EXHIBIT 10.4
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE is dated for reference purposes only as
February 5, 1996, and is part of that Lease dated January 29, 1993 together with
the Summary of Basic Lease Terms, the First Addendum To Lease, and the
Acceptance Agreement dated January 28, 1994 thereto (collectively, the "Lease")
by and between ORCHARD INVESTMENT COMPANY NUMBER 510 a California general
partnership ("Landlord"), and PERICOM SEMICONDUCTOR CORPORATION a California
corporation ("Tenant"), and is made with reference to the following facts:
A. The Premises currently leased by Tenant pursuant to the Lease consists
of 19,786 rentable square feet commonly known as 0000 Xxxxxx Xxxxx, Xxxx xx Xxx
Xxxx, Xxxxxxxxxx.
B. The Lease Term for said Premises currently expires on January 31, 1999.
C. Tenant and Landlord have agreed to expand the square footage of said
Premises by 7,000 rentable square feet as shown on "Exhibit A" attached hereto
and incorporated herein by reference as the "Expansion Space".
D. Tenant and Landlord have agreed to extend the Term of the Lease.
NOW, THEREFORE, Landlord and Tenant hereby agree that the Summary of Basic
Lease Terms is amended as follows:
1. Premises: Section D is hereby amended to provide for the
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Expansion Space of 7,000 square feet at 0000 Xxxxxx Xxxxx ("2350 Bering"), plus
Tenant's original space consisting of 19,786 square feet at 0000 Xxxxxx Xxxxx
("2380 Bering"), for a total of 26,786 square feet in San Jose, California.
2. Building: Section F is hereby amended to read that the Building at
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2380- 0000 Xxxxxx Xxxxx ("Building C") containing the 2380 Bering portion of
the Premises consists of a total of 27,488 square feet, and the building at
0000-0000 Xxxxxx Xxxxx ("Building E") containing the 2350 Bering portion of the
Premises consist of a total of 24,888 square feet.
3. Tenant's Share: Section G is hereby amended to mean seventy one
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and 98/100 percent (71.98%) for the 2380 Bering portion of the Premises, and
twenty seven and 04% (27.04%) for the 2350 Bering portion of the Premises.
4. Tenant's Allocated Parking Stalls: Section H is hereby amended to
---------------------------------
mean 103 stalls of which Tenant may use two (2) stalls for the installation of
its generator and one (1) stall for the new door access at the 2350 Bering
portion of the Premises.
5. Lease Term: Section J is hereby amended to provide that the Lease
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Term shall be for a period of five (5) years after the Commencement Date (plus
the partial month following the Commencement Date if such date is not the first
day of a month.).
6. Base Monthly Rent: Commencing on the Commencement Date Section K
-----------------
is hereby amended to provide for the Base Monthly Rent as follows:
A. For the 2380 Bering portion of the Premises:
From the Commencement Date
through January 31, 1997 $14,839.50 per month
From February 1, 1997
through January 31, 1999 $16,224.52 per month
From February 1, 1999
through Month 60 $16,818.10 per month
Page Two
B. For the 2350 Bering
portion of the Premises.
Months 1 - 30: $5,950.00 per month
months 31 - 60: $6,650.00 per month
7. Security Deposit: Section M is hereby amended to provide for an
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increase in the Security Deposit of $7,244.00 which Tenant has provided Landlord
upon signature hereon, for a total of $23,468.52.
8. Retained Real Estate Brokers: Section S is amended to provide
----------------------------
that Tenant warrants that it has not been represented by or had any dealings
with any real estate broker, salesman, or agent in regard to the transaction
represented by this Amendment, or incurred any obligations for the payment of
brokerage commissions or finder's fees which would be earned or become due and
payable by reason of the execution of this Lease Amendment and/or the underlying
transaction, and no brokerage commissions or finder's fees are due in regard to
the transaction. Tenant will hold Landlord harmless and indemnify Landlord
against any claim loss, or damage, including reasonable attorney's fees, in
regard to a brokerage commission or finder's fee claim by a broker or finder
under contract with or working with Tenant.
9. Commencement Date: The Commencement Date of the Lease Term shall
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be upon Substantial Completion of the interior improvements as defined in
paragraph 2D of Exhibit B to this Amendment.
10. Construction of Improvements: Prior to the Commencement Date,
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Landlord shall construct certain improvements that shall become part of the
Expansion Space in accordance with the terms of Exhibit B and C to this
Amendment.
11. Tenant Improvement Allowance: The term "Tenant Improvement
----------------------------
Allowance" shall mean the maximum amount Landlord is required to spend toward
the payment of Interior Improvement Costs for all Interior Improvements
constructed in the Expansion Space which amount is $70,000.00 (i.e. $10.00 per
square foot for Tenant's Gross Leasable Area within the entire Expansion Space).
12. HVAC Warranty: Landlord shall provide the HVAC system within the
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Expansion Space in good working condition as of the Commencement Date.
Additionally, subject to Tenants obligation to maintain the HVAC system as
provided for in Article 6 of the Lease, Landlord shall pay for the cost of
repair or replacement of any HVAC component within the Expansion Space during
the first three (3) months after the Commencement Date.
13. Except as expressly set forth in this Amendment, all terms and
conditions of the Lease remain in full force and effect.
Page Three
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
to be effective as of the date first set forth above.
LANDLORD: TENANT:
ORCHARD INVESTMENT COMPANY PERICOM SEMICONDUCTOR CORP.
NUMBER 510 a California Corporation
a California general partnership
By: NELO, a California general partnership By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
By: New England Mutual Xxxxxxx X. Xxxxxxx VP Finance
Life Insurance Company -----------------------------
a Massachusetts corporation, [Print Name and Title]
a general partner
By: Xxxxxx Real Estate Advisors, Inc.
asset manager and advisor
hereunto duly authorized
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Date: 2/8/96 Date: 2/6/96
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[LOGO OF XXXXXXX XXXXXXXXXX]
[MAP OF BUILDING E EXPANSION SPACE]
EXHIBIT A
EXHIBIT B
INTERIOR IMPROVEMENT AGREEMENT
------------------------------
THIS IMPROVEMENT AGREEMENT is made part of that Lease dated February 5,
1996, (the "Lease") by and between ORCHARD INVESTMENT COMPANY NUMBER 510,
("Landlord"), and PERICOM SEMICONDUCTOR CORPORATION, ("Tenant"). Landlord and
Tenant agree that the following terms are part of the Lease:
1. Purpose of Improvement Agreement: The purpose of this Improvement
--------------------------------
Agreement is to set forth the rights and obligations of Landlord and Tenant
with respect to the construction of Interior Improvements within the Expansion
Space prior to the Commencement Date.
2. Definitions: As used in this Interior Improvement Agreement, the
-----------
following terms shall have the following meanings, and terms which are not
defined below, but which are defined in the Lease and which are used in this
Interior Improvement Agreement, shall have the meanings ascribed to them by the
Lease:
A. Approved Specifications: The term "Approved Specifications" shall
-----------------------
mean those specifications for the Interior Improvements to be constructed by
Landlord which are described by Exhibit "C" to the Lease.
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B. Interior Improvements: The term "Interior Improvements" shall mean
---------------------
all interior improvements to be constructed by Landlord in accordance with the
Approved Specifications (e.g., HVAC equipment and distribution, transformer and
power distribution, partitions, floor, wall, and window covering, lighting
fixtures).
C. Interior Improvement Costs: The term "Interior Improvement Costs"
--------------------------
shall mean the following: (i) the total amount due pursuant to the general
construction contract entered into by Landlord to construct the Interior
Improvements; (ii) the cost of all governmental approvals required as a
condition to the construction of the Interior Improvements (including all
construction taxes imposed by the City of San Xxxx) in connection with the
issuance of a building permit for the Interior Improvements; (iii) all utility
connection or use fees; (iv) fees of architects or engineers for services
rendered in connection with the design and construction of the Interior
Improvements; and (v) the cost of payment and performance bonds obtained by
Landlord or Prime Contractor to assure completion of the Interior Improvement.
The parties acknowledge that the City of San Xxxx imposes certain taxes as a
condition to the issuance of building permits in certain circumstances,
including the "Building and Structure Construction Tax" imposed by Chapter 4.46
of the City of San Xxxx Municipal Code (the "BSC Tax") and the "Commercial-
Residential-Mobile Home Park Building Tax" imposed by Chapter 4.47 of the City
of San Xxxx Municipal Code (the "CRM Tax"). The parties further acknowledge that
the rate for these two taxes is higher for a structure designed or intended to
be used for "industrial purposes". However, the parties acknowledge and agree
that (i) an additional BSC Tax will be due upon the issuance of a building
permit for all Interior Improvements if the City of San Xxxx determines that the
Interior Improvements are intended for "industrial purposes" or (ii) a BSC Tax
and a CRM Tax based on the value of the Interior Improvements, plus an
additional BSC Tax and a CRM Tax based on the value of the shell, will be due if
the City of San Xxxx determines that the Building is intended for "commercial
purposes", and (iii) any of such taxes that must be paid in order to obtain
building permits for the Interior Improvements shall be "Interior Improvement
Costs".
D. Substantial Completion and Substantially Complete: The terms
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"Substantial Completion" and "Substantially Complete" shall each mean the date
when all of the following have occurred with respect to the Interior
Improvements in question: (i) the construction of the Interior Improvements in
question has been substantially completed in accordance with the requirements of
this Lease; (ii) the architect responsible for preparing the plans shall have
executed a certificate or statement representing that the Interior Improvements
in question have been substantially completed in accordance with the plans and
specifications therefor; and (iii) the Building Department of the City of San
Xxxx has completed its final inspection of such improvements and has "signed
off" the building inspection card approving such work as complete.
Page Two
3. Schedule of Performance: Set forth in this paragraph is a schedule of
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certain critical dates relating to Landlord's and Tenant's respective
obligations regarding the construction of the Interior Improvements (the
"Schedule of Performance"). Landlord and Tenant shall each be obligated to use
reasonable efforts to perform their respective obligations within the time
periods set forth in the Schedule of Performance and elsewhere in this Interior
Improvement Agreement. The Schedule of Performance is as follows:
Action Responsible
Items Due Date Party
------------ --------------------------------- -----------
A. Delivery to Prior to Lease Tenant
Landlord of Execution
Tenant's
Interior
Requirements
B. Delivery to Within five (5) business days Landlord
Tenant of after delivery to Landlord of
Preliminary conceptual plans for the Interior
Interior Improvements.
Improvement
Plans
C. Approval by Within three (3) business Tenant
Tenant of days after Tenant receives
Preliminary Preliminary interior Plans.
Interior
Plans
D. Delivery to Within ten (10) business Landlord
Tenant of days after approval of the
Final Preliminary Interior Plans
Interior
Plans
E. Approval by Within two (2) days after Tenant Tenant
Tenant of receives Final Interior Plans
Final
Interior
Plans
F. Commence- Within five (5) days after Landlord
ment of issuance of all necessary
construction governmental approvals
of Interior
Improvement
G. Substantial Within thirty (30) days after Landlord
Completion issuance of building permit for
of Interior tile Interior Improvements
Improvements
4. Construction of Interior Improvements: Landlord shall, at its sole
-------------------------------------
cost and expense, construct the Interior Improvements in accordance with the
following:
Page Three
A. Development and Approval of Preliminary Interior Plans: On or
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before the due date specified in the Schedule of Performance, Tenant shall
deliver to Landlord a proposed floor plan identifying its requirements for the
Interior Improvements that is consistent with the Approved Specifications
("Tenant's Interior Requirements"). On or before the due date specified in the
Schedule of Performance, Landlord shall and deliver to Tenant for its review and
approval preliminary plans for the Interior Improvements which are consistent
with and conform to Tenant's Interior Requirements and the Approved
Specifications (the "Preliminary Interior Plans"). On or before the due date
specified in the Schedule of Performance, Tenant shall either approve such plans
or notify Landlord in writing of its specific objections to the Preliminary
Interior Plans. If Tenant so objects, Landlord shall revise the Preliminary
Interior Plans to address such objections in a manner consistent with the
parameters for the Interior improvements set forth in this improvement Agreement
and the Approved Specifications and shall resubmit such revised Preliminary
Interior Plans as soon as reasonably practicable to Tenant for its approval.
When such revised Preliminary Interior Plans are resubmitted to Tenant, it shall
either approve such plans or notify Landlord of any further objections in
writing within two (2) business days after receipt thereof. If Tenant has
further objections to the revised Preliminary Interior Plans, the parties shall
meet and confer to develop Preliminary Interior Plans that are acceptable to
both Landlord and Tenant within five(5) business days after Tenant has notified
Landlord of its second set of objections. In the event Tenant and Landlord do
not resolve all of Tenant's objections within such five (5) business day period,
Landlord and Tenant shall immediately cause Landlord's architect to meet and
confer with Tenant's architect or construction consultant, who shall apply the
standards set forth in this Improvement Agreement to resolve Tenant's objections
and incorporate such resolution into the Preliminary Interior Plans, which
process Landlord and Tenant shall cause to be completed within five (5) business
days after the conclusion of the five (5) business day period referred to in the
immediately preceding sentence.
B. Development and Approval of Final Interior Plans: Once the
------------------------------------------------
Preliminary Interior Plans have been approved by Landlord and Tenant (including
all changes made to resolve Tenant's objections approved by Landlord's architect
and Tenant's architect or construction consultant pursuant to subparagraph 4A),
Landlord shall complete and submit to Tenant for its approval final working
drawings for the Interior Improvements by the due date specified in the Schedule
of performance. Tenant shall approve the final plans for the Interior
Improvements or notify Landlord in writing of its specific objections by the due
date specified in the Schedule of Performance. If Tenant so objects, the
parties shall confer and reach agreement upon final working drawings for the
Interior Improvements within five (5) business days after Tenant has notified
Landlord of its objections. In the event Tenant and Landlord do not resolve all
of Tenant's objections within such five (5) business day period, Landlord and
Tenant shall immediately cause Landlord's architect to meet and confer with
Tenant's architect or construction consultant, who shall apply the standards set
forth in the Improvement Agreement to resolve Tenant's objections and
incorporate such resolution into the Final Interior Plans, which process
Landlord and Tenant shall cause to be completed within five (5) business days
after the conclusion of the five (5) business day period referred to in the
immediately preceding sentence. The final working drawings so approved by
Landlord and Tenant (including all changes made to resolve Tenant's objections
approved by Landlord's architect and Tenant's architect or construction
consultant) are referred to herein as the "Final Interior Plans".
C. Building Permit: As soon as the Final Interior Plans have been
---------------
approved by Landlord and Tenant, Landlord shall apply for a building permit for
the Interior Improvements, and shall diligently prosecute to completion such
approval process.
D. Construction Contract: Landlord and Tenant shall cooperate to
---------------------
cause the Interior Improvements to be constructed by a general contractor who is
engaged by Landlord in accordance with whichever of the procedures set forth in
either subparagraph 4D (1) or 4D (2) hereof that is approved by Landlord and
Tenant; provided, however, that if Landlord and Tenant do not agree on which
method to use for selecting the general contractor and awarding the construction
contact within five (5) days after either party requests the other to approve
one of the two methods set forth herein, then the general contractor shall be
selected and the general construction contract awarded in accordance within the
provisions of subparagraph 4D (1) hereof.
Page Four
(1) The job of constructing the Interior Improvements shall be offered
for "competitive bid", on a fixed price basis, to three (3) general contractors
selected by Landlord and approved by Tenant. The construction contract shall be
awarded to the bidder submitting the lowest bid for the job. Landlord shall
submit to Tenant a list of general contractors acceptable to Landlord to whom
the job may be bid, and Tenant shall notify Landlord within three (3) business
clays after receipt of such list of its objection to any proposed contractor.
days failure to object within such period of time shall be deemed to be its
approval of all bidders on the list so submitted by Landlord. If the lowest bid
resulting from such competitive bidding process indicates that the Interior
Improvement Costs will exceed $70,000.00 Dollars ($10.00 per gross leasable
square foot of the Expansion Space), Landlord shall promptly notify Tenant, in
writing, to that effect, and Tenant shall have the right to propose
modifications to the Final Interior Plans within five (5) business days after
Tenant's receipt of Landlord's notice, subject to Landlord's approval of such
changes, for the purpose of reducing the Interior Improvement costs. Such
revision of the final Interior Plans shall be completed as expeditiously as
possible; provided, however, that (i) the job shall nonetheless be awarded to
the low bidder whose price shall be adjusted based upon the changes requested by
Tenant and approved by Landlord made to the Final Interior Plans; and (ii) if
Tenant should choose to exercise its right to modify the final Interior Plans
for the purpose of reducing the Interior Improvement costs, any delay resulting
from the failure by Tenant to timely exercise its right to do so shall be a
delay caused by Tenant for purposes of paragraph 7 hereof.
(2) The Interior Improvements may be constructed pursuant to a "cost
plus" construction contract awarded to a general contractor selected by Landlord
and approved by Tenant. Landlord shall submit to Tenant Landlord's
recommendation of the general contractor and the terms of the "cost plus"
construction contract for the Interior Improvements for Tenant's approval, which
shall be deemed given if objection is not made by Tenant within two (2) business
days after receipt of such proposal from Landlord. If this method of awarding
the construction contract is selected, the general construction contract shall
provide that all major subcontractors for the Interior Improvements shall be
chosen by a competitive bid process where (i) Tenant shall have the right to
approve subcontractors who bid on specific parts of the job, and (ii) Tenant
shall have the right to cause a major subcontract to rebid if Tenant does not
approve the low bid, if such low bid would cause the total Interior Improvement
Costs to exceed $70,000.00 Dollars ($10.00 per square foot of gross leasable
area within buildings that are part of the Expansion Space), and requests that
changes be made to the Final Interior Plans (subject to Landlord's approval) for
the purpose of lowering the total Interior Improvement Costs to a level that
does not exceed $70,000.00 Dollars ($10.00 per square foot of gross leasable
area within the buildings that are part of the Expansion Space). Delays caused
by any modifications to the Final Interior Plans and rebidding requested by
Tenant shall be deemed delays caused by Tenant for purposes of paragraph 7
hereof.
(3) Landlord and Tenant shall use their best efforts to approve the
general contractor and all subcontractors so that the construction contract may
be executed as soon as possible.
E. Commencement of Interior Improvements: On or before the due date
-------------------------------------
specified in the Schedule of Performance, Landlord shall commence construction
for the Interior Improvements and shall diligently prosecute such construction
to completion, using all reasonable efforts to achieve Substantial Completion of
the Interior Improvements by the due date specified in the Schedule of
performance.
5. Payment of Interior Improvement Costs: Landlord and Tenant shall have
-------------------------------------
the following obligations with respect to the payment of Interior Improvement
Costs:
Page Five
A. Landlord shall be obligated to pay an amount equal to the Tenant
Improvement Allowance as provided for in Paragraph 11 of the First Amendment To
Lease for the Payment of Interior Improvement costs. If the total of Interior
Improvement Costs exceeds the amount of Landlord's required contribution, Tenant
shall be obligated to pay the entire amount of such excess. If Tenant becomes
obligated to contribute toward paying Interior Improvement Costs pursuant to
this subparagraph 5A, then Landlord shall estimate the amount of such excess
prior to commencing construction of the Interior Improvements and Tenant shall
pay to Landlord a proportionate share of each progress payment due to the
general contractor which bears the same relationship to the total amount of the
progress payment in question as the amount Tenant is obligated to contribute to
the payment of Interior Improvement Costs bears to the total estimated Interior
Improvement Costs. Tenant shall pay Tenant's share of any progress payment to
Landlord within five (5) business days after receipt of a statement therefor
from landlord. At the time the final accounting is rendered by Landlord pursuant
to subparagraph 5C hereof, there shall be an adjustment between Landlord and
Tenant such that each shall only be required to contribute to the payment of
Interior Improvement Costs in accordance with the obligations set forth in this
subparagraph 5A, which adjustment shall be made within five (5) days after
Landlord notifies Tenant of the required adjustment. If Tenant is required to
make a payment to Landlord, Tenant shall make such payment even if Tenant elects
to audit the statement submitted by Landlord pursuant to subparagraph 5C. In
the event Tenant's audit discloses that an overpayment or underpayment was made
by Tenant, there shall be an adjustment between Landlord and Tenant as soon as
reasonably practicable such that each shall only be required to contribute to
the payment of costs in accordance with the obligations set forth in this
subparagraph 5A.
B. If Tenant fails to pay any amount when due pursuant to this
paragraph 5, then (i) Landlord may (but without the obligation to do so) advance
such funds on Tenant's behalf, and Tenant shall be obligated to reimburse
Landlord for the amount of funds so advanced on its behalf, and (ii) Tenant
shall be liable for the payment of a late charge and interest in the same manner
as if Tenant had failed to pay Base Monthly Rent when due as described in
paragraph 3.4 of the Lease. Any amounts paid to Landlord by Tenant pursuant to
this subparagraph shall be held by Landlord as Tenant's agent, for disbursal to
the general contractor in payment for work costing in excess of Landlord's
required contribution.
C. When the Interior Improvements are Substantially Completed,
Landlord shall submit to Tenant a final and detailed accounting of all Interior
Improvement Costs paid by Landlord, certified as true and correct by Landlord's
financial officers. Tenant shall have the right to audit the books, records, and
supporting documents of Landlord to the extent necessary to determine the
accuracy of such accounting during normal business hours after giving Landlord
at least two (2) days prior written notice. Tenant shall bear the cost of such
audit, unless such audit discloses that Landlord has overstated the total of
such costs by more than two percent (2%) of the actual amount of such costs, in
which event Landlord shall pay the cost of Tenant's audit. Any such audit must
be conducted, if at all, within ninety (90) days after Landlord delivers such
accounting to Tenant.
6. Changes to Approved Plans: Once the Final Interior Plans have been
-------------------------
approved by Landlord and Tenant, neither shall have the right to order extra
work or change orders with respect to the construction of the Interior
Improvements without the prior written consent of the other. All extra work or
change orders requested by either Landlord or Tenant shall be made in writing,
shall specify any added or reduced cost and/or construction time resulting
therefrom, and shall become effective and a part of the Final Interior Plans
once approved in writing by both parties. If a change order requested by Tenant
results in an increase in the cost of constructing the Interior Improvements,
Tenant shall pay the amount of such increase caused by the change order
requested by Tenant at the time the change order is approved by both Landlord
and Tenant if and to the extent such change order causes the Interior
Improvement Costs to exceed Landlord's required contribution thereto described
in subparagraph 5A. If a change order results in an increase in the amount of
construction time needed by Landlord to complete the Interior Improvements,
paragraph 7 hereof may apply.
Page Six
7. Delay in Completion Caused by Tenant: The parties hereto acknowledge
------------------------------------
that the date on which Tenant's obligation to pay the Base Monthly Rent and the
Additional Rent would otherwise commence may be delayed because of (i) Tenant's
failure to submit necessary information to Landlord when required, (ii) Tenant's
failure to promptly review and approve the plans for the Interior Improvements
in accordance with the Schedule for Performance, (iii) any act by Tenant which
interferes with or delays the completion of the plans for the Interior
Improvements or Landlord's construction work, (iv) change orders requested by
Tenant and approved by Landlord, or (v) special materials or equipment ordered
or specified by Tenant that cannot be obtained by Landlord at normal cost within
a reasonable period of time because of limited availability. It is the intent of
the parties hereto that the commencement of Tenant's obligation to pay the Base
Monthly Rent and all Additional Rent not be delayed by any of such causes or by
any other act of Tenant, and in the event it is so delayed, Tenant's obligation
to pay the base Monthly Rent and all Additional Rent shall commence as of the
date it would otherwise have commenced absent delay caused by Tenant, provided
that within a reasonable period of time after learning of the occurrence of the
cause of any such delay, Landlord notifies Tenant in writing of the fact that
such delay has occurred and the known or anticipated extent of any such delay.
8. Delivery of Possession, Punch List, and Acceptance Agreement: As soon
------------------------------------------------------------
as the Interior Improvements are Substantially Completed, Landlord and Tenant
shall together walk through the Expansion Space and inspect all Interior
Improvements so completed, using reasonable efforts to discover all uncompleted
or defective construction in the Interior Improvements. After such inspection
has been completed, each party shall sign an acceptance agreement in the form
attached to the Lease as Exhibit "D", which shall (i) include a list of all
-----------
"punch list" items which the parties agree are to be corrected by Landlord and
(ii) shall state the Commencement Date and the initial Base Monthly Rent. As
soon as such inspection has been completed and such acceptance agreement
executed, Landlord shall deliver possession of the Expansion Space to Tenant.
Landlord shall use reasonable efforts to complete and/or repair such "punch
list" items within thirty (30) days after executing the acceptance agreement.
Landlord shall have no obligation to deliver possession of the Expansion Space
to Tenant until such procedures regarding the preparation of a punch list and
the execution of the acceptance agreement have been completed. Tenant's taking
possession of any part of the Expansion Space shall be deemed to be an
acceptance by Tenant of Landlord's work of improvement in such part as complete
and in accordance with the terms of the Lease except for the punch list items
noted and latent defects that could not reasonably have been discovered by
Tenant during its inspection of the Interior Improvements prior to completion of
the acceptance agreement. Notwithstanding anything contained herein, Tenant's
obligation to pay the Base Monthly Rent and Additional Rent shall commence as
provided in the Lease, regardless of whether Tenant completes such inspection or
executes such acceptance agreement.
9. Standard of Construction and Warranty: Landlord here by warrants that
-------------------------------------
the Interior Improvements shall be constructed substantially in accordance with
the Final Interior Plans (as modified by change orders approved by Landlord and
Tenant), all Private Restrictions and all Laws, in a good and workmanlike
manner, and all materials and equipment furnished shall conform to such final
plans and shall be new and otherwise of good quality. The foregoing warranty
shall be subject to, and limited by, the following:
A. Once Landlord is notified in writing of any breach of the above-
described warranty, Landlord shall promptly commence the cure of such breach and
complete such cure with diligence at Landlord's sole cost and expense.
B. Landlord's liability pursuant to such warranty shall be limited to
the cost of correcting the defect or other matter in question. In no event shall
Landlord be liable to Tenant for any damages or liability incurred by Tenant as
a result of such defect or other matter, including without limitation damages
resulting from any loss of business by Tenant or other consequential damages.
Page Seven
C. Notwithstanding anything contained herein, Landlord shall not be
liable for any defect in design, construction, or equipment furnished which is
discovered and of which Landlord receives written notice from Tenant after the
first (1st) anniversary of the recordation of a notice of completion for the
work of improvement affected by the defect.
D. With respect to defects for which Landlord is not responsible
pursuant to subparagraph 9C, Tenant shall have the benefit of any construction
or equipment warranties existing in favor of Landlord that would assist Tenant
in correcting such defect and in discharging its obligations regarding the
repair and maintenance of the Expansion Space. Upon request by Tenant, Landlord
shall inform Tenant of all written construction and equipment warranties
existing in favor of Landlord which affect the Interior Improvements. Landlord
shall cooperate with Tenant in enforcing such warranties and in bringing any
suit that may be necessary to enforce liability with regard to any defect for
which Landlord is not responsible pursuant to this paragraph so long as Tenant
pays all costs reasonably incurred by Landlord in so acting.
E. Landlord makes no other express or implied warranty with respect
to the design, construction or operation of the Interior Improvements except as
set that forth in this paragraph.
10. Condition to Landlord's Performance: Landlord's obligations under the
-----------------------------------
Lease are subject to the satisfaction or waiver of the condition that Landlord
obtain all building permits and other governmental approvals required in order
to commence construction of the Interior Improvements by the due dates specified
in the Schedule of Performance. If such condition is not satisfied or waived
within the applicable time period, Landlord shall have the option of terminating
the Lease; provided, however, that Landlord shall have the option to extend the
time period for the satisfaction of such condition for a period of up to sixty
(60) days to enable Landlord to continue its efforts to cause such condition to
be satisfied. If any such option to extend the time for satisfaction of this
condition is exercised, (i) Landlord shall continue to use reasonable efforts to
cause the condition to be satisfied; (ii) all other time periods contained in
the Schedule of Performance which are impacted by such extension shall be
appropriately adjusted; and (iii) such extension shall not constitute a delay
caused by Tenant pursuant to paragraph 7 hereof, nor shall Landlord in any way
be penalized for exercising such option to obtain additional time to cause the
condition to be satisfied. If Landlord becomes entitled to and elects to so
terminate the Lease, the Lease shall terminate on the date notice is so given to
Tenant. Landlord shall be under an obligation of good faith to use all
reasonable efforts to cause the condition to be satisfied.
11. Tenant's Right to Install Trade Fixtures: When the construction of the
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Interior Improvements has proceeded to the point where Tenant's work of
installing its fixtures and equipment in the Premises can be commenced in
accordance with good construction practices, Landlord also shall notify Tenant
to that effect and shall permit Tenant, and its authorized representatives and
contractors, to have access to the Premises for the purpose of installing
Tenant's trade fixtures and equipment. Any such installation work by Tenant, or
its authorized representatives and contractors, shall be undertaken at their
sole risk, free from rent, and upon the following conditions:
A. If the entry into the Premises by Tenant, or its representatives
or contractors, interferes with or delays Landlord's construction work, after
twenty-four (24) hours notice of such fact to Tenant (i) Tenant shall cause the
party responsible for such interference or delay to leave the Premises, or (ii)
Tenant shall cause to be taken such steps as may be reasonably necessary in the
Prime Contractor's opinion to alleviate such interference or delay;
B. Any contractor used by Tenant in connection with such entry and
installation shall be subject to Landlord's approval, which approval shall not
be unreasonably withheld, but which may be withheld if such contractor's entry
on the Premises would interfere with Landlord's work;
Page Eight
C. If Tenant's entry or installation causes any strike or other
labor dispute which materially and adversely affects construction of the
Premises, upon Landlord's demand Tenant shall withdraw its contractors and
representatives from the Premises or take such other as Landlord shall deem
appropriate to remedy the situation; and
D. Tenant shall have such obligations tinder the Lease as are
specified in paragraph 2.5 of the Lease (e.g., indemnification and insurance).
12. Effect of Agreement: In the event of any inconsistency between this
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Improvement Agreement and the Lease, the terms of this Improvement Agreement
shall prevail.
LANDLORD: TENANT:
ORCHARD INVESTMENT COMPANY PERICOM SEMICONDUCTOR CORP.
NUMBER 510 a California Corporation
a California general partnership
By: NELO, a California general partnership By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx VP Finance
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By: New England Mutual [Print Name and Title]
Life Insurance Company
a Massachusetts corporation,
a general partner
By: Xxxxxx Real Estate Advisors, Inc.
asset manager and advisor
hereunto duly authorized
By: /s/ Xxxxxx X. Xxxxx
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Date: 2/8/96 Date: 2/6/96
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EXHIBIT C
APPROVED SPECIFICATIONS
(To be added at a later date)
