EXHIBIT 10.25(b)
CONTRACT NO.____________
ACCOUNT NO.____________
AGREEMENT FOR CONSULTING SERVICES
(LUMP SUM)
THIS AGREEMENT FOR CONSULTING SERVICES (LUMP SUM) ("Agreement") is
effective as of the date set forth in Section 1.1 by and between the entity
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identified in Section 1.5 ("AMCC") and the consultant identified in Section 1.2
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("Consultant") with reference to the following facts and objectives:
A. Description of the Project. AMCC is ground leasing from Kilroy Realty,
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L.P. ("Kilroy") Lots 20 and 21 of the Lusk Mira Mesa Business Park East II, Unit
No. 2, located in the City and County of San Diego, California ("Lots 20 and
21"). Kilroy and AMCC have agreed to process a lot line adjustment ("Lot Line
Adjustment") so as to create a separate legal parcel comprising a portion of
Lots 20 and 21 consisting of approximately 205,000 gross square feet as more
particularly depicted on Exhibit A attached hereto ("Site"). AMCC desires to
develop on the Site one three-story building for use by AMCC as an office,
research and development and manufacturing facility (the "Project"). Unless
otherwise defined herein, capitalized terms shall have the meanings set forth in
the Ground Lease made effective January 1, 1998 by and between AMCC and Kilroy
(the "Ground Lease").
B. Consulting Services. Subject to the terms and conditions of this
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Agreement, AMCC desires to retain Consultant to perform certain consulting
services ("Services") with respect to the Lot Line Adjustment and design,
budgeting, development and construction of the Project. The exact nature and
scope of the Services is described in the Description of Services attached
hereto as Exhibit "B".
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1. Fundamental Provisions.
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1.1 Effective Date of Agreement: April 1, 1998
1.2 Consultant: Kilroy Realty Corporation, a
Maryland Corporation
Consultant's Designated
Representative: Mr. Steven L. Black
Executive Vice President
Consultant's address: 4365 Executive Drive, Suite 850
San Diego, CA 92121-2130
Attention: Mr. Steven L. Black
Telephone Number: (619) 550-1930
Telecopier Number: (619) 550-1935
Electronic Mail Address: _________________________
1.3 Other Key Personnel [if any]:______________________________________
1.4 Project Name: Applied Micro Circuits
Manufacturing Facility
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1.5 AMCC: Applied Micro Circuits Corporation
AMCC's Designated Representative: Mr. Joel Holliday, Chief Financial
Officer
AMCC's Address: 6290 Sequence Drive
San Diego, California 92121
Attention: Mr. Joel Holliday
Chief Financial Officer
Telephone Number: (619) 535-6535
Telecopier Number: (619) 535-6800
Electronic Mail Address: ________________________________
1.6 Exhibits. The following documents, drawings, and special provisions are
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attached hereto as Exhibits and made a part of this Agreement:
Exhibit "A" - Description of the Site
Exhibit "B" - Description of Services.
Exhibit "C" - Insurance Requirements.
2. Scope of Services.
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2.1 Services. AMCC hereby retains Consultant and Consultant hereby accepts
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its retention on all of the terms and conditions set forth herein. Consultant
shall perform all of the Services set forth in Exhibit "B" and such other
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services as are customarily furnished in connection therewith. Consultant shall
perform the Services in a first-class manner and in accordance with AMCC's
guidelines and standards for the Project. In entering into this Agreement, AMCC
is relying upon Consultant's superior knowledge, experience and expertise with
respect to rendering the Services which Consultant has affirmatively represented
to AMCC. Consultant shall at all times faithfully, industriously and to the best
of the ability, experience and talents of Consultant and its employees and
representatives, consistent with industry standards for work of the type and
complexity of the Services, perform the Services required of and from it
pursuant to the express and implied terms hereof to the reasonable satisfaction
of AMCC.
2.2 Reports. Consultant shall prepare and send to AMCC at such times as
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AMCC may request, reports setting forth what has been done including results
achieved. Any sketches, drawings, specifications, studies, or documents
resulting from the Services shall be included as part of the reports.
2.3 Other Consultants. If Consultant intends to hire or retain any other
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person, firm or corporation to perform Services under this Agreement, the
selection of such other person, firm or corporation shall be subject to AMCC's
prior written approval, provided that nothing herein contained shall be deemed
to create any contractual relationship between AMCC and any consultant,
subcontractor or other professional so employed by Consultant. Any' such other
person, firm or corporation shall be employed at Consultant's own cost and
expense (except as otherwise expressly agreed by AMCC and Consultant), shall be
duly licensed in its respective field of specialization by the appropriate
governmental authorities. Consultant shall be fully responsible to AMCC for the
Services rendered by such other parties. Consultant shall secure the written
agreement of any such party that such party shall not be or act as an agent or
employee of AMCC or assume or create any commitment or obligation on behalf of
AMCC or bind AMCC in any respect whatsoever. Consultant shall provide AMCC with
a copy of each such written agreement.
2.4 Coordination. Consultant shall provide progress copies of drawings,
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reports, specifications and other necessary information, as required hereunder
or as requested by AMCC, to AMCC and AMCC's contractors and other consultants.
Consultant shall ascertain the requirements for the Services, shall confirm such
requirements to AMCC and inform AMCC of any additional information Consultant
needs from AMCC or AMCC's contractors or other consultants sufficiently ahead of
time to allow AMCC to obtain such additional information and shall promptly
notify AMCC of any deficiencies in the information provided to Consultant by
AMCC or AMCC's contractors or other consultants. AMCC will employ other
contractors, engineers and
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consultants in connection with the Project, and Consultant shall cooperate and
coordinate its Services with that of such other contractors, engineers and
consultants as required to facilitate reasonable, orderly, and timely completion
of the Project; provided that Consultant shall not be required to perform any
Services other than as set forth herein and those customarily furnished in
connection therewith.
2.5 Additional Services. When directed in writing by AMCC or AMCC's
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authorized representative, and subject to Section 5.3, Consultant shall provide
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additional services not otherwise described herein or included as Services under
this Agreement ("Additional Services"). The nature of such Additional Services
shall be set forth in a writing specifically referring to this Agreement in a
form substantially similar to the Description of Services attached hereto as
Exhibit "B", and all terms of this Agreement shall apply to such Additional
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Services except as expressly provided otherwise in said writing.
3. Term.
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3.1 Commencement; Term. The term of this Agreement shall commence upon the
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Date of Agreement set forth in Section 1.1 and shall continue through June 30,
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1998.
4. Scheduling.
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4.1 Schedule of Services. Consultant at all times shall proceed diligently
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to complete the Services as expeditiously as is consistent with the generally
recognized standards of professional skill and care for Consultant's profession
on a project of similar size, scope, and complexity, and the orderly progress of
the Services. Consultant shall at all times provide sufficient personnel to
perform its Services.
4.2 Force Majeure. Consultant shall be excused only from such delay in
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timely and satisfactory completion of its Services as is caused by acts of God,
or by strikes, lockouts, acts of public utilities or public bodies beyond the
reasonable control of Consultant, its consultants and subcontractors, or by any
default by AMCC hereunder; provided, however, that Consultant shall notify AMCC
in writing of the occurrence of any such excusable delay within five (5) days
after the occurrence thereof, and failing such notice Consultant shall be deemed
to have waived any right to an extension of time to complete its Services on
account of such occurrence. No act or default by Consultant, nor any controversy
or dispute of any kind between the parties hereto or between Consultant and any
other consultants, shall constitute a valid or compensable cause for delay or
stoppage of Consultant's Services or for an extension of time to complete such
Services, provided that (a) Consultant is given the necessary information to
continue its performance, and b) in case of any such controversy or dispute, all
payments not in dispute are made to Consultant when due.
5. Basis for Compensation.
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5.1 Consultant's Compensation. AMCC shall pay Consultant the amount set
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forth in Exhibit "B" (the "Compensation") as total compensation for the
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Services. The Compensation shall be paid to Consultant in accordance with
Exhibit "B".
5.2 Corrections. No compensation shall be paid to or claimed by Consultant
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for Services required to correct deficiencies in any documents, reports, or
studies prepared by Consultant and attributable to errors or omissions of
Consultant.
5.3 Compensation for Additional Services. AMCC shall pay Consultant for all
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Additional Services authorized in advance and in writing by AMCC such amount as
shall be mutually agreed by AMCC and Consultant before AMCC directs Consultant
to perform such Additional Services, and such amount shall be paid in accordance
with Section 2.5.
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6. Reimbursable Costs.
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Consultant shall not be entitled to any reimbursement from AMCC for any
costs or expenses incurred by Consultant in connection with the performance of
Consultant's obligations under this Agreement. Consultant's Compensation shall
be limited to the amount set forth in Exhibit "B" (Description of Services).
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7. Consultant's Insurance.
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7.1 Consultant's Insurance. Consultant, at Consultant's sole cost and
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expense, shall procure and maintain the policies of insurance set forth in
Exhibit "C".
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8. AMCC's and Consultant's Representatives.
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AMCC has designated AMCC's Designated Representative set forth in Section
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1.5 to act as AMCC's agent and authorized representative in connection with this
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Agreement. Consultant has authorized the person identified as Consultant's
Designated Representative in Section 1.2 to act on Consultant's behalf in
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connection with the performance of Consultant's Services under this Agreement.
Such representatives shall render decisions pertaining thereto promptly in order
to avoid unreasonable delay in the progress of Consultant's Services. Consultant
shall not change Consultant's Designated Representative for the Project without
AMCC's prior written consent. Anything herein to the contrary notwithstanding,
no instruction given by AMCC's Designated Representative, whether oral or
written, shall add to (except as expressly provided herein) or modify the terms
and conditions of this Agreement unless the same shall be reduced to writing and
executed in accordance with Section 16.2. All invoices, statements and reports
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to be delivered by Consultant under this Agreement shall be sent directly to
AMCC.
9. Independent Contractor.
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Consultant is and shall perform its Services under this Agreement as an
independent contractor, and shall not act as nor be deemed an agent, employee,
partner, joint venturer or legal representative of AMCC. Consultant has no
authority to assume or create any commitment or obligation on behalf of AMCC or
bind AMCC in any respect whatsoever. Consultant shall not be entitled to any of
the benefits to which employees of AMCC may be entitled, such as group life,
health and similar medical plans, savings plans, incentive compensation plans,
vacations, sick pay or similar benefits. Consultant assumes all risks, hazards
and liability encountered in the performance of this Agreement and shall obtain
such liability or other forms of insurance as are required hereunder and such
additional insurance as Consultant deems appropriate in connection with its
furnishing of consulting Services.
10. Social Security and Taxes.
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Consultant shall pay all withholding and other taxes required by any local,
state or federal law with respect to Consultant's employees and shall accept the
exclusive liability for such taxes. Consultant shall indemnify, defend, protect
and hold AMCC harmless against any such tax which may be assessed against either
AMCC with respect to Consultant's employees.
11. Unemployment Insurance.
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Consultant shall pay any required contribution under federal and state
unemployment insurance laws with respect to Consultant's employees, and shall
accept the exclusive liability for said contributions. Consultant shall
indemnify, defend, protect and hold AMCC harmless against any such contribution
which may be assessed against either of them.
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12. Rights in Results of Services.
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All documents and materials prepared by Consultant, and its consultants or
subcontractors, in connection with the performance of the Services under this
Agreement or which describe or relate to the Services performed or to be
performed hereunder or the results thereof, including, without limitation, all
writings, drawings, specifications, blueprints, pictures, recordings, computer
or machine readable data and all copies or reproductions thereof (collectively,
the "Documents"), and, to the extent assignable or transferable, all copyrights,
rights of reproduction and other interests relating thereto, are and shall
remain the property of AMCC and shall be delivered to AMCC, without charge, on
request. Submission or distribution of all or any portion of the Documents to
meet official regulatory requirements in connection with obtaining approvals
and/or permits for the Project or for other purposes in connection with the
development of the Project is not to be construed as publication in derogation
of the Consultant's and AMCC's rights.
13. Mechanics' Lien.
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Consultant agrees that if any mechanic's lien is filed against the Project
for work done or Services claimed to have been rendered in connection with or
pursuant to this Agreement, provided Consultant has been paid for such work or
Services, Consultant shall cause such mechanic's lien to be discharged within
ten (10) days after filing, at Consultant's expense, by: (a) filing the
applicable bond required by the laws of the state where the Project is located;
or Co) providing AMCC with a court order discharging the lien; or (c) providing
AMCC with another form of protection against such lien which is acceptable to
AMCC, in its sole discretion. Upon Consultant's failure to discharge any such
lien, AMCC may, but shall not be required to, discharge such lien and the cost
thereof shall become a debt due to AMCC from Consultant and shall bear interest
of the lesser of (a) the Bank of America N.T. & S.A. Reference Rate plus two
percent (2%) per annum, or (b) the maximum interest rate that may be charged by
AMCC on such amounts under the applicable usury law (if any).
14. Non-Discrimination.
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Consultant shall comply with all applicable laws, ordinances, rules,
regulations, writs and orders of public and governmental authorities relating to
the terms and conditions of employment of any person employed in connection with
the Services to be performed under this Agreement. Consultant hereby covenants
by and for itself, its heirs, executors, administrators, assigns, and all
persons claiming under or through Consultant, and this Agreement is made and
accepted upon and subject to the condition that, with respect to the terms and
conditions of employment of any person, firm, or corporation that is employed in
connection with the Services to be performed under this Agreement, there shall
be no discrimination against or segregation of any person or group of persons on
account of age, sex, sexual orientation, marital status, race, color, religion,
creed, national origin or ancestry.
15. Confidential Information.
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Consultant shall maintain confidential and secret and shall not divulge,
disclose or use, except in performance of this Agreement, any information
obtained or created by Consultant relating to AMCC's businesses or
investigations, which (a) is information not generally known to the public; or
(b) is proprietary information of AMCC or any of their customers, suppliers or
affiliated entities; or (c) represents the "know how" and the present and future
plans of AMCC relating to the fields of endeavor in which Consultant performs
Services for AMCC, as well as the nature of certain completed, existing or
proposed projects to which Consultant is or may be exposed and the identity of
persons working on such projects (collectively, "Confidential Information").
Upon AMCC's request, Consultant shall execute and shall cause each of
Consultant's employees to execute an agreement, in such form as AMCC may
require, to keep in confidence all Confidential Information. Consultant shall
return or deliver to AMCC prior to termination of this Agreement, all tangible
forms of Confidential Information in Consultant's possession or control,
including all copies and reproductions thereof. The obligations of this Article
shall survive the termination of this Agreement.
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16. General Provisions.
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16.1 Waiver. The waiver by AMCC or Consultant of any breach of any term,
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provision or condition contained in this Agreement, or the failure to insist
upon strict performance thereof shall be deemed to be a waiver of such term,
provision or condition as to any subsequent breach thereof or a waiver of any
other term, provision or condition contained in this Agreement. The acceptance
of performance by either party shall not be deemed to be a waiver of any breach
by the other party. The exercise of any right or remedy hereunder shall not be
deemed to preclude or affect the exercise of any other right or remedy provided
herein.
16.2 Entire Agreement. This Agreement (including Exhibits) constitutes the
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entire agreement between AMCC and Consultant with respect to the Services
described in this Agreement and supersedes any and all prior and contemporaneous
oral or written understandings. This Agreement may not be altered, amended or
modified except by a written document executed by both AMCC and Consultant.
16.3 Assignment; Successors. Consultant shall not assign or delegate any
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rights or obligations under this Agreement, or permit any change in the persons
in effective control of Consultant's business, or subcontract the performance of
any portion of the Services required hereunder except as otherwise may be agreed
in writing by AMCC in its sole discretion. Any attempt to so assign or transfer
this Agreement or any rights or obligations hereunder without such consent shall
be null and void and of no force and effect. A change in Consultant's membership
of one or more partners, members or shareholders shall not constitute an
assignment for purposes of this provision provided that said change does not
constitute a substantial change in the membership or ownership of Consultant.
AMCC may assign its rights and obligations under this Agreement to any person or
entity which has an interest in the Project, to any lender for the Project or to
any successor to AMCC's interest in the Project, without releasing AMCC from
liability hereunder. This Agreement shall not inure to the benefit of any
trustee in bankruptcy, receiver or creditor of Consultant, whether by operation
of law or otherwise, without the prior written consent of AMCC. Subject to the
foregoing limitations on assignment, this Agreement shall bind and inure to the
benefit of the successors and assigns of the parties hereto.
16.4 Notices. All notices, consents, approvals, requests, demands and other
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communications (collectively "Notice") which AMCC, or Consultant are required or
desire to serve upon or deliver to any other party shall be in writing
(including telex, telecopy, telegram or other similar writing) and shall be
given to such party at its address or such electronic communication number as is
set forth in Article 1 or such address or electronic communication number as
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such party may hereafter specify for the purpose by Notice to the others. Each
Notice shall be deemed delivered to the party to whom it is addressed(a) if
personally served or delivered, upon delivery, (b) if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender's
receipt of an appropriate answer-back, telephonic, or written confirmation of
receipt of the entire Notice, (c) if given by certified or registered mail,
return receipt requested, deposited with the United States Mail with first-class
postage prepaid, seventy-two (72) hours after such Notice is deposited with the
United States Mail, (d) if given by overnight courier, with courier charges
prepaid, one (1) business day after delivery to said overnight courier, or (e)
if given by any other means, upon delivery at the addresses specified in Article
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1. Rejection or other refusal to accept a Notice or the inability to deliver the
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same because of a changed address of which no Notice was given shall be deemed
to be receipt of the Notice sent.
16.5 Severability. If any term or provision of this Agreement, the deletion
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of which would not adversely affect the receipt of any material benefit by
either party hereto, shall be held invalid or unenforceable, the remaining
terms, conditions and provisions of this Agreement shall not be affected thereby
and each of said terms, conditions and provisions shall be valid and enforceable
to the fullest extent permitted by law.
16.6 Governing Law. This Agreement shall be interpreted and construed in
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accordance with the laws of the State of California without regard to principles
of conflicts of laws.
16.7 Headings. The headings of the Articles and Sections of this Agreement
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are for convenience only and are not to be considered in construing said
Articles and Sections.
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16.8 Costs and Attorneys' Fees. If any action, arbitration or other
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proceeding be commenced (including an appeal thereof) to enforce any of the
provisions of this Agreement or to enforce a judgment, whether or not such
action is prosecuted to judgment ("Action"), (a) the unsuccessful party therein
shall pay all costs incurred by the prevailing party therein, including
reasonable attorneys' fees and costs, court costs and reimbursements for any
other expenses incurred in connection therewith, and (b) as a separate right,
severable from any other rights set forth in this Agreement, the prevailing
party therein shall be entitled to recover its reasonable attorneys' fees and
costs incurred in enforcing any judgment against the unsuccessful party therein,
which right to recover post-judgment attorneys' fees and costs shall be included
in any such judgment. The right to recover post-judgment attorneys' fees and
costs shall (1) not be deemed waived if not included in any judgment, (2)
survive the final judgment in any Action, and (3) not be deemed merged into such
judgment. The rights and obligations of the parties under this Section 16.8
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shall survive the termination of this Agreement.
16.9 Mortgages. This Agreement shall be and remain absolutely and
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unconditionally subordinate to any valid recorded mortgage on the Project
whether already or hereafter recorded. The subordination of this Agreement shall
require the execution of no further documentation, but Consultant agrees to
execute any reasonable subordination agreement requested by AMCC.
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16.10 Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, and all of which, together, shall constitute
one and the same instrument.
16.11 Time is of the Essence. Time is of the essence of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Date of Agreement set forth in Section 1.1.
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"AMCC"
APPLIED MICRO CIRCUITS CORPORATION,
a Delaware corporation
By:
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Name:
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Title:
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"CONSULTANT"
KILROY REALTY CORPORATION,
a Maryland corporation
By: /s/ STEVEN L. BLACK
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Name: Steven L. Black
Title: Executive Vice President
16.10 Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, and all of which, together, shall constitute
one and the same instrument.
16.11 Time is of the Essence. Time is of the essence of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Date of Agreement set forth in Section 1.1.
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"AMCC"
APPLIED MICRO CIRCUITS CORPORATION,
a Delaware corporation
By: /s/ JOEL O. HOLIDAY
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Name: Joel O. Holiday
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Title: Vice President
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"CONSULTANT"
KILROY REALTY CORPORATION,
a Maryland corporation
By:
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Name: Steven L. Black
Title: Executive Vice President
EXHIBIT "A"
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DESCRIPTION OF SITE
Parcel 1 of attached draft Parcel Map comprising 4.718 acres.
EXHIBIT "A" - Page 1
[PARCEL MAP APPEARS HERE]
EXHIBIT "B"
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DESCRIPTION OF SERVICES
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Consultant shall provide the following services to AMCC during the term of
the Agreement (April 1, 1998 through June 30, 1998):
1. Supervise and coordinate on behalf of AMCC the preparation,
application and processing with the City of San Diego of the Lot Line
Adjustment. These services will include working and coordinating with engineers
and other professionals engaged to prepare and process the Lot Line Adjustment;
meeting with City Planning Department representatives and other City agencies
involved in the application and review process for the Lot Line Adjustment;
attending meetings with City representatives and officials and hearings relative
to the Lot Line Adjustment; assisting AMCC with negotiations of any conditions,
reservations or stipulations to approval of the Lot Line Adjustment.
2. Consult and advise AMCC with respect to siting, design, development
and construction of the Project. These services will include but are not
necessarily limited to: working with architect and design professionals and
contractors to be engaged by AMCC with respect to the Project relative to the
design, layout, and specific AMCC requirements for the Project; assist AMCC and
work with the design and construction professionals in developing preliminary
cost estimates for design alternatives for the Project; assist AMCC with
preparing project development schedules; consult with AMCC regarding the
necessary permits and entitlements for the Project and develop a critical path
schedule with AMCC for obtaining such entitlements and permits; and consult with
AMCC regarding facilities benefit assessments and other fees and exactions
payable with respect to the development of the Project.
Compensation. In consideration of the Services rendered by Consultant
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during the term of this Agreement, AMCC shall pay Consultant a lump sum payment
of $480,000.00 ("Compensation") payable upon signing this Agreement.
Rescission Option. AMCC and Consultant agree that if (a) AMCC has elected
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to terminate the Ground Lease, pursuant to Sections 9 or 14 thereof, or (b)
except as provided below, AMCC has not completed a purchase of the Site on or
before December 30, 1998 or by the Closing Date if AMCC exercises the Extension
Option, AMCC may elect to rescind this Agreement upon delivery of written notice
to Consultant ("Rescission Notice"). If the Approved Lot Line Adjustment has
been recorded by December 30, 1998, and AMCC has exercised the Extension Option,
AMCC may not elect to rescind this Agreement or deliver a Rescission Notice.
Upon receipt of a Rescission Notice, Consultant shall refund the Compensation to
AMCC plus an mount equivalent to interest accrued thereon at the rate of eight
percent (8%) per annum from and after the date of Consultant's receipt of such
Compensation.
EXHIBIT "B" - Page 1
EXHIBIT "C"
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INSURANCE REQUIREMENTS
Consultant, at its sole cost and expense, shall maintain the following
policies of insurance:
1. Worker's Compensation Insurance with statutory limits, as required
under California laws and Employers' Liability Insurance on an "occurrence"
basis with a limit of not less than $1,000,000.
2. Commercial General Liability Insurance on an "occurrence" basis,
covering all operations of Consultant as named insured, including (a) owner's
and consultant's protective liability, (b) products/completed operations
liability, (c) broad form property damage liability, and (d) broad form
contractual liability against claims for bodily injury, personal injury (with
employee and contractual exclusions deleted), property damage and death, with a
limit of not less than $2,000,000 per occurrence, and in the aggregate, with
aggregates applying separately to products/completed operations and all other
general liability coverages combined.
3. Commercial Automobile Liability Insurance on an "occurrence" basis,
with a limit of not less than $1,000,000 of the Agreement per occurrence against
bodily injury and property damage liability arising out of the use by or on
behalf of Consultant, its agents and employees, in pursuit of the Services
provided for in the Agreement, of any owned, non-owned or hired motor vehicle or
automotive equipment.
Consultant shall provide AMCC with originals of the endorsements to each of
the policies required by this Exhibit "C" (with the exception of the workers'
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compensation insurance) which include the following wording:
It is agreed that Applied Micro Circuits Corporation, and its
members, managers, partners, officers, affiliates, agents and
employees, are additional insureds. The coverage under this policy
is primary insurance with regard to services performed by or at the
direction of Kilroy Realty Corporation, a Maryland corporation.
EXHIBIT "C" - Page 1