EXHIBIT 10.35
$74,800,000.00
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
3COM CORPORATION,
AS TENANT
EFFECTIVE AS OF OCTOBER 4, 1996
(Great America Site - Phase I)
This Agreement is being facilitated by the following banks:
Banque Nationale de Paris
ABN AMRO Bank N.V.
TABLE OF CONTENTS
1. Definitions
(a) Active Negligence
(b) Additional Rent
(c) Administrative Fee
(d) Affiliate
(e) Applicable Laws
(f) Applicable Purchaser
(g) Attorneys' Fees
(h) Base Rent
(i) Base Rent Date
(j) Base Rent Period
(k) Breakage Costs
(l) Business Day
(m) Capital Adequacy Charges
(n) Closing Costs
(o) Change of Control Event
(p) Code
(q) Collateral
(r) Collateral Percentage
(s) Debt
(t) Default
(u) Default Rate
(v) Designated Sale Date
(w) Effective Rate
(x) Environmental Indemnity
(y) Environmental Laws
(z) Environmental Losses
(aa) Environmental Report
(ab) ERISA
(ac) ERISA Affiliate
(ad) ERISA Termination Event
(ae) Escrowed Proceeds
(af) Eurocurrency Liabilities
(ag) Eurodollar Rate Reserve Percentage
(ah) Event of Default
(ai) Excluded Taxes
(aj) Fair Market Value
(ak) Fed Funds Rate
(al) Funding Advances
(am) GAAP
(an) Hazardous Substance
(ao) Hazardous Substance Activity
(ap) Impositions
(aq) Improvements
(ar) Indemnified Party
(as) Initial Funding Advance
(at) Landlord's Parent
(au) LIBOR
(av) Lien
(aw) Losses
(ax) Ordinary Negligence
(ay) Participant
(az) Participation Agreement
(ba) Permitted Encumbrances
(bb) Permitted Hazardous Substance Use
(bc) Permitted Hazardous Substances
(bd) Permitted Transfer
(be) Person
(bf) Plan
(bg) Pledge Agreement
(bh) Prime Rate
(bi) Purchase Agreement
(bj) Purchase Price
(bk) Qualified Payments
(bl) Remaining Proceeds
(bm) Rent
(bn) Responsible Financial Officer
(bo) Spread
(bp) Stipulated Loss Value
(bq) Subsidiary
(br) Tenant's Knowledge
(bs) Term
(bt) Unfunded Benefit Liabilities
(bu) Upfront Fee
(bv) Voluntary Minimum Pledge Commitment
(bw) Other Terms and References
2. Term
3. Rental
(a) Base Rent
(b) Upfront Fee
(c) Administrative Fees
(d) Additional Rent
(e) Interest and Order of Application
(f) Net Lease
(g) No Demand or Setoff
4. Insurance and Condemnation Proceeds
5. No Lease Termination
(a) Status of Lease
(b) Waiver By Tenant
6. Purchase Agreement, Pledge Agreement and Environmental Indemnity
7. Use and Condition of Leased Property
(a) Use
(b) Condition
(c) Consideration of and Scope of Waiver
8. Other Representations, Warranties and Covenants of Tenant
(a) Financial Matters
(b) Existing Contract
(c) No Default or Violation
(d) Compliance with Covenants and Laws
(e) Environmental Representations
(f) No Suits
(g) Condition of Property
(h) Organization
(i) Enforceability
(j) Not a Foreign Person
(k) Omissions
(l) Existence
(m) Tenant Taxes
(n) Operation of Property
(o) Debts for Construction
(p) Impositions
(q) Repair, Maintenance, Alterations and Additions
(r) Insurance and Casualty
(s) Condemnation
(t) Protection and Defense of Title
(u) No Liens on the Leased Property
(v) Books and Records
(w) Financial Statements; Required Notices; Certificates as to
Default
(x) Further Assurances
(y) Fees and Expenses; General Indemnification; Increased Costs;
and Capital Adequacy Charges
(z) Liability Insurance
(aa) Permitted Encumbrances
(ab) Environmental
(ac) Affirmative Financial Covenants
(ad) Negative Covenants
(i) Liens
(ii) Transactions with Affiliates
(iii) Mergers; Sales of Assets
(v) Change of Business
(ae) ERISA
9. Representations, Warranties and Covenants of Landlord
(a) Title Claims By, Through or Under Landlord
(b) Actions Required of the Title Holder
(c) No Default or Violation
(d) No Suits
(e) Organization
(f) Enforceability
(g) Existence
(h) Not a Foreign Person
10. Assignment and Subletting
(a) Consent Required
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters
(c) Consent Not a Waiver
(d) Landlord's Assignment
11. Environmental Indemnification
(a) Indemnity
(b) Assumption of Defense
(c) Notice of Environmental Losses
(d) Rights Cumulative
(e) Survival of the Indemnity
12. Landlord's Right of Access
13. Events of Default
(a) Definition of Event of Default
(b) Remedies
(c) Enforceability
(d) Remedies Cumulative
(e) Waiver by Tenant
(f) No Implied Waiver
14. Default by Landlord
15. Quiet Enjoyment
16. Surrender Upon Termination
17. Holding Over by Tenant
18. Miscellaneous
(a) Notices
(b) Severability
(c) No Merger
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD
(e) Entire Agreement
(f) Binding Effect
(g) Time is of the Essence
(h) Termination of Prior Rights
(i) Governing Law
(j) Waiver of a Jury Trial
(k) Not a Partnership, Etc
(l) Tax Reporting
Exhibits and Schedules
Exhibit A Legal Description
Exhibit B Encumbrance List
Exhibit C Permitted Hazardous Substances
Exhibit D Resolution of Disputed Insurance Claims
Exhibit E Covenant Compliance Certificate
Exhibit F Certificate Setting Forth the Calculation of the Spread
Exhibit G List of Environmental Reports
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this "Lease"),
made to be effective as of October 4, 1996 (all references
herein to the "date hereof" or words of like effect shall
mean such effective date), by and between BNP LEASING
CORPORATION, a Delaware corporation (hereinafter called
"Landlord"), and 3COM CORPORATION, a California corporation
(hereinafter called "Tenant");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Real Property Purchase and Sale
Agreement dated as of September 30, 1996 (hereinafter called
the "Existing Contract") between Tenant and Dairy Associates,
L.P., a California limited partnership (hereinafter called
"Seller"), concerning the land described in Exhibit A
attached hereto (hereinafter called the "Land") and the
improvements on such Land, Landlord is acquiring the Land and
improvements from Seller contemporaneously with the execution
of this Lease;
WHEREAS, in anticipation of Landlord's acquisition of
the Land, the improvements on the Land and other rights and
interests hereinafter described, Landlord and Tenant have
reached agreement as to the terms and conditions upon which
Landlord is willing to lease the same to Tenant, and by this
Lease Landlord and Tenant desire to evidence such agreement;
NOW, THEREFORE, in consideration of the rent to be paid
and the covenants and agreements to be performed by Tenant,
as hereinafter set forth, Landlord does hereby LEASE, DEMISE
and LET unto Tenant for the term hereinafter set forth the
Land, together with:
(i) Landlord's interest in any and all buildings and
improvements now or hereafter erected on the Land,
including, but not limited to, the fixtures,
attachments, appliances, equipment, machinery and
other articles attached to such buildings and
improvements (hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or
hereafter
acquired by Landlord for use in connection with the
Land or Improvements or as a means of access thereto;
(iii) all right, title and interest of Landlord, now
owned or hereafter acquired, in and to (A) any land
lying within the right-of-way of any street, open or
proposed, adjoining the Land, (B) any and all
sidewalks and alleys adjacent to the Land and (C)
any strips and gores between the Land and abutting land
(except strips and gores, if any, between the Land and
abutting land owned by Landlord, with respect to which this
Lease shall cover only the portion thereof to the center
line between the Land and the abutting land owned by
Landlord).
The Land and all of the property described in items (i)
through (iii) above are hereinafter referred to
collectively as the "Real Property".
In addition to conveying the leasehold in the Real
Property as described above, Landlord hereby grants and
assigns to Tenant for the term of this Lease the right to
use and enjoy (and, to the extent the following consist of
contract rights, to enforce) any assignable interests or
rights in, to or under the following that have been
transferred to Landlord by Seller under the Existing
Contract: (a) any goods, equipment, furnishings, furniture,
chattels and personal property of whatever nature that are
located on the Real Property and all renewals or
replacements of or substitutions for any of the foregoing;
and (b) any general intangibles, permits, licenses,
franchises, certificates, and other rights and privileges.
All of the property, rights and privileges described above
in this paragraph are hereinafter collectively called the
"Personal Property". The Real Property and the Personal
Property are hereinafter sometimes collectively called the
"Leased Property."
Provided, however, the leasehold estate conveyed
hereby and Tenant's rights hereunder are expressly made
subject and subordinate to the Permitted Encumbrances (as
hereinafter defined) and to any other claims or
encumbrances not asserted by Landlord itself or by third
parties lawfully claiming through or under Landlord.
The Leased Property is leased by Landlord to Tenant
and is accepted and is to be used and possessed by Tenant
upon and subject to the following terms, provisions,
covenants, agreements and conditions:
2. Definitions. As used herein, the terms "Landlord,"
"Tenant,"
"Existing Contract," "Seller," "Land," "Improvements,"
"Real Property," "Personal Property" and "Leased Property"
shall have the meanings indicated above and the terms
listed immediately below shall have the following meanings:
(a) Active Negligence. "Active Negligence" of an
Indemnified Party
means, and is limited to, the negligent conduct of
activities on the Leased Property by the Indemnified Party
in a manner that proximately causes actual bodily injury or
property damage to occur. "Active Negligence" shall not
include (1) any negligent failure of Landlord to act when
the duty to act would not have been imposed but for
Landlord's status as owner of the Leased Property or as a
party to the transactions described in this Lease, (2) any
negligent failure of any other Indemnified Party to act when
the duty to act would not have been imposed but for such
party's contractual or other relationship to Landlord or
participation or facilitation in any manner, directly or
indirectly, of the transactions described in this Lease, or
(3) the exercise in a lawful manner by Landlord (or any
party lawfully claiming through or under Landlord) of any
remedy provided herein or in the Purchase Agreement.
(b) Additional Rent. "Additional Rent" shall have the
meaning
assigned to it in subparagraph 3.(d) below.
(c) Administrative Fee. "Administrative Fee" shall have the
meaning
assigned to it in subparagraph 3.(c).
(d) Affiliate. "Affiliate" of any Person means any other
Person
controlling, controlled by or under common control with
such Person. For purposes of this definition, the term
"control" when used with respect to any Person means the
power to direct the management of policies of such Person,
directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative
to the foregoing.
(e) Applicable Laws. "Applicable Laws" shall have the
meaning
assigned to it in subparagraph 8.(d) below.
(f) Applicable Purchaser. "Applicable Purchaser" means
any third
party designated by Tenant to purchase the Landlord's
interest in the Leased Property and in any Escrowed
Proceeds as provided in the Purchase Agreement.
(g) Attorneys' Fees. "Attorneys' Fees" means the reasonable
fees and
expenses of counsel to the parties incurring the same, which
may include fairly allocated costs of in-house counsel,
printing, photostating, duplicating and other expenses, air
freight charges, and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing
services under the supervision of
an attorney. Such terms shall also include, without
limitation, all such fees and expenses incurred with respect
to appeals, arbitrations and bankruptcy proceedings, and
whether or not any manner or proceeding is brought with
respect to the matter for which such fees and expenses were
incurred.
(h) Base Rent. "Base Rent" means the rent payable by Tenant
pursuant
to subparagraph 3.(a) below.
(i) Base Rent Date. "Base Rent Date" means November 1, 1996
and the
first Business Day of February, May, August and November of
each calendar year thereafter to and including the first
Business Day of November, 2001.
(j) Base Rent Period. "Base Rent Period" means (1) the
period
beginning on and including the date hereof and ending on but
not including the first Base Rent Period, and (2) each
successive period
of approximately three (3) months. Each successive Base Rent
Period after the first Base Rent Period shall begin on and
include the day on which the preceding Base Rent Period ends
and shall end on but not include the next following Base Rent
Date.
(k) Breakage Costs. "Breakage Costs" means any and all
costs, losses
or expenses incurred or sustained by Landlord's Parent or any
other Participant, for which Landlord's Parent or the other
Participant
shall expect reimbursement from Landlord, because of the
resulting liquidation or redeployment of deposits or other
funds used to make Funding Advances upon any termination of
this Lease by Tenant pursuant to Paragraph 2, if such
termination is effective as of any day other than a Base
Rent Date. Breakage Costs will include losses attributable
to any decline in LIBOR as of the effective date of
termination as compared to LIBOR used to determine the
Effective Rate then in effect. (However, if Landlord's
Parent or another Participant actually receives a profit
upon the liquidation or redeployment of deposits or other
funds used to make Funding Advances, because of any
increase in LIBOR, then such profit will be offset against
costs or expenses that would otherwise be charged as
Breakage Costs under this Lease.) Each determination by
Landlord's Parent of Breakage Costs shall, in the absence
of clear and demonstrable error, be conclusive and binding
upon Landlord and Tenant.
(l) Business Day. "Business Day" means any day that is
(1) not a
Saturday, Sunday or day on which commercial banks are
generally closed or required to be closed in New York City,
New York or San Francisco,
California, and (2) a day on which dealings in deposits of
dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely
for any reason, "Business Day" shall mean any day described
in clause (1).
(m) Capital Adequacy Charges. "Capital Adequacy
Charges" means any additional amounts Landlord's Parent or
any other Participant requires Landlord to pay as
compensation for an increase in required capital as provided
in subparagraph 8.(y)(iv).
(n) Closing Costs. "Closing Costs" means the excess of
$74,800,000 over the sums actually paid by Landlord for or
in connection with Landlord's acquisition of the Leased
Property (including the payment of amounts secured by any
lien to which the Real Property may be subject when it is
conveyed to Landlord) at the closing under the Existing
Contract, which excess will be advanced by or on behalf of
Landlord to pay costs incurred in connection with the
preparation and negotiation of this Lease, the Purchase
Agreement, the Pledge Agreement, the Environmental
Indemnity, the Participation Agreement and related
documents. To the extent that Landlord does not itself use
such excess to pay expenses incurred by Landlord in
connection with the preparation and negotiation of such
documents, the remainder thereof will be advanced to Tenant,
with the expectation that Tenant shall use any such amount
advanced for one or more of the following purposes: (1) the
payment or reimbursement of expenses incurred by Tenant in
connection with the preparation and negotiation of this
Lease, the Purchase Agreement, the Pledge Agreement and
related documents; (2) the payment or reimbursement of
expenses incurred by Tenant in connection with any
improvements Tenant may elect to make to the Leased Property
in accordance with the requirements and limitations imposed
by this Lease, including the planning, design, engineering
and permitting of thereof; (3) the maintenance of the Leased
Property; (4) the payment of the Upfront Fee and the first
Administrative Fee; or (5) the payment of Rents next due.
(o) Change of Control Event. "Change of Control
Event" means the occurrence of any merger or consolidation or
sale of assets involving Tenant that is prohibited by
subparagraph 8.(ad)(iii).
(p) Code. "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
(q) Collateral. "Collateral" shall have the meaning
assigned to it in the Pledge Agreement.
(r) Collateral Percentage. "Collateral Percentage" for
each Base Rent Period means the Collateral Percentage for such
period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of this Lease, the
Collateral Percentage for any Base Rent Period shall not
exceed a fraction; the numerator of which fraction
shall equal the value (determined as provided in the Pledge
Agreement) of all Collateral (a) that is, on the first day of
such Base Rent Period, held by the Deposit Takers under (and
as defined in) the Pledge Agreement subject to a Qualifying
Security Interest (as defined below), (b) that is free from
claims or security interests held or asserted by any third
party, and (c) that is not in excess of Stipulated Loss Value;
and the denominator of which fraction shall equal the
Stipulated Loss Value on the first day of such Base Rent
Period. "Qualifying Security Interest" means a first priority
perfected security interest under the Pledge Agreement which
is sufficient, for purposes of the laws and regulations which
govern minimum amounts of capital that each of Landlord's
Parent and other Participants (or their respective affiliates)
must maintain, to permit them to assign a risk weighting of no
more than twenty percent to the portion of their respective
Funding Advances equal to the Collateral their respective
Deposit Takers hold on deposit as provided by the
Pledge Agreement.
(s) Debt. "Debt" of any Person means (i) indebtedness of
such Person
for borrowed money, (ii) obligations of such Person evidenced
by
bonds, debentures, notes or other similar instruments,
(iii) obligations of such Person to pay the deferred purchase
price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, (v)
obligations of such Person, contingent or otherwise, under any
lease of real property or related documents (including a
separate purchase agreement) which provide that such Person
must purchase or cause another to purchase any interest in the
leased property and thereby guarantee a minimum residual value
of the leased property to the lessor; (vi) obligations under
direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to
in clauses (i) through (v) above,
(vii) liabilities of another Person secured by a Lien on,
or payable out of the proceeds of production from, property
of such Person even though such obligation shall not be
assumed by such Person (but in the case of such liabilities
not assumed by such Person, the liabilities shall
constitute Debt of such Person only to the extent of the
value of such Person's property encumbered by the Lien
securing such liabilities) and (viii) Unfunded Benefit
Liabilities.
(t) Default. "Default" means any event which, with the
passage of
time or the giving of notice or both, would (if not cured
within any applicable cure period) constitute an Event of
Default.
(u) Default Rate. "Default Rate" means a floating per
annum rate
equal to three percent (3%) above the Prime Rate. However,
in no event will the Default Rate exceed the maximum
interest rate permitted by law.
(v) Designated Sale Date. "Designated Sale Date" shall
have the
meaning assigned to it in the Purchase Agreement.
(w) Effective Rate. "Effective Rate" means:
(i) for each day during the short first Base Rent Period
ending
on November 1, 1996, the per annum rate which is fifty
basis points (50/100 of 1%) above the Fed Funds Rate on
that day; and
(ii) for each Base Rent Period after the first Base Rent
Period,
the per annum rate determined by dividing (A) LIBOR for
such
period, by (B) 100% minus the Eurodollar Rate Reserve
Percentage
for such period.
If LIBOR or the Eurodollar Rate Reserve Percentage changes
from Base Rent Period to Base Rent Period, then the
Effective Rate shall be automatically increased or
decreased, as the case may be, as of the date of the change
from Base Rent Period to Base Rent Period. If for any
reason Landlord's Parent determines that it is impossible
or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with
the preceding sentences, then the "Effective Rate" for that
Base Rent Period shall equal any published index or per
annum interest rate determined reasonably and in good faith
by Landlord's Parent to be a comparable rate at the
beginning of the first day of that period. A comparable
interest rate might be, for example, the then existing
yield on short term United States Treasury obligations (as
compiled by and published in the then most recently
published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a
fixed adjustment based on Landlord's Parent's comparison of
past eurodollar market rates to past yields on such
Treasury obligations. Any
determination by Landlord's Parent of the Effective Rate
hereunder shall, in the absence of clear and demonstrable
error, be conclusive and binding.
(x) Environmental Indemnity. "Environmental Indemnity"
means the
separate Environmental Indemnity Agreement dated as of the
date hereof executed by Tenant in favor of Landlord
covering the Land and certain other property described
therein, as such agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time.
(y) Environmental Laws. "Environmental Laws" means any
and all
existing and future Applicable Laws pertaining to safety,
health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including without
limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (as
amended, hereinafter called "CERCLA"), and the Resource
Conservation and Recovery Act of 1976, as amended by the
Used Oil Recycling Act of 1980, the Solid Waste Disposal
Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984 (as amended, hereinafter called "RCRA").
(z) Environmental Losses. "Environmental Losses" means
Losses
suffered or incurred by any Indemnified Party, directly or
indirectly, relating to or arising out of, based on or as a
result of: (i) any Hazardous Substance Activity; (ii) any
violation of Environmental Laws relating to the Leased
Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing,
action, or other proceeding by or before any governmental
or quasi-governmental agency or authority in connection
with any Hazardous Substance Activity; or (iv) any claim,
demand, cause of action or investigation, or any action or
other proceeding, whether meritorious or not, brought or
asserted against any Indemnified Party which directly or
indirectly relates to, arises from, is based on, or results
from any of the matters described in clauses (i), (ii), or
(iii) of this subparagraph 1.(z), or any allegation of any
such matters. ENVIRONMENTAL LOSSES INCURRED BY OR ASSERTED
AGAINST A PARTICULAR INDEMNIFIED PARTY SHALL INCLUDE LOSSES
RELATING TO OR ARISING OUT OF OR AS A RESULT OF ANY MATTERS
LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH MATTERS ARE
CAUSED BY THE ORDINARY NEGLIGENCE (AS DEFINED BELOW) OF
THAT PARTICULAR OR ANY OTHER INDEMNIFIED PARTY.
However, Losses incurred by or asserted against a
particular Indemnified Party and proximately caused by (and
attributed by any applicable principles of comparative
fault to) the wilful misconduct, Active Negligence or gross
negligence of any Indemnified Party will not constitute
Environmental Losses of such Indemnified Party for purposes
of this Lease.
(aa) Environmental Report. "Environmental Report" means,
collectively, the reports listed on Exhibit G attached
hereto.
(bb) ERISA. "ERISA" means the Employee Retirement Income
Security Act
of 1974, as amended from time to time, together with all rules
and regulations promulgated with respect thereto.
(cc) ERISA Affiliate. "ERISA Affiliate" means any Person who
for
purposes of Title IV of ERISA is a member of Tenant's
controlled
group, or under common control with Tenant, within the meaning
of Section 414 of the Code, and the regulations promulgated
and rulings issued thereunder.
(dd) ERISA Termination Event. "ERISA Termination Event" means
(i) the
occurrence with respect to any Plan of a) a reportable event
described in Sections 4043(b)(5) or (6) of ERISA or b) any
other reportable
event described in Section 4043(b) of ERISA other than a
reportable
event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver
by such corporation under Section 4043(a) of ERISA, or (ii)
the withdrawal of Tenant or any Affiliate of Tenant from a
Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate any
Plan or the treatment of any Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate any Plan by the
Pension Benefit Guaranty Corporation under Section 4042 of
ERISA, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan.
(ee) Escrowed Proceeds. "Escrowed Proceeds" shall mean any
proceeds that are received by Landlord from time to time
during the Term (and any interest earned thereon), which
Landlord is holding for the purposes specified in the next
sentence, from any party (1) under any casualty insurance
policy as a result of damage to the Leased Property, (2) as
compensation for any restriction placed upon the use or
development of the Leased Property or for the condemnation of
the Leased Property or any portion thereof, (3) because of any
judgment, decree or award for injury or damage to the Leased
Property or (4) under any title insurance policy or otherwise
as a result of any title defect or claimed title defect with
respect to the Leased Property; provided, however, in
determining "Escrowed Proceeds" there shall be deducted all
expenses and costs of every type, kind and nature (including
Attorneys' Fees) incurred by Landlord to collect such
proceeds; and provided, further, "Escrowed Proceeds" shall not
include any payment to Landlord by a Participant or an
Affiliate of Landlord that is made to compensate Landlord for
the Participant's or Affiliate's share of any Losses Landlord
may incur as a result of any of the events described in the
preceding clauses (1) through (4). "Escrowed Proceeds" shall
include only such proceeds as are held by Landlord (A)
pursuant to Paragraph 4 for the payment to Tenant for the
restoration or repair of the Leased Property or (B) for
application (generally, on the next following Base Rent Date
which is at least three (3) Business Days following Landlord's
receipt of such proceeds) as a Qualified Payment or as
reimbursement of costs incurred in connection with a Qualified
Payment. "Escrowed Proceeds" shall not include any proceeds
that have been applied as a Qualified Payment or to pay any
costs incurred in connection with a Qualified Payment. Until
Escrowed Proceeds are paid to Tenant pursuant to Paragraph 4
below or applied as a Qualified Payment or as reimbursement
for costs incurred in connection with a Qualified Payment,
Landlord shall keep the same deposited in an interest bearing
account, and all interest earned on such account shall be
added to and made a part of Escrowed Proceeds.
(ff) Eurocurrency Liabilities. "Eurocurrency
Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to
time.
(gg) Eurodollar Rate Reserve Percentage. "Eurodollar
Rate Reserve Percentage" means,
for purposes of determining the Effective Rate for any Base
Rent Period, the reserve percentage applicable two Business
Days before the first day of such period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to,
any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with deposits exceeding One Billion Dollars
with respect to liabilities or deposits consisting of or
including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is
determined) having a term comparable to such
period.
(hh) Event of Default. "Event of Default" shall have the
meaning assigned to it in
subparagraph 13.(a) below.
(ii) Excluded Taxes. "Excluded Taxes" shall mean (1) all
federal, state and local income taxes upon the
Base Rent, the Upfront Fee, the Administrative Fees and any
interest paid to Landlord pursuant to subparagraph 3.(e), (2)
any taxes imposed by any governmental authority outside the
United States, and (3) any transfer or change of ownership
taxes assessed because of Landlord's transfer or conveyance to
any third party of any rights or interest in this Lease, the
Purchase Agreement or the Leased Property, but excluding any
such taxes assessed because of any Permitted Transfer.
(jj) Fair Market Value. "Fair Market Value" shall have the
meaning assigned to it in the Purchase
Agreement.
(kk) Fed Funds Rate. "Fed Funds Rate" means, for any period,
a fluctuating interest rate (expressed as a
per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if
such
rates are not so published for any day which is a Business
Day, the average of the quotations for such day on such
transactions received by the Landlord's Parent from three
Federal funds brokers of recognized standing selected by
Landlord's Parent. All determinations of the Fed Funds Rate
by Landlord's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon Landlord
and Tenant.
(ll) Funding Advances. "Funding Advances" means the Initial
Funding Advance and any subsequent
advances made by Landlord's Parent or any other Participant to
or on behalf of Landlord in replacement of or renewal and
extension of all or part of the Initial Funding Advance. For
example, if after the date hereof a new Participant advances
funds to or on behalf of Landlord to Landlord's Parent or ABN
AMRO Bank N.V. in repayment of all or part of the Initial
Funding Advance, such advance of funds by the new Participant
shall constitute a Funding Advance hereunder.
(mm) GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in
effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements
referred to in subparagraph 8.(w) (except for changes
concurred in by Tenant's independent public accountants).
(nn) Hazardous Substance. "Hazardous Substance" means (i) any
chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in,
regulated under, or otherwise classified pursuant to, any
Environmental Laws as a "hazardous substance," "hazardous
material," "hazardous waste," "extremely
hazardous waste," "infectious waste," "toxic substance,"
"toxic pollutant," or any other formulation intended to
define, list or classify substances by reason of deleterious
properties, including, without limitation, ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or
reproductive toxicity; (ii) petroleum, any fraction of
petroleum, natural gas, natural gas liquids, liquified natural
gas, synthetic gas usable for fuel (or mixtures of natural gas
and such synthetic gas), and ash produced by a resource
recovery facility utilizing a municipal solid waste stream,
and drilling fluids, produced waters and other wastes
associated with the exploration,
development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos
containing material; (iv) "waste" as defined in section
13050(d) of the California Water Code; and (v) any other
material that, because of its quantity, concentration or
physical or chemical characteristics, poses a significant
present or potential hazard to human health or safety or to
the environment if released into the workplace or the
environment.
(oo) Hazardous Substance Activity. "Hazardous Substance
Activity" means any actual, proposed or
threatened use, storage, holding, existence, location, release
(including, without limitation, any spilling, leaking,
leaching, pumping, pouring, emitting, emptying, dumping,
disposing into the environment, and the continuing migration
into or through soil, surface water, groundwater or any body
of water), discharge, deposit, placement, generation,
processing, construction, treatment, abatement, removal,
disposal, disposition, handling or transportation of any
Hazardous Substance from, under, in, into or on the Leased
Property, including, without limitation, the movement or
migration of any Hazardous Substance from surrounding
property, surface water, groundwater or any body of water
under, in, into or onto the Leased Property and any residual
Hazardous Substance contamination in, on or under the Leased
Property.
(pp) Impositions. "Impositions" shall have the meaning
assigned to it in subparagraph 8.(p) below.
(qq) Improvements. "Improvements," as defined in the recitals
at the beginning of this Lease, shall include
not only existing improvements to the Land as of the date
hereof, if any, but also any new improvements or changes to
existing improvements made by Tenant.
(rr) Indemnified Party. "Indemnified Party" means each of (1)
Landlord and any of Landlord's successors
and assigns as to all or any portion of the Leased Property or
any interest therein (but excluding Tenant or any Applicable
Purchaser under the Purchase Agreement or any Person that
claims its interest in the Leased
Property through or under Tenant or through or under an
assignment from Landlord that does not constitute a Permitted
Transfer), (2) the Participants, and (3) any Affiliate,
officer, agent, director, employee or servant of any of the
parties described in clause (1) or (2) preceding.
(ss) Initial Funding Advance. "Initial Funding Advance" means
the advance of $74,800,000 made by
Landlord's Parent and another Participant to or on behalf of
Landlord on or prior to the date of this Lease to cover the
cost of Landlord's acquisition of the Leased Property and
Closing Costs.
(tt) Landlord's Parent. "Landlord's Parent" means Landlord's
Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France, together
with any Affiliates of such bank that directly or indirectly
provided or hereafter during the Term provide or maintain any
Funding Advances, and any
successors of such bank and such Affiliates.
(uu) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Base Rent Period,
the rate determined by Landlord's Parent to be the average
rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars
are offered or available to Landlord's Parent in the London
interbank market at approximately 11:00 a.m. (London time) on
the second Business Day preceding the first day of such
period. Landlord shall instruct Landlord's Parent to consider
deposits, for purposes of making the determination described
in the preceding sentence, that are offered: (i) for delivery
on the first day of such Base Rent Period, (ii) in an amount
equal or comparable to the total (projected on the applicable
date of determination by Landlord's Parent) Stipulated Loss
Value on the first day of such Base Rent Period, and (iii) for
a period of time equal or comparable to the Base Rent Period.
If Landlord's Parent so chooses, it may determine LIBOR for
any period by reference to the rate reported by the British
Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business
Day preceding the first day of such period; provided, however,
Tenant may notify Landlord
that Tenant objects to any future determination of LIBOR in
the manner provided by this sentence, in which case any
determination of LIBOR required more than three Business Days
after Landlord's receipt of such
notice shall be made as if this sentence had been struck from
this Lease. If for any reason Landlord's Parent determines
that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance
with the preceding sentences, or if Landlord's Parent shall
determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for
Landlord, Landlord's Parent or any other Participant to
provide or maintain any Funding Advances hereunder during any
Base Rent Period
for which Base Rent is computed by reference to LIBOR, then
"LIBOR" for that Base Rent Period shall equal the rate which
is fifty basis points (50/100 of 1%) above the Fed Funds Rate
for that period. All determinations of LIBOR by Landlord's
Parent shall, in the absence of clear and demonstrable error,
be binding and conclusive upon Landlord and Tenant.
(vv) Lien. "Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any
agreement to sell receivables with recourse, any lease in the
nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any
jurisdiction). Customary bankers' rights of set-off arising
by operation of law or by contract (however styled, if the
contract grants rights no
greater than those arising by operation of law) in connection
with working capital facilities, lines of credit, term loans
and letter of credit facilities and other contractual
arrangements entered into with banks in the ordinary course of
business are not "Liens" for the purposes of this Lease.
(ww) Losses. "Losses" means any and all losses, liabilities,
damages (whether actual, consequential,
punitive or otherwise denominated), demands, claims, actions,
judgments, causes of action, assessments, fines, penalties,
costs, and out-of-pocket expenses (including, without
limitation, Attorneys' Fees and the fees of outside
accountants and environmental consultants), of any and every
kind or character, foreseeable and unforeseeable, liquidated
and contingent, proximate and remote, known and unknown.
(xx) Ordinary Negligence. "Ordinary Negligence" of an
Indemnified Party means any negligent acts or
omissions of such party that does not for any reason
constitute Active Negligence as defined in this Lease.
(yy) Participant. "Participant" means any Person, including
Landlord's Parent, that agrees with Landlord
or another Participant to participate in all or some of the
risks and rewards to Landlord of this Lease and the Purchase
Agreement. As of the effective date hereof, the only
Participants are Landlord's Parent and ABN AMRO Bank N.V., but
such Participants and Landlord may agree to share in risks and
rewards of this Lease
and the Purchase Agreement with other Participants in the
future. However, no Person other than Landlord's Parent and
ABN AMRO Bank N.V. shall qualify as a Participant for purposes
of this Lease, the Purchase Agreement or any other agreement
to which 3COM is a party unless, with 3COM's prior written
approval
(such approval not to be unreasonably withheld) or when an
Event of Default had occurred and was continuing, such Person
became a party to the Pledge Agreement and to the
Participation Agreement by executing supplements to those
agreements as contemplated therein.
(zz) Participation Agreement. "Participation Agreement" means
the Participation Agreement dated the
date hereof between Landlord, Landlord's Parent and ABN AMRO
Bank N.V., pursuant to which Landlord's Parent and ABN AMRO
Bank N.V. have agreed to participate in certain risks and
rewards to Landlord of this Lease and the Purchase Agreement,
as such Participation Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in
accordance with its terms.
(aaa) Permitted Encumbrances. "Permitted Encumbrances"
means (i) the encumbrances and other matters
affecting the Leased Property that are set forth in Exhibit B
attached hereto and made a part hereof, and (ii) any
provisions of the Existing Contract or any other agreement
described therein that survived closing thereunder (but not
any deed of trust, mortgage or other agreement given to secure
the repayment of borrowed funds), and (iii) any easement
agreement or other document affecting title to the Leased
Property executed by Landlord at the request of or with the
consent of Tenant.
(bbb) Permitted Hazardous Substance Use. "Permitted
Hazardous Substance Use" means the use, storage
and offsite disposal of Permitted Hazardous Substances in
strict accordance with applicable Environmental Laws and with
due care given the nature of the Hazardous Substances
involved; provided, the scope and nature of such use, storage
and disposal shall not include the use of underground storage
tanks for any purpose other than the storage of water for fire
control, nor shall such scope and nature:
(1) exceed that reasonably required for the construction
of Improvements permitted by this Lease and for the operation
of the Leased Property for the purposes expressly permitted
under subparagraph 7.(a); or
(2) include any disposal, discharge or other release of
Hazardous Substances from operations on the Leased Property in
any manner that might allow such substances to reach the San
Francisco Bay, surface
water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works
or (B) with rainwater or storm water runoff in accordance with
Applicable Laws
and any permits obtained by Tenant that govern such runoff; or
(ii) any such disposal, discharge or other release of
Hazardous Substances for which no permits are required and
which are not otherwise regulated under applicable
Environmental Laws.
Further, notwithstanding anything to the contrary herein
contained, Permitted Hazardous Substance Use shall
not include any use of the Leased Property as a treatment,
storage or disposal facility (as defined by federal
Environmental Laws) for Hazardous Substances, including but
not limited to a landfill, incinerator or other waste disposal
facility.
(ccc) Permitted Hazardous Substances. "Permitted
Hazardous Substances" means Hazardous Substances
used and reasonably required for Tenant's operation of the
Leased Property for the purposes expressly permitted by
subparagraph 7.(a) in strict compliance with all Environmental
Laws and with due care given the nature of the Hazardous
Substances involved. Without limiting the generality of the
foregoing, Permitted Hazardous Substances shall include,
without limitation, usual and customary office and janitorial
products, and the materials listed on Exhibit C attached
hereto.
(ddd) Permitted Transfer. "Permitted Transfer" means any
one or more of the following: (1) the creation
or conveyance of rights and interests under the Participation
Agreement in favor of Landlord's Parent, ABN AMRO Bank N.V. or
future Participants; (2) subject to the last sentence of
subparagraph 10.(d), any
assignment or conveyance by Landlord of any lien or security
interest against the Leased Property (in contrast to a
conveyance of Landlord's fee estate in the Leased Property) or
of any interest in Rent, payments required by the Purchase
Agreement or payments to be generated from the Leased Property
after the Term, to any present or future Participant or to any
Affiliate of Landlord; (3) any agreement to exercise or
refrain from exercising rights or remedies hereunder or under
the Purchase Agreement, the Pledge Agreement or the
Environmental Indemnity made by Landlord with any present or
future Participant or Affiliate of Landlord; (4) any
assignment or conveyance by Landlord requested by Tenant or
required by any Permitted Encumbrance,
by the Purchase Agreement or by Applicable Laws; (5) any
assignment or conveyance by Landlord when an
Event of Default shall have occurred and be continuing; or (6)
any assignment or conveyance by Landlord after the Designated
Sale Date.
(eee) Person. "Person" means an individual, a
corporation, a partnership, an unincorporated organization,
an association, a joint stock company, a joint venture, a
trust, an estate, a government or agency or political
subdivision thereof or other entity, whether acting in an
individual, fiduciary or other capacity.
(fff) Plan. "Plan" means at any time an employee pension
benefit plan which is covered under Title IV of
ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by Tenant
or any Subsidiary for employees of Tenant or any Subsidiary or
(ii) maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer
makes contributions and to which Tenant or any Subsidiary is
then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
(ggg) Pledge Agreement. "Pledge Agreement" means the
Pledge Agreement dated as of the date hereof
between Landlord and Tenant, pursuant to which Tenant may
pledge certificates of deposit as security for Tenant's
obligations under the Purchase Agreement (and for the
corresponding obligations of Landlord to the Participants
under the Participation Agreement), as such Pledge Agreement
may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
(hhh) Prime Rate. "Prime Rate" means the prime interest
rate or equivalent charged by Landlord's Parent in
the United States as announced or published by Landlord's
Parent from time to time, which need not be the lowest
interest rate charged by Landlord's Parent. If for any reason
Landlord's Parent does not announce or publish a prime rate or
equivalent, the prime rate or equivalent announced or
published by either ABN AMRO Bank N.V. or Credit Commercial
de France as selected by Landlord shall be used as the Prime
Rate. The
prime rate or equivalent announced or published by such bank
need not be the lowest rate charged by it. The Prime Rate may
change from time to time after the date hereof without notice
to Tenant as of the effective time of each change in rates
described in this definition.
(iii) Purchase Agreement. "Purchase Agreement" means the
Purchase Agreement dated as of the date
hereof between Landlord and Tenant pursuant to which Tenant
has agreed to purchase or to arrange for the purchase by a
third party of the Leased Property, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
(jjj) Purchase Price. "Purchase Price" shall have the
meaning assigned to it in the Purchase Agreement.
(kkk) Qualified Payments. "Qualified Payments" means all
payments received by Landlord from time to
time during the Term from any party (1) under any casualty
insurance policy as a result of damage to the Leased Property,
(2) as compensation for any restriction placed upon the use or
development of the Leased
Property or for the condemnation of the Leased Property or any
portion thereof, (3) because of any judgment, decree or award
for injury or damage to the Leased Property or (4) under any
title insurance policy or
otherwise as a result of any title defect or claimed title
defect with respect to the Leased Property; provided, however,
that (x) in determining Qualified Payments, there shall be
deducted all expenses and costs of every kind, type and nature
(including taxes and Attorneys' Fees) incurred by Landlord
with respect to the collection of such payments, (y) Qualified
Payments shall not include any payment to Landlord by a
Participant or an Affiliate of Landlord that is made to
compensate Landlord for the Participant's or Affiliate's share
of any Losses Landlord may incur as a result of any of the
events described in the preceding clauses (1) through (4) and
(z) Qualified Payments shall not include any payments received
by Landlord that Landlord has paid to Tenant for the
restoration or repair of the Leased Property or that Landlord
is holding as Escrowed Proceeds. For purposes of computing
the total Qualified Payments (and other amounts dependent upon
Qualified
Payments, such as Stipulated Loss Value) paid to or received
by Landlord as of any date, payments described in the
preceding clauses (1) through (4) will be considered as
Escrowed Proceeds, not Qualified Payments, until they are
actually applied as Qualified Payments by Landlord, which
Landlord will do upon the first Base Rent Date which is at
least three (3) Business Days after Landlord's receipt of the
same unless postponement of such application is required by
other provisions of this Lease or consented to by Tenant in
writing. Thus, for example, condemnation proceeds actually
received by Landlord in the middle of a Base Rent Period will
not be considered as having been received by Landlord for
purposes of computing the total Qualified Payments unless and
until actually applied by Landlord as a Qualified Payment on a
subsequent Base Rent Date in accordance with Paragraph 4
below.
(lll) Remaining Proceeds. "Remaining Proceeds" shall have
the meaning assigned to it in subparagraph
4.(a)(ii).
(mmm) Rent. "Rent" means the Base Rent and all Additional
Rent.
(nnn) Responsible Financial Officer. "Responsible
Financial Officer" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of
Tenant.
(ooo) Spread. The "Spread" on any date will depend upon a
computation involving (a) the rating by
Standard and Poor's Corporation (the "S&P Rating") or the
rating by Xxxxx'x Investor Service, Inc. (the "Moody's
Ratings"), whichever rating is higher, of Tenant's senior,
unsecured debt on that date (whether such ratings are express
or published, implied ratings), and (b) the Debt to Capital
Ratio (as defined below) on that date, such computation to be
as follows:
(i) If (1) there is no S&P Rating for the senior, unsecured
debt of Tenant (express or published,
implied) or the S&P Rating is below BBB-, AND (2) there is no
Xxxxx'x Rating for senior, unsecured debt of Tenant (express
or published, implied) or the Xxxxx'x Rating is below Baa3,
AND (3) the Debt to Capital Ratio is greater than 0.30, then
the Spread will be fifty basis points (.500%).
(ii) If (1) the S&P Rating is BBB-, OR (2) the Xxxxx'x Rating
is Baa3, OR (3) the Debt to Capital
Ratio is equal to or less than 0.30 and more than 0.15, and if
Tenant does not qualify for a lower Spread pursuant to clause
(iii) or (iv) below, then the Spread will be forty-five basis
points (.450%).
(iii) If (1) the S&P Rating is BBB, OR (2) the Xxxxx'x
Rating is Baa2, OR (3) the Debt to Capital
Ratio is equal to or less than 0.15, and if Tenant does not
qualify for a lower Spread pursuant to clause (iv) below, then
the Spread will be thirty-seven and one-half basis points
(.375%).
(iv) If (1) the S&P Rating is above BBB, OR (2) the Xxxxx'x
Rating is above Baa2, then the
Spread will be thirty basis points (.300%).
For purposes of calculating the Spread, "Debt to Capital
Ratio" means the quotient determined by dividing
(A) funded Senior Debt (as defined in subparagraph
8.(ac)(ii)), by (B) the total Capitalization (as defined in
subparagraph 8.(ac)(ii)), including Subordinated Debt (as
defined in subparagraph 8.(ac)(ii)). The parties
believe it improbable that the ratings systems used by
Standard and Poor's Corporation and by Xxxxx'x
Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, Landlord
shall be entitled to select and use a comparable ratings
systems as a substitute for the S&P Rating or the Xxxxx
Rating, as the case may be, for purposes of determining the
Spread. All determinations of the Spread by Landlord shall,
in the absence of clear and demonstrable error, be binding and
conclusive for purposes of this Lease. Further Landlord may,
but shall not be required, to rely on the determination of the
Spread set forth in any certificate delivered by Tenant
pursuant to subparagraph 8.(w)(iv) below, and no reduction in
the Spread will be effective because of an improvement in the
S&P Rating, the Xxxxx'x Rating or the Debt to Capital Ratio
before Tenant has notified Landlord thereof by delivery of
such a certificate.
(ppp) Stipulated Loss Value. "Stipulated Loss Value"
means the amount computed from time to time in
accordance with the formula specified in this definition.
Such amount shall equal the Initial Funding Advance (i.e.,
$74,800,000), LESS the amount (if any) of Qualified Payments
paid to Landlord on or prior to such date. Thus, for example,
if a determination of Stipulated Loss Value is required under
subparagraph 3.(a) on the first day of the applicable Base
Rent Period, but the Leased Property has been damaged by fire
or other casualty with the result that $500,000 of net
insurance proceeds have been paid to Landlord and retained by
Landlord as Qualified Payments, then the Stipulated Loss Value
as of the date of the required determination shall be
$74,300,000. Under no circumstances will any payment of Base
Rent or the Upfront Fee or any Administrative Fee reduce
Stipulated Loss Value.
(qqq) Subsidiary. "Subsidiary" means any corporation of
which Tenant and/or its other Subsidiaries own,
directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the
election of directors.
(rrr) Tenant's Knowledge. "Tenant's knowledge," "to the
knowledge of Tenant" and words of like effect
means the actual knowledge (with due investigation) of any of
the following employees of Tenant: Xxxx Xxxxxx, Vice President
and Corporate Controller; Xxxxxxxxxxx X. Xxxxxxx, Chief
Financial Officer; Xxx Xxxxxxx, Director of Site Services; and
Xxxxxx Xxxxx, Manager of Safety and Security. However, to the
extent Tenant's knowledge after the date hereof may become
relevant hereunder or under any certificate or other notice
provided by Tenant to Landlord in connection with this Lease,
"Tenant's knowledge" and words of like effect shall include
the then actual knowledge of other employees of Tenant (if
any) that have assumed responsibilities of the current
employees listed in the preceding sentence or that have
replaced such current employees. But none of the employees of
Tenant whose knowledge is now or may hereafter be relevant
shall be personally liable for the representations of Tenant
made herein.
(sss) Term. "Term" shall have the meaning assigned to it
in Paragraph 2 below.
(ttt) Unfunded Benefit Liabilities. "Unfunded Benefit
Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit
liabilities (within the meaning of Section 4001(a)(16)
of ERISA) under the Plan exceeds the fair market value of all
Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA for calculating the
potential liability of Tenant or any ERISA Affiliate of Tenant
under Title IV of ERISA.
(uuu) Upfront Fee. "Upfront Fee" shall have the meaning
assigned to it in subparagraph 3.(b).
(vvv) Voluntary Minimum Pledge Commitment. "Voluntary
Minimum Pledge Commitment" means an
agreement in form and substance reasonably satisfactory to
Landlord and the other parties to the Pledge
Agreement which Tenant may elect to execute in connection with
a casualty, condemnation or sale in lieu of condemnation
affecting the Leased Property and which modifies the Pledge
Agreement by establishing a
Minimum Collateral Percentage sufficient to require Tenant to
maintain Collateral under the Pledge Agreement
with a value of no less than the insurance, condemnation or
sale proceeds paid or to be paid because of the casualty,
condemnation or sale in lieu of condemnation until Tenant has
completed any related repairs or restoration required by this
Lease.
(www) Other Terms and References. Words of any gender
used in this Lease shall be held and construed to
include any other gender, and words in the singular number
shall be held to include the plural and vice versa, unless the
context otherwise requires. References herein to Paragraphs,
subparagraphs or other subdivisions shall refer to the
corresponding Paragraphs, subparagraphs or subdivisions of
this Lease, unless specific reference is made to another
document or instrument. References herein to any Schedule or
Exhibit shall refer to the corresponding Schedule or Exhibit
attached hereto, which shall be made a part hereof by such
reference.
All capitalized terms used in this Lease which refer to other
documents shall be deemed to refer to such other documents as
they may be renewed, extended, supplemented, amended or
otherwise modified from time to
time, provided such documents are not renewed, extended or
modified in breach of any provision contained herein or
therein or, in the case of any other document to which
Landlord is a party or of which Landlord is an intended
beneficiary, without the consent of Landlord. All accounting
terms not specifically defined herein shall be construed in
accordance with GAAP. The words "this Lease", "herein",
"hereof", "hereby", "hereunder" and words of similar import
refer to this Lease as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this
Paragraph" and "this subparagraph" and similar phrases refer
only to the Paragraphs or subparagraphs hereof in which the
phrase occurs. The word "or" is not exclusive. Other
capitalized terms are defined in the provisions that follow.
3. Term. The term of this Lease (herein called the "Term")
shall commence on and include the effective
date hereof, and end at 8:00 A.M. on the first Business Day of
November, 2001, unless extended or sooner
terminated as herein provided. Notwithstanding any other
provision of this Lease which may expressly restrict the early
termination hereof, and provided that Tenant is still in
possession of the Leased Property and has not breached its
obligation to make or have made any payment required by
Paragraph 2 of the Purchase Agreement
on any prior Designated Sale Date, Tenant may notify Landlord
of Tenant's election to terminate this Lease before the first
Business Day of November, 2001 by giving Landlord an
irrevocable notice of such election and
of the effective date of the termination, which notice must be
given (if at all) at least sixty (60) days prior to the
effective date of the termination. If Tenant elects to so
terminate this Lease, then on the date on which this Lease is
to be terminated, not only must Tenant pay all unpaid Rent,
Tenant must also pay any Breakage Costs resulting from the
termination and must satisfy its obligations under the
Purchase Agreement. The payment of
any unpaid Rent and Breakage Costs and the satisfaction of
Tenant's obligations under the Purchase Agreement shall be
conditions precedent to the effectiveness of any early
termination of this Lease by Tenant.
The Term may be extended at the option of Tenant for two
successive periods of five (5) years each; provided, however,
that prior to any such extension the following conditions must
have been satisfied: (A) at least one hundred eighty (180)
days prior to the commencement of any such extension, Landlord
and Tenant must have agreed in writing upon, and received the
written consent and approval of Landlord's Parent and all
other Participants to (1) a corresponding extension of the
date specified in clause (iii) of the definition of Designated
Sale Date in the Purchase Agreement, and (2) an adjustment to
the Rent that Tenant will be
required to pay for the extension, it being expected that the
Rent for the extension may be different than the Rent required
for the original Term, and it being understood that the Rent
for any extension must in all events be satisfactory to both
Landlord and Tenant, each in its sole and absolute discretion;
(B) there must be no Event of Default continuing hereunder at
the time of Tenant's exercise of its option to extend; and (C)
immediately prior to any such extension, this Lease must
remain in effect. With respect to the condition that Landlord
and Tenant must have agreed upon the Rent required for any
extension of the Term, neither Tenant nor Landlord is willing
to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both
Tenant and Landlord hereby disclaim any obligation express or
implied to be reasonable in negotiating the Rent for any such
extension. Subject to the changes to the Rent payable during
any extension of the Term as provided in this Paragraph, if
Tenant exercises its option to extend the Term as provided in
this Paragraph, this Lease shall continue in full force and
effect, and the leasehold estate hereby granted to Tenant
shall continue without interruption and without any loss of
priority over other interests in or claims against the Leased
Property that may be created or arise after the date hereof
and before the extension.
4. Rental.
(a) Base Rent. Tenant shall pay Landlord rent (herein called
"Base Rent") in arrears, in currency that at
the time of payment is legal tender for public and private
debts in the United States of America, in installments on each
Base Rent Date through the end of the Term. Each payment of
Base Rent must be received by
Landlord no later than 12:00 noon (San Francisco time) on the
date it becomes due; if received after 12:00 noon it will be
considered for purposes of this Lease as received on the next
following Business Day. Each installment of Base Rent shall
represent rent allocable to the Base Rent Period ending on the
date on which the installment is due. Landlord shall notify
Tenant in writing of the Base Rent due for each Base Rent
Period at least fifteen (15) days prior to the Base Rent Date
on which such period ends. Any failure by Landlord to so
notify Tenant shall not constitute a waiver of Landlord's
right to payment, but absent such notice Tenant shall
not be in default for any underpayment resulting therefrom if
Tenant, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated
and corrects any underpayment within three (3) Business Days
after being notified by Landlord of the underpayment. If
Tenant or any other Applicable Purchaser purchases Landlord's
interest in the Leased Property pursuant to the Purchase
Agreement, any Base Rent for the three (3) months ending on
the date of purchase (or if the date of Purchase is not a Base
Rent Date, then pro rated Base Rent for the Base Rent Period
which included the date of purchase) and all outstanding
Additional Rent shall be due on the Designated Sale Date in
addition to the purchase price and other sums due Landlord
under the Purchase Agreement.
Base Rent shall accrue for each day of the first Base
Rent Period, and the total Base Rent for the first Base Rent
Period shall equal the sum of Base Rent for all days during
such period. The Base Rent accruing for each day during such
period shall equal:
(1) (A) $74,800,000, times (B) one minus the Collateral
Percentage for the first Base Rent Period,
times (C) the sum of (i) the Effective Rate for such day and
(ii) the Spread calculated on the date of this Lease, divided
by (D) three hundred sixty (360); PLUS
(2) (A) $74,800,000, times (B) the Collateral Percentage for
the first Base Rent Period, times (C)
twenty-two and one-half basis points (22.5/100 of 1%), divided
by (D) three hundred sixty (360)
The Base Rent for each Base Rent Period after the first Base
Rent Period shall equal the sum of:
(1) (A) Stipulated Loss Value on the first day of such Base
Rent Period, times (B) one minus the
Collateral Percentage for such Base Rent Period, times (C) the
sum of (i) the Effective Rate for such Base Rent Period and
(ii) the Spread calculated on the tenth (10th) Business Day
prior to the day upon which
such Base Rent Period commences, times (D) the number of days
in such Base Rent Period, divided by (E) three hundred sixty
(360); PLUS (2) (A) Stipulated Loss Value on the first day of such
Base Rent Period, times (B) the Collateral Percentage for such
Base Rent Period, times (C) twenty-two and one-half basis
points (22.5/100 of 1%), times (D) the number of days in such
Base Rent Period, divided by (E) three hundred sixty (360)
Assume, only for the purpose of illustration: that a
hypothetical Base Rent Period contains exactly ninety (90)
days; that prior to the first day of such Base Rent Period a
total of $44,800,000 of Qualified
Payments have been received by Landlord, leaving a Stipulated
Loss Value of $30,000,000 (the Initial Funding Advance of
$74,800,000 less the Qualified Payments of $44,800,000); that
the Collateral Percentage for such Base Rent Period is forty
percent (40%); and that the Effective Rate for the applicable
Base Rent Period is 6%.
Under such assumptions, the Base Rent for the hypothetical
Base Rent Period will equal:
$30,000,000 x 60% x 6% x 90/360, or $270,000, PLUS
$30,000,000 x 40% x .225% x 90/360, or $6,750 = $276,750
To ease the administrative burden of this Lease and the
Pledge Agreement, clause (2) in the formulas above for
calculating Base Rent reflects a reduction in the Base Rent
equal to the interest that would accrue on any Collateral
required by the Pledge Agreement from time to time if the
Accounts (as defined in the Pledge Agreement) bore interest at
the Effective Rate. Landlord has agreed to such reduction in
the Base Rent to provide Tenant with the economic equivalent
of interest on such Collateral, and in return Tenant has
agreed to the provisions of the Pledge Agreement that excuse
the actual payment of interest on the Accounts. By
incorporating such reduction of Base Rent into the formulas
above, and by providing for noninterest bearing Accounts in
the Pledge Agreement, the parties will avoid an unnecessary
and cumbersome periodic exchange
of equal payments. It is not, however, the intent of Landlord
or Tenant to understate Base Rent or interest for financial
reporting purposes. Accordingly, for purposes of determining
Tenant's compliance with the affirmative financial covenants
set forth in subparagraph 8.(ac), and for purposes of any
financial reports that this Lease requires of Tenant from time
to time, Tenant may report Base Rent as if there had been no
such reduction and as if the Collateral from time to time
required by the Pledge Agreement had been maintained in
Accounts bearing interest at the Effective Rate.
(b) Upfront Fee. Upon execution and delivery of this Lease
by Landlord, Tenant shall pay Landlord an
upfront fee (the "Upfront Fee") as provided in the letter
dated August 20, 1996 (modifying a letter dated August 9,
1996) from Landlord to Tenant (less the deposit already paid
by Tenant pursuant to that letter which will be applied
against the Upfront Fee). The Upfront Fee shall represent
Additional Rent for the first Base Rent Period.
(c) Administrative Fees. Upon execution and delivery of this
Lease by Landlord, and again on each
anniversary of the date hereof prior to the Designated Sale
Date, Tenant shall pay Landlord an administrative fee (an
"Administrative Fee") as provided in the letter dated August
9, 1996 from Landlord to Tenant. Each
payment of an Administrative Fee shall represent Additional
Rent for the Base Rent Period during which it first becomes
due.
(d) Additional Rent. All amounts which Tenant is required to
pay to or on behalf of Landlord pursuant to
this Lease, together with every charge, premium, interest and
cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts,
other than Base Rent, are herein called "Additional Rent").
(e) Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the
Default Rate in effect from time to time from the date due
until paid; provided, that nothing herein contained will be
construed as permitting the charging or collection of interest
at a rate exceeding the maximum rate permitted under
Applicable Laws. Landlord shall be entitled to apply any
amounts paid by or on behalf of Tenant hereunder against any
Rent then past due in the order the same became due or in such
other order as Landlord may elect.
(f) Net Lease. It is the intention of Landlord and Tenant
that the Base Rent and all other payments herein
specified shall be absolutely net to Landlord. Tenant shall
pay all costs, expenses and obligations of every kind relating
to the Leased Property or this Lease which may arise or become
due, including, without limitation: (i) Impositions, including
any taxes payable by virtue of Landlord's receipt of amounts
paid to or on behalf of Landlord in accordance with this
subparagraph 3.(f), but not including any Excluded Taxes; (ii)
any Capital Adequacy Charges; (iii) any amount for which
Landlord is or becomes liable with respect to the Permitted
Encumbrances; and (iv) any costs incurred by Landlord
(including Attorneys' Fees) because of Landlord's acquisition
or ownership of the Leased Property or because of this Lease
or the transactions contemplated herein.
(g) No Demand or Setoff. The Base Rent and all Additional
Rent shall be paid without notice or demand
and without abatement, counterclaim, deduction, setoff or
defense, except as expressly provided herein.
5. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 4, and
so long as no Event of Default shall have
occurred and be continuing, Tenant shall be entitled to use
all casualty insurance and condemnation proceeds payable with
respect to the Leased Property during the Term for the
restoration and repair of the Leased Property or any remaining
portion thereof. Except as provided in the last sentence of
subparagraph 8.(r) and the last sentence of subparagraph
8.(s), all insurance and condemnation proceeds received with
respect to the Leased Property (including proceeds payable
under any insurance policy covering the Leased Property which
is maintained by Tenant) shall be paid to Landlord and applied
as follows:
(i) First, such proceeds shall be used to reimburse Landlord
for any costs and expenses, including
Attorneys' Fees, incurred in connection with the collection of
such proceeds.
(ii) Second, the remainder of such proceeds (the "Remaining
Proceeds"), shall be held by Landlord as
Escrowed Proceeds and applied to reimburse Tenant for the
actual cost of the repair, restoration or replacement of the
Leased Property. However, any Remaining Proceeds not needed
for such purpose shall be applied by Landlord as Qualified
Payments after Tenant notifies Landlord that they are not
needed for repairs, restoration or replacement.
Notwithstanding the foregoing, if an Event of Default shall
have occurred and be continuing, then Landlord shall be
entitled to receive and collect insurance or condemnation
proceeds payable with respect to the Leased Property, and
either, at the discretion of Landlord, (A) hold such proceeds
as Escrowed Proceeds until paid to Tenant as reimbursement for
the actual and reasonable cost of repairing, restoring or
replacing the Leased Property when Tenant has completed such
repair, restoration or replacement, or (B) apply such proceeds
(net of the deductions described in clause (i) above) as
Qualified Payments.
(b) Any Remaining Proceeds held by Landlord as Escrowed
Proceeds shall be deposited by Landlord in an
interest bearing account as provided in the definition of
Escrowed Proceeds and shall be paid to Tenant upon completion
of the applicable repair, restoration or replacement and upon
compliance by Tenant with such terms, conditions and
requirements as may be reasonably imposed by Landlord, but in
no event shall Landlord be required to pay any Escrowed
Proceeds to Tenant in excess of the actual cost to Tenant of
the applicable
repair, restoration or replacement, it being understood that
Landlord may retain any such excess as a Qualified Payment.
In any event, Tenant will not be entitled to any abatement or
reduction of the Base Rent or any other amount due hereunder
except to the extent that such excess Remaining Proceeds
result in Qualified Payments which reduce Stipulated Loss
Value (and thus payments computed on the basis of Stipulated
Loss Value) as provided in the definitions set out above.
Further, notwithstanding the inadequacy of the Remaining
Proceeds held by Landlord as Escrowed Proceeds, if any, or
anything herein to the contrary, Tenant must, after any taking
of less than all or substantially all of the Leased Property
by condemnation and after any damage to the
Leased Property by fire or other casualty, restore or improve
the Leased Property or the remainder thereof to a value no
less than Stipulated Loss Value (computed after the
application of any Remaining Proceeds as a Qualified Payment)
and to a safe and sightly condition. Any taking of so much of
the Leased Property as, in Landlord's reasonable judgment,
makes it impracticable to restore or improve the remainder
thereof as required by the preceding sentence shall be
considered a taking of substantially all the Leased Property
for purposes of this Paragraph 4.
(c) In the event of any taking of all or substantially all
of the Leased Property, Landlord shall be entitled to apply
all Remaining Proceeds as a Qualified Payment, notwithstanding
the foregoing. In addition, if Stipulated Loss Value
immediately prior to any taking of all or substantially all of
the Leased Property by condemnation exceeds the sum of the
Remaining Proceeds resulting from such condemnation, then
Landlord shall be entitled
to recover the excess from Tenant upon demand as an additional
Qualified Payment, whereupon this Lease shall terminate.
(d) Nothing herein contained shall be construed to prevent
Tenant from obtaining and applying as it deems appropriate any
separate award from any condemning authority or from any
insurer for a taking of or damage to Tenant's personal
property not included in the Leased Property or for moving
expenses or business interruption, provided, such award is not
combined with and does not reduce the award for any taking of
the
Leased Property, including Tenant's interest therein.
Further, notwithstanding anything to the contrary herein
contained, if Remaining Proceeds held by Landlord during the
term of this Lease shall exceed Stipulated Loss Value and any
Rent payable by Tenant, then Tenant may get the excess by
terminating this Lease in accordance with Paragraph 2 and
purchasing such excess (which will then be held by Landlord as
Escrowed Proceeds), together with any remaining interest of
Landlord in the Leased Property, pursuant to the Purchase
Agreement.
(e) Landlord and Tenant each waive any right of recovery
against the other, and the other's agents, officers or
employees, for any damage to the Leased Property or to the
personal property situated from time to time in or on the
Leased Property resulting from fire or other casualty covered
by a valid and collectible insurance policy; provided,
however, that the waiver set forth in this subparagraph 4.(e)
shall be effective insofar, but only insofar, as compensation
for such damage or loss is actually recovered by the waiving
party
(net of costs of collection) under the policy notwithstanding
the waivers set out in this paragraph. Tenant shall cause the
insurance policies required of Tenant by this Lease to be
properly endorsed, if necessary, to prevent any loss of
coverage because of the waivers set forth in this paragraph.
If such endorsements are not available, the waivers set forth
in this paragraph shall be ineffective to the extent that such
waivers would cause required insurance with respect to the
Leased Property to be impaired.
6. No Lease Termination.
(a) Status of Lease. Except as expressly provided herein,
this Lease shall not terminate, nor shall Tenant have any
right to terminate this Lease, nor shall Tenant be entitled to
any abatement of the Rent, nor shall the obligations of Tenant
under this Lease be excused, for any reason whatsoever,
including without limitation any of the following: (i) any
damage to or the destruction of all or any part of the Leased
Property from whatever cause, (ii) the taking of the Leased
Property or any portion thereof by eminent domain or otherwise
for any
reason, (iii) the prohibition, limitation or restriction of
Tenant's use of all or any portion of the Leased Property or
any interference with such use by governmental action or
otherwise, (iv) any eviction of Tenant or of
anyone claiming through or under Tenant by paramount title or
otherwise (provided, if Tenant is wrongfully evicted by
Landlord or by any third party lawfully claiming through or
under Landlord, other than Tenant or a third party claiming
through or under Tenant, then Tenant will have the remedies
described in Xxxxxxxxx 00 xxxxx), (x) any default on the part
of Landlord under this Lease or under any other agreement to
which Landlord and Tenant are parties, (vi) the inadequacy in
any way whatsoever of the design or construction of any
improvements included in the Leased Property, it being
understood that Landlord has not made and will not make any
representation express or implied as to the adequacy thereof,
or (vii) any other cause whether
similar or dissimilar to the foregoing, any existing or future
law to the contrary notwithstanding. It is the intention of
the parties hereto that the obligations of Tenant hereunder
shall be separate and independent of the covenants and
agreements of Landlord, that the Base Rent and all other sums
payable by Tenant hereunder
shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected,
unless the requirement to pay or perform the same shall have
been terminated or limited pursuant to an express provision of
this Lease. However, nothing in this Paragraph shall be
construed as a waiver by Tenant of any right Tenant may have
at law or in equity to (i) recover monetary damages for any
default under this Lease by Landlord that Landlord fails to
cure within the period provided in Xxxxxxxxx 00, (xx)
injunctive relief in case of the violation, or attempted or
threatened violation, by Landlord of any of the express
covenants, agreements, conditions or provisions of this Lease,
or (iii) a decree compelling performance of any of the express
covenants, agreements, conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the foregoing,
Tenant waives to the extent permitted by
Applicable Laws, except as otherwise expressly provided
herein, all rights to which Tenant may now or hereafter be
entitled by law (including any such rights arising because of
any implied "warranty of suitability"
or other warranty under Applicable Laws) (i) to quit,
terminate or surrender this Lease or the Leased Property or
any part thereof or (ii) to any abatement, suspension,
deferment or reduction of the Base Rent or any other sums
payable under this Lease.
7. Purchase Agreement, Pledge Agreement and Environmental
Indemnity. Tenant acknowledges and
agrees that nothing contained in this Lease shall limit,
modify or otherwise affect any of Tenant's obligations under
the Purchase Agreement, Pledge Agreement or Environmental
Indemnity, which obligations are intended
to be separate, independent and in addition to, and not in
lieu of, the obligations established by this Lease. In the
event of any inconsistency between the terms and provisions of
the Purchase Agreement, Pledge Agreement
or Environmental Indemnity and the terms and provisions of
this Lease, the terms and provisions of the
Purchase Agreement, Pledge Agreement or Environmental
Indemnity (as the case may be) shall control.
8. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the terms
hereof, Tenant may use and occupy the
Leased Property so long as no Event of Default occurs
hereunder, but only for the following purposes and
other lawful purposes incidental thereto:
(i) research and development of computer-related and other
electronic products;
(ii) administrative and office space; and
(iii) distribution and warehouse storage of computer-related
and other electronic products; and
(iv) assembly of computer-related and other electronic
products using components manufactured elsewhere,
but not including the manufacture of computer chips on-site;
and
(v) cafeteria, library, fitness center and other support
function uses that Tenant may provide to its employees.
Although the term "electronic products" in this subparagraph
may include products designed to detect, monitor, neutralize,
handle or process Hazardous Substances, the use of the Leased
Property by Tenant shall not include bringing Hazardous
Substances onto the Leased Property for the purpose of
researching, testing or demonstrating any such products.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the
Landlord's interest therein) in its present state, AS IS, and
without any representation or warranty, express or implied, as
to the condition of such property or as to the use which may
be made thereof. Tenant also accepts the Leased Property
without any representation or warranty, express or implied, by
Landlord regarding the title
thereto or the rights of any parties in possession of any part
thereof, except as set forth in subparagraph 9.(a). Landlord
shall not be responsible for any latent or other defect or
change of condition in the Land, Improvements, fixtures and
personal property forming a part of the Leased Property, and
the Rent hereunder
shall in no case be withheld or diminished because of any
latent or other defect in such property, any change in the
condition thereof or the existence with respect thereto of any
violations of Applicable Laws. Nor shall Landlord be required
to furnish to Tenant any facilities or service of any kind,
such as, but not limited to, water, steam, heat, gas, hot
water, electricity, light or power.
(c) Consideration of and Scope of Waiver. The provisions of
subparagraph 7.(b) above have been
negotiated by the Landlord and Tenant after due consideration
for the Rent payable hereunder and are intended to be a
complete exclusion and negation of any representations or
warranties of the Landlord, express or implied, with respect
to the Leased Property that may arise pursuant to any law now
or hereafter in effect, or otherwise. However, such exclusion
of representations and warranties by Landlord is not intended
to impair any representations or warranties made by other
parties, including Seller, the benefit of which is to pass to
Tenant during the Term because of the definition of Personal
Property and Leased Property above.
9. Other Representations, Warranties and Covenants of
Tenant. Tenant represents, warrants and
covenants as follows:
(a) Financial Matters. Tenant is solvent and has no
outstanding liens, suits, garnishments or court actions
which could render Tenant insolvent. There has not been filed
by or, to Tenant's knowledge, against Tenant a petition in
bankruptcy or a petition or answer seeking an assignment for
the benefit of creditors, the appointment of a receiver,
trustee, custodian or liquidator with respect to Tenant or any
significant portion of Tenant's property, reorganization,
arrangement, rearrangement, composition, extension,
liquidation or dissolution or similar relief under the federal
Bankruptcy Code or any state law. The financial statements
and all financial data heretofore delivered to Landlord
relating to Tenant have been prepared in accordance with GAAP
in all material respects. No material adverse change has
occurred in the financial position of Tenant as
reflected in Tenant's financial statements covering the fiscal
period ended May 31, 1996.
(b) Existing Contract. Except to the extent required of
Landlord under subparagraph 9.(b), Tenant shall satisfy all
surviving obligations of Tenant under the Existing Contract
and under other agreements described therein. Tenant agrees
to indemnify, defend and hold Landlord harmless from and
against any and all Losses imposed on or asserted against or
incurred by Landlord at any time and from time to time by
reason of, in connection with or arising out of any
obligations imposed by the Existing Contract or the other
agreements described therein. THE INDEMNITY SET OUT IN THIS
SUBPARAGRAPH SHALL APPLY EVEN IF
THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT
OF THE
ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF LANDLORD; provided,
such indemnity shall not
apply to Losses proximately caused by (and attributed by any
applicable principles of comparative fault to) the Active
Negligence, gross negligence or willful misconduct of
Landlord. Because Tenant hereby assumes and agrees to satisfy
all surviving obligations of Tenant under the Existing
Contract and the other agreements described therein, no
failure by Landlord to take any action required by the
Existing Contract or such other agreements (save and except
any actions required of Landlord under subparagraph 9.(b))
shall, for the purposes of this indemnity, be deemed to be
caused by the Active Negligence, gross negligence or willful
misconduct of
Landlord. The foregoing indemnity is in addition to the other
indemnities set out herein and shall not terminate upon the
closing of any sale of Landlord's interest in the Leased
Property pursuant to the provisions of the Purchase Agreement
or the termination of this Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease, the
Purchase Agreement, the Pledge Agreement and the Environmental
Indemnity do not and will not constitute a breach or default
under any other material agreement or contract to which Tenant
is a party or by which Tenant is bound or which affects the
Leased Property or Tenant's use, occupancy or operation of the
Leased Property or any part thereof and do not, to the
knowledge of Tenant, violate or contravene any law, order,
decree, rule or regulation to which Tenant is subject, and
such execution, delivery and performance by Tenant will not
result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or
security interest in, Tenant's property pursuant to the
provisions of any of the foregoing.
(d) Compliance with Covenants and Laws. The intended use
of the Leased Property by Tenant complies,
or will comply after Tenant obtains readily available permits,
in all material respects with all applicable restrictive
covenants, zoning ordinances and building codes, flood
disaster laws, applicable health, safety and environmental
laws and regulations, the Americans with Disabilities Act and
other laws pertaining to disabled persons, and all other
applicable laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions (all
of the foregoing are herein sometimes collectively called
"Applicable Laws"). Tenant has obtained or will promptly
obtain all utility, building, health and operating permits as
may be required for Tenant's use of the Leased Property by any
governmental authority or municipality having jurisdiction
over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge
and except as otherwise disclosed in the Environmental Report,
as of the date hereof: (i) no Hazardous Substances Activity
has occurred prior to the date of this Lease; (iii) neither
Tenant nor any prior owner or operator of the Leased Property
or any surrounding property has reported or been required to
report any release of any Hazardous Substances on or
from the Leased Property or the surrounding property pursuant
to any Environmental Law; (iv) neither Tenant nor any prior
owner or operator of the Leased Property or any surrounding
property has received any warning, citation, notice of
violation or other communication regarding a suspected or
known release or discharge of Hazardous Substances on or from
the Leased Property or regarding a suspected or known
violation of Environmental Laws concerning the Leased Property
from any federal, state or local agency; and (v) none of
the following are located on the Leased Property: asbestos;
urea formaldehyde foam insulation; transformers or other
equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts per
million; any other Hazardous Substances other than Permitted
Hazardous Substances; or any underground storage tank or
tanks. Further, Tenant represents that to its knowledge the
Environmental Report is not misleading or inaccurate in any
material respect.
(f) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to
Tenant's knowledge, threatened that will affect Tenant's
intended use of the Leased Property or the validity,
enforceability or priority of this Lease, or Tenant's use,
occupancy and operation of the Leased Property or any part
thereof, and Tenant is not in default with respect to any
order, writ, injunction, decree or demand of any court or
other governmental or regulatory authority that could
materially and adversely affect the business or assets of
Tenant and its Subsidiaries taken as a whole or Tenant's use,
occupancy or operation of the Leased Property. No
condemnation or other like proceedings are pending or, to
Tenant's knowledge, threatened against the Leased Property.
(g) Condition of Property. The Land as described in
Exhibit A is shown on the plat included as part of the
A.L.T.A. Survey prepared by Xxxxxx X. Xxxxx, dated August 12,
1991, which was delivered to Landlord at
the request of Tenant, subject, however, to that certain Lot
Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records of Santa Xxxxx County,
California. All material improvements on the Land as of the
date hereof are as shown on that survey, and except as shown
on that survey there are no easements or encroachments visible
or apparent from an inspection of the Real Property. Adequate
provision has been made for the Leased Property to be served
by electric, gas, storm and sanitary sewers, sanitary water
supply, telephone and other utilities required for the use
thereof. All streets, alleys and easements necessary to serve
the Leased Property have been completed and are serviceable.
The Leased Property is in a condition satisfactory for its use
and occupancy. Tenant is not aware of any latent or patent
material defects or deficiencies in the Real Property that,
either individually or in the aggregate, could materially and
adversely affect Tenant's use or occupancy or could reasonably
be anticipated to endanger life or limb.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of
California. Tenant has all requisite power and has procured
or will procure on a timely basis all governmental
certificates of authority, licenses, permits, qualifications
and other documentation required to lease and operate the
Leased Property. Tenant has the corporate power and adequate
authority, rights and franchises to own Tenant's property and
to carry on Tenant's business as now conducted and is duly
qualified and in good
standing in each state in which the character of Tenant's
business makes such qualification necessary
(including, without limitation, the State of California) or,
if it is not so qualified in a state other than California,
such failure does not have a material adverse effect on the
properties, assets, operations or businesses of Tenant
and its Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement, the
Pledge Agreement and the Environmental Indemnity are duly
authorized and do not require the consent or approval of any
governmental body or other regulatory authority that has not
heretofore been obtained and are not in contravention of or
conflict with any Applicable Laws or any term or provision of
Tenant's articles of incorporation or bylaws. This Lease, the
Purchase Agreement, the Pledge Agreement and the Environmental
Indemnity are valid, binding and legally enforceable
obligations of Tenant in accordance with their terms, except
as such enforcement is affected by bankruptcy, insolvency and
similar laws affecting the rights of creditors, generally, and
equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person"
within the meaning Sections 1445 and 7701 of
the Code (i.e., Tenant is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign
estate as those terms are defined in the Code and regulations
promulgated thereunder).
(k) Omissions. To Tenant's knowledge, none of Tenant's
representations or warranties contained in this
Lease or any document, certificate or written statement
furnished to Landlord by or on behalf of Tenant contains any
untrue statement of a material fact or omits a material fact
necessary in order to make the statements contained herein or
therein (when taken in their entireties) not misleading.
(l) Existence. Tenant shall continuously maintain its
existence and its qualification to do business in the
State of California.
(m) Tenant Taxes. Tenant shall comply with all applicable
tax laws and pay before the same become
delinquent all taxes imposed upon it or upon its property
where the failure to so comply or so pay would have a material
adverse effect on the financial condition or operations of
Tenant; except that Tenant may in good faith by appropriate
proceedings contest the validity, applicability or amount of
any such taxes and pending such contest Tenant shall not be
deemed in default under this subparagraph if (1) Tenant
diligently prosecutes such contest to completion in an
appropriate manner, and (2) Tenant promptly causes to be paid
any tax adjudged by
a court of competent jurisdiction to be due, with all costs,
penalties, and interest thereon, promptly after such judgment
becomes final; provided, however, in any event such contest
shall be concluded and the tax,
penalties, interest and costs shall be paid prior to the date
any writ or order is issued under which any of Tenant's
property that is material to the business of Tenant and its
Subsidiaries taken as a whole may be seized or sold because of
the nonpayment thereof.
(n) Operation of Property. Tenant shall operate the Leased
Property in a good and workmanlike manner
and in compliance with all Applicable Laws and will pay all
fees or charges of any kind in connection therewith. Tenant
shall not use or occupy, or allow the use or occupancy of, the
Leased Property in any manner which violates any Applicable
Law or which constitutes a public or private nuisance or which
makes void, voidable or cancelable any insurance then in force
with respect thereto. To the extent that any of the following
would, individually or in the aggregate, materially and
adversely affect the value of the Leased Property or Tenant's
use, occupancy or operations on the Leased Property, Tenant
shall not: (i) initiate or permit any zoning reclassification
of the Leased Property; (ii) seek any variance under existing
zoning ordinances applicable to the Leased Property; (iii) use
or permit the use of the Leased Property in a manner that
would result in such use becoming a nonconforming use under
applicable zoning ordinances or similar
laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Leased Property; or (v) consent
to the annexation of the Leased Property to any municipality.
If a change in the zoning or other Applicable
Laws affecting the permitted use or development of the Leased
Property shall occur that Landlord determines
will materially reduce the then-current market value of the
Leased Property, and if after such reduction the Stipulated
Loss Value shall substantially exceed the then-current market
value of the Leased Property in the reasonable judgment of
Landlord, then Tenant shall pay Landlord an amount equal to
such excess for application as a Qualified Payment. Tenant
shall make any payment required by the preceding sentence
within one hundred eighty (180) days after it is requested by
Landlord, and in any event shall make any such payment before
the end of the Term. Tenant shall not impose any restrictive
covenants or encumbrances upon the Leased Property without the
prior written consent of the Landlord; provided, that such
consent shall not be unreasonably withheld for any encumbrance
or restriction that is made expressly subject to this Lease,
as modified from time to time, and subordinate to Landlord's
interest in the Leased Property by an agreement in
form satisfactory to Landlord. Tenant shall not cause or
permit any drilling or exploration for, or extraction, removal
or production of, minerals from the surface or subsurface of
the Leased Property. Tenant shall not do any act whereby the
market value of the Leased Property may be materially
lessened. Tenant shall allow Landlord or its authorized
representative to enter the Leased Property at any reasonable
time to inspect the Leased Property and, after reasonable
notice, to inspect Tenant's books and records pertaining
thereto, and Tenant shall assist Landlord or Landlord's
representative in whatever way reasonably necessary to make
such inspections. If Tenant receives a written notice or
claim from any federal, state or other governmental entity
that the Leased Property is not in compliance in any material
respect with any Applicable Law, or that any action may be
taken against the owner of the Leased Property because the
Leased Property does not comply
with Applicable Law, Tenant shall promptly furnish a copy of
such notice or claim to Landlord. Notwithstanding the
foregoing, Tenant may in good faith, by appropriate
proceedings, contest the validity and applicability of any
Applicable Law with respect to the Leased Property, and
pending such contest Tenant shall not be deemed in default
hereunder because of a violation of such Applicable Law, if
Tenant diligently prosecutes such contest to completion in a
manner reasonably satisfactory to Landlord, and if Tenant
promptly causes the Leased Property to comply with any such
Applicable Law upon a final determination by a court of
competent jurisdiction that the same is valid and applicable
to the Leased Property; provided, that in any event such
contest shall be concluded and the violation of such
Applicable Law must be corrected and any claims asserted
against Landlord or the Leased Property because of such
violation must be paid by Tenant, all prior to the date that
(i) any criminal charges may be brought against Landlord or
any of its directors, officers or employees because of such
violation or (ii) any action may be taken by any governmental
authority against Landlord or any property owned by Landlord
(including the Leased Property) because of such violation.
(o) Debts for Construction. Tenant shall cause all debts
and liabilities incurred in the construction, maintenance,
operation and development of the Leased Property, including
without limitation all debts and liabilities for labor,
material and equipment and all debts and charges for utilities
servicing the Leased Property, to be promptly paid.
Notwithstanding the foregoing, Tenant may in good faith by
appropriate proceedings contest the validity, applicability or
amount of any asserted mechanic's or materialmen's lien and
pending such contest Tenant shall not be deemed in default
under this subparagraph (or subparagraphs 8.(t) or
8.(u)) because of the contested lien if (1) within sixty (60)
days after being asked to do so by Landlord, Tenant bonds over
to Landlord's satisfaction any contested liens alleged to
secure an amount in excess of $500,000 (individually or in the
aggregate) (2) Tenant diligently prosecutes such contest to
completion in a manner reasonably satisfactory to Landlord,
and (3) Tenant promptly causes to be paid any amount adjudged
by a court of competent jurisdiction to be due, with all costs
and interest thereon, promptly after such judgment becomes
final; provided, however, that in any event each such contest
shall be concluded and the lien, interest and costs shall be
paid prior to the date (i) any criminal action may be
instituted against Landlord or its directors, officers or
employees because of the nonpayment thereof or (ii) any writ
or order is issued under which any property
owned by Landlord (including the Leased Property) may be
seized or sold or any other action may be taken
against Landlord or any property owned by Landlord because of
the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or,
if requested by Landlord, will pay or cause to be paid prior
to delinquency) all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes,
levies, fees, charges, surcharges, assessments or penalties
which arise out of or are attributable to this Lease or which
are imposed upon Landlord or the Leased Property because of
the
ownership, leasing, occupancy, sale or operation of the Leased
Property, or any part thereof, or relating to or required to
be paid by the terms of any of the Permitted Encumbrances
(collectively, herein called the "Impositions"), excluding
only Excluded Taxes. If Landlord requires Tenant to pay any
Impositions directly
to the applicable taxing authority or other party entitled to
collect the same, Tenant shall furnish Landlord with receipts
showing payment of such Impositions and other amounts prior to
delinquency; except that Tenant may
in good faith by appropriate proceedings contest the validity,
applicability or amount of any asserted Imposition, and
pending such contest Tenant shall not be deemed in default of
this subparagraph (or subparagraphs 8.(t) or 8.(u)) because of
the contested Imposition if (1) within sixty (60) days after
being asked to do so by Landlord, Tenant bonds over to the
satisfaction of Landlord any lien asserted against the Leased
Property and alleged to secure an amount in excess of $500,000
because of the contested Imposition, (2)
Tenant diligently prosecutes such contest to completion in a
manner reasonably satisfactory to Landlord, and (3) Tenant
promptly causes to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all costs, penalties
and interest thereon, promptly after such judgment becomes
final; provided, however, that
in any event each such contest shall be concluded and the
Impositions, penalties, interest and costs shall be paid
prior to the date (i) any criminal action may be instituted
against Landlord or its directors, officers or employees
because of the nonpayment thereof or (ii) any writ or order is
issued under which any property owned by Landlord (including
the Leased Property) may be seized or sold or any other action
may be taken against Landlord or any property owned by
Landlord because of the nonpayment thereof.
(q) Repair, Maintenance, Alterations and Additions. Tenant
shall keep the Leased Property in good order,
repair, operating condition and appearance (ordinary wear and
tear excepted), causing all necessary repairs, renewals,
replacements, additions and improvements to be promptly made,
and will not allow any of the Leased Property to be materially
misused, abused or wasted or to deteriorate. Tenant shall
promptly replace any worn-out fixtures included within the
Leased Property with fixtures comparable to the replaced
fixtures when new and repair any damage caused by the removal
of such fixtures. Further, Tenant shall not, without the
prior written consent of Landlord, (i) remove from the Leased
Property any fixtures of significant value,
except such as are replaced by Tenant by articles of equal
value, free and clear of any Lien (and for purposes of this
clause "significant value" will mean any fixture that has a
value of more than $100,000 or that, when considered together
with all other fixtures removed and not replaced by Tenant by
articles of equal suitability and value, has an aggregate
value of $500,000 or more) or (ii) make any alteration to any
Improvements which significantly reduce the fair market value
or change the general character of the Leased Property, taken
as a whole, or which impair in any significant manner the
useful life or utility of the Improvements, taken as whole.
Notwithstanding the foregoing provisions of this
subparagraph 8.(q), Tenant may construct the following
substantial new Improvements to the Leased Property and modify
or remove existing Improvements
as reasonably required in connection with such construction:
(1) a new building and separate parking structure to be used
as a data center;
(2) an expansion of the cafeteria; and
(3) an elevated walkway between Building 100 (which
is on the Land) and Building 500 (which
is on land adjacent to the Land and is presently leased to
Tenant by Landlord pursuant to another lease agreement);
provided, however: no Event of Default has occurred and is
continuing; Tenant causes the construction to be performed in
a good and workmanlike manner and in accordance with
Applicable Laws; Tenant causes the construction to be
completed in a manner that does not significantly reduce the
fair market value of or change the general character of the
Leased Property, taken as a whole, or impair in any
significant manner the useful life or utility of the
Improvements, taken as whole; in the case of the elevated
walkway, Landlord must have approved (which approval will not
be unreasonably withheld) an agreement which negates any
easements or
rights that would run with the land or prevent the removal of
the walkway, except as expressly set forth in such agreement,
if the same Person should cease to own both Building 100 and
Building 500; and Tenant causes the construction to be
completed prior to any Designated Sale Date on which neither
Tenant nor any Applicable Purchaser purchases the Leased
Property pursuant to the Purchase Agreement for a price to
Landlord (when
taken together with any additional payments made by Tenant
pursuant to Paragraph 2(a)(ii) of the Purchase Agreement, in
the case of a purchase by an Applicable Purchaser) of not less
than the Purchase Price.
Upon request of Landlord made at any time when an Event of
Default shall have occurred and be
continuing, Tenant shall deliver to Landlord an inventory
describing and showing the make, model, serial number and
location of all fixtures and personalty, if any, included in
the Leased Property with a certification by Tenant that such
inventory is a true and complete schedule of all such fixtures
and personalty and that all items specified in the inventory
are covered hereby free and clear of any Lien other than the
Permitted Encumbrances described in Exhibit B.
(r) Insurance and Casualty. Throughout the Term, Tenant will
keep all Improvements (including all
alterations, additions and changes made to the Improvements)
which are located within the Leased Property insured under an
all-risk property insurance policy (excluding from coverage
damage by flood or earthquake, but not excluding other perils
normally included within the definitions of extended coverage,
vandalism and malicious mischief) in the amount of one hundred
percent (100%) of the replacement value with endorsements
for contingent liability from operation of building laws,
increased cost of construction and demolition costs which may
be necessary to comply with building laws. Tenant will be
responsible for determining the amount of property insurance
to be maintained, but such coverage will be on an agreed value
basis to eliminate the effects of coinsurance. Such insurance
shall be issued by an insurance company or companies rated by
the A.M. Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported financial
information rating of X or better. Any deductible applicable
to such insurance shall not exceed
$500,000. Such insurance shall cover not only the value of
Tenant's interest in the Improvements, but also the interest
of Landlord, and such insurance shall include provisions that
Landlord must be notified at least ten (10) days prior to any
cancellation or reduction of insurance coverage. With this
Lease Tenant shall deliver to Landlord a certificate from the
applicable insurer or its authorized agent evidencing the
insurance required by
this subparagraph and any additional insurance which shall be
taken out upon any part of the Leased Property. Thereafter,
Tenant shall deliver to Landlord certificates from the
applicable insurer or its authorized agent of renewals or
replacements of all such policies of insurance at least five
(5) days before any such insurance shall expire. Tenant
further agrees that all such policies shall provide that
proceeds thereunder will be payable to Landlord as Landlord's
interest may appear. If Tenant fails to obtain any insurance
required by this Lease or to provide confirmation of any such
insurance as required by this Lease, Landlord shall be
entitled (but not required) to obtain the insurance that
Tenant has failed to obtain or for which Tenant has not
provided the required confirmation and, without limiting
Landlord's other remedies under the circumstances, Landlord
may require Tenant to reimburse Landlord for the cost of such
insurance and to pay interest thereon computed at the Default
Rate from the date such cost was paid by Landlord until the
date of reimbursement by Tenant. In the event any of the
Leased Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which
insurance shall have been required hereunder, (i) Landlord
may, but shall not be obligated to, make proof of loss if not
made promptly by Tenant, (ii) each insurance company concerned
is hereby authorized and directed to make payment for such
loss directly to Landlord for application as required by
Paragraph 4, and (iii) Landlord's consent must be obtained for
any settlement, adjustment or compromise of
any claims for loss, damage or destruction under any policy or
policies of insurance (provided, that if any such claim is for
less than $2,000,000 and no Event of Default shall have
occurred and be continuing, Tenant alone shall have the right
to settle, adjust or compromise the claim as Tenant deems
appropriate; and, provided further, that any disagreement
between Landlord and Tenant about the amount for which any
such claim should
be settled shall, at the request of either party, be resolved
as provided in Exhibit D, unless an Event of Default shall
have occurred and be continuing, in which case Landlord alone
shall have the right to settle, adjust or compromise the claim
as Landlord deems appropriate). If any casualty shall result
in damage to or loss or destruction of the Leased Property in
excess of $1,000,000, Tenant shall give immediate notice
thereof to Landlord and Paragraph 4 shall apply.
Notwithstanding the foregoing provisions of this
subparagraph 8.(r), following any fire or other casualty
involving the Leased Property, if insurance proceeds totaling
not more than $2,000,000 are to be recovered as a result
thereof, or if in connection therewith Tenant shall have
executed a Voluntary Minimum Pledge Commitment and delivered
any additional Collateral required to satisfy such Voluntary
Minimum
Pledge Commitment, Tenant shall be entitled to receive
directly and hold such insurance proceeds, so long as no Event
of Default shall have occurred and be continuing and so long
as Tenant applies such proceeds towards the restoration,
replacement and repair of the Leased Property as required by
subparagraph 4.(b).
(s) Condemnation. Immediately upon obtaining knowledge of
the institution of any proceedings for the
condemnation of the Leased Property or any portion thereof, or
any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Leased
Property or any portion thereof, Tenant shall notify Landlord
of the pendency of such proceedings. Tenant shall, at its
expense, diligently prosecute any such proceedings and shall
consult with Landlord, its attorneys and experts and cooperate
with them as reasonably requested in the carrying on or
defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with
respect to the Leased Property and all judgments, decrees and
awards for injury or damage to the Leased Property shall be
paid to Landlord and applied as provided in Paragraph 4 above.
Landlord is hereby authorized, in the name of Tenant, to
execute and deliver valid acquittances for, and to appeal
from, any such judgment, decree or award concerning
condemnation of any of the Leased Property. Landlord shall
not be, in any event or circumstances, liable or
responsible for failure to collect, or to exercise diligence
in the collection of, any such proceeds, judgments, decrees or
awards.
Notwithstanding the foregoing provisions of this
subparagraph 8.(s), following any condemnation or sale in lieu
of condemnation involving the Leased Property, if condemnation
or sale proceeds totaling not more than $2,000,000 are to be
recovered as a result thereof, or if in connection therewith
Tenant shall have executed a Voluntary Minimum Pledge
Commitment and delivered any additional Collateral required to
satisfy such Voluntary Minimum Pledge Commitment, Tenant shall
be entitled to receive directly and hold such condemnation or
sale proceeds, so long as no Event of Default shall have
occurred and be continuing and so long as Tenant applies such
proceeds towards the restoration, replacement and repair of
the remainder of the Leased Property as required by
subparagraph 4.(b).
(t) Protection and Defense of Title. If any encumbrance or
title defect whatsoever affecting Landlord's fee
interest in the Leased Property is claimed or discovered
(excluding Permitted Encumbrances, this Lease and
any other encumbrance which is claimed by Landlord or lawfully
claimed through or under Landlord and
which is not claimed by, through or under Tenant) or if any
legal proceedings are instituted with respect to title to the
Leased Property, Tenant shall give prompt written notice
thereof to Landlord and at Tenant's own cost
and expense will promptly cause the removal of any such
encumbrance and cure any such defect and will take all
necessary and proper steps for the defense of any such legal
proceedings, including but not limited to the employment of
counsel, the prosecution or defense of litigation and the
release or discharge of all adverse claims. If Tenant fails
to promptly remove any such encumbrance or title defect (other
than a Lien Tenant is contesting as expressly permitted by and
in accordance with subparagraph 8.(o) or subparagraph 8.(p)),
Landlord (whether or not named as a party to legal proceedings
with respect thereto) shall be entitled to take such
additional steps as in its judgment may be necessary or proper
to remove such encumbrance or cure such defect or for the
defense of any such attack or legal proceedings or the
protection of Landlord's fee interest in the Leased Property,
including but not limited to the employment of counsel, the
prosecution or defense of litigation, the compromise or
discharge of any adverse claims made with respect to the
Leased Property, the removal of prior liens or security
interests, and all expenses (including Attorneys' Fees) so
incurred of every kind and character shall be a demand
obligation owing by Tenant.
For purposes of this subparagraph 8.(t), Tenant shall be
deemed to be acting promptly to remove any
encumbrance or to cure any title defect, other than a Lien
which Tenant has itself granted or authorized, so long as
Tenant (or a title insurance company obligated to do so) is in
good faith by appropriate proceedings contesting the validity
and applicability of the encumbrance or defect, and pending
such contest Tenant shall not be deemed in default under this
subparagraph because of the encumbrance or defect; provided,
with respect
to a contest of any encumbrance or title defect which is the
subject of subparagraphs 8.(o) or 8.(p), Tenant (or the
applicable title insurance company) must satisfy the
conditions and requirements for a permitted contest set forth
in those subparagraphs, and with respect to a contest of any
other encumbrance or title defect, Tenant (or the applicable
title insurance company) must:
(1) diligently prosecute the contest to completion
in a manner reasonably satisfactory to Landlord;
(2) immediately remove the encumbrance or cure the
defect, as and to the extent reasonably required to preserve
Landlord's indefeasible fee estate in the Leased Property and
to prevent any significant adverse impact the encumbrance or
defect may have on the value of the Leased Property, upon a
final determination by a court of competent jurisdiction that
the encumbrance or defect is valid and applicable to the
Leased Property; and
(3) in any event conclude the contest and remove the
encumbrance or cure the defect and pay any claims asserted
against Landlord or the Leased Property because of such
encumbrance or defect, all
prior to (i) any Designated Sale Date on which neither Tenant
nor any Applicable Purchaser purchases the Leased Property
pursuant to the Purchase Agreement for a price to Landlord
(when taken together with any additional payments made by
Tenant pursuant to Paragraph 2(a)(ii) of the Purchase
Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than the Purchase Price, (ii) the date
any criminal charges may be brought against Landlord or any of
its directors, officers or employees because of such
encumbrance or defect or (iii) the date any action may be
taken against Landlord or any property owned by Landlord
(including the Leased Property) by any governmental authority
or any other Person who has or claims rights superior to
Landlord because of the encumbrance or defect.
(u) No Liens on the Leased Property. Tenant shall not,
without the prior written consent of Landlord,
create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or
allow to remain, any Lien (except the lien for property taxes
or assessments assessed against the Leased Property which are
not delinquent and any Lien Tenant is contesting as expressly
permitted by and in
accordance with subparagraph 8.(o) or subparagraph 8.(p)),
against or covering the Leased Property or any part thereof
(other than any Lien which is lawfully claimed through or
under Landlord and which is not claimed by, through or under
Tenant) regardless of whether the same are expressly or
otherwise subordinate to this Lease or Landlord's interest in
the Leased Property, and should any prohibited Lien exist or
become attached hereafter in any manner to any part of the
Leased Property without the prior written consent of Landlord,
Tenant shall cause the same to be promptly discharged and
released to the satisfaction of Landlord.
(v) Books and Records. Tenant shall keep books and records
that are accurate and complete in all material
respects for the construction and maintenance of the Leased
Property and will permit all such books and
records (including without limitation all contracts,
statements, invoices, bills and claims for labor, materials
and services supplied for the construction and operation of
any Improvements) to be inspected and copied by
Landlord and its duly accredited representatives at all times
during reasonable business hours; provided that so long as
Tenant remains in possession of the Leased Property, Landlord
or Landlord's representative will,
before making any such inspection or copying any such
documents, if then requested to do so by Tenant to maintain
Tenant's security: (i) sign in at Tenant's security or
information desk if Tenant has such a desk on the premises,
(ii) wear a visitor's badge or other reasonable identification
provided by Tenant when Landlord or Landlord's representative
first arrives at the Leased Property, (iii) permit an employee
of Tenant to observe such inspection or work, and (iv) comply
with other similar reasonable nondiscriminatory security
requirements of Tenant that do not, individually or in the
aggregate, interfere with or delay inspections or copying by
Landlord authorized by this subparagraph.. This subparagraph
shall not be construed as requiring Tenant to regularly
maintain separate books and records relating exclusively to
the Leased Property; provided, however, that if requested by
Landlord at any time when an Event of Default shall have
occurred and be continuing, Tenant shall construct or abstract
from its regularly maintained books and records information
required by this subparagraph relating to the Leased Property.
(w) Financial Statements; Required Notices; Certificates
as to Default. Tenant shall deliver to Landlord and to each
Participant of which Tenant has been notified:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of Tenant,
a consolidated balance sheet of Tenant and its consolidated
Subsidiaries as of the end of such fiscal year and a
consolidated income statement and statement of cash flows of
Tenant and its consolidated Subsidiaries for such fiscal year,
all in reasonable detail and all prepared in accordance with
GAAP and accompanied by a report and opinion of accountants of
national standing selected by Tenant,
which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject
to any qualifications or exceptions as to the scope of the
audit nor to any qualification or exception which Landlord
determines, in Landlord's reasonable discretion, is
unacceptable; provided
that notwithstanding the foregoing, for so long as Tenant is a
company subject to the periodic reporting requirements of
Section 12 of the Securities Exchange Act of 1934, as amended,
Tenant shall be deemed to have satisfied its obligations under
this clause (i) so long as Tenant delivers to Landlord the
same annual report and report and opinion of accountants that
Tenant delivers to its shareholders;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of each
fiscal year of Tenant, the consolidated balance sheet of
Tenant and its consolidated Subsidiaries as of the end of such
quarter and the consolidated income statement and the
consolidated statement of cash flows of Tenant and its
consolidated Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such
quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by a Responsible Financial
Officer of Tenant (subject to year-end adjustments); provided
that notwithstanding the foregoing, for so long as Tenant is a
company subject to
the periodic reporting requirements of Section 12 of the
Securities Exchange Act of 1934, as amended,
Tenant shall be deemed to have satisfied its obligations under
this clause (ii) so long as Tenant delivers to Landlord the
same quarterly reports, certified by a Responsible Financial
Officer of Tenant (subject to year-end adjustments), that
Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph 8.(w)(ii) and 8.(w)(i), a
certificate of a Responsible Financial Officer of Tenant in
substantially the form attached hereto as Exhibit E: (i)
certifying that to the knowledge of Tenant no Default or Event
of Default under this Lease
has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a brief statement as
to the nature thereof and the action which is proposed to be
taken with respect thereto, (ii) certifying that the
representations of Tenant set forth in Paragraph 8 of this
Lease are true and correct in all material respects as of the
date thereof as though made on and as of the date thereof or,
if not then true and correct, a brief statement as to why such
representations are no longer true and correct, and (iii) with
computations demonstrating compliance with the financial
covenants contained in subparagraph 8.(ac);
(iv) promptly after any change in the rating of Tenant's
senior, unsecured debt by Standard and Poor's Corporation or
Xxxxx'x Investor Service, Inc. or in Tenant's Debt to Capital
Ratio (as defined in
subparagraph 1.(bo)), which will result in a change in the
Spread (as defined in subparagraph 1.(bo)), a certificate of a
Responsible Financial Officer of Tenant in substantially the
form attached hereto as Exhibit F with computations evidencing
Tenant's calculation of the Spread after giving effect to such
changes;
(v) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which
Tenant sends to Tenant's stockholders, and copies of all
regular, periodic and special reports, and all registration
statements (other than registration statements on Form S-8 or
any form substituted therefor) which Tenant files with the
Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any
national securities exchange;
(vi) as soon as possible and in any event within five (5)
Business Days after a Responsible Financial Officer of Tenant
becomes aware of the occurrence of each Default or Event of
Default with respect to the Affirmative Financial Covenants
described in subparagraph 9.(ae) or the Negative Covenants
described in subparagraph 9.(af), a statement of a Responsible
Financial Officer of Tenant setting forth details of such
Default or Event of Default and the action which Tenant has
taken and proposes to take with respect
thereto;
(vii) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect
(or, if there have been modifications, that this Lease is in
full effect as modified, and setting forth such modifications)
and the dates to which the Base Rent has been paid and either
stating that to the knowledge of Tenant no Default or Event of
Default under this Lease has occurred and is continuing or, if
a Default or Event of Default under this Lease has occurred
and is continuing, a brief statement as to the nature thereof;
it being intended that any such statement by Tenant may be
relied upon by any prospective purchaser or mortgagee of the
Leased Property and by any Participant; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Tenant, of
any of its Subsidiaries or of the Leased Property as Landlord
or any Participant through Landlord may
from time to time reasonably request.
Landlord is hereby authorized to deliver a copy of any
information or certificate delivered to it pursuant to this
subparagraph 8.(w) to any Participant and to any regulatory
body having jurisdiction over Landlord that
requires or requests it.
(x) Further Assurances. Tenant shall, on request of
Landlord, (i) promptly correct any defect, error or omission
which may be discovered in the contents of this Lease or in
any other instrument executed in
connection herewith or in the execution or acknowledgment
thereof; (ii) execute, acknowledge, deliver and record or file
such further instruments and do such further acts as may be
necessary, desirable or proper to carry out more effectively
the purposes of this Lease and to subject to this Lease any
property intended by the terms hereof to be covered hereby
including specifically, but without limitation, any renewals,
additions, substitutions, replacements or appurtenances to the
Leased Property; (iii) execute, acknowledge, deliver, procure
and record or file any document or instrument deemed advisable
by Landlord to protect its rights in
and to the Leased Property against the rights or interests of
third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do
such further acts as may be necessary, desirable or proper in
the reasonable determination of Landlord to enable Landlord,
Landlord's Parent and other Participants to comply with the
requirements or requests of any agency or authority having
jurisdiction over them.
(y) Fees and Expenses; General Indemnification; Increased
Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the proceeds
of the Initial Funding Advance as part of the Closing Costs,
Tenant shall pay (and shall indemnify and hold harmless
Landlord, Landlord's Parent and
any Person claiming through Landlord by reason of a Permitted
Transfer from and against) all Losses incurred by Landlord or
Landlord's Parent or any Person claiming through Landlord
through a Permitted Transfer in connection with or because of
(A) the ownership of any interest in or operation of the
Leased Property, (B) the negotiation or administration of this
Lease, the Purchase Agreement, the Pledge Agreement, the
Environmental Indemnity or the Participation Agreement
(excluding the negotiation or administration of the
Participation Agreement between Landlord and Landlord's
Parent), or (C) 3COM's request for assistance in identifying
any new Participant pursuant to Paragraph 18 of the Purchase
Agreement, whether such Losses are incurred at the time of
execution of this Lease or at any time during the Term. Costs
and expenses included in such Losses may include, without
limitation, all appraisal fees, filing and recording fees,
inspection fees, survey fees, taxes (other than Excluded
Taxes), brokerage fees and commissions, abstract fees, title
policy fees, Uniform Commercial Code search fees, escrow fees,
Attorneys' Fees and environmental consulting fees incurred by
Landlord with respect to the Leased Property. If Landlord
pays or reimburses Landlord's Parent for any such Losses,
Tenant shall reimburse Landlord for the same notwithstanding
that Landlord may have already received any payment from any
other Participant on account of such Losses, it being
understood that the other Participant may expect repayment
from Landlord when Landlord does collect the required
reimbursement from Tenant.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against)
all Losses, including Attorneys' Fees, incurred or expended by
Landlord or Landlord's Parent or any Person claiming through
Landlord through a Permitted Transfer or in connection with
(A) the breach by Tenant of any covenant of Tenant herein or
in any other instrument executed in connection herewith or (B)
Landlord's exercise in a lawful manner of any of Landlord's
remedies hereunder or under Applicable Law or Landlord's
protection of the Leased Property and Landlord's interest
therein as permitted hereunder or under Applicable Law.
(However, the indemnity in the preceding sentence shall not be
construed to make Tenant liable to both Landlord and any
Participant or other party claiming through Landlord for the
same damages. For example, so long as Landlord remains
entitled to recover any past due Base Rent from Tenant, no
Participant shall be entitled to collect a percentage of the
same Base Rent from Tenant.) Tenant shall further indemnify
and hold harmless Landlord and all other Indemnified Parties
against, and reimburse them for, all Losses which may be
imposed upon, asserted against or incurred or paid by them by
reason
of, on account of or in connection with any bodily injury or
death or damage to the property of third parties occurring in
or upon or in the vicinity of the Leased Property through any
cause whatsoever. THE
FOREGOING INDEMNITY FOR INJURY, DEATH OR PROPERTY DAMAGE SHALL
APPLY
EVEN WHEN INJURY, DEATH OR PROPERTY DAMAGE IN, ON OR IN THE
VICINITY OF
THE LEASED PROPERTY RESULTS IN WHOLE OR IN PART FROM THE
ORDINARY
NEGLIGENCE (AS DEFINED ABOVE) OF AN INDEMNIFIED PARTY;
provided, such indemnity
shall not apply to Losses suffered by an Indemnified Party
that were proximately caused by (and attributed by any
applicable principles of comparative fault to) the Active
Negligence, gross negligence or wilful misconduct of such
Indemnified Party.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage)
in or in the interpretation of any law or regulation or (B)
the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having
the force of law), there shall be
any increase in the cost to Landlord's Parent or any other
Participant of agreeing to make or making,
funding or maintaining advances to Landlord in connection with
the Leased Property, then Tenant shall from time to time, upon
demand by Landlord pay to Landlord for the account of
Landlord's Parent or such other Participant, as the case may
be, additional amounts sufficient to compensate Landlord's
Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of
reserve requirements applicable to Collateral held from time
to time by Landlord's Parent or other Participants pursuant to
the Pledge Agreement would be an increase covered by the
preceding sentence. A certificate as to the amount of any
increased cost covered by this subparagraph, submitted to
Landlord and Tenant by Landlord's Parent or the other
Participant, shall be conclusive and binding for purposes of
determining Tenant's obligations hereunder, absent clear and
demonstrable error.
(iv) Landlord's Parent or any other Participant may demand
additional payments (herein called "Capital Adequacy Charges")
if Landlord's Parent or the other Participant determines that
any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not
having the force of law) affects the amount of capital to be
maintained by it and that the amount of such capital is
increased by or based upon the existence of Funding Advances
made or to be made to Landlord to permit Landlord to maintain
Landlord's investment in the Leased Property. To the extent
that Landlord's Parent or the other Participant demands
Capital Adequacy Charges as compensation for the additional
capital requirements reasonably allocable to such advances,
Tenant shall pay to Landlord for the account of Landlord's
Parent or the other Participant, as the case may be, the
amount so demanded.
(v) Any amount to be paid to Landlord, Landlord's Parent or
any other Indemnified Party under this subparagraph 8.(y)
shall be a demand obligation owing by Tenant. Tenant's
indemnities and obligations under this subparagraph 8.(y)
shall survive the termination or expiration of this Lease with
respect to any circumstance or event existing or occurring
prior to such termination or expiration.
(z) Liability Insurance. Tenant shall maintain one or
more policies of commercial general liability insurance
against claims for bodily injury or death and property damage
occurring or resulting from any occurrence in or upon the
Leased Property, in standard form and with an insurance
company or companies rated by the A.M. Best Company of
Oldwick, New Jersey as having a policyholder's rating of A or
better and
a reported financial information rating of X or better, such
insurance to afford immediate protection, to the aggregate
limit of not less than $10,000,000 combined single limit for
bodily injury and property damage in respect of any one
accident or occurrence, with not more than $500,000 self-
insured retention. Such commercial general liability
insurance shall include blanket contractual liability coverage
which insures
contractual liability under the indemnifications set forth in
this Lease (other than the indemnifications set forth in
Paragraph 11 concerning environmental matters), but such
coverage or the amount thereof shall in no way
limit such indemnifications. The policy evidencing such
insurance shall name as additional insureds Landlord and all
Participants of which Tenant has been notified (including
Landlord's Parent and ABN AMRO Bank N.V.). Tenant shall
maintain with respect to each policy or agreement evidencing
such commercial general
liability insurance such endorsements as may be reasonably
required by Landlord and shall at all times deliver and
maintain with Landlord written confirmation (in form
satisfactory to Landlord) with respect to such insurance from
the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be
canceled or reduced without at least ten (10) days notice to
Landlord. Not less than five (5) days prior to the expiration
date of each policy of insurance required of Tenant pursuant
to this subparagraph, Tenant shall deliver to Landlord a
certificate evidencing a paid renewal policy or policies.
(aa) Permitted Encumbrances. Except to the extent
expressly required of Landlord by subparagraph 9.(b), Tenant
shall comply with and will cause to be performed all of the
covenants, agreements and obligations imposed upon the owner
of the Leased Property in the Permitted Encumbrances in
accordance with their respective terms and provisions. Tenant
shall not, without the prior written consent of Landlord,
modify or permit any modification of any Permitted Encumbrance
in any manner that could impose significant monetary
obligations upon Landlord or any subsequent owner of the
Leased Property, could significantly and adversely affect the
value of the Leased Property, could impose any lien to secure
payment or performance obligations against any part of the
Leased Property or would otherwise be material and adverse to
Landlord.
(bb) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased Property to be in
violation of, or do anything or permit
anything to be done which will subject the Leased Property to
any remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming
disclosure to the
applicable governmental authorities of all relevant facts,
conditions and circumstances pertaining to the Leased
Property;
b) not to conduct or authorize others to conduct Hazardous
Substance Activities on the Leased
Property, except Permitted Hazardous Substance Use;
c) to the extent required by Environmental Laws, to remove
Hazardous Substances from the
Leased Property (or if removal is prohibited by law, to take
whatever action is required by law) promptly upon discovery;
and
d) not to discharge or authorize the discharge of anything
(including Permitted Hazardous
Substances) from the Leased Property into groundwater or
surface water that would require any permit under applicable
Environmental Laws, other than storm water runoff.
If Tenant's failure to cure any breach of the covenants
listed above in this subparagraph (i) continues beyond the
Environmental Cure Period (as defined below), Landlord may, in
addition to any other
remedies available to it, after notifying Tenant of the
remediation efforts Landlord believes are needed, cause the
Leased Property to be freed from all Hazardous Substances (or
if removal is prohibited by law, to take whatever action is
required by law), and the cost of the removal shall be a
demand obligation owing
by Tenant to Landlord. Further, subject to the provisions of
subparagraph 11.(c) below, Tenant agrees to indemnify Landlord
against all Losses incurred by or asserted or proven against
Landlord in connection therewith. As used in this
subparagraph, "Environmental Cure Period" means the period
ending on the
earlier of: (1) one hundred and eighty days (180) after Tenant
is notified of the breach which must be cured within such
period, or such longer period as is reasonably required for
any cure that Tenant pursues with diligence pursuant to and in
accordance with an Approved Plan (as defined below), (2) the
date any writ or order is issued for the levy or sale of any
property owned by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of
its directors, officers or employees because of the breach
which must be cured within such period, (3) the end of the
Term. As used in this subparagraph, an "Approved Plan" means
a plan of remediation of a violation of Environmental Laws for
which Tenant
has obtained, within one hundred and eighty days (180) after
Tenant is notified of the applicable breach of the covenants
listed above in this subparagraph (i), the written approval of
the governmental authority with primary jurisdiction over the
violation and with respect to which no other governmental
authority asserting jurisdiction has claimed such plan is
inadequate.
(ii) Environmental Inspections and Reviews. Landlord reserves
the right to retain an independent
professional consultant to review any report prepared by
Tenant or to conduct Landlord's own investigation to confirm
whether Hazardous Substances Activities or the discharge of
anything into groundwater or surface water has occurred in
violation of the preceding subparagraph (i), but Landlord's
right to
reimbursement for the fees of such consultant shall be limited
to the following circumstances: (1) an Event of Default shall
have occurred; (2) Landlord shall have retained the consultant
to establish the condition of the Leased Property just prior
to any conveyance thereof pursuant to the Purchase Agreement
or just prior to the expiration of this Lease; (3) Landlord
shall have retained the consultant to satisfy any regulatory
requirements applicable to Landlord or its Affiliates; or (4)
Landlord shall have retained the consultant because Landlord
has been notified of a violation of Environmental Laws
concerning the Leased Property
or Landlord otherwise reasonably believes that Tenant has not
complied with the preceding subparagraph (i). Tenant grants
to Landlord and to Landlord's agents, employees, consultants
and contractors the right during reasonable business hours and
after reasonable notice to enter upon the Leased Property to
inspect the Leased Property and to perform such tests as are
reasonably necessary or appropriate to conduct a review or
investigation of Hazardous Substances on, or any discharge
into groundwater or surface water from, the Leased Property.
Without limiting the generality of the foregoing, Tenant
agrees that Landlord will have the same right, power and
authority to enter and inspect the Leased Property as is
granted to a secured lender under Section 2929.5 of the
California Civil Code. Tenant shall promptly reimburse
Landlord for the cost of any such inspections and tests, but
only when the inspections and tests are (1) ordered by
Landlord after an Event of Default; (2) ordered by Landlord to
establish the condition of the Leased Property just prior to
any conveyance thereof pursuant to the Purchase Agreement or
just prior to the expiration of this Lease; (3) ordered by
Landlord to satisfy any regulatory requirements applicable to
Landlord or its Affiliates; or (4) ordered because Landlord
has been notified of a violation of Environmental Laws
concerning the Leased Property or Landlord otherwise
reasonably believes that
Tenant has not complied with the preceding subparagraph (i).
(iii) Notice of Environmental Problems. Tenant shall
immediately advise Landlord of (i) any discovery of
any event or circumstance which would render any of the
representations contained in subparagraph 8.(e) inaccurate in
any material respect if made at the time of such discovery,
(ii) any remedial action taken by Tenant in response to any
(A) discovery of any Hazardous Substances other than Permitted
Hazardous Substances on, under or about the Leased Property or
(B) any claim for damages resulting from Hazardous Substance
Activities, (iii) Tenant's discovery of any occurrence or
condition on any real property adjoining
or in the vicinity of the Leased Property which could cause
the Leased Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions
under Environmental Laws, or (iv) any investigation or inquiry
affecting the Leased Property by any governmental authority in
connection
with any Environmental Laws. In such event, Tenant shall
deliver to Landlord within thirty (30) days after Landlord's
request, a preliminary written environmental plan setting
forth a general description of the action that Tenant proposes
to take with respect thereto, if any, to bring the Leased
Property into compliance with Environmental Laws or to correct
any breach by Tenant of the covenants listed above in
subparagraph (i), including, without limitation, any proposed
corrective work, the estimated cost and time of completion,
the name of the contractor and a copy of the construction
contract, if any, and such additional data, instruments,
documents, agreements or other materials or information as
Landlord may reasonably request.
(cc) Affirmative Financial Covenants.
(i) Quick Ratio. Tenant shall maintain a ratio of (A) Quick
Assets of Tenant and its Subsidiaries (determined on a
consolidated basis) to (B) the sum of Current Liabilities of
Tenant and its Subsidiaries (determined on a consolidated
basis), of not less than 1.00 to 1.00. As used in this
subparagraph 8.(ac), "Quick Assets" means the sum (without
duplication of any item) of the Collateral held and pledged
under the Pledge Agreement, plus unencumbered cash, plus
unencumbered short term cash investments, plus
other unencumbered marketable securities which are classified
as short term investments according to GAAP, plus the fair
market value of unencumbered Long-Term Investments, plus
unencumbered current net accounts receivable. For purposes of
determining Quick Assets, assets will be deemed to be
"unencumbered" if they are actually unencumbered or if they
are encumbered only by Liens, from which,
at the time of the applicable determination of Quick Assets,
Tenant is entitled to a release of such assets upon no more
than ninety days' notice, without any payment (other than the
payment of ministerial fees
and costs), without subjecting other assets to any Lien and
without otherwise satisfying any condition that is beyond
Tenant's control. As used herein "Long-Term Investments"
means those investments described
below (to the extent that they are not classified as short
term investments in accordance with GAAP), provided that such
investments shall have maturities of not longer than two
years, and shall be rated not less than A- by Standard &
Poor's Corporation or less than A by Xxxxx'x Investors
Service, Inc.:
(1) Securities issued or fully guaranteed
or fully insured by the United States government or any agency
thereof and backed by the full faith and credit of the United
States;
(2) Certificates of deposit, time deposits,
eurodollar time deposits, repurchase agreements, or banker's
acceptances that are issued by either one of the 50 largest
(in assets) banks in the United States or by one of the 100
largest (in assets) banks in the world; and
(3) Notes and municipal bonds.
As used in this subparagraph 8.(ac), "Current
Liabilities" means, with respect to any Person, all
liabilities of such Person treated as current liabilities in
accordance with GAAP, including without
limitation (a) all obligations payable on demand or within one
year after the date in which the determination is made and (b)
installment and sinking fund payments required to be made
within one year after the date
on which determination is made, but excluding all such
liabilities or obligations which are renewable or extendable
at the option of such Person to a date more than one year from
the date of determination.
(ii) Maximum Senior Debt to Capitalization. Throughout the
Term Tenant shall maintain a ratio of Senior Debt to
Capitalization of not more than 0.35 to 1.00. As used in this
subparagraph 8.(ac):
"Senior Debt" means the Debt of Tenant and its Subsidiaries
(determined on a
consolidated basis), minus the aggregate principal amount of
the Subordinated Debt.
"Capitalization" means the sum of the Debt of Tenant
and its Subsidiaries (determined on a consolidated basis),
including the aggregate principal amount of the Subordinated
Debt, plus Consolidated Tangible Net Worth of Tenant and its
Subsidiaries (determined on a consolidated
basis).
"Subordinated Debt" means the unsecured Debt of
Tenant in respect of the
$110,000,000 aggregate principal amount at maturity of 10
1/14% Convertible Subordinated Notes due 2001 issued pursuant
to the Indenture. However, such unsecured Debt shall be
included in Subordinated Debt for purposes hereof only to the
extent that it remains expressly subordinated to the payment
and performance obligations of Tenant in transactions of the
type and structure contemplated by this Lease and the Purchase
Agreement.
"Consolidated Tangible Net Worth" means, at any date of
determination thereof, the excess of consolidated total assets
on such date over consolidated total liabilities on such date;
provided, however, that Intangible Assets on such date shall
be excluded from any determination of consolidated total
assets on such date.
"Intangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of
Tenant and its consolidated Subsidiaries that are properly
classified as "intangible assets" in accordance with GAAP and,
in any event, shall include, without limitation, goodwill,
patents, trade names, trademarks, copyrights, franchises,
experimental expense, organization expense, unamortized debt
discount and expense, and deferred charges other than prepaid
insurance and prepaid taxes and current deferred taxes which
are classified on the balance sheet of Tenant and its
consolidated Subsidiaries as a current asset in accordance
with GAAP and in which classification Tenant's independent
public accountants concur.
"Indenture" means the Indenture dated as of November 1,
1994 by and between Tenant and the First National Bank of
Boston, as trustee.
(iii) Minimum Tangible Net Worth. Tenant shall not permit
its Consolidated Tangible Net Worth, on a consolidated basis,
at the end of any fiscal quarter to be less than the sum of:
(A) eighty percent (80%) of Consolidated Tangible Net Worth as
of May 31, 1996; plus (B) fifty percent (50%) of Tenant's net
income
(but without deducting any net losses for any period) earned
in each fiscal quarter, starting with the quarter ended August
31, 1996, and ending with the quarter which, at such time, is
the most recently ended fiscal quarter; less (C) the amount of
write-offs resulting from acquisitions after May 31, 1996,
such amount not to exceed an aggregate, cumulative amount of
$150,000,000.
(iv) Fixed Charge Ratio. Throughout the Term Tenant shall
maintain as of the last day of each fiscal quarter of Tenant a
ratio of (A) Adjusted EBIT of Tenant and its Subsidiaries
(determined on a consolidated basis) for the twelve (12) month
period ending on such date, to (B) Fixed Charges of Tenant and
its Subsidiaries (determined on a consolidated basis) for the
twelve (12) month period ending on such date, of not less than
2.00 to 1.00. As used in this clause (iv), "Adjusted EBIT"
means, for any accounting
period, net income (or net loss), plus the amounts (if any)
which, in the determination of net income (or net loss) for
such period, have been deducted for (a) gross interest
expense, (b) income tax expense (c) rent expense under leases
of property (excluding rent expense payable under any "Minor
Lease", which shall
mean a lease under which rent is less than $1,000,000 per
annum), (d) depreciation, and (e) non-recurring charges taken
in connection with the acquisition of in-process technologies,
in each case determined in accordance with GAAP. As used in
this clause (iv), "Fixed Charges" means, for any accounting
period,
the sum of (a) gross interest expense, plus (b) amortization
of principal or debt discount in respect of all Debt during
such period, plus (c) rent payable under all leases of
property during such period (excluding rent payable under any
Minor Lease), plus (d) taxes payable during such period.
(dd) Negative Covenants. Without the prior written consent
of Landlord in each case, neither Tenant nor any of its
Subsidiaries shall:
(i) Liens. Create, incur, assume or suffer to exist any
Lien, upon or with respect to any of its properties, now owned
or hereafter acquired; provided, however, that the following
shall be permitted except to the extent that they would
encumber any interest in the Leased Property in violation of
other provisions of this Lease or would encumber Collateral
covered by the Pledge Agreement:
a) Liens for taxes or assessments or other government charges
or levies if not yet due and payable
or if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained;
b) Liens that secure obligations incurred in the ordinary
course of business, that are not past due for more than thirty
(30) days (or that are being contested in good faith by
appropriate proceedings and for which appropriate reserves
have been established) and that:
(1) are imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's
and carrier's Liens, and other similar Liens; or
(2) encumber only equipment or other tangible personal
property and any proceeds thereof (including Liens created by
equipment leases) and are imposed to secure the payment of the
purchase price or other direct costs of acquiring the
equipment or other tangible personal property they encumber;
c) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than
ERISA);
d) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment
of money), leases, public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds,
or other similar obligations arising in the ordinary course of
business;
e) judgment and other similar Liens arising in connection
with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and
by appropriate proceedings;
f) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially
interfere with the occupation, use and enjoyment by Tenant or
any such Subsidiary of the property or assets encumbered
thereby in the normal course of its business or materially
impair the value of the property subject thereto;
g) Liens securing obligations of such a Subsidiary to Tenant
or to another such Subsidiary;
h) Liens incurred after the date of this Lease given to
secure the payment of the purchase price or other direct costs
incurred in connection with the acquisition, construction,
improvement or rehabilitation of assets, including Liens
existing on such assets at the time of acquisition thereof or
at the time of acquisition by Tenant or a Subsidiary of any
business entity (including a Subsidiary) then owning such
assets, whether or not such existing Liens were given to
secure the payment of
the purchase price of the assets to which they attach,
provided that (i) except in the case of Liens existing on
assets at the time of acquisition of a Subsidiary then owning
such assets, the Lien shall be created within six (6) months
of the later of the acquisition of, or the completion of the
construction or improvement in respect of, such assets and
shall attach solely to such assets, and (ii) except in the
case of Liens existing on assets at the time of acquisition of
a Subsidiary then owning such assets, at the time such Liens
are imposed, the aggregate amount remaining unpaid on all Debt
secured by Liens on such assets whether or not assumed by
Tenant or a Subsidiary shall not exceed
an amount equal to seventy-five percent (75%) of the lesser of
the total purchase price or fair market value, at the time
such Debt is incurred, of such assets;
i) existing mortgages and deeds of trust as of the date of
this Lease;
j) Liens created by the Lease Agreement dated as of July 14,
1994 between Landlord and Tenant, evidenced by a short form
dated July 15, 1994, recorded in Book N520, Page 1474 of the
Official Records of Santa Xxxxx County, California, or by the
other agreements executed in connection therewith (including
the Pledge Agreement and Custodial Agreement referenced
therein);
k) Liens created by any real property lease, or related
documents (including a separate purchase agreement), executed
after the date hereof that requires Tenant or its Subsidiaries
to purchase or cause another to purchase any interest in the
property covered thereby and thus guarantee a
minimum residual value of the property to the landlord;
provided, that the value of all such leases (other than this
lease and the lease referenced in the preceding clause) shall
not exceed an aggregate, cumulative amount of $300,000,000
(for purposes of this clause, the "value" of a lease means the
amount, determined as of the date the lease became effective,
equal to the greater of (1) the present value of rentals and
other minimum lease payments required in connection with such
lease [calculated in accordance with FASB Statement 13 and
other GAAP relevant to the determination of the whether such
lease must be accounted for as capital leases] or (2) the fair
value of the property covered thereby);
l) Liens imposed to secure Debt incurred to finance the
acquisition of property which has been leased or sold by
Tenant or one of its Subsidiaries to another Person (other
than Tenant or a Subsidiary of Tenant) pursuant to a lease or
sales agreement providing for payments sufficient to
pay such Debt in full, provided such Debt is not a general
obligation of Tenant or its Subsidiaries, but rather is
payable only from the rentals or other sums payable under the
lease or sales agreement or from the property sold or leased
thereunder;
m) Liens not otherwise permitted by this subsection 8.(ad)(i)
(and not encumbering the Leased Property or any Collateral)
which secure the payment of Debt, provided that (i) at no time
does the sum of the aggregate amount of all outstanding Debt
secured by such Liens exceed $50,000,000,
and (i) such Liens do not constitute Liens against Tenant's
interest in any material Subsidiary or blanket Liens against
all or substantially all of the inventory, receivables,
general intangibles or equipment of Tenant or of any material
Subsidiary of Tenant (for purposes of this clause, a "material
Subsidiary" means any subsidiary whose assets represent a
substantial part of the total assets of Tenant and its
Subsidiaries, determined on a consolidated basis in accordance
with
GAAP); and
n) Liens incurred in connection with any renewals, extensions
or refundings of any Debt secured by Liens described in the
other clauses of this subsection 8.(ad)(i), provided that
there is no increase in the aggregate principal amount of Debt
secured thereby from that which was outstanding as of the date
of such renewal, extension or refunding and no additional
property is encumbered.
(ii) Transactions with Affiliates. Enter into any
transactions that individually or in the aggregate are
material to Tenant (including, without limitation, the
purchase, sale or exchange of property or the rendering of any
service) with any Affiliates, except upon fair and reasonable
terms no less favorable to Tenant than would be obtained in a
comparable arm's length transaction with a Person not an
Affiliate.
(iii) Mergers; Sales of Assets.
a) Except to the extent permitted by the last sentence of
this subparagraph 8.(ad), liquidate or dissolve, or merge,
consolidate with or into, or convey, transfer, lease, or
otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired), to any Person, or
enter into any joint venture,
partnership or other combination which involves the
investment, sale, lease, loan, or other disposition of the
business or all of the assets of Tenant and its Subsidiaries
or so much thereof as, in the reasonable opinion of Landlord,
constitutes a substantial portion of such business or assets.
b) Except to the extent permitted by the last
sentence of this subparagraph 8.(ad), acquire the assets or
business of any Person, other than in the ordinary course of
Tenant's business as presently conducted.
(iv) Sale of Receivables. Sell for less than the full face
value of, or otherwise sell for consideration other than cash,
any of its notes or accounts receivable. However, this
subparagraph (iv) shall not prohibit: a) a sale of receivables
for cash at a discount which is less than fifteen percent
(15%) of the face value of all receivables then outstanding on
the books of Tenant and its consolidated Subsidiaries, if such
sale and all other discounted sales of receivables permitted
by this clause a) during the same fiscal year of Tenant do
not affect more than fifteen percent (15%) of the individual
accounts (excluding intercompany accounts) comprising the
receivables of Tenant and its Subsidiaries; b) any license or
sale of products or services in the ordinary course of
business where payment for such transactions is made by credit
card, provided that the fees and discounts incurred by the
Tenant or the Subsidiary in connection therewith shall not
exceed the normal and customary fees and discounts incurred
for general credit card transactions through major credit card
issuers; or c) the delivery and endorsement to banks in the
ordinary course of business by Tenant or any of its
Subsidiaries of promissory notes received in payment of trade
receivables, where delivery and endorsement are made prior to
the date of maturity of such promissory notes, and the
retention by such banks of normal and customary fees and
discounts therefor, provided such practice is usual and
customary in the country where such activity occurs.
(v) Change of Business. Permit any significant change in the
nature of the business of Tenant and its Subsidiaries, taken
as whole, from that presently conducted.
Notwithstanding any contrary provisions of subparagraph
8.(ad)(iii), Tenant may engage in any of the following
transactions, provided that immediately prior to and
immediately after giving effect thereto, no Default or Event
of Default exists or would exist:
(i) merge with another entity if Tenant is the
corporation surviving the merger;
(ii) enter into joint ventures;
(iii) acquire the assets or business of another Person;
or
(iv) liquidate or dissolve Subsidiaries to the extent
that such liquidations and dissolutions
would not, in the aggregate, result in a material adverse
effect on the properties, assets, operations or businesses of
Tenant and its Subsidiaries, taken as a whole.
(ee) ERISA.
(i) Each Plan is in compliance in all material respects with,
and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code
and any other applicable
Federal or state law, and as of the date hereof no event or
condition is occurring or exists which would require a notice
from Tenant under clause 8.(ae)(ii).
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after
Tenant becomes aware that, any of the following has occurred,
with respect to which the potential aggregate liability to
Tenant relating thereto is $2,000,000 or more, and such notice
shall include a statement signed by a senior financial officer
of Tenant setting forth details of the following and the
response, if any, which Tenant or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or
notice required to be filed with or given to Pension Benefit
Guaranty Corporation by Tenant
or an ERISA Affiliate with respect to any of the following or
the events or conditions leading up it): (A) the assertion, to
secure any Unfunded Benefit Liabilities, of any Lien against
the assets of Tenant, against the assets of any Plan of Tenant
or any ERISA Affiliate of Tenant or against any interest of
Landlord or Tenant in the Leased Property or the Collateral
covered by the Pledge Agreement, or (B) the taking of any
action
by the Pension Benefit Guaranty Corporation or any other
governmental authority action against Tenant to terminate any
Plan of Tenant or any ERISA Affiliate of Tenant or to cause
the appointment of a trustee or receiver to administer any
such Plan.
10. Representations, Warranties and Covenants of Landlord.
Landlord represents, warrants and covenants
as follows:
(a) Title Claims By, Through or Under Landlord. Except by a
Permitted Transfer, Landlord shall not
assign, transfer, mortgage, pledge, encumber or hypothecate
this Lease or any interest of Landlord in and to the Leased
Property during the Term without the prior written consent of
Tenant. Landlord further agrees that
if any encumbrance or title defect affecting the Leased
Property is lawfully claimed through or under Landlord,
including any judgment lien lawfully filed against Landlord,
Landlord will at its own cost and expense remove any such
encumbrance and cure any such defect; provided, however,
Landlord shall not be responsible for (i) any Permitted
Encumbrances (regardless of whether claimed through or under
Landlord) or any other encumbrances not lawfully claimed
through or under Landlord, (ii) any encumbrances or title
defects claimed by, through or under Tenant, ABN AMRO Bank
N.V. or any other Participant (other than Landlord's Parent)
which Tenant shall have approved, or (iii) any encumbrance or
title defect arising because of Landlord's compliance with
subparagraph 9.(b) or any request made by Tenant.
(b) Actions Required of the Title Holder. So long as no
Event of Default shall have occurred and be
continuing, Landlord shall take any and all action required of
Landlord by the Permitted Encumbrances or otherwise required
of Landlord by Applicable Laws or reasonably requested by
Tenant (including granting any utility easements required in
connection with construction of Improvements); provided that
(i) actions Tenant may require of Landlord under this
subparagraph shall be limited to actions that can only be
taken by Landlord as the owner of the Leased Property, as
opposed to any action that can be taken by Tenant or any third
party (and the payment of any monetary obligation shall not be
an action required of Landlord under this subparagraph unless
Landlord shall first have received funds from Tenant, in
excess of any other amounts due
from Tenant hereunder, sufficient to pay such monetary
obligations), (ii) Tenant requests the action to be taken by
Landlord (which request must be specific and in writing, if
required by Landlord at the time the request is made) and
(iii) the action to be taken will not constitute a violation
of any Applicable Laws or compromise or constitute a waiver of
Landlord's rights hereunder or under the Purchase Agreement,
the Pledge Agreement or Environmental Indemnity or otherwise
be reasonably objectionable to Landlord. Any Losses incurred
by
Landlord because of any action taken pursuant to this
subparagraph shall be covered by the indemnification set forth
in subparagraph 8.(y). Further, for purposes of such
indemnification, any action taken by Landlord will be deemed
to have been made at the request of Tenant if made pursuant to
any request of Tenant's counsel or
of any officer of Tenant (or with their knowledge, and without
their objection) in connection with the closing under the
Existing Contract.
(c) No Default or Violation. The execution, delivery and
performance of this Lease do not contravene,
result in a breach of or constitute a default under any
material contract or agreement to which Landlord is a party or
by which Landlord is bound and do not, to the knowledge of
Landlord, violate or contravene any law, order, decree, rule
or regulation to which Landlord is subject.
(d) No Suits. To Landlord's knowledge there are no judicial
or administrative actions, suits or proceedings
involving the validity, enforceability or priority of this
Lease, and to Landlord's knowledge no such suits or
proceedings are threatened.
(e) Organization. Landlord is duly incorporated and legally
existing under the laws of Delaware and is or,
if necessary, will become duly qualified to do business in the
State of California. Landlord has or will obtain, at Tenant's
expense pursuant to the other provisions of this Lease, all
requisite power and all material governmental certificates of
authority, licenses, permits, qualifications and other
documentation necessary to own and lease the Leased Property
and to perform its obligations under this Lease.
(f) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement and
the Pledge Agreement by Landlord are duly authorized, are not
in contravention of or conflict with any term or
provision of Landlord's articles of incorporation or bylaws
and do not, to Landlord's knowledge, require the consent or
approval of any governmental body or other regulatory
authority that has not heretofore been obtained or conflict
with any Applicable Laws. This Lease, the Purchase Agreement
and the Pledge Agreement are valid, binding and legally
enforceable obligations of Landlord except as such enforcement
is
affected by bankruptcy, insolvency and similar laws affecting
the rights of creditors, generally, and equitable principles
of general application; provided, Landlord makes no
representation or warranty that conditions imposed by any
state or local Applicable Laws to the purchase, ownership,
lease or operation of the Leased Property have been satisfied.
(g) Existence. Landlord will continuously maintain its
existence and, after qualifying to do business in the
State of California if Landlord has not already done so,
Landlord will continuously maintain its right to do business
in that state to the extent necessary for the performance of
Landlord's obligations hereunder.
(h) Not a Foreign Person. Landlord is not a "foreign person"
within the meaning of the Sections 1445 and
7701 of the Code (i.e., Landlord is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and
regulations promulgated thereunder), and Landlord is not
subject to withholding under California Revenue and Taxation
Code Sections 18805, 18815,
and 26131.
11. Assignment and Subletting.
(a) Consent Required. During the term of this Lease, without
the prior written consent of Landlord first
had and received, Tenant shall not assign, transfer, mortgage,
pledge or hypothecate this Lease or any interest of Tenant
hereunder and shall not sublet all or any part of the Leased
Property, by operation of law or otherwise; provided, that, so
long as no Event of Default has occurred and is continuing,
Tenant shall be entitled without the consent of Landlord to
sublet all or any portion of the space in any then completed
Improvements if:
(i) any sublease by Tenant is made expressly
subject and subordinate to the terms hereof;
(ii) no sublease has a term longer than the
remainder of the then effective term of this Lease;
(iii) the use permitted by such sublease is
expressly limited to general office use or other uses approved
in advance by Landlord as uses that will not present
extraordinary risks of uninsured environmental or other
liability; and
(iv) no more than 245,000 square feet of the
space in any completed Improvements shall be subleased without
Landlord's prior consent to any Person that is neither (A) an
Affiliate of Tenant nor (B) the operator of a business in the
subleased space that is related to the operation of Tenant's
own business (such as another venturer in a joint venture with
Tenant).
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters. Consents and approvals
of Landlord which are required by this Paragraph 10 will not
be unreasonably withheld, but Tenant
acknowledges that Landlord's withholding of such consent or
approval shall be reasonable if Landlord determines in good
faith that (1) giving the approval may increase Landlord's
risk of liability for any existing or future environmental
problem, (2) giving the approval is likely to substantially
increase Landlord's administrative burden of complying with or
monitoring Tenant's compliance with the requirements of this
Lease, or (3) any transaction for which Tenant has requested
the consent or approval would negate Tenant's representations
in this Lease regarding ERISA or cause this Lease or the other
documents referenced herein to constitute a violation of any
provision of ERISA.
(c) Consent Not a Waiver. No consent by Landlord to a sale,
assignment, transfer, mortgage, pledge or
hypothecation of this Lease or Tenant's interest hereunder,
and no assignment or subletting of the Leased Property or any
part thereof in accordance with this Lease or otherwise with
Landlord's consent, shall release Tenant from liability
hereunder; and any such consent shall apply only to the
specific transaction thereby authorized and shall not relieve
Tenant from any requirement of obtaining the prior written
consent of Landlord to any further sale, assignment, transfer,
mortgage, pledge or hypothecation of this Lease or any
interest of Tenant hereunder.
(d) Landlord's Assignment. Landlord shall have the right to
transfer, assign and convey, in whole or in
part, the Leased Property and any and all of its rights under
this Lease by any conveyance that constitutes a Permitted
Transfer. (However, any Permitted Transfer shall be subject
to all of the provisions of each and every agreement
concerning the Leased Property then existing between Landlord
and Tenant, including without limitation this Lease and the
Purchase Agreement.) If Landlord sells or otherwise transfers
the Leased
Property and assigns its rights under this Lease, the Purchase
Agreement and the Pledge Agreement pursuant to
a Permitted Transfer, then to the extent Landlord's successor
in interest confirms its liability for the obligations imposed
upon Landlord by this Lease, the Purchase Agreement and the
Pledge Agreement on and subject to the
express terms and conditions set out herein and therein, the
original Landlord shall thereby be released from any
obligations thereafter arising under this Lease, the Purchase
Agreement and the Pledge Agreement, and Tenant will look
solely to each successor in interest of Landlord for
performance of such obligations. However, notwithstanding
anything to the contrary herein contained, if withholding
taxes are imposed on the rents and other amounts payable to
Landlord hereunder because of Landlord's assignment of this
Lease to any
citizen of, or any corporation or other entity formed under
the laws of, a country other than the United States, Tenant
shall not be required to compensate such assignee for the
withholding tax. Further, during the Term and so long as no
Event of Default has occurred and is continuing, Landlord
shall not decrease the percentage
of Base Rent it (and/or its Affiliates) is entitled to receive
and retain under the Participation Agreement below ten percent
(10%) without Tenant's consent, which consent will not be
unreasonably withheld.
12. Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume liability for
and to pay, indemnify, defend, and hold
harmless each and every Indemnified Party from and against any
and all Environmental Losses, subject only to the provisions
of subparagraph 11.(c) below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies Tenant of any claim,
demand, action, administrative or legal
proceeding, investigation or allegation as to which the
indemnity provided for in this Paragraph 11 applies, Tenant
shall assume on behalf of the Indemnified Party and conduct
with due diligence and in good faith
the investigation and defense thereof and the response thereto
with counsel selected by Tenant but reasonably satisfactory to
the Indemnified Party; provided, that the Indemnified Party
shall have the right to be represented by advisory counsel of
its own selection and at its own expense; and provided
further, that if any such claim, demand, action, proceeding,
investigation or allegation involves both Tenant and the
Indemnified Party and the Indemnified Party shall have been
advised in writing by counsel that there may
be legal defenses available to it which are inconsistent with
those available to Tenant, then the Indemnified Party shall
have the right to select separate counsel to participate in
the investigation and defense of and response to such claim,
demand, action, proceeding, investigation or allegation on its
own behalf, and Tenant shall pay or reimburse the Indemnified
Party for all Attorney's Fees incurred by the Indemnified
Party because of the selection of such separate counsel.
(ii) If any claim, demand, action, proceeding, investigation
or allegation arises as to which the indemnity
provided for in this Paragraph 11 applies, and Tenant fails to
assume promptly (and in any event within fifteen (15) days
after being notified of the claim, demand, action, proceeding,
investigation or allegation) the defense of the Indemnified
Party, then the Indemnified Party may contest (or settle, with
the prior written consent of Tenant, which consent will not be
unreasonably withheld) the claim, demand, action, proceeding,
investigation or allegation at Tenant's expense using counsel
selected by the Indemnified Party; provided, that if any such
failure by Tenant continues for thirty (30) days or more after
Tenant is notified thereof, no such contest need be made by
the Indemnified Party and settlement or full payment of any
claim may be made by the Indemnified Party without Tenant's
consent and without releasing Tenant from any obligations to
the Indemnified Party under this Paragraph 11 so long as, in
the written opinion of reputable counsel to the Indemnified
Party, the settlement or payment in full is clearly advisable.
(c) Notice of Environmental Losses. If an Indemnified Party
receives a written notice of Environmental
Losses that such Indemnified Party believes are covered by
this Paragraph 11, then such Indemnified Party will be
expected to promptly furnish a copy of such notice to Tenant.
The failure to so provide a copy of the notice to Tenant shall
not excuse Tenant from its obligations under this Paragraph
11; provided, that if Tenant is unaware of the matters
described in the notice and such failure renders unavailable
defenses that Tenant might otherwise assert, or precludes
actions that Tenant might otherwise take, to minimize its
obligations hereunder, then Tenant shall be excused from its
obligation to indemnify such Indemnified Party (and any
Affiliate of such Indemnified Party) against Environmental
Losses, if any, which would not have been incurred but for
such failure. For example, if Landlord fails to provide
Tenant with a copy of a notice of an obligation covered by the
indemnity set out in subparagraph 11.(a) and Tenant is not
otherwise already aware of such obligation, and if as a result
of such failure Landlord becomes liable for penalties and
interest covered by the indemnity in excess of the penalties
and interest that would have accrued if Tenant had been
promptly provided with a copy of the notice, then Tenant will
be excused from any obligation to Landlord (or any Affiliate
of Landlord) to pay the excess.
(d) Rights Cumulative. The rights of each Indemnified Party
under this Paragraph 11 shall be in addition
to any other rights and remedies of such Indemnified Party
against Tenant under the other provisions of this Lease or
under any other document or instrument now or hereafter
executed by Tenant, or at law or in equity
(including, without limitation, any right of reimbursement or
contribution pursuant to CERCLA).
(e) Survival of the Indemnity. Tenant's obligations under
this Paragraph 11 shall survive the termination or expiration
of this Lease. All obligations of Tenant under this Paragraph
11 shall be payable upon demand, and any amount due upon
demand to any Indemnified Party by Tenant which is not paid
shall bear interest
from the date of such demand at a floating interest rate equal
to the Default Rate, but in no event in excess of the maximum
rate permitted by law.
13. Landlord's Right of Access.
(a) Landlord and Landlord's representatives may enter the
Leased Property, after five (5) Business Days advance written
notice to Tenant (except in the event of an emergency, when no
advance notice will be required), for the purpose of making
inspections or performing any work Landlord is authorized to
undertake
by the next subparagraph. So long as Tenant remains in
possession of the Leased Property, Landlord or Landlord's
representative will, before making any such inspection or
performing any such work on the Leased Property, if then
requested to do so by Tenant to maintain Tenant's security:
(i) sign in at Tenant's security or information desk if Tenant
has such a desk on the premises, (ii) wear a visitor's badge
or other reasonable identification provided by Tenant when
Landlord or Landlord's representative first arrives at the
Leased Property, (iii) permit an employee of Tenant to observe
such inspection or work, and (iv) comply with other similar
reasonable nondiscriminatory security requirements of Tenant
that do not, individually or in the aggregate, interfere with
or delay inspections or work of Landlord authorized by this
Lease.
(b) If Tenant fails to perform any act or to take any action
which hereunder Tenant is required to perform or take, or to
pay any money which hereunder Tenant is required to pay, and
if such failure or action constitutes an Event of Default or
renders Landlord or any director, officer, employee or
Affiliate of Landlord at risk of criminal prosecution or
renders Landlord's interest in the Leased Property or any part
thereof at risk of forfeiture by forced sale or otherwise,
then in addition to any other remedies specified herein or
otherwise available, Landlord may, in Tenant's name or in
Landlord's own name, perform or cause to be performed such
act or take such action or pay such money. Any expenses so
incurred by Landlord, and any money so paid by Landlord, shall
be a demand obligation owing by Tenant to Landlord. Further,
Landlord, upon making such payment, shall be subrogated to all
of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any
duty upon the part of Landlord to do any work which under any
provision of this Lease Tenant may be required to perform, and
the performance thereof by Landlord shall not constitute a
waiver of Tenant's default. Landlord may during the progress
of any such work permitted by Landlord hereunder on or in the
Leased Property keep and store upon the Leased Property all
necessary materials, tools, and equipment. Landlord shall not
in any event be liable for inconvenience, annoyance,
disturbance, loss of business, or other damage to Tenant or
the subtenants of Tenant by reason of making such repairs or
the performance of any such work on or in the Leased Property,
or on account of bringing materials, supplies and equipment
into or through the Leased Property during the course of such
work (except for liability in connection with death or injury
or damage to the property of third parties caused by the
Active Negligence, gross negligence or wilful misconduct of
Landlord or its officers, employees, or agents in connection
therewith), and the obligations of Tenant under this Lease
shall not thereby be affected in any manner.
14. Events of Default.
(a) Definition of Event of Default. Each of the following
events shall be deemed to be an "Event of Default" by Tenant
under this Lease:
(i) Tenant shall fail to pay when due any installment of Rent
due hereunder and such failure shall continue for three (3)
Business Days after Tenant is notified thereof.
(ii) Tenant shall fail to cause any representation or
warranty of Tenant contained herein that is false or
misleading in any material respect when made to be made true
and not misleading (other than as described
in the other clauses of this subparagraph 13.(a)), or Tenant
shall fail to comply with any term, provision or covenant of
this Lease (other than as described in the other clauses of
this subparagraph 13.(a)), and in either case shall not cure
such failure prior to the earlier of (A) thirty (30) days
after written notice thereof is sent to Tenant or (B) the date
any writ or order is issued for the levy or sale of any
property owned by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of
its directors, officers or employees because of such failure;
provided, however, that so long as no such writ or order is
issued and no such criminal action is instituted, if such
failure is susceptible of cure but cannot with reasonable
diligence be cured within such thirty day period, and if
Tenant shall promptly have commenced
to cure the same and shall thereafter prosecute the curing
thereof with reasonable diligence, the period within which
such failure may be cured shall be extended for such further
period (not to exceed an additional sixty (60) days) as shall
be necessary for the curing thereof with reasonable diligence.
(iii) Tenant shall fail to comply with any term, provision or
condition of the Purchase Agreement or the
Pledge Agreement and, if the Purchase Agreement or Pledge
Agreement expressly provides a time within which Tenant may
cure such failure, Tenant shall not cure the failure within
such time.
(iv) Tenant shall abandon the Leased Property.
(v) Tenant shall fail to make any payment or payments of
principal, premium or interest, on any Debt of Tenant
described in the next sentence when due (taking into
consideration the time Tenant may have to cure such failure,
if any, under the documents governing such Debt). As used in
this clause 13.(a)(v), "Debt" shall mean only a Debt of Tenant
now existing or arising in the future, (A) payable to Landlord
or any Participant or any Affiliate of Landlord or any
Participant, the outstanding balance of which has become due
by reason of acceleration or maturity, or (B) payable to any
Person, with respect to which $5,000,000 or more is actually
due and payable because of acceleration or otherwise.
(vi) Tenant or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against Tenant or any of
its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of thirty (30)
consecutive days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against, or
the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its
property) shall occur; or Tenant or any of its Subsidiaries
shall take any corporate action to authorize
any of the actions set forth above in this clause (vi).
(vii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary
decreeing the dissolution of Tenant or such Subsidiary and
such order, judgment or decree remains unstayed and in effect
for more than sixty (60) days.
(viii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing a
split-up of Tenant or such Subsidiary which requires the
divestiture of assets representing a
substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the
consolidated assets of Tenant and its Subsidiaries (determined
in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary,
which shall have contributed a substantial part of the
consolidated net income of Tenant and its Subsidiaries
(determined in accordance with GAAP) for any
of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for
more than sixty (60) days.
(ix) A final judgment or order for the payment of money in an
amount (not covered by insurance) which exceeds $3,000,000
shall be rendered against Tenant or any of its Subsidiaries
and within sixty (60) days after the entry thereof, such
judgment or order is not discharged or execution thereof
stayed pending appeal, or within thirty (30) days after the
expiration of any such stay, such judgment is not discharged.
(x) Any ERISA Termination Event that Landlord determines
might constitute grounds for the termination of
any Plan or for the appointment by the appropriate United
States district court of a trustee to administer any Plan
shall have occurred and be continuing thirty (30) days after
written notice to such effect shall have been given to Tenant
by Landlord, or any Plan shall be terminated, or a trustee
shall be appointed by an appropriate United States district
court to administer any Plan, or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any Plan
or to appoint a trustee to administer any Plan.
(xi) A Change of Control Event not approved in advance by
Landlord shall occur.
(xii) The subordination provisions of the Indenture (as
defined in subparagraph 8.(ac)(ii) of this Lease) or any other
agreement or instrument governing the Subordinated Debt (as
defined in subparagraph 8.(ac)(ii)
of this Lease) shall be for any reason revoked or invalidated,
or otherwise cease to be in full force and effect; or the
Tenant or any of its Subsidiaries shall contest in any manner
the validity or enforceability of such subordination
provisions or shall deny that it has any further liability or
obligation thereunder; or the obligations of Tenant hereunder
or under the Purchase Agreement shall be for any reason
subordinated to
such Subordinated Debt or shall not have the priority over
such Subordinated Debt as contemplated by this Lease or by the
Indenture or by such subordination provisions.
Notwithstanding the foregoing, any Default that could become
an Event of Default under clause 13.(a)(ii) may be cured
within the earlier of the periods described in clauses (A) and
(B) thereof by Tenant's delivery to Landlord of a written
notice irrevocably exercising Tenant's option under the
Purchase Agreement to purchase
Landlord's interest in the Leased Property and designating as
the Designated Sale Date the next following date which is a
Base Rent Date and which is at least ten (10) days after the
date of such notice; provided, however, Tenant must, as a
condition to the effectiveness of its cure, on the date so
designated as the Designated Sale Date tender to Landlord the
full purchase price required by the Purchase Agreement and all
Rent and all other amounts then due or accrued and unpaid
hereunder (including reimbursement for any costs incurred by
Landlord in connection with the applicable Default hereunder,
regardless of whether Landlord shall have been reimbursed for
such costs in whole or in part by any Participants) and Tenant
must also furnish written confirmation that all indemnities
set forth herein (including specifically, but without
limitation, the general indemnity set forth in subparagraph
8.(y) and the environmental indemnity set forth in Paragraph
11 shall survive the payment of such amounts by Tenant to
Landlord and the conveyance of Landlord's interest in the
Leased Property to Tenant.
(b) Remedies. Upon the occurrence of an Event of Default
which is not cured within any applicable period
expressly permitted by subparagraph 13.(a), at Landlord's
option and without limiting Landlord in the exercise of any
other right or remedy Landlord may have on account of such
default, and without any further demand or notice except as
expressly described in this subparagraph 13.(b):
(i) By notice to Tenant, Landlord may terminate Tenant's
right to possession of the Leased Property. A notice given in
connection with unlawful detainer proceedings specifying a
time within which to cure a default shall terminate Tenant's
right to possession if Tenant fails to cure the default within
the time specified in the notice.
(ii) Upon termination of Tenant's right to possession and
without further demand or notice, Landlord may re-enter the
Leased Property and take possession of all improvements,
additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property in the
Leased Property may
be removed and stored in a warehouse or elsewhere at the
expense and risk of and for the account of Tenant.
(iii) Upon termination of Tenant's right to possession, this
Lease shall terminate and Landlord may recover from Tenant:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of
termination;
b) The worth at the time of award of the amount by which the
unpaid Rent which would have
been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have
been reasonably avoided;
c) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the
scheduled Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably
avoided; and
d) Any other amount necessary to compensate Landlord for all
the detriment proximately caused
by Tenant's failure to perform Tenant's obligations under this
Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, the
costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of
the Leased Property, removing persons or property therefrom,
placing the Leased Property in good order, condition, and
repair, preparing and altering the Leased Property for
reletting, all other costs and expenses of reletting, and any
loss incurred by Landlord as a result of Tenant's failure to
perform Tenant's obligations under the Purchase Agreement.
The "worth at the time of award" of the amounts
referred to in subparagraph 13.(b)(iii)a) and subparagraph
13.(b)(iii)b) shall be computed by allowing interest at ten
percent (10%) per annum or such other rate as may be the
maximum interest rate then permitted to be
charged under California law at the time of computation. The
"worth at the time of award" of the amount referred to in
subparagraph 13.(b)(iii)c) shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to
time by applicable California law.
(iv) The Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may
continue lease in force even after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable
limitations). Accordingly, even though Tenant has breached
this Lease and abandoned the Leased Property, this Lease shall
continue in effect for
so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all of Landlord's rights
and remedies under this Lease, including the right to recover
the Rent as it becomes due under this Lease. Tenant's right
to possession shall not be deemed to have been terminated by
Landlord except pursuant to subparagraph 13.(b)(i) hereof.
The following shall not constitute a termination of Tenant's
right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Leased Property;
b) The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest
under this Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or
assignment by Tenant.
(c) Enforceability. This Paragraph shall be enforceable to
the maximum extent not prohibited by
Applicable Law, and the unenforceability of any provision in
this Paragraph shall not render any other provision
unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred
upon or reserved to Landlord is intended
to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now
or hereafter existing under Applicable Law or in equity. In
addition to other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by Applicable Law,
to injunctive relief in case of the violation, or attempted or
threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease to be performed by
Tenant, or to a decree compelling performance of any of the
other covenants, agreements, conditions or provisions of this
Lease to be performed by Tenant, or to any other remedy
allowed to Landlord under Applicable Law or in equity.
Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain in proceedings for
bankruptcy or insolvency of Tenant by reason of the
termination of this Lease, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, the damages are
to be proved, whether or not the amount be greater, equal to,
or less than the amount of the loss or damages referred to
above. Without limiting the generality of the foregoing,
nothing contained herein shall modify, limit or impair any of
the rights and remedies of Landlord under the Purchase
Agreement, the Pledge Agreement or the Environmental
Indemnity.
(e) Waiver by Tenant. To the extent permitted by law, Tenant
hereby waives and surrenders for itself and
all claiming by, through and under it, including creditors of
all kinds, (i) any right and privilege which it or any of them
may have under any present or future constitution, statute or
rule of law to have a continuance of this Lease for the term
hereby demised after termination of Tenant's right of
occupancy by order or judgment of
any court or by any legal process or writ, or under the terms
of this Lease, or after the termination of this Lease as
herein provided, and (ii) the benefits of any present or
future constitution, or statute or rule of law which exempts
property from liability for debt or for distress for rent, and
(iii) the provisions of law relating to notice and/or delay in
levy of execution in case of eviction of a lessee for
nonpayment of rent.
(f) No Implied Waiver. The failure of Landlord to insist at
any time upon the strict performance of any
covenant or agreement or to exercise any option, right, power
or remedy contained in this Lease shall not be construed as a
waiver or a relinquishment thereof for the future. The waiver
of or redress for any violation by Tenant of any term,
covenant, agreement or condition contained in this Lease shall
not prevent a similar subsequent act from constituting a
violation. Any express waiver shall affect only the term or
condition specified in such waiver and only for the time and
in the manner specifically stated therein. A receipt by
Landlord of any Base Rent or other payment hereunder with
knowledge of the breach of any covenant or
agreement contained in this Lease shall not be deemed a waiver
of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed
in writing and signed by Landlord.
15. Default by Landlord. If Landlord should default in the
performance of any of its obligations under this
Lease, Landlord shall have the time reasonably required, but
in no event less than thirty (30) days, to cure such default
after receipt of written notice from Tenant specifying such
default and specifying what action Tenant believes is
necessary to cure the default. If Tenant prevails in any
litigation brought against Landlord because of Landlord's
failure to cure a default within the time required by the
preceding sentence, then Tenant shall be entitled to an award
against Landlord for the damages proximately caused to Tenant
by such default.
16. Quiet Enjoyment. Provided no Event of Default has
occurred and is continuing, Landlord shall not
during the Term disturb Tenant's peaceable and quiet enjoyment
of the Leased Property; however, such
enjoyment shall be subject to the terms, provisions,
covenants, agreements and conditions of this Lease and the
Permitted Encumbrances and any other claims or encumbrances
not lawfully made through or under Landlord,
to which this Lease is subject and subordinate as hereinabove
set forth. Any breach by Landlord of the
foregoing covenant of quiet enjoyment shall, subject to the
other provisions of this Lease, render Landlord liable to
Tenant for any monetary damages proximately caused thereby,
but as more specifically provided in Paragraph 5 above, no
such breach shall entitle Tenant to terminate this Lease or
excuse Tenant from its obligation to pay Base Rent and other
amounts hereunder.
17. Surrender Upon Termination. Unless Tenant or an
Applicable Purchaser purchases Landlord's entire
interest in the Leased Property pursuant to the terms of the
Purchase Agreement, Tenant shall, upon the termination of
Tenant's right to occupancy, surrender to Landlord the Leased
Property, including any buildings, alterations, improvements,
replacements or additions constructed by Tenant, with all
fixtures and furnishings included in the Leased Property, but
not including movable furniture and movable personal property
not covered by this Lease, free of all Hazardous Substances
(including Permitted Hazardous
Substances) and tenancies and, to the extent required by
Landlord, with all Improvements in the same condition as of
the date hereof, excepting only (i) ordinary wear and tear
(provided that the Leased Property shall have been maintained
as required by the other provisions hereof) and (ii)
alterations and additions which are expressly permitted by the
terms of this Lease and which have been completed by Tenant in
a good and workmanlike manner in accordance with all
Applicable Laws. Any movable furniture or movable personal
property belonging to Tenant or any party claiming under
Tenant, if not removed at the time of such termination and if
Landlord shall so elect, shall be deemed abandoned and become
the property of Landlord without any payment or offset
therefor. If Landlord shall not so elect, Landlord may remove
such property
from the Leased Property and store it at Tenant's risk and
expense. Tenant shall bear the expense of repairing any
damage to the Leased Property caused by such removal by
Landlord or Tenant.
18. Holding Over by Tenant. Should Tenant not purchase
Landlord's right, title and interest in the Leased
Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Leased Property after the
termination of this Lease without Landlord's written consent,
whether such termination occurs by lapse of time or otherwise,
such holding over shall constitute and be construed as a
tenancy from day to day only, at a daily Base Rent equal to:
(i) the unpaid Purchase Price on the day in question, times
(ii) the Holdover Rate (as defined below) for such day,
divided by (iii) 360; subject, however, to all of the terms,
provisions, covenants and agreements on the part of Tenant
hereunder. No payments of money by Tenant to Landlord after
the termination of this Lease shall reinstate, continue or
extend the Term of this Lease and no extension of this Lease
after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both
Landlord and Tenant; provided, however, following any breach
by Landlord of its obligations
to tender a deed and other documents on the Designated Sale
Date as provided in the Purchase Agreement,
Tenant may at its option continue its possession and use of
the Leased Property pursuant to this Lease, as if the Term had
been extended, for a period not to exceed 180 days after the
Designated Sale Date or such longer
time as may be proscribed by Applicable Law.
As used herein, the "Holdover Rate" means:
(1) for any day prior to the date on which Landlord
tenders a deed and other documents as required by the Purchase
Agreement (or is excused from its obligation to tender by
Tenant's breach or anticipatory repudiation of the Purchase
Agreement), a rate equal to the Fed Funds Rate on that day
plus
one hundred basis points;
(2) for any day on which or within ninety days after
Landlord tenders a deed and other documents as required by the
Purchase Agreement (or is excused from its obligation to
tender by Tenant's breach or anticipatory repudiation of the
Purchase Agreement), the per annum Prime Rate in effect for
such day; and
(3) for any day after the ninety days described in
the preceding clause, a rate which is three percent (3%) above
the per annum Prime Rate.
19. Miscellaneous.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending,
mailing or delivery of any notice or with reference to the
making of any payment by Tenant to Landlord, shall be deemed
to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to Landlord
hereunder shall be paid to Landlord in immediately available
funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 000000000
Reference: 3COM (Phase I)
or at such other place and in such other manner as Landlord
may designate in a notice to Tenant
(provided Landlord will not unreasonably designate a method of
payment other than wire transfer). Time
is of the essence as to all payments and other obligations of
Tenant under this Lease.
(ii) All notices, demands and other communications to be made
hereunder to the parties hereto shall be in writing (at the
addresses set forth below, or in the case of communications to
Participants, at the addresses for notice established by the
Participation Agreement) and shall be given by any of the
following means: (A) personal service, with proof of delivery
or attempted delivery retained; (B) electronic communication,
whether by telex, telegram or telecopying (if confirmed in
writing sent by United States first class mail, return receipt
requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by
notice to the other parties given in the same manner as
provided above. Any notice or other communication sent
pursuant to clause (A) or (C) hereof shall be deemed received
(whether or not actually received) upon first attempted
delivery at the proper notice address on any Business Day
between 9:00 A.M. and 5:00 P.M., and any notice or other
communication sent pursuant to clause (B)
hereof shall be deemed received upon dispatch by electronic
means.
Address of Landlord:
BNP Leasing Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx
Telecopy: (000) 000-0000
With a copy to:
Banque Nationale de Paris,
San Francisco 000 Xxxxxxxxxx
Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxx
or Will Xx Xxxxxx Telecopy:
(000) 000-0000
And with a copy to:
Xxxxx Xxxxxx
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Address of Tenant:
3Com Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Legal Dept.
Telecopy: (000) 000-0000
With copies to:
3Com Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Real Estate Dept.
Telecopy: (000) 000-0000; and
3Com Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Treasury Dept.
Telecopy: (000) 000-0000; and
Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx,
Esq. Telecopy: (000) 000-0000
(b) Severability. If any term or provision of this Lease or
the application thereof shall to any extent be
held by a court of competent jurisdiction to be invalid and
unenforceable, the remainder of this Lease, or the application
of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
(c) No Merger. There shall be no merger of this Lease or of
the leasehold estate hereby created with the
fee estate in the Leased Property or any part thereof by
reason of the fact that the same person may acquire or
hold, directly or indirectly, this Lease or the leasehold
estate hereby created or any interest in this Lease or in such
leasehold estate as well as the fee estate in the Leased
Property or any interest in such fee estate, unless all
Persons with an interest in the Leased Property that would be
adversely affected by any such merger
specifically agree in writing that such a merger shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S
AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT
TO THE LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN,
AND NO RIGHTS, EASEMENTS OR LICENSES ARE ACQUIRED BY TENANT BY
IMPLICATION OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH IN THE
PROVISIONS OF THIS LEASE, THE PURCHASE AGREEMENT AND THE
PLEDGE AGREEMENT.
(e) Entire Agreement. This Lease and the instruments
referred to herein supersede any prior negotiations
and agreements between the parties concerning the Leased
Property and no amendment or modification of this Lease shall
be binding or valid unless expressed in a writing executed by
both parties hereto.
(f) Binding Effect. All of the covenants, agreements, terms
and conditions to be observed and performed
by the parties hereto shall be applicable to and binding upon
their respective successors and, to the extent assignment is
permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to all
obligations of Tenant and all notices required
of Tenant under this Lease, but this paragraph shall not limit
Tenant's opportunity to prevent an Event of Default by curing
any breach within the cure period (if any) applicable under
subparagraph 13.(a).
(h) Termination of Prior Rights. Without limiting the rights
and obligations of Tenant under this Lease,
Tenant acknowledges that any and all rights or interest of
Tenant in and to the Land, the improvements to the Land and to
any other property included in the Leased Property (except
under this Lease and the Purchase Agreement) are hereby
superseded. Tenant quitclaims unto Landlord any rights or
interests Tenant has in or to the Land, the improvements to
the Land and to any other property included in the Leased
Property other than the rights and interests created by this
Lease and the Purchase Agreement.
(i) Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the
State of California.
(j) Waiver of a Jury Trial. LANDLORD AND TENANT EACH HEREBY
WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING
OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS BETWEEN
THEM RELATING TO
THIS LEASE OR THE LEASED PROPERTY. The scope of this waiver
is intended to be all-encompassing of
any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including,
without limitation, contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims.
Tenant and Landlord each acknowledge that this waiver is a
material inducement to enter into a business relationship,
that each has already relied on the waiver in entering into
this Lease and the other
documents referred to herein, and that each will continue to
rely on the waiver in their related future dealings. Tenant
and Landlord each further warrants and represents that it has
reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
LEASE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
LEASE OR THE LEASED PROPERTY.
In the event of litigation, this Lease may be filed as a
written consent to a trial by the court.
(k) Not a Partnership, Etc. NOTHING IN THIS LEASE IS
INTENDED TO BE OR TO CREATE ANY
PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
LANDLORD AND
TENANT. NEITHER THE EXECUTION OF THIS LEASE NOR THE
ADMINISTRATION OF THIS LEASE OR OTHER DOCUMENTS REFERENCED
HEREIN BY LANDLORD, NOR ANY OTHER
RIGHT, DUTY OR OBLIGATION OF LANDLORD UNDER OR PURSUANT TO
THIS LEASE OR SUCH
DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY
OBLIGATIONS OF
LANDLORD TO TENANT.
(l) Tax Reporting. Landlord and Tenant shall report this
Lease and the Purchase Agreement for federal
income tax purposes as a conditional sale unless prohibited
from doing so by the Internal Revenue Service. Similarly,
Tenant shall report all interest earned on Escrowed Proceeds
or the Collateral as Tenant's income for federal and state
income tax purposes. If the Internal Revenue Service shall
challenge Landlord's characterization of this Lease and the
Purchase Agreement as a conditional sale for federal income
tax reporting purposes, Landlord shall notify Tenant in
writing of such challenge and consider in good faith any
reasonable suggestions by Tenant about an appropriate
response. In any event, Tenant shall indemnify and
hold harmless Landlord from and against all liabilities,
costs, additional taxes and other expenses that may arise or
become due because of such challenge or because of any
resulting recharacterization required by the Internal Revenue
Service, including any additional taxes that may become due
upon any sale under the Purchase
Agreement to the extent (if any) that such additional taxes
are not offset by tax savings resulting from additional
depreciation deductions or other tax benefits to Landlord of
the recharacterization.
(m) IN WITNESS WHEREOF, this Lease is hereby executed in multiple
originals as of the effective date
above set forth.
"Landlord"
BNP LEASING CORPORATION
By: /s/ Xxxxx X. Xxx
--------------------
Xxxxx X. Xxx, Vice President
"Tenant"
3COM CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxxxx X. Xxxxxxx, Chief Financial Officer
Exhibit A
Legal Description
REAL PROPERTY in the City of Santa Xxxxx, County of Santa
Xxxxx, State of California, described as
follows:
Parcel One
Parcel A, as shown on that certain Parcel Map recorded July 7,
1989, Book 602 of Maps, at pages 34 and 35, Records of Santa
Xxxxx County, California.
EXCEPTING THEREFROM that portion described in that certain Lot
Line Adjustment dated August 16, 1991
in Book L826, at page 0826 of Official Records and described
as follows:
Beginning at the Southwest corner of said Parcel "A"; thence
on the Westerly and Northerly lines of said
Parcel "A" the following 5 courses:
1. North 00 12' 36" East a distance of 665.00 feet;
2. North 45 12' 36" East a distance of 64.00 feet;
3. North 00 12' 36" East a distance of 82.98 feet to a
point on a non-tangent curve the center of which
bears North 29 17' 50" West a distance of 9000.00 feet;
4. Northeasterly a distance of 79.37 feet on the arc of said
curve to the left through a central angle of 00
30' 19" (chord bears North 60 27' 01" East a distance of
79.37 feet, to a point on said curve;
5. North 66 32' 39" East, departing said curve, a distance
of 75.89 feet;
Thence South 62 07' 20" West a distance of 104.00 feet to a
point of curvature; thence Southwesterly a
distance of 9.53 feet on the arc of said 10136.00 foot radius
curve to the right through a central angle of 00 03' 14"
(chord bears South 62 08' 57" West a distance of 9.53 feet)
to a point on said curve; thence South 00 12' 36" West a
distance of 809.62 feet to a point on the South line of said
parcel "A"; thence North 89 47' 24" West, on said South line,
a distance of 83.50 feet to the point of beginning.
ALSO EXCEPTING THEREFROM that portion of said land as
condemned to the State of California by Order
recorded March 10, 1993 in Book M660, page 1700, described as
follows:
Being a portion of Parcel A, as shown on that certain Parcel
Map filed for record in Book 602 of Maps at pages 34 and 35
Santa Xxxxx County Records described as follows:
Beginning at the Northeast corner of said Parcel A; thence
from said point of beginning, along the Northerly line of said
Parcel A, S 67 25' 20" W 39.39 feet; thence leaving said
Northerly line S 41 34' 47" E 73.60 feet to a point in the
Easterly line of said Parcel A; thence along said Easterly
line of N 10 04' 48" W 71.28 feet to the point of beginning.
Parcel Two
That portion of Parcel B, as shown on that certain Parcel Map
recorded July 7, 1989, Book 602 of Maps, at pages 34 and 35,
Records of Santa Xxxxx County, California and described in
that certain Lot Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records and described as
follows:
Beginning at a point on the most Northerly Southeasterly line
of said Parcel "B" which bears South 66 32' 39" West a
distance of 226.19 feet from the most Easterly corner thereof;
thence South 10 57' 34" East a distance of 218.69 feet;
thence North 89 47' 24" West a distance of 324.26 feet;
thence North 77 17' 24" West a distance of 141.24 feet;
thence North 66 32' 39" East a distance of 458.33 feet to the
point of beginning.
APN: 000-00-000, 16
ARB: 000-00-000, 046.02, 046.02.01
Exhibit B
Permitted Encumbrances
This conveyance is subject to the following matters,
but only to the extent the same are still valid and in full
force and effect:
1. EASEMENT shown on map filed for record in Book 460 of
Maps, page 44 and 45, and incidents thereto
Purpose : Public Utility Easement
Affects : A portion of the Southerly 10 feet of
(Affects Parcels A and B)
2. DECLARATION of Reciprocal Easements, Covenants, and
Restrictions for the purpose stated herein
and subject to the terms and conditions therein, executed by
Dairy Associates, L.P., a California Limited Partnership,
recorded July 7, 1989 in Book L013, page 971 of Official
Records.
(Affects Parcels A and B)
Amendment No. 1 of Declaration of Reciprocal Easements,
Covenants and Restrictions recorded
August 16, 1991 in Book L826, page 830 of Official Records.
3. AGREEMENT on the terms and conditions contained therein,
For : Agreement regarding number of
required parking spaces
Between : The City of Santa Xxxxx, a
municipal corporation
And : Dairy Associates, LP., a California
Limited Partnership
Recorded : March 6, 1990 in Book L278, page
2239, Official Records.
(Affects Parcels A and B)
4. EASEMENT for the purposes stated herein and incidents
thereto
Purpose : Construction and reconstructing,
installing, operating, maintaining, repairing and/or replacing
underground electrical distribution and/or communication
systems and appurtenances thereto, including a reasonable
right of ingress and egress over adjoining lands of Grantor
Granted to : City of Santa Xxxxx, a California
municipal corporation
Recorded : April 4, 1990 in Book L310, page
1548, Official Records
Affects : As follows:
Beginning at a point in the Southerly line of Parcel 2 of
that Parcel Map filed for record in Book 460 of Maps at pages
44-45, Santa Xxxxx County Records, distant thereon North 89
47' 24" West, 67.50 feet
from the Southeasterly corner of said Parcel 2; thence from
said point of beginning, the following forty-
eight courses: South 89 47' 24" East, 30.00 feet; North 0
12' 36" East, 19.10 feet; South 89 47' 24" West, 10.00 feet;
North 29 47' 24" West, 43.00 feet; North 18 32' 24" West,
89.00 feet; North 29 47'
24" West, 119 feet; North 0 12' 36" East, 235 feet; North 11
02' 24" West, 157 feet; South 78 57' 36" West, 6.00 feet;
North 21 02' 24" West, 119.00 feet; South 88 57' 36" West,
73.00 feet; South 58 57' 36" West, 51.00 feet; South 88 57'
36" West, 80.00 feet; North 46 02' 24" West, 11.00 feet;
South 43 57' 36" West, 15.00 feet; South 46 02' 24" East,
20.00 feet; North 43 57' 36" East, 9.86 feet; North 88 57'
36" East, 69.77 feet; South 1 02' 24" East, 22.00 feet; North
88 57' 36" East, 15.00 feet; North 1 02' 24" West, 24.78
feet; North 58 57' 36" East, 45.43 feet; North 88 57' 36"
East, 63.32 feet; South 21 02' 24" East, 145.68 feet; South
11 02' 24" East 121.11 feet; South 0 12' 36" West, 234.02
feet; North 89 47' 24" West, 63.00 feet; North 59 47' 24"
West, 10.00 feet; North 89 47' 24" West, 10.00 feet; South 60
12' 36" West, 10.00 feet; North 89 47' 24" West, 286.00
feet; North 0 12' 36" East,
20.00 feet; South 89 47' 24" East, 2.50 feet; North 0 12'
36" East, 15.00 feet; North 89 47' 24" West, 15.00 fee; South
0 12' 36" West, 294.00 feet; North 0 12' 36" East, 20.00
feet; South 89 47' 24" East, 2.50 feet; North 0 12' 36"
East, 15.00 feet; North 89 47' 24" West, 15.00 feet; South 0
12' 36" West,
15.00 feet; South 89 47' 24" East, 2.50 feet; South 0 12'
36" West, 170.00 feet; South 44 37' 45" East, 75.00 feet;
South 0 12' 36" West, 3.76 feet; thence, from a tangent
bearing South 85 11' 34" East, along the arc of a curve
concave to the South, having a radius of 1040 feet, through a
central angle of 4 30' 30" an arc length of 81.83 feet; and
the following nine courses; North 44 47' 24" West, 44.62
feet; North 89 47' 24" West, 53.50 feet; North 44 37' 45"
West, 55.39 feet; North 0 12' 36" East, 135.87 feet; South
89 47' 24" East, 684.55 feet; South 29 47' 24" East, 112.24
feet; South 18 32' 24" East, 89.00 feet; South 29 47' 24"
East, 21.30 feet; South 0 12' 36" West, 33.67 feet to the
point of beginning.
5. EASEMENT for the purposes stated herein and incidents
thereto
Purpose : Underground pipes
Granted to : Pacific Gas and Electric Company, a
California corporation
Recorded : October 22, 1990 in Book L515, page
1223, Official Records
Affects : Parcel A as shown upon the Parcel
Map filed for record in Book 602 of Parcel Maps at page 35,
Santa Xxxxx County Records.
Reference is hereby made to the record for further
particulars and a map of said easement, no description was
recorded.
6. AGREEMENT on the terms and conditions contained therein,
For : Deferred obligation to construct
stoplight
Between : City of Santa Clara, California, a
municipal corporation
And : Dairy Associates, LP.
Recorded : December 17, 1990 in Book L568,
page 1565, Official Records.
(Affects Parcels A and B)
7. LACK OF ABUTTER'S RIGHTS to and from Xxxxx 000 - Xxxxx
Xxx Xxxxxxx, lying adjacent to the Northerly line of Parcels A & B of
said land, said rights having been released and relinquished
By : Dairy Associates, LP., a California
Limited Partnership
To : The State of California
Recorded : August 16, 1991 in Book L826, page
839, Official Records.
8. EASEMENT for the purposes stated herein and incidents thereto
Purpose : An easement for cut and fill slope
purposes
Granted to : The State of California
Recorded : August 16, 1991 in Book L826, page
839, Official Records
Affects : As follows:
Commencing at the most Southerly corner of Parcel 1
described in that certain Deed recorded August 16, 1991 in
Book L826, page 889, Official Records; thence along the
general Southerly line of said Parcel 1 the following courses:
from a tangent that bears N. 68 57' 08" E., along a curve to
the left with a radius of 10,136.00 feet, through an angle of
05 40' 34", an arc length of 1,004.14 feet, N. 01 05' 17"
E., 3.47 feet, and from a tangent that bears N. 61 34' 51"
E., along a curve to the left with a radius of
8999.52 feet, through an angle of 00 15' 40", an arc length
of 41.03 feet; thence leaving last said line S. 26 57' 54"
E., 26.28 feet; thence from a tangent that bears S. 63 02'
06" W., on a curve to the right with a radius of 10,158.00
feet, through an angle of 05 58' 01", an arc length of
1,057.88 feet to the Westerly line of the aforesaid Parcel B;
thence along last said line N. 00 50' 30" E., 23.71 feet to
the point of commencement.
Exhibit C
PERMITTED HAZARDOUS SUBSTANCES
(NOT a Comprehensive List)
It is anticipated that the following Hazardous Substances, and
others necessary for the use, occupancy, and operation of the
Leased Property in accordance with the terms and conditions of
this Lease, will be used by Tenant at the Leased Property:
Description C.A.S.#
Solder bars (lead) 7439-92-1
Solder paste
Lead 7439-91-1
Tin 7440-31-5
Solder paste remover
Sodium hydroxide 1310-73-2
Isopropyl alcohol
Isopropanol 67-63-0
S32-10M
Isopropanol 67-63-0
Methanol 67-56-1
Exhibit D
RESOLUTION OF DISPUTED INSURANCE CLAIMS
If Landlord and Tenant cannot agree upon the amount for
which any insurance claim against an insurer
should be settled after damage to the Leased Property by fire
or other casualty, and so long as neither Tenant nor Landlord
is authorized to determine such amount without the consent of
the other pursuant to subparagraph 8.(r), then either party
may require that the amount be determined as follows:
(i) Landlord and Tenant shall each appoint an experienced
architect who is familiar with construction costs
for comparable properties in the vicinity of the Leased
Property. Each party will make the appointment no later than
10 days after receipt of notice from the other party that the
dispute resolution process described in this Exhibit has been
invoked. The agreement of the two architects as to the
appropriate amount of the insurance settlement will be binding
upon Landlord and Tenant. If the two architects cannot agree
upon the settlement amount within 30 days following their
appointment, they shall within another 10 days agree
upon a third architect. Immediately thereafter, each of the
first two architects will submit his best estimate of the
appropriate settlement amount (together with a written report
supporting such estimate) to the third architect and the third
architect will choose between the two estimates. The estimate
chosen by the third architect as the closest to the amount
needed to repair and restore the Leased Property will be
binding upon Landlord and Tenant as the amount for which the
applicable insurance claim should be settled. (However,
no such estimate and nothing contained in this Exhibit will
limit Tenant's liability under other provisions of this Lease
for the repair and restoration of the Leased Property.)
Notification in writing of the estimate chosen by the third
architect shall be made to Landlord and Tenant within 15 days
following the selection
of the third architect.
(ii) If architects must be selected under the procedure set
out above and either Tenant or Landlord fails to
appoint an architect or fails to notify the other party of
such appointment within 10 days after receipt of notice that
the prescribed time for appointing the architects has passed,
then the other party's architect will determine the
appropriate settlement amount. All architects selected for
the dispute resolution process set out in this Exhibit will be
disinterested, reputable, qualified architects with at least
15 years experience designing and overseeing the construction
of properties comparable to the Leased Property.
(iii) If a third architect must be chosen under the
procedure set out above, he will be chosen on the basis of
objectivity and competence, not on the basis of his
relationship with the other architects or the parties to this
Lease, and the first two architects will be so advised.
Although the first two architects will be instructed to
attempt in good faith to agree upon the third architect, if
for any reason they cannot agree within the prescribed time,
either Landlord or Tenant may require the first two architects
to immediately submit its top choice for the third architect
to the then highest ranking officer of the San Francisco Bar
Association who will agree to help and who has no
attorney/client or other significant relationship to either
Landlord or Tenant. Such officer will have complete
discretion to select the most objective and competent third
architect from between the choice of each of the first two
architects, and will do so within 20 days after such choices
are submitted to him.
(iv) Either Landlord or Tenant may notify the architect
selected by the other party to demand the
submission of an estimate of the appropriate settlement amount
or a choice of a third architect as required under the
procedure described above; and if the submission of such an
estimate or choice is required but
the other party's architect fails to comply with the demand
within 5 days after receipt of such notice, then the
settlement amount or choice of the third architect, as the
case may be, selected by the other architect (i.e., the
notifying party's architect) will be binding upon Landlord and
Tenant.
(v) For the purposes of this Exhibit, "appropriate settlement
amount" and words of like effect means the
amount required to restore the Leased Property, less any
insurance deductible that clearly applies under the policy of
insurance which provides the coverage to be settled; and all
architects and other persons involved in the determination of
the settlement amount will be so advised.
Exhibit E
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
x/x Xxxxxx Xxxxxxxxx xx Xxxxx, Xxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxx or Will Xx Xxxxxx
Re: 3Com Lease Agreement
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to
subparagraph 8.(w)(iii) of that certain Lease
Agreement dated as of October 4, 1996 (the "Lease Agreement,"
the terms defined therein being used herein
as therein defined) between 3Com Corporation (the "Tenant"),
and you.
2. Annex 1 attached hereto sets forth financial data
and computations evidencing the Tenant's
compliance with certain covenants of the Lease Agreement, all
of which data and computations are complete,
true and correct.
3. To the knowledge of Tenant no Default or Event of
Default under the Lease Agreement has
occurred and is continuing.
4. The representations of Tenant set forth in the Lease
Agreement are true and correct in all
material respects as of the date hereof as though made on and
as of the date hereof.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, ____
I. PARAGRAPH 8.(ac)(i): Quick Ratio
A. Unencumbered Cash and Cash Equivalents
and other "Quick Assets" as defined in
Paragraph 8.(ac)(i) of the Lease: $_____________
B. "Current Liabilities" as defined in
Paragraph 8.(ac)(i) of the Lease: $_____________
C. Ratio of A to B: _____ to 1.00
F. Minimum ratio computed as provided in
Paragraph 8.(ac)(i) of the Lease: 1.00 to 1.00
II. PARAGRAPH 8.(ac)(ii): Maximum Senior Debt to
Capitalization
A. Total "Debt" as defined
in Paragraph 1.(s) of
Tenant and its consolidated
Subsidiaries: $_____________
B. "Subordinated
Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease:
$_____________
C. "Senior Debt" as
defined in Paragraph 8.(ac)(ii)
of the Lease
(A - B): $_____________
D. Consolidated Tangible Net Worth
(from calculation below): $_____________
E. Capitalization as defined in
Paragraph 8.(ac)(ii) of the Lease
(A + D): $_____________
F. Ratio of B to E: _____ to 1.00
D. Maximum ratio: 0.35 to 1.00
III. PARAGRAPH 8.(ac)(iii): Minimum Tangible Net Worth
A. Reported stockholders equity: $_____________
B. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii)
of the Lease: $_____________
D. Consolidated Tangible Net Worth
(A - B): $_____________
E. Minimum computed as provided
in Paragraph 8.(ac)(iii) of the
Lease: $_____________
IV. PARAGRAPH 8.(ac)(iv): Fixed Charge Ratio
A. "Adjusted EBIT" as
defined in Paragraph
8.(ac)(iv) of the
Lease: $_____________
B. "Fixed Charges" as
defined in Paragraph
8.(ac)(iv) of the
Lease: $_____________
C. Ratio of A to B: _____ to 1.00
D. Minimum ratio: 2.00 to 1.00
Exhibit F
CERTIFICATE OF TENANT'S CALCULATION OF THE SPREAD
BNP Leasing Corporation
x/x Xxxxxx Xxxxxxxxx xx Xxxxx, Xxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxx or Will Xx Xxxxxx
Re: 3Com Lease Agreement
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to
subparagraph 8.(w)(iv) of that certain Lease
Agreement dated as of October 4, 1996 (the "Lease Agreement,"
the terms defined therein being used herein
as therein defined) between 3Com Corporation, and you.
2. Annex 1 attached hereto sets forth financial data
and computations evidencing the Tenant's
computation of the Spread, all of which data and computations
are complete, true and correct.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Certificate of Tenant's Calculation of the Spread
As of the ________________, ____
I. S&P'S RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
II. XXXXX'X RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
III. CALCULATION OF TENANT'S DEBT TO CAPITAL RATIO: _____________
A. Funded "Senior Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease: $_____________
B. Other outstanding Debt as defined in
Paragraph 1.(s) of the Lease: $_____________
C. Outstanding "Subordinated Debt" as
defined in Paragraph 8.(ac)(ii) of
the Lease: $_____________
D. Debt for purposes of this ratio
(A + B - C): $_____________
E. Reported stockholders equity: $_____________
F. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii)
of the Lease: $_____________
G. Consolidated Tangible Net Worth
(E - F): $_____________
H. Capital for purposes of this test
(A + B + G): $_____________
I. D divided by H: _____________
III. SPREAD AS DEFINED IN PARAGRAPH 1.(bo) OF THE LEASE: _____________
Exhibit G
LIST OF ENVIRONMENTAL REPORTS
(Phase I Property)
As used in this Lease, "Environmental Reports" means,
collectively, the following reports provided to BNPLC by 3COM
or acquired by BNPLC from its own consultants:
Tetra tech, 1996, Phase I Environmental Site Assessment
for 3COM Corporation, 0000
Xxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000. September
30, 1996.
Tetra tech, 1996, Phase II Environmental Site
Investigation for 3COM Corporation, 0000
Xxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000. October
2, 1996.
Xxxxxx-Xxxxxx, 0000, Remedial Strategy Development for
Property at the Former Edelweiss Dairy, Santa Clara,
California. April 25, 1989.
Xxxxxx-Xxxxxx, Installation of Three Ground Water
Monitoring Xxxxx at the Former Edelweiss Dairy, 0000 Xxx
Xxxxxxxx Xxxx-Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. August
23, 1994 and DRAFT same title August 19, 1994.
Xxxxxx-Xxxxxx, Proposed Ground Water Monitoring Sampling
and Analysis at the Former Edelweiss Dairy, 0000 Xxx Xxxxxxxx
Xxxx-Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. December,
1991.
Xxxxxx-Xxxxxx, Analytical Results for four Ground Water
Samples and one Composite Soil Sample Collected at the Former
Edelweiss Dairy, 0000 Xxx Xxxxxxxx Xxxx-Xxxxxx Xxxx, Xxxxx
Xxxxx, Xxxxxxxxxx. February 14, 1992.
Xxxxxx-Xxxxxx, Analytical Results for four Ground Water
Samples and one Composite Soil Sample Collected at the Former
Edelweiss Dairy, 0000 Xxx Xxxxxxxx Xxxx-Xxxxxx Xxxx, Xxxxx
Xxxxx, Xxxxxxxxxx. May 18, 1992.
Xxxxxx-Xxxxxx, Analytical Report on Results of Ground
Water Monitoring at the Former Edelweiss Dairy, 0000 Xxx
Xxxxxxxx Xxxx-Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. October
1, 1992.
Xxxxxx-Xxxxxx, Analytical Report on Results of Ground
Water Monitoring for 1992 at the Former Edelweiss Dairy, 0000
Xxx Xxxxxxxx Xxxx-Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx.
March 8, 1993.
Xxxxxx-Xxxxxx, Request for Case Closure at the Former
Edelweiss Dairy, 0000 Xxx Xxxxxxxx
Xxxx-Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. August, 1993.
Xxxxxx-Xxxxxx, Case Closure at the Former Edelweiss Dairy,
0000 Xxx Xxxxxxxx Xxxx-Xxxxxx
Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. March 7, 1994.
Xxxxxx-Xxxxxx, Case Closure at the Former Edelweiss Dairy,
0000 Xxx Xxxxxxxx Xxxx-Xxxxxx
Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx. January 21, 1993.
Xxxxxx-Xxxxxx, Phase I Environmental Site Assessment, 3COM
Phase I Parcel, Santa Clara,
California. June, 1994.
Santa Xxxxx Fire Department, permit removing removal of two
gasoline tanks. October 19,
1984.
Xxxxxx-Xxxxxx, remedial proposal, recommending further
characterization of the site including the establishment of a
groundwater monitoring system. April 19, 1989.
Xxxxxx-Xxxxxx, Status Report on Soil Remediation at Former
Edelweiss Dairy and Future
0XXX Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx. June 13,
1989.
Xxxxxx-Xxxxxx, letter to the California Water Quality
Control Board regarding its final soil status report.
February 5, 1990.
Xxxxxx-Xxxxxx, Report of Quarterly Ground Water
Monitoring at the Former Edelweiss Dairy.
January 23, 1993.
Santa Xxxxx Valley Water District ("SCVWD"), letter to
Regional Water Quality Control Board requesting concurrence on
case closure for the site. November 18, 1994.
SCVWD, "no action" letter to Dairy Associates, L.P.
December 2, 1994.
