California-Fremont-47266 Benicia Street Lease - State of California Public Employees' Retirement System and Cardima Inc.
STANDARD FORM LEASE
(INDUSTRIAL MULTI-TENANT; NET)
This Lease dated April 25, 1994 (this "Lease") is entered into by and between
State of California Public Employees' Retirement System ("Landlord") and
Cardima, Inc., a California corporation ("Tenant").
ARTICLE I.
BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following terms, the application of which shall be governed by the
provisions in the remaining Articles of this Lease:
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1. Address of Landlord: c/o O'Donnell Property Services, Inc. with a copy to:
1737 North First Street, Suite 580 2201 Dupont Drive, Suite 100
San Jose, CA 95112 Irvine, CA 92715
2. Promises Address: 47266 Benicia Street
Fremont, CA 94538
3. Address of Tenant:
(a) Notices: 47266 Benicia Street Fremont. CA 94538
(b) Billing: 47266 Benicia Street Fremont, CA 94538
4. Tenant's Trade Name: N/A
5. Tenant's Contact: Gabriel B. Vegh Telephone (510) 440-7709
6. Premises Square Footage: Approximately 44,810 Square Feet
Building Square Footage: Approximately 44,810 Square Feet
Project Square Footage: Approximately 430,104 Square Feet
7. Anticipated Commencement Date: August 1, 1994
8. Term: Five (5) years and Zero (0) months
9. Initial Monthly Rent: $17,027.80/month
(subject to adjustment per Exhibit E)
10. Security Deposit: $30,022.70
11. Permitted Uses: Develop, manufacture, store, and market and distribute
medical diagnostic and therapeutic devices and related
product and conduct stated research and office activities.
12. Brokers: J.R. Parrish (Landlord); CS Madison (Tenant)
13. Landlord's Architect: N/A
14. Guarantor: N/A
15. Vehicle Parking Spaces: One hundred seventy-nine (179) unassigned
16. Additional Insureds: THE STATE OF CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
ALEX. BROWN KLEINWORT BENSON REALTY ADVISORS
CORPORATION O'DONNELL PROPERTY SERVICES, INC.
17. Tenant's Liability Insurance Limits: $2,000,000
18. Tenant's Share: See Section 7.2 and Exhibit L
Exhibits:
A Description of Premises G Rules and Regulations
B Project Site Plan H Environmental Questionnaire
C Work Letter I Landlord's Disclosures
D Commencement Date Memorandum J [INTENTIONALLY OMITTED]
E Adjustments to Monthly Rent K [INTENTIONALLY OMITTED]
F [INTENTIONALLY OMITTED] L Calculation of Tenant's Share
Riders:
Rider Number One
Rider Number Two
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ARTICLE II
DEFINITIONS
2.1. Certain Definitions. The capitalized terms set forth below, unless the
context clearly requires otherwise, shall have the following meanings in
this Lease:
"Additional Rent" means any and all sums (whether or not specifically
called "Additional Rent" in this Lease) other than Monthly Rent which
Tenant is or becomes obligated to pay to Landlord under this Lease. See
also Rent.
"Alterations" means any alterations, decorations, modifications,
additions or improvements made in, on, about, under or contiguous to the
Building or the Premises after the Commencement Date, including, but not
limited to, lighting, HVAC and electrical fixtures, pipes and conduits,
transfer, storage and disposal facilities, partitions, drapery, wall
coverings, shelves, cabinetwork, carpeting and other floor coverings,
ceiling tiles, fixtures and carpentry installations.
"Applicable Laws" means the laws, rules, regulations, ordinances,
restrictions, and practices described in Section 5.2.
"Applicable Rate" means the greater of ten percent (10%) per annum or
five percent (5%) in excess of the discount rate of the Federal Reserve
Bank of San Francisco in effect on the twenty-fifth (25/th/) day of the
calendar month immediately prior to the event giving rise to the
Applicable Rate Imposition; provided, however, the Applicable Rate shall
in no event exceed the maximum interest rate permitted to be charged by
applicable law.
"Broker" means the person or entity identified in Item 12 of the Basic
Lease Provisions.
"Building" means that certain building within which the Premises are
located.
"Casualty" is defined in Section 12.1.
"City" means the city in which the Premises are located.
"Commencement Date" means the commencement date of the term, described in
Section 3.2.
"Common Area" means all areas and facilities within the Project exclusive
of the Premises and other portions of the Project leased (or to be
leased) exclusively to other tenants. The Common Area includes, but is
not limited to, parking areas, access and perimeter roads, sidewalks,
landscaped areas and similar areas and facilities. Tenant's use of the
Common Area, and its rights and obligations with respect thereto, are
more particularly described in Article X.
"County" means the county in which the Premises are located.
"Event of Default" means the Tenant defaults described in Section 15.1.
"Guarantor" means the person(s) or entity identified in item 14 of the
Basic Lease Provisions, if any.
"HVAC" means the heating, ventilating and air conditioning system serving
the Building.
"Hazardous Materials" is defined in Section 6.1.
"Landlord's Agents" means Landlord's authorized agents, representatives,
property managers (whether as agents or independent contractors),
consultants, contractors, partners, subsidiaries, affiliates, directors,
officers and employees, including without limitation the Additional
Insureds named in Item 16 of the Basic Lease Provisions.
"Landlord's Architect" means the architect or architectural firm from
time to time designated by Landlord to perform the function of Landlord's
Architect set forth in this Lease. Landlord's Architect initially shall
be the architect or architectural firm designated in Item 13 of the Basic
Lease Provisions.
"Lease" means this instrument together with all exhibits,
amendments, addends and riders attached hereto and made a part hereof.
"Monthly Rent" means the monthly rental which Tenant is to pay to
Landlord pursuant to Section 41.1, as the same may be adjusted from time
to time as set forth in this Lease. See also Rent.
"Mortgage" means any mortgage, deed of trust, or similar lien on or
covering the Project or any part thereof.
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"Mortgagee" means any mortgagee of a mortgage, beneficiary of a deed of
trust or lender having a lien on or covering the Project or any part
thereof.
"Notice" means each and every notice, communication, request, demand,
reply or advice, or duplicate thereof, in this Lease provided or
permitted to be given, made or accepted by either party to any other
party, which shall be in writing and given in accordance with the
provisions of Section 21.6.
"Operating Expenses" means, collectively, Project Costs and Real Property
Taxes.
"Plans" means the final working drawings for the construction of the
Tenant Improvements to be prepared and approved as set forth in the Work
Letter.
"Premises" means the premises shown in Exhibit A, and all areas
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appurtenant thereto, if any, for the exclusive use of Tenant, as shown in
Exhibit A. The Premises are located within and constitute a portion of
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the Building at the address set forth in Item 2 of the Basic Lease
Provisions.
"Premises Square Footage" means the approximate floor area of the
Premises. The Premises Square footage as of the execution of this Lease
is set forth in Item 6 of the Basic Lease Provisions.
"Project" means that certain real property, and all improvements thereon,
including the Building and other buildings, if any, located within the
boundaries of such property, shown on the Project Site Plan.
"Project Costs" is defined in Section 7.3.
"Project Site Plan" means Exhibit B.
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"Real Property Taxes" is defined in Section 7.4.
"Rent" means Monthly Rent and Additional Rent, collectively.
"Rules and Regulations" means the rules and regulations attached hereto
as Exhibit G and any modifications thereto promulgated by Landlord or
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Landlord's Agents from time to time.
"Security Deposit" means the amount set forth in Item 10 of the Basic
Lease Provisions, which shall be paid to Landlord by Tenant pursuant to
Section 4.6.
"Substantial Completion" and "substantially completed" means the Tenant
Improvements, or repair of the Premises following a Casualty, have been
fully completed, except for minor details of construction, mechanical
adjustments or decoration the absence or completion of which do not
materially interfere with Tenant's use and enjoyment of the Premises and
which may reasonably be completed within thirty (30) days (items normally
referred to as "punch list" items).
"Tenant Delays" means (i) any and all delays in the construction of the
Tenant Improvements due to the fault of the Tenant, as defined and
specified in the Work Letter, and (ii) Tenant's failure to deliver to
Landlord prior to the Anticipated Commencement Date, executed copies of
policies of insurance or certificates thereof as required under Section
11.8.
"Tenant Improvements" means those certain improvements, if any, to
be constructed on the Premises as provided in Article XX and in the Work
Letter.
"Tenant's Agents" means Tenant's agents, representatives, consultants,
contractors, affiliates, subsidiaries, officers, directors, employees,
subtenants, guests and invitees.
"Tenant's Personal Property" means Tenant's trade fixtures, furniture,
equipment and other personal property located in or on the Premises.
"Term" means the term of this Lease, as provided in Section 3.2.
"Unavoidable Delay" means any delays which are beyond a party's
reasonable control, including, but not limited to, delays due to
inclement weather, strikes, acts of God, inability to obtain labor or
materials, inability to secure governmental approvals or permits,
governmental restrictions, civil commotion, fire, earthquake, explosion,
flood, hurricane, the elements, or the public enemy, action or
interference of governmental authorities or agents, war, invasion,
insurrection, rebellion, riots, lockouts or any other cause whether
similar or dissimilar to the foregoing which is beyond a party's
reasonable control; provided however, that in no event shall any of the
foregoing ever apply with respect to the payment of any monetary
obligation.
"Work Letter" means the work letter between Landlord and Tenant regarding
the construction of the Tenant Improvements, if any, in the form of
Exhibit C.
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2.2. Other Definitions. Terms defined elsewhere in this Lease, unless the
context clearly requires otherwise, shall have the meaning as there
given.
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ARTICLE III
PREMISES AND TERM
3.1 Lease of Premises. Subject to and upon the terms and conditions set
forth herein, Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord.
3.2 Term and Commencement. Unless sooner terminated as provided herein,
the Term of this Lease shall be for that period of years and months set forth in
Item 8 of the Basic Lease Provisions, as the same may be extended in accordance
with any option or options to extend the Term granted herein, and shall commence
(the "Commencement Date") on the earlier of (i) the date upon which the City has
approved the Tenant improvements in accordance with its building code, as
evidenced by its written approval thereof in accordance with the building
permits issued for the Tenant Improvements, and Landlord's Architect has
certified in writing that the Tenant Improvements are substantially completed in
accordance with the Plans, provided that Landlord shall deliver to Tenant a
certificate of occupancy (temporary or otherwise) from the City for the Premises
within five (5) business days of such date, or (ii) the date Tenant commences
occupancy of the Premises. See Rider 3.2. When the actual Commencement Date
has occurred, Landlord and Tenant shall execute a Commencement Date Memorandum
in the form shown in Exhibit D. Landlord and Tenant anticipate that the Term
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will commence on the "Anticipated Commencement Date" set forth in Item 7 of the
Basic Lease Provisions, but the Anticipated Commencement Date shall in no event
affect the actual Commencement Date, which shall be determined as set forth in
this Section 3.2.
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RIDER 3.2: TERM AND COMMENCEMENT
(a) For the purposes of Clause (ii) [formerly clause (iii)] of Section
3.2, "occupancy of the Premises" shall mean occupancy of the Premises for the
conduct of Tenant's business, other than pursuant to Rider 3.2, subparagraph (b)
below.
(b) Notwithstanding any provision of the Lease to the contrary, from
and after the date on which this Lease is mutually executed by Landlord and
Tenant, Tenant shall have the right to use and occupy the ground floor lobby and
the second floor of the Premises for the conduct of Tenant's business, together
with the non-exclusive rights to the parking and other common areas of the
Project, without charge; provided, however, Tenant shall pay for all utilities
consumed by it and further provided that all provisions of this Lease other than
those dealing with Monthly Rent and Additional Rent shall apply during the
period of such use and occupancy. Such occupancy shall not cause the
Commencement Date of the Lease to occur. Tenant shall coordinate its activities
in such portion of the Premises so as to not interfere with Landlord's
construction of the Tenant Improvement pursuant to the Work Letter.
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3.3 Early Entry. Tenant and its authorized agents, contractors,
subcontractors and employees shall be granted a license by Landlord to enter
upon the Premises, at Tenant's sole risk and expense, during ordinary business
hours prior to the Commencement Date, for the sole purpose of installing
Tenant's trade fixtures and equipment in the Premises; provided, however, that
(i) the provisions of this Lease, other than with respect to the payment of
Monthly Rent or Additional Rent (except as provided below), shall apply during
such early entry, including, but not limited to, the provisions of Article XI
relating to Tenant's indemnification of Landlord, (ii) prior to any such entry,
Tenant shall pay for and provide evidence of the insurance to be provided by
Tenant pursuant to the provisions of Article XI, (iii) Tenant shall pay all
utility, service and maintenance charges for the Premises attributable to
Tenant's early entry and use of the Premises as reasonably determined by
Landlord, (iv) Tenant shall not unreasonably interfere, delay or hinder
Landlord, its agents, contractors or subcontractors in the construction of the
Tenant Improvements in accordance with the provisions of this Lease, and (v)
Tenant shall not use the Premises for the storage of inventory or otherwise
commence the operation of business during the period of such early entry except
as provided in Rider 3.2. Upon Tenant's breach of any of the foregoing
conditions, Landlord may, in addition to exercising any of its other rights and
remedies set forth herein, revoke such license upon notice to Tenant. Early
entry by Tenant in accordance with this Section 3.3 shall not constitute
occupancy of the Premises for purposes of establishing the Commencement Date.
3.4. Delay in Possession. If for any reason Landlord cannot deliver
possession of the Premises to Tenant with the Tenant Improvements substantially
completed on or before the Anticipated Commencement Date, Landlord shall not be
subject to any liability therefor, and such failure shall not affect the
validity of this Lease or the obligations of Tenant hereunder, but in such case,
Tenant shall not be obligated to pay Monthly Rent or Additional Rent other than
as provided in Section 3.3 and Section 3.5 until the Commencement Date has
occurred. If the Commencement Date has not occurred within ninety (90) days
following the Anticipated Commencement Date plus periods attributable to Tenant
Delays or Unavoidable Delay or one hundred fifty (150) days after the
anticipated Commencement Date plus periods attributable to Tenant Delays (but
without regard to Unavoidable Delays), Tenant may, at its option, by Notice to
Landlord within ten (10) days thereafter, terminate this Lease, in which event
the parties shall be discharged from all further obligations hereunder;
provided, however, if Tenant fails to give such notice to Landlord within such
ten-day period, Tenant shall no longer have the right to terminate this Lease
under this Section 3.4. Tenant understands that, notwithstanding anything to
the contrary contained herein, Landlord shall have no obligation to deliver
possession the Premises to Tenant for so long as Tenant fails to deliver to
Landlord executed copies of policies of insurance or certificates thereof as
required under Section 11.8.
3.5 Tenant Delays. The Commencement Date shall not be delayed or
postponed due to Tenant Delays, and the Term, Tenant's obligations to pay Rent
and all of Tenant's other obligations under this Lease shall commence upon the
date which would have been the Commencement Date but for Tenant Delays.
3.6 Condition of Premises. Landlord's sole construction obligations, if
any, regarding Tenant improvements for the Premises are set forth in Article XX
and the Work Letter and Rider 3.6. The taking of possession or use of the
Premises by Tenant for any purpose other than as provided in Section 3.3 or
Rider 3.2 shall conclusively establish that Tenant has inspected the Premises
and accepts them as being in good and sanitary order, condition and repair and
that the Tenant Improvements have been constructed in accordance with the Plans;
provided, however, Tenant shall have a period of thirty (30) days after taking
possession of the Premises (other than as provided in Section 3.3 or Rider 3.2)
in which to notify Landlord in writing of any construction deficiencies or
defects and any uncompleted punch list items (the punch list shall be limited to
items required to be accomplished by Landlord under the Work Letter) and, except
as hereafter provided, Landlord will repair, replace or complete at its expense
all items referenced in such notice within thirty (30) days after receipt of
such notice, subject to Unavoidable Delay, or as soon thereafter as Landlord,
acting in good faith and with diligence, can repair, replace or complete the
same. If Landlord reasonably contends that a particular item in such notice is
not justified, the parties will refer the issue to Landlord's Architect for
resolution. Landlord's Architect's determination shall be final and binding
upon the parties. Nothing in this Section 3.6 shall limit or expand Landlord's
maintenance and repair obligations set forth in Article IX. See Rider 3.6.
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RIDER 3.6 CONDITION OF PREMISES:
On the Commencement Date, Landlord shall deliver the Premises to
Tenant clean and free of debris, with all utility systems, HVAC, loading docks,
exterior doors and locks, and fixtures in good operating order, condition and
repair. Landlord warrants that the utility systems and fixtures shall remain in
good operating condition and repair for a period of 120 days following the
Commencement Date and that the roof shall be in good condition and repair and
watertight for a period of 270 days following the Commencement Date. If the
foregoing warranty is violated, then Landlord, upon written notice from Tenant,
shall promptly rectify the violation at Landlord's sole cost and expense.
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3.7 No Representations. Tenant acknowledges that neither Landlord nor any
of Landlord's Agents has made any representations or warranties as to the
suitability or fitness of the Premises for the conduct of Tenant's business,
including, but not limited to, any representations or warranties regarding
zoning or other land use matters, or for any other purpose, and that neither
Landlord nor any of Landlord's Agents has agreed to undertake any alterations or
additions or construct any Tenant Improvements to the Premises except as
expressly provided in this Lease.
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ARTICLE IV
RENT AND ADJUSTMENTS
4.1 Monthly Rent. From and after the Commencement Date, Tenant shall pay
to the Landlord, for each calendar month of the Term, the Monthly Rent set forth
in Item 9 of the Basic Lease Provisions, as the same may be adjusted from time
to time as provided in Section 4.2. Monthly Rent shall be due and payable to
Landlord in lawful money of the United States, in advance, on the first (1st)
day of each calendar month of the Term, without abatement, deduction, claim or
offset, and without prior notice, invoice or demand, at Landlord's address set
forth in Item 1 of the Basic Lease Provisions or at such place as Landlord may
from time to time designate. Tenant's payment of Monthly Rent for the first
(1st) month of the Term shall be delivered to Landlord concurrently with
Tenant's execution of this Lease.
4.2 Adjustments. Monthly Rent shall be adjusted from time to time as
provided in Exhibit E.
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4.3 Additional Rent. All Additional Rent shall be due and payable to
Landlord in lawful money of the United States, at Landlord's address set forth
in Item 1 of the Basic Lease Provisions or at such other place as Landlord may
from time to time designate, without abatement, deduction, claim or offset,
within ten (10) days of receipt of Landlord's invoice or statement for same, or
if this Lease provides another time for the payment of certain items of
Additional Rent, then at such other time.
4.4 Prorations. If the Commencement Date is not the first (1st) day of a
month, or if the expiration of the Term of this Lease is not the last day of a
month, a prorated installment of Monthly Rent based on a thirty (30) day month
shall be paid for the fractional month during which the Term commences or
terminates. All items of Additional Rent shall likewise be prorated for any
fractional period at the beginning or expiration of the Term.
4.5 Late Payment Charges. Tenant acknowledges that late payment by Tenant
to Landlord of Rent under this Lease will caused Landlord to incur costs not
contemplated by this Lease, the exact amount of which is extremely difficult or
impracticable to determine. Such costs include, but are not limited to,
processing and accounting charges, late charges that may be imposed on Landlord
by the terms of any Mortgage, and late charges and penalties that may be imposed
due to late payment of Real Property Taxes. Therefor, if any installment of
Monthly Rent or any payment of Additional Rent due from Tenant is not received
by landlord in good funds by the fifth (5th) calendar day from the applicable
due date, Tenant shall pay to Landlord an additional sum equal to five percent
(5%) of the amount overdue as a late charge for every month or portion thereof
that such amount remains unpaid. The parties acknowledge that this late charge
represents a fair and reasonable estimate of the costs that Landlord will incur
by reason of the late payment by Tenant. Acceptance of late Rent and late
charge therefor shall not prevent Landlord from exercising any of the other
rights and remedies available to Landlord for any other event of default under
this Lease.
4.6 Security Deposit. Tenant has deposited with Landlord the sum set
forth in Item 10 of the Basic Lease Provisions as a Security Deposit for the
full and faithful performance of every provision of this Lease to be performed
by Tenant. Upon an Event of Default, and whether or not Landlord is informed of
or has knowledge of the Event of Default, the Security Deposit (if not already
applied as hereinabove provided) shall be deemed to be automatically applied,
without waiver of any rights Landlord may have under this Lease or at law or in
equity as a result of an Event of Default, to the payment of any Rent not paid
when due, the repair of damage to the Premises caused by Tenant or for which
Tenant is responsible under the terms of this Lease or the payment of any other
amount which Landlord may spend or become obligated to spend by reason of an
Event of Default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of an Event of Default, to the full extent
permitted by law. If any portion of the Security Deposit is so applied, Tenant
shall, within ten (10) days after written demand therefor, deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep the Security Deposit separate
from its general funds. The unused portion of the Security Deposit, if any,
shall be returned to Tenant within thirty (30) days of the expiration of this
Lease or any termination of this Lease not resulting from an Event of Default,
so long as Tenant has vacated the Premises in the manner required by this Lease
and paid all sums required to be paid under this
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Lease, provided however that Landlord may retain a portion of the Security
Deposit equal to the reasonably estimated amount of unpaid Additional Rent that
is Payable by Tenant for periods prior to the expiration of the Term until such
time as any amounts of Additional Rent due from Tenant have been determined and
paid in full but not longer than 90 days after expiration of the Term. Tenant
hereby waives the provisions of Section 1950.7(c) of the California Civil Code
and any present or future laws otherwise governing the return of the Security
Deposit to Tenant to the extent of reasonably anticipated Additional Rent
retained by Landlord pursuant to the previous sentence.
ARTICLE V
USE
5.1 Tenant's Use. Tenant shall use the Premises solely for the purposes
set forth in item 11 of the Basic Lease Provisions and shall use the Premises
for no other purpose. Tenant's use of the Premises shall be subject to all of
the terms and conditions of this Lease, including, but not limited to, all the
provisions of this Article V. Tenant, at Tenant's sole cost and expense, shall
procure, maintain and make available for Landlord's inspection throughout the
Term, all governmental approvals, licenses and permits required for the proper
and lawful conduct of Tenant's permitted use of the Premises. At Landlord's
request, Tenant shall deliver copies of all such approvals, licenses and permits
to Landlord.
5.2 Compliance With Applicable Laws. Throughout the Term, Tenant, at
Tenant's sole cost and expense, shall comply with, and shall not use the
Premises, Building or Common Area, or suffer or permit anything to be done in or
about the same which will in any way conflict with, (i) any and all present and
future laws, statutes, zoning restrictions, ordinances, orders, regulations,
directions, rules and requirements of all governmental authorities having
jurisdiction over all or any part of the Premises (including, but not limited
to, state, municipal, county and federal governments and their departments,
bureaus, boards and officials) pertaining to the use or occupancy of, or
applicable to, the Premises or privileges appurtenant to or in connection with
the enjoyment of the Premises, (ii) any and all applicable federal, state and
local laws, regulations or ordinances pertaining to air and water quality,
Hazardous Materials (as defined in Section 6.1), waste disposal, air emissions
and other environmental or health and safety matters, zoning, land use and
utility availability, which impose any duty upon Tenant directly or with respect
to the use or occupation of the Premises or any portion thereof, (iii) the
requirements of the Board of Fire Underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises or any portion thereof, (iv) any covenants, conditions,
easements or restrictions, including but not limited to the Restrictions, now
affecting or encumbering the project or any portion thereof, regardless of when
they become effective, (v) the Rules and Regulations, and (vi) good business
practices (collectively, (i) through (vi) above are hereinafter referred to as
"Applicable Laws"). Tenant shall not commit any waste of the Premises, Building
or Project, or any public or private nuisance or any other act or thing which
might or would disturb the quiet enjoyment of any other tenant of Landlord or
any occupant of nearby property. Tenant shall not place or permit to be placed
any loads upon the floors, walls or ceilings in excess of the maximum designed
load specified by Landlord or which might damage the Premises or the Building,
or place or permit to be placed any harmful liquids in the drainage systems, and
Tenant shall not dump or store, or permit to be dumped or stored, any inventory,
waste materials, refuse or other materials or allow any such materials to remain
outside the Building proper, except in designated enclosed trash areas. Tenant
shall not conduct or permit any auctions, sheriff's sales or other like
activities at the Project or any portion thereof. See Rider 5.2.
5.3 Restrictions. Tenant agrees that it will subordinate this Lease to
any other covenants, conditions and restrictions and any reciprocal easement
agreements or any similar agreements which Landlord may hereafter record against
the Premises and to any amendment or modification to any of the existing
Restrictions, provided that such subordination does not unreasonably interfere
with Tenant's use and enjoyment of the Premises. See Rider 5.3.
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RIDER 4.6 SECURITY DEPOSIT:
Pursuant to Section 21.20, certain obligations of Tenant under this
Lease are guaranteed by Guarantor. As provided in the Lease Guaranty Agreement
attached as Lease Rider Number Three and subject to the terms hereof, the
obligations of Guarantor shall terminate, for among other reasons, upon the
delivery to Landlord of a certificate certifying that Tenant has received
additional equity capital in the amount of not less than $6,750,000 and a
standby letter of credit, as further described in the Lease Guaranty Agreement.
Such standby letter of credit if and when delivered to Landlord, shall
constitute an additional security deposit under this Lease, subject to the
provisions of this Section 4.6.
RIDER 5.2 COMPLIANCE WITH LAW:
Landlord represents and warrants to Tenant that, to Landlord's
knowledge, the Premises complies with all Applicable Laws existing as of the
Commencement Date. Landlord further represents and warrants that Landlord has
received no notice from any governmental authority claiming that the Project (or
any portion thereof) fails to comply with any Applicable Law, commencing an
investigation to determine if the Project (or any portion thereof) may violate
any Applicable Law, or otherwise requiring any work to be done on or about the
Project. If any of the foregoing warranties is violated or if any structural
alteration or improvement is required by any governmental authority to be made
to the Premises in order to bring it into compliance with any Applicable Law now
in effect, then Landlord shall, at its sole cost, promptly upon notice from
Tenant, rectify such violation or effect such structural alteration or
improvement to the extent required by applicable governmental authorities.
Notwithstanding any provision of this Lease to the contrary, Tenant shall not
(a) be obligated to effect, or to reimburse Landlord for, any alteration
required by Applicable Law to be made to the Premises, unless and to the extent
such alteration is required solely because of the particular use of the Premises
being made by Tenant (as opposed to use of the Premises by tenants in general);
or (b) be liable, under any circumstance, for violations or alleged violations
of law which were otherwise not caused by Tenant or Tenant's Agents.
RIDER 5.3 RESTRICTIONS:
And provided, further, that such documents shall provide that no
violation of any restriction, and no foreclosure or other action thereunder
shall terminate Tenant's rights under the Lease. Notwithstanding the foregoing,
Tenant shall have no obligation to comply with or observe any modification to or
amendment of any Restrictions existing at the date of this Lease or any new
Restrictions that may be imposed after the date of this Lease to the extent such
modification, amendment or new Restrictions impose any financial obligation on
Tenant, unreasonably increase Tenant's duties or obligations thereunder or
unreasonably interfere with Tenant's use and enjoyment of the Premises and
Common Areas.
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5.4 Landlord's Right of Entry. Landlord and Landlord's Agents shall have
the right to enter the Premises at all reasonable times during Tenant's business
hours upon reasonable notice to Tenant (24 or more hours being deemed
reasonable), except for emergencies in which case no notice shall be required,
to inspect the Premises, to take samples and conduct environmental
investigations, to post notices of nonresponsibility and similar notices and
signs indicating the availability of the Premises for sale, to show the Premises
to interested parties such as prospective lenders and purchasers, to make
necessary Alternations or maintenance and repairs, to perform Tenant's
obligations as permitted herein when Tenant has failed to do so and, at any
reasonable time after one hundred eighty (180) days prior to the expiration of
the Term, to place upon the Premises reasonable signs indicating the
availability of the Premises for lease and to show the Premises to prospective
tenants, all without being deemed to have caused an eviction of Tenant and
without any liability to Tenant or abatement of Rent. The above rights are
subject to reasonable security regulations of Tenant (including, without
limitation, those pertaining to Tenant's trade secrets and clean-room
operations) and in exercising its rights set forth herein. Landlord shall
endeavor to cause the least possible interference with Tenant's business.
Landlord shall at all times have the right to retain a key which unlocks all of
the doors in the Premises, excluding Tenant's vaults and safes, and Landlord and
Landlord's Agents shall have the right to use any and all means which Landlord
may deem proper to open the doors Landlord's Agents shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises. Except during the
last six (6) months of the Term, Tenant may rightfully refuse access to the
Premises to any person known or suspected by Tenant to be a competitor of
Tenant.
ARTICLE VI
HAZARDOUS MATERIALS
6.1 Definition of Hazardous Materials. For purposes of this Lease, the
term "Hazardous Materials" includes (i) any "hazardous materials" as defined in
Section 25501(k) of the California Health and Safety Code unless Tenant
establishes, to the satisfaction of Landlord, that because of the quantity,
concentration, or physical or chemical characteristics, such substance or matter
does not pose a present or potential hazard to human health and safety or to the
environment, (ii) any other substance or matter which results in liability to
any person or entity from exposure to such substance or matter under any
statutory or common law theory, and (iii) any substance or matter which is in
excess of relevant and appropriate levels set forth in any applicable federal,
state or local law or regulation pertaining to any hazardous or toxic substance,
material or waste, or for which any applicable federal, state or local agency
orders or otherwise requires removal, treatment or remediation.
6.2 Use of Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, stored, used, generated, released into
the environment or disposed of on, under, from or about the Premises (which for
purposes of this Article VI shall include, but is not limited to, subsurface
soil and ground water), by Tenant or Tenant's Agents without the prior written
consent of Landlord. Landlord may, in its reasonable discretion, place such
conditions as Landlord deems appropriate with respect to such Hazardous
Materials, and may further require that Tenant demonstrates to Landlord that
such Hazardous Materials are necessary or useful to Tenant's business and will
be generated, stored, used and disposed of in a manner that complies with all
Applicable Laws regulating such Hazardous Materials and with good business
practices. Tenant understands that Landlord may utilize an environmental
consultant to assist in determining conditions of approval and monitoring in
connection with the presence, storage, generation or use of Hazardous Materials
on or about the Premises by Tenant, and Tenant agrees that any costs reasonably
incurred by landlord in connection with any such environmental consultant's
services shall be reimbursed by Tenant to Landlord as Additional Rent upon
demand. See Rider 6.2.
6.3 Environmental Questionnaire; Disclosure. Prior to the execution of
this Lease, Tenant shall complete, execute and deliver to Landlord an
Environmental Questionnaire and Disclosure Statement (the "Environmental
Questionnaire") in the form of Exhibit H, and Tenant shall certify to Landlord
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all information contained in the Environmental Questionnaire as true and correct
to the best of Tenant's knowledge and belief. The
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completed Environmental Questionnaire shall be deemed incorporated into this
Lease for all purposes, and Landlord shall be entitled to rely fully on the
information contained therein. On each anniversary of the Commencement Date
(each such date is hereinafter referred to as a "Disclosure Date"), until and
including the first Disclosure Date occurring after the expiration or sooner
termination of this Lease, Tenant shall disclose to Landlord in writing the
names and amounts of all Hazardous Materials, or any combination thereof, which
were stored, generated, used or disposed of on, under or about the Premises for
the twelve-month period prior to each Disclosure Date, and which Tenant intends
to store, generate, use or dispose of on, under or about the Premises through
the next Disclosure Date. At Landlord's option, Tenant's disclosure obligations
under this Section 6.3 shall include a requirement that Tenant update, execute
and deliver to Landlord the Environmental Questionnaire, as the same may be
modified by Landlord from time to time. In addition to the foregoing, Tenant
shall promptly notify Landlord of, and shall promptly provide Landlord with
true, correct, complete and legible copies of, all of the following
environmental items relating to Hazardous Materials used by Tenant or the
Premises: reports filed pursuant to any self-reporting requirements; reports
filed pursuant to any Applicable Laws or this Lease; all permit applications,
permits, monitoring reports, workplace exposure and community exposure warnings
or notices, and all other reports, disclosures, plans or documents (even those
which may be characterized as confidential but excluding document for which a
legal evidentiary disclosure privilege applies provided that Tenant complies
with California Health and Safety Code Section 25359.7) relating to water
discharges, air pollution, waste generation or disposal, underground storage
tanks or Hazardous Materials; all orders, reports, notices, listings and
correspondence (even those which may be considered confidential but excluding
document for which a legal evidentiary disclosure privilege applies provided
that Tenant complies with California Health and Safety Code Section 25359.7) of
or concerning the release, investigation, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required
by Applicable Laws; and all complaints, pleadings and other legal documents
filed against Tenant related to Tenant's use, handling, storage or disposal of
Hazardous Materials.
6.4 Inspection; Compliance. Landlord and Landlord's Agents shall have the
right, but not the obligation, to inspect, investigate, sample and/or monitor
the Premises, including any air, soil, water, groundwater or other sampling, and
any other testing, digging, drilling or analyses, at any time to determine
whether Tenant is complying with the terms of this Article VI, and in connection
therewith, Tenant shall provide Landlord with full access to all relevant
facilities, records and personnel, subject to Section 5.4 and excluding
documents to which a legal evidentiary privilege applies provided that Tenant
complies with California Health and Safety Code Section 25359.7. If Tenant is
not in compliance with any of the provisions of this Article VI, or in the event
of a release of any Hazardous Material on, under, from or about the Premises,
Landlord and Landlord's Agents shall have the right, but not the obligation,
without limitation on any of Landlord's other rights and remedies under this
Lease, to immediately enter upon the Premises and (if such release was caused by
Tenant or Tenant's Agents) to discharge Tenant's obligations under this Article
VI at Tenant's expense, including without limitation the taking of emergency or
long-term remedial action. Landlord and Landlord's Agents shall endeavor to
minimize interference with Tenant's business but shall not be liable for any
such interference. In addition, Landlord, at Tenant's sole costs and expense,
shall have the right, but not the obligation, to join and participate in any
legal proceedings or actions initiated in connection with any claims or causes
of action under, from or about the Premises. All sums reasonably disbursed,
deposited or incurred by Landlord in connection herewith, including, but not
limited to, all costs, expenses and actual attorneys fees, shall, to the extent
incurred as the result of the use, storage, disposal or release by Tenant, be
due and payable by Tenant to Landlord, as an item of Additional Rent, on demand
by Landlord, together with interest thereon at the Applicable Rate from the date
of such demand until paid by Tenant.
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RIDER 6.2 USE OF HAZARDOUS MATERIALS:
Notwithstanding the foregoing, Tenant may, without Landlord's prior
consent, but in compliance with all Applicable Laws, use any ordinary and
customary materials reasonably required to be used by Tenant in the normal
course of Tenant's business permitted on the Premises, so long as such use does
not expose the Premises or neighboring properties to any meaningful risk of
contamination or damage or expose Landlord to any liability therefor. Landlord
acknowledges and agrees that, unless Landlord has a reasonable belief that there
has been (i) a violation of Applicable Laws in connection with the presence,
storage, generation or use of Hazardous Materials on or about the Premises, or
(ii) a spill or release of Hazardous Materials on or about the Premises by
Tenant since Landlord's most recent environmental consultant's inspection of the
Premises, Tenant shall not be required to reimburse Landlord more than once
annually for Landlord's costs incurred in monitoring or inspecting the Premises.
Tenant shall not be required to expend more than $5,000 for each of Landlord's
annual inspections (which inspections shall be reasonable in scope taking into
consideration the use by Tenant of the Premises and the degree of risk that such
use has resulted in contamination thereof), except that Tenant may be required
to expend up to $10,000 for such annual inspection upon the expiration of the
Lease (the foregoing limitations shall not apply with respect to inspections
performed because of clause (i) or (ii) of the preceding sentence). Without
diminishing Tenant's obligations under Section 6.7 hereof, provided that Tenant
shall have obtained Landlord's prior written approval of any investigation to be
performed by Tenant pursuant to Section 6.7, Landlord shall not thereafter seek
reimbursement from Tenant for Landlord's annual inspection in the final year of
the Term as contemplated in the preceding sentence.
6.5 Tenant Obligation. If the presence of any Hazardous Materials on,
under or about the Premises or the Project caused by Tenant or Tenant's Agents
results in (i) injury to any person, (ii) injury to or contamination of the
Premises for the Project, or (iii) injury to or contamination of any real or
personal property wherever situated, Tenant, at its sole cost and expense, shall
promptly take all actions necessary to return the Premises and the Project to
the condition existing prior to the introduction of such Hazardous Materials to
the Premises and Project and to remedy or repair any such injury or
contamination. See Rider 6.5. Without limiting any other rights or remedies of
Landlord under this Lease. Tenant shall pay the cost of any cleanup work
performed on, under or about the Premises, the Building and the Project as
required by this Lease or any Applicable Laws in connection with the removal,
disposal, neutralization or other treatment of such Hazardous Materials caused
by Tenant or Tenant's Agents. If Landlord has reason to believe that Tenant or
Tenant's Agents may have caused the release of a Hazardous Material on, under,
from or about the Premises, then Landlord may require Tenant, at Tenant's sole
cost and expense, to conduct monitoring activities on or about the Premises
satisfactory to Landlord. In its sole and absolute judgment, concerning such
release of Hazardous Materials on, under, from or about the Premises.
Notwithstanding anything in the foregoing, Tenant shall not, without Landlord's
prior written consent, take any remedial action in response to the presence of
any Hazardous Materials on, under or about the Premises, or enter into any
settlement agreement, consent decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided, however,
Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises (i) poses an
immediate threat to the health, safety or welfare of any individual or (ii) is
of such nature that an immediate remedial response is necessary and it is not
possible to obtain Landlord's consent before taking such action.
6.6 Indemnification. To the fullest extent permitted by law, Tenant
hereby agrees to indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and Landlord's Agents, and any successors to
all or any portion of Landlord's interest in the Premises, the Building and the
Project and their directors, officers, partners, employees, authorized agents,
affiliates, representatives and Mortgagees, from and against any and all
liabilities, losses, damages (including, but not limited to, damages for the
loss or restriction on use of rentable or usable space or any amenity of the
premises, the Building and the Project or damages arising from any adverse
impact on marketing of space in the Premises, the Building and the Project
during any required repair, restoration or clean-up of the Premises),
diminution in the value of the Premises, the Building and the Project,
judgments, fines, demands, claims, recoveries, deficiencies, costs and
expenses (including, but not limited to,
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reasonable attorneys' fees, disbursements and court costs and all other
professional or consultant's expenses), whether foreseeable or unforeseeable,
arising directly or indirectly out of the presence, use, generation, storage,
treatment, on or off-site disposal or transportation of Hazardous Materials
on, in or, from, under or about the Premises, the Building and the Project by
Tenant or Tenant's Agents, and specifically including the cost of any required
or necessary repair, restoration, clean-up (including, but not limited to, the
costs of investigation and removal of Hazardous Materials) or detoxification
of the Premises, the Building and the Project and the preparation of any
closure or other detoxification of the Premises, the Building and the Project
and the preparation of any closure or other required plans, whether or not
such action is required or necessary during the Term or after the expiration
of this Lease.
6.7 Tenant's Responsibility at Conclusion of Lease. Promptly upon the
expiration or sooner termination of this Lease, Tenant shall represent to
Landlord in writing that (i) Tenant has made a diligent effort to determine
whether any Hazardous Materials are on, under or about the Premises as a result
of any acts or omissions of Tenant or Tenant's Agents and (ii) to Tenant's
knowledge no such Hazardous Materials exist on, under or about the Premises
other than as specifically identified to Landlord by Tenant in writing. If
Tenant discloses the existence of Hazardous Materials on, under or about the
Premises caused by Tenant or Tenant's Agents, or if Landlord at any time
discovers that Tenant or Tenant's Agents caused the release of a Hazardous
Material on, under, from or about the Premises, Tenant shall, at Landlord's
request, immediately prepare and submit to Landlord within thirty (30) days
after such request a comprehensive plan, subject to Landlord's approval,
specifying the actions to be taken by Tenant to return the Premises to the
condition existing prior to the introduction of such Hazardous Materials. Upon
Landlord's approval of such clean up plan, Tenant shall, at Tenant's sole cost
and expense, without limitation on any rights and remedies of Landlord under
this Lease or at law or in equity, immediately implement such plan and proceed
to clean up such Hazardous Materials in accordance with all Applicable Laws and
as required by such plan and this Lease. See Rider 6.7.
6.8 Landlord's Disclosures. Landlord hereby discloses to Tenant, and
Tenant hereby acknowledges, certain facts relating to Hazardous Materials at the
Project known by Landlord to exist as of the date of this Lease, as more
particularly described in Exhibit I attached hereto. Tenant shall have no
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liability or responsibility with respect to the Hazardous Materials facts
described in Exhibit I. See Rider 6.8.
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RIDER 6.5 TENANT OBLIGATIONS:
If restoration of the Premises or Project to such pre-existing
condition is not possible or reasonably practicable, then Tenant shall
nevertheless take such actions to reduce the level and extent of contamination
to the extent that the governmental regulatory authorities having jurisdiction
thereover shall acknowledge in writing that tenant has complied with the
requirements of Applicable Law.
RIDER 6.7 TENANT'S RESPONSIBILITY AT CONCLUSION OF LEASE
If restoration of the Premises or Project to such pre-existing
condition is not possible or reasonably practicable, then Tenant shall
nevertheless take such actions to reduce the level and extent of contamination
to the extent that the governmental regulatory authorities having jurisdiction
thereover shall acknowledge in writing that Tenant has complied with the
requirements of Applicable Law.
RIDER 6.8 HAZARDOUS MATERIALS:
(a) Landlord represents and warrants to Tenant as follows:
(i) To the best of Landlord's knowledge, except as disclosed in
Exhibit I and without undertaking any investigation other than that which was
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performed in connection with Landlord's purchase of the Project, no Hazardous
Materials are located in, on, under or about the Premises or Project.
(ii) Landlord has received no notice of (A) any violation or
alleged violation of any Applicable Law pertaining to Hazardous Materials with
respect to the Project; or (B) any pending claims or investigations relating to
the presence of any Hazardous Materials in, on, under or about the Project.
(b) Except for matters that constitute Tenant's obligations under
Article VI of the Lease, Landlord shall, at its sole expense, take all actions
required by applicable governmental authorities to investigate and remediate any
Hazardous Materials which are found or suspect to exist in, on, under or about
the Project. Landlord hereby agrees to indemnify, hold harmless, protect and
defend Tenant (with attorneys acceptable to Tenant), from and against any
remediation costs or expenses imposed upon or incurred by Tenant in connection
with any investigation or remediation of Hazardous Materials present in, on or
under the Premises caused by Landlord or by a party or parties not party to this
Lease, which is required by a governmental agency with jurisdiction, provided
that such indemnification shall be limited to costs imposed upon or incurred by
Tenant to remediate the Premises, including, without limitation, actual
attorneys and consultants fees and costs, and it is not intended to and shall
not include losses, liabilities or expenses of any other type whatsoever,
including, without limitation, losses, liabilities or expenses due to business
interruption, economic or personal injury claims or otherwise.
(c) Except with respect to Hazardous Materials for which Tenant is
responsible pursuant to Article VI of the Lease, in no event shall Tenant be
required to pay (and Landlord shall not seek reimbursement from Tenant as an
item of Project Costs or otherwise) any costs or expenditure incurred in
connection with (i) any testing, investigation, monitoring, analysis or
remediation of any Hazardous Materials; (ii) any violation or alleged violation
of, or the defense of any claim arising under, any Applicable Law pertaining to
Hazardous Materials; (iii) any consequential damages suffered as a result of any
Hazardous Material contamination; or (iv) Landlord's compliance with its
obligations under subsection (b) above.
ARTICLE VII
OPERATING EXPENSES; TAXES; UTILITIES
7.1 Tenant to Bear Tenant's Share of Operating Expenses. Tenant shall pay
to Landlord Tenant's Share (as defined in Section 7.2) of Operating Expenses as
follows: Prior to the Commencement Date and thereafter prior to the
commencement of each of Landlord's fiscal years during the Term, Landlord shall
give Tenant a written estimate of Tenant's Share of Operating Expenses for the
ensuing fiscal year or partial fiscal year, as the case may be. Tenant shall
pay, as an item of Additional Rent, such estimated amount in equal monthly
installments, in advance, on or before the first (1st) day of each calendar
month concurrent with its payment of Monthly Rent. If Landlord has not
furnished its written estimate by the time set forth above, Tenant shall pay
monthly installments of Operating Expenses at the rate established for the prior
fiscal year, if any; provided that
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when the new estimate is delivered to Tenant, Tenant shall at the next monthly
payment date pay Landlord any accrued deficiency based on the new estimate, or
Landlord shall credit any accrued overpayment after the end of each fiscal year
(in no event less than one hundred (120) days after the end of each fiscal year
unless sooner completed by Landlord) Landlord shall furnish Tenant a statement
showing in reasonable detail Tenant's Share of the actual Operating Expenses
incurred for the period in question. If Tenant's estimated payments are less
than Tenant's Share of actual Operating Expenses incurred for the period in
question. If Tenant's estimated payments are less than Tenant's Share of actual
Operating Expenses as shown by the applicable statement, Tenant shall pay the
difference to Landlord within thirty (30) days thereafter. If Tenant shall have
overpaid Landlord, Landlord shall credit such overpayment toward Tenant's next
installment payment hereunder. When the final determination is made of Tenant's
Share of the actual Operating Expenses for the fiscal year in which this Lease
terminates, Tenant shall, even if this Lease has terminated, pay to Landlord
within fifteen (15) days after notice the excess of Tenant's Share of such
actual Operating Expenses over the estimate of Tenant's Share of Operating
Expenses paid. Conversely, any overpayment shall be rebated by landlord to
Tenant within fifteen (15) days. If Landlord shall determine at any time that
the estimate of Tenant's Share of Operating Expenses for the current fiscal year
is or will become inadequate to meet Tenant's Share of all such Operating
Expenses for any reason, Landlord shall immediately determine the approximate
amount of such inadequacy and issue a supplemental estimate as to Tenant's Share
of such Operating Expenses and Tenant shall pay any increase as reflected by
such supplemental estimate. Landlord shall keep or cause to be kept separate and
complete books of accounting covering all Operating Expenses and showing the
method of calculating Tenant's Share of Operating Expenses, and shall preserve
for at least twelve (12) months after the close of each fiscal year all material
documents evidencing said Operating Expenses for that fiscal year. Tenant, at
its sole cost and expense, through its officers or any public accountant
designated by it, shall have the right, during reasonable business hours and not
more frequently than once during any fiscal year, to examine and/or audit the
books and documents mentioned above evidencing such costs and expenses for the
previous fiscal year. Any delay or failure by Landlord in delivering any
estimate or statement pursuant to this Section 7.1 shall not constitute a waiver
of its right to require Tenant to pay Tenant's Share of Operating Expenses
pursuant hereto. See Rider 7.1.
7.2 Definition of Tenant's Share. The term "Tenant's Share" means that
portion of an Operating Expense determined by multiplying the cost of such item
by a fraction, the numerator of which is the Premises Square Footage and the
denominator of which is the total square footage of the floor area, as of the
date on which the computation is made, to be charged with such Operating
Expense. A determination of Tenant's Share for various Operating Expenses is
set forth in Exhibit I attached to and made a part of this Lease.
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7.3 Definition of Project Costs. The term "Project Costs" means all costs
and expenses incurred by Landlord or Landlord's Agents in connection with the
operation of the Project, including, but not limited to the following: repair
and maintenance of the roof, foundation and exterior walls of the buildings in
the Project, periodic painting of the buildings in the Project, periodic
cleaning of the exterior windows of the buildings in the Project, landscaping
services, outside pest control, normal maintenance and repair of the HVAC,
unless Landlord elects to maintain the same pursuant to Section 9.2), sweeping,
maintenance services, repairs to and replacement of asphalt paving, bumpers,
striping, light bulbs, light standards, monument and directional signs and
lighting systems, perimeter walls, retaining walls, sidewalks, planters,
landscaping and sprinkler system in planting area, any and all assessments
levied against the Project pursuant to the Restrictions, water, electrical and
other utility services not supplied directly to a tenant, removal of trash,
rubbish and other refuse from the Project, cleaning of and replacement of signs
of the Project, including relamping and repairs made as required; repair,
operation and maintenance of the Common Area, including, but not limited to,
removal of any obstructions not reasonably required for the Common Area uses,
prohibition and removal of the sale or display of merchandise or the storing of
materials and/or equipment in the Common Area, and payment of all electrical,
water and other utility charges or fees for services furnished to the Common
Area; obtaining and maintaining public liability, property damage and other
forms of insurance which Landlord may or is required to maintain in connection
with the Project (including the payment of any deductibles thereunder); costs
incurred in connection with compliance of any laws or changes in
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laws applicable to the Project, including without limitation any laws or changes
in laws regarding Hazardous Materials; employment of such personnel as Landlord
may deem reasonably necessary, if any, to direct parking and police the Common
Area and facilities; the cost of any capital improvements (other than tenant
improvements for specific tenants) made by or on behalf of Landlord to the
Project or Common Area to the extent of the amortized amount thereof over the
useful life of such capital improvements calculated at a market cost of funds,
all as reasonably determined by Landlord, for each such year of useful life
during the Term; depreciation of machinery and equipment used in connection with
the maintenance and operation of the Common Area for which a reasonable reserve
has not been established as herein provided; employment of personnel used in
connection with any of the foregoing, including, but not limited to, cost of
bookkeeping, accounting and auditing and legal services provided in connection
with any of the foregoing; the cost of any environmental consultant or other
services used in connection with Landlord's monitoring of the Project with
respect to Hazardous Materials; the cost of any tax, insurance or other
consultant utilized in connection with the Project; and any other items
reasonably necessary from time to time to properly repair, replace, maintain and
operate the Project. Project Costs shall also include management fee to cover
Landlord's management, overhead and administrative expenses; provided, however,
if Landlord elects to delegate its duties hereunder to a professional property
manager, then Project Costs shall not include any fee to Landlord, but under
such circumstances any reasonable amounts paid to the professional property
manager shall be added to and deemed a part of Project Costs. If Landlord elects
to perform any maintenance or repair herein described in conjunction with
properties other than the Project, and if a common maintenance contractor is
contracted with for such purpose, the contract amount allocable to the Project,
as reasonably determined by Landlord, shall be added to and deemed a part of
Project Costs hereunder. Increases in Project Costs by reason of a
disproportionate impact by Tenant thereon (for example, and not by way of
limitation, increases in costs of trash collection because of Tenant's excessive
generation of trash or increases in costs of Common Area maintenance because of
Tenant's unpermitted storage of inventory or materials in the Common Area), in
Landlord's reasonable judgment, may be billed by Landlord, as an item of
Additional Rent, directly to Tenant. See Rider 7.3.
7.4 Definition of Real Property Taxes. The term "Real Property Taxes"
means any form of tax, assessment, charge, license, fee, rent tax, levy, penalty
(if a result of Tenant's delinquency), real property or other tax (other than
Landlord's net income, estate, succession, inheritance, or franchise taxes), now
or hereafter imposed with respect to the Project or any part thereof (including
any Alterations), this Lease or any Rent payable under this Lease by any
authority having the direct or indirect power to tax, or by any city, county,
state or federal government or any improvement district or other district or
division thereof, whether such tax or any portion thereof (i) is determined by
the area of the Project or any part thereof or the Rent payable under this Lease
by Tenant including, but not limited to, any gross income or excise tax levied
by any of the foregoing authorities with respect to receipt of the Rent due
under this Lease, (ii) is levied or assessed in lieu of, in substitution for, or
in addition to, existing or additional taxes with respect to the Project or any
part thereof whether or not now customary or within the contemplation of
Landlord or Tenant, or (iii) is based upon any legal or equitable interest in
Landlord in the Project or any part thereof. See Rider 7.4.
7.5 Apportionment of Taxes. If the Project is assessed as part of a
larger parcel, then Landlord shall equitably apportion the Real Property Taxes
assessed against the real property which includes the Project and reasonably
determine the amount of Real Property Taxes attributable to the Project. If
other buildings exist on the assessed parcel, the Real Property Taxes
apportioned to the Project shall be based upon the ratio of the square footage
of all buildings within the Project to the square footage of all buildings on
the assessed parcel, and the amount of real Property Taxes so apportioned to the
Project shall be included as part of Operating Expenses. Landlord's reasonable
determination of such apportionment shall be conclusive.
7.6 Tax on Improvements; Permitted Contests. Tenant shall, at Landlord's
election, be directly responsible for and shall pay the full amount of any
increase in Real Property Taxes attributable to any and all Tenant Improvements
and any other improvements of any kind whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. Tenant may
contest the amount or validity of any Real Property Taxes by appropriate
proceedings, provided that Tenant gives Landlord prior Notice of any such
contest and keeps
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Landlord advised as to all proceedings, and provided further that Tenant shall
continue to reimburse Landlord for Landlord's payment of such Real Property
Taxes unless such proceedings shall operate to prevent or stay such payment and
the collection of the tax so contested. Landlord shall join in any such
proceedings if any Applicable Laws shall so require, provided that Tenant shall
hold harmless, indemnify, protect and defend Landlord from and against any
liability, claim, demand, cost or expense in connection therewith, including,
but not limited to, actual attorneys' fees and costs reasonably incurred.
7.7 Utilities and Services. Tenant shall be responsible for and shall pay
promptly, directly to the appropriate supplier, all charges for water, gas,
electricity, heat, light, power, telephone, refuse pickup, janitorial service,
interior landscape maintenance and all other utilities, materials and services
furnished directly to Tenant or the remises or use by Tenant in, on or about the
Premises during the Term, together with any taxes thereon. If any utilities or
services are not separately metered or assessed to Tenant, Landlord shall make a
reasonable determination of Tenant's proportionate share of the cost of such
utilities and services and Tenant shall pay such amount to Landlord, as an item
of Additional Rent, within ten (10) days after receipt of Landlord's statement
or Invoice therefor. Landlord may also require Tenant to have any Specialized
HVAC system separately metered to Tenant, at Tenant's expense. Landlord shall
not be liable in damages or otherwise for any failure or interruption of any
utility or other service furnished to the Premises unless such failure or
interruption is due to Landlord's gross negligence or willful misconduct. No
such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or abate any Rent due hereunder.
RIDER 7.1 OPERATING EXPENSES:
If, as a result of Tenant's examination or audit, it is determined
that the amount charged to Tenant for Tenant's Share of Operating Expenses
exceeded by more than 5% the amount actually due, then Landlord shall promptly
reimburse Tenant's costs of the examination and/or audit.
RIDER 7.3 PROJECT COSTS:
Notwithstanding anything to the contrary in the Lease, Project Costs
(and any terms of similar meaning in the Lease) shall not include, and Tenant
shall have no liability for, the expense items listed below, and Project Costs
shall be subject to the limitations listed below:
(a) The following operating expense items shall not be charged to
Tenant:
1. The costs of original construction, the purchase price or
any depreciation of the Premises, Building or Project, any additions or
improvements thereto or any Premises, Building or Project service or utility
systems therein, including, without limitation, the cost of tools, equipment and
materials purchased in connection therewith.
2. Costs incurred for the repair, maintenance and replacement
of the structural components of the Premises, Building or Project, including,
without limitation, beams, columns, foundations, footings, load bearing and
exterior walls, structural slabs and the structural components of, the roof
(except that Tenant is solely responsible for the cost of all non-structural
repairs and maintenance to the roof commencing 270 days following the
Commencement Date).
3. Costs incurred for the repair, maintenance or replacement of
the Premises, Building or Project, or any portion thereof, to the extent: (a)
of the proceeds of insurance which Landlord is required to maintain under the
Lease or actually maintains (whichever is greater), (b) of any reimbursement
which Landlord receives therefor under any warranties or from any third party
(other than on account of a tenant's pro rata share of Project Costs), or (c)
caused by the gross negligence or willful misconduct of Landlord or Landlord's
Agents.
4. Rentals and other payments by Landlord under any ground
lease or other lease underlying this Lease, and interest, principal, points,
penalties and fees on any security instrument encumbering all or any portion of
the Premises, Building or Project.
5. Expenses and penalties (including, without limitation,
attorneys fees) incurred due to Landlord's violation of any lease, deed of
trust, mortgage, other security instrument, ground lease, Applicable Law or
private restriction.
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6. Leasing commissions, attorneys' fees, tenant improvement
costs and other costs and expenses incurred in connection with the leasing, or
the improvement for leasing, of any premises.
7. Any cost incurred in furnishing items or services other than
for the benefit of all tenants of the Building or Project generally.
8. Advertising, marketing, media and promotional expenditures
regarding the Premises, Building or Project, and costs of signs in or on the
Premises, Building or Project identifying the owner, lender or any contractor.
9. The rental value of any management office, engineer's
office, mechanical spaces and Common Areas.
10. Costs incurred in connection with the presence,
investigation, monitoring, release, removal or remediation of any Hazardous
Materials on, under, in or about the Premises, Building or Project, unless such
costs are incurred because of the activities of Tenant or Tenants Agents.
11. Any insurance premiums for insurance coverage or policy
limits which materially exceed the coverage or limits maintained by landlords of
comparable properties in the city in which the Premises is located.
(b) Project costs shall be subject to the following limitations:
1. Any management fee included in Project Costs shall not
exceed three and one-half percent (3 1/2%) of the Monthly Rent and shall
exclude: salaries, wages and benefits paid or provided to persons not employed
full-time in the management and operation of the Project; costs of automobiles
and travel expenses; professional, civic or recreational memberships; costs of
seminars, conventions, educational programs and the like; charitable
contributions; and any other administrative cost or expense not directly related
to the management and operation of the Project.
2. No fee shall be charged for the use of the Project parking
area or any other Common Area facility.
3. The aggregate sum of all Project Costs items allocated to
tenants of the Project for any year upon which an allocation is made shall not
exceed the aggregate sum of such cost items which are actually incurred by
Landlord for the year in question. No cost item shall be included more than
once or allocated under more than one expense category.
4. All expense items which are classified as capital
expenditures, improvements or replacements under generally accepted accounting
principles and which are permitted to be charged to Tenant hereunder shall be
amortized on a monthly basis over their maximum estimated useful lives at the
lesser of Landlord's cost of funds or the Bank of America prime rate plus two
percent (2%) per annum. Only the monthly amortized portion of such expense
which accrues or falls due during the Term shall be included as a Project Cost
item payable by Tenant hereunder.
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RIDER 7.4 REAL PROPERTY TAXES:
Notwithstanding anything to the contrary in the Lease, "Real Property
Taxes" shall not include, and Tenant shall have no liability for the following
items, and Real Property Taxes shall be subject to the following limitations:
(a) Real Property Taxes shall not include the following items:
1. Interest or penalties imposed as a result of Landlord's
failure to pay taxes or assessments when due;
2. Any taxes, fees, assessments, levies or similar impositions
that are charged or assessed other than with respect to the Premises, Building
or Project or Tenant's possessory interest therein;
3. Any increase in taxes resulting from the construction of
improvements for the benefit of a particular tenant or resulting from the use of
premises by a particular tenant;
4. Landlord's income, transfer, gift, estate, succession,
franchise or excess profits tax, or fees, taxes or assessments imposed on
Landlord for the privilege or right to conduct its business in general
(including, for example, fees paid for Landlord's business license) rather than
for a permit or license to operate the Project or any equipment or facility
therein in particular.
(b) Real Property Taxes shall be subject to the following limitations:
1. All taxes and assessments which can be paid by Landlord in
installments shall be included as a reimbursable expense item as if paid over
the maximum number of installments permitted, regardless of when Landlord
actually pays such assessments.
2. Taxes and assessments shall be prorated for the portion of
the year in which the Lease Term commences or ends.
ARTICLE VIII
ALTERATIONS
8.1 Permitted Alterations. After the Commencement Date, Tenant shall not
make or permit any Alterations in, on or about the Premises without the prior
written consent of Landlord (which consent shall not be unreasonably withheld or
delayed, except for Alterations not exceeding One Dollar ($1.00) per square foot
of the Premises in aggregate costs per year. Notwithstanding the foregoing,
without the prior written consent of Landlord. In no event shall any
Alterations (i) affect the exterior of the Building or the outside areas (or be
visible from adjoining sites), (ii) affect or penetrate any of the structural
portions of the Building, including, but not limited to, the roof, (iii) require
any change to the structural or mechanical components of the Premises, (iv)
interfere in any manner with the proper functioning of or Landlord's access to
any mechanical, electrical, plumbing or HVAC systems, facilities or equipment
located in or serving the Building, or (v) diminish the value of the premises.
All Alterations shall be constructed pursuant to plans and specifications
previously provided to and, when applicable, approved in writing by landlord,
shall be installed by a licensed contractor at Tenant's sole expense in
compliance with all Applicable Laws, and shall be accomplished in a good and
workmanlike manner conforming in quality and design with the Premises existing
as of the Commencement Date. No Hazardous Materials, including, but not limited
to, asbestos or asbestos containing materials, shall be used by Tenant or
Tenant's Agents in the construction of any Alterations permitted hereunder. All
Alterations made by Tenant shall be and become the property of Landlord upon the
installation thereof and shall not be deem Tenant's Personal Property; provided,
however, that Landlord may, at its option, require that Tenant, upon the
termination of this Lease, at Tenant's expense, remove any or all non-structural
Alterations installed by or on behalf of Tenant and return the Premises to its
condition as of the Commencement Date of this Lease, normal wear and tear
excepted. Notwithstanding any other provisions of this Lease, Tenant shall be
solely responsible for the maintenance, repair and replacement of any and all
Alterations made by or on behalf of Tenant (including without limitation by
Landlord on behalf of Tenant) to the Premises. See Rider 8.1.
8.2 Trade Fixtures. Tenant shall, at its own expense, provide, install
and maintain in good condition all of Tenant's Personal Property required in the
conduct of its business in the Premises.
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8.3 Mechanics' Liens. Tenant shall give Landlord Notice of Tenant's
intention to perform any work on the Premises which might result in any claim of
lien at least twenty (20) days prior to the commencement of such work to enable
Landlord to post and record a notice of nonresponsibility or other notice
Landlord deems proper prior to the commencement of any such work. Tenant shall
not permit any mechanic's, materialmen's or other liens to be filed against the
property of which the Premises are part or against Tenant's leasehold interest
in the premises. If Tenant fails to cause the release of record of any lien(s)
filed against the Premises or its leasehold estate therein by payment or posting
of a proper bond within ten (10) days from the date of the lien filing(s), then
Landlord may, at Tenant's expense, cause such lien(s) to be released by any
means Landlord deems proper, including, but not limited to, payment of or
defense against the claim giving rise to the lien(s). All sums reasonably
disbursed, deposited or incurred by Landlord in connection with the release of
the lien(s), including, but not limited to, all costs, expenses and actual
attorneys' fees, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
RIDER 8.1 PERMITTED ALTERATIONS:
Within 15 days after Tenant's written request, Landlord shall inform Tenant
in writing whether or not Landlord will require any Alteration made or proposed
to be made by Tenant of the Lease Term. Failure of Landlord to respond timely
to Tenant's request shall constitute Landlord's consent to the surrender of such
Alteration with the Premises, excluding any trade fixtures and non-structural
Alterations which Tenant elects to remove, provided that Tenant shall repair all
damage to the Premises caused by such removal.
ARTICLE IX
MAINTENANCE AND REPAIR
9.1 Landlord's Maintenance and Repair Obligations. Landlord shall,
subject to Section 9.2, Article XII and Article XIII, maintain in good condition
and repair the roof (including any skylights, but including as needed any
replacement thereof), exterior walls, structural components and foundation of
the Building, utility systems within the structural components of the Building
and the Common Areas, provide normal maintenance services for the HVAC serving
the Building through maintenance contracts or otherwise, and paint the exterior
of the Building and clean the exterior windows of the Building as and when such
painting or window cleaning, as the case may be, becomes necessary in Landlord's
sole discretion. Landlord shall also provide maintenance and repair services to
the electrical, plumbing, and mechanical systems serving the Premises. Landlord
shall not be required to make any repairs to the roof, exterior walls,
foundation or any systems within the Premises unless and until Tenant has
notified Landlord in writing of the need for such repair and Landlord shall have
a reasonable period of time thereafter to commence and complete said repair, if
warranted. The cost of any maintenance and repairs on the part of Landlord
provided for in this Section 9.1 shall be considered part of Project Costs,
except that repairs which Landlord deems arise out of any gross negligence or
willful misconduct of Tenant or Tenant's Agents shall be made at the expense of
Tenant. Landlord's obligation to so repair and maintain the premises shall be
limited to the cost of effecting such repair and maintenance and in no event
shall Landlord be liable for any costs or expenses in excess of said amounts,
including, but not limited to, any consequential damages, opportunity costs or
lost profits incurred or suffered by Tenant.
9.2 Tenant's Maintenance and Repair Obligations. Subject to Section 9.1
and Articles XII and XIII. Tenant shall at all times during the Term of this
Lease, at Tenant's sole cost and expense, clean, keep, maintain, repair and make
necessary improvements to, the Premises and every portion thereof and all
improvements therein or thereto, in good and sanitary order and condition to the
reasonable satisfaction of Landlord and in compliance with all Applicable Laws,
usual wear and tear excepted. Any damage or deterioration of the Premises shall
not be deemed usual wear and tear if the same could have been prevented by good
maintenance practices by Tenant. Tenant's repair and maintenance obligations
herein shall include, but are not limited to, all necessary maintenance and
repairs to all portions of the Premises, and all exterior entrances, all glass,
windows, window easements, show window moldings, partitions, doors, door jams,
door closures, hardware, fixtures, electrical lighting and outlets, plumbing
fixtures, sewage facilities, interior walls, floors, ceilings, fans and exhaust
equipment, fire extinguisher
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equipment and systems, and all repairs to Specialized HVAC (as hereinafter
defined). As part of its maintenance obligations hereunder, Tenant shall, at
Landlord's request, provide Landlord with copies of all maintenance schedules,
reports and notices prepared by, for, or on behalf of Tenant. Landlord may
impose reasonable restrictions and requirements with respect to repairs by
Tenant, which repairs shall be at least equal in quality to the original work,
and the provisions of Section 8.3 shall apply to all such repairs. Tenant's
obligation to repair includes the obligation to replace, as necessary,
regardless of whether the benefit of such replacement extends beyond the Term.
Any special or above-standard heating, ventilating and air conditioning
installed by, on behalf of, or at the request of Tenant ("Specialized HVAC"),
shall be paid for and maintained by Tenant at Tenant's sole cost and expense.
Notwithstanding the foregoing, Landlord shall have the right, upon Notice to
Tenant, to undertake the responsibility for maintenance and repair of automatic
fire extinguisher equipment, such as sprinkler systems and alarms, Specialized
HVAC and other obligations of Tenant hereunder which Landlord deems appropriate
to undertake that affect the Building as a whole, in which event the cost
thereof shall be included as part of Project Costs and paid by Tenant in the
manner set forth in Section 7.1. Tenant shall not permit or authorize any person
to go onto the roof of the Building without the prior written consent of
Landlord.
9.3. Waiver. Tenant hereby waives all rights provided for by the
provisions of Sections 1941 and 1942 of the California Civil Code and any
present or future laws regarding Tenant's right to make repairs at the expense
of Landlord or to terminate this Lease because of the condition of the Premises.
9.4 Self-Help. If Tenant refuses or fails to initiate the repair and
maintenance of the Premises as required hereunder within ten (10) days from the
date on which Landlord makes a written demand on Tenant to effect such repair
and maintenance, Landlord may enter upon the Premises and make such repairs or
perform such maintenance without liability to Tenant for any loss or damage that
may accrue to Tenant or its merchandise, fixtures or other property or to
Tenant's business by reason thereof. All sums reasonably disbursed, deposited
or incurred by Landlord in connection with such repairs or maintenance, plus
five percent (5%) for overhead, shall be due and payable by Tenant to Landlord,
as an item of Additional Rent, on demand by Landlord, together with interest at
the Applicable Rate on such aggregate amount from the date of such demand until
paid by Tenant.
ARTICLE X
COMMON AREA AND PARKING
10.1 Grant of Nonexclusive Common Area License and Right. Landlord hereby
grants to Tenant and its permitted subtenants, in common with Landlord and all
persons, firms and corporations conducting business in the Project and their
respective customers, guests, licensees, invitees, subtenants, employees and
agents, to use the Common Area within the Project for vehicular parking, for
pedestrian and vehicular ingress, egress and travel, and for such other purposes
and for doing such other things as may be provided for, authorized and/or
permitted by the Restrictions, such nonexclusive license and right to be
appurtenant to Tenant's leasehold estate created by this Lease. The
nonexclusive license and rights granted pursuant to the provisions of this
Article X shall be subject to the provisions of the Restrictions, which pertain
in any way to the Common Area covered by such Restrictions, and the provisions
of this Lease.
10.2 Use of Common Area. Notwithstanding anything to the contrary herein,
Tenant and its successors, assigns, employees, agents and invitees shall use the
Common Area only for the purposes permitted hereby and by the Restrictions and
the Rules and Regulations. All uses permitted within the Common Area shall be
undertaken with reason and judgment so as not to interfere with the primary use
of the Common Area which is to provide parking and vehicular and pedestrian
access throughout the Common Area within the Project and to adjacent public
streets for the Landlord, Landlord's Agents, its tenants, subtenants and all
persons, firms and corporations conducting business within the Project and their
respective customers, guests and licensees. In no event shall Tenant erect,
install, or place, or cause to be erected, installed, or placed any structure,
building, trailer, fence, wall, signs or other obstructions on the Common Area
except as otherwise permitted herein and in the Restrictions, and Tenant shall
not store or sell any merchandise, equipment or materials on the Common Area.
10.3 Control of Common Area. Subject to provisions of the Restrictions,
all Common Area and all improvements located from time to time within the Common
Area shall at all times be subject to the exclusive
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control and management of the Landlord. Landlord shall have the right to
construct, maintain and operate lighting facilities within the Common Area; to
police the Common Area from time to time; to change the area, level, location
and arrangement of the parking areas and other improvements within the Common
Area; to close all or any portion of the Common Area or improvements therein to
such extent as may, in the opinion of counsel for Landlord, be legally
sufficient to prevent a dedication thereof or the accrual of any rights to any
person or to the public therein; to close temporarily all or any portion of the
Common Area and/or the improvements thereon; to discourage noncustomer parking;
and to do and perform such other acts in and to said Common Area and
improvements thereon as, in the use of good business judgment, Landlord shall
determine to be advisable; provided that, at all times and subject to the terms
hereof, Tenant shall have available for use the number of parking spaces set
forth in Section 15 of the Basic Lease Information.
10.4 Maintenance of Common Area. Subject to the provisions of the
Restrictions, Landlord shall operate and maintain (or cause to be operated and
maintained) the Common Area in a first-class condition, in such manner as
Landlord in its discretion shall determine from time to time. Without limiting
the scope of such discretion, Landlord shall have the full right and authority
to employ or cause to be employed all personnel and to make or cause to be made
all rules and regulations pertaining to or necessary for the proper operation
and maintenance of the Common Area and the improvements located thereon. The
cost of such maintenance of the Common Area shall be included as part of Project
Costs. No part of the Common Area may be used for the storage of any items,
including without limitation, vehicles, materials, inventory and equipment. All
trash and other refuse shall be placed in designated receptacles. No work of
any kind, including, but not limited to, painting, drying, cleaning, repairing,
manufacturing, assembling, cutting, merchandising or displaying shall be
permitted upon the Common Area.
10.5 Revocation of License. All Common Area and improvements located
thereon which Tenant is permitted to use and occupy pursuant to the provisions
of this Lease are to be used and occupied under a revocable license and right,
and if any such license be revoked, or if the amount of such areas be
diminished, Landlord shall not be subject to any liability nor shall Tenant be
entitled to compensation or diminution or abatement of Rent, and such revocation
or diminution of such areas shall not be deemed constructive or actual eviction.
It is understood and agreed that the condemnation or other taking or
appropriation by any public or quasi-public authority, or sale in lieu of
condemnation, of all or any portion of the Common Area shall not constitute a
violation of Landlord's agreements hereunder, and Tenant shall not be entitled
to participate in or make any violation of Landlord's agreements hereunder, and
Tenant shall not be entitled to participate in or make any claim for any award
or other condemnation proceeds arising from any such taking or appropriation of
the Common Area. Notwithstanding the foregoing, during the term of this Lease,
Landlord shall provide to Tenant the number of vehicle parking spaces set forth
in Item 15 of the basic Lease Provisions throughout the Term (subject to the
rights of Landlord under this Article X), and reasonable rights of ingress and
egress.
10.6 Landlord's Reserved Rights. Landlord reserves the right to install,
use, maintain, repair relocate and replace pipes, ducts, conduits, wires and
appurtenant meters and equipment included in the Premises or outside the
Premises, change the boundary lines of the Project and install, use, maintain,
repair, alter or relocate, expand and replace any Common Area; provided,
however, Landlord shall not unreasonably interfere with Tenant's use of the
Premises. Such rights of Landlord shall include, but are not limited to,
designating from time to time certain portions of the parking lot as exclusively
for the benefit of certain Tenants in the Project (so long as such exclusive
rights to the parking lot do not impair Tenant's parking rights under this
Lease).
10.7 Parking. Tenant shall be entitled to the number of vehicle parking
spaces set forth in Item 15 of the Basic Lease Provisions, which spaces shall be
unreserved and unassigned, on those portions of the Common Area designated by
Landlord for parking. Tenant shall not use more parking spaces than such
number. All parking spaces shall be used only for parking by vehicles no larger
than full size passenger automobiles or pick-up trucks. Tenant shall not permit
or allow any vehicles that belong to or are controlled by Tenant or Tenant's
employees, suppliers, shippers, customers, or invitees to be loaded, unloaded,
or parked in areas other than those designated by Landlord for such activities.
If Tenant permits or allows any of the prohibited activities described above,
then
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Landlord shall have the right, after reasonable notice, in addition to such
other rights and remedies that Landlord may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be immediately
payable upon demand by Landlord. Parking within the Common Area shall be limited
to striped parking stalls, and no parking shall be permitted in any driveways,
accessways or in any area which would prohibit or impede the free flow of
traffic within the Common Area. Vehicles which have been abandoned or parking in
violation of the terms hereof may be towed away at the owner's expense.
Notwithstanding the foregoing, delivery vehicles may be parked, staged and
stored overnight, on a temporary basis.
ARTICLE XI
INDEMNITY AND INSURANCE
11.1 Indemnification. To the fullest extent permitted by Law, Tenant
hereby agrees to defend (with attorneys acceptable to Landlord), indemnify,
protect and hold harmless Landlord and Landlord's Agents and any successors to
all or any portion of Landlord's interest in the Premises and their directors,
officers, partners, employees, authorized agents, representatives, affiliates
and Mortgagees, from and against any and all damage, loss, claim, liability and
expense including, but not limited to, actual attorneys' fees and legal costs,
incurred directly or indirectly by reason of any claim, suit or judgment brought
by or on behalf of (i) any person or persons for damage, loss or expense due to,
but not limited to, bodily injury or property damage sustained by such person or
persons which arise out of, are occasioned by, or are in any way attributable to
the use or occupancy of the Premises by Tenant or the acts or omissions of the
Tenant or Tenant's Agents in or about the Premises or the Project (including but
not limited to any Event of Default hereunder), or (ii) Tenant or Tenant's
Agents for damage, loss or expense due to, but not limited to, bodily injury or
property damage which arise out of, are occasioned by, or are in any way
attributable to the use of any of the Common Area, except to the extent caused
by the gross negligence or willful misconduct of Landlord or Landlord's Agents.
11.2 Property Insurance. Landlord shall obtain and keep in force during
the Terms of this Lease a policy or policies of insurance, with deductibles at
the sole discretion of Landlord, covering loss of rents and loss or damage to
the Premises and the Building, the Tenant improvements and objects owned by
Landlord and normally covered under a "Boiler and Machinery" policy (as such
term is used in the insurance industry) at least in the amount of the full
replacement cost thereof, and in no event less than the total amount required by
Mortgagees, against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, special extended perils ("all
risk" or "special causes of action," as such terms are used in the insurance
industry, including, at Landlord's option, collapse, earthquake and flood) and
other perils as required by the Mortgagees or deemed necessary by Landlord. A
stipulated value or agreed amount endorsement deleting any co-insurance
provision of said policy or policies shall be procured with said insurance. The
cost of such insurance policies shall be included in the definition of Project
Costs, and shall be paid by Tenant in the manner set forth in Section 7.1. Such
insurance policies shall provide for payment of loss thereunder to Landlord or,
at Landlord's election, to the Mortgagees. If the Premises are part of a larger
building, or if the Premises are part of a group of buildings owned by Landlord
which are adjacent to the Premises, then Tenant shall pay for any increase in
the property insurance of the Building or such other building or buildings
within the Project if such increase is caused by Tenant's acts, omissions, use
or occupancy of the Premises. Tenant shall obtain and keep in force during the
Term, at its sole cost and expense, (i) an "all risk" or "special causes of
action" property policy in the amount of the full replacement cost covering
tenant's Personal Property and any Alterations made by or at the request of
Tenant, with Landlord insured as its interest may appear.
11.3 Liability/Miscellaneous Insurance. Tenant shall maintain in full
force and effect at all times during the Term (plus such earlier and later
periods as Tenant may be in occupancy of the Premises), at its sole cost and
expense, for the protection of Tenant, Landlord and Landlord's Agents and
Mortgagees, policies of insurance issued by a carrier or carriers acceptable to
Landlord and the Mortgagees which afford the following coverages: (i) statutory
workers' compensation, (ii) employer's liability with minimum limits of Five
Hundred Thousand Dollars ($500,000), (iii) commercial general liability
insurance including, but not limited to, blanket contractual liability
(including the indemnity set forth in Section 11.1), fire and water legal
liability, broad form property damage,
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personal injury, independent contractors, and, if alcoholic beverages are
served, manufactured, distributed or sold in the Premises, comprehensive liquor
liability, and owned, non-owned and hired vehicles, of not less than the limits
set forth in Item 17 of the Basic Lease Provisions (or current limit carried,
whichever is greater), naming Landlord, the Mortgagees, and the Additional
insureds named in Item 16 of the Basic Lease Provisions as additional insureds,
and including a cross-liability or severability of interests endorsement, and
(iv) such other insurance in such terms and amounts as may be required by
Landlord or the Mortgagees from time to time. Landlord or Landlord's Agents on
behalf of Landlord may, at Landlord's election, obtain liability insurance in
such amounts and on such terms as Landlord shall determine, and the cost thereof
shall be included in Project Costs and paid by Tenant in the manner described in
Section 7.1.
11.4 Hazardous Materials. In the event Landlord consents to Tenant's use,
generation or storage of Hazardous Materials on, under or about the Premises
pursuant to Section 6.2, Landlord shall have the continuing right to require
Tenant, at Tenant's sole cost and expense, to purchase insurance specified and
approved by Landlord, with coverage of no less than Two Million Dollars
($2,000,000), insuring (i) any Hazardous Materials shall be removed from the
Premises, (ii) the Premises shall be restored to a clean, neat, attractive,
healthy, safe and sanitary condition, and (iii) any liability of Tenant,
Landlord and Landlord's Agents arising from such Hazardous Materials; provided,
however, that such insurance is available and can be obtained at commercially
reasonable rates.
11.5 Deductibles; Blanket Coverage. Any policy of insurance required
pursuant to this Lease containing a deductible exceeding Five Thousand Dollars
($5,000) per occurrence must be approved in writing by Landlord prior to the
issuance of such policy. Tenant shall be solely responsible for the payment of
any deductible. Any insurance required of Tenant pursuant to this Lease may be
provided by means of a so-called "blanket policy", so long as (i) the Premises
are specifically covered (by rider, endorsement or otherwise), (ii) the limits
of the policy are applicable on a "per location" basis to the Premises and
provide for restoration of the aggregate limits, and (iii) the policy otherwise
complies with the provisions of this Lease. Tenant may obtain the coverage
limits specified herein by an umbrella policy, if desired.
11.6 Increased Coverage. Upon demand, Tenant shall provide Landlord, at
Tenant's expense, with such increased amount of existing insurance, and such
other insurance as Landlord or the Mortgagees may reasonably require.
11.7 Sufficiency of Coverage. Neither Landlord nor any of Landlord's
Agents makes any representation that the types of insurance and limits specified
to be carried by Tenant under this Lease are adequate to protect Tenant. If
Tenant believes that any such insurance coverage is insufficient, Tenant shall
provide, at its own expense, such additional insurance as Tenant deems adequate.
Nothing contained herein shall limit Tenant's liability under this Lease, and
Tenant's liability under any provision of this Lease, including without
limitation under any indemnity provisions, shall not be limited to the amount of
any insurance obtained.
11.8 Insurance Requirements. Tenant's insurance shall be carried with
companies that have a general policyholder's rating of not less than "A" and
that are determined by Landlord, as financially sound on a current basis, (ii)
shall provide that such policies shall not be subject to material alteration or
cancellation except after at least thirty (30) days prior written notice to
Landlord, and (iii) shall be primary, and any insurance carried by Landlord or
Landlord's Agents shall be noncontributing. Tenant's policy or policies, or
duly executed certificates for them in the form and content of acceptable to the
Property Manager, shall be deposited with Landlord prior to the Commencement
Date, and prior to renewal of such policies. If Tenant fails to procure and
maintain the insurance required to be procured by tenant under this Lease,
Landlord may, but shall not be required to, order such insurance at Tenant's
expense. All sums reasonably disbursed, deposited or incurred by Landlord in
connection therewith, including, but not limited to, all costs, expenses and
actual attorneys' fees, shall be due and payable by Tenant to Landlord, as an
item of Additional Rent, on demand by Landlord, together with interest thereto
at the Applicable Rate from the date of such demand until paid by Tenant.
11.10 Landlord's Disclaimer. Notwithstanding any other provisions of this
Lease, and to the fullest extent permitted by law, Landlord and Landlord's
Agents shall not be liable for any loss or damage to persons or property
resulting from theft, vandalism, fire, explosion, failing materials, glass, tile
or sheetrock, steam, gas,
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electricity, water or rain which may leak from any part of the Premises, or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or whatsoever, unless caused by or due to the negligence or willful
misconduct of Landlord or Landlord's Agent, Landlord or Landlord's Agents shall
not be liable for interference with light or air, or for any latent defect in
the Premises except as otherwise expressly provided in this Lease. Tenant shall
give prompt Notice to Landlord in case of a casualty, accident or repair needed
to the Premises.
11.11 Waiver of Subrogation. Landlord and Tenant each hereby waives all
rights of recovery against the other and the other's agents on account of loss
and damage occasioned to such waiving party to the extent only that such loss or
damage is insured against under any insurance policies required by this Article
XI (and to the extent such insurance is inadequate to cover such loss, this
waiver shall not apply to amounts of loss above such coverage). Tenant and
Landlord shall, upon obtaining policies of insurance required hereunder, give
notice to the insurance carriers that the foregoing waiver of subrogation is
contained this Lease.
ARTICLE XII
DAMAGE OR DESTRUCTION
12.1 Landlord's Obligation to Rebuild. If the Premises ar damaged or
destroyed by fire or other casualty (a "Casualty"), Tenant shall promptly give
notice thereof to Landlord, and Landlord shall thereafter repair the Premises as
set forth in Sections 12.4 and 12.6 unless Landlord has the right to terminate
this Lease as provided in Section 12.2 and Landlord elects to so terminate or
Tenant has the right to terminate this Lease as provided in Section 12.3 and
Tenant elects to so terminate.
12.2 Landlord's Right to Terminate. Landlord shall have the right to
terminate this Lease following a Casualty if any of the following occurs: (i)
insurance proceeds (together with any additional amounts Tenant elects, at its
option, to contribute) are not available to Landlord to pay one hundred percent
(100%) of the cost to fully repair the Premises, excluding the deductible (for
which Tenant shall pay Tenant's Share of such deductible); (ii) Landlord's
Architect determines that the Premises cannot, with reasonable diligence, be
fully repaired by Landlord (or cannot be safely repaired because of the presence
of hazardous factors, including, but not limited to, Hazardous Materials,
earthquake faults, radiation, chemical waste and other similar dangers) within
one hundred eighty (180) days after the date of such Casualty; (iii) the
Premises are destroyed or damaged during the last twelve (12) months of the
Term; (but not later than six months prior to the expiration of the Term). If
Landlord elects to terminate this Lease following a Casualty pursuant to this
Section 12.2, Landlord shall give Tenant Notice of its election to terminate
within thirty (30) days after Landlord has knowledge of such Casualty, and this
Lease shall terminate fifteen (15) days after the date of such Notice. See
Rider 12.2.
12.3 Tenant's Right to Terminate. Subject to the later terms hereof,
Tenant shall have the right to terminate this Lease following the destruction of
the Premises (or damage to the Premises so extensive as to reasonably prevent
Tenant'' substantial use and enjoyment of the Premises) if any of the following
occurs: (i) the Premises cannot, with reasonable diligence, be or is not fully
repaired by Landlord within one hundred eighty (180) days after the date of the
damage or destruction, as determined by Landlord's Architect; (ii) the Premises
cannot safely be repaired because of the presence of hazardous factors,
including Hazardous Materials, earthquake faults, radiation, chemical waste and
other similar dangers; or (iii) the damage or destruction occurs during the last
twelve (12) months of the Term and cannot, with reasonable diligence, be fully
repaired by Landlord within ninety (90) days after the date of the destruction
or damage (but not later than six months prior to the expiration of the Term) as
determined by Landlord's Architect. Notwithstanding the foregoing, Tenant shall
not have the right to terminate under this Section 12.3 if (an Event of Default
has occurred and is continuing at the time of such damage or destruction or at
the time of exercising the right to terminate, or (b) the damage or destruction
was caused, in whole or in part, by the willful act or omission of Tenant or
Tenant's Agents. If Tenant elects to terminate this Lease pursuant to this
Section 2.3, Tenant shall give Landlord Notice of its election to terminate
within thirty (30) days after the date of such damage or destruction or ten (10)
days after receipt of the estimated construction period from Landlord's
Architect under clause (iii) if applicable, and this Lease shall terminate
thirty (30) days after the date of such Notice.
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12.4 Effect of Termination. If this Lease is terminated following a
Casualty pursuant to Section 12.2 or Section 12.3, Landlord shall, subject to
the rights of the Mortgagees, be entitled to receive and retain all the
insurance proceeds resulting from or attributable to such Casualty, except for
those proceeds payable under policies obtained by Tenant which specifically
insure Tenant's Personal Property. If neither party exercises any such right to
terminate this Lease, this Lease will continue in full force and effect, and
Landlord shall, promptly following the tenth (10th) day after the date of such
Casualty and receipt of the amounts set forth in clause (i) of Section 12.2,
commence the process of obtaining necessary permits and approvals for the repair
of the Premises, and shall commence such repair and prosecute the same
diligently to completion as soon thereafter as is practicable. Tenant shall
fully cooperate with Landlord in removing Tenant's Personal Property and any
debris from the Premises to facilitate the making of such repairs.
12.5 Limited Obligation to Repair. Landlord's obligation, should it elect
to or be obligated to repair the Premises following a Casualty, shall be limited
to the basic Building and Tenant Improvements and Tenant shall, at its expense,
replace or fully repair all Tenant's Personal Property and at Tenant's option,
any Alterations installed by Tenant existing at the time of such Casualty. If
the Premises are to be repaired in accordance with the foregoing, Tenant shall
make available to Landlord any portion of insurance proceeds it receives which
are allocable to the Tenant Improvements.
12.6 Abatement of Monthly Rent. During any period when Landlord or
Landlord's Architect reasonably determines that there is substantial
interference with Tenant's use of the Premises by reason of a Casualty, Monthly
Rent and Additional Rent shall be temporarily abated in proportion to the degree
of such substantial interference. Such abatement shall commence upon the date
of such Casualty and shall end upon the Substantial Completion of the repair of
the Premises which Landlord undertakes or is obligated to undertake hereunder.
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of the use of the Premises, Tenant's Personal Property or other damage or
any inconvenience occasioned by a Casualty or by the repair or restoration of
the Premises thereafter, including, but not limited to, any consequential
damages, opportunity costs or lost profits incurred or suffered by Tenant.
Tenant hereby waives the provisions of Section 1932(2) and Section 1933(4) of
the California Civil Code, and the provisions of any similar or successor
statutes.
12.7 Landlord's Determination. The determination in good faith by
Landlord's Architect of or relating to the estimated cost of repair of any
damage, replacement cost, the time period required for repair or the
interference with or suitability of the Premises for Tenant's use or occupancy
shall be conclusive for purposes of this Article XII and Article XIII.
RIDER 12.2 LANDLORD'S RIGHT TO TERMINATE:
Notwithstanding the terms of Tenant's option to extend the Term,
pursuant to Lease Rider No. One, if a Casualty occurs during the initial Term of
this Lease during the period in which Tenant is entitled to exercise such
option, Tenant shall have the right (but not the obligation) to exercise such
option by giving Landlord written notice of exercise within thirty (30) days
after Tenant receives the estimate of Landlord's Architect of the period needed
to restore the Premises and, in that event, Landlord may not terminate the Lease
under clause (iii) above.
ARTICLE XIII
CONDEMNATION
13.1 Total Taking--Termination. If title to the Premises, the Common Areas
or so much thereof is taken for any public or quasi-public use under any statute
or by right of eminent domain so that reconstruction of the Premises or Common
Areas will not result in the Premises being reasonably suitable for Tenant's
continued occupancy for the uses and purposes permitted by this Lease, this
Lease shall terminate as of the date possession of the Premises or part thereof
is so taken.
13.2 Partial Taking. If any part of the Premises, or the parking and
access rights granted hereby not being sufficient for Tenant's use, or Common
Area, is taken for any public or quasi-public use under any statute or by right
of eminent domain and the remaining part is reasonably suitable for Tenant's
continued occupancy for the
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uses permitted by this Lease, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part of the Premises or Common
Area is taken and the Monthly Rent and Additional Rent shall be reduce in the
same proportion that the floor area of the portion of the Premises so taken
(less any addition thereto by reason of any reconstruction) bears to the
original floor area of the Premises, as reasonably determined by Landlord or
Landlord's Architect. Landlord shall, at its own cost and expense, make all
necessary repairs or alternations to the Premises so as to make the portion of
the Premises not taken a complete architectural unit. Such work shall not,
however, exceed the scope of the work done by Landlord in originally
constructing the Premises including Tenant Improvements under this Lease. If
severance damages from the condemning authority are not available to Landlord in
sufficient amounts to permit such restoration, landlord may terminate this Lease
upon Notice to Tenant. Monthly Rent and Additional Rent due and payable
hereunder shall be temporarily abated during such restoration period in
proportion to the degree to which there is substantial interference with
Tenant's use of the Premises, as reasonably determined by Landlord or Landlord's
Architect. Each party hereby waives the provisions of Section 1265.130 of the
California Code of Civil Procedure and any present or future law allowing either
party to petition the Superior Court to terminate this Lease in the event of a
partial taking of the Building or Premises.
13.3 No Apportionment of Award. No award for any partial or total taking
shall be apportioned, it being agreed and understood that Landlord shall be
entitled to the entire award for any partial or entire taking. Tenant assigns
to Landlord its interest in any award which may be made in such taking or
condemnation, together with any and all rights of Tenant arising in or to the
same or any part thereof. Nothing contained herein shall be deemed to give
Landlord any interest in or require Tenant to assign to Landlord any separate
award made to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business or its moving costs, or for the loss of its
goodwill.
13.4 Temporary Taking. No temporary taking of the Premises (which for
purposes hereof shall mean a taking of all or any part of the Premises for one
hundred eighty (180) days or less) shall terminate this Lease or give Tenant any
right to any abatement of Rent. Any award made to Tenant by reason of such
temporary taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein. Each party agrees to execute and deliver to the
other all instruments that may be required to effectuate the provisions of this
Section 13.4.
13.5 Sale Under Threat of Condemnation. A sale made in good faith to any
authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed at
taking under the power of eminent domain for all purposes of this Article XIII.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
14.1 Prohibition. Tenant shall not directly or indirectly, voluntarily or
by operation of law, assign (which term shall include any transfer, assignment,
pledge, mortgage or hypothecation) this Lease, or any right or interest
hereunder, or sublet the Premises or any part thereof, or allow any other person
or entity to occupy or use all or any part of the Premises without first
obtaining the written consent of Landlord in each instance, which consent shall
not be unreasonably withheld or delayed. No assignment, encumbrance,
subletting, or other transfer in violation of the terms of this Article XIV,
whether voluntary or involuntary, by operation of law, under legal process or
proceedings, by receivership, in bankruptcy, or otherwise shall be valid or
effective and, at the option of Landlord, shall constitute an Event of Default
under this Lease. To the extent not prohibited by provisions of the Bankruptcy
Code of 1978, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"). Tenant on
-- ----
behalf of itself, creditors, administrators and assigns waives the applicability
of Sections 541(c) and 365(e) of the Bankruptcy Code unless the proposed
assignee of the trustee for the estate of the bankrupt meets Landlord's
standards for consent as set forth below. Landlord has entered into this Lease
with Tenant in order to obtain for the benefit of the Project the unique
attraction of Tenant's name and business; the foregoing prohibition on
assignment or subletting is expressly agreed to by Tenant in consideration of
such fact. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or the estate of Tenant
within the meaning of the
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Bankruptcy Code. Any and all monies or other considerations constituting
Landlord's property under the preceding sentence not paid or delivered to person
or entity to which this Lease is assigned pursuant to the provisions of the
Bankruptcy Code shall be deemed without further act or deed to have assumed all
of the obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to Landlord
an instrument confirming such assumption. See Rider 14.1.
14.2 Landlord's Consent. In the event Landlord consents to any assignment
or subletting, such consent shall not constitute a waiver of any of the
restrictions of this Article XIV and the same shall apply to each successive
assignment or subletting hereunder, if any. In no event shall Landlord's
consent to an assignment or subletting affect the continuing primary liability
of Tenant (which, following assignment, shall be joint and several with the
assignee), or relieve Tenant of any of its obligations hereunder without an
express written release being given by Landlord. In the event that Landlord
shall consent to an assignment under this Article XIV, such assignment shall not
be effective until the assignee shall assume all of the obligations of this
Lease on the part of Tenant to be performed or observed and whereby the assignee
shall agree that the provisions contained in this Lease shall, notwithstanding
such assignment, continue to be binding upon it with respect to all future
assignments. Such assignment or sublease agreement shall be duly executed and a
fully executed copy thereof shall be delivered to Landlord, and Landlord may
collect Monthly Rent and Additional Rent due hereunder directly from the
assignee or following the occurrence of an Event of Default hereunder, from the
sublessee. Collection of Monthly Rent and Additional Rent directly from an
assignee or the sublessee shall not constitute a consent or a waiver of the
necessity of consent to such assignment or subletting, nor shall such collection
constitute a recognition of such assignee or sublessee as the Tenant hereunder
or a release of Tenant from the performance of all of its obligations hereunder.
14.3 Information. Regardless of whether Landlord's consent is required
under this Article XIV, Tenant shall notify Landlord in writing of Tenant's
intent to assign this Lease or any right or interest hereunder, or to sublease
the Premises or any part thereof, and of the name of the proposed assignee or
sublessee, the nature of the proposed assignee's or sublessee's business to be
conducted on the Premise, the terms and provisions of the proposed assignment or
sublease, a copy of the proposed assignment or sublease form, and such other
information as Landlord may reasonably request concerning the proposed assignee
or sublessee, including but not limited to, net worth, income statements and
other financial statements for a two-year period preceding Tenant's request for
consent, evidence of insurance complying with the requirements of Article XI, a
completed Environmental Questionnaire from the proposed assignee or sublessee,
and the fee described in Section 14.7.
14.4 Standard for Consent. Landlord shall, within fifteen (15) days of
receipt of such Notice and all information requested by Landlord concerning the
proposed assignee or sublessee, elect to take one of the following actions:
(a) consent to such proposed assignment or sublease;
(b) refuse to consent to such proposed assignment or sublease, which
refusal shall be on reasonable grounds specified in written Notice of Landlord's
refusal; or
(c) if Tenant proposes to sublease all or part of the Premises for the
entire remaining Term, Landlord may, at its option exercised by fifteen (15)
days Notice to Tenant, elect to recapture such portion of the Premises as Tenant
proposes to sublease and unless Tenant provides Notice to Landlord in writing of
its election to withdraw its sublease proposal within fifteen (15) days of
Landlord's Notice to recapture as of the (30th) day after Landlord so notifies
Tenant of its election to recapture, this Lease shall terminate as to the
portion of the Premises recaptured and the Monthly Rent payable under this Lease
shall be reduced in the same proportion that the floor area of that portion of
the Premises so recaptured bears to the floor area of the Premises prior to such
recapture.
Tenant agrees, by way of example and without limitation, that it shall not
be unreasonable for Landlord to withhold its consent to a proposed assignment or
subletting if any of the following situations exist or may exist:
(i) Landlord determines that the proposed assignee's or
sublessee's use of the Premises conflicts with Article V or Article VI, presents
an unacceptable risk, as determined by Landlord, under Article VI (and Landlord
may require such assignee or sublessee to complete the Environmental
Questionnaire in
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the manner described in Section 6.5 prior to making such determination), or
conflicts with any other provision under this Lease;
(ii) Landlord determines that the proposed assignee or sublessee
is not as financially responsible as Tenant as of the date of Tenant's request
for consent or as of the effective date of such assignment or subletting;
(iv) Landlord determines that the proposed assignment or
subletting would breach a covenant, condition or restriction in some other
lease, financing agreement or other agreement relating to the Project, the
Building, the Premises or this Lease;
(v) Landlord determines that the proposed assignee or sublessee
(A) has been required by any prior landlord, lender or governmental authority to
take remedial action in connection with Hazardous Materials contaminating a
property if such contamination resulted from the proposed enforcement order
issued by any governmental authority in connection with the use, disposal or
storage of a Hazardous Material; or
(vi) An Event of Default has occurred and is continuing at the
time of Tenant's request for Landlord's consent, or as of the effective date of
such assignment or subletting.
14.5 Bonus Value. Tenant agrees that fifty percent (50%) of any amounts
paid by the assignee or sublessee, however described, in excess of (i) the
Monthly Rent payable by Tenant hereunder (or, in the case of sublease of a
portion of the Premises, in excess of the Monthly Rent reasonably allocable to
such portion), plus (ii) Tenant's direct out-of-pocket costs which Tenant
certifies to Landlord have been paid to provide occupancy or marketing related
improvements, repairs, or services to effect such assignment or sublease of a
nature commonly provided by landlords of similar space, shall be the property of
Landlord and such amounts shall be payable directly to Landlord by the assignee
or sublessee. At Landlord's request, a written agreement shall be entered into
by and among Tenant, Landlord and the proposed assignee or sublessee confirming
the requirements of this Section 14.5.
14.6 Certain Transfers. The sole of all or substantially all of Tenant's
assets (other than bulk sales in the ordinary course of business), or, if Tenant
is a corporation, an unincorporated association, or a partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of fifty percent (50%)
(except for publicly traded shares of stock constituting a transfer of fifty
percent (50%) or more in the aggregate, so long as no change in the controlling
interest of Tenant occurs as a result thereof) shall be deemed an assignment
within the meaning and provisions of this Article XIV.
14.7 Landlord's Fee and Expenses. If Tenant requests Landlord's consent to
an assignment or subletting by Tenant under this Lease, Tenant shall pay and all
of Landlord's reasonable out-of-pocket expenses, including, but not limited to,
attorneys' fees (not to exceed $1,500 per Tenant's request) reasonably incurred
related to such assignment or subletting by Tenant, whether or not the
assignment or subletting is approved.
14.8 Transfer of the Premises by Landlord. Upon any conveyance of the
Premises and assignment by Landlord of this Lease, Landlord shall and is hereby
entirely released from all liability under any and all of its covenants and
obligations contained in or derived from this Lease occurring after the date of
such conveyance and assignment, and Tenant agrees to attorn to any entity
purchasing or otherwise acquiring the Premises; provided Landlord's transferee
assumes and agrees, in writing, to be bound by all of Landlord's obligations
under this Lease including, without limitation, those pertaining to refund of
the security deposit.
RIDER 14.1 PERMITTED LEASE TRANSFERS:
(a) Notwithstanding the provisions of Article XIV to the contrary,
Landlord's consent shall not be required for, and the provisions of Sections
14.4, 14.5, 14.6 and 14.7 shall not apply to, the following events:
(i) any assignment of this Lease or sublease of all or a portion
of the Premises to any entity which is controlled by, under common control with,
or controls Tenant ("control" being defined as the ownership of equity interests
constituting fifty percent (50%) or more of the total voting power of all
outstanding equity interests of the entity over which control is asserted) (an
assignment to Target Therapeutics shall not require Landlord's consent);
(ii) any assignment of this Lease pursuant to a merger,
consolidation or reorganization of Tenant in which Tenant is the surviving
entity; or
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(iii) any assignment of this Lease to a company that purchases
all or substantially all of the assets of Tenant as a going concern; provided
that, with respect to assignments under this clause (iii), the following
requirements are met:
(A) The assignee has a net worth equal to or greater than
that of Tenant at the date of execution of this Lease;
(B) Tenant shall have given Landlord not less than fifteen
(15) days prior written notice of the assignment, which includes documentation
evidencing satisfaction of the foregoing requirement;
(C) No Event of Default shall have occurred and be
continuing at the time of the assignment; and
(D) The assignee assumes, in writing, and agrees to be
bound by all of the conditions, obligations and agreements of Tenant contained
in this Lease. Tenant shall provide a copy of such agreement to Landlord within
thirty (30) days after such assignment;
(iv) any sale of Tenant's capital stock in any transaction which
is registered pursuant to the Securities Act of 1933, as amended, and the
regulations thereunder, or which is issued for fair value in any transaction
which is exempt from such registration requirements;
(v) if Tenant's capital stock is publicly traded, any sale or
transfer of Tenant's capital stock on any public securities exchange;
(vi) any transfer of Tenant's capital stock by Tenant's
shareholders to or among Tenant's shareholders or members of their immediate
families or any such shareholder's testamentary, or inter-vivos trust or upon
the death of any such shareholder; or
(vii) any transfer of Tenant's capital stock by corporate or
partnership shareholders thereof to the equity holders of such corporate or
partnership shareholders.
ARTICLE XV
DEFAULTS AND REMEDIES
15.1 Tenant's Default. At the option of Landlord, a default under this
Lease by Tenant shall exist if any of the following events shall occur (each is
called an "Event of Default"):
(a) Tenant fails to pay the Rent payable hereunder, as and when due,
for a period of three (3) days after Notice by Landlord; provided, however, the
Notice given hereunder shall be in lieu of, and not in addition to, any notice
required under Section 1161, et seq., of the California Code of Civil Procedures
-- ----
so long as such notice conforms to the requirement of such Section 1161, et seq.
-- ----
(b) Tenant suffers to be made any transfer, assignment or subletting,
except as provided in Article XIV hereof;
(c) Any of Tenant's rights under this Lease are sold or otherwise
transferred by or under court order or legal process or otherwise or if any of
the actions described in Section 15.2 are taken by or against Tenant or any
Guarantor;
(d) The Premises are used for any purpose other than as permitted
pursuant to Article V. See Rider 15.1(d);
(e) Tenant abandons the Premises
(f) Any representation or warranty given by Tenant under or in
connection with this Lease proves to be materially false or misleading;
(g) Tenant fails to timely comply with the provisions of Article VI
("Hazardous Materials") See Rider 15.1(g), Article XIV ("Assignment and
Subletting"), Article XVI ("Subordination; Estoppel Certificate; Financials"),
Section 21.5 ("Modifications for Mortgagees") or Section 21.19 ("Authority"); or
(h) Tenant fails to observe, keep, perform or cure within fifteen (15)
days after Notice by Landlord any of the other terms, covenants, agreements or
conditions contained in this Lease or those set forth in any other agreements or
rules or regulations which Tenant is obligated to observe or perform. In the
event such default reasonably could not b cured or corrected within such fifteen
day period, but is reasonably susceptible to
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cure or correction, then Tenant shall not be in default hereunder if Tenant
commences the cure or correction of such default within such fifteen-day period
and diligently prosecutes the same to completion after commencing such cure or
correction. The Notice required by this subparagraph 15.1(h) shall be in lieu
of, and not in addition to, any notice required under Section 1161, et seq., of
------
the California Code of Civil Procedure; provided such notice conforms to the
requirements of such Section 1161, et seq.
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Notices given under this Section 15.1 shall specify the alleged default
and shall demand that Tenant perform the provisions of this Lease or pay the
Rent that is in arrears, as the case may be, within the applicable period of
time, or quit the Premises. No such Notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord so elects in the Notice.
15.2 Bankruptcy or Insolvency. In no event shall this Lease be assigned or
assignable by operation of law and in no event shall this Lease be an asset of
Tenant in any receivership, bankruptcy, insolvency or reorganization proceeding.
In the event:
(a) A court makes or enters any decree or order adjudging Tenant to be
insolvent, or approving as properly filed by or against Tenant a petition
seeking reorganization or other arrangement of Tenant under any provisions of
the Bankruptcy Code or any applicable state law, or directing the winding up or
liquidation of Tenant and such decree or order shall have continued for a period
of thirty (30) days.
(b) Tenant makes or suffers any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provisions of the
Bankruptcy Code or any applicable state law;
(c) Tenant assigns its assets for the benefit of its creditors; or
(d) The material part of the property of Tenant or any property
essential to Tenant's business or of Tenant's interest in this Lease is
sequestered, attached or executed upon, and Tenant fails to secure a return or
release of such property within thirty (30) days thereafter, or prior to sale
pursuant to such sequestration, attachment or levy, whichever is earlier;
then this Lease shall, at Landlord's election, immediately terminate and be of
no further force or effect whatsoever, without the necessity for any further
action by Landlord, except that Tenant shall not be relieved of obligations
which have accrued prior to the date of such termination. Upon such
termination, the provisions herein relating to the expiration or earlier
termination of this Lease shall control and Tenant shall immediately surrender
the Premises in the condition required by the provisions of this Lease.
Additionally, Landlord shall be entitled to all relief, including recovery of
damages from Tenant, which may from time to time be permitted, or recoverable,
under the Bankruptcy Code or any other applicable state laws.
15.3 Landlord's Remedies. Upon the occurrence of an Event of Default,
then, in addition to and without waiving any other rights and remedies available
to Landlord at law or in equity or otherwise provided in this Lease, Landlord
may, at its option, cumulatively or in the alternative, exercise the following
remedies:
(a) Landlord may terminate Tenant's right to possession of the
Premises, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. No act by Landlord other than
giving Notice to Tenant of Landlord's election to terminate Tenant's right to
possession shall terminate this Lease. Acts of maintenance, efforts to relet
the Premises, or the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not constitute a termination
of Tenant's right to possession. Termination shall terminate Tenant's right to
possession of the Premises but shall not relieve Tenant of any obligation under
this Lease which has accrued prior to the date of such termination. Upon such
termination, Landlord shall have the right to re-enter the Premises, and remove
all persons and property, and Landlord shall also be entitled to recover from
Tenant:
(i) The worth at the time of award of the unpaid Monthly Rent
and Additional Rent which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided;
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(iii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent for the balance of the Term after the
time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result from Tenant's default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, demolition and renovation of the Premises
to the condition existing immediately prior to Tenant's occupancy, the
unamortized portion of any Tenant improvements and brokerage commissions funded
by Landlord in connection with this Lease, the cost of rectifying any damage to
the Premises occasioned by the act or omission of Tenant, reasonable attorneys'
fees, and any other reasonable costs; and
(v) At Landlord's election, all other amounts in addition to or
in lieu of the foregoing as may be permitted by law.
As used in subsections (i) and (ii) above, the "worth at the time of award"
shall be computed by allowing interest at the maximum legal rate permitted by
law. As used in subsection (iii) above, the "worth at the time of award" shall
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(b) Landlord may elect not to terminate Tenant's right to possession
of the Premises, in which event this Lease will continue in full force and
effect as long as Landlord does not terminate Tenant's right to possession, and
Landlord may continue to enforce all of its rights and remedies under this
Lease, including remedy provided by this subparagraph 15.3(b), Landlord shall
not unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord's consent as are
contained in this Lease. In addition, in the event Tenant has entered into a
sublease which is valid under the terms of this Lease, Landlord may also, at its
option, cause Tenant to assign to Landlord the interest of Tenant under said
sublease, including, but not limited to, Tenant's right to payment of Rent as it
becomes due. To the extent permitted by law, Landlord may elect to enter the
Premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord
reasonably incurs in reletting the Premises, including, but not limited to,
broker's commissions, expenses of cleaning and remodeling the Premises required
by the reletting, attorneys' fees and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease and for the entire
Premises or any portion thereof. Tenant shall pay to Landlord the Monthly Rent
and Additional Rent due under this Lease on the dates the Monthly Rent and such
Additional Rent are due, less the Rent Landlord actually collects from any
reletting. Except as provided in the preceding sentence, if Landlord relets the
Premises or any portion thereof, such reletting shall not relieve Tenant of any
obligation hereunder. Notwithstanding the above, no act by Landlord allowed by
this subparagraph 15.3(b) shall terminate this Lease unless Landlord notifies
Tenant in writing that Landlord elects to terminate this Lease.
15.4 No Surrender. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law in the event Tenant is evicted or Landlord
takes possession of the Premises by reason of an Event of Default. No act or
thing done by Landlord or Landlord's Agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by landlord. No employee
of Landlord or of Landlord's Agents shall have any power to accept the keys to
the Premises prior to the termination of this Lease, and the delivery of the
keys to any employee shall not operate as a termination of this Lease or a
surrender of the Premises.
15.5 Interest on Late Payments. Any Rent due under this Lease that is not
paid to Landlord within three (3) days of the date when due shall commence to
bear interest at the Applicable Rate until fully paid. Neither the accrual nor
the payment of interest shall cure any default by Tenant under this Lease.
15.6 Attorneys' and Other Fees. All sums reasonably incurred by Landlord
in connection with an Event of Default or holding over of possession by Tenant
after the expiration or termination of this Lease,
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including, but not limited to, all costs, expenses and actual accountants',
appraisers', attorneys' and other professional fees, and any collection agency
or other collections charges, shall be due and payable by Tenant to Landlord on
demand, and shall bear interest at the Applicable Rate from the date of such
demand until paid by Tenant. In addition, in the even that any action shall be
instituted by either of the parties hereto for the enforcement of any of its
rights in and under this Lease, the party in whose favor judgment shall be
rendered shall be entitled to recover from the other party all expenses
reasonably incurred by the prevailing party in such action, including actual
costs and reasonable attorneys' fees.
15.7 Landlord's Default. Landlord shall not be deemed to be in default in
the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within a reasonable
time, not to exceed thirty (30) days after receipt of Notice by Tenant to
Landlord (and the Mortgagees who have provided Tenant with notice) specifying
the nature of such default; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion. See Rider 15.7.
15.8 Limitation of Landlord's Liability. The obligations of the Landlord
do not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners. If
Landlord shall fail to perform any covenant, term, or condition of this Lease
upon Landlord's part to be performed, Tenant shall be required to deliver to
Landlord Notice of the same. If, as a consequence of such default, Tenant shall
recover a money judgment against Landlord, 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 Landlord in the Project and out
of rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or
any part of Landlord's right, title or interest in the Project, and no action
for any deficiency may be sought or obtained by Tenant, provided, however, that
the total of all liens and encumbrances against the Project shall not exceed
70% of its appraised value.
15.9 Mortgagee Protection. Upon any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any Mortgagee who has
provided Tenant with notice of its interest together with an address for
receiving notice, and shall offer such Mortgagee a reasonable opportunity to
cure the default. Tenant agrees that each of the Mortgagees to whom this Lease
has been assigned by Landlord is an express third party beneficiary hereof.
Tenant shall not make any prepayment of Monthly Rent more than one (1) month in
advance without the prior written consent of such Mortgagee. Tenant waives any
right under California Civil Code Section 1950.5 or any other present or future
law to the collection of any deposit from such Mortgagee or any purchaser at a
foreclosure sale of such Mortgagee's interest unless such Mortgagee or such
purchaser shall have actually received and not refunded the deposit. In such
case, Landlord shall remain fully liable for the refund of all deposits. Tenant
agrees to make all payments under this Lease to the Mortgagee upon receiving a
direction, in writing, to pay said amounts to such Mortgagee. Tenant shall
comply with such written direction to pay without determining whether an even of
default exists under such Mortgagee's load to Landlord.
15.10 Landlord's Right to Perform. If Tenant shall at any time fail to
make any payment or perform any other act on its part to be made or performed
under this Lease, Landlord may (but shall not be obligated to), at Tenant's
expense, and without waiving or releasing Tenant from any obligation of Tenant
under this Lease, make such payment or perform such other act to the extent
Landlord may deem desirable, and in connection therewith, pay expenses and
employ counsel. All sums paid by Landlord and all penalties, interest and
costs, including, but not limited to, collection costs and attorneys' fees
reasonably incurred in connection therewith, shall be due and payable by Tenant
to Landlord, as an item of Additional Rent, on demand by Landlord, together with
interest thereon at the Applicable Rate from the date of such demand until paid
by Tenant.
15.11 Limitation of Actions Against Landlord. Any claim, demand or right
of any kind by Tenant which is based upon or arises in connection with this
Lease shall be barred unless Tenant commences an action thereon within one (1)
year after the date Tenant discovers the act, omission, event or default upon
which the claim, demand or right arises.
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15.12 Waiver of Jury Trial. To the full extent permitted by law, Tenant
hereby waives the right to trial by jury in any action, proceeding or
counterclaim brought by Tenant on any matter whatsoever arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, Tenant's
use or occupancy of the Premises and/or any claim of injury or damage.
RIDER 15.1 TENANT'S DEFAULT.
(d) ; provided, however, if a use other than the permitted use is
undertaken by Tenant in a good faith belief that such use is in fact a permitted
use, and if such unauthorized use is terminated within fifteen (15) days Notice
from Landlord, such use shall not constitute an Event of Default hereunder.
(g) (with respect to Tenant's failure to comply with the disclosure
and/or reporting requirements of Article VI, no Event of Default shall occur
until after Notice from Landlord with respect to such matters)
RIDER 15.7 LANDLORD'S DEFAULT.
In the event Landlord, after Notice, has failed to perform an
obligation required of it, and the nature of such failure is such that, if such
obligation is not immediately performed imminent personal injury or property
damage will ensue, Tenant shall have the right to perform such obligation on
Landlord's behalf and to invoice Landlord for the reasonable costs incurred by
Tenant in performing such obligation.
ARTICLE XVI
SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
16.1 Subordination, Attornment and Non-Disturbance. Without the necessity
of any additional document being executed by Tenant for the purpose of effecting
a subordination, and at the election of Landlord or any Mortgagee or any ground
lessor with respect to the land of which the Premises are a part, this Lease
shall be subject and subordinate at all times to (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building, and (ii) the lien of any Mortgage which may now exist or hereafter be
executed in any amount for which the Project, the Building, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Landlord or any such Mortgagee or ground lessor shall
have the right, at its election, to subordinate or cause to be subordinated any
such ground leases or underlying leases or any such liens to this Lease. No
subordination shall permit material interference with Tenant's rights or
increase its obligations or liability hereunder, and any ground lessor or
Mortgagee shall recognize Tenant and its permitted successors and assigns as the
tenant of the Premises and shall not disturb Tenant's right to quiet possession
of the Premises during the Term so long as no Event of Default has occurred and
is continuing under this Lease. If Landlord's interest in the Premises is
acquired by any ground lessor or Mortgagee, or in the event proceedings are
brought for the foreclosure of, or in the event of exercise of the power of sale
under, any Mortgage made by Landlord covering the Premises or any part thereof,
or in the event a conveyance in lieu of foreclosure is made for any reason,
Tenant shall, notwithstanding any subordination and upon the request of such
successor in interest to Landlord, attorn to and become the Tenant of the
successor in interest to Landlord and recognize such successor in interest as
the Landlord under this Lease provided such successor in interest assumes and
agrees to be bound by, in writing, all of Landlord's obligations under this
Lease. Although this Section 16.1 is self-executing, Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form requested
by Landlord, or any Mortgagee or ground lessor, any additional documents
evidencing the priority or subordination of this Lease with respect to any such
ground leases or underlying leases or the lien of any such Mortgage, or
evidencing the attornment of Tenant to any successor in interest to Landlord as
herein provided. Tenant's failure to timely execute and deliver such additional
documents shall, at Landlord's option, constitute an Event of Default hereunder.
Landlord represents that no Mortgage currently encumbers the Premises.
16.2 Estoppel Certificate. Tenant shall within ten (10) days following
written request by Landlord, execute and deliver to landlord any documents,
including estoppel certificates, in a form required by Landlord (i) certifying
that this Lease is unmodified and in full force and effect or, if modified,
attaching a copy of such modification and certifying that this Lease, as so
modified, is in full force and effect and the date to which the Rent
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and other charges are paid in advance, if any, (ii) acknowledging that there are
not, to Tenant's knowledge, any uncured defaults on the part of the Landlord or
stating the nature of any uncured defaults, (iii) evidencing the status of this
Lease as may be required by a Mortgagee or a purchaser of the Premises, (iv)
certifying the current Monthly Rent amount and the amount and form of Security
deposit on deposit with Landlord, and (v) certifying to such other information
regarding the status of the Lease as Landlord, Landlord's Agents, Mortgagees and
prospective purchasers may reasonably request, including, but not limited to,
any requested information regarding Hazardous Materials. Tenant's failure to
deliver an estoppel certificate within ten (10) days after delivery of
Landlord's written request therefor shall constitute an Event of Default
hereunder. See Rider 16.2.
RIDER 16.2 ESTOPPEL CERTIFICATE.
Landlord shall, within twenty (20) days following written request by
Tenant, execute and deliver to Tenant Estoppel Certificates similar to the
Estoppel Certificates referenced above.
ARTICLE XVII
SIGNS AND GRAPHICS
Landlord shall designate the location on the Premises, for one (1) or more
exterior identification signs for Tenant. Tenant shall have no right to
maintain identification signs in any other location in, on or about the Premises
and shall not display or erect any other signs, displays or other advertising
materials that are visible from the exterior of the Building. The size, design,
color and other physical aspects of permitted signs shall be subject to
Landlord's written approval prior to installation, which approval may be
withheld in Landlord's discretion, any Restrictions and any applicable municipal
or other governmental permits and approvals. All such signs and graphics shall
conform to the Sign Criteria set forth by the Property Manager. The cost of all
signs and graphics, including the installation, maintenance and removal thereof,
shall be at Tenant's sole cost and expense. If Tenant fails to maintain its
signs, or if Tenant fails to remove same upon termination of this Lease and
repair any damage caused by such removal (including, but not limited to,
repainting the affected area, if required by Landlord), Landlord may do so at
Tenant's expense. All sums reasonably disbursed, deposited or incurred by
Landlord in connection with such removal, including, but not limited to, all
costs, expenses and actual attorneys' fees, shall be due and payable by Tenant
to Landlord on demand by landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
ARTICLE XVIII
QUIET ENJOYMENT
Landlord covenants that Tenant, upon performing the terms, conditions and
covenants of this Lease, shall have quiet and peaceful possession of the
Premises as against any person claiming the same by, through or under Landlord.
ARTICLE XIX
SURRENDER; HOLDING OVER
19.1 Surrender of the Premises. Upon the expiration or earlier termination
of this Lease, Tenant shall surrender the Premises to Landlord in its condition
existing as of the Commencement Date, normal wear and tear, casualty damage and
acts of God excepted, with all interior walls in good repair, all carpets
shampooed and cleaned, the HVAC equipment, plumbing, electrical and other
mechanical installations in good operating order and all floors cleaned and
waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from
the Premises all of Tenant's Alterations which Landlord requires Tenant to
remove pursuant to Section 8.1 and all Tenant's Personal Property, and shall
repair any damage and perform any restoration work caused by such removal. If
Tenant fails to remove such Alterations and Tenant's Personal Property which
Tenant is authorized and obligated to remove pursuant to the above, and such
failure continues after the termination of this Lease, Landlord may retain such
property and all rights of Tenant with respect to it shall cease, or Landlord
may place all or any portion of such property in public storage for Tenant's
account. Tenant shall pay to Landlord, upon demand, the costs of removal
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of any such Alterations and Tenant's Personal Property and storage and
transportation costs of same, and the cost of repairing and restoring the
Premises, together with attorneys' fees and interest on said amounts at the
Applicable Rate from the date of expenditure by Landlord. If the Premises are
not so surrendered at the termination of this Lease, Tenant hereby agrees to
indemnify Landlord and Landlord's Agents against all loss or liability resulting
from any delay by Tenant in so surrendering the Premises, including, but not
limited to, any claims made by any succeeding tenant, losses to Landlord due to
lost opportunities to lease to succeeding tenants, and actual attorneys' fees
and costs.
19.2 Holding Over. If Tenant remains in possession of all or any part of
the Premises after the expiration of the Term with the prior written consent of
Landlord, such possession shall constitute a month-to-month tenancy only and
shall not constitute a renewal or extension for any further term. If Tenant
remains in possession of all or any part of the Premises after the expiration of
the Term without the prior written consent of Landlord, such possession shall
constitute a tenancy at sufferance. In either of such events, Monthly Rent
shall be increased to an amount equal to one hundred fifty percent (150%) of the
Monthly Rent payable during the last month of the Term, and any other sums due
hereunder shall be payable in the amounts and at the times specified in this
Lease. Any such tenancy shall be subject to every other term, condition, and
covenant contained in this Lease.
ARTICLE XX
CONSTRUCTION OF TENANT IMPROVEMENTS
The obligations of Landlord and Tenant, if any, with respect to the Tenant
Improvements, are set forth in the Work Letter attached as Exhibit C. It is
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acknowledged and agreed that all Tenant Improvements under this Lease are and
shall be the property of Landlord from and after their installation.
ARTICLE XXI
MISCELLANEOUS AND INTERPRETIVE PROVISIONS
21.1 Broker. Landlord and Tenant each warrant and represent to the other
that neither has had any dealings with any real estate broker, agent or finder
in connection with the negotiation of this Lease or the introduction of the
parties to this transaction, except for the Broker (whose commission shall be
paid by Landlord), and that it knows of no other real estate broker, agent or
finder who is or might be entitled to a commission or fee in connection with
this Lease. In the event of any additional claims for brokers' or finders' fees
with respect to this Lease, Tenant shall indemnify, hold harmless, protect and
defend Landlord from and against such claims if they shall be based upon any
statement or representation or agreement made by Tenant, and Landlord shall
indemnify, hold harmless, protect and defend Tenant from and against such claims
if they shall be based upon any statement, representation or agreement made by
Landlord.
21.2 Examination of Lease. Submission of this Lease for examination or
signature by Tenant does not create a reservation of or option to lease. This
Lease shall become effective and binding only upon full execution of this Lease
by both Landlord and Tenant.
21.3 No Recording. Tenant shall not record this Lease without Landlord's
prior written consent, but if either party requests, the other party agrees to
execute, have acknowledged and deliver a memorandum of this Lease in recordable
form which the requesting party thereafter may file for record.
21.4 Quitclaim. Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in and to the Premises by reason of this Lease or
otherwise.
21.5 Modifications for Mortgagees. If in connection with obtaining
financing for the Premises or any portion thereof, Landlord's Mortgagees shall
request reasonable modifications to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not adversely affect Tenant's rights hereunder or
increase Tenant's obligations hereunder. Tenant's failure to so consent shall
constitute an Event of Default under this Lease.
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21.6 Notice. Any Notice required or desired to be given under this Lease
shall be in writing and shall be addressed to the address of the party to be
served. The addresses of Landlord and Tenant are as set forth in Items 1 and 3,
respectively, of the basic Lease Provisions, except that (a) prior to the
Commencement Date, the address for Notices to Tenant shall be as set forth
opposite Tenant's signature on this Lease and (b) from and after the
Commencement Date, notwithstanding the addresses for Tenant set forth in Item 3
of the Basic Lease Provisions, all Notices regarding the operation and
maintenance of the Project shall be delivered to Tenant at the Premises. Each
such Notice shall be deemed effective and given (i) upon receipt, if personally
delivered (which shall include delivery by courier or overnight delivery
services), (ii) upon being telephonically confirmed as transmitted, if sent by
telegram, telex or telecopy, (iii) two (2) business days after deposit in the
United States mail in Santa Clara County or in the county in which the Premises
are located, certified and postage prepaid, properly addressed to the party to
be served, or (iv) upon receipt if sent in any other way. Any party hereto may
from time to time, by Notice to the other in accordance with this Section 21.6,
designate a different address than that set forth above for the purposes of
Notice.
21.7 Captions. The captions and headings used in this Lease are for the
purpose of convenience only and shall not be construed to limit or extend the
meaning of any part of this Lease.
21.8 Executed Copy. Any fully executed copy of this Lease shall be deemed
an original for all purposes.
21.9 Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
21.10 Severability. If any one or more of the provisions contained herein
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality, or unenforcability shall not affect any
other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
21.11 Survival. All covenants and indemnities set forth herein which
contemplate the payment of sums, or the performance by Tenant after the Term or
following an Event of Default, including specifically, but not limited to, the
covenants and indemnities set forth in Section 5.3, Article VI, Article VII,
Section 8.1, Section 9.2, Section 11.1, Section 11.10, Article XV, and Article
XIX, and all representations and warranties of Tenant, shall survive the
expiration or sooner termination of this Lease. The foregoing sentence shall
not be construed as imposing on Tenant any obligation or liability that did not
accrue, according to the terms of this Lease, during the Term of this Lease.
21.12 Choice of Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against either Landlord or Tenant.
21.13 Gender; Singular, Plural. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership or
corporation or joint venture, the singular includes the plural and the plural
includes the singular.
21.14. Non-Agency. It is not the intention of Landlord or Tenant to
create hereby a relationship of master-servant or principal-agent, and under no
circumstance shall Tenant herein be considered the agent of Landlord. It being
the sole purpose and intent of the parties hereto to create a relationship of
landlord and tenant.
21.15 Successors. The terms, covenants, conditions and agreements
contained in this Lease shall, subject to the provisions as to assignment,
subletting, and bankruptcy contained herein and any other provisions restricting
successors or assigns, apply to and bind the heirs, successors, legal
representatives and assigns of the parties hereto.
21.16 Waiver; Remedies Cumulative. The waiver by either party of any
term, covenant, agreement or condition herein contained shall not be deemed to
be a waiver of any subsequent breach of the same or any other term, covenant,
agreement or condition herein contained, nor shall any custom or practice
which may grow up between the parties in the administration of this Lease be
construed to waive or to lessen the right of Landlord to insist upon the
performance by Tenant in strict accordance with all of the provisions of this
Lease. The subsequent
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acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach by Tenant of any provisions, covenant, agreement or
condition of this Lease, other than the failure of Tenant to pay the
particular Rent payment so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent payment.
Landlord's acceptance of any check, letter or payment shall in no event be
deemed an accord and satisfaction, and Landlord shall accept the check, letter
or payment without prejudice to Landlord's right to recover the balance of the
Rent or pursue any other remedy available to it. The rights and remedies of
either party under this Lease shall be cumulative and in addition to any and
all other rights and remedies which either party has or may have.
21.17 Unavoidable Delay. Except for the monetary obligations of Landlord
and Tenant under this Lease, neither party shall be chargeable with, liable for,
or responsible to the other for anything or in any amount for any Unavoidable
Delay and any Unavoidable Delay shall not be deemed a breach of or default in
the performance of this Lease, it being specifically agreed that any time limit
provision contained in this Lease (other than the scheduled expiration of the
Term) shall be extended for the same period of time lost by Unavoidable Delay.
21.18 Entire Agreement. This Lease is the entire agreement between the
parties, and supersedes any prior agreements, representations, negotiations or
correspondence between the parties except as expressed herein. Except as
otherwise provided herein, no subsequent change or addition to this Lease shall
be binding unless in writing and signed by the parties hereto.
21.19 Authority. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of the corporation or partnership, as
the case may be, represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said entity in accordance with its corporate
bylaws, statement of partnership or certificate of limited partnership, as the
case may be, and that this Lease is binding upon said entity in accordance with
its terms. If Tenant is a corporation, Tenant shall, if requested by Landlord,
within thirty (30) days after execution of this Lease and prior to entering into
possession of the Premises, deliver to Landlord a certified copy of a resolution
of the Board of Directors of the corporation or certificate of the Secretary of
the corporation, authorizing, ratifying or confirming the execution of this
Lease. If Tenant is a partnership, Tenant shall, if requested by Landlord,
within thirty (30) days after the execution of this Lease and prior to entering
into possession of the Premises, deliver to Landlord a certified copy of its
partnership agreement authorizing such execution.
21.20 Guaranty. As a condition to the execution of this Lease by
Landlord, the obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor listed in Item 14 of
the Basic Lease Provisions.
21.21 Exhibits; References. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease. In the event of variation or discrepancy, the duplicate original hereof
(including exhibits, amendments, riders and addenda, if any, specified above)
held by Landlord shall control. All references in this Lease to Articles,
Sections, Exhibits, Riders and clauses are made, respectively, to Articles,
Sections, Exhibits, Riders and clauses of this Lease, unless otherwise
specified.
21.22 Basic Lease Provisions. The Basic Lease Provisions at the beginning
of this Lease are intended to provide general information only. In the event of
any inconsistency between the Basic Lease Provisions and the specific provisions
of this Lease, the specific provisions of this Lease shall prevail.
21.23 No Merger. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall
not work a merger, and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all such subtenancies.
21.24 Joint and Several Obligations. If more than one person or entity is
Tenant, the obligations imposed on each such person or entity shall be joint and
several.
21.25 No Light or Air Easement. Any diminution or shutting off of light
or air by any structure which may be erected on lands adjacent to the Building
shall in no way affect this Lease, abate Rent or otherwise impose any liability
on Landlord. This Lease does not confer any right with regard to the subsurface
below the ground level of the Building.
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21.26 Security Measures. Tenant hereby acknowledges that Landlord shall
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, Tenant's Agents and the property of
Tenant and of Tenant's Agents from acts of third parties. Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from providing
security protection for the Project or any part thereof, in which event the cost
thereof shall be included within the definition of Project Costs and paid by
Tenant in the manner set forth in Section 7.1.
THIS LEASE is effective as of the date the last signatory necessary to
execute this Lease shall have executed this Lease.
"LANDLORD"
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
By: Alex. Brown Kleinwort Benson Realty
Advisors Corporation
Its: Advisor and Duly Authorized Agent
By: /s/ Richard Cunningham
----------------------------
Richard Cunningham
Its: Senior Vice President
By: /s/ Joseph R. Shea
------------------------
Joseph R. Shea
Its: Senior Vice President
ADDRESS FOR NOTICES
PRIOR TO
COMMENCEMENT DATE:
"TENANT"
CARDIMA, INC.,
4720 Lakeview Blvd. A California corporation
Fremont, CA 94537
By: /s/ Gabriel B. Vegh
-------------------------
Name: Gabriel B. Vegh
Title: President
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
42
<PAGE>
RIDER 21.27
21.27(a) $600,000 Letter of Credit. Upon execution of this Lease,
-------------------------
Tenant shall deliver to Landlord a $600,000 letter of credit (the "$600,000
Letter of Credit"). The $600,000 Letter of Credit shall be issued by Silicon
Valley Bank, shall have an expiration date no earlier than October 31, 1994,
shall name Landlord as beneficiary thereunder and shall be a "clean" letter of
credit payable, in whole or in part, upon presentation of Landlord's sight
draft. Landlord shall be entitled to draw upon the $600,000 Letter of Credit
(i) upon the occurrence of an Event of Default under the Lease, and/or (ii) if
the $600,000 Letter of Credit, or any renewal or replacement thereof, shall not
be renewed or replaced (with a substitute satisfactory to Landlord) at least
fifteen (15) days prior to the expiration date thereof. Landlord shall be
entitled to draw upon the $600,000 Letter of Credit in an amount sufficient to
cure any then-current Event of Default and, if Landlord shall have terminated
this Lease because of an Event of Default hereunder, or if Landlord shall be
entitled to draw upon it because of pending expiration thereof pursuant to
clause (ii) of the preceding sentence, Landlord shall be entitled to draw upon
the entire amount of the $600,000 Letter of Credit. Landlord shall deliver the
original $600,000 Letter of Credit to Tenant upon delivery to Landlord of (A) a
certificate executed by the president of Tenant certifying that Tenant has,
after the date of execution of this Lease, received, in immediately available
funds, additional equity capital in the amount of at least $6,570,000 and (B) a
standby letter of credit conforming to the terms set forth in the following
subsection.
(b) Standby Letter of Credit. The standby letter of credit referred to in
------------------------
subsection (a) above (i) shall be issued by a financial institution that is
reasonably acceptable to Landlord, (ii) shall name Landlord as the beneficiary
thereunder, and (iii) shall be payable upon delivery of Landlord's sight draft.
Such letter of credit shall be renewed annually during the initial Term of the
Lease and shall provide for payment up to the amounts set forth below, plus the
unamortized balance of the "Additional Allowance", if any, funded by Landlord
pursuant to Exhibit C to this Lease:
<TABLE>
<CAPTION>
Period Amount
----------------------------------------- --------
<S> <C>
Commencement - 07/30/95 $200,000
08/01/95 - 07/31/96 160,000
08/01/96 - 07/31/97 120,000
08/01/97 - 07/31/98 80,000
08/01/98 - Expiration 40,000
</TABLE>
Landlord shall be entitled to draw upon the standby letter of credit (i)
upon the occurrence of an Event of Default under the Lease, and/or (ii) if the
standby letter of credit, or any renewal or replacement thereof, shall not be
renewed or replaced (with a substitute satisfactory to Landlord) at least
fifteen (15) days prior to the expiration date thereof. Landlord shall be
entitled to draw upon the standby letter of credit in an amount sufficient to
cure any then-current Event of Default and, if Landlord shall have terminated
this Lease because of an Event of Default hereunder, or if Landlord shall be
entitled to draw upon it because of pending expiration thereof pursuant to
clause (ii) of the preceding sentence, Landlord shall be entitled to draw upon
the entire amount of the standby letter of credit.
43
<PAGE>
LEASE RIDER NO. ONE
-------------------
OPTION TO EXTEND TERM
(FAIR MARKET VALUE ADJUSTMENT)
THIS LEASE RIDER is attached to and made a part of that certain Standard
Form Lease dated April 25, 1994, by and between State of California Public
Employees' Retirement System as "Landlord", and Cardima, Inc., a California
corporation as "Tenant", for the Premises known as 47266 Benicia Street,
Fremont, California.
The capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Lease Rider
shall supersede any inconsistent or conflicting provisions of the Lease.
A. Option to Extend Term.
----------------------
1. Grant of Option. Landlord hereby grants to Tenant the option (the
----------------
"Option") to extend the Term of the Lease for an additional consecutive term of
five (5) years and zero (0) months (the "Extension"), on the same terms and
conditions as set forth in the Lease, except the Monthly Rent shall be the
amount determined as set forth below. The Option shall be exercised only by
written notice delivered to Landlord at least one hundred twenty (120) days
before the expiration of the initial Term of the Lease. If Tenant fails to
deliver to Landlord written notice of the exercise of the Option within the time
period prescribed above, the Option shall lapse and there shall be not further
right to extend the Term of the Lease. The Option shall be exercisable by
Tenant on the express conditions that (i) at the time of the exercise of the
Option, and thereafter at all times prior to the commencement of the Extension,
an Event of Default shall not have occurred and be continuing under the Lease.
If Tenant properly exercises the Option, "Term", as used herein and in the
Lease, shall be deemed to include the Extension, unless specified otherwise
herein or in the Lease.
2. Personal Option. The Option is personal to Tenant. If Tenant
----------------
subleases or assigns or otherwise transfers any interest under the Lease prior
to the exercise of the Option, other than as permitted in Rider 14.1, the Option
shall lapse. If Tenant subleases or assigns or otherwise transfers any interest
of Tenant under the Lease after the exercise of the Option but prior to the
Commencement of the Extension, the Option shall lapse and the Term of the Lease
shall expire as if the option were not exercised.
B. Calculation of Monthly Rent.
----------------------------
1. Initial Monthly Rent. The Monthly Rent during the Extension shall be
---------------------
adjusted, as of the commencement of the Extension (the "Rental Adjustment Date")
to 95% of the "Fair Market Value" of the Premises, determined in the following
manner: Not later than one hundred (100) days prior to the Rental Adjustment
Date, Landlord and Tenant shall meet in an effort to negotiate, in good faith,
the Fair Market Value of the Premises as of the Rental Adjustment Date. If
Landlord and Tenant have not agreed upon the Fair Market Value of the Premises
at least ninety (90) days prior to the Rental Adjustment Date, the Fair Market
Value shall be determined by the following appraisal method:
(i) If Landlord and Tenant are not able to agree upon the Fair Market
Value of the Premises within the time period described above, then Landlord and
Tenant shall attempt to agree in good faith upon a single appraiser not later
than seventy-five (75) days prior to the Rental Adjustment Date. If Landlord
and Tenant are unable to agree upon a single appraiser within such time period,
then Landlord and Tenant shall each appoint one appraiser not later than sixty-
five (65) days prior to the Rental Adjustment Date, and Landlord and Tenant
shall each give written notice to the other of such appointment at the time of
such appointment. Within ten (10) days thereafter, the two appointed appraisers
shall appoint a third appraiser. If either Landlord or Tenant fails to appoint
its appraiser and to give written notice thereof to the other party within the
prescribed time period, the single appraiser appointed shall determine the Fair
Market Value of the Premises. If both parties fail to appoint appraisers within
the prescribed time periods, then the first appraiser thereafter selected by a
party (such selection to be by written notice thereof to such appraiser and the
other party) shall determine the Fair Market Value of the Premises. Each party
shall bear the cost of its own appraiser and the parties shall have at least
five (5) years' experience in the appraisal of commercial/industrial real
property in the area in which the Premises are located and shall be members of
professional organizations such as MAI or its equivalent.
44
<PAGE>
(ii) For the purposes of such appraisal, the term "Fair Market Value"
shall mean the price that a ready and willing tenant would pay, as of the Rental
Adjustment Date, as monthly rent, to a ready and willing Landlord of property
comparable to the Premises if such property were exposed for lease on the open
market for a reasonable period of time and taking into account all of the
purposes for which such property may be used. See Option Rider One (A). If a
single appraiser is chosen, then such appraiser shall determine the Fair Market
Value of the Premises. Otherwise, the Fair Market Value of the Premises shall
be the arithmetic average of the two (2) of the three (3) appraisals which are
closest in amount, and the third appraisal shall be disregarded. Landlord and
Tenant shall instruct the appraiser(s) to complete their determination of the
Fair Market Value not later than thirty (30) days prior to the Rental Adjustment
Date. If the Fair Market Value is not determined prior to the Rental Adjustment
Date, then Tenant shall continue to pay to Landlord the Monthly Rent applicable
to the Premises immediately prior to the Rental Adjustment Date until the Fair
Market Value is determined. When the Fair Market Value of the Premises is
determined, Landlord shall deliver notice thereof to Tenant, and Tenant shall
pay to Landlord, within ten (10) days after receipt of such notice, the
difference between the Monthly Rent actually paid by Tenant to Landlord for the
period after the Rental Adjustment Date and the new Monthly Rent determined
hereunder effective as of the Rental Adjustment Date.
RIDER ONE(A) EXTENSION OPTION, FAIR MARKET VALUE:
In determining the Fair Market Value of the Premises, the appraiser(s)
shall take into account a mix of economic and other relevant factors, including,
without limitation (i) the size, age and condition of the premises, excluding
the value of any leasehold improvements paid for by Tenant but including those
tenant improvements paid for by the "Allowance" (as defined in the Work Letter
Agreement), (ii) the services provided by Landlord under the terms of the Lease;
(iii) the duration of the extended term; (iv) the presence or absence of leasing
commissions and marketing costs; (v) the allocation of Operating Expenses, other
costs and expenses, and maintenance obligations between Landlord and Tenant as
provided in the Lease; and (vi) the rental and other monetary payments
(including any escalations and rental concessions) then being offered by
landlords of comparable properties for new leases.
45
<PAGE>
LEASE RIDER NO. TWO
-------------------
SPECIAL TAX PROVISIONS
(CALPERS)
THIS LEASE RIDER is attached to and made apart of that certain Standard
Form Lease dated May 2, 1994 , by and between State of California Public
--------------- -----------------------------
Employees' Retirement System , as "Landlord", and Cardima, Inc., a
---------------------------- ----------------
California corporation , as "Tenant", for the Premises known as 47266
---------------------- ----------
Benicia Street, Fremont , California.
-----------------------
The capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Lease Rider
shall supersede any inconsistent or conflicting provisions of the Lease.
TO BE ADDED TO THE END OF THE DEFINITION OF "REAL PROPERTY TAXES":
Tenant acknowledges that Landlord is an agency of the State of California
and as such is exempt from the payment of ad valorem Real Property Taxes under
Section 3A of Article 13 of the California Constitution. Tenant acknowledges
that, despite such exemption, a Real Property Tax may be imposed upon the value
of the possessory interest in the Premises held by Tenant pursuant to California
Revenue and Taxation Code Section 107, et seq., as the same may be revised,
-- ---
amended or replaced from time to time (the "possessory interest tax"), and that
the value of the possessory interest may be determined as of the Commencement
Date of the Lease or as of such later date as may be determined by the
applicable taxing entity. The term "Real Property Taxes" as defined herein
shall include the possessory interest tax. Tenant shall pay the possessory
interest tax to Landlord as part of its payment of Real Property Taxes under the
terms and provisions of Article VII of the Lease. The full cash value, as
defined in Sections 110 and 110.1 of the Revenue and Taxation Code, of the
possessory interest, upon which property taxes will be based, shall equal the
greater of (A) the full cash value of the possessory interest, or (B) if Tenant
has leased less than all of the Project, the Tenant's allocable share of the
full cash value of the Project that would have been enrolled if the Project had
been subject to property tax upon acquisition by Landlord. Tenant's allocable
share shall be the Tenant's leaseable square feet divided by the total leasable
square feet of the Project.
46
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF PREMISES
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
First level floor plan graphic.
47
<PAGE>
EXHIBIT B
---------
PROJECT SITE
------------
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
Map of Project Site graphic.
48
<PAGE>
EXHIBIT C
---------
WORK LETTER
(TENANT IMPROVEMENT ALLOWANCE)
(PENDING PRELIMINARY PLANS)
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
1. APPLICATION OF EXHIBIT
Capitalized terms used and not otherwise defined herein shall have the same
definitions as set forth in the Lease. The provisions of this Work Letter shall
apply to the planning and completion of leasehold improvements requested by
Tenant (the "Tenant Improvements") for the fitting out of the initial Premises,
as more fully set forth herein.
2. LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS
(a) Preliminary Plans. Within five (5) business days following full
execution of this Lease by both Landlord and Tenant, Landlord's Architect shall
prepare preliminary space plans, and a preliminary general budget, for the
Tenant Improvements (the "Preliminary Plans") which shall include, without
limitation, sketches and/or drawings showing the locations of doors,
partitioning, electrical fixtures, outlets and switches, plumbing fixtures,
floor loads and other requirements, and a list of all specialized installations
and improvements and upgrade specifications determined by Tenant as required for
its use of the Premises. Tenant agrees to and shall promptly and fully
cooperate with Landlord's Architect and shall supply all information Landlord's
Architect deems necessary for the preparation of the Preliminary Plans. Tenant
acknowledges that the Preliminary Plans shall be prepared by Landlord's
Architect after consultation and cooperation between Tenant and Landlord's
Architect regarding the proposed Tenant Improvements and Tenant's requirements.
Landlord and Landlord's Architect shall be entitled, in all respects, to rely
upon all information supplied by Tenant regarding the Tenant Improvements. The
costs associated with preparation of the Preliminary Plans shall be borne by
Tenant and paid as set forth in Sections 5 and 6 of the Work Letter.
(b) Working Drawings. Within fourteen (14) business days following full
execution of this Lease by both Landlord and Tenant, Landlord's Architect shall
prepare working drawings together with a preliminary line item budget (the
"Working Drawings") for the Tenant Improvements based upon the approved
Preliminary Plans. The Working Drawings shall include architectural, mechanical
and electrical construction drawings for the Tenant Improvements based on the
Preliminary Plans. Notwithstanding the Preliminary Plans, in all cases the
Working Drawings (i) shall be subject to Landlord's final approval, which
approval shall not be unreasonably withheld, (ii) shall not be in conflict with
building codes for the City or County or with insurance requirements for a fire
resistive Class A building, and (iii) shall be in a form satisfactory to
appropriate governmental authorities responsible for issuing permits and
licenses required for construction. The costs associated with preparation of
the Working Drawings shall be borne by Tenant and paid as set forth in Sections
5 and 6 of this Work Letter.
(c) Approval of Working Drawings. Landlord or Landlord's Architect shall
submit the Working Drawings to Tenant for Tenant's review, and Tenant shall
notify Landlord and Landlord's Architect within five (5) business days after
delivery thereof of any requested revisions. Within five (5) days after receipt
of Tenant's notice, Landlord's Architect shall make all approved revisions to
the Working Drawings and submit two (2) copies thereof to Tenant for its final
review and approval, which approval shall be given within three (3) business
days thereafter. Concurrently with the above review and approval process,
Landlord may submit all plans and specifications to necessary permits and
licenses to construct the Tenant Improvements as shown on the Working Drawings.
Any changes which are required by City or other governmental agencies shall be
immediately submitted to Landlord for Landlord's review and reasonable approval,
and Landlord shall promptly notify Tenant of such changes. See Rider 2(c) to
Work Letter.
(d) Schedule of Critical Dates. Set forth below is a schedule of certain
critical dates relating to Landlord's and Tenant's respective obligations for
the design and construction of the Tenant Improvements. Such
49
<PAGE>
dates and the respective obligations of Landlord and Tenant are more fully
described elsewhere in this Work Letter. The purpose of the following schedule
is to provide a reference for Landlord and Tenant and to make certain the Final
Approval Date occurs as set forth herein. Following the Final Approval Date,
Tenant shall be deemed to have released Landlord to commence construction of the
Tenant Improvements as set forth in Section 4 below .
<TABLE>
<CAPTION>
Reference Date Due Responsible Party
--------- -------- ----------------
<S> <C> <C>
A. "Preliminary Plan Completion" Five (5) business days after Tenant and Landlord
full execution of the Lease
B. "Working Drawings Completion" Fourteen (14) business days Landlord
after full execution of
the Lease
C. "Working Drawings Review" Five (5) business days after Tenant
Landlord submits the Working
Drawings to Tenant
D. "Working Drawings Revision" Five (5) days after Tenant Landlord
returns the Working Drawings
to Landlord
E. "Final Approval Date" Three (3) business days after Tenant
Landlord submits the revised
Working Drawings to Tenant
</TABLE>
50
<PAGE>
RIDER 2(c) TO WORK LETTER:
If Tenant timely disapproves the budget that is included within the
Working Drawings, Tenant shall be required to direct Landlord and Landlord's
Architect to amend the Working Drawings in a manner satisfactory to Tenant and
Landlord so as to reduce the estimated costs to an amount acceptable to Tenant,
and Tenant shall be liable for any delay in completing the Tenant Improvements
resulting from such amendment. If Tenant is unwilling or unable to amend the
Working Drawings in a manner acceptable to Landlord, then Tenant shall be deemed
to have approved the estimate for the Working Drawings as prepared.
51
<PAGE>
3. BUILDING PERMIT
After the Final Approval Date has occurred, Landlord shall, if Landlord has
not already done so, submit the Working Drawings to the appropriate governmental
body or bodies for final plan checking and a building permit. Landlord, with
Tenant's cooperation, shall cause to be made any change in the Working Drawings
necessary to obtain the building permit; provided, however, after the Final
Approval Date, no changes shall be made to the Working Drawings without the
prior written approval of both Landlord and Tenant, and then only after
agreement by Tenant to pay any excess costs resulting from such changes.
4. CONSTRUCTION OF TENANT IMPROVEMENTS
After the Final Approval Date has occurred and a building permit for the
work has been issued, Landlord shall, through a guaranteed maximum cost or fixed
price (at Landlord's sole option) construction contract ("Construction
Contract") with a reputable, licensed contractor selected by Landlord
("Contractor"), cause the construction of the Tenant Improvements to be carried
out in substantial conformance with the Working Drawings in a good and
workmanlike manner using first-class materials. The costs associated with the
construction of the Tenant Improvements shall be paid as set forth in Sections 5
and 6 of this Work Letter. Landlord shall see that the construction complies
with all applicable building, fire, health, and sanitary codes and regulations,
the satisfaction of which shall be evidenced by a certificate of occupancy for
the Premises.
5. TENANT IMPROVEMENT ALLOWANCE
Landlord shall provide Tenant with a Tenant Improvement Allowance in the
amount of Four Hundred Fifty Thousand and no/100 Dollars ($450,000.00) towards
the cost of the design, purchase and construction of the Tenant Improvements,
including without limitation design, engineering and consulting fees
(collectively, the "Tenant Improvement Costs"). Landlord shall also provide
Tenant with an additional Tenant Improvement Allowance in the amount of Two
Hundred Twenty-Four Thousand and no/100 Dollars ($224,000.00). Any portion of
the "Additional Allowance" that Tenant elects to use shall be fully amortized
over the initial term of the Lease at a rate of 10%. By example only: If the
Tenant used $44,810 ($1.00 p.s.f.), his monthly pay back in addition to rent and
CAMS would be $952.08($.0212 p.s.f. per month). The Tenant Improvement
Allowance shall be used for payment of the following Tenant Improvements Costs:
(i) Preparation by Landlord's Architect of the Preliminary Plans and the
Working Drawings as provided in Section 2 of this Work Letter, including without
limitation all fees charged by City (including without limitation fees for
building permits and plan checks) in connection with the Tenant Improvements
work in the Premises;
(ii) Construction work for completion of the Tenant Improvements as
reflected in the Construction Contract; and
(iii) All contractors' charges, general conditions, performance bond
premiums and construction fees.
6. COSTS IN EXCESS OF TENANT IMPROVEMENT ALLOWANCE AND ADDITIONAL TENANT
IMPROVEMENT ALLOWANCE AT TENANT'S EXPENSE
(a) Cost Approval. Tenant shall pay the excess of the Tenant Improvement
Costs over the amount of the Tenant Improvement Allowance and Additional
Allowance available to defray such costs. Concurrent with the plan checking
referred to in Section 3 of this Work Letter, Landlord shall prepare and submit
to Tenant a written line-item estimate of the amount of the remaining Tenant
Improvement Costs and the cost of the Tenant Improvement Allowance still
available to defray such costs (after preparation of the Preliminary Plans and
Working Drawings). Tenant shall approve or disapprove any such estimate by
written notice to Landlord within three (3) business days after receipt thereof.
If Tenant fails to notify Landlord of its disapproval within such three (3)
business day period, Tenant shall be deemed to have approved such estimate. If
such estimate exceeds the Tenant Improvement Allowance and Additional Allowance,
then still available and Tenant approves such estimate, Tenant's notice of
approval shall include payment to Landlord for the full amount of such excess.
If Tenant disapproves such estimate within the three (3) business day period,
Tenant shall be required to direct Landlord and Landlord's Architect to amend
the Working Drawings in a manner satisfactory to Landlord so as to reduce the
estimated costs to an amount acceptable to Tenant, and any excess estimated
costs remaining after such amendment
52
<PAGE>
shall be paid by Tenant in the manner described in the preceding sentence.
Tenant shall additionally pay any costs resulting from such amendment and Tenant
shall be liable for the delay in completing the Tenant Improvements and the
increased costs, if any, resulting from such delay. If Tenant is unwilling or
unable to amend the Working Drawings in a manner acceptable to Landlord, then
Tenant shall be deemed to have approved the estimate for the Working Drawings a
prepared, and shall pay in full the amount of any excess estimated costs
together with any costs arising from delay as a result of Tenant's actions
hereunder, in the manner hereinabove provided. See Rider One to work letter.
(b) Final Costs. Within sixty (60) days after completion by Landlord of
the Tenant Improvements, Landlord shall determine the actual final Tenant
Improvements Costs and shall submit a written statement of such amount to
Tenant. If any estimate previously paid by Tenant exceeds the amount due
hereunder from Tenant for such work, such excess shall be refunded to Tenant.
If any amount is still due from Tenant for such work, then Tenant shall pay such
amount in full within ten (10) days of receipt of Landlord's statement. See
Rider One to work letter.
7. CHANGE ORDERS
Tenant may from time to time request and obtain change orders during the
course of construction provided that: (i) each such request shall be
reasonable, shall be in writing and signed by or on behalf of Tenant, and shall
not result in any structural change in the Building, as reasonably determined by
Landlord, (ii) all additional charges and costs, including without limitation
architectural and engineering costs, construction and material costs, and
processing costs of any governmental entity shall be the sole and exclusive
obligation of Tenant, and (iii) any resulting delay in the completion of the
Tenant Improvements shall be deemed a Tenant Delay and in no event shall extend
the Commencement Date of the Lease. Upon Tenant's request for a change order,
Landlord shall as soon as reasonably possible submit to Tenant a written
estimate of the increased or decreased cost and anticipated delay, if any,
attributable to such requested change. Within three (3) days of the date such
estimated cost adjustment and delay are delivered to Tenant, Tenant shall advise
Landlord whether it wished to proceed with the change order, and if Tenant
elects to proceed with the change order, Tenant shall remit, concurrently with
Tenant's notice to proceed, the amount of the increased cost, if any,
attributable to such change order to the extent the Tenant Improvement Allowance
and Additional Allowance are fully applied. Unless Tenant includes in its
initial change order request that the work in process at the time such request
is made be halted pending approval and execution of a change order, Landlord
shall not be obligated to stop construction of the Tenant Improvements, whether
or not the change order relates to the work then in process or about to be
started. Tenant shall have no liability for any change order not specifically
approved by Tenant in writing.
8. TENANT DELAYS
In no event shall the Commencement Date of the Lease be extended or delayed
due or attributable to delays due to the fault of Tenant ("Tenant Delays").
Tenant Delays shall include delays caused by or resulting from any one or more
of the following:
(a) Tenant's failure to timely review and reasonably approve the Working
Drawings or to promptly cooperate with Landlord's Architect and furnish
information to Landlord for the preparation of the Preliminary Plans and Working
Drawings;
(b) Tenant's request for or use of special materials, finishes or
installations which are not readily available, provided that Landlord shall
notify Tenant in writing that the particular material, finish, or installation
is not readily available promptly upon Landlord's discovery of same;
(c) Change orders requested by Tenant to the extent of the delay period
specified in an approved changed order or the actual delay period, if shorter
provided that Landlord shall have notified Tenant in writing of such
interference within a reasonably period thereafter;
(d) Interference by Tenant or by Tenant's Agents with Landlord's
construction activities;
(e) Tenant's failure to approve any other item or perform any other
obligation in accordance with and by the dates specified herein or in the
Construction Contract;
53
<PAGE>
(f) Tenant's requested changes in the Preliminary Plans, Working Drawings
or any other plans and specifications after the approval thereof by Tenant or
submission thereof by Tenant to Landlord;
(g) Tenant's failure to approve written estimates of costs within the time
period specified in this Work Letter; and
(h) Tenant's obtaining or failure to obtain any necessary governmental
approvals or permits for Tenant's intended use of the Premises.
If the Commencement Date of the Lease is delayed by any Tenant Delays, then the
Commencement Date of the Lease and the payment of Rent shall be accelerated by
the number of days of such delay. Landlord shall give Tenant written notice
within a reasonable time of any circumstance that Landlord believes constitutes
a Tenant Delay. The Period of any Tenant Delay shall be determined after taking
into account the period of time that the construction work is accelerated by
Tenant's acts or performance.
9. TRADE FIXTURES AND EQUIPMENT
Tenant acknowledges and agrees that Tenant is solely responsible for
obtaining, delivering and installing in the Premises all necessary and desired
furniture, trade fixtures, equipment and other similar items, and that Landlord
shall have no responsibility whatsoever with regard thereto. Tenant further
acknowledges and agrees that neither the Commencement Date of the Lease nor the
payment of Rent shall be delayed for any period of time whatsoever due to any
delay in the furnishing of the Premises with such items.
10. FAILURE OF TENANT TO COMPLY
Any failure of Tenant to comply with any of the provisions contained in
this Work Letter within ten (10) days after written notice from Landlord given
after expiration of the times for compliance herein set forth shall be deemed a
default under the Lease. In addition to the remedies provided to Landlord in
this Work Letter upon the occurrence of such a default by Tenant, Landlord shall
have all remedies available at law or equity to a landlord against a defaulting
tenant pursuant to a written lease, including but not limited to those set forth
in the Lease.
54
<PAGE>
RIDER ONE TO WORK LETTER:
(a) Section 6(a) is amended by adding at the end thereof the following
language:
"Tenant shall not be obligated to reimburse Landlord for any amount in
excess of the approved budget based on the working drawings, except
with Tenant's prior written consent."
(b) Section 6(b) is amended by adding at the end thereof the following
language:
"The Tenant Improvement Costs shall not include any costs incurred to
correct errors or defects in the design or construction of the
Improvements not caused by Tenant. Tenant shall have the right,
during the course of construction, to review the Tenant Improvement
Costs."
(c) Landlord, at its sole expense (and not as part of Tenant Improvement
Allowance, Additional Allowance or Project Costs) shall (1) make all repairs,
maintenance and replacements required to put the Premises (without regard to the
Tenant Improvements), building and all building systems in good operating
condition and repair, and (2) make all repairs, replacements and alterations
necessary to bring the Premises and Building into compliance with all applicable
laws and restrictions.
55
<PAGE>
EXHIBIT D
---------
COMMENCEMENT DATE MEMORANDUM
DATE: April 25, 1994
RE: Standard Form Lease dated April 25, 1994, by and between State of
California Public Employees' Retirement System as "Landlord", and Cardima,
Inc. as "Tenant", for the Premises known as 47266 Benicia Street, Fremont,
California.
Agreement
---------
The undersigned hereby agree as follows:
1. The Tenant Improvements (as defined in the Lease) to the Premises have been
substantially completed in accordance with the terms and conditions of the
Lease, subject only to "punch list" items agreed to by Landlord and Tenant
pursuant to the terms of the Lease.
2. The Commencement Date, as defined in and determined in accordance with the
Lease, is hereby stipulated for all purposes to be______________________.
3. In accordance with the Lease, Monthly Rent (as defined in the Lease) in the
amount of_______ ($_______________), subject to adjustment in accordance with
the terms of the Lease, commences to accrue on_____ and is due and payable in
advance on the first day of each and every month during the Term (as defined in
the Lease). Unless and until notified by Landlord to the contrary, Tenant shall
make its Rent checks payable to O'Donnell Property Services, Inc. as agent for
CALPERS, P.O. Box 100053, Pasadena, CA 91189-0053.
"Landlord"
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By: O'Donnell Property Services, Inc.,
a California corporation,
Property Manager for the State of
California Public Employees' Retirement
System
By: _______________________________________
Donald S. Grant
Chief Executive Officer
"Tenant"
CARDIMA, INC.
a California corporation
By: ________________________________________
Its:____________________________________
By: ________________________________________
Its:____________________________________
56
<PAGE>
EXHIBIT E
---------
ADJUSTMENTS TO MONTHLY RENT
(FIXED ADJUSTMENT)
This Exhibit is attached to and made a part of that certain standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
The capitalized terms used and not otherwise defined in this Exhibit shall
have the same definitions as set forth in the Lease. The provisions of this
Exhibit shall supersede any inconsistent or conflicting provisions of the Lease.
The Monthly Rent shall be adjusted, as of the commencement of the dates set
forth below, in accordance with the following schedule:
Months During Term Monthly Rent
------------------ ------------
1-18 $17,027.80
19-60 $30,022.70
57
<PAGE>
EXHIBIT G
---------
RULES AND REGULATIONS
(INDUSTRIAL)
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
This Exhibit sets forth the rules and regulations governing Tenant's use of
the Common Area and the Premises leased to Tenant pursuant to the terms,
covenants and conditions of the Lease to which this Exhibit is attached and
therein made part thereof. Unless otherwise defined, capitalized terms used
herein shall have the same meanings as set forth in the Lease. In the event of
any conflict or inconsistency between this Exhibit and the Lease, the Lease
shall control.
1. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other than ingress
and egress of pedestrian travel to and from the Premises, and shall not be used
for loitering or gathering, or to display, store or place any merchandise,
equipment or devices, or for any other purpose. The walkways, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. No tenant or employee or invitee of any tenant shall be
permitted upon the roof of the Building.
3. No awnings or other projection shall be attached to the outside walls
of the Building. No security bars or gates, curtains, blinds, shades or screens
shall be attached to or hung in, or used in connection with, any window or door
of the Premises without the prior written consent of Landlord. Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without the express written consent of Landlord.
4. Tenant shall not in any way deface any part of the Premises or the
Building. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord in writing. The expense of repairing any
damage resulting from a violation of this rule or removal of any floor covering
shall be borne by Tenant.
5. The toilet room, urinals, wash bowls and other plumbing apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the Tenant.
6. Landlord shall direct electricians as to the manner and location of
any future telephone wiring. No boring or cutting for wires will be allowed
without the prior consent of Landlord. The locations of the telephones, call
boxes and other office equipment affixed to the Premises shall be subject to the
prior written approval of Landlord.
7. No exterior storage shall be allowed at any time without the prior
written approval of Landlord. The Premises shall not be used for cooking or
washing clothes without the prior written consent of Landlord, or for lodging or
sleeping or for any immoral or illegal purposes.
8. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, phonograph, machinery, or otherwise. Tenant
shall not use, keep or permit to be used, or kept, any foul or obnoxious gas or
substance in the Premises or permit or suffer the Premises to
58
<PAGE>
be used or occupied in any manner offensive or objectionable to Landlord or
other occupants of this or neighboring buildings or premises by reason of any
odors, fumes or gases.
9. Neither Tenant nor any of Tenant's Agents shall at any time bring or
keep upon the Premises any toxic, hazardous, inflammable, combustible or
explosive fluid, chemical or substance without the prior written consent of
Landlord.
10. No animals shall be permitted at any time within the Premises.
11. Tenant shall not use the name of the Building or the Project in
connection with or in promoting or advertising the business of Tenant, except as
Tenant's address, without the prior written consent of Landlord. Landlord shall
have the right to prohibit any advertising by Tenant which, in Landlord's
reasonable opinion, tends to impair the reputation of the Project or its
desirability for its intended uses, and upon written notice from Landlord Tenant
shall refrain from or discontinue such advertising.
12. Canvassing, soliciting, peddling, parading, picketing, demonstrating
or otherwise engaging in any conduct that unreasonably impairs the value or use
of the Premises or the Project are prohibited and Tenant shall cooperate to
prevent the same.
13. No equipment of any type shall be placed on the Premises which in
Landlord's opinion exceeds the load limits of the floor or otherwise threatens
the soundness of the structure or improvements of the Building.
14. Landlord will not be responsible for loss or damage to any furniture,
equipment, or other personal property of Tenant from any cause.
15. No air conditioning unit or other similar apparatus shall be installed
or used by Tenant without the prior written consent of Landlord.
16. No aerial antenna shall be erected on the roof or exterior walls of
the Premises, or on the grounds, without in each instance the prior written
consent of Landlord. Any aerial or antenna so installed by or on behalf of
Tenant without such written consent shall be subject to removal by Landlord at
any time without prior notice at the expense of Tenant, and Tenant shall upon
Landlord's demand pay a removal fee to Landlord of not less than $200.00.
17. The entire Premises, including vestibules, entrances, doors, fixtures,
windows and plate glass, shall at all times be maintained in a safe, neat and
clean condition by Tenant. All trash, refuse and waste materials shall be
regularly removed from the Premises by Tenant and placed in the containers at
the locations designated by Landlord for refuse collection. All cardboard boxes
must be "broken down" prior to being placed in the trash containers. All
styrofoam chips must be bagged or otherwise contained prior to placement in the
trash containers, so as not to constitute a nuisance. Pallets may not be
disposed of in the trash containers or enclosures. The burning of trash, refuse
or waste materials is prohibited.
18. Tenant shall use at Tenant's cost such pest extermination contractor
as Landlord may direct and at such intervals as Landlord may require.
19. All keys for the Premises shall be provided to Tenant by Landlord and
Tenant shall return to Landlord any of such keys so provided upon the
termination of the Lease. Tenant shall not change locks or install other locks
on doors of the Premises, without the prior written consent of Landlord. In the
event of loss of any keys furnished by Landlord for Tenant, Tenant shall pay to
Landlord the costs thereof.
20. No person shall enter or remain within the Project white intoxicated
or under the influence of liquor or drugs. Landlord shall have the right to
exclude or expel from the Project any person who, in the absolute discretion of
Landlord, is under the influence of liquor or drugs.
Tenant agrees to comply with all such Rules and Regulations. Should Tenant
not abide by these Rules and Regulations, Landlord or any "Operator,"
"Association" or "Declarant" under any Restrictions may serve a three (3) day
notice to correct the deficiencies. If Tenant has not corrected the
deficiencies by the end of the notice period, Tenant will be in default of the
Lease, and Landlord and/or its designee shall have the right, without further
notice, to cure the violation at Tenant's expense.
Landlord reserves the right to amend or supplement the foregoing Rules and
Regulations and to adopt and promulgate additional rules and regulations
applicable to the Project. Notice of such rules and regulations and
59
<PAGE>
amendments and supplements thereto, if any, shall be given to the Tenant. The
terms of the Lease shall govern and control over any conflict between the terms
of the Lease and the Rules and Regulations wherever adopted.
Neither Landlord nor Landlord's Agents or any other person or entity shall
be responsible to Tenant or to any other person for the ignorance or violation
of these Rules and Regulations by any other tenant or other person. Tenant
shall be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition precedent, waivable only by Landlord, to Tenant's
occupancy of the Premises.
60
<PAGE>
EXHIBIT H
---------
DRAFT 4/10/91
ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT
The purpose of this questionnaire is to obtain information regarding the
environmental impact your company or business may have on 47266 Benicia Street,
Fremont, California property, neighboring properties or the atmosphere based
upon your use, storage, treatment, generation, handling, transportation or
disposal of hazardous materials or hazardous waste including, but not limited
to, regulated substances, chemicals, diesel fuel, gasoline, and other petroleum
products. Prospective tenant should answer the questions in light of their
proposed operations on the premises. Existing tenants should answer the
questions as they relate to on-going operations on the premises and should
update any information previously submitted. If additional space is needed to
answer the questions, you may attach separate sheets of paper to this
questionnaire.
If any answers to this questionnaire require further investigation, please
complete the investigation before answering the question. Your answers should
be complete and include any information which you believe pertinent to the
questions asked.
Your cooperation in this matter is appreciated. Any questions should be
directed to, and when completed, the forms should be mailed to:
O'Donnell Property Services, Inc.
1737 North First Street, Suite 580
San Jose, CA 95112
Attn: Mark Schmidt
Phone: (408) 453-9444
1. GENERAL INFORMATION
1.1 Name of responding company or business (this entity will be referred
to as "you" or "your"):
Check the Applicable Status:
Prospective Tenant [X] Existing Tenant [_]
1.2 Mailing Address 47201 Lakeview Blvd.
_____________________________________________________
Fremont, CA
_____________________________________________________________________
Contact Person and Title: Bob Balderrama, Facilities Mgr.
__________________________________________
Telephone Number: (510) 440-7666
__________________________________________________
Address of Leased Premises (the "premises")
_________________________
1
<PAGE>
_____________________________________________________________________
Length of Lease Term: _______________________________________________
1.3 Describe the proposed operations to take place on the property,
including principal products manufactured or services to be
conducted. Existing tenant should describe any proposed changes to
on-going operations.
Warehouse storage for finished products, catheters, guidewires
_____________________________________________________________________
_____________________________________________________________________
1.4 Will a company or business other than you occupy the premises?
Yes [_] No [_]
If your answer is yes, complete a separate questionnaire for each
additional occupant.
1.5 Provide the name, title and address of the person who is responsible
for ensuring you are in compliance with environmental laws and
regulations pertaining to the use, storage, treatment, generation,
handling, transportation or disposal of hazardous materials or
hazardous wastes.
Bob Balderrama, Facilities Mgr.
_____________________________________________________________________
1.6 Provide the name, title and address of the person completing this
questionnaire.
Bob Balderrama
_____________________________________________________________________
If, the person who completes this questionnaire is not the same person
identified in Section 1.5, did the person identified in Section 1.5
assist in completing this questionnaire?
Yes [_] No [_]
If your answer is no, explain why. N/A
___________________________________
_____________________________________________________________________
1.7 How many employees will be employed at the premises.
5
_____________________________________________________________________
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be treated, used, stored or present on-
site?
Yes [_] No [X]
2.2 If you answered yes to Section 2.1, provide the following information
for each hazardous material. Also, provide a copy of the MSDSs for
each hazardous material.
Name or Description: N/A
____________________________________________________
Nature of Material: ______________________________________________________
Maximum Volume stored at one time: _______________________________________
Total amount used per year: ______________________________________________
Location of Storage: _____________________________________________________
Maximum time stored: _____________________________________________________
2
<PAGE>
Describe the manner in which each hazardous material is used on the
premises:
__________________________________________________________________________
__________________________________________________________________________
2.3 If you answered yes to Section 2.1, describe the containers and
storage areas. Your description should provide the following
information:
Number of Storage Areas: N/A
_________________________________________________
Type of Containers: ______________________________________________________
Capacity of Containers: __________________________________________________
Number of Containers: ____________________________________________________
Secondary Containment: Yes [_] No [_]
Type/Composition: ___________________________________________________
Maximum Volume: _____________________________________________________
Location of Storage Areas: _______________________________________________
2.4 If you answered yes to Section 2.1, provide a map showing where each
hazardous material, container and storage area is located on the
premises. N/A
3. STORAGE TANKS & SUMPS
3.1 Is any above or below ground storage of hazardous materials in tanks
proposed or currently conducted on the premises?
Yes [_] No [X]
If yes, describe the hazardous materials to be stored, the type, size
and construction of each tank, and describe the secondary containment.
Identify the location of each tank.
3.2 Do you have all federal, state or local (including local fire
department) permits required to operate each above or below ground
tank? N/A
Yes [_] No [_]
If yes, please attach copies of the permits. If no, please explain
why not.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
3.3 Do you have or intend to have any sumps on the premises?
Yes [_] No [X]
If yes, how many sumps are there, or do you intend to have, on the
premises?
Provide the following information for each sump: (i) its intended
use, (ii) the hazardous material it contains, (iii) whether or not it
is used for storage, (iv) its type, size and construction, and (v) its
location.
3.4 Have any of the tanks or sumps been monitored, inspected or tested
for leakage? N/A
Yes [_] No [_]
3
<PAGE>
If so, attach the results.
3.5 Have any spills or leaks occurred from such tanks or sumps? N/A
Yes [_] No [_]
If so, describe (e.g., date, location, hazardous material and
quantity released).
_____________________________________________________________________
_____________________________________________________________________
3.6 Were any regulatory agencies notified of the spill or leak? N/A
Yes [_] No [_]
If so, attach copies of any spill reports filed, any clearance letters
or other correspondence from regulatory agencies relating to the spill
or leak.
3.7 Have any underground or above ground storage tanks or sumps been taken
out of service or removed? N/A
Yes [_] No [_]
If yes, attach copies of any closure permits and clearance obtained
from regulatory agencies relating to closure and removal of such
tanks.
4. SPILLS AND RELEASES
4.1 During the past five years, have any spills or releases occurred on
the premises? N/A
Yes [_] No [_]
If so, please describe each spill or release (e.g., date, location,
hazardous material and quantity) and attach the results of any testing
conducted to determine the extent of such spills or release.
4.2 Were any agencies notified in connection with such spills or releases?
N/A
Yes [_] No [_]
If so, attach copies of any spill or release reports or other
correspondence with regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the spills or
releases? N/A
Yes [_] No [_]
If so, briefly describe the actions taken. Attach copies of any
clearance letters obtained from any regulatory agencies involved and
the results of any final air, soil or groundwater sampling done upon
completion of the clean-up work.
5. HAZARDOUS WASTE MANAGEMENT
5.1 Have you been issued an EPA Hazardous Waste Generator I.D. Number?
N/A
Yes [_] No [_]
If yes, provide the number: _________________________________________
4
<PAGE>
5.2 Have you filed a biennial report as a hazardous waste generator? N/A
Yes [_] No [_]
If so, attach a copy of the most recent report filed.
5.3 For each hazardous waste generated or to be generated provide (i) its
hazard class and waste code, (ii) describe the process generating the
waste, and (iii) state the quantity generated on a monthly basis.
5.4 Describe the method(s) of disposal for each hazardous waste. Indicate
where and how often disposal will take place and provide the name and
telephone number of your hazardous waste recycling and/or disposal
company and the name and telephone number of your hazardous waste
transporter.
N/A
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
5.5 Indicate the name of the person(s) responsible for maintaining copies
of hazardous waste manifests completed for off-site shipments of
hazardous waste.
N/A
_____________________________________________________________________
5.6 Is any treatment or processing of hazardous wastes currently conducted
or proposed to be conducted at the premises: N/A
Yes [_] No [_]
If yes, please describe any existing or proposed treatment methods.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Provide the name, telephone number and agency (local, state or
federal) which supervises your waste management operation in this
state or region:
_____________________________________________________________________
_____________________________________________________________________
5.7 Attach copies of any hazardous waste permits or licenses issued to you
with respect to the operations on the premises. N/A
If no permit is required to conduct the activities on the premises,
so indicate.
_____________________________________________________________________
_____________________________________________________________________
5.8 Are you in the process of obtaining a hazardous waste permit? N/A
Yes [_] No [_]
If yes, provide the information requested in Section 5.3
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to: N/A
5
<PAGE>
___ storm drain? ___ other? Describe. __________________________
____________________________________
___ surface water? ___ no industrial discharge
___ sewer?
6.2 Is your wastewater treated before discharge? N/A
Yes [_] No [_]
If yes, describe the type of treatment conducted. If no, explain why
treatment is not required.
_____________________________________________________________________
6.3 Attach copies of any wastewater discharge permits issued to you with
respect to the operations on the premises.
6.4 Provide the name, telephone number and agency (local, state or
federal) which supervises your wastewater discharge practices:
_____________________________________________________________________
_____________________________________________________________________
7. AIR EMISSIONS
7.1 Do you have any air pollution control systems or stacks?
Yes [_] No [_]
Please describe (e.g., type of system, purpose, height of stacks,
venting, quantity of emissions):
N/A
_____________________________________________________________________
_____________________________________________________________________
7.2 Do you operate any of the following types of equipment or type of
process, or any other equipment or process requiring an air emissions
permit from an air pollution control district or agency? N/A
___ Spray booth ___ Generator
___ Dip tank ___ Storage Tank
___ Drying oven ___ Degreaser
___ Incinerator ___ No Equipment or Process Requires
an Air Permit
___ Other (Please Describe):
______________________________________________
Are you required to prepare any air emission inventory reports and/or
risk assessments for any equipment or process? N/A
Yes [_] No [_]
If yes, attach a copy of the report or assessment:
6
<PAGE>
_____________________________________________________________________
_____________________________________________________________________
7.3 Are air emissions from your operations monitored? N/A
Yes [_] No [_]
If so, indicate the frequency of monitoring and a description of the
monitoring results.
_____________________________________________________________________
7.4 Attach copies of any air emissions permits pertaining to your
operations on the premises. N/A
7.5 Provide the name, telephone number, and agency (local, state or
federal) which issues your air pollution permits. N/A
8. CALIFORNIA HAZARDOUS MATERIALS DISCLOSURES [Note: For California property
only.]
8.1 Do you handle any hazardous materials in a quantity equal to or
exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet?
N/A
Yes [_] No [_]
8.2 If you answered yes to Section 8.1, have you prepared a hazardous
materials management plan ("business plan") and submitted it to the
appropriate agency as required by the California Health and Safety
Code? N/A
Yes [_] No [_]
If so, attach a copy of the business plan.
8.3 Are any of the chemicals used in your operations regulated under
Proposition 65? N/A
Yes [_] No [_]
If so, describe the actions taken, or proposed actions to be taken, to
comply with Proposition 65 requirements.
_____________________________________________________________________
8.4 Will you be posting proposition 65 warning signs? N/A
Yes [_] No [_]
If you will not be posting Proposition 65 warning signs, please
explain why not.
_____________________________________________________________________
_____________________________________________________________________
If you answered yes, please describe any additional actions you will
take to comply with Proposition 65 requirements.
_____________________________________________________________________
_____________________________________________________________________
9. WORKER SAFETY
9.1 Describe the procedures followed to comply with OSHA Hazard
Communication Standard requirements.
N/A
_____________________________________________________________________
7
<PAGE>
9.2 Describe any protective or special equipment or clothing (e.g.,
respirators) which your employees wear, or are required to wear, in
order to reduce exposures to hazardous substances on the premises.
Also indicate the purpose of such equipment or clothing.
_____________________________________________________________________
_____________________________________________________________________
10. ENVIRONMENTAL ENFORCEMENT ACTIONS, COMPLAINTS
10.1 Have you ever been subject to (i) any local, state or federal agency
environmental enforcement actions, administrative orders, or consent
decrees (civil, criminal or administrative) or permit revocation
within the last five years, or (ii) any local, state or federal agency
or private party notifications identifying you as a potentially
responsible party for an environmental cleanup or environmental
related claim? N/A
Yes [_] No [_]
If so, describe the actions and any continuing compliance obligations
imposed as a result of these actions.
_____________________________________________________________________
10.2 Other than governmental action addressed in Section 10.1, have there
ever been, or are there now pending or threatened, any lawsuits or
claims against you regarding compliance with any environmental or
health and safety laws or regulations concerns? N/A
Yes [_] No [_]
If so, provide the following: (i) the nature of the claim, (ii) the
data when the claim was first asserted, (iii) the name(s) of the
party(ies) asserting the claim, and (iv) the history and current
status of such claim, including what actions you have taken to address
and/or remediate the claim.
_____________________________________________________________________
10.3 Has an environmental audit ever been conducted at your current
facility? N/A
Yes [_] No [_]
If so, specify the number of audits, identify the person who conducted
the audit, the data of each audit, and discuss the results of such
audits or attach a copy of each audit.
_____________________________________________________________________
10.4 Have there been any problems or complaints from employees or
neighbors regarding environmental issues (e.g., odor, emissions,
nuisance, etc.) resulting from the operation of your current facility?
Yes [_] No [X]
If so, describe the source and nature of the complaint.
_____________________________________________________________________
_____________________________________________________________________
8
<PAGE>
11. ADDITIONAL INFORMATION
11.1 Please provide any additional information which you believe is
relevant to assess the environmental impact which your use, storage,
treatment, generation, handling, transportation or disposal of
hazardous materials or hazardous waste may have on the premises.
12. TENANT DISCLOSURES AND REPRESENTATIONS.
12.1 The undersigned understands that it has an ongoing obligation
according to the terms of the lease, to report in writing any changes
to the information it provides in this questionnaire and to update
this questionnaire, as necessary, with any new information which may
impact the health and safety of people on or in the vicinity of the
premises or which may impact the environment.
12.2 The undersigned warrants and represents that it is, as of the date set
forth below, in compliance with all environmental laws and regulations
governing its activities on the premises, except as expressly set
forth in this questionnaire.
12.3 The information contained in this questionnaire is true and correct.
NOTICE FOR CALIFORNIA PROPERTY ONLY:
------------------------------------
PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 25359.7(b) IF
YOU KNOW OR HAVE REASONABLE CAUSE TO BELIEVE THAT A RELEASE OF
HAZARDOUS MATERIALS HAS COME TO BE LOCATED ON OR BENEATH THE PROPERTY,
YOU ARE REQUIRED, WITHIN A REASONABLE PERIOD OF TIME, EITHER PRIOR TO
THE RELEASE OF THE HAZARDOUS MATERIAL OR FOLLOWING THE DISCOVERY OF
THE PRESENCE, OR BELIEVED PRESENCE, OF THE HAZARDOUS MATERIAL RELEASE,
TO PROVIDE WRITTEN NOTICE OF SUCH RELEASE TO THE OWNER OF THE PROPERTY
OR TO THE LESSOR UNDER YOUR LEASE. YOUR FAILURE TO PROVIDE SUCH
NOTICE MAY CONSTITUTE A DEFAULT UNDER YOUR LEASE AND YOU MAY BE LIABLE
FOR DAMAGES AND ANY REMEDIES AVAILABLE AT LAW, INCLUDING CIVIL
PENALTIES.
TARGET THERAPEUTICS
____________________________________________
[Name of company or business]
By: /s/ Bob Balderrama
________________________________________
Title: Facilities Mgr.
________________________________
Date: 6/27/94
______________________
9
<PAGE>
EXHIBIT I
---------
GROUNDWATER SAMPLING AND ANALYSIS
MISSION BUSINESS PARK,
FREMONT, CALIFORNIA 95815
PREPARED FOR:
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
F.I.A. ASSOCIATES
1601 RESPONSE ROAD, SUITE 300
SACRAMENTO, CALIFORNIA
PREPARED BY:
MED-TOX ASSOCIATES, INC.
1431 WARNER AVENUE
TUSTIN, CALIFORNIA 95815
FILE 8.28
MAY 1989
10
<PAGE>
MED-TOX ASSOCIATES, INC.
ENVIRONMENTAL & OCCUPATIONAL HEALTH SERVICES
1431 WARNER AVENUE * P.O. BOX 2054 * TUSTIN, CA 92681 * (714)259-0620 * FAX
(714)259-0351
May 24, 1989
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
c/o Mr. Christopher Hays
F.I.A. ASSOCIATES
1601 Response Road, Suite 300
Sacramento, California 95815
RE: Groundwater Sampling and Analysis - Mission Business Park,
Fremont, California. Reference Job #: 1E-3809
Dear Mr. Hays:
In this letter Med-Tox Associates, Inc. (MED-TOX) presents the results of the
groundwater sampling and analysis conducted at the above referenced site.
In the MED-TOX report, Final Site Assessment Report, Cerritos, Irvine, Tustin,
-------------------------------------------------------
Fremont, and San Jose Properties (Reference #1E-3809), issued to your attention
--------------------------------
on May 9, 1989, it was recommended that additional sampling be conducted at the
Mission Business Park.
Background
----------
On April 11-12, 1989, a subsurface investigation was conducted on the Mission
Business Park Property. Results of the groundwater sampling and analysis
indicated that two volatile organic compounds (1,1,1-Trichloroethane and 1,1-
Dicholoroethene) occur in one of the wells, MW-MT-2 (Figure 1.0). The
concentrations detected were below present regulatory criteria and applied
action levels.
Because these two compounds were detected, MED-TOX recommended additional
testing be performed on the Mission Business Park Property.
The scope of work consisted of the following:
. Installing two additional groundwater monitoring wells, designated as MW-MT3
and MW-MT4;
. Develop the existing 10 groundwater monitoring wells;
. Sample and analyze groundwater from all the wells at the site.
All water samples were analyzed for purgeable halocarbons (per EPA Method 601).
Water samples collected from MW-MT2, MW-MT4 and MW-E3, were analyzed for Total
Petroleum Hydrocarbons (per EPA Method 8015) and purgeable aromatics (per EPA
Method 602). General minerals analysis and CAC-17 Metals Analysis (California
Assessment Method) were conducted on water samples collected from MW-MT1, MW-
MT2, MW-MT3, and MW-MT4.
11
<PAGE>
Monitoring Well Construction
----------------------------
The field activities were conducted on May 4 and 5, 1989. The soil borings were
drilled about thirty and twenty five feet below groundsurface in borings MW-MT3
and MW-MT4, respectively. Borings were converted to monitoring wells and
designated as MW-MT3 and MW-MT4. The borings penetrated into mostly clayey
materials, as shown in Appendix B, Log of Boring of MW-MT3 and MW-MT4.
Two-inch, schedule 40, flush threaded PVC well casing was lowered into the
hollow stem auger. The bottom 20 feet of the 2-inch casing consisted of machine
slotted well screen with 0.010-inch slots. The hollow stem auger was retracted,
exposing the screen section of the PVC casing. The annulus surrounding the
screen section was filled with 2/16 LoneStar Monterey type sand. The well
casing was packed with sand to two feet above the top of the well screen. A
one-foot thick bentonite seal was then constructed above the sand pack using
bentonite pellets. The remaining annular space was grouted with neat cement. A
representative of the Alameda County Water District was present to inspect the
well seal.
A steel well cover was cemented into place to protect the top of the well
casing.
Well Development and Groundwater Sampling
-----------------------------------------
Monitoring wells were developed using a centrifugal pump. The pump was washed
and steamed cleaned between wells. The wells were pumped until the discharge
was relatively clear of sediment. Water samples were then obtained using a
three-foot long teflon bailer. A water sample was also obtained with the teflon
bailer for field collection of pH and electrical conductivity (analogous to
total dissolved solids) measurements (see Table 2.0). The teflon bailer was
washed and steam cleaned before each water sample was obtained. All water
samples were placed in laboratory prepared containers and refrigerated in an ice
chest. The samples were then delivered to Med-Tox Laboratories located in
Pleasant Hill, California. The samples were accompanied by a chain-of-custody
form.
In addition to the monitoring wells constructed by MED-TOX on May 4 and 5, 1989,
(i.e., MT3 and MW-MT4) ten existing wells were also developed and sampled.
These wells are MW-E1, MW-E2, MW-E3, MW-E4, MW-1, MW-2, MW-3, MW-4, MW-MT1 and
MW-MT2. Their locations are shown on Figure 1, Site Plan.
Hydrology
---------
The site is underlain by clay and clayey sand to sandy clay materials to a depth
of about 30 feet below ground surface. The first water-bearing zone beneath the
site appears to be 13 feet below grade. These units are typical low energy
fluvial type deposits.
The surficial sediments within the study area consist of an upper layer of clay
to an approximate depth of 13 feet below ground surface. Underlying this layer
is a layer of clayey sand to sandy clay and clay with an approximate thickness
of 10 feet. Underlying this unit is a medium stiff clay to a depth of 31.5 feet
which may be the lower boundary of the shallow aquifer.
During on-site investigation on May 4-5, 1989, MED-TOX surveyed groundwater
elevations at wells MW-E3, MW-E4 and MW-E2. The groundwater flow direction was
then computed and data indicates groundwater is flowing to the west at very
gentle gradient of 0.57 feet per 100 feet (0.0057). The hydraulic conductivity
is estimated from well be development activities to be low in these clayey
sediments (1,300 gallon per day per foot). Therefore, the groundwater movement
is estimated to be low (0.21 ft/day). However, it should be mentioned that the
water movement would be higher in sand lense that might occur within the water
bearing sediments. Such sand lense are often associated with alluvial fan
deposits. However, MED-TOX wells did not encounter such high permeable zones.
12
<PAGE>
In general, because of the low groundwater velocity, any potential degraded
waters at the site or in the general area will be migrating slowly to the west.
In other words, potential plumes created by accidental chemical releases are
generally limited in areal extent and will not proliferate rapidly throughout
the site.
Analytical Results
------------------
The laboratory analysis indicated the presence of 1,1,1-Trichloroethane and 1,1-
Dichloroethene (TCA and DCE, respectively) in water samples collected from MW-
MT4 and MW-MT2 (Table 1.0). U.S. EPA Method 601, purgeable halocarbon
constituents were not detected in the remaining water samples (Appendix A).
U.S. EPA Method 602, purgeable aromatic constituents were not detected in the
water samples submitted for analysis. Similarly, total petroleum hydrocarbons
were not detected in the water samples submitted for analysis. The general
minerals analysis as well as the CAC-17 Metals Analysis did not detect any
chemical constituents of regulatory concern.
CONCLUSION AND RECOMMENDATION
The detection of TCA and DEC in two groundwater samples indicates chemical
contamination exist. However, the levels detected are below current regulatory
criteria and applied action levels. It is difficult to assess whether the
concentration detected and the location indicate one source or two sources.
Data from the field indicate that groundwater flows in a westerly direction.
Upgradient well (MW-E2 and MW-E3) water samples did not detect TCA or DCE. MW-
MT3 was installed upgradient and the Okidata facility to assess the groundwater
quality coming onto the subject property. Based on data from MW-MT3, MW-E2, and
MW-E3, it does not appear degraded water is originating off-site. Figure 1
shows that MW-MT4 and MW-MT2, which are linear and downgradient to each other,
are located approximately 500 feet apart. MW-MT4 is located directly adjacent
and west of Building 1. MW-MT2 is located directly adjacent and southwest of
Building 2 (see Figure 1.0).
Based on the identified conditions of the underlying soil and low groundwater
velocity, any potential degraded waters at the site will be migrating very
slowly. It should be noted that organic compounds such as DCE and TCA move 2 to
5 times slower than water moving thru an aquifer. In other words, potential
plumes created by accidental chemical releases are generally limited in area
extent, however, they may be indicative of a peripheral contaminant plume.
It is strongly recommended that a quarterly groundwater sampling and analysis
program be instituted to monitor the progress of the contaminant plume.
If the client wishes to discover the possible release location of the organics
to the subsurface, it is advisable to initiate a soil gas survey of the
underlying soils beneath buildings 1 and 2.
The soil gas method involves the collection of a known volume of soil gas from
soil pores within a few feet of the ground surface. The soil gas method depends
on the existence of a chemical concentration gradient in the vadose zone in
which the contaminated soil acts as a "source" and it will defuse toward the
above ground atmosphere. The greater the concentration gradient, the greater
the rate of diffusion of chemical constituents from the soil to soil gas.
The site specific disadvantages to a soil gas survey area:
. Samples to be collected beneath the building;
. The underlying soil is comprised of clayey material;
. The results are not definitive, but only allude to the potential presence of
chemicals.
Based on the results of the soil gas survey, soil borings and groundwater
monitoring wells would be located at areas of detected contaminant soil gas
readings.
13
<PAGE>
If you have any questions or concerns regarding this matter, please do not
hesitate to contact me at (714) 259-0620.
Respectfully submitted,
Med-Tox Associates, Inc.
Amir K. Matin, M.S., R.G., C.E.G. Lincoln A. Castro, M.P.H., R.E.A.
Director of Environmental and Senior Environmental Scientist
Geotechnical Services
LC/lh:E5024/06
1E-3809
14
<PAGE>
TABLE 1.0
MISSION BUSINESS PARK
WATER SAMPLE ANALYSIS
PURGEABLE HALOCARBONS/(1)/
(ug/l)
<TABLE>
<CAPTION>
___________________________________
WELL # TCA/(2)/ DCE/(3)/
___________________________________
<S> <C> <C>
MW-MT2 24 5
MW-MT4 19 6
</TABLE>
___________________________________
Note:
(1): U.S. EPA Method 601
(2): 1,1,1-Trichloroethane
(3): 1,1-Dichloroethene
15
<PAGE>
TABLE 2
Field Measurements of pH and Electrical Conductance
<TABLE>
<CAPTION>
_____________________________________________________
WELL #1 pH EC (micro mnos/cm)
_____________________________________________________
<S> <C> <C>
MW-2 7.33 1359
MW-MT1 7.39 1974
MW-3 7.57 1802
MW-4 7.66 1527
MW-MT3 (Okidata) 7.54 1431
MW-E3 7.41 1788
MW-E2 7.36 1629
MW-E4 7.18 1681
MW-MT4 7.26 1782
MW-E1 7.28 1522
MW-1 7.60 2160
MW-MT2 7.38 1810
</TABLE>
_____________________________________________________
16
<PAGE>
Site Plan
[graphic]
17
<PAGE>
APPENDIX A
LABORATORY ANALYTICAL
RESULTS
18
<PAGE>
MED-TOX ASSOCIATES, INC.
ENVIRONMENTAL & OCCUPATIONAL HEALTH SERVICES
1431 WARNER AVENUE * P.O. BOX 2054 * TUSTIN, CA 92681 * (714)259-0620 * FAX
(714)259-0351
LABORATORY ANALYSIS REPORT
MED-TOX ASSOCIATES, INC. REPORT DATE: 05/19/89
1431 WARNER AVENUE
TUSTIN, CA 92631 DATE SAMPLED: 05/06/89
ATTN: AMIR MATIN DATE RECEIVED: 05/06/89
DATE EXTRACTED: 05/06/89
DATE ANALYZED: 05/06/89
CLIENT ID: 1E-3809 MED-TOX JOB NO: 8905037
ANALYSIS OF: WATER SAMPLES FOR PURGEABLE HALOCARBONS, PURGEABLE
AROMATICS, GENERAL MINERALS, CAM-17 METALS, AND
TOTAL PETROLEUM HYDROCARBONS
<TABLE>
<CAPTION>
METHOD: EPA 8015 (Extraction)
_____________________________________________________
Total Petroleum
Hydrocarbons
Sample Identification as Diesel
Client Id. Lab No. (mg/L)
_____________________________________________________
<S> <C> <C>
MWMT-2 01D ND
MWMT-4 02D ND
MW-E3 06B ND
Detection limit 0.3
</TABLE>
/s/ Linnea M. Nowak for M.L.
_________________________________________________
Michael Lynch, Manager
Organic Laboratory
Results FAXed to Amir Matin 05/10-11/89
19
<PAGE>
PAGE 2 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-2 MED-TOX LAB NO: 8905037-01C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 5 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 24 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
20
<PAGE>
PAGE 3 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-4 MED-TOX LAB NO: 8905037-02C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 6 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 19 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
21
<PAGE>
PAGE 4 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-3 MED-TOX LAB NO: 8905037-03C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
22
<PAGE>
PAGE 5 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-1 MED-TOX LAB NO: 8905037-04C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
23
<PAGE>
PAGE 6 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E2 MED-TOX LAB NO: 8905037-05B
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
24
<PAGE>
PAGE 7 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E3 MED-TOX LAB NO: 8905037-06A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
25
<PAGE>
PAGE 8 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-3 MED-TOX LAB NO: 8905037-07A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
26
<PAGE>
PAGE 9 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-4 MED-TOX LAB NO: 8905037-08A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
27
<PAGE>
PAGE 10 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E4 MED-TOX LAB NO: 8905037-09A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
28
<PAGE>
PAGE 11 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-1 MED-TOX LAB NO: 8905037-10A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
29
<PAGE>
PAGE 12 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E1 MED-TOX LAB NO: 8905037-11A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
30
<PAGE>
PAGE 13 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-2 MED-TOX LAB NO: 8905037-12A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
31
<PAGE>
PAGE 14 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: Trip Blank MED-TOX LAB NO: 8905037-13A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 601
PURGEABLE HALOCARBONS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Bromodichloromethane 75-27-4 ND 0.5
Bromoform 75-25-2 ND 0.5
Bromomethane 74-83-9 ND 0.5
Carbon Tetrachloride 56-23-5 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
Chloroethane 75-00-3 ND 0.5
2-Chloroethyl Vinyl Ether 110-75-8 ND 0.5
Chloroform 67-66-3 ND 0.5
Chloromethane 74-87-3 ND 0.5
Dibromochloromethane 124-48-1 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Dichlorodifluoromethane 75-71-8 ND 0.5
1,1-Dichloroethane 75-34-3 ND 0.5
1,2-Dichloroethane 107-06-2 ND 0.5
1,1-Dichloroethene 75-35-4 ND 0.5
1,2-Dichloroethene, total 540-59-0 ND 0.5
1,2-Dichloropropane 78-87-5 ND 0.5
cis-1,3-Dichloropropene 10061-01-5 ND 0.5
trans-1,3-Dichloropropene 10061-02-6 ND 0.5
Methylene Chloride 75-09-2 ND 0.5
1,1,2,2-Tetrachloroethane 79-34-5 ND 0.5
Tetrachloroethene 127-18-4 ND 0.5
1,1,1-Trichloroethane 71-55-6 ND 0.5
1,1,2-Trichloroethane 79-00-5 ND 0.5
Trichloroethene 79-01-6 ND 0.5
Trichlorofluoromethane 75-69-4 ND 0.5
1,1,2-Trichloro- 76-13-1 ND 0.5
1,2,2-trifluouroethane
Vinyl Chloride 75-01-4 ND 0.5
</TABLE>
ND - Not detected at or above indicated method detection limit
32
<PAGE>
PAGE 15 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-2 MED-TOX LAB NO: 8905037-01C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 602
PURGEABLE AROMATICS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Benzene 71-43-2 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Ethylbenzene 100-41-4 ND 0.5
Toluene 108-88-3 ND 0.5
Xylenes, Total ------ ND 2
</TABLE>
ND - Not detected at or above indicated method detection limit
33
<PAGE>
PAGE 16 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-4 MED-TOX LAB NO: 8905037-02C
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 602
PURGEABLE AROMATICS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Benzene 71-43-2 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Ethylbenzene 100-41-4 ND 0.5
Toluene 108-88-3 ND 0.5
Xylenes, Total ------ ND 2
</TABLE>
ND - Not detected at or above indicated method detection limit
34
<PAGE>
PAGE 17 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E3 MED-TOX LAB NO: 8905037-06A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE SAMPLED: 05/06/89 DATE ANALYZED: 05/08/89
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
EPA METHOD 602
PURGEABLE AROMATICS
<TABLE>
<CAPTION>
_______________________________________________________________________________
DETECTION
CONCENTRATION LIMIT
COMPOUND CAS # (ug/L) (ug/L)
_______________________________________________________________________________
<S> <C> <C> <C>
Benzene 71-43-2 ND 0.5
Chlorobenzene 108-90-7 ND 0.5
1,2-Dichlorobenzene 95-50-1 ND 0.5
1,3-Dichlorobenzene 541-73-1 ND 0.5
1,4-Dichlorobenzene 106-46-7 ND 0.5
Ethylbenzene 100-41-4 ND 0.5
Toluene 108-88-3 ND 0.5
Xylenes, Total ------ ND 2
</TABLE>
ND - Not detected at or above indicated method detection limit
35
<PAGE>
PAGE 18 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-2 MED-TOX LAB NO: 8905037-01A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
GENERAL MINERALS
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE PARAMETER CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Bicarbonate Alkalinity 390 * 2 403
Carbonate Alkalinity ND * 2 403
Hydroxide Alkalinity ND * 2 403
Ca Calcium 130 0.1 7140
Cl Chloride 240 0.1 300
Cu Copper 0.012 0.005 7210
Fe Iron ND 0.1 7380
Mg Magnesium 57 0.01 7450
Mn Manganese 0.013 0.005 7460
pH 8.0 ** NA 9040
Na Sodium 140 0.01 7770
Sulfate 110 0.5 300
Conductivity 1,700 *** 20 120.1
Total Dissolved Solids 1,000 10 160.1
Hardness 560 * 0.3 314-A
Zn Zinc 0.044 0.003 7950
</TABLE>
* mg CaC03/L
** standard units
*** umhos/cm
ND = Not detected at or above indicated method detection limit
36
<PAGE>
PAGE 19 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-4 MED-TOX LAB NO: 8905037-02A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
GENERAL MINERALS
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE PARAMETER CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Bicarbonate Alkalinity 400 * 2 403
Carbonate Alkalinity ND * 2 403
Hydroxide Alkalinity ND * 2 403
Ca Calcium 130 0.1 7140
Cl Chloride 250 0.1 300
Cu Copper 0.018 0.005 7210
Fe Iron ND 0.1 7380
Mg Magnesium 56 0.01 7450
Mn Manganese 0.022 0.005 7460
pH 7.9 ** NA 9040
Na Sodium 160 0.01 7770
Sulfate 64 0.5 300
Conductivity 1,800 *** 20 120.1
Total Dissolved Solids 1,000 10 160.1
Hardness 560 * 0.3 314-A
Zn Zinc 0.059 0.003 7950
</TABLE>
* mg CaC03/L
** standard units
*** umhos/cm
ND = Not detected at or above indicated method detection limit
37
<PAGE>
PAGE 20 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-3 MED-TOX LAB NO: 8905037-03A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
GENERAL MINERALS
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE PARAMETER CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Bicarbonate Alkalinity 390 * 2 403
Carbonate Alkalinity ND * 2 403
Hydroxide Alkalinity ND * 2 403
Ca Calcium 72 0.1 7140
Cl Chloride 160 0.1 300
Cu Copper 0.012 0.005 7210
Fe Iron ND 0.1 7380
Mg Magnesium 38 0.01 7450
Mn Manganese 0.018 0.005 7460
pH 7.8 ** NA 9040
Na Sodium 160 0.01 7770
Sulfate 57 0.5 300
Conductivity 1,300 *** 20 120.1
Total Dissolved Solids 740 10 160.1
Hardness 340 * 0.3 314-A
Zn Zinc 0.028 0.003 7950
</TABLE>
* mg CaC03/L
** standard units
*** umhos/cm
ND = Not detected at or above indicated method detection limit
38
<PAGE>
PAGE 21 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-1 MED-TOX LAB NO: 8905037-04A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
GENERAL MINERALS
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE PARAMETER CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Bicarbonate Alkalinity 390 * 2 403
Carbonate Alkalinity ND * 2 403
Hydroxide Alkalinity ND * 2 403
Ca Calcium 140 0.1 7140
Cl Chloride 350 0.1 300
Cu Copper 0.008 0.005 7210
Fe Iron ND 0.1 7380
Mg Magnesium 73 0.01 7450
Mn Manganese 0.017 0.005 7460
pH 7.8 ** NA 9040
Na Sodium 140 0.01 7770
Sulfate 88 0.5 300
Conductivity 1,900 *** 20 120.1
Total Dissolved Solids 1,100 10 160.1
Hardness 650 * 0.3 314-A
Zn Zinc 0.37 0.003 7950
</TABLE>
* mg CaC03/L
** standard units
*** umhos/cm
ND = Not detected at or above indicated method detection limit
39
<PAGE>
PAGE 22 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MW-E2 MED-TOX LAB NO: 8905037-05A
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
GENERAL MINERALS
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE PARAMETER CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Bicarbonate Alkalinity 370 * 2 403
Carbonate Alkalinity ND * 2 403
Hydroxide Alkalinity ND * 2 403
Ca Calcium # 0.1 7140
Cl Chloride 220 0.1 300
Cu Copper # 0.005 7210
Fe Iron # 0.1 7380
Mg Magnesium # 0.01 7450
Mn Manganese # 0.005 7460
pH 7.8 ** NA 9040
Na Sodium # 0.01 7770
Sulfate 94 0.5 300
Conductivity 1,600 *** 20 120.1
Total Dissolved Solids 950 10 160.1
Hardness # * 0.3 314-A
Zn Zinc # 0.003 7950
</TABLE>
* mg CaC03/L
** standard units
*** umhos/cm
ND = Not detected at or above indicated method detection limit
# No sample available for analysis
40
<PAGE>
PAGE 23 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-2 MED-TOX LAB NO: 8905037-01B
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
CAM-17 METALS IN WATER
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE METAL CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Sb Antimony ND 0.1 7040
As Arsenic 0.002 0.002 7060
Ba Barium 0.23 0.02 7080
Be Beryllium ND 0.003 7090
Cd Cadmium ND 0.003 7130
Cr Chromium ND 0.01 7190
Co Cobalt ND 0.02 7200
Cu Copper 0.012 0.005 7210
Pb Lead ND 0.01 7420
Hg Mercury ND 0.0003 7470
Mo Molybdenum ND 0.05 7480
Ni Nickel ND 0.01 7520
Se Selenium 0.007 0.006 7740
Ag Silver ND 0.005 7760
Ti Thallium ND 0.05 7840
V Vanadium ND 0.1 7910
Zn Zinc 0.044 0.003 7950
</TABLE>
ND = Not detected at or above indicated method detection limit
41
<PAGE>
PAGE 24 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-4 MED-TOX LAB NO: 8905037-02B
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
CAM-17 METALS IN WATER
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE METAL CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Sb Antimony ND 0.1 7040
As Arsenic ND 0.002 7060
Ba Barium 0.26 0.02 7080
Be Beryllium ND 0.003 7090
Cd Cadmium ND 0.003 7130
Cr Chromium ND 0.01 7190
Co Cobalt ND 0.02 7200
Cu Copper 0.018 0.005 7210
Pb Lead ND 0.01 7420
Hg Mercury ND 0.0003 7470
Mo Molybdenum ND 0.05 7480
Ni Nickel ND 0.01 7520
Se Selenium 0.017 0.006 7740
Ag Silver ND 0.005 7760
Ti Thallium ND 0.05 7840
V Vanadium ND 0.1 7910
Zn Zinc 0.059 0.003 7950
</TABLE>
ND = Not detected at or above indicated method detection limit
42
<PAGE>
PAGE 25 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-3 MED-TOX LAB NO: 8905037-03B
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
CAM-17 METALS IN WATER
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE METAL CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Sb Antimony ND 0.1 7040
As Arsenic 0.003 0.002 7060
Ba Barium 0.22 0.02 7080
Be Beryllium ND 0.003 7090
Cd Cadmium ND 0.003 7130
Cr Chromium ND 0.01 7190
Co Cobalt ND 0.02 7200
Cu Copper 0.012 0.005 7210
Pb Lead ND 0.01 7420
Hg Mercury ND 0.0003 7470
Mo Molybdenum ND 0.05 7480
Ni Nickel ND 0.01 7520
Se Selenium ND 0.006 7740
Ag Silver ND 0.005 7760
Ti Thallium ND 0.05 7840
V Vanadium ND 0.1 7910
Zn Zinc 0.028 0.003 7950
</TABLE>
ND = Not detected at or above indicated method detection limit
43
<PAGE>
PAGE 26 OF 26
MED-TOX ASSOCIATES, INC.
CLIENT ID: MWMT-1 MED-TOX LAB NO: 8905037-04B
CLIENT JOB NO: 1E-3809 MED-TOX JOB NO: 8905037
DATE RECEIVED: 05/06/89 REPORT DATE: 05/19/89
CAM-17 METALS IN WATER
<TABLE>
<CAPTION>
_______________________________________________________________________________
CODE METAL CONCENTRATION DETECTION METHOD
(mg/L) LIMIT REFERENCE
(mg/L)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Sb Antimony ND 0.1 7040
As Arsenic ND 0.002 7060
Ba Barium 0.39 0.02 7080
Be Beryllium ND 0.003 7090
Cd Cadmium ND 0.003 7130
Cr Chromium ND 0.01 7190
Co Cobalt ND 0.02 7200
Cu Copper 0.008 0.005 7210
Pb Lead ND 0.01 7420
Hg Mercury ND 0.0003 7470
Mo Molybdenum ND 0.05 7480
Ni Nickel ND 0.01 7520
Se Selenium ND 0.006 7740
Ag Silver ND 0.005 7760
Ti Thallium ND 0.05 7840
V Vanadium 0.2 0.1 7910
Zn Zinc 0.37 0.003 7950
</TABLE>
ND = Not detected at or above indicated method detection limit
44
<PAGE>
ANALYTICAL REQUEST/CHAIN OF CUSTODY FORM
Handwritten form.
Signed by Amir Matin on 5/6/89
45
<PAGE>
APPENDIX B
LOG OF BORINGS
46
<PAGE>
Log of Boring
MW-MT-3
Page 1 of 2
[graphic]
47
<PAGE>
Log of Boring
MW-MT-3
Page 2 of 2
[graphic]
48
<PAGE>
Log of Boring
MW-MT-4
Page 1 of 2
[graphic]
49
<PAGE>
Log of Boring
MW-MT-4
Page 2 of 2
[graphic]
50
<PAGE>
EXHIBIT L
---------
CALCULATION OF TENANT'S SHARE
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated April 25, 1994, by and between State of California Public Employees'
Retirement System as "Landlord", and Cardima, Inc., a California corporation as
"Tenant", for the Premises known as 47266 Benicia Street, Fremont, California.
The capitalized terms used and not otherwise defined herein shall have
the same definitions as set forth in the Lease. The provisions of this Exhibit
shall supersede any inconsistent or conflicting provisions of the Lease.
Building and Project:
---------------------
Tenant understands that the Premises are a part of a multi-tenant
Building having the approximate square footage as set forth in Item 6 of the
Basic Lease Provisions contained in the Lease, and that the Building is part of
a multi-building Project containing as of the date of the Lease approximately
430,104 square feet of space.
Calculation of Tenant's Share:
------------------------------
Tenant's Share of various Operating Expenses under the Lease shall be
determined as a function of Building square footage, Project square footage or
Product square footage, depending upon the nature of the Operating Expense to be
charged. Tenant acknowledges that the total square footage of the Building, the
Project or other uses of the Project by tenants in the same Product type as
Tenant, may change from time to time, and that Tenant's Share under any or all
of the foregoing categories may vary accordingly, effective on the first day of
the month after each such change occurs.
Set forth below is the initial Tenant's Share (i.e. calculated as of
----
the date of the Lease) with respect to Operating Expenses to be charged as a
function of the Building, of the Project, and of the Product, as of the date of
the Lease. Tenant understands that (i) Landlord shall determine, in its sole
discretion, what Operating Expenses are included within each category to be
charged as a function of the Building, the Project or the Product, and (ii)
Landlord may change the category of any Operating Expense at any time, at
Landlord's sole discretion.
Tenant's Share of the Building: One hundred percent (100%)
Tenant's Share of the Project: Ten point four percent (10.4%)
51