California-Santa Clara-3131/3151 Jay Street Lease - Orchard Jay Investors LLC, David J. Brown and Cylink Corp.
LEASE
DATED MAY 10, 1999
BY AND BETWEEN
ORCHARD JAY INVESTORS, LLC
and
DAVID J. BROWN
as Landlord
and
CYLINK CORPORATION
as Tenant
AFFECTING PREMISES COMMONLY KNOWN AS
3131 and 3151 Jay Street
Santa Clara, California
[12/15/95 MULTI TENANT NET INDUSTRIAL LEASE]
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TABLE OF CONTENTS
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ARTICLE 1 - DEFINITIONS
1.1 General 1
1.2 Additional Rent 1
1.3 Address for Notices 1
1.4 Agents 1
1.5 Agreed Interest Rate 1
1.6 Base Monthly Rate 1
1.7 Building 1
1.8 Commencement Date 1
1.9 Common Area 1
1.10 Common Operating Expense 1
1.11 Consumer Price Index 1
1.12 Effective Date 1
1.13 Event of Tenant's Default 1
1.14 Hazardous Materials 1
1.15 Insured and Uninsured Peril 1
1.16 Law 1
1.17 Lease 1
1.18 Lease Term 1
1.19 Lender 1
1.20 Permitted Use 1
1.21 Premises 1
1.22 Project 2
1.23 Private Restrictions 2
1.24 Real Property Taxes 2
1.25 Scheduled Commencement Date 2
1.26 Security Instrument 2
1.27 Summary 2
1.28 Tenant's Alterations 2
1.29 Tenant's Share 2
1.30 Trade Fixtures 2
ARTICLE 2 - DEMISE, CONSTRUCTION, AND ACCEPTANCE 2
2.1 Demise of Premises 2
2.2 Commencement Date 2
2.3 Construction of Improvements 2
2.4 Delivery and Acceptance of Possession 2
2.5 Early Occupancy 3
ARTICLE 3 - RENT 3
3.1 Base Monthly Rent 3
3.2 Additional Rent 3
3.3 Payment of Rent 3
3.4 Late Charge and Interest on Rent in Default 3
3.5 Security Deposit 3
ARTICLE 4 - USE OF PREMISES 3
4.1 Limitation on Use 3
4.2 Compliance with Regulations 4
4.3 Outside Areas 4
4.4 Signs 4
4.5 Parking 4
4.6 Rules and Regulations 4
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TABLE OF CONTENTS
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ARTICLE 5 - TRADE FIXTURES AND ALTERATIONS 4
5.1 Trade Fixtures 4
5.2 Tenant's Alterations 4
5.3 Alterations Required by Law 5
5.4 Amortization of Certain Capital Improvements 5
5.5 Mechanic's Liens 5
5.6 Taxes on Tenant's Property 6
ARTICLE 6 - REPAIR AND MAINTENANCE 6
6.1 Tenant's Obligation to Maintain 6
6.2 Landlord's Obligation to Maintain 6
6.3 Control of Common Area 6
ARTICLE 7 - WASTE DISPOSAL AND UTILITIES 7
7.1 Waste Disposal 7
7.2 Hazardous Materials 7
7.3 Utilities 8
7.4 Compliance with Governmental Regulations 8
ARTICLE 8 - COMMON OPERATING EXPENSES 8
8.1 Tenant's Obligation to Reimburse 8
8.2 Common Operating Expenses Defined 8
8.3 Real Property Taxes Defined 9
ARTICLE 9 - INSURANCE 9
9.1 Tenant's Insurance 9
9.2 Landlord's Insurance 10
9.3 Tenant's Obligation to Reimburse 10
9.4 Release and Waiver of Subrogation 10
ARTICLE 10 - LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY 11
10.1 Limitation on Landlord's Liability 11
10.2 Limitation on Tenant's Recourse 11
10.3 Indemnification of Landlord 11
10.4 Indemnification of Tenant 11
ARTICLE 11 - DAMAGE TO PREMISES 11
11.1 Landlord's Duty to Restore 11
11.2 Landlord's Right to Terminate 11
11.3 Tenant's Right to Terminate 12
11.4 Abatement of Rent 12
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TABLE OF CONTENTS
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ARTICLE 12 - CONDEMNATION 12
12.1 Landlord's Termination Right 12
12.2 Tenant's Termination Right 12
12.3 Restoration and Abatement of Rent 13
12.4 Temporary Taking 13
12.5 Division of Condemnation Award 13
ARTICLE 13 - DEFAULT AND REMEDIES 13
13.1 Events of Tenant's Default 13
13.2 Landlord's Remedies 13
13.3 Waiver 14
13.4 Limitation on Exercise of Rights 14
13.5 Waiver by Tenant of Certain Remedies 15
13.6 Events of Landlord's Default 15
ARTICLE 14 - ASSIGNMENT AND SUBLETTING 15
14.1 Transfer by Tenant 15
14.2 Transfer by Landlord 17
ARTICLE 15 - GENERAL PROVISIONS 17
15.1 Landlord's Right to Enter 17
15.2 Surrender of the Premises 17
15.3 Holding Over 18
15.4 Subordination 18
15.5 Mortgagee Protection and Attornment 18
15.6 Estoppel Certificates and Financial Statements 18
15.7 Reasonable Consent 18
15.8 Notices 19
15.9 Attorney's Fees 19
15.10 Corporate Authority 19
15.11 Miscellaneous 19
15.12 Termination by Exercise of Right 19
15.13 Brokerage Commissions 19
15.14 Force Majeure 20
15.15 Entire Agreement 20
15.16 Quiet Possession 20
EXHIBITS
Exhibit A - Site plan of the Project containing a description of the
Premises
Exhibit B - Improvement Agreement
Exhibit C - Approved Specifications
Exhibit D - Acceptance Agreement
Exhibit E - Description of Private Restrictions
Exhibit F - Sign Criteria
Exhibit G - Form of Subordination Agreement
Exhibit H - Hazardous Materials Questionnaire
Exhibit I - Santa Clara File A.3429
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SUMMARY OF BASIC LEASE TERMS
SECTION
(LEASE REFERENCE) TERMS
A. Lease Reference Date: May 10, 1999
(Introduction)
B. Landlord: Orchard Jay Investors, LLC
(Introduction) a California limited liability company
and David J. Brown
C. Tenant: Cylink Corporation
(Introduction) a California corporation
D. Premises: That area consisting of 95,828 square
(ss.1.21) feet of gross leasable area, the
addresses of which are 3131 and 3151 Jay
Street, Santa Clara, California within
the Buildings as shown on Exhibit A.
E. Project: The land and improvements shown on
(ss.1.22) Exhibit A consisting of three (3)
buildings, the aggregate gross leasable
area of which is 142,552 square feet.
F. Building: The buildings in which the Premises are
(ss. 1.7) located known as 3131 Jay Street
containing 49,104 square feet of gross
leasable area and 3151 Jay Street
containing 46,724 square feet of gross
leasable area.
G. Tenant's Share: 100% of Buildings B and C
(ss.1.29) 67.22% of the Project
H. Tenant's Allocated Parking Stalls: 362 stalls.
(ss.4.5)
I. Scheduled Commencement Date: September 1, 1999.
(ss. 1.25)
J. Lease Term: 120 calendar months (plus the partial
(ss. 1.18) month following the Commencement Date if
such date is not the first day of a
month).
K.
(ss. 3.1) Base Monthly Rent: Months 1 - 12: $174,406.96
Months 13 - 24: $179,639.17
Months 25 - 36: $185,028.34
Months 37 - 48: $190,579.19
Months 49 - 60: $196,296.57
Months 61 - 72: $202,185.47
Months 73 - 84: $208,251.03
Months 85 - 96: $214,498.56
Months 97 - 108: $220,933.52
Months 109 - 120: $227.561.52
L. Prepaid Rent: $174,406.96
(ss. 3.3)
M. Security Deposit: $827,561.52.
(ss. 3.5) Refer to First Addendum to Lease
Paragraph 3.
N. Permitted Use: General office, marketing, research,
(ss. 4.1) assembly, testing and other legal
related uses. However, without
Landlord's permission, which
Landlord may withhold in its sole
discretion, neither Tenant nor any
successor, assignee, or subtenant of
Tenant, shall use the facility in
any way which is inconsistent with
or in violation of the provisions of
that certain hazardous materials
condition for Orchard Properties'
Project at 3131 and 3151 Jay Street,
Santa Clara (File A.3429) dated
March 13, 1998, a copy of which is
attached hereto as Exhibit I and
incorporated herein by reference.
0. Permitted Tenant's Alterations Limit: $10,000.00
(ss. 5.2)
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P.
(ss. 9.1) Tenant's Liability Insurance Minimum: $2,000,000.00
Q. Landlord's Address: Orchard Jay Investors, LLC
(ss. 1.3) and David J. Brown
c/o Orchard Properties
2290 North First Street, Suite 300
San Jose, CA 95131
R. Tenant's Address: Prior to the Commencement Date:
(ss. 1.3)
Cylink Corporation
Attn: Chief Financial Officer
910 Hermosa Court
Sunnyvale, CA 94088-3759
Cylink Corporation
Attn: General Counsel
910 Hermosa Court
Sunnyvale, CA 94088-3759
After the Commencement Date:
Cylink Corporation
Attn: Chief Financial Officer
3151 Jay Street
Santa Clara, CA 95054
Cylink Corporation
Attn: General Counsel
3151 Jay Street
Santa Clara, CA 95054
S. Retained Real Estate Brokers: CB Richard Ellis
(ss. 15.13)
T. Lease: This Lease includes the summary of the
(ss. 1.17) Basic Lease Terms, the Lease, and the
following exhibits and addenda: First
Addendum to Lease; Exhibit A (Site plan
of the Project containing description of
the Premises), Exhibit B (Improvement
Agreement), Exhibit C (Approved
Specifications), Exhibit D (Acceptance
Agreement), Exhibit E (Description of
Private Restrictions), Exhibit F (Sign
Criteria), Exhibit G (Form of
Subordination Agreement), Exhibit H
(Hazardous Materials Questionnaire),
Exhibit I (Santa Clara File A.3429)
The foregoing Summary is hereby incorporated into and made part of this
Lease. Each reference in this Lease to any term of the Summary shall mean the
respective information set forth above shall be construed to incorporate all of
the terms provided under the particular paragraph pertaining to such
information. In the event of any conflict between the Summary and the Lease, the
Summary shall control.
LANDLORD: TENANT:
ORCHARD JAY INVESTORS LLC CYLINK CORPORATION
a California limited liability company a California corporation
By: /s/ David J. Brown By: /s/ [ILLEGIBLE]
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David J. Brown
Managing Member Its: Chief Financial Officer
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Dated: May 11, 1999
-------------------- Dated: May 10, 1999
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DAVID J. BROWN
By: /s/ [ILLEGIBLE]
By: /s/ David J. Brown -----------------------
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Its: Corporate Secretary
Dated: May 11, 1999 -----------------------
--------------------
Dated: May 10, 1999
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This Lease is dated as of the lease reference date specified in Section A of the
Summary and is made by and between the party identified as Landlord in Section B
of the Summary and the party identified as Tenant in Section C of the Summary.
ARTICLE I
DEFINITIONS
1.1 General: Any initially capitalized term that is given a special
meaning by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.
1.2 Additional Rent: The term "Additional Rent" is defined in P.13.2.
1.3 Address for Notices: The term "Address for Notices" shall mean the
addresses set forth in Sections Q and R of the Summary; provided, however, that
after the Commencement Date, Tenant's Address for Notices shall be the address
of the Premises.
1.4 Agents: The term "Agents" shall mean the following: (i) with
respect to Landlord or Tenant, the agents, employees, contractors, and invitees
of such party; and (ii) in addition with respect to Tenant, Tenant's subtenants
and their respective agents, employees, contractors, and invitees.
1.5 Agreed Interest Rate: The term "Agreed Interest Rate" shall mean
that interest rate determined as of the time it is to be applied that is equal
to the lesser of (i) 5% in excess of the discount rate established by the
Federal Reserve Bank of San Francisco as it may be adjusted from time to time,
or (ii) the maximum interest rate permitted by Law.
1.6 Base Monthly Rent: The term "Base Monthly Rent" shall mean the
fixed monthly rent payable by Tenant pursuant to P.3.1 which is specified in
Section K of the Summary.
1.7 Building: The term "Building" shall mean the building in which the
Premises are located which Building is identified in Section F of the Seminary,
the gross leasable area of which is referred to herein as the "Building Gross
Leasable Area."
1.8 Commencement Date: The term "Commencement Date" is the date the
Lease Term commences, which term is defined in P.2.2.
1.9 Common Area: The term "Common Area" shall mean all areas and
facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant or any other lessee or other occupant of the Project,
including the parking areas, access and perimeter roads, pedestrian sidewalks,
landscaped areas, trash enclosures, recreation areas and the like. The Common
Area does not include any portion of the interior of 3101 Jay Street.
1.10 Common Operating Expenses: The term "Common Operating Expenses" is
defined in P.8.2.
1.11 Consumer Price Index: The term "Consumer Price Index" shall refer
to the Consumer Price Index, All Urban Consumers, subgroup "All Items", for the
San Francisco-Oakland-San Jose metropolitan area (base year 1982-84 equals 100),
which is presently being published monthly by the United States Department of
Labor, Bureau of Labor Statistics. However, if this Consumer Price Index is
changed so that the base year is altered from that used as of the commencement
of the initial term of this Lease, the Consumer Price Index shall be converted
in accordance with the conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics to obtain the same results that
would have been obtained had the base year not been changed. If no conversion
factor is available, or if the Consumer Price Index is otherwise changed,
revised or discontinued for any reason, there shall be substituted in lieu
thereof and the term "Consumer Price Index" shall thereafter refer to the most
nearly comparable official price index of the United States government in order
to obtain substantially the same result as would have been obtained had the
original Consumer Price Index not been discontinued, revised or changed, which
alternative index shall be selected by Landlord and shall be subject to Tenant's
written approval.
1.12 Effective Date: The term "Effective Date" shall mean the date the
last signatory to this Lease whose execution is required to make it binding on
the parties hereto shall have executed this Lease
1.13 Event of Tenant's Default: The term "Event of Tenant's Default" is
defined in P.13.1.
1.14 Hazardous Materials: The terms "Hazardous Materials" and
"Hazardous Materials Laws" are defined in P.7.2E.
1.15 Insured and Uninsured Peril: The terms "Insured Peril" and
"Uninsured Peril" are defined in P.11.2E.
1.16 Law: The term "Law" shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal or other government
agency or authority having jurisdiction over the parties to this Lease or the
Premises, or both, in effect either at the Effective Date or any time during the
Lease Term.
1.17 Lease: The term "Lease" shall mean the Summary and all elements of
this Lease identified in Section T of the Summary, all of which are attached
hereto and incorporated herein by this reference.
1.18 Lease Term: The term "Lease Term" shall mean the term of this
Lease which shall commence on the Commencement Date and continue for the period
specified in Section J of the Summary.
1.19 Lender: The term "Lender" shall mean any beneficiary, mortgagee,
secured party, lessor, or other holder of any Security Instrument.
1.20 Permitted Use: The term "Permitted Use" shall mean the use
specified in Section N of the Summary.
1.21 Premises: The term "Premises" shall mean that building area
described in Section D of the Summary that is within the Building.
1.22 Project: The term "Project" shall mean that real
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property and the improvements thereon which are specified in Section E of the
Summary, the aggregate gross leasable area of which is referred to herein as the
"Project Gross Leasable Area."
1.23 Private Restrictions: The term "Private Restrictions" shall mean
all recorded covenants, conditions and restrictions, private agreements,
reciprocal easement agreements, and any other recorded instruments affecting the
use of the Premises which (i) exist as of the Effective Date, or (ii) are
recorded after the Effective Date and are approved by Tenant in writing.
1.24 Real Property Taxes: The term "Real Property Taxes" is defined in
P.8.3.
1.25 Scheduled Commencement Date: The term "Scheduled Commencement
Date" shall mean the date specified in Section I of the Summary.
1.26 Security Instrument: The term "Security Instrument" shall mean any
underlying lease, mortgage or deed of trust which now or hereafter affects the
Project, and any renewal, modification, consolidation, replacement or extension
thereof.
1.27 Summary: The term "Summary" shall mean the Summary of Basic Lease
Terms executed by Landlord and Tenant that is part of this Lease.
1.28 Tenant's Alterations: The term "Tenant's Alterations" shall mean
all improvements, additions, alterations, and fixtures installed in the Premises
by Tenant at its expense which are not Trade Fixtures.
1.29 Tenant's Share: The term "Tenant's Share" shall mean the
percentage obtained by dividing Tenant's Gross Leasable Area by the Building
Gross Leasable Area, which as of the Effective Date is the percentage identified
in Section G of the Summary.
1.30 Trade Fixtures: The term "Trade Fixtures" shall mean (i) Tenant's
inventory, furniture, signs, and business equipment, and (ii) anything affixed
to the Premises by Tenant at its expense for purposes of trade, manufacture,
ornament or domestic use (except replacement of similar work or material
originally installed by Landlord) which can be removed without material injury
to the Premises unless such thing has, by the manner in which it is affixed,
become an integral part of the Premises.
ARTICLE 2
DEMISE, CONSTRUCTION AND ACCEPTANCE
2.1 Demise of Premises: Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term upon the terms and conditions of this
Lease, the Premises for Tenant's own use in the conduct of Tenant's business
together with (i) the non-exclusive right to use the number of Tenant's
Allocated Parking Stalls within the Common Area (subject to the limitations set
forth in P.4.5), and (ii) the non-exclusive right to use the Common Area for
ingress to and egress from the Premises and for the purposes of performing
Tenant's obligations hereunder. Landlord reserves the use of the exterior walls,
the roof and the area beneath and above the Premises, together with the right to
install, maintain, use, and replace ducts, wires, conduits and pipes leading
through the Premises in locations which will not materially interfere with
Tenant's use of the Premises.
2.2 Commencement Date: The Scheduled Commencement Date shall be only an
estimate of the actual Commencement Date, and subject to the provisions of
Exhibit B, the term of this Lease shall begin on the first to occur of the
following, which shall be the "Commencement Date" (provided, that in no event
shall the Commencement Date occur prior to September 1, 1999): (i) the date
Landlord offers to deliver possession of the Premises to Tenant following
Substantial Completion (as defined in Exhibit B hereto) of all improvements to
be constructed by Landlord pursuant to P.2.3 except for punch list items which
do not prevent Tenant from using the Premises for the Permitted Use and such
work as Landlord is required to perform but cannot complete until Tenant
performs necessary portions of construction work it has elected or is required
to do; or (ii) the date Tenant enters into occupancy of the Premises (which
shall not include any Early Occupancy Period).
2.3 Construction of Improvements: Prior to the Commencement Date,
Landlord shall construct certain improvements that shall constitute or become
part of the Premises if required by, and then in accordance with, the terms of
Exhibit B and Exhibit C.
2.4 Delivery and Acceptance of Possession: If Landlord is unable to
(deliver possession of the Premises to Tenant on or before the Scheduled
Commencement Date for any reason whatsoever, this Lease shall not be void or
void able, so long as the Premises are Substantially Complete (as defined in
Exhibit B, the Interior Improvement Agreement) not later than December 31, 1999,
plus one day for each day of delay in completion caused by Tenant as defined in
Paragraph 7 of Exhibit B, the Interior Improvement Agreement, and one day for
each day of delay caused by force majeure factors as defined in Paragraph 15.14
of this Lease and Landlord shall not be liable to Tenant for any loss or damage
resulting therefrom. However, no more than thirty (30) calendar days shall be
added to the foregoing period on account of force majeure. Tenant shall accept
possession and enter into good faith occupancy of the entire Premises and
endeavor to commence the operation of its business therein within 30 days after
the Commencement Date. Tenant acknowledges that it has had un opportunity to
conduct, and has conducted, such inspections of the Premises as it deems
necessary to evaluate its condition. Except as otherwise specifically provided
herein, (including the warranties of Landlord set forth herein, which shall not
be affected by Tenant's acceptance of possession) Tenant agrees to accept
possession of the Premises in its then existing condition, "as-is", including
all patent and latent defects. Tenant's taking possession of any part of the
Premises shall be deemed to be an acceptance by Tenant of any work of
improvement done by Landlord in such part as complete and in accordance with the
terms of this Lease except for defects of which Tenant has given Landlord
written notice prior to the time Tenant takes possession and except for items
covered under the Landlord's warranties provided in this Lease. At the time
Landlord delivers possession of the Premises to Tenant, Landlord and Tenant
shall together execute an acceptance agreement in the form attached as Exhibit D
appropriately completed. Landlord shall have no obligation to deliver
possession, nor shall Tenant be entitled to take occupancy, of the Premises
until such acceptance agreement has been executed, and Tenant's obligation to
pay Base Monthly Rent and Additional Rent shall not be excused or delayed
because of Tenant's failure to execute such acceptance
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agreement.
2.5 Early Occupancy: If Tenant enters or permits its contractors to
enter the Premises prior to the Commencement Date pursuant to Paragraph 4A of
the First Addendum to Lease, it shall do so upon all of the terms of this Lease
(including its obligations regarding indemnity and insurance) except those
regarding the obligation to pay rent, which shall commence on the Commencement
Date.
ARTICLE 3
RENT
3.1 Base Monthly Rent: Commencing on the Commencement Date and
continuing throughout the Lease Term, Tenant shall pay to Landlord the Base
Monthly Rent set forth in Section K of the Summary.
3.2 Additional Rent: Commencing on the Commencement Date and continuing
throughout the Lease Term, Tenant shall pay the following as additional rent
(the "Additional Rent"): (i) any late charges or interest due Landlord pursuant
to P.3.4; (ii) Tenant's Share of Common Operating Expenses as provided in P.8.1;
(iii) Landlord's share of any Subrent received by Tenant upon certain
assignments and sublettings as required by P.14.1; (iv) any legal fees and costs
due Landlord pursuant to P.15.9; and (v) any other charges due Landlord pursuant
to this Lease.
3.3 Payment of Rent: Concurrently with the execution of this Lease by
both parties, Tenant shall pay to Landlord the amount set forth in Section L of
the Summary as prepayment of rent for credit against the first installment(s) of
Base Monthly Rent. All rent required to be paid in monthly installments shall be
paid in advance on the first day of each calendar month during the Lease Term.
If Section K of the Summary provides that the Base Monthly Rent is to be
increased during the Lease Term and if the date of such increase does not fall
on the first day of a calendar month, such increase shall become effective on
the first day of the next calendar month. All rent shall be paid in lawful money
of the United States, without any abatement, deduction or offset whatsoever
(except as specifically provided in P.11.4 and P.12.3), and without any prior
demand therefor. Rent shall be paid to Landlord at its address set forth in
Section Q of the Summary, or at such other place as Landlord may designate from
time to time. Tenant's obligation to pay Base Monthly Rent and Tenant's Share of
Common Operating Expenses shall be prorated at the commencement and expiration
of the Lease Term.
3.4 Late Charge and Interest on Rent in Default: If any Base Monthly
Rent or Additional Rent is not received by Landlord from Tenant within five (5)
business days after Landlord has notified Tenant in writing that payment of such
rent has not been received by Landlord, then Tenant shall immediately pay to
Landlord a late charge equal to 5% of such delinquent rent as liquidated damages
for Tenant's failure to make timely payment. In no event shall this provision
for a late charge be deemed to grant to Tenant a grace period or extension of
time within which to pay any rent or prevent Landlord from exercising any right
or remedy available to Landlord upon Tenant's failure to pay any rent due under
this Lease in a timely fashion, including any right to terminate this Lease
pursuant to P.13.2C. If any rent remains delinquent for a period in excess of 30
days then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
following the date such amount became due until paid.
3.5 Security Deposit: On the Effective Date, Tenant shall deposit with
Landlord the amount set forth in Section M of the Summary as security for the
performance by Tenant of its obligations under this Lease, and not as prepayment
of rent (the "Security Deposit"). Landlord may from time to time apply such
portion of the Security Deposit as is reasonably necessary for the following
purposes: (i) to remedy any default by Tenant in the payment of rent; (ii) to
repair damage to the Premises caused by Tenant; (iii) to clean the Premises upon
termination of the Lease; and (iv) to remedy any other default of Tenant to the
extent permitted by Law and, in this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be put contained in
California Civil Code Section 1950.7. In the event the Security Deposit or any
portion thereof is so used, Tenant agrees to pay to Landlord promptly upon
demand an amount in cash sufficient to restore the Security Deposit to the full
original amount. Landlord shall not be deemed a trustee of the Security Deposit,
may use the Security Deposit in business, and shall not be required to segregate
it from its general accounts. Tenant shall not be entitled to any interest on
the Security Deposit. If Landlord transfers the Premises during the Lease Term,
Landlord may pay the Security Deposit to any transferee of Landlord's interest
in conformity with the provisions of California Civil Code Section 1950.7 and/or
any successor statute, in which event the transferring Landlord will be released
from all liability for the return of the Security Deposit.
ARTICLE 4
USE OF PREMISES
4.1 Limitation on Use: Tenant shall use the Premises solely for the
Permitted Use specified in Section N of the Summary. Tenant shall not do
anything in or about the Premises which will (i) cause structural injury to the
Building, or (ii) cause damage to any part of the Building except to the extent
reasonably necessary for the installation of Tenant's Trade Fixtures and
Tenant's Alterations, and then only in a manner which has been first approved by
Landlord in writing. Tenant shall not operate any equipment within the Premises
which will (i) materially damage the Building or the Common Area, (ii) overload
existing electrical systems or other mechanical equipment servicing the
Building, (iii) impair the efficient operation of the sprinkler system or the
heating, ventilating or air conditioning ("HVAC") equipment within or servicing
the Building, or (iv) damage, overload or corrode the sanitary sewer system.
Tenant shall not attach, hang or suspend anything from the ceiling, roof, walls
or columns of the Building or set any load on the floor in excess of the load
limits for which such items are designed nor operate hard wheel forklifts within
the Premises. Any dust, fumes, or waste products generated by Tenant's use of
the Premises shall be contained and disposed so that they do not (i) create an
unreasonable fire or health hazard, (ii) damage the Premises, or (iii) result in
the violation of any Law. Except as approved by Landlord, Tenant shall not
change the exterior of the Building or install any equipment or antennas on or
make any penetrations of the exterior or roof of the Building. Tenant shall not
commit any waste in or about the Premises, and Tenant shall keep the Premises in
an neat,
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clean attractive and orderly condition, free of any nuisances. If Landlord
designates a standard window covering for use throughout the Building, Tenant
shall use this standard window covering to cover all windows in the Premises.
Tenant shall not conduct on any portion of the Premises or the Project any sale
of any kind, including any public or private auction, fire sale,
going-out-of-business sale, distress sale or other liquidation sale.
4.2 Compliance with Regulations: Tenant shall not use the Premises in
any manner which violates any Laws or Private Restrictions which affect the
Premises. Tenant shall abide by and promptly observe and comply with all Laws
and Private Restrictions. Tenant shall make any alteration, addition, or other
capital improvement which is required by any Laws or Private Restrictions for
Tenant's particular use of the Premises. Landlord shall make any alteration,
additions, or other capital improvements which are required by any Laws or
Private Restrictions for buildings in general and shall be reimbursed for such
matters to the extent otherwise allowed by the Lease. Tenant shall not use the
Premises in any manner which will cause a cancellation of any insurance policy
covering Tenant's Alterations or any improvements installed by Landlord at its
expense or which poses an unreasonable risk of damage or injury to the Premises.
Tenant shall not sell, or permit to be kept, used, or sold in or about the
Premises any article which may be prohibited by the standard form of fire
insurance policy. Tenant shall comply with all reasonable requirements of any
insurance company, insurance underwriter, or Board of Fire Underwriters which
are necessary to maintain the insurance coverage carried by either Landlord or
Tenant pursuant to this Lease.
4.3 Outside Areas: No materials, supplies, tanks or containers,
equipment, finished products or semi-finished products, raw materials,
inoperable vehicles or articles of any nature shall be stored upon or permitted
to remain outside of the Premises except in fully fenced and screened areas
outside the Building which have been designed for such purpose and have been
approved in writing by Landlord for such use by Tenant.
4.4 Signs: Tenant shall not place on any portion of the Premises any
sign, placard, lettering in or on windows, banner, displays or other advertising
or communicative material which is visible from the exterior of the Building
without the prior written approval of Landlord. All such approved signs shall
strictly conform to all Laws, Private Restrictions, and Landlord's sign criteria
Exhibit F, and expenses shall be allocated, as set forth in Exhibit F. Tenant
shall maintain such signs in good condition and repair.
4.5 Parking: Tenant is allocated and shall have the non-exclusive right
to use not more than the number of Tenant's Allocated Parking Stalls contained
within the Project described in Section H of the Summary for its use and the use
of Tenant's Agents, the location of which may be designated from time to time by
Landlord. Tenant shall not at any time use more parking spaces than the number
so allocated to Tenant or park its vehicles or the vehicles of others in any
portion of the Project not designated by Landlord as a non-exclusive parking
area. Tenant shall not have time exclusive right to use any specific parking
space. If Landlord grants to any other tenant the exclusive right to use any
particular parking space(s), Tenant shall not use such spaces. Landlord
reserves the right, after having given Tenant reasonable notice, to have any
vehicles owned by Tenant or Tenant's Agents utilizing parking spaces in excess
of the parking spaces allowed for Tenant's use to be towed away at Tenant's
cost. All trucks and delivery vehicles shall be (i) parked at the rear of the
Building, (ii) loaded and unloaded in a manner which does not interfere with the
businesses of other occupants of the Project, and (iii) permitted to remain on
the Project only so long as is reasonably necessary to complete loading and
unloading. In the event Landlord elects or is required by any Law to limit or
control parking in the Project, whether by validation of parking tickets or any
other method of assessment, Tenant agrees to participate in such validation or
assessment program under such reasonable rules and regulations as are from time
to time established by Landlord. [See First Addendum to Lease, Paragraph 7.]
4.6 Rules and Regulations: Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees. Such rules and regulations shall be
binding upon Tenant, and Tenant agrees to abide by such rules and regulations as
long as: (i) the rules and regulations do not require tenant to pay additional
Base Monthly Rent or Additional Rent; (ii) no rules and regulations or
amendments or additions thereto are binding on Tenant until the tenth (10th)
business day after Tenant receives written notice of the change, and no rules
and regulations or amendments or additions thereto applies retroactively; and
(iii) the rules and regulations or amendments or additions thereto, do not
materially decrease Tenant's rights or materially increase Tenant's obligations
under the terms and conditions under this Lease. If there is a conflict between
the rules and regulations and any of the provisions of this Lease, the
provisions of this Lease shall prevail. Landlord shall not be responsible for
the violation by any other tenant of the Project of any such rules and
regulations.
ARTICLE 5
TRADE FIXTURES AND ALTERATIONS
5.1 Trade Fixtures: Throughout the Lease Term, Tenant may provide and
install, and shall maintain good condition, any Trade Fixtures required in the
conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5.2 Tenant's Alterations: Construction by Tenant of Tenant's
Alterations shall be governed by the following:
A. Tenant shall not construct any Tenant's Alterations or
otherwise alter the Premises without Landlord's prior written approval. Tenant
shall be entitled, without Landlord's prior approval, to make Tenant's
Alterations (i) which do not affect the structural or exterior parts or water
tight character of the Building, and (ii) the reasonably estimated cost of
which, plus the original cost of any part of the Premises removed or materially
altered in connection with such Tenant's Alterations, together do not exceed the
Permitted Tenant Alterations Limit specified in Section O of the Summary per
work of improvement. In the event Landlord's approval for any Tenant's
Alterations is required, Tenant shall not construct the Leasehold Improvement
until Landlord has approved in writing the plans and specifications therefor,
and such Tenant's Alterations shall be constructed substantially in compliance
with such
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approved plans and specifications by a licensed contractor first approved by
Landlord. All Tenant's Alterations constructed by Tenant shall be constructed by
a licensed contractor in accordance with all Laws using new materials of good
quality.
B. Tenant shall not commence construction of any Tenant's
Alterations until (i) all required governmental approvals and permits have been
obtained (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant has given Landlord at least five days' prior
written notice of its intention to commence such construction, and (iv) if
reasonably requested by Landlord, Tenant has obtained contingent liability and
broad form builders' risk insurance in an amount reasonably satisfactory to
Landlord if there are any perils relating to the proposed construction not
covered by insurance carried pursuant to Article 9.
C. All Tenant's Alterations shall remain the property of
Tenant during the Lease Term but shall not be altered or removed from the
Premises. At the expiration or sooner termination of the Lease Term, all
Tenant's Alterations shall be surrendered to Landlord as part of the realty and
shall then become Landlord's property, and Landlord shall have no obligation to
reimburse Tenant for all or any portion of the value or cost thereof; provided,
however, that if Landlord requires Tenant to remove any Tenant's Alterations,
Tenant shall so remove such Tenant's Alterations prior no the expiration or
sooner termination of the Lease Term. Notwithstanding the foregoing, Tenant
shall not be obligated to remove any Tenant's Alterations with respect to which
the following is true: (i) Tenant was required, or elected, to obtain the
approval of Landlord to the installation of the Leasehold Improvement in
question; and (ii) at the time Landlord granted its approval, it did not inform
Tenant in writing that it would require Tenant to remove such Leasehold
Improvement at the expiration of the Lease Term.
5.3 Alterations Required by Law: Tenant shall make any alteration,
addition or change of any sort to the Premises that is required by any Law
because of (i) Tenant's particular use or change of use of the Premises; (ii)
Tenant's application for any permit or governmental approval; or (iii) Tenant's
construction or installation of any Tenant's Alterations or Trade Fixtures. Any
other alteration, addition, or change required by Law which is not the
responsibility of Tenant pursuant to the foregoing shall be made by Landlord
(subject to Landlord's right to reimbursement from Tenant specified in P.5.4).
5.4 Amortization of Certain Capital Improvements: Tenant shall pay
Additional Rent in the event Landlord reasonably elects or is required to make
any of the following kinds of capital improvements to the Project and the cost
thereof is not reimbursable as a Common Operating Expense: (i) capital
improvements required to be constructed in order to comply with any Law
(excluding any Hazardous Materials Law) not in effect or applicable to the
Project as of the Effective Date; (ii) modification of existing or construction
of additional capital improvements or building service equipment to the extent
that the cost thereof would reduce the cost of consumption of utility services
or the cost of Common Operating Expenses of the Project payable by Tenant; (iii)
replacement of capital improvements or building service equipment existing as of
the Effective Date when required because of normal wear and tear; and (iv)
restoration of any part of the Project that has been damaged by any peril to
the extent the cost thereof is not covered by insurance proceeds actually
recovered by Landlord up to a maximum amount per occurrence of 2% of the then
replacement cost of the Project. The amount of Additional Rent Tenant is to pay
with respect to each such capital improvement shall be determined as follows:
A. All costs paid by Landlord to construct such improvements
(including financing costs) shall be amortized over the useful life of such
improvement (as reasonably determined by Landlord in accordance with generally
accepted accounting principles) with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it borrowed funds no construct
such improvements from an institutional lender, and Landlord shall inform Tenant
of the monthly amortization payment required to so amortize such costs, and
shall also provide Tenant with the information upon which such determination is
made; provided, that Tenant shall not be responsible for amortized payments
attributable to any portion of such useful life occurring after the Lease
expires (as it may be extended) or if it is terminated earlier without breach by
Tenant.
B. As Additional Rent, Tenant shall pay at the same time the
Base Monthly Rent is due an amount equal to Tenant's Share of that portion of
such monthly amortization payment fairly allocable no the Building (as
reasonably determined by Landlord) for each month after such improvements are
completed until the first to occur of (i) the expiration of the Lease Term (as
it may be extended), or (ii) the end of the term over which such costs were
amortized.
For the sole purpose of distinguishing between capital events for which
Landlord is reimbursed under this Paragraph 5.4 and repair items which are
Landlord's responsibility and which are to be reimbursed to Landlord as a part
of common Operating Expenses, a "capital expense" shall be a single expense (i)
which would be denominated a "capital expense" under generally accepted
accounting principles as applied under industry practice in the commercial and
industrial real estate industry; and (ii) which exceeds in the aggregate the sum
of $50,000.00. Expenses of this nature which otherwise meet the definition of
capital expense but which do not exceed $50,000.00 shall be deemed to be
repairs and billed a pair of Common Operating Expenses.
Notwithstanding the foregoing in this Paragraph, Tenant is not required
to pay any Additional Rent related to repairs, replacement or improvements to
the structural portions of the Property (defined as structural portions of roof,
foundations, floor slab and steel frame).
5.5 Mechanic's Liens: Tenant shall keep the Project free from any liens
and shall pay when due all bills arising out of any work performed, materials
furnished, or obligations incurred by Tenant or Tenant's Agents relating to the
Project. If any claim of lien is recorded (except those caused by Landlord or
Landlord's Agents), Tenant shall bond against or discharge the same within 10
days after Tenant receives written notice that the same has been recorded
against the Project. Should any lien be filed against the Project or any action
be commenced affecting title to the Project, the party receiving notice of such
lien or action shall immediately give the other party written notice thereof
5.6 Taxes on Tenant's Property: Tenant shall pay
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before delinquency any and all taxes, assessments, license fees and public
charges levied, assessed or imposed against Tenant or Tenant's estate in this
Lease or the property of Tenant situated within the Premises which become due
during the Lease Term. If any tax or other charge is assessed by any
governmental agency because of the execution of this Lease, such tax shall be
paid by Tenant. On demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of these payments.
ARTICLE 6
REPAIR AND MAINTENANCE
6. 1 Tenant's Obligation to Maintain: Except as otherwise provided in
P.6.2, P.11.1, and P.12.3, Tenant shall be responsible for the following during
the Lease Term:
A. Tenant shall clean and maintain in good order, condition,
and repair and replace when necessary the Premises and every part thereof,
through regular inspections and servicing, including, but not limited to: (i)
all plumbing and sewage facilities (including all sinks, toilets, faucets and
drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing
system; (ii) all fixtures, interior walls, floors, carpets and ceilings; (iii)
all windows, doors, entrances, plate glass, showcases and skylights (including
cleaning both interior and exterior surfaces); (iv) all electrical facilities
and all equipment (including all lighting fixtures, lamps, bulbs, tubes, fans,
vents, exhaust equipment and systems); and (v) any automatic fire extinguisher
equipment in the Premises.
B. With respect to utility facilities serving the Premises
(including electrical wiring and conduits, gas lines, water pipes, and plumbing
and sewage fixtures and pipes), Tenant shall be responsible for the maintenance
and repair of any such facilities which serve only the Premises, including all
such facilities that are within the walls or floor, or on the roof of the
Premises, and any part of such facility that is not within the Premises, but
only up to the point where such facilities join a main or other junction (e.g.,
sewer main or electrical transformer) from which such utility services are
distributed to other parts of the Project as well as to the Premises. Tenant
shall replace any damaged or broken glass in the Premises (including all
interior and exterior doors and windows) with glass of the same kind, size and
quality. Tenant shall repair any damage to the Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry.
C. Tenant shall (i) maintain, repair and replace when
necessary all HVAC equipment which services only the Premises, and shall keep
the same in good condition through regular inspection and servicing, and (ii)
maintain continuously throughout the Lease Term a service contract for the
maintenance of all such HVAC equipment with a licensed HVAC repair and
maintenance contractor approved by Landlord, which contract provides for the
periodic inspection and servicing of the HVAC equipment at least once every 60
days during the Lease Term. Notwithstanding the foregoing, Landlord may elect at
any time to assume responsibility for the maintenance, repair and replacement of
such HVAC equipment which serves only the Premises. Tenant shall maintain
continuously throughout the Lease Term a service contract for the washing of all
windows (both interior and exterior surfaces) in time Premises with a contractor
approved by Landlord, which contract provides for the periodic washing of all
such windows at least once every 60 days during the Lease Term. Tenant shall
furnish Landlord with copies of all such service contracts, which shall provide
that they may not be cancelled or changed without at least 30 days' prior
written notice to landlord.
D. All repairs and replacements required of Tenant shall be
promptly made with new materials of like kind and quality. If the work affects
the structural parts of the Building or if the estimated cost of any item of
repair or replacement is in excess of the Permitted Tenant's Alterations Limit,
then Tenant shall first obtain Landlord's written approval of the scope of the
work, plans therefor, materials to be used, and the contractor.
E. Notwithstanding anything to the contrary in this Lease,
Tenant shall not be required to repair any items which are covered by or under
the provisions of any warranty given by Landlord hereunder.
6.2 Landlord's Obligation to Maintain: Landlord shall repair, maintain
and operate the Common Area and repair and maintain the roofs, exterior and
structural parts of the building(s) located on the Project so that the same are
kept in good order and repair. If there is central HVAC or other building
service equipment and/or utility facilities serving portions of the Common Area
and/or both the Premises and other parts of the Building, Landlord shall
maintain and operate (and replace when necessary) such equipment. Landlord shall
not be responsible for repairs required by an accident, fire or other peril or
for damage caused to any part of the Project by any act or omission of Tenant or
Tenant's Agents except as otherwise required by Article 11. Landlord may engage
contractors of its choice to perform the obligations required of it by this
Article, and the necessity of any expenditure to perform such obligations shall
be at the sole discretion of Landlord.
6.3 Control of Common Area: Landlord shall at all times have exclusive
control of the Common Area. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any abatement of rent, to: (i) close any part of the Common Area to whatever
extent required in the opinion of Landlord's counsel to prevent a dedication
thereof or the accrual of any prescriptive rights therein; (ii) temporarily
close the Common Area to perform maintenance or for any other reason deemed
sufficient by Landlord; (iii) change the shape, size, location and extent of the
Common Area; (iv) eliminate from or add to the Project any land or improvement,
including multi-deck parking structures; (v) make changes to the Common Area
including, without limitation, changes in the location of driveways, entrances,
exits, parking spaces, parking areas, sidewalks or the direction of the flow of
traffic and the site of the Common Area; (vi) remove unauthorized persons from
the Project; and/or (vii) change the name of the Building or Project or the
address of the Building or Project if, and only if, the change is made as a
result of a change made by a governmental authority. Tenant shall keep the
Common Area clear of all obstructions created or permitted by Tenant. If in the
opinion of Landlord unauthorized persons are using any of the Common Area by
reason of the presence of Tenant in the Building, Tenant, upon demand of
Landlord, shall restrain such unauthorized use by appropriate proceedings. In
exercising any such rights regarding time Common Area, (i) Landlord shall make a
reasonable
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effort to minimize any disruption to Tenant's business, and (ii) Landlord shall
not exercise its rights to control the Common Area in a manner that would
materially interfere with Tenant's use of the Premises, or substantially reduce
Tenant's Allocated Parking Stalls without first obtaining Tenant's consent
Landlord shall have no obligation to provide guard services or other security
measures for the benefit of the Project. Tenant assumes all responsibility for
the protection of Tenant and Tenant's Agents from acts of third parties;
provided, however, that nothing contained herein shall prevent Landlord, at its
sole option, from providing security measures for the Project
ARTICLE 7
WASTE DISPOSAL AND UTILITIES
7.1 Waste Disposal: Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are fully fenced and screened
in compliance with all Private Restrictions, and designed for such purpose. All
entrances to such outside trash enclosures shall be kept closed, and waste shall
be stored in such manner as not to be visible from the exterior of such outside
enclosures. Tenant shall cause all of its waste to be regularly removed from the
Premises at Tenant's sole cost. Tenant shall keep all fire corridors and
mechanical equipment rooms in the Premises free and clear of all obstructions at
all times.
7.2 Hazardous Materials: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Project:
A. Any handling, transportation, storage, treatment, disposal
or use of Hazardous Materials by Tenant and Tenant's Agents after the Effective
Date in or about time Project shall strictly comply with all applicable
Hazardous Materials Laws. Tenant shall indemnify, defend upon demand with
counsel reasonably acceptable to Landlord, and hold harmless Landlord from and
against any liabilities, losses, claims, damages, host profits, consequential
damages, interest, penalties, fines, monetary sanctions, attorneys' fees,
experts' fees, court costs, remediation costs, investigation costs, and other
expenses which result from or arise in any manner whatsoever out of the use,
storage, treatment, transportation, release, or disposal of Hazardous Materials
on or about the Project by Tenant or Tenant's Agents after the Effective Date.
B. If the presence of Hazardous Materials on the Project
caused or knowingly permitted by Tenant or Tenant's Agents after the Effective
Date results in contamination or deterioration of water or soil resulting in a
level of contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Tenant
shall promptly take any and all action necessary to investigate and remediate
such contamination if required by Law or as a condition to the issuance or
continuing effectiveness of any governmental approval which relates to the use
of the Project or any part thereof. Tenant shall further be solely responsible
for, and shall defend, indemnify and hold Landlord and its agents harmless from
and against, all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with any investigation and remediation
required hereunder to return the Project to its condition existing prior to the
appearance of such Hazardous Materials.
C. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication received from
any governmental authority concerning Hazardous Materials which relates to the
Project, and (ii) any contamination of the Project by Hazardous Materials which
constitutes a violation of any Hazardous Materials Law. Tenant may use small
quantities of household chemicals such as adhesives, lubricants, and cleaning
fluids in order to conduct its business at the Premises and such other Hazardous
Materials as are necessary for the operation of Tenant's business of which
Landlord receives notice prior to such Hazardous Materials being brought onto
the Premises and which Landlord consents in writing may be brought onto the
Premises. At any time during the Lease Term, Tenant shall, within five business
days after written request therefor received from Landlord, disclose in writing
all Hazardous Materials that are being used by Tenant on the Project, the nature
of such use, and the manner of storage and disposal.
D. Landlord may cause testing wells to be installed on the
Project, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for
such purposes. If Tenant so requests, Landlord shall supply Tenant with copies
of such test results. The cost of such tests and of the installation,
maintenance, repair and replacement of such wells shall be paid by Tenant if
such tests disclose the existence of facts which give rise to liability of
Tenant pursuant to its indemnity given in P.7.2A and/or P.7.2B.
E. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42
U.S.C. 6903), or (iii) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response; Compensation and Liability Act,
42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.
F. To the actual knowledge of Michael J. Biggar, Landlord's
executive handling this Project, as of the Effective Date, without having made
any investigation (and without having been deemed to have investigated or
discovered any unknown facts which such investigation would have disclosed), and
subject to and qualified by all information and disclosures made to Tenant by
Landlord (including but not limited to those disclosures made or described in
Exhibit I and Paragraph 6 of the First Addendum to Lease, and reports referenced
therein) (i) the soil, surface water, or groundwater on or under the
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Premises and the Project does not contain Hazardous Materials in amounts which
violate any Hazardous Materials Laws to the extent that any governmental entity
could require either Landlord or Tenant to take any remedial action with respect
to such Hazardous Materials; (ii) no asbestos-containing building materials are
present in the Buildings; and (iii) no action, proceeding, or claim is pending
or threatened regarding the Premises or the Project concerning any Hazardous
Materials.
G. Tenant shall not be liable to Landlord under any
provisions of Article 7 of this Lease for any claims arising out of or in
connection with any Hazardous Materials present on the Premises or the Project,
or the soil, air, improvements, groundwater, or surface water thereof as of the
Commencement Date and not resulting from Tenant's acts or omissions.
H. The obligations of Landlord and Tenant under this P.7.2
shall survive the expiration or earlier termination of the Lease Term. The
rights mind obligations of Landlord and Tenant with respect to issues relating
to Hazardous Materials are exclusively established by this P.7.2. In the event
of any inconsistency between any other part of this Lease and this P.7.2, the
terms of this P.7.2 shall control.
7.3 Utilities: Tenant shall promptly pay, as the same become due, all
charges for water, gas, electricity, telephone, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, and water service available to the Premises as of the
Commencement Date), and (ii) penalties for discontinued or interrupted service.
If any utility service is not separately metered to the Premises, then Tenant
shall pay its pro rata share of the cost of such utility service with all others
served by the service not separately metered, However, if Landlord (determines
that Tenant is using a disproportionate amount of any utility service not
separately metered, then Landlord at its election may (i) periodically charge
Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the
cost of Tenant's excess use of such utility service, or (ii) install a separate
meter (at Tenant's expense) to measure the utility service supplied to the
Premises.
7.4 Compliance with Governmental Regulations: Landlord and Tenant shall
comply with all rules, regulations and requirements promulgated by national,
state or local governmental agencies or utility suppliers concerning the use of
utility services, including any rationing, limitation or other control. Tenant
shall not be entitled to terminate this Lease nor to any abatement in rent by
reason of such compliance.
ARTICLE 8
COMMON OPERATING EXPENSES
8. 1 Tenant's Obligation to Reimburse: As Additional Rent, Tenant shall
pay Tenant's Share (specified in Section G of the Summary) of all Common
Operating Expenses; provided, however, if the Project contains more than one
building, then Tenant shall pay Tenant's Share of all Common Operating Expenses
fairly allocable to the Building, including (i) all Common Operating Expenses
paid with respect to the maintenance, repair, replacement and use of the
Building, and (ii) a proportionate share (based on the Building Gross Leasable
Area as a percentage of the Project Gross Leasable Area) of all Common Operating
Expenses which relate to the Project in general are not fairly allocable to any
one building that is part of the Project. Tenant shall pay such share of the
actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within 10 days after receipt of a written bill
therefor from Landlord, on such periodic basis as Landlord shall designate, but
in no event more frequently than once a month. Alternatively, Landlord may from
time to time require that Tenant pay Tenant's Share of Common Operating Expenses
in advance in estimated monthly installments, in accordance with the following:
(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the
Common Operating expenses it anticipates will be paid or incurred for the
Landlord's fiscal year in question; (ii) during such Landlord's fiscal year
Tenant shall pay such share of the estimated Common Operating Expenses in
advance in monthly installments as required by Landlord due with the
installments of Base Monthly Rent; and (iii) within 90 days after the end of
each Landlord's fiscal year, Landlord shall furnish to Tenant a statement in
reasonable detail of the actual Common Operating Expenses paid or incurred by
Landlord during the just ended Landlord's fiscal year and thereupon there shall
be an adjustment between Landlord and Tenant, with payment to Landlord or credit
by Landlord against the next installment of Base Monthly Remit or reimbursement
to Tenant if this Lease has terminated, as the case may require, within 10 days
after delivery by Landlord to Tenant of said statement, so that Landlord shall
receive the entire amount of Tenant's Share of all Common Operating Expenses for
such Landlord's fiscal year and no more. Tenant shall have the right at its
expense, exercisable upon reasonable prior written notice to Landlord, to audit
at Landlord's office during nominal business hours Landlord's books and records
as they relate to Common Operating Expenses. Such inspection must be within 90
days of Tenant's receipt of Landlord's annual statement for the same, and shall
be limited to verification of the charges contained in such statement. Tenant
may not withhold payment of such bill pending completion of such audit. If such
audit reveals that Landlord has overcharged Tenant, the amount overcharged shall
be credited to Tenant's account within thirty (30) days after the audit is
concluded. In the event that an audit proves that Tenant has been overcharged
by more than ten percent (10%), Landlord shall reimburse Tenant for the costs of
such audit within thirty (30) days after receipt of a statement and supporting
documents therefor; provided, however, that the following limitations shall
apply; (i) Landlord shall not be responsible for reimbursing Tenant for audit
costs in excess of $2,000.00 for the audit of a single year; (ii) Landlord shall
not be obligated to reimburse for audit costs if the audit is conducted by an
employee of Tenant; (iii) the auditor retained by Tenant shall be a certified
public accountant and not be engaged on a "contingency fee" basis; and (iv)
Landlord is not bound by the conclusions of Tenant's auditor.
8.2 Common Operating Expenses Defined: The term "Common Operating
Expenses" shall mean time following:
A. All costs and expenses paid or incurred by Landlord in
doing the following (including payments to independent contractors providing
services related to the
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performance of the following): (i) maintaining, cleaning, repairing and
resurfacing the roof (including repair of leaks) and the exterior surfaces
(including painting) of all buildings located on the Project; (ii) maintenance
of the liability, fire and property damage insurance covering the Project
carried by Landlord pursuant to P. 9.2 (including the prepayment of premiums for
coverage of up to one year); (iii) maintaining, repairing, operating and
replacing when necessary HVAC equipment, utility facilities and other building
service equipment; (iv) providing utilities to the Common Area (including
lighting, trash removal and water for landscaping irrigation); (v) complying
with all applicable Laws and Private Restrictions; (vi) operating, maintaining,
repairing, cleaning, painting, restriping and resurfacing the Common Area; (vii)
replacement or installation of lighting fixtures, directional or other signs and
signals, irrigation systems, trees, shrubs, ground cover and other plant
materials, and all landscaping in the Common Area; and (viii) providing
security.
B. The following costs: (i) Real Property Taxes as defined in
P. 8.3; (ii) the amount of any "deductible" paid by Landlord with respect to
damage caused by any Insured Peril; (iii) the cost to repair damage caused by an
Uninsured Peril up to a maximum amount in any 12 month period equal to 2% of the
replacement cost of the buildings or other improvements damaged; and (iv) that
portion of all compensation (including benefits and premiums for workers'
compensation and other insurance) paid to or on behalf of employees of Landlord
but only to the extent they are substantially involved in the performance of the
work described by P.8.2A that is fairly allocable to the Project;
C. Fees for management services rendered by either Landlord or
a third party manager engaged by Landlord (which may be a party affiliated with
Landlord), except that the total amount charged for management services and
included in Tenant's Share of Common Operating Expenses shall not exceed the
monthly rate of 4% of the Base Monthly Rent.
D. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of the
Project which would be considered a current expense (and not a capital
expenditure) pursuant to generally accepted accounting principles; provided,
however, that Common Operating Expenses shall not include any of the following:
(i) payments on any loans or ground leases affecting the Project; (ii)
depreciation of any buildings or any major systems of building service equipment
within the Project; (iii) leasing commissions; (iv) the cost of tenant
improvements installed for the exclusive use of other tenants of the Project;
(v) any cost incurred in complying with Hazardous Materials Laws, which subject
is governed exclusively by P.7.2; and (vi) legal fees incurred in lease
preparation; (vii) the cost of initial Interior Improvements of the Premises to
the extent of the Tenant Improvement Allowance as defined in the First Addendum
to Lease, Paragraph 5; (viii) costs actually reimbursed to Landlord by insurance
or any third party; (ix) advertising and leasing costs; (x) costs of compliance
with the warranties made by Landlord hereunder; (xi) depreciation, amortization,
or other expense reserves; (xii) costs and expenses for which Tenant reimburses
or pays Landlord directly; and (xiii) costs no comply with any Laws which were
in effect and applicable to the Project as of the Commencement Date (which shall
not include any matters where Landlord was not required to comply with
particular Laws, as of the Commencement Date, but is later required to comply
due to intervening events).
8.3 Real Property Taxes Defined: The term "Real Property Taxes" shall
mean all taxes, assessments, levies, and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments resulting from a change in
ownership, new construction, or any other cause), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any
portion of the Project (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein, the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located on the Project, the gross receipts, income, or
rentals from the Project, or the use of parking areas, public utilities, or
energy within the Project, or Landlord's business of leasing the Project. If at
any time during time Lease Term the method of taxation or assessment of the
Project prevailing as of the Effective Date shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlord's interest therein, or (ii) on or measured by the gross receipts,
income or rentals from the Project, on Landlord's business of leasing the
Project, or computed in any manner with respect to the operation of the Project,
then any such tax or charge, however designated shall be included within the
meaning of the term "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is based upon property or rents unrelated to the Project, then
only that part of such Real Property Tax that is fairly allocable to the Project
shall be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
estate, inheritance, transfer, gift or franchise taxes of Landlord or time
federal or state net income tax imposed on Landlord's income from all sources.
Tenant shall have the right (but not the obligation), at its own expense and
risk, to contest the amount of Real Property Taxes or the underlying appraisal,
both for the entire Project, which is a single parcel. Tenant agrees to
indemnify, defend, and hold harmless Landlord against any claims, damages,
losses or costs incurred by Landlord on account of Tenant's activities. If
Landlord is actively contesting the Real Property Taxes, the above right of
Tenant shall be limited to a right to be included as a co-party, but under such
circumstances, Landlord reserves all final decisions to itself.
ARTICLE 9
INSURANCE
9.1 Tenant's Insurance: Tenant shall maintain insurance complying with
all of the following:
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A. Tenant shall procure, pay for and keep in full force and
effect the following:
(1). Commercial general liability insurance,
including property damage, against liability for personal injury, bodily injury,
death and damage to property occurring in or about, or resulting from an
occurrence in or about, the Premises with combined single limit coverage of not
less than the amount of Tenant's Liability Insurance Minimum specified in
Section P of the Summary, which insurance shall contain a "contractual
liability" endorsement insuring Tenant's performance of Tenant's obligation to
indemnify Landlord contained in P.10.3;
(2). Fire and property damage insurance in so-called
"all risk" form insuring Tenant's Trade Fixtures and Tenant's Alterations for
the full actual replacement cost thereof;
(3). Such other insurance that is either (i)
reasonably required by any Lender, or (ii) reasonably required by Landlord and
customarily carried by tenants of similar property in similar businesses.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this P.9.1: (i) the
insurance under 9.1. (A)(I) shall name Landlord and such other parties in
interest as Landlord reasonably designates as additional insured; (ii) shall be
primary insurance which provides that the insurer shall be liable for the full
amount of the loss up to and including the total amount of liability set forth
in the declarations without the right of contribution from any other insurance
coverage of Landlord; (iii) shall be in a form reasonably satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to
Landlord; (v) shall provide that such policy shall not be subject to
cancellation, except after at least 30 days prior written notice to Landlord so
long as such provision of 30 days notice is reasonably obtainable, but in any
event not less than 10 days prior written notice; (vi) shall not have a
"deductible" in excess of $ 10,000 unless approved in writing by Landlord; (vii)
shall contain a cross liability endorsement; and (viii) shall contain a
"severability" clause. If Tenant has in full force and effect a blanket policy
of liability insurance with the same coverage for time Premises as described
above, as well as other coverage of other premises and properties of Tenant, or
in which Tenant has some interest, such blanket insurance shall satisfy the
requirements of this P.9.1.
C. A copy of each paid-up policy evidencing the insurance
required to be carried by Tenant pursuant to this P.9.1 (appropriately
authenticated by the insurer) or a certificate of the insurer, certifying that
such policy has been issued, providing the coverage required by this P.9. 1, and
containing the provisions specified herein, shall be delivered to Landlord prior
to the time Tenant or any of its Agents enters the Premises and upon renewal of
such policies, but not less than 5 days prior to the expiration of the term of
such coverage. Landlord may, at any time, and from time to time, inspect and/or
copy any and all insurance policies required to be procured by Tenant pursuant
to this P.9.1. If any Lender reasonably determines at any time that the amount
of coverage required for any policy of insurance Tenant is to obtain pursuant to
this P.9.1 is not adequate, then Tenant shall increase such coverage for such
insurance to such amount as such Lender reasonably deems adequate, not to exceed
the level of coverage for such insurance commonly carried by comparable
businesses similarly situated.
9.2 Landlord's Insurance: Landlord shall have the following obligations
and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents (both Base Monthly
Rent and Additional Rent) for a period of not less than 12 months and from
physical damage to due Project with coverage of not less than the full
replacement cost thereof. Landlord may so insure the Project separately, or may
insure the Project with other property owned by Landlord which Landlord elects
to insure together under the same policy or policies. Such fire and property
damage insurance (i) may be endorsed to cover loss caused by such additional
perils against which Landlord may elect to insure, including earthquake and/or
flood, and to provide such additional coverage as Landlord reasonably requires,
and (ii) shall contain reasonable "deductibles" which, in the case of earthquake
and flood insurance, may be up to 15% of the replacement value of the property
insured or such higher amount as is then commercially reasonable. Landlord shall
not be required to cause such insurance to cover any Trade Fixtures or Tenant's
Alterations of Tenant.
B. Landlord may maintain a policy or policies of commercial
general liability insurance insuring Landlord (and such others as are designated
by Landlord) against liability for personal injury, bodily injury, death and
damage to property occurring or resulting from an occurrence in, on or about the
Project, with combined single limit coverage in such amount as Landlord from
time to time determines is reasonably necessary for its protection.
9.3 Tenant's Obligation to Reimburse: If Landlord's insurance rates for
the Building are increased at my time during the Lease Term as a result of the
nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for the
full amount of such increase immediately upon receipt of a bill from Landlord
therefor.
9.4 Release and Waiver of Subrogation: The parties hereto release each
other, and their respective agents and employees, from any liability for injury
to any person or damage to property that is caused by or results from any risk
insured or required to be insured against under any valid and collectible
insurance policy carried by either of the parties which contains a waiver of
subrogation by the insurer and is in force at the time of such injury or damage;
subject to the following limitations: (i) the foregoing provision shall not
apply to the commercial general liability insurance described by subparagraphs
P.9.1A and P.9.2B; (ii) such release shall apply to liability resulting from any
risk insured against or covered by self-insurance maintained or provided by
Tenant to satisfy the requirements of P.9.1 to the extent permitted by this
Lease; and (iii) Tenant shall not be released from any such liability to the
extent any damages resulting front such injury or damage are not covered by the
recovery obtained by Landlord from such insurance, but only if the insurance in
question permits such partial release in connection with obtaining a waiver of
subrogation from the insurer this release shall be in effect only so long as
the applicable insurance policy contains a clause to the effect that this
release shall not affect the right of the insured to recover under such policy.
Each party shall
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use reasonable efforts to cause each insurance policy obtained by it to provide
that the insurer waives all right of recovery by way of subrogation against the
other party and its agents and employees in connection with any injury or damage
covered by such policy. However, if any insurance policy cannot be obtained with
such a waiver of subrogation, despite the party's exercise of such reasonable
efforts, or if such waiver of subrogation is only available at additional cost
and the party for whose benefit the waiver is to be obtained does not pay such
additional cost, then the party obtaining such insurance shall notify the other
party of that fact and thereupon shall be relieved of the obligation to obtain
such waiver of subrogation rights from the insurer with respect to the
particular insurance involved.
ARTICLE 10
LIMITATION ON LANDLORD'S
LIABILITY AND INDEMNITY
10.1 Limitation on Landlord's Liability: Landlord shall not be liable
to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of rent (except as expressly provided otherwise in this Lease), for
any injury to Tenant or Tenant's Agents, damage to the property of Tenant or
Tenant's Agents, or loss to Tenant's business resulting from any cause,
including without limitation any: (i) failure, interruption or installation of
any HVAC or other utility system or service; (ii) failure to furnish or delay in
furnishing any utilities or services when such failure or delay is caused by
fire or other peril, the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord;
(iii) limitation, curtailment, rationing or restriction on the use of water or
electricity, gas or any other form of energy or any services or utility serving
the Project; (iv) vandalism or forcible entry by unauthorized persons or the
criminal act of any person; or (v) penetration of water into or onto any portion
of the Premises or the Building through roof leaks or otherwise. Notwithstanding
the foregoing but subject to P.9.4, Landlord shall be liable for any such
injury, damage or loss which is proximately caused by Landlord's willful
misconduct or active negligence.
10.2 Limitation on Tenant's Recourse: If Landlord is a corporation,
trust, partnership, joint venture, unincorporated association or other form of
business entity: (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity; and (ii) Tenant shall not have recourse to the assets of such
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, principals or representatives except to the extent of their
interest in the Project. Tenant shall have recourse only to the interest of
Landlord in the Project for the satisfaction of the obligations of Landlord and
shall not have recourse to any other assets of Landlord for the satisfaction of
such obligations.
10.3 Indemnification of Landlord: Tenant shall hold harmless, indemnify
and defend Landlord, and its employees, agents and contractors, with competent
counsel reasonably satisfactory to Landlord (and Landlord agrees to accept
counsel that any insurer requires be used), from all liability, penalties,
losses, damages, costs, expenses, causes of action, claims and/or judgments
arising by reason of any death, bodily injury, personal injury or property
damage resulting from (i) any cause or causes whatsoever (other than the willful
misconduct or active negligence of Landlord occuring in or about or resulting
from an occurrence in or about the Premises during the Lease Term; (ii) the
negligence or willful misconduct of Tenant or its agents, employees and
contractors, wherever the same may occur; or (iii) an Event of Tenant's Default.
The provisions of this P.10.3 shall survive the expiration or sooner termination
of this Lease.
10.4. Indemnification of Tenant: Landlord shall hold harmless,
indemnify and defend Tenant, and its employees, agents and contractors, with
competent counsel reasonably satisfactory to Tenant (and Tenant agrees to accept
counsel that any insurer requires be used), from all liability, penalties,
losses, damages, costs, expenses, causes of action, claims and/or judgments
arising by reason of any death, bodily injury, personal injury or property
damage resulting from the active negligence or willful misconduct of Landlord or
Landlord's intentional violation of any Laws.
ARTICLE 11
DAMAGE TO PREMISES
11.1 Landlord's Duty to Restore: If the Premises are damaged by any
peril after the Effective Date, Landlord shall restore the Premises unless the
Lease is terminated by Landlord pursuant to P.11.2 or by Tenant pursuant to
P.11.3 All insurance proceeds available from the fire and property damage
insurance carried by Landlord pursuant to P.9.2 shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either P.11.2 or
P.11.3, then all insurance proceeds available from insurance carried by Tenant
which covers loss to property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become the
property of Landlord. If this Lease is not so terminated, then upon receipt of
the insurance proceeds (if the loss is covered by insurance) and the issuance of
all unnecessary governmental permits, Landlord shall commence and diligently
prosecute to completion the restoration of the Premises, to the extent then
allowed by Law, to substantially the same condition in which the Premises were
immediately prior to such damage. Landlord's obligation to restore shall be
limited to the Premises and interior improvements constructed by Landlord as
they existed as of the Commencement Date excluding any Tenant's Alterations,
Trade Fixtures and/or personal property constructed or installed by Tenant in
the Premises. Tenant shall forthwith replace or fully repair all Tenant's
Alterations and Trade Fixtures installed by Tenant and existing at the time of
such damage or destruction, and all insurance proceeds received by Tenant from
the insurance carried by it pursuant to P.9.1A(2) shall be used for such
purpose.
11.2 Landlord's Right to Terminate: Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within 30 days after the date of such damage:
A. The Buildings are damaged by an Insured Peril to such an
extent that the estimated cost to restore exceeds 50% of the then actual
replacement cost thereof;
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provided, however, that Landlord may not terminate this Lease under this
Subparagraph if the insurance proceeds actually received equal or exceed the
actual replacement cost of the damage, or if not, Tenant agrees in writing to
pay the amount by which the cost to restore the damage exceeds the amount of
insurance proceeds actually received and subsequently deposits such amount with
Landlord within 30 days after Landlord has notified Tenant of its election to
terminate this Lease;
B. A Building is damaged by an Uninsured Peril to such an
extent that the estimated cost to restore exceeds 4% of the then actual
replacement cost thereof; provided, however, that Landlord may not terminate
this Lease pursuant to this P.11.2B if one or more tenants of the Project agree
in writing to pay the amount by which time cost to restore the damage exceeds
such amount and subsequently deposit such amount with Landlord within 30 days
after Landlord has notified Tenant of its election to terminate this Lease;
C. The Premises are damaged by any peril within 12 months of
the last day of the Lease Term to such an extent that the estimated cost to
restore equals or exceeds an amount equal to six times the Base Monthly Rent
then due; provided, however, that Landlord may not terminate this Lease pursuant
to this P.1l.2C if Tenant, at the time of such damage, has a then valid express
written option to extend the Lease Term and Tenant exercises such option to
extend the Lease Term no later than 15 days following receipt of Landlord's
written notice electing to terminate this Lease; or
D. A Building is damaged by any peril and, because of the Laws
then in force, (i) cannot be restored at reasonable cost to substantially the
same condition in which it was prior to such damage; provided, however, that
Landlord may not terminate this Lease under this Subparagraph if the insurance
proceeds actually received equal or exceed the actual cost to restore to
substantially the same condition, or if not, Tenant agrees in writing to pay the
amount by which the cost to restore to substantially the same condition exceeds
the amount of insurance proceeds actually received and subsequently deposits
such amount with Landlord within 30 days after Landlord has notified Tenant of
its election to terminate this Lease; or (ii) cannot be used for substantially
the same use being made thereof before such damage if restored as required by
this Article.
E. As used herein, the following terms shall have the
following meanings: (i) the term "Insured Peril" shall mean a peril actually
insured against for which the insurance proceeds actually received by Landlord
are sufficient (except for any "deductible" amount specified by such insurance)
to restore the Project under then existing building codes to the condition
existing immediately prior to the damage; and (ii) the term "Uninsured Peril"
shall mean any peril which is not aim Insured Peril. Notwithstanding the
foregoing, if the "deductible" for earthquake or flood insurance exceeds 2% of
the replacement cost of the improvements insured, such peril shall be deemed an
"Uninsured Peril".
11.3 Tenant's Right to Terminate: If the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to P.11.2, then as soon as reasonably practicable,
Landlord shall furnish Tenant with the written opinion of Landlord's architect
or construction consultant as to when the restoration work required of Landlord
may be completed. Tenant shall have the might to terminate this Lease in the
event any of the following occurs, which right may be exercised only by delivery
to Landlord of a written notice of election to terminate within 15 days after
Tenant receives from Landlord the estimate of the time needed to complete such
restoration.
A. The Premises are damaged by any peril and, in the
reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Premises cannot be substantially completed within 270 days
after the date of such damage; or
B. The Premises are damaged by any peril within 12 months of
the last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of time Premises cannot be
substantially completed within 90 days after the date of such damage and such
damage renders unusable more than 15% of the Premises.
C. The Buildings are damaged by any peril and because of the
Laws then in force, the Buildings cannot be used for the substantially the same
use being made thereof before such damage occurred if restored as required by
this Article.
11.4 Abatement of Rent: In the event of damage to the Premises which
does not result in the termination of this Lease, the Base Monthly Rent and the
Additional Rent shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Premises is impaired by
such damage. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of Tenant's business or property or for any inconvenience or
annoyance caused by such damage or restoration. Tenant hereby waives the
provisions of California Civil Code Sections 1932(2) and 1933(4) and the
provisions of any similar law hereinafter enacted.
ARTICLE 12
CONDEMNATION
12.1 Landlord's Termination Right: Landlord shall have the right to
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to
a condemnor under threat of condemnation), (i) all or any part of a Building is
so taken, or (ii) more than 50% of the Common Area is so taken. Any such right
to terminate by Landlord must be exercised within a reasonable period of time,
to be effective as of the date possession is taken by the condemnor. Landlord's
right to terminate shall be exercised only as to any Building which is wholly or
partially taken by condemnation, and Landlord may not terminate the Lease as to
any Building unaffected by the condemnation.
12.2 Tenant's Termination Right: Tenant shall have the right to
terminate this Lease as to any Building if, as a result of any taking by means
of the exercise of the power of eminent domain (including any voluntary sale or
transfer by Landlord to any condemnor under threat of condemnation), (i) 10% or
more the Building's leasable area is so taken and that part of the Premises that
remains cannot be restored within a reasonable period of time and thereby made
reasonably suitable for the continued operation of the Tenant's business, or
(ii) there is a taking affecting the Common Area and, as a result of such
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taking, Landlord cannot provide parking spaces within the Project equal in
number to at least 80% of the number of spaces allocated to Tenant by P.2.1, by
rearrangement of the remaining parking areas in the Common Area (including
construction of multi-deck parking structures or restriping for compact ears
where permitted by Law). Tenant must exercise such right within a reasonable
period of time, to be effective on the date that possession of that portion of
the Premises or Common Area that is condemned is taken by the condemnor.
12.3 Restoration and Abatement of Rent: If any part of the Premises or
the Common Area is taken by condemnation and this Lease is not terminated, then
Landlord shall restore the remaining portion of the Premises and Common Area and
interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant. Thereafter, except in the
case of a temporary taking, as of the date possession is taken the Base Monthly
Rent and Additional Rent shall be reduced in the same proportion that the floor
area of that part of the Premises so taken (less any addition thereto by reason
of any reconstruction) bears to the original floor area of the Premises.
12.4 Temporary Taking: If any portion of the Premises is temporarily
taken for one year or less, this Lease shall remain in effect. If any portion of
the Premises is temporarily taken by condemnation for a period which exceeds one
year or which extends beyond the natural expiration of the Lease Term, and such
taking materially and adversely affects Tenant's ability to use the Premises for
the Permitted Use, then Tenant shall have the right to terminate this Lease,
effective on the date possession is taken by the condemnor.
12.5 Division of Condemnation Award: Any award made as a result of any
condemnation of the Premises or the Common Area shall belong to and be paid to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided, however, that Tenant shall be entitled to
receive any condemnation award that is made directly to Tenant for the following
so long as the award made to Landlord is not thereby reduced: (i) for the taking
of personal property or Trade Fixtures belonging to Tenant; (ii) for the
interruption of Tenant's business or its moving costs; (iii) for loss of
Tenant's goodwill; or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant
regarding any condemnation shall be determined as provided in this Article, and
each party hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 and the provisions of any similar law hereinafter enacted
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.
ARTICLE 13
DEFAULT AND REMEDIES
13.1 Events of Tenant's Default: Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or
Additional Rent when due, and such failure is not cured within 3 days after
delivery of written notice from Landlord specifying such failure to pay,
provided, that before the deadline to pay expires, Tenant must have at least two
(2) business days to pay; or
B. Tenant shall have failed to perform any term, covenant, or
condition of this Lease except those requiring the payment of Base Monthly Rent
or Additional Rent, and Tenant shall have failed to cure such breach within 30
days after written notice from Landlord specifying the nature of such breach
where such breach could reasonably be cured within said 30 day period, or if
such breach could not be reasonably cured within said 30 day period, Tenant
shall have failed to commence such cure within said 30 day period and thereafter
continue with due diligence to prosecute such cure to completion within such
time period as is reasonably needed or
C. Tenant shall have sublet the Premises or assigned its
interest in the Lease in violation of the provisions contained in Article 14; or
D. Tenant shall have abandoned the Premises or left the
Premises substantially vacant; or
E. The occurrence of the following: (i) the making by Tenant
of any general arrangements or assignments for the benefit of creditors; (ii)
Tenant becomes a "debtor" as defined in 11 USC ss.101 or any successor statute
thereto (unless, in the case of a petition filed against Tenant, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where possession is not restored to
Tenant within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this Section 13.1E
is contrary to any applicable Law, such provision shall be of no force or
effect; or
F. Tenant shall have failed to deliver documents required of
it pursuant to P.15.4 or P.15.6 within the time periods specified therein and
Tenant further fails to satisfy such obligations within five (5) days after a
further written notice of this breach from Landlord which states that "FAILURE
TO RESPOND TO THIS NOTICE WITHIN FIVE (5) DAYS WILL MEAN THAT AN EVENT OF
TENANT'S DEFAULT UNDER THE LEASE WILL EXIST".
13.2 Landlord's Remedies: If an Event of Tenant's Default occurs,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by any Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:
A. Landlord may keep this Lease in effect and enforce by an
action at law or in equity all of its rights and remedies under this Lease,
including (i) the right to recover the remit and other sums as they become due
by appropriate legal action; (ii) the right to make payments required of Tenant
or perform Tenant's obligations and be reimbursed by Tenant for the cost thereof
with interest at the Agreed Interest Rate from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant; and (iii) the remedies of
injunctive relief mind specific performance to compel Tenant to perform its
obligations under this Lease. Notwithstanding anything contained in
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this Lease, in the event of a breach of an obligation by Tenant which results in
a condition which poses an imminent danger to safety of persons or damage to
property, an unsightly condition visible from the exterior of the Building, or a
threat to insurance coverage, then if Tenant does not cure such breach within 3
days after delivery to it of written notice from Landlord identifying the
breach, Landlord may cure the breach of Tenant and be reimbursed by Tenant for
the cost thereof with interest at the Agreed Interest Rate from the date the sum
is paid by Landlord until Landlord is reimbursed by Tenant,
B. Landlord may enter the Premises and release them to third
parties for Tenant's account for any period, whether shorter or longer than the
remaining Lease Term. Tenant shall be liable immediately to Landlord for all
reasonable costs Landlord incurs in releasing the Premises, including brokers'
commissions, expenses of altering and preparing the Premises required by the
releasing. Tenant shall pay to Landlord the rent and other sums due under this
Lease on the date the rent is due, less the rent and other sums Landlord
received from any releasing. No act by Landlord allowed by this subparagraph
shall terminate this Lease unless Landlord notifies Tenant in writing that
Landlord elects to terminate this Lease. Notwithstanding any releasing without
termination, Landlord may later elect to terminate this Lease because of the
default by Tenant.
C. Landlord may terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date set
forth for termination in such notice. Any termination under this P.13.2C shall
not relieve Tenant from its obligation to pay sums then due Landlord or from any
claim against Tenant for damages or rent previously accrued or then accruing. In
no event shall any one or more of the following actions by Landlord, in the
absence of a written election by Landlord to terminate this Lease, constitute a
termination of this Lease: (i) appointment of a receiver or keeper in order to
protect Landlord's interest hereunder; (ii) consent to any subletting of the
Premises or assignment of this Lease by Tenant, whether pursuant to the
provisions hereof or otherwise; or (iii) any other action by Landlord or
Landlord's Agents intended to mitigate the adverse effects of any breach of this
Lease by Tenant, including without limitation any action taken to maintain and
preserve the Premises or any action taken to relet the Premises or any portions
thereof to the extent such actions do not affect a termination of Tenant's
right to possession of the Premises.
D. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including those
described by P.13.C, shall constitute a termination of Tenant's right to
possession unless Landlord gives Tenant written notice of termination. Should
Landlord not terminate this Lease by giving Tenant written notice, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover the rent as it becomes due under the Lease as provided in California
Civil Code Section 1951.4.
E. In the event Landlord terminates this Lease, Landlord shall
be entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Effective Date. For
purposes of computing damages pursuant to California Civil Code Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include:
(1). The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided, computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%); and
(2). Any other amount necessary no compensate
Landlord for all detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease, or which in the ordinary course of things
would be likely to result therefrom, including the following: (i) expenses for
cleaning, repairing or restoring the Premises; (ii) expenses for altering,
remodeling or otherwise improving the Premises for the purpose of reletting,
including installation of leasehold improvements (whether such installation be
funded by a reduction of rent, direct payment or allowance to a new tenant, or
otherwise); (iii) broker's fees, advertising costs and other expenses of
reletting the Premises; (iv) costs of carrying the Premises, such as taxes,
insurance premiums, utilities and security precautions; (v) expenses in retaking
possession of time Premises; and (vi) attorneys' fees and court costs incurred
by Landlord in retaking possession of the Premises and in releasing the Premises
or otherwise incurred as a result of Tenant's default.
F. Nothing in this P.13.2 shall limit Landlord's right to
indemnification from Tenant as provided in P.7.2 and P.10.3. Any notice given by
Landlord in order to satisfy the requirements of P.13.1A or P.13.B above shall
also satisfy the notice requirements of California Code of Civil Procedure
Section 1161 regarding unlawful detainer proceedings.
13.3 Waiver: One party's consent to or approval of any act by the other
party requiring the fist party's consent or approval shall not be deemed to
waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. The receipt by Landlord of any rent
or payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach unless such waiver is in writing
and signed by Landlord. No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any such
breach theretofore or thereafter occurring. The waiver by either parry of any
breach of any provision of this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or of any other provisions herein contained
13.4 Limitation On Exercise of Rights: At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give and (ii)
Tenant may not exercise any option to extend, right to terminate this Lease, or
other right granted to it by this Lease which would otherwise be available to
it.
13.5 Waiver by Tenant of Certain Remedies: Tenant waives the provisions
of Sections 1932(1), 1941 and
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1942 of the California Civil Code and any similar or successor law regarding
Tenant's right to terminate this Lease or to make repairs and deduct the
expenses of such repairs from the rent due under this Lease. Tenant hereby
waives any right of redemption or relief from forfeiture under the laws of the
State of California, or under any other present or future law, including the
provisions of Sections 1174 and 1179 of the California Code of Civil Procedure.
13.6 Events of Landlord's Default: Landlord shall be in default of its
obligations under this Lease if Landlord shall have failed to perform any term,
covenant, or condition of this Lease, and thereafter shall have failed to cure
such breach within thirty (30) days after written notice has been given by
Tenant to Landlord and any Lender whose name and address shall have been
furnished to Tenant in writing specifying the nature of such breach, where such
breach could reasonably be cured within said thirty (30) day period, or if such
breach could not reasonably be cured in 30 days, Landlord shall have failed to
commence such cure within said thirty (30) day period and thereafter continued
with due diligence to prosecute such cure to completion within such time period
as is reasonably needed.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 Transfer By Tenant: The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this P.14.1 as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of law, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed: (i) sublet all or any part of the
Premises or allow it to be sublet, occupied or used by any person or entity
other than Tenant; (ii) assign its interest in this Lease; (iii) mortgage or
encumber the Lease (or otherwise use the Lease as a security device) in any
manner; or (iv) materially amend or modify an assignment, sublease or other
transfer that has been previously approved by Landlord. Tenant shall reimburse
Landlord for all reasonable costs and attorneys' fees incurred by Landlord in
connection with the evaluation, processing, and/or documentation of any
requested Transfer (which, in the ease of attorneys' fees, shall not exceed
$1,200.00 per request unless there is litigation between the parties arising
therefrom), whether or not Landlord's consent is granted. Landlord's reasonable
costs shall include the cost of any review or investigation performed by
Landlord or consultant acting on Landlord's behalf of (i) Hazardous Materials
(as defined in Section 7.2E of this Lease) used, stored, released, or disposed
of by the potential Subtenant or Assignee, and/or (ii) violations of Hazardous
Materials Law (as defined in Section 7.2E of this Lease) by the Tenant or the
proposed Subtenant or Assignee. Any Transfer so approved by Landlord shall not
be effective until Tenant has delivered to Landlord an executed counterpart of
the document evidencing the Transfer which (i) is in a form reasonably approved
by Landlord; (ii) contains the same terms and conditions as stated in Tenant's
notice given to Landlord pursuant to P.14.1B; and (iii) in the case of an
assignment of the Lease, contains the agreement of the proposed transferee to
assume all obligations of Tenant under this Lease arising after the effective
date of such Transfer and to remain jointly and severally liable therefor with
Tenant. Any attempted Transfer without Landlord's consent shall constitute an
Event of Tenant's Default and shall be voidable at Landlord's option. Landlord's
consent to any one Transfer shall not constitute a waiver of the provisions of
this P.14.1 as to any subsequent Transfer or a consent to any subsequent
Transfer. No Transfer, even with the consent of Landlord, shall relieve Tenant
of its personal and primary obligation to pay the rent and to perform all of the
other obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any person shall not be deemed to be a waiver by Landlord of any
provision of this Lease nor to be a consent to any Transfer.
B. At least 15 days before a proposed Transfer is to become
effective, Tenant shall give Landlord written notice of the proposed terms of
such Transfer and request Landlord's approval, which notice shall include the
following: (i) the name and legal composition of the proposed transferee; (ii) a
current financial statement of the transferee, financial statements of the
transferee covering the preceding three years if the same exist, and (if
available) an audited financial statement of the transferee for a period ending
not more than one year prior to the proposed effective date of the Transfer, all
of which statements are prepared in accordance with generally accepted
accounting principles; (iii) the nature of the proposed transferee's business to
be carried on in the Premises; (iv) all consideration to be given on account of
the Transfer; (v) a current financial statement of Tenant; and (vi) an
accurately filled out response to Landlord's standard Hazardous Materials
Questionnaire. Tenant shall provide to Landlord such other information as may be
reasonably requested by Landlord within three days after Landlord's receipt of
such notice from Tenant. Landlord shall respond in writing to Tenant's request
for Landlord's consent to a Transfer within the later of (i) 10 days of receipt
of such request together with the required accompanying documentation, or (ii)
seven days after Landlord's receipt of all information which Landlord reasonably
requests within three days after it receives Tenant's first notice regarding the
Transfer in question. If Landlord fails to respond in writing within said
period, Landlord will be deemed to have withheld consent to such Transfer.
Tenant shall immediately notify Landlord of any material modification to the
proposed terms of such Transfer. However, if Landlord does not respond within
the time specified above, then within five (5) business days after such period
has expired without a response (and provided that no response has been received
in the interim), then Tenant may give Landlord a second notice, specifically
identifying the proposed Transfer and conspicuously stating that "FAILURE TO
RESPOND TO THIS NOTICE WITH EITHER APPROVAL OR DISAPPROVAL OF THE
ABOVE-IDENTIFIED PROPOSED TRANSFER WITHIN FIVE (5) BUSINESS DAYS WILL MEAN THAT
THE ABOVE-IDENTIFIED PROPOSED TRANSFER WILL BE DEEMED APPROVED WITHOUT FURTHER
ACTION ON YOUR PART". Said notice must be given to Landlord at its then-current
notice address, and must also be given to John Marshall Collins, 111 W. St. John
St., Suite 400, San Jose, CA 95113 (or such other address as Collins may specify
from time to time by notice hereunder). If said notice is given to both notice
recipients as required above and contains the information and statements
required and set forth above, then upon the expiration of five (5) business days
from the effective
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date of said notice, if Landlord has not given its approval or disapproval of
the proposed Transfer, Landlord's consent shall be deemed to have been given to
the Proposed Transfer. In such event, Tenant and the proposed subtenant or
assignee shall nevertheless be required to execute Landlord's Consent of
Landlord form to the extent such would have been required if Landlord had
expressly consented.
C. In the event that Tenant to seeks assign its interest in
this Lease (other than by means of a Permitted Transfer) or to sublease either
Building for ninety percent (90%) or more of the then-remaining term of the
Lease (other than by means of a Permitted Transfer), Landlord shall have the
right to terminate this Lease or, in the case of a sublease relating to a single
Building terminate this Lease as to that Building, by giving written notice to
Tenant within the time during which Landlord may accept or reject the proposed
Transfer, either (i) on the condition that the proposed transferee immediately
enter into a direct lease of the Premises with Landlord (or, in the ease of a
sublease relating to one Building, a lease for the Building ) on the same terms
and conditions contained in Tenant's notice, or (ii) so that Landlord is
thereafter free to lease the Premises (or, in the case of a sublease relating to
one Building, the Building to whomever it pleases on whatever terms are
acceptable to Landlord. In the event Landlord elects to so terminate this Lease,
then (i) if such termination is conditioned upon the execution of a lease
between Landlord and the proposed transferee, Tenant's obligations under this
Lease shall not be terminated until such transferee executes a new lease with
Landlord, enters into possession and commences the payment of rent, and (ii) if
Landlord elects simply to terminate this Lease (or, in the case of a sublease
relating to one Building, terminate this Lease as to the Building), the Lease
shall so terminate in its entirety (or as to the applicable Building) fifteen
(15) days after Landlord has notified Tenant in writing of such election. Upon
such termination, Tenant shall be released from any further obligation under
this Lease if it is terminated in its entirety, or shall be released from any
further obligation under the Lease with respect to the applicable Building in
the case of a proposed sublease relating to only one Building (but in each such
case, Tenant shall not be released from any obligations which would survive the
expiration or earlier termination of the Lease). In the ease of a partial
termination of the Lease, the Base Monthly Rent, Tenant's share, and Tenant's
Allocated Parking Spaces shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Premises which remains subject to the Lease bears to the original area of the
Premises. Landlord and Tenant shall execute a cancellation and release with
respect to the Lease or the applicable portion of the Lease in the ease of
termination as to a single Building to effect such termination.
D. If Landlord consents to a Transfer proposed by Tenant,
Tenant may enter into such Transfer, and if Tenant does so, the following shall
apply:
(1) Tenant shall mint be released of its liability
for the performance of all of its obligations under the lease.
(2) If Tenant assigns its interest in this Lease,
then Tenant shall pay to Landlord 50% of all Subrent (as defined in P.14.1D(5))
received by Tenant over and above (i) the assignee's agreement to assume the
obligations of Tenant under this Lease, and (ii) all Permitted Transfer Costs
related to such assignment. In the case of assignment, the amount of Subrent
owed to Landlord shall be paid to Landlord on the same basis whether periodic or
in lump sum, that such Subrent is paid to Tenant by the assignee.
(3). If Tenant sublets any part of the Premises,
then with respect to the space so subleased, Tenant shall pay to Landlord 50% of
the positive difference, if any, between (i) all Subrent paid by the subtenant
to Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent
allocable to the space sublet and all Permitted Transfer Costs related to such
sublease. Such amount shall be paid to Landlord on the same basis, whether
periodic or in lump sum, that such Subrent is paid to Tenant by its subtenant.
In calculating Landlord's share of any periodic payments, all Permitted Transfer
Costs shall be first recovered by Tenant.
(4). Tenant's obligations under this P.14.1D shall
survive any Transfer, and Tenant's failure to perform its obligations hereunder
shall be an Event of Tenant's Default. At the time Tenant makes any payment to
Landlord required by this P.14.1D, Tenant shall deliver an itemized statement of
the method by which the amount to which Landlord is entitled was calculated,
certified by Tenant as true and correct. Landlord shall have the right at
reasonable intervals to inspect Tenant's books and records relating to the
payments due hereunder. Upon request therefor, Tenant shall deliver to Landlord
copies of all bills, invoices or other documents upon which its calculations are
based. Landlord may condition its approval of any Transfer upon obtaining a
certification from both Tenant and time proposed transferee of all Subrent and
other amounts that are to be paid to Tenant in connection with such Transfer
(5). As used in this P.14.1D, the term "Subrent"
shall mean any consideration of any kind received, or to be received, by
Tenant as a result of the Transfer, if such sums are related to Tenant's
interest in this Lease or in the Premises, including payments from or on behalf
of time transferee (in excess of the book value thereof) for Tenant's assets,
fixtures, leasehold improvements, inventory, accounts, goodwill, equipment,
furniture, and general intangibles. As used in this P. 14.1D, the term
"Permitted Transfer Costs" shall mean (i) all reasonable leasing commissions
paid to third parties not affiliated with Tenant in order to obtain the Transfer
in question; (ii) all reasonable attorneys' fees incurred by Tenant with respect
to the Transfer in question; (iii) the cost of any reasonable improvements made
to the Premises by Tenant specifically for any assignee or subtenant; and (iv)
any moving costs or costs relating to the termination of the subtenant or
assignee's former space which Tenant actually pays pursuant to the contractual
obligation to do so pursuant to the sublease or assignment document. If a
proposed Transfer involves payment of a portion of the Subrent to Landlord under
Subparagraphs 14.1D(2) or (3) above, then upon submission of its request for
approval of a Transfer, Tenant shall identify any Permitted Transfer Costs in
writing.
E. If Tenant is a corporation, the following shall be deemed a
voluntary assignment of Tenant's interest in this Lease: (i) any dissolution,
merger, consolidation, or other reorganization of or affecting Tenant, whether
or non Tenant is the surviving corporation; and (ii) if the capital stock of
Tenant is not publicly traded, the sale or transfer to one person or entity
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(or no any group of related persons or entities) stock possessing more than 50%
of the total combined voting power of all classes of Tenant's capital stock
issued, outstanding and entitled to vote for the election of directors. If
Tenant is a partnership, any withdrawal or substitution (whether voluntary,
involuntary or by operation of law, and whether occurring at one time or over a
period of time) of any partner owning 25% or more (cumulatively) of any interest
in the capital or profits of the partnership, or the dissolution of the
partnership, shall be deemed a voluntary assignment of Tenant's interest in this
Lease
F. Notwithstanding anything contained, in P.14.1, so long as
Tenant otherwise complies with the provisions of P.14.1 Tenant may enter into
any of the following transfers (a "Permitted Transfer") without Landlord's prior
written consent, and Landlord shall not be entitled to terminate the Lease
pursuant to P.14.1C or to receive any part of any Subrent resulting therefrom
that would otherwise be due it pursuant to P.14.1D:
(1). Tenant may sublease all or part of the Premises
or assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with the original Tenant to this Lease
by means of an ownership interest of at least 50%;
(2). Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other reorganization
in which Tenant is not the surviving corporation, so long as the surviving
corporation is demonstrated by Tenant to have a net worth at time of such
assignment than is equal to or greater than the net worth of Tenant immediately
prior to such transaction; and
(3). Tenant may assign this Lease to a corporation
which purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as such acquiring corporation is demonstrated by Tenant to be as
creditworthy as Tenant immediately prior to such transaction, judged according
to the standards used by reasonable landlords in the market area of the Premises
in evaluating the creditworthiness of prospective tenants.
14.2 Transfer By Landlord: Landlord and its successors in interest
shall have the right to transfer their interest in this Lease and the Project at
any time and to any person or entity. In the event of any such transfer, the
Landlord originally named herein (and, in the case of any subsequent transfer,
the transferror) from the date of such transfer, shall be automatically
relieved, without any further act by any person or entity, of all liability for
the performance of the obligations of the Landlord hereunder which may accrue
after the date of such transfer. After the date of any such transfer, the term
"Landlord" as used herein shall mean the transferee of such interest in the
Premises.
ARTICLE 15
GENERAL PROVISIONS
15.1 Landlord's Right to Enter: Landlord and its agents may enter the
Premises an any reasonable tine after giving at least 24 hours' prior notice to
Tenant (and immediately in the case of emergency) for the purpose of (i)
inspecting time same; (ii) posting notices of non-responsibility; (iii)
supplying any service no be provided by Landlord to Tenant; (iv) showing the
Premises to prospective purchasers, mortgagees or tenants; (v) making necessary
alterations, additions or repairs; (vi) performing Tenant's obligations when
Tenant has failed to do so after written notice from Landlord; (vii) placing
upon the Premises ordinary "for lease" signs or "for sale" signs; and (viii)
responding to an emergency. Landlord shall have the right to use any and all
means Landlord may deem necessary and proper to enter the Premises in an
emergency. Any entry into the Premises obtained by Landlord in accordance with
this P.15.1 shall not be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction, actual or constructive, of Tenant from the
Premises. In connection with any entry by Landlord pursuant to this Paragraph
15.1, the business of Tenant and use of the Premises shall be interfered with to
the least extent that is reasonably practical.
15.2 Surrender of the Premises: Upon the expiration or sooner
termination of this Lease, Tenant shall vacate and surrender the Premises to
Landlord in the same condition as existed at the Commencement Date, except for
(i) reasonable wear and tear, (ii) damage caused by any peril or condemnation,
and (iii) contamination by Hazardous Materials for which Tenant is not
responsible pursuant to P.7.2A or P.7.2B. In this regard, normal wear and tear
shall be construed to mean wear and tear caused to the Premises by the natural
aging process which occurs in spite of prudent application of the best standards
for maintenance, repair and janitorial practices, and does not include items of
neglected or deferred maintenance. In any event, Tenant shall cause the
following to be done prior to the expiration or the sooner termination of this
Lease: (i) all interior walls shall be painted or cleaned so that they appear
freshly painted; (ii) all tiled floors shall be cleaned and waxed; (iii) all
carpets shall be cleaned and shampooed; (iv) all broken, marred, stained or
nonconforming acoustical ceiling tiles shall be replaced; (v) all windows shall
be washed; (vi) the HVAC system shall be serviced by a reputable and licensed
service firm and left in good operating condition and repair as so certified by
such firm; and (vii) the plumbing and electrical systems and lighting shall be
placed in good order and repair (including replacement of any burned out,
discolored or broken light bulbs, ballasts, or lenses). Notwithstanding the
foregoing, Tenant shall not be required to take an action required by the HVAC
service firm in order for said firm to certify the HVAC as meeting the standards
of subparagraph (vi) above if, and to the extent that such action requires
repair or replacement which is in the nature of a capital expense as defined in
Paragraph 5.4, provided, however, that Tenant shall not be relieved from such
duty by this sentence if time need for such repair or replacement results,
wholly or in part, from Tenant's breach of its duties under this Lease relating
to the HVAC system, including but not limited to the duties set forth in
Paragraph 6.1C. If Landlord so requests, Tenant shall, prior to the expiration
or sooner termination of this Lease, (i) remove any Tenant's Alterations which
Tenant is required to remove pursuant to P.5.2 and repair all damage caused by
such removal, and (ii) subject to Paragraph 5.2, return the Premises or any part
thereof to its original configuration existing as of the time the Premises were
delivered to Tenant. If the Premises are not so surrendered at the termination
of this Lease, Tenant shall be liable to Landlord for all costs reasonably
incurred by Landlord in returning the Premises to the required condition, plus
interest on all costs incurred at the Agreed Interest Rate. Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
so surrendering the Premises, including,
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without limitation, any claims made by any succeeding tenant or losses to
Landlord due to lost opportunities to lease to succeeding tenants.
15.3 Holding Over: This Lease shall terminate without further notice at
the expiration of the Lease Term. Any holding over by Tenant after expiration of
the Lease Term shall not constitute a renewal or extension of the Lease or give
Tenant any rights in or to the Premises except as expressly provided in this
Lease. Any holding over after such expiration with the written consent of
Landlord shall be construed to be a tenancy from month to month on the same
terms and conditions herein specified insofar as applicable except that Base
Monthly Rent shall, be increased to an amount equal to 150% of the Base Monthly
Rent payable during the last full calendar month of the Lease Term.
15.4 Subordination: The following provisions shall govern the
relationship of this Lease to any Security Instrument:
A. The Lease is subject and subordinate to all Security
Instruments existing as of the Effective Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Effective Date.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed so long as Tenant is not in default and performs
all of its obligations under this Lease, unless this Lease is otherwise
terminated pursuant to its terms.
C. Tenant shall upon request execute any document or
instrument reasonably required by any Lender to make this Lease either prior or
subordinate to a Security Instrument, which may include such other matters as
the Lender customarily and reasonably requires in connection with such
agreements, including provisions that the Lender not be liable for (i) the
return of any security deposit unless the Lender receives it from Landlord, and
(ii) any defaults on the part of Landlord occurring prior to the time the Lender
takes possession of the Project in connection with the enforcement of its
Security Instrument. Tenant's failure to execute any such document or instrument
within 10 days after written demand therefor shall constitute an Event of
Tenant's Default. Tenant approves as reasonable the form of subordination
agreement attached to this Lease as Exhibit G.
D. As a condition to Tenant's obligations under this Lease,
not later than the Commencement Date, Landlord shall supply Tenant with a
Subordination Agreement; Acknowledgment of Lease Assignment; Estoppel,
Attornment, and Non-Disturbance Agreement in substantially the form of Exhibit
G, which is a sample of such an agreement from Wells Fargo Bank, Landlord's
construction Lender. Tenant approves Exhibit G and agrees that it will not
unreasonably withhold, delay, or condition its approval of changes required by
the Lender in such document. Landlord will use its best efforts to obtain such
Agreement as soon as possible.
E. Subordination of Tenant's Lease to any Security Instruments
created after the Effective Date of this Lease and Tenant's duty to sign
documents confirming such subordination shall be subject to the Landlord
providing Tenant with a subordination agreement substantially in the form of
Exhibit G if the Lender is Wells Fargo, or in any commercial Lender's standard
form. Tenant agrees that it will not unreasonably withhold, delay or condition
its approval of changes required by the Lender in such document.
15.5 Mortgagee Protection and Attornment: In the event of any default
on the part of the Landlord, Tenant will use reasonable efforts to give notice
by registered mail to any Lender whose name has been provided to Tenant and
shall offer such Lender a reasonable opportunity to cure the default, including
time to obtain possession of the Premises by power of smile or judicial
foreclosure or other appropriate legal proceedings, if such should prove
necessary to effect a cure. Tenant shall attorn to any purchaser of the Premises
at any foreclosure sale or private sale conducted pursuant to any Security
Instrument encumbering the Premises, or to any grantee or transferee designated
in any deed given in lieu of foreclosure, provided that the purchaser, grantee,
or transferee is subject to the obligations of the Landlord hereunder.
15.6 Estoppel Certificates and Financial Statements: At all times
during the Lease Term, each party agrees, following any request by the other
party, promptly to execute and deliver to the requesting party within 15 days
following delivery of such request an estoppel certificate: (i) certifying that
this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect, (ii) stating the date to which the rent and other
charges are paid in advance, if any, (iii) acknowledging that there are not, to
the certifying party's knowledge, any uncured defaults on the part of any party
hereunder or, if there are uncured defaults, specifying the nature of such
defaults, and (iv) certifying such other information about the Lease as may be
reasonably required by the requesting party. A failure to deliver an estoppel
certificate within 15 days after delivery of a request therefor shall be a
conclusive admission that, as of the date of the request for such statement: (i)
this Lease is unmodified except as may be represented by the requesting party in
said request and is in full force and effect, (ii) there are no uncured defaults
in the requesting party's performance, and (iii) no rent has been paid more than
30 days in advance. At any time during the Lease Term Tenant shall, upon 15
days' prior written notice from Landlord, provide Tenant's most recent financial
statement and financial statements covering the 24 month period prior to the
date of such most recent financial statement to any existing Lender or to any
potential Lender or buyer of time Premises. Such statements shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant. So long as Tenant is a publicly traded company (and if Tenant ceases
to be a publicly traded company but has a direct or indirect parent which is
publicly traded and whose public reports and financial statements separately
state the financial strength and worth of Tenant), Tenant may satisfy the
foregoing requirements by providing Tenant's most recently filed public report
and the public reports filed by Tenant for the immediately preceding 24 months,
or the same documents for the parent. If Tenant does not meet the conditions in
the immediately preceding section, then Tenant shall supply financial data as
set forth above, but in such case, Landlord agrees that is shall be kept in
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confidence, to be disclosed in confidence only to Landlord's Lenders, potential
lenders, potential purchasers, accountants, and attorneys, and under such
circumstances, Tenant is only required to disclose reports prepared by Tenant in
the ordinary course of its business and is not required to make up reports
specifically to meet these requirements.
15.7 Reasonable Consent: Whenever any party's approval or consent is
required by this Lease before an action may be taken by the other party, such
approval or consent shall not be unreasonably withheld or delayed.
15.8 Notices: Any notice required or desired to be given regarding this
Lease shall be in writing and may be given by personal delivery, by facsimile
telecopy, by courier service, or by mail. A notice shall be deemed to have been
given (i) when delivered or refused if such notice was deposited in the United
States mail, certified or registered, postage prepaid, addressed to the party to
be served at its Address for Notices specified in Section Q or Section R of the
Summary (as applicable), (ii) when delivered if given by personal delivery, and
(iii) in all other cases when actually received at the party's Address for
Notices. Either party may change its address by giving notice of the same in
accordance with this P.15.8, provided, however, that any address to which
notices may be sent must be a California address. Notwithstanding any other
provision hereof, notice that is personally delivered is not required to be
personally delivered to more than one person, and is not required to be
delivered to the particular persons or officers identified in the Summary of
Basic Lease Terms, Section 9, and such personal delivery shall be deemed
complete if personally delivered to Tenant.
15.9 Attorneys' Fees: In the event either Landlord or Tenant shall
bring any action or legal proceeding for an alleged breach of any provision of
this Lease, to recover rent, to terminate this Lease or otherwise to enforce,
protect or establish any term or covenant of this Lease, the prevailing party
shall be entitled to recover as a part of such action or proceeding, or in a
separate action brought for that purpose, reasonable attorneys' fees, court
costs, and experts' fees as may be fixed by the court.
15.10 Corporate Authority: If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of such
corporation in accordance with the by-laws of such corporation (or partnership
in accordance with the partnership agreement of such partnership) and that this
Lease is binding upon such corporation (or partnership) in accordance with its
terms. Each of the persons executing this Lease on behalf of a corporation does
hereby covenant and warrant that the party for whom it is executing this Lease
is a duly authorized and existing corporation, that it is qualified to do
business in California, and that the corporation has full right and authority to
enter into this Lease.
15.11 Miscellaneous: Should any provision of this lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect, impair
or invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof. Any
executed copy of this Lease shall be deemed an original for all purposes. This
Lease shall, subject to the provisions regarding assignment, apply to and bind
the respective heirs, successors, executors, administrators and assigns of
Landlord and Tenant. "Party" shall mean Landlord or Tenant, as the context
implies. If Tenant consists of more than one person or entity, then all members
of Tenant shall be jointly and severally liable hereunder. 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. When the context of this Lease requires, the neuter gender
includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms "shall"," will" and
"agree" are mandatory. The term "may" is permissive When a party is required to
do something by this Lease, it shall do so at its sole cost and expense without
right of reimbursement from the other party unless a provision of this Lease
expressly requires reimbursement. Landlord and Tenant agree that (i) the gross
leasable area of the Premises includes any atriums, depressed loading docks,
covered entrances or egresses, and covered loading areas, (ii) each has had an
opportunity to determine to its satisfaction the actual area of the Project and
the Premises, (iii) all measurements of area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more or
less than the amount of area reflected in this Lease, and (iv) any such
subsequent determination that the area is more or less than shown in this Lease
shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a factor.
Where a party hereto is obligated not to perform any act, such party is also
obligated to restrain any others within its control from performing said act,
including the Agents of such party. Landlord shall not become or be deemed a
partner or a joint venturer with Tenant by reason of the provisions of this
Lease.
15.12 Termination by Exercise of Right: If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this lease shall
terminate 30 days after the date the right to terminate is properly exercised
(unless another date is specified in that part of the Lease creating the right,
in which event the date so specified for termination shall prevail), the rent
and all other charges dime hereunder shall be prorated as of the date of
termination, and neither Landlord nor Tenant shall have any further rights or
obligations under this Lease except for those that have accrued prior to the
date of termination or those obligations which this Lease specifically provides
are to survive termination. This P.15.12 does not apply to a termination of this
Lease by Landlord as a result of an Event of Tenant's Default.
15.13 Brokerage Commissions: Each party hereto (i) represents and
warrants to the other that it has not had any dealings with any real estate
brokers, leasing agents or salesmen, or incurred any obligations for the payment
of real estate brokerage commissions or finder's fees which would be earned or
due and payable by reason of the execution of this Lease, other than to the
Retained Real Estate Brokers described in Section 6 of the Summary, and (ii)
agrees to indemnify, defend, and hold harmless the other party from any claim
for any such
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commission or fees which result from the actions of the indemnifying party.
Landlord shall be responsible for the payment of any commission owed to the
Retained Real Estate Brokers if there is a separate written commission agreement
between Landlord and the Retained Real Estate Brokers for the payment of a
commission as a result of the execution of this Lease.
15.14 Force Majeure: Any prevention, delay or stoppage due to strikes,
lock-outs, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefor, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other acts
of God, and other causes beyond the reasonable control of the party obligated
to perform (except financial inability) shall excuse the performance, for a
period equal to the period of any said prevention, delay or stoppage, of any
obligation hereunder except the obligation of Tenant to pay rent or any other
sums due hereunder.
15.15 Entire Agreement: This Lease constitutes the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that neither
Landlord nor Landlord's Agents has made any legally binding representation or
warranty as to any matter except those expressly set forth herein, including any
warranty as to (i) whether the Premises may be used for Tenant's intended use
under existing Law, (ii) the suitability of the Premises or the Project for the
conduct of Tenant's business, or (iii) the condition of any improvements. There
are no oral agreements between Landlord and Tenant affecting this Lease, and
this Lease supercedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant or displayed by Landlord to Tenant with respect to the subject matter
of this Lease. This instrument shall not be legally binding until it is executed
by both Landlord and Tenant. No subsequent change or addition to this Lease
shall be binding unless in writing and signed by Landlord and Tenant.
1516. Quiet Possession. Tenant shall peacefully have, hold and enjoy
the Premises subject to the other terms of this Lease, provided Tenant pays the
Base Monthly Rent and Additional Rent and performs all of Tenant's covenants and
agreement contained in this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease within
the intent to be legally bound thereby, to be effective as of the Effective
Date.
LANDLORD:
Orchard Jay Investors, LLC
a California limited liability company
By: /s/ David J. Brown
-----------------------
David J. Brown
Managing Member
Dated: May 11, 1999
--------------------
DAVID J. BROWN
By: /s/ David J. Brown
-----------------------
Dated: May 11, 1999
--------------------
TENANT:
Cylink Corporation
a California corporation
By: /s/ [ILLEGIBLE]
-----------------------
/s/ [ILLEGIBLE]
---------------------------
typed or printed name
Title: Chief Financial Officer
-----------------------
By: /s/ [ILLEGIBLE]
-----------------------
/s/ [ILLEGIBLE]
---------------------------
typed or printed name
Title: Corporate Secretary
-----------------------
Dated: May 10, 1999
-----------------------
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FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM To Lease is dated for reference purposes as May 10,
1999, and is made a part of that Lease Agreement (the "Lease") dated May 10,
1999, by and between Orchard Jay Investors, LLC, a California limited liability
company and David J. Brown, ("Landlord") and Cylink Corporation, a California
corporation ("Tenant") affecting certain real property commonly known as 3131
and 3151 Jay Street, Santa Clara, California, with reference to the following
facts:
1. Tenant's Right of First Offer for Additional Space
A. Grant and Right of First Offer: Landlord hereby grants
Tenant a right of first offer (the "RFO") to lease all or any part of the "First
Offer Space", which consists of the Building located within the Project and
commonly known as 3101 Jay Street, Santa Clara, California, on the terms
contained in this Paragraph.
B. Effective Period: The effective period for the RFO
("Effective Period") shall begin only after the period while Landlord is first
leasing the First Offer Space, that is, the period from the Effective Date of
this Lease to the time when all of the First Offer Space has been leased, or the
period of one (1) year from the Effective Date of this Lease, whichever shall
first end, and shall extend throughout the term of this Lease and any extended
term pursuant to an exercise of an option.
C. Notice: If Landlord proposes to lease all or part of the
First Offer Space at any time during the Effective Period and before the
expiration or earlier termination of this RFO, Landlord shall notify Tenant in
writing (the "RFO Notice") of the following basic business terms upon which
Landlord would be willing to lease all or any part of the First Offer Space: (a)
the portion of the First Offer Space which Landlord proposes to lease (the
"Offered Space"); (b) the rent for the Offered Space; and (c) any other material
business terms Landlord elects to specify. The RFO shall not be deemed under any
circumstances an offer to lease the Offered Space, but is simply a notice that
Tenant has until the end of the Offer Period to make an offer to lease.
D. Offer Period: Tenant shall have three (3) business days
(the "Offer Period") from the RFO Notice within which to make a written offer to
lease the Offered Space, whether on the terms set forth in Landlord's notice or
otherwise. During the Offer Period, Landlord will not enter into any legally
binding agreement to lease the Offered Space to any third party.
E. Neither Party Bound: Neither Landlord nor Tenant shall be
bound to agree to or accept any terms and conditions for such lease except those
which each party, in its sole discretion, wishes to agree to, nor shall there
be any legally enforceable standards for Landlord's acceptance or rejection of
Tenant's offer made pursuant to the RFO, nor shall any agreement between
Landlord and Tenant for the lease of Offered Space be binding unless and until a
full and formal Lease, prepared and reviewed by Landlord's counsel, has been
executed by both Landlord and Tenant. Landlord is not bound to agree to any or
all of the terms set forth in the RFO Notice if it determines at any time that
one or more of said terms is not in Landlord's best interests, notwithstanding
that Tenant may have accepted such terms in writing, and no such acceptance
creates a binding contract.
F. Landlord's Rights and Obligations: Landlord will respond in
writing to Tenant's offer within five (5) days of receipt. If Landlord does not
accept Tenant's offer, then the parties revert to their ordinary rights in the
marketplace, that is, Tenant is free to make any and all further offers or enter
into any negotiations to which Landlord consents, and Landlord is free to deal
or not to deal with Tenant as determined in its sole and unfettered discretion.
Once Tenant has had the opportunity to make its offer, Landlord is not bound to
enter into negotiations with Tenant, and is free to offer the Offered Space to
any one or more third parties, on such terms and conditions as Landlord may
elect, and Landlord shall not, thereafter, have any duty to further offer the
Offered
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Space to Tenant unless and until the Offered Space has been leased to a third
party which has entered into possession and paid rent thereon, at which point,
as to future availability of the Offered Space, the RFO shall once again apply.
G. Non-Assignability; Termination: The right granted to
Tenant in this Paragraph is personal to Tenant, and may not be assigned by
Tenant to any third party, either alone or in conjunction with an assignment of
this Lease or a sublease of all or any part of the Premises, and either
voluntarily or by operation of law; provided, however, that it may be assigned
in conjunction with an assignment or sublease which is a Permitted Transfer
under Paragraph 14.1F hereof. The rights granted to Tenant under this paragraph
shall terminate upon the earliest of the following to occur: (i) the expiration
or earlier termination of the Lease; (ii) any assignment by Tenant of its
interest in this Lease; (iii) any subletting by Tenant of substantially all of
the Premises for substantially all of the remainder of the Lease Term; (iv) the
termination of this right by default as set forth in Subparagraph H. below; or
(v) as to any Offered Space, when Tenant has had the above granted right to
make an offer and either failed to make an offer or Landlord did not accept the
offer (until the Offered Space is leased to a third party which takes possession
and pays rent, after which time the RFO is revived).
H. Termination By Default: The rights of Tenant under this
Paragraph shall not be effective at any time when Tenant is in default under
this Lease beyond any applicable cure period provided in this Lease. If such a
default exists, Landlord shall not be required to give the RFO Notice as to
Offered Space, and Tenant shall permanently lose the RFO with regard to such
space. If Tenant, with the agreement of Landlord, shall nevertheless cure such
default, then the rights provided hereunder shall be reinstated on a prospective
basis only, and any Offered Space first offered during the period when the
condition of default existed shall not be subject to the RFO, which shall not be
reinstated as to such space, until such Offered Space has been leased to a third
party which takes possession and pays rent.
I. No Right To Negotiate For Renewal Or Extension Space: The
right granted to Tenant by this Paragraph shall not arise on account of or in
connection with the renewal or extension of the term of any then existing lease
affecting all or any portion of the First Offer Space, including both renewal
or extension pursuant to the exercise, of an option or other contractual right
by the tenant and renewal or extension by voluntary agreement between the
existing tenant and Landlord.
2. Option to Extend Lease Term: Landlord hereby grants to Tenant the
option to extend the Lease Term for one (1) five (5) year term commencing when
the prior term expires, under the following terms and conditions:
A. Exercise Dates: Tenant must give Landlord notice in writing
of its exercise of the option no earlier than two hundred seventy (270) days
before the date the Lease Term would end but for said exercise (the "Earliest
Exercise Date") and no later than one hundred eighty (180) days before the date
the Lease Term would end but for said exercise (the "Last Exercise Date").
B. Conditions to Exercise of Option: Tenant's right to extend
is conditioned upon and subject to each of the following:
(1) In order to exercise its option to extend, Tenant
must give written notice of such election to Landlord and Landlord must receive
same by the Last Exercise Date, but not prior to the Earliest Exercise Date. If
proper notification of the exercise of the option is not given and/or received,
such option shall automatically expire. Failure to exercise the option
terminates that option. Tenant acknowledges that because of the importance of
Landlord of knowing no later than the Last Exercise Date whether or not Tenant
will exercise the option, the failure of Tenant to notify Landlord by the Last
Exercise Date will conclusively be presumed an election by Tenant not to
exercise the option.
(2) Tenant shall have no right to exercise the option
(i) if an Event of Tenant's Default has occurred and is continuing either on the
date of exercise of
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the option or on the date on which the Lease would terminate absent exercise of
the option or (ii) in the event that Landlord has given to Tenant three (3) or
more notices of separate Defaults during the 12 month period immediately
preceding the exercise of the option, whether or not the Defaults are cured. The
period of time within which the option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise the option because of the
provisions of this Paragraph.
C. Creation of Extended Term: Upon the timely exercise of the
option to extend and the commencement of the extended term, all references in
the Lease to the Term shall be considered to mean the term as extended by the
exercise of the option, which shall be referred to herein as the "Extended
Term".
D. Options Personal: The option is personal to the Tenant, and
cannot be assigned to or exercised by anyone other than the Tenant or an
assignee or sublessee pursuant to a permitted transfer. The option can only be
exercised at a time when the Tenant and/or an assignee or sublessee pursuant to
a permitted transfer is in full possession of the Premises.
E. The Base Monthly Rent for the Option Period shall be the
greater of (i) one hundred percent (100%) of the Base Monthly Rent due the last
month of the previous Lease Term, or (ii) one hundred percent (100%) of the then
fair market monthly rent determined as of the commencement of the option period
in question based upon like buildings with like improvements in the area within
the boundaries of the City of Santa Clara. Said Base Monthly Rent (and any
scheduled increases thereto) shall apply to every month during the Option Period
in question, and accordingly, Tenant shall not be entitled to any free rent or
other rent concession during the Option Periods. Further, Tenant shall not be
entitled to any Tenant Improvement Allowance nor reimbursement for improvements
in connection with any Option Period, and shall accept the Premises, the
Building, and the Project in there "as is" condition as of the first day of the
Option Period in question.
F. Upon exercise of an option, the parties shall conduct
discussions in an attempt to reach agreement on the Base Monthly Rent (and any
scheduled increases thereto) for the Option Period under the standards set forth
in Subparagraph E above. If the parties are unable to agree upon the such Base
Monthly Rent and increases for the Option Period at least one hundred twenty
(120) days prior to the commencement of the option period, then the fair market
monthly rent shall be determined by appraisal conducted pursuant to the
following provisions of this Subparagraph F. In the event it becomes necessary
to determine by appraisal the fair market rent of the Premises for the purpose
of establishing the Base Monthly Rent during the Option Period, then such fair
market monthly rent shall be determined by three (3) real estate appraisers, all
of whom shall be members of the American Institute of Real Estate Appraisers
with not less than five (5) years experience appraising real property (other
than residential or agricultural property) located in Santa Clara County,
California, in accordance with the following procedures:
(1) The party demanding an appraisal (the "Notifying
Party") shall notify the other party (the "Non-Notifying Party") thereof by
delivering a written demand for appraisal, which demand, to be effective, must
give the name, address, and qualifications of an appraiser selected by the
Notifying Party. Within ten (10) days of receipt of said demand, the
Non-Notifying Party shall select its appraiser and notify the Notifying Party,
in writing, of the name, address, and qualifications of an appraiser selected by
it. Failure by the Non-Notifying Party to select a qualified appraiser within
said ten (10) day period shall be deemed a waiver of its right to select a
second appraiser on its own behalf and the Notifying Party shall select a second
appraiser on behalf of the Non-Notifying Party within five (5) days after the
expiration of said ten (10) day period. Within ten (10) days from the date the
second appraiser shall have been appointed, the two (2) appraisers so selected
shall appoint a third appraiser. If the two appraisers fail to select a third
qualified appraiser, the third appraiser shall be selected by the American
Arbitrations Association or if it shall refuse to perform this function, then at
the request of either Landlord or Tenant, such third appraiser shall be promptly
appointed by the then
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Presiding Judge of the Superior Court of the State of California for the County
of Santa Clara.
(2) The three (3) appraisers so selected shall meet
in Santa Clara County, California, not later than twenty (20) days following the
selection of the third appraiser. At said meeting the appraisers so selected
shall attempt to determine the fair market monthly rent of the Premises for the
option period in question (including the timing and amount of periodic
increases).
(3) If the appraisers so selected are unable to
complete their determinations in one meeting, they may continue to consult at
such times as they deem necessary for a fifteen (15) day period from the date of
the first meeting, in an attempt to have at least two (2) of them agree. If, at
the initial meeting or at any time during said fifteen (15) day period, two (2)
or more of the appraisers so selected agree on the fair market rent of the
Leased Premises, such agreement shall be determinative and binding on the
parties hereto, and the agreeing appraisers shall, in simple letter form
executed by the agreeing appraisers, forthwith notify both Landlord and Tenant
of the amount set by such agreement.
(4) If two (2) or more appraisers do not so agree
within said fifteen (15) day period, then each appraiser shall, within five (5)
days after the expiration of said fifteen (15) day period, submit his
independent appraisal in simple letter form to Landlord and Tenant stating his
determination of the fair market rent of the Premises for the option period in
question. The parties shall then determine the fair market rent for the Premises
by determining the average of the fair market rent set by each of the
appraisers. However, if the lowest appraisal is less than eighty-five percent
(85%) of the middle appraisal then such lowest appraisal shall be disregarded
and/or if the highest appraisal is greater than one hundred fifteen percent
(115%) of the middle appraisal then such highest appraisal shall be disregarded.
If the fair market rent set by any appraisal is so disregarded, then the average
shall be determined by computing the average set by the other appraisals that
have not been disregarded.
(5) Nothing contained herein shall prevent Landlord
and Tenant from jointly selecting a single appraiser to determine the fair
market rent of the Premises, in which event the determination of such appraisal
shall be conclusively deemed the fair market rent of the Premises.
(6) Each party shall bear the fees and expenses of
the appraiser selected by or for it, and the fees and expenses of the third
appraiser (or the joint appraiser if one joint appraiser is used) shall be
borne fifty percent (50%) by Landlord and fifty percent (50%) by Tenant.
3. Security Deposit:
A. Tenant shall provide to Landlord a Security Deposit
totaling $827,561.52, of which up to $600,000.00 can be, at Tenant's sole cost,
an irrevocable letter of credit which (i) is for an initial term of at least
twelve (12) months; (ii) is drawn upon a local commercial bank reasonably
acceptable to Landlord; (iii) is in the amount of $600,000.00; (iv) is in a form
satisfactory to Landlord; and (v) may be drawn on by Landlord solely upon
submission of a written certification of Landlord that there exists an Event of
Tenant's Default (as defined in Paragraph 13.1 of this Lease or in this
Paragraph), that Tenant has not cured such Event of Default, and that the amount
drawn on the letter of credit is the net amount due Landlord after first
applying any cash Security Deposit then being held by Landlord. Tenant's failure
to replenish any cash Security Deposit which is applied by Landlord, within ten
(10) days after notice that it has been applied, shall be an immediate Event of
Tenant's Default, without further notice or opportunity to cure, which shall
entitle Landlord to resort to the letter of credit to replenish its cash
Security Deposit. Except as provided in Subparagraph B herein, Tenant shall keep
the letter of credit in effect during the entire Lease term plus a period of
four (4) weeks thereafter, and Tenant's failure to renew a letter of credit at
least thirty (30) days prior to its expiration for additional periods of at
least twelve (12) months and to furnish written evidence thereof to Landlord (or
to provide a cash deposit in lieu
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thereof) shall be deemed an Event of Tenant's Default under this Lease upon the
expiration of the thirtieth (30th) day prior to the date of expiration of the
then-current letter of credit. If Tenant provides Landlord with a letter of
credit meeting the foregoing requirements, any cash Security Deposit previously
provided to Landlord in excess of $227,561.52 shall be returned to Tenant. Any
proceeds received by Landlord by drawing upon the letter of credit shall be
applied in accordance with the provisions of Paragraph 3.5 of the Lease. If
Landlord draws upon the letter of credit, thereafter Tenant shall once again
have the right to post a letter of credit in place of a cash Security Deposit so
long as there exits no Event of Tenant's Default under the Lease. If Landlord
transfers the Premises during the Lease Term, and if a letter of credit is still
posted as part of the Security Deposit, Tenant agrees to take such actions as
are necessary to have the letter of credit redrawn in favor of the new owner of
the Premises, at Tenant's sole cost and expense.
B. Notwithstanding the foregoing, the letter of credit and any
cash Security Deposit held by Landlord in excess of $227,561.52 shall be
released by Landlord upon the achievement by Tenant of the following financial
goals:
(1) Tenant shall have achieved four (4) consecutive
quarters of positive Net Income, as disclosed in Tenant's audited financial
statements, and
(2) Tenant's Net Income over the four (4) consecutive
quarters described in subsection 1 above, shall equal a minimum of $6,000,000.00
in the aggregate.
4. Early Occupancy:
A. As consideration for Tenant's performance of all
obligations to be performed by Tenant under the Lease, and upon receipt of (i)
the first month's Base Monthly Rent and Security Deposit totaling $1,001,968.48,
and (ii) a certificate of insurance as provided by Article 9.1C of the Lease,
Landlord shall permit Tenant to enter and use the Premises commencing thirty
(30) days prior to the Scheduled Commencement Date (the "Early Occupancy
Period"). Such occupancy during the Early Occupancy Period shall be subject to
all of the terms, covenants and conditions of the Lease provided, however, that
the rent payable during the Early Occupancy Period shall be waived.
B. In the event either party shall bring any action or legal
proceeding for damages for alleged breach of any provision of this agreement, to
recover rent, to terminate tenancy of the Premises, or to enforce, protect or
establish any term or covenant of this agreement or the Lease or right of remedy
of either party, the prevailing party shall be entitled to recover as a part of
such action or proceeding, reasonable attorney's fees and court costs as may be
fixed by the court or jury.
C. Tenant agrees to cooperate with construction personnel
completing the Interior Improvements (as defined in Exhibit B to the Lease) in
the Premises and not cause any delay in the completion of these improvements. It
is the intent of Landlord and Tenant that Tenant's obligation to pay the Base
Monthly Rent and all Additional Rent not be delayed by any cause or other act of
Tenant and, if it is so delayed, and provided that Landlord promptly notifies
Tenant in writing of each separate delay and the estimated period of delay, then
Tenant's obligation to pay the Base Monthly Rent and all Additional Rent shall
commence as of the date it would have commenced absent said delay caused by
Tenant.
D. During the Early Occupancy Period, Tenant shall arrange to
have all utility services, including but not limited to gas, electric, water and
trash, billed directly to Tenant for payment.
5. Tenant Improvement Allowances:
A. The term "Tenant Improvement Allowance" shall mean the
maximum amount Landlord is required to spend toward the payment of Interior
5
<PAGE>
Improvement Costs (as defined in Exhibit B to the Lease) for all Interior
Improvements constructed in the Premises, which amount is Two Million, Three
Hundred Ninety-Five Thousand, Seven Hundred and no/100 Dollars ($2,395,700.00)
(i.e., $25.00 per square foot for Tenant's Gross Leasable Area within the entire
Premises).
B. No credit in the Base Monthly Rent shall be made if a
portion of the Tenant Improvement Allowance is not spent. Additionally, Landlord
shall not be obligated to provide future use of any Tenant Improvement Allowance
not spent prior to the completion of all "punch list" items (as described in
Exhibit B to the Lease).
6. Hazardous Materials Disclosure: Tenant acknowledges Landlord's
disclosure that a neighboring property has suffered a Hazardous Material
problem, and that as a result of a past common ownership of the Project and the
business which operated on this neighboring property, an air stripper has been
installed on the Project to service this neighboring property and is being
operated by third parties who are responsible for such problem under government
approval and supervision, all as more fully detailed in the Phase I
Environmental Site Assessment and Phase II Groundwater Investigation of 3151 Jay
Street, Santa Clara, California, dated November 10, 1997, and performed by PES
Environmental, Inc.; the Semi-Annual Status Report on the 3080/3100 Alfred
Street Site in Santa Clara, California dated as of January, 1999 and performed
by Locus Technologies; and the report of Erler & Kalinowski, Inc., dated
February 24, 1998, which Tenant has reviewed pursuant to a separate
confidentiality agreement.
7. Parking: Notwithstanding anything to the contrary in Paragraph 4.5,
a total of ten (10) of Tenant's Allocated Parking Stalls may, at Tenant's
option, be designated for Tenant's non-exclusive use as "Visitor" spaces. If
Tenant desires to mark and use such stalls, it shall be under the following
terms and conditions:
A. All expenses associated with the marking of such
non-exclusive "Visitor" parking spaces shall be paid by Tenant.
B. Tenant shall designate not more than five (5) non-exclusive
"Visitor" parking spaces for each of its two Buildings. The "Visitor" parking
spaces shall be located reasonably near to the entrance to each Building, with
due regard for the rights of the tenant(s) of the other building which make up
the Project. Their exact location, and the location and nature of any associated
markings, shall be submitted to and approved in writing by Landlord before work
is commenced.
C. If Tenant elects to paint the parking lot with markings
relating to the "Visitor" spaces, then on expiration or earlier termination of
this Lease, Tenant shall remove markings and restore the parking lot to its
condition prior to their placement, to Landlord's satisfaction, and at Tenant's
expense. Tenant's marking of the designated "Visitor" parking spaces shall be
limited to inscribing the word "Visitors" on the asphalt parking area. Tenant
shall not apply any markings other than as stated above, and Tenant shall not
erect any or maintain any signs relating to these spaces.
D. Landlord shall not be responsible for enforcing the use of
said spaces, provided, however, that Landlord will not grant to any other Tenant
of the Project the right to exclusive use of such stalls or any other parking
stalls without Tenant's consent. Landlord shall not be required, in any other
lease of the property in the Project, to prohibit the tenant under such lease
from any use of the "Visitor" spaces, or otherwise to make any rules relating
thereto. Tenant shall not post or mark the "Visitor" spaces with any "tow away"
or similar signs, and shall not have the right to any physical enforcement, by
towing or otherwise, relating to said parking spaces.
8. Warranty for Building Shell and Grounds: Landlord warrants that the
portion of the Buildings and surrounding parking, landscaping, and grounds area
existing prior to the construction of the Interior Improvements under Exhibit B,
the Interior Improvement Agreement (collectively the "Building Shell") was
constructed in a good and workmanlike manner with materials and equipment which
were new and otherwise of good quality, installed in accordance with
manufacturer's and vendor's specifications. The foregoing warranty shall be
subject to, and limited by, the following:
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<PAGE>
A. Once Landlord is notified in writing of any breach of the
above-described warranty, Landlord shall promptly commence the cure of such
breach and complete such cure with diligence at Landlord's sole cost and
expense.
B. Landlord's liability pursuant to such warranty shall be
limited to the cost of correcting the defect or other matter in question. In no
event shall Landlord be liable to Tenant for any loss, damage, claim, or
liability incurred by Tenant as a result of such defect or other matter,
including without limitation damages resulting from any loss of business by
Tenant or other consequential damages.
C. Notwithstanding anything contained in this Paragraph 8,
Landlord shall not be liable pursuant to the warranty granted by this Paragraph
8 for any defect in design, construction, or equipment in the Building Shell
which is discovered and of which Landlord receives written notice from Tenant
after the first (1st) anniversary of the recordation of a notice of completion
for the work of improvement affected by the defect or the Commencement Date,
whichever is later.
D. With respect to defects for which Landlord is not
responsible pursuant to subparagraph C, Tenant shall have the benefit of any
construction or equipment warranties existing in favor of Landlord that would
assist Tenant in correcting such defect and in discharging its obligations
regarding the repair and maintenance of the Premises. Upon request by Tenant,
Landlord shall inform Tenant of all written construction and equipment
warranties existing in favor of Landlord which affect the Building Shell.
Landlord shall cooperate with Tenant in enforcing such warranties and in
bringing any suit that may be necessary to enforce liability with regard to any
defect for which Landlord is not responsible pursuant to this Paragraph or under
the Lease so long as Tenant pays all costs reasonably incurred by Landlord in so
acting.
E. Landlord makes no other express or implied warranty with
respect to the design, construction or operation of the Building Shell except as
that set forth in this Paragraph. Notwithstanding anything to the contrary
contained in the Lease or this Agreement, Tenant's acceptance of the Premises
shall not be deemed a waiver of the foregoing warranty. THE FOREGOING DISCLAIMER
INCLUDES A DISCLA]MER OF ALL WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MATTERS DESCRIBED HEREIN, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
9. To the actual knowledge of Michael J. Biggar, Landlord's executive
handling this Project, as of the Effective Date, without having made any
investigation (and without having been deemed to have investigated or discovered
any unknown facts which such investigation would have disclosed), and subject
to and qualified by all information and disclosures made to Tenant by Landlord,
Landlord represents that Landlord does not know of any person who has, during
Landlord's ownership of the Project, served in the function of Declarant under
the Private Restrictions.
10. Building Signage: Landlord agrees that, provided the parties can
reach mutual agreement on the size, quality, and appearance of the sign (and
Landlord will not unreasonably withhold its agreement on such matters), that it
will not object to Tenant's maintenance of a tasteful sign on the north side of
one building facing toward Highway 101 which states solely Tenant's corporate
name.
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<PAGE>
11. If the Lease is terminated pursuant to a right granted to
Tenant under Paragraph 2.4 of the Lease, all monies deposited or paid by Tenant
to Landlord as a Security Deposit or Prepaid Rent under the Summary of Basic
Lease Terms, Paragraphs L and M and Paragraphs 3.3 and 3.5 of the Lease shall be
returned to Tenant on demand, but Landlord shall have no duty to refund any
other monies paid hereunder, including but not limited to monies paid or
contributed for Interior Improvements and/Or under the Cost Reimbursement
Agreement between the parties.
LANDLORD: TENANT:
ORCHARD JAY INVESTORS LLC CYLINK CORPORATION
a California limited liability company a California corporation
By: /s/ David J. Brown By: /s/ [ILLEGIBLE]
-------------------------------- --------------------------------
David J. Brown
Managing Member Its: Chief Financial Officer
--------------------------------
Dated: May 11, 1999
------------------------------- Dated: May 10, 1999
--------------------------------
DAVID J. BROWN
By: /s/ [ILLEGIBLE]
--------------------------------
By: /s/ David J. Brown
--------------------------------
David J. Brown Its: Corporate Secretary
--------------------------------
Dated: May 11, 1999
-------------------------------- Dated: May 10, 1999
--------------------------------
8
<PAGE>
LANDLORD: TENANT:
ORCHARD JAY INVESTORS LLC CYLINK CORPORATION
a California limited liability company a California corporation
By: By:
-------------------------------- --------------------------------
David J. Brown
Managing Member Its:
--------------------------------
Dated:
------------------------------- Dated:
--------------------------------
DAVID J. BROWN
By:
--------------------------------
By:
--------------------------------
David J. Brown Its:
--------------------------------
Dated:
-------------------------------- Dated:
--------------------------------
8
<PAGE>
Exhibit A
ORCHARD BUSINESS CENTRE
SANTA CLARA
(GRAPHIC OMITTED)
JAY STREET
COMMUNICATIONS AND FIBER OPTIC LOOP
______ Six 4" Conduits
------ Four 4" Conduits
[ ] Junction Box.
The information contained herein has been obtained from sources we deem
reliable. We have no reason to doubt its accuracy, but we do not guarantee it.
All information should be verified prior to lease. Site plan may not be to
scale.
<PAGE>
EXHIBIT B
INTERIOR IMPROVEMENT AGREEMENT
THIS INTERIOR IMPROVEMENT AGREEMENT ("Agreement") is made part of that
Lease dated May 10, 1999, (the "Lease") by and between Orchard Jay Investors,
LLC, a California limited liability company and David J. Brown, ("Landlord"),
and Cylink Corporation, a California corporation, ("Tenant"). Landlord and
Tenant agree that the following terms are part of the Lease:
1. Purpose of Improvement Agreement: The purpose of this Improvement
Agreement is to set forth the rights and obligations of Landlord and Tenant with
respect to the construction of Interior Improvements within the Premises.
2. Definitions: As used in this Interior Improvement Agreement, the
following terms shall have the following meanings, and terms which are not
defined below, but which are defined in the Lease and which are used in this
Interior Improvement Agreement, shall have the meanings ascribed to them by the
Lease:
A. Approved Specifications: The term "Approved Specifications"
shall mean those specifications for the Interior Improvements to be constructed
by Landlord which are described by Exhibit "C" to the Lease.
B. Interior Improvements: The term "Interior Improvements"
shall mean all interior improvements to be constructed by Landlord in accordance
with the Approved Specifications (e.g., HVAC equipment and distribution,
transformer and power distribution, partitions, floor, wall, and window
covering, lighting fixtures).
C. Interior Improvement Costs: The term "Interior Improvement
Costs" shall mean the following: (i) the total amount due pursuant to the
general construction contract entered into by Landlord to construct the Interior
Improvements, including costs for any and all building code compliance; (ii) the
cost of all governmental approvals required as a condition to the construction
of the Interior Improvements (including all construction taxes imposed by the
City of Santa Clara) in connection with the issuance of a building permit for
the Interior Improvements; (iii) all utility connection or use fees; (iv) fees
of architects or engineers for services rendered in connection with the design
and construction of the Interior Improvements; (v) the cost of payment and
performance bonds obtained by Landlord or Prime Contractor to assure completion
of the Interior Improvement (but only if Tenant requests or approves such
bonds); (vi) the cost of any fees or other exactions of any municipal or
governmental entities which arise out of the construction of the Interior
Improvements; (vii) costs associated with compliance with the Americans with
Disabilities Act and/or such California laws and/or regulations which relate to
facilities for the disabled; and (viii) costs to comply with Paragraph 12 of
this Agreement. There shall not be included in the Interior Improvement Costs
any expenses of Landlord for building the shell and the grounds of the Project,
nor complying with legal requirements relating thereto and required by any Laws
or Private Restrictions for building shells and exteriors in general.
D. Substantial Completion and Substantially Complete: The
terms "Substantial Completion" and "Substantially Complete" shall each mean the
date when all of the following have occurred with respect to the Interior
Improvements in question: (i) the construction of the Interior Improvements has
been substantially completed in accordance with the requirements of this Lease;
(ii) the architect responsible for preparing the plans shall have executed a
certificate or statement representing that the Interior Improvements in question
have been substantially completed in accordance with the plans and
specifications therefor; (iii) the Building Department of the City of Santa
Clara has completed its final inspection of such improvements and has "signed
off the building inspection card approving such work as complete; (iv) if
applicable, a Certificate of Occupancy has been issued and any other necessary
governmental approvals for occupancy have been obtained; (v) all utilities are
hooked up and
<PAGE>
EXHIBIT B
available for use; and (vi) Tenant has received written notice that all above
parts of Substantial Completion have taken place.
3. Schedule of Performance: Set forth in this paragraph is a schedule
of certain critical dates relating to Landlord's and Tenant's respective
obligations regarding the construction of the Interior Improvements (the
"Schedule of Performance"). Landlord and Tenant shall each be obligated to use
reasonable efforts to perform their respective obligations within the time
periods set forth in the Schedule of Performance and elsewhere in this Interior
Improvement Agreement. The Schedule of Performance is as follows:
Action Responsible
Items Due Date Party
----- -------- -----
A. Delivery to Completed. Tenant
Landlord of
Tenant's
Interior
Requirements
B. Delivery to Completed. Landlord
Tenant of
Preliminary
Interior
Improvement
Plans
C. Approval by Within three (3) business days Tenant
Tenant of after Tenant receives
Preliminary Preliminary Interior Plans.
Interior Plans
D. Delivery to Within seventeen (17) business Landlord
Tenant of days after approval of the
Final Preliminary Interior Plans.
Interior Plans
E. Approval by Within five (5) business days Tenant
Tenant of after Tenant receives Final
Final Interior Plans.
Interior Plans
F. Approval by Within three (3) business days Tenant
Tenant of after receipt of construction
Construction costs.
Costs
G. Issuance of By June 21, 1999. Landlord
Building Permits
H. Commence- Within ten (10) business days Landlord
ment of after issuance of all
construction necessary governmental
of Interior approvals and approval of
Improvement construction costs by Tenant
and Landlord.
2
<PAGE>
EXHIBIT B
Action Responsible
Items Due Date Party
----- -------- -----
I. Substantial Within ten (10) weeks after Landlord
Completion execution of construction contract
of Interior for the Interior Improvements.
Improvements Estimated August 30, 1999.
J. Commence- Rent shall commence on Tenant
ment of Rent the Commencement Date.
Payments
4. Construction of Interior Improvements: Landlord shall construct the
Interior Improvements in accordance with the following:
A. Development and Approval of Preliminary Interior Plans:
Tenant has delivered to Landlord a proposed floor plan identifying its
requirements for the Interior Improvements that is consistent with the Approved
Specifications ("Tenant's Interior Requiremens"). On or before the due date
specified in the Schedule of Performance, Landlord shall and deliver to Tenant
for its review and approval preliminary plans for the Interior Improvements
which are consistent with and conform to Tenant's Interior Requirements and the
Approved Specifications (the "Preliminary Interior Plans"). On or before the due
date specified in the Schedule of Performance, Tenant shall either approve such
plans or notify Landlord in writing of its specific objections to the
Preliminary Interior Plans. If Tenant so objects, Landlord shall revise the
Preliminary Interior Plans to address such objections in a manner consistent
with the parameters for the Interior Improvements set forth in this Interior
Improvement Agreement and the Approved Specifications and shall resubmit such
revised Preliminary Interior Plans as soon as reasonably practicable to Tenant
for its approval. When such revised Preliminary Interior Plans are resubmitted
to Tenant, it shall either approve such plans or notify Landlord of any further
objections in writing within two (2) business days after receipt thereof. If
Tenant has further objections to the revised Preliminary Interior Plans, the
parties shall meet and confer to develop Preliminary Interior Plans that are
acceptable to both Landlord and Tenant within five (5) business days after
Tenant has notified Landlord of its second set of objections. In the event
Tenant and Landlord do not resolve all of Tenant's objections within such five
(5) business day period, Landlord and Tenant shall immediately cause Landlord's
architect to meet and confer with Tenant's architect or construction consultant,
who shall apply the standards set forth in this Interior Improvement Agreement
to resolve Tenant's objections and incorporate such resolution into the
Preliminary Interior Plans, which process Landlord and Tenant shall cause to be
completed within five (5) business days after the conclusion of the five (5)
business day period referred to in the immediately preceding sentence.
B. Development and Approval of Final Interior Plans: Once the
Preliminary Interior Plans have been approved by Landlord and Tenant (including
all changes made to resolve Tenant's objections approved by Landlord's architect
and Tenant's architect or construction consultant pursuant to subparagraph 4A),
Landlord shall complete and submit to Tenant for its approval final working
drawings for the Interior Improvements by the due date specified in the Schedule
of Performance. Tenant shall approve the final plans for the Interior
Improvements or notify Landlord in writing of its specific objections by the due
date specified in the Schedule of Performance. If Tenant so objects, the parties
shall confer and reach agreement upon final working drawings for the Interior
Improvements within five (5) business days after Tenant has notified Landlord of
its objections. In the event Tenant and Landlord do not resolve all of Tenant's
objections within such five (5) business day period, Landlord and Tenant shall
immediately cause Landlord's architect to meet and confer with Tenant's
architect or
3
<PAGE>
EXHIBIT B
construction consultant, who shall apply the standards set forth in this
Interior Improvement Agreement to resolve Tenant's objections and incorporate
such resolution into the Final Interior Plans, which process Landlord and Tenant
shall cause to be completed within five (5) business days after the conclusion
of the five (5) business day period referred to in the immediately preceding
sentence. The final working drawings so approved by Landlord and Tenant
(including all changes made to resolve Tenant's objections approved by
Landlord's architect and Tenant's architect or construction consultant) are
referred to herein as the "Final Interior Plans".
C. Building Permit: Not later than immediately following the
time that the Final Interior Plans have been approved by Landlord and Tenant,
Landlord shall apply for a building permit for the Interior Improvements, and
shall diligently prosecute to completion such approval process.
D. Construction Contract: Landlord and Tenant shall cooperate
to cause the Interior Improvements to be constructed by a general contractor who
is engaged by Landlord in accordance with the procedures set forth in
subparagraph 4D(1) hereof
(1) The Interior Improvements will be constructed
pursuant to a "fixed price" construction contract awarded to a general
contractor selected by Landlord and approved by Tenant. Landlord has submitted
to Tenant Landlord's recommendation of the general contractor--Hollander Smith
Inc.-- which Tenant has approved. Landlord shall submit to Tenant the terms of
the "fixed price" construction contract for the Interior Improvements for
Tenant's approval, which shall be deemed given if objection is not made by
Tenant within three (3) business days after receipt of such proposal from
landlord. Subject to mutual agreement of Landlord and Tenant, the general
construction contract will provide that major subcontractors for electrical,
plumbing, mechanical and HVAC, and elevator work (as well as all other
subcontractors as to which Landlord and Tenant agree) for the Interior
Improvements shall be engaged on a "design-build" basis where Tenant shall have
the right to reasonably approve such subcontractors. Tenant and Landlord
acknowledge that the total Interior Improvement Costs are likely to exceed the
amount stated in Paragraph 5 of the First Addendum to Lease. Tenant shall have
the right to approve the total Interior Improvement Costs. After all such costs
are known, in the event that Tenant does not approve the total Interior
Improvement Costs, Tenant may request that changes be made to the Final Interior
Plans (subject to Landlord's approval which shall not be unreasonably withheld
or delayed) for the purpose of lowering the total Interior Improvement Costs.
Other major subcontracts shall go through the bid process, wherein Tenant shall
have the right to reasonably approve such subcontractors and to have major
subcontracts rebid if Tenant does not approve the bid. Delays caused by any
modifications to the Final Interior Plans and rebidding or re-pricing requested
by Tenant shall be deemed delays caused by Tenant for purposes of Paragraph 7
hereof.
(2) Landlord and Tenant shall use their best efforts
to approve the general contractor and all subcontractors so that the
construction contract may be executed as soon as possible. Tenant shall have no
liability to the general contractor or to any subcontractor under the
construction contract and/or any subcontractor otherwise with respect to the
Interior Improvements.
E. Commencement of Interior Improvements: On or before the due
date specified in the Schedule of Performance, Landlord shall commence
construction for the Interior Improvements and shall diligently prosecute such
construction to completion, using all reasonable efforts to achieve Substantial
Completion of the Interior Improvements by the due date specified in the
Schedule of Performance.
4
<PAGE>
EXHIBIT B
5. Payment of Interior Improvement Costs: Landlord and Tenant shall
have the following obligations with respect to the payment of Interior
Improvement Costs:
A. Landlord shall be obligated to pay an amount equal to the
Tenant Improvement Allowance as provided for in Paragraph 5 of the First
Addendum To Lease for the Payment of Interior Improvement Costs. If the total of
Interior Improvement Costs exceeds the amount of Landlord's required
contribution, Tenant shall be obligated to pay the entire amount of such excess,
including Landlord's construction management fee of Four Percent (4%) of the
hard costs of construction in excess of the Tenant Improvement Allowance. In no
event shall Landlord be obligated to pay for Interior Improvement Costs in
excess of the allowance provided for in Paragraph 5 of the First Addendum to
Lease. If Tenant becomes obligated to contribute toward paying Interior
Improvement Costs pursuant to this subparagraph 5A, then Landlord shall
determine the amount of such excess prior to commencing construction of the
Interior Improvements and Tenant shall pay to Landlord the total amount of such
estimated excess costs as follows: Within ten (10) days after receipt of
Landlord's statement of such excess costs, Tenant shall pay to Landlord 20% of
such excess cost; within ten (10) days after receipt of Landlord's certification
that 50% of the Interior Improvement work has been completed, Tenant shall pay
to Landlord a further 40% of such excess cost; within ten (10) days of receipt
of Landlord's certification that 90% of the Interior Improvement work has been
completed, Tenant shall pay to Landlord a further 30% of such excess cost.
Landlord's certification of progress shall be accompanied by a contractor's
written certification confirming the progress of construction, and on request,
Landlord shall supply Tenant with other back-up documents reasonably requested
by Tenant in regard to such progress determination. If changes are approved,
Landlord may, at its discretion, provide Tenant with a new and updated statement
of the amount of excess costs based on the additional costs of approved changes,
and in such event (a) all further progress payments shall be based on the new
statement of excess costs and (b) at the time of the next progress payment,
Tenant shall pay an additional amount sufficient to bring all previous progress
payments current based on the new statement of excess costs. Within thirty (30)
days after the Building is Substantially Completed, the amount of all Interior
Improvement Costs has been finally determined, and all "punch-list" items have
been competed, Tenant shall pay Landlord any portion of the actual excess costs
that remains due and unpaid. The excess costs remaining due and unpaid are
comprised of the amount determined by Landlord as the excess costs prior to the
work being performed, less all progress payments made as set forth above, plus
any added costs resulting from approved changes to the plans and the work.
Landlord shall not be obligated to commence construction of the Interior
Improvements unless and until the first payment of these excess costs have been
paid by Tenant to Landlord, and at Landlord's option, if Tenant does not pay
such amount within the time specified above, Landlord may give Tenant a further
five (5) day notice to pay such costs or commit an Event of Tenant's Default as
defined in the Lease, and if Tenant does not, within such five (5) day period
after such notice, pay such amount to Landlord, then Tenant shall be considered
to have committed an Event of Tenant's Default without any further notice or
cure periods, and Landlord shall be entitled, in addition to any other rights or
remedies hereunder, to all of its rights and remedies prescribed in the Lease in
the case of an Event of Tenant's Default. At the time the final accounting is
rendered by Landlord pursuant to subparagraph 5C hereof, there shall be an
adjustment between Landlord and Tenant such that each shall only be required to
contribute to the payment of Interior Improvement Costs in accordance with the
obligations set forth in this subparagraph 5A which adjustment shall be made
within five (5) days after Landlord notifies Tenant of the required adjustment.
If Tenant is required to make a payment to Landlord, Tenant shall make such
payment even if Tenant elects to audit the statement submitted by Landlord
pursuant to subparagraph 5C. In the event Tenant's audit discloses that an
overpayment or underpayment was made by Tenant, there shall be an adjustment
between Landlord and Tenant as soon as reasonably practicable such that each
shall only be required to contribute to the payment of costs in accordance with
the obligations set forth in this subparagraph 5A.
B. If Tenant fails to pay any amount when due pursuant to this
Paragraph 5, then (i) Landlord may (but without the obligation to do so) advance
such
5
<PAGE>
funds on Tenant's behalf, and Tenant shall be obligated to reimburse Landlord
for the amount of funds so advanced on its behalf, and (ii) Tenant shall be
liable for the payment of a late charge and interest in the same manner as if
Tenant had failed to pay Base Monthly Rent when due as described in Paragraph
3.4 of the Lease. Any amounts paid to Landlord by Tenant pursuant to this
subparagraph shall be held by Landlord as Tenant's agent, for disbursal to the
general contractor in payment for work costing in excess of Landlord's required
contribution.
C. When the Interior Improvements are Substantially Completed,
Landlord shall submit to Tenant a final and detailed accounting of all Interior
Improvement Costs paid by Landlord, certified as true and correct by Landlord's
financial officers. Tenant shall have the right to audit the books, records, and
supporting documents of Landlord to the extent necessary to determine the
accuracy of such accounting during normal business hours after giving Landlord
at least two (2) days prior written notice. Tenant shall bear the cost of such
audit, unless such audit discloses that Landlord has overstated the total of
such costs by more than two percent (2%) of the actual amount of such costs, in
which event Landlord shall pay the cost of Tenant's audit. Any such audit must
be conducted, if it all, within ninety (90) days after Landlord delivers such
accounting to Tenant.
6. Changes to Approved Plans: Subject to Paragraph 4.D.1, once the
Final Interior Plans have been approved by Landlord and Tenant, neither shall
have the right to order extra work or change orders with respect to the
construction of the Interior Improvements without the prior written consent of
the other (which, in the case of Tenant's approval, may be withheld in its sole
discretion). All extra work or change orders requested by either Landlord or
Tenant shall be made in writing, shall specify any added or reduced cost
(including the construction manager's fees of Landlord for the management of the
construction specified under such change order or extra work, as set forth in
Paragraph 5A) and/or construction time resulting therefrom, and shall become
effective and a part of the Final Interior Plans once approved in writing by
both parties. If a change order requested by Tenant results in an increase in
the cost of constructing the Interior Improvements, (including Landlord's
construction management fee of Four Percent (4%) of the hard costs of
construction), Tenant shall pay the amount of such increase caused by the change
order requested by Tenant at the time the change order is approved by both
Landlord and Tenant if and to the extent such change order causes the Interior
Improvement Costs to exceed Landlord's required contribution thereto described
in subparagraph 5A. If a change order requested by Tenant results in an increase
in the amount of construction time needed by Landlord to complete the Interior
Improvements, Paragraph 7 hereof may apply.
7. Delay in Completion Caused by Tenant: The parties hereto acknowledge
that the date on which Tenant's obligation to pay the Base Monthly Rent and the
Additional Rent would otherwise commence may be delayed because of: (i) Tenant's
failure to submit necessary information to Landlord when required; (ii) Tenant's
failure to promptly review and approve the plans for the Interior Improvements
in accordance with the Schedule for Performance; (iii) any act by Tenant which
interferes with or delays the completion of the plans for the Interior
Improvements or Landlord's construction work; (iv) change orders requested by
Tenant and approved by Landlord; (v) special materials or equipment ordered or
specified by Tenant that cannot be obtained by Landlord at normal cost within a
reasonable period of time because of limited availability; or (vi) any delay or
default by Tenant in paying the estimated cost of construction of Interior
Improvements in excess of the Landlord's required contribution. It is the intent
of the parties hereto that the commencement of Tenant's obligation to pay the
Base Monthly Rent and all Additional Rent not be delayed by any of such causes
or by any other act of Tenant, and in the event it is so delayed, Tenant's
obligation to pay the Base Monthly Rent and all Additional Rent shall commence
as of the date it would otherwise have commenced absent delay caused by Tenant,
provided that within a reasonable period of time after learning of the
occurrence of the cause of any such delay, Landlord notifies Tenant in writing
of the fact that such delay has occurred and the known or anticipated extent of
any such delay, (but Landlord is not required to give any notice in regard to
failure to pay estimated excess Interior Improvement Costs except the initial
notice to pay
6
<PAGE>
EXHIBIT B
such costs required by Paragraph 5A above as of the Effective Date, there have
not been any Tenant Delays).
8. Delivery of Possession, Punch List, and Acceptance Agreement: As
soon as the Interior Improvements are Substantially Completed, Landlord and
Tenant shall together walk through the Premises and inspect all Interior
Improvements so completed, using reasonable efforts to discover all uncompleted
or defective construction in the Interior Improvements. After such inspection
has been completed, each party shall sign an acceptance agreement in the form
attached to the Lease, as Exhibit "D", which shall (i) include a list of all
"punch list" items which the parties agree are to be corrected by Landlord and
(ii) shall state the Commencement Date and the initial Base Monthly Rent. As
soon as such inspection has been completed and such Acceptance Agreement
executed, Landlord shall deliver possession of the Premises to Tenant. Landlord
shall use reasonable efforts to complete and/or repair such "punch list" items
within thirty (30) days after executing the Acceptance Agreement. Landlord shall
have no obligation to deliver possession of the Premises to Tenant until such
procedures regarding the preparation of a punch list and the execution of the
Acceptance Agreement have been completed. Subject to the provisions of Paragraph
9 of this Agreement, Tenant's taking possession of any part of the Premises
shall be deemed to be an acceptance by Tenant of Landlord's work of improvement
in such part as complete and in accordance with the terms of the Lease except
for the punch list items noted and latent defects that could not reasonable have
been discovered by Tenant during its inspection of the Interior Improvements
prior to completion of the acceptance agreement. Tenant's participation in and
execution of a "punch list", execution of the Acceptance Agreement, and taking
possession of the Premises shall not in any way affect Landlord's warranty
obligations under this Agreement. Notwithstanding anything contained herein,
Tenant's obligation to pay the Base Monthly Rent and Additional Rent shall
commence as provided in the Lease, regardless of whether Tenant completes such
inspection or executes such Acceptance Agreement.
9. Standard of Construction and Warranty: Landlord hereby warrants
that the Interior Improvements shall be constructed substantially in accordance
with the Final Interior Plans (as modified by change orders approved by Landlord
and Tenant), all Private Restrictions and all Laws, in a good and workmanlike
manner, and all materials and equipment furnished shall conform to such final,
plans and shall be new and otherwise of good quality and were installed in
accordance with all vendor's and manufacturer's specifications, instructions and
requirements. All construction, product and equipment warranties and guarantees
obtained by Landlord shall, to the extent obtainable, provide that such
warranties and guarantees shall also run to the benefit of Tenant and its
successors and assigns. The foregoing warranty shall be subject to, and limited
by, the following:
A. Once Landlord is notified in writing of any breach of the
above-described warranty, Landlord shall promptly commence the cure of such
breach and complete such cure with diligence at Landlord's sole cost and
expense.
B. Landlord's liability pursuant to such warranty shall be
limited to the cost of correcting the defect or other matter in question. In no
event shall Landlord be liable to Tenant' for any damages or liability incurred
by Tenant as a result of such defect or other matter, including without
limitation damages resulting from any loss of business by Tenant or other
consequential damages.
C. Except for Landlord's obligations under the Lease,
notwithstanding anything contained in this Paragraph 9, Landlord shall not be
liable for any defect in design, construction, or equipment furnished which is
discovered and of which Landlord receives written notice from Tenant after
eighteen (18) months have passed since the later of (i) the Commencement Date,
and (ii) recordation of a notice of completion for the work of improvement
affected by the defect.
D. With respect to defects for which. Landlord is not
responsible pursuant to subparagraph 9C, Tenant shall have the benefit of any
construction or equipment warranties existing in favor of Landlord that would
assist Tenant in correcting.
7
<PAGE>
EXHIBIT B
such defect and in discharging its obligations regarding the repair and
maintenance of the Premises. Upon request by Tenant, Landlord shall inform
Tenant of all written construction and equipment warranties existing in favor of
Landlord which affect the Interior Improvements. Landlord shall cooperate with
Tenant in enforcing such warranties and in bringing any suit that may be
necessary to enforce liability with regard to any defect for which Landlord is
not responsible pursuant to this paragraph so long as Tenant pays all costs
reasonably incurred by Landlord in so acting.
E. Landlord makes no other express or implied warranty with respect to
the design, construction or operation of the Interior Improvements except as
set that forth in this Paragraph. Notwithstanding anything to the contrary
contained in the Lease or this Agreement, Tenant's acceptance of the Premises
shall not be deemed a waiver of the foregoing warranty. THE FOREGOING DISCLAIMER
INCLUDES A DISCLAIMER OF ALL WARRANTIES AI Th REPRESENTATIONS, EXPERESS OR
IMPLIED, WITH RESPECT TO THE MATTERS DESCRIBED HEREIN, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
11. Effect of Agreement: In the event of any inconsistency between this
Improvement Agreement and the Lease, the terms of this Improvement Agreement
shall prevail.
12. Delivery of Documents: Landlord shall deliver to Tenant (i) within
thirty (30) days after the same is obtained by Landlord, any temporary or
permanent certificates of occupancy issued with regard to the Premises; (ii)
within sixty (60) days after Tenant's request (if such request is made within
one year of the Effective Date), a complete "as-built" set of Mylar reproducible
building plans reflecting all approved changes to the work; and (iii) within
thirty (30) days after Substantial Completion of the Premises, complete
maintenance and operating manuals for all the equipment, fixtures, and systems
that are part of the Building.
13. Miscellaneous: Paragraph 15.11 of the Lease is incorporated herein
and its provisions, as applicable, shall be a part hereof.
LANDLORD: TENANT:
ORCHARD JAY INVESTORS LLC CYLINK CORPORATION
a California limited liability company a California corporation
By: /s/ David J. Brown By: /s/ [ILLEGIBLE]
-------------------------------- --------------------------------
David J. Brown
Managing Member Its: Chief Financial Officer
--------------------------------
Dated: May 11, 1999
------------------------------- Dated: May 10, 1999
--------------------------------
DAVID J. BROWN
By: /s/ [ILLEGIBLE]
--------------------------------
By: /s/ David J. Brown
--------------------------------
David J. Brown Its: Corporate Secretary
--------------------------------
Dated: May 11, 1999
-------------------------------- Dated: May 10, 1999
--------------------------------
8
<PAGE>
EXHIBIT C
APPROVED SPECIFICATIONS
(to be inserted)
<PAGE>
EXHIBIT D
ACCEPTANCE AGREEMENT
THIS ACCEPTANCE AGREEMENT is made as of _________________ 1999, by and
between the parties hereto with regard to that Lease dated May 10, 1999, by and
between ORCHARD JAY INVESTORS, LLC, a California limited liability company and
David J. Brown ("Landlord"), and Cylink Corporation, a California corporation as
Tenant ("Tenant"), affecting those Premises commonly known as 3131 and 3151 Jay
Street, Santa Clara, California. The parties hereto agree as follows:
1. Possession of the Premises has been delivered to Tenant and Tenant
has taken possession of the Premises (subject to any qualifications set forth in
the Lease).
2. The Commencement Date of the Lease Term is __________________ and
the Lease Term shall expire on _________________ unless sooner terminated
according to the terms of the Lease or by mutual agreement.
3. The Base Monthly Rent initially due pursuant to the Lease is One
Hundred Seventy-Four Thousand, Four Hundred Six and 96/100 Dollars ($174,406.96)
per month, subject to any subsequent adjustments required by the Lease.
4. Landlord has received a Security Deposit in the amount of Eight
Hundred Twenty-Seven Thousand, Five Hundred Sixty-One and 52/100 Dollars
($827,561.52) which shall be held by Landlord pursuant to Paragraph 3.5 of the
Lease and Paragraph 3 of the First Addendum to Lease and all other applicable
terms of the Lease. In addition, Tenant has prepaid rent in the amount of One
Hundred Seventy-Four Thousand, Four Hundred Six and 96/100 Dollars
($174,406.96), which shall be applied to the first installment of Base Monthly
Rent.
5. The Lease is in full force and effect, neither party is in default
of its obligations under the Lease, and Tenant has no setoffs, claims, or
defenses to the enforcement of the Lease.
LANDLORD: TENANT:
ORCHARD JAY INVESTORS LLC CYLINK CORPORATION
a California limited liability company a California corporation
By: By:
-------------------------------- --------------------------------
David J. Brown
Managing Member Its:
--------------------------------
Dated:
------------------------------- Dated:
--------------------------------
DAVID J. BROWN
By:
--------------------------------
By:
--------------------------------
David J. Brown Its:
--------------------------------
Dated:
-------------------------------- Dated:
--------------------------------
<PAGE>
EXHIBIT E
3633460 BOOK 8565 539
INDEX TO DECLARATION
Page No.
--------
PREAMBLE
I. DEFINITIONS 1
II. PROPERTY SUBJECT TO THE SAN TOMAS INDUSTRIAL
PARK RESTRICTIONS 2
Section 2.1 General Declaration Creating San Tomas
Industrial Park 2
Section 2.2 Addition of Other Real Property by Grantor 3
A. Grantor's Power 3
B. Notice of Addition of Land 3
III. REGULATION OF IMPROVEMENTS 3
Section 3.1 Approval of Plans 3
A. Approval Required 3
B. Basis for Approval 4
C. Result of Inaction 4
D. Proceeding With Work 4
E. Completion of Work 5
F. Estoppel Certificate 5
G. Liability ?
H. Review Fee ?
Section 3.2 Limitations on Improvements 6
A. Minimum Setback Lines 6
B. Exceptions to Setback Requirements 6
C. Landscaping 7
D. Signs 7
E. Parking Areas 7
F. Storage and Loading Areas 8
<PAGE>
BOOK 8565 540
Page No.
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IV. REGULATION OF OPERATIONS AND USES 8
Section 4.1 Permitted Uses 8
Section 4.2 Restrictions and Prohibited Uses 9
A. Prohibited Uses 9
B. Nuisances 9
C. Repair of Buildings 10
D. Right of Entry 10
Section 4.3 Other Operations and Uses 10
V. DURATION; MODIFICATION AND REPEAL 10
Section 5.1 Duration of Restrictions 10
Section 5.2 Termination and Modification 11
VI. ENFORCEMENT 11
Section 6.1 Abatement and Suit 11
Section 6.2 Deemed to Constitute a Nuisance 12
Section 6.3 Attorney's Fees 12
Section 6.4 Failure to Enforce Not a Waiver of Rights 12
VII. MISCELLANEOUS PROVISIONS 12
Section 7.1 Assignment of Rights and Duties 12
Section 7.2 Constructive Notice and Acceptance 13
Section 7.3 Waiver 13
Section 7.4 Mutuality, Reciprocity; Runs With Land 13
Section 7.5 Rights of Mortgages 13
Section 7.6 Paragraph Headings 14
Section 7.7 Effect of Invalidation 14
<PAGE>
BOOK 8565 541
DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
FOR
SAN TOMAS INDUSTRIAL PARK
PREAMBLE
THIS DECLARATION is made on June 5, 1969, by AETNA LIFE INSURANCE
COMPANY, a Connecticut Corporation, as owner of the real property in the City of
Santa Clara, County of Santa Clara, State of California, described in Exhibit
"A" which is attached hereto and incorporated herein by this reference.
The property described in Exhibit "A" is subject to this DECLARATION
and will be known as SAN TOMAS INDUSTRIAL PARK.
SAN TOMAS INDUSTRIAL PARK is being developed as a planned industrial
complex which will provide employment opportunities for the residents of the
City of Santa Clara and the surrounding area. These DECLARATIONS are designed to
complement local government and municipal regulations and where conflicts occur,
the most rigid requirements shall prevail. It is assumed that the users of
industrial sites in the SAN TOMAS INDUSTRIAL PARK will be motivated to preserve
these qualities through mutual cooperation and by enforcing not only the letter
but the spirit of this DECLARATION.
<PAGE>
BOOK 8565 542
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for all purposes of this DECLARATION, have the meanings
herein specified.
ARCHITECT The term "Architect" shall mean a person holding a
certificate to practice architecture in the State of California under authority
of Division 3, Chapter 3 of the Business and Professions Code of the State of
California.
BENEFICIARY The term "Beneficiary" shall mean a mortgagee under a
mortgage, as well as beneficiary under a deed of trust.
DECLARATION The term "Declaration" shall mean the SAN TOMAS INDUSTRIAL
PARK RESTRICTIONS.
DEED OF TRUST The term "Deed of Trust" or "Trust Deed" shall mean a
mortgage as well as a deed of trust.
FILE The term "File" shall mean, with reference to any subdivision map,
the filing of said map in the Office of the Recorder of the County of Santa
Clara, State of California.
GRANTOR The term "Grantor" shall mean the AETNA LIFE INSURANCE COMPANY
and, to the extent provided in Section 7.1 below, its successors and assigns.
IMPROVEMENTS The term "Improvements" shall include buildings,
outbuildings, roads, driveways, parking areas, fences, screening walls and
barriers, retaining walls, stairs, decks, hedges, windbreaks, plantings, planted
trees and shrubs, poles, signs, loading areas and all other structures or
landscaping improvements of every type and kind.
MORTGAGEE The term "Mortgagee" shall mean a beneficiary under, or a
holder of a deed of trust as well as a mortgagee.
RECORD; RECORDED The term "Record" shall mean, with respect to any
document, the recordation of said document in the Office of the County Recorder
of the County of Santa Clara, State of California.
SITE The term "Site" shall mean all contiguous land under one
ownership.
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<PAGE>
BOOK 8565 543
VISIBLE FROM NEIGHBORING PROPERTY The term "Visible From Neighboring
Property" shall mean, with respect to any given object, that such object is or
would be visible to a person six feet tall, standing on any part of such
neighboring property at an elevation no greater than the elevation of the base
of the object being viewed.
SAN TOMAS INDUSTRIAL PARK The term "SAN TOMAS INDUSTRIAL PARK" shall
mean all of the real property now or hereafter made subject to this DECLARATION.
SAN TOMAS INDUSTRIAL PARK RESTRICTIONS The term "SAN TOMAS INDUSTRIAL
PARK RESTRICTIONS" shall mean the covenants, conditions, and restrictions set
forth in this DECLARATION, as it may from time to time be amended or
supplemented.
ARTICLE II
PROPERTY SUBJECT TO THE SAN TOMAS INDUSTRIAL PARK RESTRICTIONS
SECTION 2.1 GENERAL DECLARATION CREATING SAN TOMAS INDUSTRIAL PARK
GRANTOR hereby declares that all of the real property located in the
County of Santa Clara, State of California, described in Exhibit A, which is
attached hereto and incorporated herein by this reference, is and shall be,
conveyed, hypothecated, encumbered, leased, occupied, built upon or otherwise
used, improved or transferred in whole or in part subject to the SAN TOMAS
INDUSTRIAL PARK RESTRICTIONS, meaning the covenants, conditions and restrictions
set forth in this DECLARATION. All of said restrictions are declared and agreed
to be in furtherance of a general plan for the subdivision, improvement and sale
of said real property and are established for the purpose of enhancing and
perfecting the value, desirability and attractiveness of said property and every
part thereof. All of the SAN TOMAS INDUSTRIAL PARK RESTRICTIONS shall run with
all of said real property for all purposes and shall be binding upon and inure
to the benefit of GRANTOR and all owners, lessees, licensees, occupants and
their successors in interest as set forth in this DECLARATION.
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<PAGE>
BOOK 8565 544
SECTION 2.2 ADDITION OF OTHER REAL PROPERTY BY GRANTOR
A. GRANTOR'S POWER Grantor may at any time during the pendency of this
DECLARATION add all or a portion of any land now or hereafter owned by GRANTOR
to the property which is covered by this DECLARATION, and upon recording of a
notice of addition of real property containing at least the provisions set forth
in Section 2.2B of this Article II, the provisions of this DECLARATION specified
in said notice shall apply to such added land in the same manner as if it were
originally covered by this DECLARATION. Thereafter, to the extent this
DECLARATION is made applicable thereto, the rights, powers and responsibilities
of GRANTOR and the owners, lessees, licensees and occupants of parcels within
such added land shall be the same as in the case of the land described in
Exhibit "A".
B. NOTICE OF ADDITION OF LAND The notice of addition of real property
referred to in Section 2.2A above shall contain at least the following
provisions:
1. A reference to this DECLARATION stating the date of
recording hereof and the book or books of the records of Santa Clara
County, California, and the page numbers where this DECLARATION is
recorded;
2. A statement that the provisions of this DECLARATION, or
some specified part thereof, shall apply to such added real property;
3. An exact description of such added real property; and
4. Such other or different covenants, conditions and
restrictions as GRANTOR shall, in its discretion, specify to regulate
and control the use, occupancy and improvement of such added real
property.
ARTICLE III
REGULATION OF IMPROVEMENTS
SECTION 3.1 APPROVAL OF PLANS
A. APPROVAL REQUIRED No improvement shall be erected, placed, altered,
maintained or permitted to remain on any land subject to this DECLARATION until
final plans
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<PAGE>
BOOK 8565 545
and specifications showing the plot layout, all exterior elevations with
materials and colors therefor, signs and landscaping shall have been submitted
to and approved in writing by GRANTOR. Such final plans and specifications shall
be submitted in writing in duplicate over the authorized signature of the owner,
lessee, licensee or other occupant of the site or his authorized agent. Under no
circumstances shall the GRANTOR approve metal-clad buildings of any type or
design other than "curtain wall", or approve buildings covering more the 55% of
the lot area. Changes in approved plans which materially affect building size,
placement or external appearance must be similarly submitted to and approved by
GRANTOR.
B. BASIS FOR APPROVAL Approval shall be based, among other things, on
adequacy of site dimensions (a minimum lot size of 20,000 square feet will be
required), conformity and harmony of external design with neighboring
structures, effect of location and use of proposed improvements on neighboring
sites, the nature of improvements on neighboring sites and the types of
operations and uses thereof, relation of topography, grade and finish ground
elevation of the site being improved to that of neighboring sites, proper facing
of main elevation with respect to nearby streets, adequacy of screening of
mechanical air conditioning or other roof top installations, and conformity of
the plans and specifications to the purpose and general plan and intent of this
DECLARATION. No plans will be approved which do not provide for the underground
installation of power lines from the lot line to buildings. GRANTOR shall not
arbitrarily or unreasonably withhold its approval of such plans and
specifications.
C. RESULT OF INACTION If GRANTOR fails either to approve or disapprove
such plans and specifications within thirty (30) days after the same have been
submitted to it, it shall be conclusively presumed that GRANTOR has approved
said plans and specifications; provided, however, that if within said thirty
(30) day period, GRANTOR gives written notice of the fact that a reasonable
additional period is required for the approval of such plans and specifications,
there shall be no presumption that the same are approved until the expiration of
the extended period set forth in said notice.
D. PROCEEDING WITH WORK Upon receipt of approval from GRANTOR pursuant
to this section the owner or lessee to whom the same is given shall as soon as
practicable, satisfy all conditions thereof and diligently proceed with the
commencement and completion of all approved construction, refinishing,
alterations and excavations. In all cases work shall be commenced within one
year from the date of such approval. If there is a failure to comply
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<PAGE>
BOOK 8565 546
with this paragraph, then the approval given pursuant to this section shall be
deemed revoked unless GRANTOR upon request made prior to the expiration of said
one year period extends the time for commencing work.
E. COMPLETION OF WORK In any event reconstruction, refinishing or
alteration of any such improvement shall be completed within two years after the
commencement thereof except for so long as such completion is rendered
impossible or would result in great hardship due to strikes, fires, national
emergencies, natural calamities or other supervening forces beyond the control
of the owner, lessee, licensee or occupant or his agents. Failure to comply with
this paragraph shall constitute a breach of the SAN TOMAS INDUSTRIAL PARK
RESTRICTIONS and subject the defaulting party or parties to all enforcement
procedures set forth in this DECLARATION and any other remedies provided by law
or in equity.
F. ESTOPPEL CERTIFICATE Within thirty (30) days after written demand is
delivered to the GRANTOR and upon payment of a reasonable fee (not to exceed
$25.00) established by GRANTOR, there shall be recorded an estoppel certificate
executed by GRANTOR and certifying that as of the date thereof either (a) all
improvements made or other work done on or within a site complies with the SAN
TOMAS INDUSTRIAL PARK RESTRICTIONS or (b) such improvements or work do not so
comply in which event the certificate shall identify the non-complying
improvements or work and set forth with particularity the cause or causes for
such non-compliance. Any lessee, purchaser or encumbrancer in good faith for
value shall be entitled to rely on said certificate with respect to the matters
set forth therein, such matters being conclusive as between the GRANTOR and all
such subsequent parties in interest.
G. LIABILITY GRANTOR shall not be liable for any damage, loss or
prejudice suffered or claimed on account of (a) the approval or disapproval of
any plans, drawings and specifications whether or not defective; (b) the
construction or performance of any work whether or not pursuant to approved
plans, drawings and specifications; (c) the development of any property within
the SAN TOMAS INDUSTRIAL PARK; or (d) the execution and filing of an estoppel
certificate pursuant to the preceding paragraph whether or not the facts therein
are correct, provided that GRANTOR has acted in good faith.
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<PAGE>
BOOK 8565 547
H. REVIEW FEE An architectural review fee shall be paid to GRANTOR at
such time as plans and specifications are submitted for approval based on the
following schedule:
(a) When the plans submitted are prepared by an architect, the
architectural review fee shall be $100.00;
(b) In all other cases the architectural review fee shall be
$250.00
SECTION 3.2 LIMITATIONS ON IMPROVEMENTS
A. MINIMUM SETBACK LINES No structures of any kind, and no part
thereof, shall be placed closer then permitted by GRANTOR to an interior
property line, or closer than thirty (30) feet to a street property line other
than Scott Boulevard, or closer than twenty-six (26) feet to the property line
of Scott Boulevard.
B. EXCEPTIONS TO SETBACK REQUIREMENTS The following structures and
improvements are specifically excluded from the foregoing setback requirements:
1. Roof overhang subject to the specific approval of GRANTOR
in writing, provided it does not extend more than six (6) feet
into the setback area.
2. Steps and walks, provided the same do not extend more than
six (6) feet in the setback area.
3. Paving and associated curbing, except that vehicle parking
area shall not be permitted within thirty (30) feet of the
street property line on which the building fronts or within
ten (10) feet of any other street property line.
4. Fences, except that no fence shall be placed within the
street setback area unless specific approval is given by
GRANTOR in writing.
5. Landscaping.
6. Planters, not to exceed three feet in height.
7. Gas and service stations including all pertinent uses,
subject to the specific approval of GRANTOR in writing
8. Displays identifying the owner, lessee or occupant, subject
to the specific approval of GRANTOR in writing.
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<PAGE>
BOOK 8565 548
C. LANDSCAPING Every site on which a building shall have been placed
shall be landscaped in accordance with plans and specifications submitted to and
approved by GRANTOR pursuant to Section 3.1 above. Landscaping as approved by
GRANTOR shall be installed within ninety days of occupancy or completion of the
building, whichever occurs first, unless GRANTOR approves in writing another
completion date. After completion such landscaping shall be maintained in a
sightly and well-kept condition. In general GRANTOR will not approve landscaping
plans which do not call for landscaping the area between curb and property line
(excluding driveways), which do not call for at least twelve (12) feet of
landscaped area between street property line and parking area, which does not
provide for an automatic sprinkler system or which does not call for at least
fifteen (15) feet of landscaped areas between buildings or parking area and an
adjoining expressway or freeway.
D. SIGNS
1. No billboard or advertising sign shall be permitted other
than those identifying by name, business and products of the person or firm
occupying the premises and those offering the premises for sale or for lease.
The size and style of sale or lease signs must be approved by GRANTOR in
writing.
2. The location of signs shall be governed by the setback
requirements set forth in ARTICLE III Section 3.2 unless GRANTOR gives
permissions for a non-conforming location.
3. Signs and identifying markings on buildings or building
sites shall only be of such size, design and color as is specifically approved
by GRANTOR in writing.
E. PARKING AREAS
1. Adequate off-street parking shall be provided to
accommodate all parking needs for employee, visitor and company vehicles on the
site. The intent of this provision is to eliminate the needs for any on-street
parking. If parking requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.
2. Parking shall not be permitted between public street
pavement and a property line or closer than twelve (12) feet to a street
property line.
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<PAGE>
BOOK 8565 549
3. Any parking area between a property line and the front of
the building must be depressed or screened.
4. The parking requirements may be modified by GRANTOR as to
any particular site.
F. STORAGE AND LOADING AREAS
1. Unless specifically approved by GRANTOR in writing, no
materials, supplies or equipment, including company-owned or operated trucks,
shall be stored in any area on a site except inside a closed building, or behind
a visual barrier screening such areas so that they are not visible from the
neighboring properties or public streets.
2. Loading areas shall not encroach into setback areas unless
specifically approved by GRANTOR in writing.
3. Loading docks shall be set back and screened to minimize
the effect of their appearance from the street and from neighboring property.
Docks shall not be closer than sixty-five (65) feet to the property line, unless
specifically approved by GRANTOR in writing.
4. No railroad tracks shall be constructed between any street property
line and the building.
ARTICLE IV
REGULATION OF OPERATIONS AND USES
SECTION 4.1 PREMITTED USES
Unless otherwise specifically prohibited herein, any industrial
operation and use will be permitted if it is performed or carried out entirely
within a building that is so designed and constructed that the enclosed
operations and uses do not cause or produce a nuisance to adjacent sites such as
but not limited to vibration, sound, electro-mechanical disturbances and
radiation, electro-magnetic disturbances, radiation, air or water pollution,
dust, emission or odorous, toxic and non-toxic matter. All lighting is to be
shielded from adjacent sites.
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<PAGE>
BOOK 8565 550
SECTION 4.2 RESTRICTIONS AND PROHIBITED USES
A. PROHIBITED USES The following operations and uses shall not be
permitted on any property subject to these restrictions:
1. Residential
2. Trailer Courts
3. Labor Camps
4. Junk Yards
5. Drilling for and/or the removal of oil, gas or other
hydrocarbon substances (except that this provision shall not be deemed
to prohibit the entry of subject property below a depth of 500 feet for
such purposes).
6. Commercial excavation of building or construction
materials.
7. Distillation of bones.
8. Dumping, disposal, incineration or reduction of garbage,
sewage, offal, dead animals or refuse.
9. Fat Rendering.
10. Stockyard or Slaughter of Animals.
11. Refining of Petroleum or of its Products.
12. Smelting of Iron, Tin, Zinc or other Ores.
13. Cemeteries.
14. Jail or Honor Farms.
B. NUISANCES No rubbish or debris of any kind shall be placed or
permitted to accumulate upon or adjacent to any site, and no odors shall be
permitted to arise therefrom [ILLEGIBLE] as to render any site or portion
thereof unsanitary, unsightly, offensive or detrimental to any of the property
in the vicinity thereof or to the occupants thereof. No nuisance shall be
permitted to exist or operate upon any site so as to be offensive or detrimental
to any property [ILLEGIBLE] the vicinity thereof or to its occupants.
-9-
<PAGE>
BOOK 8565 551
C. REPAIR OF BUILDINGS No building or structure upon any site shall be
permitted to fall into disrepair, and each such building and structure shall at
all times be kept in good condition and repair and adequately painted or
otherwise finished.
D. RIGHT OF ENTRY During reasonable hours, and subject to reasonable
security requirements, GRANTOR, or its authorized representatives, shall have
the right to enter upon and inspect any building, site or parcel and the
improvements thereon embraced for the purpose of ascertaining whether or not the
provisions of the SAN TOMAS INDUSTRIAL PARK RESTRICTIONS have been or are being
complied with and shall not be deemed guilty to trespass by reason of such
entry.
SECTION 4.3 OTHER OPERATIONS AND USES
Operations and uses which are neither specifically prohibited nor
specifically authorized by these restrictions may be permitted in a specific
case if operational plans and specifications are submitted to and approved in
writing by GRANTOR. Approval or disapproval of such operational plans and
specifications shall be based upon the effect of such operations or uses on
other property subject to these restrictions or upon the occupants thereof, but
shall be the sole discretion of GRANTOR.
ARTICLE V
DURATION, MODIFICATION AND REPEAL
SECTION 5.1 DURATION OF RESTRICTIONS
The SAN TOMAS INDUSTRIAL PARK RESTRICTIONS shall continue and remain in
full force and effect at all times with respect to all property, and each part
thereof, now or hereafter made subject thereto (subject, however, to the right
to amend and repeal as provided for herein) until January 1, 1990. However,
unless within one year prior to January 1, 1990, there shall be recorded an
instrument directing the termination of the SAN TOMAS INDUSTRIAL PARK
RESTRICTIONS signed by owners of not less than two-thirds of the property then
subject to these RESTRICTIONS, based on the number of square feet subject to
these RESTRICTIONS, the SAN TOMAS INDUSTRIAL PARK RESTRICTIONS, as in effect
immediately prior to the expiration date shall be continued automatically
without any further notice for an additional period of ten years
-10-
<PAGE>
BOOK 8565 552
and thereafter for successive periods of ten years unless within one year prior
to the expiration of any such period the SAN TOMAS INDUSTRIAL PARKS RESTRICTIONS
are terminated as set forth above in this paragraph.
SECTION 5.2 TERMINATION AND MODIFICATION
This DECLARATION, or any provisions thereof, or any covenant, condition
or restriction contained herein, may be terminated, extended, modified or
amended, as to the whole of said property or any portion thereof, with the
written consent of the owners of seventy-five (75%) percent of the property
subject to these restrictions, based on the number of square feet owned as
compared to the total number of square feet subject to these RESTRICTIONS,
provided, however, that so long as GRANTOR owns at least twenty-five (25%)
percent of the property subject to these RESTRICTIONS, or for a period of
fifteen (15) years from the effective date hereof, whichever period is longer,
no such termination, extension, modification or amendment shall be effective
without the written approval of GRANTOR thereto. No such termination, extension,
modification or amendment shall be effective until a proper instrument in
writing has been executed and acknowledged and recorded in the County where the
land affected thereby is situated.
ARTICLE VI
ENFORCEMENT
SECTION 6.1 ABATEMENT AND SUIT
Violation or breach of any restriction herein contained shall give to
GRANTOR the right to enter upon the property upon or at to which said violation
or breach exists and to summarily abate and remove at the expense of the owner,
lessee or occupant thereof, any structure, thing or condition that may be or
exist thereon contrary to the intent and meaning of the provisions hereof, or to
prosecute a proceeding at law or in equity against the person or persons who
have violated or are attempting to violate any of these restrictions to enjoin
or prevent them from doing so, to cause said violation to be remedied or to
recover damages for said violation. In addition, every owner of property subject
to these restrictions shall have the right in the event of violation or breach
of any restriction herein contained to prosecure a proceeding ?????? or in
equity against the person or persons who have violated or are attempting
-11-
<PAGE>
BOOK 8565 553
to violate any of these restrictions to enjoin or prevent them from doing so, to
cause said violation to be remedied or to recover damages for said violation.
SECTION 6.2 DEEMED TO CONSTITUTE A NUISANCE
The result of every action or omission whereby and restriction herein
contained is violated in whole or in part is hereby declared to be and to
constitute a nuisance, and every remedy allowed by law or equity against an
owner, either public or private, shall be applicable against every such result
and may be exercised by GRANTOR or by any owner or lessee of property subject to
these RESTRICTIONS.
SECTION 6.3 ATTORNEY'S FEES
In any legal or equitable proceeding for the enforcement or to restrain
the violation of this DECLARATION or any provision hereof, the losing party or
parties shall pay the attorneys' fees of the prevailing party or parties, in
such amount as may be fixed by the Court in such proceedings. All remedies
provided herein or at law or in equity shall be cumulative and not exclusive.
SECTION 6.4 FAILURE TO ENFORCE NOT A WAIVER OR RIGHTS
The failure of GRANTOR or any property owner to enforce any restriction
herein contained shall in no event be deemed to be a waiver of the right to do
so thereafter nor or the right to enforce any other restriction.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1 ASSIGNMENT OF RIGHTS AND DUTIES
Any and all of the rights, powers and reservations of GRANTOR herein
contained may be assigned to any person, corporation or association which will
assume the duties of GRANTOR pertaining to the particular rights, powers and
reservations assigned, and upon any such person, corporation or association's
evidencing its consent in writing to accept such assignment and assume such
duties, he or it shall, to the extent of such assignment, have the same rights
and powers and be subject to the same obligations and duties as are given to and
assumed by GRANTOR herein. The term GRANTOR as used herein includes all such
assignees and their heirs, successors and assigns. If at any time GRANTOR ceases
to exist and has not made such an assignment, a successor GRANTOR may be
appointed in the same manner as there RESTRICTIONS
-12-
<PAGE>
BOOK 8565 554
may be terminated, extended, modified or amended under Section 5.2 of Article V.
Any assignment or appointment made under this section shall be in recordable
form and shall be recorded in the County where the land affected is situated.
SECTION 7.2 CONSTRUCTION NOTICE AND ACCEPTANCE
Every person or other entity who now or hereafter owns or acquires any
right, title or interest in or to any portion of the property made subject to
these RESTRICTIONS is and shall be conclusively deemed to have consented and
agreed to every covenant, condition and restriction contained herein, whether or
not any reference to this DECLARATION is contained in the instrument by which
such person or entity acquired an interest in said property.
SECTION 7.3 WAIVER
Neither GRANTOR nor its successors or assigns shall be liable to any
owner, lessee, licensee, or occupant of land subject to this DECLARATION by
reason of any mistake in judgment, negligence, nonfeasance, action or inaction
or for the enforcement or failure to enforce any provision of this DECLARATION.
Every owner, lessee, licensee or occupant of any of said property by acquiring
his interest therein agrees that he will not bring any action or suit against
GRANTOR to recover any such damages or to seek equitable relief.
SECTION 7.4 MUTUALITY, RECIPROCITY; RUNS WITH LAND
All covenants, conditions, restrictions and agreements contained herein
are made for the direct, mutual and reciprocal benefit of each and every part
and parcel of the property now or hereafter made subject to this DECLARATION;
shall create mutual, equitable servitudes upon each parcel in favor of every
other parcels; shall create reciprocal rights and obligations between the
respective owners of all parcels and privity of contract and estate between all
grantees of said parcels, their heir, successors and assigns; and shall, as to
the owner of each parcel, his heirs, successors and assigns, operate as
covenants running with the land, for the benefit of all other parcels.
SECTION 7.5 RIGHTS OF MORTGAGEES
No breach of the restrictions and other provisions contained herein
shall defeat or render invalid the lien of any mortgage or deed of trust now or
hereafter executed upon land
-13-
<PAGE>
BOOK 8565 555
subject to these restrictions; provided, however, that if any portion of said
property is sold under a foreclosure of any mortgage or under the provisions of
any deed of trust, any Purchaser at such sale and his successors and assigns
shall hold any and all property so purchased subject to all of the restrictions
and other provisions of this DECLARATION.
SECTION 7.6 PARAGRAPH HEADINGS
Paragraph headings, where used herein, are inserted for convenience
only and are not intended to be a part of this DECLARATION or in any way to
define, limit or describe the scope and intent of the particular paragraphs to
which they refer.
SECTION 7.6 EFFECT OF INVALIDATION
If any provision of this DECLARATION is held to be invalid by any
court, the invalidity of such provision shall not affect the validity of the
remaining provisions hereof.
IN WITNESS WHEREOF, GRANTOR has executed this DECLARATION the day and
year first above written.
AETNA LIFE INSURANCE COMPANY
By: /s/ R. D. SWINEHART
-------------------------------
VICE PRESIDENT
By: /s/ F. E. HEALY
-------------------------------
ASSISTANT SECRETARY GRANTOR
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On June 5, 1969 before me, the undersigned, a Notary Public in and for
said State, personally appeared R. D. SWINEHART, known to me to be the VICE
President, and F. E. HEALY, known to me to be ASSISTANT Secretary of the
corporation that executed the within instrument, known to me to be the persons
who executed the within instrument on behalf of the corporation therein named,
and acknowledged to me that such corporation executed the within instrument
pursuant to its by-laws or a resolution of its board of directors.
WITNESS my hand and official seal. Frank A. Kelly Jr., Notary Public
Within and for the State of Connecticut
My Commission Expires March 31, 1970.
Signature /s/ Frank A. Kelly Jr.
----------------------------
--------------------------------------
Name (Typed or Printed)
-14-
<PAGE>
BOOK 8565 556
EXHIBIT "A"
LEGAL DESCRIPTION
All that certain real property situate in the City of Santa Clara, County of
Santa Clara, State of California described as follows: all of lots 1 to 29
inclusive as shown upon that certain map entitled "Tract No. 2971" which map was
filed for record in the Office of the Recorder of the City of Santa Clara, State
of California on May 16, 1969 in Book 253 of Maps at Pages 28 and 29.
3633460
BOOK 8565 539
------------------------------------
RECORDED AT THE REQUEST OF
Title Insurance and Trust Company
JUN 12 1969 8:01 AM
GEORGE E. FOWLES, Rcorder
SANTA CLARA COUNTY, OFFICIAL RECORDS
------------------------------------
<PAGE>
EXHIBIT F
SIGN CRITERIA
These criteria have been established for the purpose of assuring an outstanding
business complex and for the mutual benefits of all tenants. Conformance will be
strictly enforced and any installed non-conforming or unapproved signs must be
brought into conformance at the expense of the Tenant.
A. General Requirements:
1. The Tenant shall submit a sketch of his proposed sign to be
Landlord for his approval.
2. The Project Monument Sign and Building Tenant Sign base and
frame shall be constructed by Landlord's agent at Landlord's
expense. The sign base shall be installed by Landlord's agent
at Landlord's expense. All tenant lettering shall be done by
Landlord's agent at Tenant's expense.
3. Tenant shall be responsible for the fulfillment of all
requirements of these criteria.
B. General Specifications:
1. No electrical or audible signs will be permitted.
2. The sign's dimensions will be in accordance with the
established sign program for the Project and Building.
3. Sign copy will be restricted to company name only.
4. The style, color and size of the individual company's name may
vary.
5. Placement of the sign and method of attachment to the Project
Monument Sign and Building Tenant Sign will be directed by the
Landlord.
6. Upon the removal of any sign, any damage to the Project
Monument Sign or Building Tenant Sign must be repaired by the
Tenant.
7. Those tenants who do not wish an exterior sign may place gold
leaf lettering on the interior window area, not to exceed more
than 144 square inches (gross area). The letters are not to
exceed 3 inches in height.
8. Except as provided herein, no advertising placards, banners,
pennants, names, insignia, trademarks or other descriptive
material shall be affixed or maintained upon the glass panes
or exterior walls of the Building.
<PAGE>
[GRAPHIC OMITTED]
ORCHARD
PROJECT
845
<PAGE>
EXHIBIT G
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
Real Estate Group (AU #AU NUMBER)
400 Capitol Mall, Suite 700
Sacramento, CA 95814
Attn: LOAN ADMINISTRATOR'S NAME
HERE
Loan No. LOAN NUMBER
================================================================================
SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT
(Lease To Deed of Trust)
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR LEASE BECOMING SUBJECT TO
AND OF LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST (DEFINED
BELOW).
THIS SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT ("Agreement") is made DATE OF DOCUMENTS
by and between BORROWER NAME, a California general partnership ("Owner"), NAME
OF LESSEE HERE ("Lessee") and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").
RECITALS
1. Pursuant to the terms and provisions of a lease dated DATE OF LEASE HERE
("Lease"), Owner, as "Lessor," granted to Lessee a leasehold estate in and
to a portion of the poperty described on Exhibit A attached hereto and
incorporated herein by this reference (which property, together with all
improvements now or hereafter located on the property, is defined as the
"Property").
2. Said Lease contains provisions and terms granting Lessee an option to
purchase the Property (the "Option To Purchase").
3. Owner has executed, or proposes to execute, a deed of trust with absolute
assignment of leases and rents, security agreement and fixture filing
("Deed of Trust") securing, among other things, a promissory note ("Note")
in the principal sum of LOAN AMOUNT AND NO/100THS DOLLARS ($LOAN AMOUNT IN
NUMBERS), dated DATE OF DOCUMENTS, in favor of Lender, which Note is
payable with interest and upon the terms and conditions described therein
("Loan"). The Deed of Trust is to be recorded concurrently herewith.
4. As a condition to making the Loan secured by the Deed of Trust, Lender
requires that the Deed of Trust be unconditionally and at all times remain
a lien on the Property, prior and superior to all the rights of Lessee
under the Lease and the Option To Purchase and that the Lessee specifically
and unconditionally subordinate the Lease and the Option To Purchase to the
lien of the Deed of Trust.
Page 1 of 9
<PAGE>
Loan No. LOAN NUMBER
5. Owner and Lessee have agreed to the subordination, attornment and other
agreements herein in favor of Lender.
NOW THEREFORE, for valuable consideration and to Induce Lender to make the Loan,
Owner and Lessee hereby agree for the benefit of Lender as follows:
6. SUBORDINATION. Owner and Lessee hereby agree that:
6.1 Prior Lien. The Deed of Trust securing the Note in favor of
Lender, and any modifications, renewals or extensions thereof,
shall unconditionally be and at all times remain a lien on the
Property prior and superior to the Lease and the Option To
Purchase;
6.2 Subordination. Lender would not make the Loan without this
agreement to subordinate; and
6.3 Whole Agreement. This Agreement shall be the whole agreement and
only agreement with regard to the subordination of the Lease and
the Option To Purchase to the lien of the Deed of Trust and shall
supersede and cancel, but only insofar as would affect the
priority between the Deed of Trust and the Lease and the Option To
Purchase, any prior agreements as to such subordination,
including, without limitation, those provisions, if any, contained
in the Lease which prodvide for the subordination of the Lease and
the Option To Purchase to a deed or deeds of trust or to a
mortgage or mortgages.
AND FURTHER, Lessee individually declares, agrees and acknowledges for the
benefit of Lender, that:
6.4 Use of Proceeds. Lender, in making disbursements pursuant to the
Note, the Deed of Trust or any loan agreements with respect to the
Property, is under no obligation or duty to, nor has Lander
represented that it will, see to the application of such proceeds
by the person or persons to whom Lender disburses such proceeds,
and any application or use of such proceeds for purposes other
than those provided for in such agreement or agreements shall not
defeat this agreement to subordinate in whole or in part;
6.5 Waiver, Relinquishment and Subordination. Lessee intentionally and
unconditionally waives, relinquishes and surobrinates all of
Lessee's right, title and interest in and to the Property to the
lien of the Deed of Trust and undestands that in reliance upon,
and in consideration of, this waiver, relinquishment and
subordination, specific loans and advances are being and will be
made by Lender and, as part and parcel thereof, specific monetary
and other oblitagions are being and will be entered into which
would not be made or entered into but for said reliance upon this
waiver, relinquishment and subordination.
7. ASSIGNMENT. Lessee acknowledges and consents to the assignment of the Lease
by Lessor in favor of Lender.
8. ESTOPPEL. Lessee acknowledges and represents that:
8.1 Lease Effective. The Lease has been duly executed and delivered by
Lessee and, subject to the terms and conditions thereof, the Lease
is in full force and effect, the obligations of Lessee thereunder
are valid and binding and there have been no modifications or
additions to the Lease, written or oral;
8.2 No Default. To the best of Lessee's knowledge, as of the date
hereof: (i) there exists no breach, default, or event or condition
which, with the giving of notice or the passage of time or both,
would constitute a breach or default under the Lease; and (ii)
there are no existing claims, defenses or offsets against rental
due or to become due under the Lease;
Page 2 of 9
<PAGE>
Loan No. LOAN NUMBER
8.3 Entire Agreement. The Lease constitutes the entire agreement
between Lessor and Lessee with respect to the Property and Lessee
claims no rights with respect to the Property other than as set
forth in the Lease; and
8.4 No Prepaid Rent. No deposits or prepayments of rent have been made
in connection with the Lease, except as follows: (if none, state
"None") _________________________________________________________.
9. ADDITIONAL AGREEMENTS. Lessee covenants and agrees that, during all such
times as Lender is the Beneficiary under the Deed of Trust:
9.1 Modification, Termination and Cancellation. Lessee will not
consent to any modification, amendment, termination or
cancellation of the Lease (in whole or in part) without Lender's
prior written consent and will not make any payment to Lessor in
consideration of any modification, termination or cancellation of
the Lease (in whole or in part) without Lender's prior written
consent;
9.2 Notice of Default. Lessee will notify Lender in writing
concurrently with any notice given to Lessor of any default by
Lessor under the Lease, and Lessee agrees that Lender has the
right (but not the obligation) to cure any breach or default
specified in such notice within the time periods set forth below
and Lessee will not declare a default of the Lease, as to Lender,
if Lender cures such default within fifteen (15) days from and
after the expiration of the time period provided in the Lease for
the cure thereof by Lessor; provided, however, that if such
default cannot with diligence be cured by Lender within such
fifteen (15) day period, the commencement of action by Lender
within such fifteen (15) day period to remedy the same shall be
deemed sufficient so long as Lender pursues such cure with
diligence;
9.3 No Advance Rents. Lessee will make no payments or prepayments of
rent more than one (1) month in advance of the time when the same
become due under the Lease; and
9.4 Assignment of Rents. Upon receipt by Lessee of written notice from
Lender that Lender has elected to terminate the license granted to
Lessor to collect rents, as provided in the Deed of Trust, and
directing the payment of rents by Lessee to Lender, Lessee shall
comply with such direction to pay and shall not be required to
determine whether Lessor is in default under the Loan and/or the
Deed of Trust.
10. ATTORNMENT. Lessee agrees for the benefit of Lender (including for this
purpose any transferee of Lender or any transferee of Lessor's title in and
to the Property by Lender's exercise of the remedy of sale by foreclosure
under the Deed of Trust) as follows:
10.1 Payment of Rent. Lessee shall pay to Lender all rental payments
required to be made by Lessee pursuant to the terms of the Lease
for the duration of the term of the Lease;
10.2 Continuation of Performance. Lessee shall be bound to Lender in
accordance with all of the provisions of the Lease for the balance
of the term thereof, and Lessee hereby attorns to Lender as its
landlord, such attornment to be effective and self-operative
without the execution of any further instrument immediately upon
Lender succeeding to Lessor's interest in the Lease and giving
written notice thereof to Lessee;
10.3 No Offset. Lender shall not be liable for, nor subject to, any
offsets or defenses which Lessee may have by reason of any act or
omission of Lessor under the Lease, nor for the return of any sums
which Lessee may have paid to Lessor under the Lease as and for
security deposits, advance rentals or otherwise, except to the
extent that such sums are actually delivered by Lessor to Lender;
and
Page 3 of 9
<PAGE>
Loan No. LOAN NUMBER
10.4 Subsequent Transfer. If Lender, by succeeding to the interesst of
Lessor under the Lease, should become obligated to perform the
covenants of Lessor thereunder, then, upon any further transfer of
Lessor's interest by Lender, all of such obligations shall
terminate as to Lender.
11. NON-DISTURBANCE. In the event of a foreclosure under the Deed of Trust, so
long as there shall then exist no breach, default, or event of default on
the part of Lessee under the Lease, Lender agrees for itself and its
successors and assigns that the leasehold interest of Lessee under the
Lease shall not be extinguished or terminated by reason of such
foreclosure, but rather the Lease shall continue in full force and effect
and Lender shall recognize and accept Lessee as tenant under the Lease
subject to the terms and provisions of the Lease except as modified by this
Agreement; provided, however, that Lessee and Lender agree that the
following provisions of the Lease (if any) shall not be binding on Lender:
any option to purchase with respect to the Property; any right of first
refusal with respect to the Property; any provision regarding the use of
insurance proceeds or condemnation proceeds with respect to the Property
which is inconsistent with the terms of the Deed of Trust.
12. MISCELLANEOUS.
12.1 Heirs, Successors, Assigns and Transferees. The covenants herein
shall be binding upon, and inure to the benefit of, the heirs,
successors and assigns of the parties hereto; and
12.2 Notices. All notices or other communications required or permitted
to be given pursuant to the provisions hereof shall be deemed
served upon delivery or, if mailed, upon the first to occur of
receipt or the expiration of three (3) days after deposit in
United States Postal Service, certified mall, postage prepaid and
addressed to the address of Lessee or Lender appearing below:
"OWNER" "LENDER"
BORROWER NAME, a California general partnership WELLS FARGO BANK, NATIONAL ASSOCIATION
BORROWER STREET ADDRESS Real Estate Group (AU #AU NUMBER)
CITY, STATE ZIP 400 Capitol Mall, Suite 700
Sacramento, CA 95814
Attn: LOAN ADMINISTRATOR'S NAME HERE
Loan No. LOAN NUMBER
"LESSEE"
NAME OF LESSEE HERE
LESSEE'S ADDRESS (STACKED) HERE
provided, however, any party shall have the right to change its address for
notice hereunder by the giving of written notice thereof to the other party in
the manner set forth in this Agreement; and
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute and be construed as one and the
same instrument; and
12.4 Remedies Cumulative. All rights of Lender herein to collect rents
on behalf of Lessor under the Lease are cumulative and shall be in
addition to any and all other rights and remedies provided by law
and by other agreements between Lender and Lessor or others; and
Page 4 of 9
<PAGE>
Loan No. LOAN NUMBER
12.5 Paragraph Headings. Paragraph headings in this Agreement are for
convenience only and are not to be construed as part of this
Agreement or in any way limiting or applying the provisions
hereof.
INCORPORATION. Exhibit A and Lease Guarantor's Consent are attached hereto and
incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE
OWNER TO OBTAIN A LOAN, THE PROCEEDS OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN THE IMPROVEMENT OF THE PROPERTY.
IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE
PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.
"OWNER"
BORROWER NAME,
a California general partnership
By:
-------------------------------------
General Partner
By:
-------------------------------------
General Partner
"LENDER"
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By:
----------------------------------
SIGNEE'S NAME
Its: SIGNEE'S TITLE
Page 5 of 9
<PAGE>
Loan No. LOAN NUMBER
"LESSEE"
NAME OF LESSEE HERE
LESSEE SIGNATURE BLOCK HERE
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
Page 6 of 9
<PAGE>
Loan No. LOAN NUMBER
LEASE GUARANTOR'S CONSENT
The undersigned ("Lease Guarantor") consents to the foregoing Subordination
Agreement; Acknowledgment of Lease Assignment, Estoppel, Attornment and
Non-Disturbance Agreement and the transactions contemplated thereby and
reaffirms its obligations under the lease guaranty ("Lease Guaranty") dated DATE
OF LEASE GUARANTY HERE. Lease Guarantor further reaffirms that its obligations
under the Lease Guaranty are separate and distinct from Lessee's obligations.
AGREED:
Dated as of: DATE OF DOCUMENTS "LEASE GUARANTOR"
LEASE GUARANTOR SIGNATURE BLOCK HERE
Page 7 of 9
<PAGE>
EXHIBIT A
Loan No. LOAN NUMBER
DESCRIPTION OF PROPERTY
EXHIBIT A to Subordination Agreement; Acknowledgment of Lease Assignment,
Estoppel, Attornment and Non-Disturbance Agreement dated as of DATE OF
DOCCUMENTS, executed by BORROWER NAME, a California general partnership as
"Owner," NAME OF LESSEE HERE, as "Lessee," and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as "Lender."
All that certain real property located in the County of PROPERTY COUNTY, State
of California, described as follows:
APN
Page 8 of 9
<PAGE>
STATE OF CALIFORNIA
COUNTY OF _______________________ss.
On this _________ day of _________________, 19__, before me, __________________
a Notary Public in and for the State of California, personally appeared
_______________ personally known to me (or proved on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal
Signature _____________________________________
My commission expires _________________________
Page 9 of 9
<PAGE>
--------------------------------------------------------------------------------
Orchard Plaza
2290 North Street, Suite 300 [Graphic] Orchard
San Jose, California 95131 Properties
(408) 922-0400
FAX (408) 922-0157
TO: PROSPECTIVE TENANT
FROM: ORCHARD PROPERTIES
SUBJECT: HAZARDOUS MATERIALS QUESTIONNAIRE AS IT RELATES
CALIFORNIA HEALTH AND SAFETY CODE
SECTIONS 25503.5 AND 25503.6
California Health and Safety Code Section 25503.5 requires any business which
handles Hazardous Materials in excess of certain limits to establish a business
plans for emergency response to a release or threatened release of Hazardous
Materials. Health and Safety Code Section 25503.6 specifies that any business
which is required under Section 25503.5 to establish and implement a business
plan and is located on leased property is required to notify the owner in
writing that the business is subject to Section 25503.5 and to provide a copy of
the business plan to the owner within five working days after receiving a
request from the owner or owner's agent for a copy.
The purpose of this letter is to request that you either verify that you are not
subject to Health and Safety Code Sections 25503.5 and 25503.6 or that you
provide the information required to be provided by those Sections by:
1. Completing the attached acknowledgment;
2. Completing the attached questionnaire;
3. If you are a reporting company, attaching a copy of your hazardous
materials management plan.
If you have questions as to your own specific requirements, Please contact the
local fire department to assess your use.
Very truly yours,
ORCHARD PROPERTIES, AMO(R)
/s/ Joe Lewis
Joe Lewis
President
JL:jlb
EXHIBIT H
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
ACKNOWLEDGEMENT
THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT IT (Mark One):
_____ Does not use any hazardous materials other than minor amounts or
reproduction and janitorial chemicals consistent with routine
office uses.
(No need to fill out the Hazardous Materials Questionnaire.)
__X__ Does not use hazardous materials in a manner or in a quantity
requiring the preparation of a hazardous material management plan
or any other documents under California Health and Safety Code
Section 25503.5.
(Please fill out the attached Hazardous Material Questionnaire.)
______ Uses only those chemicals identified in the attached
questionnaire in accordance with the provisions of the attached
hazardous materials management plan, which has been approved by
the Fire Department of the City of _______________and is in full
force and effect.
(Please fill out the attached Hazardous Materials Questionnaire
and attach copy of your Hazardous Materials Management Plan.)
THE UNDERSIGNED FURTHER ACKNOWLEDGES THAT IT HAS COMPLIED IN ALL RESPECTS TO THE
PROVISIONS OF LOCAL, STATE AND FEDERAL LAW AND THE HAZARDOUS MATERIALS
MANAGEMENT PLAN ATTACHED HERETO IN CONNECTION WITH ITS STORAGE, USE AND DISPOSAL
OF HAZARDOUS MATERIALS ONLY BY (1) DISCHARGE TO APPROPERIATELY TREATED WASTE TO
A PUBLICLY OWNED TREATMENT WORK IN ACCORDANCE WITH A VALID AND ENFORCEABLE WASTE
DISCHARGE PERMIT AND (2) DELIVERY OF HAZARDOUS WASTES TO A PROPERLY LICENSED
WASTE DISPOSAL AGENT.
IN WITNESS WHEREOF, the undersigned, an authorized officer of the aforementioned
company has executed this acknowledgment as of the date written below.
Cylink Corporation
------------------------
(Company Name)
a California Corporation
------------------------
By: /s/ Robert B. Fougner
------------------------
Robert B. Fougner, Corporate Secretary
(Print Name and Title)
<PAGE>
---------------------------------------
|For OP Use Only:________PM |
|______Project No.______Audit (Y/N) |
|______Unit No. ______Database Entry|
---------------------------------------
ORCHARD PROPERTY
HAZADOUS MATERIALS QUESTIONNAIRE
General Instructions: Please provide all requested information, based on review
of the Company's records and interviews with Company personnel likely to possess
the information requested. If there is insufficient space to response to a
question, please attach a separate page referring to the question number. Use
"N/A" if the question is not applicable to your facility, or write "Unknown" if
the information is not available in the Company's files and is not known by the
person completing this questionnaire.
As used herein, the "Government Agency" shall mean any local, state, or federal
governmental or quasi-governmental agency, authority, entity, subdivision or
court. The term "Hazardous Material" shall mean any chemical, substance, vapor,
smoke, radiation, or material which is listed as "hazardous" or "toxic" under
Law or which is otherwise regulated or prohibited under any Law, including
petroleum hydrocarbon and substances regulated under Proposition 65. The term
"Law" shall mean any local, state, or federal regulation, statute, law, order,
or ordinance.
Tenant/Company Name: Cylink
------------------------------------------------------------
Main Address of Facility/Leased Premises: ______________________________________
________________________________________________________________________________
(This questionnaire should address all activities conducted at the Leased
Premises. Please copy and separate questionnaire for operations conducted in
multiple buildings leased by Tenant within the same Property.)
Years at Current Location: ____________
Facility SIC Code: ____________ Facility EPA ID Number: _____________
Description of products manufactured and/or activities conducted on the
Property:
________________________________________________________________________________
________________________________________________________________________________
The undersigned acknowledges that the information contained within this
Hazardous Materials Questionnaire is true and correct to the best of his/her
knowledge and belief. The undersigned further acknowledges that the Company has
complied in all respects to the provisions of local, state and federal law and
the Hazardous Materials Management Plan attached (if applicable) in connection
with its storage, use, and disposal of hazardous materials discharged only by
(1) discharge of appropriately treated waste in accordance with a valid and
enforceable waste discharge permit and (2) delivery of hazardous wastes to a
properly licensed waste disposal agent.
By: /s/ Bill Bush Bill Bush, Sr. Manufacturing Engineer
------------------------------- -------------------------------------
Signature of individual completing Print Name & Title
Questionnaire
Date: 5/31/99 Phone Number: 408-543-5602
---------------------------- ----------------------
Address (if different from above):______________________________________________
Page 1
<PAGE>
Type of Business Activity(ies): Hazardous Material Activities
------------------------------- -----------------------------
(check all that apply) (check all that apply)
__________ machine shop __________ degreasing
__________ light assembly __________ chemical etching
__________ research and development __________ wastewater treatment
__________ product service or repair __________ painting
__________ photographic processing __________ stripping
__________ vehicle maintenance or repair __________ metal treatment or finishing
__________ auto/body __________ printing:
__________ engine/drive train __________ type:
____X_____ manufacturing:
product: Electronic/Software __________ analytical wet chemistry lab
__________ integrated circuit: __________ plating
__________ manufacturing __________ chemical mixing/synthesis
__________ assembly __________ lathe/mill machining
__________ chemical/pharmaceutical products __________ printed circuit:
__________ manufacturing __________ manufacturing
__________ distribution __________ assembly
__________ other: __________________ __________ other: _________________
2. HAZARDOUS MATERIALS USAGE/STORAGE
What chemicals, if any, are involved in your operations (please list the types
of products, the maximum quantity stored on-site, and the annual quantity used)
--------------------------------------------------------------------------------
MATERIAL MAX.QUANITY ON-SITE ANNUAL QTY. USED
--------------------------------------------------------------------------------
Isopropyl Alcohol 7 gal 20 gal
--------------------------------------------------------------------------------
Chemtronics FLUX-OFF II 4 gal 10 gal
--------------------------------------------------------------------------------
135 Rosin Soldering Flux Type R 1 gal 1 gal
--------------------------------------------------------------------------------
951 Low Residue Soldering Flux 1 gal 1 gal
--------------------------------------------------------------------------------
Polyurethane touch-up paint 1 gal 1 gal
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
If this table provides insufficient space, please use additional pages
necessary.
Page 2
<PAGE>
3. HAZARDOUS WASTE GENERATION
Does your facility generate and/or store waste on-site? ______ Yes ____X____No
If yes, how is it being handled? __________ on-site treatment or recovery
___________________________________________ discharge to sewer
___________________________________________ hauled off-site
___________________________________________ incineration
List waste streams that constitute more than 5% of total annual waste stream or
routine wastes:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Name(s) of hazardous waste hauler used:_________________________________________
________________________________________________________________________________
How often is hazardous waste hauled off-site? __________________________________
4. INDUSTRIAL WASTEWATER TREATMENT/DISCHARGE
Does your facility discharge industrial wastewater to:
________________________ sewer?
________________________ storm drain?
________________________ surface water?
___________X____________ no industrial discharge
5. UNDERGROUND STORAGE OF HAZARDOUS MATERIALS/WASTES
Are underground tanks or sumps being used for any of the following:
_____________________NO______________________hazardous waste storage
_____________________NO______________________chemical storage
_____________________NO______________________gasoline/diesel fuel storage
_____________________NO______________________waste treatment
_____________________NO______________________wastewater neutralization
_____________________NO______________________industrial wastewater treatment
_____________________________________________Other:_____________________________
Page 3
<PAGE>
6. HAZARDOUS SUBSTANCE SPILLS
To the best of your knowledge, have hazardous substances ever spilled:
________________________ into the sewer?
________________________ into the storm drain?
________________________ onto the property?
________________________ onto the property from adjacent propert(ies)?
___________X____________ no spills have occurred
7. ENVIRONMENTAL PERMITS AND COMPLIANCE PROGRAMS
Please attach copies of environmental regulatory permits and agency reports that
are held for this facility (check those enclosed).
___________ City/County Hazardous Materials Inventory Statement, HMIS
___________ City/County Hazardous Materials Management/Business Plan, HMMP/HMBP
___________ Department of Toxic Substances Control (DTSC) Hazardous Waste
Generator Treatment Storage or Disposal Permit
___________ County Health Department hazardous waste generator storage permit
___________ State/Local Fire Department Above or Underground Storage Tank
Registration(s)
___________ Industrial Wastewater Discharge Permit
___________ Air Pollution Control District Air Emissions/Discharge Permit
___________ California Air Resources Control Board (CARB) Air Toxics Emissions
Inventory (AB2588)
___________ National Pollution Discharge Elimination System (NPDES) Permit
___________ Other _____________________________________________________________
___________ Other _____________________________________________________________
___________ Other _____________________________________________________________
Page 4
<PAGE>
EXHIBIT I
Hazardous materials condition for Orchard Properties project at 3151 Jay Street,
Santa Clara (file A.3429) March 13, 1998
In approving the use of the adjacent property located at 3003 Scott Boulevard as
a private religious school, pre-school, day care center and Islamic Mosque (the
"MCA Project"), the City Council imposed certain mitigation measures which
resulted in an unmitigated risk of exposing students (the "sensitive receptors")
engaging in activities outside the building at 3003 Scott Boulevard (the "MCA
Building") to hazardous materials releases, as discussed in the MCA Project
Environmental Impact Report (the "EIR").
The purpose of this condition of approval is to mitigate the aforementioned risk
to sensitive receptors to a level of insignificance (as discussed and evaluated
in the MCA Project EIR). This condition proposes to mitigate this risk by (i)
limiting the types or quantities of hazardous chemicals with the potential for
adverse health consequences to sensitive receptors outside the MCA Building, or
by (ii) insuring that adequate measures are in place to protect sensitive
receptors outside of the MCA Building from exposure to such chemicals. At the
same time, the objective of this condition of approval is to provide the owner
of the property the widest flexibility and latitude for allowable uses and
chemicals.
1. All occupancies other than the F and H occupancies as defined in the 1994
Uniform Building Code ("UBC") are permitted, subject to meeting the
requirements of the UBC, Uniform Fire Code ("UFC") and the City of Santa
Clara Zoning Ordinance.
2. All F occupancies as defined in the 1994 UBC are permitted, subject to
meeting the requirements of the UBC, Uniform Fire Code and the City of
Santa Clara Zoning Ordinance, and subject to Fire Department approval of
chemicals, and quantities of such chemicals, with the potential for adverse
health consequences to sensitive receptors present outside the MCA
Building, such as toxic gases, liquids which can form toxic gases, certain
heavy metals and flammable materials. Examples of common toxic gases which
would be of concern are listed in the attached matrix. The potential for
such adverse off-site consequences shall be determined by chemical's toxic
or hazardous properties, in light of the quantities of such chemical which
will be used or stored at the site, containment methods which will be
employed, the location of the chemical on site and by proposed mitigation
measures.
The owner or potential occupant of this property may submit to the Hazardous
Materials Division of the Fire Department, a list of chemicals and quantities
proposed to be used. Quantities identified should take into account likely
business expansion that would increase the amounts on-site in the future. Fire
Department approval shall be based on a finding that the proposed chemical(s),
quantities and uses would not have the potential to significantly impact the
sensitive receptor population present outside the
<PAGE>
MCA Building. It is anticipated that the Fire Department review would be
completed within a few days to one week at the latest. Based on workload at the
time and complexity of the evaluation required. The applicant will have the
right to address any issues or questions arising out of the Fire Department's
review, either in person or by telephone, prior to the Fire Department taking
action. If the Fire Department approves, a letter of approval similar to the
attached example would be issued by the Fire Department.
However, if the Fire Department finds that the chemical usage, based on the
above review and criteria, does have the potential to significantly impact the
sensitive receptor population outside the MCA Building, then the property owner
or prospective tenant shall make application to the City's Planning Division.
Planning shall consult with the Fire Department to determine whether additional
environmental analysis, such as a mitigated negative declaration or an EIR,
would be required and what should be the appropriate approval process.
3. All H occupancies as defined in the 1994 UBC prohibited except as follows:
If the property owner or prospective tenant desires to create an H occupancy at
the subject property, the owner or tenant shall make application to the City's
Planning Division. Planning shall consult with the Fire Department to determine
whether additional environmental analysis, such as mitigated negative
declaration or EIR, would be required and what should be the appropriate
approval process.
The City's evaluation and approval shall be based upon the same criteria as for
an F occupancy as stated in paragraph 2 above, and shall specifically evaluate
the potential for significant adverse health consequences to sensitive receptors
present outside the MCA Building.
In the event that the owner or prospective tenant believes that the type and
quantity of chemicals used will not pose a significant risk to sensitive
receptors as defined in paragraph 2 above, prior to submitting the application
to the City's Planning Division, the owner or tenant may obtain an initial
evaluation from the Fire Department in accordance with the process described in
paragraph 2 above. If the Fire Department concurs and issues its letter of
approval as described in paragraph 2 above, then no further environmental review
shall be required.
4. If the use permit for a school on the adjacent property at 3003 Scott
Boulevard lapsed due to abandonment for one year, due to an agreement
between the property owner and the City of Santa Clara or for any other
reason, this condition shall become null and void and the property at 3161
Jay Street shall be subject to the same regulations as other ML (Light
Industrial) zoned property.
<PAGE>
COMMON TOXIC GASES AS DEFINED BY THE TOXIC GAS ORDINANCE AND CFC
For Use by All Jurisdictions, Cities and County, Within the Limits of Santa Clara County
------------------------------------------------------------------------------------------------------------------------------------
CAS No./ UBC/CFC TGO MAX
GAS & FORMULA UN No. CLASS(1) CLASS IDLH(2) LC(50)(3) LOC TQ PEL(4)
------------------------------------------------------------------------------------------------------------------------------------
Ammonia-NH(3) 7664-41-7 Corrosive(5,6) II 300 ppm 4,000 ppm 30 ppm 7,500 lbs 50 ppm
(Old Dot Posin A) UN1005 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Arsine-AsH(3) 7784-42-1 Highly Toxic I 3 ppm 20 ppm 0.3 ppm N/A 0.05 ppm
UN2188 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Boron Tribromide-BBr(3) 10294-33-4 Toxic II 50 ppm 380 ppm 5 ppm 15,600 lbs 1 ppm(c)
UN2692 WR-2
------------------------------------------------------------------------------------------------------------------------------------
Boron Trichloride-BCI(3) 10294-34-5 Corrosive(5) II 25 ppm(7) 2,541 ppm 2.5 ppm 635 lbs 5 ppm
UN1741
------------------------------------------------------------------------------------------------------------------------------------
Boron Trifluoride-BF(3) 7637-07-2 Toxic II 25 ppm 806 ppm 2.5 ppm 625 lbs 1 ppm(c)
UN1008 WR-1
------------------------------------------------------------------------------------------------------------------------------------
Bromine-BR(2) 7726-95-6 Highly Toxic I 3 ppm 113 ppm 0.3 ppm N/A 0.1 ppm
UN1744 Corrosive
Oxidizer
------------------------------------------------------------------------------------------------------------------------------------
Carbon Monoxide-CO 630-08-0 Flammable(5) III 1,200 ppm 3,614 ppm 120 ppm 30,000 lbs 50 ppm
UN1016
------------------------------------------------------------------------------------------------------------------------------------
Chlorine-CI(2) 7782-50-5 Toxic I 10 ppm 293 ppm 1 ppm N/A 1 ppm(c)
UN1017
------------------------------------------------------------------------------------------------------------------------------------
Cholorine Dioxide-CIO(2) 10049-04-4 Toxic UR-3 I 5 ppm 250 ppm 0.5 ppm N/A 0.1 ppm
NA9191 Oxidizer WR-1
------------------------------------------------------------------------------------------------------------------------------------
Chlorine Trifluoride 7790-91-2 Toxic I 20 ppm 299 ppm 2 ppm N/A 0.1 ppm(c)
CIF(3) UN1749 Oxidizer WR-3
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Class as defined in CFC: 1.) Health Hazards per Article 2; Highly Toxic = <200 LC(50) Toxic = 200 - 2,000 LC (50) 2.)
Physical Hazards per UFC Standard 79-3.
2. IDLH values published in 1994 by the National Institute for Occupational Safety and Health (NIOSH).
3. LC(50) data: Lowest reported value, 1 hour adjusted, taken from nationally reognized standards.
4. PEL values published by OSHA (29 CFR, part 1910.1000, Table Z-1) dated 7/1/95. OSHA values used if available, otherwise
TLV from ACGIH or Cal OSHA values used. (C) = Ceiling Limit.
5. Moderately toxic as adopted by the cities of San Jose, Santa Clara, and Milpitas: LC(50) = 2,000 - 3,000.
6. When used as a refrigerant, UBC Class does not apply. See TGO consensus guidelines for additional information regarding
ammonia refrigeration systems.
7. IDLH determined by 0.01 of LC(50).
8. Cal OSHA PEL, Title 8, Section 5155, 9/1/95.
9. Threshold Limit Values (TLV) from the American Conference of Governmental Industrial Hygienists (1994-1995).
UN-015 Page 1 of 4 Rev. 04/30/98
<PAGE>
Common Toxic Gases As Defined By Toxic Gas Ordinance and CFC - Page 2 of 4 Rev. 04/30/98
------------------------------------------------------------------------------------------------------------------------------------
CAS No./ UBC/CFC TGO MAX
GAS & FORMULA UN No. CLASS(1) CLASS IDLH(2) LC(50)(3) LOC TQ PEL(4)
------------------------------------------------------------------------------------------------------------------------------------
Diborane-B(2)H(6) 19278-45-7 Higly Toxic I 15 ppm 80 ppm 1.5 ppm N/A 0.1 ppm
UN1911 Flammable WR-2
------------------------------------------------------------------------------------------------------------------------------------
Dichlorosilane-SIH(2) 4109-96-0 Toxic II 50 ppm 314 ppm 5 ppm 1,250 lbs 5 ppm(c)
CI(2)(HCI) UN2189 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Ethylene Oxide-C(2)H(4)0 75-21-8 Flammable WR-1 II 800 ppm 4,350 ppm 80 ppm 20,000 lbs 1 ppm
UN1040 Toxic UR-3
------------------------------------------------------------------------------------------------------------------------------------
Fluorine-F(2) 7782-41-4 Highly Toxic II 25 ppm 185 ppm 2.5 ppm 625 lbs 0.1 ppm
UN1045 Oxidizer
------------------------------------------------------------------------------------------------------------------------------------
Germane-Gell(4) 7782-65-2 UR-3 Toxic I 6 ppm(7) 622 ppm 0.6 ppm N/A 0.2 ppm(8)
(Old DOT Poison A) UN2192 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Bromide-HBr 10035-10-6 Corrosive(5) II 30 ppm 2,858 ppm 3 ppm 750 lbs 3 ppm
UN1048
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Cloride-HCI 7647-01-0 Corrosive(5) II 30 ppm 2,810 ppm 5 ppm 1,250 lbs 5 ppm(c)
UN1050
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Cyanide-HCN 74-90-8 Highly Toxic I 50 ppm 140 ppm 5 ppm N/A 10 ppm
UN1051 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Floride-HF 7664-39-3 Toxic II 30 ppm 1,276 ppm 3 ppm 750 lbs 3 ppm
UN1052
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Selenide-H(2)Se 7783-07-5 Highly Toxic I 1 ppm 2 ppm 0.1 ppm N/A 0.05 ppm
(Old Dot Poison A) UN1749 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Hydrogen Sulfide-H(2)S 7783-06-4 Toxic II 100 ppm 444 ppm 10 ppm 2,500 lbs 20 ppm
UN1053 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Class as defined in CFC: 1.) Health Hazards per Article 2; Highly Toxic = <200 LC(50) Toxic = 200 - 2,000 LC (50) 2.)
Physical Hazards per UFC Standard 79-3.
2. IDLH values published in 1994 by the National Institute for Occupational Safety and Health (NIOSH).
3. LC(50) data: Lowest reported value, 1 hour adjusted, taken from nationally reognized standards.
4. PEL values published by OSHA (29 CFR, part 1910.1000, Table Z-1) dated 7/1/95. OSHA values used if available, otherwise
TLV from ACGIH or Cal OSHA values used. (C) = Ceiling Limit.
5. Moderately toxic as adopted by the cities of San Jose, Santa Clara, and Milpitas: LC(50) = 2,000 - 3,000.
6. When used as a refrigerant, UBC Class does not apply. See TGO consensus guidelines for additional information regarding
ammonia refrigeration systems.
7. IDLH determined by 0.01 of LC(50).
8. Cal OSHA PEL, Title 8, Section 5155, 9/1/95.
9. Threshold Limit Values (TLV) from the American Conference of Governmental Industrial Hygienists (1994-1995).
<PAGE>
Common Toxic Gases As Defined By Toxic Gas Ordinance and CFC - Page 3 of 4 Rev. 04/30/98
------------------------------------------------------------------------------------------------------------------------------------
CAS No./ UBC/CFC TGO MAX
GAS & FORMULA UN No. CLASS(1) CLASS IDLH(2) LC(50)(3) LOC TQ PEL(4)
------------------------------------------------------------------------------------------------------------------------------------
Methyl Bromide-CH(3)Br 74-83-9 Toxic II 250 ppm 854 ppm 25 ppm 625 lbs 20 ppm(c)
UN1062 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Methylisocyanate-CH(3) 624-83-9 Highly Toxic I 3 ppm 15 ppm 0.3 ppm N/A 0.02 ppm
NCO UN2480 Flammable WR-2
------------------------------------------------------------------------------------------------------------------------------------
Methyl Mercaptan-CH(3)SH 74-93-1 Toxic II 150 ppm 675 ppm 15 ppm 3,750 lbs 10 ppm(c)
UN1064 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Methylamine-CH(3)NH(2) 74-89-5 Flammable(5) II 100 ppm 7,010 ppm 10 ppm 2,500 lbs 10 ppm
UN1061 Corrosive
------------------------------------------------------------------------------------------------------------------------------------
Nickel Carbonyl-Ni(C0)(4) 13463-39-3 Highly Toxic I 2 ppm 18 ppm 0.2 ppm N/A 0.001 ppm
UN1259 Flammable WR-1
------------------------------------------------------------------------------------------------------------------------------------
Nitric Oxide-NO 10102-43-9 Highly Toxic I 100 ppm 115 ppm 10 ppm N/A 25 ppm
(Old DOT Poison A) UN1660 Oxidizer
------------------------------------------------------------------------------------------------------------------------------------
Nitrogen Dioxide-NO(2) 10102-44-0 Highly Toxic I 20 ppm 115 ppm 2 ppm N/A 5 ppm(c)
(Old DOT Poison A) UN1067 Oxidizer WR-1
------------------------------------------------------------------------------------------------------------------------------------
Nitrogen Trifluoride-NF(3) 7483-54-2 Oxidizer(5) II 1,000 ppm 6,700 ppm 100 ppm 25,000 lbs 10 ppm
UN2451
------------------------------------------------------------------------------------------------------------------------------------
Phosgene-COCI(2) 75-44-5 Highly Toxic I 2 ppm 5 ppm 0.2 ppm N/A 0.1 ppm
(Old DOT Poison A) UN1076 WR-1
------------------------------------------------------------------------------------------------------------------------------------
Phosphine-PH(3) 7803-51-2 Highly Toxic I 50 ppm 22 ppm 5 ppm N/A 0.3 ppm
(Old DOT Poison A) UN2199 Pyrophoric
------------------------------------------------------------------------------------------------------------------------------------
Phosphorus Oxychloride 10025-87-3 Highly Toxic I 0.96 ppm(7) 96 ppm 0.096 ppm 2,280 lbs 0.1 ppm(7,8)
POCI(3) UN1810 WR-2
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Class as defined in CFC: 1.) Health Hazards per Article 2; Highly Toxic = <200 LC(50) Toxic = 200 - 2,000 LC (50) 2.)
Physical Hazards per UFC Standard 79-3.
2. IDLH values published in 1994 by the National Institute for Occupational Safety and Health (NIOSH).
3. LC(50) data: Lowest reported value, 1 hour adjusted, taken from nationally reognized standards.
4. PEL values published by OSHA (29 CFR, part 1910.1000, Table Z-1) dated 7/1/95. OSHA values used if available, otherwise
TLV from ACGIH or Cal OSHA values used. (C) = Ceiling Limit.
5. Moderately toxic as adopted by the cities of San Jose, Santa Clara, and Milpitas: LC(50) = 2,000 - 3,000.
6. When used as a refrigerant, UBC Class does not apply. See TGO consensus guidelines for additional information regarding
ammonia refrigeration systems.
7. IDLH determined by 0.01 of LC(50).
8. Cal OSHA PEL, Title 8, Section 5155, 9/1/95.
9. Threshold Limit Values (TLV) from the American Conference of Governmental Industrial Hygienists (1994-1995).
<PAGE>
Common Toxic Gases As Defined By Toxic Gas Ordinance and CFC - Page 4 of 4 Rev. 04/30/98
------------------------------------------------------------------------------------------------------------------------------------
CAS No./ UBC/CFC TGO MAX
GAS & FORMULA UN No. CLASS(1) CLASS IDLH(2) LC(50)(3) LOC TQ PEL(4)
------------------------------------------------------------------------------------------------------------------------------------
Phosphorus Pentafluoride 7647-19-0 Toxic I 2.6 ppm(7) 260 ppm 0.26 ppm N/A 3 ppm
PF(5) UN2198 Oxdizer WR-1
------------------------------------------------------------------------------------------------------------------------------------
Phosphorus Trichoride 7719-12-2 Toxic UR2 II 25 ppm 208 ppm 2.5 ppm 3,518 lbs 0.5 ppm
PCI(3) UN1809 WR-2 Oxidizer
------------------------------------------------------------------------------------------------------------------------------------
Selenium Hexafluoride 7783-79-1 Highly Toxic I 2 ppm 50 ppm 0.2 ppm N/A 0.05 ppm
SeF(6) UN2194 (as Se)
------------------------------------------------------------------------------------------------------------------------------------
Silicon Tetachloride 10026-04-7 Corrosive II 50 ppm 16,000 ppm 5 ppm 4,835 lbs 5 ppm(c)
SiCI(4)(HCI) UN1818
------------------------------------------------------------------------------------------------------------------------------------
Silicon Tetrafluoride 7783-61-1 Toxic II 30 ppm 450 ppm 3 ppm 750 lbs 0.1 ppm
SiF(4)(HF) UN1859 WR-2
------------------------------------------------------------------------------------------------------------------------------------
Stibine-SbH(3) 7803-52-3 Highly Toxic II 5 ppm 20 ppm 0.5 ppm N/A 0.1 ppm
UN2676 Flammable
------------------------------------------------------------------------------------------------------------------------------------
Sulfur Dioxide-SO(2) 7446-09-5 Corrosive(5) II 100 ppm 2,520 ppm 10 ppm 2,500 lbs 5 ppm
UN1079
------------------------------------------------------------------------------------------------------------------------------------
Sulfur Pentafluroide 5714-22-7 Highly Toxic I 1 ppm 79 ppm 0.1 ppm N/A 0.025 ppm
SF(10) Oxidizer
------------------------------------------------------------------------------------------------------------------------------------
Sulfuryl Fluoride 2699-79-8 Corrosive(5) III 200 ppm 3,020 ppm 20 ppm 50,000 lbs 5 ppm
SO(2)F(2) UN2191
------------------------------------------------------------------------------------------------------------------------------------
Tellurium Hexafluoride 7783-80-4 Highly Toxic I 1 ppm 25 ppm 0.1 ppm N/A 0.02 ppm
TeF(6) UN2195 (aste)
------------------------------------------------------------------------------------------------------------------------------------
Titanium Tetrachloride 7550-45-0 Highly Toxic II 1.3 ppm 66 ppm 0.13 ppm 2,470 lbs
TiCI(4) UN1838 Water Reactive -
------------------------------------------------------------------------------------------------------------------------------------
Tungsten Hexafluoride 7783-82-6 Toxic II 30 ppm 217 ppm 3 ppm 750 lbs 0.1 ppm
WF(6)(HF) UN2196
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Class as defined in CFC: 1.) Health Hazards per Article 2; Highly Toxic = <200 LC(50) Toxic = 200 - 2,000 LC (50) 2.)
Physical Hazards per UFC Standard 79-3.
2. IDLH values published in 1994 by the National Institute for Occupational Safety and Health (NIOSH).
3. LC(50) data: Lowest reported value, 1 hour adjusted, taken from nationally reognized standards.
4. PEL values published by OSHA (29 CFR, part 1910.1000, Table Z-1) dated 7/1/95. OSHA values used if available, otherwise
TLV from ACGIH or Cal OSHA values used. (C) = Ceiling Limit.
5. Moderately toxic as adopted by the cities of San Jose, Santa Clara, and Milpitas: LC(50) = 2,000 - 3,000.
6. When used as a refrigerant, UBC Class does not apply. See TGO consensus guidelines for additional information regarding
ammonia refrigeration systems.
7. IDLH determined by 0.01 of LC(50).
8. Cal OSHA PEL, Title 8, Section 5155, 9/1/95.
9. Threshold Limit Values (TLV) from the American Conference of Governmental Industrial Hygienists (1994-1995).
<PAGE>
DRAFT LETTER OF APPROVAL-HAZARDOUS MATERIALS DIVISION
CITY OF SANTA CLARA FIRE DEPARTMENT
We have reviewed the attached (insert chemical inventory, HMMP or appropriate
document title) dated _____ and submitted by (insert landlord prospective
tenant) in accordance with the terms of the Condition of Approval for the
Orchard Properties Jay Street project.
Based on our review of the documents submitted, we approve this proposed use at
the premises at _______ Jay Street, based on our finding that the proposed
chemicals, quantities and uses do not have the potential to significantly impact
the sensitive receptors outside the MCA building.
(signed)
HAZARDOUS MATERIALS DIVISION
CITY OF SANTA CLARA FIRE DEPARTMENT