1
LEASE
(BUILDINGS "K" AND "L")
By and Between
SUMITOMO BANK OF NEW YORK TRUST COMPANY ("SBNYTC"),
AS TRUSTEE
UNDER THAT CERTAIN TRUST AGREEMENT
DATED MAY 22, 1995
BETWEEN
SUMITOMO BANK LEASING AND FINANCE, INC. AND SBNYTC
as Landlord
and
CISCO SYSTEMS, INC.,
A CALIFORNIA CORPORATION
as Tenant
for
Premises located in
San Jose, California
THIS LEASE IS NOT INTENDED TO CONSTITUTE A TRUE LEASE
FOR INCOME TAX PURPOSES. SEE SECTION 21.2
2
TABLE OF CONTENTS
Page
ARTICLE 1 BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Date of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Address for Rent Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Approval Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Authorized Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Authorized Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 Building Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Capitalized Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11 Construction Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.12 Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.13 Coverage Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.14 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.15 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.16 Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.17 Equity Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.18 Equity Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.19 Equity Rent Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.20 Event of Major Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.21 Extension Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.22 Extension Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.23 Fee Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.24 Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.25 Guaranteed Residual Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.26 HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.27 Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.28 Improvements Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.29 Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.30 ILC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.31 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.32 Land Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.33 Land Lease Deed of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.34 Land Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.35 Landlord Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.36 Landlord Deed of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.37 Lease Inception Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
i.
3
2.38 Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.39 Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.40 Lenders Deed of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.41 LIBOR Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.42 LIBOR Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.43 Monthly Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.44 Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.45 Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.46 New Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.47 Nominal Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.48 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.49 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.50 Official Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.51 Permitted Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.52 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.53 Real Estate Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.54 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.55 Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.56 Rent Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.57 Rent Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.58 Required Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.59 SBNYTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.60 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.61 Senior Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.62 Senior Rent Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.63 Site Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.64 Sumitomo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.65 Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.66 Tenant Deed of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.67 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 3 DEMISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 4 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1 Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Extension Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 5 RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Delinquent Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Equity Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Exhibits Reflecting Initial Advance and Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . 17
5.7 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 6 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 Real Estate Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Personal Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.3 Right to Contest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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6.4 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Additional Provisions Relating to Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 7 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Builders' Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3 All-Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 General Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8 USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Contest of Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 9 UTILITIES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.1 Services to the Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 10 MAINTENANCE AND REPAIRS; SURRENDER OF THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1 Tenant Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Surrender of the Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 11 CONSTRUCTION OF IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Tenant's Rights to Construct Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Request for Construction Funding; Landlord Obligation to Fund . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Conditions Precedent to Landlord's Obligation to Fund Initial Advances . . . . . . . . . . . . . . . . . 30
11.4 Conditions Precedent to Landlord's Obligation to Fund Subsequent Advances . . . . . . . . . . . . . . . . 33
11.5 Conditions Precedent to Landlord's Obligation to Fund Final Advance . . . . . . . . . . . . . . . . . . . 34
11.6 Additional Provisions Regarding Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.7 Required Permits, Easements, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.8 Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.9 Title to and Nature of Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.10 Tenant as Landlord's Construction Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.11 Tenant's Release of Funding Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12 LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 13 ASSIGNMENT BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.1 Further Mortgages or Encumbrances by Landlord; Authorized Loans . . . . . . . . . . . . . . . . . . . . . 36
13.2 Landlord's Right to Sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.3 Transfer of Funds and Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 14 ASSIGNMENT AND SUBLEASING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14.1 Right to Assign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14.2 Right to Sublet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14.3 Tenant's Right to Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE 15 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.1 Total or Substantial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.2 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.3 Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.4 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.5 Notice and Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 16 DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
16.1 Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
16.2 Termination of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
16.3 Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 17 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
17.1 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
17.2 Event of Major Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
17.3 Contest by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
17.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
17.5 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
17.6 Effect of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
17.7 Landlord Cure Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
17.8 Landlord's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 18 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 19 TENANT'S OPTION TO PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
19.1 Option To Purchase Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
19.2 Mandatory Purchase/Sale of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
19.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 20 ADDITIONAL COVENANTS OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
20.1 Title and Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
20.2 Land Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
20.3 Transfer of Property Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
20.4 Trust Equity; No Other Asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
20.5 Default Under Authorized Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 21 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
21.1 Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
21.2 Form of Transaction; Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
21.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
21.4 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
21.5 Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
21.6 Approvals and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
21.7 Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
21.8 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
21.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
21.10 Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
21.11 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.14 Time Is of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.15 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.16 Limitations on Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
21.17 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
iv.
6
21.18 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
21.19 Landlord's Continuing Obligation to Sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
21.20 As-Is Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
21.21 Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
21.22 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
21.23 Appraisal Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
21.24 Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
21.25 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
List of Exhibits
Exhibit A Description of Land
Exhibit B Permitted Exceptions
Exhibit C Site Plan
Exhibit D Pre-Approved Approval Plans
Exhibit E Memorandum of Lease
Exhibit F Form of Contractor's Certificate
Exhibit G Initial Advance Memorandum
Exhibit H Rent Commencement Date Memorandum
Exhibit I Draw Request Form
Exhibit J Closing Costs and Fees to be Included in Funded Amount
Exhibit K Notice of Interest Rate Period Selection
Exhibit L Description of Additional Property Owned by Landlord
v.
7
LEASE
THIS LEASE ("Lease") by and between SUMITOMO BANK OF NEW YORK
TRUST COMPANY ("SBNYTC"), AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED
MAY 22, 1995 BETWEEN SUMITOMO BANK LEASING AND FINANCE, INC., AND SBNYTC
("Landlord"), and CISCO SYSTEMS, INC., a California corporation ("Tenant"), is
entered into as of the date set forth in Article 1 and shall be effective and
binding upon the parties hereto as of such date. Capitalized terms used in
this Lease shall have the definitions set forth in Article 2 or in the text of
this Lease.
In consideration of the Base Rent reserved herein, and the
terms, covenants and conditions set forth below, Landlord and Tenant hereby
agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
1.1 DATE OF LEASE: May 22, 1995.
1.2 LANDLORD: Sumitomo Bank of New York Trust Company, ("SBNYTC"),
as trustee under that certain trust agreement dated
May 22, 1995 between Sumitomo Bank Leasing and
Finance, Inc. and SBNYTC.
1.3 TENANT: Cisco Systems, Inc., a California corporation.
1.4 LAND: That certain tract of land located in the City of
San Jose, Santa Clara County, California, consisting
of two (2) parcels and more particularly described
on Exhibit A attached hereto, together with all
easements, rights of way, appurtenances and other
rights and benefits belonging or pertaining to such
land. The Land does not include the Improvements.
Landlord makes no representations as to the accuracy
of the description of the Land.
1.5 PREMISES: The Improvements which Tenant may elect to
construct, as agent for Landlord, on the Land
pursuant to the terms of this Lease. The Premises
does not include any portion of the Land itself.
1.
8
1.6 TERM: The initial term ("Initial Term") of this Lease
shall commence on the Date of Lease set forth in
Section 1.1 above and shall expire on May 21, 2000.
Subject to the Extension Conditions contained in
Section 4.2, upon at least ninety (90) days' prior
written notice to Landlord, Tenant may extend the
Initial Term for one (1) additional period of five
(5) years ("Extension Term"). The Initial Term and
(if exercised by Tenant) the Extension Term shall be
referred to collectively herein as the "Term." The
Term shall cease upon, and shall not refer to any
period of time after, termination of this Lease
(whether pursuant to the terms of the Lease, by
operation of law, or otherwise).
1.7 RENT COMMENCEMENT
DATE: Tenant's obligation to pay Base Rent shall commence
on a Building-by-Building basis. With respect to
any particular Building, the rent commencement date
("Rent Commencement Date") shall be the first LIBOR
Business Day of the next calendar month which
commences immediately following the earlier to occur
of: (a) the date Tenant receives from the
applicable governmental authority a final
Certificate of Occupancy for the Building in
question; or (b) eighteen (18) months following the
first Advance by Landlord for the foundation for the
Building in question. If Tenant shall elect to
construct certain Improvements in a phase of
Buildings, then on or before the Lease Inception
Date for such phase of Buildings, Landlord and
Tenant shall execute a memorandum of understanding
that construction is taking place on a phased basis,
and in that event, the Rent Commencement Date for
such phase of Buildings shall be the first LIBOR
Business Day of the next calendar month which
commences immediately following the earlier to occur
of: (i) the date Tenant receives a final Certificate
of Occupancy for the phase in question from the
applicable governmental authority; or
2.
9
(ii) eighteen (18) months after the first Advance by
Landlord for the foundation for the phase in
question.
1.8 BASE RENT: As described in Section 2.6.
1.9 ADDRESSES FOR
NOTICES:
LANDLORD: TENANT:
Sumitomo Bank of New York Cisco Systems, Inc.
Trust Company Treasury Department
277 Park Avenue 3535 Garrett Drive
New York, NY 10172 Santa Clara, CA 95054
Attn: Corporate Trust Attention: Eugene Hill
Department
With a copy to: With a copy to:
Landels, Ripley & Diamond Cisco Systems, Inc.
Hills Plaza 3535 Garrett Drive
350 Steuart Street Santa Clara, CA 95054
San Francisco, CA 94105 Attention: Nancy Bareilles
Attn: Bruce W. Hyman, Esq.
and
Todd J. Anson, Esq.
Brobeck, Phleger & Harrison
550 West C Street
Suite 1300
San Diego, CA 92101
1.10 ADDRESS FOR RENT
PAYMENTS:
Equity Rent Component: Sumitomo Bank of New York
Trust Company
277 Park Avenue
New York, NY10172
Attn: Corporate Trust
Department
3.
10
Senior Rent
Component: One half (1/2) of the Senior Rent Component (as
defined in Section 2.62) shall be payable at the
following address:
The Hongkong and Shanghai
Banking Corporation Limited
160 Sansome Street
San Francisco, CA 94104
Attn: Loan Administration
Department
and one half (1/2) of the Senior Rent Component (as
defined in Section 2.62) shall be payable at the
following address:
The Sumitomo Bank, Limited
555 California Street
Suite 3350
San Francisco, CA 94104
Attn: Mr. Dave Kubiak
This Article 1 is intended to supplement and/or summarize the
provisions set forth in the balance of this Lease. If there is any conflict
between any provisions contained in this Article 1 and the balance of this
Lease, the balance of this Lease shall control.
ARTICLE 2
DEFINITIONS
For purposes of this Lease, the following defined terms shall
have the meanings set forth in this Article 2.
2.1 ADDITIONAL RENT. "Additional Rent" shall mean any
amounts other than Base Rent payable by Tenant to Landlord or to other Entities
on Landlord's behalf as required under this Lease, including, without
limitation, interest accrued on past due Base Rent and on other past due
Additional Rent amounts owing to Landlord hereunder (including interest on the
past due amounts payable by Landlord to Lenders under the Improvements Loan, as
described in Section 21.21, excluding interest on interest) at the Default Rate
(to be compounded annually), costs and expenses to be paid or reimbursed by
Tenant hereunder (including any amounts which Tenant owes to Landlord pursuant
to the terms of Section 17.7 or Section 21.21), any charges, fees or other
amounts due under the Improvements Loan and any other Authorized Loan, amounts
due pursuant to Tenant's indemnity obligations hereunder, Real Estate Taxes,
Tenant's obligation to pay condemnation proceeds to Landlord pursuant to
Section 15.4, Tenant's obligation to pay insurance proceeds to Landlord
pursuant to Section 16.3, Tenant's obligation to pay the Purchase Price under
Section 19.2, and Tenant's obligation, if any, to pay the "Margin Increase" (as
defined in that certain side letter regarding "Management of Collateral
4.
11
Account" between Tenant and HSBC, of even date herewith). Except as provided
in this Section, Additional Rent shall not include interest charged on
interest.
2.2 ADVANCE. "Advance" shall mean any payment by
Landlord for Improvements which has been requested by Tenant and paid pursuant
to the terms of Article 11.
2.3 APPROVAL PLANS. "Approval Plans" shall have the
meaning set forth in Section 11.3(c).
2.4 AUTHORIZED LOAN. "Authorized Loan" shall have the
meaning set forth in Section 13.1(b).
2.5 AUTHORIZED PLANS. "Authorized Plans" shall have the
meaning set forth in Section 11.3(c).
2.6 BASE RENT. "Base Rent" shall mean, as of a Rent
Payment Date, the sum of the following for any Building for which the Rent
Commencement Date has occurred: (1) the Senior Rent Component; and (2) the
Equity Rent Component.
2.7 BUILDING. "Building" shall mean any individual
building which constitutes an Improvement.
2.8 BUILDING LEASES. "Building Leases" shall mean this
Lease and those two (2) certain lease agreements by and between Landlord and
Tenant for premises located in San Jose, California, dated the date hereof,
collectively.
2.9 CAPITALIZED INTEREST. "Capitalized Interest" shall
mean: (1) the Senior Rent Component incurred by Landlord to Lenders under the
Notes on Advances during the construction of any Building or phase prior to the
Rent Commencement Date for such Building or phase; and (2) the Equity Rent
Component as a result of Advances made by Landlord pursuant to Section 5.5
during the construction of any Building or phase prior to the Rent Commencement
Date for such Building or phase.
2.10 COLLATERAL. "Collateral" shall have the meaning set
forth in Section 21.18.
2.11 CONSTRUCTION PERIOD. "Construction Period" for each
Building or phase shall mean that period beginning on the date of the first
Advance for the foundation of the Building or phase and ending on the Rent
Commencement Date for the Building or phase.
2.12 CONTRACTOR. "Contractor" shall mean the general
contractor hired to construct any Improvements, which contractor shall be
selected by Tenant in Tenant's capacity as agent for Landlord, and shall be
subject to Landlord's approval, which shall not be unreasonably withheld or
delayed. Landlord hereby approves Devcon Construction, Inc.
5.
12
2.13 COVERAGE TEST. "Coverage Test" shall mean a
requirement, wherever referenced in the Lease, that the fair market value of
the Land and the Improvements together be at least three (3) times the Equity
Funded Amount.
2.14 DEFAULT. "Default" shall have the meaning set forth
in Section 17.1.
2.15 DEFAULT RATE. "Default Rate" means that weighted
average of the interest rates of (i) the Senior Rent Component as set forth in
Section 2.62 and (ii) the Equity Rent Component set forth in Section 2.19, plus
two percent (2.0%), or the highest rate permitted by applicable law (if any),
whichever is less. Mathematically, the Default Rate shall be:
(3/86 X Equity Rent Component rate) + (83/86 X Senior Rent Component rate)+ 2%
Each change in the Default Rate due to a change in such interest rates under
the Notes shall take effect simultaneously with such change in such interest
rates, without Notice to either party. Notwithstanding the foregoing, in the
event that the foregoing Default Rate shall be in violation of any usury or
similar law, then the Default Rate shall be reduced to the extent necessary to
cause the Default Rate to comply with any usury or similar law.
2.16 ENTITY. "Entity" shall mean any person, corporation,
partnership (general or limited), joint venture, association, joint stock
company, trust or other business entity or organization.
2.17 EQUITY CONTRIBUTION. "Equity Contribution" shall
mean that portion of the Funded Amount equal to three percent (3%) of the
Funded Amount, which Landlord has paid as Landlord's equity contribution to the
Funded Amount (subject, however, to Tenant's adjusted Base Rent payments in the
forty-ninth (49th) and fiftieth (50th) months of the Term, as set forth in
Section 5.1(a) below).
2.18 EQUITY FUNDED AMOUNT. "Equity Funded Amount" shall
mean that portion of the Funded Amount equal to the amount which Landlord has
paid pursuant to the terms of Section 5.5. The Equity Funded Amount shall be
the sum of the Equity Contribution plus the Security Deposit. In no event
shall the Equity Funded Amount exceed the difference between the Funded Amount
minus the aggregate Guaranteed Residual Value. In no event shall the aggregate
of the Equity Funded Amounts of the Building Leases exceed Nineteen Million
Three Hundred Eighty Thousand Dollars ($19,380,000).
2.19 EQUITY RENT COMPONENT. "Equity Rent Component" shall
mean the quotient equal to the product of the Equity Contribution (at the time
of the relevant calculation of the Equity Rent Component) multiplied by the
LIBOR Rate plus 4.05%, divided by
6.
13
the Monthly Calculation. Mathematically, the Equity Rent Component shall be:
[(Equity Contribution) X (LIBOR Rate + 4.05%)]
------------------------------------------------
[ Monthly Calculation ]
2.20 EVENT OF MAJOR DEFAULT. "Event of Major Default"
shall have the meaning set forth in Section 17.2.
2.21 EXTENSION FEE. "Extension Fee" shall have the
meaning set forth in the Section 4.2.
2.22 EXTENSION TERM. "Extension Term" shall have the
meaning set forth in the Basic Lease Provisions.
2.23 FEE MORTGAGE. "Fee Mortgage" shall mean any
Mortgage, other than the Improvements Loan, at any time given by Landlord, and
remaining uncancelled on the Official Records, encumbering all or any portion
of Landlord's right, title and estate in Improvements.
2.24 FUNDED AMOUNT. "Funded Amount" shall mean the
aggregate amount of any Advances requested and actually paid by Landlord
pursuant to the terms of Section 11 (including Capitalized Interest) and the
closing costs and fees set forth in Exhibit J attached hereto (which shall be
attributable to the first Building or phase of the Lease), less any reductions
in the principal amount of the Improvements Loan or any New Loan or in the
Equity Funded Amount, whether such principal reduction or reduction in the
Equity Funded Amount is accomplished by payment to Lenders or the holder of a
New Loan, the application of the Collateral or other collateral by Lenders or
the holder of a New Loan, the payment of insurance proceeds, condemnation
awards, or otherwise (subject, however, to Tenant's obligation to adjust its
Base Rent payments in the forty-ninth (49th) and fiftieth (50th) months of the
Term, as set forth in Section 5.1(a) below).
2.25 GUARANTEED RESIDUAL VALUE. "Guaranteed Residual
Value" shall be calculated on each Building or phase, and shall mean that
amount necessary to cause the present value of the Minimum Lease Payments under
this Lease, including the present value of the Guaranteed Residual Value, to
approximately equal, but not exceed, eighty nine and 9/10 percent (89.9%) of
the estimated Funded Amount, computed at the Lease Inception Date and
discounted to present value as of the expected Rent Commencement Date using the
interest rate implicit in the Lease (or Tenant's best available incremental
borrowing rate as communicated by Tenant to Landlord, if lower), all as
calculated and determined pursuant to Statement of Financial Accounting
Standards Number 13. "Minimum Lease Payments" shall mean the Base Rent payable
over the Initial Term and the Extension Term, plus imputed interest on the
Security Deposit imputed at the one month LIBOR rate of interest, plus the
Guaranteed Residual Value, plus the following to the extent paid in cash: the
fees listed on Exhibit J, the Extension Fee and
7.
14
reimbursed costs of Landlord paid by Tenant deemed to meet the definition of
Minimum Lease Payments under SFAS No. 13. During the Construction Period for
each Building, the Guaranteed Residual Value shall not exceed an amount
determined by multiplying the then existing Funded Amount for such Building by
a fraction, the numerator of which is the estimated Guaranteed Residual Value
to be allocated to such Building as of the Rent Commencement Date for such
Building and the denominator of which is the estimated Funded Amount to be
allocated to such Building as of such Rent Commencement Date. If, at any time
prior to the determination of the Guaranteed Residual Value for any Building or
phase, the Financial Accounting Standards Board, Emerging Issues Task Force, or
the Securities Exchange Commission, releases any pronouncements which modify
FAS 13, paragraph 7(d) which outlines the criteria for the determination of the
Guaranteed Residual Value, this Section 2.25 shall be modified to insure
compliance with the new standards.
2.26 HSBC. "HSBC" shall mean The Hongkong and Shanghai
Banking Corporation Limited, a Hong Kong banking corporation, acting through
its San Francisco branch.
2.27 IMPROVEMENTS. "Improvements" shall mean any and all
improvements which Tenant may elect, as construction agent for Landlord, to
erect, construct or situate upon the Land or any part thereof during the Term
under and pursuant to the terms of, and using funding provided by or through
Landlord pursuant to Article 11 of this Lease. Any improvements constructed,
erected or situated on the Land which are not funded by or through Landlord
pursuant to the terms of Article 11 of this Lease shall be and remain the
property of Tenant, and shall not be subject to the terms of this Lease.
2.28 IMPROVEMENTS LOAN. "Improvements Loan" shall have
the meaning set forth in Section 13.1(b).
2.29 INITIAL TERM. "Initial Term" shall have the meaning
set forth in the Basic Lease Provisions.
2.30 ILC. "ILC" shall mean Irish Leasing Corporation, a
Texas corporation, or a successor landlord under the Land Lease.
2.31 LAND. "Land" shall have the meaning set forth in the
Basic Lease Provisions.
2.32 LAND LEASE. "Land Lease" shall mean that certain
Ground Lease dated as of February 28, 1995 by and between Tenant and ILC, by
which Tenant leases the Land from ILC.
2.33 LAND LEASE DEED OF TRUST. "Land Lease Deed of Trust"
shall mean that certain fourth priority deed of trust, junior only to the lien
of the Lenders Deed of Trust, the Landlord Deed of Trust and the Tenant Deed of
Trust, by ILC, as trustor, in favor of Tenant, as beneficiary, dated May 1,
1995 and recorded on
8.
15
May 1, 1995 in the Official Records as Instrument No. 12877066, and as more
fully described in Section 13.1(g).
2.34 LAND LOAN. "Land Loan" shall mean that loan funded
by Union Bank of Switzerland, a Swiss banking corporation, acting through its
Los Angeles branch, or any other loan authorized pursuant to the terms of the
Land Lease for purposes of ILC's purchase of the Land, as more particularly
described in the Land Lease.
2.35 LANDLORD AFFILIATE. "Landlord Affiliate" shall mean
any Entity which controls or is controlled by or is under the common control of
Landlord or its beneficiary.
2.36 LANDLORD DEED OF TRUST. "Landlord Deed of Trust"
shall mean that certain second priority deed of trust, securing Tenant's
obligations under this Lease, and junior only to the lien of the Lenders Deed
of Trust, to be executed by Tenant in favor of Landlord and recorded in the
Official Records as of the Date of Lease, as more fully described in Section
13.1(e).
2.37 LEASE INCEPTION DATE. "Lease Inception Date" shall
mean, for the first Building or phase constructed (i.e., Building "L" as
depicted in the Site Plan attached hereto as Exhibit C), the date of this
Lease. For subsequent Buildings or phases, "Lease Inception Date" shall be
that date when Tenant's Approval Plans for such Building or phase are approved
by Landlord pursuant to Section 11.3(c).
2.38 LEGAL REQUIREMENTS. "Legal Requirements" shall mean
all statutes, codes, laws, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations, directions
and requirements of all federal, state, county, municipal and other
governments, departments, commissions, boards, courts, authorities, officials
and officers, which now or at any time hereafter are applicable to Tenant or
this Lease or applicable to and enforceable against the Premises, the
Improvements or any part thereof, as applicable.
2.39 LENDERS. "Lenders" shall mean HSBC and Sumitomo,
collectively. Individually, the Lenders are sometimes hereinafter referred to
as a Lender.
2.40 LENDERS DEED OF TRUST. "Lenders Deed of Trust" shall
mean that certain first priority deed of trust to be executed by Landlord and
Tenant in favor of HSBC and Sumitomo jointly and recorded in the Official
Records as of the Date of Lease, as more fully described in Section 13.1(d).
2.41 LIBOR BUSINESS DAY. "LIBOR Business Day" shall have
the same meaning as "Business Day" is defined in the Notes or other Authorized
Loan.
9.
16
2.42 LIBOR RATE. "LIBOR Rate" shall mean the LIBOR Rate
as defined in the Notes, or a subsequent Authorized Loan, as selected in
accordance with Section 5.1(d).
2.43 MONTHLY CALCULATION. "Monthly Calculation" shall
mean the quotient resulting from dividing three hundred sixty (360) by the
number of days in any applicable calendar month. The applicable calendar month
shall be the month for which the calculation involving this Monthly Calculation
is being done.
2.44 MORTGAGE. "Mortgage" shall mean any mortgage, deed
of trust, or other instrument in the nature thereof at any time and from time
to time constituting a lien, charge or encumbrance upon any interest or estate
of Tenant or Landlord in the Premises or in this Lease.
2.45 MORTGAGEE. "Mortgagee" shall mean the record holder
(as reflected in the Official Records) from time to time of, or the record
beneficiary (as reflected in the Official Records) from time to time under, a
Mortgage.
2.46 NEW LOAN. "New Loan" shall have the meaning set
forth in Section 13.1(b).
2.47 NOMINAL RATE. "Nominal Rate" shall mean the
operative and relevant rate (or rates) of interest under the Notes from time to
time, or if the Improvements Loan has been replaced by an Authorized Loan, then
the relevant rate of interest under the promissory note evidencing such
Authorized Loan, all subject to the terms of Section 13.1(b).
2.48 NOTES. "Notes" shall have the meaning set forth in
Section 13.1(b).
2.49 NOTICE. "Notice" shall mean a written advice,
request, demand or notification required or permitted by this Lease, as more
particularly provided in Section 21.3.
2.50 OFFICIAL RECORDS. "Official Records" shall mean the
official records of Santa Clara County, California.
2.51 PERMITTED EXCEPTIONS. "Permitted Exceptions" shall
mean the following: (1) the exceptions set forth in Exhibit B; (2) any
exceptions created or caused by Tenant or to which Tenant consents in writing;
(3) taxes and assessments not yet due and payable; (4) the Lenders Deed of
Trust (or, if the Lenders Deed of Trust has been reconveyed and removed from
title, then a deed of trust that secures an Authorized Loan); (5) the Landlord
Deed of Trust; (6) the Tenant Deed of Trust; (7) the Land Lease Deed of Trust;
(8) all title defects, liens, encumbrances, deeds of trust, mortgages,
rights-of-way, and restrictive covenants and conditions affecting the Land
unless any of the foregoing arise as a result of Landlord's actions or with
Landlord's written consent (unless such
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actions taken or consent given by Landlord are requested in writing by Tenant);
and (9) this Lease.
2.52 PREMISES. "Premises" shall have the meaning set
forth in the Basic Lease Provisions. It is the intention of the parties that
the Premises consist only of the Improvements, and in no event shall the
Premises consist of any portion of the Land.
2.53 REAL ESTATE TAXES. "Real Estate Taxes" shall have
the meaning set forth in Section 6.1(b).
2.54 RENT. "Rent" shall mean Base Rent and Additional
Rent.
2.55 RENT COMMENCEMENT DATE. "Rent Commencement Date"
shall have the meaning set forth in the Basic Lease Provisions.
2.56 RENT PAYMENT DATE. "Rent Payment Date" shall have
the meaning set forth in Section 5.1.
2.57 RENT PERIOD. "Rent Period" shall mean each period
equal to one calendar month occurring during the Term hereof, except that the
first Rent Period shall be a partial calendar month commencing on the Rent
Commencement Date and ending on the last day of such calendar month and the
last Rent Period shall be a partial calendar month commencing on the first
LIBOR Business Day of the last calendar month of the Term and ending on the
last day of the Term.
2.58 REQUIRED PERMITS. "Required Permits" shall mean each
and every building and development permit including, without limitation,
demolition permits, site permits and addenda thereto (including, without
limitation, foundation permits and structural permits), temporary and final
occupancy permits and any other governmental or quasi-governmental approvals
which must be issued by any governmental authority, department, commission,
board, official or officer as a condition precedent to construction and
occupancy of any Improvements.
2.59 SBNYTC. "SBNYTC" shall mean Sumitomo Bank of New
York Trust Company.
2.60 SECURITY DEPOSIT. "Security Deposit" shall have the
meaning set forth in Section 5.7.
2.61 SENIOR FUNDED AMOUNT. "Senior Funded Amount" of this
Lease shall mean that amount equal to the Funded Amount minus the Equity Funded
Amount, which amount shall not exceed the Guaranteed Residual Value.
2.62 SENIOR RENT COMPONENT. "Senior Rent Component" shall
mean the quotient equal to the product of the Senior Funded Amount (at the time
of the relevant calculation of the Senior Rent
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Component) multiplied by the Nominal Rate, divided by the Monthly Calculation.
Mathematically, the Senior Rent Component shall be:
[ Senior Funded Amount X Nominal Rate ]
-----------------------------------------
[ Monthly Calculation ]
2.63 SITE PLAN. "Site Plan" shall mean the Site Plan
attached hereto as Exhibit C.
2.64 SUMITOMO. "Sumitomo" shall mean The Sumitomo Bank,
Limited, a Japanese banking corporation, acting through its San Francisco
branch.
2.65 TAKING. "Taking" shall have the meaning set forth in
Section 15.1.
2.66 TENANT DEED OF TRUST. "Tenant Deed of Trust" shall
mean that certain third priority deed of trust, securing (i) Landlord's
obligation to return Tenant's Security Deposit under this Lease and (ii)
Landlord's obligation to convey the Premises to Tenant pursuant to Article 19
of this Lease, and shall be junior only to the liens of the Lenders Deed of
Trust and the Landlord Deed of Trust, to be executed by Landlord, as trustor,
in favor of Tenant, as beneficiary, and recorded in the Official Records as of
the Date of Lease, as more fully described in Section 13.1(f).
2.67 TERM. "Term" shall have the meaning set forth in the
Basic Lease Provisions.
ARTICLE 3
DEMISE
3.1 PREMISES. Subject to the terms, covenants and
conditions contained herein, Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Premises, together with all rights,
privileges, easements and appurtenances relating to the Premises.
ARTICLE 4
TERM
The Term of this Lease shall consist of the Initial Term, and if
exercised by Tenant, the Extension Term, as follows:
4.1 INITIAL TERM. The Initial Term of this Lease is
specified in Article 1.
4.2 EXTENSION TERM. Upon Notice of the extension given
to Landlord in accordance with Article 1, so long as the "Extension Conditions"
(defined below) are satisfied at the time of such Notice of extension, Tenant
may extend the Term for the Extension Term specified in Article 1. All
provisions of this Lease shall
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remain in full force and effect for the Extension Term, including, without
limitation, the Base Rent payable hereunder, except that Tenant shall have no
further right to extend the Term of this Lease, and except that the Base Rent
during the Extension Term may be adjusted only to reflect any actual change in
the rate of interest (that is, the spread over LIBOR) charged pursuant to the
Authorized Loan. The "Extension Conditions" shall consist of the following:
(1) Tenant shall satisfy the "Financial Tests" (defined below) at the time of
such Notice and as of the expiration of the Initial Term; (2) Tenant shall pay
to Landlord no later than thirty (30) days before the first day of the
Extension Term an amount equal to the product of the outstanding Funded Amount
as of the end of the fifty-seventh (57th) full calendar month of the Initial
Term times 0.25% ("Extension Fee"); (3) there shall exist no ongoing and
uncured Event of Major Default at the time of such Notice and as of the
expiration of the Initial Term; (4) the Improvements Loan shall have been
refinanced or repaid as of the commencement of the Extension Term (the
refinancing or repayment of which shall be subject to the terms of Section
13.1(c)) and (5) the Land and the Improvements shall satisfy the Coverage Test
at the time of the Notice and as of the expiration of the Initial Term. The
"Financial Tests" shall consist of the following: (a) Tenant shall have a
minimum tangible net worth (total assets minus intangible assets minus total
liabilities as calculated according to generally accepted accounting
principles) ("Tangible Net Worth") of not less than Seven Hundred Fifty Million
Dollars ($750,000,000); (b) Tenant's leverage (the ratio of funded debt to
Tangible Net Worth) shall not exceed a ratio of 1:1; and (3) Tenant shall not
have incurred any net losses in excess of Ten Million Dollars ($10,000,000) per
year during the two complete fiscal years immediately preceding such Notice of
extension.
4.3 HOLDING OVER. If Tenant remains in possession of the
Premises after the expiration of the Term without executing a new lease, such
holding over shall be construed as a tenancy from month-to-month, subject to
all terms, covenants and conditions herein contained, and at the Base Rent
required to be paid by Tenant pursuant to the terms hereof during the last
month of the Term.
ARTICLE 5
RENT
5.1 BASE RENT.
(a) PAYMENT. Base Rent shall accrue in the
manner set forth below commencing on the Rent Commencement Date. Tenant's
obligation to pay Base Rent, with respect to any Building, shall commence
accruing on the Rent Commencement Date for such Building, and shall be payable
monthly in arrears thereafter on the first LIBOR Business Day of each
successive month, except that the last installment of Base Rent shall be
payable on the last day of the last month during the Term (each such date shall
be a "Rent Payment
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Date"). Tenant's obligation to pay Base Rent on account of Advances made for
any Building shall not commence accruing until the Rent Commencement Date for
that Building. No sooner than thirty (30) days prior to the due date for any
installment of Base Rent hereunder, Landlord shall deliver to Tenant a Notice
indicating the exact dollar amount of the Base Rent that is due on such due
date ("Invoice"). The Base Rent payment due on the first LIBOR Business Day of
the forty-ninth (49th) month of the Term shall be deemed paid entirely to
Landlord to be applied first to the Equity Rent Component then due and the
balance to be applied to the reduction of the Equity Funded Amount. The amount
of the Senior Rent Component that would otherwise have been due but for the
preceding sentence shall be added to the Senior Funded Amount. The Base Rent
payment due on the first LIBOR Business Day of the fiftieth (50th) month of the
Term shall be deemed paid entirely to Lenders under the Improvements Loan to
the extent of the Senior Rent Component for the immediately preceding month and
the balance shall be applied to the reduction of the Senior Funded Amount
(excluding any prepayment premium thereon).
Tenant shall pay Base Rent as follows: The Senior
Rent Component shall be paid to Lenders as set forth in the Basic Lease
Provisions, and the Equity Rent Component shall be paid to Landlord at the
Address for Rent set forth in the Basic Lease Provisions (or, if the
Improvements Loan has been replaced by a New Loan or Replacement Loan, then the
Senior Rent Component shall be paid directly to the holder of such New Loan or
Replacement Loan) or at such other place as Landlord and Tenant may from time
to time mutually agree upon, in their respective sole and absolute discretion.
With the exception of payments made pursuant to the Clearinghouse Debit Account
and Clearinghouse Credit Account, established by Tenant in accordance with the
requirements of this Section 5.1(b) and (c), as set forth below, Tenant shall
pay Base Rent by wire transfer or by check. Landlord, Lenders or such other
holder of a New Loan or Replacement Loan, as the case may be, shall supply
Tenant with such bank account information as Tenant shall require to enable
payment by wire transfer. The parties agree that Tenant is paying the Senior
Rent Component of Base Rent directly to Lenders for the convenience of the
parties in order to satisfy Landlord's obligations to pay interest under the
Improvements Loan for the period of time corresponding to the Term of this
Lease; all Base Rent payments shall be deemed payments to Landlord to the
extent of the Equity Rent Component and payments of the interest due to Lenders
under the Improvements Loan to the extent of the Senior Rent Component.
(b) CLEARINGHOUSE CREDIT ACCOUNT. At any time,
and from time to time, during the Term of the Lease, Tenant shall have the
right to request in writing that a Lender designate a clearinghouse credit
account at a financial institution legally authorized to receive funds on
behalf of the Lender ("Clearinghouse Credit Account") for Tenant's payment of
the Senior Rent Component due and payable to the Lender (as set forth in the
Basic Lease Provisions) on a Rent Payment Date. At any time, and from time to
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time, after a Lender's designation of a Clearinghouse Credit Account, Tenant
may, but shall not be obligated to, deposit funds on a Rent Payment Date in the
exact amount of the Senior Rent Component due and payable to the Lender who has
established such a Clearinghouse Credit Account and any payment by Tenant of a
portion of the Senior Rent Component due a Lender by payment directly into a
Lender's Clearinghouse Credit Account shall not prevent Tenant from making
future payments of rent by any other means permitted in this Section 5.1. A
Lender's designation of a Clearinghouse Credit Account for deposit of Tenant's
payment of the Lender's portion of the Senior Rent Component shall be deemed
that Lender's approval of Tenant's payment of the Lender's Senior Rent
Component into the Clearinghouse Credit Account. Tenant's ability to deposit a
Lender's portion of the Senior Rent Component into a Clearinghouse Credit
Account shall not alleviate Landlord's obligation to deliver to Tenant an
Invoice as set forth above.
(c) CLEARINGHOUSE DEBIT ACCOUNT. At any time,
and from time to time, during the Term of the Lease, Tenant and HSBC may agree
that Tenant's payment of HSBC's portion of the Senior Rent Component as set
forth in the Basic Lease Provisions shall be paid to HSBC by funds available to
HSBC in a clearinghouse debit account at a financial institution reasonably
acceptable to HSBC ("Clearinghouse Debit Account"). If Tenant and HSBC agree
to payment of HSBC's portion of the Senior Rent Component through a
Clearinghouse Debit Account, Tenant shall provide written notice of such
agreement to Landlord, and shall indicate the account number and location of
the Clearinghouse Debit Account. The Clearinghouse Debit Account shall be
terminable by Tenant at will, without advance notice to Landlord or HSBC.
During any portion of the Term in which the Clearinghouse Debit Account is
available for and contains sufficient funds to cover the amount of HSBC's
portion of the Senior Rent Component due and payable to HSBC on a Rent Payment
Date, interest shall not accrue on (nor shall Tenant be deemed in default
hereunder for failure to pay) any of HSBC's portion of the Senior Rent
Component due hereunder which is not collected on a Rent Payment Date due to
any failure by HSBC to collect its portion of the Senior Rent Component in a
timely manner. HSBC's ability to collect its portion of the Senior Rent
Component from the Clearinghouse Debit Account shall not alleviate Landlord's
obligation to deliver to Tenant an Invoice as set forth above. Notwithstanding
anything to the contrary in this Lease, the Clearinghouse Debit Account shall
not be used for the payment of any amounts (whether or not payable under the
Lease) other than HSBC's portion of the Senior Rent Component as set forth in
the Basic Lease Provisions and which are due and payable on the then-current
Rent Payment Date.
(d) INTEREST RATE SELECTION. The parties
acknowledge that the interest rate applicable under the Improvements Loan (or
other Authorized Loan) and the Equity Rent Component shall affect the amount of
Base Rent payable by Tenant hereunder. Therefore, Tenant shall have the right,
by written notice to Landlord in the form of Exhibit K (which notice may be
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transmitted to Landlord by facsimile), to designate the interest period to be
selected from time to time by Landlord pursuant to the terms of the Notes (or
other Authorized Loan) as the interest period then in effect for interest rate
of the Improvements Loan (or other Authorized Loan) and the Equity Rent
Component. Tenant acknowledges that the rates available to be selected as the
LIBOR Rate after the first partial calendar month of the Term are 1, 3, 6, 9 or
12-month LIBOR rates. In the event that Tenant fails to give such written
notice to Landlord prior to the applicable deadline for selection of such
interest period pursuant to the terms of the Notes (or other Authorized Loan),
Landlord shall select the same interest period then in effect for the
Improvements Loan (or other Authorized Loan) and for the Equity Rent Component.
Notwithstanding the foregoing, the interest rate applicable during the
Construction Period for each Building or phase shall be the one-month LIBOR
rate.
5.2 PRORATION. If the Term expires or is otherwise
terminated on a day other than the day before the first LIBOR Business Day of a
calendar month, then Base Rent for such Rent Period shall be prorated on the
basis of actual days elapsed on the basis of a thirty (30) day month.
5.3 NO ABATEMENT OF RENT. Except as a consequence of a
reduction in the Funded Amount or the terms of Section 15 (Taking), Tenant
shall not be entitled to any abatement, diminution, reduction, setoff or
postponement of Base Rent as a consequence of any inconvenience to,
interruption of, cessation of or loss of Tenant's use or enjoyment of the
Premises or as a result of any reason whatsoever.
5.4 DELINQUENT RENT. Any Base Rent not paid on the due
date shall accrue interest at the Default Rate from the date such Base Rent was
originally due until the date such Base Rent is paid. All interest accrued on
past due Base Rent shall be due and payable to Landlord at the time the Base
Rent is paid, or upon demand by Landlord, if earlier.
5.5 EQUITY FUNDING.
(a) For each Building (as such term is defined in
Section 5.6 for purposes of this Section 5.5), after the appraisal described in
Section 21.25 has been received by Landlord, Landlord shall itself fund any
Advances on a proportionate basis based upon a fraction of the total amount of
the Advance, the numerator of which is the difference between the total
estimated Funded Amount (as of completion of construction, as reasonably
estimated by Tenant) for the Building or phase less the Guaranteed Residual
Value for such Building, and the denominator of which is the total estimated
Funded Amount (as of completion) for such Building or phase; provided that the
Equity Funded Amount of Advances for a Building shall be deemed to be paid on a
proportionate basis out of those funds held by Landlord as Tenant's Security
Deposit and out of Landlord's Equity Contribution. In no event shall Landlord
be
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required to do any of the following: (a) pay the Equity Funded Amount of
Advances for a Building resulting in such payment exceeding the difference
between the Funded Amount for such Building minus the Guaranteed Residual Value
for such Building; (b) make Advances such that the aggregate Funded Amounts of
the Building Leases exceeds One Hundred Fourteen Million Dollars ($114,000,000)
or the aggregate Equity Funded Amounts of the Building Leases exceeds Nineteen
Million Three Hundred Eighty Thousand Dollars ($19,380,000); or (c) make
Advances such that the Funded Amount under this Lease exceeds Twenty Four
Million Dollars ($24,000,000).
(b) Notwithstanding the foregoing, in the event:
(1) Contractor fails to complete any Building or phase on account of either the
insolvency or bankruptcy of the Contractor or a dispute with the Contractor
concerning an alleged default by the Contractor; and (2) Tenant elects to have
Landlord enter into a construction contract with another contractor for the
purpose of completing such Building or phase; and (3) completion of such
incomplete Building or phase by another contractor requires funds in excess of
the funds that would have been required had Contractor not become insolvent or
bankrupt or had such dispute not existed (excluding change orders), then
Landlord's obligation for funding for such Building or phase under this Section
5.5 shall be equal to the amount that Landlord would have been required to fund
under this Section 5.5 absent such insolvency, bankruptcy or dispute plus the
amount of any change orders. At least two (2) days prior to making such equity
Advance to Tenant, Landlord shall submit to Tenant and shall have obtained
Tenant's prior written approval of the amount of such payment and the basis
upon which such amount has been calculated. Tenant may withhold Tenant's
consent to such payment if Tenant's accountant in good faith disagrees with
such amount or the manner in which it was calculated.
5.6 EXHIBITS REFLECTING INITIAL ADVANCE AND RENT
COMMENCEMENT DATE. Within thirty (30) days after the initial Advance for the
foundation for any Building and within thirty (30) days after the initial
Advance under this Lease, Landlord and Tenant shall execute the "Initial
Advance Memorandum" in the form attached hereto as Exhibit G. With respect to
the initial Advance under this Lease, the Initial Advance Memorandum shall also
indicate to which Building such Advance applies. Within thirty (30) days after
the Rent Commencement Date for any Building under this Lease, Landlord and
Tenant shall execute the "Rent Commencement Date Memorandum" in the form
attached hereto as Exhibit H. If the Rent Commencement Date for any Building
under this Lease occurs prior to the completion or occupancy of such Building,
then the parties shall, within thirty (30) days after the completion or
occupancy of such Building, enter into a memorandum, which shall reflect the
Guaranteed Residual Value for such Building (the parties acknowledge that,
except as provided in Section 19.2, they will not reflect the Guaranteed
Residual Value for any Building until such Building has been completed or
occupied). Guaranteed Residual Value for any Building during construction and
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after construction shall be determined by multiplying the Guaranteed Residual
Value percentage, calculated pursuant to Section 2.25, by the Funded Amount for
any Building at the date of calculation. Whenever the term "Building" is used
in this Lease in connection with the calculation of the Guaranteed Residual
Value during a construction period, in connection with Landlord's equity
funding under Section 5.5 or in connection with Tenant's Security Deposit
funding under Section 5.7, such term shall mean a particular construction phase
of the Improvements.
5.7 SECURITY DEPOSIT. On the date of initial Advance for
a Building, Tenant shall deliver to Landlord a security deposit ("Security
Deposit") in an amount equal to fourteen percent (14%) of the estimated Funded
Amount for the Building as stated in the Initial Advance Memorandum for the
Building in the form attached hereto as Exhibit G. Landlord may use and
commingle the Security Deposit with other funds of Landlord and the Security
Deposit shall not bear interest. On the Rent Commencement Date, the amount of
the Security Deposit shall be increased or decreased to an amount equal to the
difference between the Funded Amount minus the sum of the Landlord's Equity
Contribution and the Guaranteed Residual Value (as of such date, as determined
pursuant to the Rent Commencement Date Memorandum for the Building in the form
attached hereto as Exhibit H). Mathematically, the Security Deposit as of the
Rent Commencement Date shall be:
Funded Amount - (Guaranteed Residual Value + Equity Contribution)
The Security Deposit shall be held by Landlord as security solely for the
payment of Base Rent and Additional Rent by Tenant pursuant to this Lease. If
at any time during the Term any Base Rent shall be overdue, then Landlord may
at its election (but shall not be required to) appropriate and apply any
portion of the Security Deposit to the payment of any such overdue Base Rent.
Should the entire Security Deposit, or any portion thereof, be appropriated and
applied by Landlord as provided herein, then Tenant shall immediately, after
receipt of written demand by Landlord, pay to Landlord a sufficient sum in cash
to restore the Security Deposit to the amount of the Security Deposit as of the
Rent Commencement Date. In the event that the Equity Funded Amount is reduced
for any reason, including without limitation by reason of a sale of any portion
of the Premises or the application of the proceeds of a condemnation award to
reduce the Equity Funded Amount (it being understood that the Equity Funded
Amount will only be reduced in the event and to the extent that the net
proceeds of such condemnation award exceeds the Senior Funded Amount, with such
award proceeds to be applied first to the Senior Funded Amount pursuant to
Section 15.4 hereof), the amount of the Security Deposit required hereunder
shall be reduced by a like amount, and any such excess funds held by Landlord
shall immediately be returned to Tenant. The entire Security Deposit (other
than amounts withheld against Base Rent and Additional Rent due hereunder)
shall be returned to Tenant at the end of the Term.
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5.8 ADDITIONAL RENT. Tenant agrees to pay all Additional
Rent when it becomes due and payable under this Lease.
ARTICLE 6
TAXES
6.1 REAL ESTATE TAXES.
(a) From and after the Rent Commencement Date
Tenant shall pay directly to the appropriate taxing authority all Real Estate
Taxes. If the Rent Commencement Date occurs or the Term expires or otherwise
terminates at any time other than the beginning or end of a taxable year,
Tenant's obligation to pay Real Estate Taxes shall be prorated on the basis of
a 365- day year, so as to include only that portion of the taxable year which
is a part of the Term. Unless a termination of the Lease results from a
purchase of the Land pursuant to Article 19, any Real Estate Taxes levied
against the Land which accrue during the Term of this Lease but which would not
be due and payable to the appropriate taxing authority until after the
expiration of the Term of this Lease (as the same may be extended) shall be
paid by Tenant to Landlord upon such termination. Landlord shall pay such
amounts to the appropriate taxing authority on a timely basis.
(b) Except to the extent that Real Estate Tax
bills and statements are sent directly to Tenant by the taxing authority, upon
receipt by Landlord of the tax bills or statements, Landlord will use
reasonable efforts to promptly advise Tenant in writing of all Real Estate
Taxes and shall deliver copies of all applicable tax bills or statements to
Tenant. Tenant shall pay directly to the taxing authority all Real Estate
Taxes prior to the later of (i) thirty (30) days after receipt by Tenant from
Landlord of a copy of such bills and statements referred to above, or (ii) five
(5) days prior to delinquency. As used herein, the term "Real Estate Taxes"
shall mean any and all taxes, governmental fees and similar charges or
assessments levied or assessed against the Improvements and/or the Land
including, without limitation, ad valorem taxes and special assessments
applicable to real property; provided, however, that Real Estate Taxes shall
not include any Landlord Income Taxes. Real Estate Taxes shall also include
any and all documentary, transfer, sales, mortgage, recording or similar taxes
imposed on Landlord or Tenant in connection with (i) the original acquisition
of the Premises by Landlord, (ii) any transfer of the Premises to Tenant
pursuant to the terms of this Lease, or (iii) any sale of the Premises to a
third party pursuant to the terms of this Lease. As used herein, the term
"Landlord Income Taxes" shall mean any and all income, franchise, gains, gift,
succession, excess profits, gross receipts, revenue, estate, rental, or similar
taxes or taxes in lieu thereof imposed upon Landlord or any party other than
Tenant (or an affiliate thereof) and any withholding tax imposed as a
collection device for, in lieu of, or otherwise related to any of the foregoing
without regard to whether such tax is required to be collected by Tenant and
without
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regard to whether Tenant would be liable for such withholding tax in the event
it failed to so withhold. For purposes of the foregoing, an income tax shall
include, without limitation, any tax imposed under the United States Internal
Revenue Code or the California Bank and Corporation Tax Law as well as any tax
which could qualify as an "income tax" under United States Treasury Regulation
Section 1.901-2 (except to the extent any such statute or regulation is
subsequently modified to include a tax or other governmental charge of a
materially different type and nature from the taxes currently described
therein) and any income tax which may be payable under the laws of any
jurisdiction either now or in the future. Real Estate Taxes for any given tax
year shall exclude assessment installments that are not due and payable during
such tax year.
6.2 PERSONAL PROPERTY TAXES. Tenant shall pay directly
to the appropriate taxing authorities prior to delinquency any and all taxes
and assessments levied or assessed during the Term upon or against Tenant's
furniture, equipment, trade fixtures and any other personal property in the
Premises.
6.3 RIGHT TO CONTEST. Tenant shall not be required to
pay any Real Estate Taxes or any other taxes for which Tenant is liable
hereunder (including, without limitation, any taxes for which Tenant is
required to indemnify Landlord under Section 6.5) (including penalties and
interest), so long as (i) Tenant shall contest the same or the validity thereof
by appropriate legal proceedings in such a manner to prevent the tax sale of
any portion of the Premises and (ii) the position to be taken by Tenant
pursuant to such contest would have a realistic possibility of success if
litigated. For purposes of this Lease, Tenant may conclusively establish that
a position to be taken in a contest would have a realistic possibility of
success if litigated by providing to Landlord a letter from counsel stating an
opinion to such effect. In the event of any such contest, Tenant shall, within
thirty (30) days after the final determination thereof, pay and discharge the
amounts determined to be due in accordance therewith and with the provisions of
this Lease, together with any penalties, fines, interest, costs and expenses
that may have accrued thereon or that may have resulted from Tenant's contest.
Tenant also shall have a right to contest any taxes for which it is liable
hereunder, but with regard to which the position to be taken pursuant to such
contest would not have a realistic possibility of success if litigated,
provided that Tenant pays such taxes on or prior to the date upon which such
taxes are asserted to be due by the relevant governmental authority.
Notwithstanding the foregoing provisions of this Section 6.3, Tenant shall have
an unconditional right to contest (without prior payment) any taxes imposed by
law upon Tenant rather than upon Landlord. Tenant's decision to pay any taxes
prior to contesting its or another party's underlying liability therefore shall
not be deemed to imply or suggest that the position to be taken in such contest
would not have a realistic possibility of success if litigated. Landlord shall
cooperate fully with Tenant in connection with the exercise of Tenant's right
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of contest contained herein, and in the event that applicable law shall require
that Landlord, rather than Tenant, pursue legal proceedings for such contest,
Landlord will initiate and pursue such contest upon Tenant's request and in
accordance with Tenant's instructions (including, without limitation, Tenant's
instructions as to the selection of legal counsel and matters of strategy or
settlement); provided, however, that Landlord shall not be subject to any
liability for the payment of any costs or expenses in connection with any such
contest or proceedings, and Tenant will indemnify and save harmless Landlord
from any such costs and expenses (including, without limitation, reasonable
attorneys' fees, costs of court and appraisal costs), reimbursing Landlord
therefor upon demand (or paying such costs and expenses directly when due, all
as directed by Landlord). Tenant shall be entitled to any refund of any taxes
and penalties or interest from any governmental authority to the extent the
refund represents monies paid to the governmental authority by Tenant or paid
by Landlord and reimbursed by Tenant.
6.4 WITHHOLDING TAXES. Subject to Section 6.5, but
notwithstanding any other provision of this Lease to the contrary, Tenant may
withhold from any payments under this Lease any Landlord Income Taxes, without
obligation to gross-up, indemnify or otherwise increase payments in consequence
thereof, to the extent required by applicable law. Upon the date hereof or
upon the date a party becomes a Landlord or a transferee of any portion of the
Landlord's interest in the Premises or this Lease, and within thirty (30) days
following the first day of each calendar year or if otherwise requested from
time to time by Tenant, Landlord and each transferee, if organized under the
laws of a jurisdiction outside the United States, shall provide Tenant with
three counterparts of each of the forms prescribed by the Internal Revenue
Service of the United States (Form 1001 or 4224, or successor form(s), as the
case may be) certifying as to Landlord's or such transferee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such person. Without limitation upon the
foregoing, unless Tenant has received such forms or other documents reasonably
satisfactory to it indicating that payments under this Lease are not subject to
withholding tax, Tenant is authorized to and shall withhold taxes from such
payments at the applicable statutory rate. Subject to Section 6.5, but
notwithstanding any other provision of this Lease to the contrary, any
withholding by Tenant under the preceding sentence shall not give rise to any
gross-up, indemnification or other payment obligation on the part of Tenant.
Landlord and each transferee, if organized under the laws of the United States
or any State thereof, shall timely provide Tenant with duplicate documents
conforming to the requirements of Treasury Regulation 1.1441-5(b) or any
successor thereto (which statement may be made on a Form W-9).
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6.5 ADDITIONAL PROVISIONS RELATING TO TAXES.
Notwithstanding anything in this Section 6 to the contrary, Tenant shall
protect and defend Landlord from and against all criminal prosecution regarding
and shall indemnify and hold Landlord harmless from and against any and all
losses, costs, liabilities or damages (including reasonable attorneys' fees and
disbursements and court costs) arising by reason of:
(a) Any and all U.S. Federal, state or local
income taxes imposed upon Landlord in consequence of Landlord being treated as
the owner or lessor of the Premises (or any part thereof) for such tax purposes
(provided that Landlord has fully complied with its obligations under Section
21.2(b));
(b) Any and all taxes imposed upon Tenant (except
to the extent that such taxes are imposed upon Tenant as a result of Landlord's
failure to comply with its obligations under this Lease);
(c) Any and all taxes required to be withheld
from payments made by Tenant to a third party not related to or affiliated with
Landlord, HSBC or Sumitomo;
(d) Any and all Real Estate Taxes;
(e) Any and all taxes owed by Landlord as a
result of payment made by Tenant to Landlord pursuant to Tenant's indemnity
obligations under this Section 6.5; and
(f) Any and all costs, liabilities or damages
(including reasonable attorneys' fees) incurred by Landlord in obtaining
indemnification payments from Tenant under the provisions of this Section 6.5.
Tenant's obligation to reimburse or indemnify Landlord for any
taxes, governmental fees, penalties, interest or other supplemental tax charges
under this Lease shall be reduced by the value of any related or offsetting tax
benefits derived or realized by Landlord. Tenant's duty to indemnify Landlord
under this Section 6.5 shall apply only to taxes arising during the Term
(whether or not due and payable at the conclusion of the Term), but shall
otherwise survive the expiration or earlier termination of this Lease.
ARTICLE 7
INSURANCE
7.1 LIABILITY INSURANCE. At all times during the Term,
Tenant shall obtain at Tenant's sole cost and expense a policy or policies of
comprehensive general liability insurance on an "occurrence" basis against
claims for "personal injury" liability, including bodily injury, death or
property damage liability. The liability insurance policy shall contain
coverage limits no less
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than the following: (1) Three Million Dollars ($3,000,000) per person; (2) Five
Million Dollars ($5,000,000) per incident; and (3) One Million Dollars
($1,000,000) for property damage.
7.2 BUILDERS' RISK INSURANCE. With respect to any
Improvements which may be under construction and not yet covered by insurance
under the terms of Section 7.3, Tenant shall maintain or cause to be maintained
a policy or policies of builders' risk insurance in an amount equal to the
value upon completion of the work (exclusive of land, foundation, excavation,
grading, landscaping, architectural and development fees and other items
customarily excluded from such coverage), insuring against the risks
customarily insured against under such insurance, including fire, vandalism,
malicious mischief, sprinkler leakage, lightning, and windstorm.
7.3 ALL-RISK INSURANCE. With respect to any completed
Improvements, prior to the termination of the builders' risk insurance required
by Section 7.2, and at all times thereafter, Tenant shall, at Tenant's sole
cost and expense, obtain and maintain, or cause to be obtained and maintained:
(a) a policy or policies of all-risk insurance covering the Improvements,
providing coverage against loss or damage by fire, vandalism, malicious
mischief, sprinkler leakage, lightning, windstorm and other insurable perils,
as, under good insurance practice, from time to time are insured against under
all-risk coverage for properties of similar character, age and location in an
amount or amounts not less than one hundred percent (100%) of the then actual
replacement cost (exclusive of land, foundation, excavations, grading,
landscaping, architectural and development fees and other items customarily
excluded from such coverage and without any deduction for depreciation); and
(b) a policy or policies of difference in conditions insurance covering the
Improvements, providing coverage against loss or damage by earthquake and flood
as, under good insurance practice, from time to time are insured against under
earthquake coverage for properties of similar character, age and location in an
amount or amounts not less than the lesser of (i) one hundred percent (100%) of
the then actual replacement cost (exclusive of land, foundation, excavations,
grading, landscaping, architectural and development fees and other items
customarily excluded from such coverage and without any deduction for
depreciation) or (ii) the amount of the Equity Funded Amount.
7.4 GENERAL REQUIREMENTS. The insurance required under
this Article 7 may be furnished under a "primary" policy and an "umbrella"
policy or policies. Landlord and the holder of any Authorized Loan shall be
named as an additional insured under Tenant's policy of insurance required
under Section 7.1; Landlord, Tenant and the holder of any Authorized Loan shall
each be named as the loss payees under the policies of insurance required under
Sections 7.2 and 7.3; and such policies shall contain an endorsement for
cross-liability coverage. Tenant shall furnish Landlord with certificates from
Tenant's insurers with respect to the insurance required to be carried
hereunder on or before the
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date such insurance is required to be carried. The certificates shall state
that such insurance is in full force and effect and that coverage will not be
reduced in any amount or otherwise limited or cancelled without twenty (20)
days' prior written notice to Landlord. Renewal certificates shall be
furnished to Landlord not less than thirty (30) days prior to the expiration of
each such policy. Any blanket insurance policy or policies that insure Tenant
against the risks and for the amounts herein specified shall be deemed to
satisfy the obligation of Tenant hereunder, provided that any such policy of
blanket insurance shall specify the amount of the total insurance allocated to
the risks required to be insured hereunder and such allocated amount meets the
requirements of this Article 7. All insurance required by this Article 7 shall
be with an insurance company licensed to do business in the State of
California, with a general policyholder's rating, as rated by the most current
available "Bests" Insurance Reports, no less than A- III,and shall be primary
and non-contributing.
7.5 WAIVER OF SUBROGATION. Notwithstanding anything to
the contrary contained herein, to the extent permitted by law and so long as
any insurance coverage maintained by Tenant is not diminished by reason
thereof, Tenant hereby (a) releases and waives any rights it may have against
Landlord and its officers, agents and employees on account of any loss or
damages occasioned to Tenant, its property or the Premises, and arising from
any risk covered by any fire and extended coverage insurance maintained by
Tenant, whether or not due to the negligence of Landlord, its agents,
employees, contractors, licensees, invitees or other persons, and (b) waives on
behalf of any insurer providing such insurance to Tenant any right of
subrogation that any such insurer may have or acquire against Landlord or such
persons by virtue of payment of any loss under such insurance. Tenant shall
use its best efforts to cause its insurance policies to contain a waiver of
subrogation clauses in accordance with the foregoing.
7.6 INDEMNITY. Tenant shall protect, defend, indemnify,
hold and save Landlord harmless from and against any and all losses, costs,
liabilities or damages (including reasonable attorneys' fees and disbursements
and court costs) arising by reason of: (i) any and all injury or death of
persons or damage to property against which Tenant is obligated to maintain
insurance for the benefit of Landlord pursuant to this Article 7; (ii) the
failure to obtain the waiver of subrogation clause required by Section 7.5
hereof where such clause could have been obtained through the exercise of
Tenant's best efforts; or (iii) the invalidation of such insurance policy
required to be obtained by Tenant hereunder by Tenant's insurer. Tenant's duty
to indemnify Landlord under this Section 7.6 shall survive the expiration or
earlier termination of this Lease with respect to events occurring during the
Term.
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ARTICLE 8
USE
8.1 USE.
(a) PERMITTED USES. Tenant may use the Premises
for any lawful purpose.
(b) ENVIRONMENTAL COMPLIANCE.
(i) DEFINED TERMS. The term
"Applicable Environmental Laws" shall mean any applicable laws, regulations or
ordinances pertaining to health or the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 or otherwise (as amended, hereinafter called
"CERCLA"), 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, the Hazardous and Solid Waste Amendments of 1984 or otherwise (as
amended, hereinafter called "RCRA"), and California Health & Safety Code
Section 25501(j). The terms "hazardous substance" and "release" as used in
this Lease shall have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") shall have the meanings specified in
RCRA; provided, in the event either CERCLA or RCRA is amended or superseded by
other laws so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply subsequent to the effective date of such amendment
or other laws; and, provided further, to the extent that the laws of the State
of California establish a meaning for "hazardous substance", "release", "solid
waste", or "disposal" which is broader than that specified in either CERCLA or
RCRA, such broader meaning shall apply. The term "Pre-existing Agricultural
Contamination" means concentrations of any chemical, compound or substance
existing in soil and groundwater on the Land as disclosed in that certain Phase
I Preliminary Environmental Site Assessment and Phase II Soil and Ground Water
Quality Evaluation for Vista Montana and Tasman Drive Parcels, San Jose,
California, performed by Lowney Associates and dated February 1995.
(ii) TENANT'S COVENANTS. Tenant
will not cause or permit the Premises or the Improvements to be in violation
of, or do anything or permit anything to be done which subjects Landlord,
Tenant or the Premises to any remedial obligations under or which creates a
claim or cause of action under, any Applicable Environmental Laws, including,
without limitation, CERCLA, RCRA, and the California Health & Safety Code
Section 25501(j), assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Premises and the Improvements, and Tenant will promptly
notify Landlord in writing of any existing, pending or threatened
investigation, claim or inquiry of which Tenant has knowledge by any
governmental authority in connection with any Applicable Environmental Laws.
Tenant shall obtain any permits, licenses or
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similar authorizations to construct, occupy, operate or use any Improvements,
fixtures and equipment at any time located on the Premises by reason of any
Applicable Environmental Laws. Tenant will not use the Premises or the
Improvements in a manner which will result in the unlawful disposal or other
unlawful release of any hazardous substance or solid waste on or to the
Premises or the Improvements and covenants and agrees to keep or cause the
Premises and the Improvements to be kept free of any unlawful hazardous
substance, unlawful solid waste or unlawful environmental contaminants
(including, without limitation, friable asbestos and any substance containing
asbestos deemed hazardous and unlawful by any Applicable Environmental Law) and
to remove the unlawful amounts of the same (or if removal is prohibited by law,
to take whatever action is required by law) promptly upon discovery at Tenant's
sole expense. Tenant shall promptly notify Landlord in writing of any unlawful
disposal or other unlawful release of any hazardous substance, environmental
contaminants or solid wastes on or to the Premises or the Improvements.
Notwithstanding the foregoing, Landlord and Tenant acknowledge that
Pre-existing Agricultural Contamination exists on the Land due to agricultural
operations of prior owners and that Tenant has no further obligation to notify
Landlord regarding such Pre-existing Agricultural Contamination. In the event
Tenant fails to comply with or perform any of the foregoing covenants and
obligations, after thirty (30) days' prior written Notice to Tenant, Landlord
may, but shall be under no obligation to, cause the Premises and the
Improvements to be freed from the unlawful hazardous substance, unlawful solid
waste or unlawful environmental contaminants (or if removal is prohibited by
law, to take whatever action is required by law) and the reasonable cost of the
removal or such other action shall be a demand obligation owing by Tenant to
Landlord pursuant to this Lease; provided, however, that this sentence shall
not apply to Pre-existing Agricultural Contamination. Notwithstanding the
foregoing, Landlord shall have no right to cause the removal of such materials
so long as Tenant both: (1) is diligently and in good faith proceeding to
comply with Tenant's obligation to remove the unlawful amounts of such
materials; and (2) has the financial ability to so comply. Subject to the
foregoing, Tenant grants to Landlord and Landlord's agents and employees access
to the Premises and the Improvements, and the license to remove the unlawful
hazardous substance, unlawful solid waste or unlawful environmental
contaminants (or if removal is prohibited by law, to take whatever action is
required by law), and agrees to indemnify and save Landlord harmless from all
reasonable costs and expenses involved and from all claims (including
consequential damages) asserted or proven against Landlord by any party in
connection therewith. Upon Landlord's reasonable request for "good cause"
(defined below), at any time and from time to time during the Term, Tenant will
provide at Tenant's sole expense an inspection or audit of the Premises and the
Improvements from an engineering or consulting firm approved by Landlord,
indicating the presence or absence of any hazardous substance, solid waste or
environmental contaminants located on the Premises; provided, however that this
provision shall not apply to Pre-existing Agricultural Contamination. If
Tenant fails to
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provide same after sixty (60) days' notice, Landlord may order same, and Tenant
grants to Landlord and Landlord's employees and agents access to the Premises
and the Improvements and a license to undertake any testing reasonably required
to obtain such inspection or audit. The reasonable cost of obtaining such
inspection or audit and any expenses incurred by Landlord in connection
therewith, shall be a demand obligation owing by Tenant to Landlord pursuant to
this Lease. For purposes of this Section 8.1(b)(ii), "good cause" shall mean
that Landlord shall have reasonable grounds to believe that an unlawful release
or unlawful disposal of hazardous substances or solid wastes has occurred on
the Premises or the Improvements, but shall not include Pre-existing
Agricultural Contamination.
(iii) TENANT'S INDEMNITY. Tenant
agrees to indemnify and hold Landlord harmless from and against, and to
reimburse Landlord with respect to, any and all claims, demands, causes of
action, losses, damages, liabilities, costs and expenses (including attorneys'
fees and court costs), fines and/or penalties of any and every kind or
character, known or unknown, fixed or contingent, asserted or potentially
asserted against or incurred by Landlord at any time and from time to time by
reason of, in connection with or arising out of (A) the failure of Tenant to
perform any obligation herein required to be performed by Tenant regarding
Applicable Environmental Laws, (B) any violation of any Applicable
Environmental Law by Tenant or with respect to the Premises or the
Improvements, or any disposal or other release by Tenant or with respect to the
Premises or the Improvements of any hazardous substance, environmental
contaminants or solid waste on or to the Premises or the Improvements, whether
or not resulting in a violation of any Applicable Environmental Law, (C) any
act, omission, event or circumstance by Tenant or with respect to the Premises
or the Improvements which constitutes or has constituted a violation of any
Applicable Environmental Law with respect to the Premises or the Improvements,
regardless of whether the act, omission, event or circumstance constituted a
violation of any Applicable Environmental Law at the time of its existence or
occurrence, and (D) any and all claims or proceedings (whether brought by
private party or governmental agencies) for bodily injury, property damage,
abatement or remediation, environmental damage or impairment or any other
injury or damage resulting from or relating to any hazardous or toxic substance
or contaminated material located upon or migrating into, from or through the
Premises or the Improvements (whether or not the release of such materials was
caused by Tenant, a subtenant, or prior owner of the Premises, or any other
Entity) which Landlord may incur. Tenant's duty to indemnify Landlord under
this Section 8.1 shall survive the expiration or earlier termination of the
Lease with respect to events occurring during, or prior to the Term or after
the Term while Landlord has record title to and Tenant is occupying the
Premises.
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(c) COMPLIANCE WITH LEGAL REQUIREMENTS. Tenant
shall at all times comply with all material Legal Requirements applicable to
the Land or the Improvements and/or the use thereof.
8.2 CONTEST OF LEGAL REQUIREMENTS. Tenant shall have the
right at its sole cost and expense to contest the validity of any Legal
Requirements applicable to the Premises by appropriate proceedings diligently
conducted in good faith; and upon the request of Tenant and at Tenant's sole
cost and expense, Landlord will join and cooperate with Tenant in such
proceedings. Subject to Section 6.3, any other provision of this Lease to the
contrary notwithstanding, Tenant's right to contest Legal Requirements must be
exercised in such a manner as to avoid any exposure of the Premises or any part
thereof to foreclosure or execution sale or exposure of Landlord to civil or
criminal penalties arising from Tenant's non-compliance with such Legal
Requirements. Tenant shall defend and indemnify Landlord against, and hold
Landlord harmless from, any and all liability, loss, cost, damage, injury or
expense (including, without limitation, attorneys' fees and costs) which
Landlord may sustain or suffer by reason of Tenant's failure or delay in
complying with, or Tenant's contest of, any such Legal Requirements (or
Landlord's contest, if requested in writing by Tenant), and Tenant's duty to
indemnify Landlord under this Section 8.2 shall survive the expiration or
earlier termination of this Lease.
8.3 INDEMNIFICATION. Tenant will defend, protect,
indemnify and save harmless Landlord from and against all liabilities,
obligations, claims, damages, causes of action, costs and expenses, imposed
upon or incurred by Landlord by reason of the occurrence or existence of any of
the following during the Term, except to the extent caused by the willful
misconduct, gross negligence, or willful breach of contract of Landlord or its
agents or contractors (but excluding from the term contractors the Contractor
and any subcontractors of the Contractor): (1) any accident, injury to or
death of persons or loss of or damage to property occurring on or about the
Premises or Improvements; (2) performance of any labor or services or the
furnishing of any materials or other property in respect of the Premises or the
Improvements; (3) the negligence or willful misconduct on the part of Tenant or
any of its agents, invitees, employees or contractors or any other persons
entering onto the Premises or the Improvements at the request, behest or with
the permission of Tenant; (4) the construction, use or occupancy of the
Improvements which Tenant may elect to construct; (5) the use of the Land; or
(6) any breach by the "Owner" under the construction contracts entered into by
Tenant as Landlord's agent pursuant to the terms of Section 11.10. Tenant's
duty to indemnify Landlord under this Section 8.3 shall survive the expiration
or earlier termination of this Lease with respect to events occurring during
the Term or after the Term while Landlord has record title to and Tenant is
occupying the Premises.
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ARTICLE 9
UTILITIES AND SERVICES
9.1 SERVICES TO THE PREMISES. At Tenant's sole cost and
expense, Tenant shall make its own arrangements for the provision of all
utilities and services to be provided to or consumed on the Premises,
including, without limitation, air conditioning, ventilation, heating, electric
power, telephone, water (both domestic and fire protection), sanitary sewer,
storm drain, natural gas and janitorial services, including for the
installation, maintenance and repair of service lines and meters to measure
Tenant's consumption of such utilities.
ARTICLE 10
MAINTENANCE AND REPAIRS; SURRENDER OF THE PREMISES
10.1 TENANT OBLIGATIONS. Except as otherwise provided in
this Lease, Tenant shall maintain the Premises and the Improvements in good
repair, normal wear and tear, casualty and Takings (as defined in Section 15.1)
excepted. All maintenance that Tenant is obligated to perform under this
Section 10.1 shall be at the sole expense of Tenant, except to the extent that
repairs are made necessary because of the gross negligence or willful
misconduct of Landlord, its agents, employees or contractors (but excluding
from the term contractor the Contractor and any subcontractors of the
Contractor).
10.2 SURRENDER OF THE PREMISES. Except as provided in
Section 19, upon the expiration or earlier termination of the Term, Tenant
shall surrender the Premises to Landlord in its then "AS-IS" condition,
including, without limitation, any condition resulting from: (i) wear and tear;
(ii) obsolescence and damage by fire or other casualty, act of God or the
elements (subject to the terms of Article 16); (iii) damage that is caused by
Landlord, its agents, employees or contractors; (iv) Takings; and (v) any
improvements, alterations, additions, repairs, replacements, or decorations in,
to or of the Premises or on the Land which are not Improvements but which
Tenant may elect to remain on the Land or the Premises. Title to all
improvements, furniture, furnishings, fixtures, trade fixtures and personal
property of Tenant which have not been funded by Landlord pursuant to the terms
of Article 11 and located in or upon the Premises or the Land, whether or not
affixed to the realty, shall be and remain in Tenant throughout the Term, and
at any time during the Term of this Lease, the same may be removed by Tenant,
or, at Tenant's election, surrendered with the Premises, in which event title
to such surrendered property shall, if Landlord so elects in Landlord's sole
discretion, be deemed transferred to Landlord. Any of such property that is
not removed from the Premises or the Improvements on or prior to the expiration
or earlier termination of this Lease shall be considered abandoned and Landlord
may deal with it as Landlord elects.
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ARTICLE 11
CONSTRUCTION OF IMPROVEMENTS
11.1 TENANT'S RIGHTS TO CONSTRUCT IMPROVEMENTS. As of the
date of this Lease, no improvements exist on the Land. Tenant shall be under
no obligation whatsoever to construct any Improvements. Tenant shall have the
right, in Tenant's sole discretion, to construct on the Land with Tenant's own
funds, improvements, buildings, and/or alterations to Improvements, without the
necessity of obtaining any approval from Landlord. In addition, Tenant shall
have the right, in Tenant's sole discretion, subject to the terms of this
Article 11, to require Landlord to pay for the construction of the Improvements
which Tenant desires. With respect to any construction which Tenant may elect
to have performed in accordance with this Article 11, Landlord hereby
irrevocably appoints Tenant as Landlord's construction agent. Landlord shall
have no right to construct any improvements, buildings, and/or alterations on
the Land unless Tenant specifically requests that such be constructed, and then
only in accordance with the terms and conditions of this Article 11.
11.2 REQUEST FOR CONSTRUCTION FUNDING; LANDLORD OBLIGATION
TO FUND. At any time during the first forty-eight (48) months of the Initial
Term, Tenant may request Landlord to provide funding for the construction of
Improvements, which may consist of one or more Buildings or phases, or for the
alteration of any existing Buildings. Each such request shall be in writing
and shall generally describe the nature of the Improvements. Landlord shall
fund amounts for: (1) the costs of construction or alteration of the
Improvements pursuant to the terms and conditions set forth in this Article 11;
(2) architectural, engineering, testing, permitting, professional fees and any
other soft costs relating to such Buildings; (3) any Capitalized Interest; and
(4) the amounts described in Exhibit J. If Tenant reduces the Funded Amount by
making payment to Landlord or the holder of any Authorized Loan, except as
provided in Articles 15 and 16, the amount so paid shall not later be available
to Tenant in the form of Advances for construction work. Landlord shall have
no obligation to make Advances to a Mortgagee of Tenant's interest under this
Lease, if any, which Mortgagee has foreclosed on Tenant's interest under this
Lease and is then the "Tenant" under this Lease. Landlord shall have no
obligation to make Advances for any Building or phase after the last day of the
twenty-fourth (24th) month after the initial Advance for such Building or
phase.
11.3 CONDITIONS PRECEDENT TO LANDLORD'S OBLIGATION TO FUND
INITIAL ADVANCES. The obligation of Landlord to make an initial Advance
hereunder in respect of each Building shall be subject to the following
conditions precedent:
(a) NO EVENT OF MAJOR DEFAULT. No Event of Major
Default shall exist and be continuing at the time of the initial Advance.
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(b) APPRAISAL. Landlord shall have approved the
appraisal delivered pursuant to Section 21.25 hereof.
(c) LANDLORD APPROVAL OF APPROVAL PLANS.
Landlord shall have approved in accordance with the terms of this Section
11.3(c) (except as otherwise permitted or already approved pursuant to Section
11.1), Tenant's proposed site plans (showing the locations and orientations of
any proposed buildings) and exterior shell plans (showing exterior building
sections) (collectively, "Approval Plans") of the Building(s) which Tenant may
elect to construct. Tenant shall deliver a letter to Landlord along with any
submitted Approval Plans in which Tenant states that the submitted Approval
Plans do not violate any Legal Requirements. Landlord may only withhold
Landlord's approval to any such Approval Plans to the extent that the Approval
Plans violate any material Legal Requirements, and Landlord may not withhold
its consent on any other ground. At the option of Tenant, the foregoing
documentation may be submitted to Landlord for approval in stages as Tenant
completes it. Landlord shall have a period of ten (10) days from the date of
receipt of each component of the documentation within which to approve or
reject it. The Approval Plans, as approved from time to time by Landlord
pursuant to this Section 11.3(c) shall constitute the "Authorized Plans."
Tenant shall immediately reimburse Landlord on demand for all reasonable
out-of-pocket costs and expenses incurred by Landlord in connection with the
review and approval of any Approval Plans (not to exceed One Thousand Dollars
($1,000) per approval). Tenant hereby certifies to Landlord that the Approval
Plans attached hereto as Exhibit C and Exhibit D do not violate any Legal
Requirements. Landlord hereby approves the Approval Plans attached hereto as
Exhibit C and Exhibit D. Landlord's approval of any Authorized Plans does not
constitute any representation or warranty by Landlord with respect to such
Authorized Plans, and Landlord hereby specifically disclaims any such
representations and warranties.
(i) FURTHER APPROVALS; PROPOSED
CHANGES. Subsequent to Landlord's approval of any Authorized Plans pursuant to
Section 11.3(c), Tenant shall only be obligated to submit to Landlord for
approval documentation showing any proposed material change to the Authorized
Plans (but no approval shall be required with respect to construction or design
matters that are not contained in or addressed by the Authorized Plans), and
only to the extent such change is materially inconsistent with the Authorized
Plans. Landlord shall have a period of ten (10) days from receipt of each
material change within which to approve or reject it. Tenant shall immediately
reimburse Landlord on demand for all reasonable out-of-pocket costs and
expenses incurred by Landlord in connection with the review and approval of any
such changes (not to exceed One Thousand Dollars ($1,000) per approval).
Tenant shall have the right, without further approval of Landlord, to construct
Improvements not materially inconsistent with the Authorized Plans together
with such changes thereto as may be requested or required to comply with Legal
Requirements.
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(ii) FAILURE TO DISAPPROVE. The
failure by Landlord to disapprove any portion of the proposed Approval Plans
submitted pursuant to this Section 11.3(c) within the specified approval period
shall be deemed to constitute approval thereof as submitted, and such Approval
Plans shall thereupon become Authorized Plans. Any disapproval by Landlord of
any portion of the proposed Approval Plans shall be in writing and shall
specify with particularity the basis for the disapproval.
(d) LANDLORD APPROVAL OF CONSTRUCTION AGREEMENT.
Landlord shall have approved in accordance with the terms of this Section
11.3(d) (except as otherwise permitted or already approved pursuant to Section
11.1), Tenant's proposed construction agreement with Contractor (collectively,
"Construction Agreement") of the Building(s) which Tenant may elect to
construct. Landlord may only withhold Landlord's approval to any such
Construction Agreement to the extent that the Construction Agreement violates
any material Legal Requirements or is not a form of agreement which includes a
guaranteed maximum price and a date certain of completion of the Improvements,
and Landlord may not withhold its consent on any other ground. Landlord shall
have a period of ten (10) days from the date of receipt of the Construction
Agreement within which to approve or reject it. Tenant shall immediately
reimburse Landlord on demand for all reasonable out-of-pocket costs and
expenses incurred by Landlord in connection with the review and approval of the
Construction Agreement (not to exceed One Thousand Dollars ($1,000) per
approval). Landlord acknowledges that Landlord has received and approved the
Construction Agreement between Tenant and Contractor for the Improvements to be
constructed pursuant to this Lease. Landlord's approval of any Construction
Agreement does not constitute any representation or warranty by Landlord with
respect to such Construction Agreement, and Landlord hereby specifically
disclaims any such representations and warranties.
(e) DRAW REQUEST. Landlord shall have received a
written request from Tenant or its agent requesting the Advance ("Draw
Request") in the form attached hereto as Exhibit I. The submission of a Draw
Request by Tenant shall be deemed to be Tenant's approval of the Capitalized
Interest which is to be included in the Funded Amount during the period covered
by such Draw Request pursuant to the terms of Section 2.24.
(f) PLANS AND SPECIFICATIONS. Landlord shall
have received a copy of the plans and specifications for the Building in
question. Landlord acknowledges that Landlord's only approval right with
respect to the plans and specifications is as specified in Section 11.3(c)
above.
(g) CONSTRUCTION AGREEMENT. Landlord shall have
received a copy of Tenant's construction agreement with Contractor for the
Building or phase in question. Landlord acknowledges that Landlord's only
approval right with respect to the plans and specifications is as specified in
Section 11.3(d) above.
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(h) BUILDING PERMITS. With respect to any
portion of an Advance going toward hard costs for any Building, Landlord shall
have received a copy of all building permits and approvals then required for
the construction of the subject Building.
(i) CONTRACTOR'S CERTIFICATE. With respect to
any portion of an Advance going toward hard costs for any Building, Landlord
shall have received a certificate from the Contractor in the form attached
hereto as Exhibit F for the Advance in question ("Contractor's Certificate").
11.4 CONDITIONS PRECEDENT TO LANDLORD'S OBLIGATION TO FUND
SUBSEQUENT ADVANCES. Landlord's obligation to make any Advance for a Building
after the initial Advance for such Improvement shall be subject to the
satisfaction of the following conditions:
(a) NO EVENT OF MAJOR DEFAULT. No Event of Major
Default shall exist and be continuing at the time of such subsequent Advance,
and no "major and material" violations of code or law shall exist with respect
to the portions of such Building which have been constructed as of the date of
the Advance in question. For purposes of this Section 11.4(a), the term "major
and material" shall mean a violation that presents a material risk to the
health and safety of the occupants of the Building in question.
(b) DRAW REQUEST. With respect to any portion of
an Advance going toward hard costs for any Building, Landlord shall have
received a Draw Request for the Advance in question.
(c) CONTRACTOR'S CERTIFICATE. With respect to
any portion of an Advance going toward hard costs for any Building, Landlord
shall have received a Contractor's Certificate for the Advance in question in
the form attached hereto as Exhibit F.
(d) LIEN WAIVERS. Landlord shall have received
conditional lien waivers and releases upon progress payment from Contractor and
any "Major Subcontractor" (defined below) scheduled to receive payment from
such Advance. The term "Major Subcontractor" shall mean any subcontractor
which has executed a subcontract calling for aggregate payments to the
subcontractor in excess of Two Hundred Fifty Thousand Dollars ($250,000).
(e) CHANGES TO AUTHORIZED PLANS. Landlord shall
have approved any material change to the Authorized Plans pursuant to Section
11.3(c)(i)
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11.5 CONDITIONS PRECEDENT TO LANDLORD'S OBLIGATION TO FUND
FINAL ADVANCE. Landlord's obligation to make the final Advance for a Building
shall be subject to the satisfaction of the following conditions:
(a) SECTION 11.4 CONDITIONS. All of the
conditions precedent set forth in Section 11.4 shall have been satisfied with
respect to the final Advance in question.
(b) CERTIFICATE OF OCCUPANCY. Landlord shall
have received a copy of the certificate of occupancy or its equivalent issued
by the appropriate governmental authority for the Building in question.
11.6 ADDITIONAL PROVISIONS REGARDING ADVANCES.
(a) TIMING AND METHOD OF DISBURSEMENT. Advances
to be made hereunder shall not be made more frequently than monthly. For any
calendar month during which Tenant desires to receive an Advance, Tenant shall
submit a Draw Request on or before the date that is five (5) days prior to the
first LIBOR Business Day of such month, and if Tenant submits such Draw Request
by such date, then Landlord shall make the Advance as requested in such Draw
Request to the party(ies) designated by Tenant on the first LIBOR Business Day
of such month (subject to the conditions to funding described in Sections 11.3,
11.4 and 11.5). The Advances shall be made to parties identified by Tenant,
which parties may include Tenant. At the option of Tenant, Landlord shall make
such Advances to one (1) or more parties.
(b) RETAINAGE. Disbursements for construction
costs shall be subject to a ten percent (10%) retainage. The retainage shall
be paid to Tenant or to any Entities designated by Tenant along with the
payment of the Final Advance with respect to any Building. Notwithstanding the
foregoing, Tenant may require Landlord to pay any retainage on account of
particular subcontractors prior to the payment of a final Advance if: (1)
Tenant is able to achieve cost savings as a result of such early payment; and
(2) Contractor delivers to Landlord a letter of credit in the amount of the
retainage to be paid out prematurely. The parties will enter into an agreement
with respect to the letter of credit, which agreement shall reflect the
parties' agreement that: (a) Landlord shall only be entitled to draw on the
letter of credit if and to the extent necessary to complete the work that the
subcontractor receiving the early payment of the retainage was required to
perform and failed to perform; and (b) the letter of credit be returned to
Tenant at the time that the retainage would have been paid pursuant to the
second sentence of this Section 11.6(b). The total retainage shall be reduced
by the amount of such retainage paid early pursuant to the terms of the
preceding sentence.
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11.7 REQUIRED PERMITS, EASEMENTS, ETC. From time to time,
upon request of Tenant, Landlord (as holder of record of title to the
Improvements) shall execute such reasonable documents, petitions, applications
and authorizations, easements and rights of way (which have been prepared at
Tenant's expense) and shall appear at and participate in such public hearings,
staff meetings and similar gatherings, in each case as may in the reasonable
and good-faith opinion of Tenant be necessary or appropriate for the purpose of
obtaining any Required Permits or private easements or rights of way or utility
services for the Improvements or to remove any title encumbrances on the Land
which may interfere with Tenant's construction of the Improvements. Tenant
shall immediately reimburse Landlord on demand (or pay directly) for all
reasonable out-of-pocket costs and expenses incurred by Landlord in complying
with Landlord's obligations under this Section 11.7.
11.8 ALTERATIONS. Tenant shall notify Landlord in writing
in advance of any alteration to the Improvements which would either cost more
than Five Hundred Thousand Dollars ($500,000), or cause the Land and the
Improvements to fail the Coverage Test. At any time and from time to time, and
without the necessity for obtaining Landlord's approval or giving Notice
thereof to Landlord (except as otherwise specifically provided in this Section
11.8), Tenant shall have the right, at its expense, to make any improvements,
alterations, additions, repairs, replacements or decorations in, to or of the
Premises which do not materially change the exterior design scope of the
Improvements as previously approved by Landlord pursuant to any Authorized
Plans. In constructing any such improvements, alterations, additions, repairs,
replacements or decorations, Tenant shall do so in a manner which does not
violate any applicable and material Legal Requirements. If, in connection with
any alterations which Tenant may desire to construct, either: (1) the
performance of such alterations would cause the Land and Improvements together
to fail the Coverage Test; or (2) such alterations would materially change the
exterior design scope of the Improvements as previously approved by Landlord
pursuant to Authorized Plans, then such alterations shall be subject to the
prior written approval of Landlord, which shall not be unreasonably withheld or
delayed. In the event that the parties disagree as to whether or not
performing such alterations would cause the Land and the Improvements to fail
the Coverage Test, such matter shall be subject to the appraisal provision
contained in Section 21.23.
11.9 TITLE TO AND NATURE OF IMPROVEMENTS. By virtue of
Tenant's rights under the Land Lease, Tenant hereby grants to Landlord the
right to own and construct the Improvements which Tenant elects to cause to be
constructed with Landlord's funds under this Article 11, and Tenant hereby
grants, conveys and transfers to Landlord all of Tenant's right, title and
interest in and to the Improvements (whether now existing or hereafter
constructed), and Tenant agrees that any and all Improvements of whatever
nature at any time constructed, placed or maintained upon any part of the Land
shall be and remain the property of Landlord,
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subject to Tenant's rights under Section 19 and elsewhere in this Lease. Any
improvements on the Land other than the Improvements shall be and remain the
property of Tenant, subject to the terms of Section 10.2. The severance of fee
title to the Land and Improvements shall not change the character of the
Improvements as real property.
11.10 TENANT AS LANDLORD'S CONSTRUCTION AGENT. Tenant
shall function as Landlord's agent for purposes of the construction of any
Improvements. In this role, Tenant shall have the authority, on Landlord's
behalf, to oversee and direct the construction of all Improvements, including
but not limited to, approval of building, site and other plans, obtaining
building and other permits, negotiating construction contracts, monitoring
construction and making periodic inspections, approval of Contractor's invoice
for payment, and submission of Draw Requests. Within a reasonable time after
Tenant's request, Landlord shall execute construction contracts negotiated by
Tenant for the construction of Improvements on the Land; Landlord shall not
amend, modify or terminate any such construction contract without the prior
written approval of Tenant, which may be withheld in Tenant's sole discretion.
Landlord's appointment of Tenant as Landlord's agent under this Section 11.10
shall be irrevocable unless this Lease is terminated pursuant to the terms of
Section 17.4(b) in connection with an Event of Major Default.
11.11 TENANT'S RELEASE OF FUNDING COMMITMENT. At any time
during the term, Tenant may elect in its sole discretion to release Landlord
from its obligation to fund construction of all or any portion of the
Improvements by written notice to Landlord and Lenders; provided, however, that
Tenant has substantially completed construction of each Building on which
construction has commenced.
ARTICLE 12
LIENS
Except for claims that Tenant is contesting in good faith in
such manner as to avoid any exposure of the Premises or any part thereof to
foreclosure or execution sale, Tenant shall promptly pay and discharge all
claims for work or labor done, supplies furnished or services rendered to the
Premises, and shall keep the Premises free and clear of all mechanics' and
materialmen's liens in connection therewith.
ARTICLE 13
ASSIGNMENT BY LANDLORD
13.1 FURTHER MORTGAGES OR ENCUMBRANCES BY LANDLORD;
AUTHORIZED LOANS.
(a) PROHIBITION. Except for the Lenders Deed of
Trust, the Landlord Deed of Trust, the Tenant Deed of Trust and the
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Land Lease Deed of Trust (which are hereby approved by Tenant) and as
specifically permitted in Section 11.7 or 13.1(b) or 20, Landlord shall not
cause or create any mortgages, deeds of trust, encumbrances or other exceptions
to title (collectively, "New Encumbrances") to exist with respect to the
Premises at any time, and any such encumbrance not authorized in writing by
Tenant shall be null and void. The term "New Encumbrances" shall also include
any bonds or assessments affecting the Premises to which Landlord consents in
writing without the prior written approval of Tenant (which may be withheld in
Tenant's sole and absolute discretion). Without the prior written consent of
Tenant (which may be withheld in Tenant's sole and absolute discretion),
Landlord shall not make or join in an application or other document which
requests or authorizes any bonds or assessments to affect the Premises.
Landlord recognizes that any New Encumbrance may irreparably harm Tenant in
connection with one or more of the following: (1) construction which Tenant
may desire to perform; (2) the use of the Premises; (3) Tenant's rights
pursuant to the Purchase Option in Section 19; (4) the amount of assessments
which Tenant is required to pay; or (5) other matters.
(b) AUTHORIZED LOAN. Tenant has approved the
loans to Landlord ("Improvements Loan") from Lenders which is evidenced by that
certain Promissory Note dated as of the Date of Lease by Landlord in favor of
HSBC and that certain Promissory Note dated as of the Date of Lease by Landlord
in favor of Sumitomo (collectively, the "Notes"), and further evidenced and/or
secured by (a) that certain Pledge Agreement made by Tenant in favor of
Lenders, as it may be amended and supplemented from time to time ("Pledge
Agreement"), dated as of the Date of Lease; (b) the Lenders Deed of Trust (c)
that certain Loan Disbursement Agreement dated as of the Date of Lease; (d)
that certain Absolute Assignment of Leases dated as of the Date of Lease; (e)
that certain UCC Financing Statement; and (f) that certain Environmental
Indemnity Agreement dated as of the Date of Lease. In addition, upon the
maturity or prepayment of the Improvements Loan (whether by its terms, by
acceleration or otherwise), Landlord may (but, subject to the terms of Section
13.1(c), shall not be obligated to) enter into a new loan (such authorized loan
shall be the "New Loan"), provided Landlord first obtains Tenant's written
consent (which consent shall not be unreasonably withheld), and so long as: (i)
the Improvements Loan is paid off with the proceeds of such New Loan and all
documents securing or reflecting the Improvements Loan are assigned to the
lender who makes the New Loan or are released and satisfied; (ii) the principal
amount of the New Loan does not exceed the principal amount of the Improvements
Loan existing at the time the Improvements Loan is repaid; (iii) the interest
rate and payment provisions under the New Loan would not result in higher
monthly payments than the method under the Improvements Loan, and all such
monthly payments shall be interest only; and (iv) the New Loan documents do not
contain terms and conditions which differ from the Improvements Loan documents
in any material respect (including provisions relating to the Collateral as
defined in Section 21.18). The Improvements Loan and the New Loan
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authorized pursuant to the preceding sentence and the Replacement Loan
described in Section 13.1(c) below shall be the "Authorized Loan"; provided
that only one Authorized Loan may exist at any one point in time. Landlord may
not modify the terms of an Authorized Loan without the prior written consent of
Tenant, which Tenant shall not unreasonably withhold (but may be withheld in
Tenant's sole and absolute discretion based upon any of the matters identified
in subitems (i) through (v) above in this Section 13.1(b)).
(c) REPLACEMENT LOAN. Subject to Landlord's prior
written consent (which consent shall not be unreasonably withheld or delayed),
at the request of Tenant, Landlord shall execute loan documents evidencing
and/or securing a new loan to Landlord, the proceeds of which would be used to
retire the Improvements Loan (such loan requested by Tenant shall be a
"Replacement Loan"). Landlord shall only be entitled to refuse to consent to
such new loan if (1) the maturity date of the Replacement Loan is a date on or
after the expiration date of the Extension Term; (2) the principal amount of
the Replacement Loan exceeds the principal amount of the Improvements Loan plus
any accrued interest and fees payable at the time the Improvements Loan is
repaid; (3) the interest rate structure under the Replacement Loan is
materially higher than market conditions would justify at the time; (4) there
are prepayment prohibitions, penalties or other restrictions which would limit
rights to retire the Replacement Loan or require additional payment to do so;
or (5) the Replacement Loan documents contain terms and conditions which differ
from the Improvements Loan documents in any material respect (including
provisions relating to the Collateral as defined in Section 21.18). If Tenant
requests and provides the funds, Landlord shall make all arrangements necessary
for, and shall pay down any Authorized Loan in the amount requested by Tenant,
and shall arrange for all documentation reasonably requested by Tenant to
reflect the reduction or elimination of such Authorized Loan.
(d) LENDERS DEED OF TRUST. On the Date of Lease,
Landlord and Tenant shall execute, acknowledge, and cause to be recorded in the
Official Records, a deed of trust in form acceptable to Lenders and Tenant
("Lenders Deed of Trust"). The Lenders Deed of Trust shall be a first priority
lien against the premises (as defined in the Lenders Deed of Trust).
(e) LANDLORD DEED OF TRUST. On the Date of
Lease, Tenant shall execute, acknowledge, and cause to be recorded in the
Official Records, a deed of trust in form acceptable to Landlord ("Landlord
Deed of Trust"), which Landlord Deed of Trust shall secure Tenant's obligations
under this Lease. The Landlord Deed of Trust shall be junior only to the
Lenders Deed of Trust as a second priority lien against the premises (as
defined in the Landlord Deed of Trust).
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(f) TENANT DEED OF TRUST. On the Date of
Lease, Landlord shall execute, acknowledge, and cause to be recorded in the
Official Records, a deed of trust in form acceptable to Tenant ("Tenant Deed of
Trust"), which Tenant Deed of Trust shall secure Landlord's obligations under
this Lease (i) to return the Security Deposit pursuant to the terms of this
Lease and (ii) to convey the Premises to Tenant as required pursuant to Article
19 hereof. The Tenant Deed of Trust shall be junior only to the Lenders Deed
of Trust and the Tenant Deed of Trust as a third priority lien against the
premises (as defined in the Tenant Deed of Trust).
(g) LAND LEASE DEED OF TRUST. The Land Lease
Deed of Trust secures ILC's obligations under the Land Lease (i) to return the
security deposits set forth in the Land Lease pursuant to the terms of the Land
Lease, (ii) to convey the Premises to Tenant as required pursuant to Article 19
thereof, and (iii) to comply with Sections 20.3, 20.4 and 20.5 of the Land
Lease. The Tenant Deed of Trust shall be junior only to the Lenders Deed of
Trust, the Landlord Deed of Trust and the Tenant Deed of Trust and shall be a
fourth priority lien against the premises (as defined in the Land Lease Deed of
Trust).
13.2 LANDLORD'S RIGHT TO SELL. Subject to Tenant's
Purchase Option and the mandatory purchase set forth in Article 19 and the
terms of Section 13.1 and Article 20, nothing contained in this Lease shall be
deemed in any way to limit, restrict or otherwise affect the right of Landlord
at any time and from time to time to sell or transfer all or any portion of its
right, title and estate in the Premises to: (1) a financial institution with a
capitalization in excess of One Hundred Million Dollars ($100,000,000) and
investments in other leased assets of at least Twenty Five Million Dollars
($25,000,000); (2) a trust established by such an institution; or (3) if an
Event of Major Default has occurred and is continuing at the time of such sale
or transfer, to any Entity; provided, however, that such Entity shall assume,
in a manner consistent with Landlord's obligations under this Lease and the
Improvements Loan documents, the Improvements Loan or any other Authorized Loan
concurrently with acquisition of the Premises, after first obtaining Lenders'
written consent thereto. Landlord shall give Tenant prior written notice of
any sale or transfer pursuant to this Section 13.2 together with written
evidence of compliance with the terms hereof. Any sale or transfer by Landlord
whatsoever shall by its express terms recognize and confirm the right of
possession of Tenant to the Premises and Tenant's other rights arising out of
this Lease shall not be affected or disturbed in any way by any such sale,
transfer, assignment or conveyance (except for any disturbance resulting from a
foreclosure sale conducted pursuant to the laws of the State of California at
which independent third party bids were permitted, pursuant to the Lenders Deed
of Trust, all subject to the terms of Section 19.2).
13.3 TRANSFER OF FUNDS AND PROPERTY. At each time
Landlord sells, assigns, transfers or conveys the entire right, title and
estate of Landlord in the Premises and in this Lease,
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Landlord shall turn over to the transferee any funds or other property then
held by Landlord under this Lease and thereupon all the liabilities and
obligations on the part of the Landlord under this Lease arising after the
effective date of such sale, assignment, transfer or conveyance shall terminate
as to the transferor and be binding upon the transferee.
ARTICLE 14
ASSIGNMENT AND SUBLEASING
14.1 RIGHT TO ASSIGN.
(a) TENANT'S RIGHT. Tenant shall have the right,
at any time and from time to time during the Term, to assign all or any portion
of its right, title and estate in the Premises and in this Lease without
approval by Landlord. Any such assignee, immediate or remote, shall have the
same right of assignment. Any such assignment shall be evidenced by a written
instrument, properly executed and acknowledged by all parties thereto and, at
Tenant's election, duly recorded in the Official Records, wherein and whereby
the assignee assumes all of the obligations of Tenant under this Lease.
Notwithstanding any such assignment and assumption or any sublease permitted
under Section 14.2 hereof, Tenant shall remain primarily liable for all
obligations and liabilities on the part of Tenant theretofore or thereafter
arising under this Lease.
(b) NOTICE. Tenant shall, promptly after
execution of each assignment, notify Landlord of the name and mailing address
of the assignee and shall, on demand, permit Landlord to examine and copy the
assignment agreement.
14.2 RIGHT TO SUBLET.
(a) TENANT'S RIGHT. Tenant shall have the right,
at any time and from time to time during the Term, to sublet all or any portion
of the Premises and to extend, modify or renew any sublease without the
approval of Landlord.
(b) NOTICE. Tenant shall, promptly after
execution of each sublease, notify Landlord of the name and mailing address of
the subtenant and shall, on demand, permit Landlord to examine and copy the
sublease.
(c) NON-DISTURBANCE AGREEMENT. Upon Tenant's
request, Landlord shall enter into a "landlord agreement" with any subtenant of
Tenant. Such agreement shall provide that Landlord shall recognize the
sublease and not disturb the subtenant's possession thereunder so long as such
subtenant shall not be in default under its sublease, and an Event of Major
Default is not then in existence and continuing under this Lease. Tenant shall
immediately reimburse Landlord on demand for all reasonable out-of-
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pocket costs and expenses incurred by Landlord in complying with Landlord's
obligations under this Section 14.2(c).
14.3 TENANT'S RIGHT TO MORTGAGE.
(a) RIGHT OF TENANT. Tenant shall have the right
from time to time and at any time, without obtaining the approval of Landlord,
to mortgage, pledge or otherwise encumber all or any portion of the right,
title and estate of Tenant in the Premises or in this Lease.
(b) NOTICE. Tenant shall, promptly after
execution of any Mortgage, notify Landlord of the name and mailing address of
the Mortgagee thereunder and shall, on demand, permit Landlord to examine and
copy the Mortgage.
ARTICLE 15
EMINENT DOMAIN
15.1 TOTAL OR SUBSTANTIAL TAKING. If title or access is
taken for any public or quasi-public use, or under any statute or by right of
condemnation or eminent domain, or by sale in lieu thereof (a "Taking") with
respect to all of the Premises, or if title to so much of the Premises or
access thereto is Taken, or if the Premises or access thereto is damaged,
blocked or impaired by the Taking, so that, in Tenant's sole discretion, the
Premises or access thereto, even after a reasonable amount of reconstruction
thereof, will no longer be suitable for Tenant's (and/or Tenant's subtenants')
continued occupancy for the conduct of Tenant's (and/or Tenant's subtenants')
business in a manner consistent with the conduct of such business prior to such
Taking, then in any such event, this Lease shall terminate on the date of such
Taking.
15.2 PARTIAL TAKING. If any part of the Premises, or
access thereto, shall be Taken, and the Premises or the remaining part thereof
and access thereto will be, in Tenant's sole discretion, suitable for Tenant's
(and/or Tenant's subtenants') continued occupancy for the conduct of Tenant's
(and/or Tenant's subtenants') business in a manner consistent with the conduct
of such business prior to such Taking, all of the terms, covenants and
conditions of this Lease shall continue, except that Base Rent shall be
adjusted to reflect the decreased Funded Amount remaining after application
thereto of the award made to Landlord for such Taking.
15.3 TEMPORARY TAKING. If the whole or any part of the
Premises is Taken for temporary use or occupancy, this Lease shall not
terminate by reason thereof and Tenant shall continue to pay, in the manner and
at the times herein specified, the full amount of the Base Rent payable by
Tenant hereunder, and, except only to the extent that Tenant may be prevented
from so doing by reason of such Taking, Tenant shall continue to perform and
observe all of the other terms, covenants and conditions hereof on the part of
Tenant
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to be performed and observed, as though the Taking had not occurred. In the
event of any such temporary Taking, Tenant shall be entitled to receive the
entire amount of the award made for the Taking, whether paid by way of damages,
rent or otherwise. If the temporary Taking is for a term in excess of thirty
(30) days, then the Taking shall be treated as a permanent Taking and be
governed by Section 15.1 or 15.2, as applicable.
15.4 DAMAGES. The compensation attributable to the
Improvements (in each case the compensation or value shall be determined as of
the date of the Taking) awarded or paid upon any Taking (other than a temporary
Taking, which shall be governed by Section 15.3), whether awarded to Landlord,
Tenant, or both of them, shall be held by the Escrow Agent described in Section
16.3(b) and distributed in the same manner as insurance proceeds pursuant to
Section 16.3. For purposes of this Section 15.4, references to the term
"casualty" or similar terms in Section 16.3 shall be deemed to refer to
"Taking."
15.5 NOTICE AND EXECUTION. Immediately upon service of
process upon Landlord or Tenant in connection with any Taking relating to the
Premises or any portion thereof or access thereto, each party shall give the
other Notice thereof. Each party agrees to execute and deliver to the other
all instruments that may be required to effectuate the provisions of this
Article 15. Tenant reserves the right to appear in and to contest any
proceedings in connection with any such Taking. Tenant shall immediately
reimburse Landlord on demand for all reasonable out-of-pocket costs and
expenses incurred by Landlord in complying with Landlord's obligations under
this Section 15.5.
ARTICLE 16
DAMAGE OR DESTRUCTION
16.1 CASUALTY. If any Improvements are damaged or
destroyed by fire or other casualty (including, but not limited to earthquake),
except as provided to the contrary in Section 16.2, this Lease shall continue
in full force and effect without any abatement or reduction in Base Rent, and
Tenant, at Tenant's election, shall either (a) restore the Improvements
substantially to their condition prior to the damage or destruction, or such
other condition as Tenant shall elect in its sole and absolute discretion,
subject to Landlord's approval rights set forth in Section 11.3(c), or (b) not
restore the Improvements, but perform, or cause to be performed, at Tenant's
sole cost and expense, any work or service required by any Legal Requirement
for the protection of persons or property from any risk, or for the abatement
of any nuisance, created by or arising from the casualty or the damage or
destruction caused thereby.
16.2 TERMINATION OF LEASE. In the case of: (a) any
damage or casualty of any Building or Buildings, which in the good faith
judgment of Tenant's Board of Directors would render such
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Building either unsuitable or uneconomic for restoration or continued use by
Tenant; (b) the damage or destruction of all or substantially all (as
determined in good faith by Tenant's Board of Directors) of any Building or
Buildings; or (c) the damage or destruction of any Building or Buildings where
restoration cannot (as determined in good faith by Tenant's Board of Directors)
reasonably be completed either within 365 days or prior to the expiration of
the Initial Term or the Extension Term, then Tenant may elect to terminate this
Lease either as to the Building(s) in question or as to the Lease in its
entirety. In the event Tenant terminates the Lease pursuant to the preceding
sentence, Tenant shall purchase Landlord's interest in the Building(s) in
question for a purchase price equal to the Purchase Price for the Building(s)
in question, as such Purchase Price is defined in Section 19.1. The purchase
of Landlord's interest in such Building(s) shall be pursuant to the terms of
Section 19.1, as applicable to such Building(s). Upon the completion of such
purchase, this Lease and all obligations hereunder in respect of such
Building(s) shall terminate. This Lease shall remain in full force and effect
with respect to all remaining Buildings which Tenant does not elect to purchase
pursuant to this Section 16.2, and such remaining Building(s) shall constitute
the "Improvements" for purposes of this Lease.
16.3 INSURANCE PROCEEDS. In the event of any fire or
other casualty, the proceeds of any insurance policies maintained by Tenant
pursuant to Section 7.2 or 7.3 shall be held, applied and dealt with as
follows:
(a) Any proceeds (per occurrence) of such
policies attributable to the Improvements below the amount of Five Hundred
Thousand Dollars ($500,000) shall be paid directly to Tenant and applied and
used as Tenant may direct in its sole discretion for any construction,
restoration or reconstruction purposes in connection with any improvements
located on the Land which were destroyed, damaged or affected by such casualty.
Any portion of such proceeds which Tenant does not want to use (subject to the
terms of Section 16.3(d)) for any construction, restoration or reconstruction
shall be paid as follows (the order of payment as set forth below shall be the
"Distribution Formula"): (1) to Lenders, or to any other holder of an
Authorized Loan, and to Landlord, pro rata in proportion to the ratio that the
then-existing Senior Funded Amount bears to the then-existing Funded Amount as
compared to the ratio that the then-existing Equity Funded Amount bears to the
then-existing Funded Amount (provided, however, that in no event shall the
amount paid to Landlord exceed the difference between the Funded Amount and the
Guaranteed Residual Value); and (2) with any remaining excess to be paid to
Tenant.
(b) Any proceeds (per occurrence) of such
policies attributable to the Improvements greater than Five Hundred Thousand
Dollars ($500,000) shall be paid to an escrow agent ("Escrow Agent") mutually
agreeable to the parties (but such escrow agent
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shall not be a party which is related to or affiliated with either of the
parties to this Lease). Such proceeds shall be invested by the Escrow Agent as
Tenant may direct; provided, however, that such proceeds shall not be invested
in the stock or obligations of Tenant. Such proceeds shall be paid by the
Escrow Agent to Tenant (or to third parties as Tenant may direct), as Tenant
may direct from time to time as restoration, construction or rebuilding
progresses to pay the cost of any restoration, construction or rebuilding which
Tenant elects to take place on the Land or any Improvements located upon the
Land, but only upon the written request of Tenant, and so long as Landlord
reasonably determines that the following conditions are satisfied at the time
of such request for payment by Tenant: (i) the sum requested has been paid or
is then due and payable or will become due and payable within thirty (30) days;
(ii) Tenant has the financial ability (taking into account the insurance
proceeds held by the Escrow Agent) to complete the restoration, construction or
rebuilding which Tenant has elected to perform; (iii) Landlord has approved the
Approval Plans, if any, relating to the restoration of Improvements, pursuant
to the terms of Article 11; and (iv) in Landlord's reasonable judgment, such
restoration work which Tenant desires to perform in connection with the
Improvements can be completed prior to the expiration of the Initial Term (or,
if Tenant has exercised, or within one hundred twenty (120) days after reaching
final written settlement with all insurance companies regarding the amount of
proceeds to be paid for the casualty in question, exercises its right to extend
for the Extension Term, then prior to the expiration of the Extension Term).
Landlord shall promptly upon request instruct the Escrow Agent to make the
payments requested by Tenant unless one of the conditions described above is
not satisfied at the time of such request. Any excess insurance proceeds
existing after either Tenant's completion of the restoration, construction or
rebuilding which Tenant elects to perform or Tenant's failure to comply with
the funding condition described in subitems (ii), (iii) and (iv) immediately
above in this Section 16.3(b), shall be paid pursuant to the Distribution
Formula. If Tenant elects to terminate this Lease as to one or more Buildings,
Tenant may use any insurance proceeds to pay the purchase price described in
Section 16.2, and all rights of Landlord in insurance proceeds not used to pay
the purchase price shall be assigned to Tenant by Landlord at the time Tenant
purchases Landlord's interest in any such Building(s).
(c) Any proceeds of such policies attributable
to improvements or buildings on the Land other than the Improvements shall
promptly be paid directly to Tenant.
(d) If either: (1) Tenant has not delivered
written notice to Landlord within one hundred twenty (120) days after reaching
final written settlement with all insurance companies regarding the amount of
proceeds to be paid for the casualty in question, pursuant to which notice
Tenant elects to either exercise some or all of its termination rights under
Section 16.2 and/or to fully or partially repair or restore
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pursuant to Section 16.1; or (2) Landlord reasonably believes that Tenant has
abandoned reconstruction or restoration work which Tenant may have elected to
perform (and Tenant shall have failed to diligently recommence reconstruction
or restoration work which Tenant is then able to perform within thirty (30)
days after Tenant's receipt from Landlord of a Notice of Landlord's belief of
Tenant's abandonment of the reconstruction or restoration work); then, in
either case, the proceeds attributable to the Improvements shall be paid
pursuant to the Distribution Formula.
(e) Any insurance proceeds paid to Landlord,
Lenders or holder of any Authorized Loan under this Article 16 shall
automatically reduce the Funded Amount by a like amount.
ARTICLE 17
DEFAULT
17.1 DEFAULT. The following event shall constitute a
default ("Default") by Tenant:
DEFAULT OTHER THAN EVENT OF MAJOR DEFAULT. Tenant's
failure to perform or comply with any of the terms, covenants or conditions
contained in this Lease other than those referred to in Section 17.2, where
such failure shall continue for a period of thirty (30) days after Notice
thereof from Landlord to Tenant, or in the case of a failure which cannot with
due diligence be cured within the period of thirty (30) days, Tenant's failure
to proceed promptly and with due diligence to cure the failure and thereafter
to prosecute the curing of the failure with all due diligence, it being
intended that in connection with a failure not susceptible of being cured with
due diligence within thirty (30) days, the time of Tenant within which to cure
the failure shall be extended for such period as may be reasonably necessary to
complete the cure with all due diligence.
17.2 EVENT OF MAJOR DEFAULT. Each of the following
events shall constitute an event of major default ("Event of Major Default") by
Tenant:
(a) FAILURE TO PAY BASE RENT. Tenant's failure
to pay any Base Rent within ten (10) days after the later to occur of the due
date or Tenant's receipt from Landlord of the Invoice required pursuant to
Section 5.1;
(b) FAILURE TO PAY ADDITIONAL RENT. Tenant's
failure to pay any Additional Rent which is due to Landlord within the later to
occur of the due date under this Lease or ten (10) days after Tenant's receipt
of Notice thereof from Landlord that such Additional Rent is due;
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(c) FAILURE TO COMPLY WITH PURCHASE OBLIGATION
UNDER SECTION 19.2. Tenant's failure to comply with Tenant's obligation to
purchase the Premises pursuant to Section 19.2 within the period required in
Section 19.2;
(d) FAILURE TO CARRY INSURANCE. Tenant's
failure to carry the insurance required by Article 7, if such failure continues
ten (10) days after Tenant's receipt of Notice thereof from Landlord that
Tenant is not carrying such required insurance (provided, however, that it
shall not be an Event of Major Default under this Section 17.2 if Tenant is
carrying when required the basic form policies required by Article 7 with
respect to the perils addressed therein and in the amounts required by Article
7, notwithstanding some other noncompliance);
(e) INSOLVENCY. Subject to Section 17.3, the
occurrence of: (i) an assignment by Tenant for the benefit of creditors
generally; or (ii) the filing of a voluntary or involuntary petition by or
against Tenant under any present or future applicable federal, state or other
statute or law having for its purpose the adjudication of Tenant as a bankrupt;
(iii) the appointment of a receiver, liquidator or trustee for all or a
substantial portion of the Premises by reason of the insolvency or alleged
insolvency of Tenant; or (iv) the taking of possession by any department of
city, county, state or federal government, or any officer thereof duly
authorized, of all or a substantial portion of the Premises by reason of the
insolvency or alleged insolvency of Tenant; and Tenant's failure to timely give
any Notice it is permitted to give pursuant to Section 17.3 (or, in the event
Tenant gives timely Notice and pursues a contest under Section 17.3, Tenant's
failure to finally prevail in the contest).
(f) FAILURE TO REPLENISH UNDER PLEDGE
AGREEMENT. Tenant's failure to replenish the collateral account as required
under the Pledge Agreement (as defined in Section 13.1(b)) after the notice and
cure periods provided in Pledge Agreement;
(g) FAILURE TO REFINANCE THE IMPROVEMENT LOAN.
Tenant's failure to refinance, or repay, the Improvement Loan prior to the
Extension Term;
(h) DEFAULT UNDER OTHER CREDIT FACILITY.
Tenant's suffering or permitting any of the following defaults: (i) A payment
default (after applicable notice and cure periods) under any credit facility of
Tenant which equals or exceeds Twenty Million Dollars ($20,000,000); (ii) An
Event of Major Default (after applicable notice and cure periods) under that
certain lease agreement by and between SGA Development Partnership, Ltd., a
Texas limited partnership, and Tenant, for premises located in San Jose,
California, dated February 25, 1993, as amended; (iii) An Event of Major
Default (after applicable notice and cure periods) under that certain lease
agreement by and between Sumitomo Bank Leasing and Finance, Inc., a Delaware
corporation ("SBLF"), and Tenant, for premises located in San Jose, California,
dated May 20, 1993, as
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amended; (iv) An Event of Major Default (after applicable notice and cure
periods) under that certain lease agreement by and between SBLF and Tenant for
premises located in Raleigh, North Carolina, dated July 11, 1994, as amended;
(v) An Event of Major Default (after applicable notice and cure periods) under
that certain lease agreement by and between SBLF and Tenant for premises
located in Raleigh, North Carolina, dated August 12, 1994; or (vi) An Event of
Major Default (after applicable notice and cure periods) under any of the
Building Leases;
(i) TANGIBLE NET WORTH. Tenant's Tangible Net
Worth shall fall below Seven Hundred Fifty Million Dollars ($750,000,000.00);
(j) FRAUD/INTENTIONAL MISREPRESENTATION. Fraud
or intentional misrepresentation by Tenant in connection with the
representations and warranties set forth in Section 21.22 hereof; or
(k) DEFAULT UNDER LAND LEASE. An Event of
Major Default under the Land Lease.
17.3 CONTEST BY TENANT. If upon the filing of any
involuntary petition of the type described in Section 17.2(e) or upon the
appointment of a receiver, other than a receiver appointed in any voluntary
proceeding referred to in Section 17.2(e), or the taking of possession of all
or a substantial portion of the Premises by any department of the city, county,
state or federal government, or any officer thereof duly authorized, by reason
of the alleged insolvency of Tenant without the consent or over the objection
of Tenant, should Tenant desire to contest the same in good faith, Tenant
shall, within ninety (90) days after the filing of the petition or after the
appointment or taking of possession, give Notice to Landlord that Tenant
proposes to make the contest, and the same shall not constitute an Event of
Major Default so long as Tenant shall prosecute the proceedings with due
diligence and no part of the Premises shall be exposed to sale by reason of the
continuance of the contest.
17.4 REMEDIES. Landlord shall have the remedies
specified below, the parties hereby acknowledging that the remedies described
in Section 17.4(b) may be exercised by Landlord only upon the occurrence of an
Event of Major Default. Tenant shall at all times have the right to exercise
and carry out the terms of the Purchase Option in Section 19.1, notwithstanding
the occurrence or existence of any Default or Event of Major Default under this
Lease, and Landlord shall have the obligation to comply with Landlord's
obligations under Section 19.1 notwithstanding any Default or Event of Major
Default.
(a) CONTINUE LEASE. In connection with a
Default or an Event of Major Default, Landlord shall have the right to enforce,
by suit or otherwise, all other covenants and conditions hereof to be performed
or complied with by Tenant and to exercise
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all other remedies permitted by Section 1951.4 of the California Civil Code, or
any amendments thereof or any successor laws which replace such Section 1951.4.
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue the Lease in effect after Tenant's breach and
abandonment and recover Base Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitation). Upon application by
Landlord, a receiver may be appointed to take possession of the Premises and
exercise all rights granted to Landlord as set forth in this Section 17.4(a);
and
(b) TERMINATE LEASE. In connection with an
Event of Major Default (but not a Default), Landlord shall have the right to
terminate this Lease, by giving Tenant Notice thereof, at any time after the
occurrence of such Event of Major Default and whether or not Landlord has also
exercised any right under Section 17.4(a). In such event, Tenant shall, within
thirty (30) days after receipt of Notice from Landlord, purchase the Premises
pursuant to Section 19.2. Landlord shall also have its other remedies at law
(including its rights under the Landlord Deed of Trust), provided, however,
that Tenant's right to purchase the Improvements pursuant to Section 19.1 shall
survive any termination of this Lease up through the date of foreclosure sale
under the Lenders Deed of Trust, the Landlord Deed of Trust or any deed of
trust securing an Authorized Loan.
17.5 NO WAIVER. No failure by Landlord or Tenant to
insist upon the strict performance of any term, covenant or condition of this
Lease or to exercise any right or remedy consequent upon a breach thereof and
no acceptance of full or partial Rent during the continuance of any breach
shall constitute a waiver of any such breach or of the term, covenant, or
condition. No term, covenant or condition of this Lease to be performed or
complied with by Tenant or Landlord, and no breach thereof, shall be waived,
terminated, altered or modified except by a written instrument executed by
Landlord and Tenant. No waiver of any breach shall affect or alter this Lease,
but each and every term, covenant, and condition of this Lease shall continue
in full force and effect with respect to any other then existing subsequent
breach thereof.
17.6 EFFECT OF ASSIGNMENT. Notwithstanding an Entity's
prior assignment or transfer of its interest as Tenant under this Lease, so
long as Landlord has been given Notice of such assignment pursuant to Sections
14.1(b) and 21.3, Landlord shall give such Entity copies of all Notices
required by this Article 17 in connection with any Default or Event of Major
Default, and such Entity shall have the period granted hereunder to Tenant to
cure such Default or Event of Major Default, unless such Entity shall have been
released from all obligations arising under this Lease. Landlord may not
assert any rights against such Entity in the absence of such Notice and
opportunity to cure, so long as Landlord has been given Notice of such
assignment pursuant to Sections 14.1(b) and 21.3.
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17.7 LANDLORD CURE RIGHT. If Tenant fails to perform any
covenant or agreement to be performed by Tenant under this Lease, and if the
failure or default continues for thirty (30) days after Notice to Tenant and to
any Mortgagee who has requested in writing notice thereof from Landlord (except
for emergencies and except for payment of any lien or encumbrance threatening
the imminent sale of the Premises or any portion thereof, in which case payment
or cure may be made as soon as necessary to minimize the damage to person or
property caused by such emergency or to prevent any such sale), Landlord may,
but shall have no obligation to, pay the same and cure such default on behalf
of and at the expense of Tenant and do all reasonably necessary work and make
all reasonably necessary payments in connection therewith including, but not
limited to, the payment of reasonable attorneys' fees and disbursements
incurred by Landlord. Notwithstanding the foregoing, Landlord shall have no
right to cure any such failure to perform by Tenant so long as Tenant both:
(1) is diligently and in good faith attempting to cure such matter; and (2) has
the financial ability to so comply, unless Tenant has failed to substantially
cure such matter within ninety (90) days after Tenant's receipt of Notice
thereof from Landlord, in which case Landlord may commence in a reasonable and
customary manner and in good faith to attempt to cure such matter (except that
Landlord shall not have a right to attempt to cure matters addressed in Section
8.1(b) unless specifically authorized to do so pursuant to Section 8.1(b)).
Notwithstanding anything to the contrary in this Lease, in no event shall
Landlord have a right to cure any matters relating to the Improvements unless
Landlord reasonably believes that the failure to cure such matter could lead to
criminal prosecution against Landlord (except as specifically permitted in
Section 8.1(b)). Upon demand, Tenant shall reimburse Landlord for the
reasonable amount so paid, together with interest at the Default Rate from the
date incurred until the date repaid. Tenant shall defend, indemnify, and hold
Landlord harmless from and against any and all losses, costs, expenses,
liabilities, claims, causes of action and damages of all kinds that may result
to Landlord, including reasonable attorneys' fees and disbursements incurred by
Landlord, arising because of any failure by Tenant to perform any of its
obligations under this Lease. Tenant's duty to indemnify Landlord under this
Section 17.7 shall survive the expiration or earlier termination of this Lease.
17.8 LANDLORD'S DEFAULT.
(a) LANDLORD'S FAILURE TO PERFORM. If Landlord
fails to perform any covenant or agreement to be performed by Landlord under
Article 11, Section 13.1, Section 15.4, Article 20, or Section 21.10 of this
Lease (including, but not limited to, Landlord's failure to keep the Premises
free of any and all liens created by or through Landlord except as approved by
Tenant in writing), and if the failure or default continues for thirty (30)
days after Notice to Landlord and to any holder of an Authorized Loan who has
requested in writing notice thereof from Tenant (except for emergencies, a
default under Section 20.5 or payment of
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any lien or encumbrance threatening the imminent sale of the Premises or any
portion thereof, in which case payment or cure may be made as soon as necessary
to minimize the damage to person or property caused by such emergency, to
prevent foreclosure on the Collateral or to prevent any such sale), Tenant may,
but shall have no obligation to, pay the same and cure such default on behalf
of and, so long as such failure to perform arises due to Landlord's gross
negligence, willful misconduct, or willful breach of this Lease, at the expense
of Landlord and do all reasonably necessary work and make all reasonably
necessary payments in connection therewith including, but not limited to, the
payment of reasonable attorneys' fees and disbursements incurred by Tenant.
Notwithstanding the foregoing, Tenant shall have no right to cure any such
failure to perform by Landlord so long as Landlord both: (1) is diligently and
in good faith attempting to cure such matter; and (2) has the financial ability
to so comply. To the extent that Landlord's failure to perform arises due to
its gross negligence, willful misconduct or willful breach of this Lease, upon
demand, Landlord shall reimburse Tenant for the reasonable amount so paid,
together with interest at the Default Rate from the date incurred until the
date repaid. To the extent that Landlord's failure to perform arises due to
its gross negligence, willful misconduct or willful breach of this Lease,
Landlord shall defend, protect, indemnify, and hold Tenant harmless from and
against any and all losses, costs, expenses, liabilities, claims, causes of
action and damages of all kinds that may result to Tenant, including reasonable
attorneys' fees and disbursements incurred by Tenant, arising because of any
failure by Landlord to perform any of its obligations under Article 11, Section
13.1, Section 15.4, Article 20 or Section 21.10 of this Lease. Landlord's duty
to indemnify Tenant under this Section 17.8 shall survive the expiration or
earlier termination of this Lease.
(b) DEFAULT UNDER CERTAIN PROVISIONS. In
addition to Tenant's rights set forth in Section (a) above, in the event of a
default by Landlord under Section 20.5, Tenant shall have the right to cure
such default on behalf of and at Landlord's expense, without prior notice to
Landlord. In addition, in the event of any default by Landlord under Section
20.3, 20.4 or 20.5, Tenant shall have the right to exercise its Purchase Option
pursuant to Section 19.1 hereof.
ARTICLE 18
QUIET ENJOYMENT
Landlord covenants to secure to Tenant the quiet possession of
the Premises for the full Term against all persons claiming the same, subject
to Landlord's rights and remedies under Section 17 upon a Default or an Event
of Major Default by Tenant. The existence of any Permitted Exceptions shall
not be deemed to constitute a breach of Landlord's obligations hereunder.
Tenant shall, immediately upon demand, reimburse Landlord for all reasonable
costs, expenses and damages incurred or paid by Landlord
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in the performance of Landlord's obligations under this Article 18 (except for
any costs, expenses or damages arising from Landlord's willful breach of this
Lease).
ARTICLE 19
TENANT'S OPTION TO PURCHASE
19.1 OPTION TO PURCHASE PREMISES.
(a) PURCHASE OPTION. Tenant shall have the
option ("Purchase Option") to purchase all or part of the Premises at any time
during the Term; provided that Tenant shall be entitled to purchase less than
all of the Premises only if the portion being purchased is released from any
existing Fee Mortgage and if the portion of the Premises not purchased shall
constitute one or more Buildings or phases after closing of the purchase and
shall be viable as a separate Building or phase as determined in Landlord's
reasonable discretion; further provided that if the portion of the Premises not
purchased will not constitute one or more legal parcels then Landlord may
refuse to sell to Tenant that portion of the Premises in its sole discretion.
The purchase price ("Purchase Price") for the Building or phase which Tenant
elects to purchase shall be (i) the then-existing Funded Amount for the
Building or phase which Tenant elects to purchase, as the same may be reduced
from time to time, plus (ii) the amount of any prepayment premium and all other
fees, costs, expenses and any accrued but unpaid interest or rent due to any
holder of an Authorized Loan in connection with such loan (to the extent not
already paid pursuant to Section 21.21 (including late charges arising from
Tenant's late payment of Base Rent hereunder and the annual servicing fee
attributable to this Lease) hereof). Tenant shall be entitled to a credit
against the Purchase Price in an amount equal to the sum of (i) the principal
balance(s) of any Fee Mortgage existing immediately prior to the closing under
this Purchase Option if such Fee Mortgage is not fully repaid and all documents
reflecting the same are not cancelled and removed from the public records on or
prior to the closing under this Purchase Option, plus (ii) the amount of the
Security Deposit (or, in the event of a purchase of a portion of the Premises,
a pro rata portion of the Security Deposit), and, upon closing under this
Purchase Option, Landlord shall be released from Landlord's obligation to
return the Security Deposit set forth in Section 5.7 hereof. If Tenant
purchases less than all of the then-existing Premises, then the credit pursuant
to the preceding sentence shall be calculated on a pro rata basis, based upon
the ratio of the area of the Premises being purchased compared to the area of
the then-existing Premises. In lieu of payment of the Purchase Price, Tenant
shall have the right (1) to assume the Improvements Loan or any other
Authorized Loan or (2) to cause Landlord to assign the Authorized Loan and this
Lease (including the existing Security Deposit) to a third party acceptable to
the holder of such Authorized Loan (which third party shall expressly assume
such obligations in writing), provided that Landlord is released from all
obligations under the Authorized Loan
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and Landlord is paid an amount equal to the Equity Contribution. Landlord
shall execute any and all documents necessary to effect such assumption and
assignment upon Tenant's request, provided that Tenant shall reimburse Landlord
for all reasonable costs and expenses related thereto.
(b) PURCHASE OPTION EXERCISE NOTICE. If Tenant
desires to exercise the Purchase Option, Tenant shall deliver to Landlord a
written notice ("Purchase Option Exercise Notice") of Tenant's election;
provided, however, that in the event of an assignment by Landlord for the
benefit of creditors generally, the filing of a voluntary or involuntary
bankruptcy petition by or against Landlord or the appointment of a receiver,
liquidator or trustee for all or a substantial portion of the Premises by
reason of Landlord's insolvency or alleged insolvency, the Purchase Option
shall be deemed exercised with respect to the entire Premises as of the
calendar day immediately preceding such assignment, filing or appointment.
(c) TRANSFER. If Tenant exercises the Purchase
Option, the purchase and sale of the Premises shall be consummated as follows.
In the event of a purchase of a portion of the Premises, the term "Premises" as
used in this Section 19.1(c) shall be deemed to mean that portion of the
Premises then to be purchased pursuant to the Purchase Option.
(i) Landlord shall grant and convey the
Premises to Tenant, its authorized agent or assignee, pursuant to a duly
executed and acknowledged grant deed ("Grant Deed"), free and clear of all
title defects, liens, encumbrances, deeds of trust, mortgages, rights-of-way
and restrictive covenants or conditions, except for the Permitted Exceptions;
(ii) The Purchase Price shall be paid
upon delivery of the Grant Deed and any other documents reasonably requested by
Tenant to evidence the transfer of the Premises or to release all liens of
Landlord, including without limitation, any and all reconveyances of mortgages
or other recorded documents as requested by Tenant ("Additional Documents").
In the event that Tenant elects to assign the Purchase Option pursuant to
Section 19.1(d) below, and Tenant's assignee pays an amount less than the
Purchase Price for the Premises, Tenant shall pay to Landlord any excess of the
Purchase Price over the amount paid by such assignee. Landlord shall deliver
the Grant Deed and the Additional Documents to Tenant on the date for closing
specified by Tenant in the Purchase Option Exercise Notice (which date shall be
no sooner than ten (10) days after the date of the Purchase Option Exercise
Notice and no later than the last day of the Term, as the same may be
extended). The closing shall take place at the location and in the manner
reasonably set forth by Tenant in the Purchase Option Exercise Notice;
(iii) If Landlord shall fail to cause
title to be in the condition required in Section 19.1(c)(i) above within the
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time herein prescribed for the delivery of the Grant Deed, then Tenant shall
have the right, in addition to all other rights provided by law, by a written
notice to Landlord: (1) to extend the time in which Landlord shall clear title
and deliver the Grant Deed and Additional Documents, during which extension
this Lease shall remain in full force and effect, except Tenant shall be
released from its obligation to pay Base Rent during the extension; (2) to
accept delivery of the Grant Deed and Additional Documents subject to such
title defects, liens, encumbrances, deeds of trust, mortgages, rights-of-way
and restrictive covenants or conditions specified and set forth in the Grant
Deed and not cleared by Landlord (but without waiving any rights or remedies
available to Tenant on account of such title exceptions); (3) to rescind, by
notice to Landlord and without any penalty or liability therefor, any and all
obligations Tenant may have under and by virtue of the Purchase Option or the
exercise thereof, whereupon this Lease shall remain in full force and effect;
(4) if the title exception is curable by the payment of money, Tenant may make
such payment and such payment shall be a credit against the Purchase Price in
favor of Tenant.
(iv) Refusal of a title company to issue
a standard form of owner's title insurance policy insuring title to the
Premises in the condition specified in subparagraph (c)(i) shall be sufficient
evidence of Landlord's failure to convey clear title and shall entitle Tenant
to exercise any of the rights specified in subparagraph (c)(iii).
(v) Base Rent shall be prorated and
paid and all unpaid Additional Rent shall be paid as of the date title to the
Premises is vested of record in Tenant. Tenant shall pay the escrow fees; the
recorder's fee for recording the Grant Deed; the premium for the title
insurance policy; all documentary transfer taxes; Tenant's attorneys' fees;
Landlord's reasonable attorneys' fees; all other costs and expenses incurred by
Tenant in consummating the transfer of the Premises; and all reasonable
expenses (except as specified in the next sentence) incurred by Landlord in
consummating the transfer of the Premises pursuant to this Section 19.1.
Landlord shall pay the costs and expenses of clearing title as required by
Section 19.1(c)(i). In the event of a purchase by Tenant under this Article
19, Landlord shall have no obligation to return the Security Deposit to Tenant
to the extent the Security Deposit has been credited against the purchase price
to be paid by Tenant pursuant to Section 19.1(a).
(d) ASSIGNMENT. Tenant shall have the right on
one or more occasions, without Landlord's consent, to assign this purchase
option, in whole or in part, to any Entity at any time, whether or not Tenant
also assigns its interest in the Lease. Tenant shall give prior written notice
to Landlord of any such assignment.
19.2 MANDATORY PURCHASE/SALE OF PREMISES.
Notwithstanding anything to the contrary herein, upon either: (1)
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the occurrence of an Event of Major Default or the expiration of the Term of
this Lease or upon the occurrence of any other event terminating this Lease; or
(2) the occurrence of any event which causes the Funded Amount to be reduced to
zero (0); or (3) Tenant's exercise of the Purchase Option pursuant to Section
19.1 or 19.2 of the Land Lease, within thirty (30) days after Tenant's receipt
of written Notice of the foregoing and of Tenant's purchase obligation under
this Section 19.2 (except in the case of a purchase obligation arising on
account of the expiration of the Term of this Lease or exercise of the Purchase
Option under the Land Lease; in either such case no prior Notice shall be
required, but Tenant shall have twenty (20) days after expiration of the Term
or exercise of the Purchase Option under the Land Lease to conclude the
purchase), Tenant shall purchase or cause another Entity to purchase, and
Landlord shall sell, the Premises in the same manner as if Tenant had exercised
the Purchase Option on such date. The Purchase Price shall be the same as if
Tenant had exercised the Purchase Option, without regard to the physical state
or condition of the Premises or any Improvements (but Tenant shall have the
rights set forth in Section 19.1, including without limitation, the terms of
Sections 19.1(c)(iii) and (iv)). In the event Tenant fails to purchase (or to
cause another Entity to purchase) the Premises pursuant to its obligation under
this Section 19.2, and if Landlord does not foreclose under the Landlord Deed
of Trust, Landlord (to the extent required under Section 21.19) shall use
commercially reasonable efforts to sell the Premises to an unrelated third
party, and, as applicable, (i) Tenant shall be obligated to pay to Landlord,
immediately upon demand, any shortfall between the Purchase Price and the
amount realized by Landlord in connection with such sale, or (ii) Landlord
shall be obligated to pay to Tenant, immediately upon demand, any excess of the
amount realized by Landlord in connection with such sale over the Purchase
Price. For purposes of the preceding sentence, the amount realized by Landlord
upon a sale of the Premises shall be net of Landlord's reasonable sale expenses
and other expenses incurred by Landlord but required to be paid by Tenant
pursuant to Section 19.1(c)(v). Landlord's obligation to pay such excess to
Tenant shall survive any termination of this Lease. Landlord and Tenant agree
that any and all cash proceeds payable at any foreclosure sale under the
Landlord Deed of Trust shall, after payment of all obligations secured by the
Landlord Deed of Trust, be paid to Tenant or to any other person claiming
through Tenant entitled thereto by applicable law. The aggregate of the
obligations under an Authorized Loan and the obligations secured by the
Landlord Deed of Trust shall not exceed the Purchase Price. Notwithstanding
anything to the contrary in this Lease, in the event of default, breach or
violation by Tenant of any of Tenant's obligations under this Section 19.2,
Tenant shall have no liability to Landlord or any other party in excess of an
amount equal to the then-existing Guaranteed Residual Value, less a credit
equal to the sum of (a) any of the Collateral (including the pledged Security
Deposit) which Lenders or any other holder of an Authorized Loan has used,
applied, or otherwise come into possession of, plus (b) any of the Security
Deposit retained by Landlord, and Landlord
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shall have no recourse, claim or counterclaim whatsoever against Tenant in
excess of such amount on account of such default, breach or violation. If the
Guaranteed Residual Value has not previously been determined as of the date
Tenant's liability under this Section 19.2 has been established, then the
Guaranteed Residual Value shall be determined as of the date Tenant's liability
hereunder is established.
19.3 SURVIVAL. The obligations of Landlord and Tenant
under this Article 19 shall survive the expiration or earlier termination of
this Lease.
ARTICLE 20
ADDITIONAL COVENANTS OF LANDLORD
20.1 TITLE AND SUBDIVISION. In the event Tenant so
requests in writing (and so long as either Tenant agrees to indemnify Landlord
from any liabilities or obligations in connection therewith, or Landlord does
not incur any liabilities or obligations in connection therewith), Landlord
shall execute all documents, instruments and agreements reasonably requested by
Tenant in order to accomplish any of the following in the manner reasonably
requested by Tenant and within the time parameters reasonably requested by
Tenant: (1) remove exceptions to title to or affecting the Premises; (2)
create exceptions to title (including, without limitation, easements and rights
of way) to or affecting the Premises (but not including any Mortgage); (3)
modify any then-existing exception to title; or (4) subdivide the Land into two
or more separate parcels. Tenant shall promptly reimburse Landlord for, or at
Landlord's request, pay directly in advance, all reasonable costs, expenses and
other amounts incurred or required to be expended by Landlord in order to
comply with Tenant's requests made in accordance with the preceding sentence,
and the failure of Tenant to reimburse or pay any such amounts shall result in
the suspension of Landlord's obligations under such sentence with respect to
that particular request until the amounts required to be paid by Tenant under
this sentence have been paid. Landlord acknowledges that it is critical to
Tenant's ability to construct improvements on the Premises to have the ability
and flexibility to accomplish the foregoing, and that the parties therefore
agree that Landlord shall not be entitled to withhold Landlord's consent to any
of the foregoing requests by Tenant, except as set forth in the preceding
sentence.
20.2 LAND USE. Except where requested by Tenant pursuant
to this Section 20.2, Landlord shall not cause or give its written consent to
any land use or zoning change affecting the Premises or any changes of street
grade. In the event Tenant so requests in writing (and so long as either
Tenant agrees to indemnify Landlord from any liabilities or obligations in
connection therewith, or Landlord does not incur any liabilities or obligations
in connection therewith), Landlord shall execute all documents, instruments and
agreements reasonably requested by
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Tenant in order to accomplish any of the following in the manner reasonably
requested by Tenant and within the time parameters reasonably requested by
Tenant: (1) cause a change in any land use restriction or law affecting the
Premises; (2) cause a change in the zoning affecting the Premises; or (3) cause
a change in the street grade with respect to any street in the vicinity of the
Premises. Tenant shall promptly reimburse Landlord for, or at Landlord's
request, pay directly in advance, all reasonable costs, expenses and other
amounts incurred or required to be expended by Landlord in order to comply with
Tenant's requests made in accordance with the preceding sentence, and the
failure of Tenant to reimburse or pay any such amounts shall result in the
suspension of Landlord's obligations under such sentence with respect to that
particular request until the amounts required to be paid by Tenant under this
sentence have been paid. Landlord acknowledges that it is critical to Tenant's
ability to construct improvements on the Premises to have the ability and
flexibility to accomplish the foregoing, and that the parties therefore agree
that Landlord shall not be entitled to withhold Landlord's request to any of
the foregoing requests by Tenant.
20.3 TRANSFER OF PROPERTY INTERESTS. Except as requested
by Tenant pursuant to Section 11.7 or 20.1, Landlord shall not transfer to any
third party any rights inuring to or benefits associated with the Premises
(including, without limitation, zoning rights, development rights, air space
rights, mineral, oil, gas or water rights). Nothing in this Section 20.3 shall
limit Landlord's rights pursuant to Section 13.2; provided that any purchaser
of Landlord's interest in the Premises shall be bound by the terms of this
Lease, including without limitation, the terms of this Section 20.3.
20.4 TRUST EQUITY; NO OTHER ASSET. Landlord covenants
and agrees that during the Term of the Lease, Landlord shall maintain a
residual equity capital investment of at least three percent (3%) of total
assets of Landlord, including assets acquired by this equity investment. In
addition, Landlord shall not, without the prior written consent of Tenant,
which consent may be withheld at Tenant's sole discretion, acquire any
significant assets other than (i) the Land, (ii) the Premises and (iii) the
land and any Improvements thereon, which Improvements are subject to certain
leases between Landlord and Tenant executed concurrently herewith, and which
land is described on Exhibit L attached hereto.
20.5 DEFAULT UNDER AUTHORIZED LOAN. Landlord shall not,
without Tenant's express prior written consent, default under any Authorized
Loan, or any loan documents relating to such Authorized Loan, where such
default does not arise from an Event of Major Default by Tenant under this
Lease. Any such default shall constitute a material default under this Lease,
subject to the limitations on liability of Section 17.8 hereof.
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ARTICLE 21
MISCELLANEOUS
21.1 RELATIONSHIP. Neither this Lease nor any agreements
or transactions contemplated hereby shall in any respect be interpreted, deemed
or construed as constituting Landlord and Tenant as partners or joint
venturers, one with the other, or as creating any partnership, joint venture,
association or, except as set forth in Section 21.2 below, any other
relationship other than that of landlord and tenant; and, except as set forth
in Section 21.2 below, both Landlord and Tenant agree not to make any contrary
assertion, contention, claim or counterclaim in any action, suit or other legal
proceeding involving either Landlord or Tenant or the subject matter of this
Lease.
21.2 FORM OF TRANSACTION; CERTAIN TAX MATTERS.
(a) Landlord and Tenant hereby agree and
declare that the transactions contemplated by this Lease are intended to
constitute, both as to matters of form and substance:
(i) an operating lease for financial
accounting and securities regulatory purposes, and
(ii) a financing arrangement (and not a
"true lease") for Federal, state and local income taxes, property tax valuation
or other tax purposes.
Accordingly, and notwithstanding any other provision of this Lease to the
contrary, Landlord and Tenant agree and declare that (A) the transactions
contemplated hereby are intended to have a dual, rather than single, form and
(B) all references in this Lease to the "Lease" of the Premises which fail to
reference such dual form do so as a matter of convenience only and do not
reflect the intent of Landlord and Tenant as to the true form of such
arrangements.
(b) Landlord and Tenant agree that, in
accordance with their intentions and the substance of the transactions
contemplated hereby, Tenant (and not Landlord) shall be treated as the owner of
the Premises for Federal, state, and local income tax and property tax
valuation purposes and this Lease shall be treated as a financing arrangement.
Tenant shall be entitled to take any deduction, credit allowance or other
reporting, filing or other tax position consistent with such characterizations.
Landlord shall not file any Federal, state or local income or property tax
returns, reports or other statements in a manner which is inconsistent with the
foregoing provisions of this Section 21.2.
(c) Each party acknowledges that it has retained
accounting, tax and legal advisors to assist it in structuring this Lease and
neither party is relying on any representations of the other regarding the
proper treatment of this transaction for accounting, income tax, property tax
or any other purpose.
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21.3 NOTICES. Each Notice shall be in writing and shall
be sent by personal delivery, overnight courier (charges prepaid or billed to
the sender) or by the deposit of such with the United States Postal Service, or
any official successor thereto, designated as registered or certified mail,
return receipt requested, bearing adequate postage and in each case addressed
as provided in the Basic Lease Provisions. Each Notice shall be effective upon
being personally delivered or actually received. The time period in which a
response to any such Notice must be given or any action taken with respect
thereto shall commence to run from the date of personal delivery or receipt of
the Notice by the addressee thereof, as reflected on the return receipt of the
Notice. Rejection or other refusal to accept shall be deemed to be receipt of
the Notice sent. By giving to the other party at least thirty (30) days' prior
Notice thereof, either party to this Lease (as well as any Mortgagee) shall
have the right from time to time during the Term of this Lease to change the
address(es) thereof and to specify as the address(es) thereof any other
address(es) within the continental United States of America.
21.4 SEVERABILITY OF PROVISIONS. If any term, covenant
or condition of this Lease, or the application thereof to any Entity or
circumstance, shall be invalid or unenforceable, the remainder of this Lease,
or the application of such term, covenant or condition to Entities or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby.
21.5 ENTIRE AGREEMENT; AMENDMENT. This Lease constitutes
the entire agreement of Landlord and Tenant with respect to the subject matter
hereof. Neither this Lease nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
21.6 APPROVALS AND CONSENTS. Except as expressly
provided in this Lease, whenever any provision of this Lease requires an
approval or consent to be given by one of the parties hereto, the approval or
consent shall not be unreasonably withheld or delayed. Whenever this Lease
grants either party the right to take action, exercise discretion, establish
rules and regulations, or make an allocation or other determination, except as
otherwise provided, such party shall act reasonably and in good faith and take
no action which might result in the frustration of the other party's reasonable
expectations concerning the benefits to be enjoyed under this Lease. If either
party withholds its consent or approval, unless by the express terms of this
Lease such consent or approval may be withheld in such party's sole discretion,
such party shall, upon request, promptly deliver to the other party a written
statement specifying in detail the reason or reasons why such consent or
approval was withheld or refused. If neither approval nor rejection is given
by Landlord within the time specified in Article 11 as to any particular
approval requested by
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Tenant under Article 11 (or, if no such time is specified, then within thirty
(30) days after request for approval is given by a Notice), then the approval
thus specifically requested in writing by Tenant shall be conclusively and
irrevocably deemed to have been given by Landlord.
21.7 TERMINOLOGY. All personal pronouns used in this
Lease shall include all other genders. The singular shall include the plural
and the plural shall include the singular. Titles of Articles, Sections and
Subsections in this Lease are for convenience only and neither limit nor
amplify the provisions of this Lease, and all references in this Lease to
Articles, Sections or Subsections shall refer to the corresponding Article,
Section or Subsection of this Lease unless specific reference is made to the
articles, sections or other subdivisions of another document or instrument.
The word "days" as used herein shall mean business days (i.e., excluding
holidays when banks in the State of California or New York are generally closed
for business and weekends) unless otherwise expressly stated.
21.8 MEMORANDUM OF LEASE. Neither party shall record
this Lease. However, concurrently with the execution of this Lease, Landlord
and Tenant have executed a Memorandum of Lease in the form attached hereto as
Exhibit E and by this reference made a part hereof, which Memorandum of Lease
shall be promptly recorded in the Official Records.
21.9 SUCCESSORS AND ASSIGNS. Subject to Articles 13 and
14, this Lease shall inure to the benefit of and be binding upon Landlord and
Tenant and their respective heirs, executors, legal representatives, successors
and assigns. Whenever in this Lease a reference to any Entity is made, such
reference shall be deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of such Entity.
21.10 COMMISSIONS. Landlord and Tenant each represent and
warrant that neither has dealt with any broker in connection with this
transaction and that no real estate broker, salesperson or finder has the right
to claim a real estate brokerage, salesperson's commission or finder's fee by
reason of contact between the parties brought about by such broker, salesperson
or finder. Each party shall hold and save the other harmless of and from any
and all loss, cost, damage, injury or expense arising out of or in any way
related to claims for real estate broker's or salesperson's commissions or fees
based upon allegations made by the claimant that it is entitled to such a fee
from the indemnified party arising out of contact with the indemnifying party
or alleged introductions of the indemnifying party to the indemnified party.
In addition to the foregoing, Tenant shall hold and save Landlord harmless of
and from any and all loss, cost, damages, injury or expense arising out of or
in any way related to claims for real estate broker's or salesperson's
commissions relating to Landlord's acquisition of the Premises or fees by The
Staubach Company in connection with this Lease.
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21.11 ATTORNEYS' FEES. In the event any action is brought
by Landlord or Tenant against the other to enforce or for the breach of any of
the terms, covenants or conditions contained in this Lease, the prevailing
party shall be entitled to recover reasonable attorneys' fees to be fixed by
the court, together with costs of suit therein incurred. Tenant shall pay the
reasonable attorneys' fees incurred by Landlord for the review and negotiation
of this Lease and the Improvements Loan documents.
21.12 GOVERNING LAW. This Lease and the obligations of
the parties hereunder shall be governed by and interpreted, construed and
enforced in accordance with the laws of the State of California.
21.13 COUNTERPARTS. This Lease may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall comprise but a single instrument.
21.14 TIME IS OF THE ESSENCE. Time is of the essence of
this Lease, and of each provision hereof.
21.15 NO THIRD PARTY BENEFICIARIES. This Lease is entered
into by Landlord and Tenant for the sole benefit of Landlord and Tenant. There
are no third party beneficiaries to this Lease.
21.16 LIMITATIONS ON RECOURSE. The obligations of Tenant
and Landlord under this Lease shall be without recourse to any partner,
officer, trustee, beneficiary, shareholder, director or employee of Tenant or
Landlord. There shall be no limitation on Landlord's liability with respect to
any willful misconduct, bad faith breach of this Lease, or gross negligence by
Landlord ("Identified Matters"). Except for any Identified Matter, Landlord's
liability to Tenant for any default by Landlord under this Lease: (1) shall be
limited to the greater of the Equity Funded Amount less any repayment to Tenant
of the Security Deposit or Landlord's interest in the Premises; and (2) shall
extend to any actual damages of Tenant, but shall not extend to any foreseeable
and unforeseeable consequential damages.
21.17 ESTOPPEL CERTIFICATES. Within thirty (30) days
after request therefor by either party, the non- requesting party shall
deliver, in recordable form, a certificate to any proposed mortgagee,
purchaser, sublessee or assignee and to the requesting party, certifying (if
such be the case) that this Lease is in full force and effect, the date of
Tenant's most recent payment of Rent, that, to the best of its knowledge, the
non-requesting party has no defenses or offsets outstanding, or stating those
claimed, and any other information reasonably requested. Failure to deliver
said statement in time shall be conclusive upon the non-requesting party that:
(a) this Lease is in full force and effect, without modification except as may
be represented by the requesting party; (b) there are no uncured defaults in
the requesting party's
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performance and the non-requesting party has no right of offset, counterclaim
or deduction against the non-requesting party's obligations hereunder; (c) no
more than one month's Base Rent has been paid in advance; and (d) any other
matters reasonably requested in such certificate.
21.18 COLLATERAL. The parties acknowledge that Tenant has
pledged certain collateral ("Collateral") to Lenders to secure Landlord's
obligations under the terms of the Note. If the holder of an Authorized Loan
applies any of the Collateral to satisfy an obligation under any Authorized
Loan documents, such application shall be deemed to reduce the Senior Funded
Amount under this Lease on a dollar-for-dollar basis. Tenant shall have no
claims, rights or causes of action against Landlord arising from any
application of the Collateral to satisfy an obligation under the Authorized
Loan documents.
21.19 LANDLORD'S CONTINUING OBLIGATION TO SELL. Except in
the case of a foreclosure under the Landlord Deed of Trust, and subject to the
rights of any holder of an Authorized Loan, in the event Landlord obtains
possession of the Premises pursuant to the terms of this Lease (including,
without limitation, upon the expiration or earlier termination of this Lease
where Tenant has defaulted in its obligation to purchase the Premises pursuant
to Section 19.2), Landlord shall be under a continuing obligation to use its
commercially reasonable efforts to sell the Premises to Tenant or to one or
more unrelated third parties; provided, however, that Landlord shall not be
required to sell or attempt to sell any portion of the Premises (i) in a
manner, or under circumstances, that could materially impair Landlord's ability
to enforce any of its rights or remedies under this Lease (as determined in
Landlord's sole discretion exercised in good faith), (ii) at a time when market
conditions render it inadvisable to sell or attempt to sell the Premises (as
determined in Landlord's sole discretion exercised in good faith). Nothing
contained in this paragraph shall be binding on any holder of an Authorized
Loan acquiring title through foreclosure, to any person acquiring title at any
such foreclosure or to their successors in interest. Upon the occurrence of
any such sale Landlord shall be obligated to pay to Tenant any excess of the
amount realized by Landlord in connection with such sale over the Purchase
Price. For purposes of the preceding sentence, the amount realized by Landlord
upon a sale of the Premises shall be net of Landlord's reasonable sale expenses
and other expenses incurred by Landlord but required to be paid by Tenant
pursuant to Section 19.1(c)(v). Landlord's obligation to pay such excess to
Tenant shall survive any termination of this Lease. Landlord shall not deliver
to any Mortgagee a deed in lieu of foreclosure under any circumstances without
Tenant's prior written approval, which may be withheld in Tenant's sole and
absolute discretion.
21.20 AS-IS LEASE. Landlord makes no representations or
warranties concerning the condition, suitability or any other
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matters relating to the Premises, and Tenant hereby acknowledges that Tenant
leases the Premises from Landlord on an "as is" basis.
21.21 NET LEASE. Except as otherwise provided in this
Lease, Tenant agrees that this Lease is an absolute net Lease, and the Base
Rent called for hereunder shall be paid as required net of all expenses
associated with the Premises, including without limitation, Real Estate Taxes
and insurance premiums for the insurance required to be carried hereunder, and
all other reasonable and customary costs and expenses incurred by Landlord in
connection with the Premises or this Lease, all of which shall be paid or
reimbursed by Tenant unless otherwise specifically provided herein. Tenant
agrees to reimburse Landlord, within five (5) business days following receipt
of any written demand therefor, for all reasonable and customary fees
(including the pro rata portion of the $3,000 annual servicing fee payable to
SBNYTC attributable to this Lease), late charges, title endorsement and other
costs and expenses charged to Landlord by Lenders pursuant to the terms and
conditions of the Note.
21.22 REPRESENTATIONS AND WARRANTIES. Tenant and Landlord
each hereby represents and warrants to the other that: (i) such party is duly
organized and existing under the laws of the jurisdiction in which it is
formed; (ii) such party has the full right and authority to enter into this
Lease, consummate the sale, transfers and assignments contemplated herein and
otherwise perform its obligations under this Lease; (iii) the person or persons
signatory to this Lease and any document executed pursuant hereto on behalf of
such party have full power and authority to bind such party; and (iv) the
execution and delivery of this Lease and the performance of such party's
obligations hereunder do not and shall not result in the violation of its
organizational documents or any contract or agreement to which such party may
be a party.
21.23 APPRAISAL PROCEDURE.
(a) If this Lease calls for an appraisal under
this Section 21.23 with respect to the Coverage Test, Landlord and Tenant shall
have thirty (30) days after either party delivers Notice to the other party of
a desire to utilize the appraisal procedure under this Section 21.23 in
connection with the Coverage Test in which to agree on whether the Coverage
Test is satisfied as of the time required under the relevant provision of this
Lease. In determining the Coverage Test, the fair market value of the Land and
Improvements ("Fair Market Value") shall be calculated together, taking into
consideration the quality, size, design and location of the Land and
Improvements, and the value of comparable property in the general locality of
the Land, and any other factors which customarily are evaluated in appraising
land or buildings. If either party elects to utilize the terms of this Section
21.23 and Landlord and Tenant agree on the Fair Market Value during such thirty
(30) day period, they shall immediately execute a letter agreement reflecting
such agreement.
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(b) If Landlord and Tenant are unable to agree
on the Fair Market Value within such thirty (30) day period, then within ten
(10) days after the expiration of the thirty (30) day period, Landlord and
Tenant each, at its cost and by giving notice to the other party, shall appoint
a competent and disinterested real estate appraiser with at least five (5)
years' full-time commercial appraisal experience in the geographical area of
the Building to appraise and set the Fair Market Value. If either Landlord or
Tenant does not appoint an appraiser within ten 10 days after the other party
has given notice of the name of its appraiser, the single appraiser appointed
shall be the sole appraiser and shall set the Fair Market Value. If two (2)
appraisers are appointed by Landlord and Tenant as stated in this Section, they
shall meet promptly and attempt to set the Fair Market Value.
(c) If the two (2) appraisers are unable to
agree on the Fair Market Value within thirty (30) days after the second
appraiser has been appointed, they shall attempt to select a third appraiser
meeting the qualifications stated in this Section within ten (10) days after
the last day the two (2) appraisers are given to set the Fair Market Value. If
they are unable to agree on the third appraiser, either Landlord or Tenant, by
giving ten (10) days' notice to the other party, can apply to the then
president of the real estate board of the county in which the Land is located,
or to the Presiding Judge of the Superior Court of the county in which the Land
is located, for the selection of a third appraiser who meets the qualifications
stated in this Section. Landlord and Tenant each shall bear one-half (l/2) of
the cost of appointing the third appraiser and of paying the third appraiser's
fee. The third appraiser, however selected, shall be a person who has not
previously acted in any capacity for either Landlord or Tenant. Within thirty
(30) days after the selection of the third appraiser, a majority of the
appraisers shall set the Fair Market Value. If a majority of the appraisers is
unable to set the Fair Market Value within the stipulated period of time, the
third appraiser shall arrange for simultaneous exchange of written appraisals
from each of the appraisers and the three (3) appraisals shall be added
together and their total divided by three (3); the resulting quotient shall be
the Fair Market Value. If, however, the low appraisal and/or the high
appraisal are/is more than ten percent (10%) lower and/or higher than the
middle appraisal, the low appraisal and/or the high appraisal shall be
disregarded. If only one (1) appraisal is disregarded, the remaining two (2)
appraisals shall be added together and their total divided by two (2); the
resulting quotient shall be the Fair Market Value. If both the low appraisal
and the high appraisal are disregarded as stated in this Section, the middle
appraisal shall be the Fair Market Value.
(d) After the Fair Market Value has been set,
the appraisers shall immediately notify Landlord and Tenant, and Landlord and
Tenant shall immediately execute a letter agreement reflecting the Fair Market
Value.
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21.24 FINANCIAL REPORTING. Tenant shall provide to
Landlord and Lenders: (1) annually, within one hundred twenty (120) days after
the end of each of Tenant's fiscal years during the Term, an annual report on
Form 10-K for such fiscal years as filed with the Securities and Exchange
Commission; (2) quarterly, within forty five (45) days after the end of each of
Tenant's fiscal quarters during the Term, quarterly reports on Form 10-Q as
filed with the Securities and Exchange Commission; and (3) within thirty (30)
days after filing with the Securities and Exchange Commission, any other
reports, proxy statements, registration statements or prospectuses filed during
the Term with the Securities and Exchange Commission.
21.25 APPRAISAL. Prior to Landlord's making the Initial
Advance pursuant to Section 11.3 hereof, Landlord shall have received an
appraisal conforming to FIRREA guidelines prepared by an appraiser reasonably
satisfactory to Landlord indicating that the current fair market value on an
as-completed basis of the buildings which Tenant may desire to have constructed
on the Land (based upon a theoretical current build-out on the Land on the
basis of the Site Plan attached hereto as Exhibit C) is not less than ninety
percent (90%) of the estimated cost of construction of the buildings as
designed as of the date of such appraisal which Tenant may desire to have
constructed on the Land. The appraisal shall be based upon Tenant's current
construction budget, specifications and intended use (both parties hereby
recognizing that such items are subject to change, and in no event shall Tenant
have any obligation to construct any or all of such buildings). Tenant hereby
approves Landlord's use of either Cushman & Wakefield or CB Commercial Real
Estate Group as the appraiser under this Section 21.25. Landlord hereby
acknowledges that the current fair market value on an as-completed basis of the
buildings as designed as of the date of such appraisal which Tenant proposes to
have constructed on the Land is not less than ninety percent (90%) of the
estimated cost of construction of said buildings.
[Remainder of This Page Intentionally Left Blank]
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[SIGNATURE PAGE TO BUILDING LEASE]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Lease as of the day and year first above written.
"LANDLORD"
SUMITOMO BANK OF NEW YORK TRUST COMPANY
("SBNYTC"), AS TRUSTEE UNDER THAT
CERTAIN TRUST AGREEMENT DATED MAY 22,
1995 BETWEEN SUMITOMO BANK LEASING AND
FINANCE, INC. AND SBNYTC
By: /s/ JOHN F. McFADDEN
-----------------------------------
Name: JOHN F. McFADDEN
-----------------------------------
Its: VICE PRESIDENT AND TREASURER
-----------------------------------
[Remainder of This Page Intentionally Left Blank]
72
[SIGNATURE PAGE TO BUILDING LEASE]
"TENANT"
CISCO SYSTEMS, INC.,
A CALIFORNIA CORPORATION
By: /s/ JOHN T. CHAMBERS
---------------------------------------
Name: JOHN T. CHAMBERS
---------------------------------------
Its: PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
By: /s/ LARRY R. CARTER
---------------------------------------
Name: LARRY R. CARTER
---------------------------------------
Its: CHIEF FINANCIAL OFFICER
---------------------------------------
73
EXHIBIT A
LEGAL DESCRIPTION OF LAND
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
Lots 58 and 59, as shown upon that certain map entitled, "Tract No. 7559",
which Map was filed for record in the office of the Recorder of the County of
Santa Clara, on December 21, 1983 in Book 522 of Maps, at pages 49 and 50.
APN: 97-53-18,22
EXHIBIT A
74
EXHIBIT B
PERMITTED EXCEPTIONS
The following exceptions from coverage of Landlord's title
insurance which affect "Parcel Two" and "Parcel Three":
1. PROPERTY TAXES, including any assessments collected with taxes, for
the fiscal year 1995-1996, a lien not yet due or payable.
2. a) Bond for City of San Jose, Reassessment District No. 93-210 1993
Consolidated Refunding
Bond No. : 24J
Assessment No. : 42V
Balance of principal : $88,186.00
Balance of interest
through maturity : $16,532.60
The above Amount excludes $12,279.07 principal, $5,140.46 interest
and $277.29 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects Lot 59 of Parcel One.
b) Bond for City of San Jose, Reassessment District No. 93-210 1993
Consolidated Refunding
Bond No. : 24J
Assessment No. : 46V
Balance of principal : $100,217.00
Balance of interest
through maturity : $18,788.10
The above Amount excludes $13,954.27 principal, $5,841.76 interest
and $312.93 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects Lot 58 of Parcel One.
c) Bond for Reassessment District #93-210 Consolidated Refunding, as
follows:
Bond No. : 24J
Assessment No. : 48V
Balance of principal : $113,800.32
Balance of interest : $21,334.61
The above Amount to pay in full excludes $15,845.61 principal,
$6,633.65 interest and $353.18 handling charge spread on the 1994-
1995 tax roll, which amounts cannot be prepaid.
Said matter affects Parcel Two.
75
2. Continued
d) Bond for Reassessment District #93-210 Consolidated Refunding, as
follows:
Bond No. : 24J
Assessment No. : 47V
Balance of principal : $123,177.11
Balance of interest : $23,092.52
The above Amount to pay in full excludes $17,151.24 principal,
$7,180.13 interest and $380.97 handling charge spread on the 1994-
1995 tax roll, which amounts cannot be prepaid.
Said matter affects Parcel Three.
e) Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 8V
Balance of principal : $63,238.68
Balance of interest
through maturity : $11,855.62
The above Amount excludes $8,806.39 principal, $3,686.25 interest
and $203.36 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects Parcels Four and Five.
f) Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 1V
Balance of principal : $429.87
Balance of interest
through maturity : $80.61
The above Amount excludes $59.86 principal, $25.02 interest and
$1.32 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects a portion of Parcel Six.
g) Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 2V
Balance of principal : $91,559.14
Balance of interest
through maturity : $17,164.97
The above Amount excludes $12,748.74 principal, $5,337.09 interest
and $280.03 handling charge spread on the 1994- 1995 tax roll, which
amounts cannot be prepaid.
Said matter affects a portion of Parcel Six.
76
2. Continued
h) Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 9V
Balance of principal : $75,028.33
Balance of interest
through maturity : $14,065.87
The above Amount excludes $10,446.98 principal, $4,373.49 interest
and $229.47 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects a portion of Parcel Six.
i) Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 10V
Balance of principal : $360.71
Balance of interest
through maturity : $67.62
The above Amount excludes $50.23 principal, $21.03 interest and
$1.10 handling charge spread on the 1994-1995 tax roll, which
amounts cannot be prepaid.
Said matter affects a portion of Parcel Six.
3. THE LIEN of supplemental taxes, if any, assessed as a result of
transfer of interest and/or new construction, said supplemented
taxes being assessed pursuant to Chapter 3.5 commencing with Section
75 of the California Revenue and Taxation Code, for which no Notice
of Assessment has been issued, as of the date herein.
4. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Right to excavate for, install, replace
(of initial or any other size), maintain
and use for conveying gas such pipe line
or lines as shall from time to time
elect, with necessary values and other
appliances
Granted to : Pacific Gas and Electric Company, a
California corporation
Recorded : July 6, 1944 in Book 1206, page 154,
Official Records
Affects : as follows:
By a Relocation Agreement between Oakmead Associates, a California
general partnership and Pacific Gas and Electric Company, a
California corporation
Recorded : April 5, 1989 in Book K903, page 1344,
Official Records
the easement was relocated as follows:
A strip of land of the uniform width of 15 feet extending from the
Northerly boundary line of said Lot 5, said Northerly boundary line
being the Southerly boundary line of the city street known as Tasman
Drive (128 feet wide), said Tasman Drive is shown on said map,
Southwesterly to the Westerly boundary line of said Lot 5, said
Westerly boundary line being the Easterly boundary line of the
street known as Rio Robles (56 feet wide), said street Rio Robles is
also shown on said map, and lying 7.5 feet on each side of the line
described as follows:
77
4. Continued
Beginning at a point in the Northerly boundary line of said Lot 5
and running (1) S. 0 degrees 23.5 minutes E. 12.4 feet to a point
which bears, S. 66 degrees 35.0 minutes W. 579.2 feet distant from
the found 5/8 inch brass pin set in concrete accepted as marking the
Southwesterly terminus of a course in the center line of said Tasman
Drive, which course as shown on said map has a bearing of, N. 59
degrees 28 minutes 40 seconds E. and a length of 700.88 feet; thence
(2) S. 29 degrees 04.3 minutes W. 187.8 feet; thence (3) S. 57
degrees 38.6 minutes W. 10.8 feet to a point in the Westerly
boundary line of said Lot 5. Said line being a survey traverse made
by second party in September, 1983. The bearings used in the
foregoing description are based on solar observations made by second
party.
Covenants, conditions and restrictions in the above mentioned
instruments.
Said matter affects Parcel Six.
5. TERMS and conditions as contained in the Grant Deed executed by
Masami Ezaki and Kaoru Ezaki, his wife in favor of the City and
County of San Francisco, a municipal corporation recorded December
8, 1950 in Book 2111, page 319, Official Records.
Said matter affect Parcels Five and Seven and portions of Parcels
Four and Six.
6. THE EFFECT of the Rincon de los Esteros Project Redevelopment Plan
and Ordinances Nos. 17306, 19686, 19835, 20677, 20958, 21417, 21496,
21903, 22660, 22412, 22761, 22761.1 and 22961, 23703, 23732, 23761
and 23934 of the City of San Jose as recorded and as disclosed by
documents recorded July 11, 1975 in Book B502, Page 711; August 6,
1979 in Book E699, Page 245; August 6, 1979 in Book E699, Page 277;
December 21, 1979 in Book F37, Page 585; October 8, 1981 in Book
G382, Page 605; July 28, 1982 in Book G929, Page 703; September 14,
1983 in Book H892, Page 200; January 10, 1984 in Book I220, Page
271; January 6, 1992 in Book L996, Page 508, all of Official
Records, and as disclosed by information provided by the
Redevelopment Agency of the City of San Jose.
7. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Any and all public service facilities,
including, but not limited to, poles, wires,
conduits and vaults, storm sewers, sanitary
sewers, and gas, water, electrical and
communication mains and all appurtenances
thereto
Granted to : City of San Jose, a municipal corporation of the
State of California
Recorded : September 14, 1981 in Book G330, page 497,
Official Records
Affects : That portion of said land as shown upon the map
herein referred to, more particularly described
as follows:
All that certain real property situated in the City of San Jose,
County of Santa Clara, State of California, being a portion of the
parcel of land described and designated as Parcel 1 in the deed to
River Oaks Associates #2, dated November 17, 1979, recorded in Book
E962 of Official Records, at page 145, Santa Clara County Records,
more particularly described as follows:
78
7. Continued
Beginning at a point in the centerline of North First Street
(formerly San Jose-Alviso Road) as said centerline is described in
said deed at the most Northerly corner of said parcel; thence along
the Northwesterly boundary line of said parcel, S. 59 degrees 28
minutes 40 seconds W. (S. 59 degrees 30 minutes W. per deed), 114.98
feet; thence leaving said line, S. 30 degrees 31 minutes 20 seconds
E. 34.00 feet to the true point of beginning; thence along a
non-tangent curve to the right having a radius of 50.00 feet; whose
radius point bears along the continuation of the last described
course, S. 30 degrees 31 minutes 20 seconds E. through a central
angle of 89 degrees 59 minutes 11 seconds for an arc length of 78.53
feet to a point in a line which is parallel with and 65.00 feet
Southwesterly of said centerline; thence along said parallel line,
S. 30 degrees 32 minutes 09 seconds E. 254.64 feet to a point in the
Northwesterly boundary line of the strip of land described in the
deed to the City of County of San Francisco, dated October 20, 1950;
recorded in Book 2111 of Official Records, at page 319, Santa Clara
County Records; thence along said Northwesterly line, S. 65 degrees
09 minutes 27 seconds W. 10.05 feet to a point in a line that is
parallel with and 75.00 feet Southwesterly from said centerline;
thence along said parallel line, N. 30 degrees 32 minutes 09 seconds
W. 253.64 feet; thence along a curve to the left, having a radius of
40.00 feet, through a central angle of 89 degrees 59 minutes 11
seconds for an arc length of 62.82 feet; thence N. 30 degrees 31
minutes 20 seconds W. 10.00 feet to the true point of beginning; the
bearing of, S. 30 degrees 32 minutes 09 seconds E. of the monument
line of North First Street, as shown on the Parcel Map recorded in
Book 460 of Maps, at page 1, Santa Clara County Records, was used as
the basis of bearings for this description.
Said matter affects Parcel Six.
8. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Landscape Easement
Granted to : City of San Jose, a municipal corporation
Recorded : September 14, 1981 in Book G330, page
504, Official Records
Affects : The Northeasterly 20 feet of Parcel Six.
9. LICENSE for the purposes stated herein and incidents thereto
Purpose : To construct, install, maintain, repair,
renew, replace, operate and use an
interim storm sewer pipe line or lines
and appurtenances of any size of
material, and/or a surface drainage
release
Granted to : City of San Jose, a municipal corporation
of the State of California
Recorded : September 14, 1981 in Book G330, page
511, Official Records
Affects : that portion of said land as shown upon
the map herein referred to, more
particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of the
parcel of land described and designated as Parcel 1 in the deed to
River Oaks Associates #2, dated November 17, 1979, recorded in Book
E962 of Official Records, at page 145, Santa Clara County Records,
more particularly described as follows:
Beginning at a point in the centerline of North First Street
(formerly San Jose-Alviso Road) as said centerline is described in
said deed at the most Northerly corner of said parcel; thence along
the Northwesterly boundary line of said parcel, S. 59 degrees 29
minutes 40 seconds W. (S. 59 degrees 30 minutes W. per deed), 114.98
feet; thence leaving said boundary line, S. 30 degrees 31 minutes 20
seconds E. 34.00; thence along a non-tangent curve to the right
having a radius of 50.00 feet whose radius point bears along the
continuation of the last described course, S. 30 degrees 31 minutes
20 seconds E. through a central angle of 17 degrees 26 minutes 39
seconds for an arc length of 15.22 feet to the point of beginning;
thence continuing along said curve
79
9. Continued
to the right having a radius of 50.00 feet, through a central angle
of 19 degrees 24 minutes 44 seconds for an arc length 16.94 feet to
a point in a line that is parallel with and 85.00 feet Southwesterly
of said centerline; thence along said parallel line S. 30 degrees 32
minutes 09 seconds E. 292.64 feet to a point in the Northwesterly
boundary line of the strip of land described in the deed to the City
and County of San Francisco, dated October 20, 1950, recorded in
Book 2111 of Official Records, at page 319, Santa Clara County
Records; thence along said Northwesterly boundary line, S. 65
degrees 09 minutes 27 seconds W. (S. 65 degrees 08 minutes 00
seconds W. per deed), 15.07 feet to a point in a line which is
parallel with and 100.00 feet Southwesterly of said centerline;
thence along said parallel line, N. 30 degrees 32 minutes 09 seconds
W. 298.84 feet to the true point of beginning.
Said matter affects Parcel Six.
10. AN EASEMENT affecting the portion of said land and for the purpose
stated herein and incidental purposes, shown or dedicated by the map
of Tract 7408 filed in Book 506 of Maps, pages 24, 25 and 26.
Purpose : Public Service Easement
Affects : The Southwesterly 10 feet of Parcels One,
Two and Three; the Northwesterly 8 feet
of Parcel Two; the Southwesterly 8 feet
of Parcel Four; the Northeasterly and
Northwesterly 10 feet of Parcel Six; and
the Southwesterly 8 feet of Parcel Six.
11. EASEMENT as shown on the filed map of Tract 7408 filed in Book 506
of Maps, pages 24-26 and incidents thereto
Purpose : Landscape Easement
Affects : The Southwesterly 20 feet of Parcel One,
Two and Three; the Northwesterly 18 feet
of Parcel Two; the Southwesterly 18 feet
of Parcel Four; the Northeasterly and
Northwesterly 20 feet of Parcel Six; and
the Southwesterly 18 feet of Parcel Six.
12. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Public Service Easement
Granted to : City of San Jose
Recorded : November 19, 1982 in Book H156, page 275,
Official Records
Affects : The Northwesterly 25 feet of Parcel Four
13. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The installation, maintenance and
operation of all landscaping plant forms,
irrigation systems, retaining walls, and
decorative walkway paving now existing or
hereinafter to be constructed
Granted to : City of San Jose, a municipal corporation
of the State of California
Recorded : May 27, 1983 in Book H590, page 649,
Official Records
Affects : The Southwesterly 20 feet of Parcel One,
Two and Three; the Northwesterly 18 feet
of Parcel Two; the Southwesterly 18 feet
of Parcel Four; the Northeasterly and
Northwesterly 20 feet of Parcel Six; and
the Southwesterly 18 feet of Parcel Six.
80
14. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The installation, maintenance and
operation of all landscaping plant forms,
irrigation systems, retaining walls, and
decorative walkway paving now existing or
hereinafter to be constructed
Granted to : City of San Jose, a municipal corporation
of the State of California
Recorded : May 27, 1983 in Book H590, page 652,
Official Records
Affects : The Westerly corner of Parcel Two and the
Northerly and Westerly corner of Parcel
Six
15. AGREEMENT on the terms and conditions contained therein,
For : The installation and maintenance of
landscape improvements
Between : City of San Jose, a municipal corporation
And : Oakmead-San Jose, a California general
partnership and Oakmead-San Jose Sign and
Landscape Maintenance Association, a
California non-profit mutual benefit
corporation
Recorded : May 27, 1983 in Book H590, page 662,
Official Records
Reference is hereby made to the record for further particulars.
16. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The construction, installation, repair
and maintenance of interlocking pavers,
retaining walls and signs, and for
pedestrian and vehicular access as
necessary or desirable thereto, but
subject to the obligation of the
association of the association, its
successors and assigns, to promptly
repair any damage to said improvements
lying within the Sign and Landscape
Easements resulting from the
Association's activities thereon
Granted to : Oakmead-San Jose Sign and Landscape
Maintenance Association, a non-profit
mutual benefit corporation
Recorded : June 3, 1983 in Book H604, page 322,
Official Records
Affects : The Westerly corner of Parcel Two and the
Northerly and Westerly corner of Parcel
Six
17. LIMITATIONS, covenants, conditions, restrictions, reservations,
exceptions, terms, liens or charges, but deleting restrictions, if
any, based on race, color, religion or national origin contained in
the document recorded June 3, 1983 in Book H604, page 334, Official
Records.
CONTAINS mortgagee protection clause.
MODIFICATION thereof recorded January 26, 1984 in Book I257, page
252, Official Records.
A Notice of Amendment of Design Guidelines
Executed by : Oakmead-San Jose, a California general
partnership
Recorded : June 21, 1984 in Book I649, page 543,
Official Records
An instrument entitled, "Designation of Approving Agent," whereby
Kimball Small Properties, a California corporation was designated
approving agent under the CC&R's and Design Guidelines.
Recorded : April 29, 1988 in Book K517, page 940,
Official Records
MODIFICATION thereof recorded October 18, 1988 in Book K721, page
265, Official Records.
81
17. Continued
Said Assignment affects Parcel One.
An instrument entitled, "Assignment and Assumption of Certain Rights
under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : May 1, 1995
Between : CROCKER PROPERTIES, INC., a California
corporation and IRISH LEASING
CORPORATION, a Texas corporation
Recorded : May 1, 1995 as Instrument No. 12877064,
Official Records
Said Assignment affects Parcels Two and Three
An Instrument entitled, "Assignment and Assumption of Certain Rights
under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : May 8, 1995
Between : AMDAHL CORPORATION, a Delaware
corporation and IRISH LEASING
CORPORATION, a Texas corporation
Recorded : May 8, 1995 as Instrument No. 12882481,
Official Records
Said Assignment affects Parcels Four, Five and Six
18. LIMITATIONS, covenants, conditions, restrictions, reservations,
exceptions, terms, liens or charges, but deleting restrictions, if
any, based on race, color, religion or national origin contained in
the document recorded June 3, 1983 in Book H604, page 505, Official
Records.
Said instrument also provides for the levy of assessments, the lien
of which are stated to be subordinate to the lien of a First
Mortgage of First Deed of Trust made in good faith and for value.
MODIFICATION thereof recorded January 26, 1984 in Book I257, page
248, Official Records.
An instrument entitled, "Assignment of Grantor's Rights under
Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose and Removal of Approving Agent,"
Dated : October 18, 1988
Between : Oakmead-San Jose, a California general
partnership and Oakmead Associates, a
California general partnership
Recorded : October 18, 1988 in Book K721, page 295,
Official Records
Said Assignment affects Parcels One, Four, Five and Six
An instrument entitled, "Assignment of Grantor's Rights under
Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose and Removal of Approving Agent,"
Dated: : April 20, 1989
Between : Oakmead Associates, a California general
partnership and Amdahl Corporation, a
Delaware corporation
Recorded : April 20, 1989 in Book K927, page 332,
Official Records
Said Assignment affects Parcels Four and Five
82
18. Continued
An instrument entitled, "Assignment of Grantor's Rights under
Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : July 12, 1989
Between : Oakmead Associates, a California general
partnership and Amdahl Corporation, a
Delaware corporation
Recorded : July 12, 1989 in Book L017, page 1927,
Official Records
Said Assignment affects Parcel Six
MODIFICATION thereof recorded July 19, 1989 in Book L024, page 587,
Official Records
An instrument entitled "Assignment and Assumption of Certain Rights
under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose"
Between : Oakmead-San Jose, a California general
partnership and Crocker Properties, Inc.,
a California corporation
Recorded : August 10, 1989 in Book L052, page 1001
and page 1011, Official Records.
Said Assignment affects Parcels Two and Three
An instrument entitled, "Assignment of Grantor's Rights under
Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : May 1, 1995
Between : OAKMEAD ASSOCIATES, a California general
partnership and IRISH LEASING
CORPORATION, a Texas corporation
Recorded : May 1, 1995 as Instrument No. 12877061,
Official Records
Said Assignment affects Parcel One.
An instrument entitled, "Assignment and Assumption of Certain Rights
under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : May 1, 1995
Between : CROCKER PROPERTIES, INC., a California
corporation and IRISH LEASING
CORPORATION, a Texas corporation
Recorded : May 1, 1995 as Instrument No. 12877064,
Official Records
Said Assignment affects Parcels Two and Three
An instrument entitled, "Assignment and Assumption of Certain Rights
under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Jose,"
Dated : May 8, 1995
Between : AMDAHL CORPORATION, a Delaware
corporation and IRISH LEASING
CORPORATION, a Texas corporation
Recorded : May 8, 1995 as Instrument No. 12882481,
Official Records
Said Assignment affects Parcels Four, Five and Six
83
19. EASEMENT as shown on the filed map of Tract 7559 filed in Book 522
of Maps, pages 49 ad 50.
Purpose : Public Service Easement
Affects : The Northwesterly 8 Feet and the Westerly
corner of Lot 59 of Parcel One
20. EASEMENT as shown on the filed map of Tract 7559 filed in Book 522
of Maps, pages 49 and 50.
Purpose : Landscape Easement
Affects : The Southeasterly 18 feet and the
Southerly corner of Lot 58 of Parcel One;
and the Northwesterly 18 feet and the
Westerly corner of Lot 59 of Parcel One
21. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Communication facilities
Granted to : Pacific Bell
Recorded : February 21, 1984 in Book I319, page 486,
Official Records
Affects : The Southwesterly 10 feet of Lot 58 of
Parcel One; the Southwesterly 10 feet,
the Northwesterly 8 feet and the Westerly
corner of Lot 59 of Parcel One; and the
Southwesterly 10 Feet of Parcel Three
22. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Underground and above ground
communication facilities
Granted to : Pacific Bell
Recorded : May 17, 1984 in Book 1552, page 624,
Official Records
Affects : The Southwesterly 10 feet of Parcel Four
23. AGREEMENT on the terms and conditions contained therein,
For : Gas and electric service
Between : Pacific Gas and Electric Company, City of
San Jose
And : Oakmead-San Jose
As disclosed by a Memorandum of Agreement
Recorded : February 25, 1985 in Book J271, page 37,
Official Records.
Reference is hereby made to the record for further particulars.
24. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Emergency overland storm drainage release
Granted to : Amdahl Corporation, a Delaware
corporation
Recorded : August 8, 1990, in Book L443, page 754,
Official Records
Affects : The Northwesterly 10 feet of the
Southeasterly 30 feet and the
Northeasterly 10 feet of the
Northwesterly 100 feet of the
Southeasterly 130 feet of Parcel Four.
Terms and conditions contained in the document hereinabove referred
to.
25. TERMS AND CONDITIONS of that certain Site Development Permit
File No. : HSH 90-09-104
Disclosed By : A Notice of Granting of a Site
Development Permit
Recorded : January 24, 1991 in Book L600, page 1242,
Official Records
84
25. Continued
Said matter affects Parcels Four, Five and Six.
Reference is hereby made to the record for particulars.
26. TERMS AND CONDITIONS of that certain Site Development Permit
File No. : HSH 92-02-011
Disclosed By : A Notice of Granting of a Site
Development Permit
Recorded : August 21, 1992 in Book M340, page 824,
Official Records
Said matter affects Parcel Six.
27. TERMS AND CONDITIONS of that certain Site Development Permit
File No. : H94-07-041
Disclosed By : A Notice of Granting of a Site
Development Permit
Recorded : October 19, 1994 in Book N638, page 215,
Official Records
Said matter affects Parcel Six.
Reference is hereby made to the record for particulars.
29. ANY RIGHTS, interests, or claims adverse to those of the vestee
herein which may exist or arise by reason of the following facts
shown on a survey plat entitled "A.L.T.A./A.C.S.M. Land Title
Survey", dated April 14, 1995, prepared by Kier & Wright, Job. No.
92160-16.
a) The fact that a concrete sign extends across the Northwesterly
boundary of Parcel Six.
30. UNRECORDED LEASE for the term and upon the terms and conditions
contained therein
Dated : February 28, 1995
Lessor : IRISH LEASING CORPORATION, a Texas
corporation
Lessee : CISCO SYSTEMS, INC., a California
corporation
Term : 5 Years
Disclosed by : Memorandum of Land Lease, recorded May 1,
1995, as Instrument No., 12877062,
Official Records.
Affects the fee to Parcel One.
31. OPTION TO PURCHASE as disclosed in the Memorandum of Lease recorded
May 1, 1995 as Instrument No. 12877062, Official Records
Affects the fee to Parcel One.
32. UNRECORDED LEASE for the term and upon the terms and conditions
contained therein
Dated : February 28, 1995
Lessor : IRISH LEASING CORPORATION, a Texas
corporation
Lessee : CISCO SYSTEMS, INC., a California
corporation
Term : 5 Years
Disclosed by : Memorandum of Land Lease, recorded May 1,
1995, as Instrument No. 12677065,
Official Records.
Affects the fee to Parcels Two and Three.
85
33. OPTION TO PURCHASE as disclosed in the Memorandum of Lease recorded
May 1, 1995 as Instrument No. 12877065, Official Records
Affects the fee to Parcels Two and Three.
34. A DEED OF TRUST to secure an indebtedness in the original principal
sum shown below and any other amounts and/or obligations secured
thereby
Amount : $2,700,000.00
Dated : May 1, 1995
Trustor : IRISH LEASING CORPORATION, a Texas
corporation
Trustee : FIRST AMERICAN TITLE INSURANCE COMPANY, a
California corporation
Beneficiary : CISCO SYSTEMS, INC., a California
corporation
Recorded : May 1, 1995, under Series No. 12877066,
Official Records.
Affects the fee to Parcels One, Two and Three.
35. UNRECORDED LEASE for the term and upon the terms and conditions
contained therein
Dated : April 12, 1995
Lessor : IRISH LEASING CORPORATION, a Texas
corporation
Leesee : CISCO SYSTEMS, INC., a California
corporation
Term : 5 years
Disclosed by : Memorandum of Land Lease, recorded May 8,
1995, as Instrument No. 12882482,
Official Records.
Affects the fee to Parcels Four, Five, Six and Seven.
36. OPTION TO PURCHASE as disclosed in the Memorandum of Lease recorded
May 8, 1995 as Instrument No. 12482482, Official Records
Affects the fee to Parcels Four, Five, Six and Seven.
37. A DEED OF TRUST to secure an indebtedness in the original principal
sum shown below and any other amounts and/or obligations secured
thereby
Amount : $1,500,000.00
Dated : May 1, 1995
Trustor : IRISH LEASING CORPORATION, a Texas
corporation
Trustee : FIRST AMERICAN TITLE INSURANCE COMPANY, a
California corporation
Beneficiary : CISCO SYSTEMS, INC., a California
corporation
Recorded : May 8, 1995, under Series No. 12882483,
Official Records.
Affects the fee to Parcels Four, Five, Six and Seven.
86
EXHIBIT C
(SITE PLAN)
EXHIBIT C
1.
87
[AERIAL RENDERING SITE PLAN BUILDING "K"]
88
[AERIAL RENDERING SITE PLAN BUILDING "L"]
89
EXHIBIT D
(PRE-APPROVED APPROVAL PLANS)
EXHIBIT D
1.
90
[ARCHITECTURAL RENDERING SITE PLAN BUILDING "K"]
91
[ARCHITECTURAL RENDERING SITE PLAN BUILDING "K"]
92
[ARCHITECTURAL RENDERING SITE PLAN BUILDING "L"]
93
[ARCHITECTURAL RENDERING SITE PLAN BUILDING "L"]
94
EXHIBIT E
MEMORANDUM OF LEASE
RECORDING REQUESTED BY, AND
WHEN RECORDED, RETURN TO:
Brobeck, Phleger & Harrison
550 West C Street, Suite 1300
San Diego, California 92101
Attention: Todd J. Anson, Esq.
- --------------------------------------------------------------------------------
THIS MEMORANDUM OF LEASE ("Memorandum of Lease") is executed
as of May ___, 1995, by and between SUMITOMO BANK OF NEW YORK TRUST COMPANY
("SBNYTC"), AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED MAY 22, 1995
BETWEEN SUMITOMO BANK LEASING AND FINANCE, INC. AND SBNYTC ("Landlord"), and
CISCO SYSTEMS, INC., a California corporation ("Tenant").
RECITALS
WHEREAS, Landlord and Tenant have executed that certain lease
("Lease") dated as of May ___, 1995, covering certain improvements ("Premises")
which may come to be located on the real property located in the County of Santa
Clara, State of California and more particularly described in Schedule 1
attached hereto and incorporated herein by this reference ("Land"); and
WHEREAS, Landlord and Tenant desire to record notice of the
Lease in the real estate records of Santa Clara County, California;
NOW, THEREFORE, in consideration of the foregoing, Landlord
and Tenant hereby declare as follows:
1. DEMISE. Landlord hereby leases the Premises to Tenant and
Tenant hereby leases the Premises from Landlord, subject to the terms, covenants
and conditions contained in the Lease. The Premises leased to Tenant pursuant to
the Lease consists of the Improvements described in Paragraph 5 below, and does
not include the Land.
2. EXPIRATION DATE. The term of the Lease ("Term") shall
commence on May ___, 1995 and shall expire five (5) years thereafter, subject to
Tenant's option to extend the Term pursuant to Section 4.2 of the Lease for one
(1) period of five (5) years.
EXHIBIT E
1.
95
3. OPTION TO PURCHASE. Tenant has an option to purchase the
Premises, as more particularly described in the Lease, during the Term, as it
may be extended.
4. RESTRICTIONS ON ENCUMBRANCES. Landlord is prohibited from
recording against the Premises liens (including, without limitation, deeds of
trust), encumbrances, and other matters that would constitute exceptions to
title, and from amending or modifying any of the foregoing that may exist now or
during the Term, as more particularly described in the Lease, and any such
encumbrance or modification of an encumbrance not authorized in writing by
Tenant shall be null and void.
5. OWNERSHIP OF CERTAIN IMPROVEMENTS. By virtue of Tenant's
rights under that certain Ground Lease between Tenant and Irish Leasing
Corporation, a Texas corporation, dated February 28, 1995, Tenant hereby grants
to Landlord the right to own and construct the improvements which Tenant may
elect, as construction agent for Landlord, to erect, construct or situate upon
the Land or any part thereof during the Term under and pursuant to the terms of,
and using funding provided by or through Landlord pursuant to Article 11 of the
Lease ("Improvements"), and Tenant hereby grants, conveys and transfers to
Landlord all of Tenant's right, title and interest in and to the Improvements
(whether now existing or hereafter constructed), and Tenant agrees that any and
all such Improvements shall be and remain the property of Landlord, subject to
Tenant's rights to purchase the Improvements under Section 19 of the Lease (with
Landlord's agreement that Tenant's purchase rights contemplated under Section 19
of the Lease reflect the primary intent of the parties to the Lease is to treat
the Lease as an operating Lease for financial accounting and securities
regulatory purposes and as a financing arrangement for all federal, state and
local income tax, property tax valuation and other tax purposes).
6. COUNTERPARTS. This Memorandum of Lease may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall comprise but a single instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
EXHIBIT E
2.
96
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Memorandum of Lease as of the date and year first written above.
"LANDLORD"
SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE
UNDER THAT CERTAIN TRUST AGREEMENT
DATED MAY 22, 1995 BETWEEN
SUMITOMO BANK LEASING AND FINANCE,
INC. AND SBNYTC
By: ___________________________
Name: ___________________________
Its: ___________________________
STATE OF __________________ )
) ss
COUNTY OF _________________ )
On _____________, before me, ______________________, Notary Public, personally
appeared _______________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Signature
[SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
EXHIBIT E
3.
97
"TENANT"
CISCO SYSTEMS, INC.
A CALIFORNIA CORPORATION
By: _______________________________
Name: _________________________
Its: _________________________
STATE OF __________________ )
) ss
COUNTY OF _________________ )
On _____________, before me, ______________________, Notary Public, personally
appeared _______________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Signature
[SEAL]
EXHIBIT E
4.
98
SCHEDULE 1 TO EXHIBIT E
LEGAL DESCRIPTION
The Premises are described as follows:
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
Lots 58 and 59, as shown upon that certain map entitled, "Tract No. 7559", which
Map was filed for record in the office of the Recorder of the County of Santa
Clara, on December 21, 1983 in Book 522 of Maps, at pages 49 and 50.
APN: 97-53-18,22
SCHEDULE 1 TO EXHIBIT E
99
EXHIBIT F
FORM OF CONTRACTOR'S CERTIFICATE
EXHIBIT F
1.
100
APPLICATION AND CERTIFICATE FOR PAYMENT
AIA DOCUMENT G702 (Instructions on reverse side) PAGE ONE OF PAGES
- --------------------------------------------------------------------------------
TO OWNER: PROJECT: APPLICATION NO: Distribution to:
PERIOD TO: / / OWNER
PROJECT NOS.: / / ARCHITECT
/ / CONTRACTOR
FROM CONTRACTOR: VIA ARCHITECT: CONTRACT DATE: / /
/ /
CONTRACT FOR:
- --------------------------------------------------------------------------------
CONTRACTOR'S APPLICATION FOR PAYMENT
Application is made for payment, as shown below, in connection with the
Contract. Continuation Sheet, AIA Document G703, is attached.
1. ORIGINAL CONTRACT SUM..................................... $
---------------
2. NET CHANGE BY CHANGE ORDERS............................... $
---------------
3. CONTRACT SUM TO DATE (Line 1 plus or minus 2)............. $
---------------
4. TOTAL COMPLETED & STORED TO DATE.......................... $
(Column G on G703) ---------------
5. RETAINAGE:
a % of Completed Work (Columns D plus E on G703) $
-------- ---------------
b % of Stored Material (Column F on G703) $
-------- ---------------
Total Retainage
(Line 5a plus 5b or Total in Column 1 of G703)............ $
---------------
6. TOTAL EARNED LESS RETAINAGE............................... $
(Line 4 less Line 5 Total) ---------------
7. LESS PREVIOUS CERTIFICATES FOR PAYMENT
(Line 6 from prior Certificate)........................... $
---------------
8. CURRENT PAYMENT DUE....................................... $
===============
9. BALANCE TO FINISH, INCLUDING RETAINAGE
(Line 3 less Line 6) $
---------------
- --------------------------------------------------------------------------------
CHANGE ORDER SUMMARY ADDITIONS DEDUCTIONS
- --------------------------------------------------------------------------------
Total changes approved in
previous months by Owner
- --------------------------------------------------------------------------------
Total approved this Month
- --------------------------------------------------------------------------------
TOTALS
- --------------------------------------------------------------------------------
NET CHANGES by Change Order
- --------------------------------------------------------------------------------
The undersigned Contractor certifies that to the best of the Contractor's
knowledge, information and belief the Work covered by this Application for
Payment has been completed in accordance with the Contract Documents, that all
amounts have been paid by the Contractor for Work for which previous
Certificates for Payment were issued and payments received from the Owner, and
that current payment shown herein is now due.
CONTRACTOR:
By: Date:
------------------------------ --------------------------------
State of:
County of:
Subscribed and sworn to before me this day of
Notary Public:
My Commission expires:
- --------------------------------------------------------------------------------
ARCHITECT'S CERTIFICATE FOR PAYMENT
In accordance with the Contract Documents, based on on-site observations and the
data comprising this application, the Architect certifies to the Owner that to
the best of the Architect's knowledge, information and belief the Work has
progressed as indicated, the quality of the Work is in accordance with the
Contract Documents, and the Contractor is entitled to payment of the AMOUNT
CERTIFIED.
AMOUNT CERTIFIED................................... $
-----------------------
(Attach explanation if amount certified differs from the amount applied for.
Initial all figures on this Application and on the Continuation Sheet that are
changed to conform to the amount certified.)
ARCHITECT:
By: Date:
------------------------------ --------------------------------
This Certificate is not negotiable. The AMOUNT CERTIFIED is payable only to the
Contractor named herein. Issuance, payment and acceptance of payment are
without prejudice to any rights of the Owner or Contractor under this Contract.
- --------------------------------------------------------------------------------
AIA DOCUMENT G702
APPLICATION AND CERTIFICATE FOR PAYMENT
1992 EDITION
AIA(R)
Copyright 1992
AMERICAN INSTITUTE OF ARCHITECTS
1735 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20006-5292
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND WILL SUBJECT
THE VIOLATOR TO LEGAL PROSECUTION.
G702/92
101
EXHIBIT G
INITIAL ADVANCE MEMORANDUM
THIS INITIAL ADVANCE MEMORANDUM ("Memorandum") is entered into this
___ day of __________, 199_, by and between SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED MAY 22,
1995 BETWEEN SUMITOMO BANK LEASING AND FINANCE, INC. AND SBNYTC ("Landlord"),
and CISCO SYSTEMS, INC., a California corporation ("Tenant") concerning that
certain Lease (Buildings "K" and "L")("Lease") between Landlord and Tenant dated
May 22, 1995. Any capitalized terms not defined in this Memorandum shall have
the meaning as defined in the Lease.
1. Pursuant to Section 5.6 of the Lease, Landlord and Tenant are
required to enter into this Memorandum within thirty (30) days after the initial
Advance for the foundation of any Building and within thirty (30) days after the
initial Advance under the Lease.
2. Landlord and Tenant agree that this Memorandum reflects initial
Advances that were made for the following Building(s):
_______________________________________________.
3. Landlord and Tenant agree that the amount(s) of the initial
Advances is (are) as follows (allocated on a Building-by- Building basis, if
this Memorandum reflects Advances for more than one Building): ________________
_______________________________________________________________________________.
4. Landlord and Tenant agree that the Guaranteed Residual Value for
the Building(s) described in Paragraph 2 is _____% of ___________________ (the
total Funded Amount for the Building(s)).
5. Landlord and Tenant agree that the estimated Funded Amount,
determined by Tenant pursuant to Section 5.5 of the Lease, is
$______________________.
6. Landlord and Tenant agree that, pursuant to Section 5.7 of the
Lease, the Security Deposit to be held by Landlord pursuant to the Lease is
$______________________.
[Remainder of This Page Intentionally Left Blank]
EXHIBIT G
1.
102
[SIGNATURE PAGE TO INITIAL ADVANCE MEMORANDUM]
IN WITNESS WHEREOF, the parties have executed this Memorandum as of
the date and year first above written.
"LANDLORD"
SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE
UNDER THAT CERTAIN TRUST
AGREEMENT DATED MAY 22, 1995
BETWEEN SUMITOMO BANK LEASING AND
FINANCE, INC. AND SBNYTC
By: ___________________________
Name:___________________________
Its: ___________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
EXHIBIT G
2.
103
[SIGNATURE PAGE TO INITIAL ADVANCE MEMORANDUM]
"TENANT"
CISCO SYSTEMS, INC.,
a California corporation
By:___________________________
Name:_________________________
Its: _________________________
EXHIBIT G
3.
104
EXHIBIT H
RENT COMMENCEMENT DATE MEMORANDUM
THIS RENT COMMENCEMENT DATE MEMORANDUM ("Memorandum") is entered into
this ___ day of _______, 199_, by and between SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED MAY 22,
1995 BETWEEN SUMITOMO BANK LEASING AND FINANCE, INC. AND SBNYTC ("Landlord"),
and CISCO SYSTEMS, INC., a California corporation ("Tenant") concerning that
certain Lease (Buildings "K" and "L")("Lease") between Landlord and Tenant dated
May 22, 1995. Any capitalized terms not defined in this Memorandum shall have
their meaning as defined in the Lease.
1. Pursuant to Section 5.6 of the Lease, Landlord and Tenant are
required to enter into this Memorandum within thirty (30) days after the Rent
Commencement Date for any Building.
2. Landlord and Tenant agree the that Rent Commencement Date for the
Building described as follows _______________________, is ___________ ___, 199_.
3. The dollar value of the Funded Amount (defined in Section 2.24 of
the Lease) for the Building described in paragraph 2 is $_____________________).
4. The dollar value of the Landlord's Equity Contribution (defined in
Section 2.17 of the Lease) for the Building described in paragraph 2 above is
_____% of $_____________________________, (i.e. $_________________________).
5. The dollar value of the Guaranteed Residual Value (defined in
Section 2.25 of the Lease) for the Building described in paragraph 2 above is
_____% of $_____________________________, (i.e. $_____________________________).
6. Landlord and Tenant agree that, pursuant to Section 5.7 of the
Lease, the Security Deposit held by Landlord pursuant to the Lease shall be in
the amount of $______________________ as of the Rent Commencement Date.
[Remainder of This Page Intentionally Left Blank]
EXHIBIT H
1.
105
[SIGNATURE PAGE TO RENT COMMENCEMENT DATE MEMORANDUM]
IN WITNESS WHEREOF, the parties have executed this Memorandum as of
the date and year first above written.
"LANDLORD"
SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE
UNDER THAT CERTAIN TRUST
AGREEMENT DATED MAY 22, 1995
BETWEEN SUMITOMO BANK LEASING AND
FINANCE, INC. AND SBNYTC
By: ___________________________
Name:___________________________
Its: ___________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
EXHIBIT H
106
[SIGNATURE PAGE TO RENT COMMENCEMENT DATE MEMORANDUM]
"TENANT"
CISCO SYSTEMS, INC.,
A CALIFORNIA CORPORATION
By: ___________________________
Name:___________________________
Its: ___________________________
EXHIBIT H
107
EXHIBIT I
DRAW REQUEST FORM
THIS DRAW REQUEST ("Draw Request") is submitted by CISCO SYSTEMS,
INC., a California corporation ("Tenant") to SUMITOMO BANK OF NEW YORK TRUST
COMPANY ("SBNYTC"), AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED MAY 22,
1995 BETWEEN SUMITOMO BANK LEASING AND FINANCE, INC. AND SBNYTC ("Landlord"),
pursuant to Article 11 of that certain Lease (Buildings "K" and "L") between
Landlord and Tenant dated May 22, 1995. Any capitalized terms not defined in
this Draw Request shall have their meaning as defined in the Lease.
Pursuant to the terms of Article 11 of the Lease, Tenant hereby makes
a Draw Request for an Advance from Landlord. The Aggregate of the amount of the
Advance requested by Tenant pursuant to this Draw Request is $_________________.
Tenant hereby instructs Landlord to make this Advance to the parties
and in the amounts described below:
Name of Entity Amount
[ADD ADDITIONAL SHEET, IF NECESSARY, TO DESCRIBE ALL ENTITIES TO
RECEIVE A PORTION OF THIS ADVANCE AND THE AMOUNT TO BE PAID TO EACH SUCH
ENTITY.]
IN WITNESS WHEREOF, Tenant has executed this Draw Request as of the
date and year first above written.
"TENANT"
CISCO SYSTEMS, INC.,
a California corporation
By: _______________________
Name:_______________________
Its: _______________________
EXHIBIT I
1.
108
EXHIBIT J
CLOSING COSTS AND FEES TO BE
INCLUDED IN FUNDED AMOUNT
The following items shall be included in the definition of the Funded
Amount under Section 2.24 of the Lease:
1. Title Insurance premiums paid by Landlord at the closing of this
transaction
2. Landlord's Trust Set Up Charge ($5,000)
3. Set Up Charge ($2,000)
4. Arrangement Fee ($3,250)
5. Irish Leasing Corporation Arrangement Fee ($100,000)
6. Landlord Arrangement Fee ($370,500)
7. Other fees and costs which are specifically authorized by Tenant
in writing to be included in the Funded Amount
EXHIBIT J
1.
109
EXHIBIT K
NOTICE OF INTEREST RATE PERIOD SELECTION
Pursuant to Section 5.1(d) of those certain Leases by and between
Sumitomo Bank of New York Trust Company, ("SBNYTC"), as trustee under that
certain trust agreement dated May 22, 1995 between Sumitomo Bank Leasing and
Finance, Inc. and SBNYTC ("SB Trust"), as Landlord, and Cisco Systems, Inc., a
California corporation ("Cisco"), as Tenant, dated as of May 22, 1995, Cisco
hereby gives notice to SB Trust of its designation of the Loan interest period
as set forth below:
Effective Date Interest Period
_____________, ____ _____ month(s)
This Notice of Borrowing is dated this ___ day of _______, _____, and
may be executed in multiple copies, each of which shall be deemed an original,
and all of which together shall be but a single Notice.
"CISCO"
CISCO SYSTEMS, INC.,
a California corporation
By: ___________________
Title: ___________________
By: ___________________
Title: ___________________
EXHIBIT K
110
EXHIBIT L
DESCRIPTION OF ADDITIONAL PROPERTY OWNED BY LANDLORD
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Parcel 2, as shown on that certain Map filed for record in the office of
the Recorder of the County of Santa Clara, State of California on July 13, 1983,
in Book 514 of Maps page(s) 47 and 48.
APN: 97-53-14
All of Lot 54 as shown upon that certain Map entitled, "Tract No. 7559", which
Map was filed for record in the Office of the Recorder of the County of Santa
Clara, State of California on December 21, 1983 in Book 522 of Maps, at pages 49
and 50.
APN: 97-53-23
Lot 50, as shown on that certain Map entitled, "Tract No. 7560," which Map was
filed for record in the office of the Recorder of the County of Santa Clara,
State of California on December 21, 1983 in Book 522 of Maps, pages 51 and 52.
Reserving therefrom a perpetual right and easement to construct, install,
maintain, repair, renew, replace, operate and use a surface drainage release to
benefit Lot 49 of Tract 7560, as contained in that certain Grant of Easement
recorded August 8, 1990 in Book L443, page 0754, Official Records, and described
as follows:
The Northwesterly 10.00 feet of the Southeasterly 30.00 feet and the
Northwesterly 100.00 feet of the Southeasterly 130.00 feet of the Northeasterly
10.00 feet of Lot 50.
That portion of Lot 51, as shown on that certain Map entitled, "Tract No. 7560,"
which Map was filed for record in the office of the Recorder of the County of
Santa Clara, State of California on December 21, 1983 in Book 522 of Maps, pages
51 and 52, being more particularly described as follows:
Beginning at the Southeasterly corner of said Lot 51; thence along the
Southerly line of said Lot 51, S. 59 degrees 27 minutes 51 seconds W. 77.00
feet; thence N. 14 degrees 27 minutes 48 seconds E. 108.90 feet to the
Northeasterly line of said Lot 51; thence along said Northeasterly line S. 30
degrees 32 minutes 09 seconds E. 77.00 feet to the point of beginning, as
provided for in that certain Lot Line Adjustment granted by the Director of
Planning of the City of San Jose, a copy of which was recorded March 28, 1984
in the office of the Recorder of the County of Santa Clara in Book I410, page
712 of Official Records.
EXHIBIT L
111
Lot 5 and 6, as shown on that certain Map of Tract No. 7408, which map was filed
for record in the office of the Recorder of the County of Santa Clara, State of
California on November 19, 1982 in Book 506 of Maps, pages 24, 25 and 26 and a
portion of that certain parcel of land described in the deed recorded December
22, 1972 in Book 0167, page 623, all as approved by that Lot Combination
recorded September 16, 1992 in Book M381 of Maps, page(s) 0081, Official
Records, more particularly described as follows:
Beginning at a point on the Northeasterly line of Rio Robles, as shown upon said
map, at the most Southerly corner of said Lot 5; thence along said Northeasterly
line of Rio Robles, N. 30 degrees 32 minutes 09 seconds W. 105.50 feet; thence
on a tangent curve to the right, having a radius of 367.00 feet, through a
central angle of 36 degrees 30 minutes 00 seconds an arc distance of 233.80
feet; thence on a curve to the right, tangent to the previous curve, having a
radius of 50.00 feet, through a central angle of 86 degrees 01 minutes 50
seconds an arc distance of 75.08 feet to the Southerly line of Tasman Drive as
shown upon said map; thence along said line on a curve to the left, tangent to
the previous curve, having a radius of 1149.00 feet, through a central angle of
32 degrees 31 minutes 01 seconds an arc distance of 652.09 feet; thence N. 59
degrees 28 minutes 40 seconds E. 600.40 feet; thence on a tangent curve to the
right, having a radius of 33.00 feet, through a central angle of 89 degrees 51
minutes 11 seconds an arc distance of 51.83 feet to the Southwesterly line of
First Street, as shown upon said map; thence along said line, S. 30 degrees 32
minutes 09 seconds E. 261.38 feet to the Northwesterly line of the lands of the
City and County of San Francisco, as shown upon said map; thence along said line
of the lands of the City and the County of San Francisco, S. 65 degrees 09
minutes 27 seconds W. 1396.95 feet to the point of beginning.
Those rights as contained in that certain Grant Deed executed by Masami Ezaki
and Kaoru Ezaki, his wife in favor of the City and County of San Francisco, a
municipal corporation recorded December 8, 1950 in Book 2111, page 319, Official
Records.
A strip of land 80 feet wide, lying 40 feet either side of the following
described line and extensions thereto, across that certain parcel of land
conveyed by Charles Nelson, et ux, to Masami Ezaki by Grant Deed dated February
27, 1936 and recorded March 11, 1936, in Volume No. 765, at page 262, Official
Records, Santa Clara County, hereinafter referred to as the Ezaki Parcel, said
line being more particularly described as commencing at a point in the Westerly
boundary of the existing San Jose-Alviso Road, said point being distant along
said boundary South 30 degrees 32 minutes 30 seconds East 381.31 feet from its
intersection with the Northerly boundary of the above mentioned Ezaki Parcel;
thence, from said point of commencement, South 65 degrees 08 minutes 00 seconds
West 1459.03 feet to a point in the common boundary between the above mentioned
Ezaki Parcel and that certain parcel of land conveyed by Lena Lindgren, et al,
to James A. Pankoski, et ux, by Joint Tenancy Deed dated November 13, 1944 and
recorded November 17, 1944 in Volume No. 1227 at Page 327, Official Records,
Santa Clara County, hereinafter referred to as the Pankoski Parcel, said point
being distant along said common boundary South 30 degrees 32 minutes 30 seconds
East 237.04 feet from the most Westerly corner of the above mentioned Ezaki
Parcel; the Easterly end of said strip being the above mentioned Westerly
boundary of the San Jose-Alviso Road, and the Westerly end of said strip being
the above mentioned common boundary between the Pankoski and Ezaki Parcels.
EXHIBIT L