to the
Property;
(h) to the extent in Seller's possession, soils reports, engineering,
architectural studies and historical significance applications or any similar
data relating to the Property;
(i) to the extent in Seller's possession, environmental documentation
with respect to the environmental condition of the Property; and
(j) to the extent in Seller's possession, correspondence related to
the current maintenance or repair of the Property or its operations or leasing.
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In addition to the documents referred to in this Section 4.2 above, Seller
agrees to make available to Purchaser for Purchaser's review at Seller's
offices during the Feasibility Period, all documents, reports and other
writings relating to the physical or legal condition of the Property known by
Xxx Xxxxx, Executive Vice-President and General Counsel, to be in Seller's
possession; provided, however, Seller shall not be obligated to make available
to Seller any appraisals, financial projections, third party offers or letters
of intent applicable to the Property or any other proprietary documents or
confidential information or information protected by the attorney-client
privilege.
All of the documents, reports, and information furnished or made available
by Seller to Purchaser shall be kept confidential and shall not be disclosed to
any third party; except that Purchaser may disclose such material to its
attorneys, accountants, consultants who have a need to know such information in
order to evaluate the Property and to provide recommendations to Purchaser as
to whether it should purchase the same and to prospective lenders, and
assignees of Purchaser's interest in this Agreement for the purpose of
off-balance sheet financing or any other financing of the acquisition of the
Property. Purchaser may also disclose any documents, reports or other
information furnished by Seller to Purchaser related to the Property to
governmental agencies (including, without limitation, the Environmental
Protection Agency) as part of Purchaser's investigations of the Property. Such
confidentiality obligations shall survive termination of this Agreement but
shall not survive the Closing.
In the event Purchaser does not close escrow under this Agreement, then
Purchaser shall deliver or assign to Seller, within ten (10) days following the
date this Agreement terminates, all of the documents, reports, studies,
correspondence and other materials delivered by Seller to Purchaser as referred
to above, and, provided that such failure to close escrow does not arise from
the material breach or default by Seller under this Agreement, Purchaser shall
also deliver and assign to Seller any and all environmental reports, soils and
geologic studies, due diligence reports and other third party reports or
studies delivered to or prepared by Purchaser (or received by Purchaser)
related to the Property. The obligations of Purchaser under this paragraph
shall survive termination of this Agreement.
ARTICLE 5
OPERATIONS AND RISK OF LOSS
5.1 Performance Under Contracts. During the executory period of this
Agreement, Seller will perform its material obligations under agreements with
third parties that materially affect the Property, and shall keep in effect all
liability insurance coverage, promptly comply with all liability insurance
requirements and operate the Property substantially in the manner in which it
has been operated by Seller prior to the execution of this Agreement.
5.2 New Contract. During the executory period of this Agreement, without
Purchaser's prior written consent (which consent shall not be unreasonably
withheld or delayed), Seller will not enter into, extend, renew or amend in any
material respect, terminate (unless the party with whom Seller is in contract
is in default or breach of its obligations under such contract), or waive any
default under, any contract that will be an obligation affecting the Property
following the close of escrow; provided, however, the foregoing shall not
preclude or
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prevent Seller from entering into any contract that does not encumber the
Property but that is related solely to the operation of Seller's business
conducted on the Property, nor shall the foregoing prevent Seller from renewing
or extending any contract applicable to the Excluded Area or the Improvements
thereon which is related solely to the operation of Seller's business conducted
on the Property and which will not survive the termination of expiration of the
Sublease.
5.3 Listings and Other Offers. During the executory period of this
Agreement, Seller will not make or accept any offers to sell the Property, or
enter into any contracts or agreements (whether binding or not) to sell the
Property or otherwise negotiate any back up offers with any prospective
purchaser of the Property.
5.4 Taxes and Legal Requirements. Seller shall pay before delinquency
all taxes and assessments and all other impositions of any kind or nature
whatsoever, levied, imposed or assessed, and all other expenses and obligations
at any time incurred by Seller, in connection with the ownership, occupancy,
use or operation of the Property, and Seller shall promptly comply, or cause to
be complied, with all applicable laws, statutes, ordinances, rules and
regulations, including, without limitation, the United States Environmental
Protection Agency Record of Decision for the Raytheon facility (the "Record of
Decision"), of any governmental or quasi-governmental agency having
jurisdiction over the Property or the use of all or a part thereof to the
extent relating to Seller's ownership, occupation, use or operation of the
Property. The preceding to the contrary notwithstanding, Seller's obligation
with respect to complying with environmental laws, statutes, ordinances, rules,
regulations and Record of Decision shall be governed solely by Seller's
Environmental Indemnity attached hereto as Exhibit C. The obligations of this
Section 5.4 shall survive the Closing.
5.5 Damage. In the event of any substantial and material damage to the
Improvements on the Property occurring before the Closing, Seller shall elect
to either (i) assume in writing the responsibility to restore such damage and
continue to occupy the Improvements (or, alternatively, remove such damaged
Improvements and continue to occupy the balance of the Improvements) following
the closing hereunder without abatement or offset of rent under the Sublease,
or (ii) not execute the Sublease as of the closing, and following the Close of
Escrow use commercially reasonable efforts to perform or cause to be performed,
at Lessor's cost (except for the cost of removal of any asbestos or other
Hazardous Materials from the Improvements) if Veritas enters into an assignment
with respect to this Agreement pursuant to Section 11.1(a)(2) below (and the
funding requirements set forth in the agreements executed by Veritas, Lessor
(as defined in Section 11.1(a) below) and the Financing Parties (as defined in
Section 11.1(b) below) in connection with the synthetic lease financing
discussed in Section 3.1(b) above (collectively, the "Financing Documents")
have been satisfied), or otherwise at Purchaser's cost, the planned removal of
the Improvements (including the damaged Improvements) in an expeditious manner.
If Seller elects not to execute the Sublease as provided in clause (ii) above,
then, in addition to removing the Improvements on the Property, Seller shall be
obligated, to remove, not later than January 1, 2001, the asbestos and any
other Hazardous Materials, if any, in the Improvements and to remove or
remediate any contaminated soil under the approximately 119,000 square foot
building located on the Excluded Area in accordance with the provisions of
paragraph 32 of the
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Sublease (which such paragraph 32 is incorporated herein by reference) and
either (x) to levels at or below the cleanup level or standards established by
the Record of Decision, or (y) to levels acceptable to the environmental agency
or agencies having jurisdiction over such cleanup or remediation (such levels
described in clauses (x) or (y) above being referred to hereinafter as the
"Soil Remediation Standard"). If Seller elects not to execute the Sublease as
provided in clause (ii) above, the provisions of subparagraphs 32(b), 32(c) and
32(d) shall apply to the removal of the Improvements from the Property, the
removal of removal or other Hazardous Materials from the Improvements and the
removal or remediation of any contaminated soil under the approximately 119,000
square foot building located on the Excluded Area in accordance with the
provisions of paragraph 32 of the Sublease and to levels that meet the Soil
Remediation Standard. Purchaser or, if Veritas enters into an assignment with
respect to this Agreement pursuant to Section 11.1(a)(2) below and the funding
requirements set forth in the Financing Documents have been satisfied, Lessor
shall reimburse Seller for the cost of removing such Improvements within ten
(10) days following receipt of a written notice, invoice or statement setting
forth the costs to be reimbursed. If the casualty shall damage any portion of
the Property other than the building Improvements and related structures such
that the effect of such damage results in greater than 10% decrease in the
value of the Property (as reasonably determined by Purchaser), then Purchaser
shall have the option to terminate this Agreement prior to Closing, in which
event the Xxxxxxx Money shall be promptly returned to Purchaser.
5.6 Condemnation. Seller, upon actually becoming aware of same, shall
promptly notify Purchaser in writing of any condemnation proceeding affecting
the Property commenced prior to the close of escrow or upon receipt of any
written notice of a potential condemnation. If, by reason of any such
proceeding, the value of the Property, in Purchaser's reasonable judgment, is
impaired or reduced, Purchaser may, at its option, elect either to (i)
terminate this Agreement (provided Purchaser shall not be permitted to
terminate this Agreement if the reduction in value is estimated by Purchaser in
good faith to be less than $3,000,000), or (ii) continue the Agreement in
effect without any reduction in the Purchase Price, in which event, upon the
close of escrow, Seller shall assign to Purchaser, and Purchaser shall be
entitled to receive, any compensation, awards, or other payments or relief
resulting from such condemnation proceeding and relating to the Property.
ARTICLE 6
CLOSING
6.1 Closing. The close of escrow under this Agreement shall occur,
subject to satisfaction of the conditions set forth in this Agreement (or
waiver by the party for whose benefit such conditions exist), upon not less
than five (5) days' prior notice from Purchaser to Seller, but in no event
shall escrow close hereunder later than April 15, 1999 (the "Closing Date");
provided, however, if all conditions to closing have been satisfied but
Purchaser's synthetic lease financing is not ready to close due to the lender
thereunder completing its financing documents, then Seller and Purchaser agree
that the April 15, 1999 date referred to above shall be extended to April 19,
1999. Time is of the essence. The consummation of the transaction contemplated
herein ("Closing") shall occur on the Closing Date at the offices of the Escrow
Agent. Closing shall occur through an escrow with the Escrow Agent. Funds shall
be
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deposited into and held by Escrow Agent in a closing escrow account with a bank
satisfactory to Purchaser and Seller. Upon satisfaction or completion of all
Closing conditions and deliveries, the parties shall direct the Escrow Agent to
immediately record and deliver the closing documents to the appropriate parties
and make disbursements according to the closing statements executed by Seller
and Purchaser. The Escrow Agent shall agree in writing with Seller and
Purchaser that (1) recordation of the Deed constitutes its representation that
it is holding the closing documents, closing funds and closing statement and is
prepared and irrevocably committed to disburse the closing funds in accordance
with the closing statements and (2) release of funds to the Seller shall
irrevocably commit it to issue the Title Policy in accordance with this
Agreement. Provided such supplemental escrow instructions are not in conflict
with this Agreement as it may be amended in writing from time to time, Seller
and Purchaser agree to execute such supplemental escrow instructions as may be
appropriate to enable Escrow Agent to comply with the terms of this Agreement.
6.2 Conditions to the Parties' Obligations to Close. In addition to all
other conditions set forth herein, the obligation of Seller, on the one hand,
and Purchaser, on the other hand, to consummate the transactions contemplated
hereunder shall be contingent upon the following:
(a) The other party's representations and warranties contained
herein shall be true and correct as of the date of this Agreement and the
Closing Date;
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder and all deliveries to be made at Closing have been
tendered;
(c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
the other party or the Property that would materially and adversely affect the
operation or value of the Property or the other party's ability to perform its
obligations under this Agreement or which seeks to restrain or prohibit, or to
obtain damages or a discovery order with respect to, this Agreement or the
consummation of the transactions contemplated hereby;
(d) Any other condition set forth in this Agreement to such party's
obligation to close is not satisfied by the applicable date;
(e) As a condition to Purchaser's obligation to close, there shall
be no notice issued of any material violation or alleged violation of any law,
rule, regulation or code including, without limitation, the Record of Decision,
which would affect Purchaser (other than possibly with respect to the existing
environmental condition of the Property known or disclosed to Purchaser), which
has not been corrected to the satisfaction of the issuer of the notice and no
material, adverse change in the condition of or affecting the Property shall
have occurred or been discovered since the expiration of the Feasibility Period,
(f) As a condition to Purchaser's obligation to close, at Closing
Seller shall not be in default under any agreement to be assigned to, or
obligation to be assumed by, Purchaser under this Agreement.
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So long as a party is not in default hereunder, if any condition referred
to in this Section 6.2 to such party's obligation to proceed with the Closing
hereunder has not been satisfied as of the Closing Date or other applicable
date, such party may, in its sole discretion, either (i) terminate this
Agreement by delivering written notice to the other party on or before the
Closing Date or other applicable date, (ii) extend the time available for the
satisfaction of such condition by up to a total of ten (10) business days or
(iii) elect to close, notwithstanding the non-satisfaction of such condition,
in which event such party shall be deemed to have waived any such condition
except for breach by a party of a covenant in which case the Closing shall not
relieve such breaching party from any liability it would otherwise have
hereunder. If such party elects to proceed pursuant to clause (ii) above, and
such condition remains unsatisfied after the end of such extension period,
then, at such time, such party may elect to proceed pursuant to either clause
(i) or (iii) above.
6.3 Seller's Deliveries in Escrow. At least three (3) business days prior
to the Closing Date, Seller shall deliver into escrow to the Escrow Agent the
following:
(a) Deed. A grant deed in the standard form of Title Company,
conveying to Purchaser fee simple title to the Property, subject only to the
Permitted Exceptions and the Sublease (the "Deed").
(b) Assignment of Permits, Contracts and Utility Rights. Such
assignments and other documents and certificates as Purchaser may reasonably
require in order to fully and completely transfer and assign to Purchaser all
of Seller's right, title, and interest, in and to the permits, rights under
utility agreements (including any deposits pursuant thereto) and similar rights
applicable to the Property (excepting therefrom permits and rights which are
necessary or reasonably required in connection with the operation of Seller's
business which is contemplated to continue on a portion of the Property
following the Closing).
(c) Environmental Indemnity. The environmental indemnity agreement
in the form of Exhibit C, executed and acknowledged by Seller ("Environmental
Indemnity"). Such Environmental Indemnity shall be recorded at the close of
escrow following the Grant Deed.
(d) Certificate. A certificate from Seller that each of the
representations and warranties contained in Section 8.1 hereof is true and
correct as set forth herein as of the closing date.
(e) FIRPTA and Form 590RE. A Foreign Investment in Real Property Tax
Act affidavit and California Withholding Certificate Form 590RE executed by
Seller. If Seller fails to provide the necessary affidavit and/or documentation
of exemption on the Closing Date, Purchaser may proceed with the Closing and
withhold from the Purchase Price such sums as are required to be withheld in
accordance with the withholding provisions of Section 1445 of the Internal
Revenue Code and the laws of the State of California.
(f) Authority. Evidence of existence, organization, and authority of
Seller and the authority of the person executing documents on behalf of Seller
reasonably satisfactory to Purchaser, the Escrow Agent and the Title Company.
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hereunder, Seller and Purchaser shall each execute escrow instructions and
deliver the same to Escrow Holder instructing Escrow Holder to hold and
disburse the Holdback Funds in accordance with the terms of this Section 6.3(i)
above. The rights and obligations of Seller and Purchaser under this Section
6.3(i) shall survive the Closing.
(j) At Closing, Seller shall also deposit into a separate, interest
bearing escrow account with Escrow Holder the sum of Three Million Five Hundred
Thousand Dollars ($3,500,000) (the "FAR Funds"). The FAR Funds equal the agreed
upon difference in value of the Property based on whether the Property has a
.50 FAR (floor area ratio) or a .45 FAR. As of the date of execution of this
Agreement, the Property has a .35 FAR (and any increased FAR for the Property
above .35 is not a condition to closing). The Property is subject to having a
FAR above .35 should the City of Mountain View determine in its discretion that
the Property (or its use or occupancy) satisfies certain Transit Zone standards
for increased FAR and the City of Mountain View grants the Property a Transit
Oriented Development Permit ("XXX Permit"). Purchaser or, if Veritas enters
into an assignment with respect to this Agreement pursuant to Section
11.1(a)(2) below, Veritas, acting as the agent of Lessor under the Financing
Documents, hereby agrees to exercise diligent and commercially reasonable
efforts to cause the City of Mountain View to approve a .50 FAR for the
Property. Purchaser's obligation under the immediately preceding sentence shall
survive the Closing and shall expire upon the earlier of (x) the date Purchaser
obtains final approval of a .50 FAR for the Property, (y) the date the City of
Mountain View makes a final decision not to approve a .50 FAR for the Property,
or (z) February 18, 2000.
Seller agrees to reasonably cooperate with Purchaser, at de minimus cost
to Seller, in Seller's efforts to achieve a .50 FAR for the Property. Such
cooperation shall include, without limitation, signing, as owner of the
Property, applications for entitlements prior to the Closing. Seller further
agrees not to actively and knowingly interfere with, or cause or encourage any
third party to interfere with Purchaser's efforts to obtain transit rezoning, a
XXX Permit, any other entitlement or any increase in the FAR for the Property
up to .50 FAR. Seller's and Purchaser's obligations under this paragraph shall
survive the Closing.
The parties hereto agree that if, on or before February 18, 2000, the City
of Mountain View finally approves a .50 FAR for the Property (and the appeal or
referendum period, if any, applicable to such decision expires without any
appeal, referendum or challenge having been made), then the parties shall
promptly instruct Escrow Holder to release the entire FAR Funds (and all
interest accrued thereon while in escrow) to Seller. If, on or before February
18, 2000, the City of Mountain View makes a final decision (and the appeal or
referendum period, if any, applicable to such decision expires without any
appeal, referendum or challenge having been made) that the FAR for the Property
will be .45 or less, then the parties shall promptly instruct Escrow Holder to
release the entire FAR Funds (and all interest accrued thereon while in escrow)
to Purchaser. If, on or before February 18, 2000, the City of Mountain View
makes a final decision (and the appeal or referendum period, if any, applicable
to such decision expires without any appeal, referendum or challenge having
been made) that the FAR for the Property will be greater than .45, then for
every one percent (.01) above 45% that is the ultimate FAR for the Property,
Seller shall receive Seven Hundred Thousand Dollars ($700,000) (prorated for any
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portion of one percent), together with the interest accrued thereon while in
escrow, from the FAR Funds in escrow and Purchaser shall receive the balance of
the FAR Funds and all interest accrued on such balance in escrow (and the
parties shall promptly so instruct Escrow Holder to release the FAR Funds and
interest thereon accordingly). The above allocation rules set forth in this
paragraph shall be hereinafter referred to as the "Allocation Rules." If, on or
before February 18, 2000, the City of Mountain View has not made any final
decision with respect to adjusting the FAR for the Property, then the parties
shall promptly instruct Escrow Holder to release the entire FAR Funds (and all
interest accrued thereon while in escrow) to Seller. If, on or before February
18, 2000, the City of Mountain View has made a final decision with respect to
the FAR for the Property and an appeal or referendum is filed and that appeal or
referendum itself is finally resolved before February 18, 2000, then the FAR
Funds shall be distributed in accordance with the Allocation Rules set forth
earlier in this paragraph, except that the FAR used in implementing the
Allocation Rules shall be the FAR resulting from the final resolution of the
appeal or referendum. If on or before February 18, 2000, the City of Mountain
View has made a final decision with respect to FAR for the Property, and an
appeal or referendum is filed which is not finally resolved before February 18,
2000, the FAR Funds shall be distributed in accordance with the Allocation Rules
except that the FAR used in implementing the Allocation Rules shall be the FAR
decided by the City of Mountain View prior to the filing of the appeal or
referendum. If any appeal or referendum is filed by or on behalf of Seller
(objecting to the decision of the City on the FAR for the Property) to increase
the FAR for the Property, the FAR Funds shall be distributed in accordance with
the Allocation Rules based upon the decision of the City of Mountain View
regarding the FAR at the time such appeal or referendum is filed.
Notwithstanding anything to the contrary contained herein, Seller shall not file
or bring, or cause to be filed or brought, an appeal or referendum of any final
decision of the City of Mountain View relating to FAR for the Property or any
other action relating to the Property entitlements without the consent of the
Purchaser, which consent may be granted, if at all, in Purchaser's sole and
absolute discretion. As an illustrative example of the foregoing, if prior to
February 18, 2000, the City of Mountain View makes a final decision to increase
the FAR for the Property to .465, then Seller shall be entitled to receive
$1,050,000 (plus interest accrued thereon while in escrow) from the FAR Funds
and Purchaser shall be entitled to receive $2,450,000 (plus interest accrued
thereon while in escrow). On or before the Closing hereunder, Seller and
Purchaser shall each execute joint escrow instructions and deliver the same to
Escrow Holder instructing Escrow Holder to hold and disburse the FAR Funds in
accordance with the terms of this Section 6.3(j) above. The rights and
obligations of Seller and Purchaser under this Section 6.3(j) shall survive the
Closing. As used in this paragraph, the terms "final approval" or "final
decision" shall mean the final decision or approval by the City of Mountain View
prior to the filing of any administrative or judicial appeal or referendum.
If, during the term of the Sublease referred to in Section 2.5 above,
Seller receives any portion of the FAR Funds from escrow pursuant to the terms
of the paragraph above, then the triple net monthly rent payable by Seller, as
tenant, under the Sublease shall be adjusted, commencing as of the date Seller
receives such portion of the FAR Funds, to equal an amount that will yield
Purchaser, as landlord under the Sublease, an eight percent (8%) annual return
on the portion of the adjusted Purchase Price Paid by Seller (which adjusted
Purchase Price shall be equal to $32,200,000 plus the amount of the FAR Funds
received by Seller pursuant to the terms
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of the paragraph above) that is allocable to the Excluded Area and the
Improvements thereon. The portion of the adjusted Purchase Price that is
allocable to the Excluded Area and the Improvements thereon (as of the date
Seller receives any portion of the FAR Funds) shall be determined by
multiplying the sum of $32,200,000 plus the amount of the FAR Funds received by
Seller pursuant to the terms of the paragraph above by a fraction, the
numerator of which is the acreage included in the Excluded Area (which is
approximately 11.49 acres) and the denominator of which is the total acreage
included in the entire Property (which is approximately 19.61 acres).
6.4 Purchaser's Deliveries in Escrow. Except as specified below, at least
three business days prior to the Closing Date (except as otherwise provided),
Purchaser shall deliver into escrow to the Escrow Agent the following:
(a) Purchase Price. On the Closing Date, the Purchase Price, less
the Xxxxxxx Money that is applied to the Purchase Price, plus or minus
applicable prorations and Purchaser's withholding obligations pursuant to
Section 6.3(c) above, deposited by Purchaser with the Escrow Agent in
immediate, same-day federal funds wired for credit into the Escrow Agent's
escrow account. On the Closing Date, Purchaser shall also deliver into Escrow
for release to Seller at Closing an amount equal to all utility deposits, if
any, related to the Property that Seller will be assigning to Purchaser at
Closing.
(b) Environmental Indemnity. The Environmental Indemnity, executed
and acknowledged by Purchaser.
(c) Additional Documents. Any additional documents that Seller, the
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement.
(d) Sublease. Subject to Section 5.5 above, an original counterpart
of the Sublease, executed by Purchaser, as landlord.
6.5 Possession. Seller shall deliver possession of the Property to
Purchaser at the Closing subject only to the Permitted Exceptions and the
Sublease.
ARTICLE 7
PRORATIONS
7.1 Proration of Taxes and Assessments. General real estate taxes and
assessments imposed by governmental authority ("Taxes") and any assessments by
private covenant constituting a lien or charge on the Property for the
then-current calendar year or other current tax period not yet due and payable
shall be prorated between Seller and Purchaser as of the close of the day
immediately preceding the Closing Date. If the Closing occurs prior to the
receipt by Seller of the tax xxxx for the calendar year or other applicable tax
period in which the Closing occurs, Purchaser and Seller shall prorate Taxes
for such calendar year or other applicable tax period based upon the most
recent ascertainable assessed values and tax rates prior to Closing. With
respect to supplemental taxes assessed against the Property under California
Revenue and
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Taxation Code Section 75 et seq., Seller shall be responsible for and pay
before delinquency all such taxes assessed against the Property applicable to
construction or transfers occurring before the Closing Date, and Purchaser
shall be responsible and pay for such taxes applicable to construction and
transfers occurring on and after the Closing Date. Any reconciliation of
estimated closing adjustments, or corrections of errors in the calculation of
closing adjustments, shall be made as soon as practicable after the Closing
and the provisions of this Section 7.1 shall survive the Closing.
7.2 Closing Costs. Seller shall bear the cost of a CLTA policy of title
insurance in the amount of the Purchase Price, and Purchaser or, if Veritas
enters into an assignment with respect to this Agreement pursuant to Section
11.1(a)(2) below, Lessor (as defined in Section 11.1(a) below) shall bear the
excess cost associated with an ALTA extended owner's policy of title insurance
and any endorsements requested by Purchaser. Purchaser shall also pay for any
title insurance policy or policies to be issued to its trustee or agent in
connection with any off-balance sheet financing secured by the Property. County
transfer taxes associated with the closing of the sale of the Property shall be
borne by Seller. City conveyance taxes or fees shall be split equally by Seller
and Purchaser. All other closing costs incurred in connection with the closing
of the transaction described in this Agreement (including, without limitation,
recording costs and escrow fees) shall be borne by Seller and Purchaser in
accordance with the custom in Santa Xxxxx County. Seller and Purchaser shall
each bear their own legal and accounting fees incurred in connection with the
Closing of the subject transaction.
7.3 Commissions. Seller and Purchaser represent and warrant each to the
other that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than Broker and EY Xxxxxxx
Xxxxxxxxx Real Estate Group ("EYKL"). At the close of escrow hereunder, and
only if escrow closes hereunder, Seller shall pay Broker a real estate sales
commission equal to Six Hundred Thirty Thousand Dollars ($630,000) and pay to
EYKL a real estate sales commission equal to Seven Hundred Thousand Dollars
($700,000) (for total commissions in the amount of One Million Three Hundred
Thirty Thousand Dollars ($1,330,000). In addition, at such time as Seller
receives any portion of the FAR Funds from Escrow Holder pursuant to the terms
of Section 6.3(j), Seller agrees to pay to Broker a real estate sales commission
equal to two percent (2%) of the amount of such FAR Funds received by Seller.
Each party shall indemnify and hold harmless the other party from and against
any claim for broker's or finder's fees or commissions in connection with the
negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby based upon any statement, representation or agreement of
such party. This provision shall survive the Closing or any termination of this
Agreement.
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ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 Seller's Representations and Warranties. As a material inducement to
Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:
(a) Authority. Seller has been duly organized and is validly existing
as a corporation, is in good standing in the state of its organization and is
qualified to do business, and is in good standing, in the state in which the
Property is located. Seller has the full right and authority and has obtained
any and all consents required therefor to enter into this Agreement, consummate
or cause to be consummated the Seller's Closing obligations and make or cause to
be made transfers and assignments contemplated herein. The persons signing this
Agreement on behalf of Seller are authorized to do so. This Agreement has been,
and the documents to be executed by Seller pursuant to this Agreement will be,
authorized and properly executed and does and will constitute the valid and
binding obligations of Seller, enforceable against Seller in accordance with
their terms.
(b) Conflicts and Pending Actions or Proceedings. There is no
agreement to which Seller is a party or, to Seller's current actual knowledge,
binding on Seller which is in conflict with this Agreement. There is no action
or proceeding pending or, to Seller's knowledge, threatened against or relating
to the Property, including, without limitation, any condemnation proceedings or
which challenges or impairs Seller's ability to execute or perform its
obligations under this Agreement, the Sublease or with respect to the Property.
(c) Agreements With Governmental Authorities/Restrictions. To
Seller's current actual knowledge, Seller has not entered into, and has no
knowledge of, any agreement with Seller or application filed by Seller to any
governmental or public body or authority with respect to any future annexation,
zoning modification, variance, platting or other land use matter. To Seller's
current actual knowledge, except with respect to the environmental condition of
the Property as disclosed to Purchaser in Article 9 of this Agreement or as
otherwise set forth in any environmental documents provided or made available
(or to be provided or made available) to Purchaser, neither Seller nor the
Property is in violation or non-compliance with any restriction or covenant
affecting the Property.
(d) Condemnation. To Seller's current actual knowledge, no
condemnation, eminent domain or similar proceedings are pending or threatened
with regard to the Property.
(e) Notice of Special Assessments. Seller has not received any
written notice and has no knowledge of any pending threatened liens, special
assessments, condemnations, impositions or increases in assessed valuations
(other than annual increases in real property taxes and assessments or increased
valuations based upon a change of ownership of the Property upon Closing) to be
made against the Property by any governmental authority.
(f) Binding Agreements. To Seller's current, actual knowledge, except
for any Permitted Exceptions entered into by Seller and any agreements
terminable at-will without
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penalty or premium, and except as described in Section 8.1(c) above, neither
Seller nor its agents or employees have entered into any written agreements
concerning the Property by which Purchaser would be bound following the Closing.
(g) Encumbrances. To Seller's current, actual knowledge, Seller has
not hypothecated, transferred, encumbered or affirmatively taken any action
with respect to the Property, or any portion thereof, which would adversely
effect Seller's ability to convey the Property to Purchaser pursuant to this
Agreement. To Seller's current actual knowledge, there shall be no leases or
tenancies (except for the Sublease) in effect on the Property as of the Closing,
and, except for the Sublease, to Seller's current actual knowledge, no facts or
conditions exist that will prevent possession of the Property from being
delivered to Purchaser upon Closing.
(h) Contract Obligations. To Seller's current, actual knowledge,
Purchaser shall have no liability as a successor-in-interest for any written
contracts or agreements entered into by Seller in connection with its operation
of the Property, except for obligations (i) accruing after the Closing Date
pursuant to any contract or agreement which is expressly assumed by Purchaser,
or (ii) in any document which is a Permitted Exception set forth in the
Preliminary Title Report.
(i) No Bankruptcy. No filing or petition under the United State
bankruptcy laws or any state insolvency laws, or any laws for composition of
indebtedness or for the reorganization of debtors has been filed by Seller.
(j) Entitlements. Seller shall not knowingly and actively take any
action prior to or after Closing that is likely to decrease the square footage
of improvements that may be constructed by Purchaser on the Property.
(k) Disclosures. To Seller's current actual knowledge, the documents
provided by Seller to Purchaser pursuant to Section 4.2 hereof and any other
matters heretofore disclosed to Purchaser in writing by Seller do not contain
any untrue statement of a material fact.
The term "to the current, actual knowledge of Seller" or "to Seller's
current actual knowledge" or other derivations thereof, shall mean the current,
actual knowledge of Xxx Xxxxx, who is Executive Vice President and General
Counsel of Seller, as of the Date of this Agreement, without any duty of inquiry
or investigation.
All of the representations and warranties set forth in this Section 8.1
above shall be true upon the execution of this Agreement and shall continue to
be true as of the Closing Date without the necessity of a separate certificate
with respect thereto and shall survive the delivery of the Deed and other
Closing instruments and documents for a period of one (1) year following the
Closing. If no action or suit is filed by Purchaser against Seller within one
(1) year following the Closing based on a breach of any such representation,
warranty or covenant set forth in this Section 8.1 above, then such
representations, warranties, and covenants for which no such action or suit is
filed by Purchaser against Seller shall be deemed void and of no further force
and effect. If, prior to Closing, Seller discovers any information which would
make any of the
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representations or warranties set forth in Section 8.1 above untrue or
inaccurate, Seller shall promptly notify Purchaser and, in such instance, if
such new information is material to Purchaser's decision whether or not to
purchase the Property, Purchaser shall have the right to terminate this
Agreement (and, in the event of such termination, as Purchaser's sole remedy,
Purchaser shall receive the return of its Xxxxxxx Money).
8.2 Purchaser's Representations and Warranties. As a material inducement
to Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized
and is validly existing as a corporation duly organized and existing under the
laws of the State of Delaware and in good standing in the State of its
organization, and will be qualified to do business in the state in which the
Property is located on the Closing Date. Purchaser has the full right and
authority and has obtained any and all consents (subject to receiving the
approval or deemed approval of Purchaser's Board of Directors to the
Environmental Indemnity as described in Section 9.3 below) required therefor
to enter into this Agreement and to consummate or cause to be consummated the
sale. This Agreement and all of the documents to be delivered by Purchaser at
the Closing have been or will be authorized and properly executed and will
constitute the valid and binding obligations of Purchaser, enforceable in
accordance with their terms.
(b) No Bankruptcy. No filing or petition under the United States
bankruptcy laws or any state insolvency laws, or any laws for composition of
indebtedness or for the reorganization of debtors has been filed by Purchaser.
All of the representations and warranties set forth in this Section 8.2
above shall be true upon the execution of this Agreement and shall continue to
be true as of the Closing Date without the necessity of a separate certificate
with respect thereto and shall survive the delivery of the Deed and other
Closing instruments and documents for a period of one (1) year following
Closing. If no action or suit is filed by Seller against Purchaser within one
(1) year following the Closing based on a breach of any such representation or
warranty set forth in this Section 8.2 above, then such representations and
warranties for which no such action or suit is filed by Seller against
Purchaser shall be deemed void and of no further force and effect. If, prior to
Closing, Purchaser discovers any information which would make any of the
representations or warranties set forth in Section 8.2 untrue or inaccurate,
Purchaser shall promptly notify Seller and, in such instance, if such new
information is material to Seller's decision whether or not to sell the
Property, Seller shall have the right to terminate this Agreement (and, in the
event of such termination, as Seller's sole remedy, Seller shall be entitled to
retain or receive the Xxxxxxx Money as its property).
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ARTICLE 9
DISCLOSURES; "AS IS" SALE
9.1 Environmental Disclosures. Seller hereby discloses to Purchaser that
the following is true and correct to the actual knowledge of Seller:
(a) In 1984, the California Regional Water Quality Control Board
issued cleanup orders to Raytheon Company, Xxxxxxxxx Semiconductor Corporation
(not related to Seller), Intel Corporation, NEC Electronics, Inc. and Siltec
Corporation with respect to Hazardous Materials contamination existing in the
regional site known as the Middlefield-Xxxxx-Xxxxxxx (MEW) site (of which the
Property is a part). Three (3) Superfund sites exist within the MEW area. The
Environmental Protection Agency ("EPA") is currently overseeing cleanup
measures that are being conducted on the Property and neighboring properties.
The Property has been identified in EPA Orders as containing sources of
contamination including underground and aboveground storage tanks for chemical
products and wastes, pH neutralization systems and industrial wastewater
treatment systems. The Property is listed on the National Priorities List.
(b) In April 1985, the EPA issued a "Request for Information"
pursuant to Section 106(e) of CERCLA and took over as the lead agency at the
Property. Raytheon Company, Xxxxxxxxx Semiconductor Corporation and Intel
Corporation entered an Administrative order on Consent with the EPA on August
15, 1985 to conduct Remedial Investigation/Feasibility Studies (RI/FS) at the
regional site referred to above. The RI/FS was finalized in 1988. The EPA
issued a Record of Decision (ROD) in May 1989. The ROD, which was later
modified in September 1990 and April 1996, established specific cleanup
concentrations for semiconductor-related contamination (TCE) and ten other
compounds, and required the implementation of site-specific source control
remediation measures and a regional groundwater remediation program. Raytheon
Company and Intel Corporation entered into a Consent Decree (CD) with the EPA
in May 1991 that was entered by the United States District Court, Northern
District of California on April 10, 1992.
(c) The CD referred to above provides that Raytheon Company will
perform groundwater and soil remediation for the sites it occupied and operated
within the MEW area. The facility specific work at the Property is now in the
operation and maintenance phase.
(d) In 1987, a soil-bentonite, subsurface, slurry wall was installed
by Raytheon Company around the perimeter of the Property enclosing the soil and
water bearing zones as part of the remedial measures. Groundwater is extracted
from the water bearing zones by Raytheon Company within the area enclosed by
the slurry wall maintaining an inward and upward groundwater flow gradient to
keep contaminated groundwater from flowing away from the Property.
(e) The groundwater extraction and treatment system was installed in
1987. Groundwater is extracted from several xxxxx located both within the
Property boundaries and from adjacent property. The groundwater extraction
system is a long term remedial measure that Raytheon Company is required to
maintain. The groundwater extraction system, soil vapor
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extraction system referred to below and groundwater monitoring are ongoing at
the Property to remediate and monitor trichlorethylene, 1,1,1-trichloroethane,
I, I-and trans-1,1-dichloroethylene contamination believed to have emanated
from former underground tanks,
(f) A soil vapor extraction system was installed by Raytheon in 1996
to remediate the contaminated soils in or under the Property. This system
covers a surface area of approximately four (4) acres and proceeds to a depth
of approximately 15 to 18 feet. The system is composed of eighty-eight (88)
shallow and deep soil vapor extraction xxxxx and one soil vapor extraction
treatment system. Raytheon Corporation has petitioned and obtained approval
from the EPA for closure for part of the soil vapor remedial system.
(g) Although Seller is the current owner of the Property, the
treatment systems referred to above are maintained by Raytheon Company, a
Delaware corporation ("Raytheon Company"). Raytheon Semiconductor, Inc., a
Delaware corporation, as grantor ("Grantor"), and Raytheon Company, as grantee,
executed a Grant of Easements, Restriction and Indemnity Agreement dated
December 24, 1997, recorded in the Official Records of Santa Xxxxx County on
December 30, 1997, as Document No.: 13994862 (the "Easements Agreement"). A
copy of such Easements Agreement is attached hereto as Exhibit D and made a
part hereof. At Closing, Seller shall execute an assignment agreement, in form
reasonably acceptable to Purchaser and Seller, pursuant to which Seller assigns
to Purchaser, on a non-exclusive basis (reserving unto Seller all of the rights
and benefits granted to Grantee under the Easements Agreement), the rights of
Grantee under the Easements Agreement. Under the terms of paragraph 4.b. of the
Easements Agreement, Raytheon Company agreed to indemnify, defend and hold the
aforementioned Grantor harmless from any damages, claims, losses, expenses,
costs, obligations and liabilities, including, without limitation, liabilities
for all reasonable attorneys', accountants' and expert fees and expenses
asserted against or incurred or suffered by such Grantor arising out of or
related to environmental conditions (i) which first occurred, existed or arose
prior to December 24, 1997, and (ii) which arose or resulted from the release
of hazardous substances in, on, under, from, or at the Grantor Property (as
defined in the Easements Agreement); except to the extent such are exacerbated
by activities or negligent omissions of Grantor or any third party (other than
Agents acting on behalf of Raytheon Company in the performance of Remedial
Measures (as defined in the Easements Agreement) on or after December 24, 1997.
Paragraph 5.a. of the Easements Agreement provides that the obligations of
Raytheon Company, as set forth in the Easements Agreement, including the
indemnities set forth in Paragraph 4 of the Easements Agreement, benefit and
run with the Grantor Property. In the event escrow closes hereunder, Purchaser
agrees not to take any action, or permit any affiliate, agent, employee,
contractor, successor, assign, tenant, lender or other authorized
representative of Purchaser to take any action, that would result in a breach
or default of the obligations of the Grantee thereunder. The provisions of the
immediately preceding sentence shall survive the Close of Escrow.
In the event escrow closes hereunder, Purchaser shall, upon prior written
notice, provide Raytheon Company, its consultants and contractors access to the
Property in accordance with the Easements Agreement and shall permit them to
install, operate and maintain remedial treatment systems and to conduct all
other remediation activities which Raytheon Company determines to be necessary
or appropriate in accordance with and to the extent permitted by the Easements
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Agreement (and/or those certain provisions attached hereto as Exhibit E (the
"Raytheon Acquisition Excerpts") which are excerpts from that certain agreement
pursuant to which Seller acquired Raytheon Semiconductor) or required by
applicable governmental agencies. Purchaser will cause any successor owners and
occupants of the Property to afford Raytheon Company the same rights to access
and to conduct remediation activities as provided under the Easements Agreement
and the Raytheon Acquisition Excerpts (which access shall only be to the extent
necessary to conduct the remediation of contamination existing on, in or under
the Property and shall terminate upon completion of such remediation), and
Purchaser agrees to record an appropriate acknowledgement of such rights in the
Registry of Deeds or Official Records of Santa Xxxxx County upon Raytheon
Company's or Seller's request. The obligations of Purchaser and Seller under
this paragraph shall survive the close of escrow hereunder.
In the event escrow closes hereunder, Seller shall reasonably cooperate
with Purchaser to engineer and relocate, upon Purchaser's reasonable request,
and at Seller's cost, any existing soil or water remediation well sites and
equipment (including, without limitation, hydrogen and other tanks and all
associated piping including the Air Products pipeline located on the Developable
Property (as defined in Section 2(b) of the Sublease) that may encumber
Purchaser's ability to develop the Property. The obligations of Seller under
this paragraph shall survive the close of escrow hereunder.
9.2 As Is Sale. Purchaser acknowledges and agrees that it has been given
or will be given before the end of the Feasibility Period, a full opportunity to
inspect and investigate each and every aspect of the Property, either
independently or through agents of Purchaser's choosing, including, without
limitation:
(i) All matters relating to title, together with all governmental and
other legal requirements such as taxes, assessments, zoning, use permit
requirements and building codes.
(ii) The physical condition of the Property, including, without
limitation, the interior, the exterior, the structure, the paving, the
utilities, and all other physical and functional aspects of the Property. In the
event Purchaser enters onto the Property to perform any test, inspection or
investigation of the Property, Purchaser shall do so in a manner that causes the
least interference possible to Seller's business operations on the Property.
Purchaser agrees not to undertake any invasive testing or investigation of the
Property unless and until Seller has approved (which shall not be unreasonably
withheld) the scope of such invasive testing or investigation and the contractor
or consultant to undertake performance of the same. Seller shall receive copies
of all reports issued, and shall be entitled to the return, if available, of all
water or soil samples taken from the Property, in connection with the
examination of the environmental condition of the Property; provided, however,
any reports, studies, or other documents delivered by Purchaser to Seller shall
be delivered to Seller without representation or warranty, express or implied,
by Purchaser as to accuracy or completeness.
(iii) Any easements and/or access rights affecting the Property.
(iv) All other matters of material significance affecting the
Property.
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PURCHASER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND
PURCHASER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS AND
THAT, SUBJECT TO SELLER'S OBLIGATION TO EXECUTE THE ENVIRONMENTAL INDEMNITY AS
PROVIDED IN SECTION 9.3 OF THIS AGREEMENT, PURCHASER IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS (EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT) OR IMPLIED, FROM SELLER, ITS AGENTS, OR
BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION:
(i) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, THE STRUCTURAL ELEMENTS, FOUNDATION, ROOF,
APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES AND THE ELECTRICAL,
MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES AND
APPLIANCES, (ii) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS,
GEOLOGY AND ANY GROUNDWATER, (iii) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND
PHYSICAL CONDITION OF UTILITIES SERVING THE PROPERTY, (iv) THE DEVELOPMENT
POTENTIAL OF THE PROPERTY, AND THE PROPERTY'S USE, HABITABILITY,
MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR
ANY PARTICULAR PURPOSE, (v) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR
ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF THE PROPERTY, (vi) THE
COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS,
REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY
GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY,
(vii) THE PRESENCE OF HAZARDOUS MATERIALS ON, UNDER OR ABOUT THE PROPERTY OR THE
ADJOINING OR NEIGHBORING PROPERTY, AND (viii) THE QUALITY OF ANY LABOR AND
MATERIALS USED IN ANY IMPROVEMENTS ON THE PROPERTY, AND (ix) THE CONDITION OF
TITLE TO THE PROPERTY.
9.3 Seller's Environmental Indemnity Agreement. At least three (3) business
days prior to the close of escrow hereunder, Purchaser and Seller shall execute
and deposit into escrow for delivery to the other at Closing, a counterpart
original of the Environmental Indemnity in the form of Exhibit C attached
hereto.
9.4 Purchaser's Indemnity. Purchaser shall indemnify, defend (using counsel
selected by Purchaser and reasonably acceptable to Seller) and hold harmless
Seller and its agents, employees, directors, officers, successors and assigns
from and against any and all damages, claims, losses, expenses, costs,
obligations and liabilities, including, without limitation, liabilities for all
reasonable attorneys', accountants', and experts' fees and expenses including
those incurred to enforce Purchaser's obligations under this Section 9.4
("Covered Liabilities") asserted or incurred or suffered by Seller arising out
of or relating to the release or discharge first occurring on after the Closing
hereunder of any hazardous or toxic substances, materials or wastes in, on,
under or from any portion of the Property or the Improvements located thereon
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(except in each case from (i) hazardous or toxic substances, materials or
wastes released or discharged by Seller (except to the extent exacerbated by
Purchaser or its agents, employees, contractors, lessees, sublessees or other
representatives of Purchaser), or (ii) an off-site source); provided, however,
that any leaking, leaching, migration or similar movement of hazardous or toxic
substances, materials or wastes which existed in soil or groundwater prior to
Closing hereunder shall not be considered a release or discharge by Purchaser
except to the extent movement is exacerbated by the negligent acts or omissions
or willful misconduct of Purchaser or anyone other than Raytheon Company and
Seller post-Closing on the Property (and provided further than construction or
other development activities on the Property that are performed in accordance
with due care shall not be considered "exacerbation" of any pre-existing
condition). Anything herein to the contrary notwithstanding, if Purchaser shall
be obligated to indemnify Seller as provided under this Section 9.4, then
Purchaser may, at its election, control the defense of any claims against Seller
that are indemnified hereunder (provided Seller shall have the right to
reasonably approve the counsel defending Seller under this indemnification
obligation), and, if required, Purchaser also shall control the remediation in
connection with any such Covered Liabilities. Purchaser shall also indemnify and
hold harmless Raytheon Company and Seller against all claims and liabilities
caused by any refusal by Purchaser or successor owners of the Property to allow
remediation by Raytheon Company or Seller of contamination existing on, in or
under the Property or any unreasonable interference with the conduct, management
or control of remediation by Raytheon Company or Seller. The obligations of
Purchaser under this Section 9.4 shall run solely to the benefit of Seller (and
its successors or assigns) and shall survive the close of escrow hereunder.
The preceding notwithstanding, it is the intent of the parties hereto that
Purchaser shall not be responsible or liable for any contamination or for the
existence of any hazardous or toxic substance which were first released,
discharged or disposed on, in or under the Property prior to the close of escrow
hereunder (unless Purchaser has exacerbated such contamination or hazardous or
toxic materials as a result of Purchaser's negligent acts or omissions or
willful misconduct, provided that construction or other development activities
on the Property that are performed in accordance with due care shall not be
considered "exacerbation" of any pre-existing condition).
ARTICLE 10
XXXXXXX MONEY PROVISIONS
10.1 Investment and Use of Funds. The Escrow Agent shall invest the
Xxxxxxx Money in government insured interest-bearing accounts satisfactory to
Purchaser, shall not commingle the Xxxxxxx Money with any funds of the Escrow
Agent or others, and shall promptly provide Purchaser and Seller with
confirmation of the investments made. If the Closing under this Agreement
occurs, the Escrow Agent shall apply the Xxxxxxx Money to the Purchase Price on
the Closing Date.
10.2 Termination Before Close. If any of the conditions to Purchaser's
obligation to close escrow hereunder set forth in Sections 2.2, 2.3, 2.5, 3.1(a)
through 3.1(f) and 6.3 above are not satisfied or deemed satisfied (or waived by
Purchaser in writing) on or before the date such
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applicable condition is required to be satisfied herein (or if no date is
expressly prescribed in this Agreement, then by the Close of Escrow), Purchaser
shall be entitled to a full return of the Xxxxxxx Money deposited by Purchaser
hereunder, as well as interest accrued thereon, and this Agreement shall
terminate. If Purchaser breaches or defaults under any obligation under this
Agreement, including, without limitation, its obligation to purchase the
Property, for any reason other than a Seller breach or default hereunder, or
Purchaser breaches any representation or warranty of Purchaser set forth in
Section 8.2 above, Seller shall be entitled to receive or retain the full
Xxxxxxx Money, as well as interest accrued thereon, as liquidated damages
pursuant to the terms of Section 1.4 below.
10.3 Interpleader. Seller and Purchaser mutually agree that in the event
of any controversy regarding the Xxxxxxx Money, unless mutual written
instructions are received by the Escrow Agent directing the Xxxxxxx Money's
disposition, the Escrow Agent shall not take any action, but instead shall
await the disposition of any proceeding relating to the Xxxxxxx Money or, at
the Escrow Agent's option, the Escrow Agent may interplead all parties and
deposit the Xxxxxxx Money with a court of competent jurisdiction in which event
the Escrow Agent may recover all of its court costs and reasonable attorneys'
fees. Seller or Purchaser, whichever loses in any such interpleader action,
shall be solely obligated to pay such costs and fees of the Escrow Agent as
well as the reasonable attorneys' fees of the prevailing party in accordance
with the other provisions of this Agreement.
10.4 Liability of Escrow Agent. The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, that the Escrow Agent shall not be deemed to be the agent of
either of the parties, and that the Escrow Agent shall not be liable to either
of the parties for any action or omission on its part taken or made in good
faith, and not in disregard of this Agreement, but shall be liable for its
negligent acts and for any loss, cost or expense incurred by Seller or
Purchaser resulting from the Escrow Agent's mistake of law respecting the
Escrow Agent's scope or nature of its duties. Seller and Purchaser shall
jointly and severally indemnify and hold the Escrow Agent harmless from and
against all costs, claims and expenses, including reasonable attorneys' fees,
incurred in connection with the performance of the Escrow Agent's duties
hereunder, except with respect to actions or omissions taken or made by the
Escrow Agent in bad faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent.
10.5 Escrow Fee. If the Closing fails to occur because of a failure by
Seller to comply with its obligations hereunder, then, without limiting
Purchaser's other rights and remedies against Seller by reason thereof, the
costs customarily charged and incurred in connection with the escrow, including
the cost of the escrow fee, any cancellation fees or other costs of the Title
Company, shall be paid by Seller (excluding any special escrow costs, premiums
or fees incurred at Purchaser's direction prior to the Closing). If the Closing
fails to occur because of a failure by Purchaser to comply with any of its
obligations hereunder, then, without limiting Seller's other rights and
remedies against Purchaser by reason thereof, such costs referred to in the
immediately preceding sentence shall be paid by Purchaser. If Closing shall
fail to occur for any other reason, such costs shall be equally divided between
the parties (excluding any special costs, premiums or fees incurred at Buyer's
direction prior to Closing).
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ARTICLE 11
MISCELLANEOUS
11.1 Assignment.
(a) Purchaser's Right to Assign. Subject to the provisions of this
Section 11.1, neither party may assign this Agreement without the prior written
consent of the other, and any such prohibited assignment shall be void. The
preceding to the contrary notwithstanding, Purchaser shall have the
unconditional right, without obtaining Seller's prior consent (but upon written
notice to Seller), to assign (1) the rights and obligations of Purchaser under
this Agreement to (A) any person who or entity which controls, is controlled by
or is under common control with Purchaser, (B) any entity resulting from the
merger, consolidation or other reorganization with Purchaser whether or not
Purchaser is the surviving entity, (C) any entity which acquires all or
substantially all of the assets or stock of Purchaser (any person or entity
identified in clauses (A), (B) and (C) of this paragraph are hereinafter
referred to as "Affiliate"), and (2) the rights and benefits of Purchaser
pursuant to this Agreement (but not the obligations or liabilities of
Purchaser pursuant to this Agreement which shall be retained exclusively by
Veritas Software Corporation ("Veritas")) to a third party (the "Lessor") as
part of a sale/leaseback, off-balance sheet lease financing operating lease or
similar transaction pursuant to which Purchaser (or an Affiliate) shall lease
the Property from Lessor pursuant to a written lease or written leases. For
purposes of this paragraph, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management,
affairs and policies of anyone, whether through the ownership of voting
securities, by contract or otherwise.
(b) Third Party Beneficiaries. The parties acknowledge that Veritas
or an Affiliate of Veritas is intended to be the ultimate occupant and user of
the Property; therefore, the parties acknowledge that Veritas (or its
Affiliate) is an intended third party beneficiary of all of Seller's covenants,
representations, warranties and obligations under this Agreement. The parties
acknowledge that any Financing Party (as defined below) acting in conjunction
with Lessor shall be providing substantial amounts of financing with regard to
the Property; therefore, each such Financing Party and each agent acting on
behalf of any such Financing Party shall also be an intended third party
beneficiary of all of Seller's covenants, representations, warranties and
obligations under this Agreement. For purposes of this Agreement the term
"Financing Party" shall mean any entity providing financing to Purchaser, or
Lessor, as the case may be, secured by a mortgage or deed of trust on the
Property, any entity participating in any such financing, any entity holding
any beneficial interest in any trust for which the holder of legal title to the
Property serves as trustee, and any entity acting as agent for any of the
foregoing entities and any successor or assign of any of the foregoing entities.
(c) Assignment to Affiliate. Upon an assignment by Purchaser to an
Affiliate, and assumption by such Affiliate of all obligations and liabilities
of Purchaser under this Agreement, the assigning Purchaser shall have no
further obligations hereunder (except Purchaser shall not be relieved or
released of any of its indemnification obligations hereunder or any
post-closing obligations) and the Affiliate will consummate the transaction
described herein.
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ARTICLE 11
MISCELLANEOUS
11.1 Assignment.
(a) Purchaser's Right to Assign. Subject to the provisions of this
Section 11.1, neither party may assign this Agreement without the prior written
consent of the other, and any such prohibited assignment shall be void. The
preceding to the contrary notwithstanding, Purchaser shall have the
unconditional right, without obtaining Seller's prior consent (but upon written
notice to Seller), to assign (1) the rights and obligations of Purchaser under
this Agreement to (A) any person who or entity which controls, is controlled by
or is under common control with Purchaser, (B) any entity resulting from the
merger, consolidation or other reorganization with Purchaser whether or not
Purchaser is the surviving entity, (C) any entity which acquires all or
substantially all of the assets or stock of Purchaser (any person or entity
identified in clauses (A), (B) and (C) of this paragraph are hereinafter
referred to as "Affiliate"), and (2) the rights and benefits of Purchaser
pursuant to this Agreement (but not the obligations or liabilities of
Purchaser pursuant to this Agreement which shall be retained exclusively by
Veritas Software Corporation ("Veritas")) to a third party (the "Lessor") as
part of a sale/leaseback, off-balance sheet lease financing operating lease or
similar transaction pursuant to which Purchaser (or an Affiliate) shall lease
the Property from Lessor pursuant to a written lease or written leases. For
purposes of this paragraph, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management,
affairs and policies of anyone, whether through the ownership of voting
securities, by contract or otherwise.
(b) Third Party Beneficiaries. The parties acknowledge that Veritas
or an Affiliate of Veritas is intended to be the ultimate occupant and user of
the Property; therefore, the parties acknowledge that Veritas (or its
Affiliate) is an intended third party beneficiary of all of Seller's covenants,
representations, warranties and obligations under this Agreement. The parties
acknowledge that any Financing Party (as defined below) acting in conjunction
with Lessor shall be providing substantial amounts of financing with regard to
the Property; therefore, each such Financing Party and each agent acting on
behalf of any such Financing Party shall also be an intended third party
beneficiary of all of Seller's covenants, representations, warranties and
obligations under this Agreement. For purposes of this Agreement the term
"Financing Party" shall mean any entity providing financing to Purchaser, or
Lessor, as the case may be, secured by a mortgage or deed of trust on the
Property, any entity participating in any such financing, any entity holding
any beneficial interest in any trust for which the holder of legal title to the
Property serves as trustee, and any entity acting as agent for any of the
foregoing entities and any successor or assign of any of the foregoing entities.
(c) Assignment to Affiliate. Upon an assignment by Purchaser to an
Affiliate, and assumption by such Affiliate of all obligations and liabilities
of Purchaser under this Agreement, the assigning Purchaser shall have no
further obligations hereunder (except Purchaser shall not be relieved or
released of any of its indemnification obligations hereunder or any
post-closing obligations) and the Affiliate will consummate the transaction
described herein.
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(d) Assignment to Lessor. Upon an assignment by Purchaser to
Lessor, Lessor shall have all the rights and benefits of Purchaser pursuant to
this Agreement; provided, however, Veritas shall retain all (and shall not be
relieved or released from any) of the obligations or liabilities of Purchaser
hereunder and Veritas will consummate or cause to be consummated the
transactions described in this Agreement. All obligations and liabilities shall
be retained by Veritas solely as the agent of Lessor pursuant to the Financing
Documents. Purchaser and Seller acknowledge and agree that Lessor may, without
the consent of and without giving notice to Seller or Purchaser, collaterally
assign or otherwise xxxxx x xxxx and security interest in its right, title and
interest pursuant to this Agreement and any proceeds thereof (excluding
therefrom the Holdback Funds and the FAR Funds which shall be deemed the
property of Seller while in escrow) to any entity acting as agent on behalf of
the Financing Parties providing any such sale/leaseback, off-balance sheet lease
financing operating lease or any similar transaction (as described in Paragraph
11.1(a) above).
11.2 Headings. The article and paragraph headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.
11.3 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and effect shall be given
to the intent manifested by the portion held invalid or inoperative. The failure
by either party to enforce against the other any term or provision of this
Agreement shall be deemed not to be a waiver of such party's right to enforce
against the other party the same or any other such term or provision in the
future.
11.4 Governing Law. This Agreement and said other instruments shall, in
all respects, be governed, construed, applied, and enforced in accordance with
the law of the state in which the Property is located.
11.5 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing shall survive the Closing and shall not be deemed to be
merged into or waived by the instruments of Closing.
11.6 No Third-Party Beneficiary. This Agreement is not intended to give
or confer any benefits, rights, privileges, claims, actions or remedies to any
person or entity as a third-party beneficiary, decree, or otherwise; except in
the event Purchaser assigns this Agreement as permitted under Section 11.1,
then each Financing Party (and each agent acting on behalf of any such Financing
Party) acting in conjunction with any third party providing any sale/leaseback,
off-balance sheet lease financing operating lease or similar transaction (as
described in Section 11.1(b) above) shall be an intended third party beneficiary
as set forth therein.
11.7 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.
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11.8 Time of the Essence. Time is of the essence in the performance of
this Agreement.
11.9 Confidentiality. Between the date hereof and for a period ending
one year after the Closing Date, neither Seller nor Purchaser will announce or
disclose or cause or permit to be announced or disclosed, in any manner
whatsoever, the terms, conditions or substance of this Agreement without first
obtaining the written consent of the other party. The foregoing shall not
preclude either party from discussing the substance or any relevant details of
such transactions with any of its attorneys, accountants, professional
consultants, lenders, partners, investors, or any prospective lender, partner or
investor, as the case may be, or any governmental agency including, but not
limited to, the Environmental Protection Agency and the California Water Quality
Control Board, or prevent either party hereto, from complying with laws, rules,
regulations and court orders, including without limitation, governmental
regulatory, disclosure, tax and reporting requirements. Following the close of
escrow hereunder, either party hereto may release a press notice relating to, or
otherwise to announce or disclose the sale, which disclosure may identify the
Property, the Purchase Price of the Property, and the identity of the parties.
The immediately preceding sentence shall not preclude either of the parties from
disclosing, prior to, on or after the close of escrow hereunder, the terms or
conditions of this Agreement to a governmental agency, including, without
limitation, a governmental regulatory agency (including, without limitation, the
Securities Exchange Commission) or taxing authority. Purchaser and Seller may
disclose this transaction or any aspect or information related to this
transaction as its attorneys deem is necessary to comply with applicable law. In
addition to any other remedies available to a party, each party shall have the
right to seek equitable relief, including without limitation injunctive relief
or specific performance, against the other party in order to enforce the
provisions of this Paragraph 11.9.
11.10 Attorneys' Fees. Should either party employ attorneys to enforce
any of the provisions hereof, the party against whom any final judgment is
entered agrees to pay the prevailing party all reasonable costs, charges and
expenses, including attorneys' fees, expended or incurred by the prevailing
party in connection therewith.
11.11 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either (a) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier, (b) sent by
telefax, in which case notice shall be deemed delivered upon transmission of
such notice provided that a hard copy is sent concurrently in accordance with
clauses (a) or (c) of this sentence, or (c) sent by personal delivery, in which
case notice shall be deemed delivered upon receipt or refusal of delivery. A
party's address may be changed by written notice to the other party; provided,
however, that no notice of a change of address shall be effective until actual
receipt of such notice. Copies of notices are for informational purposes only,
and a failure to give or receive copies of any notice shall not be deemed a
failure to give notice. The attorney for a party has the authority to send
notices on behalf of such party.
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11.12 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by Seller to
Purchaser at Closing, Seller and Purchaser each agree to perform, execute and
deliver, but without any obligation to incur any additional liability or
expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to
further perfect the conveyance, transfer and assignment of the Property to
Purchaser and the lease back of a portion of the Property to Seller pursuant to
the terms of the Sublease.
11.13 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages.
11.14 Interpretation. The parties hereto acknowledge that, although
Seller's legal counsel primarily has been responsible for drafting this
Agreement and the exhibits hereto, Purchaser and its legal counsel have been
involved in the negotiations of such Agreement and exhibits. Accordingly the
parties hereto agree that the doctrine or presumption that ambiguities in a
contract shall be construed against the party drafting the same shall not be
employed in connection with this Agreement and the exhibits attached hereto.
This Agreement and the exhibits attached hereto shall be construed in accordance
with their fair meaning.
11.15 Specific Performance. Seller hereby acknowledges that, in the
event of a breach or threatened breach of any of the provisions of this
Agreement by Seller, damages at law may be an inadequate remedy to Purchaser
and, accordingly, without limiting the other remedies of Purchaser, Seller's
obligations under this Agreement may be enforceable by specific performance.
11.16 Release of Claims. Except for the obligations of the parties
hereto under this Agreement that survive the close of escrow hereunder and
except for the obligations of the parties under the Sublease and the
Environmental Indemnity Agreement attached hereto as Exhibit "C," as of the
Close of Escrow hereunder, Purchaser and Seller shall be deemed to have waived,
for themselves, and their respective successors and assigns, any and all claims
each of them may have against the other with respect to this Agreement and the
Property. With respect to the claims waived and released by the respective
parties as provided in this Section 11.16, the parties hereto expressly waive
the benefits of Section 1542 of the Civil Code of the State of California, which
provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which, if known by him, must have
materially affected his settlement with the debtor.
Seller's Initials: [illegible] Purchaser's Initials: [illegible]
----------- -----------
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SELLER:
XXXXXXXXX SEMICONDUCTOR
CORPORATION OF CALIFORNIA, a
Delaware corporation
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: XXXXXX X. XXXXX
-------------------------------------
Date: 3/26/99 Title: EXEC VP
-----------------------------------
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Name: XXXXXXX X. XXXXX
-----------------------------------
Date: 3/26/99 Title: Treasurer
----------------------------------
PURCHASER:
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Date: Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Date: Title:
-----------------------------------
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SELLER:
XXXXXXXXX SEMICONDUCTOR
CORPORATION OF CALIFORNIA, a
Delaware corporation
By:
-------------------------------------
Name:
-------------------------------------
Date: Title:
-----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Date: Title:
----------------------------------
PURCHASER:
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
By: /s/ XXX X. XXXXX
--------------------------------------
Name: XXX X. XXXXX
------------------------------------
Date: March 29, 1999 Title: VICE PRESIDENT AND GENERAL COUNSEL
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Date: Title:
-----------------------------------
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Escrow Agent has executed this Agreement in order to confirm that Escrow
Agent shall act as escrowee with respect to and hold in escrow the Xxxxxxx
Money, or applicable portion thereof as provided in this Agreement, and the
interest accrued thereon while in escrow, and shall disburse the Xxxxxxx Money
and the interest earned thereon, pursuant to the provisions of this Agreement.
CHICAGO TITLE COMPANY
By:
--------------------------------------
Name:
------------------------------------
Date: Title:
-----------------------------------
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EXHIBITS
A -- Legal Description of Real Property
B -- Sublease
C -- Form of Seller Environmental Indemnity Agreement
D -- Easements Agreement Executed by Raytheon Company
E -- Raytheon Acquisition Excerpts
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EXHIBIT "A"
LEGAL DESCRIPTION OF REAL PROPERTY
The land referred to herein is situated in the State of California, County of
Santa Xxxxx, City of Mountain View, described as follows:
LOT 23, as shown on that certain Map entitled, "Tract No. 0000 Xxxxx-Xxxxxxxxxxx
Xxxxxxxxxx Xxxx," which Map was filed for record in the Office of the Recorder
of Santa Xxxxx County, State of California, on June 16, 1960, in Book 121 of
Maps at Pages 40, 41, 42, 43 and 44, and being known as 000 Xxxxx Xxxxxx
XXX: 000-00-000 JPN: 000-00-00
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EXHIBIT B
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease"), dated for reference purposes as of
April __, 1999, is made by and between VERITAS SOFTWARE CORPORATION, a Delaware
corporation ("Sublandlord"), and XXXXXXXXX SEMICONDUCTOR CORPORATION OF
CALIFORNIA, a Delaware corporation ("Subtenant").
RECITALS
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
42
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 xxxxx of the Developable Land, which is also included as
part of the Subtenant Improvements. During the term of this Sublease, Subtenant
shall have access over the Developable Land to use, maintain and repair, if
necessary, the Subtenant's hydrogen tank and related piping. In addition,
Sublandlord's leasehold estate includes the rights of Lessor to that certain Air
Products pipeline containing gaseous nitrogen exists on or under the Developable
Land and during the term of this Sublease, Subtenant shall have the exclusive
right to use such pipeline and shall have access over the Developable Land to
use, maintain and repair, if necessary, the Air Products pipeline and related
piping. All of the foregoing rights of Subtenant shall be exercised at
Subtenant's sole cost and expense, and Subtenant shall indemnify, defend (with
counsel acceptable to Sublandlord) and hold Sublandlord and Sublandlord's Agents
and the Lenders and Lenders' Agents harmless from and against any and all
claims, damages, losses, causes of action, judgments, obligations and
liabilities, and all reasonable expenses incurred in investigating or resisting
the same (including, without limitation, reasonable attorneys fees and costs),
on account of or arising out of the Subtenant's use, ownership, maintenance,
repair, alteration or removal of any of the Subtenant Improvements (except for
the items identified in subparagraphs (viii), (x) and (xvi) above), the hydrogen
tank or the Air Products pipeline and related piping and improvements on or
following the Commencement Date of this Sublease. Subtenant's obligations under
the preceding sentence shall survive the expiration or earlier termination of
this Sublease.
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(b) Exclusive Use of Excluded Area. Subject to the terms and
conditions set forth in Paragraph 3 below, Subtenant shall have the exclusive
right, during the term of this Sublease, to use that portion of the Land,
consisting of eleven and forty-nine hundredths (11.49) acres (the "Excluded
Area"), that is bounded by the dotted lines shown on Exhibit "A" and which is
referred to as the "Excluded Area" on such Exhibit "A". (The Main Building and
the Equipment Area are located within the Excluded Area). Subject to the terms
and conditions hereof, Subtenant shall have the right to use that portion of
the Excluded Area which does not have buildings, structures, improvements or
other property on it for parking, ingress and egress and other uses reasonably
related to Subtenant's business. The balance of the Land that is located
outside of the dotted lines shown on Exhibit "A" and which is not part of the
Excluded Area, consisting of eight and twelve one hundredths (8.12) acres, is
referred to herein as the "Developable Land." Subtenant shall have no rights to
use or occupy any portion of the Developable Land during the Term hereof
without Sublandlord's prior written approval in each instance, except as
permitted under Section 2(a) above.
(c) Acceptance of Premises and Subtenant Improvements. Subtenant
acknowledges that prior to the Commencement Date of this Sublease (as defined
below), Subtenant owned the Premises, the Land and certain of the Subtenant
Improvements. Subtenant is familiar with the condition of the Premises, the
Subtenant Improvements, the Land and the Subtenant Improvements and, as of the
Commencement Date of this Sublease, Subtenant accepts the Premises, the
Excluded Area and the Subtenant Improvements in their "as is" condition. As of
the Commencement Date, Subtenant shall be deemed to have accepted the Premises,
the Subtenant Improvements and the Excluded Area subject to all applicable laws
and other matters of public record governing the use of the Premises, the
Subtenant Improvements and the Excluded Area. Subtenant acknowledges that
neither Sublandlord nor Sublandlord's agents have made any representation or
warranty as to the suitability of the Premises, the Subtenant Improvements or
the Excluded Area for the conduct of Subtenant's business, the condition of the
Premises or the Subtenant Improvements, or the use or occupancy which may be
made thereof and Subtenant has independently investigated and is satisfied that
the Premises and the Excluded Area is and will be suitable for Subtenant's
intended use. Any agreements, warranties or representations not expressly
contained herein (or in the Exhibits attached hereto) shall in no way bind
either Sublandlord or Subtenant, and Sublandlord and Subtenant expressly waive
all claims for damages by reason of any statement, representation, warranty,
promise or agreement, if any, not contained in this Sublease (or in the
Exhibits attached hereto). This Sublease constitutes the entire understanding
between the parties hereto and no addition to, or modification of, any term or
provision of this Sublease shall be effective until set forth in a writing
signed by both Sublandlord and Subtenant.
(d) Lessor Inspection. Notwithstanding the other terms of this
Sublease, Lessor and any Lender shall have and retain the right to inspect any
portion of the Premises from time to time upon no less than twenty-four hours
prior written notice to Subtenant.
3. Excluded Area.
(a) Subtenant's Rights in Excluded Area. In addition to Subtenant's
lease of the Premises described above, during the Sublease Term, Subtenant
shall have the following rights with respect to the Excluded Area (exclusive of
the Main Building) contained within the
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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.
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(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
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with such additional rents as are payable by Subtenant to Sublandlord under the
terms of this Sublease. The Monthly Installment for any period during the
Sublease Term which is less than one (1) full month shall be a pro rata portion
of the Monthly Installment based upon a thirty (30) day month.
(b) Monthly Installment. The Monthly Installment of rent to be
paid each month by Subtenant to Sublandlord during the Sublease Term, subject to
adjustment as provided below, shall be equal to one-twelfth (1/12th) of an
amount that will yield Sublandlord an eight percent (8%) annual return on the
portion of the Purchase Price paid by Sublandlord that is allocable to the
Excluded Area and the improvements thereon. The acreage of the Excluded Area
shall be deemed to be 11.49 acres, and the acreage of the Land shall be deemed
to be 19.61 acres. The portion of the Purchase Price that is allocable to the
Excluded Area and the improvements thereon shall be determined by multiplying
$32,200,000 by a fraction, the numerator of which is the acreage included in the
Excluded Area (11.49 acres) and the denominator of which is the total acreage
included in the entire Land (19.61 acres). Thus, the Monthly Installment shall
be equal to $125,778.68 per month. Once the allocation of FAR Funds (as defined
in the Purchase Agreement) has been determined pursuant to Section 6.3(j) of the
Purchase Agreement, the Purchase Price used to calculate the Monthly
Installment, and thus the Monthly Installment, shall be adjusted accordingly.
(c) Additional Rent. All taxes, utilities, services, insurance
premiums, late charges, costs, expenses and other sums which Subtenant is
required to pay under this Sublease, and all reasonable damages, costs, and
attorneys' fees and expenses which Sublandlord may incur by reason of any
default of Subtenant or failure on Subtenant's part to comply with the terms of
this Sublease, shall be deemed to be additional rent ("Additional Rent") and
shall be paid, commencing on the Commencement Date, in addition to the Monthly
Installment of rent, and, in the event of nonpayment by Subtenant, Sublandlord
shall have all of the rights and remedies with respect thereto as Sublandlord
has for the nonpayment of the Monthly Installment of rent. Monthly Installments
of rent and Additional Rent are collectively referred to herein as "Rent".
(d) Place of Payment. Rent shall be payable in lawful money of the
United States of America to Sublandlord at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxxxx 00000, Attn: _______________ or to such other person(s) or at such
other place(s) as Sublandlord may designate in writing. Upon designation of
another person to receive the Rent, all subsequent payments of Rent shall be
directed to such other person until such other person gives written notice to
direct such payments elsewhere.
(e) Late Payments. Any Monthly Installment of rent and Additional
Rent due under this Sublease that is not received by Sublandlord within five (5)
days after written notice that such sum is past due shall bear interest at the
Permitted Rate (as defined in Paragraph 31) from the date due until fully paid.
The payment of interest shall not cure any default by Subtenant 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
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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 affect Sublandlord's
right of re-entry or any other rights of Sublandlord under this Sublease or at
law.
6. Use of Premises.
(a) Restrictions on Use. Subtenant shall use the Premises (and the
Subtenant improvements) for research and development, manufacturing, general
office purposes, and any other legally permitted use, provided such use is in
conformance and compliance with all applicable governmental laws, regulations,
rules and ordinances including, without limitation, all applicable environmental
and zoning and land use laws, regulations, rules, and ordinances (collectively,
"Law" or "Laws"). Except as required under Section 32 hereof, Subtenant shall
not commit or suffer to be committed, any waste upon the Premises, the Subtenant
Improvements or the Excluded Area, or any nuisance, or allow the Premises, the
Subtenant Improvements or the Excluded Area to be used for any unlawful purpose
or any purpose not permitted by this Sublease. Subtenant, at its sole cost and
expense, shall procure, maintain and make available for Sublandlord's reasonable
inspection throughout the Lease Term, all governmental approvals, 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
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the same for the conduct of Subtenant's business, nor has Sublandlord agreed to
undertake any modification, alteration or improvement to the Premises, except as
provided in this Sublease. Subtenant acknowledges that Sublandlord makes no
representations regarding the use of the Premises, the Subtenant Improvements or
the Excluded Area by Subtenant or that the uses permitted by Subparagraph 6(a)
are allowed by governmental or quasi-governmental agencies having jurisdiction
or applicable laws, statutes, ordinances, rules, regulations, orders or
requirements now or hereafter in effect.
7. Hazardous Materials. Subtenant and Subtenant's agents, employees,
contractors, assignees and subtenants may not use, place, store or transport
(collectively, "Use") Hazardous Material(s) (defined below) on or about any
portion of the Premises or Excluded Area or any other part of the Land (or in
connection with the use or operation of the Subtenant Improvements) unless
Subtenant complies with all applicable Laws with respect to the Use by
Subtenant, its agents, employees, contractors, assignees or subtenants of such
Hazardous Materials. Nothing herein shall be construed to allow Subtenant to
release or dispose of (collectively, "Release") Hazardous Materials in or about
any portion of the Premises or Excluded Area unless such Release is in
compliance with applicable Laws. Any Use of the Hazardous Materials beyond the
scope allowed in this Paragraph and any Release of Hazardous Materials shall be
subject to Sublandlord's and Lessor's prior written consent, which may be
withheld in Sublandlord's or Lessor's sole and absolute discretion, and shall
require an amendment to the Sublease in the event Sublandlord and Lessor do
consent which shall set forth the materials, scope of use, indemnification and
any other matter required by Sublandlord and Lessor in Sublandlord's and
Lessor's sole and absolute discretion. Subtenant shall indemnify, defend and
hold Sublandlord and Sublandlord's agents harmless from and against any and all
claims, losses, damages, liabilities, or expenses arising in connection with the
Use or Release of Hazardous Materials on or following the Commencement Date of
this Sublease in violation of Law by Subtenant, Subtenant's agents, employees,
contractors, assignees or subtenants using the Premises or Excluded Area.
Subtenant's obligation to defend, hold harmless and indemnify pursuant to this
Paragraph 7 shall survive the expiration or earlier termination of this
Sublease.
The foregoing indemnity shall not apply to, and Subtenant shall not be
responsible hereunder for, the presence of Hazardous Materials on, under, or
about the Premises or Excluded Area to the extent caused by Sublandlord, its
agents, employees, contractors, assignees or subtenants (other than Subtenant);
provided that Sublandlord hereby acknowledges and agrees that the foregoing
indemnity is intended to supplement that certain Indemnity Agreement between
Subtenant and Sublandlord in the form of Exhibit C to the Purchase Agreement
(the "Indemnity Agreement"), and to the extent the foregoing indemnity
contradicts Subtenant's obligations under the Indemnity Agreement, the Indemnity
Agreement shall prevail. The parties hereto agree and acknowledge that all of
Subtenant's indemnity obligations set forth in this Sublease are supplemental to
Subtenant's indemnity obligations set forth in the Indemnity Agreement.
Sublandlord shall have the right, upon reasonable advance notice to
Subtenant, to inspect, investigate, sample and/or monitor the Premises and
Excluded Area, including any soil, water, groundwater, or other sampling, to the
extent reasonably necessary to determine whether Subtenant is complying with the
terms of this Sublease with respect to Hazardous Materials. In connection
therewith, Subtenant shall provide Sublandlord with reasonable access to all
portions
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of the Premises, the Subtenant Improvements and the Excluded Area (subject to
reasonable security measures imposed by Subtenant); provided, however, that
Sublandlord shall avoid any unreasonable interference with the operation of
Subtenant's business on or in the Premises or the Excluded Area. All costs
reasonably incurred by Sublandlord in performing such inspections,
investigation, sampling and/or monitoring shall be reimbursed by Subtenant to
Sublandlord as Additional Rent within thirty (30) days after Sublandlord's
demand for payment if it is determined that Hazardous Materials have been Used
by Subtenant or Subtenant's Agents on or after the Commencement Date of this
Sublease in violation of Laws or a Release of Hazardous Materials in violation
of Laws has occurred on, in or under the Premises or the Excluded Area, or any
portion thereof.
Notwithstanding anything to the contrary contained in this Sublease,
Sublandlord and Subtenant acknowledges that (i) the Environmental Protection
Agency is currently overseeing cleanup measures that are being conducted at the
Land and at surrounding parcels of real property, (ii) the Land is part of a
regional Superfund site known as the Middlefield-Xxxxx-Xxxxxxx (MEW) site, (iii)
Raytheon, a former owner of the Land, is under a Consent Decree that provides
that Raytheon will perform groundwater and soil remediation for the property it
occupied and operated within the MEW area, (iv) in 1987, a soil-bentonite,
subsurface, slurry wall was installed by Raytheon around the perimeter of the
Land enclosing the soil and water bearing zones as part of the remedial measures
conducted by Raytheon, (v) a groundwater extraction and treatment system was
installed in 1987 on the Land and, as a long term remedial measure, groundwater
is extracted from several xxxxx located both within the boundaries of the Land
and from adjacent property, (vi) a soil vapor extraction system (covering
approximately a surface area of four acres and going to a depth of approximately
15 to 18 feet) was installed by Raytheon in 1996 to remediate the contaminated
soils in the Land and Raytheon has petitioned and obtained approval from the
Environmental Protection Agency for closure for part of the soil vapor remedial
system, and (vii) the groundwater and soil treatment facilities referred to
above are maintained by Raytheon and Raytheon has provided an indemnification to
Subtenant to protect it from clean up or other liability related to
contamination existing prior to the date Subtenant acquired title to the Land
and the improvements then located thereon.
As used in this Sublease, the term "Hazardous Materials" means any
chemical, substance, waste or material which has been or is hereafter determined
by any federal, state or local governmental authority to be capable of posing
risk of injury to health or safety, including without limitation, those
substances included within the definitions of "hazardous substances," "hazardous
materials," "toxic substances," or "solid waste" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Hazardous Materials
Transportation Act, as amended, and in the regulations promulgated pursuant to
said laws; those substances defined as "hazardous wastes" in section 25117 of
the California Health & Safety Code, or as "hazardous substances" in section
25316 of the California Health & Safety Code, as amended, and in the regulations
promulgated pursuant to said laws; those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments thereto) or
designated by the Environmental Protection Agency (or any successor agency) as
hazardous substances (see, eg., 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
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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
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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.
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(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 noncontributing 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
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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
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notwithstanding, under no circumstances shall Lessor, any Lender or Sublandlord
be liable to Subtenant for any claim by Subtenant of lost profits, loss of
income or loss of business.
(f) Mutual Waiver of Subrogation. Sublandlord hereby releases
Subtenant, and Subtenant hereby releases Sublandlord (and, to the extent Lessor
carries any insurance on the Property or any furnishings, fixtures, equipment,
inventory or other property in, on or about the Premises, Sublandlord shall use
its reasonable best efforts to cause Lessor to release Subtenant), and their
respective officers, agents, employees and servants, from any and all claims or
demands of damages, loss, expense or injury to the Premises or the Excluded Area
(or the Land), or to the furnishings, fixtures, equipment, inventory or other
property of either Sublandlord or Subtenant in, about or upon the Premises or
the Excluded Area (or the Land) (collectively, a "Claim"), which is caused by or
results from perils, events or happenings which are the subject of insurance
carried by the respective parties pursuant to this Paragraph 9 or otherwise and
in force at the time of any such loss, whether due to the negligence of the
other party or its agents and regardless of cause or origin; provided, however,
that such waiver shall be effective only to the extent permitted by the
insurance covering such loss, to the extent such insurance is not prejudiced
thereby, to the extent insured against and to the extent each such Claim is
fully satisfied by proceeds from such insurance. In the event of a Claim
concerning Subtenant's Use or Release of Hazardous Materials in, on or about the
Premises, the Excluded Area or the Land, Subtenant shall use any proceeds from
insurance received by Subtenant in connection with such Claim to remove and/or
remediate the Hazardous Materials.
10. Utilities. Subtenant shall pay during the Sublease Term and prior to
delinquency all charges for water, gas, light, heat, power, electricity,
telephone or other communication service, janitorial service, trash pick-up,
sewer and all other services supplied to Subtenant or consumed by Subtenant or
any of Subtenant's agents, contractors or invitees on the Premises or the
Excluded Area (collectively, the "Services") and all taxes, levies, fees or
surcharges therefor. Subtenant shall arrange for Services to be supplied to the
Premises and the Excluded Area and shall contract for all of the Services in
Subtenant's name prior to the Commencement Date. In the event that any of the
Services cannot be separately billed or metered to the Premises or the Excluded
Area, or if any of the Services are not separately metered as of the
Commencement Date, the cost of such Services shall be an Operating Expense and
Subtenant shall pay such cost to Sublandlord, as Additional Rent, as provided in
Paragraph 11 below.
11. Operating Expenses.
(a) Definition. "Operating Expense" or "Operating Expenses," as
used in this Sublease, shall mean and include all items identified in other
paragraphs of this Sublease as an Operating Expense and the reasonable and
necessary cost paid or incurred by Sublandlord for the operation, maintenance,
and repair of the Premises and Excluded Area, which costs shall include, without
limitation: the cost of any necessary Services and utilities supplied to the
Premises and Excluded Area (to the extent the same are not separately incurred
by, or charged or metered to, Subtenant). Sublandlord and Subtenant acknowledge
that, during the Sublease Term, the Premises and Excluded Area will be managed,
maintained and operated by Subtenant, at Subtenant's cost, in a continuation of
its present operations. Consequently, other than those costs or expenses that
are expressly identified in this Sublease as an Operating Expense, neither
Sublandlord nor Subtenant contemplate any other expenses incurred or to be
incurred by
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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
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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.
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(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
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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 nonstructural
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:
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(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:
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(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
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(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)
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place the damaged improvements or Excluded Area, as the case may be, in safe
condition; provided, however, that Sublandlord's and Subtenant's election under
clause (B) of the preceding sentence shall not be permitted unless the Sublease
is terminated by Tenant pursuant to Subparagraph 15(b). If a Release of
Hazardous Materials placed, stored, transported or used by Subtenant and/or
Subtenant's Agents in, on or about the Property occurs as a result of such
peril, Subtenant shall investigate and clean up any contaminated soil and/or
groundwater contaminated by such Release to levels established by all
appropriate governmental agencies. All insurance proceeds available from the
property damage insurance carried by Subtenant pursuant to Paragraph 9(c)(v) of
this Sublease shall be paid to and become the property of Subtenant. If this
Sublease is not terminated by Subtenant as provided in Subparagraph 15(b), then
upon the issuance of all necessary governmental permits, Subtenant shall either
commence and diligently prosecute to completion the restoration of the damaged
Premises or Subtenant Improvements, to the extent then allowed by Law, to
substantially the same condition in which the damaged Premises or Subtenant
Improvements was immediately prior to such damage, or remove the rubble
generated from such damage, if any, from the Excluded Area and cause such
Excluded Area to be placed in a safe condition. In the event of such damage to
the Premises or the Subtenant Improvements, Sublandlord shall have no obligation
to rebuild or restore the same (unless such damage was caused by the acts,
negligence or willful misconduct of Sublandlord) and Sublandlord shall have no
obligation to rebuild or restore any trade fixtures and/or personal property
and/or alterations, additions or other improvements constructed or installed by
Subtenant in the Premises.
(b) Subtenant's Right to Terminate. If the Premises or Subtenant
Improvements, or any portion thereof, is damaged by any peril, then as soon as
reasonably practicable, Subtenant shall obtain and deliver to Sublandlord an
opinion of Subtenant's architect or construction consultant as to when the
restoration work may be completed. Subtenant shall 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
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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
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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
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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 have no further obligation to Subtenant
hereunder except to return any moneys theretofore paid by Subtenant to
Sublandlord as Rent under this Sublease.
21. Notices. Any notice required or desired to be given under this
Sublease shall be in writing with copies directed as indicated below and shall
be personally served or given by mail. Any notice given by mail shall be deemed
to have been given when seventy-two (72) hours have elapsed from the time such
notice was deposited in the United States mails, certified and postage prepaid,
return receipt requested, addressed to the party to be served with a copy as
indicated herein at the last address given by that party to the other party
under the provisions of this paragraph. At the date of execution of this
Sublease, the address of Sublandlord is:
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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 copy to:
Berliner Xxxxx
00 Xxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxx, XX. 00000
Attn: Xxx Xxxx
22. Attorneys' Fees. In the event either party shall bring any action or
legal proceeding for damages for any alleged breach of any provision of this
Sublease, to recover rent or possession of the Premises or the Excluded Area, to
terminate this Sublease, or to enforce, interpret, protect or establish any term
or covenant of this Sublease or right or remedy of either party, the prevailing
party shall be entitled to recover as a part of such action or proceeding,
reasonable attorneys' fees and court costs, including reasonable attorneys' fees
and costs for appeal, as may be fixed by the court or jury. The term "prevailing
party" shall mean the party who received substantially the relief requested,
whether by settlement, dismissal, summary judgment, judgment, or otherwise.
23. Subleasing and Assignment.
(a) Sublandlord's Consent Required. Subtenant's interest in this
Sublease is not assignable, by operation of law or otherwise (except as may be
required for security purposes), nor shall Subtenant have the right to sublet
the Premises or the Excluded Area, transfer any interest of Subtenant therein or
permit any use of the Premises by another party, without the prior written
consent of Lessor and Sublandlord to each such assignment, subletting, transfer
or use, which consent Sublandlord may withhold in its sole discretion. A consent
to one assignment, subletting, occupancy or use by another party shall not be
deemed to be a consent to any subsequent assignment, subletting, occupancy or
use by another party. Any assignment or
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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
transfer or 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
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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.
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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 Term, Subtenant shall remove
all of Subtenant's personal property and trade fixtures (including, without
limitation, all machinery and equipment) from the Main Building, and all
property not so removed shall be deemed abandoned by Subtenant and may be
removed by Sublandlord at Subtenant's sole cost and expense. Anything herein to
the contrary notwithstanding, at the expiration or earlier termination of the
Sublease Term, Subtenant shall not be obligated to remove from the Excluded Area
any "Remediation Equipment" as such term is defined in that certain Grant of
Easements, Restriction and Indemnity Agreement dated December 24, 1997, executed
by Raytheon Semiconductor, Inc., a Delaware corporation, as grantor, and
Raytheon Company, as grantee, and recorded in the Official Records of Santa
Xxxxx County on December 30, 1997, as Document No.: 13994862 (the "Easements
Agreement").
(b) Demolition of Main Building and Related Improvements.
(i) The parties hereto agree that Subtenant shall (A)
complete the demolition of the Main Building and related structures and
improvements including, without limitation, the Subtenant Improvements (except
for those items set forth in subparagraphs (viii), (x) and (xvi) of Paragraph
2(a) of this Sublease) on the Excluded Area and the Main Building foundation,
(B) complete, at Subtenant's cost, the remediation of any contaminated soil
underlying the Main Building or related improvements (as further discussed in
Paragraph 32(d) below) either (i) to levels at or below the cleanup level or
standards established by the United States Environmental Protection Agency
Record of Decision for the Raytheon facility, or (ii) to levels acceptable to
the environmental agency or agencies having jurisdiction over such cleanup or
remediation (such levels described in clauses (i) or (ii) above being referred
to hereinafter as the "Soil Remediation Standard") and (C) obtain, at
Subtenant's cost, an "environmental closure" pertaining to the operations of
Subtenant within the Main Building and related facilities, as required by all
applicable governmental agencies having jurisdiction over such closure (the
items set forth in subparagraphs (A), (B) and (C) of this subparagraph are
collectively referred to as the "Demolition") on or before January 1, 2001 (such
date is referred to herein as the "Departure Deadline"), without any liability
of Sublandlord or Lessor, as the case may be, for overtime or
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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 prelude
Sublandlord or Lessor from exercising any rights or remedies against Subtenant
under the Purchase Agreement (to the extent such remedies survive the close of
escrow thereunder) or that certain Environmental Indemnity Agreement by and
between Sublandlord and Subtenant (the "Indemnity Agreement").
(iii) Notwithstanding the provisions of subparagraph
32(b)(ii) above, if Subtenant fails to complete the Demolition on or before the
Departure Deadline due to Subtenant's failure to use commercially reasonable
efforts to complete the Demolition in an expeditious manner, Subtenant shall pay
Sublandlord, as Sublandlord's sole and exclusive remedy for Subtenant's failure
to complete the Demolition on or before the Departure Deadline,
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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:_______________ 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
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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
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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 shall
be at Sublandlord's cost. Except as provided in this Paragraph 32(d)(ii), all
costs of Demolition shall be borne by Subtenant.
(iii) Upon Sublandlord's selection of a contractor,
Sublandlord shall cause Lessor (to the extent the funding requirements set forth
in the Participation Agreement and the Agency Agreement are satisfied) to
deposit into an interest bearing escrow account as quickly as practicable under
the Financing Documents, but in no event more than forty (40) days after
Sublandlord's approval of the contractor as set forth in subparagraph 32(d)(ii)
above, an amount equal to such contractor's estimated Cost to Lessor. If
Sublandlord or Lessor fails to cause such amount to be deposited into the escrow
account as provided herein, Subtenant shall not be required to demolish the Main
Building and related improvements or remediate any soil contamination under the
Main Building, if any, or remove any asbestos from the Main Building or any of
the related improvements. Upon Subtenant's submission to the escrow holder of
reasonably detailed documentation with respect to costs actually incurred with
respect to the Demolition which are Costs to Lessor, the escrow holder shall
promptly disburse from the escrow account to Subtenant or Subtenant's designees
funds sufficient to pay such Costs to Lessor. In the event the total Costs to
Lessor are less than the amount held in escrow, all remaining amounts held in
the escrow account shall be returned to Sublandlord, as agent for Lessor. In the
event the total Costs to Lessor exceed the amount held in escrow, Lessor shall
promptly reimburse Subtenant (to the extent the funding requirements set forth
in the Participation Agreement and the Agency Agreement are satisfied) such
additional costs. If the funding requirements set forth in the Participation
Agreement and the Agency Agreement are not satisfied, the items identified in
the preceding sentence as being reimbursed by Lessor shall be reimbursed by
Sublandlord.
(iv) The parties hereto agree that Subtenant or Raytheon
Company shall be identified as the party responsible for the proper disposal of
any Hazardous Materials within the Main Building (e.g., asbestos) or
contaminated soil to be removed from the Excluded Area as part of the demolition
and removal obligations referred to in this paragraph, and in the
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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 ("CRC"); 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
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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 Subtenant with
written notice and the appropriate cure period provided in the Lease before
performing any act on behalf of Subtenant and will provide Subtenant with
written request for any reimbursement payable hereunder.
37. Expenses and Legal Fees. All sums reasonably incurred by Sublandlord
in connection with any Event of Default by Subtenant under this Sublease or
holding over of possession by Subtenant after the expiration or earlier
termination of this Sublease, including without limitation all reasonable costs,
expenses and reasonable accountants, appraisers, attorneys and other
professional fees, and any collection agency or other collection charges, shall
be due and payable by Subtenant to Sublandlord on demand, and shall bear
interest at the Permitted Rate. Should either Sublandlord or Subtenant bring any
action in connection with this Sublease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all other
costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
38. WAIVER OF JURY TRIAL. SUBLANDLORD AND SUBTENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND
KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.
39. Satisfaction of Judgement. The obligations of Sublandlord and
Subtenant do not constitute the personal obligations of the directors, officers
or shareholders of Sublandlord or its constituent partners. Should Subtenant
recover a money judgment against Sublandlord, such judgment shall be satisfied
only out of the proceeds of sale received upon execution of such judgment and
levied thereon against the right, title and interest of Sublandlord in the
Property and out of the rent, insurance proceeds or other income from such
property receivable by Sublandlord or out of consideration received by
Sublandlord from the sale or other disposition of all or any part of
Sublandlord's right, title or interest in the Property, and no action for any
deficiency may be sought or obtained by Subtenant.
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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:_______, 1999 By:______________________________________
Name:____________________________________
Title:___________________________________
SUBLANDLORD:
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
DATED:_______, 1999 By:______________________________________
Name:____________________________________
Title:___________________________________
By:______________________________________
Name:____________________________________
Title:___________________________________
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CONSENT OF LESSOR
The undersigned Lessor under that certain Lease Agreement dated as of April __,
1999 by and between Lessor and Lessee hereby consents to the subletting of the
Premises by Subtenant on the terms and conditions contained in this Sublease
including, without limitation, the terms and conditions set forth in Paragraph
32, and Lessor agrees to be bound by its obligations under Paragraph 32. This
consent shall apply only to this Sublease and shall not be deemed to be a
consent to any other subleases.
LESSOR
By:______________________________________
Name:____________________________________
Title:___________________________________
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EXHIBIT "A"
[EXHIBIT MAP]
79
EXHIBIT B
[GENERAL SITE PLAN]
80
EXHIBIT B
000 XXXXX XXXXXX
BUILDING
[FLOOR PLAN]
81
EXHIBIT B
[540 PRICE AVENUE MAP]
82
EXHIBIT "C"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY, AND )
WHEN RECORDED, RETURN TO: )
Berliner Xxxxx )
Ten Almaden Boulevard, 11th Floor )
Xxx Xxxx, Xxxxxxxxxx 00000-0000 )
(000) 000-0000 )
Attn: Xxxxxx X. Xxxx, Esq. )
(Space Above for Recorder's Use)
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into this____ day
of April, 1999, by and among (1) XXXXXXXXX SEMICONDUCTOR CORPORATION OF
CALIFORNIA, a Delaware corporation ("Subtenant"), (2) VERITAS SOFTWARE
CORPORATION, a Delaware corporation ("Sublandlord"), (3) VS TRUST 1999-1, a
__________________ ("Owner") and (3)_________________________ , as agent for the
Financing Parties (as defined below) ("Agent"). The defined term "Agent" shall
include any successors and assigns of Agent.
R E C I T A L S:
WHEREAS, Sublandlord executed a Sublease (the "Sublease") dated as of
April 1999, in favor of Subtenant, covering a certain premises therein described
(the "Premises") and (2) a portion of certain real property legally described on
Exhibit A attached hereon (the "Land").
WHEREAS, Sublandlord has entered into a financing and lease transaction
(the "Financing Transaction") with Owner and the other parties to that certain
Participation Agreement dated as of April __,1999 (such other parties are
referred to herein as the "Financing Parties" pursuant to which (1) Owner has
purchased the Land and all improvements thereon, (2) Owner has leased the Land
to Sublandlord pursuant to that certain Lease Agreement dated April ___, 1999
among Owner and Sublandlord (the "Lease"), (3) Sublandlord, as Owner's agent,
has agreed to manage the construction of certain improvements on the Land and
(4) Owner and
C-1
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Sublandlord have each entered into various other agreements to secure their
respective obligations under the Financing Transaction.
WHEREAS, in order to induce the Financing Parties to provide the
financing called for by the Financing Transaction, the Financing Parties have
requested that the Sublease be subordinate to any and all underlying leases,
deeds of trust or other security instruments existing as of the date of
execution of this Agreement or which hereafter may be made and/or to any
renewal, modification, replacement, extension or expansion hereafter or any
consolidation or spreader thereof heretofore or hereinafter made (collectively,
the "Security Instruments").
WHEREAS, in order to induce Subtenant to subordinate its interest in the
Sublease to the Security Instruments, the parties hereto desire to assure
Subtenant's possession and control of the Premises under the Sublease upon the
terms and conditions therein contained;
NOW, THEREFORE, for and in consideration of the mutual covenants and
premises herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed by the parties hereto,
the parties hereto do hereby agree as follows:
AGREEMENT:
1. Subject to the non-disturbance covenants set forth herein, the
Sublease is and shall be subordinate to the Security Instruments.
2. Should default under the Security Instruments occur such that (a)
Sublandlord's rights under the Sublease are assigned to the Agent, (b) the Agent
becomes the owner of the Land or any portion thereof and/or (c) the Land or any
portion thereof is sold by reason of foreclosure, transferred by deed in lieu of
foreclosure, or sold under a trustee's sale, (x) Subtenant shall not be evicted
from the Premises or the Excluded Area, nor shall Subtenant's continuing use and
occupancy of the Premises or the Excluded Area be interrupted, restricted or
impaired, nor shall any of Subtenant's rights under this Sublease be affected in
any way by reason of any default under such Security Instrument; and (y)
Subtenant's leasehold estate under the Sublease shall not be terminated or
disturbed by reason of any default under such Security Instrument which does not
arise from a default by Subtenant hereunder, and this Sublease and Subtenant's
rights hereunder, including any rights of offset, shall be recognized by the
Agent or Lessor. Subtenant does hereby agree to attorn to Agent or to any such
owner as its Sublandlord after Subtenant's receipt of written notice from Agent
provided Agent or Lessor, as the case may be, assume the obligations of
Sublandlord under the Sublease, and Agent or any such owner hereby agree that it
will accept such attornment.
3. In the event the Lease terminates prior to the date (a) the Sublease
term expires or earlier terminates or (b) Subtenant completes Demolition as
described in Paragraph 32(b) of the Sublease, then Sections 2(x) and (y) above
shall apply, and Subtenant shall attorn to Owner as its Sublandlord after
Subtenant's receipt of written notice provided Owner assumes the obligations of
Sublandlord under the Sublease, and Owner hereby agrees that it will accept such
attornment.
C-2
84
4. Notwithstanding any other provision of this Agreement, Agent shall
not be (a) liable for any default of any sublandlord under the Sublease
(including Sublandlord), (b) subject to any offsets or defenses which have
accrued prior to the date of foreclosure which shall be the earliest to occur of
(1) delivery of a trustee's deed following a non-judicial foreclosure, (2)
delivery of a marshal's deed upon sale of the property following entry of
judgment in a judicial foreclosure and/or (3) delivery of a deed in lieu of
foreclosure, unless Subtenant shall have delivered to Agent written notice of
the default which gave rise to such offset or defense and permitted Agent the
same right to cure such default as permitted Sublandlord under the Sublease; (c)
bound by any rent that Subtenant may have paid under the Sublease more than one
month in advance; (d) bound by any amendment or modification of the Sublease
hereafter made without Agent's prior written consent which shall be
Sublandlord's obligation to request and obtain; or (e) responsible for the
return of any security deposit delivered to Sublandlord under the Sublease and
not subsequently received by Agent.
5. If Agent sends written notice to Subtenant to direct its rent
payments under the Sublease to Agent instead of Sublandlord, then Subtenant
agrees to follow the instructions set forth in such written instructions and
deliver rent payments to Agent; however, Sublandlord and Agent agrees that
Subtenant shall be credited under the Sublease for any rent payments sent to
Agent pursuant to such written notice.
6. Subtenant shall give Agent or any successor in interest of Agent such
notices and cure rights as are required under Section 14(c) of the Sublease.
7. If any legal action, arbitration or other proceeding is commenced to
enforce any provision of this Agreement, the prevailing party shall be entitled
to an award of its actual expenses, including without limitation, expert witness
fees, actual attorneys' fees and disbursements.
8. This Agreement may not be modified other than by an agreement in
writing, signed by the parties hereto or by their respective successors in
interest. Except as herein modified all of the terms and provisions of the
Sublease shall remain in full force and effect. Nothing in this Agreement shall
in any way impair or affect the lien created by the Security Instruments or the
other lien rights of Agent.
9. All notices which may or are required to be sent under this Agreement
shall be in writing and shall be sent by Federal Express (or similar overnight
delivery service) or first-class, certified U.S. mail, postage prepaid, return
receipt requested, and sent to the party at the address appearing below or such
other address as any party shall hereafter inform the other party by written
notice given as set forth below:
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85
SUBTENANT: OWNER
_____________________________ _________________________________________
_____________________________ _________________________________________
_____________________________ _________________________________________
Attn:________________________ Attn:____________________________________
AGENT: SUBLANDLORD:
_____________________________ _________________________________________
_____________________________ _________________________________________
_____________________________ _________________________________________
Attn:________________________ Attn:____________________________________
10. This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their successors in interest, heirs and assigns and any
subsequent owner of the Property.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
OWNER: SUBTENANT:
_____________________ _____________________________
By:__________________________ By:______________________________________
Its:_________________________ Its:_____________________________________
AGENT: SUBLANDLORD:
_____________________ _____________________________
By:__________________________ By:______________________________________
Its:_________________________ Its:_____________________________________
X-0
00
XXXXX XX XXXXXXXXXX )
) ss
COUNTY OF SAN DIEGO )
On_________________________, before me,__________________________,
Notary Public, personally appeared____________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On___________________________, before me,__________________________,
Notary Public, personally appeared_______________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________[SEAL]
X-0
00
XXXXX XX XXXXXXXXXX )
) ss
COUNTY OF SAN DIEGO )
On___________________________, before me,______________________________,
Notary Public, personally appeared__________________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
On______________________________, before me,__________________________,
Notary Public, personally appeared______________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
____________________________________[SEAL]
C-6
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EXHIBIT A
All that certain Real Property in the City of Mountain View, County of Santa
Xxxxx, State of California, described as follows:
All of Lot 23, as shown upon that certain Map entitled, "Tract No. 2724
Xxxxx-Middlefield Industrial Park", which Map was filed for Record in the Office
of the Recorder of the County of Santa Xxxxx, State of California, on June 16,
1960 in Book 121 of Maps, at Pages 40, 41, 42, 43 and 44.
X-X-0
00
XXXXXXX C
Recording Requested By
and When Recorded Return To:
Veritas Software Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX. 00000
Attn: Xxx X. Xxxxx
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT ("Agreement") is made this 1999
("Execution Date") by and between Veritas Software Corporation, a corporation
("Veritas"), and Xxxxxxxxx Semiconductor Corporation of California, a Delaware
corporation ("Fairchild"):
Recitals
A. This Agreement is entered into pursuant to that Agreement of Purchase
and Sale dated March __, 1999 (the "Purchase Agreement"), between Veritas, as
purchaser, and Fairchild, as seller, covering the property more particularly
described in Exhibit A to this Agreement (the "Property").
B. The Property is subject to certain requirements pursuant to which
Raytheon Company, a Delaware corporation, is performing remediation.
C. The "Contamination" is any and all Hazardous Materials (as defined
below), soil and groundwater pollution and groundwater plume or plumes that
exist partially or entirely beneath the Property or emanated from the Property
or in any building or improvement located on the Property as of the date hereof.
As used in this Agreement, the term "Hazardous Materials" shall mean 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 wastes 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 CFR 172.101 and amendments thereto) or
designated by the Environmental Protection Agency (or
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90
any successor agency) as hazardous substances (see, e.g., 40 CFR Part 302 and
amendments thereto); such other substances, materials and wastes which are or
become regulated or become classified as hazardous or toxic under any laws,
including without limitation, the California Health & Safety Code, Division 20,
and Title 26 of the California Code of Regulations; and any material, waste,
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.
D. Raytheon Company and Raytheon Semiconductor, Inc., a Delaware
corporation, the predecessor of Fairchild, entered into a Grant of Easements,
Restriction and Indemnity Agreement dated December 24, 1997 concerning the
remediation being performed by Raytheon Company ("1997 Raytheon Agreement").
Pursuant to the 1997 Raytheon Agreement, as well as the terms of the acquisition
of Raytheon Semiconductor by Fairchild, Raytheon Company has agreed to indemnify
and hold harmless Fairchild from any claims or liabilities related to the
Contamination which first occurred, existed or arose prior to December 24, 1997.
X. Xxxxxxxxx and Veritas (or its designee) have entered into that certain
Sublease Agreement dated ______________, 1999 (the "Sublease"), pursuant to
which Veritas (or its designee) has agreed to sublease to Fairchild that certain
portion of the Property described therein.
For good and valuable consideration, the parties agree as follows:
Agreement
1. Indemnification. It is the intent of the parties hereto that Veritas
not be responsible or liable for any Contamination or the existence of any
hazardous or toxic substances which were first released, discharged or diagnosed
on, in, under or at the Property, or which otherwise existed thereon, therein or
thereunder, prior to the close of escrow under the Purchase Agreement (unless
such environmental condition is exacerbated by the negligent acts or omissions
or willful misconduct of Veritas or any of its agents, employees, contractors,
subcontractors, successors, assigns or other authorized representatives,
provided that construction or other development activities by Veritas on the
Property that are performed in accordance with due care shall not be considered
"exacerbation" of any pre-existing condition). In addition to Xxxxxxxxx'x
remediation and indemnification obligations pursuant to the Sublease, which
Fairchild covenants and agrees to abide by, Fairchild shall, subject to the
terms and conditions of this Agreement, indemnify, hold harmless, and defend
(with counsel selected by Fairchild) Veritas, and its successors and assigns,
and any entity holding legal title to the Property or improvements thereon
("Owner Entities"), and any entity providing financing to any Owner Entity
secured by a mortgage or deed of trust on the Property, any entity participating
in any such financing, any entity holding any beneficial interest in any trust
for which the holder of legal title to the Property serves as trustee, and any
entity acting as agent for any of the foregoing entities
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and any successor or assign of any of the foregoing entities (collectively, the
"Financing Parties"), from and against any and all claims, damages, liabilities,
costs (including, without limitation, reasonable fees and expenses of attorneys
and expert consultants, investigation and remedial costs), fines, judgments,
penalties, or expenses asserted against or incurred or suffered by any Owner
Entities arising out of or related to (i) the Contamination first occurring
before the close of escrow under the Purchase Agreement, (ii) the release or
discharge of hazardous or toxic materials or wastes in, on, under or from the
Property or improvements located thereon first occurring after the date of this
Agreement to the extent such release or discharge is caused as a result of the
activities of Fairchild in its use, occupancy or operation of the Property
(including, without limitation, any exacerbation by Fairchild of the
pre-existing Contamination in, on, under or about the Property which adversely
affects or eliminates Raytheon Company's indemnity obligations under the 1997
Raytheon Agreement (and then such indemnity, defense and hold harmless
obligation of Fairchild hereunder shall apply only to the extent of such
exacerbation of such pre-existing Contamination), and (iii) the cost or expense
of any remediation action covered by the 1997 Raytheon Agreement if such cost or
expense is incurred by Veritas as a result of Xxxxxxxxx'x breach of such 1997
Raytheon Agreement and such breach is not caused, or contributed to, by Veritas,
any other Owner Entity or any Financing Party or any of their respective agents,
employees, contractors, subcontractors or other authorized representatives
(collectively, "Liabilities"); provided, however, Fairchild shall have no
obligation to clean up or remediate any Contamination existing on, in or under
the Property as of the close of escrow under the Purchase Agreement unless
required to do so by a governmental agency, board or authority having
jurisdiction over such clean up or remediation or except as required under the
Sublease. The foregoing indemnity, defense and hold harmless obligation of
Fairchild shall not apply to the extent any Liability arises out of or results
from (i) hazardous or toxic materials or wastes which are released, discharged,
brought upon, or are permitted or suffered to be brought upon, the Property by
any person or persons other than Fairchild or its agents, employees, contractors
or subcontractors after the close of escrow under the Purchase Agreement and are
first released or discharged into the environment on, in, under or from the
Property after such close of escrow under the Purchase Agreement by a person or
persons other than Fairchild, or its agents, employees, contractors, and
subcontractors, or (ii) hazardous or toxic materials or wastes in, on, under,
from, or from the Property to the extent such are exacerbated by the negligent
acts or omissions or willful misconduct of Veritas, any other Owner Entities,
any Financing Parties or any other third party (other than any agents,
employees, contractors or subcontractors of Fairchild) or any of their
respective agents, employees, contractors, subcontractors, successors, assigns
or other authorized representatives following the close of escrow under the
Purchase Agreement, provided that construction or other development activities
by Veritas on the Property that are performed in accordance with due care shall
not be considered "exacerbation" of any pre-existing condition.
In no event shall Fairchild have any liability to Veritas, any Owner
Entities or any Financing Parties or their respective successors and assigns
(collectively, "Indemnitees") for any consequential damages, loss of profits,
perceived loss of profits, reduction in value or perceived loss of value of the
Property, inability to sell, Sublease or finance the Property or any part
thereof or inability to use the Property for any purposes due to (i) the mere
existence of the Contamination, (ii) any remedial work or clean up obligation
now or hereafter imposed on the Property by
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any environmental agency having jurisdiction over the clean up or remediation of
the Property, or (iii) any of the matters subject to the foregoing indemnity
obligation of Fairchild. In addition, in no event (other than as provided in the
Sublease or as provided in the immediately following sentence) shall Fairchild
be liable to Veritas or any other Indemnitees or any party claiming by or
through any Indemnitees for any claim, loss, cost, damage or expense, including
consequential damages, incurred by any Indemnitee or such party as a result of
construction delays caused by the performance of any remedial or clean up work
required to satisfy Xxxxxxxxx'x obligations under this Agreement. The preceding
sentence notwithstanding, Fairchild shall indemnify and hold harmless Veritas
from and against any and all losses caused by any interruption of the initial
construction of improvements on the Property, or any portion thereof, by Veritas
caused by any Contamination that is not known by Veritas to exist in, on or
under the Property or that has not been disclosed to Veritas in any
environmental reports or studies delivered or made available to Veritas prior to
or as of the close of escrow under the Purchase Agreement, but such
indemnification and hold harmless obligation under this sentence shall apply
only to the extent that such newly discovered Contamination poses a significant
health or safety risk to construction workers or, based on sound engineering and
construction practices, initial construction of improvements on the Property by
Veritas cannot be completed until such newly discovered Contamination is
remediated or removed from the Property. Anything in this paragraph above the
contrary notwithstanding, Fairchild also shall indemnify and hold harmless
Veritas from and against any and all losses caused by any interruption of
business conducted on the Property by Veritas caused by any Contamination that
is not known by Veritas to exist in, on or under the Property or that has not
been disclosed to Veritas in any environmental reports or studies delivered or
made available to Veritas prior to or as of the close of escrow under the
Purchase Agreement, but such indemnification and hold harmless obligation under
this sentence shall apply only to the extent that Veritas is required by any
governmental agency having jurisdiction to vacate improvements constructed the
Property to allow clean up or remediation of such newly discovered Contamination
to be commenced and completed. The benefits of the two (2) immediately preceding
sentences shall be personal to Veritas and its Financing Parties, shall not run
with the Property and shall not be enforceable against Fairchild by any person
or entity other than Veritas or its Financing Parties.
2. Release. Except for the obligations of Fairchild set forth in this
Agreement, in the Sublease or in the Purchase Agreement (to the extent such
obligations survive the close of escrow thereunder), by taking title to the
Property, Veritas (and all Owner Entities and Financing Parties) shall be deemed
to have waived, for itself, and its successors and assigns, any and all claims
it may have against Fairchild with respect to the existence of the
Contamination, including any and all claims under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601, et. seq., as amended, any other federal, state, or local law,
rule, ordinance, or regulation pursuant to which Veritas may have a claim or
cause of action against Fairchild due to the presence of the Contamination.
Veritas expressly waives the benefits of Section 1542 of the Civil Code of the
State of California, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
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the release, which, if known by him, must have materially affected
his settlement with the debtor.
The foregoing release expressly excludes any claims Veritas may have against
Fairchild for breach by Fairchild of its obligations under this Agreement or the
Sublease or for breach by Fairchild of its obligations under the Purchase
Agreement that expressly survive the close of escrow thereunder.
3. Remediation. Solely with respect to any Contamination existing on, in
or under the Property as of the close of escrow under the Purchase Agreement
(and which is not exacerbated (as described above) by any activities or
negligent omissions of Veritas (or its assignee or affiliate) or any future
Owner Entities or any third party other than Fairchild or any of Xxxxxxxxx'x
agents, employees, contractors or subcontractors, provided that construction or
other development activities by Veritas on the Property that are performed in
accordance with due care shall not be considered "exacerbation" of any
pre-existing Contamination), Fairchild shall have the obligation and
responsibility to either perform (at Xxxxxxxxx'x cost) or to cause Raytheon
Company to perform (at Raytheon's cost) all investigation, monitoring,
remediation, cleanup, removal, or other environmental response action with
respect to the Contamination existing on or beneath the Property or in any
building or improvement located on the Property as of the date of this Agreement
which currently is or may in the future be required of Raytheon Company,
Fairchild or of or any other Owner Entity by any federal, state, or local
agency, court, or tribunal, with Fairchild or Raytheon Company to be named on
all permits and manifests for any materials removed from the Property pursuant
to such remediation or clean up (collectively, "Remedial Action"). All Remedial
Action shall be performed on the Property in a good, safe, professional, and
workmanlike manner, in compliance with all applicable laws, ordinances and
regulations and after obtaining all requisite permits and licenses, and in a
manner which does not interfere unreasonably with any Owner Entity's use of the
property. Fairchild shall, following completion of such Remedial Action, restore
or cause to be restored the Property as close as practicable to the condition in
which it existed prior to the performance of the Remedial Action, Nothing in
this Paragraph 3 above shall constitute a waiver or release of Xxxxxxxxx'x
rights or remedies available to it under the 1997 Raytheon Agreement or any
other agreement pursuant to which Fairchild acquired Raytheon Semiconductor,
Inc.
if any Contamination is discovered on or under the Property, or any
portion thereof, following the date hereof and such Contamination is covered by
the 1997 Raytheon Agreement, then, Fairchild shall have no liability to Veritas
or any Owner Entity under paragraph 1 or 2 of this Agreement so long as Raytheon
Company is performing its obligations under the 1997 Raytheon Agreement with
respect to such discovered Contamination.
Veritas and all Owner Entities shall provide Fairchild and/or Raytheon
Company and their consultants and contractors reasonable access to the Property
to maintain and operate all remedial systems. Maintenance and operation of such
remedial systems shall not unreasonably interfere with the use and operation of
the Property by Veritas or any Owner Entity where reasonableness is determined
by the conduct of a reasonable, prudent person responsible for both the
operations of the business and the conduct of the remedial activities; provided,
however, in
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no event shall the maintenance and operation of such remedial systems require
Veritas or any Owner Entity to demolish, modify or relocate any buildings,
structures, or paved areas or other improvements to the Property constructed or
placed by Veritas or a successor Owner Entity on the Property (collectively,
"Future Improvements") so long as (i) such Future Improvements are not initially
placed or constructed on or over an area where remedial systems are then
located, and (ii) such Future Improvements are not constructed or placed within
that portion of the Property lying within the area which is of a uniform
distance of fifty (50) feet laterally from and along the top of the subsurface
bentonite slurry wall located around the approximate perimeter of the Property
(unless steps are taken at Veritas' or such successor Owner Entity's expense,
subject to Xxxxxxxxx'x reasonable approval, to protect the slurry wall). If any
additional groundwater or extraction xxxxx, related equipment or other
remediation equipment are required by any environmental agency or agencies
having jurisdiction over the clean up or remediation of the Property, Fairchild
shall consult and cooperate with Veritas to locate such facilities in a location
on the Property that does not unreasonably interfere with the use of the
Property by Veritas while at the same time satisfying the requirements of the
environmental agency imposing such requirements.
Veritas and all Owner Entities agree not to take any action that would
result in a breach or default of any of the Grantee's obligations under the 1997
Raytheon Agreement, provided that such actions shall not include Veritas'
reasonable activities relating to its development of the Property as a corporate
campus facility. Veritas and the Owner Entities agree to indemnify, defend and
hold harmless Fairchild and its agents, employees, directors, officers,
shareholders, affiliates, successors and assigns, from and against any and all
damages, losses, claims, liabilities, actions, causes of action, costs and
expenses (including, without limitation, attorneys' fees and costs) arising out
of or related to any breach or default by Veritas or any of the Owner Entities
of any of the Grantee's obligations under the 1997 Raytheon Agreement.
4. Notice of Intent to Commence Remedial Work. So long as Fairchild and
Raytheon Company are in compliance with all remedial work obligations imposed by
the environmental agency or agencies having jurisdiction over the Property with
respect to the Contamination, Veritas covenants not to voluntarily undertake any
remedial work with respect to such Contamination. If the applicable
environmental agency or agencies having jurisdiction over the remediation of
Contamination on, in or under the Property requires Veritas to perform such
remedial work, Veritas shall give prompt written notice of such requirement to
Fairchild in accordance with Paragraph 9 below, enclosing a copy of the notice
imposing the remedial work obligation upon Veritas. If Fairchild thereafter
fails to perform, or cause to be performed, the remedial work obligation with
respect to such Contamination within the time period imposed by the applicable
environmental agency or agencies, then Veritas may give written notice of its
intent to perform the remedial work obligation within sixty (60) days from the
date of such notice, or, if a shorter period of time is required by the
applicable environmental agency or agencies for performance of such obligation,
within a reasonable time after the date of such notice. Veritas may undertake
the remedial work obligation if Fairchild has failed to perform or to commence
to perform and thereafter diligently prosecute the remedial work obligation
within said sixty (60) day period or such shorter reasonable period of time, as
applicable. If Veritas performs a remedial work obligation imposed upon Veritas
(with respect to the Contamination)
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by the applicable environmental agency or agencies after (i) satisfying the
notice requirements set forth in this Paragraph 4, and (ii) Xxxxxxxxx'x failure
to perform or commence to perform the remedial work obligation within the
applicable time period set forth above, then Fairchild shall indemnify, defend,
and hold Veritas harmless from the cost of performance of such remedial work.
All reasonable sums paid or incurred by Veritas pursuant to the terms of the
immediately preceding sentence which are not repaid or reimbursed by Fairchild
within thirty (30) days following receipt by Fairchild of written notice of the
amounts required to be repaid (plus documentation evidencing the sums so paid or
incurred by Veritas and the nature of remediation work performed by or for
Veritas) shall bear interest, commencing at the expiration of the aforementioned
thirty day period until repaid, at the per annum rate of two percent (2%) in
excess of the prime interest rate or reference rate for the then current
calendar month, as of the first day of such calendar month, which is quoted,
published or announced from time to time by Bank of America.
5. Retention of Rights to Negotiate or Contest Liabilities. As between
Fairchild and the Owner Entities, Fairchild shall have the sole right to
negotiate and/or contest, on behalf of itself and/or any of the Owner Entities,
any Liabilities that are within the scope of the indemnity in paragraph 1 above,
provided that upon notice of the Liabilities, Fairchild shall have timely
acknowledged in writing its obligations to indemnify, protect, hold harmless and
defend the Owner Entities with respect to such Liabilities. Any such negotiation
or defense against a Liability within the scope of the indemnity in Paragraph 1
or in Paragraph 4 above shall not be a breach of this Agreement provided that
Xxxxxxxxx'x negotiations or defense is in good faith and not unreasonable and
Fairchild indemnifies, protects, holds harmless and defends the Owner Entities
against any Liabilities which may become enforceable against the Owner Entities.
6. Subsequent Owner Entities. With respect to future fee owners of the
Property, or any portion thereof, notwithstanding anything in this Agreement to
the contrary, the obligations of Fairchild under this Agreement shall only inure
to the benefit of, and exist in favor of, those future fee owners of the
Property, or any portion thereof, who have executed this Agreement at or about
the time of their purchase of the Property, indicating their assumption of the
obligations of Veritas hereunder and agreement to be bound by the terms of this
Agreement, including the release of claims set forth in Paragraph 2 above. Any
other Owner Entity who makes a claim or seeks a benefit under this Agreement
shall be deemed to have agreed to all terms of this Agreement from the time it
obtained its Owner Entity status.
7. No Waiver of Rights Against Third Parties. Each party and any Owner
Entities reserve their rights to pursue any claims for damages or other relief
which they may have against third parties, including parties under the 1997
Raytheon Agreement, arising from any release of Hazardous Materials within the
scope of the indemnity in Paragraph 1 above.
8. Regulatory Notices. The parties shall cooperate in the sharing of
notices or other communication from or to any governmental authority related to
any release of hazardous or toxic materials within the scope of the indemnity in
Paragraph 1.
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9. Notice. In the event that for any reason notice of any fact or event
relating to this Agreement is given by one party to another party, such notice
(a) shall be given to all other parties to this Agreement, (b) shall be in
writing, (c) shall be effective upon personal delivery or upon delivery by
overnight delivery service providing receipted delivery, and (d) shall be sent
to the parties, with postage or delivery charge prepaid, addressed as follows:
TO VERITAS: TO FAIRCHILD:
Veritas Software Company Xxxxxxxxx Semiconductor Corporation
0000 Xxxxxxxx Xxxxxx xx Xxxxxxxxxx
Xxxxxxxx Xxxx, XX. 94043 000 Xxxxxxx Xxxxxx
Attn: Xxx X. Xxxxx Xxxxx Xxxxxxxx, XX 00000
Attn: Xxx Xxxxx, Esq.
Any party designated to receive notices hereunder may change its recipient
by providing written notice to the other parties. Any Owner Entity, other than
the fee owner, may also add its name and address to this notice list by
providing notice to all parties listed in this Paragraph.
10. Effectuation of Agreement. Veritas and Fairchild represent, warrant
and agree to execute all documents and to do all things reasonably necessary to
fully effectuate the terms of this Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed one and the same instrument.
12. Severability. Veritas, Owner Entities, Financing Parties and Fairchild
agree that the provisions of this Agreement are severable and, should any
portion hereof be deemed unenforceable, the remaining provisions shall remain in
full force and effect.
13. Disclosure. Veritas and each subsequent owner of the Property shall
disclose this Agreement to any person to whom they sell the Property before such
agreement of sale is concluded.
14. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior or contemporaneous negotiations,
correspondence, understandings and agreements between the parties regarding the
subject matter of this Agreement. It is expressly understood and agreed that
this Agreement may not be altered, amended, modified or otherwise changed in any
respect whatsoever except by a writing duly executed by each of the parties
hereto.
15. Waivers. No waiver or indulgence of any breach or series of breaches
of this Agreement shall be construed as a waiver of any other breach of the same
or any other provision hereof or affect the enforceability of any part or all of
this Agreement, and no waiver shall be valid unless executed in writing by the
waiving party.
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97
16. Representations. Veritas and Fairchild represent, warrant and agree
that no promise or agreement not expressed herein has been made to them; that
this Agreement contains the entire agreement between the parties relating to the
subject matter hereof, that this Agreement supersedes any and all prior
agreements or understandings between the parties concerning the subject matter
of this Agreement; that all terms of this Agreement are contractual; and that in
executing this Agreement, no party is relying on any statement or representation
made by another party or another party's representatives concerning the subject
matter, except as expressed herein.
17. Authority to Execute. Each of the undersigned declares and represents
that she or he is competent to execute this instrument and that she or he is
duly authorized, and has the full right and authority, to execute this Agreement
on behalf of the party for whom she or he is signing.
18. Third Party Beneficiaries. The parties hereto expressly acknowledge
and agree that any and all Financing Parties are intended third party
beneficiaries of this Agreement and may rely upon its provisions as if each of
them were a party hereto. So long as any loan (secured by the Property) made by
any Financing Party to Veritas is outstanding, this Agreement may not be
terminated, revoked, amended or otherwise modified, in whole or in part, without
the prior written consent of the Financing Party or Financing Parties providing
Veritas with such financing.
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IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed as of the date first set forth above.
XXXXXXXXX SEMICONDUCTOR
CORPORATION OF CALIFORNIA,
a Delaware corporation
By:______________________________________
Its___________________________________
By:______________________________________
Its___________________________________
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
By:______________________________________
Its___________________________________
By:______________________________________
Its___________________________________
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EXHIBIT "A"
LEGAL DESCRIPTION OF REAL PROPERTY
The land referred to herein is situated in the State of California, County of
Santa Xxxxx, City of Mountain View, described as follows:
LOT 23, as shown on that certain Map entitled, "Tract No. 0000 Xxxxx-Xxxxxxxxxxx
Xxxxxxxxxx Xxxx," which Map was filed for record in the Office of the Recorder
of Santa Xxxxx County, State of California, on June 16, 1960, in Book 121 of
Maps at Pages 40, 41, 42, 43 and 44, and being known as 000 Xxxxx Xxxxxx
XXX: 000-00-000 JPN: 000-00-00
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100
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On _________________, before me, __________________, personally appeared
__________________________________.
[ ] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose
name(s) is/are subscribed to the within
instrument and acknowledged to me that
he/she/they executed the same in
his/her/their authorized capacity(ies),
and that by this/her/their signature(s)
on the instrument the person(s), or the
entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------------------
SIGNATURE OF NOTARY
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On _________________, before me, _______________________, personally
appeared ________________________________________________________________.
[ ] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose
name(s) is/are subscribed to the within
instrument and acknowledged to me that
he/she/they executed the same in
his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on
the instrument the person(s), or the
entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
SIGNATURE OF NOTARY
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
----------------------------
Title(s)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: ___________________
SIGNER IS REPRESENTING:
Name of Person(s) or Entity(ies)
--------------------------------
--------------------------------
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
-----------------------------
Title(s)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: ___________________
SIGNER IS REPRESENTING:
Name of Person(s) or Entity(ies)
--------------------------------
--------------------------------
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101
EXHIBIT D
DOCUMENT: 13994842 Titles / Pages: 12
Fees . . . . 40.00
Taxes . . .
RECORDING REQUESTED BY AND Copies . . .
WHEN RECORDED RETURN TO: AMT PAID 40.00
---------------------------------------
Xxxxxx X. Xxxxxxxx XXXXXX XXXXX RDE #437
Xxxxxx Godward SANTA XXXXX COUNTY RECORDER 12/30/1997
5 Palo Alto Square Recorded at the request of
0000 Xx Xxxxxx Xxxx Xxxxxxx
Xxxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
(Space above this line for Recorder's use)
GRANT OF EASEMENTS, RESTRICTION AND INDEMNITY AGREEMENT
THIS GRANT OF EASEMENTS, RESTRICTION AND INDEMNITY AGREEMENT ("Agreement")
is made this 24th day of December 1997 by and between Raytheon Semiconductor,
Inc., a Delaware corporation, as grantor ("Grantor") and RAYTHEON COMPANY, a
Delaware corporation ("Grantee"), as grantee.
WITNESSETH
WHEREAS, a wholly-owned subsidiary of Grantee contemporaneously with the
recordation of this Agreement is conveying to Grantor that certain real property
consisting of land and the improvements thereon, located in the City of Mountain
View, County of Santa Xxxxx, State of California, commonly known as Assessor's
Parcel Number 000-00-000, as more particularly described in Exhibit A attached
hereto (the "Grantor Property"); and
WHEREAS, due to the alleged presence of certain conditions subject to
regulation or enforcement under state or federal laws such conditions
hereinafter collectively referred to as "Contamination)" Grantee has conducted
certain investigation, testing, remediation activities, and other response
actions ("Remedial Activities") on certain portions of the Grantor Property,
some of which activity is required by the United States Environmental Protection
Agency ("EPA"); and
WHEREAS, Grantor has agreed to grant certain easements to Grantee with
respect to the Grantor Property for the purpose of permitting Grantee to
continue to conduct such Remedial Activities; and
WHEREAS, Grantor has further agreed to restrict the use of certain portions
of the Grantor Property as set forth herein in order to avoid a potentially
unsafe condition due to the potential for subsidence in soils along the
northerly border of the Grantor Property.
1
102
NOW, THEREFORE, for good and valuable consideration, including the
conveyance by Grantee to Grantor of the Grantor Property, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, Grantee and Grantor hereby agree as follows:
1. Grant of Easements. Grantor hereby grants and conveys to Grantee, and
its successors and assigns, and their respective agents, consultants,
contractors and invitees involved in the Remedial Activities (collectively
"Agents"), and the EPA, the following irrevocable easements, which shall be
subject to the limitations on use set forth in Paragraph 2:
a. an exclusive easement in, over and under the Grantor Property for
the drilling, installation, location, operation, repair and replacement of ????
and extraction xxxxx for both groundwater and soil vapor extraction, and related
treatment and support systems, utilities, piping, equipment devices, fences,
???? walls and structure ("Remediation Equipment"), excluding the surface and
above surface portions thereof on which are located buildings and other
structures (other than the existing tunnel underlying 000 Xxxxx Xxxxxx
Building), the locations of which excluded portions are set forth in Exhibit B
attached hereto ("Excluded Area"), provided that (i) each access does not
unreasonably interfere with Grantor's use of the Property, and (ii) if requested
by Grantor, the Remediation Equipment shall be subject to alteration,
modification or relocation at the expense of Grantor, subject to governmental
approval;
b. a non-exclusive easement for pedestrian and vehicular ingress and
egress as reasonably required in connection with easements granted in
subparagraphs a, c, and d of this Paragraph 1, to and over those areas of the
Grantor Property as are generally used for such purpose, provided such access
does not unreasonably interfere with Grantor's use of the Property;
c. an exclusive easement for the installation, location, operation,
repair and replacement of a pipeline in, under and over that area of the Grantor
Property depicted in Exhibit ? attached hereto for purposes of transmission of
ground water, provided that, if requested by Grantor, such pipeline and such
easement shall be subject to movement or relocation at the expense of Grantor,
subject to governmental approval, but no such movement or relocation shall
impair the ability of such pipeline to connect with the continuation of such
pipeline within the existing easement of Grantee on property contiguous with and
southerly of the Grantor Property; and
d. an exclusive easement in and over the Grantor Property, or any
portion thereof, excluding the Excluded Area, for the purpose of implementing
and effectuating any additional testing or remediation work required by any
governmental agency having jurisdiction, provided that, if requested by Grantor,
such work and easement shall be subject to movement or relocation at Grantor's
expense, subject to governmental approval.
2
103
2. Exercise
a. Grantee shall exercise its rights under Paragraph 1 in a manner
that (i) does not increasingly interfere with the use and occupancy of the
Grantor Property by Grantor or its tenants where reasonableness is determined by
the conduct of a reasonable, prudent person responsible for both the operations
of the [ILLEGIBLE] and the conduct of the Remedial Activities, and (ii) complies
with the participations of governmental authority. Grantor shall obtain the
written consent of Grantee, which shall not be [ILLEGIBLE] delayed or withheld,
prior to making any improvements or [ILLEGIBLE] to the Grantor Property that
should adversely affect any Remedial Activities or Remediation Equipment. Prior
to entry onto the Grantor Property, Grantor shall provide the then owner
reasonable written notice of its proposed entry prior to commencement of any
work, and Grantee agrees to reasonably cooperate with the Grantor's and its
transferees' reasonable plans for the future not of the Grantor's property by
offering, modifying or relocating Remediation Equipment, subject to governmental
approval and provided that the Grantor or its transferees, as applicable, will
be responsible for the cost of such alteration, modification or relocation.
b. Notwithstanding the use of the term "exclusive" in Paragraph
1.a.c. and d., Grantor may make such use of the current areas (including
performing any remediation for which Grantee is not responsible, and
implementing any emergency [ILLEGIBLE] activities reasonably necessary on the
account of Grantee to abide as imminent threat of harm) described in Paragraph 1
as does not unreasonably interfere with or pose a significant risk to Grantee's
reasonable exercise of its rights hereunder (including, if required, the grant
of reasonable utility [ILLEGIBLE]), and Grantor shall reasonably cooperate with
Grantee in Grantee's exercise of its rights of access in those areas; provided
Grantee shall not exercise its rights in a fashion which would cause the Grantor
Property to violate applicable laws and regulations, including, without
[ILLEGIBLE], those relating to [ILLEGIBLE] and land use.
3. Grant of Negative Easement and Restriction. Notwithstanding anything
herein to the contrary, Grantor covenants and agrees, on behalf of itself and
its successors and assigns to the Grantor Property or any portion thereof, and
hereby grants and conveys the Grantor, its successors and assigns, a negative
easement that at no time shall there be constructed, enacted or placed any
building, structure, or other improvement within that portion of the Property
lying within the area which is of a uniform distance of fifty (50) feet
laterally from and along the top of the subsurface [ILLEGIBLE] [ILLEGIBLE] wall
located around the approximate perimeter of the Grantor Property in the location
set forth on Exhibit E, unless steps are taken at Grantor's expense, subject to
Grantee's reasonable approval, to protect the [ILLEGIBLE] wall, and any required
approval of applicable governmental authority, provided that; landscaping in the
form of plants, trees and other vegetation; paving; parking; walkways; and
fencing shall be permitted, except that in no event shall the soil be disturbed
to a depth of more than two (2) feet below present grade).
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4. Indemnity.
a. Grantee shall (i) repair any damage to the Grantor Property or
improvements thereon caused by the exercise by Grantee of its rights under
Paragraph 1, and (ii) defend, indemnify and hold Grantor harmless from any
claims, costs, reasonable attorneys' fees, liabilities, damages, causes of
action, demands or expenses for personal injury and property damage and for the
costs of repairs to the Grantor Property or improvements thereon that are
caused by the exercise by Grantee of its rights under Paragraph 1.
b. Grantee shall indemnify, defend and hold Grantor harmless from
any damages, claims, losses, expenses, costs, obligations and liabilities,
including, without limitation, liabilities for all reasonable attorneys',
accountants' and experts' fees and expenses asserted against or incurred or
suffered by Grantor arising out of or related to environmental conditions (i)
which first occurred, existed or arose prior to the date of this Agreement and
(ii) which arose or resulted from the release of hazardous substances in, on,
under, from, or at the Grantor Property, except to the extent such act
exacerbated by activities of negligent omissions of Grantor or any third party
(other than any Agents acting on behalf of Grantee in the performance of
Remedial Activities) on or after the date of this Agreement.
5. Nature of Rights and Obligations; Termination.
a. The easements and restrictions set forth in Paragraphs 1, 2 and
3 of this Agreement (i) burden and run with the Grantor Property, and (ii) are
granted by Grantor for the personal benefit of Grantee, its successors and
assigns, in gross. The obligations of Grantee, as set forth in this Agreement,
including the indemnities set forth in Paragraph 4, benefit and run with the
Grantor Property.
b. Grantee shall be obligated to terminate the easements set forth
in Paragraph 1 (but not the easement and restriction set forth in Paragraph 3)
of this Agreement upon the ????? to occur of (i) five (5) years following the
date of final determination by the relevant federal, state and other applicable
governmental agencies that no further Remedial Activities at the Grantor
Property or any adjacent property is required in respect of the Contamination
(which is to be evidenced by such documentation as is reasonably satisfactory
to the parties) or (ii) termination of Grantee's obligations under Paragraph 4.
Upon such obligation of Grantee to terminate such easements, Grantee shall (i)
promptly remove all Remediation Equipment which Grantor, in its reasonable
discretion, requests to have removed, including, without limitation, the
closure and sealing of any groundwater monitoring xxxxx and removal of piping
(but excluding the ????? walls) in compliance with all applicable laws and
regulations, and (ii) execute, acknowledge and record with the Santa Xxxxx
County Recorder a quitclaim deed by which, upon such recording, such easements
set forth in Paragraph 1 and all remaining obligations of Grantee set forth in
this Agreement thereupon shall be extinguished without further act or deed.
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6. No Admission. No provision of this Agreement constitutes an admission
of Grantee or Grantor that any condition at or arising from the Grantor
Property constitutes Contamination or requires clean-up under any applicable
law. No provision of this Agreement constitutes an admission by Grantee or
Grantor that it is liable for the clean-up of, or otherwise responsible for,
any Contamination or Hazardous Materials at Grantor Property. Nothing in this
Agreement obligates Grantee or Grantor to conduct any activities on the Grantor
Property.
7. Notices. Any notice, report or demand required or desired to be given
under this Agreement shall be in writing and shall be deemed to have been
sufficiently given or served for all purposes if it is delivered (i)
personally, (ii) by generally recognized overnight courier or (iii) by United
States Postal Service registered or certified mail, return receipt requested,
postage prepaid, to the parties at the addresses shown below or at such other
address as the perspective parties may from time to time designate by like
notice. Each such notice shall be effective upon delivery. Such addresses shall
be as follows:
If to Grantor: Dr. Xxx Xxx
Raytheon Semiconductor, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Tel: (000) 000-0000
And to: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and
General Counsel
Xxxxxxxxx Semiconductor Corporation
000 Xxxxxxx Xxx., M.S. 00-00
Xxxxx Xxxxxxxx, Xxxxx 00000
If to Grantee: Raytheon Company
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn.: Office of the General Counsel
8. Miscellaneous.
a. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns and transferees.
b. Recording. This Easement and Restriction Agreement shall be
recorded in the office of the Recorder of Deeds in and for the County of Santa
Xxxxx, State of California.
c. Captions. The captions of the actions of this Agreement are for
conveniences only and shall not be considered or referred to in resolving
questions of interpretation and construction.
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d. Governing Law. This Easement and Restriction Agreement shall be
construed, interpreted and applied in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.
e. Integration Amendment. This Agreement may not be altered, modified,
amended or terminated unless by an instrument in writing duly executed by each
of the parties then bound by this Agreement. This Agreement contains all of the
agreements and understandings of the parties concerning the subject matter
contained herein and supersedes all prior oral or written agreements or
understandings. Grantor has entered into this Agreement in reliance upon its
own investigation of the Grantor Property and not in reliance upon any
representations and warranties made by Grantee or anyone acting on Grantee's
behalf.
f. No Partnership. This Agreement is not intended, nor shall it be
construed, as constituting a partnership or joint venture between the parties
hereto, or as constituting any party the agent of any other party, or render
any party liable for the debts or obligations of any other party.
g. Severability. The provisions of this Agreement shall be deemed
independent and severable, and the invalidity or unenforceability of any
portion or portions thereof shall not affect the enforceability or validity of
any other provisions or portion thereof.
h. Assignment. Grantee shall have the right to assign all or any portion
of this Agreement or any of its interests herein, but shall not be released
from its obligations hereunder without the consent of the then owner of the
Grantor Property.
i. Governmental Approval. Wherever in this Agreement the term "subject
to governmental approval," "in compliance with requirement of governmental
authority" or variant thereof is used, the same shall mean the approval of,
compliance with the requirements of or consent of any and all applicable United
States federal and California legal, administrative and regulatory authority
(including political subdivisions), including, without limitation, the United
States Environmental Protection Agency and the California Environmental
Protection Agency.
j. Relocation. Wherever in this Agreement Grantor or its transferees is
provided the right to request Grantee to alter, modify or relocate Remediation
Equipment (i) Grantor or its transferees, as applicable, and Grantee shall
enter into an appropriate amendment of this Agreement by which the new location
of the easements designated herein is specified and (ii) Grantor and its
transferees shall be responsible for any incremental cost to Grantee of the
Remedial Activities thereafter incurred as a consequence of all alterations,
modifications and improvements (in addition to the cost of such alterations,
modifications or improvements).
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first shown written.
RAYTHEON SEMICONDUCTOR, INC., a Delaware corporation
By: /s/ [Signature Illegible]
-----------------------------------
Name: [Name Illegible]
-----------------------------------
Title: President
-----------------------------------
RAYTHEON COMPANY, A DELAWARE CORPORATION
By: /s/ XXX XXX
-----------------------------------
Name: Xxx Xxx
-----------------------------------
Title: Vice President
-----------------------------------
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On , 1997, before me Xxxxxx X. Xxxxx, Notary Public, personally appeared
[Name Illegible] ,
WITNESS by my hand and official seal, [NOTARY SEAL]
/s/ XXXXXX X. XXXXX
------------------------------------
Signature
000
XXXXX XX XXXXXXXXXXXXX ) CAPACITY CLAIMED BY SIGNER
) ss. [COPY ILLEGIBLE]
COUNTY OF MIDDLESEX ) [COPY ILLEGIBLE]
[COPY ILLEGIBLE]
[COPY ILLEGIBLE]
On December 29, before me, Xxxxx X. Xxxxxxxx
previously appeared Xxxxx X. [ILLEGIBLE] [ ] [ILLEGIBLE]
[ ] Corporate Officer
Vice President
[ ] [COPY ILLEGIBLE] [ ] [ILLEGIBLE] [ ] [ILLEGIBLE]
[COPY ILLEGIBLE] [ ] [ILLEGIBLE]
[X] [COPY ILLEGIBLE] [ ] Attorney-in-Fact
to be the [ILLEGIBLE] [ ] [ILLEGIBLE]
[COPY ILLEGIBLE] [ ] [ILLEGIBLE]
[COPY ILLEGIBLE] [ ] Other: _______________________
[COPY ILLEGIBLE] ______________________________
[COPY ILLEGIBLE]
[COPY ILLEGIBLE] [ILLEGIBLE]
[ILLEGIBLE]
Witness my hand and [ILLEGIBLE]
__________________________________
/s/ [SIGNATURE ILLEGIBLE] __________________________________
_________________________________________________
My Commission Expires [ILLEGIBLE] Signature of [ILLEGIBLE]
____________________________________________________________________________________________________________________________
This certificate must be attached to the
document described at right: Title or Type of Document: ____________________________________________________
Number of Pages: __________ Date of Document: _________________________________
Signature other than names above: _____________________________________________
[COPY ILLEGIBLE]
109
EXHIBIT A
LEGAL DESCRIPTION
OF GRANTOR PROPERTY
All that certain Real Property in the City of Mountain View, County of Santa
Xxxxx, State of California, described as follows:
Order No.: 393018E1
The land referred to herein is [illegible] in the State of California, County of
Santa Xxxxx, City of Mountain View, described as follows:
LOT 23, as shown on that certain Map entitled, "Tract No. 0000 Xxxxx-Xxxxxxxxxxx
Xxxxxxxxxx Xxxx," which map was filed for record in the Office of the Recorder
of Santa Xxxxx County, State of California, on June 16, [illegible], in Book 121
of Maps at Pages 40, 41, 42, 43 and 44, and being known as 000 Xxxxx Xxxxxx.
XXX: 000-00-000 IPN: 000-00-00
000
[XXXXXX XXX]
XXX 180 53 DO3
RAYTHEON COMPANY
B 932 OR 591
111
[MAP OF EXCLUDED AREA BUILDINGS AND STRUCTURES]
112
[MAP]
113
any schedules or attachments thereto) that are required pursuant to Treas. Reg.
Section 1.338-I or Treas. Reg. Section 1.338(h)(10)-I.
(h) "Section 338(h)(10) Election" means an election described in
Section 338(h)(10) of the Code with respect to Seller's sale of the Shares to
Buyer pursuant to this Agreement. Section 338(h)(10) Election shall include any
corresponding election under any other relevant Tax Laws for which a separate
election is permissible with respect to Buyer's acquisition of the Shares from
Seller under this Agreement.
(i) "Tax Benefit" means the tax effect of any item of loss, deduction or
credit or any other item which decreases Taxes paid or payable or increases tax
basis including any interest with respect thereto or interest that would have
been payable but for such item.
(j) "Tax Detriment" means the tax effect of any item of income or other
item that increases Taxes paid or payable or decreases tax basis, including any
interest with respect thereto or interest that would have been payable but for
such item.
(k) "Taxes" means all taxes (whether federal, state, local or foreign)
based upon or measured by income and any other tax whatsoever, including, but
not limited to, gross receipts, profits, sales, use, occupation, value added,
ad valorem, transfer, franchise, withholding, payroll, employment, excise or
property taxes, together with any interest or penalties imposed with respect
thereto.
(l) "Tax Laws" means the Code, federal, state, county, local or foreign
laws relating to Taxes and any regulations or official administrative
pronouncements released thereunder.
(m) "Taxing Authority" means any Governmental Authority, domestic or
foreign, having jurisdiction over the assessment, determination, collection or
other imposition of Tax.
Article VIII.
Environmental Matters
Section 8.1. Environmental Liabilities.
(a) The parties acknowledge that the Mountain View Facility is listed on
the National Priorities List and has been the subject of Remediation by Raytheon
with oversight by the United States Environmental Protection Agency ("EPA").
Raytheon shall retain all responsibility and liability following Closing, with
such consultants and contractors as it may select in its sole discretion, for
dealing with EPA and undertaking and completing Remediation of conditions at or
originating from the Mountain View Facility which arose prior to the Closing
Date or were created by Releases of Hazardous Substances that first occurred
prior to the Closing Date, to the extent required by Environmental Law or any
Order, taking into consideration the current industrial use of the Mountain View
Facility (the "Mountain View Environmental Liabilities"). Raytheon shall retain
all rights under insurance policies and all rights to recover from
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responsible parties with respect to the Mountain View Environmental Liabilities.
Raytheon shall bear no responsibility for any conditions which may arise on or
after the Closing Date as a result of any Post-Closing Release of Hazardous
Substances by Buyer or any third party (except Raytheon's consultants or
contractors or any Person acting for, on behalf of or at the direction of
Raytheon, including, without limitation, in connection with the performance of
the Remediation of the Mountain View Facility ("Raytheon Parties")), provided
that any leaking, leaching, migration or similar movement of Hazardous
substances which existed in soil or ground water prior to the Closing Date shall
not be considered a Release by Buyer except to the extent such is exacerbated by
activities or negligent omissions of Buyer or any third party (other than any
Raytheon Parties) on or after the Closing Date.
(b) In connection with such Remediation of the Mountain View Environmental
Liabilities by Raytheon, Raytheon shall conduct all Remediation required by EPA
or any other Governmental Authority with jurisdiction (subject to Raytheon's
right to contest any such requirement by appropriate proceedings), and Buyer
shall, upon prior written notice, provide Raytheon, its consultants and
contractors access to the Mountain View Facility and shall permit them to
install, operate and maintain remedial treatment systems and to conduct all
other Remediation which Raytheon determines to be necessary or appropriate.
Buyer will cause any successor owners of the Facility to afford Raytheon the
same rights to access and to conduct Remediation (which access shall only be to
the extent necessary to conduct the Remediation and shall terminate upon the
completion of the Remediation), and Buyer agrees to record an appropriate
acknowledgement of such rights in the Registry of Deeds upon Raytheon's request.
Raytheon shall use commercially reasonable efforts not to interfere unreasonably
with Buyer's operation of the Company (where reasonableness is determined by the
conduct of a reasonably prudent person responsible for both the operations and
the business and the conduct of the Remediation) and Raytheon shall indemnify
and hold harmless Buyer Indemnified Parties (as defined in Section 11.2) for any
damage to the Mountain View Facility and against any liability to third persons
to the extent such damage or liability is caused by Raytheon's Remediation;
provided, however, as a condition to such indemnity, that upon the request of
Raytheon, the Buyer Indemnified Party first assigns, subrogates or otherwise
effectively transfers to Raytheon its rights against the Persons causing such
damage or liability. Raytheon agrees to reasonably cooperate with the Buyer's
reasonable plans for the future use of the Mountain View Facility by relocating
or modifying equipment used in connection with the Remediation; provided,
however, that Buyer will be responsible for the cost of such relocation or
modification.
(c) In addition to the foregoing, from and after the Closing Date,
Raytheon shall indemnify, defend and hold Buyer Indemnified Parties (as defined
in Section 11.2) harmless from and against any and all Covered Liabilities
asserted against or incurred or suffered by Buyer Indemnified Parties arising
out of or related to: (i) environmental conditions first occurring, existing or
arising prior to the Closing Date arising out of or resulting from the Release
of Hazardous Substances in, on, under, from, or at the Mountain View Facility
and any real property formerly (but not currently) owned, operated or leased by
the Company or any of its predecessors except to the extent such is exacerbated
by activities or negligent omissions of Buyer or any third party (other than any
Raytheon Parties) on or after the Closing Date or (ii) the off-site
transportation, disposal, recycling, treatment or storage prior to the Closing
Date of
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Hazardous Substances generated by the Company or Raytheon in connection with
the Semiconductor Division Business prior to the Closing Date.
(d) Notwithstanding the foregoing, nothing contained in this Section 8.1
shall be interpreted to waive any claims which Raytheon may have against Buyer
in the absence of this transaction and Raytheon does not indemnify or hold
harmless Buyer with respect to any Covered Liabilities for which Buyer would be
responsible in the absence of this transaction.
Section 8.2 Indemnities by Buyer. Buyer shall indemnify and hold harmless
Raytheon against all Covered Liabilities asserted against or incurred or
suffered by Raytheon arising out of or relating to the Release first occurring
on or after the Closing Date of any Hazardous Substance in, on, under or from
any portion of a facility owned, operated or leased by the Company after the
Closing Date (except in each case from an off-site source and provided that any
leaking, leaching, migration or similar movement of Hazardous Substances which
existed in soil or ground water prior to the Closing Date shall not be
considered a Release by Buyer except to the extent such is exacerbated by
activities or negligent omission of Buyer or anyone other than Raytheon Parties
post-Closing on the Company's property); provided, however, that Buyer may, at
its election, control the defense and, if required, Remediation in connection
with any such Covered Liabilities. Except as set forth in Section 8.1(b), Buyer
shall also indemnify and hold harmless Raytheon against (a) all claims and
liabilities caused by any refusal by Buyer or successor owners to allow
Remediation by Raytheon or any unreasonable interference with the conduct,
management or control of Remediation by Raytheon and (b) all claims and
liabilities arising from or related in any way to the Remediation by Buyer or
any third party, including any Governmental Authority, or additional Remediation
required of Raytheon, in connection with or as a result of any changes to the
existing use of the Mountain View Facility.
Section 8.3 Remediation for Releases after Closing. If any Remediation
required by Environmental Law with respect to Releases of Hazardous Substances
at, on, in or under any portion of the Mountain View Facility is required in
part by Releases before the Closing Date and in party by Releases first
occurring on or after the Closing Date (provided that any leaking, leaching,
migration or similar movement of Hazardous Substances which existed in soil or
ground water prior to the Closing Date shall in no event be considered a
post-Closing Date Release), the costs for such cleanup or other response shall
be divided between Raytheon and Buyer according to their respective degree of
responsibility in connection with such Releases. To determine Buyer's portion of
the costs for such cleanup or other response, Raytheon shall deliver to Buyer
its good faith estimate of the allocation of responsibility. Within 30 days
after Raytheon's delivery of such estimate, Buyer shall be entitled to provide
notice to Raytheon that it is of the view that Raytheon's allocation of
responsibility was not accurate and shall provide Buyer's good faith estimate of
the allocation of responsibility in reasonable detail. Thereupon, Raytheon and
Buyer shall meet to resolve their differences concerning such allocation. If
Raytheon and Buyer cannot agree within 30 days of the date of such notice, such
allocation of fault shall be promptly resolved by submitting, at either party's
request, such dispute to final and binding arbitration. The Arbitrator shall be
a retired Judge from JAMS/End Dispute ("JAMS") selected by the JAMS office in
Boston, Massachusetts. The arbitration location shall be decided by the parties
jointly, or if no agreement is reached, the arbitration shall be held at a
location
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selected by JAMS. Each party shall bear its own expenses and will share equally
in the arbitrator's fees and related expenses, provided that once an
arbitration judgment is entered, the prevailing party shall be entitled to
recover attorneys' and or expert fees and related costs. The arbitrator will
determine what discovery, if any, is appropriate. Judgment on the award
rendered by the arbitrator may be entered in a court having competent
jurisdiction. The judgment awarded by the Arbitrator shall be final, binding
and nonappealable.
Section 8.4. OSHA Matters.
(a) Set forth on Schedule 8.4 hereto is a list of certain conditions and
operations observed by Buyer at the Mountain View Facility and separately with
respect to each, the sections under the Occupational Safety and Health Act, as
amended ("OSHA"), and each of the specific regulations adopted pursuant thereto
deemed applicable by Buyer to each such condition or operation. Raytheon has
reviewed Schedule 8.4 and considers that no actions are necessary to conform
such conditions and operations with the requirements of such sections of OSHA
and such regulations as are set forth for each listed item on Schedule 8.4
hereto.
(b) From and after the date hereof and until Raytheon takes such actions as
are required to bring any item listed on Schedule 8.4 hereto into reasonable
conformity (to the extent such item was not already in reasonable conformity)
with the sections of OSHA and regulations thereunder cited on Schedule 8.4
hereto, or until such item is in reasonable conformity therewith, Raytheon
shall indemnify and hold harmless Buyer and the Company from and against any
and all Covered Liabilities (as defined in Section 11.2 hereof), suffered,
incurred by or asserted, directly or indirectly, against Buyer or the Company
by reason or arising out of an item identified on Schedule 8.4 hereto not in
reasonable conformity with OSHA and the regulations thereunder. Claims for
indemnity by Buyer in this Section 8.4 may be asserted until 60 days after the
running of the applicable statute of limitations. The indemnity provided
pursuant to this paragraph shall be void and of no effect unless Buyer grants
Raytheon reasonable access to the Mountain View Facility for purposes of
remedying or alleviating any condition or operation listed on Schedule 8.4.
Buyer agrees that when requested by Raytheon to acknowledge that a condition or
operation specified in Schedule 8.4 has been brought into or is in reasonable
conformity with the sections of OSHA and the regulations thereunder specified
on Schedule 8.4, it will do so promptly after reasonable inquiry.
Section 8.5 Wastewater Treatment. Raytheon agrees that, without the proper
consent of Buyer (which consent shall be granted at Buyer's discretion), it
will not accept or treat pollutants, including wastewater or groundwater, from
any property other than the Mountain View Facility except for pollutants from
other properties the treatment of which is (i) within the existing capacity of
the treatment facilities of the Mountain View Facility and footprint, and (ii)
which are either (A) currently being transported for treatment to the Mountain
View Facility via existing pipeline, or (B) contemplated to be transported for
treatment to the Mountain View Facility from the properties located at 365 and
000 Xxxx Xxxxxxxxxxx Xxxx along a pipeline routing proposed by Raytheon,
provided, however, that, Raytheon shall indemnify and hold harmless Buyer
Indemnified Parties for Covered Liabilities suffered, incurred by or asserted,
directly or indirectly, against Buyer Indemnified Parties by reason or arising
out of such
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the consummation of all or any portion of the Stock Purchase, and no Law shall
have been enacted by any Governmental Authority which prevents consummation of
the Stock Purchase.
Article XI.
Survival; Indemnification
Section 11.1. Survival Periods. Except as provided in Section 11.4, all
representations and warranties contained or made in, or in connection with, this
Agreement or in any Schedule, or any certificate, document or other instrument
delivered in connection herewith, shall survive the Closing for a period of
eighteen months.
Section 11.2. Indemnification by Seller. From and after the Closing Date,
Raytheon shall indemnify and hold harmless Buyer, the Company, their Affiliates,
each of their directors, officers, employees and agents, and each of the heirs,
executors, successors, transferees and assigns of any of the foregoing
(collectively, the "Buyer Indemnified Parties") from and against any and all
damages, claims, losses, expenses, costs, obligations and liabilities, including
without limitation liabilities for all reasonable attorneys', accountants', and
experts' fees and expenses including those incurred to enforce the terms of this
Agreement (collectively, "Covered Liabilities"), suffered, incurred by or
asserted, directly or indirectly, against the Buyer Indemnified Parties by
reason or arising out of (i) any breach of any representation or warranty,
covenant or agreement of Raytheon or Seller contained herein (each of which for
purposes of this paragraph shall be read as though none of them contains any
Adverse Affect, Change or Effect or other materiality qualifier), or (ii) any
Retained Liability; provided, however, that, except for a breach of any
representation or warranty in Section 3.15, Raytheon shall not be required to
indemnify the Buyer Indemnified Parties with respect to any claim for
indemnification pursuant to clause (i) of this Section 11.2 unless and until the
aggregate amount of all claims against Raytheon under this Section 11.2 exceeds
$1,000,000 and then only to the extent such aggregate amount exceeds such
amount, and; provided, further, that, except for a breach of any representation
or warranty in Section 3.15, in no event shall Raytheon be required to pay or
otherwise be liable for an amount in excess of $40,000,000 with respect to
claims made under clause (i) of this Section.
Section 11.3. Indemnification by Buyer. From and after the Closing Date,
Buyer shall indemnify and hold harmless Raytheon, its Affiliates, each of their
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "Raytheon
Indemnified Parties") from and against any and all Covered Liabilities suffered,
incurred by or asserted, directly or indirectly, against by the Raytheon
Indemnified Parties by reason or arising out of (i) any breach of any
representation or warranty, covenant or agreement of Buyer contained herein
(each of which for purposes of this paragraph shall be read as though none of
them contains any Adverse Affect, Change or Effect or other materiality
qualifier), or (ii) any Assumed Liability; provided, however, that Buyer shall
not be required to indemnify the Raytheon Indemnified Parties with respect to
any claim made for indemnification pursuant to clause (i) of this Section 11.3
unless and until the aggregate amount of all claims against Buyer under this
Section 11.3 exceeds $1,000,000 and then only to the
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