1
EXHIBIT 4.1
EXECUTION
$18,200,000.00
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
CYPRESS SEMICONDUCTOR CORPORATION,
AS TENANT
EFFECTIVE AS OF APRIL 12, 1996
(BUILDINGS #3 AND #0, XXXXX XXXXX XXXXXX, XXX XXXX, XXXXXXXXXX)
PURSUANT TO AND AS MORE PARTICULARLY PROVIDED IN SUBPARAGRAPH k OF THIS LEASE,
THIS LEASE AND THE PURCHASE AGREEMENT REFERENCED HEREIN ARE TO CONSTITUTE, FOR
INCOME TAX PURPOSES ONLY, A FINANCING ARRANGEMENT OR CONDITIONAL SALE. AS
PROVIDED IN SUBPARAGRAPH k OF THIS LEASE, LANDLORD AND TENANT EXPECT THAT
TENANT (AND NOT LANDLORD) SHALL BE TREATED AS THE TRUE OWNER OF THE PROPERTY
FOR INCOME TAX PURPOSES, THEREBY ENTITLING TENANT (AND NOT LANDLORD) TO TAKE
2
DEPRECIATION DEDUCTIONS AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER.
3
TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(a) Active Negligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(b) Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(c) Advance Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(d) Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(e) Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(f) Applicable Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(g) Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(h) Banking Rules Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(i) Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(j) Base Rental Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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(k) Base Rental Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(l) Base Rental Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(m) Breakage Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(n) Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(o) Capital Adequacy Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(p) Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(q) Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(r) Construction Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(s) Construction Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(t) Construction Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(u) Construction Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(z) Custodial Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(v) Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(w) Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(x) Designated Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(y) Effective Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(z) Environmental Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(aa) Environmental Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(ab) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(ac) Environmental Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(ad) Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(ae) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(af) ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(ag) ERISA Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(ah) Escrowed Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(ai) Eurocurrency Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(aj) Eurodollar Rate Reserve Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(ak) Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(al) Excluded Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(am) Fed Funds Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(an) Funding Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(ao) GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(i)
4
(ap) Hazardous Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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(aq) Hazardous Substance Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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(ar) Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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(as) Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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(at) Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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(au) Initial Funding Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(av) Landlord's Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(aw) Landlord's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(ax) LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(ay) Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(az) Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(ba) Maximum Construction Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(bb) Misconduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(bc) Outstanding Construction Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(bd) Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(be) Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(bf) Permitted Hazardous Substance Use . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(bg) Permitted Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(bh) Permitted Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(bi) Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(bj) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(bk) Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(bl) Potential Lien Claimants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(bm) Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(bn) Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bo) Purchase Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bp) Qualified Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bq) Remaining Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(br) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bs) Responsible Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bt) Scope Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(bu) Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(bv) Stipulated Loss Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(bw) Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(bx) Tenant's Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(by) Trade Fixture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(bz) Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(ca) Unfunded Benefit Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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(cb) Other Terms and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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3. Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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(a) Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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(b) Upfront Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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(c) Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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(d) Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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(e) Interest and Order of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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(ii)
5
(f) Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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(g) Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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(h) No Demand or Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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4. Insurance and Condemnation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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5. No Lease Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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(a) Status of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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(b) Waiver By Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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6. Construction Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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(a) Advances; Outstanding Construction Allowance . . . . . . . . . . . . . . . . . . . . . . . 23
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(b) Construction Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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(i) Preconstruction Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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(ii) Scope Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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(iii) Responsibility for Construction. . . . . . . . . . . . . . . . . . . . . . . . . 25
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(iv) Value Added. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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(v) Advances Not a Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(c) Conditions to Construction Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(i) Prior Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(ii) Amount of the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(iii) Other Restrictions on the Amount of Advances . . . . . . . . . . . . . . . . . . 27
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(iv) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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a) Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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b) Builder's Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 27
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(v) Progress of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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(vi) Evidence of Costs and Expenses to be Reimbursed . . . . . . . . . . . . . . . . . 28
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(vii) No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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(viii) No Sale of Landlord's Interest . . . . . . . . . . . . . . . . . . . . . . . . . 28
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(ix) Certificate of No Default and Other Matters . . . . . . . . . . . . . . . . . . . 28
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7. Purchase Documents and Environmental Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8. Use and Condition of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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(a) Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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(b) Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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(c) Consideration of and Scope of Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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9. Other Representations, Warranties and Covenants of Tenant . . . . . . . . . . . . . . . . . . . . 29
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(a) Financial Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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(b) Existing Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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(c) No Default or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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(d) Compliance with Covenants and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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(e) Environmental Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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(f) No Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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(g) Condition of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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(h) Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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(i) Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(iii)
6
(j) Not a Foreign Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(k) Omissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(l) Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(m) Tenant Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(n) Operation of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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(o) Debts for Operation of Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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(p) Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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(q) Repair, Maintenance, Alterations and Additions . . . . . . . . . . . . . . . . . . . . . . 34
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(r) Insurance and Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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(s) Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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(t) Protection and Defense of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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(u) No Liens on the Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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(v) Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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(w) Financial Statements; Required Notices; Certificates as to Default . . . . . . . . . . . . 37
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(x) Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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(y) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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(z) Fees and Expenses; General Indemnification; Increased Costs; and Capital Adequacy Charges 39
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(aa) Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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(ab) Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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(ac) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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(ad) [SUBPARAGRAPH INTENTIONALLY DELETED.] . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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(ae) Affirmative Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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(i) Quick Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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(ii) Minimum Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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(af) Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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(ag) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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10. Other Representations, Warranties and Covenants of Landlord . . . . . . . . . . . . . . . . . . . . 46
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(a) Removal of Landlord's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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(b) Actions Required of the Title Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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(c) No Default or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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(d) No Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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(e) Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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(f) Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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(g) Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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(h) Not a Foreign Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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11. Assignment and Subletting by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
-----------------------------------
(a) Landlord's Consent Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
---------------------------
(b) Transfers in Violation of ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-------------------------------
(c) Standard for Landlord's Consent to Assignments and Certain Other Matters . . . . . . . . . . 48
------------------------------------------------------------------------
(d) Consent Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
--------------------
12. Assignment by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
----------------------
(a) Landlord's Assignment Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-------------------------------
(b) Restrictions on Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-------------------------
(iv)
7
13. Environmental Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
-----------------------------
(a) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
---------
(b) Assumption of Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
---------------------
(c) Notice of Environmental Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
------------------------------
(d) Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
-----------------
(e) Survival of the Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
-------------------------
14. Landlord's Right of Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
--------------------------
15. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
-----------------
(a) Definition of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
------------------------------
(b) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
--------
(c) Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
--------------
(d) Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------------------
(e) Waiver by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
----------------
(f) No Implied Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-----------------
16. Default by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------------------
17. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
---------------
18. Surrender Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
--------------------------
19. Holding Over by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
----------------------
20. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-------------
(a) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-------
(b) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
------------
(c) No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
---------
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
--------------------------------------
(e) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
----------------
(f) Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
--------------
(g) Time is of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
----------------------
(h) Termination of Prior Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
---------------------------
(i) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
-------------
(j) Waiver of a Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
----------------------
(k) Income Tax Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
--------------------
Exhibits and Schedules
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal Description
---------
Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Encumbrance List
---------
Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of Permitted Hazardous Substances
---------
Exhibit D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of Existing Trade Fixtures
---------
(v)
8
Exhibit E . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Advance Request Forms
---------
Exhibit F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Covenant Compliance Certificate
---------
Exhibit G. . . . . . . . . . . . . . . . . . Notice of Reduction in Maximum Construction Allowance
---------
Schedule 1 . . . . . . . . . . . . . . . . . . . . . . Description of initial Construction Project
(vi)
9
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this "LEASE"), made to be
effective as of April 12, 1996 (all references herein to the "DATE HEREOF" or
words of like effect shall mean such effective date), by and between BNP
LEASING CORPORATION, a Delaware corporation (hereinafter called "LANDLORD"),
and CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation (hereinafter
called "TENANT");
W I T N E S E T H T H A T:
WHEREAS, pursuant to an Agreement of Purchase and Sale dated March 22,
1996 (hereinafter called the "EXISTING CONTRACT") covering the land described
in Exhibit A attached hereto (hereinafter called the "LAND") and any
improvements thereon, Landlord is acquiring the Land and any improvements
thereon from R.N.D. Funding Company, Inc. (hereinafter called "SELLER")
contemporaneously with the execution of this Lease;
WHEREAS, pursuant to an existing lease dated as of November 22, 1989,
originally between OSJ Properties Partners I, as lessor, and Tenant, as lessee
(the "EXISTING LEASE"), between Seller, as lessor, and Tenant, as lessee,
Tenant is already in possession of the Land; and
WHEREAS, in anticipation of Landlord's acquisition of the Land and
other property hereinafter described, Landlord and Tenant have reached
agreement as to the terms and conditions upon which Landlord is willing to
lease the same to Tenant, and by this Lease Landlord and Tenant desire to
evidence such agreement and to amend and restate the Existing Lease in their
entirety;
NOW, THEREFORE, in consideration of the rent to be paid and the
covenants and agreements to be performed by Tenant, as hereinafter set forth,
Landlord does hereby LEASE, DEMISE and LET unto Tenant for the term hereinafter
set forth the Land, together with:
(i) Landlord's interest in any and all buildings
and improvements now or hereafter erected on the Land, including, but
not limited to, the fixtures, attachments, appliances, building
service, equipment, machinery and other articles attached to such
buildings and improvements (hereinafter called the "IMPROVEMENTS");
(ii) all easements, rights-of-way now and other
appurtenant rights owned or hereafter acquired by Landlord for use in
connection with the Land or Improvements or as a means of access
thereto;
(iii) all right, title and interest of Landlord, now owned
or hereafter acquired, in and to (A) any land lying within the
right-of-way of any street, open or proposed, adjoining the Land, (B)
any and all sidewalks and alleys adjacent to the Land and (C) any
strips and gores between the Land and abutting land.
The Land and all of the property described in items i through iii above are
hereinafter referred to collectively as the "REAL PROPERTY".
10
In addition to conveying the leasehold in the Real Property as
described above, Landlord hereby grants and assigns to Tenant for the term of
this Lease the right to use and enjoy (and, to the extent the following consist
of contract rights, to enforce) any interests or rights in, to or under the
following that have been transferred to Landlord by Seller under the Existing
Contract or which are hereafter acquired by Landlord, to the extent any such
rights and interests are assignable and related to the Real Property: (a) any
goods, building service equipment, chattels and personal property of whatever
nature that are located on the Real Property and transferred to Landlord by
Seller under the Existing Contract and all renewals or replacements of or
substitutions for any of the foregoing; and (b) any general intangibles,
permits, licenses, franchises, certificates, and other rights and privileges.
All of the property, rights and privileges described above in this paragraph
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"LEASED PROPERTY."
Provided, however, the leasehold estate conveyed hereby and Tenant's
rights hereunder are expressly made subject and subordinate to the Permitted
Encumbrances (as hereinafter defined) and to any other claims not constituting
Landlord's Liens (as hereinafter defined).
The Leased Property is leased by Landlord to Tenant and is accepted
and is to be used and possessed by Tenant upon and subject to the following
terms, provisions, covenants, agreements and conditions:
2. Definitions. As used herein, the terms "Landlord,"
"Tenant," "Existing Contract," "Seller," "Existing Lease," "Land,"
"Improvements," "Real Property," "Personal Property" and "Leased Property"
shall have the meanings indicated above and the terms listed immediately below
shall have the following meanings:
(a) Active Negligence. "ACTIVE NEGLIGENCE" of
any Person (including Landlord) means, and is limited to, the negligent conduct
of activities on the Leased Property by such Person or by others acting and
authorized to act on such Person's behalf in a manner that proximately causes
actual bodily injury or property damage to occur. "ACTIVE NEGLIGENCE" shall
not include (1) any negligent failure of Landlord to act when the duty to act
would not have been imposed but for Landlord's status as owner of the Leased
Property or as a party to the transactions described in this Lease, (2) any
negligent failure of any other Indemnified Party to act when the duty to act
would not have been imposed but for such party's contractual or other
relationship to Landlord or participation or facilitation in any manner,
directly or indirectly, of the transactions described in this Lease, or (3) the
exercise in a lawful manner by Landlord (or any party lawfully claiming through
or under Landlord) of any right or remedy provided herein or in the Purchase
Documents.
(b) Additional Rent. "ADDITIONAL RENT" shall
have the meaning assigned to it in subparagraph d below.
(c) Advance Date. "ADVANCE DATE" means,
regardless of whether any Construction Advance shall actually be made thereon,
the first Business Day of every calendar month, beginning with May 1, 1996 and
continuing regularly thereafter to and including the Base Rent Commencement
Date; provided, that if Landlord sells its interest in the Leased Property
pursuant to
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11
the Purchase Agreement before the Base Rental Commencement Date, the last
Advance Date shall be the Designated Payment Date.
(d) Affiliate. "AFFILIATE" of any Person means
any other Person controlling, controlled by or under common control with such
Person. For purposes of this definition, the term "CONTROL" when used with
respect to any Person means the power to direct the management of policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
(e) Applicable Laws. "APPLICABLE LAWS" shall
have the meaning assigned to it in subparagraph d below.
(f) Applicable Purchaser. "APPLICABLE PURCHASER"
means any third party designated by Tenant to purchase the Landlord's interest
in the Leased Property and in any Escrowed Proceeds as provided in the Purchase
Agreement.
(g) Attorneys' Fees. "ATTORNEYS' FEES" means the
reasonable fees and expenses of counsel to the parties incurring the same,
which may include fairly allocated costs of in-house counsel, printing,
photostating, duplicating and other expenses, air freight charges, and
reasonable fees billed for law clerks, paralegals, librarians and others not
admitted to the bar but performing services under the supervision of an
attorney. Such terms shall also include, without limitation, all such
reasonable fees and expenses incurred with respect to appeals, arbitrations and
bankruptcy proceedings, and whether or not any manner or proceeding is brought
with respect to the matter for which such fees and expenses were incurred.
(h) Banking Rules Change. "BANKING RULES CHANGE"
means either: (1) the introduction of or any change after the date hereof
(other than any change by way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in any law or regulation,
in the generally accepted interpretation by the institutional lending community
of any law or regulation or in the interpretation of any law or regulation
asserted by any regulator, court or other governmental authority or (2) the
compliance with any new guideline or new request after the date hereof from any
central bank or other governmental authority (whether or not having the force
of law).
(i) Base Rent. "BASE RENT" means the rent
payable by Tenant pursuant to subparagraph a below.
(j) Base Rental Commencement Date. "BASE RENTAL
COMMENCEMENT DATE" means the earlier of the first Business Day in May, 1997 or
the first Business Day of the first calendar month upon which or after which
any of the following shall have occurred: (1) Tenant shall have substantially
completed the initial Construction Project described in subparagraph i and any
subsequent Construction Projects commenced before completion of the initial
Construction Project, or (2) the then Outstanding Construction Allowance
(including any Construction Advance and Carrying Costs added to the Outstanding
Construction Advance on that Business Day) shall equal or exceed the Maximum
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12
Construction Allowance available under this Lease. For example, if on the
first Business Day of December, 1996 construction of the initial Construction
Project is continuing, the Outstanding Construction Allowance is $2,099,999
(before adding any Carrying Costs for the preceding month) and the Maximum
Construction Allowance is $2,100,000 (assuming the Initial Funding Advance is
$16,100,000), and if Carrying Costs of $100,000 would be added to the
Outstanding Construction Allowance on such day if the Construction Allowance
were not limited to the Maximum Construction Allowance, then such day shall be
the Base Rental Commencement Date and on such day $1 will be added to the
Outstanding Construction Allowance as Carrying Cost and $99,999 will be payable
as Base Rent pursuant to Paragraph a.
(k) Base Rental Date. "BASE RENTAL DATE" means
the first Business Day of each calendar month, beginning with first Business
Day of the first calendar month after the Base Rental Commencement Date and
continuing regularly thereafter to and including the Designated Payment Date.
(l) Base Rental Period. "BASE RENTAL PERIOD"
means each successive period of approximately one (1) month, with the first
Base Rental Period beginning on and including the Base Rental Commencement Date
and ending on but not including the first Base Rental Date. Each successive
Base Rental Period after the first Base Rental Period shall begin on and
include the day on which the preceding Base Rental Period ends and shall end on
but not include the next following Base Rental Date.
(m) Breakage Costs. "BREAKAGE COSTS" means any
and all costs, losses or expenses incurred or sustained by Landlord's Parent or
any Participant, for which Landlord's Parent or the Participant shall expect
reimbursement from Landlord, because of the resulting liquidation or
redeployment of deposits or other funds used to make or maintain advances to
the Landlord in connection with the Leased Property upon any application of a
Qualified Payment, any sale of the Leased Property pursuant to the Purchase
Agreement or any termination of this Lease, if such application, sale or
termination occurs on any day other than a Base Rental Date. Breakage Costs
will include losses attributable to any decline in LIBOR as of the effective
date of termination as compared to LIBOR used to determine the Effective Rate
then in effect. (However, if Landlord's Parent or the applicable Participant
actually receives a profit upon the liquidation or redeployment of deposits or
other funds used to make or maintain advances to the Landlord in connection
with the Leased Property, because of any increase in LIBOR, then such profit
will be offset against costs or expenses that would otherwise be charged as
Breakage Costs under this Lease.) Each determination by Landlord's Parent of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon Landlord and Tenant.
(n) Business Day. "BUSINESS DAY" means any day
that is (1) not a Saturday, Sunday or day on which commercial banks are
generally closed or required to be closed in New York City, New York or San
Francisco, California, and (2) a day on which dealings in deposits of dollars
are transacted in the London interbank market; provided that if such dealings
are suspended indefinitely for any reason, "BUSINESS DAY" shall mean any day
described in clause (1).
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13
(o) Capital Adequacy Charges. "CAPITAL ADEQUACY
CHARGES" means any additional amounts Landlord's Parent requires Landlord to
pay as compensation for an increase in required capital as provided in
subparagraph iv.
(p) Closing Costs. "CLOSING COSTS" means the
excess of $16,100,000 over the sums actually paid by Landlord for or in
connection with Landlord's acquisition of the Leased Property at the closing
under the Existing Contract, which excess will be advanced by or on behalf of
Landlord to pay Attorneys' Fees and other costs incurred in connection with the
preparation and negotiation of this Lease, the Purchase Documents, the
Environmental Indemnity and related documents. To the extent that Landlord
does not itself use such excess to pay expenses incurred by Landlord in
connection with the preparation and negotiation of such documents, the
remainder thereof will be advanced to Tenant, with the understanding that
Tenant shall use any such amount advanced for one or more of the following
purposes: (1) the payment or reimbursement of expenses incurred by Tenant in
connection with the preparation and negotiation of this Lease, the Purchase
Documents, the Environmental Indemnity and related documents; (2) the payment
or reimbursement of expenses incurred by Tenant in connections with anticipated
Construction Projects, including subdivision, demolition and grading
activities, as appropriate, the planning, design, engineering and permitting of
the Improvements; (3) the maintenance of the Leased Property; or (4) the
payment of Rents next due.
(q) Code. "CODE" means the Internal Revenue Code
of 1986, as amended from time to time.
(r) Construction Advances. "CONSTRUCTION
ADVANCES" means actual advances of funds made by or on behalf of Landlord to
Tenant pursuant to Paragraph 7 below for Construction Projects.
(s) Construction Allowance. "CONSTRUCTION
ALLOWANCE" means the allowance which is to be provided by Landlord for
Construction Projects as more particularly described in Paragraph 7 below.
(t) Construction Period. "CONSTRUCTION PERIOD"
means each successive period of approximately one (1) month, except that the
first Construction Period shall be a shorter period beginning on and including
the effective date hereof and ending on but not including the first Advance
Date. Each successive Construction Period after the first Construction Period
shall begin on and include the day on which the preceding Construction Period
ends and shall end on but not include the next following Advance Date.
(u) Construction Project. "CONSTRUCTION
PROJECTS" include (1) the "initial Construction Project" which means the
construction of the improvements described in Schedule 1 and contemplated by
the plans, renderings and budgets referenced therein, consistent with the uses
permitted by this Lease, and (2) "subsequent Construction Projects" which means
any other project to be undertaken by Tenant during the term of this Lease for
the construction of new Improvements or for the alteration of then existing
Improvements. A subsequent Construction Project may involve demolition of then
existing Improvements which are no longer needed or which must be removed to
accommodate new Improvements, subject to the requirements of Paragraph b below.
All construction work planned or done contemporaneously shall constitute a
single Construction Project for purposes of
-5-
14
this Lease, notwithstanding that such work may be done in stages or performed
by more than one general contractor. However, it is understood that any number
of distinct Construction Projects may be undertaken by Tenant during the term
of (and in accordance with the provisions of) this Lease.
(z) Custodial Agreement. "CUSTODIAL AGREEMENT" means the
Custodial Agreement dated as of the date hereof between Banque Nationale de
Paris, New York Branch, and Tenant pursuant to which such bank will hold
securities pledged by Tenant as collateral for Tenant's obligations under the
Purchase Agreement, as such Custodial Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in accordance with
its terms.
(v) Default. "DEFAULT" means any event which,
with the passage of time or the giving of notice or both, would (if not cured
within any applicable cure period) constitute an Event of Default.
(w) Default Rate. "DEFAULT RATE" means a
floating per annum rate equal to three percent (3%) above the Prime Rate.
However, in no event will the Default Rate exceed the maximum interest rate
permitted by law.
(x) Designated Payment Date. "DESIGNATED PAYMENT
DATE" shall have the meaning assigned to it in the Purchase Agreement.
(y) Effective Rate. "EFFECTIVE RATE" means:
(i) for the short first Construction Period
ending May 1, 1996, the per annum rate which equals the Spread plus
the per annum rate charged to Landlord by Landlord's Parent on the
Initial Funding Advance for such Construction Period, it being
understood that the rate charged to Landlord by Landlord's Parent
during such period will be equal to the average daily rate for such
period established internally by Landlord's Parent as its marginal
cost of funds; and
(ii) for each subsequent Construction Period and
for each Base Rental Period, the per annum rate which equals the
Spread plus the per annum rate determined by dividing (A) LIBOR for
such Construction Period or Base Rental Period by (B) 100% minus the
Eurodollar Rate Reserve Percentage for such Construction Period or
Base Rental Period. When "LIBOR" or the "Eurodollar Rate Reserve
Percentage" changes upon the commencement of a new Construction Period
or Base Rental Period in accordance with the definitions of those
terms herein, then the Effective Rate shall be automatically increased
or decreased, as the case may be, upon the commencement of such
period. If for any reason Landlord determines that it is impossible
or impractical to determine the Effective Rate with respect to a given
Construction Period or Base Rental Period in accordance with the
preceding sentences, then the "EFFECTIVE RATE" for that period shall
equal the Spread plus any published index or per annum interest rate
determined in good faith by Landlord's Parent to be comparable to
LIBOR at the beginning of the first day of that period. A comparable
interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published
in the then most recently published United States Federal Reserve
Statistical Release H.15(519) or its successor publication), plus or
minus a fixed adjustment based on Landlord's Parent's
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15
comparison of past eurodollar market rates to past yields on such
Treasury obligations. Any determination by Landlord's Parent of the
Effective Rate hereunder shall, in the absence of clear and
demonstrable error, be conclusive and binding.
(z) Environmental Cutoff Date. "ENVIRONMENTAL
CUTOFF DATE" means the later of the dates upon which (i) this Lease terminates,
(ii) Tenant surrenders possession of the Leased Property or (iii) Tenant ceases
to have any leasehold or other interest in the Leased Property under this Lease
or otherwise.
(aa) Environmental Indemnity. "ENVIRONMENTAL
INDEMNITY" means the separate Environmental Indemnity Agreement dated as of the
date hereof executed by Tenant in favor of Landlord covering the Land and
certain other property described therein, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
(bb) Environmental Laws. "ENVIRONMENTAL LAWS"
means any and all existing and future Applicable Laws pertaining to safety,
health or the environment, or to Hazardous Substances or Hazardous Substance
Activities, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, hereinafter called
"CERCLA"), and the Resource Conservation and Recovery Act of 1976, as amended
by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments
of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as amended,
hereinafter called "RCRA").
(cc) Environmental Losses. "ENVIRONMENTAL LOSSES"
means Losses suffered or incurred by any Indemnified Party relating to or
arising out of, based on or as a result of: (i) any Hazardous Substance
Activity that occurs or is alleged to have occurred on or prior to the
Environmental Cutoff Date; (ii) any violation on or prior to the Environmental
Cutoff Date of Environmental Laws relating to the Leased Property or to the
ownership, use, occupancy or operation thereof; (iii) any investigation,
inquiry, order, hearing, action, or other proceeding by or before any
governmental or quasi-governmental agency or authority in connection with any
Hazardous Substance Activity that occurs or is alleged to have occurred in
whole or in part on or prior to the Environmental Cutoff Date; or (iv) any
claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Indemnified Party which relates to, arises from, is based on, or results from
any of the matters described in clauses (i), (ii) or (iii) of this subparagraph
cc, or any allegation of any such matters. For purposes of determining whether
Losses constitute "Environmental Losses," as the term is used in this Lease,
any actual or alleged Hazardous Substance Activity or violation of
Environmental Laws relating to the Leased Property will be presumed to have
occurred prior to the Environmental Cutoff Date unless Tenant establishes by
clear and convincing evidence to the contrary that the relevant Hazardous
Substance Activity or violation of Environmental Laws did not occur or commence
prior to the Environmental Cutoff Date. Even if after the Environmental Cutoff
Date Losses are incurred by or asserted against a particular Indemnified Party
that would not have been incurred or asserted, but for any matter described in
clauses (i), (ii) or (iii) of this subparagraph cc, or an allegation of any
such matter, then such Losses will constitute Environmental Losses. FURTHER,
ENVIRONMENTAL LOSSES INCURRED BY OR ASSERTED AGAINST A PARTICULAR INDEMNIFIED
PARTY SHALL
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16
INCLUDE LOSSES RELATING TO OR ARISING OUT OF OR AS A RESULT OF ANY MATTERS
LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH MATTERS ARE CAUSED BY THE
NEGLIGENCE OF THAT PARTICULAR OR ANY OTHER INDEMNIFIED PARTY; PROVIDED,
HOWEVER, THAT LOSSES INCURRED BY OR ASSERTED AGAINST A PARTICULAR INDEMNIFIED
PARTY AND PROXIMATELY CAUSED BY (AND ATTRIBUTED BY ANY APPLICABLE PRINCIPLES OF
COMPARATIVE FAULT TO) MISCONDUCT OF THAT INDEMNIFIED PARTY WILL NOT CONSTITUTE
ENVIRONMENTAL LOSSES OF SUCH INDEMNIFIED PARTY FOR PURPOSES OF THIS LEASE.
(dd) Environmental Report. "ENVIRONMENTAL REPORT"
means the following certain reports: Environmental Baseline Investigation
Building Three and Four Cypress Semiconductor Corporation 3939 and 0000 X.
Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, prepared for Tenant by Associated Terra
consultants, Inc., dated March 27, 1996, file no. 125175 and Appendices
thereto.
(ee) ERISA. "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from time to time, together with all
rules and regulations promulgated with respect thereto.
(ff) ERISA Affiliate. "ERISA AFFILIATE" means any
Person who for purposes of Title IV of ERISA is a member of Tenant's controlled
group, or under common control with Tenant, within the meaning of Section 414
of the Code, and the regulations promulgated and rulings issued thereunder.
(gg) ERISA Termination Event. "ERISA TERMINATION
EVENT" means (i) the occurrence with respect to any Plan of a) a reportable
event described in Sections 4043(b)(5) or (6) of ERISA or b) any other
reportable event described in Section 4043(b) of ERISA other than a reportable
event not subject to the provision for 30-day notice to the Pension Benefit
Guaranty Corporation pursuant to a waiver by such corporation under Section
4043(a) of ERISA, or (ii) the withdrawal of Tenant or any Affiliate of Tenant
from a Plan during a plan year in which it was a "SUBSTANTIAL EMPLOYER" as
defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of
intent to terminate any Plan or the treatment of any Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of proceedings
to terminate any Plan by the Pension Benefit Guaranty Corporation under Section
4042 of ERISA, or (v) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
(hh) Escrowed Proceeds. "ESCROWED PROCEEDS" means
any proceeds that are received by Landlord from time to time during the Term
(and any interest earned thereon), which Landlord is holding for the purposes
specified in the next sentence, from any party (1) under any casualty insurance
policy as a result of damage to the Leased Property, (2) as compensation for
any restriction placed upon the use or development of the Leased Property or
for the condemnation of the Leased Property or any portion thereof, (3) because
of any judgment, decree or award for injury or damage to the Leased Property or
(4) under any title insurance policy or otherwise as a result of any title
defect or claimed title defect with respect to the Leased Property; provided,
however, in determining "ESCROWED PROCEEDS" there shall be deducted all
expenses and costs of every type, kind
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and nature (including Attorneys' Fees) incurred by Landlord to collect such
proceeds; and provided, further, "ESCROWED PROCEEDS" shall not include any
payment to Landlord by a Participant or an Affiliate of Landlord that is made
to compensate Landlord for the Participant's or Affiliate's share of any Losses
Landlord may incur as a result of any of the events described in the preceding
clauses (1) through (4). "ESCROWED PROCEEDS" shall include only such proceeds
as are held by Landlord (A) pursuant to Paragraph 5 for the payment to Tenant
for the restoration or repair of the Leased Property or (B) for application as
a Qualified Payment or as reimbursement of Breakage Costs incurred in
connection with a Qualified Payment. "ESCROWED PROCEEDS" shall not include any
proceeds that have been applied as a Qualified Payment or to pay any Breakage
Costs incurred in connection with a Qualified Payment. Until Escrowed Proceeds
are paid to Tenant pursuant to Paragraph 5 below or applied as a Qualified
Payment or as reimbursement for costs incurred in connection with a Qualified
Payment, Landlord shall keep the same deposited in an interest bearing account,
and all interest earned on such account shall be added to and made a part of
Escrowed Proceeds.
(ii) Eurocurrency Liabilities. "EUROCURRENCY LIABILITIES"
has the meaning assigned to that term in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
(jj) Eurodollar Rate Reserve Percentage. "EURODOLLAR RATE
RESERVE PERCENTAGE" means, for purposes of determining the Effective Rate for
any Construction Period or Base Rental Period, the reserve percentage
applicable two Business Days before the first day of such period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirement
(including, but not limited to, any emergency, supplemental or other marginal
reserve requirement) for Landlord's Parent with respect to liabilities or
deposits consisting of or including Eurocurrency Liabilities (or with respect
to any other category or liabilities by reference to which LIBOR is determined)
having a term comparable to such period.
(kk) Event of Default. "EVENT OF DEFAULT" shall
have the meaning assigned to it in subparagraph a below.
(ll) Excluded Taxes. "EXCLUDED TAXES" shall mean
(1) all Federal, state and local income taxes upon Base Rent, the Upfront Fee,
Commitment Fees, any interest paid to Landlord pursuant to subparagraph e and
any additional compensation claimed by Landlord pursuant to subparagraph iv;
(2) all federal, state and local income taxes upon any amounts paid as
reimbursement for or to satisfy Losses incurred by Landlord under this Lease or
otherwise to the extent such taxes are offset by a corresponding reduction of
Landlord's income taxes because of Landlord's deduction of the reimbursed
Losses from Landlord's taxable income or because of any tax credits
attributable thereto; (3) taxes imposed by any governmental authority outside
the United States; and (4) any transfer or change of ownership taxes assessed
because of Landlord's transfer or conveyance to any third party of Landlord's
rights or interests in the Lease, the Purchase Documents or the Leased
Property, but excluding any such taxes assessed because of any Permitted
Transfer described in clauses (4) or (5) of the definition of Permitted
Transfer below. For purposes of this definition, income taxes shall include
without limitation any income taxes (whether or not so designated) imposed
under the Code or California Bank and Corporation Tax Law as well as Texas
corporate franchise taxes.
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(mm) Fed Funds Rate. "FED FUNDS RATE" means, for
any period, a fluctuating interest rate (expressed as a per annum rate and
rounded upwards, if necessary, to the next 1/16 of 1%) equal for each day
during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rates are not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Landlord's Parent from three Federal funds brokers of
recognized standing selected by Landlord's Parent. All determinations of the
Fed Funds Rate by Landlord's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon Landlord and Tenant.
(nn) Funding Advances. "FUNDING ADVANCES" means
(1) the Initial Funding Advance and (2) all future advances (which, together
with Initial Funding Advance, are expected to total but in no event exceed
$18,200,000) made by Landlord's Parent or any Participant to or on behalf of
Landlord to allow Landlord to provide the Construction Allowance hereunder.
(oo) GAAP. "GAAP" means generally accepted
accounting principles in the United States of America as in effect from time to
time, applied on a basis consistent with those used in the preparation of the
financial statements referred to in subparagraph w (except for changes
concurred in by Tenant's independent public accountants).
(pp) Hazardous Substance. "HAZARDOUS SUBSTANCE"
means (i) any chemical, compound, material, mixture or substance that is now or
hereafter defined or listed in, regulated under, or otherwise classified
pursuant to, any Environmental Laws as a "hazardous substance," "hazardous
material," "hazardous waste," "extremely hazardous waste or substance,"
"infectious waste," "toxic substance," "toxic pollutant," or any other
formulation intended to define, list or classify substances by reason of
deleterious properties addressed by Environmental Laws, including, without
limitation, ignitability, corrosiveness, reactivity, carcinogenicity, toxicity
or reproductive toxicity; (ii) petroleum, any fraction of petroleum, natural
gas, natural gas liquids, liquified natural gas, synthetic gas usable for fuel
(or mixtures of natural gas and such synthetic gas), and ash produced by a
resource recovery facility utilizing a municipal solid waste stream, and
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iii) asbestos and any asbestos containing material; (iv) "waste" as
defined in section 13050(d) of the California Water Code (with the exception of
non-hazardous waste as defined under federal law); and (v) any other material
that, because of its quantity, concentration or physical or chemical
characteristics, poses a significant present or potential hazard to human
health or safety or to the environment if released into the workplace or the
environment.
(qq) Hazardous Substance Activity. "HAZARDOUS
SUBSTANCE ACTIVITY" means any actual, proposed or threatened use, storage,
holding, release (including, without limitation, any spilling, leaking,
leaching, pumping, pouring, emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through soil, surface water,
groundwater or any body of water), discharge, deposit, placement, generation,
processing, construction, treatment, abatement, removal, disposal, disposition,
handling or transportation of any Hazardous Substance from, under, in, into or
on the Leased Property, including, without limitation, the movement or
migration of any Hazardous Substance from surrounding property, surface water,
groundwater or any
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body of water under, in, into or onto the Leased Property and any resulting
residual Hazardous Substance contamination in, on or under the Leased Property.
"HAZARDOUS SUBSTANCE ACTIVITY" also means any existence of Hazardous Substances
on the Leased Property that would cause the Leased Property or the owner or
operator thereof to be in violation of, or that would subject the Leased
Property to any remedial obligations under, any Environmental Laws, including
without limitation CERCLA and RCRA, assuming disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances
pertaining to the Leased Property.
(rr) Impositions. "IMPOSITIONS" shall have the
meaning assigned to it in subparagraph p below.
(ss) Improvements. "IMPROVEMENTS," as defined in
the recitals at the beginning of this Lease, shall include not only existing
improvements to the Land as of the date hereof, but also any new improvements
or changes to existing improvements made by Tenant and any replacements,
substitutions or restorations thereof.
(tt) Indemnified Party. "INDEMNIFIED PARTY" means
each of (1) Landlord and any of Landlord's permitted successors and assigns as
to all or any portion of the Leased Property or any interest therein (but
excluding any Applicable Purchaser under the Purchase Agreement or any Person
that claims its interest in the Leased Property through or under Tenant or such
Applicable Purchaser), and (2) any Affiliate, officer, agent, director,
employee or servant of any of the parties described in clause (1) preceding.
(uu) Initial Funding Advance. "INITIAL FUNDING
ADVANCE" means the advance of $16,100,000 made by Landlord's Parent (directly
or through one or more of its Affiliates) to or on behalf of Landlord on or
prior to the date of this Lease to cover the cost of Landlord's acquisition of
the Leased Property and Closing Costs.
(vv) Landlord's Parent. "LANDLORD'S PARENT" means
Landlord's Affiliate, Banque Nationale de Paris, a bank organized and existing
under the laws of France and any successors of such bank.
(ww) Landlord's Liens. "LANDLORD'S LIENS" means,
and is limited to, Liens encumbering the Leased Property that are asserted (1)
other than as contemplated by this Lease or the Purchase Documents by Landlord
itself, (2) by third parties lawfully claiming through or under Landlord (which
for purposes of this Lease shall include any judgment lien established against
the Leased Property because of a judgment rendered against Landlord and shall
also include any lien established against the Leased Property to secure past
due Excluded Taxes), or (3) by third parties claiming under a deed or other
instrument duly executed by Landlord; provided, Landlord's Liens shall not
include (A) any Permitted Encumbrances (regardless of whether claimed through
or under Landlord), (B) this Lease, the Purchase Documents or any other
document executed by Landlord contemporaneously with the execution of this
Lease, (C) Liens which are neither lawfully claimed through or under Landlord
(as described above) nor claimed under a deed or other instrument duly executed
by Landlord, (D) Liens claimed by, through or under Tenant, (E) Liens arising
because of Landlord's compliance with Applicable Law, the Existing Agreement,
subparagraph b below or any written request made by Tenant, or (F) Liens
securing the payment of property taxes or other amounts
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assessed against the Leased Property by any governmental authority, other than
to secure the payment of Excluded Taxes which Landlord owes but has failed to
pay or damages caused by (and attributed by any applicable principles of
comparative fault to) Landlord's own Misconduct.
(xx) LIBOR. "LIBOR" means, for purposes of
determining the Effective Rate for each Construction Period or Base Rental
Period, the rate determined by Landlord's Parent to be the average rate of
interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of
the rates at which deposits of dollars are offered or available to Landlord's
Parent in the London interbank market at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such Construction Period
or Base Rental Period. Landlord shall instruct Landlord's Parent to consider
deposits, for purposes of making the determination described in the preceding
sentence, that are offered: (i) for delivery on the first day of such
Construction Period or Base Rental Period, (ii) in an amount equal or
comparable to the total (projected on the applicable date of determination by
Landlord's Parent) Stipulated Loss Value on the first day of such period, and
(iii) for a period of time equal or comparable to the length of such period.
If Landlord's Parent so chooses, it may determine LIBOR for any period by
reference to the rate reported by the British Banker's Association on Page 3750
of the Telerate Service at approximately 11:00 a.m. (London time) on the
second Business Day preceding the first day of such period. If for any reason
Landlord's Parent determines that it is impossible or impractical to determine
LIBOR with respect to a given Construction Period or Base Rental Period in
accordance with the preceding sentences, or if Landlord's Parent shall
determine that it is unlawful (or any central bank or governmental authority
shall assert that it is unlawful) for Landlord's Parent to fund or maintain
advances to Landlord in connection with the Leased Property during any
Construction Period or Base Rental Period for which Carrying Costs or Base Rent
is computed by reference to LIBOR, then "LIBOR" for that Construction Period or
Base Rental Period shall equal the rate which is forty basis points (40/100 of
1%) above the Fed Funds Rate for that period. All determinations of LIBOR by
Landlord's Parent shall, in the absence of clear anddemonstrable error, be
binding and conclusive upon Landlord and Tenant.
(yy) Lien. "LIEN" means any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, any agreement to sell
receivables with recourse, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction). Customary
bankers' rights of set-off arising by operation of law or by contract (however
styled, if the contract grants rights no greater than those arising by
operation of law) in connection with working capital facilities, lines of
credit, term loans and letter of credit facilities and other contractual
arrangements entered into with banks in the ordinary course of business are not
"Liens" for the purposes of this Lease.
(zz) Losses. "LOSSES" means any and all losses,
liabilities, damages (whether actual, consequential, punitive or otherwise
denominated), demands, claims, actions, judgments, causes of action,
assessments, fines, penalties, costs, and out-of-pocket expenses (including,
without limitation, Attorneys' Fees and the fees of outside accountants and
environmental consultants), of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote, known and
unknown. However, Losses incurred by any Indemnified Party (including
Landlord) shall not include, for purposes of this Lease, losses, liabilities,
damages, demands, claims, actions, judgments, causes of action, assessments,
fines, penalties, costs, or out-of-pocket expenses
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incurred because of (and attributed by any applicable principles of comparative
fault to) such Indemnified Party's Misconduct and shall not in any event
include Excluded Taxes.
(aaa) Maximum Construction Allowance. "MAXIMUM
CONSTRUCTION ALLOWANCE" means an amount equal to $18,200,000, less the Initial
Funding Advance, or such lesser amount to which the Maximum Construction
Allowance may be reduced by Tenant pursuant to Paragraph 6.(d).
(bbb) Misconduct. "MISCONDUCT" of a Person means,
and is limited to: (1) if the Person is subject to the terms of this Lease or
the Purchase Documents, a breach by such Person of the express provisions of
this Lease or the Purchase Documents that continues beyond any period for cure
provided herein, and (2) any Active Negligence, gross negligence or wilful
misconduct of such Person or its Affiliates or of the officers, employees or
employers of such Person or its Affiliates. Misconduct of one Indemnified
Party shall not be attributed to a second Indemnified Party if the second
Indemnified Party is not an Affiliate, officer, employee or employer of the
first. Negligence which does not constitute Active Negligence or gross
negligence shall not constitute Misconduct.
(ccc) Outstanding Construction Allowance.
"Outstanding Construction Allowance" shall have the meaning assigned to it in
subparagraph i.
(ddd) Participant. "PARTICIPANT" means any banks
or financial institutions organized under the laws of the United States or any
state thereof or any European Country and any Affiliates of such entities who
may after the date of this Lease agree with Landlord to participate in all or
some of the risks and rewards to Landlord of this Lease and the Purchase
Documents.
(eee) Permitted Encumbrances. "PERMITTED
ENCUMBRANCES" means (i) the encumbrances and other matters affecting the Leased
Property that are set forth in Exhibit B attached hereto and made a part
hereof, and (ii) any provisions of the Existing Contract that survived closing
thereunder, and (iii) any easement agreement or other document affecting title
to the Leased Property executed by Landlord pursuant to the Existing Contract
or pursuant to a document executed in accordance with the Existing Contract or
otherwise executed by Landlord at the written request of or with the written
consent of Tenant.
(fff) Permitted Hazardous Substance Use.
"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, storage and offsite disposal
of Permitted Hazardous Substances in strict accordance with applicable
Environmental Laws and with due care given the nature of the Hazardous
Substances involved; provided, the scope and nature of such use, storage and
disposal shall not include the use of underground storage tanks for any purpose
other than the storage of water for fire control, nor shall such scope and
nature:
(1) exceed that reasonably required for the operation of the Leased
Property for the purposes permitted under subparagraph a; or
(2) include any disposal, discharge or other release of Hazardous
Substances in any manner that poses a significant risk of allowing
such substances to reach the San Francisco Bay, surface water or
groundwater, except (i) through a lawful and properly authorized
discharge (A) to a publicly owned treatment works or (B) with
rainwater or storm water runoff in
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accordance with Applicable Laws and any permits obtained by Tenant
that govern such runoff; or (ii) any such disposal, discharge or other
release of Hazardous Substances for which no permits are required and
which are not otherwise regulated under applicable Environmental Laws.
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Leased Property in
manner which requires a RCRA treatment, storage or disposal facility permit,
including but not limited to a landfill, incinerator or other waste disposal
facility.
(ggg) Permitted Hazardous Substances. "PERMITTED
HAZARDOUS SUBSTANCES" means Hazardous Substances used and reasonably required
for Tenant's operation of the Leased Property for the purposes expressly
permitted by subparagraph a, in strict compliance with all Environmental Laws
and with due care given the nature of the Hazardous Substances involved.
Without limiting the generality of the foregoing, Permitted Hazardous
Substances shall include, without limitation, usual and customary office and
janitorial products, and the materials listed on Exhibit C attached hereto.
(hhh) Permitted Transfer. "PERMITTED TRANSFER"
means any one or more of the following:
(1) an assignment or conveyance to an Affiliate of Landlord of either
(A) all, but not less than all, of Landlord's then existing rights and
interests hereunder, under the Purchase Documents and in the Leased
Property, or (B) less than all of such rights and interests of
Landlord pursuant to conveyancing documentation which requires that
any action taken directly against Tenant for the collection of Rent or
other payments due under this Lease or the Purchase Documents will be
taken by or on behalf of Landlord in Landlord's own name and not by or
in the name of the Affiliate;
(2) any assignment to Participants of any interest in Rent, payments
required by the Purchase Agreement or payments to be generated from
the Leased Property after the Term, provided such assignment requires
that any action taken directly against Tenant for the collection of
Rent or other payments due under this Lease or the Purchase Documents
will be taken by or on behalf of Landlord in Landlord's own name and
not by or in the name of such Participants;
(3) any agreement to exercise or refrain from exercising rights or
remedies hereunder or under the Purchase Agreement made by Landlord
with any Participant;
(4) any assignment or conveyance requested in writing by Tenant or
required by the Existing Contract, by any Permitted Encumbrance, by
the Purchase Documents or by Applicable Laws; or
(5) any assignment or conveyance of all, but not less than all, of
Landlord's then existing rights and interests hereunder, under the
Purchase Documents and in the Leased Property, when an Event of
Default shall have occurred and be continuing or after the Designated
Payment Date.
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(iii) Person. "PERSON" means an individual, a
corporation, a partnership, an unincorporated organization, an association, a
joint stock company, a joint venture, a trust, an estate, a government or
agency or political subdivision thereof or other entity, whether acting in an
individual, fiduciary or other capacity.
(jjj) Plan. "PLAN" means at any time an employee
pension benefit plan which is covered under Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is either (i)
maintained by Tenant or any Subsidiary for employees of Tenant or any
Subsidiary or (ii) maintained pursuant to a collective bargaining agreement or
any other arrangement under which more than one employer makes contributions
and to which Tenant or any Subsidiary is then making or accruing an obligation
to make contributions or has within the preceding five plan years made
contributions.
(kkk) Pledge Agreement. "PLEDGE AGREEMENT" means
the Pledge Agreement dated as of the date hereof between Landlord and Tenant
pursuant to which Tenant will pledge securities as collateral for Tenant's
obligations under the Purchase Agreement, as such Pledge Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
(lll) Potential Lien Claimants. "POTENTIAL LIEN
CLAIMANTS" means general contractors or other parties who have filed a
statutory Preliminary Notice to preserve their right to a mechanic's or
materialman's lien against the Leased Property in connection with any
Construction Project.
(mmm) Prime Rate. "PRIME RATE" means the prime
interest rate or equivalent charged by Landlord's Parent in the United States
as announced or published by Landlord's Parent from time to time, which need
not be the lowest interest rate charged by Landlord's Parent. If for any
reason Landlord's Parent does not announce or publish a prime rate or
equivalent, the prime rate or equivalent announced or published by either
Citibank, N.A. or any New York branch or office of Credit Commercial de France
as selected by Landlord shall be used to compute the rate describe in the
preceding sentence. The prime rate or equivalent announced or published by
such bank need not be the lowest rate charged by it. The Prime Rate may change
from time to time after the date hereof without notice to Tenant as of the
effective time of each change in rates described in this definition.
(nnn) Purchase Agreement. "PURCHASE AGREEMENT"
means the Purchase Agreement dated as of the date hereof between Landlord and
Tenant pursuant to which Tenant has agreed to purchase or to arrange for the
purchase by a third party of the Leased Property, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise modified from
time to time in accordance with its terms.
(ooo) Purchase Documents. "PURCHASE DOCUMENTS"
means collectively the Purchase Agreement, the Pledge Agreement and the
Custodial Agreement.
(ppp) Qualified Payments. "QUALIFIED PAYMENTS"
means all payments received by Landlord from time to time during the Term from
any party (1) under any casualty insurance policy as a result of damage to the
Leased Property, (2) as compensation for any restriction placed upon the use
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or development of the Leased Property or for the condemnation of the Leased
Property or any portion thereof, (3) because of any judgment, decree or award
for injury or damage to the Leased Property or (4) under any title insurance
policy or otherwise as a result of any title defect or claimed title defect
with respect to the Leased Property; provided, however, that (x) in determining
Qualified Payments, there shall be deducted all expenses and costs of every
kind, type and nature (including taxes, Breakage Costs and Attorneys' Fees)
incurred by Landlord with respect to the collection of such payments, (y)
Qualified Payments shall not include any payment to Landlord by a Participant
or an Affiliate of Landlord that is made to compensate Landlord for the
Participant's or Affiliate's share of any Losses Landlord may incur as a result
of any of the events described in the preceding clauses (1) through (4) and (z)
Qualified Payments shall not include any payments received by Landlord that
Landlord has paid to Tenant for the restoration or repair of the Leased
Property or that Landlord is holding as Escrowed Proceeds. For purposes of
computing the total Qualified Payments (and other amounts dependent upon
Qualified Payments, such as Stipulated Loss Value) paid to or received by
Landlord as of any date, payments described in the preceding clauses (1)
through (4) will be considered as Escrowed Proceeds, not Qualified Payments,
until they are actually applied as Qualified Payments by Landlord as provided
in subparagraph c.
(qqq) Remaining Proceeds. "REMAINING PROCEEDS"
shall have the meaning assigned to it in subparagraph ii.
(rrr) Rent. "RENT" means the Base Rent and all
Additional Rent.
(sss) Responsible Financial Officer. "RESPONSIBLE
FINANCIAL OFFICER" means the chief financial officer, the controller, the
treasurer or the assistant treasurer of Tenant.
(ttt) Scope Change. "SCOPE CHANGE" means a change to a
Construction Project that, if implemented, will make the quality, function or
capacity of the Improvements affected by such Construction Project "materially
different" (as defined below in this paragraph) than as described or inferred
by plans and other items submitted to Landlord by Tenant as described in
subparagraph i. Notwithstanding the foregoing, "Scope Change" shall not
include refinement, correction and detailing of plans or other items submitted
to Landlord by Tenant. As used in this definition, a "material difference"
means a difference that (a) could (after completion of the applicable
Construction Project and the funding of any Construction Advances required in
connection therewith) significantly reduce any excess of the fair market value
of the Leased Property over Stipulated Loss Value or significantly increase any
excess of Stipulated Loss Value over the fair market value of the Leased
Property, or (b) will change the general character of the Improvements from
that needed to accommodate the uses permitted by subparagraph a.
(uuu) Spread. "SPREAD" means, 0.25% per annum.
(vvv) Stipulated Loss Value. "STIPULATED LOSS
VALUE" as of any date means an amount equal to the sum of the Initial Funding
Advances, plus the sum of all Construction Advances and Carrying Costs added to
the Outstanding Construction Allowance on or prior to such date, minus all
funds received by Landlord and applied as Qualified Payments on or prior to
such date. Under no circumstances will any payment of Base Rent, the Upfront
Fee or Commitment Fees reduce Stipulated Loss Value.
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(www) Subsidiary. "SUBSIDIARY" means any
corporation of which Tenant or its other Subsidiaries own, directly or
indirectly, such number of outstanding shares as have more than 50% of the
ordinary voting power for the election of directors.
(xxx) Tenant's Knowledge. "TENANT'S KNOWLEDGE,"
"TO THE KNOWLEDGE OF TENANT" and words of like effect means the actual
knowledge (with due investigation) of any of the following employees of Tenant:
Xxxxxxx Xxxxx, Treasurer; Xxxxx Xxxxxxxxx, Chief Financial Officer; and, Xxxxx
Xxxxx, Director of Site Services. However, to the extent Tenant's knowledge
after the date hereof may become relevant hereunder or under any certificate or
other notice provided by Tenant to Landlord in connection with this Lease,
"Tenant's knowledge" and words of like effect shall include the then actual
knowledge of other employees of Tenant (if any) that have assumed
responsibilities of the current employees listed in the preceding sentence or
that have replaced such current employees. But none of the employees of Tenant
whose knowledge is now or may hereafter be relevant shall be personally liable
for the representations of Tenant made herein.
(yyy) Trade Fixture. "TRADE FIXTURE" means (1)
anything (including, without limitation, furniture, fixtures, equipment,
vessels, piping, electrical panels, conduit, ventilating equipment, demountable
partitions, etc.) brought onto or fixed to the Premises during the term of this
Lease by Tenant at Tenant's expense other than repairs and replacement of the
Leased Property and (2) all of the items more particularly described on
attached Exhibit D.
(zzz) Term. "TERM" shall have the meaning assigned
to it in Paragraph 3 below.
(aaa) Unfunded Benefit Liabilities. "UNFUNDED
BENEFIT LIABILITIES" means, with respect to any Plan, the amount (if any) by
which the present value of all benefit liabilities (within the meaning of
Section 4001(a)(16) of ERISA) under the Plan exceeds the fair market value of
all Plan assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan and in accordance with the provisions of
ERISA for calculating the potential liability of Tenant or any ERISA Affiliate
of Tenant under Title IV of ERISA.
(bbb) Other Terms and References. Words of any
gender used in this Lease shall be held and construed to include any other
gender, and words in the singular number shall be held to include the plural
and vice versa, unless the context otherwise requires. References herein to
Paragraphs, subparagraphs or other subdivisions shall refer to the
corresponding Paragraphs, subparagraphs or subdivisions of this Lease, unless
specific reference is made to another document or instrument. References
herein to any Schedule or Exhibit shall refer to the corresponding Schedule or
Exhibit attached hereto, which shall be made a part hereof by such reference.
All capitalized terms used in this Lease which refer to other documents shall
be deemed to refer to such other documents as they may be renewed, extended,
supplemented, amended or otherwise modified from time to time, provided such
documents are not renewed, extended or modified in breach of any provision
contained herein or therein or, in the case of any other document to which
Landlord or Tenant is a party or of which Landlord is an intended beneficiary,
without the consent of Landlord. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. The words "THIS LEASE",
"HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and words of similar import refer to
this Lease as a whole and not to any particular subdivision unless expressly so
limited. The phrases "THIS PARAGRAPH"
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and "THIS SUBPARAGRAPH" and similar phrases refer only to the Paragraphs or
subparagraphs hereof in which the phrase occurs. The word "OR" is not
exclusive. Other capitalized terms are defined in the provisions that follow.
3. Term. The term of this Lease (herein called the
"TERM") shall commence on and include the effective date hereof, and end at
8:00 A.M. on the first Business Day in May, 2001, unless sooner terminated as
herein provided. Tenant may terminate this Lease immediately after purchasing
or causing an Applicable Purchaser to purchase the Leased Property pursuant to
the Purchase Agreement; provided, however, on any Designated Payment Date
established under and in accordance with the Purchase Agreement, Tenant must
have paid to Landlord all unpaid Rent then due or past due, must have satisfied
Tenant's obligations under the Purchase Agreement, must have paid to Landlord
all Base Rent accruing to the Designated Payment Date (even though such Base
Rent will not be due pursuant to the definitions set forth above if the
Designated Payment Date does not fall on a scheduled Base Rental Date) and must
have paid any Breakage Costs caused by the Landlord's sale of the Leased
Property pursuant to the Purchase Agreement. Satisfaction of the requirements
listed in the proviso to the preceding sentence shall be a condition precedent
to the effectiveness of any early termination of this Lease by Tenant.
4. Rental.
(a) Base Rent. Tenant shall pay Landlord rent
(herein called "BASE RENT") in arrears, in currency that at the time of payment
is legal tender for public and private debts in the United States of America,
in monthly installments on each Base Rental Date through the end of the Term.
Each payment of Base Rent must be received by Landlord no later than 10:00 A.M.
(San Francisco time) on the date it becomes due; if received after 10:00 A.M.
it will be considered for purposes of this Lease as received on the next
following Business Day. Each installment of Base Rent shall represent rent
allocable to the Construction Period or Base Rental Period ending on the date
on which the installment is due. Landlord shall notify Tenant in writing of
the Base Rent due for the Construction Period ending on the Base Rental
Commencement Date (if any) and for each Base Rental Period at least three (3)
days prior to the Base Rent Commencement Date or Base Rental Date on which such
period ends, but any failure by Landlord to so notify Tenant shall not
constitute a waiver of Landlord's right to payment. If Tenant or any other
Applicable Purchaser purchases Landlord's interest in the Leased Property
pursuant to the Purchase Agreement, any Base Rent for the month (or shorter
period) ending on the date of purchase and all outstanding Additional Rent
shall be due on the Designated Payment Date in addition to the purchase price
and other sums due Landlord under the Purchase Agreement. The Base Rent
payable on the Base Rental Commencement Date shall equal the difference (if
any) between (a) total Carrying Costs that would have been added to the
Outstanding Construction Allowance on such date if the Construction Allowance
available hereunder were not limited to the Maximum Construction Allowance, and
(b) the Carrying Costs actually added on such date to the Outstanding
Construction Allowance. The Base Rent for each Base Rental Period shall equal
(A) Stipulated Loss Value on the first day of such Base Rental Period, times
(B) the Effective Rate with respect to such Base Rental Period, times (C) the
number of days in such Base Rental Period, divided by (D) three hundred sixty
(360). Assume, only for the purpose of illustration: that a hypothetical Base
Rental Period contains exactly thirty (30) days; that on the first day of such
Base Rental Period, after the entire Construction Allowance had been funded,
and after deducting a total of $13,200,000 of Qualified Payments received by
Landlord, the resulting Stipulated Loss Value is
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$5,000,000; and that the Effective Rate computed with respect to the applicable
Base Rental Period is 6%. Under such assumptions, the Base Rent for the
hypothetical Base Rental Period will equal:
$5,000,000 x 6% x 30/360, or $25,000.
(b) Upfront Fee. Upon execution and delivery of
this Lease by Landlord, Tenant shall pay Landlord an upfront fee (the "UPFRONT
FEE") as provided in the letter dated March 4, 1996 from Landlord to Tenant
(less the deposit already paid by Tenant pursuant to that letter which will be
applied against the Upfront Fee). The Upfront Fee shall represent Additional
Rent for the first Construction Period.
(c) Commitment Fees. For each Construction
Period Tenant shall pay Landlord a fee (a "COMMITMENT FEE") equal to (1)
twenty-five basis points (25/100 of 1%), times (2) the difference at the end of
the first day of such Construction Period between (A) the Maximum Construction
Allowance and (B) the sum (computed without deduction for any Qualified
Payments) of all Construction Advances made by or on behalf of Landlord and all
Carrying Costs added to and made a part of the Construction Allowance, times
(3) the number of days in such Construction Period, divided by (4) three
hundred sixty (360). Tenant shall pay Commitment Fees in arrears on the first
Business Day of April, July, October and January of each calendar year,
beginning with July 1, 1996 and continuing regularly throughout the Term so
long as Commitment Fees accrue because of a difference between the Maximum
Construction Allowance and the amount described in the preceding clause (B);
provided, if any Commitment Fees shall have accrued and remain unpaid on the
Designated Payment Date, such accrued unpaid Commitment Fees shall be due on
the Designated Payment Date.
(d) Additional Rent. All amounts which Tenant is
required to pay to or on behalf of Landlord pursuant to this Lease, together
with every charge, premium, interest and cost set forth herein which may be
added for nonpayment or late payment thereof, shall constitute rent (all such
amounts, other than Base Rent, are herein called "ADDITIONAL RENT").
(e) Interest and Order of Application. All Rent
shall bear interest, if not paid when first due, at the Default Rate in effect
from time to time from the date due until paid; provided, that nothing herein
contained will be construed as permitting the charging or collection of
interest at a rate exceeding the maximum rate permitted under Applicable Laws.
Landlord shall be entitled to apply any amounts paid by or on behalf of Tenant
hereunder against any Rent then past due in the order the same became due or in
such other order as Landlord may elect.
(f) Net Lease. It is the intention of Landlord
and Tenant that the Base Rent and all other payments herein specified shall be
absolutely net to Landlord, and that Tenant shall pay all costs, expenses and
obligations of every kind relating to the Leased Property or this Lease which
may arise or become due, including, without limitation: (i) Impositions,
including any taxes payable by virtue of Landlord's receipt of amounts paid to
or on behalf of Landlord in accordance with this subparagraph f; (ii) any
Capital Adequacy Charges; (iii) any amount for which Landlord is or becomes
liable with respect to the Permitted Encumbrances; and (iv) any costs incurred
by Landlord (including Attorneys' Fees) because of Landlord's acquisition or
ownership of the Leased Property or because of this Lease or the transactions
contemplated herein. However, the preceding sentence shall not be construed to
make Tenant liable for (1) damages suffered by Landlord because of (and
attributed by any applicable
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principles of comparative fault to) its own Misconduct, (2) Excluded Taxes, (3)
withholding taxes permitted by subsection g or (4) general overhead or internal
administrative expenses of Landlord, Landlord's Parent or any Participant,
except to the extent allowed by subparagraph iii because of changes described
in that subparagraph after the date of this Lease.
(g) Withholding Taxes. Subject to the provisions
of this subparagraph g, but notwithstanding anything else to the contrary in
this Lease, to the extent required by law Tenant may deduct United States and
California withholding taxes imposed as a way of collecting or in lieu of
Excluded Taxes on payments of the Upfront Fee, Commitment Fees, Base Rent, any
interest payable pursuant to subparagraph e or any additional compensation
claimed by Landlord pursuant to subparagraph iv (collectively, "INCOME
PAYMENTS") from Income Payments, without obligation to gross up, indemnify or
otherwise increase payments in consequence thereof. Such withholding will be
permitted if, but only if:
(i) in the case of withholding for Excluded Taxes
imposed by the United States, the Person entitled to receive Income
Payments (whether the original Landlord named herein or an assignee of
the original Landlord's rights hereunder, a "PAYEE") is not exempt
from withholding by reason of having been organized under the laws of
the United States or any State thereof, and such Person shall not have
provided Tenant with three (3) counterparts of each of the forms
prescribed by the Internal Revenue Service (Form 1001 or 4224, or
successor forms, as the case may be) claiming for Payee an exemption
from federal withholding on all Income Payments;
(ii) in the case of withholding for Excluded Taxes
imposed by the State of California, the Payee is not exempt from
withholding by reason of having been qualified to do business in
California, and such Person shall not have provided Tenant with three
(3) counterparts of the forms (if any) prescribed by the California
taxing authorities claiming for Payee an exemption from California
withholding on all Income Payments;
(iii) at least thirty (30) days prior to any withholding
from or reduction of Income Payments, Tenant shall have notified the
Payee that Tenant believes the withholding is required and permitted
by this subparagraph; and
(iv) the withholding taxes on the Income Payments
would have been assessed even if the applicable taxing authorities had
characterized the transactions evidenced by this Lease and the
Purchase Agreement as a mere financing arrangement.
Any Payee exempt from withholding for Excluded Taxes imposed by the United
States by reason of having been organized under the laws of the United States
or any State thereof shall provide to Tenant statements conforming to the
requirements of Treasury Regulation 1.1441-5(b) or any successor thereto (which
statements may be made on a Form W-9). If Tenant shall ever be required to pay
Excluded Taxes that Landlord has failed to pay when due because of Tenant's
failure to withhold from payments made under this Lease, Landlord shall
reimburse Tenant for such Excluded Taxes. Nothing in this subparagraph g shall
excuse Tenant from its obligation under subparagraph iii to compensate Landlord
for increased costs attributable to any change in law relating to withholding
taxes after the date hereof.
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(h) No Demand or Setoff. The Base Rent and all
Additional Rent shall be paid without notice or demand and without abatement,
counterclaim, deduction, setoff or defense, except as expressly provided
herein.
5. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 5,
and so long as no Event of Default shall have occurred and be continuing,
Tenant shall be entitled to use all casualty insurance and condemnation
proceeds payable with respect to the Leased Property during the Term for the
restoration and repair of the Leased Property or any remaining portion thereof.
All insurance and condemnation proceeds received with respect to the Leased
Property (including proceeds payable under any insurance policy covering the
Leased Property which is maintained by Tenant) shall be paid to Landlord and
then applied as follows:
(i) First, such proceeds shall be used to
reimburse Landlord for any costs and expenses, including Attorneys'
Fees, incurred in connection with the collection of such proceeds.
(ii) Second, the remainder of such proceeds (the
"REMAINING PROCEEDS"), shall be held by Landlord as Escrowed Proceeds
and applied to reimburse Tenant for the actual cost of the repair,
restoration or replacement of the Leased Property. However, any
Remaining Proceeds not needed for such purpose shall be applied by
Landlord as Qualified Payments, as provided in subparagraph c, after
Tenant notifies Landlord that they are not needed for repairs,
restoration or replacement.
(b) Any Remaining Proceeds held by Landlord as Escrowed
Proceeds shall be deposited by Landlord in an interest bearing account as
provided in the definition of Escrowed Proceeds and shall be paid to Tenant as
the applicable repair, restoration or replacement progresses and upon
compliance by Tenant with such terms, conditions and requirements as may be
reasonably imposed by Landlord, but in no event shall Landlord be required to
pay any Escrowed Proceeds to Tenant in excess of the actual cost to Tenant of
the applicable repair, restoration or replacement, as evidenced by invoices or
other documentation reasonably satisfactory to Landlord, it being understood
that Landlord may retain any such excess as a Qualified Payment. In any event,
Tenant will not be entitled to any abatement or reduction of the Base Rent or
any other amount due hereunder except to the extent that such excess Remaining
Proceeds result in Qualified Payments which reduce Stipulated Loss Value (and
thus payments computed on the basis of Stipulated Loss Value) as provided in
the definitions set out above. Further, notwithstanding the inadequacy of the
Remaining Proceeds held by Landlord as Escrowed Proceeds, if any, or anything
herein to the contrary, Tenant must, after any taking of less than all or
substantially all of the Leased Property by condemnation and after any damage
to the Leased Property by fire or other casualty, either:
(1) promptly restore or improve the Leased Property or the
remainder thereof to a value no less than sixty percent (60%) of
Stipulated Loss Value (computed after the application of any Remaining
Proceeds as a Qualified Payment) and to a reasonably safe and sightly
condition; or
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(2) promptly restore the Leased Property to a reasonably safe
and sightly condition and pay to Landlord for application as a
Qualified Payment the amount (if any), as determined by Landlord,
needed to reduce Stipulated Loss Value (computed after the application
of such amount and any available Remaining Proceeds as Qualified
Payments) to no more than one hundred sixty-six percent (166%) of the
then-current market value of the Leased Property or remainder thereof.
Any taking of so much of the Leased Property as, in Landlord's reasonable
judgment, makes it impracticable to restore or improve the remainder thereof as
required by part (1) of the preceding sentence shall be considered a taking of
substantially all the Leased Property for purposes of this Paragraph 5.
(c) Notwithstanding the foregoing, if an Event of Default
shall have occurred and be continuing, Landlord shall be entitled to receive
and collect all insurance or condemnation proceeds payable with respect to the
Leased Property, and:
(i) Landlord shall apply the Remaining Proceeds
received by Landlord as a Qualified Payment (or as reimbursement for
Breakage Costs incurred in connection with such Qualified Payment)
within ten (10) Business Days after Landlord receives a written notice
from Tenant unconditionally directing Landlord to so apply the same;
and
(ii) in the absence of such a notice from Tenant
to Landlord, Landlord shall be entitled to either, at the discretion
of Landlord, (A) hold all Remaining Proceeds as Escrowed Proceeds
until paid to Tenant as reimbursement for the actual and reasonable
cost of repairing, restoring or replacing the Leased Property when
Tenant has completed such repair, restoration or replacement, or (B)
apply such proceeds as Qualified Payments when and to the extent
deemed appropriate by Landlord.
When no Event of Default shall have occurred and be continuing, Landlord shall
apply any Remaining Proceeds paid to it or other amounts which are to be
applied as a Qualified Payment (or as reimbursement for Breakage Costs incurred
in connection with a Qualified Payment) within three (3) Business Days after
Landlord receives a written notice from Tenant unconditionally directing
Landlord to so apply the same. In any event, Landlord may deduct Breakage
Costs incurred in connection with a Qualified Payment from the Remaining
Proceeds or other amounts available to Landlord for application as the
Qualified Payment, and Tenant will reimburse Landlord upon request for any such
Breakage Costs that Landlord incurs but does not so deduct. If Remaining
Proceeds held by Landlord exceed Stipulated Loss Value and any Rent payable by
Tenant, Tenant may get the excess by terminating this Lease in accordance with
Paragraph 3 and purchasing any remaining interest of Landlord in the Leased
Property and the Escrowed Proceeds, pursuant to the Purchase Agreement.
(d) In the event of any taking of all or substantially
all of the Leased Property, Landlord shall be entitled to apply all Remaining
Proceeds as a Qualified Payment, notwithstanding the foregoing. In addition, if
Stipulated Loss Value immediately prior to any taking of all or substantially
all of the Leased Property by condemnation exceeds the sum of the Remaining
Proceeds resulting from
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such condemnation, then Landlord shall be entitled to recover the excess from
Tenant upon demand as an additional Qualified Payment, whereupon this Lease
shall terminate.
(e) Nothing herein contained shall be construed to
prevent Tenant from obtaining a separate award from any condemning authority
for a taking of Tenant's personal property
or Trade Fixtures, for moving expenses, for severance damages to other real
property owned by Tenant adjacent to the Land or for business interruption,
provided, such award is not combined with and does not reduce the award for any
taking of the Leased Property, including Tenant's interest therein.
(f) Without limiting Landlord's obligations under the
other provisions of this Paragraph 5 or Tenant's obligations to make repairs
under other provisions of this Lease, Landlord and Tenant each waive any right
of recovery against the other, and the other's agents, officers or employees,
for any damage to the Leased Property or to the personal property situated from
time to time in or on the Leased Property resulting from fire or other casualty
covered by a valid and collectible insurance policy; provided, however, that
the waiver set forth in this subparagraph f shall be effective insofar, but
only insofar, as compensation for such damage or loss is actually recovered by
the waiving party (net of costs of collection) under the policy notwithstanding
the waivers set out in this paragraph. Tenant shall cause the insurance
policies required of Tenant by this Lease to be properly endorsed, if
necessary, to prevent any loss of coverage because of the waivers set forth in
this paragraph. If such endorsements are not available, the waivers set forth
in this paragraph shall be ineffective to the extent that such waivers would
cause required insurance with respect to the Leased Property to be impaired.
6. No Lease Termination.
(a) Status of Lease. Except as expressly
provided herein, this Lease shall not terminate, nor shall Tenant have any
right to terminate this Lease, nor shall Tenant be entitled to any abatement of
the Rent, nor shall the obligations of Tenant under this Lease be excused, for
any reason whatsoever, including without limitation any of the following: (i)
any damage to or the destruction of all or any part of the Leased Property from
whatever cause, (ii) the taking of the Leased Property or any portion thereof
by eminent domain or otherwise for any reason, (iii) the prohibition,
limitation or restriction of Tenant's use of all or any portion of the Leased
Property or any interference with such use by governmental action or otherwise,
(iv) any eviction of Tenant or of anyone claiming through or under Tenant by
paramount title or otherwise (provided, if Tenant is wrongfully evicted by
Landlord or by any third party exercising its rights under a Landlord's Lien,
then Tenant will have the remedies described in Xxxxxxxxx 00 xxxxx), (x) any
default on the part of Landlord under this Lease or under any other agreement
to which Landlord and Tenant are parties, (vi) the inadequacy in any way
whatsoever of the design or construction of any improvements included in the
Leased Property, it being understood that Landlord has not made and will not
make any representation express or implied as to the adequacy thereof, or (vii)
any other cause whether similar or dissimilar to the foregoing, any existing or
future law to the contrary notwithstanding. It is the intention of the parties
hereto that the obligations of Tenant hereunder shall be separate and
independent of the covenants and agreements of Landlord, that the Base Rent and
all other sums payable by Tenant hereunder shall continue to be payable in all
events and that the obligations of Tenant hereunder shall continue unaffected,
unless the requirement to pay or perform the same shall have been terminated or
limited pursuant to an express provision of this Lease. However, nothing in
this Paragraph shall be construed as a waiver by Tenant of any right Tenant may
have at law or in equity to (i) recover monetary damages for any default under
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this Lease by Landlord that Landlord fails to cure within the period provided
in Xxxxxxxxx 00, (xx) injunctive relief in case of the violation, or attempted
or threatened violation, of any of the express covenants, agreements,
conditions or provisions of this Lease which are binding upon Landlord, or
(iii) a decree compelling performance of any of the express covenants,
agreements, conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the
foregoing, Tenant waives to the extent permitted by Applicable Laws, except as
otherwise expressly provided herein, all rights to which Tenant may now or
hereafter be entitled by law (including any such rights arising because of any
implied "warranty of suitability" or other warranty under Applicable Laws) (i)
to quit, terminate or surrender this Lease or the Leased Property or any part
thereof or (ii) to any abatement, suspension, deferment or reduction of the
Base Rent or any other sums payable under this Lease.
7. Construction Allowance.
(a) Advances; Outstanding Construction Allowance.
(i) Subject to the conditions set forth below,
Landlord shall make advances (herein called "CONSTRUCTION ADVANCES")
on Advance Dates from time to time as requested by Tenant to reimburse
Tenant for the cost of Construction Projects or to pay Commitment Fees
then due. As used herein, references to the "OUTSTANDING CONSTRUCTION
ALLOWANCE" shall mean the difference on the date in question (but not
less than zero) of (A) the total Construction Advances made by
Landlord on or prior to the date in question, less (B) any Qualified
Payments received on or prior to the date in question; provided, that
Landlord will not be under any obligation to readvance any portion of
the Construction Allowance repaid by Qualified Payments.
Notwithstanding the foregoing, if for any reason Stipulated Loss Value
(and thus the Outstanding Construction Allowance included as a
component thereof) must be determined under this Lease as of any date
between Advance Dates, the Outstanding Construction Allowance
determined on such date shall equal the Outstanding Construction
Allowance on the immediately preceding Advance Date computed in
accordance with the preceding sentence, plus Carrying Costs (if any)
accruing on and after such preceding Advance Date to but not including
the date in question.
(ii) Charges accruing at the Effective Rate
(herein collectively called "CARRYING COSTS") for each Construction
Period will be added to (and thereafter be included in) the
Outstanding Construction Allowance on the last day of each such
Construction Period (i.e., on the Advance Date upon which such
Construction Period ends). The amount of Carrying Costs for each such
Construction Period shall be equal to (A) Stipulated Loss Value
(including Carrying Costs added with respect to every previous
Construction Period, if any) as of the first day of such Construction
Period, times (B) the Effective Rate with respect to such Construction
Period, times (C) the number of days in such Construction Period,
divided by (D) 360; provided, however, that because the Construction
Allowance available under this Lease is limited to the Maximum
Construction Allowance, Carrying Costs added to the Outstanding
Construction Allowance on the Base Rental Commencement Date shall not
exceed the amount that can be added without causing the Outstanding
Construction Allowance to exceed the Maximum Construction Allowance.
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(b) Construction Projects.
(i) Preconstruction Approvals. Prior to the execution of
this Lease, Tenant submitted and obtained Landlord's approval of plans
or renderings for, a construction budget for, and descriptions of the
initial Construction Project which Tenant expects to construct with the
Construction Allowance. Except as provided below in this subparagraph,
Tenant shall submit and obtain Landlord's written approval of plans or
renderings for any subsequent Construction Project prior to commencement
of the subsequent Construction Project. Landlord may disapprove of such
plans or other items if, but only if, Landlord believes in good faith
that the Construction Project proposed by Tenant will (1) fail to
satisfy the requirements set forth in subparagraph iv, (2) change the
general character of the Leased Property from that needed to accommodate
the uses permitted by subparagraph a or (3) cause Tenant or the Leased
Property to violate some other express provision of this Lease; but no
approval given by Landlord in connection with any Construction Project,
prior to or after the date hereof, shall constitute a waiver of
subparagraph iv or of any other provision of this Lease. Any items
hereafter submitted by Tenant to satisfy this subparagraph shall be
sufficiently detailed to allow Landlord to make a reasonable
determination of whether the applicable Construction Project will
satisfy subparagraph iv, but need not include all detailed construction
specifications and drawings of the work to be included in the
Construction Project. All Construction Projects commenced by Tenant,
including the initial Construction Project which is described in
Schedule 1, and all construction contracts and other agreements executed
or adopted by Tenant in connection therewith, must be substantially
consistent with the plans or other items heretofore or hereafter
submitted to and approved by Landlord as described above in this
subparagraph, except to the extent otherwise provided by any Scope
Changes approved as described below. Before commencing any Construction
Project subsequent to the initial Construction Project, Tenant shall
notify Landlord if Tenant believes that, upon completion of such
subsequent Construction Project, there will be a substantial likelihood
that the Leased Property will have a value of less than 60% of
Stipulated Loss Value.
(ii) Scope Changes. Before making a Scope Change to any
Construction Project, Tenant shall provide to Landlord a reasonably
detailed written description of the Scope Change, a revised construction
budget (only if such Scope Change will require an increase in the
existing construction budget) and a copy of any changes to the drawings,
plans and specifications for the Improvements required in connection
therewith, all of which must be approved in writing by Landlord (or by
any construction representative appointed by Landlord from time to time)
before the Scope Change is implemented. Landlord may disapprove of any
Scope Change if, but only if, Landlord believes in good faith that the
Construction Project proposed by Tenant, as modified by the Scope
Change, will (1) fail to satisfy the requirements set forth in
subparagraph iv, (2) change the general character of the Leased Property
from that needed to accommodate the uses permitted by subparagraph a or
(3) cause Tenant or the Leased Property to violate some other express
provision of this Lease; but Landlord's approval shall not constitute a
waiver of subparagraph iv or of any other provision of this Lease.
(iii) Responsibility for Construction. Tenant shall have
sole responsibility for contracting for and administering all
Construction Projects, it being understood that Landlord's
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obligation with respect to Construction Projects shall be limited to
the making of advances under and subject to the conditions set forth
in this Paragraph 7. No contractor or other third party shall be
entitled to require Landlord to make advances as a third party
beneficiary of this Lease or otherwise. Notwithstanding delays beyond
Tenant's control, and even if the Construction Allowance is not
sufficient to pay for completion of any Construction Project, Tenant
warrants that on the Designated Payment Date under the Purchase
Agreement it shall have caused the initial Construction Project and
any subsequent Construction Projects which are commenced during the
Term to be completed in a good and workmanlike manner, substantially
in accordance with Applicable Laws, and otherwise in compliance with
the provisions of this Lease, unless Tenant or an Applicable Purchaser
has purchased the Leased Property pursuant to the Purchase Agreement
for a net price to Landlord (when taken together with any additional
payments made by Tenant pursuant to Paragraph 2(a)(ii) of the Purchase
Agreement, in the case of a purchase by an Applicable Purchaser) of
not less than Stipulated Loss Value.
(iv) Value Added. Each Construction Project, upon
completion and taken as a whole, must enhance the value of the Leased
Property by an amount commensurate with the Construction Advances made
for such Construction Project, and no Construction Project may
significantly reduce the fair market value of the Property; however:
(1) this subparagraph iv will not preclude Tenant
from obtaining Construction Advances for soft costs (such as
architectural fees and design and permitting costs),
demolition costs or other costs that do not, individually, add
value to the Leased Property but that are incurred in
connection with a Construction Project which will in the
aggregate satisfy this subparagraph iv;
(2) to address any concerns Landlord may express
about Tenant's ability to satisfy this subparagraph iv for a
Construction Project, Tenant may by a written notice to
Landlord stipulate a maximum amount of Construction Advances
that Landlord will be required to make for such Construction
Project, in which case Landlord shall not be required to make
Construction Advances for such project in excess of the amount
so stipulated;
(3) if Landlord invokes this subparagraph iv as
justification for disapproving of a Construction Project (or
Scope Change) or for declining to provide Construction
Advances for a Construction Project, then Tenant may satisfy
this subparagraph iv by (A) stipulating a maximum amount of
Construction Advances that Landlord will be required to make
for such Construction Project, and (B) establishing (by an
appraisal in form and scope satisfactory to Landlord from an
independent appraiser satisfactory to Landlord) that the value
of the Leased Property will be no less than 60% of Stipulated
Loss Value upon completion of the Construction Project and
after Landlord provides Construction Advances equal to the
maximum so stipulated;
(4) further, if Tenant ever does satisfy this
subparagraph iv for a particular Construction Project by
establishing a value of no less than 60% of Stipulated Loss
Value as described in the preceding clause (3), Landlord shall
have no further right,
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absent a subsequent Scope Change to such Construction Project,
to invoke this subparagraph iv as justification for
disapproving of such Construction Project or for withholding
Construction Advances requested within the limit of the
maximum Construction Advances stipulated by Tenant.
(v) Advances Not a Waiver. No funding of
Construction Advances and no failure of Landlord to object to any
Construction Project proposed or constructed by Tenant shall
constitute a waiver by Landlord of the requirements contained in this
subparagraph b.
(c) Conditions to Construction Advances.
Landlord's obligation to make Construction Advances from time to time under
this Paragraph 7 shall be subject to the following terms and conditions, all of
which are intended for the sole benefit of Landlord:
(i) Prior Notice. Tenant must make a request in
substantially the form attached to this Lease as Exhibit E for any
Construction Advance at least seven (7) Business Days prior to the
Advance Date upon which the advance is to be paid. Landlord shall
consider in good faith any changes to the Construction Advance request
forms attached hereto that Tenant may reasonably request for a
particular Construction Project, provided the requested changes do not
impair Landlord's rights or create or increase any liability Landlord
may have in connection with the applicable Construction Project.
(ii) Amount of the Advances. No Construction
Advance shall exceed the lesser of:
a) the Maximum Construction Allowance, less the
then Outstanding Construction Allowance (computed after adding
any Carrying Costs accrued for the month ending on the Advance
Date upon which such Construction Advance is to be made); or
b) (1) the actual costs and expenses previously
incurred or paid by Tenant (other than expenses already
included in Closing Costs) for the preparation, negotiation
and execution of this Lease, for Construction Projects
(including "soft costs") or for Commitment Fees, less (2) the
sum of all prior Construction Advances made under this
Paragraph 7 to Tenant as reimbursement for such costs and
expenses.
(iii) Other Restrictions on the Amount of Advances.
No Construction Advance shall be required that would cause the total
Construction Advances required to complete any Construction Project
previously commenced, as estimated by Landlord, to exceed the
difference computed by subtracting (1) the Carrying Costs then
projected by Landlord to be added to the Construction Allowance, from
(2) the Construction Allowance remaining to be advanced. Nor shall
any Construction Advance (other than the final Construction Advance)
be requested for an amount less than $100,000.
(iv) Insurance. Tenant shall have obtained and provided
certificates (or, in the case of clause a) below, title policies or
binders) reasonably satisfactory to Landlord evidencing insurance
covering the Leased Property as follows (in addition to the liability
insurance required under subparagraph aa below):
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a) Title Insurance. An owner's
title insurance policy (or binder committing the applicable
title insurer to issue an owner's title insurance policy,
without the payment of further premiums) in the amount of
$18,200,000, in form and substance reasonably satisfactory to
Landlord, written by Chicago Title Company or one or more
other title insurance companies reasonably satisfactory to
Landlord and insuring Landlord's ownership of fee title to the
Leased Property, including any new Improvements constructed by
Tenant; and
b) Builder's Risk Insurance.
Builder's Completed Value Risk and such other hazard insurance
as Landlord may require against all risks of physical loss
(including collapse and transit coverage, but not including
earthquake coverage) with deductibles not to exceed $500,000,
such insurance to be in amounts sufficient to cover the total
value of all Improvements under construction and to be
maintained in full force and effect at all times until
completion of the initial Construction Project or any
subsequent Construction Projects.
(v) Progress of Construction. Each Construction
Project which has commenced but not yet been completed shall be
progressing without any significant continuing interruption in a good
and workmanlike manner and substantially in accordance with Applicable
Laws and the requirements of this Lease, and Tenant shall be
diligently pursuing the correction of any significant defect in the
construction thereof.
(vi) Evidence of Costs and Expenses to be Reimbursed.
To the extent contemplated by the Construction Advance request forms
attached as Exhibit E and described in subparagraph i, or otherwise
reasonably required by Landlord at the time a Construction Advance is
to be made, Tenant shall have submitted invoices, requests for payment
from contractors and other evidence that all costs and expenses for
which Tenant requests reimbursement constitute actual costs and
expenses incurred by Tenant for a Construction Project.
(vii) No Event of Default. No Event of Default shall
have occurred and be continuing under this Lease.
(viii) No Sale of Landlord's Interest. No sale of
Landlord's interest in the Leased Property shall have occurred
pursuant to the Purchase Agreement.
(ix) Certificate of No Default and Other Matters.
Landlord shall have received, together with the notice requesting the
Construction Advance described in clause (i) above, a current
certificate of an officer of Tenant in the form included in Exhibit E.
Without limiting the foregoing, Landlord may decline to advance any
amount when Tenant is unable to truthfully certify, as contemplated in
Exhibit E, that no liens are being asserted (as defined in such
Certificate) against any part of or interest in the Leased Property
that in the aggregate secure or allegedly secure more that $500,000 of
claims by Potential Lien Claimants, regardless of whether any such
liens have caused an Event of Default to occur hereunder or are being
contested by Tenant as permitted by subparagraph o.
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(d) Reduction of Maximum Construction Allowance. So long
as the Maximum Construction Allowance exceeds the Outstanding Construction
Allowance, Tenant may reduce the Maximum Construction Allowance to any amount
in excess of the Outstanding Construction Allowance by delivering to Landlord a
notice in the form of Exhibit G hereto specifying the amount to which the
Maximum Construction Allowance is to be reduced. Such reduction shall be
effective on the date on which Landlord receives such notice, and once so
reduced, the Maximum Construction Allowance may not be increased by Tenant at
any time during the Term.
8. Purchase Documents and Environmental Indemnity.
Tenant acknowledges and agrees that nothing contained in this Lease shall
limit, modify or otherwise affect any of Tenant's obligations under the
Purchase Documents or Environmental Indemnity, which obligations are intended
to be separate, independent and in addition to, and not in lieu of, the
obligations established by this Lease. Except as provided in subparagraph k,
in the event of any inconsistency between the terms and provisions of the
Purchase Documents or Environmental Indemnity and the terms and provisions of
this Lease, the terms and provisions of the Purchase Documents or Environmental
Indemnity (as the case may be) shall control.
9. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances
and the terms hereof, Tenant may use and occupy the Leased Property so long as
no Event of Default occurs hereunder, but only for the following purposes and
other lawful purposes incidental thereto:
(i) manufacturing, assembly, warehousing
and laboratory-based research and development of semiconductor,
computer-related or other electronic products;
(ii) administrative and office space;
(iii) cafeteria, library, and other support
function uses that Tenant may provide to its employees; and
(iv) those uses specified under Section
5.1.2 of the Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Xxxx (included in Permitted Encumbrances), except for
subsections 5.1.2(a) relating to gasoline service stations and
5.1.2(c) relating to public utility service facilities, transmission
and distribution substations and public utility service centers, which
shall be prohibited uses.
As used in this subparagraph, "products" shall not include products designed to
detect, monitor, neutralize, handle or process Hazardous Substances.
(b) Condition. Tenant accepts the Leased
Property (and will accept the same upon any purchase of the Landlord's interest
therein) in its present state, AS IS, and without any representation or
warranty, express or implied, as to the condition of such property or as to the
use which may be made thereof. Tenant also accepts the Leased Property without
any representation or warranty, express or implied, by Landlord regarding the
title thereto or the rights of any parties in
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possession of any part thereof, except as set forth in subparagraph a.
Landlord shall not be responsible for any latent or other defect or change of
condition in the Land, Improvements, fixtures and personal property forming a
part of the Leased Property, and the Rent hereunder shall in no case be
withheld or diminished because of any latent or other defect in such property,
any change in the condition thereof or the existence with respect thereto of
any violations of Applicable Laws. Nor shall Landlord be required to furnish
to Tenant any facilities or service of any kind, such as, but not limited to,
water, steam, heat, gas, hot water, electricity, light or power.
(c) Consideration of and Scope of Waiver. The
provisions of subparagraph b above have been negotiated by the Landlord and
Tenant after due consideration for the Rent payable hereunder and are intended
to be a complete exclusion and negation of any representations or warranties of
the Landlord, express or implied, with respect to the Leased Property that may
arise pursuant to any law now or hereafter in effect, or otherwise. However,
such exclusion of representations and warranties by Landlord is not intended to
impair any representations or warranties made by other parties, including
Seller, the benefit of which is to pass to Tenant because of the definition of
Personal Property and Leased Property above.
10. Other Representations, Warranties and Covenants of
Tenant. Tenant represents, warrants and covenants as follows:
(a) Financial Matters. Tenant is solvent and has
no outstanding liens, suits, garnishments or court actions which could render
Tenant insolvent. There has not been filed by or, to Tenant's Knowledge,
against Tenant a petition in bankruptcy or a petition or answer seeking an
assignment for the benefit of creditors, the appointment of a receiver,
trustee, custodian or liquidator with respect to Tenant or any significant
portion of Tenant's property, reorganization, arrangement, rearrangement,
composition, extension, liquidation or dissolution or similar relief under the
federal Bankruptcy Code or any state law. The financial statements and all
financial data heretofore delivered to Landlord relating to Tenant are true,
correct and complete in all material respects. No material adverse change has
occurred in the financial position of Tenant and its Subsidiaries taken as a
whole as reflected in Tenant's financial statements covering the fiscal period
ended December 31, 1995.
(b) Existing Contract. Except to the extent
required of Landlord under subparagraph b, Tenant shall satisfy all surviving
obligations of the "Buyer" (as the term "Buyer" is used in the Existing
Contract) under the Existing Contract and under all other documents, the
execution of which is required by or in connection with the Existing Contract.
Tenant agrees to indemnify, defend and hold Landlord harmless from and against
any and all Losses imposed on or asserted against or incurred by Landlord at
any time and from time to time by reason of, in connection with or arising out
of any obligations imposed by the Existing Contract. THE INDEMNITY SET OUT IN
THIS SUBPARAGRAPH SHALL APPLY EVEN IF THE SUBJECT OF THE INDEMNIFICATION IS
CAUSED BY OR ARISES OUT OF THE NEGLIGENCE OF LANDLORD; PROVIDED, SUCH INDEMNITY
SHALL NOT APPLY TO LOSSES PROXIMATELY CAUSED BY (AND ATTRIBUTED BY ANY
APPLICABLE PRINCIPLES OF COMPARATIVE FAULT TO) THE MISCONDUCT OF LANDLORD.
Because Tenant hereby assumes and agrees to satisfy all surviving obligations
of the Buyer under the Existing Contract, no failure by Landlord to take any
action required by the Existing Contract (save and except any actions required
of Landlord under subparagraph b) shall, for the purposes of this indemnity, be
deemed to be caused by the Misconduct
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of Landlord. The foregoing indemnity is in addition to the other indemnities
set out herein and shall not terminate upon the closing of any sale of
Landlord's interest in the Leased Property pursuant to the provisions of the
Purchase Agreement or the termination of this Lease.
(c) No Default or Violation. The execution,
delivery and performance by Tenant of this Lease, the Purchase Documents and
the Environmental Indemnity do not and will not constitute a breach or default
under any other material agreement or contract to which Tenant is a party or by
which Tenant is bound or which affects the Leased Property or Tenant's use,
occupancy or operation of the Leased Property or any part thereof and do not,
to the knowledge of Tenant, violate or contravene any law, order, decree, rule
or regulation to which Tenant is subject, and such execution, delivery and
performance by Tenant will not result in the creation or imposition of (or the
obligation to create or impose) any lien, charge or encumbrance not
contemplated by this Lease or the Purchase Documents on, or security interest
in, Tenant's property pursuant to the provisions of any of the foregoing.
(d) Compliance with Covenants and Laws. The
intended use of the Leased Property by Tenant complies, or will comply after
Tenant obtains readily available permits, in all material respects with all
applicable restrictive covenants, zoning ordinances and building codes, flood
disaster laws, applicable health, safety and environmental laws and
regulations, the Americans with Disabilities Act and other laws pertaining to
disabled persons, and all other applicable laws, statutes, ordinances, rules,
permits, regulations, orders, determinations and court decisions (all of the
foregoing are herein sometimes collectively called "APPLICABLE LAWS"). Tenant
has obtained or will promptly obtain all utility, building, health and
operating permits as may be required for Tenant's use of the Leased Property by
any governmental authority or municipality having jurisdiction over the Leased
Property.
(e) Environmental Representations. To Tenant's
Knowledge and except as otherwise disclosed in the Environmental Report, as of
the date hereof: (i) neither Tenant nor any prior owner or operator of the
Leased Property or any surrounding property has reported or been required to
report any release of any Hazardous Substances on or from the Leased Property
or the surrounding property pursuant to any Environmental Law; (ii) neither
Tenant nor any prior owner or operator of the Leased Property has received from
any federal, state or local governmental authority any warning, citation,
notice of violation regarding a suspected or known release or discharge of
Hazardous Substances on or from the Leased Property or regarding a suspected or
known violation of Environmental Laws concerning the Leased Property which has
not been completely rectified; and (iii) none of the following are located on
the Leased Property: asbestos; urea formaldehyde foam insulation; transformers
or other equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts per million; any other
Hazardous Substances other than Permitted Hazardous Substances; or any
underground storage tank or tanks prohibited by this Lease. Further, Tenant
represents that to Tenant's Knowledge the Environmental Report is not
misleading or inaccurate in any material respect.
(f) No Suits. As of the effective date of this
Lease, there are no judicial or administrative actions, suits, proceedings or
investigations pending or, to Tenant's Knowledge, threatened that will affect
Tenant's intended use of the Leased Property or the validity, enforceability or
priority of this Lease, or Tenant's use, occupancy and operation of the Leased
Property or any part
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thereof, and Tenant is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority that could materially and adversely affect the business or assets of
Tenant and its Subsidiaries taken as a whole or Tenant's use, occupancy or
operation of the Leased Property. No condemnation or other like proceedings
are pending or, to Tenant's Knowledge, threatened against the Leased Property.
(g) Condition of Property. The Land as described
in Exhibit A is the same as the land shown on the survey plat entitled
"A.L.T.A. Survey" dated March 29, 1996, prepared by Sandis Humbar Xxxxx,
Drawing No. 296123, which was delivered to Landlord at the request of Tenant.
The Leased Property is currently served by electric, gas, storm and sanitary
sewers, sanitary water supply, telephone and other utilities as required for
the use thereof. All streets, alleys and easements necessary to serve the
Leased Property have been completed and are serviceable. The Leased Property
is (or will be after completion of the initial Construction Project) in a
condition satisfactory for its use and occupancy. To Tenant's Knowledge, no
latent or patent defects or deficiencies in the Leased Property exist that,
either individually or in the aggregate, could materially and adversely affect
Tenant's use or occupancy of the Leased Property after completion of the
initial Construction Project or could reasonably be anticipated to endanger
life or limb. No part of the Real Property is within a flood plain as
designated by any governmental authority, or if located in flood plain, Tenant
has insured the improvements from loss by flood in accordance with Section
8(r).
(h) Organization. Tenant is duly incorporated
and legally existing under the laws of the State of Delaware and is duly
qualified to do business in the State of California. Tenant has all requisite
power and has procured or will procure on a timely basis all governmental
certificates of authority, licenses, permits, qualifications and other
documentation required to lease and operate the Leased Property. Tenant has
the corporate power and adequate authority, rights and franchises to own
Tenant's property and to carry on Tenant's business as now conducted and is
duly qualified and in good standing in each state in which the character of
Tenant's business makes such qualification necessary (including, without
limitation, the State of California) or, if it is not so qualified in a state
other than California, such failure does not have a material adverse effect on
the properties, assets, operations or businesses of Tenant and its
Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and
performance of this Lease, the Purchase Documents and the Environmental
Indemnity are duly authorized and do not require the consent or approval of any
governmental body or other regulatory authority that has not heretofore been
obtained and are not in contravention of or conflict with any Applicable Laws
or any term or provision of Tenant's articles of incorporation or bylaws. This
Lease, the Purchase Documents and the Environmental Indemnity are valid,
binding and legally enforceable obligations of Tenant in accordance with their
terms, except as such enforcement is affected by bankruptcy, insolvency and
similar laws affecting the rights of creditors, generally, and equitable
principles of general application.
(j) Not a Foreign Person. Tenant is not a
"foreign person" within the meaning Sections 1445 and 7701 of the Code (i.e.,
Tenant is not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined in the Code and
regulations promulgated thereunder).
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(k) Omissions. None of Tenant's representations
or warranties contained in this Lease or any document, certificate or written
statement furnished to Landlord by or on behalf of Tenant contains any untrue
statement of a material fact or omits a material fact necessary in order to
make the statements contained herein or therein (when taken in their
entireties) not misleading.
(l) Existence. Tenant shall continuously
maintain its existence and its qualification to do business in the State of
California.
(m) Tenant Taxes. Tenant shall comply with all
applicable tax laws and pay before the same become delinquent all taxes imposed
upon it or upon its property (but not Excluded Taxes) where the failure to so
comply or so pay would have a material adverse effect on the financial
condition or operations of Tenant; except that Tenant may in good faith by
appropriate proceedings contest the validity, applicability or amount of any
such taxes and pending such contest Tenant shall not be deemed in default under
this subparagraph if (1) Tenant diligently prosecutes such contest to
completion in an appropriate manner, and (2) Tenant promptly causes to be paid
any tax adjudged by a court of competent jurisdiction to be due, with all
costs, penalties, and interest thereon, promptly after such judgment becomes
final; provided, however, in any event such contest shall be concluded and the
tax, penalties, interest and costs shall be paid prior to the date any writ or
order is issued under which any of Tenant's property that is material to the
business of Tenant and its Subsidiaries taken as a whole may be seized or sold
because of the nonpayment thereof.
(n) Operation of Property. Tenant shall operate
the Leased Property in a good and workmanlike manner and in compliance with all
Applicable Laws and will pay all fees or charges of any kind in connection
therewith other than Excluded Taxes. Tenant shall not use or occupy, or allow
the use or occupancy of, the Leased Property in any manner which violates any
Applicable Law or which constitutes a public or private nuisance or which makes
void, voidable or cancelable any insurance then in force with respect thereto.
To the extent that any of the following would, individually or in the
aggregate, materially and adversely affect the value of the Leased Property
Tenant shall not: (i) initiate or permit any zoning reclassification of the
Leased Property; (ii) seek any variance under existing zoning ordinances
applicable to the Leased Property; (iii) use or permit the use of the Leased
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations; (iv)
execute or file any subdivision plat affecting the Leased Property; or (v)
consent to the annexation of the Leased Property to any municipality. If a
change in the zoning or other Applicable Laws affecting the permitted use or
development of the Leased Property shall occur that Landlord determines will
materially reduce the then-current market value of the Leased Property, and if
after such reduction the Stipulated Loss Value shall substantially exceed the
then-current market value of the Leased Property in the reasonable judgment of
Landlord, then Tenant shall pay Landlord prior to the termination or expiration
of this Lease an amount equal to such excess for application as a Qualified
Payment. Tenant shall not impose any restrictive covenants or encumbrances
upon the Leased Property without the prior written consent of the Landlord;
provided, that such consent shall not be unreasonably withheld for any
encumbrance or restriction that is made expressly subject to this Lease, as
modified from time to time, and subordinate to Landlord's interest in the
Leased Property by an agreement in form satisfactory to Landlord. Tenant shall
not cause or permit any drilling or exploration for, or extraction, removal or
production of, minerals from the surface or subsurface of the Leased Property.
Tenant shall not do any act whereby the market value of the Leased Property may
be materially lessened. Tenant shall
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allow Landlord or its authorized representative to enter the Leased Property at
any reasonable time to inspect the Leased Property and, after reasonable
notice, to inspect Tenant's books and records pertaining thereto, and Tenant
shall assist Landlord or Landlord's representative in whatever way reasonably
necessary to make such inspections. If Tenant receives a written notice or
claim from any federal, state or other governmental entity that the Leased
Property is not in compliance in any material respect with any Applicable Law,
or that any action may be taken against the owner of the Leased Property
because the Leased Property does not comply with Applicable Law, Tenant shall
promptly furnish a copy of such notice or claim to Landlord. Notwithstanding
the foregoing, Tenant may in good faith, by appropriate proceedings, contest
the validity and applicability of any Applicable Law with respect to the Leased
Property, and pending such contest Tenant shall not be deemed in default
hereunder because of a violation of such Applicable Law, if Tenant diligently
prosecutes such contest to completion in a manner reasonably satisfactory to
Landlord, and if Tenant promptly causes the Leased Property to comply with any
such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Leased Property;
provided, that in any event such contest shall be concluded and the violation
of such Applicable Law must be corrected and any claims asserted against
Landlord or the Leased Property because of such violation must be paid by
Tenant, all prior to the date that (i) any criminal charges are threatened or
instituted against Landlord or any of its directors, officers or employees
because of such violation or (ii) any action is threatened or instituted by any
governmental authority against Landlord or any property owned by Landlord
(including the Leased Property) because of such violation.
(o) Debts for Operation of Leased Property.
Tenant shall promptly pay or cause to be paid all debts and liabilities
incurred in the maintenance and operation of the Leased Property, including
without limitation all debts and liabilities for labor, material and equipment
and all debts and charges for utilities servicing the Leased Property;
provided, nothing in this subparagraph will be construed to make Tenant liable
for Landlord's Liens or Excluded Taxes. Notwithstanding the foregoing, Tenant
may in good faith by appropriate proceedings contest the validity,
applicability or amount of any asserted mechanic's or materialmen's lien and
pending such contest Tenant shall not be deemed in default under this
subparagraph (or subparagraphs t or u) because of the contested lien if (1)
within sixty (60) days after being asked to do so by Landlord, Tenant bonds
over to Landlord's reasonable satisfaction any contested liens against the
Leased Property alleged to secure an amount in excess of $500,000 (individually
or in the aggregate) (2) Tenant diligently prosecutes such contest to
completion in a manner reasonably satisfactory to Landlord, and (3) Tenant
promptly causes to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all costs and interest thereon, promptly after
such judgment becomes final; provided, however, that in any event each such
contest shall be concluded and the lien, interest and costs shall be paid prior
to the date (i) any criminal action is threatened or instituted against
Landlord or its directors, officers or employees because of the nonpayment
thereof or (ii) any writ or order is issued under which any property owned by
Landlord (including the Leased Property) may be seized or sold or any other
action is threatened or instituted against Landlord or any property owned by
Landlord because of the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord
for (or, if requested by Landlord, will pay or cause to be paid prior to
delinquency) all sales, excise, ad valorem, gross receipts, business, transfer,
stamp, occupancy, rental and other taxes, levies, fees, charges, surcharges,
assessments or penalties which arise out of or are attributable to this Lease
or which are imposed upon Landlord or the Leased Property because of the
ownership, leasing, occupancy, sale or
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operation of the Leased Property, or any part thereof, or relating to or
required to be paid by the terms of any of the Permitted Encumbrances,
excluding only Landlord's Liens and Excluded Taxes (collectively, all such
taxes, levies, fees, charges, surcharges, assessments or penalties, other than
Landlord's Liens and Excluded Taxes, are herein called the "IMPOSITIONS"). If
Landlord requires Tenant to pay any Impositions directly to the applicable
taxing authority or other party entitled to collect the same, Tenant shall
furnish Landlord with receipts showing payment of such Impositions and other
amounts prior to delinquency; except that Tenant may in good faith by
appropriate proceedings contest the validity, applicability or amount of any
asserted Imposition, and pending such contest Tenant shall not be deemed in
default of this subparagraph (or subparagraphs t or u) because of the contested
Imposition if (1) within sixty (60) days after being asked to do so by
Landlord, Tenant bonds over to the reasonable satisfaction of Landlord any lien
asserted against the Leased Property and alleged to secure an amount in excess
of $500,000 because of the contested Imposition, (2) Tenant diligently
prosecutes such contest to completion in a manner reasonably satisfactory to
Landlord, and (3) Tenant promptly causes to be paid any amount adjudged by a
court of competent jurisdiction to be due, with all costs, penalties and
interest thereon, promptly after such judgment becomes final; provided,
however, that in any event each such contest shall be concluded and the
Impositions, penalties, interest and costs shall be paid prior to the date (i)
any criminal action is threatened or instituted against Landlord or its
directors, officers or employees because of the nonpayment thereof or (ii) any
writ or order is issued under which any property owned by Landlord (including
the Leased Property) may be seized or sold or any other action is threatened or
instituted against Landlord or any property owned by Landlord because of the
nonpayment thereof.
(q) Repair, Maintenance, Alterations and
Additions. Subject to Paragraph 5, Tenant shall keep the Leased Property in
good order, repair, operating condition and appearance (ordinary wear and tear
excepted), causing all necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the Leased Property
to be materially misused, abused or wasted or to materially deteriorate.
Tenant shall promptly replace any worn-out fixtures covered by this Lease with
fixtures comparable to the replaced fixtures when new, and Tenant shall not,
without the prior written consent of Landlord, (i) remove from the Leased
Property any fixtures of significant value covered by this Lease except such as
are replaced by Tenant by articles of equal suitability and value, free and
clear of any Lien other than Permitted Encumbrances or Landlord's Liens, or
(ii) make any structural alteration to any Improvements or any alterations
thereto which significantly reduce the fair market value or which change the
general character of the Leased Property or which impair in any significant
manner the useful life or utility of any Improvements; provided, however, the
restrictions imposed upon Tenant by this subparagraph shall not be construed to
impair Tenant's right to undertake the initial or any subsequent Construction
Project permitted by other provisions of this Lease. Upon request of Landlord
made when an Event of Default shall have occurred and be continuing, Tenant
shall deliver to Landlord an inventory describing and showing the make, model,
serial number and location of all Trade Fixtures and personalty not included in
the Leased Property with a certification by Tenant that such inventory is a
true and complete schedule of all such Trade Fixtures and personalty and that
all items covered hereby are free and clear of any Lien other than the
Permitted Encumbrances or Landlord's Liens.
(r) Insurance and Casualty. Throughout the Term,
Tenant will keep all Improvements (including all alterations, additions and
changes made to the Improvements) which are located within the Leased Property
insured under an all-risk property insurance policy (not excluding
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from coverage perils normally included within the definitions of extended
coverage, vandalism, malicious mischief and, if the Leased Property is in a
flood zone, flood) in the amount of one hundred percent (100%) of the
replacement value with endorsements for contingent liability from operation of
building laws, increased cost of construction and demolition costs which may be
necessary to comply with building laws. Tenant will be responsible for
determining the amount of property insurance to be maintained, but such
coverage will be on an agreed value basis to eliminate the effects of
coinsurance. Such insurance shall be issued by an insurance company or
companies rated by the A.M. Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported financial information
rating of X or better. Any deductible applicable to such insurance shall not
exceed $500,000. Such insurance shall cover not only the value of Tenant's
interest in the Improvements, but also the interest of Landlord, and such
insurance shall include provisions that Landlord must be notified at least ten
(10) days prior to any cancellation or reduction of insurance coverage. With
this Lease Tenant shall deliver to Landlord a certificate from the applicable
insurer or its authorized agent evidencing the insurance required by this
subparagraph and any additional insurance which shall be taken out upon any
part of the Leased Property. Thereafter, Tenant shall deliver to Landlord
certificates from the applicable insurer or its authorized agent of renewals or
replacements of all such policies of insurance at least fifteen (15) days
before any such insurance shall expire. Tenant further agrees that all such
policies shall provide that proceeds thereunder will be payable to Landlord and
Tenant as their interests may appear, it being understood between Landlord and
Tenant that such proceeds will be paid to Landlord as Escrowed Proceeds and
will be applied in accordance with Paragraph 5 of this Lease. Landlord shall
have no right to receive proceeds for loss of Tenant's Trade Fixtures and
personal property. If Tenant fails to obtain any insurance required by this
Lease or to provide confirmation of any such insurance as required by this
Lease, Landlord shall be entitled (but not required) to obtain the insurance
that Tenant has failed to obtain or for which Tenant has not provided the
required confirmation and, without limiting Landlord's other remedies under the
circumstances, Landlord may require Tenant to reimburse Landlord for the cost
of such insurance and to pay interest thereon computed at the Default Rate from
the date such cost was paid by Landlord until the date of reimbursement by
Tenant. In the event any of the Leased Property is destroyed or damaged by
fire, explosion, windstorm, hail or by any other casualty against which
insurance shall have been required hereunder, (i) Landlord may, but shall not
be obligated to, make proof of loss if not made promptly by Tenant, (ii) each
insurance company concerned is hereby authorized and directed to make payment
for such loss directly to Landlord for application as required by Paragraph 5,
and (iii) Landlord may settle, adjust or compromise any and all claims for
loss, damage or destruction under any policy or policies of insurance
(provided, that so long as no Event of Default shall have occurred and be
continuing, Landlord must obtain Tenant's written consent to any such
settlement, which consent will not be unreasonably withheld). If any casualty
shall result in damage to or loss or destruction of the Leased Property, Tenant
shall give immediate notice thereof to Landlord and Paragraph 5 shall apply.
Notwithstanding the foregoing, however, if any insurance claim for damage to
the Leased Property is for less than $500,000 and no Event of Default shall
have occurred and be continuing, Tenant shall have the right to settle, adjust
or compromise the claim as Tenant deems appropriate; and Tenant may directly
receive and hold the proceeds of such claim so long as no Event of Default
shall have occurred and be continuing and so long as Tenant applies such
proceeds for any restoration, replacement and repair of the Leased Property
required by subparagraph b.
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(s) Condemnation. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Leased Property or any portion thereof, or any other similar governmental or
quasi-governmental proceedings arising out of injury or damage to the Leased
Property or any portion thereof, each party shall notify the other (provided,
however, Landlord shall have no liability for its failure to provide such
notice) of the pendency of such proceedings. Tenant shall, at its expense,
diligently prosecute any such proceedings and shall consult with Landlord, its
attorneys and experts and cooperate with them as reasonably requested in the
carrying on or defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with respect to the Leased
Property and all judgments, decrees and awards for injury or damage to the
Leased Property shall be paid to Landlord as Escrowed Proceeds for application
as provided in Paragraph 5 above. Landlord is hereby authorized, in the name
of Tenant, at any time when an Event of Default shall have occurred and be
continuing, or with Tenant's prior written consent (which consent will not be
unreasonably withheld), to execute and deliver valid acquittances for, and to
appeal from, any such judgment, decree or award concerning condemnation of any
of the Leased Property. Landlord shall not be in any event or circumstances
liable or responsible for failure to collect, or to exercise diligence in the
collection of, any such proceeds, judgments, decrees or awards.
Notwithstanding the foregoing provisions of this subparagraph, if condemnation
proceeds totaling not more than $500,000 are to be recovered as a result of a
taking of less than all or substantially all of the Leased Property, Tenant may
directly receive and hold such proceeds so long as no Event of Default shall
have occurred and be continuing and so long as Tenant applies such proceeds for
any restoration, replacement and repair of the remainder of the Leased Property
required by Paragraph 4.(b).
(t) Protection and Defense of Title. If any
encumbrance or title defect whatsoever affecting Landlord's fee interest in the
Leased Property is claimed or discovered (excluding Permitted Encumbrances and
Landlord's Liens and this Lease) or if any legal proceedings are instituted
with respect to title to the Leased Property, Tenant shall give prompt written
notice thereof to Landlord and at Tenant's own cost and expense will promptly
cause the removal of any such encumbrance and cure any such defect and will
take all necessary and proper steps for the defense of any such legal
proceedings, including but not limited to the employment of counsel, the
prosecution or defense of litigation and the release or discharge of all
adverse claims. If Tenant fails to promptly remove any such encumbrance or
title defect (other than a Lien Tenant is contesting as expressly permitted by
and in accordance with subparagraph o or subparagraph p), Landlord (whether or
not named as a party to legal proceedings with respect thereto) shall be
entitled to take such additional steps as in its judgment may be necessary or
proper to remove such encumbrance or cure such defect or for the defense of any
such attack or legal proceedings or the protection of Landlord's fee interest
in the Leased Property, including but not limited to the employment of counsel,
the prosecution or defense of litigation, the compromise or discharge of any
adverse claims made with respect to the Leased Property, the removal of prior
liens or security interests, and all expenses (including Attorneys' Fees) so
incurred of every kind and character shall be a demand obligation owing by
Tenant.
(u) No Liens on the Leased Property. Tenant
shall not, without the prior written consent of Landlord, create, place or
permit to be created or placed, or through any act or failure to act, acquiesce
in the placing of, or allow to remain, any Lien which secures any payment or
performance obligation (except Landlord's Liens, the lien for ad valorem taxes
on the Leased Property which are not delinquent and any Lien Tenant is
contesting as expressly permitted by and in
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accordance with subparagraph o or subparagraph p), against or covering the
Leased Property or any part thereof regardless of whether the same are
expressly or otherwise subordinate to this Lease or Landlord's interest in the
Leased Property, and should any such prohibited Lien exist or become attached
hereafter in any manner to any part of the Leased Property without the prior
written consent of Landlord, Tenant shall cause the same to be promptly
discharged and released to the satisfaction of Landlord.
(v) Books and Records. Tenant shall keep books
and records that are accurate and complete in all material respects for the
Leased Property and will permit all such books and records (including without
limitation all contracts, statements, invoices, bills and claims for labor,
materials and services supplied for the operation of any Improvements) to be
inspected and copied by Landlord and its duly accredited representatives at all
times during reasonable business hours. This subparagraph shall not be
construed as requiring Tenant to regularly maintain separate books and records
relating exclusively to the Leased Property; provided, however, that upon
request, Tenant shall construct or abstract from its regularly maintained books
and records information required by this subparagraph relating to the Leased
Property.
(w) Financial Statements; Required Notices;
Certificates as to Default. Tenant shall deliver to Landlord:
(i) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of Tenant, a consolidated
balance sheet of Tenant and its consolidated Subsidiaries as of the end
of such fiscal year and a consolidated income statement and statement
of cash flows of Tenant and its consolidated Subsidiaries for such
fiscal year, all in reasonable detail and all prepared in accordance
with GAAP and accompanied by a report and opinion of accountants of
national standing selected by Tenant, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and
shall not be subject to any qualifications or exceptions as to the
scope of the audit nor to any qualification or exception which Landlord
determines, in Landlord's reasonable discretion, is unacceptable;
provided that notwithstanding the foregoing, for so long as Tenant is a
company subject to the periodic reporting requirements of Section 12 of
the Securities Exchange Act of 1934, as amended, Tenant shall be deemed
to have satisfied its obligations under this clause (i) so long as
Tenant delivers to Landlord the same annual report and report and
opinion of accountants that Tenant delivers to its shareholders;
(ii) as soon as available and in any event within forty-five
(45) days after the end of each of the first three quarters of each
fiscal year of Tenant, the consolidated balance sheet of Tenant and its
consolidated Subsidiaries as of the end of such quarter and the
consolidated income statement and the consolidated statement of cash
flows of Tenant and its consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by a Responsible Financial Officer
of Tenant (subject to year-end adjustments); provided that
notwithstanding the foregoing, for so long as Tenant is a company
subject to the periodic reporting requirements of Section 12 of the
Securities Exchange Act of 1934, as amended, Tenant shall be deemed to
have satisfied its obligations under this clause (ii) so long
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as Tenant delivers to Landlord the same quarterly reports, certified
by a Responsible Financial Officer of Tenant (subject to year-end
adjustments), that Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph ii and i, a certificate of a Responsible
Financial Officer of Tenant in substantially the form attached hereto
as Exhibit F: (i) certifying that to the Tenant's Knowledge no Default
or Event of Default under this Lease has occurred and is continuing
or, if a Default or Event of Default has occurred and is continuing, a
brief statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, (ii) certifying that the
representations of Tenant set forth in this Lease are true and correct
in all material respects as of the date thereof as though made on and
as of the date thereof or, if not then true and correct, a brief
statement as to why such representations are no longer true and
correct, and (iii) with computations demonstrating compliance with the
financial covenants contained in subparagraph ee;
(iv) promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports which Tenant
sends to the Securities and Exchange Commission and all registration
statements (other than registration statements on Form S-8 or any form
substituted therefor) which Tenant files with the Securities and
Exchange Commission or any governmental authority which may be
substituted therefor, or with any national securities exchange;
(v) as soon as possible and in any event within five (5)
days after the occurrence of each Default or Event of Default, a
statement of a Responsible Financial Officer of Tenant setting forth
details of such Default or Event of Default and the action which
Tenant has taken and proposes to take with respect thereto;
(vi) such other information concerning the compliance by
Tenant with the provisions of this Lease or the Purchase Documents,
the Leased Property or Tenant's financial condition as Landlord may
from time to time reasonably request.
Landlord is hereby authorized to deliver a copy of any information or
certificate delivered to it pursuant to this subparagraph w to any regulatory
body having jurisdiction over Landlord that requires or requests it.
(x) Estoppel Certificate. Each party will, upon not less
than twenty (20) days' prior written request, execute, acknowledge and deliver
to the requesting party or its designee a written statement certifying that this
Lease is unmodified and in full effect (or, if there have been modifications,
that this Lease is in full effect as modified, and setting forth such
modification) and either stating that no default exists hereunder or specifying
each such default of which the signer may have knowledge. Any such statement
may be relied upon by any Participant and by any prospective assignee or lender
of Landlord or Tenant with respect to the Property. Each Party shall be
required to provide such a certificate no more frequently than once in any six
month period; provided, however, that if a party determines that there is a
significant business reason for requiring a current certificate, including,
without limitation, the need to provide such a certificate to a prospective
purchaser or assignee, the other party shall provide a certificate upon request
whether or not a certificate has been provided within the prior six month
period.
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(y) Further Assurances. Tenant shall, on request
of Landlord, (i) promptly correct any error which may be discovered in the
contents of this Lease or in any other instrument executed in connection
herewith or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver and record or file such further instruments and do such
further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Lease and to subject to this Lease any
property intended by the terms hereof to be covered hereby including
specifically, but without limitation, any renewals, additions, substitutions,
replacements or appurtenances to the Leased Property; (iii) execute,
acknowledge, deliver, procure and record or file any document or instrument
deemed advisable by Landlord to protect its rights in and to the Leased
Property against the rights or interests of third persons; and (iv) provide
such certificates, documents, reports, information, affidavits and other
instruments and do such further acts as may be necessary, desirable or proper
in the reasonable determination of Landlord to enable Landlord or Landlord's
Parent to comply with the requirements or requests of any agency or authority
having jurisdiction over them.
(z) Fees and Expenses; General Indemnification;
Increased Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the
proceeds of the Initial Funding Advance as part of the Closing Costs,
Tenant shall pay (and shall indemnify and hold harmless Landlord,
Landlord's Parent and any Person claiming through Landlord by reason
of a Permitted Transfer from and against) all Losses incurred by
Landlord or Landlord's Parent (or any Person claiming through Landlord
by reason of a Permitted Transfer) in connection with or because of
(A) the ownership of any interest in or operation of the Leased
Property or (B) the negotiation or administration of this Lease, the
Purchase Documents or the Environmental Indemnity or (C) the making of
Funding Advances, including Attorneys' Fees or other costs or expenses
incurred to evaluate lien releases and other information submitted by
Tenant with requests for Construction Advances or (D) any breach by
Tenant of its obligations hereunder with respect to Construction
Projects, or (E) any claims asserted by third parties and any
out-of-pocket costs incurred by Landlord in connection with or because
of Construction Projects, whether such Losses are incurred at the time
of execution of this Lease or at any time during the Term. Costs and
expenses included in such Losses may include, without limitation: all
appraisal fees, filing and recording fees, inspection fees, survey
fees, taxes (other than Excluded Taxes), brokerage fees and
commissions, abstract fees, title policy fees, Uniform Commercial Code
search fees, escrow fees, Attorneys' Fees and environmental consulting
fees incurred by Landlord with respect to the Leased Property; but
will not include an allocation of general overhead or internal
administrative expenses of Landlord, Landlord's Parent or any
Participant, except to the extent allowed by subparagraph iii because
of a Banking Rules Change after the date of this Lease, and will not
include costs incurred in connection with the negotiation and
execution of agreements between Landlord and Participants. If
Landlord pays or reimburses Landlord's Parent for any such Losses,
Tenant shall reimburse Landlord for the same notwithstanding that
Landlord may have already received any payment from any Participant on
account of such Losses, it being understood that the Participant may
expect repayment from Landlord when Landlord does collect the required
reimbursement from Tenant.
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(ii) Tenant shall also pay (and indemnify and hold
harmless Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against) all
Losses, including Attorneys' Fees, incurred or expended by Landlord or
Landlord's Parent or any Person claiming through Landlord through a
Permitted Transfer or in connection with (A) the breach by Tenant of
any covenant of Tenant herein or in any other instrument executed in
connection herewith or (B) Landlord's exercise of any of Landlord's
rights and remedies hereunder or under Applicable Law or Landlord's
protection of the Leased Property and Landlord's interest therein as
permitted hereunder or under Applicable Law. (However, the indemnity
in the preceding sentence shall not be construed to make Tenant liable
to both Landlord and any other party claiming through Landlord for the
same costs, expenses or damages or for any allocation of general
overhead or internal administrative expenses of Landlord, Landlord's
Parent or any Participant except to the extent allowed by subparagraph
iii because of a Banking Rules Change after the date of this Lease.)
Tenant shall further indemnify and hold harmless Landlord and all
other Indemnified Parties against, and reimburse them for, all Losses
which may be imposed upon, asserted against or incurred or paid by
them by reason of, on account of or in connection with any bodily and
personal injury or death or damage to the property of third parties
occurring in or upon or in the vicinity of the Leased Property through
any cause whatsoever. THE FOREGOING INDEMNITY FOR INJURY, DEATH OR
PROPERTY DAMAGE SHALL APPLY EVEN WHEN INJURY, DEATH OR PROPERTY DAMAGE
IN, ON OR IN THE VICINITY OF THE LEASED PROPERTY RESULTS IN WHOLE OR
IN PART FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY; PROVIDED, SUCH
INDEMNITY SHALL NOT APPLY TO LOSSES SUFFERED BY AN INDEMNIFIED PARTY
THAT WERE PROXIMATELY CAUSED BY (AND ATTRIBUTED BY ANY APPLICABLE
PRINCIPLES OF COMPARATIVE FAULT TO) THE MISCONDUCT OF SUCH INDEMNIFIED
PARTY.
(iii) If, after the date hereof, there shall be any
increase in the cost to Landlord's Parent or any Participant agreeing
to make or making, funding or maintaining advances to Landlord in
connection with the Leased Property because of any Banking Rules
Change, then Tenant shall from time to time, upon demand by Landlord
pay to Landlord for the account of Landlord's Parent, or such
Participant, as the case may be, additional amounts sufficient to
compensate Landlord's Parent or the Participant for such increased
cost. A certificate as to the amount of such increased cost,
submitted to Landlord and Tenant by Landlord's Parent of the
Participant, shall be conclusive and binding for all purposes, absent
clear and demonstrable error.
(iv) Landlord's Parent or any Participant may demand
additional payments (herein called "CAPITAL ADEQUACY CHARGES") if
Landlord's Parent or the Participant determines that any Banking Rules
Change affects the amount of capital to be maintained by it and that
the amount of such capital is increased by or based upon the existence
of advances made or to be made to Landlord to permit Landlord to
maintain Landlord's investment in the Leased Property. To the extent
that Landlord's Parent or the Participant demands Capital Adequacy
Charges as compensation for the additional capital requirements
reasonably allocable to such advances, Tenant shall pay to Landlord
for the account of the Landlord's Parent or the Participant, as the
case may be, the amount so demanded. Without limiting the foregoing,
Landlord and Tenant hereby acknowledge and agree that the Spread (as
such term is used
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herein in the calculation of Base Rent) was established assuming that
because of the Pledge Agreement, the risk weight assigned to 85% of
the collective investment of Landlord and its Affiliates in the Leased
Property pursuant to 12 Code of Federal Regulations, part 225, as from
time to time supplemented or amended, or pursuant to any other similar
or successor statute or regulation applicable to Landlord and its
Affiliates (the "Regulations") would remain at twenty percent during
the term of this Lease. If and so long as such risk weight is
increased because of a Banking Rules Change, Capital Adequacy Charges
may be collected in the form of an increase in the Spread which will
yield the same rate of return to Landlord, Landlord's Parent and any
Participants (net of their costs of maintaining required capital) that
would have existed absent such increase.
(v) Any amount to be paid to Landlord, Landlord's Parent
or any Indemnified Party under this subparagraph z shall be a
demand obligation owing by Tenant. Tenant's indemnities and
obligations under this subparagraph z shall survive the
termination or expiration of this Lease with respect to any
circumstance or event existing or occurring prior to such
termination or expiration. However, Landlord must notify
Tenant of any claim for additional compensation pursuant to
subsections iii or iv within six (6) months after Tenant or
any Applicable Purchaser purchases the Leased Property
pursuant to the Purchase Agreement.
(aa) Liability Insurance. Tenant shall maintain
commercial general liability insurance against claims for bodily and personal
injury or death and property damage occurring or resulting from any occurrence
in or upon the Leased Property, in standard form and with an insurance company
or companies rated by the A.M. Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported financial information
rating of X or better, such insurance to afford immediate protection, to the
limit of not less than $10,000,000 combined single limit for bodily and
personal injury and property damage in respect of any one accident or
occurrence, with not more than $500,000 self-insured retention. Such
commercial general liability insurance shall include blanket contractual
liability coverage which insures contractual liability under the
indemnifications set forth in this Lease for Losses attributable to bodily
injury, personal injury or property damage (other than the indemnifications set
forth in Paragraph 14 concerning environmental matters), but such coverage or
the amount thereof shall in no way limit such indemnifications. The policy
evidencing such insurance shall name Landlord as an additional insured. Tenant
shall maintain with respect to each policy or agreement evidencing such
commercial general liability insurance such endorsements as may be reasonably
required by Landlord and shall at all times deliver and maintain with Landlord
written confirmation (in form satisfactory to Landlord) with respect to such
insurance from the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be canceled or
reduced without at least fifteen (15) days notice to Landlord. Not less than
fifteen (15) days prior to the expiration date of each policy of insurance
required of Tenant pursuant to this subparagraph, Tenant shall deliver to
Landlord a certificate evidencing a paid renewal policy or policies.
(bb) Permitted Encumbrances. Except to the extent
expressly required of Landlord by subparagraph b, Tenant shall comply with and
will cause to be performed all of the covenants, agreements and obligations
imposed upon the owner of the Leased Property in the Permitted Encumbrances in
accordance with their respective terms and provisions. Tenant shall not modify
or permit any modification of any Permitted Encumbrance without the prior
written consent of Landlord.
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Such consent will not be unreasonably withheld for the modification of any
Permitted Encumbrance that has been made expressly subject to this Lease, as
modified from time to time, and subordinate to Landlord's interest in the
Leased Property by agreement in form satisfactory to Landlord.
(cc) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased
Property to be in violation of, or do anything or permit
anything to be done which will subject the Leased Property to
any remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming
disclosure to the applicable governmental authorities of all
relevant facts, conditions and circumstances pertaining to the
Leased Property;
b) not to conduct or authorize others
to conduct Hazardous Substance Activities on the Leased
Property, except Permitted Hazardous Substance Use;
c) to the extent required by
Environmental Laws, to remove Hazardous Substances from the
Leased Property (or if removal is prohibited by law, to take
whatever action is required by law) promptly upon discovery;
and
d) not to discharge or authorize the
discharge of anything (including Permitted Hazardous
Substances) from the Leased Property into groundwater or
surface water that would require any permit under applicable
Environmental Laws, other than storm water runoff.
If Tenant's failure to cure any breach of the covenants listed above
in this subparagraph i continues beyond the Environmental Cure Period
(as defined below), Landlord may, in addition to any other remedies
available to it, after notifying Tenant of the remediation efforts
Landlord believes are needed, cause the Leased Property to be freed
from all Hazardous Substances (or if removal is prohibited by law, to
take whatever action is required by law), and the cost of the removal
shall be a demand obligation owing by Tenant to Landlord. Further,
subject to the provisions of subparagraph c below, Tenant agrees to
indemnify Landlord against all Losses incurred by or asserted or
proven against Landlord in connection therewith. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on
the earlier of: (1) one hundred and eighty days (180) after Tenant is
notified of the breach which must be cured within such period, or such
longer period as is reasonably required for any cure that Tenant
pursues with diligence pursuant to and in accordance with an Approved
Plan (as defined below), (2) the date any writ or order is issued for
the levy or sale of any property owned by Landlord (including the
Leased Property) or any criminal action is threatened or instituted
against Landlord or any of its directors, officers or employees
because of the breach which must be cured within such period, (3) the
end of the Term. As used in this subparagraph, an "APPROVED PLAN"
means a plan of remediation of a violation of Environmental Laws for
which Tenant has obtained, within one hundred and eighty days (180)
after Tenant is notified of the applicable breach of the covenants
listed above in this subparagraph i, the written approval of the
governmental authority with primary jurisdiction
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over the violation and with respect to which no other governmental
authority asserting jurisdiction has claimed such plan is inadequate.
(ii) Environmental Inspections and Reviews.
Landlord reserves the right to retain an independent professional
consultant to review any report prepared by Tenant or to conduct
Landlord's own investigation to confirm whether Hazardous Substances
Activities or the discharge of anything into groundwater or surface
water has occurred in violation of the preceding subparagraph i, but
Landlord's right to reimbursement for the fees of such consultant
shall be limited to the following circumstances: (1) an Event of
Default shall have occurred; (2) Landlord shall have retained the
consultant to establish the condition of the Leased Property just
prior to any conveyance thereof pursuant to the Purchase Agreement or
just prior to the expiration of this Lease; (3) Landlord shall have
retained the consultant to satisfy any regulatory requirements
applicable to Landlord or its Affiliates; or (4) Landlord shall have
retained the consultant because Landlord has been notified of a
violation of Environmental Laws concerning the Leased Property or
Landlord otherwise reasonably believes that Tenant has not complied
with the preceding subparagraph i. Tenant grants to Landlord and to
Landlord's agents, employees, consultants and contractors the right
during reasonable business hours and after reasonable notice to enter
upon the Leased Property to inspect the Leased Property and to perform
such tests as are reasonably necessary or appropriate to conduct a
review or investigation of Hazardous Substances on, or any discharge
into groundwater or surface water from, the Leased Property. Without
limiting the generality of the foregoing, Tenant agrees that Landlord
will have the same right, power and authority to enter and inspect the
Leased Property as is granted to a secured lender under Section 2929.5
of the California Civil Code. Tenant shall promptly reimburse
Landlord for the cost of any such inspections and tests, but only when
the inspections and tests are (1) ordered by Landlord after an Event
of Default; (2) ordered by Landlord to establish the condition of the
Leased Property just prior to any conveyance thereof pursuant to the
Purchase Agreement or just prior to the expiration of this Lease; (3)
ordered by Landlord to satisfy any regulatory requirements applicable
to Landlord or its Affiliates; or (4) ordered because Landlord has
been notified of a violation of Environmental Laws concerning the
Leased Property or Landlord otherwise reasonably believes that Tenant
has not complied with the preceding subparagraph i.
(iii) Notice of Environmental Problems. Tenant
shall immediately advise Landlord of (i) any discovery of any event or
circumstance which would render any of the representations contained
in subparagraph e inaccurate in any material respect if made at the
time of such discovery, (ii) any remedial action taken by Tenant in
response to any (A) discovery of any Hazardous Substances other than
Permitted Hazardous Substances on, under or about the Leased Property
or (B) any claim for damages resulting from Hazardous Substance
Activities, (iii) Tenant's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Leased Property
which is not fully disclosed in the Environmental Report and which
could cause the Leased Property or any part thereof to be subject to
any ownership, occupancy, transferability or use restrictions under
Environmental Laws, or (iv) any investigation or inquiry affecting the
Leased Property by any governmental authority in connection with any
Environmental Laws. In such event, Tenant shall deliver to Landlord
within thirty (30) days after Landlord's request, a preliminary
written environmental plan setting forth a general description of the
action that Tenant proposes to take with respect
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thereto, if any, to bring the Leased Property into compliance with
Environmental Laws or to correct any breach by Tenant of the covenants
listed above in subparagraph i, including, without limitation, any
proposed corrective work, the estimated cost and time of completion,
the name of the contractor and a copy of the construction contract, if
any, and such additional data, instruments, documents, agreements or
other materials or information as Landlord may reasonably request.
(dd) [SUBPARAGRAPH INTENTIONALLY DELETED.]
(ee) Affirmative Financial Covenants.
(i) Quick Ratio. Throughout the Term Tenant shall
maintain a ratio of (A) Quick Assets to (B) the sum of Current
Liabilities of Tenant and its Subsidiaries, of not less than 1.10 to
1.00. As used in this Paragraph ee, "QUICK ASSETS" means the sum
(without duplication of any item) of:
(a) unencumbered cash on hand or on deposit in banks;
(b) unencumbered readily marketable securities:
(1) issued by the United States of
America or any agency thereof and fully
guaranteed by the United States Government;
or
(2) issued by any Person rated at
least (i) A (in the case of securities with
an original maturity greater than one year)
or A-2 (in the case of securities with an
original maturity of one year or less) or the
equivalent thereof by Standard and Poor's
Corporation, or (ii) A-2 (in the case of
securities with an original maturity greater
than one year) or P-2 (in the case of
securities with an original maturity of one
year or less) or the equivalent thereof by
Xxxxx'x Investor Service, Inc.;
(c) unencumbered certificates of deposit or banker's
acceptances issued by commercial banks operating in the United
States of America having capital and surplus in excess of
$1,000,000,000;
(d) unencumbered accounts receivable of Tenant and
its Subsidiaries (determined on a consolidated basis net of
reserves for uncollectible amounts in accordance with GAAP);
and
(e) the securities encumbered by the Pledge
Agreement;
provided, however, any assets described in the preceding clauses (b),
(c) or (e) that have a maturity in excess of one (1) year from the
date of a determination of Quick Assets will be included in Quick
Assets only to the extent that they are both (1) readily marketable
and (2) reported, for purposes of this subparagraph 8.(ae), in an
amount not in excess of their fair
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market value, regardless of whether GAAP would permit reporting at a
higher historical cost. (In contrast, any assets described in the
preceding clauses (b), (c) or (e) with a maturity of less than one (1)
year from the date of a determination of Quick Assets will be included
in Quick Assets, for purposes of this subparagraph ee, as reported by
Tenant on its books and records in accordance with GAAP, regardless of
whether GAAP requires reporting at cost or at market value.) As used
in this subparagraph ee, "CURRENT LIABILITIES" means, with respect to
any Person, all liabilities of such Person treated as current
liabilities in accordance with GAAP other than any obligation under
the Purchase Agreement, including without limitation (a) all
obligations payable on demand or within one year after the date in
which the determination is made and (b) installment and sinking fund
payments required to be made within one year after the date on which
determination is made, but excluding all such liabilities or
obligations which are renewable or extendable at the option of such
Person to a date more than one year from the date of determination.
(ii) Minimum Tangible Net Worth. Throughout the Term Tenant shall
maintain a Consolidated Tangible Net Worth of not less than $467,000,000. As
used in this subparagraph ee, "CONSOLIDATED TANGIBLE NET WORTH" means, at any
date of determination thereof, the excess of consolidated total assets on such
date over consolidated total liabilities on such date; provided, however, that
Intangible Assets on such date shall be excluded from any determination of
consolidated total assets on such date. As used in this subparagraph ee,
"INTANGIBLE ASSETS" means, as of the date of any determination thereof, the
total amount of all assets of Tenant and its consolidated Subsidiaries that are
properly classified as "INTANGIBLE ASSETS" in accordance with GAAP and, in any
event, shall include, without limitation, goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, and deferred charges other than prepaid
insurance and prepaid taxes and current deferred taxes which are classified on
the balance sheet of Tenant and its consolidated Subsidiaries as a current
asset in accordance with GAAP and in which classification Tenant's independent
public accountants concur.
(ff) Negative Covenants. Tenant shall not, without the
prior written consent of Landlord permit any significant change in the nature
of the business of Tenant and its Subsidiaries, taken as whole, from that
presently conducted. Tenant shall not sell all or substantially all of its
assets or merge with another corporation, unless (1) immediately after giving
effect to such sale or merger, no Default or Event of Default will exist, and
(2) the corporation surviving the merger or acquiring the assets by sale
expressly and unconditionally shall immediately assume and ratify all of
Tenant's obligations under this Lease, the Purchase Documents and the
Environmental Indemnity by a written agreement in form reasonably acceptable to
Landlord. Further, Tenant shall not sell, liquidate, combine, dissolve
Subsidiaries to the extent that such liquidations and dissolutions would, in
the aggregate, result in a material adverse effect on the properties, assets,
operations, businesses or financial condition of Tenant or of Tenant and its
Subsidiaries taken as a whole.
(gg) ERISA.
(i) Each Plan is in compliance in all material respects
with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and
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any other applicable Federal or state law, and as of the date this
Lease is executed no event or condition is occurring or exists which
would require a notice from Tenant under clause ii.
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after Tenant
becomes aware that, any of the following has occurred, with respect to
which the potential aggregate liability to Tenant relating thereto is
$2,000,000 or more, and such notice shall include a statement signed
by a senior financial officer of Tenant setting forth details of the
following and the response, if any, which Tenant or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to Pension Benefit
Guaranty Corporation by Tenant or an ERISA Affiliate with respect to
any of the following or the events or conditions leading up it): (A)
the assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of Tenant, against the assets of any Plan of Tenant
or any ERISA Affiliate of Tenant or against any interest of Landlord
or Tenant in the Leased Property or the collateral covered by the
Pledge Agreement, or (B) the taking of any action by the Pension
Benefit Guaranty Corporation or any other governmental authority
action against Tenant to terminate any Plan of Tenant or any ERISA
Affiliate of Tenant or to cause the appointment of a trustee or
receiver to administer any such Plan.
11. Other Representations, Warranties and Covenants of
Landlord. Landlord represents, warrants and covenants as follows:
(a) Removal of Landlord's Liens. If a Landlord's
Lien is claimed against the Leased Property, including without limitation any
judgment lien resulting from a judgment rendered against Landlord, Landlord
will at its own cost and expense remove the Landlord's Lien. However, Landlord
shall not be responsible for any Lien that is expressly excluded from the
definition of Landlord's Liens above.
(b) Actions Required of the Title Holder. So
long as no Event of Default shall have occurred and be continuing, Landlord
shall take any and all action required of Landlord by the Permitted
Encumbrances or otherwise required of Landlord by Applicable Laws or reasonably
requested by Tenant; provided that (i) actions Tenant may require of Landlord
under this subparagraph shall be limited to actions that can only be taken by
Landlord as the owner of the Leased Property, as opposed to any action that can
be taken by Tenant or any third party (and the payment of any monetary
obligation shall not be an action required of Landlord under this subparagraph
unless Landlord shall first have received funds from Tenant, in excess of any
other amounts due from Tenant hereunder, sufficient to pay such monetary
obligations), (ii) Tenant requests the action to be taken by Landlord (which
request must be specific and in writing, if required by Landlord at the time
the request is made) and (iii) the action to be taken will not constitute a
violation of any Applicable Laws or compromise or constitute a waiver of
Landlord's rights hereunder or under the Purchase Documents or Environmental
Indemnity or otherwise be reasonably objectionable to Landlord. Any Losses
incurred by Landlord because of any action taken pursuant to this subparagraph
shall be covered by the indemnification set forth in subparagraph z. Further,
for purposes of such indemnification, any action taken by Landlord will be
deemed to have been made at the request of Tenant if made pursuant to any
request of Tenant's counsel or of any officer of Tenant (or with their
knowledge, and without their objection) in connection with the closing under
the Existing Contract.
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(c) No Default or Violation. The execution,
delivery and performance of this Lease do not contravene, result in a breach of
or constitute a default under any material contract or agreement to which
Landlord is a party or by which Landlord is bound and do not, to the knowledge
of Landlord, violate or contravene any law, order, decree, rule or regulation
to which Landlord is subject.
(d) No Suits. To Landlord's knowledge there are
no judicial or administrative actions, suits or proceedings involving the
validity, enforceability or priority of this Lease, and to Landlord's knowledge
no such suits or proceedings are threatened.
(e) Organization. Landlord is duly incorporated
and legally existing under the laws of Delaware and is duly qualified to do
business in the State of California. Landlord has or will obtain, at Tenant's
expense pursuant to the other provisions of this Lease, all requisite power and
all material governmental certificates of authority, licenses, permits,
qualifications and other documentation necessary to own and lease the Leased
Property and to perform its obligations under this Lease.
(f) Enforceability. The execution, delivery and
performance of this Lease and the Purchase Documents by Landlord are duly
authorized, are not in contravention of or conflict with any term or provision
of Landlord's articles of incorporation or bylaws and do not, to Landlord's
knowledge, require the consent or approval of any governmental body or other
regulatory authority that has not heretofore been obtained or conflict with any
Applicable Laws. This Lease and the Purchase Documents are valid, binding and
legally enforceable obligations of Landlord except as such enforcement is
affected by bankruptcy, insolvency and similar laws affecting the rights of
creditors, generally, and equitable principles of general application;
provided, Landlord makes no representation or warranty that conditions imposed
by any state or local Applicable Laws to the purchase, ownership, lease or
operation of the Leased Property have been satisfied.
(g) Existence. Landlord will continuously
maintain its existence and will continuously maintain its right to do business
in California to the extent necessary for the performance of Landlord's
obligations hereunder.
(h) Not a Foreign Person. Landlord is not a
"foreign person" within the meaning of the Sections 1445 and 7701 of the Code
(i.e., Landlord is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate as those terms are defined in the
Code and regulations promulgated thereunder).
12. Assignment and Subletting by Tenant.
(a) Landlord's Consent Required. During the term
of this Lease, without the prior written consent of Landlord first had and
received, Tenant shall not assign, transfer, mortgage, pledge or hypothecate
this Lease or any interest of Tenant hereunder and shall not sublet all or any
part of the Leased Property, by operation of law or otherwise; provided, that,
so long as no Event of Default has occurred and is continuing, Tenant shall be
entitled to sublet all or any portion of the Leased Property if (i) any
sublease by Tenant is made expressly subject and subordinate to the terms
hereof, (ii) such
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sublease has a term less than the remainder of the then effective term of this
Lease, and (iii) the use permitted by such sublease is expressly limited to
general office uses or other uses approved in advance by Landlord.
(b) Transfers in Violation of ERISA. During the
term of this Lease, without the prior written consent of Landlord first had and
received, Tenant shall not permit (1) any sale, assignment or transfer of any
direct or indirect interest in Tenant which would negate Tenant's
representations in this Lease regarding ERISA or cause this Lease, the Purchase
Documents or such other documents (or any exercise of Landlord's rights
hereunder or thereunder) to constitute a violation of any provision of ERISA,
and (2) any direct or indirect transfer of the Leased Property or any interest
therein by Tenant (including, without limitation, any Lien against Tenant's
leasehold interest hereunder) which would cause this Lease, the Purchase
Documents or any such other documents (or any exercise of Landlord's rights
hereunder or thereunder) to constitute a violation of ERISA. Further, not less
than fifteen (15) days before consummation of a transfer of title to all or
part of Tenant's leasehold interest in the Leased Property or of an interest in
Tenant, or of any direct or indirect right, title or interest in either of them
(a "TRANSFER"), or of the placing of any Lien on Tenant's interest in the
Leased Property, Tenant shall obtain from the proposed transferee or lienholder
a representation to Landlord in form and substance reasonably satisfactory to
Landlord that the Transfer or the placement of the Lien, as the case may be,
will not violate this subparagraph b.
(c) Standard for Landlord's Consent to
Assignments and Certain Other Matters. Consents and approvals of Landlord
which are required by this Paragraph 12 will not be unreasonably withheld, but
Tenant acknowledges that Landlord's withholding of such consent or approval
shall be reasonable if Landlord determines in good faith that (1) giving the
approval may increase Landlord's risk of liability for any existing or future
environmental problem, or (2) any transaction for which Tenant has requested
the consent or approval would negate Tenant's representations in this Lease
regarding ERISA or cause this Lease, the Purchase Documents or such other
documents (or any exercise of Landlord's rights hereunder or thereunder) to
constitute a violation of any provision of ERISA. Further, Tenant acknowledges
that if Tenant requests Landlord's consent to a Transfer or the placing of any
Lien against Tenant's leasehold, Landlord may reasonably refuse to give such
consent if the transferee does not agree in writing that such Transfer or
placement of a Lien will be governed by the provisions of this Lease relating
to ERISA.
(d) Consent Not a Waiver. No consent by Landlord
to a sale, assignment, transfer, mortgage, pledge or hypothecation of this
Lease or Tenant's interest hereunder, and no assignment or subletting of the
Leased Property or any part thereof in accordance with this Lease or otherwise
with Landlord's consent, shall release Tenant from liability hereunder; and any
such consent shall apply only to the specific transaction thereby authorized
and shall not relieve Tenant from any requirement of obtaining the prior
written consent of Landlord to any further sale, assignment, transfer,
mortgage, pledge or hypothecation of this Lease or any interest of Tenant
hereunder.
13. Assignment by Landlord.
(a) Landlord's Assignment Generally. Subject to
subparagraph b below, Landlord shall have the right to transfer, assign and
convey the Leased Property and any and all of its rights under this Lease and
the Purchase Documents. In the event Landlord sells or otherwise transfers the
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Leased Property and assigns its rights under this Lease and the Purchase
Documents, and if Landlord's successor in interest confirms its liability for
the obligations imposed upon Landlord by this Lease and the Purchase Documents
on and subject to the express terms and conditions set out herein and therein,
then the original Landlord shall thereby be released from any further
obligations under this Lease and under the Purchase Documents, and Tenant
agrees to look solely to each successor in interest of Landlord for performance
of such obligations.
(b) Restrictions on Transfers. Except by a
Permitted Transfer, Landlord shall not assign, transfer, mortgage, pledge,
encumber or hypothecate this Lease or the Purchase Documents or any interest of
Landlord in and to the Leased Property during the Term without the prior
written consent of Tenant, which consent will not be unreasonably withheld if
Landlord is proposing to transfer not less than all of its interest in the
Leased Property and rights under this Lease and the Purchase Documents to a
single Person who will assume Landlord's obligations under and be subject to
this Lease and the Purchase Documents; provided, however, in connection with
any transfer that constitutes a Permitted Transfer only because it is a
transfer to an Affiliate of Landlord, the price for the transfer shall not
exceed (and in any report or declaration required in connection therewith by
local or state taxing authorities Landlord shall not report such price to be in
excess of) the Stipulated Loss Value. Landlord does not, as of the date of
this Lease, expect to transfer the Leased Property to any Person (including any
Affiliate of Landlord) that will have no material assets other than the Leased
Property. Even if it is permitted by other provisions of this Lease, before
transferring the Leased Property to any Person that will have no material
assets other than the Leased Property, Landlord will, so long as no Event of
Default has occurred and is continuing, endeavor to notify Tenant of the
transfer at least thirty (30) days in advance. (However, the failure of
Landlord to so notify Tenant of any transfer permitted by other provisions of
this Lease will not render Landlord liable for any Losses of Tenant.)
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14. Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume
liability for and to pay, indemnify, defend, and hold harmless each and every
Indemnified Party from and against any and all Environmental Losses, subject
only to the provisions of subparagraph c below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies
Tenant of any claim, demand, action, administrative or legal
proceeding, investigation or allegation as to which the indemnity
provided for in this Paragraph 14 applies, Tenant shall assume on
behalf of the Indemnified Party and conduct with due diligence and in
good faith the investigation and defense thereof and the response
thereto with counsel selected by Tenant but reasonably satisfactory to
the Indemnified Party; provided, that the Indemnified Party shall have
the right to be represented by advisory counsel of its own selection
and at its own expense; and provided further, that if any such claim,
demand, action, proceeding, investigation or allegation involves both
Tenant and the Indemnified Party and the Indemnified Party shall have
been advised in writing by counsel that there may be legal defenses
available to it which are inconsistent with or in addition to those
available to Tenant, then the Indemnified Party shall have the right
to select separate counsel to participate in the investigation and
defense of and response to such claim, demand, action, proceeding,
investigation or allegation on its own behalf, and Tenant shall pay or
reimburse the Indemnified Party for all Attorney's Fees incurred by
the Indemnified Party because of the selection of such separate
counsel.
(ii) If any claim, demand, action,
proceeding, investigation or allegation arises as to which the
indemnity provided for in this Paragraph 14 applies, and Tenant fails
to assume promptly (and in any event within fifteen (15) days after
being notified of the claim, demand, action, proceeding, investigation
or allegation) the defense of the Indemnified Party, then the
Indemnified Party may contest (or settle, with the prior written
consent of Tenant, which consent will not be unreasonably withheld)
the claim, demand, action, proceeding, investigation or allegation at
Tenant's expense using counsel selected by the Indemnified Party;
provided, that after any such failure by Tenant which continues for
thirty (30) days or more no such contest need be made by the
Indemnified Party and settlement or full payment of any claim may be
made by the Indemnified Party without Tenant's consent and without
releasing Tenant from any obligations to the Indemnified Party under
this Paragraph 14 if, in the written opinion of reputable counsel to
the Indemnified Party, the settlement or payment in full is clearly
advisable.
(c) Notice of Environmental Losses. If an
Indemnified Party receives a written notice of Environmental Losses that such
Indemnified Party believes are covered by this Paragraph 14, then such
Indemnified Party will be expected to promptly furnish a copy of such notice to
Tenant. The failure to so provide a copy of the notice to Tenant shall not
excuse Tenant from its obligations under this Paragraph 14; provided, that if
Tenant is unaware of the matters described in the notice and such failure
renders unavailable defenses that Tenant might otherwise assert, or precludes
actions that Tenant might otherwise take, to minimize its obligations
hereunder, then Tenant shall be excused from its obligation to indemnify such
Indemnified Party (and any Affiliate of such Indemnified
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Party) against Environmental Losses, if any, which would not have been incurred
but for such failure. For example, if Landlord fails to provide Tenant with a
copy of a notice of an obligation covered by the indemnity set out in
subparagraph 12.(a) and Tenant is not otherwise already aware of such
obligation, and if as a result of such failure Landlord becomes liable for
penalties and interest covered by the indemnity in excess of the penalties and
interest that would have accrued if Tenant had been promptly provided with a
copy of the notice, then Tenant will be excused from any obligation to Landlord
to pay the excess.
(d) Rights Cumulative. The rights of each
Indemnified Party under this Paragraph 14 shall be in addition to any other
rights and remedies of such Indemnified Party against Tenant under the other
provisions of this Lease or under any other document or instrument now or
hereafter executed by Tenant, or at law or in equity (including, without
limitation, any right of reimbursement or contribution pursuant to CERCLA).
(e) Survival of the Indemnity. Tenant's
obligations under this Paragraph 14 shall survive the termination or expiration
of this Lease. All obligations of Tenant under this Paragraph 14 shall be
payable upon demand, and any amount due upon demand to any Indemnified Party by
Tenant which is not paid shall bear interest from the date of such demand at a
floating interest rate equal to the Default Rate, but in no event in excess of
the maximum rate permitted by law.
15. Landlord's Right of Access.
(a) Landlord and Landlord's representatives may enter the Leased
Property , after five (5) Business Days advance written notice to Tenant
(except in the event of an emergency, when no advance notice will be required),
for the purpose of making inspections or performing any work Landlord is
authorized to undertake by the next subparagraph. So long as Tenant remains in
possession of the Leased Property, Landlord or Landlord's representative will,
before making any such inspection or performing any such work on the Leased
Property, if then requested to do so by Tenant to maintain Tenant's security:
(i) sign in at Tenant's security or information desk if Tenant has such a desk
on the premises, (ii) wear a visitor's badge or other reasonable identification
provided by Tenant when Landlord or Landlord's representative first arrives at
the Leased Property, (iii) permit an employee of Tenant to observe such
inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Tenant that do not, individually or
in the aggregate, interfere with or delay inspections or work of Landlord
authorized by this Lease.
(b) If Tenant fails to perform any act or to take any action
which hereunder Tenant is required to perform or take, or to pay any money
which hereunder Tenant is required to pay, and if such failure or action
constitutes an Event of Default or causes Landlord or any director, officer,
employee or Affiliate of Landlord to be threatened with criminal prosecution or
renders Landlord's interest in the Leased Property or any part thereof at risk
of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, Landlord may, perform or
cause to be performed such act or take such action or pay such money. Any
expenses so incurred by Landlord, and any money so paid by Landlord, shall be a
demand obligation owing by Tenant to Landlord. Further, Landlord, upon making
such payment, shall be subrogated to all of the rights of the person,
corporation or body politic receiving such payment. But nothing herein shall
imply any duty upon the part of Landlord to do any work which under any
provision of this Lease Tenant may be required to
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perform, and the performance thereof by Landlord shall not constitute a waiver
of Tenant's default. Landlord may during the progress of any such work
permitted by Landlord hereunder on or in the Leased Property keep and store
upon the Leased Property all necessary materials, tools, and equipment.
Landlord shall not in any event be liable for inconvenience, annoyance,
disturbance, loss of business, or other damage to Tenant or the subtenants of
Tenant by reason of making such repairs or the performance of any such work on
or in the Leased Property, or on account of bringing materials, supplies and
equipment into or through the Leased Property during the course of such work
(except for liability in connection with death or injury or damage to the
property of third parties caused by [and attributed by any applicable
principles of comparative fault to] the Misconduct of Landlord), and the
obligations of Tenant under this Lease shall not thereby be affected in any
manner.
16. Events of Default.
(a) Definition of Event of Default. Each of the
following events shall be deemed to be an "EVENT OF DEFAULT" by Tenant under
this Lease:
(i) Tenant shall fail to pay when due any installment of
Rent due hereunder and such failure shall continue for three (3)
Business Days after Tenant is notified in writing of the delinquency
thereof.
(ii) Tenant shall fail to cause any representation
or warranty of Tenant contained herein that is false or misleading in
any material respect when made to be made true and not misleading
(other than as described in the other clauses of this subparagraph a),
or Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than as described in the other clauses of this
subparagraph a), and in either case shall not cure such failure prior
to the earlier of (A) thirty (30) days after written notice thereof is
sent to Tenant or (B) the date any writ or order is issued for the
levy or sale of any property owned by Landlord (including the Leased
Property) because of such failure or any criminal action is threatened
or instituted against Landlord or any of its directors, officers or
employees because of such failure; provided, however, that so long as
no such writ or order is issued and no such criminal action is
threatened or instituted, if such failure is susceptible of cure but
cannot with reasonable diligence be cured within such thirty day
period, and if Tenant shall promptly have commenced to cure the same
and shall thereafter prosecute the curing thereof with reasonable
diligence, the period within which such failure may be cured shall be
extended for such further period (not to exceed an additional sixty
days beyond the initial thirty day cure period) as shall be reasonably
necessary for the curing thereof.
(iii) Tenant shall fail to comply with any term, provision
or condition of the Purchase Documents and shall not cure such failure
within the time, if any, provided for such cure in said agreements.
(iv) Tenant shall abandon the Leased Property.
(v) Tenant or any of its Subsidiaries shall fail to
make any payment described in the next sentence when due, whether due
because of acceleration or otherwise (but taking into consideration
the time Tenant may have to cure such failure, if any, under the
documents
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governing such payment). Payments covered by this clause v shall
include only payments owed by Tenant or any Subsidiary of Tenant (A)
that, individually or in the aggregate, exceed $5,000,000 and are due
and payable to any Person other than Landlord or an Affiliate of
Landlord, or (B) that are payable to Landlord or any Affiliate of
Landlord under any agreement other than this Lease.
(vi) Tenant or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against Tenant or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of thirty (30) consecutive days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or Tenant or any of
its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this clause (vi).
(vii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing the dissolution
of Tenant or such Subsidiary and such order, judgment or decree
remains unstayed and in effect for more than sixty (60) days.
(viii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing a split-up of
Tenant or such Subsidiary which requires the divestiture of assets
representing a substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the
consolidated assets of Tenant and its Subsidiaries (determined in
accordance with GAAP) or which requires the divestiture of assets, or
stock of a Subsidiary, which shall have contributed a substantial part
of the consolidated net income of Tenant and its Subsidiaries
(determined in accordance with GAAP) for any of the three fiscal years
then most recently ended, and such order, judgment or decree remains
unstayed and in effect for more than sixty (60) days.
(ix) A final judgment or order for the payment of
money in an amount (not covered by insurance) which exceeds $3,000,000
shall be rendered against Tenant or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor
upon such judgment, or (ii) within sixty (60) days after the entry
thereof, such judgment or order is not discharged or execution thereof
stayed pending appeal, or within thirty (30) days after the expiration
of any such stay, such judgment is not discharged.
(x) Any ERISA Termination Event that Landlord
determines might constitute grounds for the termination of any Plan or
for the appointment by the appropriate United States district court of
a trustee to administer any Plan shall have occurred and be continuing
thirty
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(30) days after written notice to such effect shall have been given to
Tenant by Landlord, or any Plan shall be terminated, or a trustee
shall be appointed by an appropriate United States district court to
administer any Plan, or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan.
(xi) Any merger or consolidation or sale of assets
involving Tenant that is prohibited by subparagraph ff and that is not
approved in advance by Landlord.
Notwithstanding the foregoing, any Default that could become an Event of
Default under clause ii may be cured within the earlier of the periods
described in clauses (A) and (B) thereof by Tenant's delivery to Landlord of a
written notice irrevocably exercising Tenant's option under the Purchase
Agreement to purchase Landlord's interest in the Leased Property and
designating as the Designated Payment Date any Business Day which is at least
fifteen (15) days after the date of such notice and not later than thirty (30)
days after the date of such notice; provided, however, Tenant must, as a
condition to the effectiveness of its cure, on the date so designated as the
Designated Payment Date satisfy all obligations of Tenant under the Purchase
Agreement in accordance with its terms and tender to Landlord all Rent and all
other amounts then due or accrued and unpaid hereunder (including reimbursement
for any Breakage Costs or other Losses incurred by Landlord in connection with
the applicable Default hereunder, regardless of whether Landlord shall have
been reimbursed for such costs in whole or in part by any Participants) and
Tenant must also furnish written confirmation that all indemnities set forth
herein (including specifically, but without limitation, the general indemnity
set forth in Paragraph z and the environmental indemnity set forth in Paragraph
14) shall survive the payment of such amounts by Tenant to Landlord and the
conveyance of Landlord's interest in the Leased Property to Tenant.
(b) Remedies. Upon the occurrence of an Event of
Default which is not cured within any applicable period expressly permitted by
subparagraph a, at Landlord's option and without limiting Landlord in the
exercise of any other right or remedy Landlord may have on account of such
default, and without any further demand or notice except as expressly described
in this subparagraph b:
(i) By notice to Tenant, Landlord may terminate
Tenant's right to possession of the Leased Property. A notice given
in connection with unlawful detainer proceedings specifying a time
within which to cure a default shall terminate Tenant's right to
possession if Tenant fails to cure the default within the time
specified in the notice.
(ii) Upon termination of Tenant's right to
possession and without further demand or notice, Landlord may re-enter
the Leased Property in any manner not prohibited by Applicable Law and
take possession of all improvements, additions, alterations, equipment
and fixtures thereon and remove any persons in possession thereof.
Any property in the Leased Property may be removed and stored in a
warehouse or elsewhere at the expense and risk of and for the account
of Tenant.
(iii) Upon termination of Tenant's right to
possession, this Lease shall terminate and Landlord may recover from
Tenant:
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a) The worth at the time of
award of the unpaid Rent which had been earned at the time of
termination;
b) The worth at the time of
award of the amount by which the unpaid Rent which would have
been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have
been reasonably avoided;
c) The worth at the time of
award of the amount by which the unpaid Rent for the balance
of the scheduled Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be
reasonably avoided; and
d) Any other amount necessary
to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform Tenant's obligations
under this Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not
limited to, the costs and expenses (including Attorneys' Fees,
advertising costs and brokers' commissions) of recovering
possession of the Leased Property, removing persons or
property therefrom, placing the Leased Property in good order,
condition, and repair, preparing and altering the Leased
Property for reletting, all other costs and expenses of
reletting, and any loss incurred by Landlord as a result of
Tenant's failure to perform Tenant's obligations under the
Purchase Documents.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph a and subparagraph b shall be computed by
allowing interest at ten percent (10%) per annum or such other
rate as may be the maximum interest rate then permitted to be
charged under California law at the time of computation. The
"WORTH AT THE TIME OF AWARD" of the amount referred to in
subparagraph c shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%).
e) Such other amounts in
addition to or in lieu of the foregoing as may be permitted
from time to time by applicable California law.
(iv) The Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue
lease in force even after lessee's breach and abandonment and recover
rent as it becomes due, if lessee has right to sublet or assign,
subject only to reasonable limitations). Accordingly, even though
Tenant has breached this Lease and abandoned the Leased Property, this
Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession, and Landlord may enforce all
of Landlord's rights and remedies under this Lease, including the
right to recover the Rent as it becomes due under this Lease.
Tenant's right to possession shall not be deemed to have been
terminated by Landlord except pursuant to subparagraph i hereof. The
following shall not constitute a termination of Tenant's right to
possession:
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a) Acts of maintenance or
preservation or efforts to relet the Leased Property;
b) The appointment of a
receiver upon the initiative of Landlord to protect Landlord's
interest under this Lease; or
c) Reasonable withholding of
consent to an assignment or subletting, or terminating a
subletting or assignment by Tenant.
(c) Enforceability. This Paragraph 16 shall be
enforceable to the maximum extent not prohibited by Applicable Law, and the
unenforceability of any provision in this Paragraph shall not render any other
provision unenforceable.
(d) Remedies Cumulative. No right or remedy
herein conferred upon or reserved to Landlord is intended to be exclusive of
any other right or remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder or now
or hereafter existing under Applicable Law or in equity. In addition to other
remedies provided in this Lease, Landlord shall be entitled, to the extent
permitted by Applicable Law, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease to be performed by Tenant, or to a
decree compelling performance of any of the other covenants, agreements,
conditions or provisions of this Lease to be performed by Tenant, or to any
other remedy allowed to Landlord under Applicable Law or in equity. Nothing
contained in this Lease shall limit or prejudice the right of Landlord to prove
for and obtain in proceedings for bankruptcy or insolvency of Tenant by reason
of the termination of this Lease, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount
be greater, equal to, or less than the amount of the loss or damages referred
to above. Without limiting the generality of the foregoing, nothing contained
herein shall modify, limit or impair any of the rights and remedies of Landlord
under the Purchase Documents or the Environmental Indemnity.
(e) Waiver by Tenant. To the extent permitted by
law, Tenant hereby waives and surrenders for itself and all claiming by,
through and under it, including creditors of all kinds, (i) any right and
privilege which it or any of them may have under any present or future
constitution, statute or rule of law to have a continuance of this Lease for
the term hereby demised after termination of Tenant's right of occupancy by
order or judgment of any court or by any legal process or writ, or under the
terms of this Lease, or after the termination of this Lease as herein provided,
and (ii) the benefits of any present or future constitution, or statute or rule
of law which exempts property from liability for debt or for distress for rent,
and (iii) the provisions of law relating to notice and/or delay in levy of
execution in case of eviction of a lessee for nonpayment of rent.
(f) No Implied Waiver. The failure of a party to
insist at any time upon the strict performance of any covenant or agreement or
to exercise any option, right, power or remedy contained in this Lease shall
not be construed as a waiver or a relinquishment thereof for the future. The
waiver of or redress for any violation of any term, covenant, agreement or
condition contained in this Lease shall not prevent a similar subsequent act
from constituting a violation. Any express waiver shall affect only the term
or condition specified in such waiver and only for the time and in the manner
specifically
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stated therein. A receipt by Landlord of any Base Rent or other payment
hereunder with knowledge of the breach of any covenant or agreement contained
in this Lease shall not be deemed a waiver of such breach, and no waiver of any
provision of this Lease shall be deemed to have been made unless expressed in
writing and signed by the waiving party.
17. Default by Landlord. If Landlord should default in
the performance of any of its obligations under this Lease, Landlord shall have
the time reasonably required, but in no event less than thirty (30) days, to
cure such default after receipt of written notice from Tenant specifying such
default and specifying what action Tenant believes is necessary to cure the
default. If Tenant prevails in any litigation brought against Landlord because
of Landlord's failure to cure a default within the time required by the
preceding sentence, then Tenant shall be entitled to an award against Landlord
for the damages proximately caused to Tenant by such default.
18. Quiet Enjoyment. Provided Tenant pays the Base Rent
and all Additional Rent payable hereunder as and when due and payable and keeps
and fulfills all of the terms, covenants, agreements and conditions to be
performed by Tenant hereunder, Landlord shall not during the Term disturb
Tenant's peaceable and quiet enjoyment of the Leased Property; however, such
enjoyment shall be subject to the terms, provisions, covenants, agreements and
conditions of this Lease and the Permitted Encumbrances and any other claims or
encumbrances not constituting Landlord's Liens, to which this Lease is subject
and subordinate as hereinabove set forth. Any breach by Landlord of the
foregoing covenant of quiet enjoyment shall, subject to the other provisions of
this Lease, render Landlord liable to Tenant for any monetary damages
proximately caused thereby, but as more specifically provided in Paragraph 6
above, no such breach shall entitle Tenant to terminate this Lease or excuse
Tenant from its obligation to pay Base Rent and other amounts hereunder.
19. Surrender Upon Termination. Unless Tenant or an
Applicable Purchaser purchases Landlord's entire interest in the Leased
Property pursuant to the terms of the Purchase Agreement, Tenant shall, upon
the termination of Tenant's right to occupancy, surrender to Landlord the
Leased Property, including any buildings, alterations, improvements,
replacements or additions constructed by Tenant (but excluding Tenant's Trade
Fixtures and personal property not covered by this Lease) free of all Hazardous
Substances (including Permitted Hazardous Substances) and tenancies and, to the
extent required by Landlord, with all Improvements in the same condition as of
the date hereof, excepting only (i) ordinary wear and tear (provided that the
Leased Property shall have been maintained as required by the other provisions
hereof) and (ii) alterations and additions which are expressly permitted by the
terms of this Lease and which have been completed by Tenant in a good and
workmanlike manner in accordance with all Applicable Laws. Any movable
furniture or movable personal property belonging to Tenant or any party
claiming under Tenant, if not removed at the time of such termination and if
Landlord shall so elect, shall be deemed abandoned and become the property of
Landlord without any payment or offset therefor. If Landlord shall not so
elect, Landlord may remove such property from the Leased Property and store it
at Tenant's risk and expense. Tenant shall bear the expense of repairing any
damage to the Leased Property caused by such removal by Landlord or Tenant.
20. Holding Over by Tenant. Should Tenant not purchase
Landlord's right, title and interest in the Leased Property as provided in the
Purchase Agreement, but nonetheless continue to hold the Leased Property after
the termination of this Lease without Landlord's written consent,
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whether such termination occurs by lapse of time or otherwise, such holding
over shall constitute and be construed as a tenancy from day to day only, at a
daily Base Rent equal to: (i) Stipulated Loss Value on the day in question,
times (ii) (A) the Prime Rate in effect for such day so long as the holdover
period does not extend beyond ninety (90) days and (B) for each such day
beginning with the ninety-first day after the holdover commences, three percent
(3%) above the Prime Rate; divided by (iii) 365; subject, however, to all of
the terms, provisions, covenants and agreements on the part of Tenant
hereunder. No payments of money by Tenant to Landlord after the termination of
this Lease shall reinstate, continue or extend the Term of this Lease and no
extension of this Lease after the termination thereof shall be valid unless and
until the same shall be reduced to writing and signed by both Landlord and
Tenant.
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21. Miscellaneous.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending, mailing or delivery of any
notice or with reference to the making of any payment by Tenant to Landlord,
shall be deemed to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to Landlord
hereunder shall be paid to Landlord in immediately available funds by
wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 000000000
Reference: Cypress II
or at such other place and in such other manner as Landlord may
designate in a notice to Tenant. Time is of the essence as to all payments and
other obligations of Tenant under this Lease.
(ii) All notices, demands and other communications to be made hereunder to
the parties hereto shall be in writing (at the addresses set forth below) and
shall be given by any of the following means: (A) personal service; (B)
electronic communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by United States first class mail, return receipt
requested); or (C) registered or certified first class mail, return receipt
requested; or (D) overnight commercial courier. Such addresses may be changed
by notice to the other parties given in the same manner as provided above. Any
notice or other communication sent pursuant to clause (A) or (B) hereof shall
be deemed received upon such personal service or upon dispatch by electronic
means, and, if sent pursuant to clause (C) shall be deemed received five (5)
days following deposit in the mail, and, if sent pursuant to clause (D), on the
next Business Day.
Address of Landlord:
BNP Leasing Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx
Telecopy: (000) 000-0000
With a copy to:
Banque Nationale de Paris, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
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And with a copy to:
Xxxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Address of Tenant:
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
With a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Real Estate Department
Telecopy: (000) 000-0000
(b) Severability. If any term or provision of this Lease or the
application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of this Lease, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
(c) No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased Property or
any part thereof by reason of the fact that the same person may acquire or
hold, directly or indirectly, this Lease or the leasehold estate hereby created
or any interest in this Lease or in such leasehold estate as well as the fee
estate in the Leased Property or any interest in such fee estate, unless all
Persons with an interest in the Leased Property that would be adversely
affected by any such merger specifically agree in writing that such a merger
shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT TO THE
LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO RIGHTS, EASEMENTS
OR LICENSES ARE ACQUIRED BY TENANT BY IMPLICATION OR OTHERWISE EXCEPT AS
EXPRESSLY SET FORTH IN THE PROVISIONS OF THIS LEASE AND THE PURCHASE DOCUMENTS.
(e) Entire Agreement. This Lease and the instruments referred to
herein supersede any prior negotiations and agreements between the parties
concerning the Leased Property and no amendment or modification of this Lease
shall be binding or valid unless expressed in a writing executed by both
parties hereto.
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(f) Binding Effect. All of the covenants, agreements, terms and
conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective successors and, to the extent
assignment is permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to all
obligations of Tenant and all notices required of Tenant under this Lease, but
this subparagraph shall not limit Tenant's opportunity to prevent an Event of
Default by curing any breach within the cure period (if any) applicable under
subparagraph a.
(h) Termination of Prior Rights. Without limiting the rights and
obligations of Tenant under this Lease, Tenant acknowledges that any and all
rights or interest of Tenant under the Existing Lease or otherwise in and to
the Land, the improvements to the Land and to any other property included in
the Leased Property (except under this Lease and the Purchase Documents) are
hereby superseded. Landlord shall have no liability for any breach by Seller of
the Existing Lease. Tenant quitclaims unto Landlord any rights or interests
Tenant has in or to the Land, the improvements to the Land and to any other
property included in the Leased Property other than the rights and interests
created by this Lease and the Purchase Documents.
(i) Governing Law. This Lease shall be governed by and construed
in accordance with the laws of the State of California, without regard to
conflict of laws principals.
(j) Waiver of a Jury Trial. LANDLORD AND TENANT EACH HEREBY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS
BETWEEN THEM RELATING TO THIS LEASE OR THE LEASED PROPERTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Tenant and Landlord
each acknowledge that this waiver is a material inducement to enter into a
business relationship, that each has already relied on the waiver in entering
into this Lease and the other documents referred to herein, and that each will
continue to rely on the waiver in their related future dealings. Tenant and
Landlord each further warrants and represents that it has reviewed this waiver
with its legal counsel, and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS LEASE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THIS LEASE OR THE LEASED PROPERTY. In the event of litigation, this Lease
may be filed as a written consent to a trial by the court.
(k) Income Tax Reporting. Landlord and Tenant intend this Lease
and the Purchase Agreement to have a form for income taxes which is different
than the form of this Lease and the Purchase Agreement for other purposes, and
thus the parties acknowledge and agree as follows:
A) FOR PURPOSES OF DETERMINING THEIR RESPECTIVE FEDERAL,
STATE AND LOCAL INCOME TAX OBLIGATIONS, Landlord and Tenant believe
and intend that this Lease and the Purchase Agreement constitute a
financing arrangement or conditional sale. Both Landlord and Tenant
agree to report this Lease and the Purchase Agreement as a financing
arrangement or conditional sale on their respective income tax returns
(the "REQUIRED REPORTING"), unless such Required Reporting is
challenged in writing by the Internal Revenue Service or another
governmental authority with jurisdiction (a "TAX CHALLENGE").
Consistent with the foregoing, Landlord and Tenant expect that Tenant
(and not Landlord) shall be
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treated as the true owner of the Property for income tax purposes,
thereby entitling Tenant (and not Landlord) to take depreciation
deductions and other tax benefits available to the owner. Tenant
shall also report all interest earned on Escrowed Proceeds or the
collateral covered by the Pledge Agreement as Tenant's income for
federal, state and local income tax purposes. REFERENCES IN THIS
LEASE OR IN THE PURCHASE AGREEMENT TO A "LEASE" OF THE "LEASED
PROPERTY" ARE NOT INTENDED FOR INCOME TAX PURPOSES TO REFLECT THE
INTENT OF LANDLORD OR TENANT AS TO THE FORM OF THE TRANSACTIONS
COVERED BY, OR THE PROPER CHARACTERIZATION OF, THIS LEASE AND THE
PURCHASE AGREEMENT.
B) FOR ALL OTHER PURPOSES, INCLUDING THE DETERMINATION
OF THE APPROPRIATE FINANCIAL ACCOUNTING FOR THIS LEASE AND THE
DETERMINATION OF THEIR RESPECTIVE RIGHTS AND REMEDIES UNDER STATE LAW,
Landlord and Tenant believe and intend that (i) this Lease constitutes
a true Lease, not a mere financing arrangement, enforceable in
accordance with its express terms (and neither this subparagraph k nor
the provisions referencing this subparagraph on the title page of this
Lease and in the Purchase Agreement are intended to affect the
enforcement of any other provisions of this Lease or the Purchase
Agreement) and (ii) the Purchase Agreement shall constitute a separate
and independent contract, enforceable in accordance with the express
terms and conditions set forth therein. In this regard, Tenant
acknowledges that Tenant asked Landlord to participate in the
transactions evidenced by this Lease and the Purchase Agreement as a
landlord and owner of the Leased Property, not as a lender. Although
other transactions might have been used to accomplish similar results,
Tenant expects to receive certain material accounting and other
advantages through the use of a lease transaction. Accordingly, and
notwithstanding the Required Reporting for income tax purposes, Tenant
cannot equitably deny that this Lease and the Purchase Agreement
should be construed and enforced in accordance with their respective
terms, rather than as a mortgage or other security device, in any
action brought by Landlord to enforce this Lease or the Purchase
Agreement.
In the event of a Tax Challenge, Landlord and Tenant shall each provide to the
other copies of all notices from the Internal Revenue Service or any other
governmental authority presenting the Tax Challenge. Further, before changing
from the Required Reporting because of a Tax Challenge, Landlord and Tenant
shall each consider in good faith any reasonable suggestions received from the
other party to this Lease about an appropriate response to the Tax Challenge;
provided, however, that the suggestions are set forth in a written notice
delivered no later than thirty (30) days after the suggesting party is first
notified of the Tax Challenge; and, provided further, that when presented with
a Tax Challenge, Landlord and Tenant shall each have the right to change from
the Required Reporting rather than participate in any litigation or other legal
proceeding against the Internal Revenue Service or another governmental
authority. In any event, Tenant must indemnify and hold harmless Landlord from
and against all liabilities, costs, additional taxes and other expenses that
may arise or become due because of any challenge to the Required Reporting or
because of any resulting recharacterization of this Lease or the Purchase
Agreement required by the Internal Revenue Service or another governmental
authority, including any additional taxes that may become due upon any sale
under the Purchase Agreement, to the extent (if any) that such liabilities,
costs, additional taxes and other expenses are not offset by tax savings
resulting from additional depreciation deductions or other tax benefits to
Landlord of the recharacterization.
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IN WITNESS WHEREOF, this Lease is hereby executed in multiple
originals as of the effective date above set forth.
"Landlord"
BNP LEASING CORPORATION
By: _____________________________
Name: Xxxxx X. Xxx
Title: Vice President
"Tenant"
CYPRESS SEMICONDUCTOR CORPORATION
By:
Name: ___________________
Title:___________________
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Exhibit A
PROPERTY DESCRIPTION
Real Property in the City of Xxx Xxxx, Xxxxxx xx Xxxxx Xxxxx, Xxxxx xx
Xxxxxxxxxx, described as follows:
74
Exhibit B
PERMITTED ENCUMBRANCES
This conveyance is subject to the following matters, but only to the
extent the same are still valid and in full force and effect:
75
Exhibit C
LIST OF PERMITTED HAZARDOUS SUBSTANCES
It is anticipated that the following Hazardous Substances, and others
reasonably necessary for the use of the Leased Property in accordance with the
express terms and conditions of this Lease, will be used by Tenant at the
Leased Property:
Description C.A.S.#
76
Exhibit D
EXISTING TRADE FIXTURES
1. Signs or sign panels including the name "Cypress Semiconductor" or
other registered trade names or trademarks of Tenant or Tenant's Affiliates.
77
Exhibit E
DRAW REQUEST FORMS
________, 199__
BNP Leasing Corporation
c/o Banque Nationale de Paris
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Ms. _________________
Re: Construction Advance Request No. __________ by Cypress Semiconductor
Corporation
Ladies and Gentlemen:
Reference is made to the Lease Agreement between BNP Leasing
Corporation (herein "LANDLORD") and Cypress Semiconductor Corporation (herein
"CYPRESS") dated as of April __, 1996 (herein "THE LEASE"). Capitalized terms
defined in the Lease and used but not defined in this letter are intended to
have the meanings assigned to them in the Lease.
Cypress hereby makes request for a Construction Advance in the amount
of $________________ (herein the "CURRENT ADVANCE"). Included herewith are:
1. An Application and Certificate for Payment based on AIA Form
G702 (herein the "CONTRACTOR'S APPLICATION") from Cypress's
general contractor or construction manager, attached to which
is a schedule listing all subcontractors, suppliers and other
parties to whom the general contractor or construction manager
has or will make payments from the draw requested in the
Contractor's Application and the amounts to be paid to each
one. The Contractor's Application evidences an obligation
incurred by (and previously paid by) Cypress for construction
of Improvements and for which Cypress is entitled to
reimbursement from the Current Advance.
2. A list of any costs paid by Cypress, other than to the general
contractor or construction manager, for which Cypress is
entitled to reimbursement from the proceeds of the Current
Advance (herein the "OTHER COSTS LIST").
[NOTE: DRAW REQUESTS NEED INCLUDE PARAGRAPH'S MARKED BELOW WITH AN ASTERISK,
AND THE INVOICES OR OTHER ITEMS DESCRIBED IN SUCH PARAGRAPHS, ONLY IF AND TO
THE EXTENT THAT LANDLORD MAY REQUEST IT AFTER THE LEASE IS EXECUTED]
Exhibit E-Page 1
78
*3. Invoices and requests for payments from the subcontractors and
others entitled to payment from the general contractor or
construction manager for construction and related work covered
by the Contractor's Application; excluding, however, invoices
or requests from some or all subcontractors and others that,
according to the Contractor's Application, are to be paid less
than $200,000 from the draw requested in Contractor's
Application. Such invoices and requests for payments are
consistent with the detail shown in the schedule of values
attached to the Contractor's Application.
*4. Invoices or other evidence reasonably requested by Landlord of
the costs (if any) included in the Other Costs List.
*5. A list of any "checks on hold" (i.e., payments withheld from
subcontractors or suppliers by Tenant's general contractor or
construction manager because of some defect or deficiency in
the payee's request for payment or in the work or materials
provided by the payee) in excess of $100,000.
6. An up-to-date list of the names and addresses of any
contractors or subcontractors that have actually filed a claim
of lien against the Leased Property, together with, to the
extent not already provided with a prior request for a
Construction Advance, a copy of the claim of lien filed.
7. A certification of an officer of Cypress as required by
Paragraph ix of the Lease.
We hereby confirm that Landlord will not be responsible for the
application of any funds advanced to Cypress or to any other party at our
request.
Sincerely,
Cypress Semiconductor Corporation
By:________________________________
Name:___________________________
Title:__________________________
cc: BNP Leasing Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx
Xxxxx Xxxxxx
Xxxxxxxx & Knight,
a Professional Corporation
3300 First City Center
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Exhibit E-Page 2
79
CONSTRUCTION ADVANCE CERTIFICATE
Pursuant to Section ix of the Lease dated April __, 1996 (the "LEASE") between
Cypress Semiconductor Corporation ("CYPRESS") and BNP Leasing Corporation
("LANDLORD"), Cypress does hereby represent, warrant and certify to Landlord in
connection with Cypress's request for Construction Advance No. __________ that:
a) no Event of Default has occurred and is continuing,
b) the representations and warranties of Cypress contained in the
Lease are true and correct in all material respects on and as of the date
hereof as though made on and as of the date hereof, subject only to the
following exceptions:
[LIST EXCEPTIONS HERE, OR IF THERE ARE NO EXCEPTIONS, INSERT "NONE"]
c) each Construction Project which has commenced but not yet been
completed is progressing without any significant continuing interruption in a
good and workmanlike manner and substantially in accordance with the
requirements of the Lease and all Applicable Laws and Cypress is diligently
pursuing the correction of any significant defect in such construction,
d) all costs and expenses for which Cypress is requesting
reimbursement by the Construction Advance referenced above constitute actual
costs and expenses incurred by Cypress for a Construction Project, and
e) to the knowledge of Cypress, liens (if any) now being asserted
against the Leased Property by Potential Lien Claimants do not in the aggregate
secure or allegedly secure more that $500,000 of claims. (As used in this
certificate a lien will be considered as "being asserted" if a claim of lien
relating thereto shall have been recorded and not discharged by payment or
settlement or removed by statutory bond.)
Capitalized terms used herein which are defined in the Lease but not in this
Certificate shall have the meanings assigned to them in the Lease.
In witness whereof, this Certificate is executed by an officer of Cypress
Semiconductor Corporation as of ______________, 19___.
Cypress Semiconductor Corporation
By:________________________________
Name:___________________________
Title:__________________________
Exhibit E-Page 3
80
LIST OF LIENS FOR WHICH A CLAIM OF LIEN HAS ACTUALLY BEEN FILED
(Construction Advance Request No. ________)
Liens for which a claim of lien has actually been filed are as follows [state
"NONE" if there are none]:
1.
2.
3.
Exhibit E-Page 4
81
OTHER COSTS LIST
(Construction Advance Request No. ________)
Costs paid - other than to Cypress's general contractor or construction manager
- by Cypress and for which Cypress is entitled to reimbursement from the
Current Advance being requested are as follows [state "NONE" if there are
none]:
1.
2.
3.
Exhibit E-Page 5
82
Exhibit F
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
x/x Xxxxxx Xxxxxxxxx xx Xxxxx, Xxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Re: Lease Agreement between BNP Leasing and Cypress Semiconductor
Gentlemen:
I, the undersigned, the [chief financial officer, controller,
treasurer or the assistant treasurer] of Cypress Semiconductor Corporation (the
"TENANT"), do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to subparagraph iii of
that certain Lease Agreement dated as of April __, 1996 (the "LEASE AGREEMENT,"
the terms defined therein being used herein as therein defined) between the
Tenant and you.
2. Annex 1 attached hereto sets forth financial data and
computations evidencing the Tenant's compliance with certain covenants of the
Lease Agreement, all of which data and computations are complete, true and
correct.
3. To the Knowledge of Tenant (as defined in the Lease) no
Default or Event of Default under the Lease Agreement has occurred and is
continuing.
4. The representations of Tenant set forth in the Lease Agreement
are true and correct in all material respects as of the date hereof as though
made on and as of the date hereof.
Executed this _____ day of ______________, 19___.
______________________________
Name:_________________________
Title:________________________
83
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, 19___
I. PARAGRAPH i: Quick Ratio
------------------------
A. Unencumbered Cash and
other "Quick Assets" as defined in
Paragraph i of the Lease: $_____________
-----------
B. "Current Liabilities" as defined in
Paragraph i of the Lease: $_____________
-----------
C. Ratio of A to B: _____ to 1.00
F. Minimum ratio computed as provided in
Paragraph i of the Lease: 1.10 to 1.00
-----------
II. PARAGRAPH 0: Minimum Tangible Net Worth
-----------
A. Reported stockholders equity: $_____________
B. "Intangible Assets" as
defined in Paragraph 0
-----------
of the Lease: $_____________
D. Consolidated Tangible Net Worth
(A - B): $_____________
E. Minimum computed as
provided in Paragraph 0
-----------
of the Lease: $467,000,000
Exhibit F-Page 2
84
Exhibit G
NOTICE OF REDUCTION OF MAXIMUM CONSTRUCTION ALLOWANCE
BNP Leasing Corporation
x/x Xxxxxx Xxxxxxxxx xx Xxxxx, Xxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Re: Lease Agreement dated April __, 1996, between Cypress
Semiconductor Corporation, as tenant, and BNP Leasing
Corporation, as landlord (the "Lease")
Gentlemen:
Capitalized terms used in this letter are intended to have the
meanings assigned to them in the Lease. This letter constitutes notice to you
that the Maximum Construction Allowance under the Lease shall be reduced to
$__________________(the "Reduced Maximum Construction Allowance"), effective on
the date you receive this notice (the "Reduction Date"); provided that in no
event shall the Reduced Maximum Construction Allowance be less than the
Outstanding Construction Allowance in effect on the Reduction Date.
Executed this _____ day of ______________, 19___.
CYPRESS SEMICONDUCTOR CORPORATION
Name:_________________________
Title:________________________
85
EXECUTION
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (this "AGREEMENT") made as of April 12, 1996
among CYPRESS SEMICONDUCTOR CORPORATION, a California corporation ("CUSTOMER"),
BANQUE NATIONALE DE PARIS, New York Branch (with its successors duly appointed
hereunder, herein referred to as "CUSTODIAN"), and BNP LEASING CORPORATION
("SECURED PARTY").
W I T N E S E T H:
WHEREAS, Customer has established a custodial account, account number
826529 styled "Cypress Semiconductor A/C #2 held for the benefit of BNP Leasing
Corporation" and a related custodial cash account number 201678-002-69
(collectively, the "CUSTODIAL ACCOUNT"), to be held by Custodian on the terms
and conditions set forth herein; and
WHEREAS, pursuant to a Pledge and Security Agreement of even date
herewith between Customer and Secured Party (the "SECURITY AGREEMENT"), a true
and correct copy of which is attached hereto as Exhibit A, Customer has pledged
to Secured Party on the terms set forth in the Security Agreement, the
Custodial Account, all Treasury Securities and funds from time to time on
deposit in the Custodial Account or otherwise designated by Customer to be held
by Custodian subject to the pledge and security interest created by the
Security Agreement, all proceeds of maturity, collections, income,
replacements, substitutions, reinvestments, distributions and claims with
respect thereto and all proceeds of the foregoing, and all of Customer's right,
title and interest in to and under this Agreement (collectively, the
"COLLATERAL"); and
WHEREAS, Custodian has agreed to hold the Collateral on the terms set
forth herein and Customer and Secured Party wish to notify Custodian of the
pledge by Customer to Secured Party of the Collateral and the grant by Customer
to Secured Party of a security interest therein and direct Custodian to
identify such pledge and security interest on its books and records;
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NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, Customer, Custodian and Secured Party agree as follows:
I. DEFINITIONS
Section 1.1. Definitions. As used herein, the terms "Agreement",
"Customer", "Custodian", "Secured Party", "Custodial Account", "Collateral" and
"Security Agreement" shall have the meanings indicated above, and the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Authorized Person" shall mean (i) with respect to Customer, any
person duly authorized by Customer in writing (certified by Customer's
corporate secretary) to give Written Instructions on behalf of Customer which
shall include the persons listed on Exhibit B hereto, and (ii) with respect to
Secured Party, any person duly authorized by Secured Party in writing to give
Written Instructions on behalf of Secured Party which shall include, without
limitation, the persons listed on Exhibit C hereto.
"Business Day" means any day that is (i) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in San
Francisco, California or New York, New York, and (ii) a day on which dealings
in deposits of dollars are transacted in the London interbank market; provided
that if such dealings are suspended indefinitely for any reason, "Business Day"
shall mean any day described in clause (i).
"CFR" means the United States Code of Federal Regulations, as from
time to time amended.
"Code" means the Uniform Commercial Code as adopted in the State of
New York.
"Execution Affidavit" means an affidavit in the form of Exhibit D
attached hereto, duly executed under oath by an Authorized Person of Secured
Party, attesting to the foreclosure of Secured Party's security interest in all
or any part of the Collateral.
"Foreclosure Event" has the meaning given it in the Pledge Agreement.
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"Market Value" means with respect to the Collateral on any Valuation
Date, a dollar value determined as follows:
(1) cash shall be valued at its face amount on such Valuation
Date; and
(2) a Treasury Security shall be valued by multiplying the
Principal Balance thereof on such Valuation Date by the
closing bid price therefor as established pursuant to
Custodian's standard and customary pricing sources which it
believes to be reliable.
"Participant" means any Participant under the Lease described in the
Pledge Agreement designated as such to Custodian by Secured Party from time to
time.
"Release Period" means each period beginning on the last regularly
scheduled Valuation Date occurring in a calendar month and continuing for five
(5) consecutive Business Days.
"Treasury Securities" shall mean uncertificated, direct, noncallable
debt obligations of the United States of America maturing within three (3)
years of the date of pledge to Secured Party constituting Treasury bonds,
notes, certificates of indebtedness or bills issued under the Second Liberty
Bond Act, as amended, in the form of entry made on the records of the Federal
Reserve Bank of New York as prescribed under 31 CFR.
"Valuation Date" means any of the following dates:
(1) the first Business Day of each calendar month and the
fifteenth day of each calendar month (or if such day is not a
Business Day, the immediately following Business Day); and
(2) any other Business Day on which Customer or Secured Party
requests a valuation of the Collateral by a notice sent to the
other and to the Custodian, provided such designated day must
be at least one (1) Business Day after the date the Custodian
receives the notice unless Custodian is then willing to
consent to the designation of the date of receipt as a
Valuation Date.
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"Written Instructions" shall mean a written notice actually received
by Custodian which Custodian reasonably believes to be from an Authorized
Person.
Section 1.2. Schedules and Exhibits. All schedules and exhibits
attached to this Agreement are a part hereof for all purposes.
Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document also refer to and
include all valid renewals, extensions, amendments, modifications, supplements
or restatements of any such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize any Person to
execute or enter into any such renewal, extension, amendment, modification,
supplement or restatement.
Section 1.4 References and Titles. All references in this
Agreement to Exhibits, Articles, Sections, subsections, and other subdivisions
refer to the Exhibits, Articles, Sections, subsections and other subdivisions
of this Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any subdivision are for convenience only and do not constitute any
part of any such subdivision and shall be disregarded in construing the
language contained in this Agreement. The words "this Agreement", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this Section" and "this subsection" and similar phrases
refer only to the Sections or subsections hereof in which the phrase occurs.
The word "or" is not exclusive, and the word "including" (in all of its forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless
the context otherwise requires.
II. APPOINTMENT OF CUSTODIAN
Section 2.1. Appointment of Custodian. Customer hereby
constitutes and appoints Custodian as custodian of the Collateral and Secured
Party hereby appoints custodian as its agent and bailee with respect to the
Collateral to
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act solely and with the sole responsibility in accordance with the terms
of this Agreement. Attached hereto as Exhibit B is a Certificate of
the Corporate Secretary of Customer certifying that Customer is authorized to
open the Custodial Account and setting forth the identity and authority of the
initial Authorized Persons of Customer and the officers of Customer authorized
to execute and deliver this Agreement on behalf of Customer. Attached hereto
as Exhibit C is an Officers' Certificate of Secured Party setting forth the
identity and authority of the initial Authorized Persons of Secured Party and
the officers of Secured Party authorized to execute and deliver this Agreement
on behalf of Secured Party. Custodian may rely on such Certificates as
conclusive evidence of the authority of such Authorized Persons and may
consider such Certificates to be in full force and effect until receipt by
Custodian of written designation of additional or substitute Authorized Persons
from Customer or Secured Party, as the case may be.
Section 2.2. Acceptance of Appointment. Custodian hereby accepts
appointment as custodian of the Collateral and agrees to perform the duties
thereof as hereinafter set forth with respect to the Collateral and (i) to act
as custodian solely in accordance with the terms of this Agreement and (ii) to
act as agent and bailee of Secured Party solely in accordance with the terms of
this Agreement. Custodian shall not have any obligations in respect of the
Collateral except as specifically set forth in this Agreement or in a separate
written agreement among the parties entered into after the date hereof.
III. CUSTODY OF PROPERTY
Section 3.1. Custodial Account.
(a) Custodian shall credit and hold the Collateral in the Custodial
Account, separate and apart from all other property and funds of Customer and
all other Persons, and no other property or funds shall be deposited in the
Custodial Account. Custodian shall hold all Treasury Securities deposited in
the Custodial Account in Custodian's name on the books of the Federal Reserve
Bank of New York; provided that the books and records of Custodian shall
reflect that all Treasury Securities deposited in the Custodial Account are
owned by Customer, subject to a pledge and security interest in favor of
Secured Party.
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(b) Custodian shall only release Collateral from the Custodial
Account as provided in Section 3.3 or pursuant to an Execution Affidavit.
Section 3.2. Action by Custodian without Written Instructions.
Unless otherwise instructed to the contrary by Written Instructions from
Customer and Secured Party, Custodian shall with respect to all Collateral:
(a) Credit the Custodial Account for all dividends and
interest earned on all the Collateral;
(b) Present for payment and collect the amount payable
upon all Treasury Securities, which are part of the Collateral, that
may mature, be redeemed or retired, or otherwise become payable;
(c) Execute, as custodian, any necessary declaration or
certificates of ownership with respect to the Collateral under the
federal tax laws or the laws or regulations of any other taxing
authority now or hereafter in effect; and
(d) Hold for the account of Customer, subject to a pledge
and security interest in favor of Secured Party pursuant to the
Security Agreement, all securities or other rights issued with respect
to any Collateral.
Unless instructed otherwise, by Written Instructions from Customer and Secured
Party, Custodian will credit the proceeds of sales, redemptions, collections,
and other receipts, and dividend and interest income from the Collateral to the
Custodial Account in accordance with Custodian's standard procedures and the
other provisions of this Agreement.
Section 3.3. Action by Custodian upon Written Instructions from
Customer. Upon the receipt of Written Instructions from Customer alone as
provided below in this Section 3.3, but not otherwise, Custodian shall:
(a) Deposit funds delivered to Custodian by Customer in
the Custodial Account for the purchase of Treasury Securities
concurrently with and in accordance with the delivery of a Written
Instruction described in Section 3.3(b);
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(b) Purchase Treasury Securities with proceeds of matured
Treasury Securities or other cash that is part of the Collateral or
otherwise delivered by Customer to Custodian in accordance with a
Written Instruction, and make payment therefor on behalf of Customer
and deposit such additional Treasury Securities in the Custodial
Account; provided that (except as otherwise provided in Section 4.2)
such purchase and deposit shall be made only if (i) Custodian shall
have received Written Instructions from Customer in the form of
Exhibit E; (ii) Custodian shall have itself purchased such Treasury
Securities on behalf of Customer for full market value from the issuer
of the Treasury Securities or from a seller not a party hereto
selected by Custodian and shall have made payment therefor in full in
immediately available funds; and (iii) upon making such deposit
Custodian shall be able to and shall (and Custodian hereby agrees to)
execute and deliver to Secured Party a Certificate in the form of
Exhibit F and all statements to be made therein shall be true and
correct;
(c) During a Release Period, Substitute new Treasury
Securities (in this section called the "New Treasury Securities") for
Treasury Securities that are part of the Collateral (in this section
called the "Existing Treasury Securities"); provided that such
substitution shall be made only if (i) Custodian shall have received
Written Instructions from Customer in the form of Exhibit G; (ii)
Custodian shall have itself purchased such New Treasury Securities on
behalf of Customer for full market value from the issuer of the New
Treasury Securities or from a seller not a party hereto selected by
Custodian and shall have made payment therefor in full in immediately
available funds delivered to Custodian by Customer or resulting from
the liquidation of the Existing Securities, and (iii) the Market Value
of the New Treasury Securities equals or exceeds the Market Value of
the Existing Treasury Securities or additional cash equal to the
amount of any shortfall is delivered to Custodian by Customer for
deposit in the Custodial Account; in each case Market Value shall be
determined by Custodian based on the closing "bid" prices quoted on
the Business Day preceding the Business Day on which such Written
Instructions are to be executed, and (iv) upon making such
substitution Custodian shall be able to and shall (and Custodian
hereby agrees to) execute and deliver to Secured Party a Certificate
in the form of Exhibit H and all statements to be made therein shall
be true and correct;
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(d) Release Collateral from the Custodial Account to Customer
without replacing it; provided that such a release shall be made only
if (i) Custodian shall have received Written Instructions from
Customer in the form of Exhibit I with the attachments required by the
terms thereof and (ii) the Market Value of the Collateral so released
is no greater than the amount by which (x) the Market Value of all
Collateral exceeds (y) 102% of the Minimum Collateral Value in each
case calculated as of the most recent Valuation Date.
(e) All Written Instructions regarding the purchase of
Treasury Securities shall be delivered to Custodian at least one
Business Day prior to the day on which such purchase is to be made.
(f) In complying with instructions for delivery of
eligible transactions, Custodian will make deliveries through the
Federal Reserve System, pursuant to Subpart O of the Treasury
Department Circular #300 (31 CFR Part 306), and operating circulars of
the Federal Reserve Bank of New York, both as amended from time to
time.
(g) Custodian shall be under no duty to Customer to take
any action with respect to any property held in any Custodial Account
except to the extent of any properly issued Written Instructions by
Customer.
(h) The parties hereto agree that the mere agreement of
the Secured Party and the Custodian to permit or cause the
substitution or release of Collateral if certain conditions are
satisfied as provided herein shall not constitute a termination of
Secured Party's security interest in any particular Collateral.
Section 3.4. Action by Custodian upon Written Instructions from
Customer and Secured Party. Custodian shall execute and deliver to such
persons as may be designated in any Written Instructions signed by both
Customer and Secured Party all notices, consents, authorizations, requests or
other announcements affecting or relating to the Collateral and any other
instruments whereby the authority of Customer as owner or Secured Party as
pledgee of any Collateral held hereunder may be exercised.
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Section 3.5. Use of Cash Balances. Any cash balances in the
Custodial Account may be applied to the purchase price of additional Treasury
Securities purchased pursuant to Section 3.3(b), and any excess cash resulting
from interest paid on Treasury Securities or a sale of Treasury Securities
constituting Collateral shall be deposited in the Custodial Account and shall
be eligible to be released pursuant to Section 3.3(d).
IV. INVESTMENT OF FUNDS
Section 4.1. Management of Investments. Subject to Section
6.2(i), and subject to compliance by Customer with the terms of Article III,
Customer acting alone and without any prior written consent of Secured Party,
shall have the power as between Customer and Custodian, to manage the
investment of the Collateral as provided in Section 3.3 so long as Custodian
shall not have received written notice from Secured Party that a Foreclosure
Event has occurred and is continuing under the Security Agreement; provided,
however, that notwithstanding the occurrence or continuance of any such
Foreclosure Event or the delivery of any such notice by Secured Party, Customer
shall be permitted to exercise its rights under Sections 3.3(a), 3.3(b) and
3.3(c) hereof, subject, in the case of the purchase of new Treasury Securities,
whether or not in substitution of existing Collateral, to the limitation that
Customer shall instruct Custodian to purchase and deposit in the Custodial
Account Treasury Securities having a maturity of ninety (90) days or less from
the date of purchase thereof. Secured Party hereby agrees to deliver to
Custodian a rescission of any notice of any Foreclosure Event previously
delivered to Custodian promptly upon the cessation of such Foreclosure Event,
provided Customer notifies Secured Party of the cessation and with such notice
provides evidence of the cessation reasonably satisfactory to Secured Party.
Except as expressly provided herein, the Custodian is not under any duty to
supervise the investments or management of the Collateral. Custodian is not
under any duty to advise or make any recommendations in respect thereof.
Section 4.2. Investments by Custodian. Notwithstanding Section
3.3 or the foregoing provisions of Section 4.1, in the event that Custodian
does not receive Written Instructions as to the investment of cash balances
held by it one (1) Business Day in the Custodial Account, Custodian shall
invest such cash balances in Treasury Securities having a maturity of ninety
(90)
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days from the date of purchase, in the name of Custodian for the benefit of
Customer and subject to the Lien of Secured Party.
Section 4.3. No Custodian Liability. It is understood and agreed
by the parties that while Custodian will perform certain ministerial and
custodial duties with respect to investment of the Collateral, such duties will
be performed in the normal course by officers and other employees of Custodian
who may be unfamiliar with investment management and that such duties will not
include the exercise of any discretionary authority or other authority to
manage and control the Collateral. Subject to Section 7.3 below, Custodian
shall have no liability or responsibility to Customer for acting without
question on Written Instructions of Customer and/or Secured Party as provided
hereunder, or for failure to act in the absence of Written Instruction from
Customer and Secured Party with respect to investment of the Collateral except
as provided otherwise in Sections 3.2 and 4.2. The parties hereto agree that
the Custodian does not have any obligation to extend credit, grant financial
accommodation or otherwise advance its own monies to the parties hereto.
V. VALUATION OF COLLATERAL; REPORTS AND ACCOUNTINGS
BY CUSTODIAN
Section 5.1. Valuation of Collateral.
(a) On each Valuation Date, the Custodian shall determine
the Market Value of the Collateral as of such Valuation Date; and
(b) On each Valuation Date, the Custodian shall:
(1) prepare a valuation report stating the Market Value
of the Collateral as of such Valuation Date and the
maturity of the Treasury Securities that are part of
the Collateral; and
(2) deliver a copy of the valuation report by facsimile
transmission, no later than two (2) Business Days
after such Valuation Date, to Customer and Secured
Party and to any Participants designated in writing
by Secured Party.
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Section 5.2. Maintenance of Reports; Accountings. Custodian shall
maintain accurate and detailed records and accounts of all investments,
receipts, disbursements and other transactions hereunder; and all accounts,
books and records relating thereto shall be open, upon reasonable notice, at
all reasonable times to inspection and audit by such person or persons as
Customer or Secured Party may designate, subject to compliance with the
Custodian's obligation of confidentiality with respect to its other customers
and other assets of the Customer maintained with the Custodian. Custodian
shall submit to the auditors or other representatives of Customer or Secured
Party such valuations, reports or other information as they may reasonably
require upon receipt of reasonable notice. Custodian shall establish and
maintain for operational and account purposes such other accounts or records as
Customer and Custodian may from time to time consider necessary under this
Agreement.
Section 5.3. Statements.
(a) Custodian shall furnish Customer with monthly written
statements of transactions and statements of property held for the
account of Customer under this Agreement with copies thereof to
Secured Party. Custodian shall furnish Customer with such other
reports as may be agreed upon from time to time with copies thereof to
Secured Party and any Participant designated in writing by Secured
Party. Customer and Secured Party may approve such accounting by
written notice of approval delivered to Custodian or by failure to
express objection to such accounting in writing delivered to Custodian
within thirty (30) days from the date upon which the accounting was
delivered to Customer and Secured Party. Custodian agrees to provide
Customer with regular monthly reports of transactions and holdings in
the Custodial Account or at such more frequent intervals as Customer
and Custodian may mutually agree.
(b) In addition, Customer understands that Customer has
the option to elect to participate in Custodian's Remote Access
Service (an on-line system) which provides Customer, on a daily basis,
with the ability to view on-line or to print on hard copy of the
following: (i) all transactions involving the delivery in and out of
Custodian securities on a free or payment basis; (ii) payments of
principal and interest or dividends; (iii) pending transactions and
fails; and (iv) schedules of Custodian holdings plus the market
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values thereof. Custodian has furnished Customer with a separate fee
schedule applicable to the Remote Access Service and, in the event
Customer subscribes thereto, Customer shall be fully responsible for
the security of Customer's connecting terminal, access thereto and the
proper and authorized use thereof and Customer's initiation and
application of continuing effective safeguards. In this connection,
except for any instance involving the negligence or misconduct of
Custodian or its officers, agents or employees, Customer agrees to
defend, indemnify Custodian and to hold Custodian harmless from and
against any and all liabilities, losses, damages, costs, including
attorneys' fees and every other expense of every nature incurred by
Custodian as a result of any improper or unauthorized use of such
terminal by Customer or by others on Customer's premises. To the
extent that the Remote Access Service shall include market values of
Customer's Custodian holdings, Customer acknowledges receipt from
Custodian of Custodian's advice that Custodian now obtains and will in
the future obtain such information from outside sources which
Custodian deems to be reliable and confirms that Custodian does not
verify nor represent or warrants either the accuracy or the
completeness of any such information furnished or transacted by or
through the Remote Access Service.
Section 5.4. Fees and Expenses. All costs and expenses incurred
by Custodian in connection with the Custodial Account, and all fees of
Custodian as may be agreed upon in writing from time to time between Customer
and Custodian (or in the absence of such an agreement, as are consistent with
Custodian's standard fee schedules for services required of Custodian
hereunder), shall be paid by Customer. Each of the parties hereto acknowledge
and agree that all such costs and expenses and all such fees are the sole
obligation of Customer and that in no event shall any such cost, charge or
expense due hereunder be or become an obligation of Secured Party or give rise
to a Lien against the Collateral. Custodian may charge any account of
Customer's in Custodian's possession, other than the Custodial Account and the
account created under the Custodial Agreement dated as of September 1, 1994
among the parties hereto, for such costs, expenses and fees. Custodian is not
obligated to effect any transaction or make any payment in connection therewith
unless there are sufficient available funds on deposit in the Custodial Account
or funds have otherwise been made available to Custodian to Custodian's
satisfaction. The amount by which
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payments made by Custodian on Customer's behalf with respect to cash or
Treasury Securities in, or to be received for, the Custodial Account, or with
respect to other transactions pursuant to this Agreement, exceed available
funds and result in an account overdraft shall be deemed a loan from Custodian
to Customer in the amount of such overdraft, payable on demand and bearing
interest at the rate customarily charged by Custodian on similar loans, to the
extent permitted by applicable law. Customer confirms that all such loans
shall be based on Custodian's sole determination to make the underlying advance
in each case.
Section 5.5. Waiver of Right of Set-Off. Custodian hereby agrees
that all contractual, common law and other rights of set-off that Custodian may
have against the Collateral are hereby subordinated to any and all rights of
Secured Party in and to the Collateral. Subject to the foregoing
subordination, in order to secure the payment and performance of all Customer's
liabilities to Custodian at any time outstanding, Customer hereby grants
Custodian a lien and right of set-off as to the balance in any of Customer's
non-custodial accounts with Custodian, from time to time, and Custodian may, at
any time or from time to time, at Custodian's sole option and without notice,
appropriate and apply toward the payment of Customer's liabilities to
Custodian, the balance of each such account and/or take such other action(s) or
exercise any other options, powers and rights which Custodian now or hereafter
has as a secured party under the Code or any other applicable law. The phrase
"Customer's liabilities to Custodian" shall include all Customer's liabilities
arising hereunder, including, but not limited to loans, other advances,
interest, fees, charges, expenses and attorneys' fees.
Section 5.6. Authority Granted to Custodian by Customer.
Custodian is authorized and empowered in Customer's name and on Customer's
behalf to execute any certificates of ownership or other reports, declarations
or affidavits which Custodian is or may hereafter be required to execute and
furnish under any regulation of the Internal Revenue Service, or other
authority of the United States, to include, but not limited to non-resident tax
withholding and reporting, so far as the same are required in connection with
any property which is now or may hereafter be held in the Custodial Account.
Customer agrees to notify Custodian immediately in writing of any material
change in Customer's status which may impact on any such certificates, reports
or other required documents or on the contents thereof.
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VI. IDENTIFICATION OF PLEDGE AND SECURITY INTEREST
ON BOOKS AND RECORDS
Section 6.1. Identification of Pledge and Security Interest.
Secured Party and Customer hereby irrevocably order and direct Custodian to
identify on its books and records the ownership of the Collateral by Customer
and the pledge of, and the grant of the security interest in, the Collateral to
Secured Party.
Section 6.2. Representations, Warranties and Covenants of
Custodian. Custodian hereby represents, warrants, covenants and confirms to
Secured Party and Customer the following:
(a) Existence and Qualification. Custodian is (1) the
New York Branch of a French banking corporation, (2) a bank which is a
member of the Federal Reserve Bank of New York, and (3) eligible to
maintain custodial book entry accounts with the Federal Reserve Bank
of New York under Sections 306.117 through 306.122 of Title 31 of the
CFR. Custodian is a bank which, in the ordinary course of its
business, maintains security accounts for its customers, is acting in
that capacity in connection with the transactions contemplated by this
Agreement and is not a clearing corporation, as such term is used in
8.313(a) of the Code as in effect on the date hereof.
(b) Nature of Business. Custodian regularly accepts
Treasury Securities in the normal course of its business as an
authorized custodial agent, bailee, representative, nominee and
financial intermediary for its customers, and maintains in the
ordinary course of its business accounts in the names of such
customers, which accounts reflect the ownership interest of such
customers in the Treasury Securities held by Custodian in such
capacity.
(c) Custodial Status; Enforceability. Collateral is and
shall be held by Custodian as custodian for the benefit of Customer
and as agent and bailee of Secured Party pursuant to the terms hereof.
Custodian has duly taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement and to authorize
its participation in the transactions contemplated hereby and the
performance of its obligations hereunder. This
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Agreement constitutes the valid, legal and binding agreement of
Custodian, enforceable in accordance with its terms.
(d) Nature of Collateral. Any Treasury Securities which
constitute the Collateral are registered in the name of Custodian and
for the account of Custodian in its capacity as authorized custodial
agent, bailee, representative, nominee and financial intermediary for
others, by means of an appropriate book entry made in accordance with
306.118(b) of Title 31 of the CFR (the "Fed Entry") on the books and
records maintained by the Federal Reserve Bank of New York with
respect to Treasury Securities pursuant to Section 306.117(a) of Title
31 of the CFR, and Custodian hereby represents, acknowledges, warrants
and confirms that effective as of the date hereof, pursuant to Section
306.118(b) of Title 31 of the CFR, it is holding any Collateral in the
Custodial Account as authorized custodial agent, bailee,
representative, nominee and financial intermediary for Customer and
Secured Party. Notwithstanding anything contained in this Agreement,
the Custodian does not make any representations as to the validity,
the value or genuineness of the Collateral purchased by Custodian in
accordance with this Agreement and makes no guarantee with respect to
the payment of interest or principal thereunder. Custodian has not
instructed the Federal Reserve Bank of New York to transfer any of the
Collateral to any other account maintained by the Federal Reserve Bank
of New York for Custodian. Except as contemplated by this Agreement
(including Sections 3.2, 3.3 and 4.2), Custodian will not cause or
permit to occur any change, alteration or modification of any kind in
the form of the Collateral from Treasury Securities including, without
limitation, any conversion of the Collateral or any part thereof to
certificated, bearer or any other form not expressly permitted by this
Agreement.
(e) Care of Collateral. Custodian shall give the
securities that come into Custodian's possession under this
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Agreement the same physical care and safeguards as are afforded
similar property owned by Custodian; provided, however, Custodian's
responsibility hereunder is limited to losses occasioned directly by
the gross negligence or willful misconduct of Custodian's officers,
agents or employees, or by robbery, burglary or theft (while
securities are in Custodian's physical possession), to the extent of
the market value of the securities at the date of the discovery of
such loss. With respect to any securities which Custodian delivers
for Customer to a third party, and with respect to such delivery,
Custodian shall be deemed no more than an "intermediary" as defined in
Section 8-306(3) of the Code. Custodian may, at Custodian's option,
make arrangements for insuring Custodian against loss from any cause,
but Custodian shall not be under any obligation to insure for
Customer's benefit.
(f) Identification of Collateral. From the time of the
Fed Entry for each Treasury Security that is part of the Collateral
such Treasury Security has been identified on the appropriate books
and records maintained by Custodian with respect to Treasury
Securities as belonging to Customer and such Treasury Security has
been identified on such books and records as being subject to the Lien
granted to Secured Party pursuant to the Security Agreement. All
Collateral is and will be held in the Custodial Account and the books
and records of Custodian do and will during the term of this Agreement
reflect the pledge and security interest of Secured Party therein.
The Collateral has not been identified on such books and records of
Custodian as belonging to any other Person or as subject to any other
pledge, security interest or lien, since the Fed Entry was made with
respect to the Collateral.
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(g) Ownership and Liens. Custodian has not received,
acknowledged nor accepted any notice, order, registration or other
document which purports to constitute or suggests in any way the
existence of any pledge, claim, security interest, lien, encumbrance
or adverse claim of any kind with respect to the Collateral or any
part thereof, other than the pledge and security interest in favor of
Secured Party. Custodian has not been served with legal process with
respect to the Collateral except for the notice from Secured Party
with respect to the security interest of Secured Party therein.
Custodian has not sold, transferred, assigned, pledged or granted, and
after the date hereof Custodian will not, except as specified in
Article III, or Section 4.1 or 4.2 above and Section 6.2(i) below,
sell, transfer, assign, pledge or grant, a security interest in the
Collateral, or any part thereof, to any person, partnership,
corporation, association, trust, entity or governmental agency,
department or instrumentality, in each case, of any kind, including,
without limitation, the Federal Reserve Bank of New York, any other
Federal Reserve Bank, the United States Treasury or any other
transferee or pledgee eligible to maintain a book-entry account in its
name with a Federal Reserve Bank.
(h) Further Assurances. Subject to the provisions of
Section 6.2(i), Custodian will take any and all steps available to it
and necessary or appropriate to maintain custody of the Collateral in
the name of Custodian for the benefit of Customer and subject to the
Lien of Secured Party under the Security Agreement. Custodian will
promptly and fully respond to any and all inquiries and requests for
data submitted by Secured Party or Customer with respect to the
Collateral or any matter relating thereto.
(i) Transfer of Ownership to Person Designated by Secured
Party. Notwithstanding the provisions of Section 6.2 (a) through (h)
above, as authorized custodial agent, bailee, representative, nominee
and financial intermediary for Customer and Secured Party,
respectively, with respect to the Collateral, upon receipt of an
Execution Affidavit, Custodian will immediately register the transfer
of ownership of the Collateral described in such Execution Affidavit
on the appropriate books and records maintained by it to the person or
entity designated by Secured Party (which may be Secured Party), such
that such Collateral is identified on such books and records as
belonging to the
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person or entity so designated by Secured Party. Notwithstanding any
other provision to the contrary in any Transaction Document, upon and
after such transfer, all prior and future directions, orders and
instructions of Customer with respect to the Collateral, including its
Written Instructions, described in such Execution Affidavit shall be
disregarded and Custodian shall accept and act upon instructions,
orders and directions relating to such Collateral solely from Secured
Party or the person or entity so designated by it in writing. The
Customer hereby agrees that, notwithstanding anything else contained
in this Agreement, the Custodian is hereby authorized to rely upon the
Execution Affidavit with respect to the Collateral described therein
and that in acting pursuant thereto, subject to Section 7.3 below, the
Custodian shall have no obligation to verify the accuracy of the
information contained therein. Secured party hereby agrees to send
Customer a copy of any Execution Affidavit at the same time it is sent
to Custodian.
VII. MISCELLANEOUS
Section 7.1. Amendments; Termination. The directions and
instructions of Customer and Secured Party contained in Section 6.1 hereof and
the representations, warranties and covenants contained in Section 6.2 are
irrevocable and may only be modified, amended or terminated with the prior
written consent of an Authorized Person of Customer and Secured Party. The
provisions of this Agreement may be changed or modified at any time solely by a
writing executed by each of the parties hereto.
Section 7.2. Reliance upon Instructions. Custodian shall be
entitled to rely upon Written Instructions actually received by Custodian as
specified in Section 7.12.
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Section 7.3. No Liability; Indemnity by Customer. Custodian shall
not be liable for any action taken or omitted by it hereunder in accordance
with the terms hereof. With respect to other performance or lack of
performance of Custodian hereunder Custodian shall be liable only for the
negligence or willful misconduct of Custodian or its officers, employees or
agents. Customer will indemnify Custodian and hold it harmless against any and
all claims, losses, liabilities, damages and expenses, including reasonable
counsel fees and expenses, howsoever arising from or in connection with this
Custodian Agreement or the performance of its duties hereunder, provided that
nothing contained herein shall require that Custodian be indemnified for the
negligence or willful misconduct of Custodian or its officers, employees or
agents. The provisions of this paragraph shall survive termination of this
Custodian Agreement.
Section 7.4. Successors and Assigns. This Agreement shall extend
to and shall be binding upon the parties hereto, and their respective
successors and assigns; provided, however, that this Agreement shall not be
assignable by Customer or Custodian without the written consent of each of the
other parties hereto and provided further, Secured Party may grant a
participation in or assign any of its rights hereunder in the same manner and
to the same extent that it is entitled to grant a participation in or assign it
rights under the Lease; provided that if there is more than one assignee under
an absolute assignment of the full rights of Secured Party under the Lease
executed after the date hereof, one of such assignees shall be selected by all
such assignees to serve as their agent hereunder. Each of Customer, Secured
Party and their respective agents and counsel are hereby entitled to rely upon
the representations, warranties and covenants made by Custodian under Section
6.2 hereof.
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Section 7.5. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York (without
regard to its conflicts of law provisions) and shall be binding upon Customer
and upon Customer's successors and assigns and shall inure to Custodian's
benefit and Custodian's successors and assigns and shall be deemed continuing
until terminated by Written Instruction to Custodian from both Customer and
Secured Party. Each party hereto irrevocably submits itself to the exclusive
jurisdiction of the state and federal courts of New York for purposes of this
Agreement and agrees and consents that service of process may be made upon it
in any legal proceeding relating to this Agreement by any means allowed under
federal or New York law. The parties hereto hereby waive and agree not to
assert, by way of motion, as a defense or otherwise, that any such proceeding
is brought in an inconvenient forum or that the venue thereof is improper.
Section 7.6. Other Agreements and Parties. Notwithstanding any
references in this Agreement to any other agreements and instruments, the
parties hereto recognize that the Custodian is not a party to any other
agreements in respect of the transactions contemplated thereby, and that the
rights, duties and obligations of the Custodian in respect of the transaction
contemplated by the Agreement are solely and exclusively stated herein. The
Custodian acknowledges that certain lenders may participate with Secured Party
in the Collateral. The Secured Party agrees that, notwithstanding the
foregoing, the Custodian shall have no obligations hereunder to any such
parties and that any duties and obligations under this Agreement are solely to
the Secured Party and Customer. Custodian shall be entitled to ignore any
notices received in respect of this Agreement and the transactions contemplated
herein from any party other than the Customer and the Secured Party.
Section 7.7. Resignation of Custodian. Custodian may at any time
resign and be discharged of the duties and obligations created by this
Agreement by giving not less than sixty (60) days' written notice to the
Customer and the Secured Party specifying the date when such resignation shall
take effect, and such resignation shall take effect upon the day specified in
such notice unless previously a successor shall have been appointed by the
Customer with the prior written consent of Secured Party, as provided in
Section 7.9 hereof, in which event such resignation shall take effect
immediately on the appointment of such
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successor, provided, however, that no such resignation may take effect until a
successor has been appointed.
Section 7.8. Removal of Custodian. The Custodian may be removed
hereunder at any time by an instrument in writing, delivered to the Custodian
and signed by the Secured Party; provided, however, that such removal shall not
become effective until such time as a successor Custodian has been appointed in
accordance with Section 7.9 hereof and has duly accepted its appointment and
provided further, that such removal of the original Custodian shall not
terminate or otherwise impair the obligations and rights of any successor
Custodian hereunder or Secured Party's Lien on the Collateral which shall
continue in full force and effect under the terms of the Security Agreement.
Secured Party hereby agrees to so remove the Custodian upon written request of
Customer in the event that the Custodian is unable to execute a certificate in
the form of Exhibit H in connection with a substitution of Collateral pursuant
to Section 3.3(c) after receiving Written Instructions from Customer in the
form of Exhibit G so long as (i) Customer has complied with all of the terms
and conditions of Section 3.3(c) and delivered to Custodian any immediately
available funds required for such substitution, (ii) no Default or Event of
Default (both as defined in the Lease referred to in the Pledge Agreement) has
occurred and is continuing, (iii) the inability of Custodian to execute and
deliver such certificate is not due to a change in any applicable law, rule or
regulation, any action of the Federal Reserve Bank of New York or the failure
of the Market Value of the New Collateral (plus any additional cash delivered
to Custodian for deposit in the Custodial Account in connection therewith) to
equal or exceed the Market Value of the Replaced Collateral (as such terms are
defined in Exhibit H).
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Section 7.9. Appointment of Successor Custodian.
(a) In case at any time the Custodian shall resign or
shall be removed hereunder or shall become incapable of acting or
shall be adjudged as bankrupt or insolvent, or if a receiver,
liquidator or conservator of the Custodian, or of its property, shall
be appointed, or if any public officer shall take charge or control of
the Custodian, or of its property or affairs, a successor to serve
hereunder shall be appointed by the Customer and the Secured Party to
serve hereunder pursuant to a duly executed written instrument signed
by an Authorized Person of the Customer and the Secured Party and
delivered to such successor and the predecessor custodian.
(b) Any Custodian appointed under the provisions of
Section 7.9(a) in succession to the Custodian shall be a bank or trust
company or banking association in good standing, within or without the
State of New York, which has a corporate trust office, in the State of
New York, and capital stock and surplus aggregating at least
$1,000,000,000, shall be authorized by law to perform all the duties
imposed upon it by this Agreement, and shall be able to make the
representations and warranties contained in Section 6.2(a) of this
Agreement.
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Section 7.10. Transfer of Rights and Property to Successor
Custodian. Any successor custodian appointed under this Agreement to serve as
Custodian hereunder and under this Agreement shall execute, acknowledge and
deliver to its predecessor Custodian, and also to the Customer and Secured
Party, an instrument accepting such appointment, and thereupon such successor
custodian, without any further act, deed or conveyance, shall become fully
vested with all moneys, estates, properties, rights, powers, duties and
obligations of such predecessor Custodian hereunder, with like effect as if
originally named as Custodian hereunder; but the Custodian ceasing to act shall
nevertheless on the written request of the Customer or the Secured Party or of
the successor custodian, execute, acknowledge and deliver such instruments or
conveyance and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
custodian all the right, title and interest of the predecessor Custodian in and
to the Collateral, and shall pay over, transfer and/or assign and deliver, as
appropriate, to the successor custodian any money or other property subject to
the conditions set forth in this Agreement.
Section 7.11. Merger or Consolidation. Any company into which the
Custodian may be merged or converted or with which it may be consolidated or
any company resulting from any merger, conversion or consolidation to which it
shall be a party, or any company to which the Custodian may sell or transfer
all or substantially all of its custody business, provided such company shall
be a bank or trust company organized under the laws of any state of the United
States or a national or French banking association with offices in New York and
shall be authorized by law to perform all the duties imposed upon it by this
Agreement and shall meet the criteria stated in Section 7.9(b), shall be the
successor to the Custodian hereunder and under this Agreement without the
execution or filing of any paper or the performance of any further act.
Section 7.12. Notices; Written Instructions. All Written
Instructions, notices, demands and other instructions and communications to be
made hereunder to the parties hereto shall be in writing (at the addresses set
forth below) and shall be given by any of the following means: (A) personal
service; (B) telecopying (if confirmed in writing sent by reputable overnight
courier service); (C) reputable overnight courier service; or (D) registered or
certified first class mail, return receipt requested. Such addresses may be
changed by notice to the
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other parties given in the same manner as provided above. Any notice or other
communication sent pursuant to clause (A), (B) or (C) hereof shall be deemed
received upon such personal service, receipt of such telecopy or delivery by
such overnight courier service, and, if sent pursuant to clause (D) shall be
deemed received five (5) days following deposit in the mail. If the Custodian
receives conflicting instructions from the Customer and the Secured Party, the
Custodian shall notify both parties, but Custodian shall take no action for
thirty (30) days after giving such notice unless it receives consistent Written
Instructions from Customer and Secured Party during such thirty-day period and
if such consistent instructions are not received within such thirty-day period,
Custodian shall interplead the Collateral with a court having jurisdiction
pursuant to Section 7.5. A copy of each notice given to a party hereunder
shall be given to all parties listed below.
Address of Secured Party:
BNP Leasing Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx
FAX (000) 000-0000
With a copy to:
Banque Nationale de Paris, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
FAX (000) 000-0000
And with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Knight, P.C.
3300 First City Center
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
FAX (000) 000-0000
Address of Customer:
Cypress Semiconductor corporation
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0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
FAX 408/000-0000
AND WITH A COPY TO:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Real Estate Department
FAX: (000) 000-0000
Address of Custodian
000 Xxxxxxx Xxxxxx
World Finance Center - Tower A
New York, New York 10281-1062
Attention: Securities Department
Section 7.13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
such counterparts shall, together, constitute only one instrument.
Section 7.14. Severability. If any provision of this Agreement
is deemed to be invalid or unenforceable, such determination shall not affect
the validity or enforceability of any other provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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110
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as of the
day and year first above written.
CUSTOMER:
CYPRESS SEMICONDUCTOR
CORPORATION
By:_____________________________________
Name:
Title:
CUSTODIAN:
BANQUE NATIONALE DE PARIS,
NEW YORK BRANCH
By:_____________________________________
Name:
Title:
Secured Party:
BNP LEASING CORPORATION
By:_____________________________________
Name: Xxxxx X.
Xxx Title: Vice President
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EXHIBIT A - Copy of Security Agreement
EXHIBIT B - Secretary's Certificate of Customer
EXHIBIT C - Officers' Certificate of Secured Party
EXHIBIT D - Form of Execution Affidavit
EXHIBIT E - Form of Written Instruction for Reinvestment
EXHIBIT F - Form of Custodian Certificate for Reinvestment
EXHIBIT G - Form of Written Instruction for Substitution
EXHIBIT H - Form of Custodian Certificate for Substitution
EXHIBIT I - Form of Written Instruction for Release
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EXHIBIT A
REQUEST FOR RELEASE
Reference is made to that certain Pledge and Security Agreement dated
as of _______________, 1996 (as from time to time amended, the "Agreement"), by
and between Cypress Semiconductor Corporation ("Debtor") and BNP Leasing
Corporation ("Secured Party"). Terms which are defined in the Agreement are
used herein with the meanings given them in the Agreement.
Pursuant to the terms of the Agreement Debtor hereby requests that
Secured Party release the Collateral described below (the "Designated
Collateral"):
[Treasury Securities to be described here by Par Amount, Coupon and Maturity or
other Collateral to be described by dollar amount and type.]
To induce Secured Party to release such Collateral, Debtor hereby
represents, warrants, acknowledges, and agrees to and with Secured Party that:
(a) The person signing this instrument on behalf of
Debtor has all necessary authority to act for Debtor in making the
request herein contained.
(b) There does not exist on the date hereof any condition
or event which constitutes an Event of Default which has not been
cured or waived in writing by Secured Party.
(c) After giving effect to the release of the Designated
Collateral, the Market Value of the Collateral remaining encumbered
under the Agreement shall be at least equal to 102% of the Minimum
Collateral Value, in each case as determined as of the Valuation Date
most recently preceding the date of this Request for Release.
IN WITNESS WHEREOF, this instrument is executed as of
____________________, ____.
CYPRESS SEMICONDUCTOR CORPORATION
By:____________________________________
Name:
Title:
113
BNP Leasing Corporation hereby releases the Designated Collateral
described above from the Agreement and authorizes Custodian to transfer the
Designated Collateral from the Custodial Account and to indicate such release
on its books and records.
BNP LEASING CORPORATION
By:____________________________________
Name:
Title:
-2-
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EXHIBIT B
SECRETARY'S CERTIFICATE OF CUSTOMER
Reference is made to (1) that certain Pledge and Security Agreement of
even date herewith (the "Pledge Agreement") between BNP Leasing Corporation, a
Delaware corporation ("Secured Party"), and Cypress Semiconductor Corporation,
a ___________ corporation ("Customer"), and (2) that certain Custodial
Agreement of even date herewith (the "Custodial Agreement") among Secured
Party, Customer and Banque de Nationale de Paris, New York ("Custodian"). The
undersigned, ________________________, does hereby certify as follows in
connection with such documents:
1. The undersigned is the duly elected, qualified, and acting
Secretary of Customer, and as such has the power and authority to certify as to
the matters addressed in this Certificate.
2. The capitalized terms used in this Certificate and not
otherwise defined shall have the meaning specified for such terms in the
Custodial Agreement.
3. The persons whose names, titles and signatures appear below are
each duly elected, qualified and acting officers of Customer, each holds on the
date hereof the office set forth opposite such officer's name below, and the
signature appearing below opposite such officer's name is such officer's
genuine signature. Messrs. ____________________________ ____________________
are each duly authorized to execute and deliver the Pledge Agreement and the
Custodial Agreement on behalf of Customer.
Name Office Signature
___________________ ___________________ __________________
___________________ ___________________ __________________
4. __________________________ and also any one of the persons
whose names, titles and signatures appear below are each duly authorized to
give instructions to Custodian under the Custodial Agreement.
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Name Office Signature
___________________ __________________ __________________
___________________ __________________ __________________
___________________ __________________ __________________
___________________ __________________ __________________
IN WITNESS WHEREOF, this instrument is executed by the undersigned as
of _____________________, 1996.
________________________________________
Name:
Title:
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EXHIBIT C
OFFICERS' CERTIFICATE OF
SECURED PARTY
Reference is made to (i) the Pledge and Security Agreement of even
date herewith between BNP Leasing Corporation ("Secured Party") Cypress
Semiconductor Corporation ("Customer"), and (ii) the Custodial Agreement of
even date herewith (the "Custodial Agreement") among Secured Party, Customer
and Banque de Nationale de Paris, New York ("Custodian"). The undersigned do
hereby certify as follows in connection with such agreements:
1. The undersigned, Xxxxx X. Xxxxx and Xxxxx X. Xxx, are the duly
authorized President and Vice President of Secured Party, respectively, and as
such have power and authority to certify as to the matters addressed in this
Certificate.
2. The capitalized terms used in this Certificate and not
otherwise defined shall have the meaning specified for such terms in the
Custodial Agreement.
3. Secured Party has duly authorized Xxxxx X. Xxx'x execution and
delivery on behalf of Secured Party, of the Lease and Purchase Agreement
described in the Security Agreement, and other agreements, documents,
certificates and instruments contemplated to be executed and delivered by
Secured Party in connection therewith.
4. Xxxxx X. Xxx, Vice President of Secured Party, and Xxxxxx
Lumnanlan, Vice President of Banque Nationale de Paris, whose genuine
signatures appear below, are duly authorized to give instructions to Custodian
under the Custodial Agreement, and execute and deliver the Execution Affidavit.
________________________________________
Xxxxx X. Xxx
________________________________________
Xxxxxx Xxxxxxxx
5. All the information contained in this Certificate is true and
correct on and as of the date hereof.
Executed as of _______________________, 1996.
________________________________________
Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxx
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EXHIBIT D
EXECUTION AFFIDAVIT OF OFFICER OF
SECURED PARTY
(Name of Officer) , residing at (Address) ,
hereby deposes and states on behalf of BNP Leasing Corporation ("Secured
Party"):
1. I am currently (Title of Officer) of BNP Leasing
Corporation, 000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000.
2. Secured Party is a party to a Pledge and Security Agreement
with Cypress Semiconductor Corporation ("Customer") dated as
____________________, 1996 (the "Security Agreement"). Secured Party,
Customer and ____________________ ("Custodian") are parties to a Custodial
Agreement dated as of ____________________, 1996 (the "Custodial Agreement").
3. A Foreclosure Event has occurred and Secured Party has
foreclosed upon the following collateral covered by the Security Agreement:
[TREASURY SECURITIES DESCRIBED HERE BY PAR AMOUNT, COUPON AND
MATURITY]
The purchaser of such collateral at the foreclosure sale was
________________________________ (the "Purchaser") who is hereby designated by
Secured Party to deliver instructions, orders and directions relating to such
collateral pursuant to the Custodial Agreement. Secured Party gave Customer
notice of such foreclosure sale at least ten (10) days prior to the date
thereof as required by Section 5.2 of the Pledge Agreement.
4. Custodian is authorized to rely upon this Execution Affidavit
in complying with such instructions, orders and directions and in registering
the transfer of ownership of such collateral to Purchaser on Custodian's books
and records pursuant to the Custodial Agreement.
5. A copy of this Affidavit is being delivered to Customer
concurrently herewith.
________________________________________
Name of Officer, Office
BNP Leasing Corporation
SWORN AND SUBSCRIBED to me this _____ day of _____________________, 199____.
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________________________________________
Notary Public
My Commission Expires:
___________________________________
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EXHIBIT E
Re: Cypress Collateral Account held for the benefit of BNP Leasing
Corporation #_______________________.
WRITTEN INSTRUCTION FOR PURCHASE
OF TREASURY SECURITIES
Reference is made to that certain Custodial Agreement dated as of
____________________, 1996 (as from time to time amended, the "Agreement"), by
and among Cypress Semiconductor Corporation ("Customer"), Banque Nationale de
Paris, New York Branch ("Custodian") and BNP Leasing Corporation ("Secured
Party"). Terms which are defined in the Agreement are used herein with the
meanings given them in the Agreement.
Pursuant to the terms of the Agreement, Customer hereby directs the
Custodian to purchase the Collateral described below (the "New Collateral")
with cash balances on deposit in the Custodial Account or otherwise provided by
Customer to Custodian and upon the purchase thereof, to deposit the New
Collateral in the Custodial Account. Upon such deposit, the New Collateral
shall be part of the Collateral subject to the Security Agreement.
NEW COLLATERAL: [TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR
AMOUNT, COUPON AND MATURITY.]
To induce Custodian to make such purchase and deposit of the New
Collateral, Customer hereby represents, warrants and acknowledges to and agrees
with Custodian that:
(a) The person signing this instrument on behalf of
Customer has all necessary authority to act for Customer in making the
request herein contained. The New Collateral has not been owned by
Customer at any time prior to the date hereof.
(b) A copy of this Written Instruction is being delivered
to Secured Party concurrently herewith.
(c) The Security Agreement, the Agreement and pledge of
and grant of security interest by Customer in the New Collateral
pursuant to the Security Agreement to secure the Obligations are
hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, this instrument is executed as of
_____________________, 19____.
CYPRESS SEMICONDUCTOR CORPORATION
By_____________________________________
Name:
Title:
2
120
EXHIBIT F
Re: Cypress Collateral Account held for the benefit of BNP Leasing
Corporation #____________.
CERTIFICATION OF CUSTODIAN FOR PURCHASE
OF TREASURY SECURITIES
Reference is made to that certain Custodial Agreement dated as of
____________________, 1996 (as from time to time amended, the "Agreement"), by
and among Cypress Semiconductor Corporation ("Customer"), Banque Nationale de
Paris, New York Branch ("Custodian") and BNP Leasing Corporation ("Secured
Party"). Terms which are defined in the Agreement are used herein with the
meanings given them in the Agreement.
Pursuant to the terms of the Agreement, Custodian hereby represents
and warrants to Secured Party that:
(a) The person signing this instrument on behalf of
Custodian is the duly elected, qualified and acting officer of
Custodian as indicated below such officer's signature hereto having
all necessary authority to act for Custodian in making the
certification herein contained.
(b) The Treasury Securities described below (the "New
Collateral") have been purchased pursuant to those certain Written
Instructions for Purchase of Treasury Securities dated
___________________________ (the "Instructions") and held in the
Custodial Account pursuant to the Instructions:
[TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR AMOUNT, COUPON AND
MATURITY.]
(c) The representations and warranties of Custodian set forth
in Section 6.2 of the Agreement are true and correct on and as of the
date hereof, with the same effect as though such representations and
warranties had been made on and as of the date hereof.
(d) Except to the extent waived in writing by Secured
Party, Custodian has performed and complied with all agreements and
conditions in the Agreement required to be performed or complied with
by Custodian on or prior to the date hereof.
(e) Custodian hereby confirms to Secured Party the
purchase of the Treasury Securities described above. Attached hereto
is a further confirmation of the transaction described above.
Custodian further confirms that the New Collateral is (i) registered
in the name of Custodian on the
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books and records of the Federal Reserve Bank of New York, (ii) held
by Custodian as authorized custodian and financial intermediary for
Customer and as agent, bailee and financial intermediary for Secured
Party, and (iii) identified on the appropriate books and records of
Custodian as belonging to Customer and being subject to the Lien of
Secured Party and has not been owned by Custodian previously.
(f) The New Collateral was purchased in the name of
Custodian or its nominee on behalf of Customer, acting upon
instructions of Custodian as financial intermediary for Customer,
against payment in full of immediately available funds and deposited
in the Custodial Account.
IN WITNESS WHEREOF, this instrument is executed as of _____________________,
19____.
CUSTODIAN
BANQUE NATIONAL DE PARIS,
NEW YORK BRANCH
By_____________________________________
Name:
Title:
2
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EXHIBIT G
Re: Cypress Collateral Account held for the benefit of BNP Leasing
Corporation #____________.
WRITTEN INSTRUCTION FOR SUBSTITUTION
OF TREASURY SECURITIES
Reference is made to that certain Custodial Agreement dated as of
____________________, 1996 (as from time to time amended, the "Agreement"), by
and among Cypress Semiconductor Corporation ("Customer"), Banque Nationale de
Paris, New York Branch ("Custodian") and BNP Leasing Corporation ("Secured
Party"). Terms which are defined in the Agreement are used herein with the
meanings given them in the Agreement.
Pursuant to the terms of the Agreement, Customer hereby directs the
Custodian to [TRANSFER FROM THE CUSTODIAL ACCOUNT] [SELL] the Collateral
described below as Replaced Collateral (the "Replaced Collateral") and to
purchase and deposit in the Custodial Account the Collateral described below as
the New Collateral (the "New Collateral"). Upon such deposit, the New
Collateral shall be part of the Collateral subject to the Security Agreement.
REPLACED COLLATERAL: [TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR
AMOUNT, COUPON AND MATURITY.]
NEW COLLATERAL: [TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR
AMOUNT, COUPON AND MATURITY.]
To induce Custodian to make such [TRANSFER] [SALE] of the Replaced
Collateral and [PURCHASE AND] deposit of the New Collateral, Customer hereby
represents, warrants and acknowledges to and agrees with Custodian that:
(a) The person signing this instrument on behalf of
Customer has all necessary authority to act for Customer in making the
request herein contained. The New Collateral has not been owned by
Customer at any time prior to the date hereof.
(b) There does not exist on the date hereof any condition
or event which constitutes an Event of Default which has not been
waived in writing by Secured Party, excepting any Event of Default
which would be cured upon compliance by Custodian with Customer's
instructions herein.
(c) Custodian shall not execute these Instructions unless the
Market Value of the New Collateral is equal to or greater than the
Market Value of the Replaced Collateral, in
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each case calculated as of the Business Day prior to the Business Day
these Instructions are executed by Custodian, unless additional cash
in the amount by which the Market Value of the Replaced Collateral
exceeds the Market Value of the New Collateral is deposited by
Customer with Custodian to complete such transaction.
(d) A copy of this Written Instruction is being delivered
to Secured Party concurrently herewith.
(e) The Security Agreement, the Agreement and pledge of
and grant of security interest by Customer in the New Collateral
pursuant to the Security Agreement to secure the Obligations are
hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, this instrument is executed as of
_____________________, 19____.
CYPRESS SEMICONDUCTOR CORPORATION
By_____________________________________
Name:
Title:
2
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EXHIBIT H
Re: Cypress Collateral Account held for the benefit of BNP Leasing
Corporation #____________.
CERTIFICATION OF CUSTODIAN FOR SUBSTITUTION
OF TREASURY SECURITIES
Reference is made to that certain Custodial Agreement dated as of
____________________, 1996 (as from time to time amended, the "Agreement"), by
and among Cypress Semiconductor Corporation ("Customer"), Banque Nationale de
Paris, New York Branch ("Custodian") and BNP Leasing Corporation ("Secured
Party"). Terms which are defined in the Agreement are used herein with the
meanings given them in the Agreement.
Pursuant to the terms of the Agreement, Custodian hereby represents
and warrants to Secured Party that:
(a) The officer signing this instrument on behalf of
Custodian is the duly elected, qualified and acting officer of
Custodian as indicated below such officer's signature hereto having
all necessary authority to act for Custodian in making the
certification herein contained.
(b) The Treasury Securities described below (the
"Replaced Collateral") have been [TRANSFERRED FROM THE CUSTODIAL
ACCOUNT] [SOLD] pursuant to those certain Written Instructions for
substitution from Customer dated _____________________, 1996 (the
"Instructions"):
REPLACED COLLATERAL: [TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR
AMOUNT, COUPON AND MATURITY.]
(c) The representations and warranties of Custodian
set forth in Section 6.2 of the Agreement are true and correct on
and as of the date hereof, with the same effect as though such
representations and warranties had been made on and as of the date
hereof.
(d) Except to the extent waived in writing by Secured
Party, Custodian has performed and complied with all agreements and
conditions in the Agreement required to be performed or complied with
by Custodian on or prior to the date hereof.
(e) The Treasury Securities described below (the "New
Collateral") have been deposited in the Custodial Account pursuant to
the Instructions:
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NEW COLLATERAL: [TREASURY SECURITIES TO BE DESCRIBED HERE BY PAR
AMOUNT, COUPON AND MATURITY.]
(f) The Market Value of the New Collateral is equal to or
greater than the Market Value of the Replaced Collateral, in each case
calculated as of the close of business on
_________________________________, which was the Business Day prior to
the Business Day on which Custodian executed the Instructions, or
Customer deposited additional cash with Custodian sufficient to
complete such transaction in the amount by which the Market Value of
the Replaced Collateral exceeds the Market Value of the New
Collateral.
(g) Custodian hereby confirms to Secured Party the
purchase of the Treasury Securities described above. Attached hereto
is a further confirmation of the transaction described above.
Custodian further confirms that the New Collateral is (i) registered
in the name of Custodian on the books and records of the Federal
Reserve Bank of New York, (ii) held by Custodian as authorized
custodian and financial intermediary for Customer, and as agent,
bailee and financial intermediary for Secured Party, and (iii)
identified on the appropriate books and records of Custodian as
belonging to Customer and being subject to the Lien (as defined in the
Pledge Agreement) of Secured Party and has not been owned by Custodian
previously.
(h) The New Collateral was purchased in the name of Custodian
or its nominee on behalf of Customer, acting upon instructions of
Custodian as financial intermediary for Customer, against payment in
full of immediately available funds.
IN WITNESS WHEREOF, this instrument is executed as of _____________________,
19____.
CUSTODIAN
BANQUE NATIONALE DE PARIS,
NEW YORK BRANCH
By_____________________________________
Name:
Title:
2
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EXHIBIT I
Re: Cypress Collateral Account held for the benefit of BNP Leasing
Corporation #____________.
WRITTEN INSTRUCTION FOR RELEASE
Reference is made to that certain Custodial Agreement dated as of
____________________, 1996 (as from time to time amended, the "Agreement"), by
and among Cypress Semiconductor Corporation ("Customer"), _____________________
("Custodian") and BNP Leasing Corporation ("Secured Party"). Terms which are
defined in the Agreement are used herein with the meanings given them in the
Agreement.
Pursuant to the terms of the Agreement, Customer hereby directs the
Custodian to [transfer the Collateral described below (the "Designated
Collateral") from the Custodial Account to ___________________] [sell] the
Designated Collateral and deposit the sale proceeds in __
________________________________________:
[THE DESIGNATED COLLATERAL (TREASURY SECURITIES) TO BE DESCRIBED HERE
BY PAR AMOUNT, COUPON AND MATURITY; OTHER COLLATERAL TO BE DESCRIBED BY DOLLAR
AMOUNT AND TYPE.]
To induce Custodian to follow Customer's instructions with respect to
the Designated Collateral, Customer hereby represents, warrants and
acknowledges to and agrees with Custodian that:
(a) The person signing this instrument on behalf of
Customer has all necessary authority to act for Customer in making the
request herein contained.
(b) There does not exist on the date hereof any condition
or event which constitutes an Event of Default which has not been
waived in writing by Secured Party, excepting any Event of Default
which would be cured upon compliance by Custodian with Customer's
instructions herein.
(c) Attached hereto is a Release Request executed by Secured
Party pursuant to which Secured Party has released the Designated
Collateral from the Liens created by the Security Agreement.
(d) Custodian shall not execute these instructions unless the
Market Value of the Collateral remaining after the release of the
Designated Collateral pursuant hereto (as such Market Value has been
calculated on the most recent Valuation Date) is equal to or greater
than the 102% of the Minimum Collateral Value on such Valuation Date,
as designated by Secured Party.
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(e) A copy of this Written Instruction is being delivered
to Secured Party concurrently herewith.
(f) The Security Agreement, this Agreement and pledge of
and grant of security interest by Customer in the Collateral remaining
encumbered thereby pursuant to the Security Agreement after the
release of the Designated Collateral are hereby ratified and confirmed
in all respects.
IN WITNESS WHEREOF, this instrument is executed as of
_______________________, 19____.
CYPRESS SEMICONDUCTOR CORPORATION
By_____________________________________
Name:
Title:
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128
OFFICERS' CERTIFICATE OF
SECURED PARTY
Reference is made to (i) the Pledge and Security Agreement of even
date herewith between BNP Leasing Corporation ("Secured Party") Cypress
Semiconductor Corporation ("Customer"), and (ii) the Custodial Agreement of
even date herewith (the "Custodial Agreement") among Secured Party, Customer
and Banque de Nationale de Paris, New York ("Custodian"). The undersigned do
hereby certify as follows in connection with such agreements:
1. The undersigned, Xxxxx X. Xxxxx and Xxxxx X. Xxx, are the duly
authorized President and Vice President of Secured Party, respectively, and as
such have power and authority to certify as to the matters addressed in this
Certificate.
2. The capitalized terms used in this Certificate and not
otherwise defined shall have the meaning specified for such terms in the
Custodial Agreement.
3. Secured Party has duly authorized Xxxxx X. Xxx'x execution and
delivery on behalf of Secured Party, of the Lease and Purchase Agreement
described in the Security Agreement, and other agreements, documents,
certificates and instruments contemplated to be executed and delivered by
Secured Party in connection therewith.
4. Xxxxx X. Xxx, Vice President of Secured Party, and Xxxxxx
Xxxxxxxx, Vice President of Banque Nationale de Paris, whose genuine signatures
appear below, are duly authorized to give instructions to Custodian under the
Custodial Agreement, and execute and deliver the Execution Affidavit.
________________________________________
Xxxxx X. Xxx
________________________________________
Xxxxxx Xxxxxxxx
5. All the information contained in this Certificate is true and
correct on and as of the date hereof.
Executed as of ____________________, 1996.
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________________________________________
Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxx
EXECUTION
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of
April 12, 1996, by and between CYPRESS SEMICONDUCTOR CORPORATION, a California
corporation (herein called "Debtor"), and BNP LEASING CORPORATION, a Delaware
corporation (herein called "Secured Party").
W I T N E S E T H:
Debtor and Secured Party are parties to (i) a Lease Agreement dated of
even date herewith (herein called the "Lease") pursuant to which Secured Party
has agreed to lease certain property to Debtor; and (ii) a Purchase Agreement
dated of even date herewith (herein called the "Purchase Agreement") pursuant
to which Debtor has agreed to purchase such property from Secured Party upon
the occurrence of certain events or cause such property to be purchased; and
WHEREAS, to secure Debtor's obligations under the Purchase Agreement,
Debtor has agreed to execute and deliver to Secured Party this Agreement
granting to Secured Party a security interest in the Collateral as defined
herein;
WHEREAS, Debtor, Secured Party and Custodian (hereinafter defined) are
parties to a Custodial Agreement of even date herewith (herein called the
"Custodial Agreement") which provides that Custodian will hold the Collateral
on the terms set forth therein and that Debtor will manage the investment of
the Collateral on the terms set forth therein;
NOW, THEREFORE, in consideration of the premises and in order to
induce Secured Party to lease such property under the Lease, Debtor hereby
agrees with Secured Party as follows:
ARTICLE I
Definitions and References
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22. General Definitions. As used herein, the terms "Agreement",
"Debtor", "Secured Party", "Lease," "Purchase Agreement" and "Custodial
Agreement" shall have the meanings indicated above, and the following terms
shall have the following meanings:
"Applicable CFR Sections" has the meaning given it in Section 5.2(a).
"Business Day" means any day that is (i) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in San
Francisco, California, or New York City, New York, and (ii) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (i).
"CFR" means the United States Code of Federal Regulations, as from
time to time amended.
"Code" means the Uniform Commercial Code in effect in the State of New
York on the date hereof.
"Collateral" means all property of whatever type, in which Secured
Party at any time has a security interest pursuant to Section 3.1.
"Collateral Percentage" means eighty-five percent (85%).
"Collateral Value" means as of any date, an amount equal to the sum
of the respective Market Values of all Treasury Securities, and cash on deposit
in the Custodial Account.
"Custodial Account" has the meaning given it in the Custodial
Agreement.
"Custodian" means Banque Nationale de Paris, New York Branch as
custodian under the Custodial Agreement, and any successor custodian thereunder
appointed in accordance with the terms thereof.
"Custodial Agreement" means the Custodial Agreement of even date
herewith among Debtor, Secured Party and Custodian.
"Designated Collateral" has the meaning given it in Section 2.3(c).
"Event of Default" means the occurrence of any of the following:
(a) the failure by Debtor to pay all or any part of the
Obligations when due, after giving effect to any applicable notice and
grace periods provided for in the Purchase Agreement;
(b) the failure by Debtor to comply with Section 2.3(a) or (b)
of this Agreement;
(c) the failure by Debtor to comply with any other term,
provision of condition of this Agreement if such failure is not cured
within thirty (30) days after Secured Party gives Debtor written
notice thereof;
(d) the failure of any representation or warranty made in
Section 4.1(a) or (c) of this Agreement to be true when made;
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(e) the failure of any other representation or warranty made
in this agreement to be true when made if such failure is not cured
within thirty (30) days after Secured Party gives Debtor notice
thereof; and
(f) the failure of the security interest of Secured Party in
the Collateral to be a valid, perfected, first priority security
interest, if such failure is not cured within three (3) Business Days
after Secured Party gives Debtor notice thereof.
"Foreclosure Event" means the failure of Debtor to pay or perform any
obligation under the Purchase Agreement when due or required under the Purchase
Agreement on or after the Designated Payment Date (after the giving of any
notice required thereunder).
"Lien" means, with respect to any property or assets, any right or
interest therein of a creditor to secure indebtedness of any kind which is owed
to him or any other arrangement with such creditor which provides for the
payment of such indebtedness out of such property or assets or which allows him
to have such indebtedness satisfied out of such property or assets prior to the
general creditors of any owner thereof, including without limitation any lien,
mortgage, security interest, pledge, deposit, production payment, rights of a
vendor under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien,
or any other charge or encumbrance for security purposes, whether arising by
law or agreement or otherwise, but excluding any right of offset which arises
without agreement in the ordinary course of business. "Lien" also means any
filed financing statement, any registration with an issuer of uncertificated
securities, or any other arrangement which would serve to perfect a Lien
described in the preceding sentence, regardless of whether such financing
statement is filed, such registration is made, or such arrangement is
undertaken before or after such Lien exists.
"Market Value" means with respect to the Collateral on any Valuation
Date, a dollar value determined as follows:
(a) cash shall be valued at its face amount on such Valuation
Date; and
(b) a Treasury Security shall be valued by multiplying the
Principal Balance thereof on such Valuation Date by the bid price therefor as
established pursuant to Custodian's standard and customary pricing sources
which it believes to be reliable.
"Minimum Collateral Value" means as of any date, an amount equal to
the Collateral Percentage multiplied by the Stipulated Loss Value on such date
as calculated in accordance with the Lease.
"Obligations" means all of Debtor's obligations under the Purchase
Agreement, including, but not limited to (i) Debtor's obligation to pay the
entire Purchase Price and Shortage Amount, if any, as the case may be, as
required under SECTION 2 of the Purchase Agreement if Secured Party elects
specific performance of the Purchase Agreement, and (ii) any damages incurred
by Secured Party because of (A) Debtor's breach of the Purchase Agreement, or
(B) the rejection by Debtor of the Purchase Agreement in any bankruptcy or
insolvency proceeding owing under or with respect to a judgement, writ, order
or other document issued by a court of competent jurisdiction or (C) for any
other reason.
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"Other Liable Party" means any Person, other than Debtor, who may now
or may at any time hereafter be primarily or secondarily liable for any of the
Obligations or who may now or may at any time hereafter have granted to Secured
Party a Lien upon any of the Collateral.
"Person" means an individual, corporation, partnership, association,
joint stock company, trust, unincorporated organization or joint venture, or a
court or governmental unit or any agency or subdivision thereof, or any other
legally recognizable entity.
"Principal Balance" means as of any date with respect to any Treasury
Security, the remaining unpaid principal balance of each Treasury Security.
"Release Period" has the meaning given it in the Custodial Agreement.
"Transaction Documents" means, collectively, this Agreement, the
Lease, the Purchase Agreement, the Environmental Indemnity and the Custodial
Agreement.
"Treasury Securities" shall mean uncertificated, direct, noncallable
debt obligations of the United States of America maturing within three (3)
years of the date of pledge to Secured Party constituting Treasury bonds,
notes, certificates of indebtedness or bills issued under the Second Liberty
Bond Act, as amended, in the form of entry made on the records of the Federal
Reserve Bank of New York as prescribed under 31 CFR.
"Valuation Date" has the meaning given it in the Custodial Agreement.
"Written Instruction" has the meaning given it in the Custodial
Agreement.
23. Other Definitions. Reference is hereby made to the Lease
and the Purchase Agreement for a statement of the terms thereof. All
capitalized terms used in this Agreement which are defined in the Lease or the
Purchase Agreement and not otherwise defined herein shall have the same
meanings herein as set forth therein. All terms used in this Agreement which
are defined in the Code and not otherwise defined herein or in the Purchase
Agreement or the Lease shall have the same meanings herein as set forth
therein, except where the context otherwise requires.
24. Exhibits. All exhibits attached to this Agreement are a
part hereof for all purposes.
25. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including, but not
limited to, references to the Transaction Documents) also refer to and include
all valid renewals, extensions, amendments, modifications, supplements or
restatements of any such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize any Person to
execute or enter into any such renewal, extension, amendment, modification,
supplement or restatement.
26. References and Titles. All references in this Agreement to
Exhibits, Articles, Sections, subsections, and other subdivisions refer to the
Exhibits, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any subdivision are for convenience only and do not constitute any
part of any such subdivision and shall be disregarded in construing the
language contained in this Agreement. The words "this Agreement", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole
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and not to any particular subdivision unless expressly so limited. The phrases
"this Section" and "this subsection" and similar phrases refer only to the
Sections or subsections hereof in which the phrase occurs. The word "or" is
not exclusive, and the word "including" (in all of its forms) means "including
without limitation". Pronouns in masculine, feminine and neuter gender shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa unless the context otherwise
requires.
ARTICLE II
Custodial Account
27. Establishment of Custodial Account. Contemporaneously with
the execution of this Agreement, Debtor shall establish with Custodian the
Custodial Account.
Section 2.2. Valuation of Collateral.
(a) On each Valuation Date, the Custodian shall determine the
Market Value of the Collateral, prepare a report thereof and deliver such
report, all in the manner described in the Custodial Agreement.
(b) On each Valuation Date, Secured Party shall determine the
Stipulated Loss Value, the Minimum Collateral Value and 102% of the Minimum
Collateral Value as of such Valuation Date, and shall deliver written notice
thereof by facsimile transmission to Debtor and Custodian no later than three
Business Days after such Valuation Date. In making such determination with
respect to the last Valuation Date occurring in each calendar month, so long as
Secured Party has received the valuation report from Custodian for such
Valuation Date, such notice shall specify whether the Market Value of the
Collateral reflected in such valuation report is less or greater than 102% of
the Minimum Collateral Value and the amount of such deficiency or excess.
Section 2.3. Minimum Collateral Value.
(a) Maintenance of Greater Than Minimum Collateral Value. Debtor
agrees to deposit with Custodian and designate to be held in the Custodial
Account subject to the pledge and security interest created hereby, immediately
available funds in an amount equal to the Minimum Collateral Value on the date
of the Initial Funding Advance, and to deliver to Custodian together with such
funds Written Instructions pursuant to Section 3.3(b) of the Custodial
Agreement instructing Custodian to purchase Treasury Securities with such
funds.
(b) Decreases in Market Value of Collateral and/or Increases in
Stipulated Loss Value. If on any Valuation Date, the Market Value of the
Collateral is less than 100% of the Minimum Collateral Value for any reason
whatsoever (including any decrease in the Market Value of the Collateral or any
increase in the Stipulated Loss Value as reported by Secured Party under
Section 2.2(b) above), Debtor shall deposit with Custodian immediately
available funds in an amount sufficient to purchase Treasury Securities having
a Market Value that will cause the Market Value of the Collateral to equal or
exceed 102% of the Minimum Collateral Value. Debtor shall designate the
Treasury Securities to be purchased in a Written Instruction to Custodian
delivered to Custodian together with such funds. Such deposit of funds and
designation of additional Treasury Securities shall be made by Debtor not later
than three (3) Business Days after receipt of notice from Secured Party under
Section 2.2(b) above that the Market Value of the Collateral is less than the
100% of the Minimum Collateral Value.
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(c) Increases in Market Value of Collateral and/or Decreases in
Stipulated Loss Value. If on the Valuation Date which occurs at the beginning
of each Release Period, the Market Value of the Collateral is greater than 102%
of the Minimum Collateral Value for any reason whatsoever (including a decrease
in the Stipulated Loss Value or an increase in the Market Value of the
Collateral), Debtor may, during the Release Period for such Valuation Date so
long as no Event of Default then exists, request in writing in the form of
EXHIBIT A (herein called a "Release Request"), that Secured Party release from
the Custodial Account certain Treasury Securities or other Collateral as
designated by Debtor (the "Designated Collateral") so long as the remaining
Collateral has a Market Value equal to or greater than 102% of the Minimum
Collateral Value. If Secured Party actually receives a Release Request,
Secured Party shall (i) confirm to Debtor by facsimile its receipt of such
Release Request on the Business Day following the date on which it receives
such Release Request and (ii) within five (5) Business Days after the date on
which it receives such Release Request, give the release requested thereby in
writing by executing such Release Request and return the same to Debtor unless
Secured Party determines in good faith that the Designated Collateral is needed
to keep the Market Value of the Collateral equal to or greater than 102% of the
Minimum Collateral Value, in which case Secured Party shall notify Debtor in
writing that it objects to the release of the Designated Collateral and specify
the reasons therefor. All references to Stipulated Loss Value, Market Value of
Collateral and Minimum Collateral Value in this subsection (c) shall mean the
amounts determined in accordance with the terms of this Agreement and the
Custodial Agreement as of the most recent Valuation Date.
(d) Release of Collateral. Upon Secured Party's written release
of specific Designated Collateral, the pledge and security interest in such
Designated Collateral shall terminate and such Designated Collateral shall no
longer be part of the Collateral, and all rights to the Designated Collateral
shall revert to the Debtor. Debtor shall thereupon have the right to deliver
to the Custodian the instructions described in Section 3.3(d) of the Custodial
Agreement and Secured Party shall execute such documents as the Custodian may
reasonably request as a condition to the release of such Collateral.
ARTICLE III
Security Interest
Section 3.1. Grant of Security Interest. As collateral security for
all of the Obligations, Debtor hereby pledges and assigns to Secured Party and
grants to Secured Party a continuing security interest in all of the following:
(a) The Custodial Account, all funds from time to time on deposit in
the Custodial Account, all Treasury Securities from time to time on deposit in
the Custodial Account, all funds and Treasury Securities otherwise designated
to be held by Custodian as collateral for the Obligations subject to the pledge
and security interest created hereby, and all proceeds, collections, income,
replacements, substitutions, reinvestments, distributions and claims with
respect thereto, except as released pursuant to Sections 2.3(c) and (d).
(b) All of Debtor's right, title and interest in, to and under the
Custodial Agreement.
(c) All proceeds of any and all of the property described in
subsection (a) and (b) immediately above.
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In each case, the foregoing shall be covered by this Agreement, whether
Debtor's ownership or other rights therein are presently held or hereafter
acquired and howsoever Debtor's interests therein may arise or appear (whether
by ownership, security interest, claim or otherwise).
Section 3.2. Obligations Secured. The security interest created
hereby in the Collateral constitutes continuing collateral security for the
payment and performance of the Obligations.
ARTICLE IV
Representations, Warranties and Covenants
28. Representations and Warranties. Debtor represents and
warrants as follows as of the date hereof and any future date on which new or
substitute Collateral is provided:
(a) Ownership and Liens. Debtor has good and marketable title
to the Collateral free and clear of all Liens, encumbrances or adverse claims,
except for the pledge and security interest created by this Agreement. None of
the Collateral has been acquired by Debtor through a clearing corporation (as
such term is defined in the Code). Debtor has not acknowledged or given to
Custodian notice of a Lien on the Collateral other than the Lien in favor of
Secured Party. No dispute, right of set-off, recoupment, counterclaim or
defense exists with respect to all or any part of the Collateral and no
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office except
such as may have been filed in favor of Secured Party relating to this
Agreement and Landlord's Liens.
(b) No Conflicts or Consents. To the best knowledge of the
Debtor, neither the ownership or the intended use of the Collateral by Debtor,
nor the grant of the security interest by Debtor to Secured Party herein, nor
the exercise by Secured Party of its rights or remedies hereunder, will (i)
violate any provision of (a) any domestic or foreign law, statute, rule or
regulation, (b) the articles or certificate of incorporation, charter or bylaws
of Debtor, or (c) any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the creation of any
Lien, charge or encumbrance upon any assets or properties of Debtor except as
expressly contemplated in this Agreement or the Custodial Agreement. Except as
expressly contemplated in this Agreement and the Custodial Agreement, to the
best knowledge of Debtor no consent, approval, authorization or order of, and
no notice to or filing with any court, governmental authority or third party is
required in connection with the grant by Debtor of the security interest
herein, or the exercise by Secured Party of its rights and remedies hereunder.
(c) Security Interest. Debtor has and will have at all times
full right, power and authority to grant a security interest in the Collateral
to Secured Party in the manner provided herein, free and clear of any Lien,
adverse claim, or encumbrance. To the best knowledge of Debtor, this Agreement
creates a valid and binding security interest in favor of Secured Party in the
Collateral securing the Obligations.
(d) Location of Debtor and Records. Debtor's chief executive
office and principal place of business and the office where its records
concerning the Collateral are kept is located at its address set forth in the
Custodial Agreement or at such other location as Debtor shall specify to
Secured Party pursuant to Section 4.2(d).
29. Affirmative Covenants. Unless Secured Party shall otherwise
consent in writing, Debtor will at all times comply with the covenants
contained in this Section 4.2 from the date hereof and so long
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as any part of the Obligations is outstanding, subject to the other terms of
this Agreement and the Custodial Agreement.
(a) Ownership and Liens. Debtor will maintain good and
marketable title to all Collateral free and clear of all Liens, encumbrances or
adverse claims, except for the security interest created by this Agreement and
Landlord's Liens. Debtor will not permit any dispute, right of set-off,
counterclaim or defense to exist with respect to all or any part of the
Collateral except those arising with respect to Landlord's Liens. Debtor will
cause to be terminated any financing statement or other registration with
respect to the Collateral, except such as may exist or as may have been filed
in favor of Secured Party. Debtor will defend Secured Party's right, title and
special property and security interest in and to the Collateral against the
claims of any Person.
(b) Further Assurances. Debtor will, at its expense and at any
time and from time to time, promptly execute and deliver all further
instruments and documents and take all further action that may be reasonably
necessary or desirable and that Secured Party may request in order (i) to
perfect and protect the security interest created or purported to be created
hereby and the perfection and first priority of such security interest and
confirm that Collateral hereafter pledged by Debtor is subject to this
Agreement; (ii) to enable Secured Party to exercise and enforce its rights and
remedies hereunder in respect of the Collateral; or (iii) to otherwise effect
the purposes of this Agreement, including, without limitation, executing and
delivery to Secured Party financing statements covering the Collateral and
furnishing to Secured Party from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Secured Party may reasonably request, all in reasonable
detail.
(c) Inspection of Collateral. Debtor will keep adequate records
concerning the Collateral and will permit Secured Party and its representatives
to inspect Debtor's books and records concerning the Collateral on the same
terms and conditions as set forth in the Lease with respect to books and
records concerning the property covered by the Lease.
(d) Information. Debtor will furnish to Secured Party any
information which Secured Party may from time to time reasonably request
concerning any covenant, provision or representation contained herein or any
other matter in connection with the Collateral. Debtor will notify Secured
Party of any change in the location of its chief executive office or principal
place of business.
(e) Delivery of Collateral. All instruments and writings, if
any, constituting Collateral shall be delivered to Secured Party or Custodian
promptly upon the receipt thereof by or on behalf of Debtor. All such
instruments and writings, if any, shall be held by Custodian on behalf of
Secured Party pursuant to the terms of the Custodian Agreement.
(f) Management of Investment of Collateral. So long as no Event of
Default has occurred and is continuing and subject to the other terms of this
Agreement and the Custodial Agreement, (including, without limitation, Section
4.1 thereof), Debtor shall have the right to deposit immediately available
funds in the Custodial Account to purchase Treasury Securities to be held
therein, substitute and/or sell Treasury Securities in the Custodial Account,
use cash balances in the Custodial Account to purchase additional Treasury
Securities to be held therein and otherwise manage the investment of the
Collateral on the terms set forth in this Agreement and the Custodial
Agreement.
30. Negative Covenants. Unless Secured Party shall otherwise
consent in writing, Debtor will at all times comply with the covenants
contained in this Section 4.3 from the date hereof and so long as any
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part of the Obligations is outstanding, subject to the other terms of this
Agreement and the Custodial Agreement:
(a) Transfer or Encumbrance. Except as expressly permitted
herein (including without limitation, in Section 4.2(f)) and in the Custodial
Agreement, Debtor will not sell, assign (by operation of law or otherwise),
transfer, exchange, lease or otherwise dispose of any of the Collateral, nor
will Debtor xxxxx x Xxxx upon or execute, file or record any financing
statement with respect to the Collateral or otherwise identify the Collateral
as being subject to a pledge or security interest other than that created
hereby, nor will Debtor allow any such Lien, financing statement, or other
identification to exist or deliver actual or constructive possession of the
Collateral to any other Person, other than Secured Party or a bailee selected
by Secured Party, including without limitation Custodian, who is holding such
Collateral for the benefit of Secured Party. Debtor will not acquire any
Collateral through a clearing corporation (as such term is defined in the
Code).
(b) Impairment of Security Interest. Debtor will not take any
action which would in any manner impair the value or enforceability of Secured
Party's security interest in any Collateral, nor will Debtor fail to take any
action which is required to prevent (and which Debtor knows is required to
prevent) an impairment of the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Certificates, etc. Evidencing Collateral.
Debtor will not cause or permit any document, instrument, or certificate
constituting or evidencing Collateral to at any time be in the actual or
constructive possession or control of any Person other than Debtor (to the
extent otherwise permitted hereunder), Secured Party, or a bailee selected by
Secured Party, including without limitation Custodian, who is holding such
Collateral for the benefit of Secured Party.
ARTICLE V
Remedies, Powers and Authorizations
31. Provisions Concerning the Collateral.
(a) Power of Attorney. Debtor hereby irrevocably appoints
Secured Party as Debtor's attorney-in-fact and proxy, with full authority in
the place and stead of Debtor and in the name of Debtor or otherwise, from time
to time in Secured Party's discretion upon the occurrence and during the
continuance of a Foreclosure Event, to take any action and to execute any
instrument which Secured Party may deem necessary or advisable to accomplish
the purposes of this Agreement including, without limitation: (i) to ask,
demand, collect, xxx for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral; (ii) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i) above;
and (iii) to file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral.
(b) Performance by Secured Party. If Debtor fails to perform
any agreement or obligation contained herein or in the Custodial Agreement,
Secured Party may itself perform, or cause performance of, such agreement or
obligation, and the expenses of Secured Party incurred in connection therewith
shall be payable by Debtor under Section 5.5.
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32. Remedies. If a Foreclosure Event shall have occurred and be
continuing, Secured Party may from time to time in its discretion, without
limitation and without notice except as expressly provided below, to the extent
permitted by applicable law:
(a) exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein, under the Transaction Documents or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code (whether or not the Code applies to the affected
Collateral) and under 31 CFR Section Section 306.117 through 306.122 (herein
called the "Applicable CFR Sections");
(b) reduce its claim to judgment or foreclose or otherwise
enforce, in whole or in part, the security interest created hereby by any
available judicial procedure;
(c) buy the Collateral, or any part thereof, at any public sale;
(d) buy the Collateral, or any part thereof, at any private
sale, to the extent that the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
price quotations;
(e) apply by appropriate judicial proceedings for appointment of
a receiver for the Collateral, or any part thereof, and Debtor hereby consents
to any such appointment; and
(f) at its discretion, retain the Collateral in satisfaction of
the Obligations whenever the circumstances are such that Secured Party is
entitled to do so under the Code or the Applicable CFR Sections or otherwise.
Secured Party shall give at least ten (10) days' notice to Debtor of the time
and place of any public sale or the time after which any private sale is to be
made. Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
33. Application of Proceeds. If a Foreclosure Event shall have
occurred and be continuing, Secured Party may in its discretion apply any cash
held by Secured Party as Collateral, and any cash proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral, to any or all of the following in such order as
Secured Party may elect:
(a) To the payment or other satisfaction of any Liens,
encumbrances, or adverse claims upon or against any of the Collateral other
than Landlord's Liens;
(b) To the satisfaction of the Obligations; and
(c) By delivery to Debtor or to whomsoever shall be lawfully
entitled to receive the same or as a court of competent jurisdiction shall
direct.
34. Deficiency. In the event that the proceeds of any sale,
collection or realization of or upon Collateral by Secured Party are
insufficient to pay the unpaid Obligations, Debtor shall, to the extent
permitted by applicable
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law, be liable for the deficiency, together with interest thereon as provided
in the Transaction Documents or (if no interest is so provided) at such other
rate as shall be fixed by applicable law, together with the costs of collection
and the Attorneys' Fees of Secured Party to collect such deficiency.
35. Non-Judicial Remedies. In granting to Secured Party the
power to enforce its rights hereunder without prior judicial process or
judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes
any legal right which might otherwise require Secured Party to enforce its
rights by judicial process. In so providing for non-judicial remedies, Debtor
recognizes and concedes that such remedies are consistent with the usage of
trade, are responsive to commercial necessity, and are the result of a bargain
at arm's length. Nothing herein is intended to prevent Secured Party or Debtor
from resorting to judicial process at either party's option.
36. Other Recourse. To the fullest extent permitted by
applicable law, Debtor waives any right to require Secured Party to proceed
against any other Person, exhaust any Collateral or other security for the
Obligations, or to have any Other Liable Party joined with Debtor in any suit
arising out of the Obligations or this Agreement, or pursue any other remedy in
Secured Party's power. Debtor waives any and all notice of acceptance of this
Agreement. Debtor further waives notice of the creation, modification,
rearrangement, renewal or extension for any period of any of the Obligations of
any Other Liable Party from time to time and any defense arising by reason of
any disability or other defense of any Other Liable Party or by reason of the
cessation from any cause whatsoever of the liability of any Other Liable Party.
Until all of the Obligations shall have been paid in full, Debtor shall have no
right to subrogation, reimbursement, contribution or indemnity against any
Other Liable Party and Debtor waives the right to enforce any remedy which
Secured Party has or may hereafter have against any Other Liable Party, and
waives any benefit of and any right to participate in any other security
whatsoever now or hereafter held by Secured Party. Except as expressly
provided in the Transaction Documents, Debtor authorizes Secured Party, without
notice or demand and without any reservation of rights against Debtor and
without affecting Debtor's liability hereunder or on the Obligations, from time
to time to (a) take or hold any other property of any type from any other
Person as security for the Obligations, and exchange, enforce, waive and
release any or all of such other property, (b) apply the Collateral in
accordance with this Agreement or such other property and direct the order or
manner of sale thereof as Secured Party may in its discretion determine, (c)
renew, extend for any period, accelerate, modify, compromise, settle or release
any of the obligations of any Other Liable Party in respect to any or all of
the Obligations or other security for the Obligations, and (d) release or
substitute any Other Liable Party.
ARTICLE VI
Miscellaneous
37. Notices. Except as otherwise expressly provided herein, any
notice or communication required or permitted hereunder shall be given as
provided in the Custodial Agreement except that neither party hereto shall be
obligated to deliver to the Custodian a copy of any notice given by such party
to the other party hereunder, except as expressly required hereunder or under
the Custodial Agreement.
38. Amendments. No amendment of any provision of this Agreement
shall be effective unless it is in writing and signed by Debtor and Secured
Party, and no waiver of any provision of this Agreement, and no consent to any
departure by Debtor therefrom, shall be effective unless it is in writing and
signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given and
to the extent specified in such writing.
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39. Preservation of Rights. No failure on the part of either
party hereto to exercise, and no delay in exercising, any right hereunder or
under the Purchase Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Neither the execution nor
the delivery of this Agreement shall in any manner impair or affect any other
security for the Obligations. The rights and remedies of the parties provided
herein and in the other Transaction Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law.
Nothing contained in this Agreement shall constitute a waiver of any right of
Debtor under the Purchase Agreement.
40. Unenforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
41. Survival of Agreements. All representations and warranties
of Debtor herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Transaction Documents and the creation of the Obligations and continue
until terminated as provided in Section 6.8 or, in the case of specific
Collateral, until released or deemed released as provided in Section 2.3(c) and
(d).
42. Other Liable Party. Neither this Agreement nor the exercise
by Secured Party or the failure of Secured Party to exercise any right, power
or remedy conferred herein or by law shall be construed as relieving any Other
Liable Party from liability on the Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any other Obligation Document to which Debtor or any Other
Liable Party may be a party, and notwithstanding the reorganization, death,
incapacity or bankruptcy of any Other Liable Party, or any other event or
proceeding affecting any Other Liable Party.
43. Binding Effect and Assignment. This Agreement creates a
continuing security interest in the Collateral and (a) shall be binding on
Debtor and its successors and permitted assigns and (b) shall inure, together
with all rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors and permitted assigns. Without limiting the
generality of the foregoing, Secured Party may grant a participation in or
assign its rights hereunder in the same manner and to the same extent that it
is entitled to grant a participation in or assign its rights under the Lease;
provided (as defined in the Purchase Agreement) that if there is more than one
assignee under an absolute assignment of the full rights of Secured Party under
the Lease executed after the date hereof, one of such assignees shall be
selected by all such assignees to serve as their agent hereunder. None of the
rights or duties of Debtor hereunder may be assigned or otherwise transferred
without the prior written consent of Secured Party; provided that, subject to
the terms and conditions of the Transaction Documents, Debtor's right to
receive Collateral upon the release thereof pursuant to the terms of this
Agreement and the Custodial Agreement may be assigned in connection with any
assignment of Debtor's rights to the Property (as defined in the Purchase
Agreement) under the other Transaction Documents so long as Debtor remains
liable for all of its duties and obligations under this Agreement and the
Custodial Agreement.
44. Termination. Following the Designated Payment Date, upon
satisfaction in full of all Obligations and upon written request for the
termination hereof delivered by Debtor to Secured Party, (i) this Agreement and
the security interest created hereby shall terminate and all rights to the
Collateral shall revert to Debtor and (ii) Secured Party will, upon Debtor's
request and at Debtor's expense, (a) return to Debtor such of the Collateral as
shall not have been sold or otherwise disposed of or applied
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pursuant to the terms hereof; and (b) execute and deliver to Debtor such
documents as Debtor shall reasonably request to evidence such termination and
release.
45. Governing Law. (a) This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York
(without regard to its conflicts of law provisions). Each party hereto
irrevocably submits itself to the non-exclusive jurisdiction of the state and
federal courts of New York for purposes of this Agreement and agrees and
consents that service of process may be made upon it in any legal proceeding
relating to this Agreement by any means allowed under federal or New York law.
The parties hereto hereby waive and agree not to assert, by way of motion, as a
defense or otherwise, that any such proceeding is brought in an inconvenient
forum or that the venue thereof is improper.
(b) Debtor hereby irrevocably designates CT Corporation Systems
located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the Designee, Appointee
and Agent of Debtor to receive, for and on behalf of Debtor service of process
in such respective jurisdictions in any legal action or proceeding with respect
to this Agreement and the Custodial Agreement. It is understood that a copy of
such process served on such Agent will be promptly forwarded by overnight
courier to Debtor at its address set forth under its signature below, but the
failure of Debtor to receive such copy shall not affect in any way the service
of such process. Debtor further irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
Debtor at its said address, such service to become effective thirty (30) days
after such mailing.
46. Counterparts. This Agreement may be separately executed in
any number of counterparts, all of which when so executed shall be deemed to
constitute one and the same Agreement.
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IN WITNESS WHEREOF, Debtor and Secured Party have caused this
Agreement to be executed and delivered by their officers thereunto duly
authorized, as of the date first above written.
CYPRESS SEMICONDUCTOR CORPORATION
By:_____________________________________
Name: _______________________________
Title: ______________________________
BNP LEASING CORPORATION
By:_____________________________________
Name: Xxxxx X. Xxx
Title: Vice President
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EXHIBIT A
REQUEST FOR RELEASE
Reference is made to that certain Pledge and Security Agreement dated
as of _______________, 1996 (as from time to time amended, the "Agreement"), by
and between Cypress Semiconductor Corporation ("Debtor") and BNP Leasing
Corporation ("Secured Party"). Terms which are defined in the Agreement are
used herein with the meanings given them in the Agreement.
Pursuant to the terms of the Agreement Debtor hereby requests that
Secured Party release the Collateral described below (the "Designated
Collateral"):
[Treasury Securities to be described here by Par Amount, Coupon and Maturity or
other Collateral to be described by dollar amount and type.]
To induce Secured Party to release such Collateral, Debtor hereby
represents, warrants, acknowledges, and agrees to and with Secured Party that:
(a) The person signing this instrument on behalf of
Debtor has all necessary authority to act for Debtor in making the
request herein contained.
(b) There does not exist on the date hereof any condition
or event which constitutes an Event of Default which has not been
cured or waived in writing by Secured Party.
(c) After giving effect to the release of the Designated
Collateral, the Market Value of the Collateral remaining encumbered
under the Agreement shall be at least equal to 102% of the Minimum
Collateral Value, in each case as determined as of the Valuation Date
most recently preceding the date of this Request for Release.
IN WITNESS WHEREOF, this instrument is executed as of
____________________, ____.
CYPRESS SEMICONDUCTOR CORPORATION
By:____________________________________
Name:
Title:
144
BNP Leasing Corporation hereby releases the Designated Collateral
described above from the Agreement and authorizes Custodian to transfer the
Designated Collateral from the Custodial Account and to indicate such release
on its books and records.
BNP LEASING CORPORATION
By:____________________________________
Name:
Title:
EXECUTION
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of
April 12, 1996, by and between CYPRESS SEMICONDUCTOR CORPORATION, a California
corporation (herein called "Debtor"), and BNP LEASING CORPORATION, a Delaware
corporation (herein called "Secured Party").
W I T N E S E T H:
Debtor and Secured Party are parties to (i) a Lease Agreement dated of
even date herewith (herein called the "Lease") pursuant to which Secured Party
has agreed to lease certain property to Debtor; and (ii) a Purchase Agreement
dated of even date herewith (herein called the "Purchase Agreement") pursuant
to which Debtor has agreed to purchase such property from Secured Party upon
the occurrence of certain events or cause such property to be purchased; and
WHEREAS, to secure Debtor's obligations under the Purchase Agreement,
Debtor has agreed to execute and deliver to Secured Party this Agreement
granting to Secured Party a security interest in the Collateral as defined
herein;
WHEREAS, Debtor, Secured Party and Custodian (hereinafter defined) are
parties to a Custodial Agreement of even date herewith (herein called the
"Custodial Agreement") which provides that Custodian will hold the Collateral
on the terms set forth therein and that Debtor will manage the investment of
the Collateral on the terms set forth therein;
NOW, THEREFORE, in consideration of the premises and in order to
induce Secured Party to lease such property under the Lease, Debtor hereby
agrees with Secured Party as follows:
ARTICLE I
Definitions and References
47. General Definitions. As used herein, the terms "Agreement",
"Debtor", "Secured Party", "Lease," "Purchase Agreement" and "Custodial
Agreement" shall have the meanings indicated above, and the following terms
shall have the following meanings:
"Applicable CFR Sections" has the meaning given it in Section 5.2(a).
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"Business Day" means any day that is (i) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in San
Francisco, California, or New York City, New York, and (ii) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (i).
"CFR" means the United States Code of Federal Regulations, as from
time to time amended.
"Code" means the Uniform Commercial Code in effect in the State of New
York on the date hereof.
"Collateral" means all property of whatever type, in which Secured
Party at any time has a security interest pursuant to Section 3.1.
"Collateral Percentage" means eighty-five percent (85%).
"Collateral Value" means as of any date, an amount equal to the sum
of the respective Market Values of all Treasury Securities, and cash on deposit
in the Custodial Account.
"Custodial Account" has the meaning given it in the Custodial
Agreement.
"Custodian" means Banque Nationale de Paris, New York Branch as
custodian under the Custodial Agreement, and any successor custodian thereunder
appointed in accordance with the terms thereof.
"Custodial Agreement" means the Custodial Agreement of even date
herewith among Debtor, Secured Party and Custodian.
"Designated Collateral" has the meaning given it in Section 2.3(c).
"Event of Default" means the occurrence of any of the following:
(a) the failure by Debtor to pay all or any part of the
Obligations when due, after giving effect to any applicable notice and
grace periods provided for in the Purchase Agreement;
(b) the failure by Debtor to comply with Section 2.3(a) or (b)
of this Agreement;
(c) the failure by Debtor to comply with any other term,
provision of condition of this Agreement if such failure is not cured
within thirty (30) days after Secured Party gives Debtor written
notice thereof;
(d) the failure of any representation or warranty made in
Section 4.1(a) or (c) of this Agreement to be true when made;
(e) the failure of any other representation or warranty made
in this agreement to be true when made if such failure is not cured
within thirty (30) days after Secured Party gives Debtor notice
thereof; and
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(f) the failure of the security interest of Secured Party in
the Collateral to be a valid, perfected, first priority security
interest, if such failure is not cured within three (3) Business Days
after Secured Party gives Debtor notice thereof.
"Foreclosure Event" means the failure of Debtor to pay or perform any
obligation under the Purchase Agreement when due or required under the Purchase
Agreement on or after the Designated Payment Date (after the giving of any
notice required thereunder).
"Lien" means, with respect to any property or assets, any right or
interest therein of a creditor to secure indebtedness of any kind which is owed
to him or any other arrangement with such creditor which provides for the
payment of such indebtedness out of such property or assets or which allows him
to have such indebtedness satisfied out of such property or assets prior to the
general creditors of any owner thereof, including without limitation any lien,
mortgage, security interest, pledge, deposit, production payment, rights of a
vendor under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien,
or any other charge or encumbrance for security purposes, whether arising by
law or agreement or otherwise, but excluding any right of offset which arises
without agreement in the ordinary course of business. "Lien" also means any
filed financing statement, any registration with an issuer of uncertificated
securities, or any other arrangement which would serve to perfect a Lien
described in the preceding sentence, regardless of whether such financing
statement is filed, such registration is made, or such arrangement is
undertaken before or after such Lien exists.
"Market Value" means with respect to the Collateral on any Valuation
Date, a dollar value determined as follows:
(a) cash shall be valued at its face amount on such Valuation
Date; and
(b) a Treasury Security shall be valued by multiplying the
Principal Balance thereof on such Valuation Date by the bid price therefor as
established pursuant to Custodian's standard and customary pricing sources
which it believes to be reliable.
"Minimum Collateral Value" means as of any date, an amount equal to
the Collateral Percentage multiplied by the Stipulated Loss Value on such date
as calculated in accordance with the Lease.
"Obligations" means all of Debtor's obligations under the Purchase
Agreement, including, but not limited to (i) Debtor's obligation to pay the
entire Purchase Price and Shortage Amount, if any, as the case may be, as
required under SECTION 2 of the Purchase Agreement if Secured Party elects
specific performance of the Purchase Agreement, and (ii) any damages incurred
by Secured Party because of (A) Debtor's breach of the Purchase Agreement, or
(B) the rejection by Debtor of the Purchase Agreement in any bankruptcy or
insolvency proceeding owing under or with respect to a judgement, writ, order
or other document issued by a court of competent jurisdiction or (C) for any
other reason.
"Other Liable Party" means any Person, other than Debtor, who may now
or may at any time hereafter be primarily or secondarily liable for any of the
Obligations or who may now or may at any time hereafter have granted to Secured
Party a Lien upon any of the Collateral.
"Person" means an individual, corporation, partnership, association,
joint stock company, trust, unincorporated organization or joint venture, or a
court or governmental unit or any agency or subdivision thereof, or any other
legally recognizable entity.
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"Principal Balance" means as of any date with respect to any Treasury
Security, the remaining unpaid principal balance of each Treasury Security.
"Release Period" has the meaning given it in the Custodial Agreement.
"Transaction Documents" means, collectively, this Agreement, the
Lease, the Purchase Agreement, the Environmental Indemnity and the Custodial
Agreement.
"Treasury Securities" shall mean uncertificated, direct, noncallable
debt obligations of the United States of America maturing within three (3)
years of the date of pledge to Secured Party constituting Treasury bonds,
notes, certificates of indebtedness or bills issued under the Second Liberty
Bond Act, as amended, in the form of entry made on the records of the Federal
Reserve Bank of New York as prescribed under 31 CFR.
"Valuation Date" has the meaning given it in the Custodial Agreement.
"Written Instruction" has the meaning given it in the Custodial
Agreement.
48. Other Definitions. Reference is hereby made to the Lease
and the Purchase Agreement for a statement of the terms thereof. All
capitalized terms used in this Agreement which are defined in the Lease or the
Purchase Agreement and not otherwise defined herein shall have the same
meanings herein as set forth therein. All terms used in this Agreement which
are defined in the Code and not otherwise defined herein or in the Purchase
Agreement or the Lease shall have the same meanings herein as set forth
therein, except where the context otherwise requires.
49. Exhibits. All exhibits attached to this Agreement are a
part hereof for all purposes.
50. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including, but not
limited to, references to the Transaction Documents) also refer to and include
all valid renewals, extensions, amendments, modifications, supplements or
restatements of any such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize any Person to
execute or enter into any such renewal, extension, amendment, modification,
supplement or restatement.
51. References and Titles. All references in this Agreement to
Exhibits, Articles, Sections, subsections, and other subdivisions refer to the
Exhibits, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any subdivision are for convenience only and do not constitute any
part of any such subdivision and shall be disregarded in construing the
language contained in this Agreement. The words "this Agreement", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this Section" and "this subsection" and similar phrases
refer only to the Sections or subsections hereof in which the phrase occurs.
The word "or" is not exclusive, and the word "including" (in all of its forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless
the context otherwise requires.
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ARTICLE II
Custodial Account
52. Establishment of Custodial Account. Contemporaneously with
the execution of this Agreement, Debtor shall establish with Custodian the
Custodial Account.
Section 2.2. Valuation of Collateral.
(a) On each Valuation Date, the Custodian shall determine the
Market Value of the Collateral, prepare a report thereof and deliver such
report, all in the manner described in the Custodial Agreement.
(b) On each Valuation Date, Secured Party shall determine the
Stipulated Loss Value, the Minimum Collateral Value and 102% of the Minimum
Collateral Value as of such Valuation Date, and shall deliver written notice
thereof by facsimile transmission to Debtor and Custodian no later than three
Business Days after such Valuation Date. In making such determination with
respect to the last Valuation Date occurring in each calendar month, so long as
Secured Party has received the valuation report from Custodian for such
Valuation Date, such notice shall specify whether the Market Value of the
Collateral reflected in such valuation report is less or greater than 102% of
the Minimum Collateral Value and the amount of such deficiency or excess.
Section 2.3. Minimum Collateral Value.
(a) Maintenance of Greater Than Minimum Collateral Value. Debtor
agrees to deposit with Custodian and designate to be held in the Custodial
Account subject to the pledge and security interest created hereby, immediately
available funds in an amount equal to the Minimum Collateral Value on the date
of the Initial Funding Advance, and to deliver to Custodian together with such
funds Written Instructions pursuant to Section 3.3(b) of the Custodial
Agreement instructing Custodian to purchase Treasury Securities with such
funds.
(b) Decreases in Market Value of Collateral and/or Increases in
Stipulated Loss Value. If on any Valuation Date, the Market Value of the
Collateral is less than 100% of the Minimum Collateral Value for any reason
whatsoever (including any decrease in the Market Value of the Collateral or any
increase in the Stipulated Loss Value as reported by Secured Party under
Section 2.2(b) above), Debtor shall deposit with Custodian immediately
available funds in an amount sufficient to purchase Treasury Securities having
a Market Value that will cause the Market Value of the Collateral to equal or
exceed 102% of the Minimum Collateral Value. Debtor shall designate the
Treasury Securities to be purchased in a Written Instruction to Custodian
delivered to Custodian together with such funds. Such deposit of funds and
designation of additional Treasury Securities shall be made by Debtor not later
than three (3) Business Days after receipt of notice from Secured Party under
Section 2.2(b) above that the Market Value of the Collateral is less than the
100% of the Minimum Collateral Value.
(c) Increases in Market Value of Collateral and/or Decreases in
Stipulated Loss Value. If on the Valuation Date which occurs at the beginning
of each Release Period, the Market Value of the Collateral is greater than 102%
of the Minimum Collateral Value for any reason whatsoever (including a decrease
in the Stipulated Loss Value or an increase in the Market Value of the
Collateral), Debtor may, during the Release Period for such Valuation Date so
long as no Event of Default then exists, request in
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writing in the form of EXHIBIT A (herein called a "Release Request"), that
Secured Party release from the Custodial Account certain Treasury Securities or
other Collateral as designated by Debtor (the "Designated Collateral") so long
as the remaining Collateral has a Market Value equal to or greater than 102% of
the Minimum Collateral Value. If Secured Party actually receives a Release
Request, Secured Party shall (i) confirm to Debtor by facsimile its receipt of
such Release Request on the Business Day following the date on which it
receives such Release Request and (ii) within five (5) Business Days after the
date on which it receives such Release Request, give the release requested
thereby in writing by executing such Release Request and return the same to
Debtor unless Secured Party determines in good faith that the Designated
Collateral is needed to keep the Market Value of the Collateral equal to or
greater than 102% of the Minimum Collateral Value, in which case Secured Party
shall notify Debtor in writing that it objects to the release of the Designated
Collateral and specify the reasons therefor. All references to Stipulated Loss
Value, Market Value of Collateral and Minimum Collateral Value in this
subsection (c) shall mean the amounts determined in accordance with the terms
of this Agreement and the Custodial Agreement as of the most recent Valuation
Date.
(d) Release of Collateral. Upon Secured Party's written release
of specific Designated Collateral, the pledge and security interest in such
Designated Collateral shall terminate and such Designated Collateral shall no
longer be part of the Collateral, and all rights to the Designated Collateral
shall revert to the Debtor. Debtor shall thereupon have the right to deliver
to the Custodian the instructions described in Section 3.3(d) of the Custodial
Agreement and Secured Party shall execute such documents as the Custodian may
reasonably request as a condition to the release of such Collateral.
ARTICLE III
Security Interest
Section 3.1. Grant of Security Interest. As collateral security for
all of the Obligations, Debtor hereby pledges and assigns to Secured Party and
grants to Secured Party a continuing security interest in all of the following:
(a) The Custodial Account, all funds from time to time on deposit in
the Custodial Account, all Treasury Securities from time to time on deposit in
the Custodial Account, all funds and Treasury Securities otherwise designated
to be held by Custodian as collateral for the Obligations subject to the pledge
and security interest created hereby, and all proceeds, collections, income,
replacements, substitutions, reinvestments, distributions and claims with
respect thereto, except as released pursuant to Sections 2.3(c) and (d).
(b) All of Debtor's right, title and interest in, to and under the
Custodial Agreement.
(c) All proceeds of any and all of the property described in
subsection (a) and (b) immediately above.
In each case, the foregoing shall be covered by this Agreement, whether
Debtor's ownership or other rights therein are presently held or hereafter
acquired and howsoever Debtor's interests therein may arise or appear (whether
by ownership, security interest, claim or otherwise).
Section 3.2. Obligations Secured. The security interest created
hereby in the Collateral constitutes continuing collateral security for the
payment and performance of the Obligations.
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ARTICLE IV
Representations, Warranties and Covenants
53. Representations and Warranties. Debtor represents and
warrants as follows as of the date hereof and any future date on which new or
substitute Collateral is provided:
(a) Ownership and Liens. Debtor has good and marketable title
to the Collateral free and clear of all Liens, encumbrances or adverse claims,
except for the pledge and security interest created by this Agreement. None of
the Collateral has been acquired by Debtor through a clearing corporation (as
such term is defined in the Code). Debtor has not acknowledged or given to
Custodian notice of a Lien on the Collateral other than the Lien in favor of
Secured Party. No dispute, right of set-off, recoupment, counterclaim or
defense exists with respect to all or any part of the Collateral and no
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office except
such as may have been filed in favor of Secured Party relating to this
Agreement and Landlord's Liens.
(b) No Conflicts or Consents. To the best knowledge of the
Debtor, neither the ownership or the intended use of the Collateral by Debtor,
nor the grant of the security interest by Debtor to Secured Party herein, nor
the exercise by Secured Party of its rights or remedies hereunder, will (i)
violate any provision of (a) any domestic or foreign law, statute, rule or
regulation, (b) the articles or certificate of incorporation, charter or bylaws
of Debtor, or (c) any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the creation of any
Lien, charge or encumbrance upon any assets or properties of Debtor except as
expressly contemplated in this Agreement or the Custodial Agreement. Except as
expressly contemplated in this Agreement and the Custodial Agreement, to the
best knowledge of Debtor no consent, approval, authorization or order of, and
no notice to or filing with any court, governmental authority or third party is
required in connection with the grant by Debtor of the security interest
herein, or the exercise by Secured Party of its rights and remedies hereunder.
(c) Security Interest. Debtor has and will have at all times
full right, power and authority to grant a security interest in the Collateral
to Secured Party in the manner provided herein, free and clear of any Lien,
adverse claim, or encumbrance. To the best knowledge of Debtor, this Agreement
creates a valid and binding security interest in favor of Secured Party in the
Collateral securing the Obligations.
(d) Location of Debtor and Records. Debtor's chief executive
office and principal place of business and the office where its records
concerning the Collateral are kept is located at its address set forth in the
Custodial Agreement or at such other location as Debtor shall specify to
Secured Party pursuant to Section 4.2(d).
54. Affirmative Covenants. Unless Secured Party shall otherwise
consent in writing, Debtor will at all times comply with the covenants
contained in this Section 4.2 from the date hereof and so long as any part of
the Obligations is outstanding, subject to the other terms of this Agreement
and the Custodial Agreement.
(a) Ownership and Liens. Debtor will maintain good and
marketable title to all Collateral free and clear of all Liens, encumbrances or
adverse claims, except for the security interest created by this Agreement and
Landlord's Liens. Debtor will not permit any dispute, right of set-off,
counterclaim or
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defense to exist with respect to all or any part of the Collateral except those
arising with respect to Landlord's Liens. Debtor will cause to be terminated
any financing statement or other registration with respect to the Collateral,
except such as may exist or as may have been filed in favor of Secured Party.
Debtor will defend Secured Party's right, title and special property and
security interest in and to the Collateral against the claims of any Person.
(b) Further Assurances. Debtor will, at its expense and at any
time and from time to time, promptly execute and deliver all further
instruments and documents and take all further action that may be reasonably
necessary or desirable and that Secured Party may request in order (i) to
perfect and protect the security interest created or purported to be created
hereby and the perfection and first priority of such security interest and
confirm that Collateral hereafter pledged by Debtor is subject to this
Agreement; (ii) to enable Secured Party to exercise and enforce its rights and
remedies hereunder in respect of the Collateral; or (iii) to otherwise effect
the purposes of this Agreement, including, without limitation, executing and
delivery to Secured Party financing statements covering the Collateral and
furnishing to Secured Party from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Secured Party may reasonably request, all in reasonable
detail.
(c) Inspection of Collateral. Debtor will keep adequate records
concerning the Collateral and will permit Secured Party and its representatives
to inspect Debtor's books and records concerning the Collateral on the same
terms and conditions as set forth in the Lease with respect to books and
records concerning the property covered by the Lease.
(d) Information. Debtor will furnish to Secured Party any
information which Secured Party may from time to time reasonably request
concerning any covenant, provision or representation contained herein or any
other matter in connection with the Collateral. Debtor will notify Secured
Party of any change in the location of its chief executive office or principal
place of business.
(e) Delivery of Collateral. All instruments and writings, if
any, constituting Collateral shall be delivered to Secured Party or Custodian
promptly upon the receipt thereof by or on behalf of Debtor. All such
instruments and writings, if any, shall be held by Custodian on behalf of
Secured Party pursuant to the terms of the Custodian Agreement.
(f) Management of Investment of Collateral. So long as no Event
of Default has occurred and is continuing and subject to the other terms of this
Agreement and the Custodial Agreement, (including, without limitation, Section
4.1 thereof), Debtor shall have the right to deposit immediately available funds
in the Custodial Account to purchase Treasury Securities to be held therein,
substitute and/or sell Treasury Securities in the Custodial Account, use cash
balances in the Custodial Account to purchase additional Treasury Securities to
be held therein and otherwise manage the investment of the Collateral on the
terms set forth in this Agreement and the Custodial Agreement.
55. Negative Covenants. Unless Secured Party shall otherwise
consent in writing, Debtor will at all times comply with the covenants
contained in this Section 4.3 from the date hereof and so long as any part of
the Obligations is outstanding, subject to the other terms of this Agreement
and the Custodial Agreement:
(a) Transfer or Encumbrance. Except as expressly permitted
herein (including without limitation, in Section 4.2(f)) and in the Custodial
Agreement, Debtor will not sell, assign (by operation of law or otherwise),
transfer, exchange, lease or otherwise dispose of any of the Collateral, nor
will Debtor
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xxxxx x Xxxx upon or execute, file or record any financing statement with
respect to the Collateral or otherwise identify the Collateral as being subject
to a pledge or security interest other than that created hereby, nor will
Debtor allow any such Lien, financing statement, or other identification to
exist or deliver actual or constructive possession of the Collateral to any
other Person, other than Secured Party or a bailee selected by Secured Party,
including without limitation Custodian, who is holding such Collateral for the
benefit of Secured Party. Debtor will not acquire any Collateral through a
clearing corporation (as such term is defined in the Code).
(b) Impairment of Security Interest. Debtor will not take any
action which would in any manner impair the value or enforceability of Secured
Party's security interest in any Collateral, nor will Debtor fail to take any
action which is required to prevent (and which Debtor knows is required to
prevent) an impairment of the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Certificates, etc. Evidencing Collateral.
Debtor will not cause or permit any document, instrument, or certificate
constituting or evidencing Collateral to at any time be in the actual or
constructive possession or control of any Person other than Debtor (to the
extent otherwise permitted hereunder), Secured Party, or a bailee selected by
Secured Party, including without limitation Custodian, who is holding such
Collateral for the benefit of Secured Party.
ARTICLE V
Remedies, Powers and Authorizations
56. Provisions Concerning the Collateral.
(a) Power of Attorney. Debtor hereby irrevocably appoints
Secured Party as Debtor's attorney-in-fact and proxy, with full authority in
the place and stead of Debtor and in the name of Debtor or otherwise, from time
to time in Secured Party's discretion upon the occurrence and during the
continuance of a Foreclosure Event, to take any action and to execute any
instrument which Secured Party may deem necessary or advisable to accomplish
the purposes of this Agreement including, without limitation: (i) to ask,
demand, collect, xxx for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral; (ii) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i) above;
and (iii) to file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral.
(b) Performance by Secured Party. If Debtor fails to perform
any agreement or obligation contained herein or in the Custodial Agreement,
Secured Party may itself perform, or cause performance of, such agreement or
obligation, and the expenses of Secured Party incurred in connection therewith
shall be payable by Debtor under Section 5.5.
57. Remedies. If a Foreclosure Event shall have occurred and be
continuing, Secured Party may from time to time in its discretion, without
limitation and without notice except as expressly provided below, to the extent
permitted by applicable law:
(a) exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein, under the Transaction Documents or
otherwise available to it, all the rights and remedies of a
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secured party on default under the Code (whether or not the Code applies to the
affected Collateral) and under 31 CFR Section Section 306.117 through 306.122
(herein called the "Applicable CFR Sections");
(b) reduce its claim to judgment or foreclose or otherwise
enforce, in whole or in part, the security interest created hereby by any
available judicial procedure;
(c) buy the Collateral, or any part thereof, at any public sale;
(d) buy the Collateral, or any part thereof, at any private
sale, to the extent that the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
price quotations;
(e) apply by appropriate judicial proceedings for appointment of
a receiver for the Collateral, or any part thereof, and Debtor hereby consents
to any such appointment; and
(f) at its discretion, retain the Collateral in satisfaction of
the Obligations whenever the circumstances are such that Secured Party is
entitled to do so under the Code or the Applicable CFR Sections or otherwise.
Secured Party shall give at least ten (10) days' notice to Debtor of the time
and place of any public sale or the time after which any private sale is to be
made. Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
58. Application of Proceeds. If a Foreclosure Event shall have
occurred and be continuing, Secured Party may in its discretion apply any cash
held by Secured Party as Collateral, and any cash proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral, to any or all of the following in such order as
Secured Party may elect:
(a) To the payment or other satisfaction of any Liens,
encumbrances, or adverse claims upon or against any of the Collateral other
than Landlord's Liens;
(b) To the satisfaction of the Obligations; and
(c) By delivery to Debtor or to whomsoever shall be lawfully
entitled to receive the same or as a court of competent jurisdiction shall
direct.
59. Deficiency. In the event that the proceeds of any sale,
collection or realization of or upon Collateral by Secured Party are
insufficient to pay the unpaid Obligations, Debtor shall, to the extent
permitted by applicable law, be liable for the deficiency, together with
interest thereon as provided in the Transaction Documents or (if no interest is
so provided) at such other rate as shall be fixed by applicable law, together
with the costs of collection and the Attorneys' Fees of Secured Party to
collect such deficiency.
60. Non-Judicial Remedies. In granting to Secured Party the
power to enforce its rights hereunder without prior judicial process or
judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes
any legal right which might otherwise require Secured Party to enforce its
rights by judicial process. In so providing for non-judicial remedies, Debtor
recognizes and concedes that such
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remedies are consistent with the usage of trade, are responsive to commercial
necessity, and are the result of a bargain at arm's length. Nothing herein is
intended to prevent Secured Party or Debtor from resorting to judicial process
at either party's option.
61. Other Recourse. To the fullest extent permitted by
applicable law, Debtor waives any right to require Secured Party to proceed
against any other Person, exhaust any Collateral or other security for the
Obligations, or to have any Other Liable Party joined with Debtor in any suit
arising out of the Obligations or this Agreement, or pursue any other remedy in
Secured Party's power. Debtor waives any and all notice of acceptance of this
Agreement. Debtor further waives notice of the creation, modification,
rearrangement, renewal or extension for any period of any of the Obligations of
any Other Liable Party from time to time and any defense arising by reason of
any disability or other defense of any Other Liable Party or by reason of the
cessation from any cause whatsoever of the liability of any Other Liable Party.
Until all of the Obligations shall have been paid in full, Debtor shall have no
right to subrogation, reimbursement, contribution or indemnity against any
Other Liable Party and Debtor waives the right to enforce any remedy which
Secured Party has or may hereafter have against any Other Liable Party, and
waives any benefit of and any right to participate in any other security
whatsoever now or hereafter held by Secured Party. Except as expressly
provided in the Transaction Documents, Debtor authorizes Secured Party, without
notice or demand and without any reservation of rights against Debtor and
without affecting Debtor's liability hereunder or on the Obligations, from time
to time to (a) take or hold any other property of any type from any other
Person as security for the Obligations, and exchange, enforce, waive and
release any or all of such other property, (b) apply the Collateral in
accordance with this Agreement or such other property and direct the order or
manner of sale thereof as Secured Party may in its discretion determine, (c)
renew, extend for any period, accelerate, modify, compromise, settle or release
any of the obligations of any Other Liable Party in respect to any or all of
the Obligations or other security for the Obligations, and (d) release or
substitute any Other Liable Party.
ARTICLE VI
Miscellaneous
62. Notices. Except as otherwise expressly provided herein, any
notice or communication required or permitted hereunder shall be given as
provided in the Custodial Agreement except that neither party hereto shall be
obligated to deliver to the Custodian a copy of any notice given by such party
to the other party hereunder, except as expressly required hereunder or under
the Custodial Agreement.
63. Amendments. No amendment of any provision of this Agreement
shall be effective unless it is in writing and signed by Debtor and Secured
Party, and no waiver of any provision of this Agreement, and no consent to any
departure by Debtor therefrom, shall be effective unless it is in writing and
signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given and
to the extent specified in such writing.
64. Preservation of Rights. No failure on the part of either
party hereto to exercise, and no delay in exercising, any right hereunder or
under the Purchase Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Neither the execution nor
the delivery of this Agreement shall in any manner impair or affect any other
security for the Obligations. The rights and remedies of the parties provided
herein and in the other Transaction Documents are cumulative and are in
addition to, and not exclusive
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of, any rights or remedies provided by law. Nothing contained in this
Agreement shall constitute a waiver of any right of Debtor under the Purchase
Agreement.
65. Unenforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
66. Survival of Agreements. All representations and warranties
of Debtor herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Transaction Documents and the creation of the Obligations and continue
until terminated as provided in Section 6.8 or, in the case of specific
Collateral, until released or deemed released as provided in Section 2.3(c) and
(d).
67. Other Liable Party. Neither this Agreement nor the exercise
by Secured Party or the failure of Secured Party to exercise any right, power
or remedy conferred herein or by law shall be construed as relieving any Other
Liable Party from liability on the Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any other Obligation Document to which Debtor or any Other
Liable Party may be a party, and notwithstanding the reorganization, death,
incapacity or bankruptcy of any Other Liable Party, or any other event or
proceeding affecting any Other Liable Party.
68. Binding Effect and Assignment. This Agreement creates a
continuing security interest in the Collateral and (a) shall be binding on
Debtor and its successors and permitted assigns and (b) shall inure, together
with all rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors and permitted assigns. Without limiting the
generality of the foregoing, Secured Party may grant a participation in or
assign its rights hereunder in the same manner and to the same extent that it
is entitled to grant a participation in or assign its rights under the Lease;
provided (as defined in the Purchase Agreement) that if there is more than one
assignee under an absolute assignment of the full rights of Secured Party under
the Lease executed after the date hereof, one of such assignees shall be
selected by all such assignees to serve as their agent hereunder. None of the
rights or duties of Debtor hereunder may be assigned or otherwise transferred
without the prior written consent of Secured Party; provided that, subject to
the terms and conditions of the Transaction Documents, Debtor's right to
receive Collateral upon the release thereof pursuant to the terms of this
Agreement and the Custodial Agreement may be assigned in connection with any
assignment of Debtor's rights to the Property (as defined in the Purchase
Agreement) under the other Transaction Documents so long as Debtor remains
liable for all of its duties and obligations under this Agreement and the
Custodial Agreement.
69. Termination. Following the Designated Payment Date, upon
satisfaction in full of all Obligations and upon written request for the
termination hereof delivered by Debtor to Secured Party, (i) this Agreement and
the security interest created hereby shall terminate and all rights to the
Collateral shall revert to Debtor and (ii) Secured Party will, upon Debtor's
request and at Debtor's expense, (a) return to Debtor such of the Collateral as
shall not have been sold or otherwise disposed of or applied pursuant to the
terms hereof; and (b) execute and deliver to Debtor such documents as Debtor
shall reasonably request to evidence such termination and release.
70. Governing Law. (a) This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York
(without regard to its conflicts of law provisions). Each party hereto
irrevocably submits itself to the non-exclusive jurisdiction of the state and
federal
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156
courts of New York for purposes of this Agreement and agrees and consents that
service of process may be made upon it in any legal proceeding relating to this
Agreement by any means allowed under federal or New York law. The parties
hereto hereby waive and agree not to assert, by way of motion, as a defense or
otherwise, that any such proceeding is brought in an inconvenient forum or that
the venue thereof is improper.
(b) Debtor hereby irrevocably designates CT Corporation Systems
located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the Designee, Appointee
and Agent of Debtor to receive, for and on behalf of Debtor service of process
in such respective jurisdictions in any legal action or proceeding with respect
to this Agreement and the Custodial Agreement. It is understood that a copy of
such process served on such Agent will be promptly forwarded by overnight
courier to Debtor at its address set forth under its signature below, but the
failure of Debtor to receive such copy shall not affect in any way the service
of such process. Debtor further irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
Debtor at its said address, such service to become effective thirty (30) days
after such mailing.
71. Counterparts. This Agreement may be separately executed in
any number of counterparts, all of which when so executed shall be deemed to
constitute one and the same Agreement.
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IN WITNESS WHEREOF, Debtor and Secured Party have caused this
Agreement to be executed and delivered by their officers thereunto duly
authorized, as of the date first above written.
CYPRESS SEMICONDUCTOR CORPORATION
By:____________________________________
Name:_______________________________
Title:______________________________
BNP LEASING CORPORATION
By:____________________________________
Name: Xxxxx X. Xxx
Title: Vice President
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EXHIBIT A
REQUEST FOR RELEASE
Reference is made to that certain Pledge and Security Agreement dated
as of _______________, 1996 (as from time to time amended, the "Agreement"), by
and between Cypress Semiconductor Corporation ("Debtor") and BNP Leasing
Corporation ("Secured Party"). Terms which are defined in the Agreement are
used herein with the meanings given them in the Agreement.
Pursuant to the terms of the Agreement Debtor hereby requests that
Secured Party release the Collateral described below (the "Designated
Collateral"):
[Treasury Securities to be described here by Par Amount, Coupon and Maturity or
other Collateral to be described by dollar amount and type.]
To induce Secured Party to release such Collateral, Debtor hereby
represents, warrants, acknowledges, and agrees to and with Secured Party that:
(a) The person signing this instrument on behalf of
Debtor has all necessary authority to act for Debtor in making the
request herein contained.
(b) There does not exist on the date hereof any condition
or event which constitutes an Event of Default which has not been
cured or waived in writing by Secured Party.
(c) After giving effect to the release of the Designated
Collateral, the Market Value of the Collateral remaining encumbered
under the Agreement shall be at least equal to 102% of the Minimum
Collateral Value, in each case as determined as of the Valuation Date
most recently preceding the date of this Request for Release.
IN WITNESS WHEREOF, this instrument is executed as of
____________________, ____.
CYPRESS SEMICONDUCTOR CORPORATION
By:____________________________________
Name:
Title:
159
BNP Leasing Corporation hereby releases the Designated Collateral
described above from the Agreement and authorizes Custodian to transfer the
Designated Collateral from the Custodial Account and to indicate such release
on its books and records.
BNP LEASING CORPORATION
By:____________________________________
Name:
Title:
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EXECUTION
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "AGREEMENT") is made as of April 12,
1996, by CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation ("CYPRESS"),
and BNP LEASING CORPORATION, a Delaware corporation ("BNP").
R E C I T A L S
A. BNP is acquiring the land described in Exhibit A attached
hereto and the improvements and certain fixtures located thereon and is leasing
the same to Cypress pursuant to that certain Lease Agreement (as from time to
time supplemented, amended or restated, the "LEASE") between Cypress and BNP
dated as of the date hereof. (The land described in Exhibit A and any and all
other real or personal property from time to time covered by the Lease and
included within the "LEASED PROPERTY" as defined therein are hereinafter
collectively referred to as the "PROPERTY".)
B. BNP is also concurrently herewith receiving a separate
environmental indemnity from Cypress pursuant to an Environmental Indemnity
Agreement (as from time to time supplemented, amended or restated, the
"ENVIRONMENTAL INDEMNITY") between Cypress and BNP dated as of the date hereof.
C. As a condition to BNP's acquisition of any of the land
described in Exhibit A, BNP requires the agreements of Cypress, on and subject
to the terms and conditions set out herein, to protect BNP against certain
losses that BNP may suffer if (1) the value of the land covered from time to
time under the Lease is or becomes less than BNP's investment in such land, or
(2) the value of buildings and other property covered by the Lease, exclusive
of land, is or may become less than BNP's investment in such buildings and
other property.
NOW, THEREFORE, in consideration of the above recitals and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
(a) Definitions. As used herein, the terms "Cypress", "BNP",
"Property", "Lease" and "Environmental Indemnity" shall have the meanings
indicated above; terms with initial capitals defined in the Lease and used but
not defined herein shall have the meanings assigned to them in the Lease; and
the terms listed immediately below shall have the following meanings:
(i) Applicable Purchaser. "Applicable Purchaser"
means any third party designated by Cypress to purchase the interest
of BNP in the Property as provided in Paragraph 2(a)(ii) below.
(ii) Designated Payment Date. "Designated Payment
Date" means the earlier of the following:
a) the first Business Day in May, 2001; or
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b) any Business Day designated by BNP in a written
notice given by BNP to Cypress when an Event of Default by
Cypress has occurred and is continuing, provided the Business
Day so designated by BNP is no earlier than thirty (30) days
after the date of such notice; or
c) any Business Day designated by Cypress in a
written irrevocable and unconditional notice given by Cypress
to BNP; provided, the Business Day so designated by Cypress
must be no earlier than ninety (90) days after the date of
such notice, unless an Event of Default has occurred and is
continuing on the date of such notice, in which case the
Business Date so designated must be no earlier than fifteen
(15) days after the date of such notice and no later than
thirty (30) days after the date of such notice.
If BNP sends a notice to Cypress pursuant to the preceding clause (ii)
properly designating a Designated Payment Date, and Cypress sends a
notice to BNP pursuant to the preceding clause (iii) properly
designating a different Designated Payment Date, the earlier of the
two dates so designated shall be the "Designated Payment Date"
hereunder regardless of which notice was first sent.
(iii) Fair Market Value. "Fair Market Value"
means the fair market value of the Property on or about the Designated
Payment Date (calculated under the assumptions, whether or not then
accurate, that Cypress has maintained the Property in compliance with
the Lease and all Applicable Laws [including Environmental Laws]; that
Cypress has completed all Construction Projects, the construction of
which was commenced prior to the Designated Payment Date; that Cypress
has repaired and restored the Property after any damage following fire
or other casualty to the extent required by the Lease; that Cypress
has restored the remainder of the Property after any partial taking by
eminent domain to the extent required by the Lease; that Cypress has
completed any contests of and paid any taxes due [other than Excluded
Taxes] or other amounts secured by or allegedly secured by a lien
against the Property other than Landlord's Liens; and that Cypress has
cured any title defects affecting the Property other than Landlord's
Liens, all in accordance with the standards and requirements of the
Lease as though the Lease were continuing in force) as determined by
an independent MAI appraiser selected by BNP, which appraiser must
have five (5) years or more experience appraising similar properties
in northern California.
(d) Improvement Value Percentage. "Improvement Value
Percentage" means the percentage computed by dividing the value of
the Improvements and any other Property, exclusive of the land, by the
value of the entire Property, including land. BNP and Cypress
stipulate that the Improvement Value Percentage is and will remain
59.78%.
(e) Land Value Percentage. "Land Value Percentage" means
40.22%, which equals 100% less the Improvement Value Percentage.
(f) Purchase Price. "Purchase Price" means an amount
equal to Stipulated Loss Value outstanding on the Designated Payment Date, plus
all costs and expenses (including appraisal costs, Attorneys' Fees, and any
Breakage Costs incurred by BNP if the Designated Payment Date does not fall on
an Advance Date or Base Rental Date) incurred by BNP in connection with any
sale of the Property by BNP hereunder or in connection with collecting sales
proceeds due hereunder.
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(g) Net Improvement Sales Proceeds. "Net Improvement
Sales Proceeds" means the Improvement Value Percentage, times the net cash
price that BNP actually receives from any Applicable Purchaser upon the
Designated Payment Date because of BNP's sale of its interest in the Property
to such
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Applicable Purchaser or that BNP would have received from an Applicable
Purchaser on the Designated Payment Date but for BNP's election to
retain the Property as provided in Paragraph 2(a)(ii) below.
(h) Net Land Sales Proceeds. "Net Land Sales Proceeds"
means the Land Value Percentage, times the net cash price that BNP
actually receives from any Applicable Purchaser upon the Designated
Payment Date because of BNP's sale of its interest in the Property to
such Applicable Purchaser or that BNP would have received from an
Applicable Purchaser on the Designated Payment Date but for BNP's
election to retain the Property as provided in Paragraph 2(a)(ii)
below.
(i) Remarketing Notice. "Remarketing Notice" shall have
the meaning assigned to it in Paragraph 2(b)(1) below.
(j) Required Documents. "Required Documents" means the
grant deed and other documents that BNP must tender pursuant to
Paragraph 3 below.
(k) Shortage Amount. "Shortage Amount" shall mean the
sum of any Supplemental Land Payment and any Supplemental Improvement
Payment that may become due pursuant to Paragraph 2(a)(ii) below.
(l) Stipulated Loss Value of the Improvements.
"Stipulated Loss Value of the Improvements" means the Improvement
Value Percentage, times the Stipulated Loss Value outstanding on the
Designated Payment Date prior to any sale hereunder.
(m) Stipulated Loss Value of the Land. "Stipulated Loss
Value of the Land" means the Land Value Percentage, times the
Stipulated Loss Value outstanding on the Designated Payment Date prior
to any sale hereunder.
(n) Supplemental Improvement Payment. "Supplemental
Improvement Payment" means a payment from Cypress to BNP equal to the
amount, if any, by which the Stipulated Loss Value of the Improvements
exceeds Net Improvement Sales Proceeds. HOWEVER, IF (BUT ONLY IF) NO
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING UNDER THE LEASE AND
NEITHER CYPRESS NOR ANY APPLICABLE PURCHASER HAS FAILED TO PAY ANY
AMOUNT REQUIRED TO BE PAID BY THIS AGREEMENT ON THE DATE SUCH AMOUNT
FIRST BECAME DUE, THEN ANY SUPPLEMENTAL IMPROVEMENT PAYMENT REQUIRED BY
THIS AGREEMENT SHALL NOT EXCEED EIGHTY-FIVE PERCENT (85%) OF THE
STIPULATED LOSS VALUE OF THE IMPROVEMENTS.
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(o) Supplemental Land Payment. "Supplemental Land
Payment" means a payment from Cypress to BNP equal to the amount, if any, by
which the Stipulated Loss Value of the Land exceeds Net Land Sale Proceeds.
HOWEVER, IF (BUT ONLY IF) NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING
UNDER THE LEASE AND NEITHER CYPRESS NOR ANY APPLICABLE PURCHASER HAS FAILED TO
PAY ANY AMOUNT REQUIRED TO BE PAID BY THIS AGREEMENT ON THE DATE SUCH AMOUNT
FIRST BECAME DUE, THEN ANY SUPPLEMENTAL LAND PAYMENT REQUIRED BY THIS AGREEMENT
SHALL NOT EXCEED EIGHTY-FIVE PERCENT (85%) OF THE STIPULATED LOSS VALUE OF THE
LAND.
(b) Cypress's Elections and Obligations on the Designated
Payment Date.
(i) Choices. On the Designated Payment Date Cypress
shall have the right and the obligation to either:
(i) purchase BNP's interest in the Property and in
Escrowed Proceeds, if any, for a net cash price equal
to the Purchase Price; or
(ii) pay to BNP the Supplemental Improvement Payment (if
any) and the Supplemental Land Payment (if any) and
cause the Applicable Purchaser to purchase BNP's
interest in the Property and in Escrowed Proceeds, if
any, for a net cash price not less than the lesser of
(a) the Fair Market Value of the Property or (b)
fifteen percent (15%) of Stipulated Loss Value
outstanding immediately prior to the purchase. If,
however, the Fair Market Value is less than fifteen
percent (15%) of Stipulated Loss Value, BNP may elect
to keep the Property and any Escrowed Proceeds rather
than sell to the Applicable Purchaser, and no such
election by BNP will relieve Cypress of its
obligation to pay the Supplemental Improvement
Payment and the Supplemental Land Payment. Any
Supplemental Improvement Payment will compensate BNP
for, or mitigate against, any loss BNP may suffer
relating to BNP's interest in Improvements; and any
Supplemental Land Payment will compensate BNP for, or
mitigate against, any loss BNP may suffer relating to
BNP's interest in the Land only. In any event, if
the net cash price actually paid by the Applicable
Purchaser to BNP exceeds the Purchase Price and all
other sums that are then due from Cypress to BNP,
Cypress shall be entitled to such excess.
(ii) Election by Cypress. Cypress shall have the right to
elect whether it will satisfy the obligations set out in clause (i) or
(ii) of the preceding Paragraph 2(a); provided, however, that the
following conditions are satisfied:
a) To give BNP the opportunity to have the Fair
Market Value determined by an appraiser before the Designated
Payment Date, Cypress must, unless Cypress agrees that Fair
Market Value will not be less than fifteen percent (15%) of
Stipulated Loss Value on the Designated Payment Date, provide
BNP with a Remarketing Notice. "REMARKETING NOTICE" means a
notice given by Cypress to BNP no earlier than one hundred
eighty (180) days before the Designated Payment Date and no
later than ninety (90) days before the Designated Payment
Date, specifying that Cypress does not agree that the Fair
Market Value is equal to or greater than
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fifteen percent (15%) of the Stipulated Loss Value. No
Remarketing Notice will be required unless Cypress does not
agree that Fair Market Value will equal or exceed fifteen
percent (15%) of Stipulated Loss Value on the Designated
Payment Date. But if for any reason (including but not
limited to any acceleration of the Designated Payment Date
pursuant to clauses (ii) or (iii) of the definition of
Designated Payment Date above) Cypress fails to provide a
Remarketing Notice within the time periods specified in the
definition of Remarketing Notice above, Fair Market Value
shall, for purposes of this Agreement, be deemed to be no less
than fifteen percent (15%) of Stipulated Loss Value on the
Designated Payment Date.
b) To give BNP the opportunity to prepare the
Required Documents before the Designated Payment Date, Cypress
must, if it is to elect to satisfy the obligations set forth
in clause (ii) of Paragraph 2(a), irrevocably specify an
Applicable Purchaser in notice to BNP given at least seven (7)
days prior to the Designated Payment Date. If for any reason
Cypress fails to so specify an Applicable Purchaser, Cypress
shall be deemed to have irrevocably elected to satisfy the
obligations set forth in clause (i) of Paragraph 2(a).
(iii) Termination of Cypress's Option To
Purchase. Without limiting BNP's right to require Cypress to satisfy
the obligations imposed by Paragraph 2(a), Cypress shall have no
further option hereunder to purchase the Property if either:
a) Cypress shall have elected to satisfy its
obligations under clause (ii) of Paragraph 2(a) on the
Designated Payment Date and BNP shall have elected to keep the
Property in accordance with clause (ii) of Paragraph 2(a); or
b) Cypress shall have failed on the Designated
Payment Date to make or cause to be made all payments to BNP
required by this Agreement or by the Lease and such failure
shall have continued beyond the thirty (30) day period for
tender specified in the next sentence.
If BNP does not receive all payments due under the Lease and all
payments required hereunder on the Designated Payment Date, Cypress
may nonetheless tender to BNP the full Purchase Price and all amounts
then due under the Lease, together with interest on the total Purchase
Price computed at the Default Rate from the Designated Payment Date to
the date of tender, and if presented with such a tender within thirty
(30) days after the Designated Payment Date, BNP must accept it and
promptly thereafter deliver any Escrowed Proceeds and a deed and all
other Required Documents.
(iv) Payment to BNP. All amounts payable under the
preceding Paragraphs 2(a) or 2(c) by Cypress and, if applicable, by
the Applicable Purchaser must be paid directly to BNP, and no payment
on behalf of or for the account of BNP to any other party shall be
effective for the purposes of this Agreement. In addition to the
payments required under Paragraphs 2(a) hereunder, on the Designated
Payment Date Cypress must pay all amounts then due to BNP under the
Lease. BNP will remit any excess amounts due Cypress pursuant to the
last sentence of clause (ii) of Paragraph 2(a) promptly after BNP's
receipt of the same.
(v) Effect of Options on Subsequent Title
Encumbrances. It is the intent of BNP and Cypress that any conveyance
of the Property to Cypress or any Applicable Purchaser pursuant to
this Agreement shall cut off and terminate any interest in the
Property claimed by, through or under BNP (but not any unsatisfied
obligations to BNP under the Lease, the Environmental Indemnity or
this Agreement),
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including but not limited to any claim by Participants, any leasehold
or other interests conveyed by BNP in the ordinary course of BNP's
business and any other Landlord's Liens. Anyone accepting or taking
any interest in the Property by or through BNP after the date of this
Agreement shall acquire such interest subject to the rights and
options granted Cypress hereby. Further, Cypress and any Applicable
Purchaser shall be entitled to pay any payment required by this
Agreement for the purchase of the Property directly to BNP
notwithstanding any actual or attempted prior conveyance or assignment
by BNP, voluntary or otherwise, of any right or interest in this
Agreement or the Property; neither Cypress nor any Applicable
Purchaser shall be responsible for the proper distribution or
application by BNP of any such payments to BNP; and any such payment
to BNP shall discharge the obligation of Cypress to cause such payment
to be made to all Persons claiming an interest in such payment.
(vi) Restrictions Applicable If BNP Retains the
Property. Without limiting BNP's right to require Cypress to satisfy
the obligations imposed by Paragraph 2(a), BNP shall not itself lease
the Property or occupy it for use in its own business after the
Designated Payment Date, but rather shall offer the Property for sale
to third parties, if both of the following conditions (the "USE
RESTRICTION CONDITIONS") are satisfied:
a) Cypress shall have elected to satisfy its
obligations under clause (ii) of Paragraph 2(a) on the
Designated Payment Date and BNP shall have elected to keep the
Property in accordance with clause (ii) of Paragraph 2(a); and
b) Cypress shall have cured any failure to make or
cause to be made all payments to BNP required on the
Designated Payment Date by this Agreement or by the Lease
within the thirty (30) days described in Paragraph 2(c)(ii).
If, but only if, the Use Restriction Conditions are satisfied, BNP
shall pay to Cypress the excess, if any, of:
1. the sum of (a) all sales, condemnation and
insurance proceeds ACTUALLY RECEIVED by BNP from any sale
after the Designated Payment Date of any interest in, or
because of any subsequent taking or damage to, the Property,
plus (b) any Escrowed Proceeds retained by BNP; over
2. the sum of (i) all costs incurred by BNP of
collecting the proceeds described in the preceding part 1,
plus (ii) all ad valorem taxes, insurance premiums and other
costs of every kind incurred by BNP with respect to the
ownership, operation or maintenance of the Property after the
Designated Payment Date, plus (iii) fifteen percent (15%) of
the Stipulated Loss Value used to compute the Shortage Amount
under Paragraph 2(a)(ii) above, plus (iv) interest computed at
the Default Rate on costs and other amounts described in the
preceding clauses (i), (ii) and (iii) from the date incurred
(in the case of costs described in clauses (i) and (ii)) or
from the Designated Payment Date (in the case of the amount
described in clause (iii)) until repaid to BNP by proceeds
described in the preceding part 1.
However, nothing herein contained shall be construed to require BNP,
or to imply a duty on BNP's part, to incur any expense or to exercise
any diligence (A) to sell the Property, or (B) to collect or maximize
the excess proceeds described in the preceding sentence, or (C) to
maintain or insure the Property. Without limiting the foregoing, if
BNP retains the Property BNP shall be entitled, even if the Use
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Restriction Conditions are satisfied, to determine in its sole and
absolute discretion how and for what price (which need not equal or
exceed Fair Market Value) and upon what terms the Property should be
sold and how and upon what terms to settle any claim for insurance or
condemnation proceeds concerning the Property.
(c) Terms of Conveyance Upon Purchase. Immediately after
receipt of all payments to BNP required pursuant to the preceding Xxxxxxxxx 0,
XXX must, unless it is to keep the Property as permitted by Paragraph 2(a)(ii):
(A) deliver Escrowed Proceeds, if any, and (B) convey the interest in the
Property received by BNP pursuant to the Existing Contract (save and except any
interest in or any part of the Property previously taken by eminent domain) by
grant deed to Cypress or the Applicable Purchaser, as the case may be, subject
to any encumbrances that do not constitute Landlord's Liens. However, such
conveyance shall not include the right to receive any payment then due BNP or
that may thereafter become due to BNP under the Lease, the Environmental
Indemnity or this Agreement because of any expense or liability incurred by BNP
resulting in whole or in part from events or circumstances occurring before
such conveyance. All costs of such purchase and conveyance of every kind
whatsoever, both foreseen and unforeseen, shall be the responsibility of the
Applicable Purchaser or Cypress, and the form of grant deed used to accomplish
such conveyance shall be substantially in the form attached as Exhibit B. With
such grant deed, BNP shall also tender to Cypress or the Applicable Purchaser,
as the case may be, the Escrowed Proceeds and the following documents, each
fully executed and, where appropriate, acknowledged on BNP's behalf by an
officer of BNP: (1) a Preliminary Change of Ownership Report in the form
attached as Exhibit C, (2) a Xxxx of Sale and Assignment of Contract Rights and
Intangible Assets in the form attached as Exhibit D, (3) an Acknowledgment of
Disclaimer of Representations and Warranties, in the form attached as Exhibit
E, which Cypress or the Applicable Purchaser must execute and return to BNP,
(5) a Documentary Transfer Tax Request in the form attached as Exhibit F, (6) a
Secretary's Certificate in the form attached as Exhibit G, (7) a letter to the
title insurance company insuring title to the Property in the form attached as
Exhibit H, (8) a certificate concerning tax withholding in the form attached as
Exhibit I, (9) an Assignment and Assumption of Grantor's Rights under
Declaration of Covenants, Conditions and Restrictions for Oakmeade - San Xxxx
(the "Assignment of Grantor's Rights") in the form attached as Exhibit J, and
(10) if applicable, an Indemnity for Landlord's Liens in the form attached
hereto as Exhibit K. The Indemnity for Landlord's Liens described in the
preceding sentence shall be required if, but only if, before the other Required
Documents are tendered by BNP in accordance with this Agreement, Cypress shall
have identified, provided a written list to BNP of, and been unable to obtain a
commitment for title insurance against, any title encumbrances that Cypress
believes in good faith may constitute Landlord's Liens and that, if valid,
would constitute Landlord's Liens. Any such Indemnity will be completed by
attaching a list of such identified encumbrances as Annex B thereto.
Notwithstanding anything to the contrary herein, BNP shall not be
required to deliver the Assignment of Grantor's Rights pursuant to this
Agreement, or any other prior agreement between Cypress and BNP, so long as BNP
continues to own any property encumbered by the restrictive covenants described
in the Assignment of Grantor's Rights.
(d) Survival of Cypress's Obligations.
(i) Status of this Agreement. Except as expressly
provided herein, this Agreement shall not terminate, nor shall Cypress
or BNP or any of their successors or assigns have any right to
terminate this Agreement, nor shall Cypress be entitled to any
adjustment of the Purchase Price hereunder, nor shall the obligations
of Cypress and BNP be affected by reason of (i) any damage to or the
destruction of all or any part of the Property from whatever cause,
(ii) the taking of or damage to the Property or any portion
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thereof under the power of eminent domain or otherwise for any reason,
(iii) the prohibition, limitation or restriction of Cypress's use of
all or any portion of the Property or any interference with such use
by governmental action or otherwise, (iv) any eviction of Cypress or
any party claiming under Cypress by paramount title or otherwise
(provided, if Cypress is wrongfully evicted by BNP or by any third
party exercising its rights under a Landlord's Lien, then Cypress will
have the remedies described in the last sentence of this Paragraph),
(v) Cypress's prior acquisition or ownership of any interest in the
Property, (vi) any default on the part of BNP under this Agreement,
the Lease or any other agreement to which BNP is a party, or (vii) any
other cause, whether similar or dissimilar to the foregoing, any
existing or future law to the contrary notwithstanding. It is the
intention of the parties hereto that the obligations of Cypress
hereunder (including Cypress' obligation to make payments under
Paragraph 2 and, if applicable, to cause the Applicable Purchaser to
make payments under Paragraph 2) shall be separate and independent of
the covenants and agreements of BNP. Accordingly, subject only to the
tender by BNP of Required Documents and of any Escrowed Proceeds (if
such tender is not excused because of an election by BNP to keep the
Property under Paragraph 2(a)(ii)), the Purchase Price and the
Shortage Amount, as the case may be under Paragraph 2, shall continue
to be payable in all events, and the obligations of Cypress hereunder
shall continue unaffected by any breach of this Agreement by BNP.
However, nothing in this subparagraph, nor the performance without
objection by Cypress of its obligations hereunder, shall be construed
as a waiver by Cypress of any right Cypress may have at law or in
equity, following (A) any failure by BNP to tender any Escrowed
Proceeds or a grant deed or any of the other Required Documents as
required by Paragraph 3 (if such tender is not excused because of an
election by BNP to keep the Property under Paragraph 2(a)(ii)) upon
the tender by Cypress or the Applicable Purchaser of the payments
required by Paragraph 2 and of any other documents to be executed in
favor of BNP at the closing of the sale hereunder, or (B) any failure
by BNP to remove all Landlord's Liens before conveying the Property
pursuant to this Agreement, (i) to recover monetary damages
proximately caused by such failure of BNP if BNP does not cure the
failure within thirty (30) days after Cypress demands a cure by
written notice to BNP, or (ii) to obtain a decree compelling specific
performance of BNP's obligations hereunder.
(ii) Remedies Under the Lease and the Environmental
Indemnity. No repossession of or re-entering upon the Property or
exercise of any other remedies available under or in connection with
the Lease (including any termination of the Lease by BNP because of an
Event of Default or any rejection of the Lease by Cypress in any
bankruptcy proceeding) or the Environmental Indemnity shall relieve
the parties of their liabilities and obligations hereunder, all of
which shall survive the exercise of remedies available under or in
connection with the Lease and Environmental Indemnity. The parties
acknowledge that the consideration for this Agreement is separate and
independent of the consideration for the Lease and the Environmental
Indemnity, and their obligations hereunder shall not be affected or
impaired by any event or circumstance that would excuse Cypress or BNP
from performance of an obligation under the Lease or the Environmental
Indemnity or the Pledge Agreement. Provided, however, nothing in this
subparagraph 4(b) shall be construed to impair, amend, modify, limit
or otherwise affect the definition of Designated Payment Date.
(e) Remedies Cumulative. No right or remedy herein conferred
upon or reserved to BNP is intended to be exclusive of any other right or
remedy BNP has with respect to the Property, and each and every right and
remedy shall be cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing at law or in equity or by statute. In
addition to other remedies available under this Agreement, either party shall
be entitled, to the extent permitted by applicable law, to a decree compelling
performance of any of the other party's agreements hereunder.
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169
(f) No Implied Waiver. The failure of either party to this
Agreement to insist at any time upon the strict performance of any covenant or
agreement of the other party or to exercise any remedy contained in this
Agreement shall not be construed as a waiver or a relinquishment thereof for
the future. The waiver by either party of or redress for any violation of any
term, covenant, agreement or condition contained in this Agreement shall not
prevent a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation. No express
waiver by either party shall affect any condition other than the one specified
in such waiver and that one only for the time and in the manner specifically
stated. A receipt by BNP of any payment hereunder with knowledge of the breach
of this Agreement shall not be deemed a waiver of such breach, and no waiver by
either party of any provision of this Agreement shall be deemed to have been
made unless expressed in writing and signed by the waiving party.
(g) Attorneys' Fees and Legal Expenses. If either party
commences any legal action or other proceeding to enforce any of the terms of
this Agreement or the documents and agreements referred to herein, or because
of any breach by the other party or dispute hereunder or thereunder, the
successful or prevailing party, shall be entitled to recover from the
nonprevailing party all Attorneys' Fees incurred in connection therewith,
whether or not such controversy, claim or dispute is prosecuted to a final
judgment. Any such Attorneys' Fees incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
such judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment.
(h) Estoppel Certificate. Each party will, upon not less than
twenty (20) days' prior written request, execute, acknowledge and deliver to
the requesting party a written statement certifying that this Agreement is
unmodified and in full effect (or, if there have been modifications, that this
Agreement is in full effect as modified, and setting forth such modification)
and either stating that no default exists hereunder or specifying each such
default of which the signer may have knowledge. Any such statement may be
relied upon by any prospective purchaser or assignee with respect to the
Property. Each Party shall be required to provide such a certificate no more
frequently than once in any six month period; provided, however, that if a
party determines that there is a significant business reason for requiring a
current certificate, including, without limitation, the need to provide such a
certificate to a prospective purchaser or assignee, the other party shall
provide a certificate upon request whether or not a certificate has been
provided within the prior six month period.
(i) Notices.
(i) All payments required to be made by Cypress or
the Applicable Purchaser to BNP hereunder shall be paid to BNP in
immediately available funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 000000000
Reference: Cypress II.
or at such other place and in such other manner as BNP may designate
in a notice to Cypress (provided BNP will not unreasonably designate
a method of payment other than wire transfer). Time is of the essence
as to all payments to BNP under this Agreement. Any payments required
to be made by BNP to Cypress pursuant to the last
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170
sentence of clause (ii) of Paragraph 2(a) shall be paid to Cypress in
immediately available funds at the address of Cypress set forth below
or as Cypress may otherwise direct by written notice sent in
accordance herewith.
(ii) All notices, demands and other communications to be
made hereunder to the parties hereto shall be in writing (at the
addresses set forth below) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses
may be changed by notice to the other parties given in the same manner
as provided above. Any notice or other communication sent pursuant to
clause (A) or (C) hereof shall be deemed received (whether or not
actually received) upon first attempted delivery at the proper notice
address on any Business Day between 9:00 A.M. and 5:00 P.M., and any
notice or other communication sent pursuant to clause (B) hereof shall
be deemed received upon dispatch by electronic means.
Address of BNP:
BNP Leasing Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx
Telecopy: (000) 000-0000
With a copy to:
Banque Nationale de Paris, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
And with a copy to:
Xxxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Address of Cypress:
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
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171
With a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Real Estate Department
Telecopy: (000) 000-0000
(j) Severability. Each and every covenant and agreement of
Cypress contained in this Agreement is, and shall be construed to be, a
separate and independent covenant and agreement. If any term or provision of
this Agreement or the application thereof to any person or circumstances shall
to any extent be invalid and unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other
than those as to which it is invalid or unenforceable, shall not be affected
thereby. Further, the obligations of Cypress hereunder, to the maximum extent
possible, shall be deemed to be separate, independent and in addition to, not
in lieu of, the obligations of Cypress under the Lease. In the event of any
inconsistency between the terms of this Agreement and the terms and provisions
of the Lease, the terms and provisions of this Agreement shall control.
(k) Entire Agreement. This Agreement and the documents and
agreements referred to herein set forth the entire agreement between the
parties concerning the subject matter hereof and no amendment or modification
of this Agreement shall be binding or valid unless expressed in a writing
executed by both parties hereto.
(l) Paragraph Headings. The paragraph headings contained in
this Agreement are for convenience only and shall in no way enlarge or limit
the scope or meaning of the various and several paragraphs hereof.
(m) Gender and Number. Within this Agreement, words of any
gender shall be held and construed to include any other gender and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires.
(n) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO CONFLICTS OR CHOICE OF LAWS.
(o) Successors and Assigns. The terms, provisions, covenants
and conditions hereof shall be binding upon Cypress and BNP and their
respective permitted successors and assigns and shall inure to the benefit of
Cypress and BNP and all permitted transferees, mortgagees, successors and
assignees of Cypress and BNP with respect to the Property; provided, that the
rights of BNP hereunder shall not pass to Cypress or any Applicable Purchaser
or any subsequent owner claiming through them. Prior to the Designated Payment
Date BNP may transfer, assign and convey, in whole or in part, the Property and
any and all of its rights under this Agreement and the other Purchase Documents
(subject to the terms of this Agreement) by any conveyance that constitutes a
Permitted Transfer, but not otherwise. If BNP so sells or otherwise transfers
the Property and assigns its rights under this Agreement, the other Purchase
Documents and the Lease pursuant to a Permitted Transfer, and if BNP's
successor in interest confirms its liability for the obligations imposed upon
BNP by this Agreement, the other Purchase Documents and the Lease on and
subject to the express terms set out herein and therein, then BNP shall thereby
be released from any further obligations under this Agreement, the other
Purchase Documents and the Lease and Cypress agrees to look solely to each
successor in interest of BNP for performance of such obligations.
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172
(p) WAIVER OF JURY TRIAL. BNP AND CYPRESS EACH HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THE LEASE, THIS AGREEMENT OR ANY OTHER DOCUMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND
THE RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation, contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Cypress and BNP each acknowledge
that this waiver is a material inducement to enter into a business
relationship, that each has already relied on the waiver in entering into this
Agreement and the other documents referred to herein, and that each will
continue to rely on the waiver in their related future dealings. Cypress and
BNP each further warrant and represent that it has reviewed this waiver with
its legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LEASE, THIS AGREEMENT OR THE ENVIRONMENTAL INDEMNITY. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
(q) Tax Reporting. Reference is made to Paragraph 19(k) of
the Lease, which explains that BNP and Cypress intend that the Lease and this
Agreement shall have a form for income tax purposes which is different than the
form of the Lease and the Agreement for other purposes.
(r) Security and Escrowed Proceeds. Cypress's obligations
under this Agreement are secured by the Pledge Agreement, reference to which is
hereby made for a description of the Collateral (as defined in the Pledge
Agreement) covered thereby and the rights and remedies provided to BNP thereby.
Although BNP shall be entitled to hold all Collateral as security for the full
and faithful performance by Cypress of Cypress's covenants and obligations
under this Agreement, the Collateral shall not be considered an advance payment
of the Purchase Price or any Shortgage Amount or a measure of BNP's damages
should Cypress breach this Agreement. BNP shall be entitled to return any
Collateral not sold or used to satisfy the obligations secured by the Pledge
Agreement directly to Cypress notwithstanding any prior actual or attempted
conveyance or assignment by Cypress, voluntary or otherwise, of any right to
receive the same; neither BNP nor the custodian named in the Custodial
Agreement shall be responsible for the proper distribution or application by
Cypress of any such Collateral returned to Cypress; and any such return of
Collateral to Cypress shall discharge any obligation of BNP to deliver such
Collateral to all Persons claiming an interest in the Collateral. Further, BNP
shall be entitled to deliver any Escrowed Proceeds it holds on the Designated
Payment Date directly to Cypress or to any Applicable Purchaser purchasing
BNP's interest in the Property and the Escrowed Proceeds pursuant to this
Agreement notwithstanding any prior actual or attempted conveyance or
assignment by Cypress, voluntary or otherwise, of any right to receive the
same; BNP shall not be responsible for the proper distribution or application
by Cypress or any Applicable Purchaser of any such Escrowed Proceeds paid over
to Cypress or the Applicable Purchaser; and any such payment of Escrowed
Proceeds to Cypress or an Applicable Purchaser shall discharge any obligation
of BNP to deliver the same to all Persons claiming an interest therein.
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173
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
"BNP"
BNP LEASING CORPORATION, a Delaware corporation
Xxxxx X. Xxx, Vice President
"Cypress"
CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation
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174
EXHIBIT A
Legal Description
Real Property in the City of Xxx Xxxx, Xxxxxx xx Xxxxx Xxxxx, Xxxxx xx
Xxxxxxxxxx, described as follows:
175
EXHIBIT B
CORPORATION GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NAME:
ADDRESS:
ATTN:
CITY:
STATE:
Zip:
MAIL TAX STATEMENTS TO:
NAME:
ADDRESS:
ATTN:
CITY:
STATE:
ZIP:
CORPORATION GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation, hereby grants to CYPRESS
SEMICONDUCTOR CORPORATION, a Delaware corporation [OR THE APPLICABLE
PURCHASER], all of the land situated in the County of Santa Xxxxx, State of
California, described on Annex A attached hereto and hereby made a part hereof,
together with the improvements currently located on such land and any
easements, rights-of-way, privileges, appurtenances and other rights pertaining
to such land; provided, however, that this grant is subject to the following,
as well as the Permitted Encumbrances described on Annex B:
1. Real Estate Taxes not yet due and payable;
2. General Special Assessments payable after the date hereof;
3. Liens, claims, easements, covenants, restrictions, encumbrances and
other matters of record;
4. Zoning ordinances and regulations;
5. Public Utility Drainage and Highway easements, whether or not of
record;
6. Rights of parties in possession;
176
7. Encroachments, variations in area or in measurements, boundary line
disputes, roadways and other matters not of record which would be
disclosed by a survey and inspection of the property conveyed
hereby.
BNP LEASING CORPORATION
Date: As of ____________ By:________________________________________
Its: Vice President
Attest:_________________________________
Its: Assistant Secretary
STATE OF ______ )
) SS
COUNTY OF _____ )
On ___________________ before me,_____________________________________,
personally appeared _________________________ and ____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the persons whose names are subscribed to the within instrument and
acknowledged to me that they executed the same in their authorized capacities,
and that by their signatures on the instrument the person, or the entity upon
behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature _____________________________
Exhibit B - Page 2
177
ANNEX A
(to Deed)
Legal Description
Real Property in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows:
[INSERT PROPERTY DESCRIPTION IDENTICAL TO EXHIBIT A TO THIS AGREEMENT.]
Exhibit B - Page 3
178
ANNEX B
(to Deed)
PERMITTED ENCUMBRANCES
This conveyance is subject to the following matters to the extent the same
are still valid and in force:
[INSERT LIST IDENTICAL TO EXHIBIT B TO LEASE]
__. Lease Agreement dated as of April __, 1996 by and between BNP Leasing
Corporation, as lessor, and Cypress Corporation, as lessee.
[IN ADDITION, IF THE CONVEYANCE IS TO AN APPLICABLE PURCHASER:
__. Any encumbrances claimed by, through or under Cypress Corporation]
[ADD A LIST OF ANY OTHER KNOWN ENCUMBRANCES FOR WHICH BNP IS NOT RESPONSIBLE
UNDER PARAGRAPH 9(A) OF THE LEASE.]
Exhibit B - Page 4
179
EXHIBIT C THIS SPACE FOR RECORDER'S USE
PRELIMINARY CHANGE OF OWNERSHIP REPORT
THIS REPORT IS NOT A PUBLIC DOCUMENT
(To be completed by transferee (buyer) prior to transfer of the subject
property in accordance with Section 480.3 of the Revenue and Taxation Code.)
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SELLER/TRANSFEROR: ________________________________________________________________
FOR ASSESSOR'S USE ONLY
SELLER RECORDING DATE: _____________________ DOCUMENT NO. _________________________
Cluster __________
BUYER/TRANSFEREE: OC1 ______________ OC2 __________
DT _______________ INT __________
ASSESSOR'S IDENTIFICATION NUMBER(S)________________________________________________ RC _______________ SP$ __________
LA ------ Page Parcel DTT $ ____________ # Pcl. _______
PROPERTY ADDRESS OR LOCATION: _____________________________________________________
No Street
_____________________________________________________
City State Zip Code
MAIL TAX INFORMATION TO:
NAME: _____________________________________________________________________________
ADDRESS: __________________________________________________________________________
Street No City State Zip Code ----------------------------------
A Preliminary Change in Ownership
Report must be filed with each
conveyance in the County Recorder's
office for the county where the
property is located; this particular
form may be used in all 58 counties
of California.
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NOTICE: A lien for property taxes applies to your property on March 1 of each year for the taxes owing in the following fiscal
year, July 1 through June 30. One-half of those taxes is due November 1 and one-half is due February 1. The first installment
becomes delinquent on December 10 and the second installment becomes delinquent on April 10. One tax xxxx is mailed before
November 1 to the owner of record. IF THIS TRANSFER OCCURS AFTER MARCH 1 AND ON OR BEFORE DECEMBER 31, YOU MAY BE RESPONSIBLE FOR
THE SECOND INSTALLMENT OF TAXES ON FEBRUARY 1.
The property which you acquired may be subject to a supplemental tax assessment in an amount to be determined by the Santa Xxxxx
County Assessor. For further information on your supplemental roll obligation, please call the Santa Xxxxx County Assessor at
(______) _______-__________.
-------------------------------------------------------------------------------------------------------------------------------
PART I: TRANSFER INFORMATION Please answer all questions.
YES NO
[ ] [ ] A. Is this transfer solely between husband and wife (Addition of a spouse, death of a spouse, divorce settlement,
etc.)?
[ ] [ ] B. Is this transaction only a correction of the name(s) of the person(s) holding title to the property (For
example, a name change upon marriage)?
[ ] [ ] C. Is this document recorded to create, terminate, or reconvey a lender's interest in the property?
[ ] [ ] D. Is this transaction recorded only to create, terminate, or reconvey a security interest (e.g., cosigner)?
[ ] [ ] E. Is this document recorded to substitute a trustee under a deed of trust, mortgage, or other similar document?
[ ] [ ] F. Did this transfer result in the creation of a joint tenancy in which the seller (transferor) remains as one of
the joint tenants?
[ ] [ ] G. Does this transfer return property to the person who created the joint tenancy (original transferor)?
[ ] [ ] H. Is this transfer of property:
1. to a trust for the benefit of the grantor, or grantor's spouse?
2. to a trust revocable by the transferor?
3. to a trust from which the property reverts to the grantor within 12 years?
[ ] [ ] I. If this property is subject to a lease, is the remaining lease term 35 years or more including written options?
[ ] [ ] J. Is this a transfer from parents to children or from children to parents?
[ ] [ ] K. Is this transaction to replace a principal residence by a person 55 years of age or older?
[ ] [ ] L. Is this transaction to replace a principal residence by a person who is severely disabled as defined by Revenue
and Taxation Code Section 69.5?
If you checked yes to J, K or L, an applicable claim form must be filed with the County Assessor. Please provide any
other information that would help the Assessor to understand the nature of the transfer. __________________________
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IF YOU HAVE ANSWERED "YES" TO ANY OF THE ABOVE QUESTIONS EXCEPT J, K, OR L, PLEASE SIGN AND DATE.
OTHERWISE COMPLETE BALANCE OF THE FORM.
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PART II: OTHER TRANSFER INFORMATION
A. Date of transfer if other than recording date.
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180
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B. Type of transfer. Please check appropriate box.
[ ] Purchase [ ] Foreclosure [ ] Gift [ ] Trade or Exchange [ ] Merger, Stock or Partnership Acquisition
[ ] Contract of Sale -- Date of Contract
[ ] Inheritance -- Date of Contract [ ] Other: Please explain:
[ ] Creation of a lease: [ ] Assignment of a lease; [ ] Termination of a lease
Date lease began
Original term in years (including written options)
Remaining term in years (including written options)
C. Was only a partial interest in the property transferred? [ ] Yes [ ] No
If yes, indicate the percentage transferred ____________%
----------------------------------------------------------------------------------------------------------------------------------
Please answer, to the best of your knowledge, all applicable questions, sign and date.
If a question does not apply, indicate with "N/A".
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PART III.: PURCHASE PRICE & TERMS OF SALE
4. CASH DOWN PAYMENT OR Value of Trade or Exchange (excluding closing cost) Amount $_______________
5. FIRST DEED OF TRUST @ ____% interest for ____ years. Pymts./Mo. = $ _________ (Prin. & Int. only) Amount $_______________
[ ] FHA [ ] Fixed Rate
[ ]
New Loan
[ ] Conventional [ ] Variable Rate
[ ]
Assumed Existing Loan
Balance Amount $_______________
[ ] VA [ ] All Inclusive D.T. ($_______ Wrapped)
[ ] Bank or Savings & Loan
[ ] Cal-Vet [ ] Loan Carried by Seller
[ ] Finance Company Amount $________________
Balloon Payment [ ] Yes [ ] No Due Date _______________
Amount $_______________
6. SECOND DEED OF TRUST @ ____% interest for ____ years. Pymts./Mo. = $ _________ (Prin. & Int. only)
[ ] Bank or Savings & Loan [ ] Fixed Rate Amount $________________
[ ] New Loan
[ ] Loan Carried by Seller [ ] Variable Rate
[ ] Assumed
Existing Loan Balance
Balloon Payment [ ] Yes [ ] No Due Date _______________
Amount $_______________
7. OTHER FINANCING: Is other financing involved not covered in (b) or (c) above? [ ] Yes
[ ] No
Type ________ @ ____% interest for_______ years. Pymts./Mo. = $ ______________ (Prin. & Int. only)
[ ] Bank or Savings & Loan [ ] Fixed Rate
[ ] New Loan
[ ] Loan Carried by Seller [ ] Variable Rate
[ ] Assumed
Existing Loan Balance
Balloon Payment [ ] Yes [ ] No Due Date _______________
Amount $_______________
8. IMPROVEMENT BOND
9. TOTAL PURCHASE PRICE: (or acquisition price, if traded or exchanged,
include real estate commission if paid.)
Total items A through E $
10. PROPERTY PURCHASED: [ ] Through a broker:
If purchased through a broker, provide broker's name and phone no.:
Please explain any special terms or financing and many other information that would
help the Assessor understand the purchase price and terms of sale.
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PART IV.: PROPERTY INFORMATION
1. IS PERSONAL PROPERTY INCLUDED IN THE PURCHASE PRICE
(other than a mobilehome subject to local property tax)? [ ] Yes [ ] No
If yes, enter the value of the personal property included in the purchase price $
(Attach itemized list of personal property)
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Exhibit C - Page 2
181
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2. IS THIS PROPERTY INTENDED AS YOUR PRINCIPAL RESIDENCE? [ ] Yes [ ] No
If yes, enter date of occupancy ______________/_______________/, 19_____ or intended occupancy ____________/___________, 19______
Month Day Month Day
3. TYPE OF PROPERTY TRANSFERRED:
[ ] Single-Family residence [ ] Agricultural [ ]
Timeshare
[ ] Multiple-Family residence (no. of units: _______) [ ] Coop/Own-your-own
[ ] Mobilehome
[ ] Commercial/Industrial [ ] Condominium [ ]
Unimproved lot
[ ] Other (Description: ______
4. DOES THE PROPERTY PRODUCE INCOME? [ ] Yes [ ] No
5. IF THE ANSWER TO QUESTION D IS YES, IS THE INCOME FROM:
[ ] Lease/Rent [ ] Contract
6. WHAT WAS THE CONDITION OF THE PROPERTY AT THE TIME OF SALE?
[ ] Good [ ] Average [ ] Fair [ ] Poor
Enter here, or on an attached sheet, any other information that would assist the Assessor in determining value of the
property such as the physical condition of the property, restrictions, etc.
__________________________________________________________________________________________________________________________________
I certify that the foregoing is true, correct and complete to the best of my knowledge and belief.
Signed ____________________________________________________
(New Owner/Corporate Officer)
Please Print Name of New Owner/Corporate Officer
Phone No. where you are available from 8:00 a.m. - 5:00 p.m. (__________) _______________________
(Note: The Assessor may contact you for further information)
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If a document evidencing a change of ownership is presented to the recorder for recordation without the concurrent filing of a
PRELIMINARY CHANGE OF OWNERSHIP REPORT, the recorder may charge an additional recording fee of twenty dollars ($20).
Exhibit C - Page 3
182
EXHIBIT D
XXXX OF SALE, ASSIGNMENT OF CONTRACT
RIGHTS AND INTANGIBLE ASSETS
Reference is made to that certain Agreement of Purchase and Sale dated
March 22, 1996 (the "Agreement") between RND Funding Company, Inc., as seller,
and BNP LEASING CORPORATION ("Assignor") as buyer.
Assignor hereby sells, transfers and assigns unto [CYPRESS OR THE
APPLICABLE PURCHASER, AS THE CASE MAY BE], a _____________ ("Assignee"), all
of Assignor's right, title and interest in and to the following property, if
any, to the extent such property is assignable:
(a) any warranties, guaranties, indemnities and claims Assignor may
have under the Agreement or under any document delivered by the seller
thereunder to the extent related to the real property described in Annex A
attached hereto (the "Property), including specifically, without limitation,
warranties, guaranties, indemnities and claims for workmanship, materials and
performance;
(b) all licenses, permits or similar consents (excluding any prepaid
utility reservations) from third parties to the extent related to the Property;
(c) Escrowed Proceeds (as defined in the Purchase Agreement hereinafter
described) and any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property;
(d) any goods, equipment, furnishings, furniture, chattels and personal
property of whatever nature that are located on or about the Property; and
(e) any general intangibles, permits, licenses, franchises, certificates,
and other rights and privileges owned by Assignor and used solely in connection
with, or relating solely to, the Property, including any such rights and
privileges conveyed to Assignor pursuant to the Agreement; but excluding any
rights or privileges of Assignor under (i) the Environmental Indemnity, as
defined in that certain Purchase Agreement between Assignor and Cypress
Semiconductor Corporation dated as of April __, 1996 (the "Purchase Agreement")
(pursuant to which this document is being delivered), (ii) the Lease, as
defined in the Purchase Agreement, to the extent rights under the Lease relate
to the period ending on the date hereof, whether such rights are presently
known or unknown, including rights of the Assignor to be indemnified against
claims of third parties as provided in the Lease which may not presently be
known, and including rights to recover any accrued unpaid rent under the Lease
which may be outstanding as of the date hereof, (iii) agreements between
Assignor and Participants, as defined in the Lease, or any modification or
extension thereof, and (iv) any other instrument being delivered to Assignor
contemporaneously herewith pursuant to the Purchase Agreement.
183
Assignor does for itself and its heirs, executors and administrators,
covenant and agree to warrant and defend the title to the property assigned
herein against any Landlord's Liens (as defined in the Lease referenced above),
but not otherwise.
Assignee hereby assumes and agrees to keep, perform and fulfill
Assignor's obligations, if any, relating to any permits or contracts, under
which Assignor has rights being assigned herein.
Executed: ____________________, ____.
ASSIGNOR:
BNP LEASING CORPORATION
a Delaware corporation
By:_____________________________________
Its:____________________________________
ASSIGNEE:
[Cypress, or the Applicable Purchaser],
a _________ corporation
By:_____________________________________
Its:____________________________________
Exhibit D - Page 2
184
ANNEX A
Legal Description
Real Property in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows:
[INSERT PROPERTY DESCRIPTION IDENTICAL TO EXHIBIT A TO THIS AGREEMENT.]
Exhibit D - Page 3
185
EXHIBIT E
ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES (this
"Certificate") is made as of ___________________, ____, by [CYPRESS OR THE
APPLICABLE PURCHASER, AS THE CASE MAY BE], a ___________________ ("Grantee").
Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNP"), is executing and delivering to
Grantee (1) a Corporation Grant Deed and (2) a Xxxx of Sale, Assignment of
Contract Rights and Intangible Assets (the foregoing documents and any other
documents to be executed in connection therewith are herein called the
"Conveyancing Documents" and any of the properties, rights or other matters
assigned, transferred or conveyed pursuant thereto are herein collectively
called the "Subject Property").
NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS TO
THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNP MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees
that warranties of merchantability and fitness for a particular purpose are
excluded from the transaction contemplated by the Conveyancing Documents, as
are any warranties arising from a course of dealing or usage of trade. Grantee
hereby assumes all risk and liability (and agrees that BNP shall not be liable
for any special, direct, indirect, consequential, or other damages) resulting
or arising from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property, except for damages
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Misconduct of BNP or any Participant. For purposes
hereof, "Misconduct" shall have the meaning assigned to it the Lease Agreement
between BNP and Cypress Semiconductor Corporation dated April __, 1996. Such
Lease Agreement is referenced in the Purchase Agreement of even date therewith
between BNP and Cypress Semiconductor Corporation, pursuant to which the
Conveyancing Documents are being delivered.
The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNP is entitled to rely and is relying on this
Certificate.
186
EXECUTED as of ________________, _____.
______________________________, a __________________________
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
E-2
187
EXHIBIT F
DOCUMENTARY TRANSFER TAX REQUEST
ACCOUNTABLE FORM #
DATE:_____________________________
To: Santa Xxxxx County Recorder
Subject: REQUEST THAT DOCUMENTARY TRANSFER TAX DECLARATION BE MADE IN
ACCORDANCE WITH REVENUE CODE 11932.
Re: Instrument Title: Corporation Grant Deed
Name of Party Conveying Title: BNP Leasing Corporation
The Documentary Transfer Tax is declared to be in the amount of
$_______________ for the referenced instrument and is:
[ ] Computed on full value of property conveyed.
[ ] Computed on full value less liens/encumbrances remaining
thereon at time of sale.
This separate declaration is made in accordance with
_________________________________. It is requested that the amount paid not be
indicated on the face of the document after the permanent copy has been made.
Sincerely,
____________________________________________
Individual (or his agent) who made, signed
or issued instrument
PART I
RECORDING REFERENCE DATA:
Serial #______________________ Date Recorded_________________________
SEPARATE PAPER AFFIXED TO INSTRUMENT:
"Tax paid" indicated on the face of instrument and the separate request
(DRA 3-A) was affixed for Recorder by:
188
______________________________________ Date ___________
Documentary Transfer Tax Collector
Witnessed by:_____________________ Date________________
Mail Clerk
(Note: Prepare photo for Recorder file.)
PART II ACCOUNTABLE FORM #
------------------
REFERENCE DATA: Title: ________________________________________________________
Serial: ______________________________ Date:________________
INSTRUCTIONS:
1. This slip must accompany document.
2. Mail Clerk hand carry document to Tax Collector to indicate the
amount of tax paid.
F-2
189
EXHIBIT G
SECRETARY'S CERTIFICATE
The undersigned, _____________________ Secretary of BNP Leasing
Corporation, a Delaware corporation (the "Corporation"), hereby certifies as
follows:
1. That he is the duly, elected, qualified and acting Secretary [or
Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.
2. That the following named persons have been properly designated,
elected and assigned to the office in the Corporation as indicated below; that
such persons hold such office at this time and that the specimen signature
appearing beside the name of such officer is his or her true and correct
signature.
[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER REQUIRED DOCUMENTS ON BEHALF OF
THE CORPORATION.]
Name Title Signature
_________________ ____________________ __________________
_________________ ____________________ __________________
3. That the resolutions attached hereto and made a part hereof were
duly adopted by the Board of Directors of the Corporation in accordance with
the Corporation's Articles of Incorporation and Bylaws, as evidenced by the
signatures of all directors of the Corporation affixed thereto. Such
resolutions have not been amended, modified or rescinded and remain in full
force and effect.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this _____, day of ____________, 199__.
________________________________________
[signature]
190
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION
WHEREAS, pursuant to that certain Purchase Agreement (herein called the
"Purchase Agreement") dated as of April __, 1996, by and between BNP Leasing
Corporation (the "Corporation") and Cypress Semiconductor Corporation
("Purchaser"), the Corporation agreed to sell and Purchaser agreed to purchase
or cause the Applicable Purchaser (as defined in the Purchase Agreement) to
purchase the Corporation's interest in the property (the "Property") located in
Santa Xxxxx County, California more particularly described therein.
NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of
the Corporation and its shareholders that the Corporation convey the Property
to Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.
RESOLVED FURTHER, that the officers of the Corporation, and each of them,
are hereby authorized and directed in the name and on behalf of the Corporation
to cause the Corporation to fulfill its obligations under the Purchase
Agreement.
RESOLVED FURTHER, that the officers of the Corporation, and each of them,
are hereby authorized and directed to take or cause to be taken any and all
actions and to prepare or cause to be prepared and to execute and deliver any
and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.
IN WITNESS WHEREOF, we, being all the directors of the Corporation, have
hereunto signed our names as of the dates indicated by our signatures.
__________________________________[signature and date]
__________________________________[signature and date]
__________________________________[signature and date]
G-2
191
EXHIBIT H
BNP LEASING CORPORATION
000 X. XXXXXXX
XXXXX 0000
XXXXXX, XXXXX 00000
____________________, 199___
[Title Insurance Company]
___________________
___________________
___________________
Re: Recording of Grant Deed to [CYPRESS OR THE APPLICABLE PURCHASER, AS
THE CASE MAY BE] ("Purchaser")
Ladies and Gentlemen:
BNP Leasing Corporation has executed and delivered to Purchaser a Grant
Deed in the form attached to this letter. You are hereby authorized and
directed to record the Grant Deed at the request of Purchaser.
Sincerely,
192
EXHIBIT I
FIRPTA STATEMENT
Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of
a California real property interest must withhold income tax if the transferor
is a nonresident seller.
To inform [CYPRESS OR THE APPLICABLE PURCHASER, AS THE CASE MAY BE] (the
"Transferee") that withholding of tax is not required upon the disposition of a
California real property interest by transferor, BNP Leasing Corporation (the
"Seller"), the undersigned hereby certifies the following on behalf of the
Seller:
1. The Seller is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. The United States employer identification number for the Seller is
_____________________;
3. The office address of the Seller is ______________
__________________________________________.
[NOTE: BNP MUST INCLUDE EITHER ONE, BUT ONLY ONE, OF THE FOLLOWING
REPRESENTATIONS IN THE FIRPTA STATEMENT, BUT IF THE ONE INCLUDED STATES THAT
BNP IS DEEMED EXEMPT FROM CALIFORNIA INCOME AND FRANCHISE TAX, THEN BNP MUST
ALSO ATTACH A WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE TAX BOARD
EVIDENCING THE SAME:
4. THE SELLER IS QUALIFIED TO DO BUSINESS IN CALIFORNIA.
OR
4. THE SELLER IS DEEMED TO BE EXEMPT FROM THE WITHHOLDING REQUIREMENT OF
CALIFORNIA REVENUE AND TAXATION CODE SECTION 26131(E), AS EVIDENCED BY THE
WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE TAX BOARD WHICH IS
ATTACHED.]
The Seller understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.
The Seller understands that the Transferee is relying on this affidavit
in determining whether withholding is required upon said transfer. The Seller
hereby agrees to indemnify and hold the Transferee harmless from and against
any and all obligations, liabilities, claims, losses, actions, causes of
193
action, demands, rights, damages, costs, and expenses (including but not
limited to court costs and attorneys' fees) incurred by the Transferee as a
result of any false misleading statement contained herein.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this document
on behalf of the Seller.
Dated: ___________, _____.
By:________________________________
Name: __________________________
Title: _________________________
I-2
194
EXHIBIT J
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
Attn: ______________________________
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ASSIGNMENT AND ASSUMPTION OF GRANTOR'S RIGHTS
UNDER DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS FOR OAKMEAD-SAN XXXX
This Assignment and Assumption ("Assignment") is made as of this ____ day
of , ___________ by and between BNP LEASING CORPORATION, a Delaware corporation
("Assignor") and _ [CYPRESS OR THE APPLICABLE PURCHASER], a
___________________________________("Assignee").
Recitals
A. Oakmead-San Xxxx, a California general partnership ("Oakmead-San
Xxxx"), by the execution of a document entitled "Declaration of Covenants,
Conditions and Restrictions for Oakmead-San Xxxx" dated May 31, 1983 (the
"Declaration") and filed for record in the official records of Santa Xxxxx
County on June 3, 1983 in Book H604, Page 334, Recorder's Series No. 7702643,
and amended by (i) that First Amendment to Covenants, Conditions and
Restrictions for Oakmead-San Xxxx dated December 23, 1983, and filed for record
in the official records of Santa Xxxxx County on January 26, 1984 in Book I257,
Page 252, Recorder's Series No. 7958309, (ii) that Second Amendment to
Declaration of Covenants, Conditions and Restrictions for Oakmead-San Xxxx
dated as of October 14, 1988, and filed for record in the official records of
Santa Xxxxx County on October 18, 1988 in Book K721, Page 265, Recorder's
Series No. 9874588, (iii) Third Amendment to Declaration of Covenants,
Conditions and Restrictions for Oakmead-San Xxxx and First Amendment to
Declaration of Covenants, Conditions and Restrictions for Oakmead-San Xxxx Sign
and Landscape Maintenance Association dated as of July 12, 1989, and filed
195
for record in the official records of Santa Xxxxx County on July 19, 1989 in
Book L024, Page 587, Recorder's Series No. 10184069, and (iv) Partial
Termination of Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Xxxx dated as of September 12, 1989, and filed for record in the
official records of Santa Xxxxx County on September 18, 1989 in Book L097, Page
1662, Recorder's Series No. 10259002 (all of the foregoing collectively, the
"CC&Rs"), imposed certain restrictions upon that real property situated in the
County of Santa Xxxxx, State of California more particularly described in
Exhibit A to the Declaration, as amended (the "Oakmead-San Xxxx Property").
B. Article VIII, Section 8.1.1 of the CC&Rs provides that any and all
of the rights, powers and reservations of "Grantor" (as defined in the CC&Rs)
contained in the CC&Rs may be assigned to any person, corporation or
association, with such assignment to be evidenced by a recorded instrument
executed by the assignor and assignee of such rights, powers and reservations.
C. Pursuant to that certain Assignment and Assumption of Grantor's
Rights Under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Xxxx and Removal of Approving Agent dated as of April 20, 1989 by
and between Oakmead-San Xxxx, as grantor, and Oakmead Building Associates, a
California general partnership ("Oakmead"), as assignee, and filed for record
in the official records of Santa Xxxxx County on April 26, 1989 in Book K927,
Page 261, Recorder's Series No. 10087302, Oakmead-San Xxxx assigned its rights,
powers and reservations as Grantor under the CC&Rs to Oakmead and Oakmead
accepted such rights, powers and reservations with respect to certain of the
Oakmead-San Xxxx Property described therein.
D. Pursuant to that certain Assignment and Assumption of Grantor's
Rights Under Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Xxxx dated as of September 1, 1994 by and between Oakmead, as
grantor, and Assignor, as assignee, and filed for record in the official
records of Santa Xxxxx County on _________________, 1994 in Book _________,
Page _______, Recorder's Series No. ______________________, Oakmead assigned
its rights, powers and reservations as Grantor under the CC&Rs to Assignor and
Assignor accepted such rights, powers and reservations with respect to certain
of the Oakmead-San Xxxx Property described therein.
E. Concurrently herewith Assignee is purchasing from Assignor a
portion of the Oakmead-San Xxxx Property more particularly described in Annex
A-1 ("_________________") and in Annex A-2 ("______ _________";
_________________________ are collectively referred to herein as the "Subject
Property").
F. In connection with the purchase and sale of the Subject Property,
Assignor desires to assign to Assignee all of its rights, powers and
reservations as Grantor contained in the CC&Rs with respect to the Subject
Property, and Assignee desires to accept the assignment thereof and assume the
obligations of Grantor contained in the CC&Rs with respect to the Subject
Property.
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, Assignor and Assignee hereby agree as follows:
1. Assignor hereby assigns to Assignee all of the rights, powers and
reservations of Assignor, as Grantor, contained in the CC&Rs with respect to
the Subject Property, including, without limitation, (i) all of the
responsibilities and approval rights of the Approving Agent (as defined in the
CC&Rs) in connection with the implementation of the restrictions contained in
the CC&Rs, in the Design Guidelines (as defined in the CC&Rs), and in that
document entitled "Declaration of Covenants, Conditions and Restrictions for
Oakmead-San Xxxx Sign and Landscape Maintenance Association", dated May 31,
1983, and recorded June 3, 1983, Book H604, Page 505, Recorder's Series No.
7702644, as
J-2
196
amended by that certain Third Amendment to Declaration of Covenants, Conditions
and Restrictions for Oakmead-San Xxxx and First Amendment to Declaration of
Covenants, Conditions and Restrictions for Oakmead-San Xxxx Sign and Landscape
Maintenance Association dated as of July 12, 1989, and filed for record in the
official records of Santa Xxxxx County on July 19, 1989 in Book L024, Page 587,
Recorder's Series Xx. 00000000 (xxx "Xxxxxxxxx XX&Xx"), (xx) all of the rights
to enforce the provisions of the CC&Rs and the Landscape CC&Rs, which are given
to the Approving Agent in those respective documents, (iii) the right of
Assignor, as Grantor, to designate a representative to perform the duties of
the Approving Agent under the CC&Rs, the Landscape CC&Rs and under the Design
Guidelines, with respect to the Subject Property, (iv) the right to amend,
modify, rescind or change the Design Guidelines with respect to the Subject
Property, (v) the right to further assign the rights, powers and reservations
of Grantor with respect to all or any portion of the Subject Property; and (vi)
the right to negotiate with the City of San Xxxx and/or the City of San Xxxx
Redevelopment Agency and/or any other appropriate governmental agency to enter
into agreements and establish payment methods for on-going maintenance, with
respect to the Subject Property.
2. Assignor warrants and represents that as of the date hereof none of
the rights, powers and reservations of Assignor, as Grantor under the CC&Rs
with respect to the Subject Property, have been assigned to any other party.
3. Assignee hereby accepts the assignment of and assumes all of
Assignor's rights, powers and reservations as Grantor under the CC&Rs with
respect to the Subject Property and agrees to be subject to the same
obligations and duties as are given to and assumed by Assignor, as Grantor in
the CC&Rs with respect only to the Subject Property and Assignor is hereby
relieved of such obligations and duties.
4. In the event of litigation between Assignor and Assignee with
respect to this Assignment, the prevailing party shall be entitled to receive
all costs and expenses of such litigation, including attorneys' fees from the
other party.
5. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their successors and assigns.
6. Reference is hereby made to each exhibit attached hereto for all
purposes.
7. This Assignment may be executed in counterparts, all of which
counterparts shall constitute but one and the same original.
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197
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
as of the day and year first above written.
ASSIGNOR:
BNP LEASING CORPORATION, a Delaware
corporation
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
ASSIGNEE:
__________________________________________
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
X-0
000
XXXXX OF ______ Section
Section
COUNTY OF ______ Section
On _____________, ____, before me, ________________________, personally
appeared _________________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
___________________________________
Notary Signature - State of Texas
J-5
199
STATE OF ________________ Section
Section
COUNTY OF _______________ Section
On _____________, ____, before me, ________________________, personally
appeared _________________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________________
Notary Signature - State of ____________
STATE OF ________________ Section
Section
COUNTY OF _______________ Section
On _____________, ____, before me, ________________________, personally
appeared _________________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________________
Notary Signature - State of ____________
J-6
200
ANNEX X-0
X-0
000
XXXXX X-0
X-0
202
EXHIBIT K
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "AGREEMENT") is made as of
_________________, _____, by CYPRESS SEMICONDUCTOR CORPORATION, a Delaware
corporation ("PURCHASER") [OR THE APPLICABLE PURCHASER] and BNP LEASING
CORPORATION, a Delaware corporation ("SELLER") and ___________________________
("TITLE COMPANY").
R E C I T A L S
A. Purchaser is acquiring the land described in Annex A attached
hereto and any improvements located thereon (the "PROPERTY") pursuant to the
terms and conditions of that certain Purchase Agreement dated April __, 1996 by
between Seller and Purchaser [or Cypress Semiconductor Corporation] (the
"PURCHASE AGREEMENT").
B. In connection with its acquisition of the Property, Seller has been
notified as contemplated by the Purchase Agreement that the matters described
in Annex B attached hereto (the "RELEVANT ENCUMBRANCES") have been identified
as encumbrances upon title to the Property and that such matters, to the extent
valid, constitute Landlord's Liens as defined in the Purchase Agreement.
C. Because of such notice to Seller, Seller is required by the
Purchase Agreement to tender this Indemnity Agreement to Purchaser.
NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Seller must promptly remove any of the Relevant Encumbrances that
constitute "LANDLORD'S LIENS" (which for purposes of this Indemnity Agreement
shall have the meaning assigned to it in the Purchase Agreement by reference to
a Lease Agreement described therein). Seller must also pay, indemnify and hold
harmless Purchaser, the Title Company, the Purchaser's successors and assigns
as to the Property and the Title Company's successors and assigns as to any
title insurance policy issued to Purchaser by the Title Company covering the
Property from and against any and all liabilities, damages, claims, actions,
judgments, costs and expenses (including, without limitation, reasonable
attorneys' fees) caused by Seller's failure to promptly remove any of the
Relevant Encumbrances that constitute Landlord's Liens.
Nothing herein shall be construed as an admission by Seller that any of
the Relevant Encumbrances do constitute Landlord's Liens or as imposing a duty
upon Seller to remove or defend against claims arising out of any Relevant
Encumbrances that do not constitute Landlord's Liens. Nothing herein contained
shall limit Purchaser's rights or remedies under the Purchase Agreement because
of any failure by BNP to remove all Landlord's Liens before conveying the
Property.
K-1
203
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
SELLER, PURCHASER AND THE TITLE COMPANY EACH HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY OTHER DOCUMENT, OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Purchaser, Seller and the Title Company each acknowledge
that this waiver is a material inducement to enter into a business
relationship, that each has already relied on the waiver in entering into this
Agreement and the other documents referred to herein, and that each will
continue to rely on the waiver in their related future dealings. Purchaser,
Seller and the Title Company each further warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LEASE OR THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
K-2
204
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Seller"
BNP LEASING CORPORATION, a Delaware
corporation
By:_________________________________________
Xxxxx Xxx, Vice President
"Purchaser"
CYPRESS SEMICONDUCTOR CORPORATION, a
Delaware corporation
By:_________________________________________
Name: ______________________
Title: ______________________
"Title Company"
_________________________________, a
_______________________
By:_________________________________________
Name: ______________________
Title: ______________________
K-3
205
ANNEX A
Property Description
Real Property in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows:
[INSERT PROPERTY DESCRIPTION IDENTICAL TO EXHIBIT A TO THIS AGREEMENT.]
K-1
206
ANNEX B
Relevant Encumbrances
[THIS ANNEX IS TO BE COMPLETED BY A LIST OF POSSIBLE LANDLORD'S LIENS
IDENTIFIED BY CYPRESS AND AGAINST WHICH CYPRESS HAS NOT BEEN ABLE TO OBTAIN
TITLE INSURANCE.]
