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EXHIBIT 10.1
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$25,000,000
AMENDED AND RESTATED
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
SOLECTRON WASHINGTON, INC.
("SOLECTRON")
JULY 1, 1998
(EVERETT, WASHINGTON)
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PURSUANT TO AND AS MORE PARTICULARLY PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE,
THIS LEASE AND THE PURCHASE AGREEMENT REFERENCED HEREIN ARE TO CONSTITUTE, FOR
INCOME TAX PURPOSES ONLY, A FINANCING ARRANGEMENT OR CONDITIONAL SALE. AS
PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE, BNPLC AND SOLECTRON EXPECT THAT
SOLECTRON (AND NOT BNPLC) SHALL BE TREATED AS THE TRUE OWNER OF THE PROPERTY FOR
INCOME TAX PURPOSES, THEREBY ENTITLING SOLECTRON (AND NOT BNPLC) TO TAKE
DEPRECIATION DEDUCTIONS AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER.
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TABLE OF CONTENTS
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1. TERM.................................................................................2
2. NO LEASE TERMINATION.................................................................3
(a) Status of Lease...............................................................3
(b) Waiver by Solectron...........................................................3
3. USE AND CONDITION OF THE PROPERTY....................................................4
(a) Use...........................................................................4
(b) Condition of the Property.....................................................4
(c) Consideration for and Scope of Waiver.........................................5
4. RENT.................................................................................5
(a) Base Rent Generally...........................................................5
(b) Calculation of and Due Dates for Base Rent....................................5
(i) Amount Payable On the Base Rent Commencement Date......................5
(ii) Determination of Payment Due Dates After the Base
Rent Commencement Date.................................................5
(iii) Base Rent Formula......................................................6
(c) Additional Rent...............................................................6
(d) Commitment Fees...............................................................6
(e) Administrative Agency Fees....................................................7
(f) No Demand or Setoff...........................................................7
(g) Default Interest and Order of Application.....................................7
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY........................7
(a) "Net" Lease Generally.........................................................7
(b) Impositions...................................................................7
(c) Increased Costs; Capital Adequacy Charges.....................................8
(d) Solectron's Payment of Other Losses; General Indemnification..................8
(e) Withholding Taxes............................................................11
6. CONSTRUCTION........................................................................12
(a) Advances; Outstanding Construction Allowance.................................12
(b) Calculation of Carrying Costs................................................12
(c) Limits on the Amount of Carrying Costs................................13
(d) Construction Projects........................................................13
(i) Preconstruction Approvals by BNPLC....................................13
(ii) Scope Changes.........................................................14
(iii) Failure by BNPLC to Respond to a Request for Approval.................14
(iv) Responsibility for Construction.......................................14
(v) Construction Warranty by Solectron....................................15
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(vi) Value Added...........................................................15
(vii) Estoppel Letters Required.............................................15
(viii) Advances Not a Waiver.................................................16
(e) Conditions to Solectron's Right to Receive Construction Advances.............16
(i) Prior Notice..........................................................16
(ii) Amount of the Advances................................................16
a) Limit Dependent Upon the Maximum Construction Allowance.........16
b) Limit Dependent Upon Costs Previously Incurred by Solectron.....16
c) Limit Dependent Upon Projected Costs Yet to be Incurred.........16
d) Minimum Amount Imposed for Administrative Convenience...........16
(iii) Insurance.............................................................17
a) Title Insurance.................................................17
b) Builder's Risk Insurance........................................17
(iv) Progress of Construction..............................................17
(v) Evidence of Costs and Expenses to be Reimbursed.......................17
(vi) No Sale of BNPLC's Interest...........................................17
(vii) No Landlord's Election to Continue Construction or Event of Default...17
(viii) Certificate of No Default and Other Matters...........................17
(ix) Funding by Participants...............................................18
(f) Breakage Costs for Construction Advances Requested But Not Taken.............19
(g) Completion Notice............................................................19
(h) Landlord's Election to Continue Construction.................................19
(i) Take Control of the Property..........................................20
(ii) Continuation of Construction..........................................20
(iii) Arrange for Turnkey Construction......................................21
(iv) Suspension or Termination of Construction.............................21
7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC...........................21
(a) Cooperation of BNPLC to Facilitate Construction and Development..............21
(b) Actions Permitted by Solectron Without BNPLC's Consent.......................23
(c) Waiver of Landlord's Liens...................................................23
(d) Limited Representations by BNPLC Concerning Accounting Matters...............24
(e) Other Limited Representations by BNPLC.......................................25
(i) No Default or Violation...............................................25
(ii) No Suits..............................................................25
(iii) Enforceability........................................................25
(iv) Organization..........................................................25
(v) Not a Foreign Person..................................................25
(f) Keeping Proprietary Information Confidential.................................26
8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC............................26
9. ENVIRONMENTAL.......................................................................27
(a) Environmental Covenants by Solectron.........................................27
(b) Right of BNPLC to do Remedial Work Not Performed by Solectron................27
(c) Environmental Inspections and Reviews........................................28
(d) Communications Regarding Environmental Matters...............................28
10. INSURANCE REQUIRED AND CONDEMNATION.................................................29
(ii)
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(a) Liability Insurance..........................................................29
(b) Property Insurance...........................................................29
(c) Failure to Obtain Insurance..................................................30
(d) Condemnation.................................................................30
11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS..................................31
(a) Collection of Insurance and Condemnation Proceeds Generally..................31
(b) Administration of Remaining Proceeds; Solectron's Obligation to Restore......31
(c) Special Provisions Concerning Event of Defaults and Qualified Payments.......32
(d) Takings of All or Substantially All of the Property..........................32
(e) Waiver of Subrogation........................................................32
12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON CONCERNING THE
PROPERTY............................................................................33
(a) Compliance with Covenants and Laws...........................................33
(b) Operation of Property........................................................33
(c) Debts for Construction, Maintenance, Operation or Development................34
(d) Repair, Maintenance, Alterations and Additions...............................34
(e) Compliance With Permitted Encumbrances and Development Contracts.............35
(f) Modification of Permitted Encumbrances and Development Contracts.............35
(g) Books and Records Concerning the Property....................................35
13. ASSIGNMENT AND SUBLETTING BY SOLECTRON..............................................35
(a) BNPLC's Consent Required.....................................................35
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters........36
(c) Consent Not a Waiver.........................................................36
14. ASSIGNMENT BY BNPLC.................................................................36
(a) Restrictions on Transfers....................................................36
(b) Effect of Permitted Transfer or other Assignment by BNPLC....................36
15. BNPLC'S RIGHT OF ACCESS.............................................................37
16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON........................37
(a) Negative Covenants...........................................................37
(i) Multi employer ERISA Plans............................................37
(ii) Prohibited ERISA Transaction..........................................38
(b) Financial Statements; Required Notices; Certificates as to Default...........38
(c) No Default or Violation......................................................39
(d) No Suits.....................................................................39
(e) Enforceability...............................................................39
(f) Financial Matters............................................................39
(g) Organization.................................................................40
(h) ERISA........................................................................40
(i) Use of Proceeds..............................................................40
(j) Investment Company Act.......................................................40
(k) Omissions....................................................................40
(l) Not a Foreign Person.........................................................40
(m) Further Assurances...........................................................41
(iii)
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17. EVENTS OF DEFAULT...................................................................41
(a) Definition of Events of Default..............................................41
18. REMEDIES............................................................................43
(a) Basic Remedies...............................................................43
(b) Enforceability...............................................................45
(c) Remedies Cumulative..........................................................45
19. DEFAULT BY BNPLC....................................................................45
20. QUIET ENJOYMENT.....................................................................45
21. SURRENDER UPON TERMINATION..........................................................46
22. HOLDING OVER BY SOLECTRON...........................................................46
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE PURCHASE AGREEMENT AND CLOSING CERTIFICATE.46
24. WAIVER OF JURY TRIAL................................................................47
25. MISCELLANEOUS.......................................................................47
(a) Notices......................................................................47
(b) Severability.................................................................49
(c) No Merger....................................................................49
(d) No Implied Waiver............................................................49
(e) NO IMPLIED REPRESENTATIONS BY BNPLC..........................................49
(f) Entire Agreement.............................................................49
(g) Binding Effect...............................................................50
(h) Time is of the Essence.......................................................50
(i) Governing Law................................................................50
(j) Paragraph Headings...........................................................50
(k) Other Terms and References...................................................50
(l) Not a Partnership, Etc.......................................................50
26. INCOME TAX REPORTING................................................................50
27. PROPRIETARY INFORMATION AND CONFIDENTIALITY.........................................52
(iv)
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EXHIBITS AND SCHEDULES
Exhibit A....................................................................Legal Description
Exhibit B...........................................................Permitted Encumbrance List
Exhibit C......................................Description of the initial Construction Project
Exhibit D.........................................................Contractor's Estoppel Letter
Exhibit E..........................................................Architect's Estoppel Letter
Exhibit F...................................................................Draw Request Forms
Exhibit G.......................................Standard Notice of Request for Action by BNPLC
Exhibit H....................................Notice of Request Requiring an Expedited Response
Exhibit I................................................................Intentionally Deleted
Exhibit J...............................................................Compliance Certificate
Exhibit K...........................................................Libor Period Election Form
Schedule 1.......................................................List of Development Documents
Schedule 2...........................List of Claims Pending or Threatened Against the Property
List of Defined Terms.......................................................Shared Definitions
(v)
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AMENDED AND RESTATED
LEASE AGREEMENT
This AMENDED AND RESTATED LEASE AGREEMENT (this "LEASE"), by and between
BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and SOLECTRON
WASHINGTON, INC., a California corporation ("SOLECTRON"), is dated as of July 1,
1998, the Effective Date. ("EFFECTIVE Date" and other capitalized terms used and
not otherwise defined in this Lease are intended to have the meanings assigned
to them in the List of Defined Terms attached to and made a part of this Lease.)
RECITALS
Pursuant to the Existing Contract, which covers the Land described in
Exhibit A, BNPLC acquired the Land and any appurtenances thereto from Seller on
or about December 1, 1997. Contemporaneously with the purchase of the Land,
BNPLC leased it to Solectron pursuant to a Lease Agreement dated as of December
1, 1997 (the "PRIOR LEASE").
This Lease is intended to amend, restate and replace the Prior Lease in
its entirety as of the Effective Date.
GRANTING CLAUSES
In consideration of the rent to be paid and the covenants and agreements
to be performed by Solectron, as hereinafter set forth, BNPLC does hereby LEASE,
DEMISE and LET unto Solectron for the term hereinafter set forth all right,
title and interest of BNPLC, now owned or hereafter acquired, in and to:
(1) the Land;
(2) any and all Improvements;
(3) all easements and other rights appurtenant to the Land or to
the Improvements, whether now owned or hereafter acquired by BNPLC; and
(4) (A) any land lying within the right-of-way of any street,
open or proposed, adjoining the Land, (B) any sidewalks and alleys
adjacent to the Land and (C) any strips and gores between the Land and
abutting land.
BNPLC's interest in all property described in clauses (1) through (4) above are
hereinafter referred to collectively as the "REAL PROPERTY".
To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contract or acquired by BNPLC pursuant to Paragraph 8 below,
BNPLC also hereby grants and assigns to Solectron for the term of this Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such
rights or interests of BNPLC:
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(a) any goods, equipment, furnishings, furniture and other
tangible 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;
(b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and
(c) any permits, licenses, franchises, certificates, and other
rights and privileges against third parties related to the Real
Property.
Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."
However, the leasehold estate conveyed hereby and Solectron's rights
hereunder are expressly made subject and subordinate to the terms and conditions
of this Lease, to the matters listed in Exhibit B and all other Permitted
Encumbrances, and to any other claims or encumbrances not constituting Liens
Removable by BNPLC.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to Solectron and is accepted and is to
be used and possessed by Solectron upon and subject to the following terms and
conditions:
1. TERM. The term of this Lease (the "TERM") shall commence on and
include the Effective Date, and end on the first Business Day of July, 2003,
unless sooner terminated as expressly herein provided. Solectron shall be
entitled to accelerate the Designated Sale Date (and thus accelerate the
purchase of BNPLC's interest in the Property by Solectron or by an Applicable
Purchaser pursuant to the Purchase Agreement) by sending a notice to BNPLC as
provided in clause (2) of the definition of "Designated Sale Date" in the List
of Defined Terms. In the event, because of Solectron's election to so accelerate
the Designated Sale Date or for any other reason, the Designated Sale Date
occurs before the end of the scheduled Term, Solectron may terminate this Lease
on or after the Designated Sale Date; provided, however, as a condition to any
such termination by Solectron, Solectron must have done the following prior to
the termination:
(a) purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Purchase Agreement and satisfied all of Solectron's
other obligations under the Purchase Agreement;
(b) paid to BNPLC all Base Rent, all Commitment Fees, all
Administrative Agency Fees and all other Rent accrued through the Designated
Sale Date; and
(c) paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to the Purchase Agreement.
The Term may be extended at the option of Solectron 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, BNPLC
and Solectron must have agreed in writing upon, and received the written consent
and approval of BNPLC's Parent and all other Participants to (1) a corresponding
extension not only to the date for the expiration of the Term specified above in
this Section,
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but also to the date specified in clause (1) of the definition of Designated
Sale Date in the List of Defined Terms attached hereto, and (2) an adjustment to
the Rent that Solectron 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 BNPLC and Solectron, each in its sole
and absolute discretion; (B) there must be no Event of Default continuing
hereunder at the time of Solectron'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 BNPLC and Solectron must have agreed upon the Rent
required for any extension of the Term, neither Solectron nor BNPLC is willing
to submit itself to a risk of liability or loss of rights hereunder for being
judged unreasonable. Accordingly, both Solectron and BNPLC 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 Solectron 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 Solectron shall
continue without interruption and without any loss of priority over other
interests in or claims against the Property that may be created or arise after
the date hereof and before the extension.
2. NO LEASE TERMINATION.
(a) Status of Lease. Except as expressly provided herein, this Lease
shall not terminate, nor shall Solectron have any right to terminate this Lease,
nor shall Solectron be entitled to any abatement of the Rent, nor shall the
obligations of Solectron under this Lease be excused, for any reason whatsoever,
including any of the following: (i) any damage to or the destruction of all or
any part of the Property from whatever cause, (ii) the taking of the Property or
any portion thereof by eminent domain or otherwise for any reason, (iii) the
prohibition, limitation or restriction of Solectron's use of all or any portion
of the Property or any interference with such use by governmental action or
otherwise, (iv) any eviction of Solectron or of anyone claiming through or under
Solectron (provided, that if Solectron is wrongfully evicted by BNPLC or by any
third party lawfully exercising its rights under a Lien Removable by BNPLC, then
Solectron will have the remedies described in ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇), (▇) any
default on the part of BNPLC under this Lease or under any other agreement to
which BNPLC and Solectron are parties, (vi) the inadequacy in any way whatsoever
of the design, construction, assembly or installation of any improvements,
fixtures or tangible personal property included in the Property, it being
understood that BNPLC has not made, does not make and will not make any
representation express or implied as to the adequacy thereof, (vii) any latent
or other defect in the Property or any change in the condition thereof or the
existence with respect to the Property of any violations of Applicable Laws or
(viii) any other cause whether similar or dissimilar to the foregoing. It is the
intention of the parties hereto that the obligations of Solectron hereunder
shall be separate and independent of the covenants and agreements of BNPLC, that
the Base Rent and all other sums payable by Solectron hereunder shall continue
to be payable in all events and that the obligations of Solectron 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.
(b) Waiver by Solectron. Without limiting the foregoing, Solectron
waives to the extent permitted by Applicable Laws, except as otherwise expressly
provided herein, all rights to which Solectron 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 Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.
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However, nothing in this Paragraph 2 shall be construed as a waiver by
Solectron of any right Solectron may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Lease that continues beyond
the period for cure provided in Paragraph 19: (i) the recovery of monetary
damages, (ii) injunctive relief in case of the violation, or attempted or
threatened violation, by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Lease which are binding upon BNPLC (including
the confidentiality provisions set forth in subparagraph 7.(f) below), or (iii)
a decree compelling performance by BNPLC of any of the express covenants,
agreements, conditions or provisions of this Lease which are binding upon BNPLC.
3. USE AND CONDITION OF THE PROPERTY.
(a) Use. Subject to the Permitted Encumbrances, the Development
Documents and the terms hereof, Solectron may use and occupy the Property during
the Term, but only for the following purposes and other lawful purposes
incidental thereto:
(i) manufacturing, engineering, assembly, warehousing and
laboratory-based research and development of circuit boards,
computer-related and other electronic products;
(ii) administrative and office space;
(iii) cafeteria, library, and other support function uses that
Solectron may provide to its employees; and
(iv) other lawful uses approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the initial Construction Project (but Solectron acknowledges that
BNPLC's withholding of such approval shall be reasonable if BNPLC
determines in good faith that (i) giving the approval may materially
increase BNPLC's risk of liability for any existing or future
environmental problem, or (ii) giving the approval is likely to
substantially increase BNPLC's administrative burden of complying with
or monitoring Solectron's compliance with the requirements of this
Lease).
Although the term "products" in this subparagraph may include products designed
to detect, monitor, neutralize, handle or process Hazardous Substances, the use
of the Property by Solectron shall not include bringing Hazardous Substances
onto the Property for the purpose of testing or demonstrating any such products.
(b) Condition of the Property. SOLECTRON ACKNOWLEDGES THAT IT HAS
CAREFULLY AND FULLY INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY 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. SOLECTRON ALSO ACCEPTS THE PROPERTY WITHOUT ANY COVENANT,
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS AFFILIATES
REGARDING THE TITLE THERETO OR THE RIGHTS OF ANY PARTIES IN POSSESSION OF ANY
PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 20. BNPLC 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 PROPERTY OR
FOR ANY VIOLATIONS WITH RESPECT THERETO OF APPLICABLE LAWS. NOR SHALL BNPLC BE
REQUIRED TO FURNISH TO SOLECTRON ANY FACILITIES OR SERVICES OF ANY KIND,
INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER.
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(c) Consideration for and Scope of Waiver. The provisions of
subparagraph 3.(b) above have been negotiated by BNPLC and Solectron after due
consideration for the Rent payable hereunder and are intended to be a complete
exclusion and negation of any representations or warranties of BNPLC or its
Affiliates, express or implied, with respect to the Property that may arise
pursuant to any law now or hereafter in effect or otherwise, except as expressly
set forth herein.
However, such exclusion of representations and warranties by BNPLC and
its Affiliates is not intended to impair any representations or warranties made
by other parties, including any architects, engineers or contractors engaged to
work on Construction Projects, the benefit of which is to pass to Solectron
during the Term because of the definition of Personal Property and Property
above.
4. RENT.
(a) Base Rent Generally. On the Base Rent Commencement Date and on
each Base Rent Date through the end of the Term, Solectron shall pay BNPLC rent
("BASE RENT"). Each payment of Base Rent must be received by BNPLC no later that
10:00 a.m. (Central time) on the date it becomes due; if received after 10:00
a.m. (Central time) it will be considered for purposes of this Lease as received
on the next following Business Day. BNPLC shall notify Solectron of the amount
of each payment of Base Rent (calculated as provided in subparagraph 4.(b)) at
least three days before the date upon which it first becomes due. However, any
failure by BNPLC to so notify Solectron shall not constitute a waiver of BNPLC's
right to payment, but absent such notice Solectron shall not be in default for
any underpayment resulting therefrom if Solectron, in good faith, reasonably
estimates the payment required, makes a timely payment of the amount so
estimated and corrects any underpayment within three Business Days after being
notified by BNPLC of the underpayment.
(b) Calculation of and Due Dates for Base Rent. Payments of Base Rent
shall be calculated and become due as follows:
(i) Amount Payable On the Base Rent Commencement Date. The Base
Rent payable on the Base Rent Commencement Date shall equal the
difference (if any) between (a) the total amount that would have been
added to the Outstanding Construction Allowance as Carrying Costs on
such date if not for the limit set forth in subparagraph 6.(c), and (b)
the Carrying Costs actually added on such date to the Outstanding
Construction Allowance.
(ii) Determination of Payment Due Dates After the Base Rent
Commencement Date. For all Base Rent Periods subject to a LIBOR Period
Election of one month or three months, Base Rent shall be due in one
installment on the Base Rent Date upon which the Base Rent Period ends.
For Base Rent Periods subject to a LIBOR Period Election of six months,
Base Rent shall be payable in two installments, with the first
installment becoming due on the Base Rent Date that occurs on the first
Business Day of the third calendar month following the commencement of
such Base Rent Period, and with the second installment becoming due on
the Base Rent Date upon which the Base Rent Period ends. Notwithstanding
the foregoing, if Solectron or any Applicable Purchaser purchases
BNPLC's interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent shall be
due on the date of purchase in addition to the purchase price and other
sums due BNPLC under the Purchase Agreement.
(iii) Base Rent Formula. Each installment of Base Rent payable
for any Base Rent Period shall equal:
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- Stipulated Loss Value on the first day of such Base Rent
Period, times
- the sum of (a) the Effective Rate with respect to such Base
Rent Period, plus (b) the Spread for the period from and
including the preceding Base Rent Date to but not including
the Base Rent Date upon which the installment is due, times
- the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that prior to the
first day of a Base Rent Period subject to a LIBOR Period Election of
one month the Construction Allowance has been fully funded, but a total
of $10,000,000 of Qualified Payments have been received by BNPLC,
leaving a Stipulated Loss Value of $15,000,000; that the Effective Rate
for such Base Rent Period is 6%; that the Spread for such period is
thirty-two and one-half basis points (32.5/100 of 1%); and that such
Base Rent Period contains exactly thirty days. Under such assumptions,
the Base Rent for the hypothetical Base Rent Period will equal:
$15,000,000 x (6% + .325%) x 30/360 = $79,062.50
(c) Additional Rent. All amounts which Solectron is required to pay
to or on behalf of BNPLC 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", and together Base Rent and Additional
Rent are herein sometimes called "RENT").
(d) Commitment Fees. For each Construction Period Solectron shall
pay BNPLC a fee (a "COMMITMENT FEE") equal to:
- twelve and one-half basis points (12.5/100 of 1%), times an
amount equal to:
(i) the Maximum Construction Allowance, less
(ii) the Funded Construction Allowance on the first day of
such Construction Period; times
- the number of days in such Construction Period; divided by
- three hundred sixty.
Solectron shall pay Commitment Fees in arrears on the first Business Day of
February, May, August and November of each calendar year, beginning with August
1, 1998 and continuing regularly throughout the Term so long as Commitment Fees
have accrued and remain unpaid. However, if any Commitment Fees shall have
accrued and remain unpaid on the Designated Sale Date, such accrued unpaid
Commitment Fees shall be due on the Designated Sale Date. With the first payment
of Commitment Fees required under this Lease, calculated as described above,
Solectron shall also pay Commitment Fees accrued but unpaid under and as defined
in the Prior Lease.
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(e) Administrative Agency Fees. Upon execution and delivery of this
Lease by BNPLC, and again on each anniversary of the date hereof, Solectron
shall pay to BNPLC an administrative fee (an "ADMINISTRATIVE AGENCY FEE") in the
amount set forth in the letter agreement dated as of April 22, 1998 between
BNPLC, Solectron and Guarantor and other affiliates of Solectron. Each
Administrative Agency Fee shall represent Additional Rent for the Construction
Period or Base Rent Period during which it is paid.
(f) Demand or Setoff. Except as expressly provided herein, Solectron
shall pay all Rent without notice or demand and without counterclaim, deduction,
setoff or defense.
(g) Default 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. BNPLC shall be
entitled to apply any amounts paid by or on behalf of Solectron against any Rent
then past due in the order the same became due or in such other order as BNPLC
may elect.
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.
(a) "Net" Lease Generally. It is the intention of BNPLC and
Solectron that the Base Rent, Commitment Fees, Administrative Agency Fees and
other payments herein specified shall be absolutely net to BNPLC and that
Solectron shall pay all costs, expenses and obligations of every kind relating
to the Property or this Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with this Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Lease or the transactions contemplated herein.
However, the preceding sentence shall not be construed to make Solectron
liable for (1) damages, costs, expenses or obligations suffered by BNPLC because
of (and attributed by any applicable principles of comparative fault to) BNPLC's
own Established Misconduct, (2) Excluded Taxes, (3) withholding of taxes
permitted by subparagraph 5.(e) or (4) general overhead or internal
administrative expenses of BNPLC or any other Interested Party, except to the
extent allowed by subparagraph 5.(c)(i) because of changes described in that
subparagraph after the Effective Date.
(b) Impositions. Solectron shall pay or cause to be paid prior to
delinquency all ad valorem taxes assessed against the Property and other
Impositions. If requested by BNPLC from time to time, Solectron shall furnish
BNPLC with receipts showing payment of all Impositions at least ten days prior
to the applicable default date therefor.
Notwithstanding the foregoing, Solectron may in good faith, by
appropriate proceedings, contest the validity, applicability or amount of any
asserted Imposition, and pending such contest Solectron shall not be deemed in
default hereunder because of the Imposition if (1) Solectron diligently
prosecutes such contest to completion in a manner reasonably satisfactory to
BNPLC, and (2) Solectron 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,
in any event each such contest shall be concluded and the contested Impositions
must be paid by Solectron prior to the earlier of (i) the date that any criminal
action is overtly threatened or instituted against BNPLC or its directors,
officers or employees because of the nonpayment thereof
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or (ii) the date any writ or order is issued under which any property owned or
leased by BNPLC (including the Property) may be seized or sold or any other
action is taken or overtly threatened against BNPLC or against any property
owned or leased by BNPLC because of the nonpayment thereof, or (iii) any
Designated Sale Date upon which, for any reason, Solectron or an Affiliate of
Solectron or any Applicable Purchaser shall not purchase BNPLC's interest in the
Property pursuant to the Purchase Agreement for a net price to BNPLC (when taken
together with any additional payments made by Solectron pursuant to Paragraph
1(a)(ii) of the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) equal to Stipulated Loss Value.
(c) Increased Costs; Capital Adequacy Charges.
(i) If, after the Effective Date, there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then Solectron shall from
time to time, pay to BNPLC for the account of BNPLC's Parent or such
other Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. A
certificate as to the amount of such increased cost, submitted to BNPLC
and Solectron by BNPLC's Parent or the other Participant, shall be
conclusive and binding upon Solectron, absent clear and demonstrable
error.
(ii) BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change 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 advances made or to be made
to BNPLC to permit BNPLC to maintain BNPLC's investment in the Property
or to make Construction Advances. To the extent that BNPLC's Parent or
another Participant demands Capital Adequacy Charges as compensation for
the additional capital requirements reasonably allocable to such
investment or advances, Solectron shall pay to BNPLC for the account of
BNPLC's Parent or the other Participant, as the case may be, the amount
so demanded.
(iii) Any amount to be paid by Solectron under this subparagraph
5.(c) shall be due within ten days after a demand for such payment is
made upon Solectron.
(d) Solectron's Payment of Other Losses; General Indemnification.
(i) Except for costs paid by BNPLC with the proceeds of the Initial
Funding Advance as part of the Transaction Expenses, all Losses
(including Environmental Losses) asserted against or incurred or
suffered by BNPLC or other Interested Parties at any time and from time
to time by reason of, in connection with or arising out of (A) their
ownership or alleged ownership of any interest in the Property or the
Rents, (B) the use and operation of the Property, (C) the negotiation or
administration of this Lease, the Closing Certificate, or the Purchase
Agreement, (D) the making of Funding Advances, (E) any Construction
Project, (F) the breach by Solectron of this Lease or any other document
executed by Solectron in connection herewith, (G) any failure of the
Property or Solectron itself to comply with Applicable Laws, (H)
Hazardous Substance Activities, including those occurring prior to the
Effective Date, or (I) any bodily or personal injury or death or
property damage occurring in or upon or in the vicinity of the Property
through any cause whatsoever, shall be paid by Solectron, and Solectron
shall indemnify and defend BNPLC and other Interested Parties from and
against all such Losses. (However, the indemnity in the preceding
sentence shall not be construed to make Solectron liable to both BNPLC
and any Participant or other party claiming through BNPLC for the same
costs, expenses or damages, nor for any allocation of general overhead
or internal administrative expenses of BNPLC, BNPLC's Parent or any
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other Interested Party except to the extent allowed by subparagraph
5.(c)(i) because of a Banking Rules Change after the date of this
Lease.)
(ii) SUBJECT ONLY TO SUBPARAGRAPH 5.(d)(vi), THE INDEMNITIES AND
RELEASES PROVIDED HEREIN FOR THE BENEFIT OF BNPLC AND OTHER INTERESTED
PARTIES, INCLUDING THE INDEMNITY SET FORTH IN THE PRECEDING SUBPARAGRAPH
5.(D)(I), SHALL APPLY EVEN IF AND WHEN THE SUBJECT MATTERS OF THE
INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OR
STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED PARTY.
(iii) Costs and expenses for which Solectron shall be responsible
pursuant to this subparagraph 5.(d) will include appraisal fees, filing
and recording fees, inspection fees, survey fees, taxes, brokerage fees
and commissions, abstract fees, title policy fees, Uniform Commercial
Code search fees, escrow fees and Attorneys' Fees incurred by BNPLC with
respect to the Property, whether such costs and expenses are incurred at
the time of execution of this Lease or at any time during the Term. Such
costs and expenses will also include Attorneys' Fees or other costs
incurred to evaluate lien releases and other information submitted by
Solectron with requests for Construction Advances.
(iv) Subject to the limitations set forth in subparagraph 5.(d)(vi),
Solectron's obligations under this subparagraph 5.(d) shall survive the
termination or expiration of this Lease. Any amount to be paid by
Solectron under this subparagraph 5.(d) shall be due within ten days
after a demand for such payment is made upon Solectron.
(v) If an Interested Party notifies Solectron of any claim or
proceeding included in, or any investigation or allegation concerning,
Losses for which Solectron is responsible pursuant to this subparagraph
5.(d), Solectron shall assume on behalf of the Interested Party and
conduct with due diligence and in good faith the investigation and
defense thereof and the response thereto with counsel selected by
Solectron, but reasonably satisfactory to the Interested Party;
provided, that the Interested 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, proceeding,
investigation or allegation involves both Solectron and the Interested
Party and the Interested 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 Solectron, then the Interested
Party shall have the right to select separate counsel to participate in
the investigation and defense of and response to such claim, proceeding,
investigation or allegation on its own behalf, and Solectron shall pay
or reimburse the Interested Party for all Attorney's Fees incurred by
the Interested Party because of the selection of such separate counsel.
If Solectron fails to assume promptly (and in any event within fifteen
days after being notified of the applicable claim, proceeding,
investigation or allegation) the defense of the Interested Party, then
the Interested Party may contest (or settle, with the prior written
consent of Solectron, which consent will not be unreasonably withheld)
the claim, proceeding, investigation or allegation at Solectron's
expense using counsel selected by the Interested Party. Moreover, if any
such failure by Solectron continues for thirty days or more after
Solectron is notified of any such claim, proceeding, investigation or
allegation, the Interested Party may elect not to contest or continue
contesting the same and instead settle (or pay in full) all claims
related thereto without Solectron's consent and without releasing
Solectron from any obligations to the Interested Party under this
subparagraph 5.(d) so long as, in the written opinion of reputable
counsel to the Interested Party, the settlement (or payment in full) is
clearly advisable.
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(vi) Notwithstanding the foregoing, Solectron shall not be required
by this subparagraph 5.(d) or by subparagraph 5.(a) to pay:
a) costs and expenditures incurred or paid by or on behalf of
BNPLC after any Landlord's Election to Continue Construction to
complete or continue construction as provided in subparagraph 6.(h),
to the extent that such costs and expenditures are considered to be
Construction Advances pursuant to subparagraph 6.(h);
b) Losses incurred or suffered by Participants in connection
with their negotiation or execution of the Participation Agreement
(or supplements making them parties thereto) or in connection with
any due diligence they may undertake before entering into the
Participation Agreement;
c) Excluded Taxes;
d) Losses incurred or suffered by any Interested Party that are
proximately caused by (and attributed by any applicable principles
of comparative fault to) the Established Misconduct of that
Interested Party; or
e) Losses incurred or suffered by any Interested Party after,
and not proximately caused by events or circumstances that actually
or allegedly occurred or existed on or before, the later of the
dates upon which (i) this Lease terminates or expires, or (ii)
Solectron surrenders possession of the Property.
Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in
subparagraph 5.(d)(i), then such Interested Party will be expected to
promptly furnish a copy of such notice to Solectron. The failure to so
provide a copy of the notice to Solectron shall not excuse Solectron
from its obligations under subparagraph 5.(d)(i); provided, that if
Solectron is unaware of the matters described in the notice and such
failure renders unavailable defenses that Solectron might otherwise
assert, or precludes actions that Solectron might otherwise take, to
minimize its obligations, then Solectron shall be excused from its
obligation to indemnify such Interested Party (and any Affiliate of such
Interested Party) against the Losses, if any, which would not have been
incurred or suffered but for such failure. For example, if BNPLC fails
to provide Solectron with a copy of a notice of an obligation covered by
the indemnity set out in subparagraph 5.(d)(i) and Solectron is not
otherwise already aware of such obligation, and if as a result of such
failure BNPLC becomes liable for penalties and interest covered by the
indemnity in excess of the penalties and interest that would have
accrued if Solectron had been promptly provided with a copy of the
notice, then Solectron will be excused from any obligation to BNPLC (or
any Affiliate of BNPLC) to pay the excess.
(e) Withholding Taxes. Notwithstanding anything else to the
contrary in this Paragraph 5, but subject to the provisions of this subparagraph
5.(e), to the extent required by law Solectron may deduct United States and
Washington withholding taxes imposed as a way of collecting or in lieu of
Excluded Taxes on payments of Base Rent, Commitment Fees, Administrative Agency
Fees, any interest payable pursuant to subparagraph 4.(g) or any additional
compensation claimed by BNPLC pursuant to subparagraph 5.(c)(ii) (collectively,
"INCOME PAYMENTS") from Income Payments, without obligation to gross up,
indemnify or otherwise increase payments in consequence thereof. Such
withholding, without obligation to gross up, indemnify or otherwise increase
payments in consequence thereof, will be permitted if, but only if:
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(i) in the case of withholding for Excluded Taxes imposed by the
United States of America, the Person entitled to receive Income Payments
(whether BNPLC, as the original landlord named herein, or an assignee of
the original landlord's rights hereunder, a "PAYEE") is not exempt from
withholding by reason of having been organized under the laws of the
United States of America or any State thereof, and such Person shall not
have provided Solectron with three counterparts of each of the forms
prescribed by the Internal Revenue Service (Form 1001 or 4224, or
successor forms, as the case may be) claiming for Payee an exemption
from federal withholding on all Income Payments;
(ii) in the case of withholding for Excluded Taxes imposed by the
State of Washington, the Payee is not exempt from withholding by reason
of having been qualified to do business in Washington or otherwise, and
such Person shall not have provided Solectron with three (3)
counterparts of the forms (if any) prescribed by the Washington taxing
authorities claiming for Payee an exemption from Washington withholding
on all Income Payments;
(iii) at least thirty days prior to any withholding from or
reduction of Income Payments, Solectron shall have notified the Payee
that Solectron believes the withholding is required and permitted by
this subparagraph; and
(iv) the withholding taxes on the Income Payments would have been
assessed even if the applicable taxing authorities had characterized the
transactions evidenced by this Lease and the Purchase Agreement as a
financing arrangement.
Any Payee exempt from withholding for Excluded Taxes imposed by the United
States of America by reason of having been organized under the laws of the
United States of America or any State thereof shall provide to Solectron
statements conforming to the requirements of Treasury Regulation 1.1441-5(b) or
any successor thereto (which statements may be made on a Form W-9). If Solectron
shall ever be required to pay Excluded Taxes that BNPLC has failed to pay when
due because of Solectron's failure to withhold from payments made under this
Lease, BNPLC shall reimburse Solectron for such Excluded Taxes and for any
penalties or interest thereon charged to Solectron. Nothing in this subparagraph
5.(e) shall excuse Solectron from its obligation under subparagraph 5.(c)(i) to
compensate BNPLC for increased costs attributable to any change in law relating
to withholding taxes after the Effective Date.
6. CONSTRUCTION.
(a) Advances; Outstanding Construction Allowance. Subject to the
conditions set forth below, BNPLC shall make advances ("CONSTRUCTION ADVANCES")
on Advance Dates from time to time as requested by Solectron to pay or reimburse
Solectron for Commitment Fees and costs of the initial Construction Project not
already paid or reimbursed from the Initial Funding Advance. Costs for which
Solectron may request Construction Advances pursuant to this subparagraph will
include not only hard costs incurred to construct the Improvements described in
Exhibit C, but also the following costs to the extent reasonably incurred in
connection with the initial Construction Project:
- soft costs, such as architectural fees, consulting fees,
Attorneys' Fees, design costs, fees and costs paid in connection
with obtaining project permits and approvals required by
governmental authorities or the Development Documents (including
application and processing fees), and the Commitment Fees to the
extent that Solectron from time to time
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requests payment of the Commitment Fees in any written request
for any Construction Advance,
- environmental investigation, protection and remediation costs,
- site preparation costs, and
- costs of offsite and other public improvements required as
conditions of governmental approvals for the initial
Construction Project.
As used herein, references to the "OUTSTANDING CONSTRUCTION ALLOWANCE" mean the
amount on the date in question (but not less than zero) equal to: (A) the total
Construction Advances made hereunder by or on behalf of BNPLC on or prior to the
date in question, plus (B) all Carrying Costs added hereunder on or prior to the
date in question, less (C) any funds received and applied as Qualified Payments
on or prior to the date in question; provided, that BNPLC will not be under any
obligation to readvance any portion of the Construction Allowance repaid by
Qualified Payments. Charges ("CARRYING COSTS") shall accrue as described below
for each Construction Period and will be added to (and thereafter be included
in) the Outstanding Construction Allowance on the last day of such Construction
Period (i.e., generally on the Advance Date upon which such Construction Period
ends). Notwithstanding the foregoing, if for any reason Stipulated Loss Value
(and thus the Outstanding Construction Allowance included as a component
thereof) must be determined as of any date between Advance Dates, the
Outstanding Construction Allowance determined on such date shall include not
only Carrying Costs added on or before the immediately preceding Advance Date
computed as described below, but also Carrying Costs accruing on and after such
preceding Advance Date to but not including the date in question.
(b) Calculation of Carrying Costs. Carrying Costs shall accrue for
each Construction Period and shall equal:
- Stipulated Loss Value on the first day of such Construction
Period, times
- the sum of (a) the Effective Rate with respect to such
Construction Period, plus (b) the Spread for such Construction
Period, times
- the number of days in the period from and including the
preceding Advance Date to but not including the Advance Date
upon which the period ends, divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that on the first day
of such Construction Period Stipulated Loss Value is $15,000,000; that
the Effective Rate for the Construction Period is 6%; that the Spread
for such Construction Period is thirty-two and one-half basis points
(32.5/100 of 1%); and that such Construction Period contains exactly
thirty days. Under such assumptions, the Carrying Costs for the
hypothetical Construction Period will equal:
$15,000,000 x (6% + .325%) x 30/360 = $79,062.50
(c) Limits on the Amount of Carrying Costs. Notwithstanding the
foregoing, however, Solectron agrees that Carrying Costs added to the
Outstanding Construction Allowance on the Base Rent
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Commencement Date shall not exceed the amount that can be added without causing
the Funded Construction Allowance to exceed the Maximum Construction Allowance.
The limits set forth in the preceding sentence are imposed because the
Construction Allowance available under this Lease is limited (prior to any
Landlord's Election to Continue Construction) to the Maximum Construction
Allowance.
(d) Construction Projects.
(i) Preconstruction Approvals by BNPLC. Prior to the execution of
this Lease, Solectron submitted and obtained BNPLC's approval of
descriptions of the initial Construction Project that Solectron expects
to construct with the Construction Allowance. Solectron shall submit and
obtain BNPLC's written approval of plans or renderings for any
subsequent Construction Project prior to commencement of the subsequent
Construction Project. Absent any prior Landlord's Election to Continue
Construction or the occurrence and continuation of an Event of Default,
BNPLC may disapprove of such plans or renderings only if BNPLC believes
in good faith that the Construction Project proposed by Solectron will
(1) fail to satisfy the requirements set forth in subparagraph
6.(d)(vi), (2) change the general character of the Property from that
needed to accommodate the uses permitted by subparagraph 3.(a) or (3)
cause Solectron or the Property to violate some other express provision
of this Lease; but no approval given by BNPLC in connection with any
Construction Project, prior to or after the Effective Date, shall
constitute a waiver of subparagraph 6.(d)(vi) or of any other provision
of this Lease. Any items hereafter submitted by Solectron to satisfy
this subparagraph shall be sufficiently detailed to allow BNPLC to make
a reasonable determination of whether the applicable Construction
Project will satisfy subparagraph 6.(d)(vi), but need not include all
detailed construction specifications and drawings of the work to be
included in the Construction Project. All Construction Projects
commenced by Solectron, including the initial Construction Project
(which is described in Exhibit C), and all construction contracts and
other agreements executed or adopted by Solectron in connection
therewith, must be not materially inconsistent with the plans or other
items heretofore or hereafter submitted to and approved by BNPLC as
described above in this subparagraph, except to the extent otherwise
provided by any Scope Changes approved by BNPLC as described below and
except as otherwise provided in subparagraph 6.(h) if BNPLC should make
a Landlord's Election to Continue Construction.
(ii) Scope Changes. Before making a Scope Change to any
Construction Project, Solectron shall provide to BNPLC a reasonably
detailed written description of the Scope Change, a revised construction
budget and a copy of any changes to the drawings, plans and
specifications for the Improvements required in connection therewith,
all of which must be approved in writing by BNPLC (or by any
construction representative appointed by BNPLC from time to time) before
the Scope Change is implemented. BNPLC may disapprove of any Scope
Change to any Construction Project if (and, in the case of a
Construction Project other than the initial Construction Project, only
if) (A) any Event of Default has occurred and is continuing, (B) any
prior Landlord's Election to Continue Construction has occurred, or (C)
BNPLC believes in good faith that the Construction Project proposed by
Solectron, as modified by the Scope Change, will (1) fail to satisfy the
requirements set forth in subparagraph 6.(d)(vi), (2) change the general
character of the Property from that needed to accommodate the uses
permitted by subparagraph 3.(a) or (3) cause Solectron or the Property
to violate some other express provision of this Lease; but in any event
BNPLC's approval shall not constitute a waiver of subparagraph 6.(d)(vi)
or of any other provision of this Lease.
(iii) Failure by BNPLC to Respond to a Request for Approval. If
Solectron submits any request for BNPLC's approval of a Construction
Project or a Scope Change pursuant to the preceding
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subparagraphs after the completion of the initial Construction Project
and more than twenty-four months before the scheduled end of the Term,
yet BNPLC fails to respond to such request within twenty days after
BNPLC's receipt of the request, then Solectron may proceed as if BNPLC
had approved the applicable Construction Project or Scope Change;
provided, however:
a) Solectron may not proceed if any Event of Default has
occurred and is continuing or any prior Landlord's Election to
Continue Construction has occurred.
b) Solectron must notify BNPLC that Solectron will proceed
with the Construction Project or Scope Change, notwithstanding
BNPLC's failure to respond, and in the notice Solectron must
certify that in Solectron's good faith judgement BNPLC cannot, in
accordance with the criteria specified in subparagraph 6.(d)(i)
or subparagraph 6.(d)(ii), as the case may be, decline to give
its approval.
c) If Solectron does proceed without BNPLC's express
approval, BNPLC may at any time within six months prior to the
scheduled end of the Term obtain an appraisal of the Property in
form and scope reasonably satisfactory to BNPLC from an
independent MAI Certified General Real Estate Appraiser
satisfactory to BNPLC, and if the appraisal indicates that the
Construction Project for which Solectron requested the approval
did not (or when completed will not) satisfy the requirements of
subparagraph 6.(d)(vi), then Solectron must upon demand pay to
BNPLC as a Qualified Payment any amount needed to reduce the sum
of (A) Stipulated Loss Value, plus (B) Carrying Costs (if any)
projected by BNPLC to accrue prior to completion of the
applicable Construction Project, to no more than one hundred
sixty-seven percent (167%) of the market value of the Property
indicated by such appraisal.
(iv) Responsibility for Construction. Subject to BNPLC's rights
under subparagraph 6.(h), Solectron shall have sole responsibility for
contracting for and administering all Construction Projects, it being
understood that although title to all Improvements will pass directly to
BNPLC (as more particularly provided in Paragraph 8), BNPLC's obligation
with respect to Construction Projects shall be limited to the making of
advances under and subject to the conditions set forth in this Paragraph
6. No contractor or other third party shall be entitled to require BNPLC
to make advances as a third party beneficiary of this Lease or
otherwise.
(v) Construction Warranty by Solectron. Notwithstanding delays
beyond Solectron's control, and even if the Construction Allowance is
not sufficient to pay for completion of the initial Construction
Project, Solectron warrants that on the Designated Sale Date it shall
have (1) caused the initial Construction Project and any subsequent
Construction Projects which are commenced prior to such date to have
been completed in a good and workmanlike manner, substantially in
accordance with Applicable Laws, and otherwise in compliance with (x)
the provisions of this Lease, (y) the material provisions of the
Permitted Encumbrances and (z) the material provisions of the
Development Documents, and (2) obtained with respect to then existing
Improvements any final certificates of occupancy required for the use
and occupancy thereof. (The warranty set forth in the preceding sentence
is hereinafter called the "CONSTRUCTION Warranty", and any payments
required from Solectron to BNPLC as compensation for the diminution in
value to BNPLC's interest in the Property caused solely by reason of
Solectron's failure to perform the Construction Warranty are hereinafter
called "CONSTRUCTION WARRANTY PAYMENTS".) However, without limiting
Solectron's other obligations under this Lease, the Purchase Agreement
or the Closing Certificate (including, for example, obligations to pay
Base Rent or reimburse BNPLC for
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Impositions), Solectron's aggregate liability for any Construction
Warranty Payments that become due because of Solectron's failure to
complete the initial Construction Project shall be limited to:
(a) 100% less the Residual Risk Percentage, times
(b) the total of all Construction Advances and Carrying
Costs and any other costs or expenditures not considered
Construction Advances that may have been incurred by or on behalf
of BNPLC to continue or complete construction of the initial
Construction Project after a Landlord's Election to Continue
Construction as contemplated in subparagraph 6.(h), computed as
of the earlier of the date upon which the initial Construction
Project is finally complete or the date upon which BNPLC obtains
a judgment for such Construction Warranty Payments.
Further, in no event will any Construction Warranty Payments required by
this Lease, when added to the payments received by BNPLC under the
Purchase Agreement (exclusive of any interest accruing after the
Designated Sale Date on past due payments under the Purchase Agreement),
exceed the payments to which BNPLC is entitled on the Designated Sale
Date according to the Purchase Agreement.
(vi) Value Added. Each Construction Project undertaken and
administered by Solectron (in contrast to the initial Construction
Project if the construction thereof is continued by BNPLC as provided in
subparagraph 6.(h) after a Landlord's Election to Continue
Construction), upon completion and taken as a whole, must enhance the
value of the Property such that the market value of BNPLC's interest in
the Property shall be no less than sixty percent (60%) of Stipulated
Loss Value when the Construction Project is complete.
(vii) Estoppel Letters Required. Within thirty days after any
written request by BNPLC, Solectron shall, with respect to each material
general construction contract for the initial Construction Project and
any material subsequent Construction Projects, cause the contractor
thereunder to execute and deliver to BNPLC an estoppel letter
substantially in the form of Exhibit D attached hereto. Within thirty
days after any written request by BNPLC, Solectron shall also cause the
architect and engineer under any material architectural or engineering
contract for the initial Construction Project and any material
subsequent Construction Project to execute and deliver to BNPLC an
estoppel letter substantially in the form of Exhibit E attached hereto.
(viii) Advances Not a Waiver. No funding of Construction Advances
and no failure of BNPLC to object to any Construction Project proposed
or constructed by Solectron shall constitute a waiver by BNPLC of the
requirements contained in this subparagraph 6.(d).
(e) Conditions to Solectron's Right to Receive Construction
Advances. BNPLC's obligation to provide Construction Advances to Solectron from
time to time under this Paragraph 6 shall be subject to the following terms and
conditions, all of which terms and conditions are intended for the sole benefit
of BNPLC, and none of which terms and conditions shall limit in any way the
right of BNPLC to treat costs or expenditures incurred or paid by or on behalf
of it as Construction Advances pursuant to subparagraph 6.(h):
(i) Prior Notice. Solectron must make a request in substantially
the form attached to this Lease as Exhibit F for any Construction
Advance at least five Business Days prior to the Advance Date upon which
the advance is to be paid. BNPLC shall consider in good faith any
changes to the Construction Advance request forms attached hereto that
Solectron may reasonably request for a particular Construction
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Project, provided the requested changes do not impair BNPLC's rights or
create or increase any liability BNPLC may have in connection with the
applicable Construction Project.
(ii) Amount of the Advances.
a) Limit Dependent Upon the Maximum Construction Allowance.
Solectron shall not be entitled to require any Construction
Advance that would cause the Funded Construction Allowance to
exceed the Maximum Construction Allowance.
b) Limit Dependent Upon Costs Previously Incurred by
Solectron. Solectron shall not be entitled to require any
Construction Advance in excess of (1) the actual costs and
expenses previously incurred or paid by Solectron (in addition to
expenses already included in Transaction Expenses) for the
preparation, negotiation and execution of this Lease, the Closing
Certificate, and the Purchase Agreement, for Commitment Fees and
for the initial Construction Project (including soft costs and
other costs listed in subparagraph 6.(a)), less (2) the sum of
all prior Construction Advances made under this Paragraph 6 to
Solectron as reimbursement for such costs and expenses.
c) Limit Dependent Upon Projected Costs Yet to be Incurred.
Solectron shall not be entitled to require any Construction
Advance that would cause the cost of completing the initial
Construction Project, as reasonably estimated by BNPLC in good
faith, to exceed the difference computed by subtracting (1) the
Carrying Costs then projected by BNPLC to be added to the
Construction Allowance, from (2) the excess, if any, of the
Maximum Construction Allowance over the Funded Construction
Allowance.
d) Minimum Amount Imposed for Administrative Convenience.
Solectron shall not request any Construction Advance (other than
the final Construction Advance) for an amount less than $500,000.
(iii) Insurance. Solectron shall have obtained and provided
certificates (or, in the case of clause a) below, title policies or
binders) reasonably satisfactory to BNPLC evidencing insurance covering
the Property as follows (in addition to the liability insurance required
under subparagraph 10.(a)):
a) Title Insurance. An owner's title insurance policy (or
binder committing the applicable title insurer to issue an
owner's title insurance policy, without the payment of further
premiums) in the amount of no less than $21,000,000, in form and
substance reasonably satisfactory to BNPLC, written by one or
more title insurance companies reasonably satisfactory to BNPLC
and insuring BNPLC's fee interest in the Land and Improvements to
be constructed on the Land; and
b) Builder's Risk Insurance. Builder's Completed Value Risk
and such other hazard insurance as is reasonably required to
protect BNPLC's and Solectron's interests in the Improvements
under construction against risks of physical loss, such insurance
to be maintained by Solectron at all times until completion of
the initial Construction Project or any subsequent Construction
Projects in accordance with the standards and requirements for
such insurance that Solectron would observe with respect to the
construction of any substantial improvements on land owned by it
or its Affiliates.
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(iv) Progress of Construction. Each Construction Project which
has commenced but not yet been completed shall be progressing in a good
and workmanlike manner and substantially in accordance with Applicable
Laws, with Permitted Encumbrances, with Development Documents and with
the requirements of this Lease, and Solectron shall have corrected or be
diligently pursuing the correction of any significant defect in the
construction thereof of which Solectron has received notice.
(v) Evidence of Costs and Expenses to be Reimbursed. To the
extent contemplated by the Construction Advance request forms attached
as Exhibit F, or otherwise reasonably required by BNPLC at the time a
Construction Advance is to be made, Solectron shall have submitted
invoices, requests for payment from contractors and other evidence that
the costs and expenses for which Solectron requests reimbursement
constitute actual costs and expenses incurred by Solectron for a
Construction Project.
(vi) No Sale of BNPLC's Interest. No sale of BNPLC's interest in
the Property shall have occurred pursuant to the Purchase Agreement.
(vii) No Landlord's Election to Continue Construction or Event of
Default. No prior Landlord's Election to Continue Construction shall
have occurred, and no Event of Default shall have occurred and be
continuing.
(viii) Certificate of No Default and Other Matters. Solectron
shall have provided to BNPLC, with the notice requesting the
Construction Advance described in clause (i) above, a current
certificate of an officer of Solectron in the form included in Exhibit F
and shall have provided a copy of such certificate to the Participants.
Without limiting the foregoing, BNPLC may decline to advance any amount
when Solectron is unable to truthfully certify, as contemplated in
Exhibit F, that no liens are being asserted against any part of or
interest in the Property that in the aggregate secure or allegedly
secure more than $5,000,000 of claims by Potential Lien Claimants,
regardless of whether any such liens have caused an Event of Default to
occur hereunder or are being contested by Solectron as permitted by
subparagraph 12.(c). (As used in this subparagraph a lien will be
considered as "being asserted" if a claim of lien relating thereto shall
have been recorded and not discharged by payment or settlement.)
(ix) Funding by Participants. None of the Participants or their
successors under the Participation Agreement shall have failed to
advance to BNPLC their pro rata shares of the Construction Advance being
requested. However, any such failure shall excuse BNPLC's obligation to
provide the Construction Advance requested only to the extent of the
funds that the applicable Participant or Participants should have
advanced (but did not advance) to BNPLC, and in the event of any such
failure:
a) BNPLC will immediately notify Solectron if any
Participant refuses or fails to advance its pro rata share of any
Construction Advance, but BNPLC will not in any event be liable
to Solectron for BNPLC's failure to do so.
b) BNPLC will, to the extent possible, postpone reductions
of Construction Advances because of the failure by any one or
more Participants ("NONFUNDING PARTICIPANTS") to make required
advances under the Participation Agreement (a "PARTICIPANT
DEFAULT") by adjusting (and readjusting from time to time, as
required) the funding "Percentages" of other Participants, and by
requesting the other Participants to make advances to BNPLC on
the basis of such adjusted Percentages, in each case as provided
in the Participation Agreement; however, so long as a Participant
Default continues, no Construction Advance shall be required that
would cause the
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Outstanding Construction Allowance to exceed (1) the Maximum
Construction Allowance available under this Lease, less (2) all
amounts that should have been, but because of a continuing
Participant Default have not been, advanced by any one or more of
the Participants to BNPLC under the Participation Agreement with
respect to Construction Advances.
c) Further, after a Participant Default, and so long as no
Event of Default has occurred and is continuing, BNPLC shall do
the following as reasonably requested by Solectron, provided that
nothing in this provision shall require BNPLC to take any action
that would violate Applicable Laws, that would constitute a
breach of BNPLC's obligations under the Participation Agreement,
or that would require BNPLC to waive any rights or remedies it
has under this Lease, the Purchase Agreement, the Closing
Certificate, the Guaranty or BNPLC's other agreements with
Solectron or Guarantor concerning the Property:
(1) BNPLC shall promptly make a written demand upon the
Nonfunding Participants for the cure of the Participant
Default.
(2) BNPLC shall, to the extent BNPLC has the right to do
so under the Participation Agreement, decline to allow the
Nonfunding Participants to exercise voting, consent or
notification rights under the Participation Agreement.
(3) BNPLC shall not unreasonably withhold its approval
for the substitution of any new participant proposed by
Solectron for Nonfunding Participants, if (A) the proposed
substitution does not require BNPLC to waive rights against
the Nonfunding Participants, (B) the new participant will
agree (by executing supplement to the Participation
Agreement as provided in the Participation Agreement) to
provide funds to replace the payments that would otherwise
be required of the Nonfunding Participants with respect to
future Construction Advances, (C) the new participant (or
Solectron) provides the funds (if any) needed to terminate
the Nonfunding Participants' rights to receive payments of
"Net Cash Flow" (as defined in the Participation Agreement)
that BNPLC will be required to pay the new participant under
the terms of the substitution reasonably proposed by
Solectron, (D) the new participant (or Solectron) provides
and agrees in writing to provide funds needed to reimburse
BNPLC for any and all Losses incurred by BNPLC in connection
with or because of the substitution of the new participant
for the Nonfunding Participants, including any cost of
defending and paying any claim asserted by Nonfunding
Participants because of the substitution (but not including
any liability of BNPLC to the Nonfunding Participants for
damages caused by BNPLC's bad faith or gross negligence in
the performance of BNPLC's obligations to the Nonfunding
Participants), (E) the obligations of BNPLC to the new
participant per dollar of the new participant's "investment"
(it being understood that such investment will be computed
in a manner consistent with the examples set forth in
Exhibit A of the Participation Agreement, but net of
reimbursements to BNPLC under clause (D) preceding) shall
not exceed the obligations per dollar of investment by the
Nonfunding Participants that BNPLC would have had to the
Nonfunding Participants if there had been no Participant
Default, and (F) the new participant shall be a reputable
financial institution having a net worth of no less than
seven and one half percent (7.5%) of total assets and total
assets of no less than $10,000,000,000.00 (all according to
then recent audited financial statements).
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(f) Breakage Costs for Construction Advances Requested But Not
Taken. If Solectron requests but thereafter declines to accept any Construction
Advance, or if Solectron requests a Construction Advance that it is not
permitted to take because of its failure to satisfy any of the conditions
specified in subparagraph 6.(e), Solectron shall pay upon demand any resulting
Breakage Costs. However, for purposes of this subparagraph, a request for a
Construction Advance by Solectron will be considered as if it had never been
made if BNPLC and each Participant actually receives written notice from
Solectron, no later than four Business Days prior to the Advance Date upon which
the requested advance is to be made, stating that Solectron unconditionally
rescinds the request.
(g) Completion Notice. Solectron shall provide a notice (a
"COMPLETION NOTICE") to BNPLC promptly after construction of the initial
Construction Project is substantially complete, advising BNPLC of the
substantial completion.
(h) Landlord's Election to Continue Construction. Without
limiting BNPLC's other rights and remedies under this Lease, and without
terminating this Lease or Solectron's obligations hereunder or under any of the
other documents referenced herein, if any Event of Default occurs before
Solectron completes the initial Construction Project, BNPLC shall be entitled
(but not obligated) to take whatever action it deems necessary or appropriate by
the use of legal proceedings or otherwise to continue or complete the
construction of the initial Construction Project in a manner substantially
consistent (to the extent practicable under Applicable Laws) with the general
description of the initial Construction Project set forth in Exhibit C and the
permitted use of the Property set forth in subparagraph 3.(a). (As used herein,
"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" means any election by BNPLC to
continue or complete the construction of the initial Construction Project
pursuant to the preceding sentence.) After giving Solectron no less than ninety
days notice that BNPLC is considering a Landlord's Election to Continue
Construction (which notice must reference this subparagraph 6.(h) and state that
it is given pursuant to this subparagraph), BNPLC may do any one or more of the
following pursuant to this subparagraph without further notice and regardless of
whether any Event of Default is then continuing:
(i) Take Control of the Property. BNPLC may cause Solectron and
any contractors or other parties on the Property to vacate the Property
until the initial Construction Project is complete or BNPLC elects to no
longer continue work on the initial Construction Project.
(ii) Continuation of Construction. BNPLC may perform or cause to
be performed any work to complete or continue the construction of the
initial Construction Project. In this regard, so long as work ordered or
undertaken by BNPLC is substantially consistent (to the extent
practicable under Applicable Laws) with the general description of the
initial Construction Project set forth in Exhibit C and the permitted
use of the Property set forth in subparagraph 3.(a), BNPLC shall have
complete discretion to:
a) proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;
b) establish and extend construction deadlines as BNPLC from
time to time deems appropriate;
c) hire, fire and replace architects, engineers,
contractors, construction managers and other consultants as BNPLC
from time to time deems appropriate, without obligation to use,
consider or compensate architects, engineers, contractors,
construction managers or other consultants previously selected or
engaged by Solectron;
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d) determine the compensation that any architect, engineer,
contractor, construction manager or other consultant engaged by
BNPLC will be paid, and the terms and conditions that will govern
the payment of such compensation (including whether payment will
be due in advance, over the course of construction or on some
other basis and including whether contracts will be let on a
fixed price basis, a cost plus a fee basis or some other basis),
as BNPLC from time to time deems appropriate;
e) pay, settle or compromise existing or future bills and
claims which are or may be liens against the Property or as BNPLC
considers necessary or desirable for the completion of the
initial Construction Project or the removal of any clouds on
title to the Property;
f) prosecute and defend all actions or proceedings in
connection with the construction of the initial Construction
Project;
g) select and change interior and exterior finishes for the
Improvements and landscaping as BNPLC from time to time deems
appropriate; and
h) generally do anything that Solectron itself might have
done or asked BNPLC to do pursuant to subparagraphs 7.(a) or
7.(b) if Solectron had satisfied or obtained BNPLC's waiver of
the conditions specified therein.
(iii) Arrange for Turnkey Construction. Without limiting the
generality of the foregoing, BNPLC may engage any contractor or real
estate developer BNPLC believes to be reputable to take over and
complete construction of the initial Construction Project on a "turnkey"
basis.
(iv) Suspension or Termination of Construction. Notwithstanding
any Landlord's Election to Continue Construction, BNPLC may subsequently
elect at any time to suspend or terminate further construction without
obligation to Solectron.
For purposes of this Lease and the Purchase Agreement (including the
determination of the Outstanding Construction Allowance and other amounts
dependent upon the Outstanding Construction Allowance, like Stipulated Loss
Value and the Break Even Price), after any Landlord's Election to Continue
Construction and the expiration of the ninety-day notice period described above
in this subparagraph 6.(h), all costs and expenditures incurred or paid by or on
behalf of BNPLC to complete or continue construction as provided in this
subparagraph shall be considered Construction Advances, regardless of whether
they cause the Outstanding Construction Allowance to exceed the Maximum
Construction Allowance. Further, as used in the preceding sentence, "costs
incurred" by BNPLC will include costs that BNPLC has become obligated to pay to
any third party that is not an Affiliate of BNPLC (including any contractor),
even if the payments for which BNPLC has become so obligated will constitute
prepayments for work or services to be rendered after payment and
notwithstanding that BNPLC's obligations for the payments may be conditioned
upon matters beyond BNPLC's control. For example, even if a construction
contract between BNPLC and a contractor excused BNPLC from making further
progress payments to the contractor upon Solectron's breach of the Purchase
Agreement, the obligation to make a progress payment would nonetheless be
"incurred" by BNPLC, for purposes of determining whether BNPLC has incurred
costs considered to be Construction Advances, when BNPLC's obligation to pay it
became subject only to Solectron's compliance with the Purchase Agreement or
other conditions beyond BNPLC's control. If and to the extent BNPLC does incur
costs considered as Construction Advances under this subparagraph, but (1) BNPLC
does not actually pay the costs and after incurring them BNPLC is fully and
finally excused from the obligation to pay them
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for any reason other than a breach by Solectron of this Lease, the Closing
Certificate or the Purchase Agreement, or (2) BNPLC receives a refund of such
costs, then the costs BNPLC is excused from paying or refunded to BNPLC shall be
considered Qualified Payments
BNPLC's rights under this subparagraph 6.(h) shall be deemed to be powers
coupled with an interest which cannot be revoked.
7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC.
(a) Cooperation of BNPLC to Facilitate Construction and Development.
During the Term BNPLC shall take any action reasonably requested by Solectron to
facilitate the construction or use of the Property permitted by this Lease;
provided, however, that:
(i) This subparagraph 7.(a) shall not impose upon BNPLC the
obligation to take any action that can be taken by Solectron,
Solectron's Affiliates or anyone else other than BNPLC as the owner of
the Land, the Improvements or any other interests in the Property.
(ii) BNPLC shall not be required by this subparagraph 7.(a) to
make any payment to another Person unless BNPLC shall first have
received funds from Solectron, in excess of any other amounts due from
Solectron hereunder, sufficient to make the payment. (This clause (ii)
will not be construed as limiting the right of Solectron to obtain
additional Construction Advances, on and subject to the terms and
conditions set forth in Paragraph 6, for payments Solectron itself may
pay or incur an obligation to pay to another Person.)
(iii) BNPLC shall have no obligations whatsoever under this
subparagraph at any time after a Landlord's Election to Continue
Construction or when an Event of Default shall have occurred and be
continuing.
(iv) Solectron must request any action to be taken by BNPLC
pursuant to this subparagraph, and such request must be specific and in
writing, if required by BNPLC at the time the request is made. A
suggested form for such a request is attached as Exhibit G.
(v) No action may be required of BNPLC pursuant to this
subparagraph 7.(a) that could constitute a violation of any Applicable
Laws or compromise or constitute a waiver of BNPLC's rights under other
provisions of this Lease, the Closing Certificate or the Purchase
Agreement or that for any other reason is reasonably objectionable to
BNPLC.
The actions BNPLC shall take pursuant to this subparagraph 7.(a) if
reasonably requested by Solectron will include, subject to the conditions listed
in the proviso above, joining in or consenting to any (I) grant of easements,
licenses, rights of way, and other rights in the nature of easements encumbering
the Real Property, (II) release or termination of easements, licenses, rights of
way or other rights in the nature of easements which are for the benefit of the
Real Property or any portion thereof, (III) dedication or transfer of portions
of the Land not improved with a building, for road, highway or other public
purposes, (IV) agreements (other than with Solectron or its Affiliates) for the
use and maintenance of common areas, for reciprocal rights of parking, for
ingress and egress and for amendments to any Permitted Encumbrances or
Development Documents (including amendments to the Development Documents that
Solectron may reasonably request to facilitate construction or development on
land owned by it or its Affiliates other than the Land), (V) instruments
necessary or desirable for the exercise or
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enforcement of rights under the Permitted Encumbrances, the Development
Documents or any contract, permit, license, franchise or other right included
within the term "Property", (VI) permit applications or other documents
reasonably required to accommodate the construction or alteration of
Improvements otherwise permitted by this Lease, (VII) confirmations of
Solectron's rights under any particular provisions of this Lease which Solectron
may wish to provide to a third party, (IX) execution or filing of a tract or
parcel map subdividing the Real Property into lots or parcels or reconfiguring
existing parcels, (X) agreements providing development incentives or tax
abatements with respect to the Property. However, the determination of whether
any such action is reasonably requested or reasonably objectionable to BNPLC may
depend in whole or in part upon the extent to which the requested action shall
result in a lien to secure payment or performance obligations against BNPLC's
interest in the Property, shall cause a decrease in the value of the Property to
less than sixty percent (60%) of Stipulated Loss Value after any Qualified
Payments that may result from such action are taken into account, or shall
impose upon BNPLC any present or future obligations greater than the obligations
BNPLC is willing to accept in reliance on the indemnifications provided by
Solectron hereunder.
Upon request by Solectron, BNPLC shall also provide 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), certifying the dates to which the Base
Rent and other amounts payable by Solectron hereunder have been paid, stating
whether BNPLC is aware of any default by Solectron that may exist hereunder and
confirming BNPLC's agreements concerning landlord's liens and other matters set
forth in subparagraph 7.(c); it being intended that any such statement by BNPLC
may be relied upon by anyone with whom Solectron may intend to enter into an
agreement for construction of the Improvements or other significant agreements
concerning the Property.
Any Losses incurred by BNPLC because of any action taken pursuant to
this subparagraph 7.(a) shall be covered by the indemnification set forth in
subparagraph 5.(d). Further, for purposes of such indemnification, any action
taken by BNPLC will be deemed to have been made at the request of Solectron if
made pursuant to any request of counsel to or any officer of Solectron (or with
their knowledge, and without their objection) in connection with the execution
or administration of this Lease or the Purchase Agreement.
To avoid construction delays or for other reasonable cause, Solectron
may ask BNPLC for an expedited response to any request for action made by
Solectron pursuant to this subparagraph 7.(a) by delivering such request with a
notice substantially in the form attached hereto as Exhibit H. BNPLC shall
endeavor in good faith to respond promptly to any such notice after the receipt
of any such notice by an officer of BNPLC.
(b) Actions Permitted by Solectron Without BNPLC's Consent. No
refusal by BNPLC to execute or join in the execution of any agreement,
application or other document requested by Solectron pursuant to the preceding
subparagraph 7.(a) shall preclude Solectron from itself executing such
agreement, application or other document; provided, that in doing so Solectron
is not purporting to act for BNPLC and does not thereby create or expand any
obligations or restrictions that encumber the Property. Further, subject to the
other terms and conditions of this Lease, Solectron shall be entitled to do any
of the following in Solectron's own name and to the exclusion of BNPLC during
the Term without any notice to or consent of BNPLC so long as no Landlord's
Election to Continue Construction has occurred, so long as no Event of Default
has occurred and is continuing and so long as Solectron is not purporting to act
for BNPLC and does not thereby create or expand any obligations or restrictions
that encumber the Property:
(i) perform obligations arising under and exercise and enforce
the rights of Solectron or the owner of the Real Property under the
Development Documents and Permitted Encumbrances;
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(ii) perform obligations arising under and exercise and enforce
the rights of Solectron or the owner of the Real Property with respect
to any other contracts or documents (such as building permits) included
within the Personal Property; and
(iii) recover and retain any monetary damages or other benefit
inuring to Solectron or the owner of the Real Property through the
enforcement of any rights, contracts or other documents included within
the Personal Property (including the Development Documents and Permitted
Encumbrances); provided, that to the extent any such monetary damages
may become payable as compensation for an adverse impact on value of the
Property, the rights of BNPLC and Solectron hereunder with respect to
the collection and application of such monetary damages shall be the
same as for condemnation proceeds payable because of a taking of all or
any part of the Property.
(c) Waiver of Landlord's Liens. BNPLC waives any security interest,
statutory landlord's lien or other interest BNPLC may have in or against
computer equipment and other tangible personal property placed on the Land from
time to time that Solectron or its Affiliates own or lease from other lessors;
provided, however, that BNPLC does not waive its interest in or rights with
respect to equipment or other property included within the "Property" as
described in Paragraph 8. Although computer equipment or other tangible personal
property may be "bolted down" or otherwise firmly affixed to Improvements, it
shall not by reason thereof become part of the Improvements if it can be removed
without causing structural or other material damage to the Improvements and
without rendering HVAC or other major building systems inoperative and if it
does not otherwise constitute "Property" as provided in Paragraph 8.
(d) Limited Representations by BNPLC Concerning Accounting Matters.
BNPLC is not expected or required to represent or warrant that this Lease or the
Purchase Agreement will qualify for any particular accounting treatment under
GAAP. However, to permit Solectron to determine for itself the appropriate
accounting for this Lease and the Purchase Agreement, BNPLC does represent to
Solectron as of the Effective Date:
(i) Equity capital invested in BNPLC is greater than three
percent (3%) of the aggregate of all lease funding amounts (including
participations) of BNPLC. Such equity capital investments constitute
equity in legal form and are reflected as shareholders' equity in the
financial statements and accounting records of BNPLC.
(ii) BNPLC is one hundred percent (100%) owned by French American
Bank Corporation, which is one hundred percent (100%) owned by BNPLC's
Parent.
(iii) BNPLC leases properties of substantial value to more than
fifteen tenants.
(iv) All parties to whom BNPLC has any material obligations known
to BNPLC are (and are expected to be) Affiliates of BNPLC's Parent,
Participants, or participants with BNPLC in other leasing deals or loans
made by BNPLC, or other tenants or borrowers in such other leasing deals
or loans.
(v) BNPLC has substantial assets in addition to the Property,
assets which BNPLC believes to have a value far in excess of the value
of the Property.
(vi) Other than any Funding Advances provided from time to time
by Participants under the Participation Agreement, BNPLC expects to
obtain all Funding Advances from Banque ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇
▇▇
or other Affiliates of BNPLC (including Funding Advances to cover
Carrying Costs and other amounts to be capitalized as part of the
Outstanding Construction Allowance, and assuming that Solectron uses the
Maximum Construction Allowance under this Lease), and to the extent that
Banque Nationale de Paris or such other Affiliates themselves borrow or
accept bank deposits to obtain the funds needed to provide such Funding
Advances, the obligation to repay such funds shall not be limited, by
agreement or corporate structure, to payments collected from Solectron
or otherwise recovered from the Property.
(vii) BNPLC has not obtained residual value insurance or a
residual value guarantee from any third party to ensure the recovery of
its investment in the Property.
(viii) BNPLC does not intend to take any action during the term
of this Lease that would change, or anticipate any change in, any of the
facts listed above in this subparagraph.
Solectron shall have the right to ask BNPLC questions from time to time
concerning BNPLC's financial condition, concerning matters relevant to the
proper accounting treatment of this Lease on Solectron's financial statements
and accounting records (including the amount of BNPLC's equity capital as a
percentage of the aggregate of all lease funding amounts [including
participations] by BNPLC) or concerning BNPLC's ability to perform under this
Lease or the Purchase Agreement, to which questions BNPLC shall promptly
respond. Such response, however, may be limited to a statement that BNPLC will
not provide requested information; provided, however, BNPLC must notify
Solectron in writing if at any time during the Term BNPLC ceases to be 100%
owned, directly or indirectly, by Banque Nationale de Paris, or if at any time
during the Term BNPLC believes it could not represent that the statements in
clauses (i), (v) and (vii) above continue to be accurate, whether because of a
change in the capital structure of BNPLC, a purchase of residual value insurance
with respect to the Property or otherwise.
(e) Other Limited Representations by BNPLC. BNPLC represents that:
(i) No Default or Violation. The execution, delivery and
performance by BNPLC of this Lease and the Purchase Agreement do not and
will not constitute a breach or default under any material contract or
agreement to which BNPLC is a party or by which BNPLC is bound and do
not, to the knowledge of BNPLC, violate or contravene any law, order,
decree, rule or regulation to which BNPLC is subject. (As used in this
subparagraph 7.(e), "BNPLC'S KNOWLEDGE" means the present actual
knowledge of ▇▇▇▇▇ ▇▇▇, the current officer of BNPLC having primary
responsibility for the negotiation of this Lease.)
(ii) No Suits. There are no judicial or administrative actions,
suits, proceedings or investigations pending or, to BNPLC's knowledge,
threatened against BNPLC that are reasonably likely to affect BNPLC's
interest in the Property or the validity, enforceability or priority of
this Lease or the Purchase Agreement, and BNPLC 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 BNPLC or its interest in the
Property.
(iii) Enforceability. The execution, delivery and performance of
this Lease and the Purchase Agreement by BNPLC are duly authorized, are
not in contravention of or conflict with any term or provision of
BNPLC's articles of incorporation or bylaws and do not, to BNPLC'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 and the Purchase Agreement
are valid, binding and legally enforceable obligations of BNPLC except
as such enforcement is affected by bankruptcy,
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insolvency and similar laws affecting the rights of creditors,
generally, and equitable principles of general application; provided,
BNPLC makes no representation or warranty that conditions imposed by
zoning ordinances or other state or local Applicable Laws to the
purchase, ownership, lease or operation of the Property have been
satisfied.
(iv) Organization. BNPLC is duly incorporated and legally
existing under the laws of Delaware and is duly qualified to do business
in the State of Washington. BNPLC has or will obtain on a timely basis,
at Solectron's expense to the extent so provided in the other provisions
of this Lease, all requisite power and all governmental certificates of
authority, licenses, permits, qualifications and other documentation
necessary to own and lease the Property and to perform its obligations
under this Lease.
(v) Not a Foreign Person. BNPLC is not a "foreign person" within
the meaning of Sections 1445 and 7701 of the Code (i.e., BNPLC 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).
(f) Keeping Proprietary Information Confidential. BNPLC agrees to
use reasonable precautions to keep confidential any "proprietary information"
(as defined in Paragraph 27) that BNPLC may receive from Solectron or otherwise
discover with respect to Solectron or Solectron's business pursuant to this
Lease or any investigation by BNPLC hereunder, except for disclosures: (i)
specifically and previously authorized in writing by Solectron; (ii) to any
permitted assignee of BNPLC as to any interest in the Property so long as the
assignee has agreed in writing to use its reasonable efforts to keep such
information confidential in accordance with the terms of this subparagraph;
(iii) to legal counsel, accountants, auditors, environmental consultants and
other professional advisors to BNPLC so long as BNPLC shall inform such persons
in writing (if practicable) of the confidential nature of such information and
shall direct them to treat such information confidentially; (iv) to regulatory
officials having jurisdiction over BNPLC or BNPLC's Parent (provided that the
disclosing party shall request confidential treatment of the disclosed
information, if practicable); (v) as required by legal process (provided that
the disclosing party shall request confidential treatment of the disclosed
information, if practicable); (vi) of information which has previously become
publicly available through the actions or inactions of a Person other than BNPLC
not, to BNPLC's knowledge, in breach of an obligation of confidentiality to
Solectron; and (vii) to any Participant so long as the Participant has not
repudiated the confidentiality provision concerning Solectron's proprietary
information set forth in the Participation Agreement.
8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. Subject in
each case to Solectron's rights under the other provisions of this Lease, all
Improvements constructed during the term of this Lease shall be owned by BNPLC
and shall constitute "Property" covered by this Lease. Further, subject in each
case to Solectron's rights under the other provisions of this Lease, all
furnishings, furniture, chattels, permits, licenses, franchises, certificates
and other personal property of whatever nature shall have been acquired on
behalf of BNPLC by Solectron, shall be owned by BNPLC and shall constitute
"Property" covered by this Lease, to the extent heretofore or hereafter
acquired, in whole or in part, with any portion of the Initial Funding Advance
provided to Solectron or with any Construction Advances or other funds for which
Solectron has received or hereafter receives reimbursement from the Initial
Funding Advance or Construction Advances, as shall all renewals or replacements
of or substitutions for any such Property. Solectron shall not authorize or
permit the transfer of title to the Improvements or to any other such Property
to pass through Solectron or Solectron's Affiliates before it is transferred to
BNPLC from contractors, suppliers, vendors or other third Persons. Nothing
herein shall constitute authorization of Solectron by BNPLC to bind BNPLC to any
construction contract or other agreement with a third Person, but any
construction contract or other agreement executed by Solectron for the
acquisition or
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construction of Improvements or other components of the Property may provide for
the transfer of title as required by the preceding sentence. Upon request of
BNPLC made when any Event of Default has occurred and is continuing, Solectron
shall deliver to BNPLC an inventory describing all significant items of Personal
Property (and, in the case of tangible personal property, showing the make,
model, serial number and location thereof) other than Improvements, with a
certification by Solectron that such inventory is true and complete and that all
items specified in the inventory are covered by this Lease free and clear of any
Lien other than the Permitted Encumbrances or Liens Removable by BNPLC.
9. ENVIRONMENTAL.
(a) Environmental Covenants by Solectron. Solectron covenants that:
(i) Solectron shall not conduct or permit others to conduct
Hazardous Substance Activities, except Permitted Hazardous Substance Use
and Remedial Work.
(ii) Solectron shall not discharge or permit the discharge of
anything on or from the Property that would require any permit under
applicable Environmental Laws, other than (1) storm water runoff, (2)
waste water discharges through a publicly owned treatment works, (3)
discharges that are a necessary part of any Remedial Work, and (4) other
similar discharges consistent with the definition herein of Permitted
Hazardous Substance Use, in each case in strict compliance with
Environmental Laws.
(iii) Following any discovery that Remedial Work is
required by Environmental Laws or otherwise reasonably required, and to
the extent not inconsistent with the other provisions of this Lease,
Solectron shall promptly perform and diligently and continuously pursue
such Remedial Work, in each case in strict compliance with Environmental
Laws.
(iv) If requested by BNPLC in connection with any significant
Remedial Work required by this subparagraph, Solectron shall retain an
independent Environmental Consultant or Industrial Hygienist, as
appropriate, to evaluate any significant new information generated
during Solectron's implementation of the Remedial Work and to discuss
with Solectron whether such new information indicates the need for any
additional measures that Solectron should take to protect the health and
safety of persons (including, without limitation, employees, contractors
and subcontractors and their employees) or to protect the environment.
Solectron shall implement any such additional measures to the extent
required with respect to the Property by Environmental Laws or otherwise
reasonably required and to the extent not inconsistent with the other
provisions of this Lease.
(b) Right of BNPLC to do Remedial Work Not Performed by Solectron. If
Solectron's failure to cure any breach of the covenants set forth in
subparagraph 9.(a) continues beyond the Environmental Cure Period (as defined
below), BNPLC may, in addition to any other remedies available to it, after
notifying Solectron of the Remedial Work BNPLC believes is needed, conduct all
or any part of the Remedial Work. To the extent that Remedial Work done by BNPLC
pursuant to the preceding sentence (including any removal of Hazardous
Substances) is reasonably required, or is required or believed by BNPLC in good
faith to be required by Applicable Law or by any demand, regulation or guideline
of any governmental authority (whether or not having the force of law), the cost
thereof shall be a demand obligation owing by Solectron to BNPLC. As used in
this subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the
earlier of: (1) one hundred twenty days after Solectron is notified of the
breach which must be cured within such period, (2) the date that any writ or
order is issued for the levy or sale of any property owned by BNPLC (including
the Property) because of such
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breach, (3) the date that any criminal action is overtly threatened or
instituted against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason,
Solectron or an Affiliate of Solectron or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a net price to BNPLC (when taken together with any additional payments made by
Solectron pursuant to Paragraph 1(a)(ii) of the Purchase Agreement, in the case
of a purchase by an Applicable Purchaser) equal to Stipulated Loss Value.
(c) Environmental Inspections and Reviews. BNPLC reserves the right
to retain an Environmental Consultant or Industrial Hygienist to review any
report prepared by Solectron or to conduct BNPLC's own investigation to confirm
whether Solectron is complying with the requirements of this Paragraph 9.
Solectron grants to BNPLC and to BNPLC's agents, employees, consultants and
contractors the right during reasonable business hours and after reasonable
notice to enter upon the Property to inspect the Property and to perform such
tests as BNPLC deems necessary or appropriate to review or investigate Hazardous
Substances in, on, under or about the Property or any discharge or suspected
discharge of Hazardous Substances into groundwater or surface water from the
Property. Solectron shall promptly reimburse BNPLC for the reasonable fees of
its Environmental Consultants and Industrial Hygienists and the costs of any
such inspections and tests; provided, however, BNPLC's right to reimbursement
for the reasonable fees of any consultant engaged as provided in this
subparagraph or for the costs of any inspections or test undertaken as provided
in this subparagraph shall be limited to the following circumstances: (1) an
Event of Default shall have occurred; (2) BNPLC shall have retained the
consultant to establish the condition of the Property just prior to any
conveyance thereof pursuant to the Purchase Agreement or just prior to the
expiration of this Lease; (3) BNPLC shall have retained the consultant to
satisfy any regulatory requirements applicable to BNPLC or its Affiliates; or
(4) BNPLC shall have retained the consultant because BNPLC has been notified of
a violation of Environmental Laws concerning the Property or BNPLC otherwise
reasonably believes that Solectron has not complied with the requirements of
this Paragraph 9.
(d) Communications Regarding Environmental Matters.
(i) Solectron shall immediately advise BNPLC and Participants of
(1) any discovery of any event or circumstance which would render any of
the representations of Solectron herein or in the Closing Certificate
concerning environmental matters materially inaccurate or misleading if
made at the time of such discovery and assuming that Solectron was aware
of all relevant facts, (2) any Remedial Work (or change in Remedial
Work) required or undertaken by Solectron or its Affiliates in response
to any (A) discovery of any Hazardous Substances on, under or about the
Property other than Permitted Hazardous Substances or (B) any claim for
damages resulting from Hazardous Substance Activities, (3) Solectron's
discovery of any occurrence or condition on any real property adjoining
or in the vicinity of the Property which would or could reasonably be
expected to cause the Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions under
Environmental Laws, or (4) any investigation or inquiry of any failure
or alleged failure by Solectron to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, Solectron shall deliver to
BNPLC within thirty days after BNPLC's request (or such longer period as
may be reasonably required, but in any event within ninety days after
BNPLC's request), a preliminary written environmental plan setting forth
a general description of the action that Solectron proposes to take with
respect thereto, if any, to bring the Property into compliance with
Environmental Laws or to correct any breach by Solectron of this
Paragraph 9, including any proposed Remedial 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 BNPLC may
reasonably request.
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(ii) Solectron shall provide BNPLC and Participants with
copies of all material written communications with federal, state and
local governments, or agencies relating to the matters listed in the
preceding clause (i). Solectron shall also provide BNPLC and
Participants with copies of any correspondence from third Persons which
threaten litigation over any significant failure or alleged significant
failure of Solectron to maintain or operate the Property in accordance
with Environmental Laws.
(iii) Prior to Solectron's submission of a Material
Environmental Communication to any governmental or regulatory agency or
third party, Solectron shall, to extent practicable, deliver to BNPLC
and Participants a draft of the proposed submission (together with the
proposed date of submission), and in good faith assess and consider any
comments of BNPLC regarding the same. Promptly after BNPLC's request,
Solectron shall meet with BNPLC to discuss the submission, shall provide
any additional information reasonably requested by BNPLC and shall
provide a written explanation to BNPLC addressing the issues raised by
comments (if any) of BNPLC regarding the submission, including a
reasoned analysis supporting any decision by Solectron not to modify the
submission in accordance with comments of BNPLC.
10. INSURANCE REQUIRED AND CONDEMNATION.
(a) Liability Insurance. Throughout the Term Solectron shall
maintain commercial general liability insurance against claims for bodily and
personal injury, death and property damage occurring in or upon or resulting
from any occurrence in or upon the Property, in standard form and with an
insurance company or companies reasonably acceptable to BNPLC (and BNPLC may
reasonably require that such insurance be provided through insurance or
reinsurance 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 VI or better), such insurance to afford immediate
protection, to the limit of not less than $20,000,000 combined single limit for
bodily and personal injury, death and property damage in respect of any one
accident or occurrence, with not more than $3,000,000 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, but such coverage or the amount
thereof shall in no way limit such indemnifications. The policy evidencing such
insurance shall name as additional insureds BNPLC and all Participants of which
Solectron has been notified (including BNPLC's Parent). Solectron shall maintain
with respect to each policy or agreement evidencing such commercial general
liability insurance such endorsements as may be reasonably required by BNPLC and
shall at all times deliver and maintain with BNPLC written confirmation (in form
reasonably satisfactory to BNPLC) 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 thirty days
notice to BNPLC. Not less than thirty days prior to the expiration date of each
policy of insurance required of Solectron pursuant to this subparagraph,
Solectron shall deliver to BNPLC a certificate evidencing a paid renewal policy
or policies.
(b) Property Insurance. Throughout the Term Solectron will keep all
Improvements (including all alterations, additions and changes made to the
Improvements) insured under an "all-risk" property insurance policy (not
excluding from coverage perils normally included within the definitions of
extended coverage, vandalism, malicious mischief and, if the Property is in a
flood zone, flood) in the amount no less than eighty percent (80%) of the
replacement value (exclusive of land, foundation, footings, excavations and
grading) 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. Subject to the reasonable approval of BNPLC,
Solectron will be responsible for determining the amount of property insurance
to be maintained from time to time, but Solectron must maintain such coverage on
an agreed value basis to eliminate the effects of coinsurance. Such
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insurance must be issued by an insurance company or companies reasonably
acceptable to BNPLC, and BNPLC may reasonably require that the insurance or
reinsurance companies providing such insurance be rated by the A.M. Best Company
of Oldwick, New Jersey as having (1) a policyholder's rating of A- or better,
(2) a reported financial information rating of no less than VI, and (3) in the
case of each such company, a reported financial information rating which
indicates an adjusted policyholders' surplus equal to or greater than the
underwriting exposure that such company has under the insurance or reinsurance
it is providing for the Property. Any deductible applicable to such insurance
shall not exceed $3,000,000. Such insurance shall cover not only the value of
Solectron's interest in the Improvements, but also the interest of BNPLC, and
such insurance shall include provisions that BNPLC must be notified at least
thirty days prior to any cancellation or reduction of insurance coverage. The
policies under which Solectron maintains such insurance may be "blanket"
policies covering not only the Property but other properties occupied or owned
by Solectron; however, all policies must provide that proceeds paid thereunder
with respect to the Property will be payable to BNPLC and Solectron as their
interests may appear, it being understood between BNPLC and Solectron that such
proceeds shall be paid to BNPLC as Escrowed Proceeds and will be applied in
accordance with Paragraph 11 of this Lease. In the event any of the Property is
destroyed or damaged by fire, explosion, windstorm, hail or by any other
casualty against which insurance shall have been required hereunder, (i) BNPLC
may, but shall not be obligated to, make proof of loss if not made promptly by
Solectron after notice from BNPLC, (ii) each insurance company concerned is
hereby authorized and directed to make payment for such loss directly to BNPLC
for application as required by Paragraph 11, and (iii) BNPLC may settle, adjust
or compromise any and all claims for loss, damage or destruction under any
policy or policies of insurance (provided, that so long as no Landlord's
Election to Continue Construction shall have occurred and no Event of Default
shall have occurred and be continuing, BNPLC must obtain Solectron's consent to
any such settlement). If any casualty shall result in damage to or loss or
destruction of the Property, Solectron shall give immediate notice thereof to
BNPLC and Paragraph 11 shall apply.
Notwithstanding the foregoing, however, Solectron shall have the right
as Solectron deems appropriate to settle, adjust or compromise any insurance
claim for damage to the Property that cannot reasonably be asserted for more
than $3,000,000 so long as no Landlord's Election to Continue Construction shall
have occurred and no Event of Default shall have occurred and be continuing; and
Solectron may directly receive and hold the proceeds of such claim so long as no
Landlord's Election to Continue Construction shall have occurred and no Event of
Default shall have occurred and be continuing and so long as Solectron applies
such proceeds as required by subparagraph 11.(b).
(c) Failure to Obtain Insurance. If Solectron fails to obtain any
insurance or to provide confirmation of any such insurance as required by this
Lease, BNPLC shall be entitled (but not required) to obtain the insurance that
Solectron has failed to obtain or for which Solectron has not provided the
required confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require Solectron to reimburse BNPLC for the cost of
such insurance and to pay interest thereon computed at the Default Rate from the
date such cost was paid by BNPLC until the date of reimbursement by Solectron.
(d) Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Property or any portion
thereof, each party shall notify the other (provided, however, BNPLC shall have
no liability for its failure to provide such notice) of the pendency of such
proceedings. Solectron shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, 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 Property and all judgments, decrees and
awards for injury or damage to the
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Property shall be paid to BNPLC as Escrowed Proceeds for application as provided
in Paragraph 11. BNPLC is hereby authorized, in the name of Solectron, at any
time when an Event of Default shall have occurred and be continuing, or
otherwise with Solectron's prior consent, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award
concerning condemnation of any of the Property. BNPLC 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, Solectron
shall have the right as Solectron deems appropriate to settle, adjust or
compromise any claim for any taking of less than all or substantially all of the
Property if the claim cannot reasonably be asserted for more than $3,000,000 and
if no Landlord's Election to Continue Construction shall have occurred and no
Event of Default shall have occurred and be continuing; and Solectron may
directly receive and hold the proceeds of any such claim so long as no
Landlord's Election to Continue Construction shall have occurred and no Event of
Default shall have occurred and be continuing and so long as Solectron applies
such proceeds as required by subparagraph 11.(b).
11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.
(a) Collection of Insurance and Condemnation Proceeds Generally.
Subject to BNPLC's rights under this Paragraph 11, and so long as no Landlord's
Election to Continue Construction shall have occurred and no Event of Default
shall have occurred and be continuing, Solectron shall be entitled to use all
property insurance and condemnation proceeds payable with respect to the
Property during the Term for the restoration and repair of the Property or any
remaining portion thereof. Except as provided in the last sentence of
subparagraph 10.(b) and the last sentence of subparagraph 10.(d), all insurance
and condemnation proceeds received with respect to the Property (including
proceeds payable under any insurance policy covering the Property which is
maintained by Solectron) shall be paid to BNPLC and then applied as follows:
(i) First, such proceeds shall be used to reimburse BNPLC 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 BNPLC as Escrowed Proceeds and used to
reimburse Solectron for the actual cost of the repair, restoration or
replacement of the Property. However, any Remaining Proceeds not needed
for such purpose shall be applied by BNPLC as Qualified Payments, as
provided in subparagraph 11.(c), after Solectron notifies BNPLC that
they are not needed for repairs, restoration or replacement.
(b) Administration of Remaining Proceeds; Solectron's Obligation to
Restore. Any Remaining Proceeds held by BNPLC as Escrowed Proceeds shall be
deposited by BNPLC in an interest bearing account as provided in the definition
of Escrowed Proceeds in the attached List of Defined Terms and shall be paid to
Solectron or to third parties as Solectron may direct as the applicable repair,
restoration or replacement progresses and upon compliance by Solectron with such
terms, conditions and requirements as may be reasonably imposed by BNPLC, but in
no event shall BNPLC be required to pay Escrowed Proceeds to Solectron in excess
of the actual cost to Solectron of the applicable repair, restoration or
replacement, as evidenced by invoices or other documentation reasonably
satisfactory to BNPLC, it being understood that BNPLC may retain and apply any
such excess as a Qualified Payment. In any event, Solectron 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 in the
attached List of Defined Terms. Further, notwithstanding
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the inadequacy of the Remaining Proceeds held by BNPLC as Escrowed Proceeds, if
any, or anything herein to the contrary, Solectron must, after any taking of
less than all or substantially all of the Property by condemnation and after any
damage to the Property by fire or other casualty, either:
(i) promptly restore or improve the Property or the remainder
thereof to a value no less than sixty percent (60%) of Stipulated Loss
Value (computed after the application of any Remaining Proceeds as a
Qualified Payment) and to a reasonably safe and sightly condition; or
(ii) promptly restore the Property to a reasonably safe and
sightly condition and pay to BNPLC for application as a Qualified
Payment the amount (if any), as determined by BNPLC, needed to reduce
Stipulated Loss Value (computed after the application of such amount and
any available Remaining Proceeds as Qualified Payments) to no more than
one hundred sixty-seven percent (167%) of the then-current market value
of the Property or remainder thereof.
(c) Special Provisions Concerning Event of Defaults and Qualified
Payments. If an Event of Default shall have occurred and be continuing, then
notwithstanding the foregoing, BNPLC shall be entitled to receive and collect
all insurance or condemnation proceeds payable with respect to the Property, and
BNPLC shall be entitled to either, at the discretion of BNPLC, (A) hold all
Remaining Proceeds as Escrowed Proceeds until paid to Solectron as reimbursement
for the actual and reasonable cost of repairing, restoring or replacing the
Property when Solectron has completed such repair, restoration or replacement,
or (B) apply such proceeds as Qualified Payments when and to the extent deemed
appropriate by BNPLC.
When no Landlord's Election to Continue Construction shall have occurred
and no Event of Default shall have occurred and be continuing, BNPLC shall apply
any Remaining Proceeds paid to it (or other amounts available for application as
a Qualified Payment) as a Qualified Payment on any date that BNPLC is directed
to do by a notice from Solectron; provided, that if such a notice from Solectron
specifies an effective date for a Qualified Payment that is less than five
Business Days after BNPLC's actual receipt of the notice, BNPLC may postpone the
date of the Qualified Payment to any date not later than five Business Days
after BNPLC's receipt of the notice. In any event, except when BNPLC is required
by the preceding sentence to apply Remaining Proceeds or other amounts as a
Qualified Payment on an Advance Date or Base Rent Date, BNPLC may deduct
Breakage Costs incurred in connection with any Qualified Payment from the
Remaining Proceeds or other amounts available for application as the Qualified
Payment, and Solectron will reimburse BNPLC upon request for any such Breakage
Costs that BNPLC incurs but does not deduct.
(d) Takings of All or Substantially All of the Property. In the
event of any taking of all or substantially all of the Property, BNPLC 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 Property by condemnation exceeds the
sum of the Remaining Proceeds resulting from such condemnation, then BNPLC shall
be entitled to recover the excess from Solectron upon demand as an additional
Qualified Payment, whereupon this Lease shall terminate. Any taking of so much
of the Real Property as, in BNPLC's reasonable good faith judgment, makes it
impracticable to restore or improve the remainder thereof as required by part
(1) of subparagraph 11.(b) shall be considered a taking of substantially all the
Property for purposes of this Paragraph 11.
(e) Waiver of Subrogation. Without limiting Solectron's obligations
to make repairs under other provisions of this Lease, BNPLC and Solectron each
waive any right of recovery against the other, and the other's agents, officers
or employees, for any damage to the Property or to the personal property
situated from time
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to time in or on the Real 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 11.(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 subparagraph. Solectron shall cause the insurance
policies required of Solectron by this Lease to be properly endorsed, if
necessary, to prevent any loss of coverage because of the waivers set forth in
this subparagraph. If such endorsements are not available at commercially
reasonable rates, the waivers set forth in this subparagraph shall be
ineffective to the extent that such waivers would cause required insurance with
respect to the Property to be impaired.
12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON
CONCERNING THE PROPERTY. Solectron represents, warrants and covenants as
follows:
(a) Compliance with Covenants and Laws. The use of the Property
permitted by this Lease complies, or will comply after Solectron obtains
available permits as the tenant under this Lease, in all material respects with
all Applicable Laws. Solectron has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for the
construction contemplated herein and the use of the Property permitted by this
Lease.
(b) Operation of Property. Solectron shall operate the Property in a
good and workmanlike manner and in a manner that causes it to comply in all
material respects with Applicable Laws. (For purposes of this Lease, "material"
noncompliance with Applicable Law will include any noncompliance, the correction
of which has been requested by a governmental authority, or because of which a
threat of action against the Property or BNPLC has been asserted by a
governmental authority.) Solectron shall not use or occupy or allow the use or
occupancy of the Property in any manner which violates any Applicable Law in any
material respect 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 could, individually or in the
aggregate, reduce the value of the Property and leave the Property with a value
of less than sixty percent (60%) of Stipulated Loss Value, Solectron shall not:
(i) initiate or permit any zoning reclassification of the Property; (ii) seek
any variance under existing zoning ordinances applicable to the Property; (iii)
use or permit the use of the 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
Property; or (v) consent to the annexation of the Property to any municipality.
If a change in the zoning or other Applicable Laws affecting the permitted use
or development of the Property shall occur that BNPLC determines will reduce the
then-current market value of the Property, and if after such reduction the
then-current market value of the Property shall be less than sixty percent (60%)
of Stipulated Loss Value in the reasonable judgment of BNPLC, then Solectron
shall before the Designated Sale Date pay BNPLC an amount equal to such excess
for application as a Qualified Payment. Solectron shall not cause or consent to
any drilling or exploration for, or extraction, removal or production of,
minerals from the surface or subsurface of the Property. If Solectron receives a
notice or claim from any federal, state or other governmental authority that the
Property is not in compliance with any Applicable Law in any material respect,
or that any action may be taken against BNPLC because the Property does not
comply with any Applicable Law, Solectron shall promptly furnish a copy of such
notice or claim to BNPLC.
Notwithstanding the foregoing, Solectron may in good faith, by
appropriate proceedings, contest the validity and applicability of any
Applicable Law with respect to the Property, and pending such contest Solectron
shall not be deemed in default hereunder because of the violation of such
Applicable Law, if Solectron diligently prosecutes such contest to completion in
a manner reasonably satisfactory to BNPLC, and if Solectron promptly causes the
Property to comply with any such Applicable Law upon a final determination by a
court of competent
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jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by Solectron and any claims asserted against
BNPLC or the Property because of such violation must be paid by Solectron, all
prior to the earlier of (i) the date that any criminal action is overtly
threatened or instituted against BNPLC or any of its directors, officers or
employees because of such violation, (ii) the date that any action is taken or
overtly threatened by any governmental authority against BNPLC or any property
owned by BNPLC (including the Property) because of such violation, or (iii) any
Designated Sale Date upon which, for any reason, Solectron or an Affiliate of
Solectron or any Applicable Purchaser shall not purchase BNPLC's interest in the
Property pursuant to the Purchase Agreement for a net price to BNPLC (when taken
together with any additional payments made by Solectron pursuant to Paragraph
1(a)(ii) of the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) equal to Stipulated Loss Value.
(c) Debts for Construction, Maintenance, Operation or Development.
Solectron shall cause all debts and liabilities incurred in the construction,
maintenance, operation or development of the Property, including all debts and
liabilities for labor, material and equipment and all debts and charges for
utilities servicing the Property, to be promptly paid; provided, nothing in this
subparagraph will be construed to make Solectron liable for Liens Removable by
BNPLC or Excluded Taxes.
Notwithstanding the foregoing, Solectron 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 Solectron
shall not be deemed in default under this subparagraph because of the contested
lien if (1) within thirty days after being asked to do so by BNPLC, Solectron
bonds over to BNPLC's reasonable satisfaction all such contested liens against
the Property alleged to secure an amount in excess of $5,000,000 (individually
or in the aggregate), (2) Solectron diligently prosecutes such contest to
completion in a manner reasonably satisfactory to BNPLC, and (3) Solectron
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 must be paid by Solectron
prior to the earlier of (i) the date that any criminal action is overtly
threatened or instituted against BNPLC or its directors, officers or employees
because of the nonpayment thereof, (ii) the date that any writ or order is
issued under which the Property or any other property in which BNPLC has an
interest may be seized or sold or any other action is taken or overtly
threatened against BNPLC or any property in which BNPLC has an interest because
of the nonpayment thereof, or (iii) any Designated Sale Date upon which, for any
reason, Solectron or an Affiliate of Solectron or any Applicable Purchaser shall
not purchase BNPLC's interest in the Property pursuant to the Purchase Agreement
for a net price to BNPLC (when taken together with any additional payments made
by Solectron pursuant to Paragraph 1(a)(ii) of the Purchase Agreement, in the
case of a purchase by an Applicable Purchaser) equal to Stipulated Loss Value.
(d) Repair, Maintenance, Alterations and Additions. Solectron shall
keep the Property in good order, operating condition and appearance, causing all
necessary repairs, renewals and replacements to be promptly made, and will not
allow any of the Property to be materially misused, abused or wasted. To the
extent that any of the following could, individually or in the aggregate, reduce
the value of the Property and leave the Property with a value of less than sixty
percent (60%) of Stipulated Loss Value, Solectron shall not: (i) fail to
promptly replace any worn-out fixtures or material items of tangible Personal
Property covered by this Lease with fixtures or other tangible Personal Property
comparable to the replaced fixtures or Personal Property when new, (ii) remove
from the Property any fixtures or tangible Personal Property of significant
value covered by this Lease except such as are replaced by Solectron by articles
of equal suitability and value, free and clear of any Lien other than Permitted
Encumbrances or Liens Removable by BNPLC, or (iii) make any significant
alterations to any
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Improvements after they are completed. Without limiting the foregoing, Solectron
will notify BNPLC before making any alterations to the Improvements which could
materially reduce the market value of the Property or which change the general
character of the Property or which impair in any significant manner the useful
life or utility of any Improvements.
Nothing in this subparagraph is intended to limit Solectron's rights and
obligations under other provisions of this Lease with respect to the
construction of the initial or any subsequent Construction Project permitted by
other provisions of this Lease.
(e) Compliance With Permitted Encumbrances and Development
Contracts. Solectron shall comply with and will cause to be performed all of the
covenants, agreements and obligations imposed upon the owner of any interest in
the Property by the Permitted Encumbrances or the Development Contracts. Without
limiting the foregoing, Solectron shall cause all amounts to be paid when due,
the payment of which is secured by any Lien against the Property created by the
Permitted Encumbrances.
(f) Modification of Permitted Encumbrances and Development
Contracts. Solectron shall not enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance or Development Contract that would
create or expand or purport to create or expand obligations or restrictions
which would encumber the Property without the prior consent of BNPLC. Whether
BNPLC must give any such consent requested by Solectron during the term of this
Lease shall be governed by subparagraph 7.(a).
(g) Books and Records Concerning the Property. Solectron shall keep
books and records that are accurate and complete in all material respects for
the Property and will, subject to Paragraph 27, permit all such books and
records (including 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 BNPLC.
13. ASSIGNMENT AND SUBLETTING BY SOLECTRON.
(a) BNPLC's Consent Required. Without the prior consent of BNPLC,
Solectron shall not assign, transfer, mortgage, pledge or hypothecate this Lease
or any interest of Solectron hereunder and shall not sublet all or any part of
the Property, by operation of law or otherwise; provided, that, so long as no
Landlord's Election to Continue Construction has occurred and no Event of
Default has occurred and is continuing, Solectron shall be entitled without the
consent of BNPLC to (1) assign Solectron's rights under this Lease and the
Purchase Agreement to an Affiliate of Solectron (including any Affiliate of
Solectron that is the surviving entity after a merger permitted by subsection
3.04(a) of Schedule A attached to the Guaranty) pursuant to a written assignment
unconditionally providing that the Affiliate assumes Solectron's obligations
hereunder and thereunder and (unless Solectron has been merged into the
Affiliate pursuant to a merger permitted by subsection 3.04(a) of Schedule A
attached to the Guaranty) that Solectron ratifies and confirms for the benefit
of BNPLC Solectron's responsibility and liability to BNPLC under this Lease and
the Purchase Agreement, and (2) sublet all or any portion of the Property if:
(i) any sublease by Solectron is made expressly subject and
subordinate to the terms hereof;
(ii) no sublease purports to grant the subtenant thereunder
rights to use or occupy the Property after the expiration or termination
of this Lease, other than rights expressly conditioned upon a purchase
by Solectron of the Property pursuant to the Purchase Agreement;
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(iii) the uses permitted by such sublease are limited to uses
expressly permitted by subparagraph 3.(a) above; and
(iv) less than forty-nine percent (49%) of any completed
Improvements are at any time subleased by Solectron to anyone other than
its own Affiliates.
(b) Standard for BNPLC's Consent to Assignments and Certain Other
Matters. Consents and approvals of BNPLC which are required by this Paragraph 13
will not be unreasonably withheld, but Solectron acknowledges that BNPLC's
withholding of such consent or approval shall be reasonable if BNPLC determines
in good faith that (1) giving the approval may materially increase BNPLC's risk
of liability for any existing or future environmental problem, (2) giving the
approval is likely to substantially increase BNPLC's administrative burden of
complying with or monitoring Solectron's compliance with the requirements of
this Lease, or (3) any transaction for which Solectron has requested the consent
or approval would negate Solectron'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 BNPLC to a sale, assignment,
transfer, mortgage, pledge or hypothecation of this Lease or Solectron's
interest hereunder, and no assignment or subletting of the Property or any part
thereof in accordance with this Lease or otherwise with BNPLC's consent, shall
release Solectron from liability hereunder; and any such consent shall apply
only to the specific transaction thereby authorized and shall not relieve
Solectron from any requirement of obtaining the prior consent of BNPLC to any
further sale, assignment, transfer, mortgage, pledge or hypothecation of this
Lease or any interest of Solectron hereunder.
14. ASSIGNMENT BY BNPLC.
(a) Restrictions on Transfers. Except by a Permitted Transfer, BNPLC
shall not assign, transfer, mortgage, pledge, encumber or hypothecate this Lease
or the Purchase Agreement or any interest of BNPLC in and to the Property during
the Term without the prior consent of Solectron.
(b) Effect of Permitted Transfer or other Assignment by BNPLC. If,
without breaching subparagraph 14.(a), BNPLC sells or otherwise transfers the
Property and assigns all of its rights under this Lease and the Purchase
Agreement, and if BNPLC's successor in interest to all such rights assumes in
writing for the benefit of Solectron BNPLC's obligations under this Lease and
the Purchase Agreement on and subject to the express terms and conditions set
out herein and therein, then BNPLC shall thereby be released from any
obligations arising after such assumption under this Lease (other than any
liability for a breach of the landlord's obligation to provide Construction
Advances) or under the Purchase Agreement, and Solectron shall look solely to
each successor in interest of BNPLC for performance of such obligations.
15. BNPLC'S RIGHT OF ACCESS.
(a) BNPLC and BNPLC's representatives may enter the Property, after
three Business Days advance notice to Solectron (except in the event of an
emergency, when no advance notice will be required), for the purpose of
performing any work BNPLC is authorized to undertake by the next subparagraph or
for the purpose confirming whether Solectron has complied with the requirements
of this Lease at any time BNPLC may reasonably question such compliance. So long
as Solectron remains in possession of the Property, BNPLC or BNPLC's
representative will, before making any such inspection or performing any such
work on the Property, if then
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requested to do so by Solectron to maintain security: (i) sign in at Solectron's
security or information desk if Solectron has such a desk on the premises, (ii)
wear a visitor's badge or other reasonable identification provided by Solectron
when BNPLC or BNPLC's representative first arrives at the Property, (iii) permit
an employee of Solectron to observe such inspection or work, and (iv) comply
with other similar reasonable nondiscriminatory security, health or safety
requirements of Solectron, as Solectron may establish from time to time in
accordance with good industry practices, provided that such other requirements
do not, individually or in the aggregate, substantially interfere with or delay
inspections or work of BNPLC authorized by this Lease.
(b) If Solectron fails to perform any act or to take any action
which hereunder Solectron is required to perform or take, or to pay any money
which hereunder Solectron is required to pay, and if such failure or action
constitutes an Event of Default or causes BNPLC or any director, officer,
employee or Affiliate of BNPLC to be overtly threatened with criminal
prosecution or renders BNPLC's interest in the 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, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by Solectron to BNPLC. Further, BNPLC, 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
BNPLC to do any work which under any provision of this Lease Solectron may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of Solectron's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to Solectron or the subtenants of Solectron by reason of making
such repairs or the performance of any such work on or in the Property, or on
account of bringing materials, supplies and equipment into or through the
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 [and
attributed by any applicable principles of comparative fault to] the Established
Misconduct of BNPLC), and the obligations of Solectron under this Lease shall
not thereby be excused in any manner.
16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON.
Solectron represents, warrants and covenants as follows:
(a) Negative Covenants. Without the prior written consent of BNPLC
in each case, neither Solectron nor any of its Affiliates shall:
(i) Multi employer ERISA Plans. Incur or permit any Affiliate to
incur any obligation to contribute to any "Multi employer plan" as
defined in Section 4001 of ERISA.
(ii) Prohibited ERISA Transaction. Enter into any transaction
which would cause this Lease, the Purchase Agreement, the Closing
Certificate or any other document executed in connection herewith (or
any exercise of BNPLC's rights hereunder or thereunder) to constitute a
non-exempt prohibited transaction under ERISA.
(b) Financial Statements; Required Notices; Certificates as to
Default. To the extent not so delivered by Guarantor, Solectron shall deliver to
BNPLC and to each Participant of which Solectron has been notified:
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(i) copies of all financial statements, certificates, notices and
other information that Guarantor is required to provide by Part 2 of
Schedule A attached to the Guaranty prior to the deadlines for delivery
established thereunder;
(ii) together with the annual and quarterly financial statements
furnished in accordance with subparagraph 16.(b)(i), a certificate of a
Responsible Financial Officer of Guarantor in the form attached hereto
as Exhibit J certifying (a) that no Event of Default or material Default
by Solectron has occurred and is continuing (or, if an Event of Default
or material Default by Solectron has occurred, stating the nature
thereof and the action which Solectron proposes to take with respect
thereto), (b) that the representations and warranties by Guarantor and
Solectron contained in the provisions referenced in Exhibit J from this
Lease, the Closing Certificate, the Purchase Agreement and the Guaranty
are true and correct in all material respects on and as of the date of
such certificate as though made on and as of such date, or, if not then
true and correct, a brief statement as to why such representations are
no longer true and correct, and (c) the accuracy of computations
attached thereto demonstrating compliance by Guarantor with the
financial covenants established in Schedule A attached to the Guaranty;
(iii) as soon as possible and in any event within five days after
the occurrence of each Event of Default or material Default known to a
Responsible Financial Officer of Guarantor, a statement setting forth
details of such Event of Default or material Default and the action
which Solectron has taken and proposes to take with respect thereto;
(iv) as soon as practicable and in any event within thirty days
after a Responsible Financial Officer of Solectron knows or has reason
to know that any ERISA Termination Event with respect to any Plan has
occurred, a statement of a Responsible Financial Officer of Solectron
describing such ERISA Termination Event and the action, if any, which
Solectron proposes to take with respect thereto;
(v) upon request by BNPLC, a statement by Solectron and Guarantor
in writing certifying that this Lease and the Guaranty are unmodified
and in full effect (or, if there have been modifications, that this
Lease and the Guaranty are in full effect as modified, and setting forth
such modifications) and the dates to which the Base Rent, Commitment
Fees and Administrative Agency Fees have been paid and either stating
that no default exists hereunder or specifying each such default; it
being intended that any such statement may be relied upon by any
prospective purchaser or mortgagee of the Property or any prospective
Participant;
(vi) promptly after any change in the rating of the Index Debt of
Guarantor by S&P or ▇▇▇▇▇'▇, which will result in a change in the Spread
(as defined in the List of Defined Terms), a certificate of a
Responsible Financial Officer of Guarantor advising BNPLC of the ratings
after the change; and
(vii) such other information respecting the condition or
operations, financial or otherwise, of Solectron, of its Affiliates or
of the Property as BNPLC or any Participant may from time to time
reasonably request.
BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 16.(b) to any Participant and to
any regulatory body having jurisdiction over BNPLC, BNPLC's Parent or any other
Participant that requires or requests it.
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(c) No Default or Violation. The execution, delivery and performance
by Solectron of this Lease do not and will not constitute a breach or default
under any other material agreement or contract to which Solectron is a party or
by which Solectron is bound or which affects the Property, and do not violate or
contravene any law, order, decree, rule or regulation to which Solectron is
subject, and such execution, delivery and performance by Solectron 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, Solectron's
property pursuant to the provisions of any of the foregoing.
(d) No Suits. Except as disclosed in Schedule 2, there are no
judicial or administrative actions, suits, proceedings or investigations pending
or, to Solectron's knowledge, threatened that will adversely affect the Property
or the validity, enforceability or priority of this Lease, and Solectron 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 use, occupancy or operation of the Property. No
condemnation or other like proceedings are pending or, to Solectron's knowledge,
threatened against the Property.
(e) Enforceability. The execution, delivery and performance by
Solectron of this Lease and the Purchase Agreement 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 Solectron's
articles of incorporation or bylaws. This Lease and the Purchase Agreement are
valid, binding and legally enforceable obligations of Solectron in accordance
with its 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.
(f) Financial Matters. Solectron is not "insolvent" on the date
hereof (that is, the sum of Solectron's absolute and contingent liabilities,
including the obligations of Solectron under this Lease, does not exceed the
fair market value of Solectron's assets) and has no outstanding liens, suits,
garnishments or court actions which could render Solectron insolvent or
bankrupt. Solectron's capital is adequate for the businesses in which Solectron
is engaged and intends to be engaged. Solectron has not incurred (whether hereby
or otherwise), nor does Solectron intend to incur or believe that it will incur,
debts which will be beyond its ability to pay as such debts mature. There has
not been filed by or, to Solectron's knowledge, against Solectron 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 Solectron or any significant portion of Solectron'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
BNPLC relating to Solectron are true, correct and complete in all material
respects.
(g) Organization. Solectron is duly incorporated and legally
existing under the laws of the State of California and is duly qualified to do
business in the State of Washington. Solectron 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
fulfill its obligations under this Lease. Solectron has the corporate power and
adequate authority, rights and franchises to own Solectron's property and to
carry on Solectron's business as now conducted and is duly qualified and in good
standing in each state in which the character of Solectron's business makes such
qualification necessary or, if it is not so qualified in a state other than
Washington, such failure does not have a material adverse effect on the
properties, assets, operations or businesses of Solectron and its Subsidiaries,
taken as a whole.
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(h) ERISA. Solectron is not and will not become an "employee benefit
plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
ERISA. The assets of Solectron do not and will not in the future constitute
"plan assets" of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101. Solectron is not and will not become a "governmental plan" within
the meaning of Section 3(32) of ERISA. Transactions by or with Solectron are not
subject to state statutes regulating investments of and fiduciary obligations
with respect to governmental plans. No ERISA Termination Event has occurred with
respect to any Plan of Solectron and Solectron and all its Affiliates are in
compliance with ERISA. Neither Solectron nor any of its Affiliates is required
to contribute to, or has any other absolute or contingent liability in respect
of, any "Multi employer plan" as defined in Section 4001 of ERISA. As of the
Effective Date no "accumulated funding deficiency" (as defined in Section 412(a)
of the Code) exists with respect to any Plan of Solectron, whether or not waived
by the Secretary of the Treasury or his delegate, and the current value of the
benefits of each Plan of Solectron, if any, equals or is less than the current
value of such Plan's assets available for the payment of such benefits.
(i) Use of Proceeds. In no event shall the funds from the Initial
Funding Advance or any Construction Advance be used (nor have they been used)
directly or indirectly for personal, family, household or agricultural purposes
or for the purpose, whether immediate, incidental or ultimate, of purchasing,
acquiring or carrying any "margin stock" or any "margin securities" (as such
terms are defined respectively in Regulation U and Regulation G promulgated by
the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any such
margin stock or margin securities. Solectron represents and warrants that
Solectron is not engaged principally, or as one of Solectron's important
activities, in the business of extending credit to others for the purpose of
purchasing or carrying such margin stock or margin securities.
(j) Investment Company Act. Solectron is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(k) Omissions. None of Solectron's representations or warranties
contained in this Lease or in any other document, certificate or written
statement furnished to BNPLC by or on behalf of Solectron in connection with
this Lease 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) Not a Foreign Person. Solectron is not a "foreign person" within
the meaning of Sections 1445 and 7701 of the Code (i.e. Solectron 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).
(m) Further Assurances. Solectron shall, upon request of BNPLC, (i)
promptly correct any 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 any renewals, additions, substitutions,
replacements or appurtenances to the Property; (iii) execute, acknowledge,
deliver, procure and record or file any document or instrument deemed advisable
by BNPLC to protect its rights in and to the 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
BNPLC to enable BNPLC, BNPLC's Parent
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and any other Participants to comply with the requirements or requests of any
agency or authority having jurisdiction over them.
17. EVENTS OF DEFAULT.
(a) Definition of Events of Default. Each of the following events
shall be deemed to be an "EVENT OF DEFAULT" by Solectron under this Lease:
(i) Solectron shall fail to pay when first due any Base Rent,
any Commitment Fees or any Administrative Agency Fees and such failure
shall continue for three Business Days after Solectron is notified
thereof by BNPLC pursuant to a notice that specifically references this
Paragraph 17.(a).
(ii) Solectron shall fail to pay when first due any Rent other
than Base Rent, Commitment Fees or Administrative Agency Fees, or
Solectron shall fail to pay when first due any amount required by the
Closing Certificate, and in either case such failure shall continue for
thirty days after Solectron is notified thereof by BNPLC pursuant to a
notice that specifically references this Paragraph 17.(a).
(iii) Solectron shall fail to comply with any term, provision or
covenant of this Lease or the Closing Certificate, other than as
described in the other clauses of this subparagraph 17.(a), and shall
not cure such failure prior to the earlier of (A) thirty days after
notice thereof is sent to Solectron, or (B) the date any writ or order
is issued for the levy or sale of any property owned by BNPLC (including
the Property) because of such failure or any criminal action is overtly
threatened or instituted against BNPLC 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 overtly
threatened or instituted, the period within which such failure may be
cured by Solectron shall be extended for a further period (not to exceed
an additional one hundred twenty days) as shall be necessary for the
curing thereof with diligence, if (but only if) (x) such failure is
susceptible of cure but cannot with reasonable diligence be cured within
such thirty day period, (y) Solectron shall promptly have commenced to
cure such failure and shall thereafter continuously prosecute the curing
thereof with reasonable diligence and (z) the extension of the period
for cure will not, in the case of such a failure that occurs or
commences more than thirty-five days prior to the expiration of this
Lease, cause the period for cure to extend beyond five days prior to the
expiration of this Lease.
(iv) Solectron shall fail to comply with any term, provision or
condition of the Purchase Agreement and, if the Purchase Agreement
expressly provide a time within which Solectron may cure such failure,
Solectron shall not cure the failure within such time.
(v) Solectron shall abandon the Property.
(vi) Guarantor, Solectron or any of Guarantor's other
Subsidiaries shall: (1) be in default with respect to any payment
(whether of principal or interest and regardless of amount) in respect
of any "Material Indebtedness" (which as used in this provision shall
mean any Debt of Guarantor or its applicable Subsidiary [as the case may
be] that is owed to BNPLC or BNPLC's Affiliates or that is outstanding
in a principal amount of at least $10,000,000 in the aggregate), and
such default shall continue beyond the applicable grace period, if any,
specified in the agreements or instruments relating to such Material
Indebtedness; or (2) be in default under any agreement or instrument
relating to any Material Indebtedness
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and as a result of such default, the Material Indebtedness shall be
declared to be due and payable prior to the stated maturity thereof.
(vii) Guarantor, Solectron or any of Guarantor's other
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 Guarantor, Solectron or any
of Guarantor's other 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 seeking the entry of an order for 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 sixty
consecutive days, or any of the actions sought in such proceeding
(including 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 Guarantor,
Solectron or any of Guarantor's other Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
clause 17.(a)(vii).
(viii) Any order, judgment or decree is entered in any
proceedings against Guarantor, Solectron or any of Guarantor's other
Subsidiaries decreeing its dissolution and such order, judgment or
decree remains unstayed and in effect for more than sixty days.
(ix) Any order, judgment or decree is entered in any proceedings
against Guarantor decreeing a divestiture of any of its assets that
represent a substantial part, or the divestiture of the stock of
Solectron or any of Guarantor's other Subsidiaries whose assets
represent a substantial part, of the total assets of Guarantor and its
Subsidiaries (determined on a consolidated basis in accordance with
GAAP) or which requires the divestiture of assets, or stock of any of
Guarantor's Subsidiaries, which shall have contributed a substantial
part of the net income of Guarantor and its Subsidiaries (determined on
a consolidated basis 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 days.
(x) A final judgment or order for the payment of money in an
amount (not covered by insurance) which exceeds $10,000,000 shall be
rendered against Guarantor, Solectron or any of Guarantor's other
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment, or (ii) within sixty days
after the entry thereof, such judgment or order is not discharged or
execution thereof stayed pending appeal, or within thirty days after the
expiration of any such stay, such judgment is not discharged.
(xi) Any ERISA Termination Event that BNPLC determines in good
faith would constitute grounds for a termination of any Plan of
Solectron or for the appointment by the appropriate United States
district court of a trustee to administer any Plan of Solectron shall
have occurred and be continuing thirty days after notice to such effect
shall have been given to Solectron by BNPLC, or any Plan of Solectron
shall be terminated, or a trustee shall be appointed by an appropriate
United States district court to administer any Plan of Solectron, or the
Pension Benefit Guaranty Corporation shall institute proceedings to
terminate any Plan of Solectron or to appoint a trustee to administer
any Plan of Solectron.
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(xii) Solectron or any of its Affiliates shall enter into any
transaction which would cause this Lease, the Purchase Agreement or any
other document executed in connection herewith (or any exercise of
BNPLC's rights hereunder or thereunder) to constitute a non-exempt
prohibited transaction under ERISA.
(xiii) Guarantor shall breach or repudiate its guarantee of the
obligations of Solectron under this Lease, the Purchase Agreement or the
Closing Certificate or Guarantor shall fail to comply with any other
covenants of Guarantor in the Guaranty including the obligations of
Guarantor set forth Section 10 of the Guaranty.
(xiv) Any breach by Solectron of subparagraph 16.(b)(iii)
resulting from Solectron's failure to notify BNPLC of a material Default
known to a Responsible Financial Officer.
(xv) Any representation of Solectron contained herein, in the
Closing Certificate or in the Purchase Agreement is false or misleading
in any material respect, or any certificate delivered to BNPLC by or on
behalf of Solectron as required by this Lease is false or misleading in
any material respect.
(xvi) Any representation of Guarantor contained in the Guaranty
is false or misleading in any material respect, or any certificate, if
any, delivered to BNPLC by or on behalf of Guarantor as may be required
by the Guaranty is false or misleading in any material respect.
18. REMEDIES.
(a) Basic Remedies. At any time when an Event of Default has
occurred and is continuing, BNPLC may notify Solectron that BNPLC intends after
the expiration of sixty days to exercise remedies provided in this subparagraph
18.(a). At any time more than sixty days after BNPLC has given such a notice to
Solectron, and regardless of whether any Event of Default continues throughout
or after such sixty days, BNPLC shall be entitled at BNPLC's option and without
limiting BNPLC in the exercise of any other right or remedy BNPLC may have, and
without any further demand or notice except as expressly described in this
subparagraph 18.(a), to exercise the following remedies:
(i) By notice to Solectron, BNPLC may terminate Solectron's
right to possession of the Property. A notice given in connection with
unlawful detainer proceedings specifying a time within which to cure a
default shall terminate Solectron's right to possession if Solectron
fails to cure the default within the time specified in the notice.
(ii) Upon termination of Solectron's right to possession and
without further demand or notice, BNPLC may re-enter the Property in any
manner not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land or in
the Improvements may be removed and stored in a warehouse or elsewhere
at the expense and risk of and for the account of Solectron.
(iii) Upon termination of Solectron's right to possession, this
Lease shall terminate and BNPLC may recover from Solectron:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of termination;
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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 Solectron 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
Solectron proves could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by Solectron's failure to
perform Solectron'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 Property, removing persons or
property therefrom, placing the Property in good order,
condition, and repair, preparing and altering the Property for
reletting, all other costs and expenses of reletting, and any
loss incurred by BNPLC as a result of Solectron's failure to
perform Solectron's obligations under the Purchase Agreement.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(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 Washington law at the time of
computation. The "WORTH AT THE TIME OF AWARD" of the amount
referred to in subparagraph 18.(a)(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
Washington law.
(iv) Even if Solectron breaches this Lease and abandons the
Property, this Lease shall continue in effect for so long as BNPLC does
not terminate Solectron's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Lease, including the right to
recover the Rent as it becomes due under this Lease. Solectron's right
to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 18.(a)(i) hereof. The following shall
not constitute a termination of Solectron's right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Property;
b) The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or assignment by
Solectron.
(b) Enforceability. This Paragraph 18 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.
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(c) Remedies Cumulative. No right or remedy herein conferred upon
or reserved to BNPLC 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; however, before exercising any right or remedy
available under Applicable Law or in equity to evict Solectron from the Property
or to terminate Solectron's right of occupancy hereunder, BNPLC shall give
Solectron at least sixty days notice as contemplated in the first sentence of
subparagraph 18.(a). In addition to other remedies provided in this Lease, BNPLC
shall be entitled, to the extent permitted by Applicable Law or in equity, 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, or to a decree compelling performance of any of the other covenants,
agreements, conditions or provisions of this Lease to be performed by Solectron,
or to any other remedy allowed to BNPLC at law or in equity. Nothing contained
in this Lease shall limit or prejudice the right of BNPLC to prove for and
obtain in proceedings for bankruptcy or insolvency of Solectron 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 BNPLC under the Purchase
Agreement, and BNPLC shall not be required to give the sixty day notice
described in subparagraph 18.(a) as a condition to any acceleration of the
Designated Sale Date or to taking any action to enforce the Purchase Agreement
or the Closing Certificate.
19. DEFAULT BY BNPLC. If BNPLC should default in the performance of any
of its obligations under this Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from Solectron specifying such default and specifying what
action Solectron believes is necessary to cure the default. If Solectron
prevails in any litigation brought against BNPLC because of BNPLC's failure to
cure a default within the time required by the preceding sentence, then
Solectron shall be entitled to an award against BNPLC for the monetary damages
proximately caused to Solectron by such default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.
20. QUIET ENJOYMENT. Provided Solectron pays the Base Rent and all
Additional Rent payable hereunder as and when due and payable and keeps and
fulfills all of the terms, covenants, agreements and conditions to be performed
by Solectron hereunder, BNPLC shall not during the Term disturb Solectron's
peaceable and quiet enjoyment of the Property; however, such enjoyment shall be
subject to the terms, provisions, covenants, agreements and conditions of this
Lease, to Permitted Encumbrances, to Development Documents and to any other
claims not constituting Liens Removable by BNPLC. If any Lien Removable by BNPLC
is claimed against the Property, including any judgment lien securing a
Deductible Judgment against BNPLC, BNPLC will remove the Lien Removable by BNPLC
promptly. However, BNPLC shall not be responsible for any Lien that is expressly
excluded from the definition of Liens Removable by BNPLC in the attached List of
Defined Terms. Any breach by BNPLC of this Paragraph shall render BNPLC liable
to Solectron for any monetary damages proximately caused thereby, but as more
specifically provided in Paragraph 2 above, no such breach shall entitle
Solectron to terminate this Lease or excuse Solectron from its obligation to pay
Base Rent and other amounts hereunder.
21. SURRENDER UPON TERMINATION. Unless Solectron or an Applicable
Purchaser purchases BNPLC's entire interest in the Property pursuant to the
terms of the Purchase Agreement, Solectron shall, upon
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the termination of Solectron's right to occupancy, surrender to BNPLC the
Property, including any buildings, alterations, improvements, replacements or
additions constructed by Solectron, with all fixtures and furnishings included
in the 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
BNPLC, with all Improvements in substantially the same condition as of the date
the same were initially completed, excepting only (i) ordinary wear and tear
that occurs between the maintenance, repairs and replacements required by other
provisions of this Lease, and (ii) alterations and additions which are expressly
permitted by the terms of this Lease and which have been completed by Solectron
in a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to Solectron or any
party claiming under Solectron, if not removed at the time of such termination
and if BNPLC shall so elect, shall be deemed abandoned and become the property
of BNPLC without any payment or offset therefor. If BNPLC shall not so elect,
BNPLC may remove such property from the Property and store it at Solectron's
risk and expense. Solectron shall bear the expense of repairing any damage to
the Property caused by such removal by BNPLC or Solectron.
22. HOLDING OVER BY SOLECTRON. Should Solectron not purchase BNPLC's
right, title and interest in the Property as provided in the Purchase Agreement,
but nonetheless continue to hold the Property after the termination of this
Lease without BNPLC's 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) Stipulated Loss Value
on the day in question, times (ii) (A) the Prime Rate in effect for such day so
long as the holdover period does not extend beyond ninety days and (B) for each
such day beginning with the ninety-first day after the holdover commences, two
percent (2%) above the Prime Rate; divided by (iii) three hundred and sixty;
subject, however, to all of the terms, provisions, covenants and agreements on
the part of Solectron hereunder. No payments of money by Solectron to BNPLC
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 BNPLC and Solectron.
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE PURCHASE AGREEMENT AND
CLOSING CERTIFICATE. Solectron acknowledges and agrees that nothing contained in
this Lease shall limit, modify or otherwise affect any of Solectron's
obligations under the Purchase Agreement or the Closing Certificate, which
obligations are intended to be separate, independent and in addition to, and not
in lieu of, the obligations set forth herein. In the event of any inconsistency
between the terms and provisions of the Purchase Agreement and the terms and
provisions of this Lease, the terms and provisions of the Purchase Agreement
shall control. In the event of any inconsistency between the terms and
provisions of the Closing Certificate and the terms and provisions of this
Lease, the terms and provisions of this Lease shall control; provided, nothing
in this Lease shall be construed to limit or impair the indemnities provided by
Solectron in the Closing Certificate, including the indemnity therein provided
against Environmental Losses.
24. WAIVER OF JURY TRIAL. BNPLC AND SOLECTRON 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 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 contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Solectron and BNPLC 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. Solectron and BNPLC
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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 PROPERTY. In the event of litigation, this Lease may be filed as a written
consent to a trial by the court.
25. 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 demand
hereunder or with reference to the making of any payment required hereunder,
shall be deemed to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Solectron to BNPLC hereunder
shall be paid to BNPLC in immediately available funds by wire transfer
to:
Federal Reserve Bank of New York
ABA ▇▇▇▇▇▇▇▇▇ Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Solectron (Solectron Washington
Synthetic Lease)
or at such other place and in such other manner as BNPLC may designate
in a notice to Solectron.
(ii) All advances paid to Solectron by BNPLC hereunder or in
connection herewith shall be paid to Solectron in immediately available
funds by wire transfer to:
Seafirst Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Name: Solectron Washington General
Account
Account No.: ▇▇▇▇▇▇▇▇
ABA: ▇▇▇▇▇▇▇▇▇
Reference: Washington Synthetic Lease
or at such other place and in such other manner as Solectron may
designate in a notice signed by Solectron's Treasurer or Chief Financial
Officer to BNPLC.
(iii) All notices, demands, approvals, consents and other
communications to be made hereunder to or by the parties hereto must, to
be effective for purpose of this Lease, be in writing. Notices, demands
and other communications required or permitted hereunder are to be sent
to the addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to 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
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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 BNPLC:
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Banque Nationale de Paris, San Francisco
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
And with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Knight, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address of Solectron:
Solectron Washington, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ #▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Real Estate Department/DSS
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(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 created hereby created with any other interest in the Property
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or the leasehold estate created hereby and any other
interest in the Property, unless all Persons with an interest in the Property
that would be adversely affected by any such merger specifically agree in
writing that such a merger shall occur.
(d) No Implied Waiver. The failure of BNPLC or Solectron 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 breach of 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 BNPLC 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 of any provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by the waiving party.
(e) NO IMPLIED REPRESENTATIONS BY BNPLC. BNPLC AND BNPLC'S AGENTS
HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT TO THE PROPERTY EXCEPT AS
EXPRESSLY SET FORTH HEREIN AND IN THE PURCHASE AGREEMENT, AND NO RIGHTS,
EASEMENTS OR LICENSES ARE ACQUIRED BY SOLECTRON BY IMPLICATION OR OTHERWISE
EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE AND THE PURCHASE AGREEMENT.
(f) Entire Agreement. This Lease, the Purchase Agreement, the
Closing Certificate, and the other documents dated as of the Effective Date
which are being executed by Solectron and executed or accepted by BNPLC
contemporaneously with the execution of this Lease supersede any prior
negotiations and agreements between BNPLC and Solectron concerning the Property,
and no amendment or modification of this Lease shall be binding or valid unless
expressed in a writing executed by both parties hereto.
(g) 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.
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(h) Time is of the Essence. Time is of the essence as to all
obligations of Solectron and BNPLC and all notices required of Solectron and
BNPLC under this Lease.
(i) Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Washington without regard to conflict
or choice of laws.
(j) Paragraph Headings. The paragraph headings contained in this
Lease are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several paragraphs hereof.
(k) 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 BNPLC is a party or of which BNPLC is an intended beneficiary,
without the consent of BNPLC. All accounting terms used but not specifically
defined herein shall be construed in accordance with GAAP. The words "this
Lease", "herein", "hereof", "hereby", "hereunder" and words of similar import
when used in this Lease 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 used herein refer only to the Paragraphs or
subparagraphs in which the phrase occurs. As used herein the word "or" is not
exclusive. As used herein the words "include", "including" and similar terms
shall be construed as if followed by "without limitation to".
(l) Not a Partnership, Etc. NOTHING IN THIS LEASE IS INTENDED TO BE
OR TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
BNPLC AND SOLECTRON. NEITHER THE EXECUTION OF THIS LEASE NOR THE ADMINISTRATION
OF THIS LEASE OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER
RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO THIS LEASE OR SUCH
DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
SOLECTRON.
26. INCOME TAX REPORTING. BNPLC and Solectron intend this Lease and the
Purchase Agreement to have a form for income taxes which is different than the
form of this Lease and the Purchase Agreement for other purposes, and thus the
parties acknowledge and agree as follows:
a) FOR PURPOSES OF DETERMINING THEIR RESPECTIVE FEDERAL, STATE
AND LOCAL INCOME TAX OBLIGATIONS, BNPLC and Solectron believe and intend
that this Lease and the Purchase Agreement constitute a financing
arrangement or conditional sale. Both BNPLC and Solectron agree to
report this Lease and the Purchase Agreement as a financing arrangement
or conditional sale on their respective income tax returns (the
"REQUIRED REPORTING"), unless such Required Reporting is challenged in
writing by the Internal Revenue Service or another governmental
authority with jurisdiction (a "TAX CHALLENGE"). Consistent with the
foregoing, BNPLC and Solectron expect that Solectron (and not BNPLC)
shall be treated as the true owner of the Property for income tax
purposes, thereby entitling Solectron (and not BNPLC) to take
depreciation deductions and other
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tax benefits available to the owner. Solectron shall also report all
interest earned on Escrowed Proceeds as Solectron's income for federal,
state and local income tax purposes. REFERENCES IN THIS LEASE OR IN THE
PURCHASE AGREEMENT TO A "LEASE" OR TO "LEASED PROPERTY" ARE NOT INTENDED
FOR INCOME TAX PURPOSES TO REFLECT THE INTENT OF BNPLC OR SOLECTRON AS
TO THE FORM OF THE TRANSACTIONS COVERED BY, OR THE PROPER
CHARACTERIZATION OF, THIS LEASE AND THE PURCHASE AGREEMENT.
b) FOR ALL OTHER PURPOSES, INCLUDING THE DETERMINATION OF THE
APPROPRIATE FINANCIAL ACCOUNTING FOR THIS LEASE AND THE DETERMINATION OF
THEIR RESPECTIVE RIGHTS AND REMEDIES UNDER STATE LAW, BNPLC and
Solectron believe and intend that (i) this Lease constitutes a true
Lease, not a mere financing arrangement, enforceable in accordance with
its express terms (and neither this subparagraph 26 nor the provisions
referencing this subparagraph on the title page of this Lease nor the
corresponding provisions in the Purchase Agreement are intended to
affect the enforcement of any other provisions of this Lease or the
Purchase Agreement) and (ii) the Purchase Agreement shall constitute a
separate and independent contract, enforceable in accordance with the
express terms and conditions set forth therein. In this regard,
Solectron acknowledges that Solectron asked BNPLC to participate in the
transactions evidenced by this Lease and the Purchase Agreement as a
landlord and owner of the Property, not as a lender. Although other
transactions might have been used to accomplish similar results,
Solectron expects to receive certain material accounting and other
advantages through the use of a lease transaction. Accordingly, and
notwithstanding the Required Reporting for income tax purposes,
Solectron cannot equitably deny that this Lease and the Purchase
Agreement should be construed and enforced in accordance with their
respective terms, rather than as a mortgage or other security device, in
any action brought by BNPLC to enforce this Lease or the Purchase
Agreement.
In the event of a Tax Challenge, BNPLC and Solectron shall each provide to the
other copies of all notices from the Internal Revenue Service or any other
governmental authority presenting the Tax Challenge. Further, before changing
from the Required Reporting because of a Tax Challenge, BNPLC and Solectron
shall each consider in good faith any reasonable suggestions received from the
other party to this Lease about an appropriate response to the Tax Challenge;
provided, however, that the suggestions are set forth in a written notice
delivered no later than thirty Business Days after the suggesting party is first
notified of the Tax Challenge; and, provided further, that when presented with a
Tax Challenge, BNPLC and Solectron shall each have the right to change from the
Required Reporting rather than participate in any litigation or other legal
proceeding against the Internal Revenue Service or another governmental
authority. In any event, Solectron must indemnify and hold harmless BNPLC from
and against all liabilities, costs, additional taxes and other expenses that may
arise or become due because of any challenge to the Required Reporting or
because of any resulting recharacterization of this Lease or the Purchase
Agreement required by the Internal Revenue Service or another governmental
authority, including any additional taxes that may become due upon any sale
under the Purchase Agreement, to the extent (if any) that such liabilities,
costs, additional taxes and other expenses are not offset by tax savings
resulting from additional depreciation deductions or other tax benefits to BNPLC
of the recharacterization.
27. PROPRIETARY INFORMATION AND CONFIDENTIALITY. Solectron shall have no
obligation to provide proprietary information (as defined in the next sentence)
to BNPLC, except and to the extent that (1) BNPLC reasonably determines that
BNPLC cannot accomplish the purposes of BNPLC's inspection of the Property
pursuant to the various provisions hereof without evaluating such information,
and (2) before conducting any inspections of the Property permitted hereunder
BNPLC shall, if requested by Solectron, confirm and ratify the
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confidentiality agreements covering such proprietary information set forth in
subparagraph 7.(f). For purposes of this Lease "PROPRIETARY INFORMATION" means
Solectron's intellectual property, trade secrets and other confidential
information of value to Solectron about, among other things, Solectron's
products, marketing and corporate strategies, but in no event will "proprietary
information" include any disclosure of substances and materials (and their
chemical composition) which are or previously have been present in, on or under
the Property at the time of any inspections by BNPLC, nor will "proprietary
information" include any additional disclosures reasonably required to permit
BNPLC to determine whether the presence of such substances and materials has
constituted a violation of Environmental Laws or this Lease. In addition, under
no circumstances shall Solectron have any obligation to disclose to BNPLC or any
other party any proprietary information of Solectron (including, without
limitation, any pending applications for patents or trademarks, any research and
design and any trade secrets) except if and to the limited extent reasonably
necessary to comply with the express provisions of this Lease.
[The signature pages follow.]
51
58
IN WITNESS WHEREOF, Solectron and BNPLC have caused this Amended and
Restated Lease Agreement to be executed as of July 1, 1998.
"SOLECTRON"
SOLECTRON WASHINGTON, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name (print): ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
59
[Continuation of signature pages to Amended and Restated Lease Agreement dated
to be effective July 1, 1998]
"BNPLC"
BNP LEASING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇, Vice President
60
Exhibit A
LEGAL DESCRIPTION
All that certain real property situate in the City of ▇▇▇▇▇▇▇, County of
Snohomish, State of Washington, being a portion of the Southwest quarter of
Section 2, and a portion of the Southeast quarter of Section 3, all in Township
28 North, Range 4 East, ▇.▇., and also being a portion of ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇/▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ recorded under Snohomish County Recording Number
8910255010, and being more particularly described as follows:
BEGINNING at the quarter corner common to said Sections 2 and 3;
thence from said point of beginning along the East-West centerline of said
Section 2, South 88(Degree) 10'56" East 1192.73 feet;
thence leaving said East-West centerline South 01(Degree) 49'04" West 347.51
feet;
thence South 26(Degree) 07'32" East 208.83 feet;
thence South 12(Degree) 56'43" East 395.73 feet to the Northerly right of way
line of ▇▇▇▇▇▇▇ Creek Parkway as deeded to the City of ▇▇▇▇▇▇▇ under Snohomish
County Recording Number 8801270201, Snohomish County records;
thence along said right of way line of ▇▇▇▇▇▇▇ Creek Parkway from a tangent that
bears South 77(Degree) 03'17" West, along the arc of a curve to the left having
a radius of 630.00 feet and a central angle of 37(Degree) 00'43", an arc length
of 406.97 feet;
thence leaving said right of way line North 79(Degree) 36'24" West 1190.79 feet
to the Easterly boundary of the Binding Site Plan/Record of Survey entitled
Seaway Center Two/Intermec recorded under Snohomish County Recording Number
8910255009;
thence along said Easterly boundary North 00(Degree) 50'18" East 955.72 feet to
the East-West centerline of said Section 3;
thence along said East-West centerline South 88(Degree) 33'31" East 136.77 feet
to the point of beginning;
(ALSO KNOWN AS Lot 2F of Binding Site Plan/Record of Survey Seaway Center Five
as recorded under Snohomish County Recording Number 9204015001);
TOGETHER WITH a non-exclusive driveway and access easement as set forth in
document entitled Driveway and Assess Easement Agreement recorded under
Snohomish County Recording Number 9711050088.
Situated in the County of Snohomish, State of Washington
61
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:
- Liens securing TAXES AND ASSESSMENTS, not yet due and payable.
- EASEMENT AND THE TERMS AND CONDITIONS THEREOF:
GRANTEE: Public Utility District No. 1 of Snohomish County
PURPOSE: Underground/overhead electric distribution system
AREA AFFECTED: Ten foot wide strips adjacent to right of way known
as ▇▇▇▇▇▇▇ Creek Parkway as conveyed to the City of
▇▇▇▇▇▇▇ by deed recorded under Snohomish County
Recording Number 8801270201; and the North boundary
of Seaway Blvd., TOGETHER WITH the right to extend
and establish switch cabinets, transformers,
pedestals and other appurtenances beyond said
easement area onto adjacent property of the grantor
RECORDED: July 26, 1988
RECORDING NO.: ▇▇▇▇▇▇▇▇▇▇
Contains covenant prohibiting structures over said easement or other
activity which might endanger the underground system.
- EASEMENT AND THE TERMS AND CONDITIONS THEREOF:
GRANTEE: City of ▇▇▇▇▇▇▇
PURPOSE: Utilities, drainageand detention pond facilities
and appurtenances
AREA AFFECTED: Portions of subject property
RECORDED: December 13, 1988
RECORDING NO.: 8812130477
- Right to make necessary slopes for cuts or fills upon property herein
described as granted to City of ▇▇▇▇▇▇▇ by deed recorded under Recording
No. 8801270201.
- ALL COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS OR
OTHER SERVITUDES, if any, disclosed by Binding Site Plan/Survey as
recorded under Snohomish County Recording Number 9204015001.
- The following as and to extent shown on as-built Survey prepared by W &
H Pacific on March 20, 1997, under Job No. ▇-▇▇▇▇-▇▇▇▇:
A) Fence from Southerly adjoiner extends 2.2 feet Northerly of our
South property line.
B) Bird feeder post 0.79 feet South of North property line (belongs
to property adjoiner to North).
C) Property adjoiner to the North wood fence extends 0.11 feet South
of subject property's North line.
D) Along Easterly property line - 1/2 light pole onto subject
property.
62
- DRIVEWAY AND ACCESS EASEMENT AGREEMENT AND THE TERMS AND CONDITIONS
THEREOF:
GRANTEE: Cintas Sales Corporation, an Ohio Corporation
PURPOSE: Ingress, egress and utilities and related rights as
in said instrument
AREA AFFECTED: Southeasterly portion of subject property
RECORDED: November 5, 1997
RECORDING NO.: 9711050088
Said easement contains a covenant to bear equal share of cost of
construction, maintenance or repair of same.
- EASEMENT AND THE TERMS AND CONDITIONS THEREOF:
GRANTEE: City of ▇▇▇▇▇▇▇, a municipal corporation
PURPOSE: Sewer system and related rights as in said instrument
AREA AFFECTED: 20 foot wide strip of land within Lot 2F
RECORDED: November 10, 1997
RECORDING NO.: 9711100557
- EASEMENT AND THE TERMS AND CONDITIONS THEREOF:
GRANTEE: City of ▇▇▇▇▇▇▇, a municipal corporation
PURPOSE: Water system and related rights as in said instrument
AREA AFFECTED: 15 foot wide strips of land within Lot 2F
RECORDED: November 12, 1997
RECORDING NO.: 9711120701
Exhibit B - Page 2
63
Exhibit C
DESCRIPTION OF THE INITIAL CONSTRUCTION PROJECT
Subject to future Scope Changes, the initial Construction Project will
be substantially consistent with the following description:
Two office/manufacturing buildings connected by a common
office/corporate entrance/cafeteria area totaling approximately 176,000
square feet, together with parking areas for approximately 700 vehicles
and other appurtenant improvements.
64
Exhibit D
ESTOPPEL FROM CONTRACTORS
_________, 199__
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Assignment of Construction Contract
Ladies and Gentlemen:
The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:
1. The undersigned has entered into that certain [Construction Contract]
(the "CONSTRUCTION CONTRACT") by and between the undersigned and Solectron
Washington, Inc. ("SOLECTRON") dated _______________, 199__ for the construction
of the improvements to be constructed as part of Solectron's Everett campus
leased by Solectron (the "IMPROVEMENTS") on the land described in the Lease
described below (the "LAND" and, together with the Improvements and any other
improvements now on or constructed in the future on the Land, the "PROJECT").
2. The undersigned has also received a copy of the Amended and Restated
Lease Agreement dated as of July 1, 1998 (the "LEASE"), pursuant to which BNPLC
is leasing the Project to Solectron, and BNPLC has agreed, subject to the terms
and conditions of the Lease, to provide a construction allowance for the
construction of the Improvements. The Lease also requires, subject to certain
limitations therein provided, that Solectron fulfill its obligations under the
Construction Contract and related documents and indemnify BNPLC against any
liability arising thereunder, all as more particularly provided in the Lease,
reference to which is hereby made for all purposes.
3. A complete and correct copy of the Construction Contract is attached
to this letter. The Construction Contract is in full force and effect and has
not been modified or amended, except as provided in any written modifications or
amendments which are also attached to this letter.
4. The undersigned has not sent or received any notice of default or any
other notice for the purpose of terminating the Construction Contract, nor does
the undesigned have knowledge of any existing circumstance or event which, but
for the elapse of time or otherwise, would constitute a default by the
undersigned or by Solectron under the Construction Contract.
The undersigned acknowledges and agrees that:
a) Title to all Improvements shall, when constructed on the Land, pass
directly to BNPLC, not to Solectron. BNPLC shall not, however, be held liable
for, and the undersigned shall not assert, any claims, demands or liabilities
against BNPLC arising under or in any way relating to the Construction Contract;
provided, this paragraph will not (1) be construed as a waiver of any statutory
mechanic's or materialmen's liens against the Land or the improvements thereon
that may otherwise exist or arise in favor of the undersigned, or (2) prohibit
the
65
BNP Leasing Corporation
_______________, 199___
Page 2
undersigned from asserting any claims or making demands against BNPLC under the
Construction Contract if BNPLC elects in writing, pursuant to Paragraph b)
below, to assume the Construction Contract in the event Solectron's right to
possession of the Land is terminated, in which event BNPLC shall be liable for
the unpaid balance of the contract sum due for the work of the undersigned,
payable pursuant to (and subject to the terms and conditions set forth for the
benefit of the owner in) the Construction Contract, but in no event shall BNPLC
otherwise be personally liable for any acts or omissions on the part of
Solectron.
b) Upon any termination of Solectron's right to possession of the
Project under the Lease, including any eviction of Solectron resulting from an
Event of Default (as defined in the Lease), BNPLC may, by notice to the
undersigned and without the necessity of the execution of any other document,
assume Solectron's rights and obligations under the Construction Contract, cure
any defaults by Solectron thereunder and enforce the Construction Contract and
all rights of Solectron thereunder. Within ten days of receiving notice from
BNPLC that Solectron's right to possession has been terminated, the undersigned
shall send to BNPLC a written estoppel letter stating: (i) that the undersigned
has not performed any act or executed any other instrument which invalidates or
modifies the Construction Contract in whole or in part (or, if so, the nature of
such modification); (ii) that the Construction Contract is valid and subsisting
and in full force and effect; (iii) that there are no defaults or events of
default then existing under the Construction Contract and no event has occurred
which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default (or, if there is a default, the
nature of such default in detail); (iv) that the construction contemplated by
the Construction Contract is proceeding in a satisfactory manner in all material
respects (or if not, a detailed description of all significant problems with the
progress of construction); (v) a reasonably detailed report of the then critical
dates projected by the undersigned for work and deliveries required to complete
the Project; (vi) the total amount received by the undersigned for construction
through the date of the letter; (vii) the estimated total cost of completing the
undersigned's work as of the date of the letter, together with a current draw
schedule; and (viii) any other information BNPLC may request to allow it to
decide whether to assume the Construction Contract. BNPLC shall have seven days
from receipt of such written certificate containing all such requested
information to decide whether to assume the Construction Contract. If BNPLC
fails to assume the Construction Contract within such time, the undersigned
agrees that BNPLC shall not be liable for (and the undersigned shall not assert
or bring any action against BNPLC or, except for any statutory lien rights,
against the Land or improvements thereon for) any damages or other amounts
resulting from the breach or termination of the Construction Contract or under
any other theory of liability of any kind or nature, but rather the undersigned
shall look solely to Solectron (and any statutory lien rights) for the recovery
of any such damages or other amounts.
c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Construction Contract pursuant to the preceding paragraph following the
termination of Solectron's right to possession of the Project under the Lease,
the undersigned shall immediately discontinue the work under the Construction
Contract and remove its personnel from the Project, and BNPLC shall be entitled
to take exclusive possession of the Project. The undersigned shall also, upon
request by BNPLC, deliver and assign to BNPLC all plans and specifications and
other contract documents previously delivered to the undersigned (except that
the undersigned may keep an original set of the Construction Contract and other
contract documents executed by Solectron), all other material relating to the
work which belongs to BNPLC or Solectron, and all papers and documents relating
to governmental permits, orders placed, bills and invoices, lien releases and
financial management under the Construction Contract. Notwithstanding the
undersigned's receipt of any notice from BNPLC that BNPLC declines to assume the
Construction Contract, the undersigned shall for a period not to exceed fifteen
days after receipt of such notice take
Exhibit D - Page 2
66
BNP Leasing Corporation
_______________, 199___
Page 3
such steps, at BNPLC's expense, as are reasonably necessary to preserve and
protect work completed and in progress and to protect materials, equipment and
supplies at the site or in transit.
d) No action taken by BNPLC or the undersigned with respect to the
Construction Contract shall prejudice any other rights or remedies of BNPLC or
the undersigned provided by law, by the Lease, by the Construction Contract or
otherwise against Solectron.
e) The undersigned agrees promptly to notify BNPLC of any material
default or claimed material default by Solectron under the Construction Contract
of which the undersigned is aware, describing with particularity the default and
the action the undersigned believes is necessary to cure the same. The
undersigned will send any such notice to BNPLC prominently marked "URGENT -
NOTICE OF SOLECTRON'S DEFAULT UNDER CONSTRUCTION AGREEMENT WITH SOLECTRON
WASHINGTON, INC. - EVERETT, WASHINGTON" at the address specified for notice
below (or at such other addresses as BNPLC shall designate in notice sent to the
undersigned), by certified or registered mail, return receipt requested.
Following receipt of such notice, the undersigned will permit BNPLC or its
designee to cure any such default within the time period reasonably required for
such cure, but in no event less than thirty days. If it is necessary or helpful
to take possession of all or any portion of the Project to cure a default by
Solectron under the Construction Contract, the time permitted by the undersigned
for cure by BNPLC will include the time necessary to terminate Solectron's right
to possession of the Project and evict Solectron, provided that BNPLC commences
the steps required to exercise such right within sixty days after it is entitled
to do so under the terms of the Lease and applicable law. If the undersigned
incurs additional costs due to the extension of the aforementioned cure period,
the undersigned shall be entitled to an equitable adjustment to the price of the
Construction Contract for such additional costs.
f) Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery or (b) expedited delivery
service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as
follows:
To the undersigned: _________________________
_________________________
_________________________
Telecopy: (___) ___-_____
To BNPLC: BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit D - Page 3
67
BNP Leasing Corporation
_______________, 199___
Page 4
A copy of any such notice or communication will also be sent to Solectron by (a)
personal delivery or (b) expedited delivery service with proof of delivery or
(c) United States mail, postage prepaid, registered or certified mail or (d)
telegram, telex or telecopy, addressed as follows:
Solectron Washington, Inc.
________________________________
________________________________
________________________________
Attention: _____________________
Telecopy: (___) ________________
g) The undersigned acknowledges that it has all requisite authority to
execute this letter. The undersigned further acknowledges that BNPLC has
requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNPLC's decision to advance
funds for construction under the Lease with Solectron.
Very truly yours,
____________________________________
By: ________________________________
Name: __________________________
Title: _________________________
Solectron joins in the execution of this letter solely for the purpose
of evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNPLC to assume the Construction Contract in the
event Solectron is evicted from the Project.
SOLECTRON WASHINGTON, INC.
By: ________________________________
Name: __________________________
Title: _________________________
Exhibit D - Page 4
68
Exhibit E
ESTOPPEL FROM ARCHITECTS/ENGINEERS
_________, 199__
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Assignment of [Architect's/Engineer's] Agreement
Ladies and Gentlemen:
The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:
1. The undersigned has entered into that certain [Architects/Engineers
Agreement] (the "AGREEMENT") by and between the undersigned and Solectron
Washington, Inc. ("SOLECTRON") dated _______, 199__ for the [design] of the
improvements to be constructed as part of Solectron's Everett campus by
Solectron (the "IMPROVEMENTS") on the land described in the Lease described
below (the "LAND" and, together with the Improvements and any other improvements
now on or constructed in the future on the Land, the "PROJECT").
2. The undersigned has been advised that BNPLC owns the Land.
3. The undersigned has also received a copy of the Amended and Restated
Lease Agreement dated as of July 1, 1998 (the "LEASE"), pursuant to which BNPLC
is leasing the Project to Solectron, and BNPLC has agreed, subject to the terms
and conditions of the Lease, to provide a construction allowance for Solectron's
construction of the Improvements. The Lease also requires Solectron to fulfill
all obligations of Solectron under the Agreement and related documents and to
indemnify BNPLC against any liability arising thereunder, all as more
particularly provided in the Lease, reference to which is hereby made for all
purposes.
4. A complete and correct copy of the Agreement is attached to this
letter. The Agreement is in full force and effect and has not been modified or
amended. The Agreement is in full force and effect and has not been modified or
amended, except as provided in any written modifications or amendments which are
also attached to this letter.
5. The undersigned has not sent or received any notice of default or any
other notice for the purpose of terminating the Agreement, nor does the
undersigned have knowledge of any existing circumstance or event which, but for
the elapse of time or otherwise, would constitute a default by the undersigned
or by Solectron under the Agreement.
The undersigned acknowledges and agrees that:
a) BNPLC shall not be held liable for, and the undersigned shall not
assert, any claims, demands or liabilities against BNPLC or against the Project
arising under or in any way relating to the Agreement; provided, this paragraph
will not prohibit the undersigned from asserting any claims or making demands
under the Agreement
69
BNP Leasing Corporation
______________, 199____
Page 2
if BNPLC elects in writing, pursuant to Paragraph b) below, to assume the
Agreement in the event Solectron's right to possession of the Land is
terminated, in which event BNPLC shall be liable thereunder for (but only for)
any acts or omissions on the part of BNPLC occurring after the date on which
BNPLC notifies the undersigned of BNPLC's election to assume the Agreement.
b) Upon any termination of Solectron's right to possession of the
Project under the Lease, including any eviction of Solectron resulting from an
Event of Default (as defined in the Lease), BNPLC may, by notice to the
undersigned and without the necessity of the execution of any other document,
assume Solectron's rights and obligations under the Agreement, cure any defaults
by Solectron thereunder and enforce the Agreement and all rights of Solectron
thereunder. Within ten days of receiving notice from BNPLC that Solectron's
right to possession has been terminated, the undersigned shall send to BNPLC a
written estoppel letter stating: (i) that the undersigned has not performed any
act or executed any other instrument which invalidates or modifies the Agreement
in whole or in part (or, if so, the nature of such modification); (ii) that the
Agreement is valid and subsisting and in full force and effect; (iii) that there
are no defaults or events of default then existing under the Agreement and no
event has occurred which with the passage of time or the giving of notice, or
both, would constitute such a default or event of default (or, if there is a
default, the nature of such default in detail); (iv) that the services
contemplated by the Agreement are proceeding in a satisfactory manner in all
material respects (or if not, a detailed description of all significant problems
with the progress of services); (v) a reasonably detailed report of the then
critical dates estimated by the undersigned for services required to complete
the construction project; (vi) the total amount received by the undersigned for
services through the date of the letter; (vii) the estimated total cost of
completing such services as of the date of the letter, together with a current
payment schedule; and (viii) any other information BNPLC may request to allow it
to decide whether to assume the Agreement. BNPLC shall have thirty days from
receipt of such written certificate containing all such requested information to
decide whether to assume the Agreement. If BNPLC fails to assume the Agreement
within such time, the undersigned agrees that BNPLC shall not be liable for (and
the undersigned shall not assert or bring any action against BNPLC or against
the Land or improvements thereon for) any damages or other amounts resulting
from the breach or termination of the Agreement or under any other theory of
liability of any kind or nature, but rather the undersigned shall look solely to
Solectron for the recovery of any such damages or other amounts.
c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Agreement pursuant to the preceding paragraph following the termination of
Solectron's right to possession of the Project under the Lease, the undersigned
shall immediately discontinue the services under the Agreement and remove its
personnel from the Project, and BNPLC shall be entitled to take exclusive
possession of the Project. The undersigned shall also, upon request by BNPLC,
deliver and assign to the following, to the extent that Solectron or BNPLC then
owns or is entitled by the Agreement to the following: (1) all plans and
specifications and other contract documents previously delivered to the
undersigned (except that the undersigned may keep an original set of the
Agreement and other contract documents executed by Solectron); (2) all other
materials or documents relating to the services, and (3) all papers and
documents relating to governmental permits, orders placed, bills and invoices,
lien releases and financial management under the Agreement. Notwithstanding the
undersigned's receipt of any notice from BNPLC that BNPLC declines to assume the
Agreement, the undersigned shall for a period not to exceed fifteen days after
receipt of such notice take such steps as are reasonably necessary to preserve
and protect services completed and in progress.
Exhibit E - Page 2
70
BNP Leasing Corporation
______________, 199____
Page 3
d) No action taken by BNPLC or the undersigned with respect to the
Agreement shall prejudice any other rights or remedies of BNPLC or the
undersigned provided by law, by the Lease, by the Agreement or otherwise against
Solectron.
e) The undersigned agrees promptly to notify BNPLC of any material
default or claimed material default by Solectron under the Agreement of which
the undersigned is aware, describing with particularity the default and the
action the undersigned believes is necessary to cure the same. The undersigned
will send any such notice to BNPLC prominently marked "URGENT - NOTICE OF
SOLECTRON'S DEFAULT UNDER AGREEMENT WITH SOLECTRON WASHINGTON, INC. - EVERETT,
WASHINGTON" at the address specified for notice below (or at such other
addresses as BNPLC shall designate in notice sent to the undersigned), by
certified or registered mail, return receipt requested. Following receipt of
such notice, the undersigned will permit BNPLC or its designee to cure any such
default within the same time period that Solectron itself would have to cure (if
any) pursuant to the Agreement, but in no event less than thirty days.
f) Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery or (b) expedited delivery
service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as
follows:
To the undersigned:
-------------------------
-------------------------
-------------------------
Telecopy: (___) ___-_____
To BNPLC: BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
A copy of any such notice or communication will also be sent to Solectron by (a)
personal delivery or (b) expedited delivery service with proof of delivery or
(c) United States mail, postage prepaid, registered or certified mail or (d)
telegram, telex or telecopy, addressed as follows:
Solectron Washington, Inc.
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Attention:
----------------------
Telecopy: (___) ________________
Exhibit E - Page 3
71
BNP Leasing Corporation
_______________, 199___
Page 4
g) The undersigned acknowledges that it has all requisite authority to
execute this letter. The undersigned further acknowledges that BNPLC has
requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNPLC's decision to advance
funds for construction under the Lease with Solectron.
Very truly yours,
------------------------------------
------------------------------------
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
Solectron joins in the execution of this letter solely for the purpose of
evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNPLC to assume the Agreement in the event
Solectron is evicted from the Project.
SOLECTRON WASHINGTON, INC.
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
Exhibit E - Page 4
72
Exhibit F
DRAW REQUEST FORMS
________, 199__
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Construction Advance Request No. __________ by
Solectron Washington, Inc.
Ladies and Gentlemen:
Reference is made to the Amended and Restated Lease Agreement between
BNP Leasing Corporation (herein "BNPLC") and Solectron Washington, Inc. (herein
"SOLECTRON") dated as of July 1, 1998 (herein the "LEASE"). Capitalized terms
defined in the Lease and used but not defined in this letter are intended to
have the meanings assigned to them in the Lease.
Solectron hereby makes request for a Construction Advance in the amount of
$________________ (herein the "CURRENT ADVANCE"). Included herewith are:
1. An Application and Certificate for Payment based on AIA Form G702
(herein the "CONTRACTOR'S APPLICATION") from Solectron's general
contractor or construction manager, attached to which is a schedule
of values listing all subcontractors, suppliers and other parties
to whom the general contractor or construction manager has or will
make payments from the draw requested in the Contractor's
Application. The Contractor's Application evidences an obligation
incurred by (and previously paid by) Solectron for construction of
Improvements and for which Solectron is entitled to reimbursement
from the Current Advance.
2. A list of any costs paid by Solectron, other than to the general
contractor or construction manager, for which Solectron is entitled
to reimbursement from the proceeds of the Current Advance (herein
the "OTHER COSTS LIST").
[NOTE: DRAW REQUESTS NEED INCLUDE THE PARAGRAPHS MARKED BELOW WITH AN ASTERISK,
AND THE INVOICES OR OTHER ITEMS DESCRIBED IN SUCH PARAGRAPHS, ONLY IF AND TO THE
EXTENT THAT BNPLC MAY REQUEST IT AFTER THE LEASE IS EXECUTED]
*3. Invoices and requests for payments from the subcontractors and
others entitled to payment from the general contractor or
construction manager for construction and related work covered by
the Contractor's Application; excluding, however, invoices or
requests from some or all subcontractors and others that, according
to the Contractor's Application, are to be paid less than $200,000
from the
73
draw requested in Contractor's Application. Such invoices and
requests for payments are consistent with the detail shown in the
schedule of values attached to the Contractor's Application.
*4. Invoices or other evidence of the costs (if any) included in the
Other Costs List.
*5. A list of any "checks on hold" (i.e., payments withheld from
subcontractors or suppliers by Solectron's general contractor or
construction manager because of some defect or deficiency in the
payee's request for payment or in the work or materials provided by
the payee) in excess of $100,000.
6. An up-to-date list of the names and addresses of any contractors or
subcontractors that have actually filed a claim of lien against the
Property, together with, to the extent not already provided with a
prior request for a Construction Advance, a copy of the claim of
lien filed.
7. A certification of an officer of Solectron as required by
subparagraph 6.(e)(viii) of the Lease.
We hereby confirm that BNPLC will not be responsible for the application
of any funds advanced to Solectron or to any other party at our request.
Sincerely,
SOLECTRON WASHINGTON, INC.
By: ________________________________
Name: __________________________
Title: _________________________
Exhibit F - Page 2
74
CONSTRUCTION ADVANCE CERTIFICATE
Pursuant to subparagraph 6.(e)(viii) of the Amended and Restated Lease Agreement
dated as of July 1, 1998 (the "LEASE") between Solectron Washington, Inc.
("SOLECTRON") and BNP Leasing Corporation ("BNPLC"), Solectron does hereby
represent, warrant and certify to BNPLC in connection with Solectron's request
for Construction Advance No. __________ that:
a) no Event of Default or material Default has occurred and is
continuing,
b) the representations and warranties of Solectron in the following
provisions of the Closing Certificate, the Lease and the Purchase Agreement are
true and correct in all material respects as of the date hereof as though made
on and as of the date hereof:
Subparagraphs 16.(c) through 16.(l) of the Lease.
Subparagraphs 3(A), 3(E) and 4(A) through 4(G) of the
Closing Certificate
Subparagraphs 4(a) through 4(e) of the Purchase Agreement
c) the representations and warranties of Guarantor in Section 9 of the
Guaranty are true and correct in all material respects as of the date hereof as
though made on and as of the date hereof,
d) each Construction Project which has commenced but not yet been
completed is progressing without any significant continuing interruption in a
good and workmanlike manner and substantially in accordance with the
requirements of the Lease and all Applicable Laws and Solectron has corrected or
is diligently pursuing the correction of any significant defect in such
construction,
e) all costs and expenses for which Solectron is requesting
reimbursement by the Construction Advance referenced above constitute actual
costs and expenses incurred by Solectron for a Construction Project, and
f) liens (if any) now being asserted against the Property by Potential
Lien Claimants do not in the aggregate secure or allegedly secure more than
$3,000,000 of claims. (As used in this certificate a lien will be considered as
"being asserted" if a claim of lien relating thereto shall have been recorded
and not discharged by payment or settlement.)
Capitalized terms used herein which are defined in the Lease but not in this
Certificate shall have the meanings assigned to them in the Lease.
In witness whereof, this Certificate is executed by an officer of Solectron
Washington, Inc. as of ______________, 19___.
SOLECTRON WASHINGTON, INC.
By: ________________________________
Name: __________________________
Title: _________________________
Exhibit F - Page 3
75
LIST OF LIENS FOR WHICH A CLAIM OF LIEN HAS ACTUALLY BEEN FILED
(Construction Advance Request No. ________)
Liens for which a claim of lien has actually been filed are as follows [state
"NONE" if there are none]:
1.
2.
3.
Exhibit F - Page 4
76
OTHER COSTS LIST
(Construction Advance Request No. ________)
Costs paid - other than to Solectron's general contractor or construction
manager - by Solectron and for which Solectron is entitled to reimbursement from
the Current Advance being requested are as follows [state "NONE" if there are
none]:
1.
2.
3.
Exhibit F - Page 5
77
Exhibit G
NOTICE OF REQUEST FOR ACTION BY BNPLC
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Amended and Restated Lease Agreement dated as of July 1, 1998,
between Solectron Washington, Inc., as tenant, and
BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. Pursuant to subparagraph 7.(a)
of the Lease, requests the following of BNPLC:
[INSERT HERE A SPECIFIC DESCRIPTION OF THE ACTION REQUESTED - E.G.,
"PLEASE EXECUTE THE ENCLOSED APPLICATION FOR BUILDING PERMIT REQUIRED BY
THE CITY OF ▇▇▇▇▇▇▇ IN CONNECTION WITH CONSTRUCTION OF CERTAIN
IMPROVEMENTS WHICH ARE PART OF THE INITIAL CONSTRUCTION PROJECT."]
PLEASE NOTE: SUBPARAGRAPH 7.(A) OF THE LEASE OBLIGATES BNPLC NOT TO UNREASONABLY
REFUSE TO COMPLY WITH THE FOREGOING REQUEST, SUBJECT TO TERMS AND CONDITIONS SET
FORTH IN THAT SUBPARAGRAPH. SOLECTRON HEREBY CERTIFIES TO BNPLC THAT AFTER
CAREFUL CONSIDERATION SOLECTRON BELIEVES THAT ALL SUCH TERMS AND CONDITIONS ARE
SATISFIED IN THE CASE OF THE FOREGOING REQUEST, AND SOLECTRON HEREBY RATIFIES
AND CONFIRMS ITS OBLIGATION TO INDEMNIFY BNPLC AGAINST ANY LOSSES BNPLC MAY
INCUR OR SUFFER BECAUSE OF ITS COMPLIANCE WITH SUCH REQUEST AS PROVIDED IN
SUBPARAGRAPH 5.(D) OF THE LEASE.
Solectron respectfully requests that BNPLC respond to this notice as
soon as reasonably possible.
Executed this _____ day of ______________, 19___.
SOLECTRON WASHINGTON, INC.
By: ________________________________
Name: __________________________
Title: _________________________
78
Exhibit H
NOTICE OF REQUEST REQUIRING AN EXPEDITED RESPONSE
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Amended and Restated Lease Agreement dated as of July 1, 1998,
between Solectron Washington, Inc., as tenant, and
BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. Solectron asks for an EXPEDITED
RESPONSE to the following request, which is a request made by Solectron pursuant
to subparagraph 7.(a) of the Lease:
[INSERT HERE A SPECIFIC DESCRIPTION OF THE ACTION REQUESTED - E.G.,
"PLEASE EXECUTE THE ENCLOSED APPLICATION FOR BUILDING PERMIT REQUIRED BY
THE CITY OF ▇▇▇▇▇▇▇ IN CONNECTION WITH CONSTRUCTION OF CERTAIN
IMPROVEMENTS WHICH ARE PART OF THE INITIAL CONSTRUCTION PROJECT."]
PLEASE NOTE: SUBPARAGRAPH 7.(A) OF THE LEASE OBLIGATES BNPLC NOT TO UNREASONABLY
REFUSE TO COMPLY WITH THE FOREGOING REQUEST, SUBJECT TO TERMS AND CONDITIONS SET
FORTH IN THAT SUBPARAGRAPH. SOLECTRON HEREBY CERTIFIES TO BNPLC THAT AFTER
CAREFUL CONSIDERATION SOLECTRON BELIEVES THAT ALL SUCH TERMS AND CONDITIONS ARE
SATISFIED IN THE CASE OF THE FOREGOING REQUEST, AND SOLECTRON HEREBY RATIFIES
AND CONFIRMS ITS OBLIGATION TO INDEMNIFY BNPLC AGAINST ANY LOSSES BNPLC MAY
INCUR OR SUFFER BECAUSE OF ITS COMPLIANCE WITH SUCH REQUEST AS PROVIDED IN
SUBPARAGRAPH 5.(D) OF THE LEASE.
As you consider the foregoing request, please understand that Solectron must ask
for an expedited request for the following reasons:
[INSERT HERE A BRIEF DESCRIPTION OF THE NEED FOR AN EXPEDITED RESPONSE -
E.G., "TO AVOID CRITICAL PATH DELAYS IN THE CONSTRUCTION CONTEMPLATED BY
THE LEASE, SOLECTRON MUST SUBMIT THE ENCLOSED APPLICATION FOR BUILDING
PERMIT TO THE CITY OF ▇▇▇▇▇▇▇ WITHIN 15 DAYS, AND UNFORTUNATELY THE CITY
HAS ONLY RECENTLY INDICATED THAT SOLECTRON WILL NEED THE SIGNATURE OF
BNPLC ON THE APPLICATION."]
For the reasons stated above, Solectron respectfully requests that BNPLC respond
to this notice as soon as possible. Although Solectron would appreciate a sooner
response, Solectron believes that it would be unreasonable for BNPLC not to
respond to this notice on or before:
[INSERT HERE A REASONABLE DEADLINE FOR THE RESPONSE - BUT IN NO EVENT
PRIOR TO 10 BUSINESS DAYS AFTER THE DATE OF THIS NOTICE - TAKING INTO
ACCOUNT THE MATERIALS THAT BNPLC WILL HAVE TO REVIEW TO EVALUATE
79
SOLECTRON'S REQUEST AND THE PARTICULAR REASONS FOR SOLECTRON'S NEED FOR
AN EXPEDITED RESPONSE]
Executed this _____ day of ______________, 19___.
SOLECTRON WASHINGTON, INC.
Name: __________________________
Title: _________________________
Exhibit H - Page 2
80
Exhibit I
INTENTIONALLY DELETED
81
Exhibit J
COMPLIANCE CERTIFICATE
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Gentlemen:
The undersigned, as _____________________________ of SOLECTRON
CORPORATION ("Guarantor"), does hereby certify on behalf of Guarantor and
Solectron Washington, Inc. ("Solectron") that the following are true:
1. This Certificate is furnished pursuant to subparagraph 16.(b)(ii) of
that certain Amended and Restated Lease Agreement dated as of July 1, 1998 (the
"LEASE"; the terms defined therein being used herein as therein defined) between
Solectron and you.
2. No Event of Default or material Default by Solectron under the Lease
has occurred and is continuing.
3. The representations and warranties of Solectron in the following
provisions of the Closing Certificate, the Lease and the Purchase Agreement are
true and correct in all material respects as of the date hereof as though made
on and as of the date hereof:
Subparagraphs 16.(c) through 16.(l) of the Lease.
Subparagraphs 3(A), 3(E) and 4(A) through 4(G) of the Closing
Certificate Subparagraphs 4(a) through 4(e) of the Purchase Agreement
4. The representations and warranties of Guarantor in Section 9 of the
Guaranty are true and correct in all material respects as of the date hereof as
though made on and as of the date hereof.
5. Annex 1 attached hereto sets forth financial data and computations
evidencing Guarantor's compliance with certain covenants established in Schedule
A attached to the Guaranty, all of which data and computations are complete,
true and correct.
Executed this _____ day of ______________, 19___.
SOLECTRON CORPORATION
Name: ____________________________
Title: ___________________________
82
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, 19___
NOTE: References to Sections below are intended to refer to the Sections in Part
3 of Schedule A to the Guaranty.
Actual Required/Permitted
------ ------------------
1. Section 3.09 - Adjusted Leverage Ratio As of the last day of
each fiscal quarter, the
amount which is not
greater than (a) 1.75 to
1.00 from the Effective
Date through and
including February 28,
1998, (b) 1.50 to 1.00
from May 31, 1998
through and including
February 28, 1999,
(c) 1.25 to 1.00 from
May 31, 1999 through and
including February 28,
2000, and (d) 1.00 to
1.00 thereafter.
Adjusted Leverage Ratio calculation
(A) Consolidated Funded Debt $_______
plus Guarantee obligations ________
plus Indebtedness with respect to ________
synthetic leases and securitized
assets
plus Indebtedness with respect to ________
letters of credit (including the
Letters of Credit)
minus Permitted Subordinated ________
Indebtedness
TOTAL $_______
Exhibit J - Page 2
83
(B) operating income $_______
plus depreciation and ________
amortization charges
TOTAL $_______
RATIO OF (A) TO (B) ________
2. Section 3.10 - Minimum Consolidated
Tangible Net Worth
As of the last day of each
fiscal quarter following
April 30, 1997, the
amount that is not less than
the sum of (without
duplication) 80% of
Consolidated Tangible Net
Worth measured as of the
end of the fiscal quarter
ended February 28, 1997,
plus 50% of consolidated
net income (without
subtracting losses or
acquisition-related charges)
for each fiscal quarter
the fiscal quarter ended
February 28, 1997, minus 100%
of all acquisition-related
charges if such charges are
recorded in the same fiscal
quarter in which the
applicable acquisition is
consummated.
(A) Consolidated Tangible Net Worth
calculation:
total shareholders' equity $_______
minus intangible assets ________
Exhibit J - Page 3
84
Consolidated Tangible Net Worth $_______
(B) Minimum Consolidated Tangible Net
Worth calculation:
Beginning minimum amount $_______
plus 50% of quarterly net income _______
for each fiscal quarter subsequent
to the quarter ended February 28,
1997, with no reduction for losses
or acquisition-related charges
minus 100% of all acquisition-
related charges if such charges are
recorded in the same fiscal quarter
in which the applicable acquisition
is consummated
Minimum Consolidated Tangible Net $_______
Worth
(A) MINUS (B) $_______
3. Section 3.11 - Modified Quick Ratio At the end of any fiscal
quarter of Guarantor
when (1) the rating the
rating established by
Moody's for the Index
Debt of Guarantor is
below Ba2 or (2) the
rating established by
S&P for the Index Debt
of Guarantor is below
BB, or (3) neither
Moody's nor S&P
maintains a rating for
the Index Debt of
Guarantor, the Modified
Quick Ratio is to be not
less than 1.0 to 1.0.
(A) Quick Assets calculation:
unencumbered cash $_______
plus unencumbered short term cash ________
investments
Exhibit J - Page 4
85
plus unencumbered marketable ________
securities which are classified
as short term investments
according to GAAP
plus unencumbered net accounts ________
receivable
plus fair market value of the
following to the extent not
otherwise already included in
Quick Assets and to the extent
having maturities of not longer
than two years:
securities issued or fully ________
guaranteed by the United
States government or any
agency thereof and backed
by the full faith and credit
of the United States
certificates of deposit, time ________
deposits, Eurodollar time
deposits, repurchase
agreements, or banker's
acceptances that are (A)
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 (B)
rated not less than A- by
Standard & Poor's Corporation
or less than A by ▇▇▇▇▇'▇
Investors Service, Inc.
corporate or municipal ________
bonds rated not less than A-
by Standard & Poor's
Corporation or less than A by
▇▇▇▇▇'▇ Investors Service,
Inc.
TOTAL $_______
Exhibit J - Page 5
86
(B) Current Liabilities according to $_______
GAAP
(C) Payments not included in Current $_______
Liabilities maturing within 12 months
on Indebtedness or which are the
subject of any Guarantee
RATIO OF (A) TO [(B) +(C)] ________
Exhibit J - Page 6
87
Exhibit K
NOTICE OF LIBOR PERIOD ELECTION
BNP Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Re: Amended and Restated Lease Agreement dated as of July 1, 1998,
between Solectron Washington, Inc., as tenant, and
BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. This letter constitutes notice
to you that the LIBOR Period Election under the Lease shall be:
________________ month(s),
beginning with the first Base Rent Period that commences on or after:
______________, ____.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF "LIBOR PERIOD
ELECTION" IN THE LIST OF DEFINED TERMS ATTACHED TO THE LEASE, OR IF THE DATE
SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR PERIOD ELECTION IS LESS
THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT
YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS
DEFECTIVE.
Executed this _____ day of ______________, 19___.
SOLECTRON WASHINGTON, INC.
Name:___________________________
Title:__________________________
[cc all Participants]
88
Schedule 1
LIST OF DEVELOPMENT DOCUMENTS
- NONE -
89
Schedule 2
LIST OF CLAIMS PENDING OR THREATENED AGAINST THE PROPERTY
- NONE -
90
LIST OF DEFINED TERMS
FOR AGREEMENTS BETWEEN
BNP LEASING CORPORATION
AND
SOLECTRON WASHINGTON, INC.
DATED AS OF JULY 1, 1998
91
TABLE OF CONTENTS
PAGE
DEFINED TERM NUMBER
------------ ------
ACTIVE NEGLIGENCE...................................................................................1
ADDITIONAL RENT.....................................................................................1
ADMINISTRATIVE AGENCY FEES..........................................................................1
ADVANCE DATE........................................................................................1
AFFILIATE...........................................................................................1
APPLICABLE LAWS.....................................................................................1
APPLICABLE PURCHASER................................................................................1
ATTORNEYS' FEES.....................................................................................1
BANKING RULES CHANGE................................................................................1
BASE RENT...........................................................................................2
BASE RENT COMMENCEMENT DATE.........................................................................2
BASE RENT DATE......................................................................................2
BASE RENT PERIOD....................................................................................3
BNPLC...............................................................................................3
BNPLC'S PARENT......................................................................................3
BREAKAGE COSTS......................................................................................3
BREAK EVEN PRICE....................................................................................4
BUSINESS DAY........................................................................................4
CAPITAL ADEQUACY CHARGES............................................................................4
CARRYING COSTS......................................................................................4
CLOSING CERTIFICATE.................................................................................4
CODE................................................................................................4
COMMITMENT FEE......................................................................................4
COMPLETION NOTICE...................................................................................4
CONSTRUCTION ADVANCES...............................................................................4
CONSTRUCTION ALLOWANCE..............................................................................5
CONSTRUCTION PERIOD.................................................................................5
CONSTRUCTION PROJECTS...............................................................................5
CONSTRUCTION WARRANTY...............................................................................5
CONSTRUCTION WARRANTY PAYMENTS......................................................................5
DEBT................................................................................................5
DEDUCTIBLE JUDGMENT.................................................................................6
DEFAULT.............................................................................................6
DEFAULT RATE........................................................................................6
DESIGNATED SALE DATE................................................................................6
DEVELOPMENT DOCUMENTS...............................................................................6
EFFECTIVE DATE......................................................................................6
EFFECTIVE RATE......................................................................................6
ENVIRONMENTAL CONSULTANT............................................................................7
ENVIRONMENTAL LAWS..................................................................................7
ENVIRONMENTAL LOSSES................................................................................7
ENVIRONMENTAL REPORTS...............................................................................8
ERISA...............................................................................................8
ERISA AFFILIATE.....................................................................................8
ERISA TERMINATION EVENT.............................................................................8
ESCROWED PROCEEDS...................................................................................8
ESTABLISHED MISCONDUCT..............................................................................8
-i-
92
PAGE
DEFINED TERM NUMBER
------------ ------
EUROCURRENCY LIABILITIES............................................................................9
EURODOLLAR RATE RESERVE PERCENTAGE..................................................................9
EVENT OF DEFAULT....................................................................................9
EXCLUDED TAXES......................................................................................9
EXISTING CONTRACT..................................................................................10
FAIR MARKET VALUE..................................................................................10
FED FUNDS RATE.....................................................................................10
FUNDED CONSTRUCTION ALLOWANCE......................................................................10
FUNDING ADVANCES...................................................................................10
GAAP...............................................................................................11
GUARANTOR..........................................................................................11
GUARANTY...........................................................................................11
HAZARDOUS SUBSTANCE................................................................................11
HAZARDOUS SUBSTANCE ACTIVITY.......................................................................11
IMPOSITIONS........................................................................................11
IMPROVEMENTS.......................................................................................12
INDEX DEBT.........................................................................................12
INDUSTRIAL HYGIENIST...............................................................................12
INITIAL FUNDING ADVANCE............................................................................12
INTERESTED PARTY...................................................................................12
LAND...............................................................................................12
LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION.......................................................12
LEASE..............................................................................................12
LIBOR..............................................................................................13
LIBOR PERIOD ELECTION..............................................................................13
LIEN...............................................................................................13
LIENS REMOVABLE BY BNPLC...........................................................................14
LIST OF DEFINED TERMS..............................................................................14
LOSS CUTOFF DATE...................................................................................14
LOSSES.............................................................................................14
MATERIAL ENVIRONMENTAL COMMUNICATION...............................................................14
MAXIMUM CONSTRUCTION ALLOWANCE.....................................................................14
▇▇▇▇▇'▇............................................................................................15
OUTSTANDING CONSTRUCTION ALLOWANCE.................................................................15
PARTICIPANT........................................................................................15
PARTICIPATION AGREEMENT............................................................................15
PERMITTED ENCUMBRANCES.............................................................................15
PERMITTED HAZARDOUS SUBSTANCE USE..................................................................15
PERMITTED HAZARDOUS SUBSTANCES.....................................................................16
PERMITTED TRANSFER.................................................................................16
PERSON.............................................................................................16
PERSONAL PROPERTY..................................................................................16
PLAN...............................................................................................16
POTENTIAL LIEN CLAIMANTS...........................................................................16
PRIME RATE.........................................................................................16
PRIOR CLOSING CERTIFICATE..........................................................................17
PRIOR GUARANTY.....................................................................................17
-ii-
93
PAGE
DEFINED TERM NUMBER
------------ ------
PRIOR LEASE........................................................................................17
PRIOR PARTICIPATION AGREEMENT......................................................................17
PRIOR PURCHASE AGREEMENT...........................................................................17
PROPERTY...........................................................................................17
PURCHASE AGREEMENT.................................................................................17
QUALIFIED PAYMENTS.................................................................................17
REAL PROPERTY......................................................................................17
REMEDIAL WORK......................................................................................17
RENT...............................................................................................18
RESIDUAL RISK PERCENTAGE...........................................................................18
RESPONSIBLE FINANCIAL OFFICER......................................................................18
S&P................................................................................................18
SCOPE CHANGE.......................................................................................18
SELLER.............................................................................................18
SOLECTRON..........................................................................................18
SOLECTRON'S MAXIMUM REMARKETING OBLIGATION.........................................................18
SPREAD.............................................................................................19
STIPULATED LOSS VALUE..............................................................................19
SUBSIDIARY.........................................................................................20
SUPPLEMENTAL PAYMENT...............................................................................20
TERM...............................................................................................20
TRANSACTION EXPENSES...............................................................................20
UNFUNDED BENEFIT LIABILITIES.......................................................................20
VOLUNTARY RETENTION OF THE PROPERTY................................................................20
-iii-
94
LIST OF DEFINED TERMS
As used in the documents to which this List of Defined Terms is
attached:
"ACTIVE NEGLIGENCE" of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which Solectron does not carry (and is not obligated by the Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Property or as a party to the transactions described in
the Lease, (2) any negligent failure of any other Interested Party to act when
the duty to act would not have been imposed but for such party's contractual or
other relationship to BNPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Lease, or (3) the
exercise in a lawful manner by BNPLC (or any party lawfully claiming through or
under BNPLC) of any right or remedy provided in or under the Lease, the Purchase
Agreement or the Closing Certificate.
"ADDITIONAL RENT" shall have the meaning assigned to it in subparagraph
4.(c) of the Lease.
"ADMINISTRATIVE AGENCY FEES" shall have the meaning assigned to it in
subparagraph 4.(e) of the Lease.
"ADVANCE DATE" means, regardless of whether any Construction Advance
shall actually be made thereon, the first Business Day of every calendar month,
beginning with July 1, 1998 and continuing regularly thereafter to and including
the Base Rent Commencement Date.
"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. Notwithstanding the foregoing, for purposes of the Lease and the
Purchase Agreement, Solectron's "Affiliates" will not include any Person
domiciled outside the United States.
"APPLICABLE LAWS" means any or all of the following, to the extent
applicable to Solectron or the Property or the Lease, the Purchase Agreement or
the Closing Certificate: restrictive covenants; zoning ordinances and building
codes; flood disaster laws; health, safety and environmental laws and
regulations; the Americans with Disabilities Act and other laws pertaining to
disabled persons; and other laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions.
"APPLICABLE PURCHASER" means any third party designated by Solectron to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.
"ATTORNEYS' FEES" means the reasonable fees and expenses of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including 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 all such reasonable fees and expenses
incurred with respect to appeals, arbitrations and bankruptcy proceedings, and
whether or not any manner of proceeding is brought with respect to the matter
for which such fees and expenses were incurred.
"BANKING RULES CHANGE" means either: (1) the introduction of or any
change after the Effective Date (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate
95
Reserve Percentage) in any law or regulation applicable to BNPLC, BNPLC's Parent
or any other Participant, or in the generally accepted interpretation by the
institutional lending community of any such law or regulation, or in the
interpretation of any such law or regulation asserted by any regulator, court or
other governmental authority or (2) the compliance by BNPLC, BNPLC's Parent or
any other Participant with any new guideline or new request after the Effective
Date from any central bank or other governmental authority (whether or not
having the force of law).
"BASE RENT" means the rent payable by Solectron pursuant to subparagraph
4.(a) of the Lease.
"BASE RENT COMMENCEMENT DATE" means the earlier of (1) the last day that
constitutes first business day of a calendar month and that is no more than 364
days after the Effective Date, (2) the first Business Day of the first calendar
month to follow by ten days or more BNPLC's receipt of the Completion Notice,
(3) the first Business Day of the first calendar month to follow by ten days or
more BNPLC's receipt of a notice from Solectron, setting forth Solectron's
express, unconditional and unequivocal election to accelerate the Base Rent
Commencement Date by delivery such notice, notwithstanding that after the Base
Rent Commencement Date, Solectron shall have no further right to Construction
Advances under the Lease, or (4) the first Business Day of the first calendar
month upon which the Funded Construction Allowance shall equal or exceed the
Maximum Construction Allowance available under the Lease. For example, if on the
first Business Day of October, 1998 construction of the initial Construction
Project is continuing, the Funded Construction Allowance is $15,995,000 (before
adding any Carrying Costs for the preceding month) and the Maximum Construction
Allowance is $16,000,000 (assuming only for purposes of this example that the
was Initial Funding Advance was $9,000,000), and if Carrying Costs of $80,000
would be added to the Funded Construction Allowance on such day if the
Construction Allowance were not limited to the Maximum Construction Allowance,
then such day will be the Base Rent Commencement Date and on such day $5,000
will be added to the Funded Construction Allowance as Carrying Cost and $75,000
will be payable as Base Rent pursuant to subparagraph 4.(b)(i) of the Lease.
"BASE RENT DATE" means a date upon which Base Rent must be paid under
the Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be determined as follows:
(a) If a LIBOR Period Election of one month is in effect on the
Base Rent Commencement Date, then the first Business Day of the first
calendar month following the Base Rent Commencement Date shall be the
first Base Rent Date.
(b) If the LIBOR Period Election in effect on the Base Rent
Commencement Date is three months or six months, then the first Business
Day of the third calendar month following the Base Rent Commencement
Date shall be the first Base Rent Date.
Each successive Base Rent Date after the first Base Rent Date shall be the first
Business Day of the first or third calendar month following the calendar month
which includes the preceding Base Rent Date, determined as follows:
(1) If a LIBOR Period Election of one month is in effect on a
Base Rent Date, then the first Business Day of the first calendar month
following such Base Rent Date shall be the next following Base Rent
Date.
(2) If a LIBOR Period Election of three months or six months is
in effect on a Base Rent Date, then the first Business Day of the third
calendar month following such Base Rent Date shall be the next following
Base Rent Date.
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96
Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of June, 1999 and a LIBOR Period Election of six months commences
on the Base Rent Commencement Date, then the first Base Rent Date shall be the
first Business Day of September, 1999, and the second Base Rent Date shall be
the first Business Day of December, 1999.
"BASE RENT PERIOD" means a period for which Base Rent must be paid under
the Lease, each of which periods shall correspond to the LIBOR Period Election
for such period. The first Base Rent Period shall begin on and include the Base
Rent Commencement Date, and each successive Base Rent Period shall begin on and
include the Base Rent Date upon which the preceding Base Rent Period ends. Each
Base Rent Period, including the first Base Rent Period, shall end on but not
include the first or second Base Rent Date after the Base Rent Date upon which
such period began, determined as follows:
(1) If the LIBOR Period Election for a Base Rent Period is one
month or three months, then such Base Rent Period shall end on the first
Base Rent Date after the Base Rent Date upon which such period began.
(2) If the LIBOR Period Election for a Base Rent Period is six
months, then such Base Rent Period shall end on the second Base Rent
Date after the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by two examples:
(1) If Solectron makes a LIBOR Period Election of three months
for a hypothetical Base Rent Period beginning on the first Business Day
in January, 2000, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent Period
will end on the first Business Day in April, 2000, the third calendar
month after January, 2000.
(2) If, however, Solectron makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2000, then such Base Rent Period will end on
but not include the second Base Rent Date after it begins; that is, the
first Business Day in July, 2000.
"BNPLC" means BNP Leasing Corporation, a Delaware corporation.
"BNPLC'S PARENT" means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.
"BREAKAGE COSTS" means any and all costs, losses or expenses incurred or
sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:
(1) used to make or maintain Funding Advances upon application of
a Qualified Payment or upon any sale of the Property pursuant to the
Purchase Agreement, if such application or sale occurs on any day other
than the last day of a Construction Period or Base Rent Period; or
(2) reserved to provide a Construction Advance that Solectron
requests (by a request not rescinded in accordance with subparagraph
6.(f) of the Lease), but thereafter declines to take for any reason, or
that
List of Defined Terms - Page 3
97
Solectron requests but is not permitted to take because of its failure
to satisfy any of the conditions specified in subparagraph 6.(e) of the
Lease.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon Solectron.
"BREAK EVEN PRICE" means an amount equal, on the Designated Sale Date,
to Stipulated Loss Value, plus all costs and expenses (including appraisal
costs, withholding taxes (if any) other than Excluded Taxes, and reasonable
Attorneys' Fees, as defined in the Lease) incurred in connection with any sale
of the Property under the Purchase Agreement or in connection with collecting
sales proceeds due thereunder, and plus any costs not considered as Construction
Advances that may have been incurred by or on behalf of BNPLC to continue or
complete construction of the initial Construction Project after a Landlord's
Election to Continue Construction made pursuant to subparagraph 6.(h) of the
Lease, less the aggregate amounts (if any) of Deductible Judgments.
"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).
"CAPITAL ADEQUACY CHARGES" means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(c)(ii) of the Lease.
"CARRYING COSTS" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(a) of the Lease.
"CLOSING CERTIFICATE" means the Amended and Restated Closing Certificate
and Agreement dated as of July 1, 1998 executed by Solectron in favor of BNPLC,
as such Closing Certificate may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITMENT FEE" shall have the meaning assigned to it in subparagraph
4.(d) of the Lease.
"COMPLETION NOTICE" means the notice required by subparagraph 6.(g) of
the Lease from Solectron to BNPLC, advising BNPLC when construction of the
initial Construction Project is substantially complete.
"CONSTRUCTION ADVANCES" means (1) actual advances of funds made by or on
behalf of BNPLC to or on behalf of Solectron pursuant to subparagraph 6.(a) of
the Lease for the reimbursement to Solectron or payment of Commitment Fees and
of costs, fees and expenses incurred to construct the initial Construction
Project, and (2) amounts otherwise considered as Construction Advances pursuant
to subparagraph 6.(h) of the Lease.
List of Defined Terms - Page 4
98
"CONSTRUCTION ALLOWANCE" means the allowance, consisting of Construction
Advances and Carrying Costs, which is to be provided for the initial
Construction Project as more particularly described in Paragraph 6 of the Lease.
"CONSTRUCTION PERIOD" means each successive period of approximately one
month, with the first Construction Period beginning on and including the
Effective Date and ending on but not including the first Advance Date. Each
successive Construction Period after the first Construction Period shall begin
on and include the day on which the preceding Construction Period ends and shall
end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the earlier of the Base
Rent Commencement Date or the Designated Sale Date.
"CONSTRUCTION PROJECTS" include (1) the "initial Construction Project"
which means the construction of the improvements described in Exhibit C to the
Lease and contemplated by any plans, renderings and budgets referenced in such
Exhibit, consistent with the uses permitted by the Lease, and (2) "subsequent
Construction Projects" which means any other project to be undertaken by
Solectron during the Term and in accordance with the Lease for the construction
of new buildings or other substantial Improvements or for the alteration of then
existing Improvements. Subject to the requirements of subparagraph 6.(d) of the
Lease, a Construction Project may involve demolition of then existing
Improvements which are no longer needed or which must be removed to accommodate
new Improvements. All construction work planned or done contemporaneously shall
constitute a single Construction Project for purposes of the Lease,
notwithstanding that such work may be done in stages or performed by more than
one general contractor. However, it is understood that any number of distinct
Construction Projects may be undertaken by Solectron during the Term of (and in
accordance with the provisions of) the Lease, and that Construction Projects
(including the initial Construction Project) may include offsite and other
public improvements required as conditions of governmental approvals for the
Construction Projects, environmental remediation and other work, dedications,
fees or contributions required by any governmental authority in connection with
the Construction Projects.
Notwithstanding the foregoing, although refinishing, reconfiguring and
refitting space or other interior nonstructural alterations within any completed
building will be subject to subparagraph 12.(d) of the Lease, it will not for
purposes of the Lease constitute a Construction Project if done in a manner that
is not likely to have any material adverse affect on the value of the Property
taken as a whole, unless Solectron expects to receive Construction Advances for
the cost thereof.
"CONSTRUCTION WARRANTY" shall have the meaning assigned to it in
subparagraph 6.(d)(v) of the Lease.
"CONSTRUCTION WARRANTY PAYMENTS" shall have the meaning assigned to it
in subparagraph 6.(d)(v) of the Lease.
"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 another Person against loss in respect of, indebtedness or obligations
of others
List of Defined Terms - Page 5
99
of the kinds referred to in the preceding clauses (i) through (v); (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.
"DEDUCTIBLE JUDGMENT" means a final, liquidated judgment against BNPLC,
the execution of which has not been and will not be stayed pending appeal by
BNPLC, secured by a judgment lien filed against the Property which constitutes a
Lien Removable by BNPLC.
"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.
"DEFAULT RATE" means a floating per annum rate equal to two percent (2%)
above the Prime Rate. However, in no event will the "Default Rate" exceed the
maximum interest rate permitted by law.
"DESIGNATED SALE DATE" means the earlier of:
(1) the first Business Day of July, 2003; or
(2) any Business Day designated as such in an irrevocable,
unconditional notice given by Solectron to BNPLC; provided, the Business
Day so designated by Solectron must be no earlier than sixty days after
the date of such notice; and provided, further, in such notice Solectron
must acknowledge that because of Solectron's election to accelerate the
Designated Sale Date, "Solectron's Maximum Remarketing Obligation" (as
defined below) will equal the Break Even Price, and thus BNPLC shall be
entitled to receive no less than the Break Even Price under the Purchase
Agreement on the Designated Sale Date; or
(3) any Business Day designated as such in a notice given by
BNPLC to Solectron when any Event of Default has occurred and is
continuing or after any breach by Solectron of the Purchase Agreement
(and the expiration without cure of any applicable cure periods which
may be expressly provided in the Purchase Agreement), including any such
breach consisting of a failure to make a payment pursuant to the
Purchase Agreement.
"DEVELOPMENT DOCUMENTS" means the contracts, ordinances and other
documents described in Schedule 1 attached to the Lease, if any, as the same may
be modified from time to time in accordance with the Lease and the Closing
Certificate (including modifications authorized pursuant to subparagraphs 7.(a)
and 7.(b) of the Lease), and any applications, permits or certificates
concerning or affecting the use or development of the Property that may be
submitted, issued or executed from time to time as contemplated in such
contracts, ordinances and other documents or that BNPLC may hereafter execute,
approve or consent to at the request of Solectron.
"EFFECTIVE DATE" means July 1, 1998.
"EFFECTIVE RATE" means for each Construction Period and for each Base
Rent Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, then the Effective Rate shall be automatically
List of Defined Terms - Page 6
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increased or decreased as of the date of such change, as the case may be,
without prior notice to Solectron. If for any reason BNPLC determines that it is
impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the foregoing, then the "EFFECTIVE RATE" for that Construction Period or Base
Rent Period shall equal any published index or per annum interest rate
determined in good faith by BNPLC's Parent to be comparable to LIBOR 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 BNPLC's Parent's
comparison of past eurodollar market rates to past yields on such Treasury
obligations. Any determination by BNPLC of the Effective Rate under this
definition shall, in the absence of clear and demonstrable error, be conclusive
and binding upon Solectron.
"ENVIRONMENTAL CONSULTANT" means a qualified individual employed by a
qualified firm. Individuals shall be deemed qualified if they (i) possess at
least five years of experience in performing environmental, engineering and
consulting services; (ii) have performed or supervised at least five projects
involving remediation of soil contaminated with hazardous substances, including
at least one project similar to the Remedial Work; (iii) have all licenses
required under applicable law for the Remedial Work; and (iv) have at least a
bachelor's degree in the physical sciences or a related field from an accredited
college or university. A firm shall be deemed qualified if it is: (i) a
nationally recognized, reputable environmental and/or engineering firm in the
business of providing professional environmental engineering and consulting
services; (ii) has experience and expertise in projects involving the Remedial
Work; (iii) maintains policies of insurance which are approved by BNPLC in its
reasonable discretion.
"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 the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "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, "RCRA").
"ENVIRONMENTAL LOSSES" means Losses suffered or incurred by any
Interested Party relating to or arising out of, based on or as a result of: (i)
any Hazardous Substance Activity that occurs or is alleged to have occurred on
or prior to the Loss Cutoff Date; (ii) any violation on or prior to the Loss
Cutoff Date of Environmental Laws relating to the 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 that occurs or is alleged to have occurred in whole or in
part on or prior to the Loss Cutoff Date; 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 Interested Party which relates to,
arises from, is based on, or results from any of the matters described in
clauses (i), (ii) or (iii) of this definition, or any allegation of any such
matters. For purposes of determining whether Losses constitute "Environmental
Losses," any actual or alleged Hazardous Substance Activity or violation of
Environmental Laws relating to the Property will be presumed to have occurred
prior to the Loss Cutoff Date unless Solectron establishes by clear and
convincing evidence to the contrary that the relevant Hazardous Substance
Activity or violation of Environmental Laws did not occur or commence prior to
the Loss Cutoff Date. Even if after the Loss Cutoff Date Losses are incurred by
or asserted against a particular Interested Party that would not have been
incurred or asserted, but for any matter described in clauses (i), (ii) or (iii)
of this definition, or an allegation of any such matter, then such Losses will
constitute Environmental Losses.
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"ENVIRONMENTAL REPORTS" means the following report, which was provided
by Solectron to BNPLC prior to the execution of the Lease: Phase I Environmental
Site Assessment, Lot 2F, Seaway Center, ▇▇▇▇▇▇▇ Creek Parkway, Everett,
Washington, performed by Geotech Consultants, Inc.
"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.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA
is a member of Solectron's controlled group, or under common control with
Solectron, within the meaning of Section 414 of the Internal Revenue Code, and
the regulations promulgated and rulings issued thereunder.
"ERISA TERMINATION EVENT" means (i) the occurrence with respect to any
Plan of a reportable event described in Section 4043(c) of ERISA for which any
penalty or notice thereof has not been waived pursuant to regulations, rulings,
or notices issued by the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, or (ii) 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 (other than in connection with a
standard termination of a fully funded Plan pursuant to Section 4041 of ERISA),
or (iii) the institution of proceedings to terminate any Plan by the Pension
Benefit Guaranty Corporation under Section 4042 of ERISA, or (iv) any other
event or condition which would constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"ESCROWED PROCEEDS" means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for injury or
damage to the 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 Property;
provided, however, in determining the amount of "Escrowed Proceeds" there shall
be deducted all expenses and costs of every type, kind and nature (including
Attorneys' Fees) incurred by BNPLC to collect such proceeds. Notwithstanding the
foregoing, "Escrowed Proceeds" will not include (A) any payment to BNPLC by a
Participant or an Affiliate of BNPLC that is made to compensate BNPLC for the
Participant's or Affiliate's share of any Losses BNPLC may incur as a result of
any of the events described in the preceding clauses (1) through (4), (B) any
money or proceeds that have been applied as a Qualified Payment or to pay any
Breakage Costs or other costs incurred in connection with a Qualified Payment,
(C) any money or proceeds that, after no less than ten days notice to Solectron,
BNPLC returns or pays to a third party because of BNPLC's good faith belief that
such return or payment is required by law, (D) any money or proceeds paid by
BNPLC to Solectron or offset against any amount owed by Solectron, or (E) any
money or proceeds used by BNPLC in accordance with the Lease for repairs or the
restoration of the Property or to obtain development rights or the release of
restrictions that will inure to the benefit of future owners or occupants of the
Property. Until Escrowed Proceeds are paid to Solectron pursuant to Paragraph 11
of the Lease, transferred to a purchaser under the Purchase Agreement as therein
provided or applied as a Qualified Payment or as otherwise described in the
preceding sentence, BNPLC 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.
"ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if
the Person is bound by the Lease or the Purchase Agreement, a breach by such
Person of the express provisions of the Lease or the Purchase Agreement that
continues beyond any period for cure provided therein, and (2) conduct of such
Person or its
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102
Affiliates that has been determined to constitute wilful misconduct or Active
Negligence in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination. Established
Misconduct of one Interested Party shall not be attributed to a second
Interested Party unless the second Interested Party is an Affiliate of the
first. Negligence which does not constitute Active Negligence shall not in any
event constitute Established Misconduct. For purposes of this definition,
"conduct of a Person" will include (1) the conduct of an employee of that
Person, but only to the extent that the employee is acting within the scope of
his employment by that Person, as determined in or as a necessary element of a
final judgment rendered against such Person by a court with jurisdiction to make
such determination, and (2) the conduct of an agent of that Person (such as an
independent environmental consultant engaged by that Person), but only to the
extent that the agent is, as determined in or as a necessary element of a final
judgment rendered against such Person by a court with jurisdiction to make such
determination, (x) acting within the scope of the authority granted to him by
such Person, (y) not acting with the consent or approval of or under the
direction of Solectron or Solectron's Affiliates, employees or agents, and (z)
not acting in good faith to mitigate Losses that such Person may suffer because
of a breach or repudiation by Solectron of the Closing Certificate or Lease or
the Purchase Agreement.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for purposes of determining
the Effective Rate for any Construction Period or 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 any emergency, supplemental or other marginal reserve
requirement) for BNPLC's Parent 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.
"EVENT OF DEFAULT" shall have the meaning assigned to it in subparagraph
17.(a) of the Lease.
"EXCLUDED TAXES" means (1) all federal, state and local income taxes
upon Base Rent, Commitment Fees, Administrative Agency Fees, any interest paid
to BNPLC or any Participant pursuant to subparagraph 4.(g) of the Lease and any
additional compensation claimed by BNPLC pursuant to subparagraph 5.(c)(ii) of
the Lease; (2) all federal, state and local income taxes upon any amounts paid
as reimbursement for or to satisfy Losses incurred by BNPLC or any Participant
to the extent such taxes are offset by a corresponding reduction of BNPLC's or
the applicable Participant's income taxes because of BNPLC's or such
Participant's deduction of the reimbursed Losses from its taxable income or
because of any tax credits attributable thereto; (3) taxes imposed by any
governmental authority outside the United States of America; and (4) any
transfer or change of ownership taxes assessed because of BNPLC's transfer or
conveyance to any third party of BNPLC's rights or interests in the Lease or the
Purchase Agreement or the Property, but excluding any such taxes assessed
because of any transfer described in clauses (4) or (6) of the definition of
Permitted Transfer below. For purposes of this definition, income taxes shall
include any state or local taxes on the net income of BNPLC or a Participant, as
the case may be, whether or not designated as an "income tax" or "franchise tax"
and regardless of any future increase in tax rates used to compute such taxes.
If, however, a change in Applicable Laws after the Effective Date results in an
increase in such taxes for any reason other than an increase in the applicable
tax rates (e.g., a disallowance of deductions that would otherwise be available
against payments described in clause (1) of this definition), then for purposes
of computing the taxes that constitute "Excluded Taxes," the change in law will
not be considered.
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103
"EXISTING CONTRACT" means the Real Estate Purchase and Sale Agreement
dated as of September 30, 1997 between Solectron Corporation and Seller covering
the Land described in Exhibit A of the Lease.
"FAIR MARKET VALUE" means the fair market value of the Property on or
about the Designated Sale Date (calculated under the assumptions, whether or not
then accurate, that Solectron has fulfilled and can be expected to continue to
fulfill its obligations under the Lease [other than its obligation to complete
the initial Construction Project before the Designated Sale Date]; that
Solectron has maintained the Property in compliance with all Applicable Laws
[including Environmental Laws]; that any Construction Projects [other than the
initial Construction Project] commenced by Solectron but not completed prior to
the Designated Sale Date shall not reduce the value of the Property; that all
Improvements are self-sufficient in the sense that any easements or offsite
facilities needed under the Development Documents or otherwise for the use of
the Improvements will be available at no additional cost to the owner of the
Improvements; that Solectron has repaired and restored the Property after any
damage following fire or other casualty; that Solectron has restored the
remainder of the Property after any partial taking by eminent domain; that
Solectron has completed any contests of and paid any taxes due [other than
Excluded Taxes] or other amounts secured by or allegedly secured by a lien
against the Property, including any assessment liens, but not including Liens
Removable by BNPLC; that no conditions or circumstances on or about the Property
[such as the presence of an endangered species] is discovered that will impede
development of the Property; that development of the Property will not be
hindered or delayed because of the limited availability of utilities or water;
that any purchaser paying fair market value for the Property will receive copies
of all of Solectron's books and records which are necessary or useful to a
future owner's or occupant's use of the Property in the manner permitted by the
Lease, including books and records evidencing the testing and validation of the
Property for the uses permitted by the Lease; that without undue cost or delay
any such purchaser can obtain any necessary permits or licenses needed to use
the Property for the purposes permitted by the Lease; and that Solectron has
cured any title defects affecting the Property other than Liens Removable by
BNPLC, all in accordance with the standards and requirements of the Lease [as
though the Lease were continuing in force], and the Closing Certificate) as
determined by an independent MAI Certified General Real Estate Appraiser
reasonably satisfactory to BNPLC who has five years or more experience
appraising similar properties in and around Everett, Washington.
"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 BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon Solectron.
"FUNDED CONSTRUCTION ALLOWANCE" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Payments deducted on or prior to that
day in the calculation of such Outstanding Construction Allowance.
"FUNDING ADVANCES" means (1) the Initial Funding Advance and (2) all
future advances made by BNPLC's Parent or any other Participant to or on behalf
of BNPLC to allow BNPLC to provide the Construction Allowance under the Lease.
List of Defined Terms - Page 10
104
"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 16.(b) of the Lease (except for changes concurred in by Solectron's
independent public accountants).
"GUARANTOR" means Solectron Corporation, a Delaware corporation.
"GUARANTY" means the Amended and Restated Guaranty dated as of July 1,
1998 given by Guarantor to BNPLC, guaranteeing the obligations of Solectron
under the Lease, Purchase Agreement and Closing Certificate, as such Guaranty
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
"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 or substance," "infectious waste," "toxic substance," "toxic
pollutant," or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including 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; and (iv) 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.
"HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including 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
Property, including 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 Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property. "HAZARDOUS SUBSTANCE ACTIVITY" does not, however, include events
or circumstances that do not affect the Property on or about other properties
owned or operated by Solectron.
"IMPOSITIONS" means 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 the Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.
List of Defined Terms - Page 11
105
"IMPROVEMENTS" means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.
"INDEX DEBT" means senior, unsecured, long-term indebtedness for
borrowed money of Guarantor that is not guaranteed by any other Person or
subject to any other credit enhancement.
"INDUSTRIAL HYGIENIST" means an industrial hygienist certified by the
American Board of Industrial Hygiene who is experienced with required and
appropriate health and safety standards and good industrial hygiene practice
related to operations at hazardous waste sites.
"INITIAL FUNDING ADVANCE" means, collectively, the advances of made by
BNPLC's Parent (directly or through one or more of its Affiliates) to or on
behalf of BNPLC (1) on or prior to the effective date of the Prior Lease to
cover the cost of BNPLC's acquisition of the Property and certain Transaction
Expenses and other amounts described in this definition, and (2) to cover
Construction Advances and Carrying Costs under (and as defined in) the Prior
Lease. The amount of the Initial Funding Advance may be confirmed by a separate
closing certificate executed by Solectron as of the Effective Date. To the
extent that BNPLC did not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC or for other purposes described in the
preceding sentence, the remainder thereof was advanced to Solectron, with the
understanding that Solectron would use any such amount advanced for one or more
of the following purposes: (1) the payment or reimbursement of Transaction
Expenses incurred by Solectron; (2) the payment or reimbursement of expenses
incurred by Solectron in connection with the initial Construction Project,
including the planning, design, engineering, construction and permitting of
thereof; (3) the maintenance of the Property; or (4) the payment of Rents next
due.
"INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) Solectron or any
Person that cannot lawfully claim an interest in the Property except through or
under a conveyance from Solectron, or (c) any Applicable Purchaser under the
Purchase Agreement and any Person that cannot lawfully claim an interest in the
Property except through or under a conveyance from such Applicable Purchaser.
"LAND" means the land as described in Exhibit A attached to the Lease,
Closing Certificate and Purchase Agreement. However, upon any amendment to the
Lease which modifies the land covered thereby, the land covered by the Closing
Certificate and Purchase Agreement shall automatically be so modified.
"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(h) of the Lease.
"LEASE" means the Amended and Restated Lease Agreement dated as of July
1, 1998 between BNPLC, as landlord, and Solectron, as tenant, pursuant to which
Solectron has agreed to lease BNPLC's interest in the Property, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
List of Defined Terms - Page 12
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"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC'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 BNPLC'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. BNPLC shall instruct BNPLC'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 Construction Period or
Base Rent Period, as the case may be, (ii) in an amount equal or comparable to
the total (projected on the applicable date of determination by BNPLC's Parent)
Stipulated Loss Value on the first day of such period, and (iii) for a time
equal or comparable to the length of such period. If BNPLC'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. If for any reason BNPLC's Parent determines that it is
impossible or unreasonably difficult to determine LIBOR with respect to a given
Construction Period or Base Rent Period in accordance with the foregoing, or if
BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain Funding Advances during any
Construction Period or Base Rent Period for which Carrying Costs or Base Rent is
computed by reference to LIBOR, then "LIBOR" for that 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 BNPLC's Parent shall, in the absence
of clear and demonstrable error, be binding and conclusive upon Solectron.
"LIBOR PERIOD ELECTION" for the first Base Rent Period means one month
and for any subsequent Base Rent Period means a period of one month, three
months or six months as designated by Solectron at least ten Business Days prior
to the commencement of such Base Rent Period by a notice given to BNPLC in the
form of Exhibit K attached to the Lease. (For purposes of the Lease a LIBOR
Period Election for any Base Rent Period shall also be considered the LIBOR
Period Election in effect on (1) the Base Rent Commencement Date or Base Rent
Date upon which such Base Rent Period begins and (2) subsequent Base Rent Dates,
if any, which occur before the date upon which such Base Rent Period ends.) Any
LIBOR Period Election so designated by Solectron shall remain in effect for the
entire Base Rent Period specified in Solectron's notice to BNPLC (provided such
Base Rent Period commences at least ten Business Days after BNPLC's receipt of
the notice) and for all subsequent Base Rent Periods until a new designation
becomes effective in accordance with the provisions set forth in this
definition. Notwithstanding the foregoing, however: (1) Solectron shall not be
entitled to designate a LIBOR Period Election that would cause a Base Rent
Period to extend beyond the end of the scheduled Term; (2) changes in the LIBOR
Period Election shall become effective only upon the commencement of a new Base
Rent Period; and (3) if Solectron fails to make a LIBOR Period Election
consistent with the foregoing requirements for any Base Rent Period, or if an
Event of Default shall have occurred and be continuing on the third Business Day
preceding the commencement of any Base Rent Period, the LIBOR Period Election
for such Base Rent Period shall be deemed to be one month.
"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 lease in the nature
thereof, any agreement to sell receivables with recourse, 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 the Lease.
List of Defined Terms - Page 13
107
"LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated by the Lease or
the Purchase Agreement, by BNPLC itself, (2) by third parties lawfully claiming
through or under BNPLC (which for purposes of the Lease shall include any
judgment liens established against the Property because of a judgment rendered
against BNPLC and shall also include any liens established against the Property
to secure past due Excluded Taxes), or (3) by third parties lawfully claiming
under a deed or other instrument duly executed by BNPLC; provided, however,
Liens Removable by BNPLC shall not include (A) any Permitted Encumbrances or
Development Documents (regardless of whether claimed through or under BNPLC),
(B) the Closing Certificate, the Lease, the Purchase Agreement or any other
document executed by BNPLC with the knowledge of (and without objection by)
Solectron's counsel contemporaneously with the execution and delivery of the
Closing Certificate, the Lease and the Purchase Agreement, (C) Liens which are
neither lawfully claimed through or under BNPLC (as described above) nor claimed
under a deed or other instrument duly executed by BNPLC, (D) Liens claimed by
Solectron or claimed through or under a conveyance made by Solectron, (E) Liens
arising because of BNPLC's compliance with Applicable Law, the Lease, Permitted
Encumbrances, the Development Documents or any written request made by
Solectron, (F) Liens securing the payment of property taxes or other amounts
assessed against the Property by any governmental authority, other than to
secure the payment of past due Excluded Taxes or to secure damages caused by
(and attributed by any applicable principles of comparative fault to) BNPLC's
own Established Misconduct or the Established Misconduct of BNPLC's Parent or
BNPLC's other Affiliates, or (G) Liens resulting from or arising in connection
with any breach by Solectron of the Closing Certificate, the Lease or the
Purchase Agreement.
"LIST OF DEFINED TERMS" means this List of Defined Terms, which is
attached to and made a part of the Closing Certificate, the Lease, and the
Purchase Agreement.
"LOSS CUTOFF DATE" means the later of the dates upon which (i) the Lease
terminates, (ii) Solectron surrenders possession of the Property or (iii)
Solectron ceases to have any leasehold or other interest in the Property under
the Lease or otherwise.
"LOSSES" means the following, to the extent (but only to the extent)
resulting from, arising out of or in connection with events or circumstances
(including the condition of the Property) that actually or allegedly occurred or
existed or may hereafter occur or exist on or before the Loss Cutoff Date: any
and all losses, liabilities, damages (whether actual, consequential, punitive or
otherwise denominated), demands, claims, administrative or legal proceedings,
actions, judgments, causes of action, assessments, fines, penalties, costs and
expenses (including 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. For purposes of
determining whether any loss, liability, damage, demand, claim, administrative
or legal proceeding, action, judgment, cause of action, assessment, fine,
penalty, cost or expense constitutes a "Loss," the events or circumstances
relating thereto will be presumed to have occurred prior to the Loss Cutoff Date
unless Solectron establishes by clear and convincing evidence to the contrary
that the relevant events or circumstances did not occur or exist prior to the
Loss Cutoff Date.
"MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between
Solectron or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.
"MAXIMUM CONSTRUCTION ALLOWANCE" means an amount equal to $25,000,000,
less the Initial Funding Advance.
List of Defined Terms - Page 14
108
"MOODY'S" means ▇▇▇▇▇'▇ Investor Service, Inc.
"OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to
it in subparagraph 6.(a) of the Lease.
"PARTICIPANT" means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement by executing a supplement as
contemplated therein, agrees from time to time to participate in all or some of
the risks and rewards to BNPLC of the Lease, the Purchase Agreement and the
Closing Certificate. As of the Effective Date, the only Participant is BNPLC's
Parent, but BNPLC may agree after the Effective Date to share in risks and
rewards of the Lease, the Purchase Agreement and the Closing Certificate with
other Participants. However, no Person other than BNPLC's Parent and its
Affiliates shall qualify as a Participant for purposes of the Lease, the
Purchase Agreement, the Closing Certificate or other agreements concerning the
Property to which Solectron is a party unless such Person, with Solectron's
prior written approval (which approval will not be unreasonably withheld),
became a party to the Participation Agreement by executing a supplement to that
agreement as contemplated therein.
"PARTICIPATION AGREEMENT" means the Amended and Restated Participation
Agreement dated as of the Effective Date, between BNPLC and BNPLC's Parent and
any other Participants that may become parties thereto as contemplated therein,
pursuant to which BNPLC's Parent has agreed to participate in the risks and
rewards to BNPLC of the 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.
"PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Lease,
(ii) any easement agreement or other document affecting title to the Property
executed by BNPLC at the request of or with the consent of Solectron, and (iii)
any liens from time to time imposed to secure only ad valorem taxes on the
Property which, at the time in question, are not delinquent.
"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, 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,
generation, storage and disposal shall not:
(1) exceed that reasonably required for the construction of
Construction Projects permitted by the Lease or for the operation of the
Property for the purposes expressly permitted under subparagraph 3.(a)
of the Lease; or
(2) include any disposal, discharge or other release of
Hazardous Substances from the Property in any manner that might allow
such substances to reach 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 Solectron
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 Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.
List of Defined Terms - Page 15
109
"PERMITTED HAZARDOUS SUBSTANCES" means Hazardous Substances used and
reasonably required for Construction Projects expressly permitted by the Lease
or for the use of the Property by Solectron and its permitted subtenants and
assigns for the purposes expressly permitted by subparagraph 3.(a) of the Lease,
in either case 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 usual
and customary office, laboratory and janitorial products.
"PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance of rights and interests in favor of the BNPLC's Parent or
other Participants pursuant to the terms and conditions of the Participation
Agreement, provided that in any case where rights or interests in the Property
are so created or conveyed, the rights or interests are made expressly subject
to the rights of Solectron under the Lease and the Purchase Agreement; (2) any
assignment or conveyance by BNPLC to any present or future Participant of any
lien or security interest against the Property (in contrast to a conveyance of
BNPLC's fee estate) or of any interest in Rent, payments required by or under
the Purchase Agreement or payments to be generated from the Property after the
Term, provided that such assignment or conveyance is made expressly subject to
the rights of Solectron under the Lease and the Purchase Agreement; (3) any
agreement to exercise or refrain from exercising rights or remedies under the
Lease or the Purchase Agreement made by BNPLC with any present or future
Participant; (4) any assignment or conveyance by BNPLC requested by Solectron or
required by any Permitted Encumbrance, by Development Documents, by the Purchase
Agreement or by Applicable Laws; (5) conveyances or transfers by BNPLC or its
Affiliates to BNPLC or its Affiliates, provided that in the case of any such
conveyance or transfer that covers any interest in the Property, the conveyance
or transfer is made expressly subject to the rights of Solectron under the Lease
and the Purchase Agreement; or (6) any other assignment or conveyance by BNPLC
when an Event of Default shall have occurred and be continuing or after a
Landlord's Election to Continue Construction or after the Designated Sale Date.
"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.
"PERSONAL PROPERTY" shall have the meaning assigned to it on page 2 of
the Lease.
"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 Internal Revenue Code and is either (i) maintained by
Solectron, Guarantor or any Subsidiary of Solectron or Guarantor for employees
of Solectron, Guarantor or any Subsidiary of Solectron or Guarantor or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Solectron, Guarantor or any Subsidiary of Solectron or Guarantor is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"POTENTIAL LIEN CLAIMANTS" means (1) general contractors, or (2) other
parties who have filed any required statutory notices, or who have actually
notified BNPLC or Solectron of claims, in order to preserve or establish their
right to a mechanic's or materialman's lien against the Property in connection
with any Construction Project.
"PRIME RATE" means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either Citibank, N.A. or any New York
List of Defined Terms - Page 16
110
branch or office of Credit Commercial de France as selected by BNPLC shall be
used to compute the rate describe in the preceding sentence. 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 Effective
Date without notice to Solectron as of the effective time of each change in
rates described in this definition.
"PRIOR CLOSING CERTIFICATE" shall have the meaning assigned to it on the
first page of the Closing Certificate.
"PRIOR GUARANTY" shall have the meaning assigned to it on the first page
of the Guaranty.
"PRIOR LEASE" shall have the meaning assigned to it on the first page of
the Lease.
"PRIOR PARTICIPATION AGREEMENT" shall have the meaning assigned to it on
the first page of the Participation Agreement.
"PRIOR PURCHASE AGREEMENT" shall have the meaning assigned to it on the
first page of the Purchase Agreement.
"PROPERTY" means the Personal Property and the Real Property,
collectively.
"PURCHASE AGREEMENT" means the Amended and Restated Purchase Agreement
dated as of July 1, 1998 between BNPLC and Solectron pursuant to which Solectron
has agreed to purchase or to arrange for the purchase by a third party of
BNPLC's interest in the Property, as such Purchase Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"QUALIFIED PAYMENTS" means all payments received by BNPLC from time to
time during the Term from any party (1) under any property insurance policy as a
result of damage to the Property, (2) as compensation for any restriction placed
upon the use or development of the Property or for the condemnation of the
Property or any portion thereof, (3) because of any judgment, decree or award
for injury or damage to the 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 Property; provided, however, that (x) in determining the amount of
"Qualified Payments", there shall be deducted all expenses and costs of every
kind, type and nature (including taxes, Breakage Costs and Attorneys' Fees)
incurred by BNPLC with respect to the collection or application of such
payments, (y) "Qualified Payments" shall not include any payment to BNPLC by a
Participant or an Affiliate of BNPLC that is made to compensate BNPLC for the
Participant's or Affiliate's share of any Losses BNPLC 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 BNPLC that BNPLC
has paid to Solectron for the restoration or repair of the Property or that
BNPLC 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 and the Outstanding Construction Allowance) paid to or
received by BNPLC 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 BNPLC as provided in
subparagraph 11.(c) of the Lease.
"REAL PROPERTY" shall have the meaning assigned to it on page 1 of the
Lease.
"REMEDIAL WORK" means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other
List of Defined Terms - Page 17
111
required remedial plans that any governmental agency or political subdivision
requires or approves (or could reasonably be expected to require if it was aware
of all relevant circumstances concerning the Property), whether by judicial
order or otherwise, because of the presence of or suspected presence of
Hazardous Substances in, on, under or about the Property or because of any prior
Hazardous Substance Activity. Without limiting the generality of the foregoing,
Remedial Work also means any obligations imposed upon or undertaken by Solectron
pursuant to Development Documents or any recommendations or proposals made
therein.
"RENT" means the Base Rent and all Additional Rent.
"RESIDUAL RISK PERCENTAGE" means fifteen percent (15%).
"RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of either Solectron or
Guarantor, as the case may be.
"S&P" means Standard and Poor's Corporation.
"SCOPE CHANGE" means a change to a Construction Project that, if
implemented, will make the quality, function or capacity of the Improvements
affected by such Construction Project "materially different" (as defined below
in this paragraph) than as described or inferred by plans and other items
submitted to BNPLC by Solectron as described in subparagraph 6.(d)(i) of the
Lease. "Scope Change" is not intended to include the mere refinement, correction
or detailing of plans or other items submitted to BNPLC by Solectron. As used in
this definition, a "material difference" means a difference that (a) could
(after completion of the applicable Construction Project and the funding of any
Construction Advances required in connection therewith) significantly reduce any
excess of the market value of the Property over Stipulated Loss Value or
significantly increase any excess of Stipulated Loss Value over the market value
of the Property, or (b) will change the general character of the Improvements
from that needed to accommodate the uses permitted by subparagraph 3.(a) of the
Lease.
"SELLER" means The Quadrant Corporation.
"SOLECTRON" means Solectron Washington, Inc., a California corporation.
"SOLECTRON'S MAXIMUM REMARKETING OBLIGATION" shall have the meaning
indicated in the following provisions:
(1) In the event of a Voluntary Retention of the Property, or if
the Designated Sale Date occurs on the first Business Day of July, 2003
as provided above in clause (1) of the definition of Designated Sale
Date, "SOLECTRON'S MAXIMUM REMARKETING OBLIGATION" will equal (A) (x)
Stipulated Loss Value on the Designated Sale Date, times (y) 100% minus
the Residual Risk Percentage, less (B) the sum of any Escrowed Proceeds
held and to be retained by BNPLC after the Designated Sale Date.
(2) Absent a Voluntary Retention of the Property, if the
Designated Sale Date should occur prior to the first Business Day of
July, 2003 because of Solectron's election to accelerate the Designated
Sale Date as provided above in clause (2) of the definition of
Designated Sale Date, "SOLECTRON'S MAXIMUM REMARKETING OBLIGATION" will
equal the Break Even Price.
(3) Absent a Voluntary Retention of the Property, if the
Designated Sale Date should occur prior to the first Business Day of
July, 2003 for any reason other than as described in the preceding
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112
clause (2) (including because of BNPLC's election to accelerate the
Designated Sale Date as provided above in clause (3) of the definition
of Designated Sale Date), "SOLECTRON'S MAXIMUM REMARKETING OBLIGATION"
will equal the Break Even Price.
"SPREAD" means, for each Construction Period or period beginning on and
including a Base Rent Date and ending on but not including the next Base Rent
Date, the amount established as described below in this definition on the date
that is two Business Days prior to such period by reference to the stated (or
published, implied) rating by S&P or by Moody's applicable to the Index Debt on
that date. The Spread shall be established at the Level in the pricing grid
below which corresponds to the rating of S&P and Moody's, respectively,
applicable to the Index Debt; provided that (a) if one, but not both, of Moody's
or S&P shall not have in effect a rating (stated or published, implied) for the
Index Debt, then the Spread shall be determined solely with reference to the
available rating by the rating agency that still rates the Index Debt; (b) if
the ratings established by Moody's and S&P for the Index Debt shall indicate two
different but consecutive Levels, the Spread shall be based on the more
favorable to Guarantor of the two Levels; (c) if the ratings established by
Moody's and S&P for the Index Debt shall indicate two different but
nonconsecutive Levels, the Spread shall be the average of the Spreads
corresponding to such Levels; (d) if the rating established by Moody's or S&P
for the Index Debt shall be changed (other than as a result of a change in the
rating system of Moody's or S&P), such change shall be effective on the date on
which it is first announced by the applicable rating agency; (e) notwithstanding
anything to the contrary in (a) through (d) above, but subject to (f) and (g)
below, if either the rating established by Moody's for the Index Debt of
Guarantor is below Ba2 or the rating established by S&P for the Index Debt of
Guarantor is below BB, the Spread shall be 80.0 basis points; (f)
notwithstanding anything to the contrary in (a) through (e) above, but subject
to (g) below, if Moody's does not establish a rating for the Index Debt of Ba2
or higher (including if Moody's has ceased to establish any rating for the Index
Debt) and S&P does not establish a rating for the Index Debt of BB or higher
(including if S&P has ceased to establish any rating of the Index Debt), the
Spread shall be the difference computed by subtracting the Effective Rate from
the rate that is 50.0 basis points above the Prime Rate; and (g) notwithstanding
anything to the contrary in (a) through (f) above, on any date where an Event of
Default has occurred and is continuing, the Spread shall equal the Default Rate
less the Effective Rate.
======================================================================================================
LEVELS S&P RATING ▇▇▇▇▇'▇ RATING MARGIN
------------------------------------------------------------------------------------------------------
Level I BBB+ (or better) Baa1 (or better) 32.5 basis points
------------------------------------------------------------------------------------------------------
Level II BBB Baa2 40.0 basis points
------------------------------------------------------------------------------------------------------
Level III BBB- Baa3 48.75 basis points
------------------------------------------------------------------------------------------------------
Level IV BB+ Ba1 67.5 basis points
------------------------------------------------------------------------------------------------------
Level V BB Ba2 80.0 basis points
======================================================================================================
All determinations of the Spread by BNPLC shall, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of the Lease. Further
BNPLC may, but shall not be required, to rely on the determination of the Spread
set forth in any certificate delivered by Guarantor pursuant to subparagraph
16.(b)(ii) of the Lease, and no reduction in the Spread will be effective
because of an improvement in the S&P Rating or the ▇▇▇▇▇'▇ Rating before the
date that Guarantor has notified BNPLC thereof by delivery of such a
certificate.
"STIPULATED LOSS VALUE" as of any date means the amount equal to the sum
of the Initial Funding Advance, plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding
List of Defined Terms - Page 19
113
Construction Allowance on or prior to such date, minus all funds received by
BNPLC and applied as Qualified Payments on or prior to such date. Under no
circumstances will any payment of Base Rent, Commitment Fees or Administrative
Agency Fees reduce Stipulated Loss Value.
"SUBSIDIARY" means any corporation of which another corporation owns,
directly or indirectly, such number of outstanding shares as have more than
fifty percent (50%) of the ordinary voting power for the election of directors.
"SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(a)(ii) of the Purchase Agreement.
"TERM" shall have the meaning assigned to it in Paragraph 1 of the
Lease.
"TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Lease, the Closing Certificate, the Purchase
Agreement and related documents and the consummation of the transactions
contemplated therein.
"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 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 Solectron or Guarantor or
any ERISA Affiliate of Solectron or Guarantor under Title IV of ERISA.
"VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election made
by BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(a)(ii) of the Purchase Agreement.
List of Defined Terms - Page 20