ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE ("Agreement") is made as of
November 22, 1995, by and among CIRCADIAN, INCORPORATED, a Delaware corporation,
as Assignor ("Assignor"), NOVELLUS SYSTEMS, INC., a California corporation, as
Assignee ("Assignee"), and CALIFORNIA SECOND, LTD., a Florida limited
partnership, as Landlord ("Landlord"), who agree as follows:
RECITALS
This Agreement is made with reference to the following facts and with the
following intentions:
A. Landlord, as Landlord, and Assignor, as Tenant, entered into a written
lease agreement dated as of June 9, 1987, as amended by that certain
First Amendment to Lease dated as of December 1, 1987, that certain
Second Amendment to Lease dated as of August 30, 1988, that certain
Third Amendment to Lease dated as of April 3, 1989, that certain
Fourth Amendment to Lease dated as of July 16, 1990, that certain
Fifth Amendment to Lease dated as of August 15, 1991, and that certain
Sixth Amendment to Lease dated as of January 3, 1994 (collectively,
the "Lease"), whereby Landlord leased to Assignor and Assignor leased
from Landlord certain real premises consisting of approximately 29,424
square feet of space located at 3942 North First Street situated in
the McCandless Business Park, in the City of San Jose, County of Santa
Clara, State of California (the "Premises"), more particularly
described on EXHIBIT A attached hereto and incorporated herein by
reference.
B. Assignor desires to assign all of its right, title, and interest in
the Lease to Assignee and Assignee desires to assume all of Assignor's
rights and obligations under the Lease on and after the Effective Date
(defined below).
C. Landlord shall consent to the proposed Assignment on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. EFFECTIVE DATE OF ASSIGNMENT. The parties to this Agreement hereby
acknowledge that this Assignment and Assumption of Lease (the "Assignment") is
conditioned upon and subject to Assignor's finding a new suitable facility for
its business to replace the Premises (the "Replacement Facility"). Subject to
the foregoing condition, the Assignment shall take effect on the date by which
both of the following shall have occurred: (i) Assignor has executed a lease for
the Replacement Facility; and (ii) Assignor has actually delivered possession of
the Premises to Assignee (the
"Effective Date"). Assignor shall use reasonable efforts to notify Assignee
verbally or in writing of Assignor's intended delivery of possession of the
Premises to Assignee at least three (3) business days in advance of any such
delivery. Assignor shall notify Assignee in writing of the Effective Date and
Assignee shall acknowledge the Effective Date in writing, if requested by
Assignor; provided, however, that any failure by Assignee to acknowledge such
date shall in no way affect the Effective Date. Notwithstanding the foregoing,
if the Effective Date does not occur on or before February 1, 1996, Assignee or
Assignor may terminate this Agreement and this Agreement shall be null and void.
In the event this Assignment is terminated pursuant to this Paragraph 1,
Assignor shall return to Assignee any Assignment Consideration paid by Assignee
to Assignor.
2. ASSIGNMENT OF LEASE. Assignor does hereby grant, transfer, assign and
set over to Assignee, as of the Effective Date, all of Assignor's right, title
and interest in and to the Lease and the Premises.
3. ACCEPTANCE AND ASSUMPTION OF LEASE. Assignee hereby accepts the
foregoing Assignment of the Lease and Assignor's rights thereunder, and Assignee
hereby assumes all of the rights and obligations of Assignor under the Lease
which accrue or are to be performed on or after the Effective Date. Except as
set forth in this Agreement, Assignee hereby expressly assumes and agrees to
perform and fulfill all of the terms and obligations to be performed by the
"Tenant" under the Lease on and after the Effective Date.
4. ASSIGNMENT CONSIDERATION. Upon the execution of this Agreement by all
of the parties hereto, Assignee shall pay to Assignor the sum of Twenty Thousand
Dollars ($20,000) as consideration for the Assignment described herein
("Assignment Consideration"). Notwithstanding anything in the Lease, Landlord
hereby acknowledges that Landlord is not entitled to any portion of the
foregoing Assignment Consideration and Landlord hereby expressly waives any
right Landlord may otherwise have under the Lease to said Assignment
Consideration.
5. MOVING EXPENSES AND PREPAID RENT. Upon the Effective Date, Assignee
shall pay to Assignor as compensation for Assignor's moving expenses, the
additional sum of (i) Twenty Thousand Dollars ($20,000) if the Effective Date
occurs on or before December 15, 1995, or (ii) Ten Thousand Dollars ($10,000),
if the Effective Date occurs after December 15, 1995 ("Moving Expense Amount").
Additionally, Assignee shall reimburse Assignor for any monthly rent, common
area or any other charges under the Lease prepaid by Assignor for any full or
partial month as of the Effective Date. Notwithstanding anything in the Lease,
Landlord hereby acknowledges that Landlord is not entitled to any portion of the
foregoing Moving Expense Amount or reimbursement and Landlord hereby expressly
waives any right Landlord may otherwise have under the Lease to said Moving
Expense Amount and reimbursement.
6. FACILITATION FEE. Upon the Effective Date, Assignee shall pay to
Tarlton Properties, Inc. the sum of Fifteen Thousand Dollars ($15,000) as a
facilitation fee for negotiating this Agreement.
7. SECURITY DEPOSIT. The parties acknowledge that Landlord now holds the
sum of Seventeen Thousand Six Hundred Fifty Four Dollars and 40/100 ($17,654.40)
as a security deposit (the "Security Deposit") under the Lease. Upon the
Effective Date, Landlord shall pay to Assignor the entire amount of the Security
Deposit, subject to prior receipt of the replacement security deposit from
Assignee as specified in the following sentence. Concurrently upon the Effective
Date, Assignee shall deposit with Landlord the sum of Seventeen Thousand Six
Hundred Fifty Four Dollars and 40/100 ($17,654.40) as a security deposit to be
applied in accordance with the provisions of the Lease.
8. LETTER OF CREDIT. Landlord hereby acknowledges that pursuant to
Paragraph 5 of the Sixth Amendment to Lease between Landlord and Assignor dated
as of January 3, 1994, Assignor deposited with Silicon Valley Bank a declining
balance letter of credit ("Letter of Credit") in the original amount of One
Hundred Thousand Dollars ($100,000) as security for Assignor's performance of
its obligations under the Lease. Upon the Effective Date, Assignor shall so
notify Landlord and Landlord shall immediately return the Letter of Credit to
Assignor with a written statement, reasonably satisfactory to Assignor,
acknowledging that all of Landlord's right and/or interest in, under or to the
Letter of Credit is thereby terminated.
9. LANDLORD REPRESENTATIONS. Landlord represents and warrants, as of
the date set forth above, that: (i) the Lease is in full force and effect; (ii)
to the best of Landlord's knowledge, Assignor is not in default in the payment
or performance of its obligations under the Lease; (iii) to the best of
Landlord's knowledge, Assignor has not committed any breach of the Lease; (iv)
no notice of default has been given to Assignor by Landlord; and (v) the
documents attached hereto as Exhibit A constitute the only agreements between
Landlord and Assignor with respect to the Premises.
10. RELEASE. Except for (i) any indemnity obligations that Landlord and
Assignor have to each other under the Lease for demands, charges, claims,
accounts, expenses (including attorneys' fees and costs), liabilities, damages
or causes of action (collectively, "Claims") resulting from events occurring
prior to the Effective Date that, pursuant to the terms of the Lease, would
otherwise survive the expiration or sooner termination of the Lease, and (ii)
any "Common Area Charges" or refunds that are due and payable by either Landlord
or Assignor under the Lease as of the Effective Date based on the applicable end
of the calendar year reconciliation of such charges, this Assignment shall fully
and finally settle all Claims of any nature by and between Landlord and
Assignor, including, without limitation, both known and unknown Claims that
arise out of or relate in any manner to the Lease and/or the Premises.
In connection with the foregoing release, the Landlord and Assignor
expressly waive the provisions of California Civil Code Section 1542, which
provide:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
11. INDEMNITY: Assignee shall indemnify, defend, protect and hold
Assignor harmless from any Claims arising on or after the Effective Date in
connection with the Lease, the Premises or as a consequence of Assignee's breach
of the obligations on its part to be performed under this Agreement. Except as
otherwise provided in paragraph 13 hereof, Assignor shall indemnify, defend,
protect and hold Assignee harmless from any Claims in connection with the Lease
or the Premises arising at any time during the Lease term prior to the Effective
Date. The foregoing indemnities shall survive the expiration or termination of
the Lease or this Assignment.
12. CONDITION OF THE PREMISES. Landlord agrees that any alterations or
additions existing on the Premises as of the date of this Agreement may remain
on the Premises and Landlord will accept surrender of the alterations and
additions upon the expiration or sooner termination of the Lease. Landlord
hereby releases Assignor from any liability Assignor may have in connection with
the restoration of the Premises or other surrender obligation upon the
expiration or sooner termination of the Lease.
13. ACCEPTANCE OF THE PREMISES. Upon the Effective Date, and except with
respect to any hazardous materials which may be present on or about the Premises
on the Effective Date, Assignee agrees to accept the Premises "AS IS".
14. SURRENDER OF THE PREMISES. Notwithstanding anything in the Lease,
Assignee's obligations with respect to surrender of the Premises upon the
expiration or sooner termination of the Lease shall be fulfilled if Assignee
surrenders possession of the Premises to Landlord in the condition existing as
of the Effective Date, ordinary wear and tear, acts of God, casualties and
condemnation, excepted.
15. MISCELLANEOUS.
A. ATTORNEY'S FEES. If any party to this Agreement commences an
action or legal proceeding against any other party or parties to this Agreement
arising out of or in connection with this Agreement or the Assignment described
herein, the prevailing party or parties shall be entitled to recover from the
losing party or parties reasonable attorneys' fees and costs of suit.
B. SUCCESSORS. This Agreement shall be binding on and inure to the
benefit of the parties and their respective successors and assigns.
C. ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties with respect to the matters contained herein.
D. SEVERABILITY. If any one or more of the provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
16. BROKERS. Each party represents that it has not had dealings with any
real estate broker, finder or other person, with respect to this Assignment
except Tarlton Properties, Inc. Each party shall hold harmless the other party
or parties from all damages resulting from any claims that may be asserted
against the other party or parties by any broker, finder or other person with
whom the other party or parties has, or purportedly has, dealt, other than
Tarlton Properties, Inc. Assignee shall pay all commissions or other fees
(including, without limitation, the aforementioned facilitation fee) owed to
Tarlton Properties, Inc. arising from this Agreement and shall hold Assignor and
Landlord harmless from any liability in connection therewith.
17. VOLUNTARY AGREEMENT. The parties have read this Agreement and the
release contained in it, and on the advice of counsel, have fully understood and
freely and voluntarily entered into this Agreement.
18. LANDLORD'S CONSENT. Landlord hereby consents to the Assignment and
the terms and conditions of this Agreement, without waiver of the restriction
concerning further assignment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
intending it to be effective as of the Effective Date.
ASSIGNOR ASSIGNEE
CIRCADIAN, INCORPORATED, NOVELLUS SYSTEMS, INC.
a Delaware corporation a California
-----------------------
By: /s/ By: /s/ William J. Wall
-------------------------- --------------------------------
Printed Printed
Name: (?) Name: William J. Wall
------------------------ -------------------------------
Title: (?) CEO Title: CFO
----------------------- -------------------------------
Date: 11/22/95 Date: 11/22/95
------------------------ ------------------------------
[signatures continued on next page]
LANDLORD
CALIFORNIA SECOND, LTD.,
a Florida limited partnership
By: MCCANDLESS PARTNERSHIP,
a California general partnership.
a General Partner
By: /s/ Birk S. McCandless
--------------------------
Printed
Name: Birk S. McCandless
Title: As Trustee under the Birk S.
McCandless and Mary McCandless
Inter Vivos Trust Agreement dated
February 17, 1982, a General Partner
Date: 11/27/95
-------------------------
LEASE
THIS LEASE is made June 9, 1987 between California Second, Ltd.
("Landlord") and CIRCADIAN, INCORPORATED, a Delaware corporation, ("Tenant").
W I T N E S S E T H :
Landlord leases to Tenant and Tenant leases from Landlord those certain
premises (the "Premises") outlined in red on Exhibit A, including those tenant
improvements constructed by Landlord for Tenant as such is described in Exhibit
C, which Landlord and Tenant hereby agree consist of approximately twenty-nine
thousand, four hundred twenty-four (29,424) square feet in McCandless Business
Park - San Jose (the "Project"). As used herein the term Project shall mean
and include all of the land described and outlined in red on Exhibit B and all
the buildings, improvements, fixtures and equipment now or hereafter situated on
said land.
Improvements for Tenant shall be constructed in accordance with the plans
and specifications, and other terms and conditions, set forth in Exhibit C. Said
work shall be at the expense of Landlord and/or Tenant as set forth in Exhibit C
and shall in each case be performed in a prompt, diligent and workmanlike
manner.
Tenant covenants, as a material part of the consideration of this lease, to
perform and observe each and all of the terms, covenants and conditions set
forth below, and this lease is made upon the condition of such performance and
observance.
1. USE
Tenant shall use the Premises for office, research and
development, and light manufacturing, and other related uses, and shall not use
or permit the Premises to be used for any other purpose.
2. TERM
(a) The term, subject to paragraphs 2(b) and 3, shall commence
on December 1, 1987 and end on September 27, 1989 unless sooner termination as
hereinafter provided. In no circumstances shall the term commence prior to
December 1, 1987.
(b) Possession of the Premises shall not be deemed tendered and
the term shall not commence until the first to occur of the following:
(1) Upon substantial completion of all work to be done by
Landlord pursuant to Exhibit C (exclusive of telephones or other communication
systems and punchlist items) and the receipt of a Certificate of Occupancy from
the proper governmental agency (or the
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receipt of a final building permit acknowledging completion and permitting
occupancy of the Premises from the City of San Jose); if no such certificate or
permit is required then certification by Landlord's architect or contractor that
the Landlord's construction work has been completed; or
(2) Upon the occupancy of the Premises by an (?) Tenant's
operating personnel, provided however that Tenant, at its sole risk and expense,
may, subject to Landlord's reasonable consent, and without causing commencement
of the term, install prior to commencement telephone, computer terminal wiring,
and equipment and items for storage to the extent permitted by applicable laws
provided same does not interfere with Landlord's construction work. It is agreed
that Landlord shall in no manner or event (excepting the negligence or willful
misconduct of Landlord or its employees or agents) be liable or responsible for
damage to, or caused by, Tenant's equipment prior to commencement. Tenant shall
not use non-union personnel for such installation prior to commencement without
Landlord's prior written approval; or
(3) If Landlord is prevented from or delayed from (?)
completing its work under Exhibit C due to the acts or omissions of Tenant, then
upon the date by which such work would have been completed (?) but for such acts
or omissions by Tenant.
3. POSSESSION
If Landlord for any reason cannot deliver possession of the
Premises to Tenant at the date of commencement set forth in paragraph 2(a), this
lease shall not be void or voidable and Landlord shall not be liable to Tenant
for any loss or damage on account thereof. Except as set forth in Exhibit C,
Tenant shall not be liable for rent until Landlord delivers possession of the
Premises to Tenant, as defined in paragraph (?). If the term commences on a date
other than specified in 2(a) above, the parties shall immediately execute an
amendment to this lease stating the actual date of commencement. Notwithstanding
the above, the period of delay shall not exceed ninety (90) days from December
1, 1987 plus (?) number of days of delay caused by Tenant or by strike or other
causes beyond Landlord's reasonable control. If the period of delay exceeds the
allowable delay, Landlord shall not be liable to Tenant for any loss or damage
on account thereof, but Tenant may, at its option, declare this lease void, and,
if Tenant so elects, all amounts deposited with Landlord shall be returned to
Tenant. If the delay exceeds ninety (90) days and Tenant does not elect to
terminate, and if none of such ninety (90) days of delay has been caused by
Tenant, then Tenant shall receive one (1) additional day free monthly rent for
every day of delay not caused by Tenant, or by strike, or other causes beyond
Landlord's reasonable control, beyond the 90 day period set forth above.
4. MONTHLY RENT
(a) MONTHLY RENT. Tenant shall pay to Landlord as rent for the
premises, in advance and subject to adjustment as provided in paragraph 5, the
sum of nineteen thousand two hundred seventy-two and 72/100 Dollars ($19,272.72)
on or before the first day of the first full calendar month of the term and on
or before the first day of each and every successive calendar
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month. Rent for any partial month shall be payable in advance and shall be
prorated at the rate of 1/30th of the monthly rent per day.
(b) PLACE OF PAYMENT. All rent and other amounts (?) Landlord
hereunder shall be paid to Landlord, without deduction or offset (?) in lawful
money of the United States of America, at the office of Landlord at 3945 Freedom
Circle, Suite 1000, Santa Clara, CA 95054, or to such other person or place as
Landlord may from time to time designate in writing.
(c) FIRST MONTH'S RENT. Landlord acknowledges receipt from
Tenant, on the execution hereof, of the sum nineteen thousand two hundred
seventy-two and 72/100 ($19,272.72) to be applied against the rent for the first
full month of the term for which rent is due.
(d) SECURITY DEPOSIT. Concurrently with Tenant's execution of
this lease, Tenant shall deliver to Landlord an unconditional and irrevocable
Letter of Credit in the amount of nineteen thousand two hundred seventy-two and
72/100 dollars ($19,272.72) to secure the faithful performance by Tenant of all
of the terms, covenants and conditions of this lease to be kept and performed by
Tenant. The Letter of Credit shall be available by draft at sight, subject only
to receipt by the bank of a notarized statement from Birk S. McCandless or
Steven E. Sund stating that the amount demanded is due and owing to Landlord by
reason of the default of Tenant. The Letter of Credit shall by its terms expire
not less than one year from the date issued, provided that said Letter of Credit
shall be renewed by Tenant for successive periods of not less than one year each
to and including not less than ten (10) days after the termination of this
lease. The bank's written renewal of the Letter of Credit shall in each case be
delivered to Landlord not less than ninety (90) days prior to the expiration
date of the then outstanding Letter of Credit. Tenant's failure to so deliver,
renew (including specifically but not limited to the delivery to Landlord of
such renewal not less than ninety (90) days prior to expiration of the Letter of
Credit) and maintain such Letter of Credit shall be a material breach of this
lease*.
If Tenant fails to comply with any provision of this lease, including
without limitation the payment of rent and other amounts due Landlord after ten
(10) days' written notice to Tenant, Landlord may immediately and without
further notice resort to said Letter of Credit and use or apply all or any part
of same to compensate Landlord for any loss and expense occasioned thereby and
for the payment of any amount due Landlord under the terms of this lease, or if
Tenant's default consists of the failure to renew said Letter of Credit, then to
deposit the full amount thereof (less any amount required otherwise to
compensate Landlord for its loss and expense) as a cash security deposit to be
held by Landlord as if Tenant had deposited the same as provided below.
If any portion of said Letter of Credit is used as specified above,
Tenant shall, within ten (10) days after written demand therefor, restore the
Letter of Credit to its original amount, except that if Tenant is reasonably and
in good faith contesting in a court of law
*, excepting only that Tenant's failure to so renew the Letter of Credit shall
constitute a breach thereof only if it fails to so renew the Letter of Credit
after not less than ten (10) days written notice thereof from Landlord.
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Landlord's resort to the Letter of Credit, then Tenant shall not be obligated to
restore the Letter of Credit while such action is pending. Tenant's failure to
restore the Letter of Credit as required herein shall be a material breach of
this lease.
Landlord's resort to said Letter of Credit shall in no way or manner
constitute an acceptance of or waiver of such failure by Tenant to comply with
this lease; nor shall resort to said Letter of Credit terminate, or permit
Tenant to terminate, or constitute a forfeiture of or be construed as an
election by Landlord to terminate, this lease; nor shall such resort affect
Landlord's remedies otherwise available under this lease or at law.
Tenant may at any time during the term, deposit with Landlord a cash
deposit of nineteen thousand two hundred seventy-two and 72/100 ($19,272.72) as
a security deposit in lieu of the aforementioned Letter of Credit, in which
event said Letter of Credit shall be promptly returned to Tenant. If Tenant
thereafter defaults with respect to any provision of this Lease including but
not limited to the provisions relating to the payment of rent and other amounts
due Landlord, Landlord may (but shall not be required to) use, apply or retain
all or any part of such security deposit for the payment of any amount which
Landlord may spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said deposit is so used, Tenant shall within ten (10)
days after written demand therefor, deposit in cash with Landlord in the amount
sufficient to restore the security deposit to its original amount; Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep this security deposit separate from its general funds and
Tenant shall not be entitled to interest on such deposit. At the termination of
this Lease, the security deposit or the unused balance thereof shall be returned
to Tenant after Tenant vacates the Premises.
5. ADJUSTMENT OF MONTHLY RENT
The monthly rent provided for in paragraph 4(a) shall not be adjusted.
If this lease commences on any date other than the first day of a month, then
Landlord shall promptly prepare a statement within a reasonable time following
lease commencement which prorates the initial rent due as set forth in paragraph
4 (a) and states the actual adjustment and termination dates of the lease.
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6. RESTRICTION ON USE
Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or (?) in or about the
Premises or Project, anything which is prohibited by or will in any way increase
the existing rate of (or otherwise affect) (?) or any other insurance covering
the Project or any part thereof or any of its contents therein (unless in any
such case, Tenant agrees in advance to pay any such increase), or will cause a
cancellation of any insurance covering the Project or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in or about
the Premises or Project which will constitute waste or which will unreasonably
obstruct or interfere with the rights of other tenants or occupants of the
Project or injure or unreasonably annoy them, or use or allow the Premises to be
used for any unlawful purpose, nor shall Tenant cause, maintain or permit any
nuisance in or about the Premises or the Project. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord. Tenant
shall not use the Premises for sleeping, washing clothes, cooking (except in the
lunch room) or the preparation, manufacture or mixing of anything that might
emit any unreasonable and objectionable odor, noises or lights into the
adjoining premises or common areas, or Project. Tenant shall not do anything on
the Premises that will cause damage to the Project or the building in which the
Premises are located and the Premises shall not be overloaded. No machinery,
apparatus or other appliance shall be used or operated in or on the Premises
that will so injure, vibrate or shake the Premises so as to damage the building.
Landlord shall be the reasonable judge of whether such odors, noises, lights or
vibrations are such as to violate the provisions of this paragraph. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part of
the Premises or outside of the building proper except in trash containers placed
inside exterior enclosures designated for that purpose by Landlord, or inside of
the building proper where designated; and no toxic or hazardous materials shall
be disposed of through the plumbing or sewage system. No materials, supplies,
equipment,
-5-
finished products or semifinished products, raw materials or articles of any
nature shall be stored or permitted to remain outside of the building proper.
Only occasional retail sales shall be made on the Premises.
7. COMPLIANCE WITH LAWS
Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and (?) with (i) all
laws, statutes, ordinances and governmental rules, regulations or requirements
now or hereafter in effect, (ii) with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted and (iii) with
any direction or occupancy certificate issued pursuant to law by any public
authority; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. (See also paragraph 50).
The judgment of any court of competent jurisdiction or the admission
of Tenant in any action against Tenant, whether Landlord (?) a party thereto or
not, that Tenant has violated any such law, statute, ordinance or governmental
rule, regulation, requirement, direction or provision, shall be conclusive of
that fact as between Landlord and Tenant.
Notwithstanding the above and except as otherwise specifically
provided in Exhibit C, Landlord shall, at its sole cost and expense, make any
additions or changes to the Premises as may be required to bring the Premises
into compliance with laws, statutes, ordinances and governmental rules,
regulations or requirements in effect at the commencement date of this lease.
8. ALTERATIONS
Tenant shall not make or suffer to be made any alteration, addition or
improvement to or of the Premises or any part thereof (collectively referred to
herein as "alterations") without (1) the prior written consent of Landlord,
which consent shall not be unreasonably withheld and shall not be delayed by
more than two (2) weeks (and if Landlord has not responded within two weeks then
Landlord shall be deemed to have consented thereto), and (ii) a valid building
permit issued by the appropriate governmental authority; provided, however, that
if such permit is not required, then it shall be sufficient that the alteration,
addition (?) improvement be in compliance with applicable governmental
regulations. Notwithstanding the foregoing, Tenant may make alterations costing
five thousand and no/100 ($5,000) or less without the prior written consent of
Landlord but shall, in such event, promptly inform Landlord of the nature of the
alteration, the cost thereof and the contractor engaged or prepared to be
engaged to perform such work, and all such work shall be done pursuant to a
valid building permit (or, if no such permit is required then in accordance with
applicable governmental regulations).
-6-
Any alteration made by Tenant (excluding moveable furniture and trade
fixtures not attached to the Premises) shall at once become a part of the
Premises and belong to Landlord. Without limiting the foregoing, all heating,
lighting, electrical (including all wiring, conduit, outlets, drops, buss ducts,
main and subpanels), air conditioning, partitioning, drapery and carpet
installations made by Tenant regardless of how attached to the Premises,
together with all other alterations that have become an integral part of the
building in which the Premises are a part, shall be and become part of the
Premises and belong to Landlord upon installation and shall not be deemed trade
fixtures, (except as specifically permitted by this paragraph 8) shall remain
upon and be surrendered with the Premises at the termination of the lease.
At any time during the lease term, Tenant may, at its sole cost and
expense and on not less than thirty (30) days' prior notice to Landlord, remove
and keep any alteration originally made by Tenant at its cost and expense,
provided that Tenant shall repair any damage to the Premises caused by such
removal and restore the affected area to the condition existing prior to such
alteration; provided that notwithstanding the foregoing, Tenant may not remove
such alteration, to the extent they constitute Standard Tenant Improvements,
within the last twelve (12) months of the lease term. Upon the expiration or
sooner termination of the term, Landlord may, at its sole option, require
Tenant, at Tenant's sole cost and expense, to promptly both remove any
alteration made by Tenant during the term and Tenant shall repair any damage to
the Premises caused by such removal. Nothing herein shall restrict Tenant's
right to remove its moveable furniture or trade fixtures, providing that any
movable furniture and equipment or trade fixtures remaining on the Premises at
the expiration or other termination of the term shall become the property of
Landlord unless promptly removed by Tenant.
Any alteration (including the removal of past alterations) by Tenant
shall be made by Tenant at its sole risk, cost and expense. Alterations
requiring Landlord's consent (and the removal of past alterations where such
work costs in excess of $5,000) shall be made only after Landlord's written
approval of any contractor or person selected by Tenant for that purpose, which
approval shall not unreasonably be withheld.
If during the term any alteration, addition or change (?) the Premises
is required by law, regulation, ordinance or order of any public authority,
Tenant, at its sole cost and expense, shall promptly make the same. If during
the term any alteration or change to the Common Area (or to the Project or
building in which the Premises is located and it being, in Landlord's judgment,
impractical for the affected tenants to individually make such alterations,
additions or changes) is required by law, regulation, ordinance or order of any
public or quasi-public authority the cost of such alteration or change shall be
a Common Area Change and Tenant shall pay its percentage share of said costs to
Landlord as provided in paragraph 16. (See also paragraph 50).
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9. REPAIR AND MAINTENANCE
By entry hereunder Tenant accepts the Premises as being in good and
sanitary order, condition and repair (excepting only "punchlist items" provided
however that such acceptance shall not be deemed a waiver with respect to
structural defects, non-compliance with applicable laws or other items not
reasonably ascertainable on walk through inspection). Except as expressly
provided below, Tenant shall at its cost keep and maintain the entire Premises
and every part thereof including, without limitations, the windows, window
frames, plate glass, glazing, truck doors, doors and all door hardware, the
interior walls and partitions, lighting and the electrical and plumbing systems.
Tenant shall also repair and maintain the heating and air conditioning systems
(unless Landlord has elected to keep and maintain the heating and air
conditioning systems as provided below) which shall include, without limitation,
a periodic maintenance agreement with a reputable and licensed heating and air
conditioning service company. If Tenant's use of the heating and air
conditioning systems is limited to normal business hours (8 a.m. to 6 p.m.),
such agreement shall provide for service at least as often as every 60 days; if
Tenant's use of the heating or air conditioning systems extends beyond such
normal business hours, this service shall be as often as may be required by
Landlord; and in any event such service shall meet all warranty enforcement
requirements of such equipment and comply with all manufacturer recommended
maintenance. Landlord may elect, at its option, to keep and maintain the heating
and air conditioning systems of the Premises and in such event, Tenant shall pay
to Landlord upon demand the full cost of such maintenance and of repairs to such
systems. In no case shall Tenant be obligated for repairs and maintenance for
(i) structural elements of the building (ii) defects in construction work of
Landlord, (iii) repairs or maintenance arising from defaults of Landlord under
this Lease, (iv) items which Landlord is obligated to restore pursuant to
paragraph 17.
Subject to the provisions of paragraph 17, Landlord shall keep and
maintain at its cost and expense the roof, structural elements, exterior walls
of the buildings constituting the Project and Common Area in good order and
repair. Landlord agrees to repair or correct, at its cost and expense, all
defects in design, materials and workmanship in the Premises and Project which
materially affect Tenant's use or occupancy thereof, provided such obligation of
Landlord shall not extend to design criteria and/or specifications for computer
rooms or other special improvement areas specifically provided by Tenant. If any
repairs or maintenance is required because of an act or omission of Tenant, or
its agents, employees or invitees, Tenant shall pay to Landlord upon demand the
full costs of such repairs of maintenance.
10. LIENS
Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant. In the event that Tenant shall not, within ten (10) days following
notice of the imposition of such lien, cause the same to be released of record,
Landlord shall have, in addition
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to all other remedies provided herein and by law, the right, but no obligation,
to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien, sums paid by Landlord
for such purpose, and all expenses incurred by (?) connection therewith, shall
be payable to Landlord by Tenant on demand with interest at the rate of eighteen
percent (18%) per annum or the maximum rate permitted by law, whichever is less.
Landlord shall have right at all times to post and keep posted on the Premises
any notices permitted or required by law, or which Landlord shall deem proper
for the protection of Landlord, the Premises and the Project and any other
parties having an interest therein, from mechanics' and materialmen's liens and
like liens. Tenant shall give Landlord at least fifteen (15) days' prior notice
of the date of commencement of any construction on the Premises in order to
permit the posting of such notices.
Notwithstanding anything to the contrary contained in this paragraph
10, Tenant shall have the right to contest the correctness or validity of any
lien referenced in this paragraph 10 if, promptly after written demand by
Landlord, Tenant procures and records a lien release (?) bond issued by a
corporation authorized to issue surety bonds in California, or delivers to
Landlord a Letter of Credit or other suitable security in form reasonably
satisfactory to Landlord, in an amount equal to the amount of the claim of lien.
11. INSURANCE
Tenant, at its sole cost and expense, shall keep in force during the
term (i) public liability insurance with limits of at least $2,000,000 per
occurrence for injuries to or death of persons occurring in, on or about the
Premises or the Project and property damage insurance with limits of at least
$2,000,000 per occurrence and (ii) Worker's Compensation insurance as required
by the State of California. All such policies shall be primary and shall provide
that said insurance shall not be cancelled or reduced except upon at least
thirty (30) days' prior written notice to Landlord. Further, Tenant's public
liability insurance shall name Landlord or Additional Insured using ISO Bureau
For G109 or G112001 (or a successor form); shall contain cross-liability
endorsements; and shall be issued by an insurance company admitted to transact
business in the State of California. Landlord agrees to pay on demand up to
$25.00 for the Additional Insured Endorsement.
Tenant shall, prior to the commencement of the term, provide Landlord
with a completed Certificate of Insurance using Acord Form 25, a blank copy of
which is attached to this lease. Tenant agrees to increase the coverages or
otherwise comply with changes in connection with said public liability, property
damage and Worker's Compensation Insurance as Landlord or Landlord's lender may
from time to time require.
Landlord shall obtain and keep in force a policy or policies of
insurance covering loss or damage to the Premises, in the amount of the full
replacement value thereof, providing protection against those perils included
within the classification of "all risk" insurance, with increased cost of
reconstruction and contingent liability (including
-9-
demolition) and flood and/or earthquake insurance if available, plus a policy of
rental income insurance in the amount of 100% of twelve (12) months' rent
(including sums paid as additional rent) and such other insurance as Landlord or
Landlord's lender may from time to time require. The cost of all such insurance
purchased by Landlord, plus any charges deferred payment of premiums and any
deductible paid by Landlord, shall (?) Common Area Charges and Tenant shall pay
its percentage share of such costs as provided in paragraph 16 (provided that if
the loss is not due to an act or omission of Tenant or its agents, employees or
invitees, any such deductible paid by Landlord shall be amortized and included
in Common Area Charges at the rate of 1/120th thereof per month through the
remaining term of this lease, and in such event there shall also be included
Common Area Charges interest at the rate of twelve (12%) on the balance of such
deductible remaining from time to time). If insurance costs are increased due to
Tenant's use of the Premises, then Tenant shall pay to Landlord upon demand the
full cost of such increase not less than ten (10) days before Landlord is
obligated to pay such increased premium (but not less than ten (10) days after
Landlord delivers to Tenant a statement from landlord's insurance carrier
stating the amount of the increase and the reason therefor). Notwithstanding the
foregoing, Tenant shall be obligated to pay any portion of premiums for
earthquake insurance if Landlord sells the Project or Premises unless earthquake
insurance is the (?) customary for buildings in the same general location in the
County of Santa Clara and of substantially similar type, construction and use,
or such insurance is required by purchaser's lender. If insurance costs are
increased due to Tenant's use of the Premises, then Tenant shall pay to Landlord
upon demand the full cost of such increase. Tenant shall be named as an
additional insured in Landlord's insurance policy.
Landlord and Tenant hereby mutually waive any and all rights of
recovery against one another for real or personal property loss or damage
occurring to the Premises, the Project, or any part thereof, or any personal
property therein, from perils insured against under fire and extended insurance
and any other property insurance policies existing for the benefit of the
respective parties and each party shall cause each such insurance policy
obtained by it to provide that the insurance company waives all rights of
recovery by way of subrogation against either party in connection with any loss
or damage covered by such policy. If additional premiums must be paid, Tenant
shall pay such additional premiums necessary to obtain such waver. A copy of the
Waiver of Subrogation in favor of Landlord shall be attached to the Tenant's
completed Acord Form 25. Tenant shall be named as an additional insured on
Landlord's policy and Tenant's rights are subject to a mortgage loss payee
clause that Landlord's lender may require.
Notwithstanding anything hereinabove contained, Tenant shall be
responsible for carrying, and shall pay the cost of, any casual insurance as
Tenant deems appropriate with respect to any Tenant's personal property and
fixtures and any tenant improvements not the property of Landlord.
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12. UTILITIES AND SERVICES
Tenant shall pay for all water, gas, light, heat, (?), electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered to the Premises, the cost of such utility services shall be a Common
Area Charge and Tenant shall pay its percentage share of such cost to Landlord
as provided in paragraph 16. In addition, the cost of any utility service
supplied to the Common Area shall be a Common Area Charge and Tenant shall pay
its percentage share of such cost to Landlord as provided in paragraph 16.
If Tenant's use of any such utility service is materially in excess of
the average furnished to the other tenants of the Project and such utility
service is not separately metered, then Tenant shall pay to Landlord upon demand
the full cost of such excess, or Landlord may cause such utility service to be
separately metered, in which case Tenant shall pay the full cost of installing
the separate meter.
Landlord shall not be liable for, and Tenant shall not be entitled to,
any abatement or reduction of rent by reason of the failure by any person or
entity to furnish any of the foregoing utility services when such failure is
caused by any cause beyond the reasonable control of Landlord.
13. TAXES AND OTHER CHARGES
All real estate taxes and assessments and other taxes, fees and
charges of every kind or nature levied or assessed against the Project or any
part thereof during the term by any federal, state, county, regional, municipal
or other governmental or quasi-public authority shall be a Common Area Charge
and payable by Tenant as set forth in paragraph 16. To the extent that any taxes
set forth in this paragraph 13 for which Tenant is responsible decrease,
Tenant's proportionate share of such taxes shall be reduced accordingly by means
of reducing Tenant's share of the Common Area charge. By way of illustration and
not limitation, "other taxes, fees and charges" as used herein include any and
all taxes payable by Landlord (other than state and federal personal or
corporate income taxes measured by the net income of Landlord from all sources,
premium taxes or Landlord's franchise, estate, inheritance, successions, or gift
taxes), whether or not now customary or within the contemplation of the parties
hereto, (i) upon, allocable to, or measured by the rent payable hereunder,
including, without limitation, any gross income or excise tax levied by the
local, state or federal government with respect to the receipt of such rent,
(ii) upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use of occupancy by Tenant of the Premises or
any part thereof, (iii) upon or measured by the value of Tenant's personal
property or leasehold improvements located in the Premises, (iv) upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or estate in the Premises, (v) upon or with respect to parking or
the number of persons employed in or about the Project, and (vi) any tax,
license, franchise free or other imposition upon Landlord which is otherwise
measured by or based in whole or in part upon the Project or any
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portion thereof. If Landlord contests any such tax, fee or charge, the cost and
expense incurred by Landlord thereby shall also be a Common Area Charge and
payable by Tenant as set forth in paragraph 16. In the event the Premises and
any improvements installed therein by Tenant or Landlord are valued by the
assessor disproportionately higher or lower than those (?) of other tenants in
the building or Project or in the event alterations (?) improvements are made to
the Premises, Tenant's percentage share of such taxes, assessments, fees and/or
charges shall be readjusted upward or downward accordingly and Tenant agrees to
pay such readjusted share. Such determination shall be made by Landlord from the
respective valuations assigned in the assessor's work sheet or such other
information was may (?) reasonably available and Landlord's determination
thereof shall be conclusive.
Tenant at its cost shall have the right at any time to seek a
reduction in the assessed valuation of the Premises or the Project or to contest
any real property taxes, assessments, fees or other taxes and charges that are
to be paid by Tenant; provided, however, that any such contest or proceeding
shall be at Tenant's sole cost and expense and provided further that Tenant
shall hold Landlord and the Premises and the Project harmless therefrom.
Landlord shall not be required to join in any proceeding or contest brought by
Tenant unless the provisions of any law require that the proceeding or contest
be brought by or in the name of Landlord or any owner of the Premises. In that
case Landlord shall cooperate and join in the proceeding or contest or permit it
to be brought in Landlord's name as long as Landlord is not required to bear any
cost. If Tenant seeks to reduce or contest any such tax, assessment, fee or
other charge and if requested by Tenant, Landlord agrees to pay such tax
assessment, fee or charge under protest and to otherwise deal with the
appropriate authority in a manner consistent with Tenant's contest or proceeding
and the applicable rules, regulations or procedures of such authority. In the
event Tenant obtains any refund attributable to the Premises, such refund shall
belong to Tenant.
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures and
other personal property located in the Premises, including carpeting and other
property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. All taxes or other charges due under
this paragraph 13 shall be prorated to reflect the portion of any such tax or
charge attributable to the period between the commencement and termination dates
of the lease.
14. ENTRY BY LANDLORD
Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises, (i) to inspect the Premises, (ii) to supply services to
be provided by Landlord hereunder, (iii) to show the Premises to prospective
purchasers or lenders and put 'for sale' signs thereon, (iv) during the last six
months of the term, or during any period when Tenant is in default, to show the
Premises to prospective tenants and to put 'for lease' signs thereon, (v) to
post notices required or allowed by this lease or by law, (vi) to alter, improve
or repair the Premises and
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any portion of the Project, and (vii) to erect scaffolding and other necessary
structures in or through the Premises or the Project where reasonably required
by the character of the work to be performed. Except to the extent Landlord is
negligent, or engages in willful misconduct, the exercise of its right of entry
hereunder, Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising from Landlord's
entry and acts pursuant to this (?) paragraph and Tenant shall not be entitled
to an abatement or reduction in rent if Landlord exercises any rights reserved
in this paragraph. For (?) each of the foregoing purposes, Landlord shall have
the right to use any and all means which Landlord may deem proper to open said
doors in an emergency in order to obtain entry to the Premises. Any entry by
Landlord to the Premises pursuant to this paragraph shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into (?)
a detainer of the Premises or an eviction, actual or constructive, of (?) Tenant
from the Premises or any portion thereof. Landlord shall also have the right at
any time to change the name (provided that such name is not the name of one of
Tenant's major competitors) or designation by which (?) Project is commonly
known.
Notwithstanding anything to the contrary contained in this paragraph
14, Landlord may not enter the Premises, except in the case of an emergency,
unless (i) Landlord has given Tenant at least twenty-four (24) hours' prior
notice of its intent to enter and (ii) such inspection is subject to the
reasonable security requirements of Tenant, and (iii) such entry by Landlord
shall not materially and unreasonably interfere with Tenant's use of the
Premises. Landlord shall not materially block or obstruct Tenant's front
entrance, nor erect scaffolding within the Premises unless reasonably required
in order for Landlord to fulfill its obligations under this lease.
15. COMMON AREA
Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees, invitees and customers shall, in common with other occupants of the
Project in which the Premises are located, (?) and their respective employees,
invitees and customers and others entitled to the use thereof, have the
nonexclusive right to use the access roads, parking areas and facilities
provided and designated by Landlord for the general use and convenience of the
occupants of the Project, which areas and facilities are referred to herein as
"Common Area". This right shall terminate upon the termination of this lease.
Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area provided that such
changes do not unreasonably interfere with the conduct of Tenant's business.
Landlord further reserves the right to promulgate such rules and regulations
relating to the use of the Common Area, and any part thereof, as Landlord may
deem appropriate for the best interests of the occupants of the Project. The
rules and regulations shall be binding upon Tenant upon delivery of a copy of
them to Tenant and Tenant shall abide by them and cooperate in their observance.
Such rules and regu-
-13-
lations may be amended by Landlord from time to time, with or without advance
notice, but shall not unreasonably and materially diminish Tenant's use of the
Premises or the Common Area.
Tenant shall be assigned the use of no less than one hundred seventeen
(117) parking spaces in the Common Area as designated from time to time by
Landlord. Landlord agrees to label at its expense (?) to ten (10) visitors
stalls; and Landlord, at the request and expense of Tenant agrees to label the
remaining (107) parking spaces. It is agreed that Landlord is not responsible
for policing any of such parking spaces. Tenant shall not at any time park or
permit the parking of Tenant's trucks or other vehicles, or the trucks or other
vehicles of others, adjacent to loading areas so as to interfere in any way with
the use of such areas; nor shall Tenant at any time park or permit the parking
of Tenant's vehicles or trucks, or the vehicles or trucks of Tenant's suppliers
or others, in any portion of the Common Area not designated by Landlord for such
use by Tenant. Tenant shall not park or permit any inoperative vehicle or
equipment to be parked on any portion of the Common Area.
Landlord shall operate, manage and maintain the Common Area. The
manner in which the Common Area shall be operated, managed and maintained and
the expenditures for such operation, management and maintenance shall be at the
sole, but reasonable, discretion of Landlord. The cost of such maintenance,
operation and management, including but not limited to landscaping, repair of
paving, parking lots and sidewalks, security services and salaries and employee
benefits (including union benefits) of on-site and accounting personnel engaged
in such maintenance and operations management (but excluding payments on loans
or ground leases, brokerage commission and costs directly related to leasing the
Project, damages caused by other tenants or their employees or agents, the cost
of repair or correction of construction defects, and management fees in excess
of the five percent (5%) referred to in paragraph 16 below) shall be a Common
Area Charge and Tenant shall pay to Landlord its percentage share of such costs
as provided in paragraph 16.
16. COMMON AREA CHARGES
Tenant shall pay to Landlord, as additional rent, an amount equal to
28.7% (29,424 [divided by] 102,528 square feet) of the total Common Area Charges
as defined in this lease. Tenant further agrees that Common Area Charges shall
include an additional 5% of the actual expenditures for the aggregate of all
other Common Area Charges in order to compensate Landlord for accounting and
processing services. Tenant's percentage share of Common Area Charges shall be
paid as follows:
At or prior to the commencement of the term and to the commencement of
each calendar year of the term, Landlord shall deliver to Tenant a written
estimate of total Common Area Charges during the balance of the calendar year in
which the term commences and each succeeding calendar year, respectively. Tenant
shall pay, as additional rent, on the first day of each month during the
calendar year (or portion thereof) covered by such estimate, its percentage
months share of Common Area Charges as shown on such estimate. Within thirty
(30) days of the end of
-14-
each calendar year and of the end of the term, Landlord shall deliver to Tenant
a statement of actual Common Area Charges incurred for the preceding year, or,
in the case of a statement after the end of the term, covering the year in which
the lease terminates. If such statement shows that Tenant has paid less than its
actual percentage then Tenant shall on demand pay to Landlord the amount of such
deficiency. If such statement shows that Tenant has paid more than its
percentage share then Landlord shall, at its option, promptly refund such excess
to Tenant or credit the amount thereof to the rent next becoming due from
Tenant. Landlord reserves the right to revise any estimate of Common Area
Charges if actual or projected Common Area Charges show an increase or decrease
in excess of 10% from any earlier estimate for the same period. In such event,
Landlord shall deliver the revised estimate to Tenant, together with an
explanation of the reasons therefor, and Tenant shall revise its payments
accordingly. Landlord's and Tenant's obligations with respect to adjustments at
the end of the term of this lease shall survive such termination.
Landlord shall allow Tenant reasonable access to Landlord's books and
records respecting Common Area Charges. Tenant shall be entitled to cause a
certified public accountant to perform an audit of the statement of actual
Common Area Charges for the preceding year, and in the event such audit shall
establish that the amount shown on such statement overstates by more than two
percent (2%) the amount Tenant is liable for then Landlord shall promptly
reimburse to Tenant any sums overpaid by Tenant, together with interest on the
overpaid amounts at the rate of ten percent (10%) per annum and the cost of such
audit. In the event such audit shall not establish such overstatement, Tenant
shall pay the entire cost of such audit.
17. DAMAGE BY FIRE; CASUALTY
In the event the Premises are damaged by any casualty which is covered
under an insurance policy required to be maintained pursuant to paragraph 11, or
in the event the Premises are damaged by any casualty not covered under an
insurance policy required to be maintained pursuant to paragraph 11 and the cost
of restoration is less than fifty thousand dollars ($50,000.00), Landlord shall
be entitled to the use of all insurance proceeds and shall repair such damage
and restore the Premises to substantially the condition existing prior to such
damage, and this lease shall continue in full force and effect provided however
in the event the Premises cannot be reasonably and lawfully restored within nine
(9) months of the date of such damage, either party may terminate this Lease
effective upon written notice of termination given to the other party within
thirty (30) days of the date of such damage. Tenant shall on demand pay to
Landlord the amount equal to the deductible under any such insurance, except as
provided in paragraph 11.
In the event the Premises are damaged by any casualty not covered
under an insurance policy required to be maintained pursuant to paragraph 11 and
the cost of restoration is fifty thousand dollars ($50,000.00) or more, Landlord
may, at Landlord's option, either (i) repair such damage, at Landlord's expense,
as soon as reasonably possible in which event this lease shall continue in full
force and effect, or (ii)
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give written notice to Tenant within thirty (30) days after the date of the
occurrence of such damages of Landlord's intention to cancel and terminate this
lease as of the date of the occurrence of the damages; provided, however, that
if such damage is caused by an act or omission to act of Tenant or its agent,
servants or employees, then Tenant shall repair such damage promptly at its sole
cost and expense. In the event Landlord elects to terminate this lease pursuant
hereto, Tenant shall have the right within ten (10) days after receipt of the
required notice to notify Landlord in writing of Tenant's intention to repair
such damage at Tenant's expense, without reimbursement from Landlord, in which
event the lease shall continue to full force and effect and Tenant shall proceed
to make such repairs as soon as reasonably possible. If Tenant does not give
such notice within the ten (10) day period, this lease shall be cancelled and
terminated as of the date of the occurrence of such damage. Under no
circumstances shall Landlord be required to repair any injury or damage by fire
or other cause, or to make any restoration or replacement of, any of Tenant's
personal property, trade fixtures or property leased from third parties, whether
or not the same is attached to the Premises.
If the Premises are totally destroyed during the term from any cause
(including any destruction required by any authorized public authority), whether
or not covered by the insurance required under paragraph 11, this lease shall
automatically terminate as of the date of such total destruction; provided,
however, that if the Premises can reasonably and lawfully be repaired or
restored within nine (9) months of the date of destruction to substantially the
condition existing prior to such destruction and if the proceeds of the
insurance payable to the Landlord by reason of such destruction is sufficient to
pay the cost of such repair or restoration, then the said insurance proceeds
shall be so applied, Landlord shall promptly repair and restore the Premises and
this lease shall continue, without interruption, in full force and effect. If
the Premises are totally destroyed during the last twelve (12) months of the
term, Landlord may at Landlord's option cancel and terminate this lease as of
the date of occurrence of such damage by giving written notice to Tenant of
Landlord's election to do so within thirty (30) days after the occurrence of
such damage.
If the Premises are partially or totally destroyed or damaged and
Landlord or Tenant repair them pursuant to this lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated in proportion to the square footage rendered unusable to Tenant or
Tenant's business operations by reason of such damage or destruction.
18. INDEMNIFICATION
Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Project by or from any
cause whatsoever except the negligence or wilful misconduct of Landlord or its
authorized representatives. Except as to injury to persons or damage to property
the principal cause of which is the negligence or wilful misconduct of Landlord
or its authorized representatives, Tenant shall hold Landlord harmless from and
defend Landlord
-16-
against any liability, loss, damage or expense, including attorney fees arising
out of any injury to or death of any person or damage to or destruction of
property occurring in, on or about the Premises from any cause whatsoever.
Tenant shall hold Landlord harmless from and defend Landlord against any
liability, loss, damage, or expense, including attorney fees, arising (i) out of
the failure of Tenant to observe or comply with laws or other requirements as
set forth in paragraph 7, or (ii) by reason of any labor or service performed
for, or materials used or furnished to, Tenant or any contractor engaged by
Tenant with respect to the Premises. The provision of this paragraph shall
survive the expiration of earlier termination of this lease. In no event shall
Tenant's obligations to hold Landlord harmless and indemnify Landlord include
(i) liability, loss, damage or expense arising from defects in Landlord's
construction work or from defaults by Landlord under this Lease and, (ii)
liability, loss, damage or expense arising from the acts or omissions of other
tenants in the property.
19. ASSIGNMENT AND SUBLETTING
Tenant shall not voluntarily assign, encumber or otherwise transfer
its interest in this lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person or entity to occupy or use all or any
part of the Premises, without first obtaining Landlord's written consent, which
consent shall not be unreasonably withheld. Any assignment, encumbrance or
sublease without Landlord's election, shall constitute a default.
If Tenant desires to sublet or assign all or any portion of the
Premises, Tenant shall give Landlord written notice thereof, specifying the
projected commencement date of the proposed sublet or assignment (which date
shall be not less than fifteen (15) days or more than one hundred twenty (120)
days after the date of such notice), the portions of the Premises proposed to be
sublet or assigned and the identity of the proposed assignee or subtenant.
Tenant shall further provide Landlord with such other information concerning the
proposed assignee or subtenant as reasonably requested by Landlord. Except as
set forth below, Landlord shall inform Tenant of Landlord's consent, or lack of
consent, to the proposed sublet or assignment within ten (10) days from the date
of receipt by Landlord of the notice from Tenant and Landlord's failure to
respond within such time shall be deemed to be a consent to such sublet or
assignment, provided that if Landlord has not received such other information
concerning the proposed assignee or subtenant then such period shall be extended
to three (3) days after the receipt of such information. In the case of any
proposed assignment, or in the case of a proposed sublet of all of the Premises
at a time when Tenant has not occupied the Premises or if the proposed sublet is
for the entire Premises fora sublet term ending within the last twelve (12)
months of the term of this lease, Landlord shall have the right, exercisable by
written notice to be delivered to Tenant within thirty (30) days of receipt of
Tenant's notice to terminate this lease effective as of the date specified in
Tenant's notice as the proposed commencement date of the assignment or sublease.
If Landlord does not elect to terminate this lease and if Landlord consents in
writing to the proposed assignment of sublet, Tenant shall be
-17-
free to assign or sublet all or a portion of the Premises subject to the
following conditions: (i) any sublease shall be on the same terms set forth in
the notice given to Landlord; (ii) no sublease shall be valid (?) no subtenant
shall take possession of the sublet premises until an executed counterpart of
such sublease has been delivered to Landlord; (iii) no subtenant shall have a
further right to sublet without Landlord's consent, which consent shall not be
unreasonably withheld; (iv) except as to a sublet for a portion of the Premises
during the first eighteen (18) months of the term, one-half of any sums or other
economic consideration received by Tenant as a result of such assignment or
sublet (except rent or other payments received which are attributable to the
amortization over the term of this lease of the cost of leasehold improvements
constructed for such assignees or subtenant, and brokerage fees) whether
denominated rentals or otherwise, which exceed, in the aggregate, the total sums
which Tenant is obligated to pay Landlord under this lease (prorated to reflect
obligations allocable to that portion of the Premises subject to such sublease),
shall be payable to Landlord as additional rent under this lease without
affecting or reducing any other obligation of Tenant hereunder; and (v) no
sublet or assignment shall release Tenant of Tenant's obligation or alter the
primary liability of Tenant to pay the rent and to perform all other obligations
to be performed by Tenant hereunder.
The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment or
sublet. In the event of default by any assignee of Tenant or any successor of
Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor provided that Landlord gives Tenant notice of such
default and five (5) days to cure same. Landlord may consent to subsequent
assignments or sublets or this lease or amendments or modifications to this
lease with assignees of Tenant, without notifying Tenant, or any successor of
Tenant and without obtaining its or their consent thereto and such action shall
not relieve Tenant of liability under this lease.
Notwithstanding the above provisions of this paragraph 19, Tenant may,
without obtaining the consent of Landlord and without Landlord having the right
to terminate this lease as set forth above, assign or sublease the whole or any
part of the Premises to any corporation or other entity which acquires or is
acquired by Circadian or which results from a merger or consolidation with
Circadian or which either controls or is controlled by Circadian or which is
controlled by any of the foregoing, provided that (i) Tenant shall continue to
be fully obligated for the timely performance of all the terms, covenants,
agreements and conditions of this lease and (ii) such assignee or subtenant
agrees in writing to be subject to and governed by all of the terms, covenants,
agreements and conditions of this lease and such agreement by assignee or
subtenant is promptly given to Tenant. Tenant shall give Landlord written notice
of any such assignment or sublease as provided above in this paragraph 19, and
any such assignment or subletting shall be subject to the conditions for other
assignments and sublettings set forth above.
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No interest of Tenant in this lease shall be assignable by operation
of law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes (or has instituted against
it) a proceeding under the Bankruptcy Act in which Tenant is the bankrupt; or if
Tenant is a partnership or consists of more than one person or entity, if any
partner of the partnership or other person or entity is or becomes bankrupt or
insolvent or makes an assignment for the benefit of creditors; (ii) if a writ of
attachment or execution is levied on this lease; or (iii) if, in any proceeding
or action to which Tenant is a party, a receiver is appointed with authority to
take possession of the Premises. An involuntary assignment shall constitute a
default by Tenant and Landlord shall have the right to elect to terminate this
lease, in which case this lease shall (?) be treated as an asset of Tenant.
Notwithstanding the foregoing, if a writ of attachment or execution is levied on
this lease then Tenant shall have seven (7) days in which to remove same, and if
an involuntary proceeding in bankruptcy is brought against Tenant then Tenant
shall have thirty (30) days to have such proceedings dismissed.
Tenant immediately and irrevocably assigns to Landlord as security for
Tenant's obligations under this lease, all rent from any subletting of all or a
part of the Premises as permitted by this lease, and Landlord, as assignee and
as attorney-in-fact for Tenant, or a receiver of Tenant appointed on Landlord's
application, any collect such rent and apply it toward Tenant's obligations
under this lease; except that, until the occurrence of an act of default by
Tenant, Tenant shall have the right to collect such rent, subject to promptly
forwarding to Landlord any portion thereof to which Landlord is entitled
pursuant to this paragraph 19.
20. DEFAULT
The occurrence of any of the following shall constitute a default
by Tenant: (i) failure to pay any rent or other sum payable hereunder within
ten (10) days of written notice from Landlord of failure to make such payment
when due; (ii) abandonment of the Premises; or (iii) failure to perform any
other term, covenant or condition of this lease (?) the failure to perform is
not cured within thirty (30) days after written notice thereof has been given
to Tenant (provided that if such default cannot reasonably be cured within
thirty (30) days, Tenant shall not be (?) default within the thirty (30) days
period and diligently and in good faith continues to cure the default). The
notice referred to in (iii) above shall specify the alleged default and the
applicable lease provisions and shall demand that Tenant perform the
provisions of this lease within the applicable period of time and no such
notice shall be deemed a forfeiture or termination of this lease unless
Landlord so elects in the notice.
In the event of a default by Tenant, then Landlord, in addition to
any other rights and remedies at law or in equity, shall have the right
either to terminate Tenant's right to possession of the Premises
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and thereby terminate this lease or, from time to time and without terminate
on this lease relet the Premises or any part thereof for the account and in
the name of Tenant for such term and on such terms and conditions as Landlord
in its sole discretion may deem advisable, with the right to make alterations
and repairs to the Premises.
Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord's rights and remedies
under this lease, including but not limited to the right to recover and to relet
the Premises. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in
such reletting and shall be applied (i) to the payment of any indebtedness due
hereunder, other than monthly rent, from Tenant to Landlord; (ii) to the payment
of the cost of any repairs necessary to return the Premises to good condition
normal wear and tear excepted, including the cost of alterations and the cost of
storing any of Tenant's property left on the Premises at the time of reletting;
and (iii) to the payment of monthly rent due and unpaid hereunder. The residue,
if any, shall be held by Landlord and applied in payment of future rent or
damages in the event of termination as the same may become due and payable
hereunder and the balance, if any at the end of the term of this lease, shall be
paid by Tenant. Should the monthly rent and Common Area Charges received from
time to time from such reletting during any month be less than that agreed to be
paid during that month by Tenant hereunder, Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. No such
reletting of the Premises by Landlord shall be construed as election on its part
to terminate this lease unless a notice of such intention is given to tenant or
unless the termination hereof is decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without termination, Landlord may at any time
thereafter elect to terminate this lease for such previous breach, provided it
has not been cured.
Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have it shall have the immediate right of
entry and may remove all persons and property from the Premises and, in addition
to all its other rights and remedies, shall be entitled to recover from Tenant
all damages it may incur by reason of such breach, including the cost of
recovering the Premises and including (i) all amounts that would have fallen due
as rent between the time of termination of this lease and the time of the
judgment or other award plus interest on the balance at the rate of twelve
percent (12%) per year, but less the avails of relettings and attornments; (ii)
the worth at the time of the judgment or other award of the amount by which the
unpaid rent for the balance of the term exceeds the amount of such rental loss
that Tenant provides could be reasonably avoided; (iii) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this lease or which in the
ordinary course of things would be likely to result therefrom. "Worth" as used
in this provision is computed by discounting the total at the discount rate of
the Federal Reserve Bank of San Francisco at the time of the judgment or award
plus one percent (1%). Property removed from the Premises may be stored in a
public or private warehouse or elsewhere at
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the sole cost and expense of Tenant. In the event that Tenant shall not
immediately pay the cost of storage of such property after the same has been
stored for a period of thirty (30) days or more, Landlord may sell any or all
there of at a public or private sale in such manner and at such times and places
at Landlord in its sole discretion may deem proper, without notice to or demand
upon Tenant.
Any proof by Tenant under subparagraphs (2) and (3) or section
1951.2(a) of the California Civil Code of the amount of rental loss that could
be reasonably avoided shall be made in the following manner: Landlord and Tenant
shall each select a licensed real estate broker in the business of renting
property at the same type and use as the Premises in the same geographical
vicinity. Such two real estate brokers shall select a third licensed real estate
broker, and the three licensed real estate brokers so selected shall determine
the amount of the rental loss that could be reasonably avoided for the balance
of the terms after the time of award. The decision of the majority of said
licensed real estate brokers shall be final and binding upon the parties hereto.
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
Landlord, at any time after Tenant commits a default, can cure the
default at Tenant's cost. If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum, the
sum paid by Landlord shall be due immediately from Tenant to Landlord at the
time the sum is paid, and if paid at a later date shall bear interest at the
rate of eighteen percent (18%) per annum or the maximum rate permitted by law,
whichever is less, from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant. This sum, together with interest on it, shall be
additional rent.
22. EMINENT DOMAIN
If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payments, income rent or award (or any interest therein)
which may be paid or made in connection with such taking or conveyance. Tenant
shall have no claim against Landlord or otherwise for the value of any unexpired
term of this lease. Notwithstanding the foregoing, Tenant shall be entitled to,
(i) the value of relocation expenses of Tenant necessitated by such taking, and
(ii) any compensation for deprecation to and loss or removal of equipment and
fixtures, but in each case only to the extent the condemning authority makes a
separate award therefor or specifically identifies a portion of the award as
being therefor. Each party waives the provisions of Section 1265.130 of the
Code of Civil Procedure (which section allows either party to petition the
Superior Court to terminate this lease in the event of a partial taking of the
Premises).
If any action or proceeding is commenced for such taking of the
Premises or any portion thereof or of any other space in the Project, or if
Landlord is advised in writing by any entity or body having
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the right of power of condemnation of its intention to condemn the Premises
or any portion thereof or of any other space in the Project, or if Landlord
is advised in writing by an entity or body having the right (?) power of
condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to
discontinue the use and operation of the Project or decide to demolish, alter
or rebuild the Project, then Landlord shall have the right to terminate this
lease by giving Tenant written notice thereof within sixty (60) days of the
date of receipt of said written advice or the commencement of said action or
proceeding. Such termination shall take place on the last day of the calendar
month next following the month in which such notice is given or the date on
which title shall vest in the condemnor, whichever occurs first.
In the event of a partial taking, or conveyance in lieu thereof, of
the Premises and twenty-five percent (25%) or more of the number of square
feet in the Premises are taken, or of the Common Area and the Premises
thereby fails to meet applicable governmental rules and regulations
concerning the minimum number of parking spaces for similar zoned premises in
the City of San Jose or if twenty percent (20%) or more of Tenant's parking
spaces are taken, then Tenant may terminate this lease. Any election by
Tenant to so terminate shall be by written notice given to Landlord within
sixty (60) days from the date of such taking or conveyance and shall be
effective on receipt of such written notice by Landlord.
If a portion of the Premises be taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant shall terminate this
lease then this lease shall continue in full force and effect as to the part of
the Premises not so taken or conveyed and all payments of rental shall be
apportioned as of the date of such taking or conveyance so that thereafter the
amounts to be paid by Tenant shall be in the ratio that the area of the portion
of the Premises not so taken bears to the total area of the Premises prior to
such taking.
23. COVENANT TO SURRENDER
On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises and all of Tenant's
improvements and alterations in their condition existing as of the commencement
of the term (reasonable wear and tear excepted), with all originally painted
interior walls washed if marked or damaged, interior vinyl covered walls cleaned
and repaired or replaced if marked or damaged, all carpets shampooed and
cleaned, the air conditioning and heating system serviced and repaired by a
reputable and licensed service firm (unless Landlord has elected to maintain
such system pursuant to paragraph 9 above) and all floors cleaned and waxed; all
to the reasonable satisfaction of Landlord. Tenant shall remove all of Tenant's
personal property and trade fixtures, together with improvements or alterations
that Tenant is obligated or has the option to remove pursuant to the provisions
of paragraph 8, from the Premises, and all such property not removed shall be
deemed abandoned. At Tenant's request, Landlord shall inspect the Premises on
the last day of the term and if Tenant has performed its obligation under this
paragraph 23, Landlord agrees to acknowledge same in writing.
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If the premises are not surrendered as required in (?) paragraph,
Tenant shall indemnify Landlord against (i) all expenses incurred by Landlord by
reason of Tenant's failure to surrender the Premises in the manner and condition
required by paragraphs 8 and 23, ((?) loss of rent by reason of Tenant's failure
to so surrender the Premises and consequent delay in the commencement date of
any subsequent lease with another party covering all or a portion of the
Premises, and (iii) losses or damage arising from the cancellation of any
subsequent lease covering the Premises or any portion thereof by reason of
Tenant's failure to so surrender the Premises; provided that Landlord shall use
its reasonable efforts to mitigate these damages. It is agreed between Landlord
and Tenants that the provisions of this paragraph shall survive termination of
this lease.
24. TENANT'S QUITCLAIM
At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required by
any reputable title company, licensed to operate in the State of California, to
remove the cloud or encumbrance created by this lease from the real property of
which the Premises are a part. This obligation shall survive said expiration or
termination.
25. HOLDING OVER
Any holding over after the expiration or termination of this lease
(with the written consent of Landlord delivered to Tenant) shall be construed to
be a tenancy from month to month at the monthly rent, as adjusted, in effect on
the date of such expiration or termination. All provisions of this lease, except
those pertaining to the terms and any option to extend, shall apply to the month
to month tenancy. This provisions of this paragraph are in addition to, and do
not affect, Landlord's right of re-entry or other rights hereunder or provided
by law.
If Tenant shall retain possession of the Premises or any part thereof
without Landlord's consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention double the amount of the daily rental in effect during the last
month prior to the date of such expiration or termination. Acceptance of rent by
Landlord following expiration or termination shall not constitute a renewal of
this lease, and nothing contained in this paragraph shall waive Landlord's right
of re-entry or any other right. Tenant shall be only a Tenant at sufferance,
whether or not Landlord accepts any rent from Tenant, while Tenant is holding
over without Landlord's written consent.
26. SUBORDINATION
In the event Landlord's title or leasehold interest is now or
hereafter encumbered in order to secure a loan from an institutional lender to
Landlord, Tenant shall, at the request of Landlord or the lender, execute in
writing an agreement subordinating its rights under this lease to the lien of
such encumbrance, or, if so requested, agreeing
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that the lien of lender's encumbrance shall be or remain subject and subordinate
to the rights of Tenant under this lease. Tenant hereby irrevocably appoints
Landlord the attorney in fact of Tenant to execute, deliver and record any such
instrument or instruments for and in the name and on behalf of Tenant.
Notwithstanding any such subordination, Tenant's (?) possession under this lease
shall not be disturbed if Tenant is not in default and so long as Tenant shall
pay all amounts due hereunder and otherwise observe and perform all provisions
of this lease.
If Landlord or such lender requests from Tenant such agreement
subordinating its rights, Landlord shall, if Tenant so requests, deliver to
Tenant a non-disturbance agreement from each and every lender holding a mortgage
or deed of trust encumbering all or any portion of the Premises and which is
then prior and superior to this lease, which non-disturbance agreement shall
provided that such lender agrees that Tenant's possession and quiet enjoyment of
the Premises shall not be disturbed by such lender so long as Tenant performs
all of its obligations under this lease, and which shall otherwise be in form
reasonably satisfactory to Tenant and such lender.
27. CERTIFICATE OF ESTOPPEL
Each party shall, within ten (10) days after request therefor, execute
and deliver to the other party, in recordable form, a certificate stating that
the lease is unmodified and in full force and effect, or in full force and
effect as modified and stating the modifications. The certificate shall also
state the amount of the monthly rent, the date to which monthly rent has been
paid in advance, the amount of the security deposit and/or prepaid monthly rent,
and, if the request is made by Landlord, shall include such other items as
Landlord or Landlord's lender may reasonably request. Failure to deliver such
certificate within such time shall constitute a conclusive acknowledgment by the
party failing to deliver the certificate that the lease is in full force and
effect and has not been modified except as may be represented by the party
requesting the certificate. Any such certificate requested by Landlord may be
conclusively relief upon by any prospective purchaser or encumbrancer of the
Premises or Project. Further, within ten (10) days following written request
made from time to time by Landlord, Tenant shall furnish to Landlord current
financial statements of Tenant, provided, however, that Tenant shall not be
required to deliver such financial statements more often than twice per year.
28. SALE BY LANDLORD
In the event the original Landlord hereunder, or any successor owner
of the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, provided
all such liabilities and obligations shall be assumed and be binding upon the
new owner. Tenant agrees to attorn to such new owner and to look solely to such
new owner for performance of any and all such liabilities and obligations
arising under this lease. Landlord or its successors shall give prompt notice to
Tenant of any such sale or conveyance.
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29. ATTORNMENT TO LENDER OR THIRD PARTY
In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee title
interest or a leasehold interest) is encumbered deed of trust, and such interest
is acquired by a lender or any other third party through judicial foreclosure or
by exercise of a power of (?) at private trustee's foreclosure sale, Tenant
hereby agrees to attorn (?) the purchaser at any such foreclosure to sale and to
recognize such purchaser as the Landlord under this lease, provided such
attornment does not disturb Tenant's leasehold interest.
30. DEFAULT BY LANDLORD
Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than sixty (60) days after written notice by Tenant to Landlord and to the
holder of any first mortgage or deed of trust covering the Premises specifying
wherein Landlord has failed to perform such obligations; provided, however, that
if the nature of Landlord's obligations is such that more than sixty (60) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
If Landlord is in default of this lease, and as a consequence Tenant
recovers a money judgment against Landlord, the judgment shall be satisfied
only out of the proceeds of sale received on execution of the judgment and levy
against the right, title and interest of Landlord in the Project of which the
Premises are a part, and out of rent or other income from such real property
receivables by Landlord or out of the consideration received by Landlord from
the sale or other disposition of all or any part of Landlord's right, title and
interest in the Project of which the Premises are a part. Neither Landlord nor
any of the partners comprising the partnership designated as Landlord shall be
personally liable for any deficiency.
31. CONSTRUCTION CHANGES
It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such minor
changes as Landlord or Landlord's architect determines to be desirable in the
course of construction of the Premises and/or the improvements constructed or
being constructed hereon, and no such changes or any changes in plans for any
other portions of the Project, shall affect this lease or entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant
unless such changes materially interfere with Tenant's use of the Premises.
32. MEASUREMENT OF PREMISES
Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions and
columns, one-half of exterior walls, and one-half
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of the partitions separating the Premises from the rest of the Project and any
outside entry overhang, if applicable. Tenant waives any claim against Landlord
regarding the accuracy of any such measurement and agrees that there shall not
be any adjustment in monthly rent or Common Area Charges or other amounts
payable hereunder by reason of inaccuracies in such measurement.
33. EXHIBITS AND ATTACHMENTS
All exhibits and attachments to this lease are a part hereof.
34. ATTORNEYS FEES
If either party commences an action against the other party arising
out of or in connection with this lease, the prevailing party shall be entitled
to have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, attorney fees, expert witness fees, trial
and appellate court costs, and deposition and transcript expenses. If either
party becomes a party to any litigation concerning this lease, the Premises, or
the Project by reason of any act or commission of the other party or its
authorized representatives, the party that causes the other party to become
involved in the litigation shall be liable to that party for all expenses of
litigation, including, without limitation, travel expenses, attorney fees,
expert witness fees, trial and appellate court costs, and deposition and
transcript expenses.
35. SURRENDER
The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not (?) a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord or all or any such
subleases or subtenancies.
36. WAIVER
No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent rent
or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the balance
of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
lease. Landlord's consent to or approval of any act by Tenant requiring a
Landlord's consent or approval shall not be deemed to waiver or tender
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of this
lease.
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37. EASEMENTS; AIRSPACE RIGHTS
Landlord reserves the right to alter the boundaries of the Project and
grant easements and dedicate for public use portions of the Project without
Tenant's consent, provided that no such grant or dedication shall interfere with
Tenant's use of the Premises or otherwise cause Tenant to incur cost or expense.
From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge
and deliver to Landlord, or in accordance with Landlord's instructions, and
any all documents, instruments, maps or plats necessary to effectuate Tenant's
covenants hereunder.
This lease confers no rights either with regard to the subsurface of
the land on which the Premises are located or with regard to airspace above the
ceiling of the Premises. Tenant agrees that no diminution or shutting off of
light or view by a structure which is or may be erected (whether or not by
Landlord) on property adjacent to the building of which the Premises area a part
or to property adjacent thereto, shall in any way affect this lease, or entitle
Tenant to any reduction of rent or result in any liability of Landlord to
Tenant. Notwithstanding the foregoing, Landlord shall not have the right to
materially block or obstruct the main entrance to the Premises.
38. RULES AND REGULATIONS
Landlord shall have the right from time to time to promulgate
reasonable rules and regulations for the safety, care and cleanliness of the
Premises, the Project and the Common Area, or for the preservations of good
order. On delivery of a copy of such rules and regulations to Tenant, Tenant
shall comply with the rules and regulations and a violation of any of them shall
constitute a default by Tenant 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 make all reasonable
efforts to enforce the rules and regulations uniformly against all tenants in
the Project, and no such rules and regulations shall require Tenant to pay
additional rent under this lease. Such rules and regulations may be amended by
Landlord from time to time with or without advance notice.
39. NOTICES
All notices, demands, requests, consents and other communications
which may be given or are required to be given by either party to the other
shall be in writing and shall be sufficiently made and delivered if personally
served or if sent by United States first class mail, postage prepaid. All such
communications from Landlord to Tenant shall be addressed to Tenant at the
Premises. All such communications by Tenant to Landlord shall be sent to
Landlord at its offices at 3945 Freedom Circle, Suite 1000, Santa Clara,
California 95054. Either party may change its address by notifying the other of
such change. Each such communication shall be deemed received on the date of the
personal service or mailing thereof in the manner herein provided, as the case
may be.
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40. NAME
Tenant shall not use the name of the Project for any purpose other
than as the address of the business conducted by Tenant in the Premises without
the prior written consent of Landlord.
41. GOVERNING LAW; SEVERABILITY
This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be invalid, unenforceable or ineffective for any reason whatsoever,
all other provisions hereof shall be and remain in full force and effect.
42. DEFINITIONS
As used in this lease, the following words and phrases shall have the
following meanings:
AUTHORIZED REPRESENTATIVE: any officer, agent, employee or
independent contractor retained or employed by either party, acting within
authority given him by that party.
ENCUMBRANCE: any deed of trust, mortgage or other written security
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the note
or obligation secured by such deed of trust, mortgage or other written security
device or agreement.
LENDER: the beneficiary, mortgagee or other holder of an encumbrance,
as defined above.
LIEN: a charge imposed on the Premises by someone other than
Landlord, by which the Premises are made security for the performance of an act.
Most of the liens referred to in this lease are mechanic's liens.
MAINTENANCE: repairs, replacement, repainting and cleaning.
PERSON: one or more human beings, or legal entities or other
artificial persons, including, without limitation, partnerships, corporations,
trusts, estates, associations and any combination of human being and legal
entities.
PROVISION: any term, agreement, covenant, condition, clause,
qualification, restriction, reservation or other stipulation in the lease that
defines or otherwise controls, establishes or limits the performance required or
permitted by either party.
RENT: monthly rent, additional rent, Common Area Charges, and all
other amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease.
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Words used in any gender include other genders. If there be more than (?) one
Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.
43. TIME
Time is of the essence of this lease and of each and all of its
provisions.
44. EXAMINATION OF LEASE
Submission of this lease for examination or signature (?)by Tenant
does not constitute a reservation or option for a lease, and this lease is not
effective until its execution and delivery by both Landlord and Tenant.
45. INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE
Any amount due from Tenant to Landlord hereunder which is not paid
when due shall bear interest at the rate of ten percent (10%) per annum from
when due until paid, unless otherwise specifically provided herein, but the
payment of such interest shall not excuse or cure any default by Tenant under
this lease. In addition, Tenant acknowledges that late payment by Tenant to
Landlord of monthly rent, or of Tenant's monthly Common Area Charge, or of
any other amount due Landlord from Tenant, will cause Landlord to incur costs
not contemplated by this lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs include, without
limitation, processing and accounting charges and late charges that may be
imposed on Landlord, e.g., by the terms of any encumbrance and note secured
by any encumbrance covering the Premises. Therefore, if any such payment due
from Tenant is not received by Landlord when due, Tenant shall pay to
Landlord an additional sum of four percent (4%) of the overdue payment as a
late charge. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge shall not constitute a
waiver of Tenant's default with respect to the overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies available to
Landlord. (?) notice to Tenant of failure to pay shall be required prior to
the imposition of such interest and/or late charge, and any notice period
provided for in paragraph 20 shall not affect the imposition of such interest
and/or late charge. Notwithstanding the foregoing, Landlord agrees to forego
the late charge and interest on past due obligations no more than twice each
lease year, provided that Tenant pays the past-due obligation in full within
(5) days following notice to Tenant of such past-due obligation.
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46. ENTIRE AGREEMENT
This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
an instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior contemporaneous oral agreements between and among
themselves or their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this lease.
47. CORPORATE AUTHORITY
Tenant shall deliver to Landlord, prior to or at the execution of this
lease, a copy of the resolution of the Board of Directors of Tenant authorizing
the execution of this lease and naming officers that are authorized to execute
this lease on behalf of Tenant, which copy shall be certified by Tenant's
president or secretary as correct and in full force and effect.
48. RECORDING
Neither Landlord nor Tenant shall record this lease or short form
memorandum hereof without the consent of the other.
49. REAL ESTATE BROKERS
Each Party represents that it has not had dealings with any real
estate broker, finder or other person with respect to this lease in any manner,
except Cornish & Carey. Each party shall hold harmless the other party from all
damages resulting from any claims that may be asserted against the other party
by any broker, finder or other person with whom the other party has or
purportedly has dealt, and relating to this Lease (including but not limited to
any extensions thereof). Landlord shall be solely responsible for paying the
commission to Cornish & Carey.
50. CAPITAL EXPENDITURES
Notwithstanding anything to the contrary in paragraphs (?) and 8,
(i) as to any required capital improvement to the Premises having useful life
of more than one year and which is not required by reason of Tenant's
specific purposes or activities of the Premises, Landlord shall make such
capital improvement and Tenant shall pay to Landlord, as additional rent and
in equal monthly installments over the remaining term of this lease, the
fraction of the cost of such capital improvement equal to the remaining term
of this Lease over the useful life of such capital improvement; (ii) as to
any required capital improvement to the Common Area having a useful life of
more than one year and which is not required by Tenant's specific purposes or
activities of the Premises, the cost thereof shall be included within Common
Area Charges proportionately over the useful life of such capital
improvement: and (iii) the sum of Tenant's payments under subparagraphs (i)
and (ii) above shall not exceed fifteen
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percent (15%) of the monthly rent payable during the concurrent month. Any
determination of useful life, as such term is used in this paragraph 50, shall
be reasonably made by Landlord.
51. OPTION TO EXTEND TERM
Landlord hereby grants to Tenant the option to extend the term under
all the provisions contained in this lease, except for the monthly rent, for one
five year period ("Extended Term") following the expiration of the initial term
set forth in paragraph 2 ("Initial Term"). The monthly rent for the Extended
Term shall be marked rent as determined below, to be increased at the rate of 6%
to 8% (as determined below) over the previous year's monthly rent on each one
year anniversary date during the Extended Term, provided that in no event shall
the monthly rent at the commencement of the Extended Term be less than the
monthly rent in effect at the expiration of the Initial Term. Tenant must give
written notice to Landlord of its intention to exercise this option at least six
(6) months before the expiration of the Initial Term. The parties shall have
forty-five (45) days after Landlord receives the notice of exercise in which to
negotiate and agree on the market rent (and the precise annual adjustment
percentage within the range of 6% to 8%) for the Extended Term. If the parties
are unable to agree on the market rent and such annual adjustment percentage
within this forty-five (45) day negotiating period, the market rent and such
annual adjustment percentage shall be determined in the following manner: (i)
Landlord and Tenant shall each select a licensed real estate broker with not
less than five years' experience in the business of commercial leasing of
property of the same type and use as the Premises and in the same geographical
vicinity, (ii) such two real estate brokers shall select a third similarly
qualified broker, and the three brokers so selected shall determine the market
rent, (iii) the decision of the majority of said brokers shall be final and
binding upon the parties hereto, and (iv) the brokers shall base their
determination of the market rent on the monthly rent (and the annual adjustment
percentage) obtained for property of comparable location, type and use as the
Premises with leases of comparable terms. Each party shall pay the expenses and
charges of the broker appointed by it and the parties shall pay the expenses and
charges of the third broker in equal shares. As soon as the market rent (and the
annual adjustment percentage) is so determined, Landlord and Tenant shall
immediately execute an amendment to this Lease stating the new monthly rent
(i.e., at market rent but not less than the monthly rent in effect at the
expiration of the Initial Term) (?) and such annual adjustment percentage.
Tenant shall not assign or otherwise transfer this option and any attempt to do
so shall render this option null and void; provided that Tenant may assign this
option to any corporation or other entity which acquires or is acquired by
Circadian or which results from a merger or consolidation with Circadian or
which either controls or is controlled by Circadian or which is controlled by
any of the foregoing, if, in any such case, this Lease is concurrently so
assigned. Further, if Tenant is in default at the time of its exercise of this
option or at the last day of the Initial Term, then such exercise shall be
ineffective and the lease shall expire at the end of the Initial Term.
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52. EXPANSION PROVISION
During the term, Tenant may give Landlord notice of desire to lease
additional or other space, such notice describing the size and location, and
other pertinent information regarding the expansion needs of Tenant. If,
thereafter, space meeting Tenant's needs becomes available in the Project (or in
other Projects owned or managed by Landlord) then Landlord shall promptly notify
Tenant of the availability of such space, and at the request of Tenant made
within five (5) days of the date of such notice of availability enter into
negotiations concerning the lease of such space. If a new lease is negotiated
covering space larger than the space leased under this Lease, Landlord will
agree, at the request of Tenant, to terminate the lease effective as of the date
of such new lease.
Landlord and Tenant shall negotiate the rent and other terms of any
lease of any applicable expansion space in good faith at a rent level, and under
other terms, substantially similar to that leased to other Tenants in the
Project of which the expansion space is a part during the nine (9) month period
prior to Landlord's notice to Tenant that such expansion space is available. If
Tenant and Landlord do not successfully negotiate a lease within thirty (30)
days of commencement of negotiations, Landlord shall not be obligated in any way
to terminate Tenant's lease, nor shall Landlord be liable to Tenant for leasing
the applicable expansion space to a third party whether under the same or more
favorable terms than that offered to the Tenant.
This paragraph 52 shall be of no further force and effect in the event
of a Sale by Landlord as provided in paragraph 28. The successor owner shall not
be obligated to offer any additional space or terminate this lease in any
manner.
IN WITNESS WHERE, Landlord and Tenant have executed and delivered this
lease on the date first above written.
LANDLORD: TENANT:
CALIFORNIA SECOND, LTD. CIRCADIAN, INCORPORATED
a Florida limited partnership a Delaware corporation
By: McCANDLESS PARTNERSHIP, a
California general partnership,
a general partner
By: /s/ Birk S. McCandless By: /s/ D. R. Nathe
------------------------- -------------------------------------
Birk S. McCandless, as (Signature)
Trustee under the Birk S.
McCandless and Mary D. R. Nathe
McCandless Inter Vivos -------------------------------------
Trust Agreement dated (Printed Name)
February 17, 1982,
a general partner V. P. Manufacturing
-------------------------------------
(Title)
7/6/87 June 24, 1987
------------------------- -------------------------------------
(Date) (Date)
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[MAP]
NOW LEASING IN NORTH SAN JOSE
McCANDLESS BUSINESS PARK
A 250,000 Square Foot
Office/Research & Development Center
PHASE I PHASE II
[MAP]
A Two-Phased Acre Master Planned Development
Single Story Buildings
WORK LETTER AGREEMENT
TURNKEY
Circadian
CONSTRUCTION EXHIBIT C
- --------------------------------------------------------------------------------
The Premises shall be improved in accordance with the following:
1. SHELL IMPROVEMENTS:
Tenant acknowledges having reviewed the drawings listed in Exhibit C-1
and the improvements constructed or to be constructed in accordance therewith,
and Tenant hereby approves the same as installed, subject only to such changes
as may subsequently be agreed upon by Landlord and Tenant. Such improvements are
hereafter called "Shell Improvements".
2. TENANT IMPROVEMENTS:
As used herein, "Tenant Improvements" shall include those items and
specifications set forth and described in Exhibits C-2 and C-3, attached
hereto, exclusive of Shell Improvements. Landlord shall construct Tenant
Improvements in accordance with Exhibits C-2 and C-3, attached hereto, and
paragraph 3 below. Landlord and Tenant hereby approve the same.
3. TENANT IMPROVEMENT DESIGN SCHEDULE:
The plans and specifications for the Tenant Improvements and any other
improvements shall be completed in accordance with the following:
(a) Tenant shall approve preliminary floor plan layouts ("Preliminary
Floor Plans") to Landlord by June 30, 1987 showing walls, doors, and other
Tenant Improvements as desired by Tenant. Landlord shall prepare final plans
("City Ready Plans") ready to submit to the City for a building permit.
(b) Between June 30, 1987 and July 10, 1987, Landlord's
representative and Tenant's representative shall meet as needed to review and
complete the final details related to the Preliminary Floor Plans, so that the
resulting July 17, 1987 City Ready Plans are subject only to minor changes.
(c) Concurrently with the preparation of the basic plans referred to
in (a) and (b) above, Landlord's contractor and subcontractors or independent
designers shall prepare design specifications outlining in reasonable detail
electrical, mechanical, and any other requirements not included on the City
Ready Plans set forth above. No later than July 10, 1987, Tenant shall have
-1-
made the decisions required, and supplied to Landlord the information necessary,
to complete the above specifications and City Ready Plans in enough detail to
bid the work, select subcontractors, and to proceed toward final design of
electrical, mechanical and other necessary plans in conformance therewith.
(d) Tenant's consultant shall provide all other color and material
specifications and finish plan by July 10, 1987.
4. CHANGES BY TENANT:
Tenant may request changes or additions to the Tenant Improvements;
provided, however, that (i) the effectiveness of any such requested change or
addition shall be subject to written approval by an authorized representative of
Landlord, (ii) to obtaining any required governmental permits or other approvals
and (iii) if such approved change order increases the cost of construction, then
Tenant shall pay the additional amount due Landlord within ten (10) days of the
day of commencement of the lease.
5. CHANGES BY AUTHORITY:
Tenant agrees that if any change, deletion or addition to any of the
improvements proposed to be constructed or installed is required by any
governmental authority in connection with obtaining any governmental permit or
approval, or otherwise, then such change, deletion or addition shall promptly be
made at Tenant's expense. Failure to obtain any required governmental approval
or permit for any Tenant Improvements desired by Tenant shall in no way be cause
for Tenant to terminate this lease.
6. DELAYS CAUSED BY TENANT:
If the commencement of the term is delayed due in any material respect
to Tenant's failure to meet the schedule set forth in paragraph 4 above, or to
construction delays because of any changes required by Tenant, or due to any
other failures to Tenant to perform its obligations under this lease, then the
basic rent and common area charges and any other payments specified in the lease
as commencing upon the commencement date of this lease shall nonetheless
commence in full as of the date by which Landlord's work would have been, in
Landlord's reasonable judgment, completed but for such delays or failure to
perform by Tenant.
7. PUNCH LIST:
Within ten (10) business days after commencement of the term, Tenant
shall deliver to Landlord a list of items ("Punch List") that Tenant believes
Landlord should complete or correct in order for the Premises to be acceptable.
Landlord shall commence to complete or correct the items as soon as possible,
except those that it contends are not justified. If Tenant does not deliver the
Punch List to Landlord within the ten (10) day period, Tenant shall
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be deemed to have accepted the Premises and approved the construction. Nothing
in this paragraph 7 shall delay the commencement of the term or Tenant's
obligation to pay rent or to make other payments due Landlord under the lease.
8. All references in the lease to Exhibit C shall be deemed to also
include Exhibits C-1, C-2 and C-3.
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PLANS FOR McCANDLESS BUSINESS PARK
CALIFORNIA SECOND, LTD.
ARCHITECT DATE JOB NO. PAGE DESCRIPTION
- --------- ------ ------- ---- -----------
V.C. Wong & Associates, 3/6/84 830123 A Cover Sheet
Inc.
" 3/6/84 " AS 1 General Specifications, Door
Schedule, Door Hardware
" 3/6/84 " AS 2 Handicapped Requirements,
Legend and Symbols
" 3/6/84 " AS 3 Sitework Details -
Construction Details
" 3/6/84 " AA Master Site Development Plan
Rev: 11/14/83
& 1/27/84
" 3/6/84 " A1 Site Plan - Bldg 4
" 3/6/84 " A2 Site Plan - Bldg 5
" 3/6/84 " A3 Floor Plan - Bldg 4
" 3/6/84 " A4 Partial Floor Plan - Bldg 5
" 3/6/84 " A5 Partial Floor Plan - Bldg 5
" 3/6/84 " A6 Floor Plan - Bldg 5
" 3/6/84 " A7 Roof Plan - Bldg 4
Rev: 3/22/84
" 3/6/84 " A8 Roof Plan - Bldg 5
Rev: 3/22/84
" 3/6/84 " A9 Elevations - Bldg 4
" 3/6/84 " A10 Elevations - Bldg 5
" 3/6/84 " A11 Building Sections - Bldg 4 & 5
" 3/6/84 " A12 Typical Hall Section & Details
Rev: 3/22/84
" 3/6/84 " A13 Soffit Plan - Bldg 4
" 3/6/84 " A14 Soffit Plan - Bldg 5
" 3/6/84 830123 A15 "Title 24" Requirements -
Bldg 4
" 3/6/84 830124 A16 "Title 24" Requirements -
Bldg 5
ARCHITECT DATE JOB NO. PAGE DESCRIPTION
- --------- ------ ------- ---- -----------
V.C. Wong & Associates, 3/6/84 VCW912 S1 General Notes & Details
Inc. Rev: 3/22/84
Kee Wong Engineering,
Inc.
" " 3/6/84 " S2 Details
Rev: 3/22/84
" " 3/6/84 " S3 Roof Notes & Details
Rev: 3/22/84
" " 3/6/84 " S4 Details
" " 3/6/84 " S5 Section - Details
" " 3/6/84 " S6 Section - Details
Rev: 3/22/84
" " 3/6/84 " S7 Details
Rev: 3/22/84
V.C. Wong & Associates, 3/6/84 83825 L1 Site Development Plan &
Inc. Rev: 12/19/84 Notes - Bldg 4
Hoffman Associates 1/19/84 & 2/13/84
" " 3/6/84 " L2 Site Development Plan &
Rev: 12/19/84, 1/24/84, Notes - Bldg 5
1/19/84 & 2/13/84
" " 3/6/84 " L3 Site Development Plan -
Rev: 1/20/84 & Irrigation Legend & Plan
1/24/84 Bldg 4
" " 3/6/84 " L4 Site Development Plan -
Rev: 1/20/84 Irrigation Legend & Plan
Bldg 5
" " 3/6/84 " L5 Plant List & Notes -
Rev: 1/19/84 & Bldg 4
1/24/84
" " 3/6/84 " L6 Plant List & Notes -
Rev: 1/19/84 Bldg 5
" " 3/6/84 " L7 Landscape Details
Rev: 1/19/84
1/24/84, 2/3/84,
2/13/84 & 3/2/84
" " 3/6/84 " L8 Landscape Details
" " 3/6/84 " L9 Landscape Specifications
The above list of plans includes a portion of those for proposed tenant
improvements as well as those for the building shell. As such, the above
specifications may be superseded to the extent inconsistent with the
attached Exhibit C-2.
McCANDLESS BUSINESS PARK
STANDARD TENANT IMPROVEMENT SPECIFICATIONS
Circadian
The Tenant Improvements shall include the following items and shall be
constructed in compliance with the following specifications:
6200 FINISH CARPENTRY
Custom-built cabinets at coffee bar and toilet rooms:
- Doors, drawers, and top faced with plastic laminate.
- Door Pulls: Stanley, No. 4484, aluminum satin finish.
- Cabinet Hinges: Stanley, No. 1501-2.
- Catches: Magnetic catches.
- Shelf Standards: Stanley, No. 6733 aluminum standards and No.
6731 brackets in aluminum mill finish.
- Drawer Slides: Knape & Vogt, No. 1260.
7200 INSULATION
- Batt insulation at exterior walls per Title 24 requirements.
- R-11 Batt insulation at demising walls and toilet room walls.
8100 METAL DOOR AND WINDOW FRAMES
- Anodized aluminum, 20 minute fire rated, door frames and
accessories by Eclipse. Color: Dark Bronze.
- Anodized aluminum window frames at sidelites to match door
frames.
8200 PLASTIC FACED WOOD DOORS
- 3 3/4" thick, solid core, fire rated wood doors.
- Plastic laminate face, color: Rustic Quartered Oak Natural,
W-8-164N by Nevamar. Edges stained to match.
8700 HARDWARE
- "Levon" by Schlage, oil rubbed bronze finish.
8800 GLAZING
- 1/4" diagonal wire glass at sidelites.
- 72" wide x 36" high mirror at toilet rooms.
9250 GYPSUM BOARD
- 5/8" thick fire rated gypsum board and accessories.
- 3 5/8" wide screw type, channel shaped metal studs, typical.
9500 ACOUSTICAL CEILING
- 2' X 4', 1 hour fire rated square edge, acoustical ceiling
panels; Natural Fissured II by Conwed. Color: White.
- "DXL" 1 hour fire rated suspended ceiling grid and accessories by
Donn. Color: White.
9650 RESILIENT FLOORING
- Armstrong, Excellon, 1/8" thick, vinyl composition tile. Color
to be selected.
- 4" rubber carpet and 4" rubber topset base by Burke. Color to be
selected.
9680 CARPET
- "Impact 30" by Philadelphia Carpets; direct glue down. Color and
quality to be same as existing at 3960 N. 1st St.
9900 PAINTING
- Gypsum board walls: taped, textured and painted with one coat
flat latex by Kelly-Moore. Color to be selected.
9985 PREFINISHED PANELS
- 4' wide x 8' high x 1/8" thick Marlite Brand Panels, vinyl-
covered aluminum moldings and water-resistant adhesive by
Masonite Corporation. Color to be selected.
10160 METAL TOILET COMPARTMENTS
- Headrail braced steel toilet partitions and wall mounted urinal
screen, porcelain enamel finish, by Flush Metal Partitions Corp.
Color to be selected.
10800 TOILET AND BATH ACCESSORIES
- Grab Bars, 36" & 42" long, #837.
- Towel dispenser and waste receptacle, #234.
- Toilet seat cover dispenser, #5831.
- Toilet paper holder, #5224.
- Napkin disposal, #4781 at women's toilet room.
- Napkin/tampon vendor, #401-104, at Women's toilet room only.
- Soap dispenser, #6314.
All toilet room accessories by Bradley or equal.
15300 FIRE PROTECTION SYSTEM
- Complete fire sprinkler system per requirements of local
governing agencies and as specified by fire sprinkler
subcontractor.
- Semi-recessed chrome heads and chrome escutheon plates at
suspended ceiling areas.
15400 PLUMBING
- Complete plumbing system including all piping, fixtures, and
accessories as required to serve toilet rooms and lunchroom as
specified by plumbing subcontractors.
- Water closet: wall-mounted white vitreous china, water-saver
"Afwall" toilet by American-standard; including flush valve
assembly and white solid plastic toilet seat.
15400 PLUMBING (Con't)
- Urinal (Men's Room Only): White vitreous china, "Jetbrook" urinal
by American-Standard; including flush valve assembly.
- Lavatory: White vitreous china, "Aqualyn" lavatory by American-
Standard; including single handle faucet.
- Drinking Fountain: Haws Model No. HWC7 electric water cooler
stainless steel finish.
15500 HEATING, VENTILATING AND AIR CONDITIONING
- Complete packaged HVAC system including all equipment, ductwork,
distribution, zoning and controls as specified by mechanical
subcontractor.
16000 ELECTRICAL, LIGHTING AND TELEPHONE
- Complete electrical and lighting distribution system including
fixtures, devices and controls as specified by electrical
subcontractor.
- Two electrical duplex outlets, one telephone pull ring and wire
per office, typical.
- Typical light fixtures shall be fluorescent lay-in type fixtures
with energy saving ballasts per Title 24 requirements. Lens:
Prismatic lens, clear acrylic.
WINDOW COVERINGS - To be same color and quality as that existing at
3960 - N. 1st St. DW 6/24/87
FIRST AMENDMENT TO LEASE
This First Amendment to Lease ("Amendment") is made this 1st day of
DECEMBER, 1987 and amends that certain lease dated June 9, 1987 ("Lease") by and
between CALIFORNIA SECOND, LTD., a Florida limited partnership ("Landlord") and
CIRCADIAN, INCORPORATED, a Delaware corporation ("Tenant").
R E C I T A L S
A. Pursuant to the Lease, Tenant leases from Landlord approximately
twenty-nine thousand, four hundred twenty-four (29,424) square feet of space
located at 3942 North First Street, San Jose, California ("Premises"). The
Premises are outlined in red on Exhibit A.
B. Paragraph 2(a) of the Lease provides that the term of the Lease is
scheduled to commence on December 1, 1987.
C. As of this date, Tenant does not intend to occupy the Premises and is
currently, with assistance from Cornish & Carey Commercial, attempting to locate
a suitable subtenant for the Premises.
D. The Lease requires Landlord to construct, at Landlord's expense, those
certain Tenant Improvements defined in Exhibit C to the Lease.
E. Tenant has requested that Landlord modify the plans and specifications
of the Tenant Improvements in accordance with Exhibit B attached hereto. The
Tenant Improvements as modified by Exhibit B shall be referred to as the
"Modified Tenant Improvements".
F. The cost of completing the Modified Tenant Improvements may be less
than the cost Landlord would have incurred to complete the Tenant Improvements
had Tenant not requested modifications. Any such saving that results from the
modification of the Tenant Improvements will be referred to herein as the
"Tenant Improvement Savings".
G. Landlord and Tenant desire to set forth their
-1-
agreement regarding the modifications to the Tenant Improvements, the
expenditure of the Tenant Improvement Savings and the agreed commencement date
of the term of the Lease.
NOW, THEREFORE, the parties hereto agree as follows:
1. TERM
The parties hereby acknowledge that notwithstanding the provisions of
paragraph 2(b) of the Lease or any other provision of the Lease, the term of the
Lease shall commence on December 1, 1987 and shall expire on September 27, 1989
(unless extended by Tenant pursuant to Paragraph 51 of the Lease). The parties
further acknowledge that said commencement date shall not be delayed for any
reason and shall not be conditioned upon the completion of the Tenant
Improvements, or Modified Tenant Improvements, or the occupancy of the Premises
by Tenant or any subtenant or assignee of Tenant.
2. MODIFICATION OF TENANT IMPROVEMENTS
Landlord agrees to diligently pursue the completion of the Modified
Tenant Improvements. Within thirty (30) days following the completion of the
Modified Tenant Improvements, Landlord shall deliver to Tenant a statement
showing the Tenant Improvement Savings, if any. The Tenant Improvement Savings
shall be determined based on the change order for such modifications provided by
the general contractor installing the Modified Tenant Improvements.
3. APPLICATION OF TENANT IMPROVEMENT SAVINGS
Within ten (10) days after Tenant's written request for any additional
improvements to the Premises ("Additional Tenant Improvements"), Landlord will
commence to prepare plans and specifications for such improvements; thereafter,
Landlord and Tenant shall meet as necessary to complete plans in sufficient
detail to submit to the City for a building permit. Once a permit is issued for
the Additional Tenant Improvements, Landlord shall commence or cause the
commencement of such improvements and diligently pursue the same to
-2-
completion. The Tenant Improvement Savings, if any, shall be applied by Landlord
to pay the Total Cost of Additional Tenant Improvements, as defined in Paragraph
4 below. In the event the Total Cost of Additional Tenant Improvements exceeds
the Tenant Improvement Savings, then Tenant shall pay the excess amount; fifty
percent (50%) of such amount (based on Landlord's estimate) to be paid prior to
commencement of construction by Landlord and fifty percent (50%) to be paid when
the Additional Tenant Improvements are fifty percent (50%) completed. Tenant
shall not be entitled to any rebate, credit, payment or other consideration, in
the event the Total Cost of Additional Tenant Improvements is less than the
Tenant Improvement Savings.
4. TOTAL COST OF ADDITIONAL TENANT IMPROVEMENTS
As used herein, the "Total Cost of Additional Tenant Improvements"
shall include (i) the cost of all materials and items installed as part of the
Additional Tenant Improvements; (ii) if requested by Tenant, the cost of
overtime or special expenditures required to obtain and install the Additional
Tenant Improvement; (iii) all costs related to change orders requested by
Tenant; (iv) the cost of changes required or requested by governmental
authority; (v) permit fees and other fees not previously paid by Landlord as
part of the Modified Tenant Improvements; (vi) the cost of consultants,
engineers and architects hired by Landlord; (vii) an amount equal to the actual
cost of supervision, administration and on-site facilities and equipment
necessary to complete the Modified Tenant Improvements; and (viii) an amount
equal to nine percent (9%) of the sum of items (i) through (vii) above as and
for the general contractor's overhead and profit.
5. ESTOPPEL CERTIFICATE
In accordance with paragraph 27 of the Lease, Tenant shall execute and
deliver to Landlord within ten (10) days after request an Estoppel Certificate
substantially in the form of the Estoppel Certificate attached hereto as Exhibit
C.
-3-
6. SUBLEASE FOR PREMISES
Tenant agrees that it shall comply with the provisions of Paragraph 19
of the Lease regarding assigning the Lease or subletting the Premises. Tenant
agrees that it shall pay any brokerage fees incurred in obtaining a subtenant
for the Premises and shall hold Landlord harmless from all damages resulting
from any claim asserted by any broker connected with obtaining a subtenant for
the Premises.
7. RESTATEMENT OF OTHER LEASE TERMS
All terms, covenants and conditions of the Lease shall remain in full
force and effect except as specifically modified herein.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
indicated below their signature.
LANDLORD: TENANT:
CALIFORNIA SECOND, LTD. CIRCADIAN, INCORPORATED
a Florida limited partnership a Delaware Corporation
By: McCandless Partnership
a California general partnership,
a general partner
By: /s/ Birk S. McCandless By: /s/ John M. Harland
-------------------------- -----------------------
Birk S. McCandless, as Trustee (Signature)
under the Birk S. McCandless John M. Harland
and Mary McCandless Inter Vivos ------------------------
Trust Agreement dated 2/17/82, (Printed Name)
a general partner Vice President, Finance
12/1/87 ------------------------
------------------------- (Title)
(Date) 12/1/87
------------------------
(Date)
-4-
NOW LEASING IN NORTH SAN JOSE
McCandless Business Park
A 250,000 Square Foot
Office/Research & Development Center
[MAP]
A Two-Phased 18 Acre Master Planned Development
Single Story Buildings
EXHIBIT A
EXHIBIT B
MODIFIED TENANT IMPROVEMENTS
CIRCADIAN - II, 3942 N. FIRST STREET
SAN JOSE, CALIFORNIA
MODIFICATIONS/DELETIONS TO
INTERIOR IMPROVEMENT SPECIFICATIONS:
A. Complete the office area between columns six and eight, including toilet
core (with janitor's closet) as designed.
B. In the area encompassing the planned rooms 115 (mail/copy), 116 (machine
shop), 117 (burn-in), 117A/117B (QA lab/machinery room) leave out the
interior walls and do the following:
1. Eliminate the hard ceiling in 117, 117A, 117B and install a complete
T-bar ceiling with drop in light fixtures throughout
2. Reduce the specification of fire sprinkler heads to ordinary
temperature
3. Install HVAC for this area by distributing the previously supplied
cooling from room 116 and 177A/B. Eliminate cooling for the mail room
area (115 off of the office space).
4. Minimal electrical plug outlets as now exist
5. Seal concrete floor
C. Eliminate all VCT tile from the high bay production area
D. Eliminate all process electrical from high bay production area. If conduit
and junction box are still installed leave them in place, but do not pull
any new wiring or connect circuitry. No process electrical in areas
previously designated machine shop/burn-in/QA lab.
E. No chain link fences
F. Compressed air piping to remain as installed (with caps) but no quick
disconnect couplings
G. Wall finishes in the high bay area are to be left rough tape (no sanding)
and no paint
H. No ceiling paint or duct work paint in the high bay area
J. Leave the existing light fixtures in place in the high bay, to
approximately G.5, make operative, but do not install new light fixtures
1. If restocking charge is significant, except delivery on remaining high
bay light fixtures, and stock pile in the building.
K. Cap off the exhaust duct in the wave solder area 4.5/L, and leave duct in
place, do not install exhaust fan
L. Do not install sink in wave solder area, cap off drain and water supply
M. Complete truck dock, shipping and receiving dock, and roll-up door
installation
SECOND AMENDMENT TO LEASE
CIRCADIAN PHASE II LEASE
THIS SECOND AMENDMENT TO LEASE ("Amendment") is made this 30th day of
----
August, 1988 and amends that certain lease dated June 9, 1987 as amended by the
- ------
First Amendment to Lease dated December 1, 1987 (the Lease as amended shall
hereinafter be referred to as the "Phase II Lease") by and between CALIFORNIA
SECOND, LTD., a Florida limited partnership ("Landlord") and CIRCADIAN,
INCORPORATED, a Delaware corporation ("Tenant").
R E C I T A L S
A. Pursuant to the Phase II Lease, Tenant leases from Landlord
approximately twenty-nine thousand four hundred twenty-four (29,424) square feet
of space located at 3942 North First Street, San Jose, California ("Premises").
The Premises are outlined in red on Exhibit A.
B. Pursuant to that certain other lease agreement dated July 3, 1984 as
amended by that First Addendum to Lease dated September 20, 1984 and that Second
Addendum to Lease dated February 25, 1985 ("Phase I Lease") Tenant also leases
from Landlord approximately thirty-three thousand nine hundred and eighty-four
(33,984) square feet of space located at 3960 North First Street, San Jose,
California ("First Lease").
C. Landlord has agreed to terminate the Phase I Lease on the terms and
conditions set forth in that certain Lease Termination Agreement executed
concurrently herewith.
D. As consideration for Landlord's agreement to terminate the Phase I
Lease, Landlord and Tenant have agreed to increase the rent payable under the
Phase II Lease and to apply a portion of tenant's security deposit under the
Phase II Lease to the payment of certain expenses incurred by Landlord in
connection with the termination of the Phase I Lease.
-1-
NOW THEREFORE, the parties hereto agree as follows:
1. INCREASE IN MONTHLY RENT.
Commencing October 1, 1988 the monthly rent payable by Tenant under
the Phase II Lease as provided in paragraph 4(a) of the Phase II Lease shall be
increased from Nineteen Thousand Two Hundred Seventy-Two and 72/100 Dollars
($19,272.72) per month to Forty-Six Thousand Three Hundred Nine and 65/100
($46,309.65) per month.
2. SECURITY DEPOSIT.
Tenant agrees that Landlord may apply Nine Thousand Five Hundred
Sixty-Two and 78/100 Dollars ($9,562,78) of the security deposit being held by
Landlord pursuant to paragraph 4(d) of the Phase II Lease to offset certain
costs incurred by Landlord in connection with terminating the Phase I Lease
and, therefore, the security deposit which will be held by Landlord under the
Phase II Lease shall be reduced from Nineteen Thousand Two Hundred Seventy-Two
and 72/100 Dollars ($19,272.72) to Nine Thousand Seven Hundred Nine and 94/100
Dollars ($9,709.94).
3. RENT CREDIT FOR UNUSED TENANT IMPROVEMENT ALLOWANCE.
Landlord and Tenant agree that Tenant has an outstanding credit of
Twenty-Nine Thousand Five Hundred Nineteen and 00/100 Dollars ($29,519.00)
("T.I. Credit ") which pursuant to the terms of the First Amendment to Lease
dated December 1, 1987 Tenant was entitled to expend on the construction of
additional improvements within the Premises. Landlord agrees that if Tenant does
not request additional improvements to the premises, Landlord will apply the
T.I. Credit, or any remaining portion thereof, against the monthly rent due
under the lease for the last lease month of the term.
4. RESTATEMENT OF OTHER LEASE TERMS.
All terms, covenants and conditions of the Lease shall remain in full
force and effect except as specifically modified herein.
-2-
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
indicated below their signatures.
LANDLORD: TENANT:
CALIFORNIA SECOND, LTD. CIRCADIAN, INCORPORATED
a Florida limited partnership a Delaware Corporation
By: McCandless Partnership
a California general partnership,
a general partner
By: /s/ Birk S. McCandless By: /s/ John M. Harland
-------------------------- -----------------------
Birk S. McCandless, as (Signature)
Trustee under Trust John M. Harland
Agreement dated 2/17/84, ------------------------
a general partner (Printed Name)
Vice President, Finance
8/30/88 ------------------------
------------------------- (Title)
(Date) 8/16/88
------------------------
(Date)
McCandless Business Park
A 250,000 Square Foot
Office/Research & Development Center
[MAP]
EXHIBIT A
SECOND AMENDMENT TO LEASE
CIRCADIAN PHASE II LEASE
THIS SECOND AMENDMENT TO LEASE ("Amendment") is made this 30th day of
August, 1988 and amends that certain lease dated June 9, 1987 as amended by the
First Amendment to Lease dated December 1, 1987 (the Lease as amended shall
hereinafter be referred to as the "Phase II Lease") by and between CALIFORNIA
SECOND, LTD., a Florida limited partnership ("Landlord") and CIRCADIAN,
INCORPORATED, a Delaware corporation ("Tenant").
R E C I T A L S
A. Pursuant to the Phase II Lease, Tenant leases from Landlord
approximately twenty-nine thousand four hundred twenty-four (29,424) square feet
of space located at 3942 North First Street, San Jose, California ("Premises").
The Premises are outlined in red on Exhibit A.
B. Pursuant to that certain other lease agreement dated July 3, 1984 as
amended by that First Addendum to Lease dated September 20, 1984 and that Second
Addendum to Lease dated February 25, 1985 ("Phase I Lease") Tenant also leases
from Landlord approximately thirty-three thousand nine hundred and eighty-four
(33,984) square feet of space located at 3960 North First Street, San Jose,
California ("First Lease").
C. Landlord has agreed to terminate the Phase I Lease on the terms and
conditions set forth in that certain Lease Termination Agreement executed
concurrently herewith.
D. As consideration for Landlord's agreement to terminate the Phase I
Lease, Landlord and Tenant have agreed to increase the rent payable under the
Phase II Lease and to apply a portion of tenant's security deposit under the
Phase II Lease to the payment of certain expenses incurred by Landlord in
connection with the termination of the Phase I Lease.
-1-
NOW THEREFORE, the parties hereto agree as follows:
1. INCREASE IN MONTHLY RENT.
Commencing October 1, 1988 the monthly rent payable by Tenant under
the Phase II Lease as provided in paragraph 4(a) of the Phase II Lease shall be
increased from Nineteen Thousand Two Hundred Seventy-Two and 72/100 Dollars
($19,272.72) per month to Forty-Six Thousand Three Hundred Nine and 65/100
($46,309.65) per month.
2. SECURITY DEPOSIT.
Tenant agrees that Landlord may apply Nine Thousand Five Hundred
Sixty-Two and 78/100 Dollars ($9,562,78) of the security deposit being held by
Landlord pursuant to paragraph 4(d) of the Phase II Lease to offset certain
costs incurred by Landlord in connection with terminating the Phase II Lease
and, therefore, the security deposit which will be held by Landlord under the
Phase II Lease shall be reduced from Nineteen Thousand Two Hundred Seventy-Two
and 72/100 Dollars ($19,272.72) TO NINE THOUSAND SEVEN HUNDRED NINE AND 94/100
DOLLARS ($9,709.94).
3. RENT CREDIT FOR UNUSED TENANT IMPROVEMENT ALLOWANCE.
Landlord and Tenant agree that Tenant has an outstanding credit of
Twenty-Nine Thousand Five Hundred Nineteen and 00/100 Dollars ($29,519.00)
("T.I. Credit ") which pursuant to the terms of the First Amendment to Lease
dated December 1, 1987 Tenant was entitled to expend on the construction of
additional improvements within the Premises. LANDLORD AGREES THAT IF TENANT DOES
NOT REQUEST ADDITIONAL IMPROVEMENTS TO THE PREMISES, LANDLORD WILL apply the
T.I. Credit, or any remaining portion thereof, against the monthly rent due
under the lease for the last lease month of the term.
4. RESTATEMENT OF OTHER LEASE TERMS.
All terms, covenants and conditions of the Lease shall remain in full
force and effect except as specifically modified herein.
-2-
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
indicated below their signatures.
LANDLORD: TENANT:
CALIFORNIA SECOND, LTD. CIRCADIAN, INCORPORATED
a Florida limited partnership a Delaware Corporation
By: McCandless Partnership
a California general partnership,
a general partner
By: /s/ Birk S. McCandless By: /s/ John M. Harland
-------------------------- -------------------------
Birk S. McCandless, as (Signature)
Trustee under Trust John M. Harland
Agreement dated 2/17/84, -------------------------
a general partner (Printed Name)
Vice President, Finance
8/30/88 -------------------------
------------------------- (Title)
(Date) 8/16/88
-------------------------
(Date)
McCandless Business Park
A 250,000 Square Foot
Office/Research & Development Center
[MAP]
EXHIBIT A
December 6, 1995
Mr. Ken Massey
NOVELLUS SYSTEMS, INC.
432 North 44th Street, Suite 420
Phoenix, Arizona 85008
RE: THREE GATEWAY
Dear Ken:
Please find enclosed a fully executed copy of the lease agreement for your
premises in Three Gateway, along with a copy of the construction pricing
estimate from Jokake. Please call me if you have any questions.
Once again, we are pleased to welcome you to the building!
Sincerely,
/s/ Rebecca White
Rebecca White
Property Manager
enc.
THREE GATEWAY - OFFICE LEASE
SUMMARY OF SELECTED MATTERS
LANDLORD: DMB PROPERTY VENTURES LIMITED PARTNERSHIP
TENANT: NOVELLUS SYSTEMS, INC.
The Premises: Suite 1140
Area of the Premises: 2,824 rsf - 2,521 rsf
The Term: Three (3) Years
Commencement and
Expiration Dates: February 1, 1996
Tenant's
Proportionate Share: 1.3%
Expense Stop: Base Year 1996
Base Rent: $56,480.04 per year, $4,706.67 per month
Tenant's address for pre-occupancy notices:
432 North 44th Street, #420
Phoenix, Arizona 85008
Landlord's address for payment of rent:
410 North 44th Street, Suite 290
Phoenix, Arizona 85008
Tenant
Improvement Allowance: $8.00 per usf
Security Deposit: $4,706.67
Description of Tenant's Business on the Premises:
General Office
Name of Guarantors:
N/A
THIS SUMMARY IS FOR PURPOSES OF CONVENIENCE, AND IS NOT PART OF THE LEASE ITSELF
TABLE OF CONTENTS
1. TERM AND POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . 1
2. RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. SECURITY DEPOSIT AND GUARANTIES . . . . . . . . . . . . . . . . . . 2
4. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. PARKING AND COMMON USE AREAS. . . . . . . . . . . . . . . . . . . . 3
7. OPERATING COSTS, REAL PROPERTY TAXES AND UTILITIES. . . . . . . . . 3
8. CONSTRUCTION, DELIVERY, AND CONDITION . . . . . . . . . . . . . . . 4
9. REPAIR AND MAINTENANCE. . . . . . . . . . . . . . . . . . . . . . . 4
10. ALTERATIONS AND PERSONAL PROPERTY . . . . . . . . . . . . . . . . . 4
11. CERTAIN RIGHTS RESERVED BY LANDLORD . . . . . . . . . . . . . . . . 5
12. DAMAGE TO PROPERTY; INJURY TO PERSONS; INSURANCE. . . . . . . . . . 5
13. FIRE AND CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . 5
14. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
15. ASSIGNMENT AND SUBLETTING; SALE BY LANDLORD . . . . . . . . . . . . 6
16. ESTOPPEL CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . 6
17. LANDLORD'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . 6
18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
19. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
20. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 7
EXHIBITS
--------
EXHIBIT "A" - Legal Description
EXHIBIT "B" - Premises and Area of Exclusivity
EXHIBIT "C" - Tenant Improvements
EXHIBIT "D" - Building Rules and Regulations
THREE GATEWAY OFFICE LEASE
THIS LEASE is made this ______ day of November, 1995, by and between DMB
PROPERTY VENTURES LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and NOVELLUS SYSTEMS, INC. a California corporation ("TENANT").
Landlord hereby leases to Tenant and Tenant leases from Landlord for the
term and upon the conditions and agreements set forth in this lease a portion of
the real property described on Exhibit "A", as illustrated by cross-hatching or
otherwise on the plan attached as Exhibit "B", consisting of approximately 2,824
rentable square feet of space (the "PREMISES") known as Suite 1140 in Three
Gateway (the "BUILDING") on the first floor. The address of the Building
is 410 North 44th Street, Phoenix, Arizona 85008.
1. TERM AND POSSESSION
(a) The term of this lease, and Tenant's obligation to pay rent, shall
commence February 1, 1996 (the "COMMENCEMENT DATE") and shall expire on January
30, 1999. Upon request of either party after the term has commenced, Landlord
and Tenant shall jointly execute a memorandum confirming the Commencement Date.
(b) Upon the termination or expiration of this lease or upon the
termination of Tenant's right of possession, whether by lapse of time or
otherwise, Tenant shall at once surrender possession of the Premises to
Landlord and remove all of Tenant's property as provided in Article 10.
(c) Tenant shall have no right to hold over after the expiration of the
term of this lease without Landlord's consent. If, with Landlord's consent,
Tenant holds over after the expiration of this lease, Tenant shall become a
tenant from month to month only, upon all of the terms of this lease except that
the amount of the Base Rent shall be increased to an amount equal to 150% of the
Base Rental Rate in effect immediately prior to the expiration.
(d) RIGHT OF FIRST REFUSAL. Tenant shall have a right of first refusal to
lease any adjacent, vacant space on the eleventh floor except any space that is
subject to renewal by the current tenant, or any space that is subject to
previously granted options, rights of first refusal or offer, or similar rights.
If a qualifying space becomes vacant during Tenant's initial term, Landlord
shall notify Tenant that the space is available. Tenant shall have five (5) days
following receipt of Landlord's notice to notify Landlord of its intention to
lease the space, which notice shall be irrevocable. The terms and conditions
shall be mutually agreed upon between the parties at that time. In the event
Tenant does not exercise its right to lease the space in the time specified
above, Landlord may proceed to lease such space to the general public.
(e) OPTION TO RENEW. Provided that Tenant is not in default under any
provision of this lease, and provided that Tenant is still occupying the
premises, Tenant shall have the option to renew this lease for one (1)
additional term of three (3) years. Tenant shall exercise said option by giving
notice to Landlord at any time not less than six (6) months and not more than
one (1) year prior to the expiration of the initial term (the "Option Exercise
Date"). If Tenant elects to extend the initial term of this lease, such extended
term shall be upon and subject to all of the terms, covenants and conditions of
this lease except that the rental rate, operating expenses, tenant improvements
and any other terms as negotiated between the parties, shall be mutually agreed
upon at that time.
2. RENT
(a) BASE RENT. Tenant shall pay to Landlord during the term of this lease
at the office of Landlord or at such other place as Landlord may designate,
without notice, demand, deduction or set-off, in equal monthly installments in
advance on the first day of each calendar month, Base Annual Rent in the amount
of:
$56,480.04 per year; $4,706.67 per month
In the event the Commencement Date does not occur on the first day of a calendar
month, Tenant shall pay rent on the Commencement Date for the fractional month
on a pro rata basis.
(b) NATURE OF PAYMENTS. All sums required to be paid by Tenant under this
lease, whether or not so designated, are rent.
(c) LATE CHARGES AND INTEREST. Any amount due from Tenant to Landlord
which is not paid when due shall bear interest at three percent in excess of the
prime rate as established from time to time by Bank One or its successor in
interest from the due date until paid, but the payment of such interest shall
not excuse or cure any default by Tenant under this lease. In addition, any rent
or other payment not paid within ten days of its due date shall be subject to
five percent late charge representing the additional costs and burdens of
special handling.
1
3. SECURITY DEPOSIT AND GUARANTIES
Concurrently with the execution of this lease, Tenant shall: (a) Deliver
to Landlord an unconditional guaranty of the performance of this lease by
Tenant, in form satisfactory to Landlord, executed by N/A; and (b) Deposit with
Landlord the sum of $4,706.67 as security for the full and faithful performance
of this lease. If Tenant defaults with respect to any provision of this lease,
Landlord may apply all or any part of the security deposit for the payment of
any sum in default, or for the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. Application of the deposit shall not constitute a
cure of the default by Tenant to which the application relates. If any portion
of the security deposit is so applied, Tenant shall, within five days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount. Landlord shall not be
required to keep the security deposit separate from its general funds, and
Tenant shall not be entitled to interest on the deposit. If Tenant shall fully
and faithfully perform every provision of this lease to be performed by Tenant,
the security deposit or any balance thereof shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest).
4. USE
(a) Tenant shall continuously use and occupy the Premises for GENERAL
OFFICE and shall use them for no other purpose whatsoever without Landlord's
prior written consent. Tenant shall be open for business during normal business
hours at least five days a week (excluding, at Tenant's option, recognized legal
holidays such as Christmas and New Year's Day). Tenant shall maintain, at all
times, an average density no greater than one person for each two hundred
rentable square feet of the premises.
(b) Tenant shall:
(i) Not use or permit upon the Premises anything that would
invalidate any policies of insurance now or hereafter carried on the Premises or
that will increase the rate of insurance on the Premises or the Building;
(ii) Pay all additional insurance premiums which may be caused by
the use which Tenant shall make of the Premises;
(iii) Not in any manner deface or injure the Premises or overload
any floor of the Premises;
(iv) Not do anything or permit anything to be done upon the Premises
in any way tending to create a nuisance, or tending to disturb any other lessee
in the Building or tending to injure the reputation of the Building, including,
without limitation, the playing of music audible outside the Premises and the
placement of signs in or displayed through any window or door;
(vi) Not use the Premises for lodging or sleeping purposes;
(vii) Not commit or suffer to be committed any waste upon the
Premises;
(viii) Not violate any recorded restriction or covenant affecting
the Building, nor use the Premises for any purpose which would be in violation
of any exclusive rights or use granted to other tenants in the Building.
Landlord shall not grant exclusive rights which would prohibit Tenant from using
the Premises for the purposes stated in Article 4(a) above.
(c) Tenant, at Tenant's expense, shall comply with all present and
future federal, state and local laws, ordinances, order, rules and
regulations (collectively, "LAWS"), and shall procure all permits,
certificates, licenses and other authorizations required by applicable Law
relating to Tenant's business or Tenant's use or occupancy of the Premises or
Tenant's activities on the Premises. Tenant shall make all reports and
filings required by applicable Laws. Tenant shall defend, indemnify and hold
harmless Landlord and Landlord's present and future officers, directors,
employees, partners and agents from and against all claims, demands,
liabilities, fines, penalties, losses, costs and expenses, including but not
limited to costs of compliance, remedial costs, and reasonable attorneys'
fees, arising out of or relating to any failure to Tenant to comply with
applicable Laws. Without limiting the foregoing, Tenant shall comply with all
Laws relating to environmental matters, and shall defend, indemnify and hold
harmless Landlord and Landlord's present and future officers, directors,
employees, partners and agents from and against all claims, demands,
liabilities, fines, penalties, losses, costs and expenses, including but not
limited to costs of compliance, remedial costs, clean-up costs and reasonable
attorneys' fees, arising from or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or
the emission, discharge, release or threatened release into the environment,
of any pollutant, contaminant or hazardous or toxic material, substance or
matter from, on or at the Premises or the Building as a result of any act or
omission on the part of Tenant. Tenant's indemnification obligations shall
survive the expiration or termination of this lease.
5. TAXES
(a) Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon Tenant's fixtures, furnishings, equipment and other personal
property located in or upon the Premises. Tenant shall cause
2
the fixtures, furnishings, equipment and other personal property to be assessed
and billed separately from the real property of which the Premises form a part.
In the event any or all of Tenant's fixtures, furnishings, equipment and other
personal property shall be assessed and taxed with the real property, Tenant
shall pay to Landlord Tenant's share of the taxes within ten days after delivery
to Tenant by Landlord of a statement in writing setting forth the amount of the
taxes applicable to Tenant's personal property.
(b) Tenant shall, simultaneously with the payment of any sums required to
be paid under this lease as rent, additional rent or otherwise, reimburse
Landlord for any sales, use, rental, transaction privilege or other excise tax
imposed or levied on, or measured by, the amount paid.
6. PARKING AND COMMON USE AREAS
All parking areas, parking structures, access roads, driveways, pedestrian
sidewalks and ramps, landscaped areas, drainage facilities, exterior lighting,
signs, courtyards, corridors, elevators (if any), entryways, public restrooms,
and other areas and improvements provided by Landlord for the general use in
common of tenants, their officers, agents, employees, customers and other
invitees (all of which are referred to as "COMMON FACILITIES") shall at all
times be subject to the exclusive control and management of Landlord, and
Landlord shall have the right from time to time to modify, enlarge or eliminate
common facilities and to establish, modify and enforce reasonable rules and
regulations with respect thereto. Without limiting the foregoing, Landlord may
designate separate or combined parking areas for visitors, tenants and
employees.
Tenant shall be entitled to the use of two (2) covered reserved spaces and
four (4) covered unreserved spaces in the parking garage adjacent to the
building at no cost for the term of this lease. Landlord to determine the
location of said spaces and may re-assign said spaces from time to time, as
Landlord deems necessary.
7. OPERATING COSTS, REAL PROPERTY TAXES AND UTILITIES
(a) Tenant shall pay Tenant's pro rata share of all of the Building's
operating cost, but only to the extent the Building's operating cost exceeds the
actual operating costs incurred in the calendar year 1996 (the "EXPENSE STOP").
The Building's operating cost consists of those costs and expenses directly
associated with managing, operating, maintaining and repairing the office
building containing the Premises and the associated parking facilities, grounds
and common facilities, including all electrical, heating, ventilating, air
conditioning, plumbing and other building systems; exterior and interior water
features; utilities; fire and extended coverage insurance, and rent interruption
insurance; window cleaning; janitorial services; energy management costs; real
property taxes and general and special assessments; assessments and other
amounts legally payable to the property owner's association created under the
restrictive covenants to which the Building is subject; wages, salaries
and employee benefits of persons performing services in connection with the
Building; parking lot and parking structure sweeping, sealing, patching,
restriping, repair and maintenance; public liability and property damage
insurance; supplies, materials, tools, parts, and equipment; equipment rental
charges; bookkeeping, accounting, legal and other professional charges and
expenses; fees for permits and licenses; administrative expenses; taxes other
than real property taxes; service and maintenance contracts; signage; and
landscaping. The Building's operating cost shall not include ground rents, debt
service, depreciation, income taxes, general overhead, tenant improvements,
brokerage commissions, new construction, or replacements outside of normal
maintenance and repair. Any expenditure for an Item with a useful life extending
over several years shall, if necessary to avoid material distortion of operating
costs, be amortized over the useful life of the item and the amortization amount
included in each year's operating cost. Operating Costs, Real Property Taxes and
Utilities shall be further categorized as follows:
Category A: Expenses not within Landlord's control.
Category A expenses include Utility Costs, Insurance Costs and
Governmental Taxes
Category B: Expenses within Landlord's control.
Category B expenses shall include all expenses not specifically
named in Category A above.
Tenant shall pay Operating Costs, Real Property Taxes and Utilities
increases in accordance with this Article 7, however, increases in Category B
expenses shall not be in excess of six percent (6%) per year. On the first day
of each month Tenant shall pay a monthly advance charge on account of Tenant's
pro rata share of the Building's operating cost in excess of the Expense Stop.
The amount of the monthly charge shall be established by Landlord and may be
adjusted from time to time by Landlord to reflect Landlord's estimate of current
and anticipated cost. Within 120 days after the end of each fiscal year as
established for the Building by Landlord, Landlord shall provide to Tenant a
reasonably detailed summary of the actual operating costs showing Tenant's
actual share and the amount by which Tenant has overpaid or underpaid. Any
overpayment shall be credited to Tenant's account. Any deficiency shall be
payable within ten days after receipt of the statement. In the alternative,
Landlord may, at its option during all or part of the Lease term, bill Tenant
for its pro rata share of operating cost in excess of the Expense Stop, in
arrears, based on actual costs as they are incurred, in which case Tenant shall
pay the invoice within ten days after receipt.
(b) Tenant's pro rata share of the Building's operating cost shall be
that proportion that the rentable area of the Premises bears to the total
rentable area of all rentable area in the Building. The operating cost for
the fiscal year in which this lease commences or terminates shall be
apportioned so that Tenant shall not be responsible for costs that relate to
periods prior to or subsequent to the term of this lease except any period
3
of holding over. Rentable area shall be measured according to BOMA standards as
approved July 31, 1980.
(c) Tenant shall be solely responsible for the cost of any heating,
ventilation or air conditioning provided to the Premises at Tenant's request
outside of normal business hours, measured at an hourly rate reasonably
established by Landlord and billed to Tenant from time to time by Landlord.
Normal business hours for the Building are from 7:00 a.m. to 6:00 p.m. on Monday
through Friday, and 8:00 a.m. to 12:00 p.m. on Saturday, excluding holidays.
8. CONSTRUCTION, DELIVERY, AND CONDITION
(a) If delivery of possession of the Premises to Tenant is delayed beyond
the anticipated Commencement Date because of a delay in the completion of
construction of the Premises by Landlord or because of a failure of an existing
tenant to surrender possession of the Premises to Landlord, then this lease
shall remain in full force and effect, Landlord shall not be liable to Tenant
for any damage occasioned by delay, and the Commencement Date shall be changed
to the date actual delivery of possession to Tenant is effected. Notwithstanding
the foregoing, if delivery of possession is delayed more than 30 days after the
anticipated Commencement Date as set forth in Article 1(a), Tenant, by written
notice to Landlord, may terminate this lease prior to taking possession, and
upon such termination any security deposit shall be refunded and both Landlord
and Tenant shall be released of all further obligation.
(b) Landlord shall construct improvements in the Premises in accordance
with the plans and specifications attached as or identified in Exhibit "C". If
no Exhibit "C" is attached, Tenant accepts the Premises AS IS. Landlord has no
obligation to design or construct Improvements or to make alterations in the
Premises except as specifically set forth in Exhibit "C". Tenant shall pay to
Landlord upon the Delivery Date the amount by which the cost of the work
performed by Landlord exceeds $20,168, and shall pay, in addition, for any
increases in costs resulting from changes in the approved plans and
specifications made at Tenant's request. Any changes in the approved plans and
specifications shall be subject to approval by both Landlord and Tenant. Any
defects in construction performed by Landlord shall automatically be waived
unless specified in a written punchlist delivered to Landlord within ten days
after Tenant takes possession. Landlord shall promptly correct all defects set
forth in the punchlist.
9. REPAIR AND MAINTENANCE
(a) Tenant shall maintain the interior of the Premises in good condition
and repair except that Landlord shall provide normal janitorial service five
nights per week. If Tenant does not perform necessary repairs and maintenance,
Landlord may, but need not, make necessary repairs and replacements, and Tenant
shall pay Landlord the cost upon demand.
(b) Subject to the provisions of Article 7, Landlord shall repair and
maintain the common facilities, all building systems (electrical, heating,
ventilation, air conditioning and plumbing), plate glass, and the roof, exterior
and structural elements of the Building, and shall provide normal janitorial
services. Landlord shall not be responsible to make any repairs or perform any
maintenance unless written notice of the need for such repairs or maintenance is
given by Tenant. Except in the case of a fire or casualty as provided in Article
13, there shall be no abatement of rent and no liability of Landlord by reason
of any entry to the Premises, interruption of services or facilities, temporary
closure of common facilities, or interference with Tenant's business arising
from the making of any repairs or maintenance.
10. ALTERATIONS AND PERSONAL PROPERTY
Tenant shall not make or suffer to be made any alterations, additions or
improvements to the Premises, including signs, without the prior written consent
of Landlord, which shall not unreasonably be withheld. Landlord may condition
its consent upon provision of a payment bond, in amount and form reasonably
satisfactory to Landlord, covering the work to be done by Tenant's contractor.
Any alterations, additions or improvements to the Premises, including signs, but
not including movable furniture and trade fixtures, shall upon installation
become a part of the realty and belong to Landlord. Tenant shall not install any
antenna, satellite dish or other fixture or equipment on the roof or in the
common facilities. In the event Landlord consents to the making of any
alterations, additions or improvements to the Premises by Tenant, they shall be
made by Tenant at Tenant's sole cost and expense and any contractor or person
selected by Tenant to perform the work must first be approved in writing by
Landlord. Tenant shall not permit any mechanic's or materialmen's lien to stand
against the Premises for any labor or materials provided to the Premises by any
contractor or other person hired or retained by Tenant. Tenant shall cause any
such lien to be discharged (by bonding or otherwise) within ten days after
demand by Landlord, and if it is not discharged within ten days, Landlord may
pay or otherwise discharge the lien and immediately recover all amounts so
expended from Tenant as additional rent. Upon the expiration or sooner
termination of the term of this lease or of Tenant's right to possession, Tenant
shall remove all of its movable furniture and trade fixtures, and, if requested
by Landlord, at Tenant's sole cost and expenses, forthwith remove any
alterations, additions or improvements made by Tenant which are designated by
Landlord to be removed. Tenant shall, forthwith at its sole cost and expense,
repair any damage to the Premises caused by such removal and restore the
Premises to a condition reasonably comparable to their condition at the
commencement of the lease.
4
11. CERTAIN RIGHTS RESERVED BY LANDLORD
Landlord shall have the right:
(i) To change the Building's name or street address;
(ii) To enter the Premises either personally or by designated
representative at all reasonable times for the purpose of examining or
inspecting the same, and showing the same to prospective purchasers or lessees;
(iii) To grant to anyone the exclusive right to conduct any
business or render any service in or to the Building, provided such exclusive
right shall not operate to exclude Tenant from the use expressly permitted under
Article 4.
12. DAMAGE TO PROPERTY; INJURY TO PERSONS; INSURANCE
(a) Tenant shall defend, indemnify and hold Landlord harmless from any and
all claims arising from Tenant's use of the Premises or the conduct of its
business or from any activity, work, or thing done, permitted or suffered by
Tenant in or about the Premises, regardless of fault or negligence which is
imputed to Landlord as the owner of the Building but which involves a condition
of the Premises within the control of tenant, its employees or contractors.
Tenant shall further defend, indemnify and hold Landlord harmless from any and
all claims arising from any breach or default in the performance of this lease
by Tenant, or arising from any act or negligence of Tenant, or of its agents or
employees, and from all costs, attorney's fees, expenses and liabilities
incurred as a result of any such claim. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons, in, upon, or about the Premises from any cause, and Tenant
hereby waives all claims in respect thereof against Landlord, unless caused by
active negligence of Landlord, its agents or employees. Landlord shall not be
liable for loss of or damage to any property by theft or otherwise, or for any
injury or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak from any part of
any building or from the pipes, appliances or plumbing works therein, or from
the roof, street or subsurface, or from any other place resulting from dampness
or any other cause whatsoever. Landlord shall not be liable for interference
with the natural light. Tenant shall give immediate notice to Landlord of any
fire, accident or defect discovered with the Premises or the Building. Tenant
acknowledges that it can protect itself against any or all of the foregoing
risks by procuring appropriate insurance.
(b) Tenant shall maintain fire and extended coverage insurance throughout
the term of this lease in an amount equal to one hundred percent of the
replacement value of Tenant's fixtures, equipment and other personal property
located on the Premises together with such other insurance as may be required by
Landlord's lender or by any government agency. All proceeds of Tenant's policy
of fire and extended coverage insurance shall be payable to Tenant, and all
proceeds of policies of insurance procured by Landlord shall be payable to
Landlord. Tenant hereby waives any right to recovery from Landlord and Landlord
hereby waives any right of recovery from Tenant for any loss or damage
(including consequential loss) resulting from any of the perils insured against
in the standard form fire insurance policy with extended coverage endorsement.
During the term of this lease, the Tenant shall, at Tenant's expense, maintain
general public liability insurance against claims for personal injury, death or
property damage occurring in, upon or about the Premises or in the common areas.
The limitation of liability of such insurance shall be not less than One Million
Dollars in respect to injury or death of one person and to the limits of not
less than One Million Dollars in respect to any one accident and to the limit of
not less than Five Hundred Thousand Dollars in respect to property damage. All
of tenant's policies of liability insurance shall name Landlord as an additional
insured, and all policies of insurance or copies thereof required to be carried
by Tenant under this Article 12 shall be delivered to Landlord prior to the
Commencement Date and thereafter at least thirty days prior to the expiration of
the then current policies. Each policy shall contain an endorsement prohibiting
cancellation or non-renewal without at least 30 days prior notice to Landlord.
13. FIRE AND CASUALTY
If the Premises are wholly or partially destroyed or damaged by fire or
other casualty, Landlord shall restore the Premises with reasonable diligence;
provided, however, that Landlord shall have no obligation to restore
improvements not originally provided by Landlord or to replace any of Tenant's
fixtures, furnishings, equipment or personal property. Tenant shall promptly
replace and restore all of Tenant's fixtures, furnishings and equipment damaged
or destroyed by the casualty. Landlord need not commence repairs until insurance
proceeds are available. Proceeds of insurance payable with respect to a fire or
other casualty shall be received and held by Landlord. In the event the Premises
are destroyed or damaged by any fire or casualty and in Landlord's reasonable
estimation restoration will require more than ninety days, then either Landlord
or Tenant shall have the option to terminate this lease by giving notice to the
other. If a fire or casualty occurs within the last three years of the lease
term (as extended by any renewal or extension options which have been
exercised), or if any portion of the Building other than the Premises is damaged
or destroyed by fire or casualty and restoration is expected to require in
excess of 45 days, then Landlord may by written notice to Tenant terminate this
Lease. In any case, Landlord shall retain all insurance proceeds paid under
Landlord's insurance policies and Tenant shall retain all insurance proceeds
paid under Tenant's insurance policies. If this lease is not terminated as
provided above, this lease shall continue in full force and effect, but rent
shall abate until the restoration is substantially complete. The provisions of
this lease shall govern when this lease shall be
5
terminable as a result of a fire or casualty, and no other rule or statute on
the subject shall apply.
14. CONDEMNATION
In the event any portion of the Building shall be appropriated or taken
under the power of eminent domain this lease shall terminate and expire as of
the date Tenant is required to vacate the Premises, or, if no portion of the
Premises is taken, as of the date designated in a notice from Landlord
establishing the date of closure of the Building. If any portion of the common
facilities, excluding the Building, is appropriated or taken under the power of
eminent domain, this lease shall not terminate. All awards or compensation for
any taking of any part of the Premises or the Building or common facilities,
whether payable to Landlord or Tenant, shall be the sole property of Landlord.
Notwithstanding anything to the contrary in this Article, Tenant shall be
entitled to receive any portion of an award of compensation relating to damage
to or loss of trade fixtures or other personal property belonging to Tenant, and
Landlord shall be under no obligation to restore or replace Tenant's
furnishings, fixtures, equipment and personal property. For the purposes of this
Article 14, a voluntary sale or conveyance in lieu of condemnation shall be
deemed in appropriation or a taking under the power of eminent domain.
15. ASSIGNMENT AND SUBLETTING; SALE BY LANDLORD
(a) Tenant shall not, either voluntarily or by operation of law, assign,
hypothecate or transfer this lease, or sublet the Premises or any part thereof,
or permit the Premises or any part thereof to be occupied by anyone other than
Tenant or Tenant's employees, without the Landlord's prior written consent,
which shall not be unreasonably withheld provided the proposed assignee or
sublessee is reasonably satisfactory to Landlord as a credit and character and
will occupy the Premises for purposes not inconsistent with Tenant's purposes as
stated in Article 4 or other purposes approved by Landlord. Landlord shall be
under no obligation to give or withhold consent until all information reasonably
required by Landlord with respect to the identity, background, experience and
financial worth of the proposed assignee, transferee, or subtenant has been
provided. No hypothecation, assignment, sublease or other transfer to which
Landlord has consented shall be effective for any purpose until such time as
fully executed documents of such transaction have been provided to Landlord,
and, in the case of an assignment, the assignee has attorned directly to
Landlord, and in the case of a sublease, the sublessee has acknowledged that the
sublease is subject to all of the terms and conditions of this lease. Any
assignment, mortgage, transfer or subletting of this lease which is not in
compliance with the provisions of this Article 15 shall be voidable and shall,
at the option of Landlord, terminate this lease. The consent by Landlord to an
assignment or subletting shall not relieve Tenant from any liability or
obligation, whether or not then accrued. Except as provided in this Article,
this lease shall be binding upon and inure to the benefit of the successors and
assigns of the parties.
(b) In the event of a sale or conveyance by Landlord of the Premises,
Landlord shall be relieved of all future liability upon any of the covenants or
conditions, express or implied, in favor of Tenant, and Tenant shall to look
solely to Landlord's successor in interest. This lease shall not be affected by
any sale, and Tenant shall attorn to the successor in interest. If any security
deposit has been made by Tenant, the successor in interest shall be obligated to
return it in accordance with the terms hereof and Landlord shall be discharged
from any further liability in reference thereto.
16. ESTOPPEL CERTIFICATE
(a) Tenant shall at any time and from time to time upon not less than ten
day's prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (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) and the dates to which the rental and other charges are paid in
advance, if any; (ii) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if they are claimed; and (iii) certifying such other matters relating
to this lease as Landlord may reasonably request. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part.
(b) Tenant's failure to deliver a statement within the time prescribed
shall constitute a material default by Tenant under this Lease and shall be
conclusive upon Tenant (i) that this lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, and (iii) that not more than one
month's rental has been paid in advance.
17. LANDLORD'S REMEDIES
(a) The following shall constitute Events of Default:
(i) Tenant's failure to pay rent or any other amount due under this
lease within five days after notice of nonpayment.
(ii) Tenant's failure to execute, acknowledge and return an estoppel
certificate under Article 16 or a subordination agreement under Article 19,
within ten days after request.
6
(iii) Tenant's failure to perform any other obligation under this
lease within fifteen days after notice of nonperformance; provided, however,
that if the breach is of such a nature that it cannot be cured within fifteen
days, Tenant shall be deemed to have cured if cure is commenced promptly and
diligently pursued to completion; and provided further, that in the event of a
breach involving an imminent threat to health or safety, Landlord may in its
notice of breach reduce the period for cure to such shorter period as may be
reasonable under the circumstances.
(iv) Tenant vacates, abandons, or otherwise ceases to use the Premises
on a substantial continuing basis except temporary absence excused by reason of
fire, casualty, or other cause wholly beyond Tenant's control.
(b) Upon the occurrence of an Event of Default, Landlord, at any time
thereafter without further notice or demand may exercise any one or more of the
following remedies concurrently or in succession:
(i) Terminate Tenant's right to possession of the Premises by legal
process or otherwise, with or without terminating this lease, and retake
exclusive possession of the Premises.
(ii) From time to time relet all or portions of the Premises, using
reasonable efforts to mitigate Landlord's damages. In connection with this
reletting, Landlord may relet for a period extending beyond the term of this
lease and may make alterations or improvements to the Premises without releasing
Tenant of any liability. Upon a reletting of all or substantially all of the
Premises, Landlord shall be entitled to recover all of its then prospective
damages for the balance of the lease term measured by the difference between
amounts payable under this lease and the anticipated net proceeds of reletting.
In no event shall Tenant be entitled to receive any amount representing the
excess of avails of reletting over amounts payable hereunder.
(iii) From time to time recover accrued and unpaid rent and
damages arising from Tenant's breach of the Lease, regardless of whether the
Lease has been terminated, together with applicable late charges and interest at
the rate of 18% per annum or the highest lawful rate, whichever is less.
(iv) Enforce the statutory Landlord's lien on Tenant's property.
(v) Recover all attorneys' fees and other costs and expenses incurred
by Landlord in connection with enforcing this lease, recovering possession,
reletting the Premises or collecting amounts owed.
(vi) Perform the obligation on Tenant's behalf and recover from
Tenant, upon demand, the entire amount expended by Landlord plus 20% for special
handling, supervision, and overhead.
(vii) Pursue other remedies available at law or in equity.
(c) Upon a termination of Tenant's right to possession, whether or not
this lease is terminated, subtenancies and other rights of persons claiming
under or through Tenant: (i) shall be terminated or (ii) Tenant's interest shall
be assigned to Landlord. Landlord may separately elect termination or assignment
with respect to each such subtenancy or other matter.
18. NOTICES
All notices to be given by one party to the other under this lease shall be
in writing, mailed or delivered to each at the address set forth at the end of
this lease or at a changed address if notice of the change is given to the other
party in writing. In the case of notice to Tenant after Tenant takes possession
of the Premises, notice shall be sufficient if mailed or delivered to the
address of the Premises.
Mailed notices shall be sent by United States certified or registered mail,
postage prepaid. Such notices shall be deemed to have been given upon posting in
the United States mail. Actual notice shall be no substitute for written notice
under any provision of this lease.
19. SUBORDINATION
Landlord expressly reserves the right at any time to place liens and
encumbrances on and against the Premises and the Building, superior in lien and
effect to this lease and the estate created hereby, and Tenant shall attorn to
the purchaser of the Building under any trustee's sheriff's or foreclosure sale.
The subordination of this Lease shall be self-operative without the necessity of
a written instrument. Tenant shall nevertheless execute within ten days after
request a subordination and attornment agreement on the form customarily used by
the holder of the lien or encumbrance with subordinates this Lease to the lien
or encumbrance, which provides that the holder will recognize Tenant's rights
under this Lease, notwithstanding any foreclosure of the lien or encumbrance,
and which requires Tenant to attorn to the purchaser as provided above.
20. GENERAL PROVISIONS
(a) This lease and the obligations of Tenant shall not be affected or
impaired because Landlord is unable to fulfill any of its obligations or is
delayed in doing so if such inability or delay is caused by reason of any
strike, lockout, civil commotion, war-like operations, invasion, rebellion,
hostilities, military or usurped
7
power, sabotage, governmental regulations or controls, inability to obtain any
material, service or financing, Act of Act or other cause beyond the control of
the Landlord.
(b) Tenant and its officers, agents, employees, and customers shall comply
with the rules and regulations established by Landlord and with such
modifications and additions as Landlord may hereafter make for the Building;
provided, however, that rules and regulations shall not materially abrogate any
right or privilege expressly granted to Tenant. Any violation of the rules and
regulations shall constitute a breach of this lease.
(c) The article captions contained in this lease are for convenience only
and shall not be considered in the construction or interpretation of any
provision.
(d) This lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this lease, and no prior agreement
or understanding pertaining to any matter shall be effective for any purpose. No
provision of this lease may be amended or added to except by an agreement in
writing signed by the parties hereto to their respective successors in interest.
(e) Submission of this instrument for examination shall not bind Landlord
in any manner, and no lease or obligations of Landlord shall arise until this
instrument is signed and delivered by Landlord and Tenant.
(f) No rights to light or air over any property, whether belonging to
Landlord or any other persons, are granted to Tenant by this lease.
(g) No waiver by Landlord of any provision of this lease or any breach by
Tenant hereunder shall be deemed to be a waiver of any other provision hereof,
or of any subsequent breach by Tenant of the same or any other provision.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act of Tenant, whether or
not similar to the act so consented to or approved. No act or thing done by
Landlord or Landlord's agent during the term of this lease shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord's agents shall have any power to accept the keys to
the Premises prior to the termination of this lease, and the delivery of the
keys to any employee shall not operate as a termination of the lease or a
surrender of the Premises.
(h) FITNESS CENTER. For the term of this Lease, Landlord will grant
Tenant three (3) complimentary memberships to Club 44, located in the service
level of the Building, to three (3) designated employees of Tenant, subject to
the following:
1. Tenant's employees must abide by and obey any and all rules and
regulations pertaining to use of the facility. Failure to abide by said
rules and regulations will result in loss of membership privileges for the
individual concerned, at the sole discretion of the Fitness Center Director
or Assistant Director.
2. At its sole and absolute discretion, Landlord may, at any time
and without recourse, compensation, or liability, close the fitness center
and cease operations.
3. Tenant will provide the Fitness Center Director with written
notification of the names of the complimentary members, and said
memberships are not transferable without thirty (30) days' written notice.
(i) Time is of the essence of this lease.
LANDLORD: ADDRESS:
DMB PROPERTY VENTURES LIMITED 4201 N. 24th Street, Suite 12D
PARTNERSHIP, a Delaware limited Phoenix, Arizona 95016
partnership Phone: 244-0500
Fax: 244-0569
By: DMB G.P., an Arizona corporation
By: /s/ James C. Hoselton
------------------------------
James C. Hoselton
Its: Vice President
TENANT: ADDRESS:
NOVELLUS SYSTEMS, INC., a California 3970 North 1st Street
corporation
San Jose, California 95134
Phone: (408) 943-3413
By: /s/ Peter Hanley Fax: (408) 943-3401
-------------------------------
Peter Hanley
Its: Executive Vice President
8
EXHIBIT "A"
DESCRIPTION OF REAL PROPERTY
Lot 5, PHOENIX GATEWAY AMENDED, according to Book 322 of Maps,
Page 18, records of Maricopa County, Arizona.
EXHIBIT "B"
PREMISES
[MAP]
10
EXHIBIT "C"
TENANT IMPROVEMENTS
(To be mutually agreed upon between Landlord and Tenant. Landlord requires
approved plans and specifications no later than December 1, 1995, in order
to deliver the Premises on February 1, 1996.rules and regulations shall
constitute a breach of this lease.
11
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE (hereinafter "Amendment") is made this 3rd
day of April, 1989 by and between CALIFORNIA SECOND, LTD., a Florida limited
partnership ("Landlord") and CIRCADIAN, INCORPORATED, a Delaware corporation
("Tenant").
R E C I T A L S
A. Tenant currently leases from Landlord approximately twenty-nine
thousand four hundred twenty-four (29,424) square feet of space located at 3942
North First Street, San Jose, California pursuant to that certain lease dated
June 9, 1987, as amended by that certain First Amendment to Lease dated December
1, 1987, and as amended by that certain Second Amendment to Lease dated August
30, 1988 (the lease as amended shall hereinafter be referred to as the
"Lease").
B. The Lease provides for a termination date of September 27, 1989.
C. Tenant desires to extend the term of the Lease on the terms and
conditions set forth herein.
D. Landlord agrees to so extend the term in consideration of Tenant's
agreement to the terms and conditions set forth below:
NOW, THEREFORE, the parties hereto agree to amend the Lease as follows:
1. TERM.
The term of the Lease is hereby extended for one (1) year commencing
September 28, 1989 and ending September 27, 1990 ("Extended Term").
2. MONTHLY RENT.
Beginning with the first lease month of the Extended Term the monthly
rent as set forth in paragraph
-1-
4(a) of the Lease, as increased by the Second Amendment to Lease, shall be
decreased from Forty-Six Thousand Three Hundred Nine and 65/100 Dollars
($46,309.65) per month to Twenty Thousand Five Hundred Ninety-Six and 80/100
Dollars ($20,596.80) per month.
3. COMMON AREA CHARGES.
Subject to adjustments as provided in paragraph 16 of the Lease and as
otherwise adjusted prior to the date hereof, Tenant shall continue to pay to
Landlord its percentage share of Common Area Charges, as defined in said
paragraph 16 of the Lease, during the Extended Term.
4. FIRST MONTH'S RENT FOR EXTENDED TERM.
Upon Tenant's execution of this Amendment Tenant shall deposit with
Landlord the sum of Ten Thousand Two Hundred Ninety-Eight and 40/100 Dollars
($10,298.40) which amount shall be applied to offset the monthly rent for the
first full month of the Extended Term.
5. OPTION TO EXTEND.
Tenant's option to extend the term of the Lease, as set forth in
paragraph 51 of the Lease, is hereby deleted and of no further force or effect.
6. RESTATEMENT OF OTHER LEASE TERMS.
All terms, covenants and conditions of the Lease shall remain in full
force and effect during the Extended Term except as specifically modified
herein.
IN WITNESS WHEREOF, the parties hereto execute this
-2-
Amendment on the date set forth below their signature.
Landlord: Tenant:
CALIFORNIA SECOND, LTD., CIRCADIAN, INCORPORATED
a Florida limited partnership a Delaware corporation
By: McCandless Partnership, a
California general partnership
By: /s/ Birk S. McCandless By: /s/ James A. Langley
--------------------------- ---------------------------
Birk S. McCandless, as (Signature)
Trustee under Trust JAMES A. LANGLEY
Agreement dated February --------------------------------
17, 1982, a general (Printed Name)
partner VP, Finance
--------------------------------
(Title)
4/3/89 3/2/89
----------------------- --------------------------------
(Date) (Date)
-3-
MCCANDLESS MANAGEMENT
CORPORATION
3945 Freedom Circle, Suite 1000
Santa Clara, CA 95054 September 19, 1990
(408) 980-6500
Fax: (408) 727-5235
Mr. Peter Chang
Circadian, Inc.
3942 N. First Street
San Jose, California 95134
RE: Commencement and Termination Letter
Dear Mr. Chang:
The purpose of this letter is to confirm the commencement and termination dates
of the Fourth Amendment to Lease dated July 16, 1990, for premises located at
3942 North First Street, San Jose, California.
The commencement and termination dates are hereby confirmed as September 28,
1990, and September 27, 1991, respectively.
Basic rent in the amount of $16,183.20 and direct expenses of $3,236.64,
totalling $19,419.84, shall be due on the first of each month beginning October
1, 1990. Thereafter, the direct expenses shall be adjusted in accordance with
the Fourth Amendment to Lease.
However, the Basic Rent and Direct Expenses due for September 1990 is
$23,392.08, which was prorated in accordance with the decrease effective date,
as follows:
September 1990
--------------
9/1 - 27 $20,596.80/30 x 27 days $18,537.12
9/28 - 30 $16,183.20/30 x 3 days 1,618.32
Direct Expenses 3,236.64
----------
Total Due $23,392.08
Should you require any assistance respecting the building or your occupancy,
please feel free to contact me or my assistant, Barbara Eibach. We can help you
with any issue related to administration of your Lease as well as with any
building or grounds maintenance issues.
Mr. Peter Chang
September 19, 1990
Page Two
Please sign your acknowledgment below and return all three copies to our office.
One fully executed original will be returned to you for your files.
Sincerely,
McCANDLESS MANAGEMENT CORPORATION
/s/ Dale Green
Dale Green
Senior Asset Manager
DG/bee
Landlord: Tenant:
- --------- -------
CALIFORNIA SECOND, LTD., a CIRCADIAN, INC., a
Florida limited partnership Delaware corporation
BY: McCandless Partnership,
a California general
partnership, a General
Partner
BY: /s/ Birk S. McCandless BY: /s/ Peter H. Chang
-------------------------- -----------------------
Birk S. McCandless, as
Trustee under the Birk
S. McCandless and Mary
McCandless Inter Vivos
Trust Agreement dated
February 17, 1982, a
General Partner
10/12/90 10/9/90
------------------------- -------------------------
(Date) (Date)
FOURTH AMENDMENT TO LEASE
THIS FOURTH AMENDMENT TO LEASE (hereinafter "Amendment") is made this 16th
day of July, 1990 by and between CALIFORNIA SECOND, LTD., a Florida limited
partnership ("Landlord") and CIRCADIAN, INCORPORATED, a Delaware corporation
("Tenant").
R E C I T A L S
A. Tenant currently leases from Landlord approximately twenty-nine
thousand four hundred twenty-four (29,424) square feet of space located at 3942
North First Street, San Jose, California pursuant to that certain lease dated
June 9, 1987, as amended by that certain First Amendment to Lease dated December
1, 1987, that certain Second Amendment to Lease dated August 30, 1988 and that
certain Third Amendment to Lease dated April 3, 1989 (the lease as amended
hereinafter be referred to as the "Lease").
B. The Lease provides for a termination date of September 27, 1990.
C. Tenant desires to extend the term of the Lease on the terms and
conditions set forth herein.
D. Landlord agrees to extend the term in consideration of Tenant's
agreement to the terms and conditions set forth below:
NOW, THEREFORE, the parties hereto agree to amend the Lease as follows:
1. TERM. The term of the Lease is hereby extended for one (1) year
commencing September 28, 1990 and ending September 27, 1991 ("Second Extended
Term").
2. MONTHLY RENT. The monthly rent as set forth in paragraph 4(a) of the
Lease shall be Sixteen Thousand One Hundred Eighty-Three and 20/100 ($16,183.20)
per month during the Second Extended Term.
1
3. COMMON AREA CHARGES. Subject to adjustments as provided in paragraph
16 of the Lease and as otherwise adjusted prior to the date hereof, Tenant shall
continue to pay to Landlord its percentage share of Common Area Charges during
the Second Extended Term.
4. RESTATEMENT OF OTHER LEASE TERMS. All terms, covenants and conditions
of the Lease shall remain in full force and effect except as specifically
modified herein.
IN WITNESS WHEREOF, the parties hereto execute this Amendment on the date
set forth below their signature.
Landlord: Tenant:
- -------- ------
CALIFORNIA SECOND, LTD., CIRCADIAN, INCORPORATED,
a Florida limited partnership a Delaware corporation
By: McCandless Partnership, a
California general partnership,
a General Partner
By: /s/ Birk S. McCandless By: /s/ Peter H. Chang
----------------------------- --------------------------
Birk S. McCandless, as (Signature)
Trustee under the Birk S.
McCandless and Mary PETER H. CHANG
McCandless Inter Vivos -----------------------------
Trust Agreement dated (Printed Name)
February 17, 1982, a
General Partner President & C.E.O.
-----------------------------
(Title)
7/20/90 7/16/90
------------------------- -----------------------------
(Date) (Date)
2
FIFTH AMENDMENT TO LEASE
THIS FIFTH AMENDMENT TO LEASE (hereinafter "Amendment") is made this 15th
day of August, 1991 by and between CALIFORNIA SECOND, LTD., a Florida limited
partnership ("Landlord") and CIRCADIAN, INC., a Delaware corporation ("Tenant").
R E C I T A L S
A. Tenant currently leases from Landlord approximately twenty-nine
thousand four hundred twenty-four (29,424) square feet of space located at 3942
North First Street, San Jose, California ("Premises") pursuant to that certain
lease dated June 9, 1987 ("Original Lease"), as amended by that certain First
Amendment to Lease dated December 1, 1987, Second Amendment to Lease dated
August 30, 1988, Third Amendment to Lease dated April 3, 1989 and Fourth
Amendment to Lease dated July 16, 1990 (the Original Lease as amended shall
hereinafter be referred to as the "Lease").
B. The Lease provides for a termination date of September 27, 1991.
C. Tenant desires to extend the term of the Lease on the terms and
conditions set forth herein.
D. Landlord agrees to extend the term in consideration of Tenant's
agreement to the terms and conditions set forth below.
NOW, THEREFORE, the parties hereto agree to amend the Lease as follows:
1. TERM. The term of the Lease is hereby extended from and after
September 28, 1991 through and including December 31, 1993. The period
commencing on September 28, 1991 and ending on December 31, 1993 is referred to
herein as the "Third Extended Term".
1
2. MONTHLY RENT. The monthly rent as provided in paragraph 4(a) of the
Original Lease shall be adjusted and payable during the Third Extended Term as
follows:
September 28, 1991 through
December 31, 1991 $16,183.20 per month
January 1, 1992 through
December 31, 1992 $17,065.92 per month
January 1, 1993 through
December 31, 1993 $18,242.88 per month
3. COMMON AREA CHARGES. Subject to adjustments as provided in paragraph
16 of the Original Lease and as otherwise adjusted prior to the date hereof,
Tenant shall continue to pay to Landlord its percentage share of Common Area
Charges during the Third Extended Term.
4. IMPROVEMENTS. Within thirty (30) days after commencement of the Third
Extended Term, Landlord shall, at Landlord's sole cost and expense, shampoo all
carpeting located within the Premises and install a dishwasher in the kitchen
located within the Premises. Except as provided in this paragraph, Landlord
shall have no obligation to alter or improve the Premises.
5. RESTATEMENT OF OTHER LEASE TERMS. Except as specifically modified
herein, all terms, covenants and conditions of the Lease shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto execute this Amendment
2
on the date set forth below their signature.
Landlord: Tenant:
- -------- ------
CALIFORNIA SECOND, LTD., CIRCADIAN, INC.,
a Florida limited partnership a Delaware corporation
By: McCandless Partnership,
a California general partnership,
a General Partner
By: /s/ Birk S. McCandless By: /s/ David L. Robertson
----------------------------- --------------------------
Birk S. McCandless, as (Signature)
Trustee under the Birk S.
McCandless and Mary David L. Robertson
McCandless Inter Vivos ----------------------------
Trust Agreement dated (Printed Name)
February 17, 1982, a
General Partner VP of Finance
----------------------------
(Title)
8/15/91
-------------------------------- ----------------------------
(Date) (Date)
3
SIXTH AMENDMENT TO LEASE
THIS SIXTH AMENDMENT TO LEASE (hereinafter "Amendment") is made this 3rd
day of January, 1994 by and between CALIFORNIA SECOND, LTD., a Florida limited
partnership ("Landlord") and CIRCADIAN, INC., a Delaware corporation ("Tenant").
R E C I T A L S
A. Tenant currently leases from Landlord approximately twenty-nine
thousand four hundred twenty-four (29,424) square feet of space located at 3942
North First Street, San Jose, California ("Premises") pursuant to that certain
lease dated June 9, 1987 ("Original Lease"), as amended by that certain First
Amendment to Lease dated December 1, 1987, Second Amendment to Lease dated
August 30, 1988, Third Amendment to Lease dated April 3, 1989, Fourth Amendment
to Lease dated July 16, 1990 and Fifth Amendment to Lease dated August 15, 1991.
The Original Lease as amended shall hereinafter be referred to as the "Lease".
B. The Lease provides for a termination date of December 31, 1993.
C. Tenant desires to extend the term of the Lease on the terms and
conditions set forth herein.
D. Landlord agrees to extend the term in consideration of Tenant's
agreement to the terms and conditions set forth below.
NOW, THEREFORE, the parties hereto agree to amend the Lease as follows:
1. TERM. The term of the Lease is hereby extended from and after January
1, 1994 through and including December 31, 1998. The period commencing on
January 1, 1994 and ending on December 31, 1998 is referred to herein as the
"Fourth Extended Term".
1
2. MONTHLY RENT.
(a) The monthly rent provided for in paragraph 4(a) of the Original Lease
shall be adjusted and payable during the Fourth Extended Term as follows:
January 1, 1994 through
December 31, 1994 $10,800.00 per month
January 1, 1995 through
December 31, 1995 $14,400.00 per month
January 1, 1996 through
December 31, 1996 $17,654.40 per month
January 1, 1997 through
December 31, 1998 Basic rent to be increased
according to paragraph 2(b) below.
(b) The basic rent provided for in paragraph 2(a) for the period
commencing January 1, 1997 through December 31, 1998 shall be adjusted on
January 1, 1997 as follows:
The Consumer Price Index for All Urban Consumers (base year 1967 = 100) for
San Francisco-Oakland-San Jose, Metropolitan Area published by the United States
Department of Labor, Bureau of Labor Statistics ("Index"), which is published
for the date nearest the January 1, 1997 ("Extension Index"), shall be compared
with the Index published for the date immediately preceding January 1, 1994
("Beginning Index"). On January 1, 1997, the monthly basic rent payable during
the following two year period shall be set by multiplying the basic rent of
Seventeen Thousand Six Hundred Fifty-Four and 40/100 Dollars ($17,654.40) per
month by a fraction, the numerator of which is the Extension Index and the
denominator of which is the Beginning Index; provided, however, that in no event
shall the increase in basic rent (using $17,654.40 per month as the basic rent
amount to be compounded) be less than three percent (3%) per annum compounded
from January 1, 1994 or greater than seven percent (7%) per annum compounded
from January 1, 1994.
As soon as the basic rent for such period is set, Landlord shall given
Tenant notice of the amount. In no case shall the basic rent be less than the
basic rent for the preceding period. Upon adjustment of the basic rent as
provided in this Amendment, the parties shall immediately execute an amendment
to the Lease stating
2
the new basic rent. If the Index is changed so that the base year differs from
that used as of the month immediately preceding the month in which the term
commences, the Index shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics.
If the Index is discontinued or revised during the term, such other government
index or computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.
3. COMMON AREA CHARGES. Subject to adjustments as provided in paragraph
16 of the Original Lease and as otherwise adjusted prior to the date hereof,
Tenant shall continue to pay to Landlord its percentage share of Common Area
Charges during the Fourth Extended Term.
4. IMPROVEMENTS. Improvements to the Premises shall be constructed and
installed in accordance with the plans and specifications, and other terms and
conditions, set forth in Exhibit A to this Agreement, the contents of which is
incorporated herein and made a part hereof by this reference. The improvements
shall be constructed and installed at the expense of Landlord and/or Tenant as
set forth in Exhibit A to this Amendment and in each case shall be performed in
a diligent and workmanlike manner.
5. SECURITY DEPOSIT.
(a) Concurrently with Tenant's execution of this Amendment, Tenant
shall deliver to Landlord an unconditional and irrevocable Letter of Credit in
the amount of One Hundred Thousand and 00/100 Dollars ($100,000.00) to secure
the faithful performance by Tenant of all of the terms, covenants and conditions
of this Amendment to be kept and performed by Tenant. Notwithstanding the actual
amount of the Letter of Credit, the maximum amount which Landlord may demand
shall not exceed an amount equal to One Hundred Thousand and 00/100 Dollars
($100,000.00) less the sum of Two Thousand Seven Hundred Seventy-Seven and
77/100 Dollars ($2,777.77) per month during the first three (3) years of the
Fourth Extended Term. The Letter of Credit (to the extent limited by the
preceding sentence) shall be available by draft at sight, subject only to
receipt by the bank of a notarized statement from Birk S. McCandless or Steven
E. Sund stating that the amount demanded is due and owing to Landlord. The
Letter of Credit shall by its terms expire not less than one year from the date
issued, provided that unless Tenant deposits with Landlord a cash security
deposit of like amount, said Letter of Credit shall be renewed by Tenant for
successive periods of not less than one year each to and including
3
December 31, 1996 in the amounts specified below for each of the first three (3)
years of the Fourth Extended Term as follows:
January 1, 1994 through
December 31, 1994 $100,000.00
January 1, 1995 through
December 31, 1995 $66,667.00
January 1, 1996 through
December 1, 1996 $33,334.00
January 1, 1997 through
End of Fourth Extended Term Not required
The bank's written renewal of the Letter of Credit shall in each case be
delivered to Landlord not less than ninety (90) days prior to the expiration
date of the then outstanding Letter of Credit. Tenant's failure to so deliver,
renew (including, but not limited to, the delivery to Landlord of such renewal
not less than ninety (90) days prior to expiration of the Letter of Credit) and
maintain such Letter of Credit shall be a material breach of this Amendment.
If Tenant defaults in the performance of any provision of this Amendment to
be performed by Tenant, including without limitation the payment of rent and
other amounts due Landlord, and such default is not cured within the cure period
set forth in the Lease, Landlord may immediately and without further notice
resort to said Letter of Credit and use or apply all or any part of same to
compensate Landlord for any loss or expense occasioned thereby and for the
payment of any amount due Landlord under the terms of this Amendment. If any
portion of said Letter of Credit is so used as specified above, Tenant shall,
within ten (10) days after written demand therefor, restore the Letter of Credit
to its original amount, and Tenant's failure to do so shall be a material breach
of this Amendment and the Lease.
Landlord's resort to said Letter of Credit shall in no way or manner
constitute an acceptance of or waiver of such default by Tenant; nor shall
resort to said Letter of Credit terminate, or permit Tenant to terminate, or
constitute a forfeiture of, or be construed as an election by Landlord to
terminate, the Lease; nor shall such resort affect Landlord's remedies otherwise
available under the Lease or at law.
(b) In addition, concurrently with Tenant's execution of this Amendment,
Tenant shall deposit with Landlord the sum of
4
Seventeen Thousand Six Hundred Fifty-Four and 40/100 Dollars ($17,654.40),
which sum shall be held by Landlord as Tenant's security deposit pursuant to
paragraph 4(d) of the Original Lease. Tenant hereby acknowledges that any
amounts previously deposited with Landlord as a security deposit pursuant to
the Lease have previously been applied by Landlord to Tenant's prior
obligations under the Lease and that the entire amount of the security
deposit held by Landlord as a security deposit, upon receipt of the above
amount, is Seventeen Thousand Six Hundred Fifty-Four and 40/100 Dollars
($17,654.40). Landlord hereby acknowledges that Tenant has performed all of
its obligations (including, but not limited to the payment of the settlement
payment) under that certain Settlement Agreement and Agreement for Mutual
Release Between Landlord and Tenant dated September 9, 1992.
6. INSURANCE. Landlord's obligation to obtain and keep in force certain
insurance policies, as specified in paragraph 11 of the Original Lease, is
hereby modified to provide that Landlord may, but shall not be obligated to,
obtain flood and/or earthquake insurance. Landlord shall have no liability to
Tenant if Landlord elects not to obtain flood and/or earthquake insurance. The
cost of such insurance shall be a Common Area Charge as provided in paragraph
11.
7. ALTERATIONS. Paragraph 8 of the Lease is hereby modified to provide
that with respect to any alteration which Tenant is required by Landlord to
remove at the end of the lease term, in addition to removing the alteration and
repairing any damage to the Premises caused by such removal and complying with
the surrender provisions in paragraph 23 of the Original Lease, Tenant shall
also be obligated to restore the Premises to their condition as it existed prior
to Tenant making such alteration. Landlord acknowledges that none of the
improvements existing in the Premises as of the date hereof, and none of the
improvements to be constructed by Landlord pursuant to the Work Letter Agreement
attached hereto and incorporated herein are required to be removed by Tenant at
the end of the Lease term.
8. ENVIRONMENTAL MATTERS
A. TENANT's COVENANTS REGARDING HAZARDOUS MATERIALS.
(1) HAZARDOUS MATERIALS HANDLING. Tenant, its agents, invitees,
employees, contractors, sublessees, assigns and/or successors shall not use,
store, dispose, release or otherwise cause to be present Hazardous Materials (as
defined
5
below) on or about the Premises or Project other than those Hazardous
Materials in the amounts set forth on Exhibit B attached hereto and
incorporated herein, and other than reasonable amounts of customary office
products and cleaners. As used herein "Hazardous Materials" shall mean any
petroleum or petroleum by-products, flammable explosives, asbestos, urea
formaldehyde, radioactive materials or waste and any "hazardous substance",
"hazardous waste", haxardous materials", "toxic substance" or "toxic waste"
as those terms are defined under the provisions of the California Health and
Safety Code and/or the provisions of the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as
amended by the Superfund Amendments and Reauthorization Act of 1986 (42
U.S.C. Section 9601 et seq.), or any other hazardous or toxic substance,
material or waste which is or becomes regulated by any local governmental
authority, the State of California or any agency thereof, or the United
States Government or any agency thereof.
(2) NOTICES. Tenant shall immediately notify Landlord in writing of:
(i) any enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any law, regulation or ordinance
relating to the industrial hygiene, environmental protection or the use,
analysis, generation, manufacture, storage, presence, disposal or transportation
of any Hazardous Materials (collectively "Hazardous Materials Laws"); (ii) any
claim made or threatened by any person against Tenant, the Premises, Project or
buildings within the Project relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials; and (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in, on or removed
from the Premises, Project or buildings within the Project, including any
complaints, notices, warnings, reports or asserted violations in connection
therewith. Tenant shall also supply to Landlord as promptly as possible, and in
any event within five (5) business days after Tenant first receives or sends the
same, with copies of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to the Premises, Project or buildings
within the Project or Tenant's use thereof. Tenant shall promptly deliver to
Landlord copies of hazardous waste manifests reflecting in the legal and proper
disposal of all Hazardous Materials removed from the Premises.
B. INDEMNIFICATION OF LANDLORD. Tenant shall indemnify, defend (by
counsel acceptable to Landlord), protect, and hold Landlord, and each of
Landlord's partners, employees, agents, attorneys, successors and assigns, free
and harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
6
injury to any person or damage to any property whatsoever (including water
tables and atmosphere), arising from or caused in whole or in part, directly or
indirectly, by (i) the presence in, on, under or about the Premises, Project or
buildings within the Project or discharge in or from the Premises, Project or
buildings within the Project of any Hazardous Materials arising from or caused
by Tenant's use, analysis, storage, transportation, disposal, release,
threatened release, discharge or generation of Hazardous Materials to, in, on,
under, about or from the Premises, Project or buildings within the Project, or
(ii) Tenant's failure to comply with any Hazardous Materials Laws whether
knowingly, unknowingly, intentionally or unintentionally. Tenant's obligations
hereunder shall include, without limitation, and whether foreseeable or
unforeseeable, all costs of any required or necessary repair, cleanup or
detoxification or decontamination of the Premises, Project or buildings within
the Project, and the preparation and implementation of any closure, remedial
action or other required plans in connection therewith. In addition, Tenant
shall reimburse Landlord for (i) losses in or reductions to rental income
resulting from Tenant's use, storage or disposal of Hazardous Materials, (ii)
all costs of refitting or other alterations to the Premises, Project or
buildings within the Project required as a result of Tenant's use, storage, or
disposal of Hazardous Materials including, without limitation, alterations
required to accommodate an alternate use of the Premises, Project or buildings
within the Project, and (iii) any diminution in the fair market value of the
Premises, Project or buildings within the Project caused by Tenant's use,
storage, or disposal of Hazardous Materials. For purposes of this paragraph 8,
any acts or omissions of Tenant, or by employees, agents, assignees, contractors
or subcontractors of Tenant or others acting for or on behalf of Tenant (whether
or not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant.
Landlord shall indemnify, defend, (with counsel reasonably acceptable to
Tenant), protect, and hold Tenant, its employees, agents, attorneys,
stockholders, officers, directors, successors and assigns free and harmless from
and against any and all claims, liabilities, penalties, forfeitures, losses or
expenses (including attorneys' fees) for the death of or injury to any person or
damage to any property whatsoever (including water tables and atmosphere)
directly arising out of or in connection with Landlord's use, analysis, storage,
transportation, disposal, release, threatened release, discharge or generation
of Hazardous Materials in, on, under or about the Premises or Project, or the
violation by Landlord of any Hazardous Materials Law relating to any such
Hazardous Material.
C. SURVIVAL. The provisions of this paragraph 8 shall survive the
expiration or earlier termination of the term of the
7
Lease.
9. REAL ESTATE BROKERS. Each party represents and warrants to the other
party that it has not had dealings in any manner with any real estate broker,
finder or other person with respect to the Premises and the negotiation and
execution of this Amendment except Tarlton Properties. Except as to commissions
and fees to be paid as provided in this paragraph, each party shall indemnify
and hold harmless the other party from all damage, loss, liability and expense
(including attorneys' fees and related costs) arising out of or resulting from
any claims for commissions or fees that may or have been asserted against the
other party by any broker, finder or other person with whom Tenant or Landlord
has or purportedly has dealt with in connection with the Premises and the
negotiation and execution of this Amendment. Landlord shall pay to Tarlton
Properties a commission equal to fifty percent (50%) of Landlord's standard
commission in connection with this transaction. Landlord and Tenant agree that
Landlord shall not be obligated to pay any broker leasing omissions, consulting
fees, finder fees or any other fees or commissions arising out of or relating to
any extended term beyond the Fourth Extended Term or to any expansion or
relocation of the Premises at any time.
10. LANDLORD'S ADDRESS.
Landlord's address for notice purposes, as provided in paragraph 39 of
the Lease, is hereby changed to:
3945 Freedom Circle, Suite 640
Santa Clara, California 95054
11. USE. The use provision set forth in paragraph 1 of the Lease is
hereby modified to allow Tenant to also use the Premises for the operating of an
Asthma Therapy Management Center and a dispensing mail order pharmacy; subject
to Tenant's compliance with all laws related thereto, including zoning
ordinances, and such uses shall not be permitted if such uses would violate any
governmental or quasi-governmental law, ordinance, rule or regulation. Landlord
makes no representation or warranty regarding the legality or permissibility of
such uses. In addition, any increases in insurance costs on the Project which
are due to Tenant's use of the Premises shall be paid entirely by Tenant.
12. RESTATEMENT OF OTHER LEASE TERMS. Except as specifically modified
herein, all terms, covenants and conditions of the Lease shall remain in full
force and effect.
8
IN WITNESS WHEREOF, the parties hereto execute this Amendment
on the date set forth below their signature.
Landlord: Tenant:
- -------- ------
CALIFORNIA SECOND, LTD., CIRCADIAN, INC.,
a Florida limited partnership a Delaware corporation
By: McCandless Partnership,
a California general partnership,
a General Partner
By: /s/ Birk S. McCandless By: /s/ Arthur A. Bertolero
----------------------------- --------------------------
Birk S. McCandless, as (Signature)
Trustee under the Birk S.
McCandless and Mary Arthur A. Bertolero
McCandless Inter Vivos -------------------------------
Trust Agreement dated (Printed Name)
February 17, 1982, a
General Partner President
-------------------------------
(Title)
1/7/94
-------------------------------- -------------------------------
(Date) (Date)
9
WORK LETTER AGREEMENT
EXISTING SPACE - ALLOWANCE
CONSTRUCTION Exhibit A
- -------------------------------------------------------------------------------
THIS WORK LETTER AGREEMENT (hereinafter "Exhibit A") is attached to and
forms a part of that certain Sixth Amendment to Lease ("Amendment") amending
that certain lease ("Lease") by and between CALIFORNIA SECOND, LTD., a Florida
limited partnership ("Landlord"), and CIRCADIAN, INC., a Delaware corporation
("Tenant"), pursuant to which Landlord leases to Tenant those certain premises
located at 3942 North First Street, San Jose, California and consisting of
approximately twenty nine thousand four hundred twenty-four (29,424) square feet
("Premises"). All capitalized terms used herein shall have the meaning ascribed
to them in the Amendment to which this Exhibit A is made a part thereof unless
otherwise defined below. The Premises shall be improved in accordance with the
following:
1. EXISTING IMPROVEMENTS:
Tenant accepts the Premises in its existing condition and the
improvements constructed therewith, and Tenant hereby approves the same as
installed, subject only to such changes as may subsequently be agreed upon by
Landlord and Tenant. Such improvements are hereafter called "Existing
Improvements".
2. TENANT IMPROVEMENTS:
As used herein, "Tenant Improvements" shall include those items and
specifications shown on the Final Construction Drawings prepared in accordance
with paragraph 3 below, including those specifications (as appropriate) set
forth and described in Exhibit A-1, attached hereto, exclusive of Existing
Improvements. Landlord shall construct Tenant Improvements in accordance with
the Fional Construction Drawings, Exhibit A-1 and the provisions of this Exhibit
A. Unless otherwise specifically agreed to by Landlord in writing, the
installation, wiring, maintenance and removal of furniture partition systems,
telephone and other communication systems, data cabling, alarm and/or security
systems and any other systems not specifically set forth in the Final
Construction Drawings or Exhibit A-1, and all cost and expense associated
therewith, shall be the sole responsibility of Tenant. In connection with the
construction and installation of the Tenant Improvements, Landlord or Landlord's
general contractor shall have no obligation to move any of Tenant's property
located in or about the Premises including, but not limited to, furniture,
inventory
1
and trade fixtures, at the time of such construction and installation. If at the
time of construction and installation of the Tenant Improvements Tenant has
property located in or about the Premises that unreasonably inhibits or prevents
the construction and installation of the Tenant Improvements, Tenant shall
within one (1) business day after receipt of notification therefore from
Landlord or Landlord's general contractor, at Tenant's sole cost and expense,
move such property to another location within the Premises, or upon receipt of
Landlord's prior approval, to another location within the Project designated by
Landlord in Landlord's sole discretion; Tenant's failure to move such property
within one (1) business day after receipt of notification therefore from
Landlord or Landlord's general contractor shall be deemed a Tenant caused delay
subject to the provisions of paragraph 8 of this Exhibit A. If at the time of
construction and installation of the Tenant Improvements Tenant has property
located in or about the portion of the Premises where the construction is
occurring from time to time, Landlord and Landlord's general contractor shall
incur no liability to Tenant or any other party in the event such property is
damaged, destroyed or stolen during the construction and installation of the
Tenant Improvements.
3. TENANT IMPROVEMENT DESIGN SCHEDULE:
The plans and specifications for the Tenant Improvements shall be
completed in accordance with the following:
(a) Tenant shall approve preliminary floor plan layouts
("Preliminary Floor Plans") prepared by Landlord by December 20, 1993. The
Preliminary Floor Plans shall show all walls, doors, and other Tenant
Improvements desired by Tenant in sufficient detail for Landlord's architect
to prepare architectural construction drawings and related documents
("Architectural Construction Documents").
(b) Between December 15 and December 20, Landlord's architect and
Tenant's representative shall meet as needed to review and complete the final
details related to the Preliminary Floor Plans, so that on December 20, 1993 the
Architectural Construction Documents are subject only to minor changes.
(c) No later than December 20, 1993, Tenant shall have made the
decisions required and supplied to Landlord the information requested by
Landlord and necessary for Landlord's architect to complete the Architectural
Construction Documents in enough detail for Landlord's general contractor to bid
the work, select subcontractors and to proceed toward the design of electrical,
mechanical and any other requirements not included on the Architectural
Construction Documents. Upon Landlord's general contractor's selection of
subcontractors, Landlord's general
2
contractor and subcontractors shall prepare design specifications outlining in
reasonable detail electrical, mechanical and any other requirements not included
on the Architectural Construction Documents ("Electrical and Mechanical
Drawings").
(d) Upon completion of the Architectural Construction Documents,
Tenant shall have one (1) day to approve the same or notify Landlord of any
final changes which are required, subject to changes, deletions or additions as
provided in paragraphs 6 and 7 of this Exhibit A.
(e) Upon completion of the Electrical and Mechanical Drawings,
Landlord or Landlord's general contractor shall submit the Architectural
Construction Documents and Electrical and Mechanical Drawings (collectively the
"City Ready Plans") to the City to obtain a building permit.
(f) Tenant shall have decided upon carpet selection and all other
color and material specifications by November 19, 1993.
(g) As used herein, "Final Construction Drawings" shall include the
City Ready Plans, as approved by the City, and any subsequent additions,
deletions or changes to the Tenant Improvements permitted or required pursuant
to paragraphs 6 and 7 of this Exhibit A.
4. TENANT IMPROVEMENT COST ESTIMATES:
Within fourteen (14) days of completion of the Electrical and
Mechanical Drawings, Landlord shall prepare and deliver to Tenant an improvement
cost budget ("Improvement Cost Budget") setting forth the Total Cost of Tenant's
Improvements (as defined in paragraph 5(b) below). Within three (3) days after
Tenant's receipt of the Improvement Cost Budget, Tenant shall, in writing,
approve or disapprove the Improvement Cost Budget. If Tenant does not deliver to
Landlord its written approval or disapproval within the three (3) day period,
Tenant will be deemed to have approved the Improvement Cost Budget. If Tenant
disapproves the Improvement Cost Budget, Landlord and Tenant shall, within three
(3) days of Tenant's disapproval, attempt to agree on mutually acceptable
modifications to the Improvement Cost Budget. If Tenant disapproves of the
Improvement Cost Budget and Landlord and Tenant are unable, within the three (3)
day period, to agree on mutually acceptable changes to the Improvement Cost
Budget, or if Tenant approves of the Improvement Cost Budget but does not
deliver to Landlord, within three (3) days of its approval, signed copies of the
Improvement Cost Budget and Architectural Construction Documents, then Landlord
may terminate the Amendment upon written notice to Tenant. Upon Tenant's written
approval of the Improvement Cost Budget (or in the event Tenant is deemed to
have approved the Improvement Cost Budget as provided hereinabove), the
3
Total Cost of Tenant's Improvements set forth therein shall be deemed a fixed
price for the Tenant Improvements (said fixed price shall be referred to herein
as the "Tenant Improvement Fixed Cost"). The Tenant Improvement Fixed Cost shall
be subject to adjustment for increases in costs resulting from changes to the
Tenant Improvements requested or required pursuant to paragraphs 6 and 7 of this
Exhibit A. Landlord shall not be obligated to commence construction of the
Tenant Improvements until the following has occurred: the Architectural
Construction Documents and Tenant Improvement Fixed Cost have been agreed to by
Landlord and Tenant; Tenant has indicated its approval of the Architectural
Construction Documents and Improvement Cost Budget by signing copies thereof;
and Landlord has executed a written authorization to proceed with construction
with Landlord's general contractor based on the agreed Architectural
Construction Documents and Tenant Improvement Fixed Cost.
5. TENANT IMPROVEMENT ALLOWANCE:
(a) Landlord agrees to grant to Tenant a Tenant Improvement Allowance
("Allowance") of $88,272.00 ($3.00/SF x 29,424 SF) to be applied toward the
"Total Cost of Tenant's Improvements" (as defined below) to be installed in
accordance with this Exhibit A.
(b) As used herein, "Total Cost of Tenant's Improvements" shall
include: (i) the cost of Tenant Improvements and increases therein pursuant
to paragraphs 6 and 7 below, if any, and all demolition costs incurred in
connection with preparing the Premises the installation of the Tenant
Improvements; (ii) the cost of overtime or special expenditures, provided
such overtime or special expenditures are approved in advance by Tenant in
writing (which Tenant shall approve or disapprove within one (1) day of
receipt of Landlord's notice regarding same); (iii) all costs related to
change orders; (iv) all costs related to changes required or requested by
governmental authority; (v) permit fees and other fees not previously paid by
Landlord as part of shell costs; (vi) the cost of consultants and engineers;
(vii) an amount equal to the actual cost of supervision, administration and
on-site facilities and equipment necessary to perform the work; (viii) an
amount equal to 9% of the sum of items (i) through (vii) above as and for the
general contractor's overhead and profit; and (ix) the cost of architects
hired by Landlord.
(c) In the event that the Tenant Improvement Fixed Cost exceeds the
Allowance (the amount by which the Tenant Improvement Fixed Cost exceeds the
Allowance shall be referred to herein as the "Excess Cost"), Tenant shall pay
twenty-five percent (25%) of such Excess Cost to Landlord within five (5) days
of Tenant's approval of the Improvement Cost Budget, twenty-five percent (25%)
thereof within five (5) days of when Landlord notifies Tenant that the
4
Tenant Improvements are twenty-five percent (25%) complete, another twenty-five
percent (25%) when Landlord notifies Tenant that the Tenant Improvements are
fifty percent (50%) complete, another fifteen percent (15%) when Landlord
notifies Tenant that the Tenant Improvements are seventy-five percent (75%)
complete and the final ten percent (10%) when the Tenant Improvements have been
completed. Tenant's failure to make any payment of the Excess Cost when due, or
to make any payment with respect to change orders as set forth in paragraph 6 of
this Exhibit A, shall be deemed a default under the Lease and the amount so
delinquent shall be deemed additional rent and Landlord may exercise all rights
and remedies set forth in the Lease; and in addition, Landlord may delay
construction until such payment is made and such delay shall be deemed a Tenant
caused delay subject to the provisions of paragraph 8 of this Exhibit A.
(d) In the event Tenant causes delays, or requests changes which
cause delays in construction of more than ninety (90) calendar days, then
Landlord shall not be obligated to grant to Tenant the Allowance, or any balance
remaining unused therein. In such case, Tenant shall be responsible for all
additional costs resulting therefrom, including any increase in labor and
materials costs. Tenant shall be entitled to no rent reduction or credit at any
time in the event that the Allowance or any portion thereof remains unused for
any reason whatsoever.
6. CHANGES BY TENANT:
Tenant may request changes, deletions or additions to the Tenant
Improvements; provided, however, that the effectiveness of any such requested
change, deletion or addition shall be subject to written approval by an
authorized representative of Landlord and to obtaining any required governmental
permits or other approvals. If any such change, deletion or addition increases
the Tenant Improvement Fixed Cost above the Allowance, Tenant shall immediately
pay to Landlord the full amount of such increase in excess of the Allowance. n
no event shall work on any change, deletion or addition requested pursuant to
this paragraph 6 commence prior to (i) Landlord and Tenant approving, in
writing, such change, deletion or addition, and (ii) Landlord's receipt from
Tenant of payment of the full amount of the increase of the Tenant Improvement
Fixed Cost in excess of the Allowance.
7. CHANGES BY AUTHORITY:
Tenant agrees that if any change, deletion or addition to any of the
improvements proposed to be constructed or installed is required by any
governmental authority in connection with obtaining any governmental permit or
approval, or otherwise, then such change, deletion or addition shall promptly be
made and the Tenant Improvement Fixed Cost shall be adjusted to reflect any
increase in cost resulting from such required change. To the extent any
5
cost resulting from such required change. To the extent any change, deletion or
addition required by any governmental authority in connection with obtaining any
governmental permit or approval increases the Tenant Improvement Fixed Cost
above the Allowance, Tenant shall pay to Landlord such increase above the
Allowance in accordance with the provisions of paragraph 5(c) of this Exhibit A.
The Tenant Improvements shall be constructed in accordance with all laws.
8. DELAYS CAUSED BY TENANT:
Any delays due to construction delays related to any changes required
by Tenant, or due to any other failures by Tenant to perform its obligations
under this Exhibit A or otherwise under the Lease or the Amendment, shall be
deemed Tenant caused delays for purposes of this Agreement.
9. PUNCH LIST:
Within ten (10) business days after the Effective Date, Tenant shall
deliver to Landlord a list of items ("Punch List") that Tenant believes Landlord
should complete or correct in order for the Premises to be acceptable. Landlord
shall commence to complete or correct the items as soon as possible, except
those items that Landlord in its reasonable discretion contends are not
justified. If Tenant does not deliver the Punch List to Landlord within the ten
(10) day period, Tenant shall be deemed to have accepted the Premises and
approved the construction (provided that such acceptance shall not be deemed a
waiver with respect to structural defects, non-compliance with laws or other
items not reasonably ascertainable on walkthrough inspection). Nothing in this
paragraph 9 shall delay the Effective Date or Tenant's obligation to pay rent or
to make other payments due Landlord under the Lease or the Amendment.
10. ACCESS TO PREMISES:
Tenant shall permit Landlord and Landlord's contractor access to the
Premises during normal business hours for construction of the Tenant
Improvements. Tenant acknowledges that some disruption of its business
operations is inevitable and that such disruption shall not be a basis for
denying Landlord's contractor access to the Premises or otherwise interfering
with construction of the Tenant Improvements. Landlord and its contractors shall
use reasonable efforts to minimize disruption to Tenant's business. In the event
Tenant elects to have construction of the Tenant Improvements, or any portion
thereof, performed at times other than during normal business hours, Landlord
shall provide Tenant with an estimate of overtime charges before commencement of
such work. Tenant shall be responsible for all actual overtime charges and shall
pay to Landlord as additional
6
rent within ten (10) days of completion of construction of the Tenant
Improvements all such actual overtime charges.
11. ATTACHMENTS:
All reference in the Amendment to Exhibit A shall be deemed to also
include Exhibit A-1.
7
EXHIBIT A
SUBORDINATION, NONDISTURBANCE AND
ATTORNMENT AGREEMENT
THIS AGREEMENT made this 28th day of February, 1995 by and among THE
TRAVELERS INSURANCE COMPANY, a Connecticut corporation, with an office at 2121
N. California Blvd., Walnut Creek, California 94596-8161 (the "Mortgagee"), and
Circadian, Inc., a Delaware corporation, with an address at 3942 North First
Street, San Jose, California 95134 (the "Tenant"), and California Second, Ltd.,
a Florida Limited Partnership, whose address is c/o McCandless Management
Company, 3945 Freedom Circle, Suite 640, Santa Clara, California 95054 (the
"Borrower").
WITNESSETH:
WHEREAS, the Mortgagee is the holder of an Amended and Restated Deed of
Trust and Security Agreement with Assignment of Rents and Leases and Fixtures
Filing from Borrower dated as of November 1, 1994 (the "Mortgage") covering
certain improved real property located in the County of Santa Clara, State of
California, and described on Exhibit A attached hereto, and recorded on December
1, 1994, as Serial No. 12736117, Santa Clara County Records (the real property
covered by the Mortgage as described in Exhibit A is hereafter referred to as
the "Mortgaged Property"); and
WHEREAS, by virtue of that certain lease ("Lease") dated June 9, 1987, as
amended by that certain First Amendment to Lease dated December 1, 1987, Second
Amendment to Lease dated August 30, 1980, Third Amendment to Lease dated April
3, 1989, Fourth Amendment to Lease dated July 16, 1990, Fifth Amendment to Lease
dated August 15, 1991, and Sixth Amendment to Lease dated January 3, 1994
(collectively, the "Lease"), between the Borrower, as Landlord therein, and the
Tenant, as Tenant therein, the Tenant has leased from the Borrower approximately
29,424 rentable square feet of space located in an office building at 3942 North
First Street, San Jose, California (the "Premises"), which Premises are a
portion of the Mortgaged Property;
WHEREAS, the Tenant desires to be assured of continued occupancy of the
Premises under the terms of the Lease and subject to the terms of the Mortgage;
NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) by each
party in hand paid to the other, receipt of which is hereby acknowledged, and in
consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereto, intending to be legally bound hereby,
hereby agree as follows:
1. The Tenant hereby agrees:
(a) subject to this Agreement, the Lease and the Tenant's leasehold
estate and any and all estates, options, liens and charges therein contained or
created thereby are, and shall be and remain, subject and subordinate in all
respects to the lien and effects of the Mortgage and to all of the terms,
conditions and provisions thereof, to all advances made or to be made
thereunder, and to any renewals, extensions, modifications, consolidations or
replacements thereof, with the same force and effect as if the Mortgage had been
executed, delivered and duly recorded at the above-mentioned Recorder, prior to
the execution and delivery of the Lease;
(b) from time to time, upon request by the Mortgagee, it shall
forthwith provide the Mortgagee within ten days of such request with an estoppel
certificate certifying that no defaults, claims, offsets or events, or
situations which, with the passage of time, could become a default or the basis
for a claim or offset against the Borrower by the Tenant, exist under the Lease
or, if the same exist, certifying and describing such items as are in existence;
(c) it will forward to the Mortgagee copies of any notice, claim or
demand given or made by the Tenant to or on the Borrower, in all cases
concurrently with forwarding same to the Borrower, such copies to be provided to
the Mortgagee by the same method of mailing as the statement, notice, claim or
demand was made or given to or on the Borrower;
(d) without the prior written consent of the Mortgagee (i) no rent or
other sums due under the Lease shall be paid more than thirty (30) days in
advance of the due date therefor established by the Lease, except the security
deposit, if any, (ii) no modifications shall be made in the provisions of the
Lease nor shall the term be extended or renewed, except as provided therein,
(iii) the Lease shall not be terminated by the Tenant except as provided therein
nor shall the Tenant tender or accept a surrender of the Lease except incident
to a termination provided for in said Lease, and (iv) it shall only subject the
Premises demised by the Lease or assign the Tenant's interest in the Lease in
accordance with the provisions of said Lease;
(e) in the event of any act or omission by the Borrower which would
given the Tenant the right to terminate the Lease or to claim a partial or total
eviction, reduce rents or to credit or offset any amounts against future rents,
the Tenant will not exercise such right (i) until it shall have given written
notice of such act or omission to the Mortgagee, and (ii) until a reasonable
time for remedying such act or omission shall have elapsed following such giving
of notice, Mortgagee's time to commence and diligently pursue cure thereof not
to exceed
2
the later of 30 days after (A) Tenant's notice to Mortgagee as provided in this
subparagraph and (B) the lapse of the applicable cure period under the Lease;
and if it so elects, the Mortgagee shall have the right to cure any default by
the Borrower under the Lease, including, if necessary to cure such defaults,
access to the premises demised by the Lease in accordance with the terms of the
Lease;
(f) notices required to be given to the Mortgagee under this
Agreement will be given to any successor-in-interest of the Mortgagee under the
Mortgage provided that, prior to the event for which notice is required to be
given to the Mortgagee, such successor-in-interest of the Mortgagee shall have
given written notice to the Tenant of its acquisition of the Mortgagee's
interest therein, and designated the address to which such notice is to be
directed;
(g) if the holder of the Mortgage (as now or hereafter
constituted), or anyone claiming from or through any such holder, shall enter
into and lawfully become possessed of the Mortgaged Property or the Premises,
or shall succeed to the rights of the Borrower under the Lease, or shall
succeed to the rights of the Borrower under the Lease, either through
foreclosure of said Mortgage or otherwise howsoever, (i) the Tenant shall
attorn to, and recognize, such holder or anyone claiming from or through such
holder as its landlord under the Lease for the unexpired balance of the term
of the Lease and any extension or renewal thereof, subject to all of the
terms and conditions of the Lease, and (ii) the Tenant shall make all
payments payable by the Tenant under the Lease directly to the holder of the
Mortgage upon such holder's written instructions to the Tenant; and if, by
operation of law, or otherwise, the institution of any action or other
proceedings by the Mortgagee under the Mortgage or the entry into and taking
possession of the Premises shall result in the cancellation or termination of
the Lease or the Tenant's obligations thereunder, the Tenant shall, upon
request, execute and deliver a new lease of the Premises pursuant to the
Lease, containing the same terms and conditions as the Lease, except that the
term and any extension thereof shall be the unexpired term and unexpired
extended term or terms of the Lease as of the date of execution and delivery
of said new lease;
(h) it has no right or option, whether under the Lease or otherwise,
to purchase any portion of the Mortgaged Property or any interest therein, and
to the extent that Tenant has or hereafter acquires any such right or option,
the same is hereby subordinated to the Mortgage;
(i) the Mortgagee shall have no responsibility, liability or
obligation to cure any defaults by the Borrower under the Lease, nor be subject
to claims, defenses or offsets under the Lease or against the Borrower possessed
by the Tenant
3
and which arose or existed prior to actual foreclosure of the Mortgage or
recording of a deed in lieu of foreclosure or entry under and taking
possession of the Mortgaged Property by the Mortgagee. If the Mortgagee
forecloses the Mortgage or takes title to the Mortgaged Property pursuant to
a deed in lieu of foreclosure or enters upon and takes actual possession of
the Mortgaged Property, the Mortgagee or any other purchaser at such
foreclosure sale shall do so free and clear of all such prior defaults,
claims, or offsets and shall not be liable or responsible to the Tenant for
any act or omission of any prior landlord (including the Borrower), or be
responsible or liable for any deposit or security which was delivered by the
Tenant to any prior landlord (including the Borrower) but which was not
subsequently delivered to the Mortgagee, or be obligated or liable to the
Tenant with respect to the construction and completion of any improvements in
the Premises for the Tenant's use, enjoyment or occupancy, or be bound by any
restriction on competition beyond the Premises contained in the Lease, or be
subject to any claims, defenses or offsets which the Tenant might have
against any prior landlord (including the Borrower); and
(j) the institution of any action or other proceedings by the
Mortgagee under the Mortgage in order to realize upon the Borrower's interest in
the Mortgaged Property shall not by operation of law, or otherwise, result in
the cancellation or termination of the Lease or the Tenant's obligations
thereunder.
2. The Mortgagee hereby agrees:
(a) so long as the Tenant is not in default (beyond all applicable
periods given the Tenant under the Lease to cure such default) and shall pay the
rents and additional rents thereunder, and shall fully comply with and perform
all the terms, covenants, conditions and provisions of the Lease on the part of
the Tenant thereunder to be complied with and performed, (i) the Tenant's
possession and occupancy of the Premises and the Tenant's rights and privileges
under the Lease, or any extension or renewal thereof which may be effected in
accordance with the terms of the Lease, shall not be disturbed by the Mortgagee
or any successor-in-interest to the Mortgagee; (ii) the Mortgagee shall not join
the Tenant as party to any action or proceeding brought as a result of a default
under the Mortgage for the purposes of terminating the Tenant's interest and
estate under the Lease, subject to paragraph 1(g) above and subject further to
the condition that the Mortgagee shall not be bound by any rent or other payment
which the Tenant might have paid more than thirty (30) days in advance of the
time stipulated for payment
4
under the Lease or by any amendment or modification of the Lease made without
its written consent; and
(b) in the event that the interest of the Borrower shall vest in the
Mortgagee by reason of foreclosure or any other procedures brought by it, or in
any other manner, the Mortgagee and its successors-in-interest agree to be bound
by all of the undischarged obligations of Landlord under the Lease occurring
after such foreclosure or other action.
3. The Tenant hereby represents and warrants that:
(a) the Lease is in full force and effect;
(b) to the Tenant's actual knowledge, neither the Landlord nor the
Tenant is in default in the performance of or compliance with any provision of
the Lease;
(c) the Tenant has not received any notice of default or termination
of the Lease;
(d) the Lease is a complete statement of the agreement of the parties
thereto with respect to the leasing of the Premises; and
(e) the Tenant has accepted possession of the Premises and is the
sole owner of the leasehold estate created thereby.
4. The Borrower hereby irrevocably authorizes and directs the Tenant and
the Tenant hereby agrees, upon receipt from the Mortgagee of written notice to
do so, to pay all rents and other monies payable by the Tenant under the Lease
to or at the direction of the Mortgagee. The Borrower irrevocably releases the
Tenant of any liability to the Borrower for all payments so made, and the
Borrower agrees to defend, indemnify and hold the Tenant harmless from and
against any and all claims, demands, losses, or liabilities asserted by,
through, or under the Borrower for any and all payments so made. The Tenant
agrees that upon receipt of such notice it will pay all monies then due and
becoming due from the Tenant under the Lease to or at the direction of the
Mortgagee, notwithstanding any provision of the Lease to the contrary. Such
payments shall continue until the Mortgagee directs the Tenant otherwise in
writing. The Tenant agrees that neither the Mortgagee's demanding or receiving
any such payments, nor the Mortgagee's exercising any other right, remedy
privilege, power or immunity granted by the Lease or this Agreement will operate
to impose any liability upon the Mortgagee for performance of any obligation of
the Mortgagee under the Lease unless and until the Mortgagee elects otherwise in
writing or unless the Mortgagee takes possession of the Premises and assumes the
functions of a landlord.
5
5. Any notice, demand or consent hereunder shall be in writing and may be
given or mailed by mailing the same by registered or certified mail, return
receipt requested, addressed, or intended for the Mortgagee, to the Mortgagee at
the address set forth on the first part of this Agreement, and if intended for
the Tenant, addressed to the Tenant at the address also set forth on the first
page of this Agreement with a copy to the Premises, and if intended for the
Borrower, addressed to the Borrower at the address also set forth on the first
page of this Agreement. Either party may designate a new address by notice in
writing to the other party. Any notice given in accordance herewith shall be
effective upon deposit in the United States mails in accordance herewith.
6. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of each of the parties hereto. The term "Mortgagee" shall
include the respective holders from time to time of the Mortgage (as now or
hereafter constituted), the term "Borrower" shall be synonymous with the term
"Landlord" during the term of the Mortgage and the terms "Landlord" and "Tenant"
shall include the holder from time to time of the lessor's interest, and the
holder from time to time of the lessee's interest, respectively, in the Lease.
7. Any claim by the Tenant against the Mortgagee under the Lease or this
Agreement shall be satisfied solely out of the interest of the Mortgagee in the
Mortgaged Property and the Tenant shall not seek recovery against or out of any
other assets of the Mortgagee.
This Agreement shall be governed by, and construed under the laws of the
State of California.
IN WITNESS WHEREOF, the parties hereto have caused the execution hereof as
a sealed instrument as of the day and year first above written.
TENANT:
CIRCADIAN, INC., a Delaware
corporation
By: /s/ Margie Kankrlik
--------------------------
Its: Secretary
-------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
6
MORTGAGEE:
THE TRAVELERS INSURANCE
COMPANY, a Connecticut corporation
By: /s/ Lona G. Andrey
------------------------
Its: Assistant Secretary
-----------------------
LANDLORD/BORROWER:
CALIFORNIA SECOND LTD., A Florida
limited partnership
By: /s/ Birk S. McCandless
---------------------------
Birk S. McCandless, As Trustee
of the Birk S. McCandless and
Mary McCandless Inter Vivos
Trust dated February 17, 1982,
General Partner
7
ACKNOWLEDGMENT OF INSTRUMENTS
STATE OF CALIFORNIA )
) SS.
COUNTY OF SANTA CLARA )
On March 29, 1995 before me, the undersigned notary public in and for
said state, personally appeared Margie Kankrlik, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity, and that by her signature on
the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Naomi B. Kuhn
---------------------
(Seal)
Naomi B. Kuhn
Comm. #986138
Notary Public - California
SANTA CLARA COUNTY
My Comm. Expires APR 9, 1997
8
ACKNOWLEDGMENT OF INSTRUMENTS
STATE OF CALIFORNIA )
) SS.
COUNTY OF SANTA CLARA )
On April 4, 1995 before me, the undersigned notary public in and for
said state, personally appeared Birk S. McCandless, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he executed the same in his authorized capacity, and that by his signature on
the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Carol J. Pluff
---------------------
(Seal)
Carol J. Pluff
Comm. #1039493
Notary Public - California
SANTA CLARA COUNTY
My Comm. Expires SEP 26, 1998
9
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
---------------
County of Contra Costa
--------------
On 4/18/95 before me, Marimil Paikos, Notary Public personally appeared Lona
S. Andrey, personally known to me to be the person whose name is subscribed
to the within instrument and acknowledged to me that she executed the same in
her authorized capacity, and that her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
MARIMIL PAIKOS
COMM. #990315
Notary Public - California
CONTRA COSTA COUNTY
My Comm. Expires APR 4, 1997 WITNESS my hand and official seal.
/s/ Marimil Paikos
--------------------------------
SIGNATURE OF NOTARY
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
/ / INDIVIDUAL
/ / CORPORATE OFFICER
----------------------------------
- -------------------------------- TITLE OR TYPE OF DOCUMENT
TITLE(S)
/ / PARTNER(S) / / LIMITED
/ / GENERAL ----------------------------------
NUMBER OF PAGES
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:______________________ _________________________________
____________________________ DATE OF DOCUMENT
____________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
__________________________________
________________________________ SIGNER(S) OTHER THAN NAMED ABOVE
________________________________
- -Copyright-1993 NATIONAL NOTARY ASSOCIATION 8236 Remmer Ave., P.O. Box 7184
Canoga Park CA 91309-7184
EXHIBIT A
SUBORDINATION, NONDISTURBANCE AND
ATTORNMENT AGREEMENT
The Mortgaged Property
The Mortgaged Property consists of the real property described in the five
page legal description attached hereto.
Address of Premises: 3390-3970 North First Street, San Jose,
California
Permanent Real Estate
Taxpayer Identification
Number: 59-207-6927
11
LEGAL DESCRIPTION
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Pcl. 1 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
PARCEL TWO:
A non-exclusive easement for ingress and egress over PCL. 2, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Easterly corner of said PCL. 2, said corner being on
the Southwesterly line of Rose Orchard Way; thence along said Southwesterly
line N. 59 DEG 57' 13" W., 38.00 feet to the true point of beginning of said
strip of land; thence S. 30 DEG 02' 47" W., 28.14 feet; thence S. 37 DEG 32'
59" W., 423.45 feet to the Southwesterly line of said PCL. 2.
Strip 2
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on
the Southwesterly line of Rose Orchard Way; thence along said Southwesterly
line S. 59 DEG 57' 13" E., 388.93 feet to the true point of beginning of said
strip of land; thence S. 30 DEG 02' 47" W., 33.86 feet; thence S. 37 DEG 32'
48" W., 335.99 feet to the Southwesterly line of said PCL. 2.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
EXHIBIT A
Page 1 of 5
LEGAL DESCRIPTION: (Continued)
PARCEL TWO: (Continued)
Strip 3
A strip of land 26.00 feet wide extending Southwesterly from the Southwesterly
line of said Rose Orchard Way to the Northwesterly line of the above described
and designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on
the Southwesterly line of Rose Orchard Way; thence along said Southwesterly
line S. 59 DEG 57" 13' E, 30.78 feet to the true point of beginning of said
strip of land; thence S. 30 DEG 02' 47" W., 26.86 feet; thence S. 37 DEG 32'
48" W., 262.18 feet; thence S. 52 DEG 27' 12" E. 343.00 feet to the
Northwesterly line of the above described and designated Strip 2.
PARCEL THREE:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 2, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the
Northwesterly line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side
of a line that begins at the most Northerly corner of said PCL. 1 and runs
thence along the Northeasterly line of said PCL. 1, S. 52 DEG 27" 12' E.
375.00 feet.
Excepting Therefrom that portion lying within the bounds of Parcel One mentioned
hereinabove.
PARCEL FOUR:
PCL. 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
PARCEL FIVE:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, and being more particularly described as follows:
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
EXHIBIT A
Page 2 of 5
LEGAL DESCRIPTION: (Continued)
PARCEL FIVE: (Continued)
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly
line N. 52 DEG 27" 12' W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 DEG 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on
the Northeasterly line of North First Street; thence along said Northeasterly
line N. 52 DEG 27" 12' W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37 DEG 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of
land being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly
line S. 52 DEG 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 DEG 32' 48" E. 566.00 feet; thence S. 52 DEG 27'
12" E, 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL SIX:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, being more particularly
described as follows:
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
EXHIBIT A
Page 3 of 5
LEGAL DESCRIPTION: (Continued)
PARCEL SIX: (Continued)
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly
line S. 52 DEG 27' 12" E. 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37 DEG 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52 DEG 27' 12" W., 278.00 feet; thence N. 00
DEG 51' 00" E., 198.30 feet; thence N. 37 DEG 32' 33" E., 279.75 feet; thence
S. 51 DEG 19' 51" E., 89.02 feet; thence N. 50 DEG 06' 47" E., 133.18 feet;
thence N. 37 DEG 32' 48" E., 5.00 feet to the Northeasterly line of said PCL.
1.
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 1 and lying 5.00 feet on
each side of a line which begins at said Point A; thence along the centerline
of an existing storm drain line the following courses: thence N. 26 DEG 55'
37" E., 154.65 feet; thence N. 32 DEG 55' 53" E., 96.31 feet; thence N. 43
DEG 21' 28" E., 113.58 feet; thence N. 54 DEG 44' 21" E., 105.72 feet to a
point herein designated as Point B; thence S. 41 DEG 57' 14" E., 65.85 feet;
thence N. 37 DEG 32' 48" E., 62.00 feet to the Northeasterly line of said
PCL. 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the
Northeasterly line of the above described and designated Strip 2 to the
Northeasterly line of said PCL. 1 and lying 5.00 feet on each side of a line
that begins at said Point B; thence along the centerline of an existing storm
drain line N. 37 DEG 32' 48" E.; 50.00 feet to the Northeasterly line of said
PCL. 1.
PARCEL SEVEN:
The right from time to time to construct, install, inspect, maintain,
replace, remove and use any and all Public Service Facilities necessary or
useful, together with a right of way therefor, over a portion of PCL 1. as
said parcel is shown on the Parcel Map recorded in Book 516 of Maps, at pages
34 and 35, Santa Clara County Records, being more particularly described as
follows:
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
EXHIBIT A
Page 4 of 5
LEGAL DESCRIPTION: (Continued)
PARCEL SEVEN: (Continued)
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on
the Northeasterly line of North First Street; thence along said Northeasterly
line N. 52 DEG 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37 DEG 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37 DEG 32' 59" E., 105.20 feet; thence N. 7 DEG
27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line
of the above described and designated Strip 5 to the Northeasterly line of
said PCL. 1 and lying 7.5 feet on each side of a line that begins at said
Point C; thence N. 30 DEG 01' 00" E., 59.5 feet; thence N. 8 DEG 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly
line S. 52 DEG 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37 DEG 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL. 1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL EIGHT:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 DEG 27' 12" E. 375.00 feet.
Excepting Therefrom that portion lying within the bounds of Parcel Four
mentioned hereinabove.
EXHIBIT A
Page 5 of 5