1
LEASE
(IMPROVEMENTS PHASE "C")
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.
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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
6.4 Withholding Taxes....................................... 21
ii.
4
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
iii.
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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
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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
three (3) 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.
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(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, NY 10172
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.
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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 April 12, 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.
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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, 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.
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).
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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 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
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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 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 ]
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2.63 SUMITOMO. "Sumitomo" shall mean The Sumitomo Bank,
Limited, a Japanese banking corporation, acting through its San Francisco
branch.
2.64 TAKING. "Taking" shall have the meaning set forth in
Section 15.1.
2.65 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).
2.66 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 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
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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 in accordance with 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 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
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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 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
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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
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
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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, and provided said appraisal
indicates that the current fair market value on an as-completed basis of the
Building as designed is not less than ninety percent (90%) of the estimated
cost of construction of the Building, 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 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
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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 the fair market
value on an as-completed basis of the Improvements as designed (as determined
by the appraisal described in Section 21.25).
(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
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
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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.
5.8 ADDITIONAL RENT. Tenant agrees to pay all Additional
Rent when it becomes due and payable under this Lease.
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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 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
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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
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
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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).
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
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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 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.
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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 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
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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 Rio Robles and Tasman Drive Parcels, San Jose,
California, performed by Lowney Associates and dated March 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 if the appraisal
described in Section 21.25 indicates that the current fair market value on an
as-completed basis of the Building as designed is less than ninety percent
(90%) of the estimated cost of construction of the Building. 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.
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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.
(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). 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
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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.
(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'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.
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(g) CONSTRUCTION AGREEMENT. Landlord shall have
received a copy of Tenant's construction agreement with Contractor for the
Building or phase in question.
(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.
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).
(b) Any proceeds of such policies attributable to improvements or
buildings on the Land other than the Improvements shall promptly be paid
directly to Tenant.
(c) 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.
(d) 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:
(a) 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 Authorized Loan and/or
Fee Mortgage existing immediately prior to the closing under this Purchase
Option if such Authorized Loan and/or Fee Mortgage are 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
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released from all obligations under the Authorized Loan 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;
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(iii) If Landlord shall fail to cause title to be in the
condition required in Section 19.1(c)(i) above within the 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.
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19.2 MANDATORY PURCHASE/SALE OF PREMISES. Notwithstanding anything to
the contrary herein, upon either: (1) 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
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has used, applied, or otherwise come into possession of, plus (b) any of the
Security Deposit retained by Landlord, and Landlord 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
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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) 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.
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21.20 AS-IS LEASE. Landlord makes no representations or warranties
concerning the condition, suitability or any other 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
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thirty (30) day period, they shall immediately execute a letter agreement
reflecting such agreement.
(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
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EXHIBIT A
LEGAL DESCRIPTION OF LAND
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
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.
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
EXHIBIT A
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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 degrees 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, over the following described property:
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 A
72
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.
73
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.
74
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:
75
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:
76
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
77
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.
78
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.
79
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
80
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
81
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
82
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.
83
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.
84
EXHIBIT C
Intentionally Omitted
EXHIBIT C
1.
85
EXHIBIT D
Intentionally Omitted
EXHIBIT D
1.
86
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.
87
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 April 12, 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.
88
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.
89
"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.
90
SCHEDULE 1 TO EXHIBIT E
LEGAL DESCRIPTION
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
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.
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
SCHEDULE 1 TO EXHIBIT E
91
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, over the following described property:
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.
SCHEDULE 1 TO EXHIBIT E
92
EXHIBIT F
FORM OF CONTRACTOR'S CERTIFICATE
EXHIBIT F
1.
93
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
94
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 ("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.
95
[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.
96
[SIGNATURE PAGE TO INITIAL ADVANCE MEMORANDUM]
"TENANT"
CISCO SYSTEMS, INC.,
a California corporation
By:
--------------------------------------
Name:
------------------------------------
Its:
------------------------------------
EXHIBIT G
3.
97
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 "I" and "J") ("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.
98
[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
99
[SIGNATURE PAGE TO RENT COMMENCEMENT DATE MEMORANDUM]
"TENANT"
CISCO SYSTEMS, INC.,
A CALIFORNIA CORPORATION
By:
------------------------------------
Name:
------------------------------------
Its:
------------------------------------
EXHIBIT H
100
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 "I" and "J") 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.
101
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:
Fees and costs which are
specifically authorized
by Tenant in writing to be
included in the Funded Amount
EXHIBIT J
1.
102
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
103
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
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 L
104
Landlord and Tenant shall immediately execute a letter agreement reflecting the
Fair Market Value.
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 as designed as of the date of such appraisal which Tenant
may desire to have constructed on the Land is not less than ninety percent (90%)
of the estimated cost of construction of the buildings 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
64.
105
[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
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VICE PRESIDENT
Its: AND TREASURER
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106
[SIGNATURE PAGE TO BUILDING LEASE]
"TENANT"
CISCO SYSTEMS, INC.,
A CALIFORNIA CORPORATION
By: /s/ JOHN T. CHAMBERS
-------------------------------------
Name: JOHN T. CHAMBERS
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Its: PRESIDENT AND CHIEF
EXECUTIVE OFFICER
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By: /s/ LARRY R. CARTER
-------------------------------------
Name: LARRY R. CARTER
-----------------------------
CHIEF FINANCIAL
Its: OFFICER
-----------------------------