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EXHIBIT 10.4
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$16,000,000
AMENDED AND RESTATED
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
FORCE COMPUTERS, INC.
("FCI")
JULY 16, 1998
(SAN JOSE, CALIFORNIA)
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PURSUANT TO AND AS MORE PARTICULARLY PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE,
THIS LEASE AND THE PURCHASE AGREEMENT REFERENCED HEREIN ARE TO CONSTITUTE, FOR
INCOME TAX PURPOSES ONLY, A FINANCING ARRANGEMENT OR CONDITIONAL SALE. AS
PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE, BNPLC AND FCI EXPECT THAT FCI (AND
NOT BNPLC) SHALL BE TREATED AS THE TRUE OWNER OF THE PROPERTY FOR INCOME TAX
PURPOSES, THEREBY ENTITLING FCI (AND NOT BNPLC) TO TAKE DEPRECIATION DEDUCTIONS
AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER.
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TABLE OF CONTENTS
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1. TERM.................................................................................2
(a) Scheduled Term................................................................2
(b) Automatic Termination as of the Base Rent Commencement Date Resulting From an
Election by FCI to Terminate the Purchase Option and FCI's Initial Remarketing
Rights and Obligations........................................................2
(c) Election by BNPLC to Terminate After an Issue 97-10 Election..................2
(d) Election by FCI to Terminate After Accelerating the Designated Sale Date......3
(e) Extension of the Term.........................................................3
2. NO LEASE TERMINATION.................................................................3
(a) Status of Lease...............................................................3
(b) Waiver by FCI.................................................................4
3. USE AND CONDITION OF THE PROPERTY....................................................4
(a) Use...........................................................................4
(b) Condition of the Property.....................................................5
(c) Consideration for and Scope of Waiver.........................................5
4. RENT.................................................................................5
(a) Base Rent Generally...........................................................5
(b) Calculation of and Due Dates for Base Rent....................................6
(i) Amount Payable On the Base Rent Commencement Date......................6
(ii) Determination of Subsequent Payment Due Dates..........................6
(iii) Base Rent Formula......................................................6
(c) Additional Rent...............................................................6
(d) Commitment Fees...............................................................7
(e) Administrative Agency Fees....................................................7
(f) Issue 97-10 Prepayments.......................................................7
(g) No Demand or Setoff...........................................................7
(h) Default Interest and Order of Application.....................................7
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY........................7
(a) "Net" Lease Generally.........................................................8
(b) Impositions...................................................................8
(c) Increased Costs; Capital Adequacy Charges.....................................8
(d) FCI's Payment of Other Losses; General Indemnification........................9
(e) Exceptions and Qualifications to Indemnities.................................10
(f) Withholding Taxes............................................................12
6. CONSTRUCTION OF NEW IMPROVEMENTS....................................................13
(a) Advances; Outstanding Construction Allowance.................................13
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(b) Calculation of Carrying Costs................................................13
(i) Carrying Costs Formula................................................13
(ii) Limits on the Amount of Carrying Costs................................13
(c) FCI's Right to Control the Construction Project..............................14
(d) Landlord's Election to Continue Construction.................................14
(i) Take Control of the Property..........................................14
(ii) Continuation of Construction..........................................14
(iii) Arrange for Turnkey Construction......................................15
(iv) Suspension or Termination of Construction.............................15
(e) Powers Coupled With an Interest..............................................16
(f) Completion Notice............................................................16
7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC...........................16
(a) Cooperation of BNPLC to Facilitate Construction and Development..............16
(b) Actions Permitted by FCI Without BNPLC's Consent.............................17
(c) Waiver of Landlord's Liens...................................................18
(d) Limited Representations by BNPLC Concerning Accounting Matters...............18
(e) Other Limited Representations by BNPLC.......................................19
(i) No Default or Violation...............................................19
(ii) No Suits..............................................................19
(iii) Enforceability........................................................19
(iv) Organization..........................................................20
(v) Not a Foreign Person..................................................20
(f) Keeping Proprietary Information Confidential.................................20
8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC............................20
9. ENVIRONMENTAL.......................................................................21
(a) Environmental Covenants by FCI...............................................21
(b) Right of BNPLC to do Remedial Work Not Performed by FCI......................21
(c) Environmental Inspections and Reviews........................................22
(d) Communications Regarding Environmental Matters...............................22
10. INSURANCE REQUIRED AND CONDEMNATION.................................................23
(a) Liability Insurance..........................................................23
(b) Property Insurance...........................................................23
(c) Failure to Obtain Insurance..................................................24
(d) Condemnation.................................................................24
11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS..................................24
(a) Collection of Insurance and Condemnation Proceeds Generally..................24
(b) Administration of Remaining Proceeds; FCI's Obligation to Restore............25
(c) Special Provisions Concerning CMA Termination Events, Events of Default and
Qualified Payments...........................................................25
(d) Takings of All or Substantially All of the Property..........................26
(e) Waiver of Subrogation........................................................26
12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF FCI
CONCERNING THE PROPERTY.............................................................26
(ii)
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(a) Compliance with Covenants and Laws...........................................26
(b) Operation of Property........................................................27
(c) Debts for Construction, Maintenance, Operation or Development................27
(d) Repair, Maintenance, Alterations and Additions...............................28
(e) Compliance With Permitted Encumbrances and Development Contracts.............28
(f) Modification of Permitted Encumbrances and Development Contracts.............29
(g) Books and Records Concerning the Property....................................29
13. ASSIGNMENT AND SUBLETTING BY FCI....................................................29
(a) BNPLC's Consent Required.....................................................29
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters........29
(c) Consent Not a Waiver.........................................................30
14. ASSIGNMENT BY BNPLC.................................................................30
(a) Restrictions on Transfers....................................................30
(b) Effect of Permitted Transfer or other Assignment by BNPLC....................30
15. BNPLC'S RIGHT OF ACCESS.............................................................30
16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF FCI..............................31
(a) Negative Covenants...........................................................31
(i) Multi employer ERISA Plans............................................31
(ii) Prohibited ERISA Transaction..........................................31
(b) Financial Statements; Required Notices; Certificates as to Default...........31
(c) No Default or Violation......................................................32
(d) No Suits.....................................................................32
(e) Enforceability...............................................................32
(f) Financial Matters............................................................33
(g) Organization.................................................................33
(h) ERISA........................................................................33
(i) Use of Proceeds..............................................................33
(j) Investment Company Act.......................................................34
(k) Omissions....................................................................34
(l) Not a Foreign Person.........................................................34
(m) Further Assurances...........................................................34
17. EVENTS OF DEFAULT...................................................................34
(a) Definition of Events of Default..............................................34
18. REMEDIES............................................................................36
(a) Basic Remedies...............................................................36
(b) Notice Required So Long As FCI 's Purchase Option and Initial Remarketing
Rights and Obligations Continue Under the Purchase Agreement.................38
(c) Enforceability...............................................................38
(d) Remedies Cumulative..........................................................38
19. DEFAULT BY BNPLC....................................................................39
20. QUIET ENJOYMENT.....................................................................39
(iii)
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21. SURRENDER UPON TERMINATION..........................................................39
22. HOLDING OVER BY FCI.................................................................40
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS..................40
24. WAIVER OF JURY TRIAL................................................................40
25. MISCELLANEOUS.......................................................................41
(a) Notices......................................................................41
(b) Severability.................................................................42
(c) No Merger....................................................................42
(d) No Implied Waiver............................................................42
(e) NO IMPLIED REPRESENTATIONS BY BNPLC..........................................43
(f) Entire Agreement.............................................................43
(g) Binding Effect...............................................................43
(h) Time is of the Essence.......................................................43
(i) Governing Law................................................................43
(j) Paragraph Headings...........................................................43
(k) Other Terms and References...................................................43
(l) Not a Partnership, Etc.......................................................43
26. INCOME TAX REPORTING................................................................44
27. PROPRIETARY INFORMATION AND CONFIDENTIALITY.........................................45
28. USURY SAVINGS CLAUSE................................................................45
(iv)
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EXHIBITS AND SCHEDULES
Exhibit A....................................................................Legal Description
Exhibit B...........................................................Permitted Encumbrance List
Exhibit C..........Notice by FCI of Election Not to Make Construction-Period Indemnity Payment
Exhibit D.......................................Standard Notice of Request for Action by BNPLC
Exhibit E....................................Notice of Request Requiring an Expedited Response
Exhibit F...............................................................Insurance Requirements
Exhibit G...............................................................Compliance Certificate
Exhibit H...........................................................Libor Period Election Form
Schedule 1.......................................................List of Development Documents
Schedule 2...........................List of Claims Pending or Threatened Against the Property
List of Defined Terms.......................................................Shared Definitions
(v)
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AMENDED AND RESTATED
LEASE AGREEMENT
This AMENDED AND RESTATED LEASE AGREEMENT (this "LEASE"), by and between
BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and FORCE COMPUTERS,
INC., a Delaware corporation ("FCI"), is dated as of July 16, 1998, the
Effective Date. ("EFFECTIVE DATE" and other capitalized terms used and not
otherwise defined in this Lease are intended to have the meanings assigned to
them in the List of Defined Terms attached to and made a part of this Lease.)
RECITALS
Pursuant to the Existing Contract, which covers the Land described in
Exhibit A, BNPLC acquired the Land and any appurtenances thereto from Seller on
or about July 16, 1998. Contemporaneously with the purchase of the Land, BNPLC
leased it to FCI pursuant to a Lease Agreement dated as of July 16, 1998. The
parties wish to amend and restate the Lease Agreement to incorporate certain
changes mutually acceptable to the parties. This Amended and Restated Lease
Agreement incorporates such changes and amends, restates and replaces the prior
Lease Agreement in its entirety as of the Effective Date.
GRANTING CLAUSES
In consideration of the rent to be paid and the covenants and agreements
to be performed by FCI, as hereinafter set forth, BNPLC does hereby LEASE,
DEMISE and LET unto FCI for the term hereinafter set forth all right, title and
interest of BNPLC, now owned or hereafter acquired, in and to:
(1) the Land;
(2) any and all Improvements acquired from Seller pursuant to
the Existing Contract and all Improvements hereafter constructed as
described in the Operative Documents;
(3) all easements and other rights appurtenant to the Land or to
the Improvements, whether now owned or hereafter acquired by BNPLC; and
(4) (A) any land lying within the right-of-way of any street,
open or proposed, adjoining the Land, (B) any sidewalks and alleys
adjacent to the Land and (C) any strips and gores between the Land and
abutting land.
BNPLC's interest in all property described in clauses (1) through (4) above are
hereinafter referred to collectively as the "REAL PROPERTY".
To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contract or acquired by BNPLC pursuant to Paragraph 8 below,
BNPLC also hereby grants and assigns to FCI for the term of this Lease the right
to use and enjoy (and, in the case of contract rights, to enforce) such rights
or interests of BNPLC:
(a) any goods, equipment, furnishings, furniture and other
tangible personal property of whatever nature that are located on the
Real Property and all renewals or replacements of or substitutions for
any of the foregoing;
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(b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and
(c) any permits, licenses, franchises, certificates, and other
rights and privileges against third parties related to the Real
Property.
Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."
However, the leasehold estate conveyed hereby and FCI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Lease, to the matters listed in Exhibit B and all other Permitted Encumbrances),
and to any other claims or encumbrances not constituting Liens Removable by
BNPLC.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to FCI and is accepted and is to be used
and possessed by FCI upon and subject to the following terms and conditions:
1. TERM.
(a) Scheduled Term. This Lease is intended to be an effective
and binding obligation upon BNPLC and FCI throughout the period (the "TERM")
commencing on and including the Effective Date and ending on the first Business
Day of August, 2003, unless extended or sooner terminated as expressly herein
provided; however, the rights of FCI as the tenant hereunder to the use,
occupancy and possession of the Land and the Improvements will not commence
until the Base Rent Commencement Date. Prior to the Base Rent Commencement Date,
FCI's will have the right under and pursuant to the rights and authority granted
to it by the Construction Management Agreement to the use, occupancy and
possession of the Land and the Improvements in its capacity as construction
manager. Such right of FCI as construction manager will be to the exclusion of
BNPLC, but subject to the terms and conditions set forth therein, herein and in
the other Operative Documents, so long as the Construction Management Agreement
remains in force.
(b) Automatic Termination as of the Base Rent Commencement Date
Resulting From an Election by FCI to Terminate the Purchase Option and FCI's
Initial Remarketing Rights and Obligations. If FCI terminates the Purchase
Option and FCI's Initial Remarketing Rights and Obligations prior to the Base
Rent Commencement Date pursuant to subparagraph 4(B) of the Purchase Agreement,
then this Lease shall terminate automatically on the Base Rent Commencement
Date. Just as any such termination of the Purchase Option and FCI's Initial
Remarketing Rights and Obligations shall be subject to the condition (set forth
in subparagraph 4(B) of the Purchase Agreement) that FCI pay an Issue 97-10
Prepayment to BNPLC, so too will the termination of this Lease pursuant to this
subparagraph be subject the condition that FCI make the Issue 97-10 Prepayment
to BNPLC.
(c) Election by BNPLC to Terminate After an Issue 97-10
Election. BNPLC shall be entitled to terminate this Lease, as BNPLC deems
appropriate in its sole and absolute discretion, at any time after receiving a
notice given by FCI to make or attempt to make any Issue 97-10 Election. Upon
any termination of this Lease by BNPLC pursuant to this subparagraph, FCI must
pay to BNPLC an Issue 97-10 Prepayment.
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(d) Election by FCI to Terminate After Accelerating the
Designated Sale Date. Provided FCI has not made any Issue 97-10 Election, FCI
shall be entitled to accelerate the Designated Sale Date (and thus accelerate
the purchase of BNPLC's interest in the Property by FCI or by an Applicable
Purchaser pursuant to the Purchase Agreement) by sending a notice to BNPLC as
provided in clause (2) of the definition of "Designated Sale Date" in the List
of Defined Terms. In the event, because of FCI's election to so accelerate the
Designated Sale Date or for any other reason, the Designated Sale Date occurs
before the end of the scheduled Term, FCI may terminate this Lease on or after
the Designated Sale Date; provided, however, as a condition to any such
termination by FCI, FCI must have done the following prior to the termination:
(i) purchased or caused an Applicable Purchaser to purchase
the Property pursuant to the Purchase Agreement and satisfied all of
FCI's other obligations under the Purchase Agreement;
(ii) paid to BNPLC all Base Rent, all Commitment Fees, all
Administrative Agency Fees and all other Rent due on or before or
accrued through the Designated Sale Date; and
(iii) paid any Breakage Costs caused by BNPLC's sale of the
Property pursuant to the Purchase Agreement.
(e) Extension of the Term. The Term may be extended at the
option of FCI for two successive periods of five (5) years each; provided,
however, that prior to any such extension the following conditions must have
been satisfied: (A) at least one hundred eighty (180) days prior to the
commencement of any such extension, BNPLC and FCI must have agreed in writing
upon, and received the written consent and approval of BNPLC's Parent and all
other Participants to (1) a corresponding extension not only to the date for the
expiration of the Term specified above in this Section, but also to the date
specified in clause (1) of the definition of Designated Sale Date in the List of
Defined Terms attached hereto, and (2) an adjustment to the Rent that FCI will
be required to pay for the extension, it being expected that the Rent for the
extension may be different than the Rent required for the original Term, and it
being understood that the Rent for any extension must in all events be
satisfactory to both BNPLC and FCI, each in its sole and absolute discretion;
(B) there must be no Event of Default continuing hereunder at the time of FCI's
exercise of its option to extend; (C) prior to any such extension, FCI must have
completed the Construction Project in accordance with the Construction
Management Agreement and must not have made any Issue 97-10 Election; and (D)
immediately prior to any such extension, this Lease must remain in effect. With
respect to the condition that BNPLC and FCI must have agreed upon the Rent
required for any extension of the Term, neither FCI nor BNPLC is willing to
submit itself to a risk of liability or loss of rights hereunder for being
judged unreasonable. Accordingly, both FCI and BNPLC hereby disclaim any
obligation express or implied to be reasonable in negotiating the Rent for any
such extension. Subject to the changes to the Rent payable during any extension
of the Term as provided in this Paragraph, if FCI exercises its option to extend
the Term as provided in this Paragraph, this Lease shall continue in full force
and effect, and the leasehold estate hereby granted to FCI shall continue
without interruption and without any loss of priority over other interests in or
claims against the Property that may be created or arise after the date hereof
and before the extension.
2. NO LEASE TERMINATION.
(a) Status of Lease. Except as expressly provided herein, this
Lease shall not terminate, nor shall FCI have any right to terminate this Lease,
nor shall FCI be entitled to any abatement of the Rent, nor shall the
obligations of FCI under this Lease be excused, for any reason whatsoever,
including any of the following: (i) any damage to or the destruction of all or
any part of the Property from whatever cause, (ii) the taking of the Property or
any portion thereof by eminent domain or otherwise for any reason, (iii) the
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prohibition, limitation or restriction of FCI'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 FCI or of anyone claiming through or under FCI (provided,
that if FCI is wrongfully evicted by BNPLC or by any third party lawfully
exercising its rights under a Lien Removable by BNPLC, then FCI will have the
remedies described in Xxxxxxxxx 00 xxxxx), (x) any default on the part of BNPLC
under this Lease or under any other agreement to which BNPLC and FCI are
parties, (vi) the inadequacy in any way whatsoever of the design, construction,
assembly or installation of any improvements, fixtures or tangible personal
property included in the Property, it being understood that BNPLC has not made,
does not make and will not make any representation express or implied as to the
adequacy thereof, (vii) any latent or other defect in the Property or any change
in the condition thereof or the existence with respect to the Property of any
violations of Applicable Laws, (viii) any breach by Seller of the surviving
provisions of the Existing Contract, or (ix) any other cause whether similar or
dissimilar to the foregoing. It is the intention of the parties hereto that the
obligations of FCI hereunder shall be separate and independent of the covenants
and agreements of BNPLC, that the Base Rent and all other sums payable by FCI
hereunder shall continue to be payable in all events and that the obligations of
FCI hereunder shall continue unaffected, unless the requirement to pay or
perform the same shall have been terminated or limited pursuant to an express
provision of this Lease.
(b) Waiver by FCI. Without limiting the foregoing, FCI waives to
the extent permitted by Applicable Laws, except as otherwise expressly provided
herein, all rights to which FCI may now or hereafter be entitled by law
(including any such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to quit, terminate or
surrender this Lease or the Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.
However, nothing in this Paragraph 2 shall be construed as a waiver by
FCI of any right FCI may have at law or in equity to the following remedies,
whether because of BNPLC's failure to remove a Lien Removable by BNPLC or
because of any other default by BNPLC under this Lease that continues beyond the
period for cure provided in Paragraph 19: (i) the recovery of monetary damages,
(ii) injunctive relief in case of the violation, or attempted or threatened
violation, by BNPLC of any of the express covenants, agreements, conditions or
provisions of this Lease which are binding upon BNPLC (including the
confidentiality provisions set forth in subparagraph 7.(f) below), or (iii) a
decree compelling performance by BNPLC of any of the express covenants,
agreements, conditions or provisions of this Lease which are binding upon BNPLC.
3. USE AND CONDITION OF THE PROPERTY.
(a) Use. Subject to the Permitted Encumbrances, the
Development Documents and the terms hereof, FCI may use and occupy the Property
during the Term, but only for the following purposes and other lawful purposes
incidental thereto:
(i) manufacturing, engineering, assembly, warehousing and
laboratory-based research and development of circuit boards,
computer-related and other electronic products;
(ii) administrative and office space;
(iii) cafeteria, library, and other support function uses
that FCI may provide to its employees; and
(iv) other lawful uses approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but FCI acknowledges that
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BNPLC's withholding of such approval shall be reasonable if BNPLC
determines in good faith that (i) giving the approval may materially
increase BNPLC's risk of liability for any existing or future
environmental problem, or (ii) giving the approval is likely to
substantially increase BNPLC's administrative burden of complying with
or monitoring FCI's compliance with the requirements of this Lease or
other Operative Documents).
Although the term "products" in this subparagraph may include products designed
to detect, monitor, neutralize, handle or process Hazardous Substances, the use
of the Property by FCI shall not include bringing Hazardous Substances onto the
Property for the purpose of testing or demonstrating any such products.
(b) Condition of the Property. FCI ACKNOWLEDGES THAT IT HAS
CAREFULLY AND FULLY INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY IN ITS
PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO THE USE WHICH MAY BE MADE
THEREOF. FCI ALSO ACCEPTS THE PROPERTY WITHOUT ANY COVENANT, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS AFFILIATES REGARDING THE TITLE
THERETO OR THE RIGHTS OF ANY PARTIES IN POSSESSION OF ANY PART THEREOF, EXCEPT
AS EXPRESSLY SET FORTH IN PARAGRAPH 20. BNPLC SHALL NOT BE RESPONSIBLE FOR ANY
LATENT OR OTHER DEFECT OR CHANGE OF CONDITION IN THE LAND, IMPROVEMENTS,
FIXTURES AND PERSONAL PROPERTY FORMING A PART OF THE PROPERTY OR FOR ANY
VIOLATIONS WITH RESPECT THERETO OF APPLICABLE LAWS. NOR SHALL BNPLC BE REQUIRED
TO FURNISH TO FCI ANY FACILITIES OR SERVICES OF ANY KIND, INCLUDING WATER,
STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR POWER.
(c) Consideration for and Scope of Waiver. The provisions of
subparagraph 3.(b) above have been negotiated by BNPLC and FCI after due
consideration for the Rent payable hereunder and are intended to be a complete
exclusion and negation of any representations or warranties of BNPLC or its
Affiliates, express or implied, with respect to the Property that may arise
pursuant to any law now or hereafter in effect or otherwise, except as expressly
set forth herein.
However, such exclusion of representations and warranties by BNPLC and
its Affiliates is not intended to impair any representations or warranties made
by other parties, including any architects, engineers or contractors engaged to
work on the Construction Project, the benefit of which is to pass to FCI during
the Term because of the definition of Personal Property and Property above.
4. RENT.
(a) Base Rent Generally. On the Base Rent Commencement Date and
on each Base Rent Date through the end of the Term, FCI shall pay BNPLC rent
("BASE RENT"). Each payment of Base Rent must be received by BNPLC no later that
10:00 a.m. (Central time) on the date it becomes due; if received after 10:00
a.m. (Central time) it will be considered for purposes of this Lease as received
on the next following Business Day. BNPLC shall notify FCI of the amount of each
payment of Base Rent (calculated as provided in subparagraph 4.(b)) at least
three days before the date upon which it first becomes due. However, any failure
by BNPLC to so notify FCI shall not constitute a waiver of BNPLC's right to
payment, but absent such notice FCI shall not be in default for any underpayment
resulting therefrom if FCI, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.
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(b) Calculation of and Due Dates for Base Rent. Payments of Base
Rent shall be calculated and become due as follows:
(i) Amount Payable On the Base Rent Commencement Date. The Base
Rent payable on the Base Rent Commencement Date shall equal the
difference (if any) between (a) the total amount that would have been
added to the Outstanding Construction Allowance as Carrying Costs on
such date if not for the limit set forth in subparagraph 6.(b)(ii), and
(b) the Carrying Costs actually added on such date to the Outstanding
Construction Allowance.
(ii) Determination of Subsequent Payment Due Dates. For all Base
Rent Periods subject to a LIBOR Period Election of one month or three
months, Base Rent shall be due in one installment on the Base Rent Date
upon which the Base Rent Period ends. For Base Rent Periods subject to a
LIBOR Period Election of six months, Base Rent shall be payable in two
installments, with the first installment becoming due on the Base Rent
Date that occurs on the first Business Day of the third calendar month
following the commencement of such Base Rent Period, and with the second
installment becoming due on the Base Rent Date upon which the Base Rent
Period ends. Notwithstanding the foregoing, if FCI or any Applicable
Purchaser purchases BNPLC's interest in the Property pursuant to the
Purchase Agreement, any accrued unpaid Base Rent and all outstanding
Additional Rent shall be due on the date of purchase in addition to the
purchase price and other sums due BNPLC under the Purchase Agreement.
(iii) Base Rent Formula. Each installment of Base Rent payable
for any Base Rent Period shall equal:
o Stipulated Loss Value on the first day of such Base Rent
Period, times
o the sum of (a) the Effective Rate with respect to such Base
Rent Period, plus (b) the Spread for the period from and
including the preceding Base Rent Date to but not including
the Base Rent Date upon which the installment is due, times
o the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
o three hundred sixty.
Assume, only for the purpose of illustration: that prior to the
first day of a Base Rent Period subject to a LIBOR Period Election of
one month the Construction Allowance has been fully funded, but a total
of $35,000,000 of Qualified Payments have been received by BNPLC,
leaving a Stipulated Loss Value of $15,000,000; that the Effective Rate
for such Base Rent Period is 6%; that the Spread for such period is
thirty-two and one-half basis points (32.5/100 of 1%); and that such
Base Rent Period contains exactly thirty days. Under such assumptions,
the Base Rent for the hypothetical Base Rent Period will equal:
$15,000,000 x (6% + .325%) x 30/360 = $79,062.50
(c) Additional Rent. All amounts which FCI is required to pay to
or on behalf of BNPLC pursuant to this Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent,
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are herein called "ADDITIONAL RENT", and together Base Rent and Additional Rent
are herein sometimes called "RENT").
(d) Commitment Fees. For each Construction Period FCI shall pay
BNPLC a fee (a "COMMITMENT FEE") equal to:
o twelve and one-half basis points (12.5/100 of 1%), times an
amount equal to:
(i) the Maximum Construction Allowance, less
(ii) the Funded Construction Allowance on the first day of
such Construction Period; times
o the number of days in such Construction Period; divided by
o three hundred sixty.
FCI shall pay Commitment Fees in arrears on the first Business Day of February,
May, August and November of each calendar year, beginning with August 1, 1998
and continuing regularly throughout the Term so long as Commitment Fees have
accrued and remain unpaid. However, if any Commitment Fees shall have accrued
and remain unpaid on the date BNPLC's interest in the Property is sold pursuant
to the Purchase Agreement, such accrued unpaid Commitment Fees shall be due on
the date of the sale.
(e) Administrative Agency Fees. Upon execution and delivery of
this Lease by BNPLC, and again on each anniversary of the date hereof, FCI shall
pay to BNPLC an administrative fee (an "ADMINISTRATIVE AGENCY FEE") in the
amount set forth in the letter agreement dated as of April 22, 1998 between
BNPLC, FCI and Guarantor and other affiliates of FCI. Each Administrative Agency
Fee shall represent Additional Rent for the Construction Period or Base Rent
Period during which it is paid.
(f) Issue 97-10 Prepayments. Following any Issue 97-10 Election
or any CMA Termination Event under (and as defined in) the Construction
Management Agreement, FCI shall make an Issue 97-10 Prepayment to BNPLC within
three Business Days after receipt of any demand for such a payment. BNPLC may
demand an Issue 97-10 Payment pursuant to this subparagraph at any time and from
time to time (as Project Costs increase) after any Issue 97-10 Election or CMA
Termination Event.
(g) No Demand or Setoff. Except as expressly provided herein,
FCI shall pay all Rent without notice or demand and without counterclaim,
deduction, setoff or defense.
(h) Default Interest and Order of Application. All Rent shall
bear interest, if not paid when first due, at the Default Rate in effect from
time to time from the date due until paid; provided, that nothing herein
contained will be construed as permitting the charging or collection of interest
at a rate exceeding the maximum rate permitted under Applicable Laws. BNPLC
shall be entitled to apply any amounts paid by or on behalf of FCI against any
Rent then past due in the order the same became due or in such other order as
BNPLC may elect.
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.
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(a) "Net" Lease Generally. Subject only to the exceptions listed
in subparagraph 5.(e) below, it is the intention of BNPLC and FCI that the Base
Rent, Commitment Fees, Administrative Agency Fees and other payments herein
specified shall be absolutely net to BNPLC and that FCI shall pay all costs,
expenses and obligations of every kind relating to the Property or this Lease
which may arise or become due, including: (i) any taxes payable by virtue of
BNPLC's receipt of amounts paid to or on behalf of BNPLC in accordance with this
Paragraph 5; (ii) any amount for which BNPLC is or becomes liable with respect
to the Permitted Encumbrances or the Development Documents; and (iii) any costs
incurred by BNPLC (including Attorneys' Fees) because of BNPLC's acquisition or
ownership of any interest in the Property or because of this Lease or the
transactions contemplated herein.
(b) Impositions. FCI shall pay or cause to be paid prior to
delinquency all ad valorem taxes assessed against the Property and other
Impositions. If requested by BNPLC from time to time, FCI shall furnish BNPLC
with receipts showing payment of all Impositions at least ten days prior to the
applicable default date therefor.
Notwithstanding the foregoing, FCI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest FCI shall not be deemed in default
hereunder because of the Imposition if (1) FCI diligently prosecutes such
contest to completion in a manner reasonably satisfactory to BNPLC, and (2) FCI
promptly causes to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all costs, penalties and interest thereon, promptly
after such judgment becomes final; provided, however, in any event each such
contest shall be concluded and the contested Impositions must be paid by FCI
prior to the earlier of (i) the date that any criminal action is overtly
threatened or instituted against BNPLC or its directors, officers or employees
because of the nonpayment thereof or (ii) the date any writ or order is issued
under which any property owned or leased by BNPLC (including the Property) may
be seized or sold or any other action is taken or overtly threatened against
BNPLC or against any property owned or leased by BNPLC because of the nonpayment
thereof, (iii) any Designated Sale Date upon which, for any reason, FCI or an
Affiliate of FCI or any Applicable Purchaser shall not purchase BNPLC's interest
in the Property pursuant to the Purchase Agreement for a net price to BNPLC
(when taken together with any additional payments made by FCI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value, or (iv) any date upon
which the Construction Management Agreement or this Lease or FCI's Initial
Remarketing Rights and Obligations may be terminated because of or following any
Issue 97-10 Election.
(c) Increased Costs; Capital Adequacy Charges.
(i) If, after the Effective Date, there shall be any increase in
the cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then FCI shall from time
to time, pay to BNPLC for the account of BNPLC's Parent or such other
Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. A
certificate as to the amount of such increased cost, submitted to BNPLC
and FCI by BNPLC's Parent or the other Participant, shall be conclusive
and binding upon FCI, absent clear and demonstrable error.
(ii) BNPLC's Parent or any other Participant may demand
additional payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or
the other Participant determines that any Banking Rules Change affects
the amount of capital to be maintained by it and that the amount of such
capital is increased by or based upon the existence of advances made or
to be made to BNPLC to permit BNPLC
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to maintain BNPLC's investment in the Property or to make Construction
Advances. To the extent that BNPLC's Parent or another Participant
demands Capital Adequacy Charges as compensation for the additional
capital requirements reasonably allocable to such investment or
advances, FCI shall pay to BNPLC for the account of BNPLC's Parent or
the other Participant, as the case may be, the amount so demanded.
(iii) Any amount to be paid by FCI under this subparagraph
5.(c) shall be due within ten days after a demand for such payment is
made upon FCI.
(d) FCI's Payment of Other Losses; General Indemnification.
(i) Subject only to subparagraph 5.(e), all Losses
(including Environmental Losses) asserted against or incurred or
suffered by BNPLC or other Interested Parties at any time and from time
to time by reason of, in connection with or arising out of (A) their
ownership or alleged ownership of any interest in the Property or the
Rents, (B) the use and operation of the Property, (C) the negotiation or
administration of this Lease or other Operative Documents, (D) the
making of Funding Advances, (E) any Construction Project, (F) the breach
by FCI of this Lease or any other document executed by FCI in connection
herewith, (G) any failure of the Property or FCI itself to comply with
Applicable Laws, (H) Hazardous Substance Activities, including those
occurring prior to the Effective Date, (I) any bodily or personal injury
or death or property damage occurring in or upon or in the vicinity of
the Property through any cause whatsoever, or (J) the Permitted
Encumbrances (including the surviving provisions of the Existing
Contract), shall be paid by FCI, and FCI shall indemnify and defend
BNPLC and other Interested Parties from and against all such Losses.
(However, the indemnity in the preceding sentence shall not be construed
to make FCI liable to both BNPLC and any Participant or other party
claiming through BNPLC for the same costs, expenses or damages. Nor will
such indemnity be construed to make FCI liable for any allocation of
general overhead or internal administrative expenses of BNPLC, BNPLC's
Parent or any other Interested Party except to the extent allowed by
subparagraph 5.(c)(i) because of a Banking Rules Change after the date
of this Lease. Nor will such indemnity be construed to limit FCI's right
to reimbursement for Reimbursable Construction-Period Costs under the
Construction Management Agreement.)
(ii) SUBJECT ONLY TO SUBPARAGRAPH 5.(E), THE INDEMNITIES AND
RELEASES PROVIDED HEREIN FOR THE BENEFIT OF BNPLC AND OTHER INTERESTED
PARTIES, INCLUDING THE INDEMNITY SET FORTH IN THE PRECEDING SUBPARAGRAPH
5.(D)(I), SHALL APPLY EVEN IF AND WHEN THE SUBJECT MATTERS OF THE
INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OR
STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED PARTY. FURTHER, SUCH
INDEMNITIES AND RELEASES WILL APPLY EVEN IF INSURANCE OBTAINED BY FCI OR
REQUIRED OF FCI BY THIS LEASE OR OTHER OPERATIVE DOCUMENTS IS NOT
ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH THE INDEMNITIES AND
RELEASES ARE PROVIDED. FCI'S LIABILITY, HOWEVER, FOR ANY FAILURE TO
OBTAIN INSURANCE REQUIRED BY THIS LEASE OR OTHER OPERATIVE DOCUMENTS
WILL NOT BE LIMITED TO LOSSES AGAINST WHICH INDEMNITIES ARE PROVIDED
HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE IS INTENDED TO DO MORE
THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES AGAINST WHICH BNPLC AND
OTHER INTERESTED PARTIES ARE ENTITLED TO INDEMNIFICATION BY THIS LEASE.
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(iii) Costs and expenses for which FCI shall be responsible
pursuant to this subparagraph 5.(d) will include appraisal fees, filing
and recording fees, inspection fees, survey fees, taxes, brokerage fees
and commissions, abstract fees, title policy fees, Uniform Commercial
Code search fees, escrow fees and Attorneys' Fees incurred by BNPLC with
respect to the Property, whether such costs and expenses are incurred at
the time of execution of this Lease or at any time during the Term. Such
costs and expenses will also include Attorneys' Fees or other costs
incurred to evaluate lien releases and other information submitted by
FCI with requests for Construction Advances.
(iv) Subject to the limitations set forth in subparagraph
5.(e), FCI's obligations under this subparagraph 5.(d) shall survive the
termination or expiration of this Lease. Any amount to be paid by FCI
under this subparagraph 5.(d) shall be due within ten days after a
demand for such payment is made upon FCI.
(v) If an Interested Party notifies FCI of any claim or
proceeding included in, or any investigation or allegation concerning,
Losses for which FCI is responsible pursuant to this subparagraph 5.(d),
FCI shall assume on behalf of the Interested Party and conduct with due
diligence and in good faith the investigation and defense thereof and
the response thereto with counsel selected by FCI, but reasonably
satisfactory to the Interested Party; provided, that the Interested
Party shall have the right to be represented by advisory counsel of its
own selection and at its own expense; and provided further, that if any
such claim, proceeding, investigation or allegation involves both FCI
and the Interested Party and the Interested Party shall have been
advised in writing by counsel that there may be legal defenses available
to it which are inconsistent with those available to FCI, then the
Interested Party shall have the right to select separate counsel to
participate in the investigation and defense of and response to such
claim, proceeding, investigation or allegation on its own behalf, and
FCI shall pay or reimburse the Interested Party for all Attorney's Fees
incurred by the Interested Party because of the selection of such
separate counsel. If FCI fails to assume promptly (and in any event
within fifteen days after being notified of the applicable claim,
proceeding, investigation or allegation) the defense of the Interested
Party, then the Interested Party may contest (or settle, with the prior
written consent of FCI, which consent will not be unreasonably withheld)
the claim, proceeding, investigation or allegation at FCI's expense
using counsel selected by the Interested Party. Moreover, if any such
failure by FCI continues for thirty days or more after FCI is notified
of any such claim, proceeding, investigation or allegation, the
Interested Party may elect not to contest or continue contesting the
same and instead settle (or pay in full) all claims related thereto
without FCI's consent and without releasing FCI from any obligations to
the Interested Party under this subparagraph 5.(d) so long as, in the
written opinion of reputable counsel to the Interested Party, the
settlement (or payment in full) is clearly advisable.
(e) Exceptions and Qualifications to Indemnities.
(i) BNPLC acknowledges and agrees that nothing in the
preceding subparagraphs of this Paragraph 5 shall be construed to
require FCI to pay or reimburse an Interested Party for: (1) Excluded
Taxes; (2) Losses incurred or suffered by such Interested Party that are
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of that Interested
Party; (3) withholding of taxes permitted by subparagraph 5.(f); (4)
general overhead or internal administrative expenses of BNPLC or any
other Interested Party, except to the extent allowed by subparagraph
5.(c)(i) because of changes described in that subparagraph after the
Effective Date; (5) Losses incurred or suffered by Participants in
connection with their negotiation or execution of the Participation
Agreement (or supplements making them parties thereto) or in connection
with any due
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diligence they may undertake before entering into the Participation
Agreement; (6) Losses incurred or suffered by any Interested Party
after, and not proximately caused by events or circumstances that
actually or allegedly occurred or existed on or before, the later of the
dates upon which (A) this Lease terminates or expires, or (B) FCI
surrenders possession of the Property. Further, without limiting BNPLC's
rights (as provided in other provisions of this Lease and other
Operative Documents) to include the following in the calculation of the
Outstanding Construction Allowance, Stipulated Loss Value, the Break
Even Price and the Maximum Permitted Prepayment (as applicable) or to
collect Base Rent, Issue 97-10 Prepayments, a Supplemental Payment and
other amounts, the calculation of which depends upon the Outstanding
Construction Allowance, Stipulated Loss Value, the Break Even Price and
the Maximum Permitted Prepayment, BNPLC acknowledges and agrees that
nothing in subparagraph 5.(a) or the preceding subparagraphs of this
Paragraph 5 shall be construed to require FCI to pay or reimburse an
Interested Party for:
a) costs paid by BNPLC with the proceeds of the Initial
Funding Advance as part of the Transaction Expenses; or
b) Construction Advances, including costs and expenditures
incurred or paid by or on behalf of BNPLC after any Landlord's
Election to Continue Construction, to the extent that such costs
and expenditures are considered to be Construction Advances
pursuant to subparagraph 6.(d).
(ii) Notwithstanding anything to the contrary in the preceding
subparagraphs of this Paragraph 5, FCI's liability for payments required
by the preceding subparagraphs of this Paragraph 5, and not excused by
the preceding subparagraph 5.(e)(i), prior to substantial completion of
the Construction Project ("CONSTRUCTION-PERIOD INDEMNITY PAYMENTS")
shall be subject to the following provisions:
a) FCI may decline to pay any Construction-Period
Indemnity Payments other than the following (it being understood that
FCI's payment of the following Construction-Period Indemnity Payments
shall not be subject to any abatement or deferral by anything contained
in this subparagraph 5.(e)(ii)):
(1) Construction-Period Indemnity Payments eligible
for reimbursement to FCI under the terms and conditions of
the Construction Management Agreement; and
(2) Construction-Period Indemnity Payments that
constitute Absolute FCI Construction Obligations.
b) Any Construction-Period Indemnity Payment FCI is
excused from paying by this subparagraph 5.(e)(ii), together
with interest thereon at the Default Rate, will be included in
the calculation of the Break Even Price under (and as defined
in) the Purchase Agreement.
(iii) Further, if an Interested Party receives a written notice
of Losses that such Interested Party believes are covered by the
indemnity in subparagraph 5.(d)(i), then such Interested Party will be
expected to promptly furnish a copy of such notice to FCI. The failure
to so provide a copy of the notice to FCI shall not excuse FCI from its
obligations under subparagraph 5.(d)(i); provided, that if FCI is
unaware of the matters described in the notice and such failure renders
unavailable defenses that FCI might otherwise assert, or precludes
actions that FCI might otherwise take, to minimize its
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obligations, then FCI shall be excused from its obligation to indemnify
such Interested Party (and any Affiliate of such Interested Party)
against the Losses, if any, which would not have been incurred or
suffered but for such failure. For example, if BNPLC fails to provide
FCI with a copy of a notice of an obligation covered by the indemnity
set out in subparagraph 5.(d)(i) and FCI is not otherwise already aware
of such obligation, and if as a result of such failure BNPLC becomes
liable for penalties and interest covered by the indemnity in excess of
the penalties and interest that would have accrued if FCI had been
promptly provided with a copy of the notice, then FCI will be excused
from any obligation to BNPLC (or any Affiliate of BNPLC) to pay the
excess.
(f) Withholding Taxes. Notwithstanding anything else to the
contrary in this Paragraph 5, but subject to the provisions of this subparagraph
5.(f), to the extent required by law FCI may deduct United States and California
withholding taxes imposed as a way of collecting or in lieu of Excluded Taxes on
payments of Base Rent, Commitment Fees, Administrative Agency Fees, any interest
payable pursuant to subparagraph 4.(h) or any additional compensation claimed by
BNPLC pursuant to subparagraph 5.(c)(ii) (collectively, "INCOME PAYMENTS") from
Income Payments, without obligation to gross up, indemnify or otherwise increase
payments in consequence thereof. Such withholding, without obligation to gross
up, indemnify or otherwise increase payments in consequence thereof, will be
permitted if, but only if:
(i) in the case of withholding for Excluded Taxes imposed
by the United States of America, the Person entitled to receive Income
Payments (whether BNPLC, as the original landlord named herein, or an
assignee of the original landlord's rights hereunder, a "PAYEE") is not
exempt from withholding by reason of having been organized under the
laws of the United States of America or any State thereof, and such
Person shall not have provided FCI with three counterparts of each of
the forms prescribed by the Internal Revenue Service (Form 1001 or 4224,
or successor forms, as the case may be) claiming for Payee an exemption
from federal withholding on all Income Payments;
(ii) in the case of withholding for Excluded Taxes imposed
by the State of California, the Payee is not exempt from withholding by
reason of having been qualified to do business in California or
otherwise, and such Person shall not have provided FCI 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 days prior to any withholding from or
reduction of Income Payments, FCI shall have notified the Payee that FCI
believes the withholding is required and permitted by this subparagraph;
and
(iv) the withholding taxes on the Income Payments would have
been assessed even if the applicable taxing authorities had
characterized the transactions evidenced by this Lease and the Purchase
Agreement as a financing arrangement.
Any Payee exempt from withholding for Excluded Taxes imposed by the United
States of America by reason of having been organized under the laws of the
United States of America or any State thereof shall provide to FCI 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 FCI shall
ever be required to pay Excluded Taxes that BNPLC has failed to pay when due
because of FCI's failure to withhold from payments made under this Lease, BNPLC
shall reimburse FCI for such Excluded Taxes and for any penalties or interest
thereon charged to FCI. Nothing in this subparagraph 5.(f) shall excuse FCI from
its obligation under subparagraph 5.(c)(i) to compensate BNPLC for increased
costs attributable to any change in law relating to withholding taxes after the
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Effective Date.
6. CONSTRUCTION OF NEW IMPROVEMENTS.
(a) Advances; Outstanding Construction Allowance. The
Construction Management Agreement entitles FCI to receive from BNPLC - subject
to the terms and conditions set forth in the Construction Management Agreement -
Construction Advances on Advance Dates from time to time to pay or reimburse FCI
for the costs of acquiring any existing Improvements after the Effective Date
pursuant to the Existing Contract, for the costs of the Construction Project and
for certain other costs described in the Construction Management Agreement. In
addition, BNPLC may from time to time make expenditures or incur costs
constituting Construction Advances after a Landlord's Election to Continue
Construction as described in subparagraph 6.(d). As used herein, references to
the "OUTSTANDING CONSTRUCTION ALLOWANCE" mean the difference on the date in
question (but not less than zero) of (A) the total Construction Advances made by
or on behalf of BNPLC on or prior to the date in question, plus (B) all Carrying
Costs added on or prior to the date in question, less (C) any funds received and
applied as Qualified Prepayments on or prior to the date in question. Charges
("CARRYING COSTS") shall accrue as described below for each Construction Period
and will be added to (and thereafter be included in) the Outstanding
Construction Allowance on the last day of such Construction Period (i.e.,
generally on the Advance Date upon which such Construction Period ends).
However, if for any reason Stipulated Loss Value (and thus the Outstanding
Construction Allowance included as a component thereof) must be determined as of
any date between Advance Dates, the Outstanding Construction Allowance
determined on such date shall include not only Carrying Costs added on or before
the immediately preceding Advance Date computed as described below, but also
Carrying Costs accruing on and after such preceding Advance Date to but not
including the date in question.
(b) Calculation of Carrying Costs. Carrying Costs shall be
calculated as follows:
(i) Carrying Costs Formula. Carrying Costs accruing for any
Construction Period shall equal:
o Stipulated Loss Value on the first day of such Construction
Period, times
o the sum of:
(A) the Spread, plus
(B) the Effective Rate with respect to such
Construction Period, times
o the number of days in the period from and including the
preceding Advance Date to but not including the Advance Date
upon which the period ends, divided by
o three hundred sixty.
(ii) Limits on the Amount of Carrying Costs. Notwithstanding the
foregoing, however, because the Construction Allowance available to FCI
under the Construction Management Agreement is limited in amount to the
Maximum Construction Allowance, and because Carrying Costs are to be
charged against the Construction Allowance, Carrying Costs added to the
Outstanding Construction Allowance on the Base Rent Commencement Date
shall not exceed the amount that can be added
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without causing the Funded Construction Allowance to exceed the Maximum
Construction Allowance. If, because of an extension of the Base Rent
Commencement Date by BNPLC (as described in the definition thereof in
the List of Defined Terms) or because of any Landlord's Election to
Continue Construction, the Funded Construction Allowance already exceeds
the Maximum Construction Allowance, then no Carrying Costs will be added
to the Outstanding Construction Allowance on the Base Rent Commencement
Date.
(c) FCI's Right to Control the Construction Project. Subject to
BNPLC's rights under subparagraph 6.(d) of this Lease, the Construction
Management Agreement grants to FCI the sole right and responsibility for
designing and constructing the Construction Project, it being understood that
although title to all Improvements will pass directly to BNPLC (as more
particularly provided in Paragraph 8), BNPLC's obligation with respect to the
Construction Project shall be limited to the making of advances under and
subject to the conditions set forth in the Construction Management Agreement. No
contractor or other third party shall be entitled to require BNPLC to make
advances as a third party beneficiary of this Lease or of the Construction
Management Agreement or otherwise.
(d) Landlord's Election to Continue Construction. Without
limiting BNPLC's other rights and remedies under this Lease, and without
terminating this Lease or FCI's obligations hereunder or under any of the other
documents referenced herein, in the event of any termination of the Construction
Management Agreement as provided in subparagraph 5(D) or subparagraph 5(E)
thereof, BNPLC shall be entitled (but not obligated) to take whatever action it
deems necessary or appropriate by the use of legal proceedings or otherwise to
continue or complete the Construction Project in a manner substantially
consistent (to the extent practicable under Applicable Laws) with the general
description of the Construction Project set forth in Exhibit B to the
Construction Management Agreement and with the permitted use of the Property set
forth in subparagraph 3.(a). (As used herein, "LANDLORD'S ELECTION TO CONTINUE
CONSTRUCTION" means any election by BNPLC to continue or complete the
Construction Project pursuant to the preceding sentence.) After any Landlord's
Election to Continue Construction, BNPLC may do any one or more of the following
pursuant to this subparagraph without further notice and regardless of whether
any Event of Default is then continuing:
(i) Take Control of the Property. BNPLC may cause FCI and any
contractors or other parties on the Property to vacate the Property
until the Construction Project is complete or BNPLC elects not to
continue work on the Construction Project.
(ii) Continuation of Construction. BNPLC may perform or cause to
be performed any work to complete or continue the construction of the
Construction Project. In this regard, so long as work ordered or
undertaken by BNPLC is substantially consistent (to the extent
practicable under Applicable Laws) with the general description of the
Construction Project set forth in Exhibit B to the Construction
Management Agreement and the permitted use of the Property set forth in
subparagraph 3.(a), BNPLC shall have complete discretion to:
a) proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;
b) establish and extend construction deadlines as BNPLC
from time to time deems appropriate, without obligation to adhere
to the deadlines for Construction Milestones set forth in the
Construction Management Agreement;
c) hire, fire and replace architects, engineers,
contractors, construction managers
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and other consultants as BNPLC from time to time deems
appropriate, without obligation to use, consider or compensate
architects, engineers, contractors, construction managers or
other consultants previously selected or engaged by FCI;
d) determine the compensation that any architect,
engineer, contractor, construction manager or other consultant
engaged by BNPLC will be paid, and the terms and conditions that
will govern the payment of such compensation (including whether
payment will be due in advance, over the course of construction
or on some other basis and including whether contracts will be
let on a fixed price basis, a cost plus a fee basis or some other
basis), as BNPLC from time to time deems appropriate;
e) pay, settle or compromise existing or future bills and
claims which are or may be liens against the Property or as BNPLC
considers necessary or desirable for the completion of the
Construction Project or the removal of any clouds on title to the
Property;
f) prosecute and defend all actions or proceedings in
connection with the construction of the Construction Project;
g) select and change interior and exterior finishes for
the Improvements and landscaping as BNPLC from time to time deems
appropriate; and
h) generally do anything that FCI itself might have done
if FCI had satisfied or obtained BNPLC's waiver of the conditions
specified therein.
(iii) Arrange for Turnkey Construction. Without limiting the
generality of the foregoing, BNPLC may engage any contractor or real
estate developer BNPLC believes to be reputable to take over and
complete construction of the Construction Project on a "turnkey" basis.
(iv) Suspension or Termination of Construction.
Notwithstanding any Landlord's Election to Continue Construction, BNPLC
may subsequently elect at any time to suspend or terminate further
construction without obligation to FCI.
For purposes of this Lease and other Operative Documents (including the
determination of the Outstanding Construction Allowance, Stipulated Loss Value,
the Break Even Price and the Maximum Permitted Prepayment), after any Landlord's
Election to Continue Construction, all costs and expenditures incurred or paid
by or on behalf of BNPLC to complete or continue construction as provided in
this subparagraph shall be considered Construction Advances and Project Costs,
regardless of whether they cause the Funded Construction Allowance to exceed the
Maximum Construction Allowance. Further, as used in the preceding sentence,
"costs incurred" by BNPLC will include costs that BNPLC has become obligated to
pay to any third party that is not an Affiliate of BNPLC (including any
contractor), even if the payments for which BNPLC has become so obligated will
constitute prepayments for work or services to be rendered after payment and
notwithstanding that BNPLC's obligations for the payments may be conditioned
upon matters beyond BNPLC's control. For example, even if a construction
contract between BNPLC and a contractor excused BNPLC from making further
progress payments to the contractor upon FCI's failure to make any required
Issue 97-10 Prepayment hereunder, the obligation to make a progress payment
would nonetheless be "incurred" by BNPLC, for purposes of determining whether
BNPLC has incurred costs considered to be Project Costs and Construction
Advances, when BNPLC's obligation to pay it became subject only to FCI's payment
of the Issue 97-10 or other conditions beyond BNPLC's control. If and to the
extent, however, BNPLC does incur costs
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considered as Construction Advances under this subparagraph, but (1) BNPLC does
not actually pay the costs and after incurring them BNPLC is fully and finally
excused from the obligation to pay them for any reason other than a breach by
FCI of this Lease or other Operative Documents, or (2) BNPLC receives a refund
of such costs, then the costs BNPLC is excused from paying or refunded to BNPLC
shall be considered Qualified Prepayments.
(e) Powers Coupled With an Interest. BNPLC's rights under
subparagraph 6.(d) are intended to constitute powers coupled with an interest
which cannot be revoked.
(f) Completion Notice. After any Landlord's Election to Continue
Construction, BNPLC may provide a notice (a "COMPLETION NOTICE") to FCI,
advising FCI that construction of the Construction Project is substantially
complete or that BNPLC no longer intends to continue such construction at that
time.
7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC.
(a) Cooperation of BNPLC to Facilitate Construction and
Development. During the Term BNPLC shall take any action reasonably requested by
FCI to facilitate the construction and use of the Property permitted by this
Lease; provided, however, that:
(i) This subparagraph 7.(a) shall not impose upon BNPLC the
obligation to take any action that can be taken by FCI, FCI's Affiliates
or anyone else other than BNPLC as the owner of the Land, the
Improvements or any other interests in the Property.
(ii) BNPLC shall not be required by this subparagraph 7.(a)
to make any payment to another Person unless BNPLC shall first have
received funds from FCI, in excess of any other amounts due from FCI
hereunder, sufficient to make the payment. (This clause (ii) will not be
construed as limiting the right of FCI to obtain additional Construction
Advances, on and subject to the terms and conditions set forth in the
Construction Management Agreement, for payments FCI itself may pay or
incur an obligation to pay to another Person.)
(iii) BNPLC shall have no obligations whatsoever under this
subparagraph at any time after an Issue 97-10 Election by FCI, after a
Landlord's Election to Continue Construction or when an Event of Default
shall have occurred and be continuing.
(iv) FCI must request any action to be taken by BNPLC
pursuant to this subparagraph, and such request must be specific and in
writing, if required by BNPLC at the time the request is made. A
suggested form for such a request is attached as Exhibit D.
(v) No action may be required of BNPLC pursuant to this
subparagraph 7.(a) that could constitute a violation of any Applicable
Laws or compromise or constitute a waiver of BNPLC's rights under other
provisions of this Lease or the other Operative Documents or that for
any other reason is reasonably objectionable to BNPLC.
The actions BNPLC shall take pursuant to this subparagraph 7.(a) if
reasonably requested by FCI will include, subject to the conditions listed in
the proviso above, joining in or consenting to any (I) grant of easements,
licenses, rights of way, and other rights in the nature of easements encumbering
the Real Property, (II) release or termination of easements, licenses, rights of
way or other rights in the nature of easements which
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are for the benefit of the Real Property or any portion thereof, (III)
dedication or transfer of portions of the Land not improved with a building, for
road, highway or other public purposes, (IV) agreements (other than with FCI or
its Affiliates) for the use and maintenance of common areas, for reciprocal
rights of parking, for ingress and egress and for amendments to any Permitted
Encumbrances or Development Documents (including amendments to the Development
Documents that FCI may reasonably request to facilitate construction or
development on land owned by it or its Affiliates other than the Land), (V)
instruments necessary or desirable for the exercise or enforcement of rights
under the Permitted Encumbrances, the Development Documents or any contract,
permit, license, franchise or other right included within the term "Property",
(VI) permit applications or other documents reasonably required to accommodate
the construction or alteration of Improvements otherwise permitted by this
Lease, (VII) confirmations of FCI's rights under any particular provisions of
this Lease which FCI may wish to provide to a third party, (IX) execution or
filing of a tract or parcel map subdividing the Real Property into lots or
parcels or reconfiguring existing parcels, (X) agreements providing development
incentives or tax abatements with respect to the Property. However, the
determination of whether any such action is reasonably requested or reasonably
objectionable to BNPLC may depend in whole or in part upon the extent to which
the requested action shall result in a lien to secure payment or performance
obligations against BNPLC's interest in the Property, shall cause a decrease in
the value of the Property to less than sixty percent (60%) of Stipulated Loss
Value after any Qualified Payments that may result from such action are taken
into account, or shall impose upon BNPLC any present or future obligations
greater than the obligations BNPLC is willing to accept in reliance on the
indemnifications provided by FCI hereunder.
Upon request by FCI, BNPLC shall also provide a statement in writing
certifying that this Lease is unmodified and in full effect (or, if there have
been modifications, that this Lease is in full effect as modified, and setting
forth such modifications), certifying the dates to which the Base Rent and other
amounts payable by FCI hereunder have been paid, stating whether BNPLC is aware
of any default by FCI that may exist hereunder and confirming BNPLC's agreements
concerning landlord's liens and other matters set forth in subparagraph 7.(c);
it being intended that any such statement by BNPLC may be relied upon by anyone
with whom FCI may intend to enter into an agreement for construction of the
Improvements or other significant agreements concerning the Property.
Any Losses incurred by BNPLC because of any action taken pursuant to
this subparagraph 7.(a) shall be covered by the indemnification set forth in
subparagraph 5.(d). Further, for purposes of such indemnification, any action
taken by BNPLC will be deemed to have been made at the request of FCI if made
pursuant to any request of counsel to or any officer of FCI (or with their
knowledge, and without their objection) in connection with the execution or
administration of this Lease or the other Operative Documents.
To avoid construction delays or for other reasonable cause, FCI may ask
BNPLC for an expedited response to any request for action made by FCI pursuant
to this subparagraph 7.(a) by delivering such request with a notice
substantially in the form attached hereto as Exhibit E. BNPLC shall endeavor in
good faith to respond promptly to any such notice after the receipt of any such
notice by an officer of BNPLC.
(b) Actions Permitted by FCI Without BNPLC's Consent. No refusal
by BNPLC to execute or join in the execution of any agreement, application or
other document requested by FCI pursuant to the preceding subparagraph 7.(a)
shall preclude FCI from itself executing such agreement, application or other
document; provided, that in doing so FCI is not purporting to act for BNPLC and
does not thereby create or expand any obligations or restrictions that encumber
the Property. Further, subject to the other terms and conditions of this Lease,
FCI shall be entitled to do any of the following in FCI's own name and to the
exclusion of BNPLC during the Term without any notice to or consent of BNPLC so
long as no Landlord's Election to Continue Construction has occurred, so long as
no Event of Default has occurred and is continuing
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and so long as FCI is not purporting to act for BNPLC and does not thereby
create or expand any obligations or restrictions that encumber the Property:
(i) perform obligations arising under and exercise and
enforce the rights of FCI or the owner of the Real Property under the
Development Documents and Permitted Encumbrances;
(ii) perform obligations arising under and exercise and
enforce the rights of FCI or the owner of the Real Property with respect
to any other contracts or documents (such as building permits) included
within the Personal Property; and
(iii) recover and retain any monetary damages or other
benefit inuring to FCI or the owner of the Real Property through the
enforcement of any rights, contracts or other documents included within
the Personal Property (including the Development Documents and Permitted
Encumbrances); provided, that to the extent any such monetary damages
may become payable as compensation for an adverse impact on value of the
Property, the rights of BNPLC and FCI hereunder with respect to the
collection and application of such monetary damages shall be the same as
for condemnation proceeds payable because of a taking of all or any part
of the Property.
(c) Waiver of Landlord's Liens. BNPLC waives any security
interest, statutory landlord's lien or other interest BNPLC may have in or
against computer equipment and other tangible personal property placed on the
Land from time to time that FCI or its Affiliates own or lease from other
lessors; provided, however, that BNPLC does not waive its interest in or rights
with respect to equipment or other property included within the "Property" as
described in Paragraph 8. Although computer equipment or other tangible personal
property may be "bolted down" or otherwise firmly affixed to Improvements, it
shall not by reason thereof become part of the Improvements if it can be removed
without causing structural or other material damage to the Improvements and
without rendering HVAC or other major building systems inoperative and if it
does not otherwise constitute "Property" as provided in Paragraph 8.
(d) Limited Representations by BNPLC Concerning Accounting
Matters. BNPLC is not expected or required to represent or warrant that this
Lease or the Purchase Agreement will qualify for any particular accounting
treatment under GAAP. However, to permit FCI to determine for itself the
appropriate accounting for this Lease and the Purchase Agreement, BNPLC does
represent to FCI as of the Effective Date:
(i) Equity capital invested in BNPLC is greater than three
percent (3%) of the aggregate of all lease funding amounts (including
participations) of BNPLC. Such equity capital investments constitute
equity in legal form and are reflected as shareholders' equity in the
financial statements and accounting records of BNPLC.
(ii) BNPLC is one hundred percent (100%) owned by French
American Bank Corporation, which is one hundred percent (100%) owned by
BNPLC's Parent.
(iii) BNPLC leases properties of substantial value to more
than fifteen tenants.
(iv) All parties to whom BNPLC has any material obligations
known to BNPLC are (and are expected to be) Affiliates of BNPLC's
Parent, Participants, or participants with BNPLC in other leasing deals
or loans made by BNPLC, or other tenants or borrowers in such other
leasing deals or loans.
(v) BNPLC has substantial assets in addition to the
Property, assets which BNPLC believes to
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have a value far in excess of the value of the Property.
(vi) Other than any Funding Advances provided from time to
time by Participants under the Participation Agreement, BNPLC expects to
obtain all Funding Advances from Banque Nationale de Paris or other
Affiliates of BNPLC (including Funding Advances to cover Carrying Costs
and other amounts to be capitalized as part of the Outstanding
Construction Allowance, and assuming that FCI uses the Maximum
Construction Allowance under this Lease), and to the extent that Banque
Nationale de Paris or such other Affiliates themselves borrow or accept
bank deposits to obtain the funds needed to provide such Funding
Advances, the obligation to repay such funds shall not be limited, by
agreement or corporate structure, to payments collected from FCI or
otherwise recovered from the Property.
(vii) BNPLC has not obtained residual value insurance or a
residual value guarantee from any third party to ensure the recovery of
its investment in the Property.
(viii) BNPLC does not intend to take any action during the
term of this Lease that would change, or anticipate any change in, any
of the facts listed above in this subparagraph.
FCI shall have the right to ask BNPLC questions from time to time concerning
BNPLC's financial condition, concerning matters relevant to the proper
accounting treatment of this Lease on FCI's financial statements and accounting
records (including the amount of BNPLC's equity capital as a percentage of the
aggregate of all lease funding amounts [including participations] by BNPLC) or
concerning BNPLC's ability to perform under this Lease or other Operative
Documents, to which questions BNPLC shall promptly respond. Such response,
however, may be limited to a statement that BNPLC will not provide requested
information; provided, however, BNPLC must notify FCI in writing if at any time
during the Term BNPLC ceases to be 100% owned, directly or indirectly, by Banque
Nationale de Paris, or if at any time during the Term BNPLC believes it could
not represent that the statements in clauses (i), (v) and (vii) above continue
to be accurate, whether because of a change in the capital structure of BNPLC, a
purchase of residual value insurance with respect to the Property or otherwise.
(e) Other Limited Representations by BNPLC. BNPLC
represents that:
(i) No Default or Violation. The execution, delivery and
performance by BNPLC of this Lease and the other Operative Documents do
not and will not constitute a breach or default under any material
contract or agreement to which BNPLC is a party or by which BNPLC is
bound and do not, to the knowledge of BNPLC, violate or contravene any
law, order, decree, rule or regulation to which BNPLC is subject. (As
used in this subparagraph 7.(e), "BNPLC'S KNOWLEDGE" means the present
actual knowledge of Xxxxx Xxx, the current officer of BNPLC having
primary responsibility for the negotiation of this Lease.)
(ii) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to BNPLC's
knowledge, threatened against BNPLC that are reasonably likely to affect
BNPLC's interest in the Property or the validity, enforceability or
priority of this Lease or the other Operative Documents, and BNPLC is
not in default with respect to any order, writ, injunction, decree or
demand of any court or other governmental or regulatory authority that
could materially and adversely affect the business or assets of BNPLC or
its interest in the Property.
(iii) Enforceability. The execution, delivery and performance
of this Lease and the other
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Operative Documents by BNPLC are duly authorized, are not in
contravention of or conflict with any term or provision of BNPLC's
articles of incorporation or bylaws and do not, to BNPLC's knowledge,
require the consent or approval of any governmental body or other
regulatory authority that has not heretofore been obtained or conflict
with any Applicable Laws. This Lease and the other Operative Documents
are valid, binding and legally enforceable obligations of BNPLC 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, BNPLC makes no
representation or warranty that conditions imposed by zoning ordinances
or other state or local Applicable Laws to the purchase, ownership,
lease or operation of the Property have been satisfied.
(iv) Organization. BNPLC is duly incorporated and legally
existing under the laws of Delaware and is (or will become, if necessary
to lawfully perform hereunder) duly qualified to do business in the
State of California. BNPLC has or will obtain on a timely basis, at
FCI's expense to the extent so provided in the other provisions of this
Lease, all requisite power and all governmental certificates of
authority, licenses, permits, qualifications and other documentation
necessary to own and lease the Property and to perform its obligations
under this Lease.
(v) Not a Foreign Person. BNPLC is not a "foreign person"
within the meaning of Sections 1445 and 7701 of the Code (i.e., BNPLC is
not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined in the Code
and regulations promulgated thereunder).
(f) Keeping Proprietary Information Confidential. BNPLC
agrees to use reasonable precautions to keep confidential any "proprietary
information" (as defined in Paragraph 27) that BNPLC may receive from FCI or
otherwise discover with respect to FCI or FCI's business pursuant to this Lease
or any investigation by BNPLC hereunder, except for disclosures: (i)
specifically and previously authorized in writing by FCI; (ii) to any permitted
assignee of BNPLC as to any interest in the Property so long as the assignee has
agreed in writing to use its reasonable efforts to keep such information
confidential in accordance with the terms of this subparagraph; (iii) to legal
counsel, accountants, auditors, environmental consultants and other professional
advisors to BNPLC so long as BNPLC shall inform such persons in writing (if
practicable) of the confidential nature of such information and shall direct
them to treat such information confidentially; (iv) to regulatory officials
having jurisdiction over BNPLC or BNPLC's Parent (provided that the disclosing
party shall request confidential treatment of the disclosed information, if
practicable); (v) as required by legal process (provided that the disclosing
party shall request confidential treatment of the disclosed information, if
practicable); (vi) of information which has previously become publicly available
through the actions or inactions of a Person other than BNPLC not, to BNPLC's
knowledge, in breach of an obligation of confidentiality to FCI; and (vii) to
any Participant so long as the Participant has not repudiated the
confidentiality provision concerning FCI's proprietary information set forth in
the Participation Agreement.
8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. Subject
in each case to FCI's rights under the other provisions of this Lease, any
Improvements sold by Seller pursuant to the Existing Contract and all
Improvements constructed during the term of this Lease shall be owned by BNPLC
and shall constitute "Property" covered by this Lease. Further, subject in each
case to FCI's rights under the other provisions of this Lease, all furnishings,
furniture, chattels, permits, licenses, franchises, certificates and other
personal property of whatever nature shall have been acquired on behalf of BNPLC
by FCI, shall be owned by BNPLC and shall constitute "Property" covered by this
Lease, to the extent heretofore or hereafter acquired, in whole or in part, with
any portion of the Initial Funding Advance provided to FCI or with any
Construction Advances or other funds for which FCI has received or hereafter
receives reimbursement from
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the Initial Funding Advance or Construction Advances, as shall all renewals or
replacements of or substitutions for any such Property. FCI shall not authorize
or permit the transfer of title to the Improvements or to any other such
Property to pass through FCI or FCI's Affiliates before it is transferred to
BNPLC from contractors, suppliers, vendors or other third Persons. Nothing
herein shall constitute authorization of FCI by BNPLC to bind BNPLC to any
construction contract or other agreement with a third Person, but any
construction contract or other agreement executed by FCI for the acquisition or
construction of Improvements or other components of the Property may provide for
the transfer of title as required by the preceding sentence. Upon request of
BNPLC made when any Event of Default has occurred and is continuing, FCI shall
deliver to BNPLC an inventory describing all significant items of Personal
Property (and, in the case of tangible personal property, showing the make,
model, serial number and location thereof) other than Improvements, with a
certification by FCI that such inventory is true and complete and that all items
specified in the inventory are covered by this Lease free and clear of any Lien
other than the Permitted Encumbrances or Liens Removable by BNPLC.
9. ENVIRONMENTAL.
(a) Environmental Covenants by FCI. FCI covenants that:
(i) FCI shall not conduct or permit others to conduct
Hazardous Substance Activities, except Permitted Hazardous Substance Use
and Remedial Work.
(ii) FCI shall not discharge or permit the discharge of
anything on or from the Property that would require any permit under
applicable Environmental Laws, other than (1) storm water runoff, (2)
waste water discharges through a publicly owned treatment works, (3)
discharges that are a necessary part of any Remedial Work, and (4) other
similar discharges consistent with the definition herein of Permitted
Hazardous Substance Use, in each case in strict compliance with
Environmental Laws.
(iii) Following any discovery that Remedial Work is required
by Environmental Laws or otherwise reasonably required, and to the
extent not inconsistent with the other provisions of this Lease, FCI
shall promptly perform and diligently and continuously pursue such
Remedial Work, in each case in strict compliance with Environmental
Laws.
(iv) If requested by BNPLC in connection with any
significant Remedial Work required by this subparagraph, FCI shall
retain an independent Environmental Consultant or Industrial Hygienist,
as appropriate, to evaluate any significant new information generated
during FCI's implementation of the Remedial Work and to discuss with FCI
whether such new information indicates the need for any additional
measures that FCI should take to protect the health and safety of
persons (including, without limitation, employees, contractors and
subcontractors and their employees) or to protect the environment. FCI
shall implement any such additional measures to the extent required with
respect to the Property by Environmental Laws or otherwise reasonably
required and to the extent not inconsistent with the other provisions of
this Lease.
(b) Right of BNPLC to do Remedial Work Not Performed by FCI. If
FCI's failure to cure any breach of the covenants set forth in subparagraph
9.(a) continues beyond the Environmental Cure Period (as defined below), BNPLC
may, in addition to any other remedies available to it, after notifying FCI of
the Remedial Work BNPLC believes is needed, conduct all or any part of the
Remedial Work. To the extent that Remedial Work done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances) is reasonably
required, or is required or believed by BNPLC in good faith to be required by
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Applicable Law or by any demand, regulation or guideline of any governmental
authority (whether or not having the force of law), the cost thereof shall be a
demand obligation owing by FCI to BNPLC. As used in this subparagraph,
"ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier of: (1) one
hundred twenty days after FCI is notified of the breach which must be cured
within such period, (2) the date that any writ or order is issued for the levy
or sale of any property owned by BNPLC (including the Property) because of such
breach, (3) the date that any criminal action is overtly threatened or
instituted against BNPLC or any of its directors, officers or employees because
of such breach, (4) a Designated Sale Date upon which, for any reason, FCI or an
Affiliate of FCI or any Applicable Purchaser shall not purchase BNPLC's interest
in the Property pursuant to the Purchase Agreement for a net price to BNPLC
(when taken together with any additional payments made by FCI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value; or (5) any date upon which
the Construction Management Agreement or this Lease or FCI's Initial Remarketing
Rights and Obligations may be terminated because of or following any Issue 97-10
Election
(c) Environmental Inspections and Reviews. BNPLC reserves the
right to retain an Environmental Consultant or Industrial Hygienist to review
any report prepared by FCI or to conduct BNPLC's own investigation to confirm
whether FCI is complying with the requirements of this Paragraph 9. FCI grants
to BNPLC and to BNPLC's agents, employees, consultants and contractors the right
during reasonable business hours and after reasonable notice to enter upon the
Property to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. Without limiting
the generality of the foregoing, FCI agrees that BNPLC will have the same right,
power and authority to enter and inspect the Property as is granted to a secured
lender under Section 2929.5 of the California Civil Code. FCI shall promptly
reimburse BNPLC for the reasonable fees of its Environmental Consultants and
Industrial Hygienists and the costs of any such inspections and tests; provided,
however, BNPLC's right to reimbursement for the reasonable fees of any
consultant engaged as provided in this subparagraph or for the costs of any
inspections or test undertaken as provided in this subparagraph shall be limited
to the following circumstances: (1) an Event of Default or CMA Termination Event
shall have occurred; (2) BNPLC shall have retained the consultant to establish
the condition of the Property just prior to any conveyance thereof pursuant to
the Purchase Agreement or just prior to the expiration of this Lease; (3) BNPLC
shall have retained the consultant to satisfy any regulatory requirements
applicable to BNPLC or its Affiliates; or (4) BNPLC shall have retained the
consultant because BNPLC has been notified of a violation of Environmental Laws
concerning the Property or BNPLC otherwise reasonably believes that FCI has not
complied with the requirements of this Paragraph 9.
(d) Communications Regarding Environmental Matters.
(i) FCI shall immediately advise BNPLC and Participants of
(1) any discovery of any event or circumstance which would render any of
the representations of FCI herein or in the Closing Certificate
concerning environmental matters materially inaccurate or misleading if
made at the time of such discovery and assuming that FCI was aware of
all relevant facts, (2) any Remedial Work (or change in Remedial Work)
required or undertaken by FCI or its Affiliates in response to any (A)
discovery of any Hazardous Substances on, under or about the Property
other than Permitted Hazardous Substances or (B) any claim for damages
resulting from Hazardous Substance Activities, (3) FCI's discovery of
any occurrence or condition on any real property adjoining or in the
vicinity of the Property which would or could reasonably be expected to
cause the Property or any part thereof to be subject to any ownership,
occupancy, transferability or use restrictions under Environmental Laws,
or (4) any investigation or inquiry of any failure or alleged failure by
FCI to comply with Environmental
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Laws affecting the Property by any governmental authority responsible
for enforcing Environmental Laws. In such event, FCI shall deliver to
BNPLC within thirty days after BNPLC's request (or such longer period as
may be reasonably required, but in any event within ninety days after
BNPLC's request), a preliminary written environmental plan setting forth
a general description of the action that FCI proposes to take with
respect thereto, if any, to bring the Property into compliance with
Environmental Laws or to correct any breach by FCI of this Paragraph 9,
including any proposed Remedial Work, the estimated cost and time of
completion, the name of the contractor and a copy of the construction
contract, if any, and such additional data, instruments, documents,
agreements or other materials or information as BNPLC may reasonably
request.
(ii) FCI shall provide BNPLC and Participants with
copies of all material written communications with federal, state and
local governments, or agencies relating to the matters listed in the
preceding clause (i). FCI shall also provide BNPLC and Participants with
copies of any correspondence from third Persons which threaten
litigation over any significant failure or alleged significant failure
of FCI to maintain or operate the Property in accordance with
Environmental Laws.
(iii) Prior to FCI's submission of a Material
Environmental Communication to any governmental or regulatory agency or
third party, FCI shall, to extent practicable, deliver to BNPLC and
Participants a draft of the proposed submission (together with the
proposed date of submission), and in good faith assess and consider any
comments of BNPLC regarding the same. Promptly after BNPLC's request,
FCI shall meet with BNPLC to discuss the submission, shall provide any
additional information reasonably requested by BNPLC and shall provide a
written explanation to BNPLC addressing the issues raised by comments
(if any) of BNPLC regarding the submission, including a reasoned
analysis supporting any decision by FCI not to modify the submission in
accordance with comments of BNPLC.
10. INSURANCE REQUIRED AND CONDEMNATION.
(a) Liability Insurance. Throughout the Term FCI shall maintain
commercial general liability insurance against claims for bodily and personal
injury, death and property damage occurring in or upon or resulting from any
occurrence in or upon the Property under one or more insurance policies that
satisfy the requirements set forth in Exhibit ?. FCI shall deliver and maintain
with BNPLC for each liability insurance policy required by this Lease written
confirmation of the policy and the scope of the coverage provided thereby issued
by the applicable insurer or its authorized agent, which confirmation must also
satisfy the requirements set forth in Exhibit ?.
(b) Property Insurance. Throughout the Term FCI will keep all
Improvements (including all alterations, additions and changes made to the
Improvements) insured against fire and other casualty under one or more property
insurance policies that satisfy the requirements set forth in Exhibit ?. FCI
shall deliver and maintain with BNPLC for each property insurance policy
required by this Lease written confirmation of the policy and the scope of the
coverage provided thereby issued by the applicable insurer or its authorized
agent, which confirmation must also satisfy the requirements set forth in
Exhibit ?. If any of the Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which insurance shall have been
required hereunder, (i) BNPLC may, but shall not be obligated to, make proof of
loss if not made promptly by FCI after notice from BNPLC, (ii) each insurance
company concerned is hereby authorized and directed to make payment for such
loss directly to BNPLC for application as required by Paragraph 11, and (iii)
BNPLC may settle, adjust or compromise any and all claims for loss, damage or
destruction under any policy or policies of insurance (provided, that so long as
no FCI has made no Issue 97-10 Election, no
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Landlord's Election to Continue Construction shall have occurred and no Event of
Default shall have occurred and be continuing, BNPLC must obtain FCI's consent
to any such settlement). If any casualty shall result in damage to or loss or
destruction of the Property, FCI shall give immediate notice thereof to BNPLC
and Paragraph 11 shall apply.
Notwithstanding the foregoing, FCI shall have the right as FCI deems
appropriate to settle, adjust or compromise any insurance claim for damage to
the Property that cannot reasonably be asserted for more than $3,000,000 if (and
after) FCI completes the Construction Project pursuant to the Construction
Management Agreement and so long no Event of Default shall have occurred and be
continuing; and FCI may directly receive and hold the proceeds of such claim if
(and after) FCI completes the Construction Project pursuant to the Construction
Management Agreement and so long as no Landlord's Election to Continue
Construction shall have occurred and no Event of Default shall have occurred and
be continuing and so long as FCI applies such proceeds as required by
subparagraph 11.(b).
(c) Failure to Obtain Insurance. If FCI fails to obtain any
insurance or to provide confirmation of any such insurance as required by this
Lease, BNPLC shall be entitled (but not required) to obtain the insurance that
FCI has failed to obtain or for which FCI has not provided the required
confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require FCI to reimburse BNPLC for the cost of such
insurance and to pay interest thereon computed at the Default Rate from the date
such cost was paid by BNPLC until the date of reimbursement by FCI.
(d) Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Property or any portion
thereof, each party shall notify the other (provided, however, BNPLC shall have
no liability for its failure to provide such notice) of the pendency of such
proceedings. FCI shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, its attorneys and experts and
cooperate with them as reasonably requested in the carrying on or defense of any
such proceedings. All proceeds of condemnation awards or proceeds of sale in
lieu of condemnation with respect to the Property and all judgments, decrees and
awards for injury or damage to the Property shall be paid to BNPLC as Escrowed
Proceeds for application as provided in Paragraph 11. BNPLC is hereby
authorized, in the name of FCI, at any time when an Event of Default shall have
occurred and be continuing, or otherwise with FCI's prior consent, to execute
and deliver valid acquittances for, and to appeal from, any such judgment,
decree or award concerning condemnation of any of the Property. BNPLC shall not
be in any event or circumstances liable or responsible for failure to collect,
or to exercise diligence in the collection of, any such proceeds, judgments,
decrees or awards.
Notwithstanding the foregoing provisions of this subparagraph, FCI shall
have the right as FCI deems appropriate to settle, adjust or compromise any
claim for any taking of less than all or substantially all of the Property if
the claim cannot reasonably be asserted for more than $3,000,000 and if (and
after) FCI completes the Construction Project pursuant to the Construction
Management Agreement and if no Event of Default shall have occurred and be
continuing; and FCI may directly receive and hold the proceeds of any such claim
if (and after) FCI completes the Construction Project pursuant to the
Construction Management Agreement and so long as no Event of Default shall have
occurred and be continuing and so long as FCI applies such proceeds as required
by subparagraph 11.(b).
11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.
(a) Collection of Insurance and Condemnation Proceeds Generally.
Subject to BNPLC's
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rights under this Paragraph 11, and so long as no CMA Termination Event shall
have occurred and no Event of Default shall have occurred and be continuing, FCI
shall be entitled to use all property insurance and condemnation proceeds
payable with respect to the Property during the Term for the restoration and
repair of the Property or any remaining portion thereof. Except as provided in
the last sentence of subparagraph 10.(b) and the last sentence of subparagraph
10.(d), all insurance and condemnation proceeds received with respect to the
Property (including proceeds payable under any insurance policy covering the
Property which is maintained by FCI) shall be paid to BNPLC and then applied as
follows:
(i) First, such proceeds shall be used to reimburse BNPLC
for any costs and expenses, including Attorneys' Fees, incurred in
connection with the collection of such proceeds.
(ii) Second, the remainder of such proceeds (the "REMAINING
Proceeds") shall be held by BNPLC as Escrowed Proceeds and used to
reimburse FCI for the actual cost of the repair, restoration or
replacement of the Property. However, any Remaining Proceeds not needed
for such purpose shall be applied by BNPLC as Qualified Payments, as
provided in subparagraph 11.(c), after FCI notifies BNPLC that they are
not needed for repairs, restoration or replacement.
(b) Administration of Remaining Proceeds; FCI's Obligation to
Restore. Any Remaining Proceeds held by BNPLC as Escrowed Proceeds shall be
deposited by BNPLC in an interest bearing account as provided in the definition
of Escrowed Proceeds in the attached List of Defined Terms and shall be paid to
FCI or to third parties as FCI may direct as the applicable repair, restoration
or replacement progresses and upon compliance by FCI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC, but in no event shall
BNPLC be required to pay Escrowed Proceeds to FCI in excess of the actual cost
to FCI of the applicable repair, restoration or replacement, as evidenced by
invoices or other documentation reasonably satisfactory to BNPLC, it being
understood that BNPLC may retain and apply any such excess as a Qualified
Payment. In any event, FCI will not be entitled to any abatement or reduction of
the Base Rent or any other amount due hereunder except to the extent that such
excess Remaining Proceeds result in Qualified Payments which reduce Stipulated
Loss Value (and thus payments computed on the basis of Stipulated Loss Value) as
provided in the definitions set out in the attached List of Defined Terms.
Further, notwithstanding the inadequacy of the Remaining Proceeds held by BNPLC
as Escrowed Proceeds, if any, or anything herein to the contrary, FCI must,
after any taking of less than all or substantially all of the Property by
condemnation and after any damage to the Property by fire or other casualty,
either:
(i) promptly restore or improve the Property or the
remainder thereof to a value no less than sixty percent (60%) of
Stipulated Loss Value (computed after the application of any Remaining
Proceeds as a Qualified Payment) and to a reasonably safe and sightly
condition; or
(ii) promptly restore the Property to a reasonably safe and
sightly condition and pay to BNPLC for application as a Qualified
Payment the amount (if any), as determined by BNPLC, needed to reduce
Stipulated Loss Value (computed after the application of such amount and
any available Remaining Proceeds as Qualified Payments) to no more than
one hundred sixty-seven percent (167%) of the then-current market value
of the Property or remainder thereof.
(c) Special Provisions Concerning CMA Termination Events, Events
of Default and Qualified Payments. If a CMA Termination Event shall have
occurred, or an Event of Default shall have occurred and be continuing, then
notwithstanding the foregoing, BNPLC shall be entitled to receive and collect
all insurance or condemnation proceeds payable with respect to the Property, and
BNPLC shall be entitled to either, at the discretion of BNPLC, (A) hold all
Remaining Proceeds as Escrowed Proceeds until paid to FCI as
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reimbursement for the actual and reasonable cost of repairing, restoring or
replacing the Property when FCI has completed such repair, restoration or
replacement, or (B) apply such proceeds as Qualified Payments when and to the
extent deemed appropriate by BNPLC.
When no CMA Termination Event shall have occurred and no Event of
Default shall have occurred and be continuing, BNPLC shall apply any Remaining
Proceeds paid to it (or other amounts available for application as a Qualified
Payment) as a Qualified Payment on any date that BNPLC is directed to do so by a
notice from FCI; provided, that if such a notice from FCI specifies an effective
date for a Qualified Payment that is less than five Business Days after BNPLC's
actual receipt of the notice, BNPLC may postpone the date of the Qualified
Payment to any date not later than five Business Days after BNPLC's receipt of
the notice. In any event, except when BNPLC is required by the preceding
sentence to apply Remaining Proceeds or other amounts as a Qualified Payment on
an Advance Date or Base Rent Date, BNPLC may deduct Breakage Costs incurred in
connection with any Qualified Payment from the Remaining Proceeds or other
amounts available for application as the Qualified Payment, and FCI will
reimburse BNPLC upon request for any such Breakage Costs that BNPLC incurs but
does not deduct.
(d) Takings of All or Substantially All of the Property. In the
event of any taking of all or substantially all of the Property, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Payment, notwithstanding
the foregoing. In addition, if Stipulated Loss Value immediately prior to any
taking of all or substantially all of the Property by condemnation exceeds the
sum of the Remaining Proceeds resulting from such condemnation, then BNPLC shall
be entitled to recover the excess from FCI upon demand as an additional
Qualified Payment, whereupon this Lease shall terminate. Any taking of so much
of the Real Property as, in BNPLC's reasonable good faith judgment, makes it
impracticable to restore or improve the remainder thereof as required by part
(1) of subparagraph 11.(b) shall be considered a taking of substantially all the
Property for purposes of this Paragraph 11.
(e) Waiver of Subrogation. Without limiting FCI's obligations to
make repairs under other provisions of this Lease, BNPLC and FCI each waive any
right of recovery against the other, and the other's agents, officers or
employees, for any damage to the Property or to the personal property situated
from time to time in or on the Real Property resulting from fire or other
casualty covered by a valid and collectible insurance policy; provided, however,
that the waiver set forth in this subparagraph 11.(e) shall be effective
insofar, but only insofar, as compensation for such damage or loss is actually
recovered by the waiving party (net of costs of collection) under the policy
notwithstanding the waivers set out in this subparagraph. FCI shall cause the
insurance policies required of FCI by this Lease to be properly endorsed, if
necessary, to prevent any loss of coverage because of the waivers set forth in
this subparagraph. If such endorsements are not available at commercially
reasonable rates, the waivers set forth in this subparagraph shall be
ineffective to the extent that such waivers would cause required insurance with
respect to the Property to be impaired.
12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF FCI
CONCERNING THE PROPERTY. FCI represents, warrants and covenants as follows:
(a) Compliance with Covenants and Laws. The use of the Property
permitted by this Lease complies, or will comply after FCI obtains available
permits as the tenant under this Lease, in all material respects with all
Applicable Laws. FCI has obtained or will promptly obtain all utility, building,
health and operating permits as may be required by any governmental authority or
municipality having jurisdiction over the Property for the construction
contemplated herein and the use of the Property permitted by this Lease.
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(b) Operation of Property. FCI shall operate the Property in a
good and workmanlike manner and in a manner that causes it to comply in all
material respects with Applicable Laws. (For purposes of this Lease, "material"
noncompliance with Applicable Law will include any noncompliance, the correction
of which has been requested by a governmental authority, or because of which a
threat of action against the Property or BNPLC has been asserted by a
governmental authority.) FCI shall not use or occupy or allow the use or
occupancy of the Property in any manner which violates any Applicable Law in any
material respect or which constitutes a public or private nuisance or which
makes void, voidable or cancelable any insurance then in force with respect
thereto. To the extent that any of the following could, individually or in the
aggregate, reduce the value of the Property and leave the Property with a value
of less than sixty percent (60%) of Stipulated Loss Value, FCI shall not: (i)
initiate or permit any zoning reclassification of the Property; (ii) seek any
variance under existing zoning ordinances applicable to the Property; (iii) use
or permit the use of the Property in a manner that would result in such use
becoming a nonconforming use under applicable zoning ordinances or similar laws,
rules or regulations; (iv) execute or file any subdivision plat affecting the
Property; or (v) consent to the annexation of the Property to any municipality.
If a change in the zoning or other Applicable Laws affecting the permitted use
or development of the Property shall occur that BNPLC determines will reduce the
then-current market value of the Property, and if after such reduction the
then-current market value of the Property shall be less than sixty percent (60%)
of Stipulated Loss Value in the reasonable judgment of BNPLC, then FCI shall pay
BNPLC an amount equal to such excess for application as a Qualified Payment. FCI
shall not cause or consent to any drilling or exploration for, or extraction,
removal or production of, minerals from the surface or subsurface of the
Property. If FCI receives a notice or claim from any federal, state or other
governmental authority that the Property is not in compliance with any
Applicable Law in any material respect, or that any action may be taken against
BNPLC because the Property does not comply with any Applicable Law, FCI shall
promptly furnish a copy of such notice or claim to BNPLC.
Notwithstanding the foregoing, FCI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest FCI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if FCI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if FCI promptly causes the 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 Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by FCI and any claims asserted against BNPLC or
the Property because of such violation must be paid by FCI, all prior to the
earlier of (i) the date that any criminal action is overtly threatened or
instituted against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken or overtly threatened
by any governmental authority against BNPLC or any property owned by BNPLC
(including the Property) because of such violation, (iii) a Designated Sale Date
upon which, for any reason, FCI or an Affiliate of FCI or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to the
Purchase Agreement for a net price to BNPLC (when taken together with any
additional payments made by FCI pursuant to Paragraph 1(A)(2) of the Purchase
Agreement, in the case of a purchase by an Applicable Purchaser) equal to
Stipulated Loss Value, or (iv) any date upon which the Construction Management
Agreement or this Lease or FCI's Initial Remarketing Rights and Obligations may
be terminated because of or following any Issue 97-10 Election.
(c) Debts for Construction, Maintenance, Operation or
Development. FCI shall cause all debts and liabilities incurred in the
construction, maintenance, operation or development of the Property, including
all debts and liabilities for labor, material and equipment and all debts and
charges for utilities servicing the Property, to be promptly paid; provided,
nothing in this subparagraph will be construed to make
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FCI liable for Liens Removable by BNPLC or Excluded Taxes.
Notwithstanding the foregoing, FCI 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 FCI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within thirty days after being asked to do so by BNPLC, FCI bonds over to
BNPLC's reasonable satisfaction all such contested liens against the Property
alleged to secure an amount in excess of $5,000,000 (individually or in the
aggregate), (2) FCI diligently prosecutes such contest to completion in a manner
reasonably satisfactory to BNPLC, and (3) FCI promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all costs
and interest thereon, promptly after such judgment becomes final; provided,
however, that in any event each such contest shall be concluded and the lien,
interest and costs must be paid by FCI prior to the earlier of (i) the date that
any criminal action is overtly threatened or instituted against BNPLC or its
directors, officers or employees because of the nonpayment thereof, (ii) the
date that any writ or order is issued under which the Property or any other
property in which BNPLC has an interest may be seized or sold or any other
action is taken or overtly threatened against BNPLC or any property in which
BNPLC has an interest because of the nonpayment thereof, (iii) a Designated Sale
Date upon which, for any reason, FCI or an Affiliate of FCI or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to the
Purchase Agreement for a net price to BNPLC (when taken together with any
additional payments made by FCI pursuant to Paragraph 1(A)(2) of the Purchase
Agreement, in the case of a purchase by an Applicable Purchaser) equal to
Stipulated Loss Value, or (iv) any date upon which the Construction Management
Agreement or this Lease or FCI's Initial Remarketing Rights and Obligations may
be terminated because of or following any Issue 97-10 Election
(d) Repair, Maintenance, Alterations and Additions. FCI shall
keep the Property in good order, operating condition and appearance, causing all
necessary repairs, renewals and replacements to be promptly made, and will not
allow any of the Property to be materially misused, abused or wasted. To the
extent that any of the following could, individually or in the aggregate, reduce
the value of the Property and leave the Property with a value of less than sixty
percent (60%) of Stipulated Loss Value, FCI shall not: (i) fail to promptly
replace any worn-out fixtures or material items of tangible Personal Property
covered by this Lease with fixtures or other tangible Personal Property
comparable to the replaced fixtures or Personal Property when new, (ii) remove
from the Property any fixtures or tangible Personal Property of significant
value covered by this Lease except such as are replaced by FCI by articles of
equal suitability and value, free and clear of any Lien other than Permitted
Encumbrances or Liens Removable by BNPLC, or (iii) make any significant
alterations to any Improvements after they are completed. Without limiting the
foregoing, FCI will notify BNPLC before making any alterations to the
Improvements which could materially reduce the market value of the Property or
which change the general character of the Property or which impair in any
significant manner the useful life or utility of any Improvements.
Nothing in this subparagraph is intended to limit FCI's rights and
obligations under other provisions of this Lease with respect to the
construction of the initial or any subsequent Construction Project permitted by
other provisions of this Lease.
(e) Compliance With Permitted Encumbrances and Development
Contracts. FCI shall comply with and will cause to be performed all of the
covenants, agreements and obligations imposed upon the owner of any interest in
the Property by the Permitted Encumbrances or the Development Contracts. Without
limiting the foregoing, FCI shall cause all amounts to be paid when due, the
payment of which is secured by any Lien against the Property created by the
Permitted Encumbrances.
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(f) Modification of Permitted Encumbrances and Development
Contracts. FCI shall not enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance or Development Contract that would
create or expand or purport to create or expand obligations or restrictions
which would encumber the Property without the prior consent of BNPLC. Whether
BNPLC must give any such consent requested by FCI during the term of this Lease
shall be governed by subparagraph 7.(a).
(g) Books and Records Concerning the Property. FCI shall keep
books and records that are accurate and complete in all material respects for
the Property and will, subject to Paragraph 27, permit all such books and
records (including all contracts, statements, invoices, bills and claims for
labor, materials and services supplied for the construction and operation of any
Improvements) to be inspected and copied by BNPLC.
13. ASSIGNMENT AND SUBLETTING BY FCI.
(a) BNPLC's Consent Required. Without the prior consent of
BNPLC, FCI shall not assign, transfer, mortgage, pledge or hypothecate this
Lease or any interest of FCI hereunder and shall not sublet all or any part of
the Property, by operation of law or otherwise; provided, that, if (and after)
FCI completes the Construction Project pursuant to the Construction Management
Agreement and so long as no Event of Default has occurred and is continuing, FCI
shall be entitled without the consent of BNPLC to (1) assign FCI's rights under
this Lease and the other Operative Documents to an Affiliate of FCI (including
any Affiliate of FCI that is the surviving entity after a merger permitted by
subsection 3.04(a) of Schedule A attached to the Guaranty) pursuant to a written
assignment unconditionally providing that the Affiliate assumes FCI's
obligations hereunder and thereunder and (unless FCI has been merged into the
Affiliate pursuant to a merger permitted by subsection 3.04(a) of Schedule A
attached to the Guaranty) that FCI ratifies and confirms for the benefit of
BNPLC FCI's responsibility and liability to BNPLC under this Lease and the other
Operative Documents, and (2) sublet all or any portion of the Property if:
(i) any sublease by FCI is made expressly subject and
subordinate to the terms hereof;
(ii) no sublease purports to grant the subtenant
thereunder rights to use or occupy the Property after the expiration or
termination of this Lease, other than rights expressly conditioned upon
a purchase by FCI of the Property pursuant to the Purchase Agreement;
(iii) the uses permitted by such sublease are limited to
uses expressly permitted by subparagraph 3.(a) above; and
(iv) less than forty-nine percent (49%) of any
completed Improvements are at any time subleased by FCI to anyone other
than its own Affiliates.
(b) Standard for BNPLC's Consent to Assignments and Certain
Other Matters. Consents and approvals of BNPLC which are required by this
Paragraph 13 will not be unreasonably withheld, but FCI acknowledges that
BNPLC's withholding of such consent or approval shall be reasonable if BNPLC
determines in good faith that (1) giving the approval may materially increase
BNPLC's risk of liability for any existing or future environmental problem, (2)
giving the approval is likely to substantially increase BNPLC's administrative
burden of complying with or monitoring FCI's compliance with the requirements of
this Lease, or (3) any transaction for which FCI has requested the consent or
approval would negate FCI's representations in this Lease regarding ERISA or
cause this Lease or the other documents referenced herein to constitute a
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violation of any provision of ERISA.
(c) Consent Not a Waiver. No consent by BNPLC to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this Lease or FCI's
interest hereunder, and no assignment or subletting of the Property or any part
thereof in accordance with this Lease or otherwise with BNPLC's consent, shall
release FCI from liability hereunder; and any such consent shall apply only to
the specific transaction thereby authorized and shall not relieve FCI from any
requirement of obtaining the prior consent of BNPLC to any further sale,
assignment, transfer, mortgage, pledge or hypothecation of this Lease or any
interest of FCI hereunder.
14. ASSIGNMENT BY BNPLC.
(a) Restrictions on Transfers. Except by a Permitted Transfer,
BNPLC shall not assign, transfer, mortgage, pledge, encumber or hypothecate this
Lease or the other Operative Documents or any interest of BNPLC in and to the
Property during the Term without the prior consent of FCI.
(b) Effect of Permitted Transfer or other Assignment by BNPLC.
If, without breaching subparagraph 14.(a), BNPLC sells or otherwise transfers
the Property and assigns all of its rights under this Lease and the other
Operative Documents, and if BNPLC's successor in interest to all such rights
assumes in writing for the benefit of FCI BNPLC's obligations under this Lease
and the other Operative Documents on and subject to the express terms and
conditions set out herein and therein, then BNPLC shall thereby be released from
any obligations arising after such assumption under this Lease or the other
Operative Documents (other than any liability for a breach of the landlord's
obligation to provide Construction Advances), and FCI shall look solely to each
successor in interest of BNPLC for performance of such obligations.
15. BNPLC'S RIGHT OF ACCESS.
(a) BNPLC and BNPLC's representatives may enter the Property,
after three Business Days advance notice to FCI (except in the event of an
emergency, when no advance notice will be required), for the purpose of
performing any work BNPLC is authorized to undertake by the next subparagraph or
for the purpose confirming whether FCI has complied with the requirements of
this Lease at any time BNPLC may reasonably question such compliance. So long as
FCI remains in possession of the Property, BNPLC or BNPLC's representative will,
before making any such inspection or performing any such work on the Property,
if then requested to do so by FCI to maintain security: (i) sign in at FCI's
security or information desk if FCI has such a desk on the premises, (ii) wear a
visitor's badge or other reasonable identification provided by FCI when BNPLC or
BNPLC's representative first arrives at the Property, (iii) permit an employee
of FCI to observe such inspection or work, and (iv) comply with other similar
reasonable nondiscriminatory security, health or safety requirements of FCI, as
FCI may establish from time to time in accordance with good industry practices,
provided that such other requirements do not, individually or in the aggregate,
substantially interfere with or delay inspections or work of BNPLC authorized by
this Lease.
(b) If FCI fails to perform any act or to take any action which
hereunder FCI is required to perform or take, or to pay any money which
hereunder FCI is required to pay, and if such failure or action constitutes an
Event of Default or causes BNPLC or any director, officer, employee or Affiliate
of BNPLC to be overtly threatened with criminal prosecution or renders BNPLC's
interest in the Property or any part thereof at risk of forfeiture by forced
sale or otherwise, then in addition to any other remedies specified herein or
otherwise available, BNPLC may, perform or cause to be performed such act or
take such action or pay such money. Any expenses so incurred by BNPLC, and any
money so paid by BNPLC, shall be a demand
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obligation owing by FCI to BNPLC. Further, BNPLC, upon making such payment,
shall be subrogated to all of the rights of the person, corporation or body
politic receiving such payment. But nothing herein shall imply any duty upon the
part of BNPLC to do any work which under any provision of this Lease FCI may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of FCI's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to FCI or the subtenants of FCI by reason of making such repairs or
the performance of any such work on or in the Property, or on account of
bringing materials, supplies and equipment into or through the Property during
the course of such work (except for liability in connection with death or injury
or damage to the property of third parties caused by [and attributed by any
applicable principles of comparative fault to] the Established Misconduct of
BNPLC), and the obligations of FCI under this Lease shall not thereby be excused
in any manner.
16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF FCI. FCI
represents, warrants and covenants as follows:
(a) Negative Covenants. Without the prior written consent
of BNPLC in each case, neither FCI nor any of its Affiliates shall:
(i) Multi employer ERISA Plans. Incur or permit any
Affiliate to incur any obligation to contribute to any "Multi employer
plan" as defined in Section 4001 of ERISA.
(ii) Prohibited ERISA Transaction. Enter into any
transaction which would cause this Lease or the other Operative
Documents or any other document executed in connection herewith (or any
exercise of BNPLC's rights hereunder or thereunder) to constitute a
non-exempt prohibited transaction under ERISA.
(b) Financial Statements; Required Notices; Certificates as
to Default(b) Financial Statements; Required Notices; Certificates as to
Default. To the extent not so delivered by Guarantor, FCI shall deliver to BNPLC
and to each Participant of which FCI has been notified:
(i) copies of all financial statements, certificates,
notices and other information that Guarantor is required to provide by
Part 2 of Schedule A attached to the Guaranty prior to the deadlines for
delivery established thereunder;
(ii) together with the annual and quarterly financial
statements furnished in accordance with subparagraph 16.(b)(i), a
certificate of a Responsible Financial Officer of Guarantor in the form
attached hereto as Exhibit G certifying (a) that no Event of Default or
material Default by FCI has occurred and is continuing (or, if an Event
of Default or material Default by FCI has occurred, stating the nature
thereof and the action which FCI proposes to take with respect thereto),
(b) that the representations and warranties by Guarantor and FCI
contained in the provisions referenced in Exhibit G from this Lease, the
other Operative Documents and the Guaranty are true and correct in all
material respects on and as of the date of such certificate as though
made on and as of such date, or, if not then true and correct, a brief
statement as to why such representations are no longer true and correct,
and (c) the accuracy of computations attached thereto demonstrating
compliance by Guarantor with the financial covenants established in
Schedule A attached to the Guaranty;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Default or material Default known
to a Responsible Financial Officer of Guarantor, a statement
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setting forth details of such Event of Default or material Default and
the action which FCI has taken and proposes to take with respect
thereto;
(iv) as soon as practicable and in any event within thirty
days after a Responsible Financial Officer of FCI knows or has reason to
know that any ERISA Termination Event with respect to any Plan has
occurred, a statement of a Responsible Financial Officer of FCI
describing such ERISA Termination Event and the action, if any, which
FCI proposes to take with respect thereto;
(v) upon request by BNPLC, a statement by FCI and Guarantor
in writing certifying that this Lease and the Guaranty are unmodified
and in full effect (or, if there have been modifications, that this
Lease and the Guaranty are in full effect as modified, and setting forth
such modifications) and the dates to which the Base Rent, Commitment
Fees and Administrative Agency Fees have been paid and either stating
that no default exists hereunder or specifying each such default; it
being intended that any such statement may be relied upon by any
prospective purchaser or mortgagee of the Property or any prospective
Participant;
(vi) promptly after any change in the rating of the Index
Debt of Guarantor by S&P or Xxxxx'x, which will result in a change in
the Spread (as defined in the List of Defined Terms), a certificate of a
Responsible Financial Officer of Guarantor advising BNPLC of the ratings
after the change; and
(vii) such other information respecting the condition or
operations, financial or otherwise, of FCI, of its Affiliates or of the
Property as BNPLC or any Participant may from time to time reasonably
request.
BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 16.(b) to any Participant and to
any regulatory body having jurisdiction over BNPLC, BNPLC's Parent or any other
Participant that requires or requests it.
(c) No Default or Violation. The execution, delivery and
performance by FCI of this Lease do not and will not constitute a breach or
default under any other material agreement or contract to which FCI is a party
or by which FCI is bound or which affects the Property, and do not violate or
contravene any law, order, decree, rule or regulation to which FCI is subject,
and such execution, delivery and performance by FCI will not result in the
creation or imposition of (or the obligation to create or impose) any lien,
charge or encumbrance on, or security interest in, FCI's property pursuant to
the provisions of any of the foregoing.
(d) No Suits. Except as disclosed in Schedule 2, there are no
judicial or administrative actions, suits, proceedings or investigations pending
or, to FCI's knowledge, threatened that will adversely affect the Property or
the validity, enforceability or priority of this Lease, and FCI is not in
default with respect to any order, writ, injunction, decree or demand of any
court or other governmental or regulatory authority that could materially and
adversely affect the use, occupancy or operation of the Property. No
condemnation or other like proceedings are pending or, to FCI's knowledge,
threatened against the Property.
(e) Enforceability. The execution, delivery and performance by
FCI of this Lease and the other Operative Documents 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 FCI's articles
of incorporation
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or bylaws. This Lease and the Other Operative Documents are valid, binding and
legally enforceable obligations of FCI in accordance with its terms, except as
such enforcement is affected by bankruptcy, insolvency and similar laws
affecting the rights of creditors, generally, and equitable principles of
general application.
(f) Financial Matters. FCI is not "insolvent" on the date hereof
(that is, the sum of FCI's absolute and contingent liabilities, including the
obligations of FCI under this Lease, does not exceed the fair market value of
FCI's assets) and has no outstanding liens, suits, garnishments or court actions
which could render FCI insolvent or bankrupt. FCI's capital is adequate for the
businesses in which FCI is engaged and intends to be engaged. FCI has not
incurred (whether hereby or otherwise), nor does FCI intend to incur or believe
that it will incur, debts which will be beyond its ability to pay as such debts
mature. There has not been filed by or, to FCI's knowledge, against FCI 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 FCI or any significant portion of FCI's property,
reorganization, arrangement, rearrangement, composition, extension, liquidation
or dissolution or similar relief under the federal Bankruptcy Code or any state
law. The financial statements and all financial data heretofore delivered to
BNPLC relating to FCI are true, correct and complete in all material respects.
(g) Organization. FCI 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. FCI has all requisite power and has procured or will
procure on a timely basis all governmental certificates of authority, licenses,
permits, qualifications and other documentation required to fulfill its
obligations under this Lease. FCI has the corporate power and adequate
authority, rights and franchises to own FCI's property and to carry on FCI's
business as now conducted and is duly qualified and in good standing in each
state in which the character of FCI's business makes such qualification
necessary 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 FCI and its Subsidiaries, taken as a whole.
(h) ERISA. FCI is not and will not become an "employee benefit
plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
ERISA. The assets of FCI do not and will not in the future constitute "plan
assets" of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101. FCI is not and will not become a "governmental plan" within the
meaning of Section 3(32) of ERISA. Transactions by or with FCI are not subject
to state statutes regulating investments of and fiduciary obligations with
respect to governmental plans. No ERISA Termination Event has occurred with
respect to any Plan of FCI and FCI and all its Affiliates are in compliance with
ERISA. Neither FCI nor any of its Affiliates is required to contribute to, or
has any other absolute or contingent liability in respect of, any "Multi
employer plan" as defined in Section 4001 of ERISA. As of the Effective Date no
"accumulated funding deficiency" (as defined in Section 412(a) of the Code)
exists with respect to any Plan of FCI, whether or not waived by the Secretary
of the Treasury or his delegate, and the current value of the benefits of each
Plan of FCI, if any, equals or is less than the current value of such Plan's
assets available for the payment of such benefits.
(i) Use of Proceeds. In no event shall the funds from the
Initial Funding Advance or any Construction Advance be used (nor have they been
used) directly or indirectly for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" or any "margin securities"
(as such terms are defined respectively in Regulation U and Regulation G
promulgated by the Board of Governors of the Federal Reserve System) or to
extend credit to others directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities. FCI represents and warrants
that FCI is not engaged principally, or as one of FCI's important
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activities, in the business of extending credit to others for the purpose of
purchasing or carrying such margin stock or margin securities.
(j) Investment Company Act. FCI is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(k) Omissions. None of FCI's representations or warranties
contained in this Lease or in any other document, certificate or written
statement furnished to BNPLC by or on behalf of FCI in connection with this
Lease contains any untrue statement of a material fact or omits a material fact
necessary in order to make the statements contained herein or therein (when
taken in their entireties) not misleading.
(l) Not a Foreign Person. FCI is not a "foreign person" within
the meaning of Sections 1445 and 7701 of the Code (i.e. FCI is not a
non-resident alien, foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and regulations
promulgated thereunder).
(m) Further Assurances. FCI shall, upon request of BNPLC, (i)
promptly correct any error or omission which may be discovered in the contents
of this Lease or in any other instrument executed in connection herewith or in
the execution or acknowledgment thereof; (ii) execute, acknowledge, deliver and
record or file such further instruments and do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Lease and to subject to this Lease any property intended by the terms
hereof to be covered hereby, including any renewals, additions, substitutions,
replacements or appurtenances to the Property; (iii) execute, acknowledge,
deliver, procure and record or file any document or instrument deemed advisable
by BNPLC to protect its rights in and to the Property against the rights or
interests of third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do such further acts
as may be necessary, desirable or proper in the reasonable determination of
BNPLC to enable BNPLC, BNPLC's Parent and any other Participants to comply with
the requirements or requests of any agency or authority having jurisdiction over
them.
17. EVENTS OF DEFAULT.
(a) Definition of Events of Default. Each of the following
events shall be deemed to be an "EVENT OF DEFAULT" by FCI under this Lease:
(i) FCI shall fail to pay when first due any Base Rent, any
Commitment Fees or any Administrative Agency Fees and such failure shall
continue for three Business Days after FCI is notified thereof by BNPLC
pursuant to a notice that specifically references this Paragraph 17.(a).
(ii) FCI shall fail to pay when first due any Rent other
than Base Rent, Commitment Fees or Administrative Agency Fees, or FCI
shall fail to pay when first due any amount required by the Closing
Certificate, and in either case such failure shall continue for thirty
days after FCI is notified thereof by BNPLC pursuant to a notice that
specifically references this Paragraph 17.(a).
(iii) FCI shall fail to comply with any term, provision or
covenant of this Lease, the Construction Management Agreement or the
Closing Certificate, other than as described in the other clauses of
this subparagraph 17.(a), and shall not cure such failure prior to the
earlier of (A) thirty days after notice thereof is sent to FCI, or (B)
the date any writ or order is issued for the levy or sale of any
property owned by BNPLC (including the Property) because of such failure
or any criminal action is
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overtly threatened or instituted against BNPLC or any of its directors,
officers or employees because of such failure; provided, however, that
so long as no such writ or order is issued and no such criminal action
is overtly threatened or instituted, the period within which such
failure may be cured by FCI shall be extended for a further period (not
to exceed an additional one hundred twenty days) as shall be necessary
for the curing thereof with diligence, if (but only if) (x) such failure
is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) FCI shall promptly have commenced to
cure such failure and shall thereafter continuously prosecute the curing
thereof with reasonable diligence and (z) the extension of the period
for cure will not, in the case of such a failure that occurs or
commences more than thirty-five days prior to the expiration of this
Lease, cause the period for cure to extend beyond five days prior to the
expiration of this Lease.
(iv) FCI shall fail to pay the full amount of any
Supplemental Payment on the Designated Sale Date as required by the
Purchase Agreement.
(v) FCI shall abandon the Property.
(vi) Guarantor, FCI or any of Guarantor's other Subsidiaries
shall: (1) be in default with respect to any payment (whether of
principal or interest and regardless of amount) in respect of any
"Material Indebtedness" (which as used in this provision shall mean any
Debt of Guarantor or its applicable Subsidiary [as the case may be] that
is owed to BNPLC or BNPLC's Affiliates or that is outstanding in a
principal amount of at least $10,000,000 in the aggregate), and such
default shall continue beyond the applicable grace period, if any,
specified in the agreements or instruments relating to such Material
Indebtedness; or (2) be in default under any agreement or instrument
relating to any Material Indebtedness and as a result of such default,
the Material Indebtedness shall be declared to be due and payable prior
to the stated maturity thereof.
(vii) Guarantor, FCI or any of Guarantor's other Subsidiaries
shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against Guarantor, FCI or any of Guarantor's
other Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization, or seeking
the entry of an order for the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of sixty consecutive days,
or any of the actions sought in such proceeding (including the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part
of its property) shall occur; or Guarantor, FCI or any of Guarantor's
other Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this clause 17.(a)(vii).
(viii) Any order, judgment or decree is entered in any
proceedings against Guarantor, FCI or any of Guarantor's other
Subsidiaries decreeing its dissolution and such order, judgment or
decree remains unstayed and in effect for more than sixty days.
(ix) Any order, judgment or decree is entered in any
proceedings against Guarantor decreeing a divestiture of any of its
assets that represent a substantial part, or the divestiture of the
stock of FCI or any of Guarantor's other Subsidiaries whose assets
represent a substantial part, of the
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total assets of Guarantor and its Subsidiaries (determined on a
consolidated basis in accordance with GAAP) or which requires the
divestiture of assets, or stock of any of Guarantor's Subsidiaries,
which shall have contributed a substantial part of the net income of
Guarantor and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed and
in effect for more than sixty days.
(x) A final judgment or order for the payment of money in
an amount (not covered by insurance) which exceeds $10,000,000 shall be
rendered against Guarantor, FCI or any of Guarantor's other Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment, or (ii) within sixty days after the entry
thereof, such judgment or order is not discharged or execution thereof
stayed pending appeal, or within thirty days after the expiration of any
such stay, such judgment is not discharged.
(xi) Any ERISA Termination Event that BNPLC determines in
good faith would constitute grounds for a termination of any Plan of FCI
or for the appointment by the appropriate United States district court
of a trustee to administer any Plan of FCI shall have occurred and be
continuing thirty days after notice to such effect shall have been given
to FCI by BNPLC, or any Plan of FCI shall be terminated, or a trustee
shall be appointed by an appropriate United States district court to
administer any Plan of FCI, or the Pension Benefit Guaranty Corporation
shall institute proceedings to terminate any Plan of FCI or to appoint a
trustee to administer any Plan of FCI.
(xii) FCI or any of its Affiliates shall enter into any
transaction which would cause this Lease or any other Operative Document
or any other document executed in connection herewith (or any exercise
of BNPLC's rights hereunder or thereunder) to constitute a non-exempt
prohibited transaction under ERISA.
(xiii) Guarantor shall breach or repudiate its guarantee of
the obligations of FCI under this Lease, the Construction Management
Agreement, the Purchase Agreement or the Closing Certificate or
Guarantor shall fail to comply with any other covenants of Guarantor in
the Guaranty including the obligations of Guarantor set forth Section 10
of the Guaranty.
(xiv) Any breach by FCI of subparagraph 16.(b)(iii) resulting
from FCI's failure to notify BNPLC of a material Default known to a
Responsible Financial Officer.
(xv) Any representation of FCI contained herein or in the
other Operative Documents is false or misleading in any material
respect, or any certificate delivered to BNPLC by or on behalf of FCI as
required by this Lease is false or misleading in any material respect.
(xvi) Any representation of Guarantor contained in the
Guaranty is false or misleading in any material respect, or any
certificate, if any, delivered to BNPLC by or on behalf of Guarantor as
may be required by the Guaranty is false or misleading in any material
respect.
18. REMEDIES.
(a) Basic Remedies. At any time after an Event of Default and
after BNPLC has given any notice required by subparagraph 18.(b), BNPLC shall be
entitled at BNPLC's option (and without limiting BNPLC in the exercise of any
other right or remedy BNPLC may have, and without any further demand or notice
except as expressly described in this subparagraph 18.(a)), to exercise any one
or more of the following
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remedies:
(i) By notice to FCI, BNPLC may terminate FCI's right
to possession of the Property. A notice given in connection with
unlawful detainer proceedings specifying a time within which to cure a
default shall terminate FCI's right to possession if FCI fails to cure
the default within the time specified in the notice.
(ii) Upon termination of FCI's right to possession and
without further demand or notice, BNPLC may re-enter the Property in any
manner not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land or in
the Improvements may be removed and stored in a warehouse or elsewhere
at the expense and risk of and for the account of FCI.
(iii) Upon termination of FCI's right to possession,
this Lease shall terminate and BNPLC may recover from FCI:
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 FCI 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 FCI
proves could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC
for all the detriment proximately caused by FCI's failure to
perform FCI's obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom,
including, but not limited to, the costs and expenses (including
Attorneys' Fees, advertising costs and brokers' commissions) of
recovering possession of the Property, removing persons or
property therefrom, placing the Property in good order,
condition, and repair, preparing and altering the Property for
reletting, all other costs and expenses of reletting, and any
loss incurred by BNPLC as a result of FCI's failure to perform
FCI's obligations under the Other Operative Documents.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall
be computed by allowing interest at ten percent (10%) per annum
or such other rate as may be the maximum interest rate then
permitted to be charged under California law at the time of
computation. The "WORTH AT THE TIME OF AWARD" of the amount
referred to in subparagraph 18.(a)(iii)c) shall be computed by
discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one
percent (1%).
e) Such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by applicable
California law.
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(iv) BNPLC 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 if FCI breaches this Lease and abandons
the Property, this Lease shall continue in effect for so long as BNPLC
does not terminate FCI's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Lease, including the right to
recover the Rent as it becomes due under this Lease. FCI's right to
possession shall not be deemed to have been terminated by BNPLC except
pursuant to subparagraph 18.(a)(i) hereof. The following shall not
constitute a termination of FCI's right to possession:
(a) Acts of maintenance or preservation or efforts to
relet the Property;
(b) The appointment of a receiver upon the initiative
of BNPLC to protect BNPLC's interest under this Lease; or
(c) Reasonable withholding of consent to an
assignment or subletting, or terminating a subletting or
assignment by FCI.
(b) Notice Required So Long As FCI 's Purchase Option and
Initial Remarketing Rights and Obligations Continue Under the Purchase
Agreement. So long as FCI remains in possession of the Property and there has
been no termination of FCI's Purchase Option and FCI's Initial Remarketing
Rights and Obligations as provided Paragraph 4 of the Purchase Agreement,
BNPLC's right to exercise remedies provided in subparagraph 18.(a) will be
subject to the condition precedent that BNPLC shall have notified FCI of BNPLC's
intent to exercise remedies provided in subparagraph 18.(a) at least sixty days
prior to exercising the remedies. The condition precedent is intended to provide
FCI with an opportunity to exercise FCI's Purchase Option or FCI's Initial
Remarketing Rights and Obligations before losing possession of the Property
pursuant to subparagraph 18.(a). The condition precedent is not, however,
intended to extend any period for curing an Event of Default. Accordingly, if an
Event of Default has occurred, and regardless of whether any Event of Default is
then continuing, BNPLC may proceed immediately to exercise remedies provided in
subparagraph 18.(a) at any time after the earlier of (i) sixty days after BNPLC
has given such a notice to FCI, (ii) any date upon which FCI relinquishes
possession of the Property, or (iii) any termination of FCI's Purchase Option
and FCI's Initial Remarketing Rights and Obligations.
(c) Enforceability. This Paragraph 18 shall be enforceable to
the maximum extent not prohibited by Applicable Law, and the unenforceability of
any provision in this Paragraph shall not render any other provision
unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred
upon or reserved to BNPLC is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy given hereunder or now or hereafter existing under
Applicable Law or in equity; however, before exercising any right or remedy
available under Applicable Law or in equity to evict FCI from the Property or to
terminate FCI's right of occupancy hereunder, BNPLC shall give FCI any sixty
days notice required in subparagraph 18.(b). In addition to other remedies
provided in this Lease, BNPLC shall be entitled, to the extent permitted by
Applicable Law or in equity, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease, or to a decree compelling performance of
any of the other covenants, agreements, conditions or provisions of this Lease
to be performed by FCI, or to any other remedy allowed to BNPLC at law or in
equity. Nothing contained in this Lease shall limit or prejudice the right of
BNPLC to prove for and
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obtain in proceedings for bankruptcy or insolvency of FCI by reason of the
termination of this Lease, an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, the damages are to be proved, whether or not the amount be greater, equal
to, or less than the amount of the loss or damages referred to above. Without
limiting the generality of the foregoing, nothing contained herein shall modify,
limit or impair any of the rights and remedies of BNPLC under the Purchase
Agreement, and BNPLC shall not be required to give the sixty day notice
described in subparagraph 18.(a) as a condition to any acceleration of the
Designated Sale Date or to taking any action to enforce the Purchase Agreement
or the Closing Certificate.
19. DEFAULT BY BNPLC. If BNPLC should default in the performance of
any of its obligations under this Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from FCI specifying such default and specifying what action
FCI believes is necessary to cure the default. If FCI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then FCI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to FCI by such
default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required to consummate a conveyance of
BNPLC's interest in the Property required by the Purchase Agreement.
20. QUIET ENJOYMENT. Provided FCI 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 FCI hereunder, BNPLC shall not during the Term disturb FCI's peaceable and
quiet enjoyment of the Property; however, such enjoyment shall be subject to the
terms, provisions, covenants, agreements and conditions of this Lease, to
Permitted Encumbrances, to Development Documents and to any other claims not
constituting Liens Removable by BNPLC. If any Lien Removable by BNPLC is claimed
against the Property, including any judgment lien securing a Deductible Judgment
against BNPLC, BNPLC will remove the Lien Removable by BNPLC promptly. However,
BNPLC shall not be responsible for any Lien that is expressly excluded from the
definition of Liens Removable by BNPLC in the attached List of Defined Terms.
Any breach by BNPLC of this Paragraph shall render BNPLC liable to FCI for any
monetary damages proximately caused thereby, but as more specifically provided
in Paragraph 2 above, no such breach shall entitle FCI to terminate this Lease
or excuse FCI from its obligation to pay Base Rent and other amounts hereunder.
21. SURRENDER UPON TERMINATION. Unless FCI or an Applicable Purchaser
purchases BNPLC's entire interest in the Property pursuant to the terms of the
Purchase Agreement, FCI shall, upon the termination of FCI's right to occupancy,
surrender to BNPLC the Property, including any buildings, alterations,
improvements, replacements or additions constructed by FCI, with all fixtures
and furnishings included in the Property, but not including movable furniture
and movable personal property not covered by this Lease, free of all Hazardous
Substances (including Permitted Hazardous Substances) and tenancies and, to the
extent required by BNPLC, with all Improvements in substantially the same
condition as of the date the same were initially completed, excepting only (i)
ordinary wear and tear that occurs between the maintenance, repairs and
replacements required by other provisions of this Lease, and (ii) alterations
and additions which are expressly permitted by the terms of this Lease and which
have been completed by FCI in a good and workmanlike manner in accordance with
all Applicable Laws. Any movable furniture or movable personal property
belonging to FCI or any party claiming under FCI, if not removed at the time of
such termination and if BNPLC shall so elect, shall be deemed abandoned and
become the property of BNPLC without any payment or offset therefor. If BNPLC
shall not so elect, BNPLC may remove such property from the Property and
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store it at FCI's risk and expense. FCI shall bear the expense of repairing any
damage to the Property caused by such removal by BNPLC or FCI.
22. HOLDING OVER BY FCI. Should FCI not purchase BNPLC's right, title
and interest in the Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Property after the termination of this Lease
without BNPLC's consent, whether such termination occurs by lapse of time or
otherwise, such holding over shall constitute and be construed as a tenancy from
day to day only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the
day in question, times (ii) (A) the Prime Rate in effect for such day so long as
the holdover period does not extend beyond ninety days and (B) for each such day
beginning with the ninety-first day after the holdover commences, two percent
(2%) above the Prime Rate; divided by (iii) three hundred and sixty; subject,
however, to all of the terms, provisions, covenants and agreements on the part
of FCI hereunder. No payments of money by FCI to BNPLC after the termination of
this Lease shall reinstate, continue or extend the Term of this Lease and no
extension of this Lease after the termination thereof shall be valid unless and
until the same shall be reduced to writing and signed by both BNPLC and FCI.
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE
DOCUMENTS. FCI acknowledges and agrees that nothing contained in this Lease
shall limit, modify or otherwise affect any of FCI's obligations under the other
Operative Documents, which obligations are intended to be separate, independent
and in addition to, and not in lieu of, the obligations set forth herein. In the
event of any inconsistency between the terms and provisions of the Purchase
Agreement and the terms and provisions of this Lease, the terms and provisions
of the Purchase Agreement shall control. In the event of any inconsistency
between the terms and provisions of the Closing Certificate or Construction
Management Agreement and the terms and provisions of this Lease, the terms and
provisions of this Lease shall control; provided, nothing in this Lease shall be
construed to limit or impair the indemnities provided by FCI in the Closing
Certificate, including the indemnity therein provided against Environmental
Losses, and nothing herein shall limit the obligations of FCI under the
Construction Management Agreement.
24. WAIVER OF JURY TRIAL. BNPLC AND FCI EACH HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS BETWEEN THEM
RELATING TO THIS LEASE OR THE PROPERTY. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. FCI and BNPLC each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on the waiver in entering into this Lease and the other documents referred to
herein, and that each will continue to rely on the waiver in their related
future dealings. FCI and BNPLC each further warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THIS LEASE OR THE PROPERTY. In the event of
litigation, this Lease may be filed as a written consent to a trial by the
court.
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25. MISCELLANEOUS.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending, mailing or delivery of any notice
or demand hereunder or with reference to the making of any payment required
hereunder, shall be deemed to be complied with when and if the following steps
are taken:
(i) All Rent required to be paid by FCI to BNPLC hereunder shall
be paid to BNPLC in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 000000000 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Solectron (Force Computers Synthetic Lease)
or at such other place and in such other manner as BNPLC may designate in a
notice to FCI.
(ii) All advances paid to FCI by BNPLC hereunder or in
connection herewith shall be paid to FCI in immediately available funds
at such place and in such manner as FCI may reasonably designate in a
notice signed by FCI's Treasurer or Chief Financial Officer to BNPLC.
(iii) All notices, demands, approvals, consents and other
communications to be made hereunder to or by the parties hereto must, to
be effective for purpose of this Lease, be in writing. Notices, demands
and other communications required or permitted hereunder are to be sent
to the addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (C) hereof shall be deemed received (whether or not
actually received) upon first attempted delivery at the proper notice
address on any Business Day between 9:00 A.M. and 5:00 P.M., and any
notice or other communication sent pursuant to clause (B) hereof shall
be deemed received upon dispatch by electronic means.
Address of BNPLC:
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Telecopy: (000) 000-0000
With a copy to:
Banque Nationale de Paris, San Francisco
000 Xxxxxxxxxx Xxxxxx
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Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx or Xxxxx Xxxxxx
Telecopy: (000) 000-0000
And with a copy to:
Xxxxx Xxxxxx
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Address of FCI:
Force Computers, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxxxxx #0
Xxxxxxxx, 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/DSS
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 created hereby created with any other interest in the Property
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or the leasehold estate created hereby and any other
interest in the Property, unless all Persons with an interest in the Property
that would be adversely affected by any such merger specifically agree in
writing that such a merger shall occur.
(d) No Implied Waiver. The failure of BNPLC or FCI to insist at
any time upon the strict performance of any covenant or agreement or to exercise
any option, right, power or remedy contained in this Lease shall not be
construed as a waiver or a relinquishment thereof for the future. The waiver of
or redress for any breach of this Lease shall not prevent a similar subsequent
act from constituting a violation. Any express waiver shall affect only the term
or condition specified in such waiver and only for the time and in the manner
specifically stated therein. A receipt by BNPLC of any Base Rent or other
payment hereunder with knowledge of the breach of any covenant or agreement
contained in this Lease shall not be deemed a waiver of such breach, and
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49
no waiver of any provision of this Lease shall be deemed to have been made
unless expressed in writing and signed by the waiving party.
(e) NO IMPLIED REPRESENTATIONS BY BNPLC. BNPLC AND BNPLC'S
AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT TO THE PROPERTY
EXCEPT AS EXPRESSLY SET FORTH HEREIN AND IN THE OTHER OPERATIVE DOCUMENTS, AND
NO RIGHTS, EASEMENTS OR LICENSES ARE ACQUIRED BY FCI BY IMPLICATION OR OTHERWISE
EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE AND THE OTHER OPERATIVE DOCUMENTS.
(f) Entire Agreement. This Lease and the other Operative
Documents and the other documents dated as of the Effective Date which are being
executed by FCI and executed or accepted by BNPLC contemporaneously with the
execution of this Lease supersede any prior negotiations and agreements between
BNPLC and FCI concerning the Property, and no amendment or modification of this
Lease shall be binding or valid unless expressed in a writing executed by both
parties hereto.
(g) Binding Effect. All of the covenants, agreements, terms and
conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective successors and, to the extent
assignment is permitted hereunder, their respective assigns.
(h) Time is of the Essence. Time is of the essence as to all
obligations of FCI and BNPLC and all notices required of FCI and BNPLC under
this Lease.
(i) Governing Law. This Lease shall be governed by and construed
in accordance with the laws of the State of California without regard to
conflict or choice of laws.
(j) Paragraph Headings. The paragraph headings contained in this
Lease are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several paragraphs hereof.
(k) Other Terms and References. Words of any gender used in this
Lease shall be held and construed to include any other gender, and words in the
singular number shall be held to include the plural and vice versa, unless the
context otherwise requires. References herein to Paragraphs, subparagraphs or
other subdivisions shall refer to the corresponding Paragraphs, subparagraphs or
subdivisions of this Lease, unless specific reference is made to another
document or instrument. References herein to any Schedule or Exhibit shall refer
to the corresponding Schedule or Exhibit attached hereto, which shall be made a
part hereof by such reference. All capitalized terms used in this Lease which
refer to other documents shall be deemed to refer to such other documents as
they may be renewed, extended, supplemented, amended or otherwise modified from
time to time, provided such documents are not renewed, extended or modified in
breach of any provision contained herein or therein or, in the case of any other
document to which BNPLC is a party or of which BNPLC is an intended beneficiary,
without the consent of BNPLC. All accounting terms used but not specifically
defined herein shall be construed in accordance with GAAP. The words "this
Lease", "herein", "hereof", "hereby", "hereunder" and words of similar import
when used in this Lease refer to this Lease as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this Paragraph" and "this
subparagraph" and similar phrases used herein refer only to the Paragraphs or
subparagraphs in which the phrase occurs. As used herein the word "or" is not
exclusive. As used herein the words "include", "including" and similar terms
shall be construed as if followed by "without limitation to".
(l) Not a Partnership, Etc. NOTHING IN THIS LEASE IS INTENDED TO
BE OR TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE
BETWEEN BNPLC
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AND FCI. NEITHER THE EXECUTION OF THIS LEASE NOR THE ADMINISTRATION OF THIS
LEASE OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER RIGHT, DUTY
OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO THIS LEASE OR SUCH DOCUMENTS IS
INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO FCI.
26. INCOME TAX REPORTING. BNPLC and FCI intend this Lease and the
Purchase Agreement to have a form for income taxes which is different than the
form of this Lease and the Purchase Agreement for other purposes, and thus the
parties acknowledge and agree as follows:
(a) FOR PURPOSES OF DETERMINING THEIR RESPECTIVE FEDERAL,
STATE AND LOCAL INCOME TAX OBLIGATIONS, BNPLC and FCI believe and
intend that this Lease and the Purchase Agreement constitute a
financing arrangement or conditional sale. Both BNPLC and FCI
agree to report this Lease and the Purchase Agreement as a
financing arrangement or conditional sale on their respective
income tax returns (the "REQUIRED REPORTING"), unless such
Required Reporting is challenged in writing by the Internal
Revenue Service or another governmental authority with
jurisdiction (a "TAX CHALLENGE"). Consistent with the foregoing,
BNPLC and FCI expect that FCI (and not BNPLC) shall be treated as
the true owner of the Property for income tax purposes, thereby
entitling FCI (and not BNPLC) to take depreciation deductions and
other tax benefits available to the owner. FCI shall also report
all interest earned on Escrowed Proceeds as FCI's income for
federal, state and local income tax purposes. REFERENCES IN THIS
LEASE OR IN THE PURCHASE AGREEMENT TO A "LEASE" OR TO "LEASED
PROPERTY" ARE NOT INTENDED FOR INCOME TAX PURPOSES TO REFLECT THE
INTENT OF BNPLC OR FCI AS TO THE FORM OF THE TRANSACTIONS COVERED
BY, OR THE PROPER CHARACTERIZATION OF, THIS LEASE AND THE
PURCHASE AGREEMENT.
(b) FOR ALL OTHER PURPOSES, INCLUDING THE DETERMINATION OF
THE APPROPRIATE FINANCIAL ACCOUNTING FOR THIS LEASE AND THE
DETERMINATION OF THEIR RESPECTIVE RIGHTS AND REMEDIES UNDER STATE
LAW, BNPLC and FCI believe and intend that (i) this Lease
constitutes a true Lease, not a mere financing arrangement,
enforceable in accordance with its express terms (and neither
this subparagraph 26 nor the provisions referencing this
subparagraph on the title page of this Lease nor the
corresponding provisions in the Purchase Agreement are intended
to affect the enforcement of any other provisions of this Lease
or the Purchase Agreement) and (ii) the Purchase Agreement shall
constitute a separate and independent contract, enforceable in
accordance with the express terms and conditions set forth
therein. In this regard, FCI acknowledges that FCI asked BNPLC to
participate in the transactions evidenced by this Lease and the
Purchase Agreement as a landlord and owner of the Property, not
as a lender. Although other transactions might have been used to
accomplish similar results, FCI 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, FCI cannot equitably deny that
this Lease and the Purchase Agreement should be construed and
enforced in accordance with their respective terms, rather than
as a mortgage or other security device, in any action brought by
BNPLC to enforce this Lease or the Purchase Agreement.
In the event of a Tax Challenge, BNPLC and FCI shall each provide to the other
copies of all notices from the Internal Revenue Service or any other
governmental authority presenting the Tax Challenge. Further, before changing
from the Required Reporting because of a Tax Challenge, BNPLC and FCI shall each
consider in good faith any reasonable suggestions received from the other party
to this Lease about an appropriate response to the
44
51
Tax Challenge; provided, however, that the suggestions are set forth in a
written notice delivered no later than thirty Business Days after the suggesting
party is first notified of the Tax Challenge; and, provided further, that when
presented with a Tax Challenge, BNPLC and FCI 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, FCI must indemnify and hold harmless BNPLC
from and against all liabilities, costs, additional taxes and other expenses
that may arise or become due because of any challenge to the Required Reporting
or because of any resulting recharacterization of this Lease or the Purchase
Agreement required by the Internal Revenue Service or another governmental
authority, including any additional taxes that may become due upon any sale
under the Purchase Agreement, to the extent (if any) that such liabilities,
costs, additional taxes and other expenses are not offset by tax savings
resulting from additional depreciation deductions or other tax benefits to BNPLC
of the recharacterization.
27. PROPRIETARY INFORMATION AND CONFIDENTIALITY. FCI shall have no
obligation to provide proprietary information (as defined in the next sentence)
to BNPLC, except and to the extent that (1) BNPLC reasonably determines that
BNPLC cannot accomplish the purposes of BNPLC's inspection of the Property
pursuant to the various provisions hereof without evaluating such information,
and (2) before conducting any inspections of the Property permitted hereunder
BNPLC shall, if requested by FCI, confirm and ratify the confidentiality
agreements covering such proprietary information set forth in subparagraph
7.(f). For purposes of this Lease "PROPRIETARY INFORMATION" means FCI's
intellectual property, trade secrets and other confidential information of value
to FCI about, among other things, FCI's products, marketing and corporate
strategies, but in no event will "proprietary information" include any
disclosure of substances and materials (and their chemical composition) which
are or previously have been present in, on or under the Property at the time of
any inspections by BNPLC, nor will "proprietary information" include any
additional disclosures reasonably required to permit BNPLC to determine whether
the presence of such substances and materials has constituted a violation of
Environmental Laws or this Lease. In addition, under no circumstances shall FCI
have any obligation to disclose to BNPLC or any other party any proprietary
information of FCI (including, without limitation, any pending applications for
patents or trademarks, any research and design and any trade secrets) except if
and to the limited extent reasonably necessary to comply with the express
provisions of this Lease.
28. USURY SAVINGS CLAUSE. Notwithstanding anything to the contrary
contained in this Lease or the other Operative Documents to the contrary, BNPLC
does not intend to contract for, charge or collect any amount of money that
constitutes interest in excess of the Maximum Rate. As used herein, "MAXIMUM
RATE" shall mean, at any time in question, the maximum rate of interest which,
under applicable law, may be charged. If, notwithstanding the intention of the
parties as explained in Paragraph 26, this Lease and the other Operative
Documents should be construed as a financing arrangement under state law, BNPLC
and FCI agree that it is their intent in the execution of this Lease and the
other Operative Documents to contract in strict compliance with applicable law
concerning usury. In furtherance thereof, BNPLC and FCI stipulate and agree that
none of the terms and provisions contained in this Lease or in the other
Operative Documents shall ever be construed to create a contract to pay for the
use, forbearance or detention of money at a rate in excess of the Maximum Rate.
Neither FCI nor any other parties now or hereafter becoming liable to BNPLC
under the terms of this Lease or the other Operative Documents shall ever be
required to pay interest at a rate in excess of the Maximum Rate, and the
provisions of this paragraph shall control over all other provisions of this
Lease and of the other Operative Documents which may be in apparent conflict
herewith. If the Designated Sale Date is accelerated and as a result thereof any
amounts payable by FCI to BNPLC under or in connection with this Lease or the
other Operative Documents are determined to constitute interest for the actual
period of existence of this Lease in excess of the interest that would have
accrued at the Maximum Rate for such period, BNPLC shall, at its option, either
refund to FCI the amount of such excess or credit such excess as a Qualified
Payment (and thus reduce Stipulated Loss Value, the Break Even Price and other
amounts, the determination of which depend upon Qualified Payments
45
52
credited to FCI) and thereby shall render inapplicable any and all penalties of
any kind provided by applicable laws as a result of such excess interest. If
BNPLC shall receive money (or anything else) which is determined to constitute
interest and which would increase the effective interest rate received by BNPLC
under or in connection with this Lease or the other Operative Documents to a
rate in excess of the Maximum Rate, the amount determined to constitute interest
in excess of the Maximum Rate shall, immediately following such determination,
at the option of BNPLC, be returned to FCI or credited as a Qualified Payment,
in which event any and all penalties of any kind under applicable law as a
result of such excess interest shall be inapplicable. If BNPLC shall not
actually receive, but shall contract for, request or demand, a payment of money
(or anything else) which is determined to constitute interest and which would
increase the effective interest rate contracted for or charged to a rate in
excess of the Maximum Rate, BNPLC shall be entitled, following such
determination, to waive or rescind the contractual claim, request or demand for
the amount determined to constitute interest in excess of the lawful rate, in
which event any and all penalties of any kind under applicable law as a result
of such excess interest shall be inapplicable. By execution of this Lease and
the Purchase Documents, FCI agrees that if, at any time, FCI should have reason
to believe that the transactions evidenced by this Lease or the other Operative
Documents are in fact usurious, it will give BNPLC notice of such condition, and
FCI agrees that BNPLC shall have ninety days in which to make appropriate refund
or other adjustment in order to correct such condition if it in fact exists. The
term "applicable law" as used in this subparagraph shall mean the laws of the
State of California or the laws of the United States, whichever laws allow the
greater rate of interest, as such laws now exist or may be changed or amended or
come into effect in the future.
[The signature pages follow.]
46
53
IN WITNESS WHEREOF, FCI and BNPLC have caused this Amended and Restated
Lease Agreement to be executed as of July 16, 1998.
"FCI"
FORCE COMPUTERS, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------
Printed Name: Xxxxxxx X. Xxxxxx
Title: Vice President & Chief FInancial
Officer
54
[Continuation of signature pages to Amended and Restated Lease Agreement dated
to be effective July 16, 1998]
"BNPLC"
BNP LEASING CORPORATION
By: /s/ XXXXX X. XXX
-------------------------------------
Name: XXXXX X. XXX
Title: Vice President
47
55
Exhibit A
LEGAL DESCRIPTION
All of that certain real property situated in the City of San Xxxx, County of
Santa Xxxxx, State of California, described as follows:
Parcel 1 as shown on that Parcel Map filed for record in the office of the
Recorder of the County of Santa Xxxxx, State of California on July 1, 1998 in
Book 704 of Maps at Pages 11-12.
Exhibit A - Page 1
56
Exhibit B
PERMITTED ENCUMBRANCES
This conveyance is subject to the following matters, but only to the extent
the same are still valid and in full force and effect:
1. Liens securing TAXES AND ASSESSMENTS, not yet due and payable.
2. Easement -
In Favor Of: County of Santa Xxxxx
For: Ingress and egress
Recorded: June 28, 1968 in Book 8174, Page 148, Official Records
Affects: a portion of the Land as follows:
Beginning at the most Northerly corner of that certain 5.545 acre
parcel shown upon that certain Record of Survey recorded October 24,
1950 in Book 29 of Maps, at page 6, Santa Xxxxx County Records;
thence along the Northeasterly line of said 5.545 acre parcel, said
Northeasterly line being also the Southwesterly line of that certain
0.441 acre parcel described as Parcel Two of Exhibit A in the deed
recorded in Book 6500, at pages 101, 102, 103, Official Records of
Santa Xxxxx County S. 17(Degree) E. 26.44 feet to the true point of
beginning and continuing along said Northeasterly and Southwesterly
line S. 17(Degree) E. 34.81 feet; thence leaving said Northeasterly
and Southwesterly line N. 11(Degree) 31' 33" E. 48.16 feet to a point
on the Northeasterly line of said 0.441 acre parcel thence along last
mentioned Northeasterly line N. 17(Degree) W. 18.93 feet to the most
Northerly corner thereof, said Northerly corner also being the most
Northerly corner of that strip of land 23 feet wide, shown parallel
and adjacent to the aforementioned 5.545 acre parcel as shown upon
said Record of Survey; thence leaving last said Northerly corner N.
73(Degree) 00' E. 10.29 feet; thence N. 11(Degree) 31' 33" E. 117.37
feet; thence along the arc of a curve to the left the tangent of
which bears S. 32(Degree) 47' 30" W. having a radius of 300.00 feet
through an angel of 30(Degree) 24' 44" for an arc distance of 159.24
feet to the true point of beginning.
3. Easement -
In Favor Of: City of San Xxxx, a municipal corporation
For: Public service facilities, slope purposes, sanitary sewer
purposes
Recorded: May 8, 1985 in Book J340, Page 1040, Official Records
Affects: Those street areas of Fontanoso Avenue, Fontanoso Way, Xxxxxxx
Avenue, Xxxxxxx Xxxx and Silver Creek Valley Road.
Reference to the records is hereby made for further particulars, as
to the description of the exact location.
4. Easement -
In Favor Of: Pacific Xxxx
For: Underground communication facilities and necessary fixtures
and appurtenances
Recorded: December 20, 1985 in Book J555, Page 160, Official Records
Affects: those portions shown as 1E on Exhibit "B" to deed from B B &
K, a general partnership, to the City of San Xxxx, recorded
May 8, 1985 in Book J340, Pages 1045 through 1062.
Exhibit B - Page 1
57
Exhibit C
NOTICE BY FCI OF ELECTION NOT TO
MAKE CONSTRUCTION-PERIOD
INDEMNITY PAYMENT
- INTENTIONALLY DELETED -
Exhibit C - Page 1
58
Exhibit D
NOTICE OF REQUEST FOR ACTION BY BNPLC
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Amended and Restated Lease Agreement dated as of July 16, 1998, between
FCI, as tenant, and BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. Pursuant to subparagraph 7.(a)
of the Lease, requests the following of BNPLC:
[INSERT HERE A SPECIFIC DESCRIPTION OF THE ACTION REQUESTED - E.G., "PLEASE
EXECUTE THE ENCLOSED APPLICATION FOR BUILDING PERMIT REQUIRED BY THE CITY IN
CONNECTION WITH CONSTRUCTION OF CERTAIN IMPROVEMENTS WHICH ARE PART OF THE
CONSTRUCTION PROJECT."]
PLEASE NOTE: SUBPARAGRAPH 7.(a) OF THE LEASE OBLIGATES BNPLC NOT TO UNREASONABLY
REFUSE TO COMPLY WITH THE FOREGOING REQUEST, SUBJECT TO TERMS AND CONDITIONS SET
FORTH IN THAT SUBPARAGRAPH. FCI HEREBY CERTIFIES TO BNPLC THAT AFTER CAREFUL
CONSIDERATION FCI BELIEVES THAT ALL SUCH TERMS AND CONDITIONS ARE SATISFIED IN
THE CASE OF THE FOREGOING REQUEST, AND FCI HEREBY RATIFIES AND CONFIRMS ITS
OBLIGATION TO INDEMNIFY BNPLC AGAINST ANY LOSSES BNPLC MAY INCUR OR SUFFER
BECAUSE OF ITS COMPLIANCE WITH SUCH REQUEST AS PROVIDED IN SUBPARAGRAPH 5.(d) OF
THE LEASE.
FCI respectfully requests that BNPLC respond to this notice as soon as
reasonably possible.
Executed this _____ day of ______________, 19___.
FORCE COMPUTERS, INC.
Name:_________________________
Title:__________________________
Exhibit D - Page 1
59
Exhibit E
NOTICE OF REQUEST REQUIRING AN EXPEDITED RESPONSE
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Amended and Restated Lease Agreement dated as of July 16, 1998,
between FCI, as tenant, and BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. FCI asks for an EXPEDITED
RESPONSE to the following request, which is a request made by FCI pursuant to
subparagraph 7.(a) of the Lease:
[INSERT HERE A SPECIFIC DESCRIPTION OF THE ACTION REQUESTED - E.G.,
"PLEASE EXECUTE THE ENCLOSED APPLICATION FOR BUILDING PERMIT REQUIRED BY
THE CITY IN CONNECTION WITH CONSTRUCTION OF CERTAIN IMPROVEMENTS WHICH
ARE PART OF THE CONSTRUCTION PROJECT."]
PLEASE NOTE: SUBPARAGRAPH 7.(a) OF THE LEASE OBLIGATES BNPLC NOT TO UNREASONABLY
REFUSE TO COMPLY WITH THE FOREGOING REQUEST, SUBJECT TO TERMS AND CONDITIONS SET
FORTH IN THAT SUBPARAGRAPH. FCI HEREBY CERTIFIES TO BNPLC THAT AFTER CAREFUL
CONSIDERATION FCI BELIEVES THAT ALL SUCH TERMS AND CONDITIONS ARE SATISFIED IN
THE CASE OF THE FOREGOING REQUEST, AND FCI HEREBY RATIFIES AND CONFIRMS ITS
OBLIGATION TO INDEMNIFY BNPLC AGAINST ANY LOSSES BNPLC MAY INCUR OR SUFFER
BECAUSE OF ITS COMPLIANCE WITH SUCH REQUEST AS PROVIDED IN SUBPARAGRAPH 5.(d) OF
THE LEASE.
As you consider the foregoing request, please understand that FCI must ask for
an expedited request for the following reasons:
[INSERT HERE A BRIEF DESCRIPTION OF THE NEED FOR AN EXPEDITED RESPONSE -
E.G., "TO AVOID CRITICAL PATH DELAYS IN THE CONSTRUCTION CONTEMPLATED BY
THE LEASE, FCI MUST SUBMIT THE ENCLOSED APPLICATION FOR BUILDING PERMIT
TO THE CITY OF WITHIN 15 DAYS, AND UNFORTUNATELY THE CITY HAS ONLY
RECENTLY INDICATED THAT FCI WILL NEED THE SIGNATURE OF BNPLC ON THE
APPLICATION."]
For the reasons stated above, FCI respectfully requests that BNPLC respond to
this notice as soon as possible. Although FCI would appreciate a sooner
response, FCI believes that it would be unreasonable for BNPLC not to respond to
this notice on or before:
Exhibit E - Page 1
60
[INSERT HERE A REASONABLE DEADLINE FOR THE RESPONSE - BUT IN NO EVENT PRIOR TO
10 BUSINESS DAYS AFTER THE DATE OF THIS NOTICE - TAKING INTO ACCOUNT THE
MATERIALS THAT BNPLC WILL HAVE TO REVIEW TO EVALUATE FCI'S REQUEST AND THE
PARTICULAR REASONS FOR FCI'S NEED FOR AN EXPEDITED RESPONSE]
Executed this _____ day of ______________, 19___.
FORCE COMPUTERS, INC.
Name:_________________________
Title:__________________________
Exhibit E - Page 2
61
Exhibit F
INSURANCE REQUIREMENTS
I. LIABILITY INSURANCE:
A. FCI must maintain commercial general liability ("CGL") insurance
on an occurrence basis, affording afford immediate protection to the limit of
not less than $20,000,000 combined single limit for bodily and personal injury,
death and property damage in respect of any one occurrence.
B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when FCI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election. After the expiration of FCI's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by FCI, FCI may increase any deductible or self-insured retention
applicable to such insurance, but not to an amount in excess of $3,000,000.
C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Lease, and the insurance company or
companies providing the CGL insurance, must be acceptable to BNPLC. BNPLC shall
have the right from time to time and at any time to review and approve such
policy forms (including endorsements) and the insurance company or companies
providing the insurance. Without limiting the generality of the foregoing, BNPLC
may reasonably require (and unless and until FCI is otherwise notified by BNPLC,
BNPLC does require) that such insurance be provided under forms and by companies
consistent with the following:
(1) Forms: CGL Insurance must be provided on Insurance
Services Office ("ISO") forms CG 0001 1093 or CG 0001
0695.
(2) Rating Requirements: Insurance must be provided through
insurance or reinsurance companies rated by the A.M. Best
Company of Oldwick, New Jersey as having a policyholder's
rating of A- or better and a reported financial
information rating of VI or better.
(3) Required Endorsements: CGL Insurance must be endorsed to
provide or include:
(a) blanket contractual liability coverage which
insures contractual liability under the indemnifications
set forth in this Lease (though such coverage or the
amount thereof shall in no way limit such
indemnifications);
(b) in any policy containing a general aggregate
limit, ISO form amendment "Aggregate Limits of Insurance
Per Location" CG 2504 1185;
(c) a waiver of subrogation, using ISO form CG 2404
1093 (and under the commercial umbrella, if any), in favor
of "BNP Leasing Corporation and other Interested Parties
(as defined in the Amended and Restated Lease Agreement
between Force Computers, Inc. and BNP Leasing Corporation
dated July 16, 1998)";
(d) ISO additional insured form CG 2026 1185, without
modification (and under the
Exhibit F - Page 1
62
commercial umbrella, if any), designating as additional
insureds "BNPLC and other Interested Parties, as defined
in the Amended and Restated Lease Agreement between Force
Computers, Inc. and BNP Leasing Corporation dated July 16,
1998)"; and
(e) provisions entitling BNPLC to 30 days' notice from
the insurer prior to any cancellation, nonrenewal or
material modification to the CGL coverage.
(4) Other Insurance: Each policy to contain standard CGL
"other insurance" wording, unmodified in any way that
would make it excess over or contributory with the
additional insured's own commercial general liability
coverage.
II. PROPERTY INSURANCE:
A. FCI must maintain property insurance in "special form" or against
"all risks," providing the broadest available coverage for all Improvements and
equipment included in the Property, with no exclusions for vandalism, malicious
mischief, or sprinkler leakage, and including coverage against earthquake and
all coverage perils normally included within the definitions of extended
coverage, vandalism, malicious mischief and, if the Property is in a flood zone,
flood. During any period of significant construction on any Improvements, the
property insurance must include builder's completed value risk insurance for
such Improvements.
B. The property insurance must provide coverage in the amount no
less than replacement value (exclusive of land, foundation, footings,
excavations and grading) with endorsements for contingent liability from
operation of building laws, increased cost of construction and demolition costs
which may be necessary to comply with building laws. Subject to the approval of
BNPLC, FCI will be responsible for determining the amount of property insurance
to be maintained from time to time, but FCI must maintain such coverage on an
agreed value basis to eliminate the effects of coinsurance.
C. Any deductible or self-insured retention applicable to the
property insurance shall not exceed $1,000 at any time when FCI shall continue
to have the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election. After the expiration of FCI's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by FCI, FCI may increase any deductible or self-insured retention
applicable to such insurance, but not to an amount in excess of $3,000,000.
D. The property insurance shall cover not only the value of FCI's
interest in the Improvements, but also the interest of BNPLC, with BNPLC shown
as an insured as its interests may appear.
E. The forms of insurance policies (including endorsements) used to
provide the property insurance required by this Lease, and the insurance company
or companies providing the property insurance, must be acceptable to BNPLC.
BNPLC shall have the right from time to time and at any time to review and
approve such policy forms (including endorsements) and the insurance company or
companies providing such insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until FCI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:
(1) Rating Requirements: Insurance to be provided through
insurance or reinsurance companies rated by the A.M. Best Company
of Oldwick, New Jersey as having (a) a policyholder's rating of
A- or better, (b) a reported financial information rating of no
less than VI,
Exhibit F - Page 2
63
and (c) in the case of each insurance or reinsurance company, a
reported financial information rating which indicates an
adjusted policyholders' surplus equal to or greater than the
underwriting exposure that such company has under the insurance
or reinsurance it is providing for the Property.
(2) Required Endorsements: FCI's property Insurance must be
endorsed to provide or include:
(a) a waiver of subrogation in favor of "BNPLC and other
Interested Parties, as defined in the Amended and
Restated Lease Agreement between Force Computers, Inc.
and BNP Leasing Corporation dated July 16, 1998)";
(b) that FCI's insurance is primary, with any policies of
BNPLC or other Interested Parties being excess,
secondary and noncontributing;
(c) that the protection afforded to BNPLC by such insurance
shall not be reduced or impaired by acts or omissions
of FCI or any other beneficiary or insured; and
(d) that BNPLC must be notified at least thirty days prior
to any cancellation, nonrenewal or reduction of
insurance coverage.
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by FCI of claims
against FCI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.
B. FCI's Property insurance must be evidenced by XXXXX form 27
"Evidence of Property Insurance" completed and interlineated in a manner
satisfactory to BNPLC to show compliance with the requirements of this Exhibit.
B. FCI's CGL insurance must be evidenced by XXXXX form 25
"Certificate of Insurance" completed and interlineated in a manner satisfactory
to BNPLC to show compliance with the requirements of this Exhibit.
C. Such evidence of required insurance must be delivered upon
execution of this Lease and new certificate or evidence of insurance must be
delivered no later than 30 days prior to expiration of existing policy.
D. Copies of endorsements must be attached to XXXXX forms 25 and
27 delivered to BNPLC.
Exhibit F - Page 3
64
Exhibit G
COMPLIANCE CERTIFICATE
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Gentlemen:
The undersigned, as _____________________________ of Solectron
Corporation ("Guarantor"), does hereby certify on behalf of Guarantor and Force
Computers, Inc. ("FCI") that the following are true:
1. This Certificate is furnished pursuant to subparagraph 16.(b)(ii)
of that certain Amended and Restated Lease Agreement dated as of July 16, 1998
(the "LEASE"; the terms defined therein being used herein as therein defined)
between FCI and you.
2. No Event of Default or material Default by FCI under the Lease
has occurred and is continuing.
3. The representations and warranties of FCI in the Operative
Documents are true and correct in all material respects as of the date hereof as
though made on and as of the date hereof.
4. The representations and warranties of Guarantor in Section 9 of
the Guaranty are true and correct in all material respects as of the date hereof
as though made on and as of the date hereof.
5. Annex 1 attached hereto sets forth financial data and
computations evidencing Guarantor's compliance with certain covenants
established in Schedule A attached to the Guaranty, all of which data and
computations are complete, true and correct.
Executed this _____ day of ______________, 19___.
Solectron Corporation
Name:_________________________
Title:________________________
Exhibit G - Page 1
65
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, 19___
NOTE: References to Sections below are intended to refer to the Sections in Part
3 of Schedule A to the Guaranty.
Actual Required/Permitted
------ ------------------
1. Section 3.09 - Adjusted Leverage As of the last day of each fiscal
Ratio quarter, the amount which is not
greater than (a) 1.75 to 1.00 from the
Effective Date through and including
February 28, 1998, (b) 1.50 to 1.00
from May 31, 1998 through and
including February 28, 1999, (c) 1.25
to 1.00 from May 31, 1999 through
and including February 28, 2000, and
(d) 1.00 to 1.00 thereafter.
Adjusted Leverage Ratio calculation
(A) Consolidated Funded Debt $
--------
plus Guarantee obligations
--------
plus Indebtedness with respect to
synthetic leases and securitized
assets
plus Indebtedness with respect to
letters of credit (including the --------
Letters of Credit)
minus Permitted Subordinated --------
Indebtedness
TOTAL $
--------
(B) operating income $
--------
plus depreciation and
amortization charges --------
TOTAL $
--------
RATIO OF (A) TO (B)
--------
Exhibit G - Page 2
66
Actual Required/Permitted
------ ------------------
2. Section 3.10 - Minimum
Consolidated Tangible Net Worth As of the last day of each fiscal quarter
following April 30, 1997, the amount
that is not less than the sum of (without
duplication) 80% of Consolidated Tangible
Net Worth measured as of the end of the
fiscal quarter ended February 28, 1997,
plus 50% of consolidated net income
(without subtracting losses or
acquisition-related charges) for each
fiscal quarter ended after the fiscal
quarter ended February 28, 1997, minus
100% of all acquisition-related charges if
such charges are recorded in the same
fiscal quarter in which the applicable
acquisition is consummated.
(A) Consolidated Tangible Net
Worth calculation:
total shareholders' equity $
-------
minus intangible assets
--------
Consolidated Tangible Net Worth $
-------
(B) Minimum Consolidated
Tangible Net Worth calculation:
Beginning minimum amount $
--------
plus 50% of quarterly net income --------
for each fiscal quarter subsequent
to the quarter ended February 28,
1997, with no reduction for losses
or acquisition-related charges
minus 100% of all acquisition-
related charges if such charges are
recorded in the same fiscal quarter
in which the applicable acquisition
is consummated
Minimum Consolidated Tangible $
Net Worth --------
(A) MINUS (B) $
--------
Exhibit G - Page 3
67
Actual Required/Permitted
------ ------------------
3. Section 3.11 - Modified Quick At the end of any fiscal quarter of
Ratio Guarantor when (1) the rating the
rating established by Moody's for
the Index Debt of Guarantor is
below Ba2 or (2) the rating
established by S&P for the Index
Debt of Guarantor is below BB, or
(3) neither Moody's nor S&P
maintains a rating for the Index
Debt of Guarantor, the Modified
Quick Ratio is to be not less than
1.0 to 1.0.
(A) Quick Assets calculation:
unencumbered cash $
--------
plus unencumbered short term cash
investments ---------
plus unencumbered marketable ---------
securities which are classified
as short term investments
according to GAAP
plus unencumbered net accounts ---------
receivable
plus fair market value of the
following to the extent not
otherwise already included in
Quick Assets and to the extent
having maturities of not longer
than two years:
securities issued or fully ---------
guaranteed by the United States
government or any agency
thereof and backed by the full
faith and credit of the United
States
Exhibit G - Page 4
68
Actual Required/Permitted
------ ------------------
certificates of deposit, time --------
deposits, Eurodollar time
deposits, repurchase
agreements, or banker's
acceptances that are (A) issued
by either one of the 50 largest
(in assets) banks in the United
States or by one of the 100
largest (in assets) banks in the
world and (B) rated not less
than A- by Standard & Poor's
Corporation or less than A by
Xxxxx'x Investors Service, Inc.
corporate or municipal bonds ---------
rated not less than A- by
Standard & Poor's Corporation
or less than A by Xxxxx'x
Investors Service, Inc.
TOTAL
---------
(B) Current Liabilities according to $
GAAP ---------
(C) Payments not included in Current $
Liabilities maturing within 12 ---------
months on Indebtedness or which are
the subject of any Guarantee
RATIO OF (A) TO [(B) +(C)]
---------
Exhibit G - Page 5
69
Exhibit H
NOTICE OF LIBOR PERIOD ELECTION
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Amended and Restated Lease Agreement dated as of July 16, 1998,
between Force Computers, Inc., as tenant, and BNP Leasing Corporation, as
landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Lease referenced above. This letter constitutes notice
to you that the LIBOR Period Election under the Lease shall be:
________________ month(s),
beginning with the first Base Rent Period that commences on or after:
______________, ____.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF "LIBOR PERIOD
ELECTION" IN THE LIST OF DEFINED TERMS ATTACHED TO THE LEASE, OR IF THE DATE
SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR PERIOD ELECTION IS LESS
THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT
YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS
DEFECTIVE.
Executed this _____ day of ______________, 19___.
FORCE COMPUTERS, INC.
Name:_________________________
Title:_________________________
[cc all Participants]
Exhibit H - Page 1
70
Schedule 1
LIST OF DEVELOPMENT DOCUMENTS
-- NONE -
71
Schedule 2
LIST OF CLAIMS PENDING OR THREATENED AGAINST THE PROPERTY
-- NONE --
72
LIST OF DEFINED TERMS
FOR AGREEMENTS BETWEEN
BNP LEASING CORPORATION
AND
FORCE COMPUTERS, INC.
DATED AS OF JULY 16, 1998
73
TABLE OF CONTENTS
PAGE
DEFINED TERM NUMBER
-----------------------------------------------------------------------------------------------------
ABSOLUTE FCI CONSTRUCTION OBLIGATIONS...............................................................1
ACTIVE NEGLIGENCE...................................................................................1
ADDITIONAL RENT.....................................................................................1
ADMINISTRATIVE AGENCY FEES..........................................................................1
ADVANCE DATE........................................................................................1
AFFILIATE...........................................................................................2
APPLICABLE LAWS.....................................................................................2
APPLICABLE PURCHASER................................................................................2
ATTORNEYS' FEES.....................................................................................2
BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS............................................2
BANKING RULES CHANGE................................................................................2
BASE RENT...........................................................................................2
BASE RENT COMMENCEMENT DATE.........................................................................2
BASE RENT DATE......................................................................................3
BASE RENT PERIOD....................................................................................3
BNPLC...............................................................................................4
BNPLC'S PARENT......................................................................................4
BREAKAGE COSTS......................................................................................4
BREAK EVEN PRICE....................................................................................4
BUSINESS DAY........................................................................................4
CAPITAL ADEQUACY CHARGES............................................................................5
CARRYING COSTS......................................................................................5
CLOSING CERTIFICATE.................................................................................5
CMA SUSPENSION EVENT................................................................................5
CMA SUSPENSION NOTICE...............................................................................5
CMA SUSPENSION PERIOD...............................................................................5
CMA TERMINATION EVENT...............................................................................5
CODE................................................................................................5
COMMITMENT FEE......................................................................................5
COMPLETION NOTICE...................................................................................5
CONSTRUCTION ADVANCES...............................................................................5
CONSTRUCTION ADVANCE REQUEST........................................................................5
CONSTRUCTION ALLOWANCE..............................................................................5
CONSTRUCTION MANAGEMENT AGREEMENT...................................................................5
CONSTRUCTION MILESTONE..............................................................................6
CONSTRUCTION PERIOD.................................................................................6
CONSTRUCTION-PERIOD INDEMNITY PAYMENTS..............................................................6
CONSTRUCTION PROJECT................................................................................6
DEBT................................................................................................6
DEDUCTIBLE JUDGMENT.................................................................................6
DEFAULT.............................................................................................6
DEFAULT RATE........................................................................................7
DEFECTIVE WORK......................................................................................7
DESIGNATED SALE DATE................................................................................7
DEVELOPMENT DOCUMENTS...............................................................................7
EFFECTIVE DATE......................................................................................8
-i-
74
PAGE
DEFINED TERM NUMBER
-----------------------------------------------------------------------------------------------------
EFFECTIVE RATE......................................................................................8
ENVIRONMENTAL CONSULTANT............................................................................8
ENVIRONMENTAL LAWS..................................................................................8
ENVIRONMENTAL LOSSES................................................................................8
ENVIRONMENTAL REPORT................................................................................9
ERISA...............................................................................................9
ERISA AFFILIATE.....................................................................................9
ERISA TERMINATION EVENT.............................................................................9
ESCROWED PROCEEDS...................................................................................9
ESTABLISHED MISCONDUCT.............................................................................10
EUROCURRENCY LIABILITIES...........................................................................10
EURODOLLAR RATE RESERVE PERCENTAGE.................................................................10
EVENT OF DEFAULT...................................................................................10
EXCESS FUNDING COMMITMENT..........................................................................10
EXCLUDED TAXES.....................................................................................10
EXISTING CONTRACT..................................................................................11
FAIR MARKET VALUE..................................................................................11
FCI................................................................................................11
FCI'S EXTENDED REMARKETING PERIOD..................................................................11
FCI'S EXTENDED REMARKETING RIGHT...................................................................12
FCI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS...................................................12
FED FUNDS RATE.....................................................................................12
FOCB NOTICE........................................................................................12
FUNDED CONSTRUCTION ALLOWANCE......................................................................12
FUNDING ADVANCES...................................................................................12
FUTURE WORK........................................................................................12
GAAP...............................................................................................12
GUARANTOR..........................................................................................12
GUARANTY...........................................................................................12
HAZARDOUS SUBSTANCE................................................................................12
HAZARDOUS SUBSTANCE ACTIVITY.......................................................................13
IMPOSITIONS........................................................................................13
IMPROVEMENTS.......................................................................................13
INDEX DEBT.........................................................................................13
INDUSTRIAL HYGIENIST...............................................................................13
INITIAL FUNDING ADVANCE............................................................................14
INTERESTED PARTY...................................................................................14
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT.....................................14
ISSUE 97-10 ELECTION...............................................................................14
ISSUE 97-10 PREPAYMENT.............................................................................14
LAND...............................................................................................15
LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION.......................................................15
LEASE..............................................................................................15
LIBOR..............................................................................................15
LIBOR PERIOD ELECTION..............................................................................15
LIEN...............................................................................................16
LIENS REMOVABLE BY BNPLC...........................................................................16
-ii-
75
PAGE
DEFINED TERM NUMBER
-----------------------------------------------------------------------------------------------------
LIST OF DEFINED TERMS...............................................................................16
LOSS CUTOFF DATE....................................................................................16
LOSSES..............................................................................................17
MATERIAL ENVIRONMENTAL COMMUNICATION................................................................17
MAXIMUM CONSTRUCTION ALLOWANCE......................................................................17
MAXIMUM PERMITTED PREPAYMENT........................................................................17
MAXIMUM REMARKETING OBLIGATION......................................................................17
MINIMUM EXTENDED REMARKETING PRICE..................................................................17
MOODY'S.............................................................................................17
NORMAL TENANT IMPROVEMENTS..........................................................................17
NOTICE OF FCI'S INTENT TO TERMINATE.................................................................18
OPERATIVE DOCUMENTS.................................................................................18
OUTSTANDING CONSTRUCTION ALLOWANCE..................................................................18
PARTICIPANT.........................................................................................18
PARTICIPATION AGREEMENT.............................................................................18
PERMITTED ENCUMBRANCES..............................................................................18
PERMITTED HAZARDOUS SUBSTANCE USE...................................................................18
PERMITTED HAZARDOUS SUBSTANCES......................................................................19
PERMITTED TRANSFER..................................................................................19
PERSON..............................................................................................19
PERSONAL PROPERTY...................................................................................19
PLAN................................................................................................19
POTENTIAL LIEN CLAIMANTS............................................................................19
PRIME RATE..........................................................................................20
PRIOR WORK..........................................................................................20
PROJECT COSTS.......................................................................................20
PROJECTED COST OVERRUNS.............................................................................21
PROPERTY............................................................................................21
PURCHASE AGREEMENT..................................................................................21
PURCHASE OPTION.....................................................................................21
QUALIFIED PAYMENTS..................................................................................21
REAL PROPERTY.......................................................................................21
REIMBURSABLE CONSTRUCTION-PERIOD COSTS..............................................................21
REMEDIAL WORK.......................................................................................21
RENT................................................................................................22
RESIDUAL RISK PERCENTAGE............................................................................22
RESPONSIBLE FINANCIAL OFFICER.......................................................................22
S&P.................................................................................................22
SCOPE CHANGE........................................................................................22
SELLER..............................................................................................22
SPREAD..............................................................................................22
STIPULATED LOSS VALUE...............................................................................24
SUBSIDIARY..........................................................................................24
SUPPLEMENTAL PAYMENT................................................................................24
TERM................................................................................................24
THIRD PARTY CONTRACT................................................................................24
THIRD PARTY SALE NOTICE.............................................................................24
-iii-
76
PAGE
DEFINED TERM NUMBER
-----------------------------------------------------------------------------------------------------
THIRD PARTY SALE PROPOSAL...........................................................................24
THIRD PARTY TARGET PRICE............................................................................24
TRANSACTION EXPENSES................................................................................25
UNFUNDED BENEFIT LIABILITIES........................................................................25
VOLUNTARY FCI CONSTRUCTION CONTRIBUTIONS............................................................25
VOLUNTARY RETENTION OF THE PROPERTY.................................................................25
WORK................................................................................................25
-iv-
77
LIST OF DEFINED TERMS
As used in the Lease to which this List of Defined Terms is attached and
in the other Operative Documents (as defined below) into which this List of
Defined Terms is incorporated by reference:
"ABSOLUTE FCI CONSTRUCTION OBLIGATIONS" means the following:
(1) Construction-Period Indemnity Payments required because of or
in connection with or arising out of Environmental Losses incurred or
suffered by any Interested Party;
(2) Construction-Period Indemnity Payments required because of or
in connection with or arising out of Losses incurred or suffered by
BNPLC, when such Losses would not have been incurred or suffered but for
any act or any omission of FCI or of any FCI's contractors or
subcontractors during the period that the Construction Management
Agreement remains in force or during any other period that FCI remains
in possession or control of the Construction Project;
(3) Construction-Period Indemnity Payments required because of or
in connection with or arising out of Losses incurred or suffered by
BNPLC that would not have been incurred but for any fraud,
misapplication of funds (including Construction Advances), illegal acts,
or willful misconduct on the part of the FCI or its employees or agents
or any other party for whom FCI is responsible; and
(4) Construction-Period Indemnity Payments required because of or
in connection with or arising out of Losses incurred or suffered by
BNPLC that would not have been incurred but for any bankruptcy
proceeding involving FCI.
For purposes of this definition, "acts and omissions of FCI" shall include (i)
any decision by FCI to make any Scope Change, (ii) any failure of FCI to
maintain insurance required by the Lease or the Construction Management
Agreement, (iii) any decision not to continue or complete Work under the
Construction Management Agreement because of a change in FCI's facility needs or
in FCI's plans to meet its facility needs (such as, for example, a decision by
FCI to lease or acquire another less expensive facility as an alternative to the
Improvements), (iv) any failure of FCI to correct Defective Work performed prior
to a termination of the Construction Management Agreement as provided in
subparagraphs 5(D) or 5(E) thereof, and (v) any other breach by FCI of the
Construction Management Agreement.
"ACTIVE NEGLIGENCE" of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which FCI does not carry (and is not obligated by the Lease to carry) insurance.
"ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of BNPLC to act
when the duty to act would not have been imposed but for BNPLC's status as owner
of the Property or as a party to the transactions described in the Lease, (2)
any negligent failure of any other Interested Party to act when the duty to act
would not have been imposed but for such party's contractual or other
relationship to BNPLC or participation or facilitation in any manner, directly
or indirectly, of the transactions described in the Lease, or (3) the exercise
in a lawful manner by BNPLC (or any party lawfully claiming through or under
BNPLC) of any right or remedy provided in or under the Lease or any other
Operative Document.
"ADDITIONAL RENT" shall have the meaning assigned to it in subparagraph
4.(c) of the Lease.
"ADMINISTRATIVE AGENCY FEES" shall have the meaning assigned to it in
subparagraph 4.(e) of the Lease.
"ADVANCE DATE" means, regardless of whether any Construction Advance
shall actually be made thereon,
78
the first Business Day of every calendar month, beginning with July 16, 1998 and
continuing regularly thereafter to and including the Base Rent Commencement
Date.
"AFFILIATE" of any Person means any other Person controlling, controlled
by or under common control with such Person. For purposes of this definition,
the term "control" when used with respect to any Person means the power to
direct the management of policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, for purposes of the Lease and the
Purchase Agreement, FCI's "Affiliates" will not include any Person domiciled
outside the United States.
"APPLICABLE LAWS" means any or all of the following, to the extent
applicable to FCI or the Property or the Lease or the other Operative Documents:
restrictive covenants; zoning ordinances and building codes; flood disaster
laws; health, safety and environmental laws and regulations; the Americans with
Disabilities Act and other laws pertaining to disabled persons; and other laws,
statutes, ordinances, rules, permits, regulations, orders, determinations and
court decisions.
"APPLICABLE PURCHASER" means any third party designated by FCI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.
"ATTORNEYS' FEES" means the reasonable fees and expenses of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such reasonable fees and expenses
incurred with respect to appeals, arbitrations and bankruptcy proceedings, and
whether or not any manner of proceeding is brought with respect to the matter
for which such fees and expenses were incurred.
"BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have
the meaning assigned to it in subparagraph 1(A)(1) of the Purchase Agreement.
"BANKING RULES CHANGE" means either: (1) the introduction of or any
change after the Effective Date (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in any law or regulation applicable to BNPLC, BNPLC's Parent or any
other Participant, or in the generally accepted interpretation by the
institutional lending community of any such law or regulation, or in the
interpretation of any such law or regulation asserted by any regulator, court or
other governmental authority or (2) the compliance by BNPLC, BNPLC's Parent or
any other Participant with any new guideline or new request after the Effective
Date from any central bank or other governmental authority (whether or not
having the force of law).
"BASE RENT" means the rent payable by FCI pursuant to subparagraph 4.(a)
of the Lease.
"BASE RENT COMMENCEMENT DATE" means the earlier of (1) the last day that
constitutes first business day of a calendar month and that is no more than 364
days after the Effective Date, (2) the first Business Day of the first calendar
month to follow by twenty days or more the date upon which any Completion Notice
is given as provided in the Construction Management Agreement or in the Lease,
(3) the first Business Day of the first calendar month to follow by twenty days
or more BNPLC's receipt of a notice from FCI, given before FCI has exercised any
Issue 97-10 Election and setting forth FCI's express, unconditional, unequivocal
and irrevocable (A)
List of Defined Terms - Page 2
79
waiver of any right to make any Issue 97-10 Election, and (B) election to
accelerate the Base Rent Commencement Date by delivery such notice,
notwithstanding that after the Base Rent Commencement Date, FCI shall have no
further right to Construction Advances under the Construction Management
Agreement or the Lease, or (4) the first Business Day of the first calendar
month upon which the Funded Construction Allowance shall equal or exceed the
Maximum Construction Allowance. Notwithstanding the forgoing, if for any reason
(including a termination of the Construction Management Agreement) FCI has not
completed the Construction Project thirty days in advance of the scheduled Base
Rent Commencement Date determined pursuant to the first sentence of this
definition, BNPLC shall be entitled (but not obligated) to extend the Base Rent
Commencement Date one or more times and at any time before the Construction
Project actually is complete and ready for occupancy. To so extend the Base Rent
Commencement Date, BNPLC shall notify FCI thereof and of the date to which the
Base Rent Commencement Date is extended, which may be the first Business Day of
any calendar month designated by BNPLC in the notice of extension, provided that
BNPLC will not so designate any date more than sixty days after the date upon
which the Construction Project is expected by BNPLC (at the time of the
designation) to be complete.
"BASE RENT DATE" means a date upon which Base Rent must be paid under
the Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be determined as follows:
(a) If a LIBOR Period Election of one month is in effect on
the Base Rent Commencement Date, then the first Business Day of
the first calendar month following the Base Rent Commencement
Date shall be the first Base Rent Date.
(b) If the LIBOR Period Election in effect on the Base Rent
Commencement Date is three months or six months, then the first
Business Day of the third calendar month following the Base Rent
Commencement Date shall be the first Base Rent Date.
Each successive Base Rent Date after the first Base Rent Date shall be the first
Business Day of the first or third calendar month following the calendar month
which includes the preceding Base Rent Date, determined as follows:
(1) If a LIBOR Period Election of one month is in effect on
a Base Rent Date, then the first Business Day of the first
calendar month following such Base Rent Date shall be the next
following Base Rent Date.
(2) If a LIBOR Period Election of three months or six
months is in effect on a Base Rent Date, then the first Business
Day of the third calendar month following such Base Rent Date
shall be the next following Base Rent Date.
Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of June, 1999 and a LIBOR Period Election of six months commences
on the Base Rent Commencement Date, then the first Base Rent Date shall be the
first Business Day of September, 1999, and the second Base Rent Date shall be
the first Business Day of December, 1999.
"BASE RENT PERIOD" means a period for which Base Rent must be paid under
the Lease, each of which periods shall correspond to the LIBOR Period Election
for such period. The first Base Rent Period shall begin on and include the Base
Rent Commencement Date, and each successive Base Rent Period shall begin on and
include the Base Rent Date upon which the preceding Base Rent Period ends. Each
Base Rent Period, including the first Base Rent Period, shall end on but not
include the first or second Base Rent Date after the Base Rent Date upon which
such period began, determined as follows:
List of Defined Terms - Page 3
80
(1) If the LIBOR Period Election for a Base Rent Period is
one month or three months, then such Base Rent Period shall end
on the first Base Rent Date after the Base Rent Date upon which
such period began.
(2) If the LIBOR Period Election for a Base Rent Period is
six months, then such Base Rent Period shall end on the second
Base Rent Date after the Base Rent Date upon which such period
began.
The determination of Base Rent Periods can be illustrated by two examples:
(1) If FCI makes a LIBOR Period Election of three months
for a hypothetical Base Rent Period beginning on the first
Business Day in January, 2000, then such Base Rent Period will
end on but not include the first Base Rent Date after it begins;
that is, such Base Rent Period will end on the first Business
Day in April, 2000, the third calendar month after January,
2000.
(2) If, however, FCI makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2000, then such Base Rent Period will
end on but not include the second Base Rent Date after it begins;
that is, the first Business Day in July, 2000.
"BNPLC" means BNP Leasing Corporation, a Delaware corporation.
"BNPLC'S PARENT" means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.
"BREAKAGE COSTS" means any and all costs, losses or expenses incurred or
sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:
(1) used to make or maintain Funding Advances upon
application of a Qualified Payment or upon any sale of the
Property pursuant to the Purchase Agreement, if such application
or sale occurs on any day other than the last day of a
Construction Period or Base Rent Period; or
(2) reserved to provide a Construction Advance that FCI
requests, but thereafter declines to take for any reason, or that
FCI requests but is not permitted to take because of its failure
to satisfy any of the conditions specified in the Construction
Management Agreement.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon FCI.
"BREAK EVEN PRICE" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.
"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
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81
on which dealings in deposits of dollars are transacted in the London interbank
market; provided that if such dealings are suspended indefinitely for any
reason, "Business Day" shall mean any day described in clause (1).
"CAPITAL ADEQUACY CHARGES" means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(c)(ii) of the Lease.
"CARRYING COSTS" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(a) of the Lease.
"CLOSING CERTIFICATE" means the Amended and Restated Closing Certificate
and Agreement dated as of July 16, 1998 executed by FCI in favor of BNPLC, as
such Closing Certificate may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.
"CMA SUSPENSION EVENT" shall have the meaning assigned to it in
subparagraph 5(A) of the Construction Management Agreement.
"CMA SUSPENSION NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(1) of the Construction Management Agreement.
"CMA SUSPENSION PERIOD" shall have the meaning assigned to it in
subparagraph 5(C) of the Construction Management Agreement.
"CMA TERMINATION EVENT" shall have the meaning assigned to it in
subparagraph 5(B) of the Construction Management Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITMENT FEE" shall have the meaning assigned to it in subparagraph
4.(d) of the Lease.
"COMPLETION NOTICE" means (1) a notice required by subparagraph 1(B) of
the Construction Management Agreement from FCI to BNPLC, advising BNPLC when
construction of the Construction Project is substantially complete, or (2) a
notice permitted by subparagraph 6.(f) of the Lease from BNPLC to FCI, advising
FCI after any Landlord's Election to Complete Construction when construction of
the Construction Project is substantially complete or that BNPLC no longer
intends to continue such construction.
"CONSTRUCTION ADVANCES" means (1) actual advances of funds made by or on
behalf of BNPLC to or on behalf of FCI pursuant to Paragraph 2 of the
Construction Management Agreement, and (2) amounts considered as Construction
Advances pursuant to subparagraph 6.(d) of the Lease.
"CONSTRUCTION ADVANCE REQUEST" shall have the meaning assigned to it in
subparagraph 2(C)(1) of the Construction Management Agreement.
"CONSTRUCTION ALLOWANCE" means the allowance, consisting of Construction
Advances and Carrying Costs, which is to be provided for the Construction
Project as more particularly described in the Construction Management
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82
Agreement and Paragraph 6 of the Lease.
"CONSTRUCTION MANAGEMENT AGREEMENT" means a Construction Management
Agreement dated as of July 16, 1998 (as from time to time supplemented, amended
or restated) pursuant to which BNPLC has authorized FCI to construct certain
improvements on the Land and agreed to provide a construction allowance for such
construction on and subject to the terms and conditions described therein.
"CONSTRUCTION MILESTONE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.
"CONSTRUCTION PERIOD" means each successive period of approximately one
month, with the first Construction Period beginning on and including the
Effective Date and ending on but not including the first Advance Date. Each
successive Construction Period after the first Construction Period shall begin
on and include the day on which the preceding Construction Period ends and shall
end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the earlier of the Base
Rent Commencement Date or any Designated Sale Date upon which FCI or any
Applicable Purchaser shall purchase BNPLC's interest in the Property pursuant to
the Purchase Agreement.
"CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have the meaning assigned
to it in subparagraph 5.(e)(ii) of the Lease.
"CONSTRUCTION PROJECT" means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.
"DEBT" of any Person means: (i) indebtedness of such Person for borrowed
money; (ii) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments; (iii) obligations of such Person to pay the deferred
purchase price of property or services; (iv) obligations of such Person as
lessee under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases; (v) obligations of such Person, contingent or
otherwise, under any lease of real property or related documents (including a
separate purchase agreement) which provide that such Person must purchase or
cause another to purchase any interest in the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor; (vi)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a another Person against loss in respect of, indebtedness or obligations
of others of the kinds referred to in the preceding clauses (i) through (v);
(vii) liabilities of another Person secured by a Lien on, or payable out of the
proceeds of production from, property of such Person even though such obligation
shall not be assumed by such Person (but in the case of such liabilities not
assumed by such Person, the liabilities shall constitute Debt of such Person
only to the extent of the value of such Person's property encumbered by the Lien
securing such liabilities); and (viii) Unfunded Benefit Liabilities.
"DEDUCTIBLE JUDGMENT" means a final, liquidated judgment against BNPLC,
the execution of which has not been and will not be stayed pending appeal by
BNPLC, secured by a judgment lien filed against the Property which constitutes a
Lien Removable by BNPLC.
"DEFAULT" means any event which, with the passage of time or the giving
of notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
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83
"DEFAULT RATE" means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.
"DEFECTIVE WORK" shall have the meaning assigned to it in subparagraph
1(A)(2)(e) of the Construction Management Agreement.
"DESIGNATED SALE DATE" means the earlier of:
(1) the first Business Day of August, 2003; or
(2) any Business Day designated as such in an irrevocable,
unconditional notice given by FCI to BNPLC before FCI has made an Issue
97-10 Election; provided, that if the Business Day so designated by FCI
is earlier than sixty days after the date of such notice, then the
notice will be of no effect for purposes of this definition; and
provided, further, to be effective for purposes of this definition, the
notice must include an express, unconditional, unequivocal and
irrevocable (A) waiver by FCI of any remaining right FCI may have under
any of the Operative Documents to make any Issue 97-10 Election, and (B)
acknowledgment by FCI that because of FCI's election to accelerate the
Designated Sale Date, the Maximum Remarketing Obligation will equal the
Break Even Price under the Purchase Agreement; or
(3) any Business Day designated as such in an irrevocable,
unconditional notice given by FCI to BNPLC after FCI has made an Issue
97-10 Election (a notice which FCI might give, for example, to force the
commencement of FCI's Extended Remarketing Period); provided, that if
the Business Day so designated by FCI is earlier than sixty days after
the date of such notice or is earlier than the Base Rent Commencement
Date, then the notice will be of no effect for purposes of this
Definition; and provided, further, to be effective for purposes of this
definition, the notice must include an express, unconditional,
unequivocal and irrevocable acknowledgment by FCI that (A) because FCI
has previously made an Issue 97-10 Election, BNPLC has the right to
collect Issue 97-10 Prepayments under the Operative Documents and such
right will continue unaffected by the notice, and (B) because of FCI's
election to accelerate the Designated Sale Date, the Maximum Remarketing
Obligation will equal the Break Even Price under the Purchase Agreement;
or
(4) any Business Day designated as such in a notice given by
BNPLC to FCI after the effective date of any termination of the
Construction Management Agreement as provided in subparagraphs 5(D) or
5(E) thereof; or
(5) any Business Day designated as such in a notice given by
BNPLC to FCI after BNPLC's receipt of a notice from FCI setting forth
FCI's election to terminate the Purchase Option and FCI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B)
thereof; or
(6) any Business Day designated as such in a notice given by
BNPLC to FCI when any Event of Default has occurred and is continuing.
"DEVELOPMENT DOCUMENTS" means the contracts, ordinances and other
documents described in Schedule 1 attached to the Lease, if any, as the same may
be modified from time to time in accordance with the Lease and the Closing
Certificate (including modifications authorized pursuant to subparagraphs 7.(a)
and 7.(b) of the Lease),
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84
and any applications, permits or certificates concerning or affecting the use or
development of the Property that may be submitted, issued or executed from time
to time as contemplated in such contracts, ordinances and other documents or
that BNPLC may hereafter execute, approve or consent to at the request of FCI.
"EFFECTIVE DATE" means July 16, 1998.
"EFFECTIVE RATE" means for each Construction Period and for each Base
Rent Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, then the Effective Rate shall be automatically
increased or decreased as of the date of such change, as the case may be,
without prior notice to FCI. If for any reason BNPLC determines that it is
impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the foregoing, then the "EFFECTIVE RATE" for that Construction Period or Base
Rent Period shall equal any published index or per annum interest rate
determined in good faith by BNPLC's Parent to be comparable to LIBOR at the
beginning of the first day of that period. A comparable interest rate might be,
for example, the then existing yield on short term United States Treasury
obligations (as compiled by and published in the then most recently published
United States Federal Reserve Statistical Release H.15(519) or its successor
publication), plus or minus a fixed adjustment based on BNPLC's Parent's
comparison of past eurodollar market rates to past yields on such Treasury
obligations. Any determination by BNPLC of the Effective Rate under this
definition shall, in the absence of clear and demonstrable error, be conclusive
and binding upon FCI.
"ENVIRONMENTAL CONSULTANT" means a qualified individual employed by a
qualified firm. Individuals shall be deemed qualified if they (i) possess at
least five years of experience in performing environmental, engineering and
consulting services; (ii) have performed or supervised at least five projects
involving remediation of soil contaminated with hazardous substances, including
at least one project similar to the Remedial Work; (iii) have all licenses
required under applicable law for the Remedial Work; and (iv) have at least a
bachelor's degree in the physical sciences or a related field from an accredited
college or university. A firm shall be deemed qualified if it is: (i) a
nationally recognized, reputable environmental and/or engineering firm in the
business of providing professional environmental engineering and consulting
services; (ii) has experience and expertise in projects involving the Remedial
Work; (iii) maintains policies of insurance which are approved by BNPLC in its
reasonable discretion.
"ENVIRONMENTAL LAWS" means any and all existing and future Applicable
Laws pertaining to safety, health or the environment, or to Hazardous Substances
or Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "CERCLA"), and the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, "RCRA").
"ENVIRONMENTAL LOSSES" means Losses suffered or incurred by any
Interested Party relating to or arising out of, based on or as a result of: (i)
any Hazardous Substance Activity that occurs or is alleged to have occurred on
or prior to the Loss Cutoff Date; (ii) any violation on or prior to the Loss
Cutoff Date of Environmental Laws relating to the Property or to the ownership,
use, occupancy or operation thereof; (iii) any investigation, inquiry, order,
hearing, action, or other proceeding by or before any governmental or
quasi-governmental agency or authority in connection with any Hazardous
Substance Activity that occurs or is alleged to have occurred in whole
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85
or in part on or prior to the Loss Cutoff Date; or (iv) any claim, demand, cause
of action or investigation, or any action or other proceeding, whether
meritorious or not, brought or asserted against any Interested Party which
relates to, arises from, is based on, or results from any of the matters
described in clauses (i), (ii) or (iii) of this definition, or any allegation of
any such matters. For purposes of determining whether Losses constitute
"Environmental Losses," any actual or alleged Hazardous Substance Activity or
violation of Environmental Laws relating to the Property will be presumed to
have occurred prior to the Loss Cutoff Date unless FCI establishes by clear and
convincing evidence to the contrary that the relevant Hazardous Substance
Activity or violation of Environmental Laws did not occur or commence prior to
the Loss Cutoff Date. Even if after the Loss Cutoff Date Losses are incurred by
or asserted against a particular Interested Party that would not have been
incurred or asserted, but for any matter described in clauses (i), (ii) or (iii)
of this definition, or an allegation of any such matter, then such Losses will
constitute Environmental Losses.
"ENVIRONMENTAL REPORT" means collectively the following reports, which
were provided by FCI to BNPLC or otherwise obtained by BNPLC prior to the
execution of the Lease: (1) Phase 1 Environmental Site Assessment Report,
Fontanoso Way Property, San Jose, California, Dated April 22, 1998, prepared by
Xxxx X. Xxxxxxx of Xxxxxxxxxxx, Inc., and (2) Environmental Report dated April
27, 1998, prepared by Xxxxxxxxx Xxxx of Washington Advisors.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA
is a member of FCI's controlled group, or under common control with FCI, within
the meaning of Section 414 of the Internal Revenue Code, and the regulations
promulgated and rulings issued thereunder.
"ERISA TERMINATION EVENT" means (i) the occurrence with respect to any
Plan of a reportable event described in Section 4043(c) of ERISA for which any
penalty or notice thereof has not been waived pursuant to regulations, rulings,
or notices issued by the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, or (ii) the filing of
a notice of intent to terminate any Plan or the treatment of any Plan amendment
as a termination under Section 4041 of ERISA (other than in connection with a
standard termination of a fully funded Plan pursuant to Section 4041 of ERISA),
or (iii) the institution of proceedings to terminate any Plan by the Pension
Benefit Guaranty Corporation under Section 4042 of ERISA, or (iv) any other
event or condition which would constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"ESCROWED PROCEEDS" means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for injury or
damage to the Property or (4) under any title insurance policy or otherwise as a
result of any title defect or claimed title defect with respect to the Property;
provided, however, in determining the amount of "Escrowed Proceeds" there shall
be deducted all expenses and costs of every type, kind and nature (including
Attorneys' Fees) incurred by BNPLC to collect such proceeds. Notwithstanding the
foregoing, "Escrowed Proceeds" will not include (A) any payment to BNPLC by a
Participant or an Affiliate of BNPLC that is made to compensate BNPLC for the
Participant's or Affiliate's share of any Losses BNPLC may incur as a result of
any of the events described in the preceding clauses (1) through (4), (B) any
money or proceeds that have been applied as a Qualified Payment or to pay any
Breakage
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Costs or other costs incurred in connection with a Qualified Payment, (C) any
money or proceeds that, after no less than ten days notice to FCI, BNPLC returns
or pays to a third party because of BNPLC's good faith belief that such return
or payment is required by law, (D) any money or proceeds paid by BNPLC to FCI or
offset against any amount owed by FCI, or (E) any money or proceeds used by
BNPLC in accordance with the Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to FCI pursuant to Paragraph 11 of the Lease,
transferred to a purchaser under the Purchase Agreement as therein provided or
applied as a Qualified Payment or as otherwise described in the preceding
sentence, BNPLC shall keep the same deposited in an interest bearing account,
and all interest earned on such account shall be added to and made a part of
Escrowed Proceeds.
"ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if
the Person is bound by the Lease or the Purchase Agreement, a breach by such
Person of the express provisions of the Lease or the Purchase Agreement that
continues beyond any period for cure provided therein, and (2) conduct of such
Person or its Affiliates that has been determined to constitute wilful
misconduct or Active Negligence in or as a necessary element of a final judgment
rendered against such Person by a court with jurisdiction to make such
determination. Established Misconduct of one Interested Party shall not be
attributed to a second Interested Party unless the second Interested Party is an
Affiliate of the first. Negligence which does not constitute Active Negligence
shall not in any event constitute Established Misconduct. For purposes of this
definition, "conduct of a Person" will include (1) the conduct of an employee of
that Person, but only to the extent that the employee is acting within the scope
of his employment by that Person, as determined in or as a necessary element of
a final judgment rendered against such Person by a court with jurisdiction to
make such determination, and (2) the conduct of an agent of that Person (such as
an independent environmental consultant engaged by that Person), but only to the
extent that the agent is, as determined in or as a necessary element of a final
judgment rendered against such Person by a court with jurisdiction to make such
determination, (x) acting within the scope of the authority granted to him by
such Person, (y) not acting with the consent or approval of or under the
direction of FCI or FCI's Affiliates, employees or agents, and (z) not acting in
good faith to mitigate Losses that such Person may suffer because of a breach or
repudiation by FCI of the Closing Certificate or Lease or the Purchase
Agreement.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for purposes of determining
the Effective Rate for any Construction Period or Base Rent Period, the reserve
percentage applicable two Business Days before the first day of such period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) for BNPLC's Parent with respect to liabilities or deposits
consisting of or including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is determined) having
a term comparable to such period.
"EVENT OF DEFAULT" shall have the meaning assigned to it in subparagraph
17.(a) of the Lease.
"EXCESS FUNDING COMMITMENT" shall have the meaning assigned to it in
subparagraph 2(C)(2)(b) of the Construction Management Agreement.
"EXCLUDED TAXES" means (1) all federal, state and local income taxes
upon Base Rent, Commitment Fees, Administrative Agency Fees, any interest paid
to BNPLC or any Participant pursuant to subparagraph 4.(h) of the
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87
Lease and any additional compensation claimed by BNPLC pursuant to subparagraph
5.(c)(ii) of the Lease; (2) all federal, state and local income taxes upon any
amounts paid as reimbursement for or to satisfy Losses incurred by BNPLC or any
Participant to the extent such taxes are offset by a corresponding reduction of
BNPLC's or the applicable Participant's income taxes because of BNPLC's or such
Participant's deduction of the reimbursed Losses from its taxable income or
because of any tax credits attributable thereto; (3) taxes imposed by any
governmental authority outside the United States of America; and (4) any
transfer or change of ownership taxes assessed because of BNPLC's transfer or
conveyance to any third party of BNPLC's rights or interests in the Lease or the
Purchase Agreement or the Property, but excluding any such taxes assessed
because of any transfer described in clauses (4) or (6) of the definition of
Permitted Transfer below. For purposes of this definition, income taxes shall
include any state or local taxes on the net income of BNPLC or a Participant, as
the case may be, whether or not designated as an "income tax" or "franchise tax"
and regardless of any future increase in tax rates used to compute such taxes.
If, however, a change in Applicable Laws after the Effective Date results in an
increase in such taxes for any reason other than an increase in the applicable
tax rates (e.g., a disallowance of deductions that would otherwise be available
against payments described in clause (1) of this definition), then for purposes
of computing the taxes that constitute "Excluded Taxes," the change in law will
not be considered.
"EXISTING CONTRACT" means the Agreement of Purchase and Sale and Joint
Escrow Instructions dated December, 1997 (as amended), originally between Xxxx &
Xxxx Enterprises as seller and Solectron Corporation as buyer, covering the Land
described in Exhibit A of the Lease.
"FAIR MARKET VALUE" means the fair market value of the Property on or
about the Designated Sale Date (calculated under the assumptions, whether or not
then accurate, that FCI has fulfilled and can be expected to continue to fulfill
its obligations under the Lease and other Operative Documents; that FCI has
maintained the Property in compliance with all Applicable Laws [including
Environmental Laws]; that any construction commenced on the Land but not
completed prior to the Designated Sale Date shall not reduce the value of the
Property; that all Improvements are self-sufficient in the sense that any
easements or offsite facilities needed under the Development Documents or
otherwise for the use of the Improvements will be available at no additional
cost to the owner of the Improvements; that FCI has repaired and restored the
Property after any damage following fire or other casualty; that FCI has
restored the remainder of the Property after any partial taking by eminent
domain; that FCI has completed any contests of and paid any taxes due [other
than Excluded Taxes] or other amounts secured by or allegedly secured by a lien
against the Property, including any assessment liens, but not including Liens
Removable by BNPLC; that no conditions or circumstances on or about the Property
[such as the presence of an endangered species] is discovered that will impede
development of the Property; that development of the Property will not be
hindered or delayed because of the limited availability of utilities or water;
that any purchaser paying fair market value for the Property will receive copies
of all of FCI's books and records which are necessary or useful to a future
owner's or occupant's use of the Property in the manner permitted by the Lease,
including books and records evidencing the testing and validation of the
Property for the uses permitted by the Lease; that without undue cost or delay
any such purchaser can obtain any necessary permits or licenses needed to use
the Property for the purposes permitted by the Lease; and that FCI has cured any
title defects affecting the Property other than Liens Removable by BNPLC, all in
accordance with the standards and requirements of the Lease [as though the Lease
were continuing in force], and the Closing Certificate) as determined by an
independent MAI Certified General Real Estate Appraiser reasonably satisfactory
to BNPLC who has five years or more experience appraising similar properties in
and around Santa Xxxxx County, California.
"FCI" means Force Computers, Inc., a Delaware corporation.
"FCI'S EXTENDED REMARKETING PERIOD" shall have the meaning assigned to
it in subparagraph 2(A) of the
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88
Purchase Agreement.
"FCI'S EXTENDED REMARKETING RIGHT" shall have the meaning assigned to it
in subparagraph 2(A) of the Purchase Agreement.
"FCI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS" shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.
"FED FUNDS RATE" means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon FCI.
"FOCB NOTICE" shall have the meaning assigned to it in subparagraph 5(E)
of the Construction Management Agreement.
"FUNDED CONSTRUCTION ALLOWANCE" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Payments deducted on or prior to that
day in the calculation of such Outstanding Construction Allowance, less any
Voluntary FCI Construction Contributions added on or prior to that day in the
calculation of such Qualified Payments.
"FUNDING ADVANCES" means (1) the Initial Funding Advance and (2) all
future advances made by BNPLC's Parent or any other Participant to or on behalf
of BNPLC to allow BNPLC to provide the Construction Allowance under the Lease.
"FUTURE WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
subparagraph 16.(b) of the Lease (except for changes concurred in by FCI's
independent public accountants).
"GUARANTOR" means Solectron Corporation, a Delaware corporation.
"GUARANTY" means the Amended and Restated Guaranty dated as of July 16,
1998 given by Guarantor to BNPLC, guaranteeing the obligations of FCI under the
Lease, Purchase Agreement and Closing Certificate, as such Guaranty may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"HAZARDOUS SUBSTANCE" means (i) any chemical, compound, material,
mixture or substance that is now or hereafter defined or listed in, regulated
under, or otherwise classified pursuant to, any Environmental Laws as
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89
a "hazardous substance," "hazardous material," "hazardous waste," "extremely
hazardous waste or substance," "infectious waste," "toxic substance," "toxic
pollutant," or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or reproductive toxicity;
(ii) petroleum, any fraction of petroleum, natural gas, natural gas liquids,
liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas
and such synthetic gas), and ash produced by a resource recovery facility
utilizing a municipal solid waste stream, and drilling fluids, produced waters
and other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iii) asbestos and any asbestos
containing material; and (iv) any other material that, because of its quantity,
concentration or physical or chemical characteristics, poses a significant
present or potential hazard to human health or safety or to the environment if
released into the workplace or the environment.
"HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property. "HAZARDOUS SUBSTANCE ACTIVITY" does not, however, include events
or circumstances that do not affect the Property on or about other properties
owned or operated by FCI.
"IMPOSITIONS" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.
"IMPROVEMENTS" means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.
"INDEX DEBT" means senior, unsecured, long-term indebtedness for
borrowed money of Guarantor that is not guaranteed by any other Person or
subject to any other credit enhancement.
"INDUSTRIAL HYGIENIST" means an industrial hygienist certified by the
American Board of Industrial Hygiene who is experienced with required and
appropriate health and safety standards and good industrial hygiene practice
related to operations at hazardous waste sites.
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"INITIAL FUNDING ADVANCE" means, collectively, the advances of made by
BNPLC's Parent (directly or through one or more of its Affiliates) to or on
behalf of BNPLC on or prior to the effective date of the Lease to cover the cost
of BNPLC's acquisition of the Property and certain Transaction Expenses and
other amounts described in this definition. The amount of the Initial Funding
Advance may be confirmed by a separate closing certificate executed by FCI as of
the Effective Date. To the extent that BNPLC does not itself use the entire
Initial Funding Advance to pay Transaction Expenses incurred by BNPLC or for
other purposes described in the preceding sentence, the remainder thereof is
being advanced to FCI, with the understanding that FCI will use any such amount
advanced for one or more of the following purposes: (1) the payment or
reimbursement of Transaction Expenses incurred by FCI; (2) the payment or
reimbursement of expenses incurred by FCI in connection with the Construction
Project, including the planning, design, engineering, construction and
permitting of thereof; (3) the maintenance of the Property; or (4) the payment
of Rents next due.
"INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) FCI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from FCI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.
"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT" means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by FCI or Guarantor of a
provision in any Operative Document or the Guaranty, the occurrence of which
breach cannot be objectively determined, or (B) any other event described in
clauses (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiv) or (xvi) of
subparagraph 17(a) of the Lease, the occurrence of which event cannot be
objectively determined. For example, an Event of Default under subparagraph
17.(a)(vii) of the Lease resulting solely from a failure of FCI to "generally"
pay its debts as such debts become due (in contrast to a failure of FCI to pay
Rent to BNPLC as it becomes due under the Lease) would constitute an Issue 97-1
Non-performance-related Subjective Event of Default. In no event, however, will
the term "Issue 97-10 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of FCI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by
Guarantor of any of sections 3.09, 3.10 or 3.11 of PART 3 of Schedule A attached
to the Guaranty (which set forth financial ratio covenants), (3) any failure of
FCI to use, maintain and insure the Property in accordance with the requirements
of the Lease, or (4) any failure of FCI to pay the full amount of any
Supplemental Payment on the Designated Sale Date as required by the Purchase
Agreement. Except as provided in subparagraph 1(A)(2)(c)(i) of the Purchase
Agreement, the characterization of any Event of Default as an Issue 97-10
Non-performance-related Subjective Event of Default will not affect the rights
or remedies available to BNPLC because of the Event of Default.
"ISSUE 97-10 ELECTION" means any of the following elections by FCI: (1)
an election to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof; and (2) an election to terminate FCI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B) of the
Purchase Agreement.
"ISSUE 97-10 PREPAYMENT" means a payment to BNPLC, required by
subparagraph 4.(f) of the Lease or by subparagraphs 4(B) or 4(C) of the Purchase
Agreement, equal in each case to (A) the Maximum Permitted Prepayment, computed
as of the date on which the payment becomes due, less (B) the accreted value of
any prior
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payments actually received by BNPLC from FCI constituting Issue 97-10
Prepayments or Voluntary FCI Construction Contributions. For purposes of the
preceding sentence, "accreted value" of a payment shall mean the amount of the
payment plus an amount equal to the interest that would have accrued on the
payment if it bore interest at the Effective Rate.
"LAND" means the land as described in Exhibit A attached to the Lease,
Closing Certificate and Purchase Agreement. However, upon any amendment to the
Lease which modifies the land covered thereby, the land covered by the Closing
Certificate and Purchase Agreement shall automatically be so modified.
"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(d) of the Lease.
"LEASE" means the Amended and Restated Lease Agreement dated as of July
16, 1998 between BNPLC, as landlord, and FCI, as tenant, pursuant to which FCI
has agreed to lease BNPLC's interest in the Property, as such Lease Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC's Parent
to be the average rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars are offered or
available to BNPLC's Parent in the London interbank market at approximately
11:00 a.m. (London time) on the second Business Day preceding the first day of
such period. BNPLC shall instruct BNPLC's Parent to consider deposits, for
purposes of making the determination described in the preceding sentence, that
are offered: (i) for delivery on the first day of such Construction Period or
Base Rent Period, as the case may be, (ii) in an amount equal or comparable to
the total (projected on the applicable date of determination by BNPLC's Parent)
Stipulated Loss Value on the first day of such period, and (iii) for a time
equal or comparable to the length of such period. If BNPLC's Parent so chooses,
it may determine LIBOR for any period by reference to the rate reported by the
British Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business Day preceding the
first day of such period. If for any reason BNPLC's Parent determines that it is
impossible or unreasonably difficult to determine LIBOR with respect to a given
Construction Period or Base Rent Period in accordance with the foregoing, or if
BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain Funding Advances during any
Construction Period or Base Rent Period for which Carrying Costs or Base Rent is
computed by reference to LIBOR, then "LIBOR" for that period shall equal the
rate which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for
that period. All determinations of LIBOR by BNPLC's Parent shall, in the absence
of clear and demonstrable error, be binding and conclusive upon FCI.
"LIBOR PERIOD ELECTION" for the first Base Rent Period means one month
and for any subsequent Base Rent Period means a period of one month, three
months or six months as designated by FCI at least ten Business Days prior to
the commencement of such Base Rent Period by a notice given to BNPLC in the form
of Exhibit H attached to the Lease. (For purposes of the Lease a LIBOR Period
Election for any Base Rent Period shall also be considered the LIBOR Period
Election in effect on (1) the Base Rent Commencement Date or Base Rent Date upon
which such Base Rent Period begins and (2) subsequent Base Rent Dates, if any,
which occur before the date upon which such Base Rent Period ends.) Any LIBOR
Period Election so designated by FCI shall remain in effect for the entire Base
Rent Period specified in FCI's notice to BNPLC (provided such Base Rent Period
commences at least ten Business Days after BNPLC's receipt of the notice) and
for all subsequent Base Rent Periods until a new designation becomes effective
in accordance with the provisions set forth in this definition. Notwithstanding
the
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foregoing, however: (1) FCI shall not be entitled to designate a LIBOR Period
Election that would cause a Base Rent Period to extend beyond the end of the
scheduled Term; (2) changes in the LIBOR Period Election shall become effective
only upon the commencement of a new Base Rent Period; and (3) if FCI fails to
make a LIBOR Period Election consistent with the foregoing requirements for any
Base Rent Period, or if an Event of Default shall have occurred and be
continuing on the third Business Day preceding the commencement of any Base Rent
Period, the LIBOR Period Election for such Base Rent Period shall be deemed to
be one month.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). Customary bankers' rights of set-off arising by operation of
law or by contract (however styled, if the contract grants rights no greater
than those arising by operation of law) in connection with working capital
facilities, lines of credit, term loans and letter of credit facilities and
other contractual arrangements entered into with banks in the ordinary course of
business are not "Liens" for the purposes of the Lease.
"LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated by the Lease or
the Purchase Agreement, by BNPLC itself, (2) by third parties lawfully claiming
through or under BNPLC (which for purposes of the Lease shall include any
judgment liens established against the Property because of a judgment rendered
against BNPLC and shall also include any liens established against the Property
to secure past due Excluded Taxes), or (3) by third parties lawfully claiming
under a deed or other instrument duly executed by BNPLC; provided, however,
Liens Removable by BNPLC shall not include (A) any Permitted Encumbrances or
Development Documents (regardless of whether claimed through or under BNPLC),
(B) any of the Operative Documents or any other document executed by BNPLC with
the knowledge of (and without objection by) FCI's counsel contemporaneously with
the execution and delivery of the Operative Documents, (C) Liens which are
neither lawfully claimed through or under BNPLC (as described above) nor claimed
under a deed or other instrument duly executed by BNPLC, (D) Liens claimed by
FCI or claimed through or under a conveyance made by FCI, (E) Liens arising
because of BNPLC's compliance with Applicable Law, the Lease, Permitted
Encumbrances, the Development Documents or any written request made by FCI, (F)
Liens securing the payment of property taxes or other amounts assessed against
the Property by any governmental authority, other than to secure the payment of
past due Excluded Taxes or to secure damages caused by (and attributed by any
applicable principles of comparative fault to) BNPLC's own Established
Misconduct or the Established Misconduct of BNPLC's Parent or BNPLC's other
Affiliates, (G) Liens resulting from or arising in connection with any breach by
FCI of the Closing Certificate, the Lease or the Purchase Agreement; or (H)
Liens resulting from or arising in connection with any Permitted Transfer that
occurs after any Designated Sale Date upon which, for any reason, FCI or an
Affiliate of FCI or any Applicable Purchaser shall not purchase BNPLC's interest
in the Property pursuant to the Purchase Agreement for a net price to BNPLC
(when taken together with any additional payments made by FCI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.
"LIST OF DEFINED TERMS" means this List of Defined Terms, which is
attached to the Lease and incorporated by reference into the other Operative
Documents.
"LOSS CUTOFF DATE" means the later of the dates upon which (i) the Lease
terminates, (ii) FCI surrenders possession of the Property or (iii) FCI ceases
to have any leasehold or other interest in the Property under the Lease or
otherwise.
List of Defined Terms - Page 16
93
"LOSSES" means the following, to the extent (but only to the extent)
resulting from, arising out of or in connection with events or circumstances
(including the condition of the Property) that actually or allegedly occurred or
existed or may hereafter occur or exist on or before the Loss Cutoff Date: any
and all losses, liabilities, damages (whether actual, consequential, punitive or
otherwise denominated), demands, claims, administrative or legal proceedings,
actions, judgments, causes of action, assessments, fines, penalties, costs and
expenses (including Attorneys' Fees and the fees of outside accountants and
environmental consultants), of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote. For purposes of
determining whether any loss, liability, damage, demand, claim, administrative
or legal proceeding, action, judgment, cause of action, assessment, fine,
penalty, cost or expense constitutes a "Loss," the events or circumstances
relating thereto will be presumed to have occurred prior to the Loss Cutoff Date
unless FCI establishes by clear and convincing evidence to the contrary that the
relevant events or circumstances did not occur or exist prior to the Loss Cutoff
Date.
"MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between FCI
or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.
"MAXIMUM CONSTRUCTION ALLOWANCE" means an amount equal to $16,000,000,
less the Initial Funding Advance.
"MAXIMUM PERMITTED PREPAYMENT" as of any date means the amount equal to
the lesser of the following:
(1) the sum of:
(A) eighty-nine and nine-tenths of one percent (89.9%)
of the aggregate of (i) all Project Costs paid or
incurred on or prior to such date, plus (ii)
ninety-seven percent (97%) of Carrying Costs added
to the Outstanding Construction Allowance on or
prior to such date; plus
(B) any amount by which the value of BNPLC's interest
in the Land and its appurtenances are less than the
price paid by BNPLC for the same as determined
reasonably and in good faith by BNPLC after
consulting with an independent appraiser; or
(2) eighty-nine and nine-tenths of one percent (89.9%) of
Stipulated Loss Value on such date.
"MAXIMUM REMARKETING OBLIGATION" shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.
"MINIMUM EXTENDED REMARKETING PRICE" shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.
"MOODY'S" means Xxxxx'x Investor Service, Inc.
"NORMAL TENANT IMPROVEMENTS" shall have the meaning assigned to it in
subparagraph 3(A) of the Construction Management Agreement.
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94
"NOTICE OF FCI'S INTENT TO TERMINATE" shall have the meaning assigned to
it in subparagraph 5(D) of the Construction Management Agreement.
"OPERATIVE DOCUMENTS" means the Closing Certificate, the Lease, the
Construction Management Agreement and the Purchase Agreement.
"OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to
it in subparagraph 6.(a) of the Lease.
"PARTICIPANT" means BNPLC's Parent, Allied Irish Banks PLC, Bank of
America National Trust and Savings Association, Security Pacific Leasing
Corporation, First Union National Bank, Mellon Bank, N.A., Standard Chartered
Bank and any other Person that, upon becoming a party to the Participation
Agreement by executing a supplement thereto as contemplated therein, agrees from
time to time to participate in all or some of the risks and rewards to BNPLC of
the Lease, the Purchase Agreement and the Closing Certificate. As of the
Effective Date, the only Participant is BNPLC's Parent, but BNPLC may agree
after the Effective Date to share in risks and rewards of the Lease, the
Purchase Agreement, and the Closing Certificate with other Participants.
However, no Person other than BNPLC's Parent, Allied Irish Banks PLC, Bank of
America National Trust and Savings Association, Security Pacific Leasing
Corporation, First Union National Bank, Mellon Bank, N.A., Standard Chartered
Bank and their respective Affiliates shall qualify as a Participant for purposes
of the Lease, the Purchase Agreement, the Closing Certificate or other
agreements concerning the Property to which SGC is a party unless such Person
became a party to the Participation Agreement by executing a supplement to that
agreement as contemplated therein and, at the time of execution of the
supplement either (i) such Person had obtained SGC's prior written approval
(which approval will not be unreasonably withheld), or (ii) an Event of Default
had occurred and was continuing.
"PARTICIPATION AGREEMENT" means the Amended and Restated Participation
Agreement dated as of the Effective Date, between BNPLC and the Participants and
any other Participants that may become parties thereto as contemplated therein,
pursuant to which BNPLC's Parent has agreed to participate in the risks and
rewards to BNPLC of the Lease and the Purchase Agreement, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Lease,
(ii) any easement agreement or other document affecting title to the Property
executed by BNPLC at the request of or with the consent of FCI, (iii) any liens
from time to time imposed to secure only ad valorem taxes on the Property which,
at the time in question, are not delinquent, and (iv) the terms and conditions
of the Existing Contract that survived the conveyance of the Land from Seller to
BNPLC.
"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:
(1) exceed that reasonably required for the construction of the
Construction Project in accordance with the Lease and the Construction
Management Agreement or for the operation of the Property for the
purposes expressly permitted under subparagraph 3.(a) of the Lease; or
(2) include any disposal, discharge or other release of
Hazardous Substances from the Property in
List of Defined Terms - Page 18
95
any manner that might allow such substances to reach surface water or
groundwater, except (i) through a lawful and properly authorized
discharge (A) to a publicly owned treatment works or (B) with rainwater
or storm water runoff in accordance with Applicable Laws and any permits
obtained by FCI that govern such runoff; or (ii) any such disposal,
discharge or other release of Hazardous Substances for which no permits
are required and which are not otherwise regulated under applicable
Environmental Laws.
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.
"PERMITTED HAZARDOUS SUBSTANCES" means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by FCI and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 3.(a) of the Lease, in either case
in strict compliance with all Environmental Laws and with due care given the
nature of the Hazardous Substances involved. Without limiting the generality of
the foregoing, Permitted Hazardous Substances shall include usual and customary
office, laboratory and janitorial products.
"PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance of rights and interests in favor of the BNPLC's Parent or
other Participants pursuant to the terms and conditions of the Participation
Agreement, provided that in any case where rights or interests in the Property
are so created or conveyed, the rights or interests are made expressly subject
to the rights of FCI under the Lease and the Purchase Agreement; (2) any
assignment or conveyance by BNPLC to any present or future Participant of any
lien or security interest against the Property (in contrast to a conveyance of
BNPLC's fee estate) or of any interest in Rent, payments required by or under
the Purchase Agreement or payments to be generated from the Property after the
Term, provided that such assignment or conveyance is made expressly subject to
the rights of FCI under the Lease and the Purchase Agreement; (3) any agreement
to exercise or refrain from exercising rights or remedies under the Lease or the
Purchase Agreement made by BNPLC with any present or future Participant; (4) any
assignment or conveyance by BNPLC requested by FCI or required by any Permitted
Encumbrance, by Development Documents, by the Purchase Agreement or by
Applicable Laws; (5) conveyances or transfers by BNPLC or its Affiliates to
BNPLC or its Affiliates, provided that in the case of any such conveyance or
transfer that covers any interest in the Property, the conveyance or transfer is
made expressly subject to the rights of FCI under the Lease and the Purchase
Agreement; or (6) any other assignment or conveyance by BNPLC when an Event of
Default shall have occurred and be continuing or after a Landlord's Election to
Continue Construction or after the Designated Sale Date (provided, that if the
assignment or conveyance constitutes a sale of BNPLC's fee estate in the
Property, and if at the time of the sale FCI's Extended Remarketing Right under
Paragraph 2 of the Purchase Agreement has not expired or been terminated as
provided in the Purchase Agreement, then the sale will be subject to FCI's
Extended Remarketing Right.)
"PERSON" means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.
"PERSONAL PROPERTY" shall have the meaning assigned to it on page 2 of
the Lease.
"PLAN" means at any time an employee pension benefit plan which is
covered under Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and is either (i) maintained by
FCI, Guarantor or any
List of Defined Terms - Page 19
96
Subsidiary of FCI or Guarantor for employees of FCI, Guarantor or any Subsidiary
of FCI or Guarantor or (ii) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which FCI, Guarantor or any Subsidiary of FCI or Guarantor
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"POTENTIAL LIEN CLAIMANTS" means (1) general contractors, or (2) other
parties who have filed any required statutory notices, or who have actually
notified BNPLC or FCI of claims, in order to preserve or establish their right
to a mechanic's or materialman's lien against the Property in connection with
any Construction Project.
"PRIME RATE" means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either Citibank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPLC shall be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from time to time after the Effective Date without notice to FCI as
of the effective time of each change in rates described in this definition.
"PRIOR WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.
"PROJECT COSTS" means the following:
1. costs incurred for the Work (as defined in the Construction
Management Agreement), including not only hard costs incurred for the
new Improvements described in Exhibit B attached to the Construction
Management Agreement, but also the following costs to the extent
reasonably incurred in connection with the Construction Project:
o soft costs, such as architectural fees, engineering
fees and fees and costs paid in connection with
obtaining project permits and approvals required by
governmental authorities or the Development Documents,
o site preparation costs, and
o costs of offsite and other public improvements required
as conditions of governmental approvals for the
Construction Project;
2. costs incurred to maintain insurance required by (and
consistent with the requirements of) the Lease prior to the Base Rent
Commencement Date;
3. a fraction of the cost of title insurance incurred to
satisfy the condition set forth in subparagraph 5(B)(3)(a) of the
Construction Management Agreement, the numerator of which fraction is
the difference computed by subtracting the price paid by BNPLC for the
Land from the maximum dollar amount of coverage provided by the title
insurance, and the denominator of which fraction is equal to such
maximum dollar amount of coverage;
4. Impositions that have accrued or become due under the Lease
prior to the Base Rent
List of Defined Terms - Page 20
97
Commencement Date; and
5. cancellation or termination fees or other compensation
payable by FCI or BNPLC pursuant to any contract concerning the
Construction Project made by FCI or BNPLC with any general contractor,
architect, engineer or other third party because of any election by FCI
or BNPLC to cancel or terminate such contract.
"PROJECTED COST OVERRUNS" shall have the meaning assigned to it in
subparagraph 4(A) of the Construction Management Agreement.
"PROPERTY" means the Personal Property and the Real Property,
collectively.
"PURCHASE AGREEMENT" means the Amended and Restated Purchase Agreement
dated as of July 16, 1998 between BNPLC and FCI pursuant to which FCI has agreed
to purchase or to arrange for the purchase by a third party of BNPLC's interest
in the Property, as such Purchase Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in accordance with its
terms.
"PURCHASE OPTION" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.
"QUALIFIED PAYMENTS" means (A) any Issue 97-10 Prepayments received by
BNPLC, (B) any Voluntary FCI Construction Contributions received by BNPLC
pursuant to subparagraph 4(C) of the Construction Management Agreement, and (C)
any payments received by BNPLC from time to time during the Term (1) under any
property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction placed upon the use or development of the
Property or for the condemnation of the Property or any portion thereof, (3)
because of any judgment, decree or award for injury or damage to the Property or
(4) under any title insurance policy or otherwise as a result of any title
defect or claimed title defect with respect to the Property; provided, however,
that (x) in determining the amount of "Qualified Payments", there shall be
deducted all expenses and costs of every kind, type and nature (including taxes,
Breakage Costs and Attorneys' Fees) incurred by BNPLC with respect to the
collection or application of such payments, (y) "Qualified Payments" shall not
include any payment to BNPLC by a Participant or an Affiliate of BNPLC that is
made to compensate BNPLC for the Participant's or Affiliate's share of any
Losses BNPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4) and (z) "Qualified Payments" shall not include
any payments received by BNPLC that BNPLC has paid or is obligated to pay to FCI
for the restoration or repair of the Property or that BNPLC is holding as
Escrowed Proceeds pursuant to Paragraph 11 of the Lease or any other provision
of the Lease. For purposes of computing the total Qualified Payments (and other
amounts dependent upon Qualified Payments, such as Stipulated Loss Value and the
Outstanding Construction Allowance) paid to or received by BNPLC as of any date,
payments described in the preceding clauses (1) through (4) will be considered
as Escrowed Proceeds, not Qualified Payments, until they are actually applied as
Qualified Payments by BNPLC as provided in subparagraph 11.(c) of the Lease.
"REAL PROPERTY" shall have the meaning assigned to it on page 1 of the
Lease.
"REIMBURSABLE CONSTRUCTION-PERIOD COSTS" shall have the meaning assigned
to it in Paragraph 2 of the Construction Management Agreement.
"REMEDIAL WORK" means any investigation, monitoring, clean-up,
containment, remediation, removal,
List of Defined Terms - Page 21
98
payment of response costs, or restoration work and the preparation and
implementation of any closure or other required remedial plans that any
governmental agency or political subdivision requires or approves (or could
reasonably be expected to require if it was aware of all relevant circumstances
concerning the Property), whether by judicial order or otherwise, because of the
presence of or suspected presence of Hazardous Substances in, on, under or about
the Property or because of any prior Hazardous Substance Activity. Without
limiting the generality of the foregoing, Remedial Work also means any
obligations imposed upon or undertaken by FCI pursuant to Development Documents
or any recommendations or proposals made therein.
"RENT" means the Base Rent and all Additional Rent.
"RESIDUAL RISK PERCENTAGE" means fifteen percent (15%) or such greater
percentage, but in no event greater than eighteen percent (18%), as is necessary
to cause the Lease to satisfy the FAS 13 "90% test" for an operating lease under
GAAP. At any time after the Base Rent Commencement Date, upon request of either
BNPLC or FCI, the parties will execute a written acknowledgment of the amount of
the Residual Risk Percentage (not less than 15% and not more than 18%)
calculated in accordance with this definition.
"RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of either FCI or Guarantor,
as the case may be.
"S&P" means Standard and Poor's Corporation.
"SCOPE CHANGE" shall have the meaning assigned to it in subparagraph
1(A)(1)(b) of the Construction Management Agreement.
"SELLER" means Xxxx & Xxxx Enterprises.
"SPREAD", means:
(A) From July 16, 1998 through and including November 30, 1998,
for each Construction Period or period beginning on and including a Base Rent
Date and ending on but not including the next Base Rent Date, the amount
established as described below in this definition on the date that is two
Business Days prior to such period by reference to the stated (or published,
implied) rating by S&P or by Xxxxx'x applicable to the Index Debt on that date.
The Spread shall be established at the Level in the pricing grid below which
corresponds to the rating of S&P and Xxxxx'x, respectively, applicable to the
Index Debt; provided that (a) if one, but not both, of Xxxxx'x or S&P shall not
have in effect a rating (stated or published, implied) for the Index Debt, then
the Spread shall be determined solely with reference to the available rating by
the rating agency that still rates the Index Debt; (b) if the ratings
established by Xxxxx'x and S&P for the Index Debt shall indicate two different
but consecutive Levels, the Spread shall be based on the more favorable to
Guarantor of the two Levels; (c) if the ratings established by Xxxxx'x and S&P
for the Index Debt shall indicate two different but nonconsecutive Levels, the
Spread shall be the average of the Spreads corresponding to such Levels; (d) if
the rating established by Xxxxx'x or S&P for the Index Debt shall be changed
(other than as a result of a change in the rating system of Xxxxx'x or S&P),
such change shall be effective on the date on which it is first announced by the
applicable rating agency; (e) notwithstanding anything to the contrary in (a)
through (d) above, but subject to (f) and (g) below, if either the rating
established by Xxxxx'x for the Index Debt of Guarantor is below Ba2 or the
rating established by S&P for the Index Debt of Guarantor is below BB, the
Spread shall be 80.0 basis points; (f) notwithstanding anything to the contrary
in (a) through (e) above, but subject to (g) below, if Xxxxx'x does not
establish a rating for the Index Debt of Ba2 or higher (including if Xxxxx'x has
ceased to establish any rating for the Index Debt) and S&P does not
List of Defined Terms - Page 22
99
establish a rating for the Index Debt of BB or higher (including if S&P has
ceased to establish any rating of the Index Debt), the Spread shall be the
difference computed by subtracting the Effective Rate from the rate that is 50.0
basis points above the Prime Rate; and (g) notwithstanding anything to the
contrary in (a) through (f) above, on any date where an Event of Default has
occurred and is continuing, the Spread shall equal the Default Rate less the
Effective Rate.
LEVELS S&P RATING XXXXX'X RATING MARGIN
------------------------------------------------------------------------------------------------
Level I BBB+ (or better) Baa1 (or better) 32.5 basis points
Level II BBB Baa2 40.0 basis points
Level III BBB- Baa3 48.75 basis points
Level IV BB+ Ba1 67.5 basis points
Level V BB Ba2 80.0 basis points
All determinations of the Spread by BNPLC shall, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of the Lease. Further
BNPLC may, but shall not be required, to rely on the determination of the Spread
set forth in any certificate delivered by Guarantor pursuant to subparagraph
16.(b)(ii) of the Lease, and no reduction in the Spread will be effective
because of an improvement in the S&P Rating or the Xxxxx'x Rating before the
date that Guarantor has notified BNPLC thereof by delivery of such a
certificate.
(B) From and after December 1, 1998, for each Construction
Period or period beginning on and including a Base Rent Date and ending on but
not including the next Base Rent Date, the amount established as described below
in this definition on the date that is two Business Days prior to such period by
reference to the stated (or published, implied) rating by S&P or by Xxxxx'x
applicable to the Index Debt on that date. The Spread shall be established at
the Level in the pricing grid below which corresponds to the rating of S&P and
Xxxxx'x, respectively, applicable to the Index Debt; provided that (a) if one,
but not both, of Xxxxx'x or S&P shall not have in effect a rating (stated or
published, implied) for the Index Debt, then the Spread shall be determined
solely with reference to the available rating by the rating agency that still
rates the Index Debt; (b) if the ratings established by Xxxxx'x and S&P for the
Index Debt shall indicate two different but consecutive Levels, the Spread shall
be based on the more favorable to Guarantor of the two Levels; (c) if the
ratings established by Xxxxx'x and S&P for the Index Debt shall indicate two
different but nonconsecutive Levels, the Spread shall be the average of the
Spreads corresponding to such Levels; (d) if the rating established by Xxxxx'x
or S&P for the Index Debt shall be changed (other than as a result of a change
in the rating system of Xxxxx'x or S&P), such change shall be effective on the
date on which it is first announced by the applicable rating agency; (e)
notwithstanding anything to the contrary in (a) through (d) above, but subject
to (f) and (g) below, if either the rating established by Xxxxx'x for the Index
Debt of Guarantor is below Ba2 or the rating established by S&P for the Index
Debt of Guarantor is below BB, the Spread shall be 80.0 basis points; (f)
notwithstanding anything to the contrary in (a) through (e) above, but subject
to (g) below, if Xxxxx'x does not establish a rating for the Index Debt of Ba2
or higher (including if Xxxxx'x has ceased to establish any rating for the Index
Debt) and S&P does not establish a rating for the Index Debt of BB or higher
(including if S&P has ceased to establish any rating of the Index Debt), the
Spread shall be the difference computed by subtracting the Effective Rate from
the rate that is 50.0 basis points
List of Defined Terms - Page 23
100
above the Prime Rate; and (g) notwithstanding anything to the contrary in (a)
through (f) above, on any date where an Event of Default has occurred and is
continuing, the Spread shall equal the Default Rate less the Effective Rate.
LEVELS S&P RATING XXXXX'X RATING MARGIN
-----------------------------------------------------------------------------------------------
Level I BBB+ (or better) Baa1 (or better) 40 basis points
Level II BBB Baa2 50 basis points
Level III BBB- Baa3 60 basis points
Level IV BB+ Ba1 75 basis points
Level V BB Ba2 95 basis points
All determinations of the Spread by BNPLC shall, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of the Lease. Further
BNPLC may, but shall not be required, to rely on the determination of the Spread
set forth in any certificate delivered by Guarantor pursuant to subparagraph
16.(b)(ii) of the Lease, and no reduction in the Spread will be effective
because of an improvement in the S&P Rating or the Xxxxx'x Rating before the
date that Guarantor has notified BNPLC thereof by delivery of such a
certificate.
"STIPULATED LOSS VALUE" as of any date means the amount equal to the sum
of the Initial Funding Advance, plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
such date, minus all funds received by BNPLC and applied as Qualified Payments
on or prior to such date. Under no circumstances will any payment of Base Rent,
Commitment Fees or Administrative Agency Fees reduce Stipulated Loss Value.
"SUBSIDIARY" means any corporation of which another corporation owns,
directly or indirectly, such number of outstanding shares as have more than
fifty percent (50%) of the ordinary voting power for the election of directors.
"SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.
"TERM" shall have the meaning assigned to it in Paragraph 1.(a) of the
Lease.
"THIRD PARTY CONTRACT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.
"THIRD PARTY SALE NOTICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"THIRD PARTY SALE PROPOSAL" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"THIRD PARTY TARGET PRICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
List of Defined Terms - Page 24
101
"TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the market
value of all Plan assets allocable to such benefit liabilities, as determined on
the most recent valuation date of the Plan and in accordance with the provisions
of ERISA for calculating the potential liability of FCI or Guarantor or any
ERISA Affiliate of FCI or Guarantor under Title IV of ERISA.
"VOLUNTARY FCI CONSTRUCTION CONTRIBUTIONS" shall have the meaning
assigned to it in subparagraph 4(C) of the Construction Management Agreement.
"VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election made
by BNPLC to keep the Property pursuant to, and under the circumstances described
in subparagraph 1(A)(2)(a) of the Purchase Agreement.
"WORK" shall have the meaning assigned to it in subparagraph 1(A)(2)(a)
of the Construction Management Agreement.
List of Defined Terms - Page 25
