Exhibit 10.17
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$6,603,470.30*
LEASE AGREEMENT
(Land)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
ZHONE TECHNOLOGIES, INC.
("Zhone")
August 1, 2000
(Oakland, California)
* Equals the Prior Funding Advances ($3,603,275.30) plus the amount
($3,000,195) that remains to be paid to the City fo Oakland under the
Purchase Money Note.
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[Land]
TABLE OF CONTENTS
Page
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1. Term............................................................................................. 2
(a) Scheduled Term.............................................................................. 2
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(b) Intentionally Deleted....................................................................... 3
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(c) Intentionally Deleted....................................................................... 3
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(d) Election by Zhone to Terminate After Accelerating the Designated Sale Date.................. 3
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(e) Extension of the Term....................................................................... 3
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2. Use and Condition of the Property................................................................ 4
(a) Use......................................................................................... 4
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(b) Condition of the Property................................................................... 4
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(c) Consideration for and Scope of Waiver....................................................... 4
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3. Rent............................................................................................. 4
(a) Base Rent Generally......................................................................... 4
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(b) Impact of Collateral Upon Formulas.......................................................... 5
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(c) Calculation of and Due Dates for Base Rent.................................................. 5
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(i) Determination of Payment Due Dates, Generally...................................... 5
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(ii) Special Adjustments to Base Rent Payment Dates, Periods and Amounts................ 5
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(iii) Base Rent Formula for Periods During Which The Collateral Percentage is 100%....... 6
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(iv) Base Rent Formula for Periods During Which The Collateral Percentage is Less
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Than 100%.......................................................................... 7
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(d) Additional Rent............................................................................. 8
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(e) Intentionally Deleted....................................................................... 8
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(f) Commitment Fees............................................................................. 8
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(g) Intentionally Deleted....................................................................... 8
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(h) Intentionally Deleted....................................................................... 8
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(i) No Demand or Setoff......................................................................... 8
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(j) Default Interest and Order of Application................................................... 8
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4. Nature of this Agreement......................................................................... 9
(a) "Net" Lease Generally....................................................................... 9
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(b) No Termination.............................................................................. 9
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(c) Tax Reporting............................................................................... 10
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(d) Characterization of this Land Lease......................................................... 10
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5. Payment of Executory Costs and Losses Related to the Property.................................... 10
(a) Impositions................................................................................. 10
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(b) Increased Costs; Capital Adequacy Charges................................................... 11
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(c) Zhone's Payment of Other Losses; General Indemnification.................................... 12
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(d) Exceptions and Qualifications to Indemnities................................................ 13
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6. Post Closing Advance to Cover Deferred Purchase Price of the Land................................ 15
(a) Purchase Money Documents.................................................................... 15
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(b) Post-Closing Advance.......................................................................... 15
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7. Intentionally Deleted................................................................................ 16
8. Environmental........................................................................................ 16
(a) Environmental Covenants by Zhone.............................................................. 16
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(b) Right of BNPLC to do Remedial Work Not Performed by Zhone..................................... 17
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(c) Environmental Inspections and Reviews......................................................... 17
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(d) Communications Regarding Environmental Matters................................................ 17
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9. Insurance Required and Condemnation.................................................................. 18
(a) Liability Insurance........................................................................... 18
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(b) Intentionally Deleted......................................................................... 18
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(c) Failure to Obtain Insurance................................................................... 18
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(d) Condemnation.................................................................................. 19
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10. Application of Insurance and Condemnation Proceeds................................................... 19
(a) Collection and Application of Insurance and Condemnation Proceeds Generally................... 19
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(b) Advances of Land Escrowed Proceeds to Zhone................................................... 20
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(c) Application of Land Escrowed Proceeds as a Qualified Prepayment............................... 20
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(d) Special Provisions Applicable After Completion by Zhone of the Construction Projects.......... 20
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(e) Special Provisions Applicable After a CMA Termination Event or an Event of Default............ 20
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(f) Zhone's Obligation to Restore................................................................. 20
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(g) Takings of All or Substantially All of the Property on or after the Last Building Base Rent
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Commencement Date............................................................................. 21
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11. Additional Representations, Warranties and Covenants of Zhone Concerning the Property................ 21
(a) Compliance with Covenants and Laws............................................................ 21
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(b) Operation of the Property..................................................................... 21
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(c) Debts for Construction, Maintenance, Operation or Development................................. 22
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(d) Repair, Maintenance, Alterations and Additions................................................ 23
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(e) Permitted Encumbrances and Development Documents.............................................. 23
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(f) Books and Records Concerning the Property..................................................... 23
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12. Financial Covenants and Other Covenants Incorporated by Reference to Schedule 1...................... 23
13. Financial Statements and Other Reports............................................................... 24
(a) Financial Statements; Required Notices; Certificates.......................................... 24
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14. Assignment and Subletting by Zhone................................................................... 25
(a) BNPLC's Consent Required...................................................................... 25
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(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters......................... 25
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(c) Consent Not a Waiver.......................................................................... 26
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15. Assignment by BNPLC.................................................................................. 26
(a) Restrictions on Transfers..................................................................... 26
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(b) Effect of Permitted Transfer or other Assignment by BNPLC..................................... 26
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16. BNPLC's Right of Access.............................................................................. 26
[Land]
17. Events of Default..................................................................................... 27
18. Remedies.............................................................................................. 29
(a) Basic Remedies................................................................................. 29
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(b) Notice Required So Long As the Purchase Option and the Land Supplemental Payment Obligation
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Continue Under the Land Purchase Agreement..................................................... 30
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(c) Enforceability................................................................................. 31
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(d) Remedies Cumulative............................................................................ 31
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19. Default by BNPLC...................................................................................... 31
20. Quiet Enjoyment....................................................................................... 31
21. Surrender Upon Termination............................................................................ 32
22. Holding Over by Zhone................................................................................. 32
23. Independent Obligations Evidenced by the other Operative Documents.................................... 32
24. Amendment and Restatement............................................................................. 33
[Land]
(iv)
[Land]
Exhibits and Schedules
Exhibit A........................... Legal Description
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Exhibit B........................... Insurance Requirements
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Exhibit C........................... LIBOR Period Election Form
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Schedule 1.......................... Financial Covenants and Other Requirements
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[Land]
(v)
LEASE AGREEMENT
(LAND)
This LEASE AGREEMENT (LAND) (this "Land Lease"), is made and dated as of
August 1, 2000 (the "Effective Date") by and between BNP LEASING CORPORATION, a
Delaware corporation ("BNPLC"), and ZHONE TECHNOLOGIES, INC., a Delaware
corporation ("Zhone").
RECITALS
Contemporaneously with the execution of this Land Lease, BNPLC and Zhone
are executing an Common Definitions and Provisions Agreement (Land) dated as of
the Effective Date (the "Land CDPA"), which by this reference is incorporated
into and made a part of this Land Lease for all purposes. As used in this Land
Lease, capitalized terms defined in the Land CDPA and not otherwise defined in
this Land Lease are intended to have the respective meanings assigned to them in
the Land CDPA.
Zhone and BNPLC have previously executed that Lease Agreement (Phase I -
Land) dated as of January 20, 2000 (the "Prior Lease Agreement"). Zhone and
BNPLC have agreed to amend, restate and replace the Prior Lease Agreement with
this Land Lease as provided in Paragraph 24 below.
Pursuant to the Acquisition Contract, which covers the Land described in
Exhibit A, BNPLC has acquired the Land from Seller.
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BNPLC and Zhone have reached agreement as to the terms and conditions upon
which BNPLC is willing to lease the Land to Zhone, and by this Land Lease BNPLC
and Zhone desire to evidence such agreement.
GRANTING CLAUSES
BNPLC does hereby LEASE, DEMISE and LET unto Zhone 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) all easements and other rights appurtenant to the Land, whether
now owned or hereafter acquired by BNPLC; and
(3) (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 any abutting land
not owned or leased by BNPLC.
BNPLC's interest in all property described in clauses (1) through (3) above are
hereinafter referred to collectively as the "Real Property". The Real Property
does not include any Improvements (now existing or those to be constructed as
provided in the Other Lease Agreements and the Construction Management
Agreements) or BNPLC's rights appurtenant to the Improvements, it being
understood that the Other Lease Agreements constitute separate leases of the
Improvements and the appurtenances thereto, and only the Improvements and the
appurtenances thereto, from BNPLC to Zhone.
[Land]
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
Acquisition Contract or acquired by BNPLC pursuant to Paragraph 7 below, BNPLC
also hereby grants and assigns to Zhone for the term of this Land Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such
rights or interests of BNPLC:
(a) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and
(b) 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 Zhone's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Land Lease, the Permitted Encumbrances and any other claims or encumbrances not
constituting Liens Removable by BNPLC.
Further, the leasehold estate conveyed hereby and Zhone's rights hereunder
shall be subject to an easement reserved by BNPLC to allow BNPLC and its
representatives, contractors, subcontractors and other invitees to enter upon
the Land and do whatever BNPLC deems necessary or appropriate to construct or
continue the construction of Improvements on the Land following any "Landlord's
Election to Continue Construction" under and as defined in either or both of the
Other Lease Agreements. Such easement, however, shall be subject to all the
terms and conditions set forth in the Other Lease Agreements regarding a
Landlord's Election to Continue Construction, and except in the event of a
Landlord's Election to Continue Construction, so long as the Other Lease
Agreements and Zhone's possessory rights thereunder remain in force, Zhone will
have the sole right to control and the sole responsibility for the design and
construction of the Construction Projects (including the means, methods,
sequences and procedures implemented to accomplish such design and construction)
as provided in (and subject to the terms and conditions of) the Other Lease
Agreements and the Construction Management Agreements.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to Zhone and is accepted and is to be used
and possessed by Zhone upon and subject to the following terms and conditions:
1 Term.
(a) Scheduled Term. The term of this Land Lease (the "Term") shall
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commence on and include the Effective Date, and end on the first Business Day of
August, 2005, unless sooner terminated as expressly herein provided or extended
as provided in subparagraph 1.(e).
(b) Intentionally Deleted.
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(c) Intentionally Deleted.
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[Land]
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(d) Election by Zhone to Terminate After Accelerating the Designated
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Sale Date. Zhone shall be entitled to accelerate the Designated Sale Date (and
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thus accelerate the purchase of BNPLC's interest in the Property by Zhone or by
an Applicable Purchaser pursuant to the Land Purchase Agreement) by sending a
notice to BNPLC as provided in clause (2) of the definition of "Designated Sale
Date" in the Land CDPA. In the event, because of Zhone'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, Zhone may terminate this Land
Lease on or after the Designated Sale Date; provided, however, as a condition to
any such termination by Zhone, Zhone must have done the following prior to the
termination:
(i) purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Land Purchase Agreement and satisfied all of
Zhone's other obligations under the Land Purchase Agreement;
(ii) paid to BNPLC all Base Rent 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 Land Purchase Agreement.
(e) Extension of the Term. The Term may be extended at the option
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of Zhone for two successive periods of one year each; provided, however, that
prior to any such extension the following conditions must have been satisfied:
(A) at least one hundred eighty days prior to the commencement of any such
extension, BNPLC and Zhone must have agreed in writing upon, and received the
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 Land CDPA, and (2) an adjustment
to the Rent that Zhone 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 Zhone, each in its sole and
absolute discretion; (B) no Event of Default shall have occurred and be
continuing at the time of Zhone's exercise of its option to extend; and (C)
immediately prior to any such extension, this Land Lease must remain in effect.
With respect to the condition that BNPLC and Zhone must have agreed upon the
Rent required for any extension of the Term, neither Zhone nor BNPLC is willing
to submit itself to a risk of liability or loss of rights hereunder for being
judged unreasonable. Accordingly, both Zhone 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 Zhone exercises its option to
extend the Term as provided in this Paragraph, this Land Lease shall continue in
full force and effect, and the leasehold estate hereby granted to Zhone 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 Use and Condition of the Property.
(a) Use. Subject to the Permitted Encumbrances, the Development
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Documents and the terms hereof, Zhone may use and occupy the Property during the
Term, but only for the following purposes.
(i) constructing, maintaining and using Improvements on the Land for
purposes expressly permitted by and described in the Other Lease
Agreements; and
[Land]
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(ii) other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion of
the Construction Project (but Zhone acknowledges that BNPLC's withholding
of such 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, or (2) giving the
approval is likely to substantially increase BNPLC's administrative burden
of complying with or monitoring Zhone's compliance with the requirements of
the Land Operative Documents or the Other Operative Documents).
(b) Condition of the Property. Zhone acknowledges that it has
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carefully and fully inspected the Property and accepts the Property in its
present state, AS IS, and without any representation or warranty, express or
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implied, as to the condition of such property or as to the use which may be made
thereof. Zhone 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 Property or for any
violations with respect thereto of Applicable Laws. Further, BNPLC shall not be
required to furnish to Zhone 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
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subparagraph 2.(b) above have been negotiated by BNPLC and Zhone 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 is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to Zhone during the Term because of the definition of
Personal Property and Property above.
3 Rent.
(a) Base Rent Generally. On each Base Rent Date through the end of
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the Term, Zhone shall pay BNPLC rent ("Base Rent"). Each payment of Base Rent
must be received by BNPLC no later than 10:00 a.m. (Pacific time) on the date it
becomes due; if received after 10:00 a.m. (Pacific time) it will be considered
for purposes of this Land Lease as received on the next following Business Day.
At least five days prior to any Base Rent Date upon which an installment of Base
Rent shall become due, BNPLC shall notify Zhone in writing of the amount of each
installment, calculated as provided below. Any failure by BNPLC to so notify
Zhone, however, shall not constitute a waiver of BNPLC's right to payment, but
absent such notice Zhone shall not be in default hereunder for any underpayment
resulting therefrom if Zhone, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.
(b) Impact of Collateral Upon Formulas. To ease the administrative
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burden of this Land Lease and the Land Pledge Agreement, the formulas for
calculating Base Rent set out below in subparagraph 3.(c) reflect a reduction in
the Base Rent equal to the interest that would accrue on any Collateral provided
in accordance with the requirements of the Land Pledge Agreement from time to
time if the Accounts (as defined in the Land Pledge Agreement) bore interest at
the Deposit Rate. BNPLC has agreed to such
[Land]
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reduction to provide Zhone with the economic equivalent of interest on such
Collateral, and in return Zhone has agreed to the provisions of the Land Pledge
Agreement that excuse the actual payment of interest on the Accounts. By
incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in the Land Pledge Agreement, an
unnecessary and cumbersome periodic exchange of equal payments will be avoided.
It is not, however, the intent of BNPLC or Zhone to understate Base Rent or
interest for financial reporting purposes. Accordingly, for purposes of any
financial reports that this Land Lease requires of Zhone from time to time,
Zhone may report Base Rent as if there had been no such reduction and as if the
Collateral from time to time provided in accordance with the requirements of the
Land Pledge Agreement had been maintained in Accounts bearing interest at the
Deposit Rate.
(c) Calculation of and Due Dates for Base Rent. Payments of Base
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Rent shall be calculated and become due as follows:
(i) Determination of Payment Due Dates, Generally. For all Base
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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.
(ii) Special Adjustments to Base Rent Payment Dates, Periods and
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Amounts. Notwithstanding the foregoing:
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(a) Any Base Rent Period that begins before, and does not
otherwise end before, the first Business Day of the first calendar
month following a Failed Collateral Test Date shall end upon but not
include such first Business Day, and such first Business Day shall
constitute a Base Rent Date, upon which Zhone must pay all accrued,
unpaid Base Rent for the Base Rent Period just ended.
(b) In addition to Base Rent due on a the first Business Day of
the first calendar month following a Failed Collateral Test Date,
Zhone must pay the Breakage Costs, if any, resulting from any early
ending of a Base Rent Period pursuant to the preceding clause
3.(c)(ii)a).
(c) If Zhone or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to the Land 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 Land Purchase Agreement.
(d) No Base Rent will be required hereunder for any Base Rent
Period that ends on or before the earlier of the "Buildings 1&2 Base
Rent Commencement Date" or the "Building 3 Base Rent Commencement
Date" (as such terms are defined in the Other Common Definitions and
Provisions Agreements), so long as the Other Lease Agreements remain
in force and Carrying Costs continue to accrue as provided therein.
(e) For any Base Rent Period that begins on or after xxx
Xxxxxxxxx 0&0 Xxxx Rent Commencement Date and ends on or before the
Building 3 Base Rent Commencement Date, the Base Rent (initially
calculated in accordance with the formulas set forth below) shall be
reduced
[Land]
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by the Building 3 Land Percentage, provided that Carrying
Costs for such period continue to accrue as provided in the Lease
Agreement (Improvements - Building 3) between Zhone and BNPLC.
(f) Although not expected, if any Base Rent Period begins on or
after the Building 3 Base Rent Commencement Date and ends on or before
xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date, the Base Rent
(initially calculated in accordance with the formulas set forth below)
for that period shall be reduced by xxx Xxxxxxxxx 0&0 Xxxx Xxxxxxxxxx,
provided that Carrying Costs for such period continue to accrue as
provided in the Lease Agreement (Improvements - Building 1&2) between
Zhone and BNPLC.
(iii) Base Rent Formula for Periods During Which The Collateral
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Percentage is 100%. Each installment of Base Rent payable for any Base
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Rent Period during which the Collateral Percentage is one hundred percent
(100%) shall equal:
. Stipulated Loss Value on the first day of such Base Rent
Period, times
. the sum of (a) the Secured Spread and (b) the Effective
Rate/Deposit Rate Difference for the period from and including
the preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, times
. the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent (100%);
that prior to the first day of such Base Rent Period Qualified Prepayments have
been received by BNPLC, leaving a Stipulated Loss Value of $5,000,000; that the
sum of the Secured Spread and the Effective Rate/Deposit Rate Difference is
fifty-seven and one-half basis points (57.5/100 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:
$5,000,000 x .575% x 30/360 = $2,395.83
(iv) Base Rent Formula for Periods During Which The Collateral
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Percentage is Less Than 100%. Each installment of Base Rent payable for any Base
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Rent Period during which the Collateral Percentage is less than one hundred
percent (100%) shall equal:
. Stipulated Loss Value on the first day of such Base Rent
Period, times
. the sum of:
(A) the product of:
(1) the Collateral Percentage for such Base Rent
Period, times
[Land]
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(2) the sum of (a) the Secured Spread and (b) the
Effective Rate/Deposit Rate Difference 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, plus
(B) the product of:
(1) one minus the Collateral Percentage for such Base
Rent Period, times
(2) the sum of (a) the Effective Rate with respect to
such Base Rent Period, plus (b) the Unsecured
Spread for the period from and including the
preceding Base Rent Date to but not including the
Base Rent Date upon which the installment is due,
times
. the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is fifty percent (50%); that
prior to the first day of such Base Rent Period Qualified Prepayments have
been received by BNPLC, leaving a Stipulated Loss Value of $5,000,000; that
the Effective Rate for the Base Rent Period is 6%; that the sum of the
Secured Spread and the Effective Rate/Deposit Rate Difference is fifty-
seven and one-half basis points (57.5/100 of 1%); that upon the
commencement of such Base Rent Period the Unsecured Spread is two hundred
twenty-five basis points (225/100 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:
$5,000,000 x {(50% x .575%) + ([1 - 50%] x [6% + 2.25%])} x
30/360 = $18,385.42
(d) Additional Rent. All amounts which Zhone is required to pay to
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or on behalf of BNPLC pursuant to this Land Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "Additional Rent", and together Base Rent and Additional
Rent are herein sometimes called "Rent").
(e) Intentionally Deleted.
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(f) Commitment Fees. For each day beginning on and including the
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date of this Agreement and ending on but not including the earlier to occur of
the date that BNPLC makes the Post Closing Advance as provided in Xxxxxxxxx 0,
Xxxxx will pay BNPLC's Parent commitment fees (the "Commitment Fees") equal to:
. the amount by which dollar amount on the cover page to this
Land Lease (the "Total Commitment") exceeds the Prior Funding
Advances; times
[Land]
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. twenty basis points (20/100 of 1%); divided by
. three hundred sixty.
Zhone shall pay Commitment Fees in arrears on the first Business Day of January,
April, July and October of each calendar year, beginning with the first Business
Day of the first Business Day of October, 2000 and continuing regularly
thereafter until such time as BNPLC shall make the Post Closing Advance, after
which Commitment Fees shall no longer accrue; provided, that all accrued, unpaid
Commitment Fees shall become due on the Designated Sale Date.
On the first Business Day of October, 2000, Zhone shall pay (in addition to
Commitment Fees payable as provided above for the Construction Periods
commencing on or after the Effective Date and ending on or before the first
Business Day of October, 2000) the Commitment Fees that had accrued and remained
unpaid under the Prior Lease Agreement as of the Effective Date.
(g) Intentionally Deleted.
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(h) Intentionally Deleted.
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(i) No Demand or Setoff. Except as expressly provided herein, Zhone
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shall pay all Rent without notice or demand and without counterclaim, deduction,
setoff or defense.
(j) Default Interest and Order of Application. All Rent shall bear
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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 Zhone against any Rent
then past due in the order the same became due or in such other order as BNPLC
may elect.
4 Nature of this Agreement.
(a) "Net" Lease Generally. Subject only to the exceptions listed in
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subparagraph 5.(d) below, it is the intention of BNPLC and Zhone that Base Rent,
Commitment Fees and other payments herein specified shall be absolutely net to
BNPLC and that Zhone shall pay all costs, expenses and obligations of every kind
relating to the Property or this Land 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 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 Land Lease or the transactions contemplated
herein.
(b) No Termination. Except as expressly provided in this Land
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Lease itself, this Land Lease shall not terminate, nor shall Zhone have any
right to terminate this Land Lease, nor shall Zhone be entitled to any abatement
of the Rent, nor shall the obligations of Zhone under this Land Lease be
excused, for any reason whatsoever, including any of the following: (i) any
damage to or the destruction of all or any part of the Property from whatever
cause, (ii) the taking of the Property or any portion thereof by eminent domain
or otherwise for any reason, (iii) the prohibition, limitation or restriction of
Zhone's use or development of all or any portion of
[Land]
-8-
the Property or any interference with such use by governmental action or
otherwise, (iv) any eviction of Zhone or of anyone claiming through or under
Zhone, (v) any default on the part of BNPLC under this Land Lease or under any
other agreement to which BNPLC and Zhone are parties, (vi) the inadequacy in any
way whatsoever of 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
Acquisition Contract or other agreements or promises or representations made in
connection with the Acquisition 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 Zhone hereunder shall be separate and independent
of the covenants and agreements of BNPLC, that Base Rent and all other sums
payable by Zhone hereunder shall continue to be payable in all events and that
the obligations of Zhone 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 Land Lease. Without limiting the
foregoing, Zhone waives to the extent permitted by Applicable Laws, except as
otherwise expressly provided herein, all rights to which Zhone 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 Land Lease or the Property or any part
thereof or (ii) to any abatement, suspension, deferment or reduction of the
Rent.
However, nothing in this subparagraph 4.(b) shall be construed as a waiver
by Zhone of any right Zhone 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 Land 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 Land Lease which are binding upon BNPLC
(including the confidentiality provisions set forth in subparagraph 16.(c)
below), or (iii) a decree compelling performance by BNPLC of any of the express
covenants, agreements, conditions or provisions of this Land Lease which are
binding upon BNPLC.
(c) Tax Reporting. BNPLC and Zhone shall report this Land Lease and
-------------
the Land Purchase Agreement for federal income tax purposes as a conditional
sale unless prohibited from doing so by the Internal Revenue Service. If the
Internal Revenue Service shall challenge BNPLC's characterization of this Land
Lease and the Land Purchase Agreement as a conditional sale for federal income
tax reporting purposes, BNPLC shall notify Zhone in writing of such challenge
and consider in good faith any reasonable suggestions by Zhone about an
appropriate response. In any event, Zhone shall (subject only to the limitations
set forth in this subparagraph) indemnify and hold harmless BNPLC from and
against all liabilities, costs, additional taxes (other than Excluded Taxes) and
other expenses that may arise or become due because of such challenge or because
of any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the Land
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to Zhone. The failure to so provide a copy of the notice to Zhone shall
not excuse Zhone from its obligations under this Paragraph; provided, that if
none of the officers of Zhone and none of the employees of Zhone responsible for
tax matters are aware of the challenge described in the notice and such failure
by BNPLC renders unavailable defenses that Zhone might otherwise assert, or
precludes actions that Zhone might otherwise take, to minimize its obligations
hereunder, then Zhone shall be excused from its obligation to indemnify BNPLC
against liabilities, costs, additional taxes and other expenses, if any, which
would not have been incurred but for such failure. For example, if BNPLC fails
to provide Zhone with a copy of a notice of a challenge by the Internal Revenue
Service covered by the indemnities set out in this Land Lease and Zhone is not
otherwise already aware of such challenge, and if as a result of such failure
BNPLC becomes liable for penalties and interest covered by
[Land]
-9-
the indemnities in excess of the penalties and interest that would have accrued
if Zhone had been promptly provided with a copy of the notice, then Zhone will
be excused from any obligation to BNPLC to pay the excess.
(d) Characterization of this Land Lease. For purposes of
-----------------------------------
determining the appropriate financial accounting for this Land Lease and for
purposes of determining their respective rights and remedies under state law,
BNPLC and Zhone believe and intend that (i) this Land Lease constitutes a true
lease, not a mere financing arrangement, enforceable in accordance with its
express terms, and the preceding subparagraph is not intended to affect the
enforcement of any other provisions of this Land Lease or the Land Purchase
Agreement, and (ii) the Land Purchase Agreement shall constitute a separate and
independent contract, enforceable in accordance with the express terms and
conditions set forth therein. In this regard, Zhone acknowledges that Zhone
asked BNPLC to participate in the transactions evidenced by this Land Lease and
the Land 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, Zhone expects to receive certain material accounting and other
advantages through the use of a lease transaction. Accordingly, and
notwithstanding the reporting for income tax purposes described in the preceding
subparagraph, Zhone cannot equitably deny that this Land Lease and the Land
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 Land Lease or the Land Purchase
Agreement.
5 Payment of Executory Costs and Losses Related to the Property.
(a) Impositions. Subject only to the exceptions listed in
-----------
subparagraph 5.(d) below, Zhone 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, Zhone shall furnish BNPLC
with receipts showing payment of all Impositions prior to the applicable
delinquency date therefor.
Notwithstanding the foregoing, Zhone may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest Zhone shall not be deemed in default under
any of the provisions of this Land Lease because of the Imposition if (1) Zhone
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (2) Zhone 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 Zhone prior to the earlier of (i) the date
that any criminal prosecution is instituted or overtly threatened 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 against BNPLC or against any property owned or leased by BNPLC
because of the nonpayment thereof, or (iii) any Designated Sale Date upon which,
for any reason, Zhone or an Affiliate of Zhone or any Applicable Purchaser shall
not purchase BNPLC's interest in the Property pursuant to the Land Purchase
Agreement for a price to BNPLC (when taken together with any additional payments
made by Zhone pursuant to Paragraph 1(A)(3) of the Land Purchase Agreement, in
-----------------
the case of a purchase by an Applicable Purchaser) equal to the Land Break Even
Amount.
(b) Increased Costs; Capital Adequacy Charges. Subject only to the
-----------------------------------------
exceptions listed in subparagraph 5.(d) below:
(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
[Land]
-10-
connection with the Property because of any Banking Rules Change, then
Zhone 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. An increase in costs resulting from any imposition or
increase of reserve requirements applicable to Collateral held from time to
time by BNPLC's Parent or other Participants pursuant to the Land Pledge
Agreement would be an increase covered by the preceding sentence. A
certificate as to the amount of such increased cost, submitted to BNPLC and
Zhone by BNPLC's Parent or the other Participant, shall be conclusive and
binding upon Zhone, absent clear and demonstrable error.
(ii) BNPLC's Parent or any other Participant may demand additional
payments ("Capital Adequacy Charges") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount of
capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made to
BNPLC to permit BNPLC to maintain BNPLC's investment in the Property. 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, Zhone shall pay to
BNPLC for the account of BNPLC's Parent or the other Participant, as the
case may be, the amount so demanded. Without limiting the foregoing, BNPLC
and Zhone hereby acknowledge and agree that the provisions for calculating
Base Rent set forth herein reflect the assumption that the Land Pledge
Agreement will cause a zero percent (0%) risk weight to be assigned to a
percentage (equal to the Collateral Percentage) of the collective
investment of BNPLC and the Participants in the Property pursuant to 12
Code of Federal Regulations, part 225, as from time to time supplemented or
amended, or pursuant to any other similar or successor statute or
regulation applicable to BNPLC and the Participants. If and so long as such
risk weight is increased the assumed amount of zero percent (0%) because of
a Banking Rules Change, Capital Adequacy Charges may be collected to yield
the same rate of return to BNPLC, BNPLC's Parent and any other Participants
(net of their costs of maintaining required capital) that they would have
enjoyed from this Land Lease absent such increase.
(iii) Notwithstanding the foregoing provisions of this subparagraph
5.(b), Zhone shall not be obligated to pay any claim for compensation
pursuant to this subparagraph 5.(b) arising or accruing more than six
months prior to the date Zhone is notified that BNPLC or a Participant
intends to make the claim; provided, however, that Zhone shall not be
excused by this subparagraph from providing such compensation for any
period during which notice on behalf of BNPLC or the Participant, as the
case may be, could not be provided because of the retroactive application
of the statute, regulation or other basis for the claim.
(iv) Any amount required to be paid by Zhone under this subparagraph
5.(b) shall be due fifteen days after a notice requesting such payment is
received by Zhone.
(c) Zhone's Payment of Other Losses; General Indemnification.
--------------------------------------------------------
Subject only to the exceptions listed in subparagraph 5.(d) below:
(i) 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,
administration or enforcement of the Land Operative Documents, (D) the
making of the Funding Advances, (E) the breach by Zhone of this Land Lease
or any other document executed by Zhone in connection herewith, (F) any
failure of the Property
[Land]
-11-
or Zhone itself to comply with Applicable Laws, (G) Permitted Encumbrances,
(H) Hazardous Substance Activities, including those occurring prior to
Effective Date, (I) any obligations under the Acquisition Contract (or
under any other agreement made with the City of Oakland in connection with
or pursuant to the Acquisition Contract) that survive the closing under the
Acquisition Contract, or (J) any bodily or personal injury or death or
property damage occurring in or upon or in the vicinity of the Property
through any cause whatsoever, shall be paid by Zhone, and Zhone shall
indemnify and defend BNPLC and other Interested Parties from and against
all such Losses.
(ii) 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.(c)(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 ZHONE OR REQUIRED OF ZHONE BY THIS LAND LEASE OR OTHER LAND
- - - - -
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
- - -
THE INDEMNITIES AND RELEASES ARE PROVIDED. ZHONE'S LIABILITY, HOWEVER, FOR
-
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER LAND
- - -
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 LAND
- - -
LEASE.
-
(iii) Costs and expenses for which Zhone shall be responsible
pursuant to this subparagraph 5.(c) 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 Land Lease or at any time during the Term.
(iv) Zhone's obligations under this subparagraph 5.(c) shall survive
the termination or expiration of this Land Lease. Any amount to be paid by
Zhone under this subparagraph 5.(c) shall be due fifteen days after a
notice requesting such payment is received by Zhone.
(v) If an Interested Party notifies Zhone of any claim or
proceeding included in, or any investigation or allegation concerning,
Losses for which Zhone is responsible pursuant to this subparagraph 5.(c),
Zhone 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 Zhone, 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 Zhone and the
Interested Party and the Interested Party shall have reasonably concluded
that there are legal defenses available to it which are inconsistent with
or in addition to those available to Zhone, 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 Zhone shall pay or
reimburse the Interested Party for all Attorney's Fees incurred by the
Interested Party because of the
[Land]
-12-
selection of such separate counsel. If Zhone 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 consent of Zhone, which consent will not be unreasonably
withheld) the claim, proceeding, investigation or allegation at Zhone's
expense using counsel selected by the Interested Party. Moreover, if any
such failure by Zhone continues for forty-five days or more after Zhone 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, in accordance with the written advice of counsel, settle (or
pay in full) all claims related thereto without Zhone's consent and without
releasing Zhone from any obligations to the Interested Party under this
subparagraph 5.(c).
(d) Exceptions and Qualifications to Indemnities.
--------------------------------------------
(i) BNPLC acknowledges and agrees that nothing in subparagraph
4.(a) or the preceding subparagraphs of this Paragraph 5 shall be construed
to require Zhone to pay or reimburse (w) any costs or expenses incurred by
any Interested Party (including BNPLC or any transferee of BNPLC) to
accomplish any Permitted Transfers described in clauses (1), (2), (3), (4)
or (6) of the definition thereof in the Land CDPA, (x) Excluded Taxes, (y)
Losses incurred or suffered by any Interested Party that are proximately
caused by (and attributed by any applicable principles of comparative fault
to) the Established Misconduct of that Interested Party, or (z) Losses
incurred or suffered in connection with the execution of the Participation
Agreement or Land Pledge Agreement by Participants (or supplements making
them parties thereto) or in connection with any negotiation or due
diligence Participants may undertake before entering into the Participation
Agreement or Land Pledge Agreement. Further, without limiting BNPLC's
rights (as provided in other provisions of this Land Lease and other Land
Operative Documents) to include the following in the calculation of
Stipulated Loss Value or the Land Break Even Amount or to collect Base
Rent, a Land Supplemental Payment and other amounts, the calculation of
which depends upon the Stipulated Loss Value or the Land Break Even Amount,
BNPLC acknowledges and agrees that nothing in subparagraph 4.(a) or the
preceding subparagraphs of this Paragraph 5 shall be construed to require
Zhone to pay or reimburse an Interested Party for:
(a) costs previously paid by BNPLC with the proceeds of the
Prior Funding Advances; or
(b) Construction Advances made under (and as defined in) any
of the Construction Management Agreements or the Other Lease
Agreements, including costs and expenditures incurred or paid by or on
behalf of BNPLC after any Landlord's Election to Continue Construction
under (and as defined in) the Other Lease Agreements, to the extent
that such costs and expenditures are considered to be Construction
Advances pursuant to subparagraph 6(e) of either of the Other Lease
-----------------
Agreements; or
(c) any Post Closing Advance made by BNPLC as hereinafter
provided.
Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in subparagraph
5.(c)(i), then such Interested Party will be expected to promptly furnish a
copy of such notice to Zhone. The failure to so provide a copy of the
notice to Zhone shall not excuse Zhone from its obligations under
subparagraph 5.(c)(i); provided, that if Zhone is unaware of the matters
described in the notice and such failure renders unavailable defenses that
Zhone
[Land]
-13-
might otherwise assert, or precludes actions that Zhone might otherwise
take, to minimize its obligations, then Zhone 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 Zhone with a copy of a notice of an obligation covered by the
indemnity set out in subparagraph 5.(c)(i) and Zhone 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 Zhone had
been promptly provided with a copy of the notice, then Zhone will be
excused from any obligation to BNPLC (or any Affiliate of BNPLC) to pay the
excess.
(ii [Intentionally Deleted.].
6. Post Closing Advance to Cover Deferred Purchase Price of the Land.
(a Purchase Money Documents. Zhone acknowledges that BNPLC has,
------------------------
with the knowledge and consent of Zhone, executed and delivered to Seller a
Promissory Note in the original principal amount of $3,000,195 pursuant to
Paragraph 1.2.2 of the Acquisition Contract (the "Purchase Money Note") and
other documents which establish a lien against a portion of the Land to secure
the Purchase Money Note (the "Purchase Money Lien"). Zhone also acknowledges
that the Purchase Money Lien is a Permitted Encumbrance.
(b Post-Closing Advance. BNPLC shall have the right and, subject
--------------------
to the conditions set forth in this Paragraph 6, an obligation to Zhone to make
an advance of funds as necessary to satisfy the Purchase Money Note and to
obtain a release of the Purchase Money Lien (the "Post Closing Advance"). If
BNPLC does make the Post Closing Advance, it shall be added to Stipulated Loss
Value as contemplated in the definition thereof in the Land CDPA, regardless of
whether BNPLC makes the Post Closing Advance to satisfy its obligations to Zhone
under this Paragraph 6, or merely because BNPLC exercises its right (even over
the objection of Zhone) to make the Post Closing Advance as provided in this
Paragraph 6. If all goes as expected, the Post Closing Advance will be made by
BNPLC to or for the benefit of Seller on or before the "Post Closing Advance
Deadline", which as used herein means the first day of the last Base Rent Period
to commence within 364 days after the Effective Date. However, BNPLC's right
and obligation to make the Post Closing Advance shall be subject to the all of
the following terms and conditions:
(1) BNPLC shall not be obligated to Zhone to make the Post Closing
Advance when any Event of Default shall have occurred and be continuing or
after any CMA Termination Event shall have occurred. When, however, any
Event of Default shall have occurred and be continuing or after any CMA
Termination Event shall have occurred, and regardless of whether the
Purchase Money Note is then due and payable, BNPLC shall be entitled to
make the Post Closing Advance if in BNPLC's sole judgment paying the
Purchase Money Note and obtaining a release of the Purchase Money Lien is
advisable. If for any reason BNPLC does not pay the Purchase Money Note in
full on or prior to the Post Closing Advance Deadline, BNPLC shall
thereafter be entitled (but not required) to make the Post Closing Advance
if in BNPLC's sole judgment it is advisable to do so.
(2) BNPLC's obligation to Zhone (but not BNPLC's right) to make the
Post Closing Advance shall be subject to the condition that Zhone first
delivers additional Collateral under and pursuant to the Land Pledge
Agreement as necessary to prevent the Minimum Collateral Value (as defined
in the Land Pledge Agreement) from exceeding the actual Value (as defined
in the Land Pledge Agreement) of all Collateral subject to a Qualified
Pledge under (and as defined in) the Land Pledge
[Land]
-14-
Agreement following the Post Closing Advance. Any decision by BNPLC to make
the Post Closing Advance before Zhone delivers any such additional
Collateral shall not in any event excuse Zhone from its obligations to
deliver additional Collateral under the Land Pledge Agreement.
(4) Although BNPLC shall be entitled to make the Post Closing
Advance in a greater amount if needed to pay the Purchase Money Note and to
obtain a release of the Purchase Money Lien, in no event shall Zhone be
entitled to require BNPLC to make the Post Closing Advance in an amount
that exceeds the Total Commitment, less the Prior Funding Advances.
(5) BNPLC's obligation to Zhone (but not BNPLC's right) to make the
Post Closing Advance shall also be subject to the condition that Zhone
shall have requested BNPLC to make the Post Closing Advance by an
unequivocal and unconditional notice delivered to BNPLC no earlier than
thirty days prior to, and no later than ten days prior to, the date upon
which BNPLC is expected to make the Post Closing Advance.
(6) BNPLC's obligation to Zhone (but not BNPLC's right) to make the
Post Closing Advance shall also be subject to the condition that no
Participant (other than an Affiliate of BNPLC) shall have failed to advance
its pro rata share of the funds needed to make the Post Closing Advance as
contemplated by the Participation Agreement. In this regard, it is
understood that BNPLC will not be responsible for a breach by any
Participant (other than an Affiliate of BNPLC) of its obligation to make
advances required by the Participation Agreement, and that Zhone will have
the right as a third party beneficiary of the provisions of the
Participation Agreement requiring such advances (as more particularly
provided therein) such that Zhone may itself pursue a claim directly
against any such Participant in the event of such a breach.
7. Intentionally Deleted.
8. Environmental.
(a Environmental Covenants by Zhone. Zhone covenants that:
--------------------------------
(i Zhone shall not conduct or permit others to conduct
Hazardous Substance Activities, except Permitted Hazardous Substance Use
and Remedial Work.
(ii Zhone 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 believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions of
this Land Lease, Zhone 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 Remedial Work
required by this subparagraph, Zhone shall retain independent environmental
consultants acceptable to BNPLC to
[Land]
-15-
evaluate any significant new information generated during Zhone's
implementation of the Remedial Work and to discuss with Zhone whether such
new information indicates the need for any additional measures that Zhone
should take to protect the health and safety of persons (including
employees, contractors and subcontractors and their employees) or to
protect the environment. Zhone shall implement any such additional measures
to the extent required with respect to the Property by Environmental Laws
or otherwise believed by BNPLC to be reasonably required and to the extent
not inconsistent with the other provisions of this Land Lease.
(b Right of BNPLC to do Remedial Work Not Performed by Zhone. If
---------------------------------------------------------
Zhone's failure to cure any breach of the covenants set forth in subparagraph
8.(a) continues beyond the Environmental Cure Period (as defined below), BNPLC
may, in addition to any other remedies available to it, conduct all or any part
of the Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant
to the preceding sentence (including any removal of Hazardous Substances), the
cost thereof shall be a demand obligation owing by Zhone to BNPLC. As used in
this subparagraph, "Environmental Cure Period" means the period ending on the
earlier of: (1) one hundred eighty days after Zhone 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
instituted or overtly threatened against BNPLC or any of its directors, officers
or employees because of such breach, or (4) any Designated Sale Date upon which,
for any reason, Zhone or an Affiliate of Zhone or any Applicable Purchaser shall
not purchase BNPLC's interest in the Property pursuant to the Land Purchase
Agreement for a net price to BNPLC (when taken together with any Land
Supplemental Payment made by Zhone pursuant to Paragraph 1(A)(3) of the Land
-----------------
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to Stipulated Loss Value.
(c Environmental Inspections and Reviews. BNPLC reserves the right
-------------------------------------
to retain environmental consultants to review any report required by Applicable
Law to be prepared by Zhone or to conduct BNPLC's own investigation to confirm
whether Zhone is complying with the requirements of this Paragraph 8. Zhone
grants to BNPLC and to BNPLC's agents, employees, consultants and contractors
the right to enter upon the Property during reasonable hours and after
reasonable notice 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. Zhone
shall promptly reimburse BNPLC for the fees of its environmental consultants and
the costs of any such inspections and tests; provided, however, BNPLC's right to
such reimbursement shall be limited to the following circumstances: (1) a breach
of this Paragraph 8 by Zhone shall, in fact, have occurred or an Event of
Default shall have occurred and be continuing at the time BNPLC engages the
consultants or first initiates the inspections and tests; (2) BNPLC shall have
engaged the consultants or undertaken the tests and inspections to establish the
condition of the Property just prior to any conveyance of the Property pursuant
to the Option Agreement or to the expiration of this Land Lease; (3) BNPLC shall
have engaged the consultants or undertaken the inspections and tests to satisfy
any regulatory requirements applicable to BNPLC or its Affiliates; or (4) BNPLC
shall have engaged the consultants or undertaken the tests because BNPLC was
notified of a violation of Environmental Laws concerning the Property by any
governmental authority or owner of other land in the vicinity of the Land.
(d Communications Regarding Environmental Matters.
----------------------------------------------
(i Zhone shall immediately advise BNPLC of (1) any
discovery of any event or circumstance which would render any of the
representations of Zhone herein or in the Closing Certificate concerning
environmental matters materially inaccurate or misleading if made at the
time of such discovery and assuming that Zhone was aware of all relevant
facts, (2) any Remedial Work (or change in Remedial Work) required or
undertaken by Zhone or its Affiliates in response to any (A)
[Land]
-16-
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) Zhone's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of the Property which could 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 Zhone to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, Zhone shall deliver to BNPLC
within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action that
Zhone proposes to take with respect thereto, if any, to bring the Property
into compliance with Environmental Laws or to correct any breach by Zhone
of this Paragraph 8, 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
request.
(ii Zhone shall provide BNPLC 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). Zhone
shall also provide BNPLC with copies of any correspondence from third
Persons which threaten litigation over any significant failure or alleged
significant failure of Zhone to maintain or operate the Property in
accordance with Environmental Laws.
(iii Prior to Zhone's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
Zhone shall, to the extent practicable, deliver to BNPLC 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, Zhone shall meet with BNPLC to discuss the
submission, shall provide any additional information 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 Zhone not to modify the
submission in accordance with comments of BNPLC.
9. Insurance Required and Condemnation.
(a Liability Insurance. Throughout the Term Zhone 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 B. Zhone shall deliver and
---------
maintain with BNPLC for each liability insurance policy required by this Land
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.
---------
(b Intentionally Deleted.
---------------------
(c Failure to Obtain Insurance. If Zhone fails to obtain any
---------------------------
insurance or to provide confirmation of any such insurance as required by this
Land Lease, BNPLC shall be entitled (but not required) to obtain the insurance
that Zhone has failed to obtain or for which Zhone has not provided the required
confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require Zhone 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 Zhone (provided,
however, that any such insurance cost paid by BNPLC relative to particular
Improvements covered by one of the Other
[Land]
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Lease Agreements prior to the end of the last Construction Period thereunder
will be charged against the Construction Allowance under, and as defined in, the
Construction Management Agreement that contemplates the construction of such
Improvements, as if such insurance cost had been paid by Zhone).
(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. Zhone shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, its attorneys and experts and
cooperate with them as 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 Land Escrowed
Proceeds, and all such proceeds will be applied as provided in Paragraph 10.
BNPLC is hereby authorized, in the name of Zhone, at any time when an Event of
Default shall have occurred and be continuing, or otherwise with Zhone'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.
10. Application of Insurance and Condemnation Proceeds.
(a Collection and Application of Insurance and Condemnation Proceeds
-----------------------------------------------------------------
Generally. This Paragraph 10 shall govern the application of proceeeds received
---------
by BNPLC or Zhone during the Term from any third party (1) 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, or (2) because of any
judgment, decree or award for injury or damage to the Property (e.g.,damage
resulting from a third party's release of Hazardous Materials onto the
Property); excluding, however, any funds paid to BNPLC by BNPLC's Parent, by an
Affiliate of BNPLC or by any Participant that is made to compensate BNPLC for
any Losses BNPLC may suffer or incur in connection with this Land Lease or the
Property. Except as provided in subparagraph 10.(d), Zhone will promptly pay
over to BNPLC any condemnation or other proceeds covered by this Paragraph 10
which Zhone may receive from any condemning authority or other third party. All
proceeds covered by this Paragraph 10, including those received by BNPLC from
Zhone or third parties, shall be applied as follows:
(i First, proceeds covered by this Paragraph 10 will be used to
reimburse BNPLC for any costs and expenses, including Attorneys' Fees, that
BNPLC incurred to collect the proceeds.
(ii Second, the proceeds remaining after such reimbursement to
BNPLC (hereinafter, the "Remaining Proceeds") will be applied, as
hereinafter more particularly provided, either as a Qualified Prepayment or
to reimburse Zhone or BNPLC for the actual out-of-pocket costs of repairing
or restoring the Property. Until, however, any Remaining Proceeds received
by BNPLC are applied by BNPLC as a Qualified Prepayment or applied by BNPLC
to reimburse costs of repairs to or restoration of the Property pursuant to
this Paragraph 10, BNPLC shall hold and maintain such Remaining Proceeds as
Land Escrowed Proceeds in an interest bearing account, and all interest
earned on such account shall be added to and made a part of such Land
Escrowed Proceeds.
(b Advances of Land Escrowed Proceeds to Zhone. Except as otherwise
-------------------------------------------
provided below in this Paragraph 10, BNPLC shall advance all Remaining Proceeds
held by it as Land Escrowed Proceeds to reimburse Zhone for the actual out-of-
pocket cost to Zhone of repairing or restoring the Property in accordance
[Land]
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with the requirements of this Land Lease and the other Land Operative Documents
as the applicable repair or restoration progresses and upon compliance by Zhone
with such terms, conditions and requirements as may be reasonably imposed by
BNPLC. In no event, however, shall BNPLC be required to pay Land Escrowed
Proceeds to Zhone in excess of the actual out-of-pocket cost to Zhone of the
applicable repair or restoration, as evidenced by invoices or other
documentation satisfactory to BNPLC, it being understood that BNPLC may retain
and apply any such excess as a Qualified Prepayment.
(c Application of Land Escrowed Proceeds as a Qualified Prepayment.
---------------------------------------------------------------
Provided 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 Prepayment) as a Qualified Prepayment on any date
that BNPLC is directed to do so by a notice from Zhone; however, if such a
notice from Zhone specifies an effective date for a Qualified Prepayment that is
less than five Business Days after BNPLC's actual receipt of the notice, BNPLC
may postpone the date of the Qualified Prepayment 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 Prepayment on an Advance Date or Base Rent Date,
BNPLC may deduct Breakage Costs incurred in connection with any Qualified
Prepayment from the Remaining Proceeds or other amounts available for
application as the Qualified Prepayment, and Zhone will reimburse BNPLC upon
request for any such Breakage Costs that BNPLC incurs but does not deduct.
(d Special Provisions Applicable After Completion by Zhone of the
--------------------------------------------------------------
Construction Projects. If, after the Last Building Base Rent Commencement Date
---------------------
and Zhone's completion of the Construction Projects pursuant to the Construction
Management Agreements, any taking by condemnation of any portion of the Property
or any diminution, destruction, demolition or damage to any portion of the
Property shall (in the good faith judgment of BNPLC) reduce the then current "AS
IS" market value by less than $500,000 and (in the good faith estimation of
BNPLC) be unlikely to result in Remaining Proceeds of more than $500,000, and if
no Event of Default shall have occurred and be continuing, then BNPLC will, upon
Zhone's request, instruct the condemning authority or insurer, as applicable, to
pay the Remaining Proceeds resulting therefrom directly to Zhone. Zhone shall
apply any such Remaining Proceeds to the repair or restoration of the Property
to a safe and secure condition and to a value of no less than the value before
taking or casualty.
(e Special Provisions Applicable After a CMA Termination Event or an
-----------------------------------------------------------------
Event of Default. Notwithstanding the foregoing, after any CMA Termination
----------------
Event, and when any Event of Default shall have occurred and be continuing,
BNPLC shall be entitled to receive and collect all condemnation or other
proceeds governed by this Paragraph 10 and to apply all Remaining Proceeds, when
and to the extent deemed appropriate by BNPLC in its sole discretion, either (A)
to the reimbursement of Zhone or BNPLC for the out-of-pocket cost of repairing
or restoring the Property, or (B) as Qualified Prepayments.
(f Zhone's Obligation to Restore. Regardless of the adequacy of
-----------------------------
any Remaining Proceeds available to Zhone hereunder, and notwithstanding other
provisions of this Land Lease to the contrary, if the Property is damaged or
less than all or substantially all of the Property is taken by condemnation,
Zhone must:
A) increase the value of the Property or the remainder thereof
by restoring the same (in a manner consistent with the requirements
and limitations imposed by this Land Lease and the other Land
Operative Documents or otherwise acceptable to BNPLC), or decrease
Stipulated Loss Value by tendering a payment to BNPLC for application
as a Qualified Prepayment, as necessary to cause the then current AS
IS market value of the Property to be not less than Stipulated Loss
Value; and
[Land]
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B) restore the Property or the remainder thereof to a
reasonably safe and sightly condition.
(g Takings of All or Substantially All of the Property on or after
---------------------------------------------------------------
the Last Building Base Rent Commencement Date. In the event of any taking of
---------------------------------------------
all or substantially all of the Property on or after the Last Building Base Rent
Commencement Date, BNPLC shall be entitled to apply all Remaining Proceeds as a
Qualified Prepayment. In addition, if Stipulated Loss Value immediately prior
to any such taking exceeds the sum of the Remaining Proceeds resulting from such
condemnation, then BNPLC shall be entitled to recover the excess from Zhone upon
demand as an additional Qualified Prepayment, whereupon this Land 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 (2) of the preceding subparagraph shall be
considered a taking of substantially all the Property for purposes of this
Paragraph 10.
11. Additional Representations, Warranties and Covenants of Zhone
Concerning the Property. Zhone represents, warrants and covenants as follows:
(a Compliance with Covenants and Laws. The use of the Property
----------------------------------
permitted by this Land Lease complies, or will comply after Zhone obtains
available permits as the tenant under this Land Lease, in all material respects
with all Applicable Laws. Zhone 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
any construction upon or use of the Property permitted by this Land Lease.
(b Operation of the Property. During the Term, Zhone shall operate
-------------------------
the Property in a good and workmanlike manner and substantially in compliance
with all Applicable Laws and will pay or cause to be paid all fees or charges of
any kind in connection therewith. (If Zhone does not promptly correct any
failure of the Property to comply with Applicable Laws that is the subject of a
written notice given to Zhone or BNPLC by any governmental authority, then for
purposes of the preceding sentence, Zhone shall be considered not to have
maintained the Property "substantially in accordance with Applicable Laws"
whether or not the noncompliance would be substantial in the absence of the
notice.) During the Term, Zhone shall not use or occupy, or allow the use or
occupancy of, the Property in any manner which violates any Applicable Law or
which constitutes a public or private nuisance or which makes void, voidable or
cancelable any insurance then in force with respect thereto. During the Term,
to the extent that any of the following would, individually or in the aggregate,
increase the likelihood of a CMA Termination Event under (and as defined in)
either of the Construction Management Agreements or materially and adversely
affect the value of the Property or the use of the Property for purposes
permitted by this Land Lease, Zhone shall not, without BNPLC's prior consent:
(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 during the Term (A) a change in the zoning or other Applicable Laws affecting
the permitted use or development of the Property shall occur after the Last
Building Base Rent Commencement Date that (in BNPLC's good faith judgment)
reduces the value of the Property, or (B) conditions or circumstances on or
about the Property are discovered after the Last Building Base Rent Commencement
Date (such as the presence of an endangered species) which substantially impede
development and thereby (in BNPLC's good faith judgment) reduce the value of the
Property, then Zhone shall upon demand pay BNPLC an amount equal to such
reduction (as determined by BNPLC in good faith) for application as a Qualified
Prepayment. Zhone shall not permit any drilling or exploration for, or
extraction, removal or production of, minerals from the surface or subsurface of
the Property, and Zhone shall not do anything that could reasonably
[Land]
-20-
be expected to significantly reduce the market value of the Property. If Zhone
receives a notice or claim from any federal, state or other governmental
authority that the Property is not in compliance with any Applicable Law, or
that any action may be taken against BNPLC because the Property does not comply
with any Applicable Law, Zhone shall promptly furnish a copy of such notice or
claim to BNPLC.
Notwithstanding the foregoing, Zhone 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 Zhone shall not be deemed in
default hereunder because of the violation of such Applicable Law, if Zhone
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if Zhone 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 Zhone and any claims asserted against BNPLC
or the Property because of such violation must be paid by Zhone, all prior to
the earlier of (i) the date that any criminal prosecution is instituted or
overtly threatened against BNPLC or any of its directors, officers or employees
because of such violation, (ii) the date that any action is taken by any
governmental authority against BNPLC or any property owned by BNPLC (including
the Property) because of such violation, or (iii) a Designated Sale Date upon
which, for any reason, Zhone or an Affiliate of Zhone or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to the
Land Purchase Agreement for a price to BNPLC (when taken together with any
additional payments made by Zhone pursuant to Paragraph 1(A)(3) of the Land
-----------------
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to the Land Break Even Amount.
(c Debts for Construction, Maintenance, Operation or Development.
-------------------------------------------------------------
Zhone 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, that nothing in
this subparagraph will be construed to require Zhone to remove Liens Removable
by BNPLC.
Notwithstanding the foregoing, Zhone 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 Zhone shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, Zhone bonds over to
BNPLC's reasonable satisfaction all such contested liens against the Property
alleged to secure an amount in excess of $500,000 (individually or in the
aggregate), (2) Zhone diligently prosecutes such contest to completion in a
manner reasonably satisfactory to BNPLC, and (3) Zhone 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 Zhone prior to the earlier of (i)
the date that any criminal prosecution is instituted or overtly threatened
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 against BNPLC or any property in which BNPLC has an
interest because of the nonpayment thereof, or (iii) a Designated Sale Date upon
which, for any reason, Zhone or an Affiliate of Zhone or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to the
Land Purchase Agreement for a price to BNPLC (when taken together with any
additional payments made by Zhone pursuant to Paragraph 1(A)(3) of the Land
-----------------
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to the Land Break Even Amount.
[Land]
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(d Repair, Maintenance, Alterations and Additions. Zhone shall
----------------------------------------------
keep the Property in good order, operating condition and appearance and shall
cause all necessary repairs, renewals and replacements to be promptly made.
Zhone will not allow any of the Property to be materially misused, abused or
wasted. Zhone shall not, without the prior consent of BNPLC, make material new
Improvements or alter Improvements in any material respect, except as part of
the work performed in accordance with the Construction Management Agreements.
Without limiting the foregoing, Zhone will notify BNPLC before making any
significant alterations to the Improvements after the completion of the
Construction Projects. Nothing in this subparagraph, however, is intended to
limit Zhone's rights and obligations under the express provisions of the Other
Lease Agreements and the Construction Management Agreements with respect to the
Construction Projects.
(e Permitted Encumbrances and Development Documents. Zhone shall
------------------------------------------------
during the Term 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 Documents. Without
limiting the foregoing, Zhone 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. Without the prior consent of BNPLC, Zhone shall not
enter into, initiate, approve or consent to any modification of any Permitted
Encumbrance or Development Document that would create or expand or purport to
create or expand obligations or restrictions which would encumber BNPLC's
interest in the Property. (Whether BNPLC must give any such consent requested
by Zhone during the Term of this Land Lease shall be governed by subparagraph
------------
3(A) of the Closing Certificate and Agreement.)
----
(f Books and Records Concerning the Property. Zhone shall keep
-----------------------------------------
books and records that are accurate and complete in all material respects for
the Property and, subject to Paragraph 16.(c), will permit all such books and
records to be inspected and copied by BNPLC. This subparagraph shall not be
construed as requiring Zhone to regularly maintain separate books and records
relating exclusively to the Property; provided, however, that upon request,
Zhone shall construct or abstract from its regularly maintained books and
records information required by this subparagraph relating to the Property.
12. Financial Covenants and Other Covenants Incorporated by Reference to
Schedule 1. Throughout the Term of this Land Lease, Zhone shall comply with
----------
the requirements of Schedule 1 attached hereto.
----------
13. Financial Statements and Other Reports.
(a Financial Statements; Required Notices; Certificates.
----------------------------------------------------
Throughout the Term of this Land Lease, Zhone shall deliver to BNPLC and to each
Participant:
(i as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of Zhone, a consolidated balance
sheet of Zhone and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash flows
of Zhone and its Consolidated Subsidiaries for such fiscal year, all in
reasonable detail and all prepared in accordance with GAAP and accompanied
by a report and opinion of accountants of national standing selected by
Zhone, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
qualification or exception which BNPLC determines, in BNPLC's reasonable
discretion, is unacceptable;
[Land]
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(ii as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of Zhone,
the consolidated balance sheet of Zhone and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and the
consolidated statement of cash flows of Zhone and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and
all prepared in accordance with GAAP and certified by the chief financial
officer or controller of Zhone (subject to year-end adjustments);
(iii together with the financial statements furnished in accordance
with subparagraph 13.(a)(i) and13.(a)(ii), a certificate of the chief
financial officer or controller of Zhone: (i) certifying that to the
knowledge of Zhone no Default or Event of Default under this Land Lease has
occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a brief statement as to the nature thereof and
the action which is proposed to be taken with respect thereto, (ii)
certifying that the representations of Zhone set forth in the Land
Operative Documents are true and correct in all material respects as of the
date thereof as though made on and as of the date thereof or, if not then
true and correct, a brief statement as to why such representations are no
longer true and correct, and (iii) with computations demonstrating
compliance with the financial covenants contained in Schedule 1;
----------
(iv within fifteen days after the end of each fiscal quarter of
Zhone, a certificate of the chief financial officer or controller of Zhone
certifying that at the end of the preceding fiscal quarter, Zhone had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;
----------
(v promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which Zhone sends to
Zhone's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which Zhone files
with the Securities and Exchange Commission or any governmental authority
which may be substituted therefor, or with any national securities
exchange;
(vi upon request by BNPLC, a statement in writing certifying that
the Land Operative Documents are unmodified and in full effect (or, if
there have been modifications, that the Land Operative Documents are in
full effect as modified, and setting forth such modifications) and the
dates to which the Base Rent has been paid and either stating that to the
knowledge of Zhone no Default or Event of Default under this Land Lease has
occurred and is continuing or, if a Default or Event of Default under this
Land Lease has occurred and is continuing, a brief statement as to the
nature thereof; it being intended that any such statement by Zhone may be
relied upon by any prospective purchaser or mortgagee of the Property and
by the Participants;
(vii as soon as possible after, and in any event within ten days
after Zhone becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to Zhone relating
thereto is $500,000 or more, a notice signed by a senior financial officer
of Zhone setting forth details of the following and the response, if any,
which Zhone or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or given to
PBGC by Zhone or an ERISA Affiliate with respect to any of the following or
the events or conditions leading up to the following): (A) the assertion,
to secure any Unfunded Benefit Liabilities, of any Lien against the assets
of Zhone, against the assets of any Plan or Multiemployer Plan or against
any interest of BNPLC or Zhone in the Property, or (B) the taking of any
action by the PBGC or any other governmental
[Land]
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authority against Zhone to terminate any Plan of Zhone or any ERISA
Affiliate of Zhone or to cause the appointment of a trustee or receiver to
administer any such Plan ; and
(viii such other information respecting the condition or operations,
financial or otherwise, of Zhone, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC 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 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.
14. Assignment and Subletting by Zhone.
(a BNPLC's Consent Required. Without the prior consent of BNPLC,
------------------------
Zhone shall not assign, transfer, mortgage, pledge or hypothecate this Land
Lease or any interest of Zhone hereunder and shall not sublet all or any part of
the Property, by operation of law or otherwise; provided, that this provision
will not be construed to prohibit any sublease of space within Improvements
expressly permitted by the Other Lease Agreements.
(b Standard for BNPLC's Consent to Assignments and Certain Other
-------------------------------------------------------------
Matters. Consents and approvals of BNPLC which are required by this Paragraph
-------
14 will not be unreasonably withheld or delayed, but Zhone 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, or
(2) giving the approval is likely to increase BNPLC's administrative burden of
complying with or monitoring Zhone's compliance with the requirements of this
Land Lease.
(c Consent Not a Waiver. No consent by BNPLC to a sale,
--------------------
assignment, transfer, mortgage, pledge or hypothecation of this Land Lease or
Zhone's interest hereunder, and no assignment or subletting of the Property or
any part thereof in accordance with this Land Lease or otherwise with BNPLC's
consent, shall release Zhone from liability hereunder; and any such consent
shall apply only to the specific transaction thereby authorized and shall not
relieve Zhone from any requirement of obtaining the prior consent of BNPLC to
any further sale, assignment, transfer, mortgage, pledge or hypothecation of
this Land Lease or any interest of Zhone hereunder.
15. Assignment by BNPLC.
(a Restrictions on Transfers. Except by a Permitted Transfer,
-------------------------
BNPLC shall not assign, transfer, mortgage, pledge, encumber or hypothecate this
Land Lease or the other Land Operative Documents or any interest of BNPLC in and
to the Property during the Term without the prior consent of Zhone, which
consent Zhone may withhold in its sole discretion. Further, notwithstanding
anything to the contrary herein contained, if withholding taxes are imposed on
the rents and other amounts payable to BNPLC hereunder because of BNPLC's
assignment of this Land Lease to any citizen of, or any corporation or other
entity formed under the laws of, a country other than the United States, Zhone
shall not be required to compensate BNPLC or any such assignee for the
withholding tax. If, in breach of this subparagraph, BNPLC transfers the
Property or any part thereof by a conveyance or that does not constitute a
Permitted Transfer, with the result that additional transfer taxes or other
Impositions are assessed against the Property or the owner thereof, BNPLC shall
be required to pay such additional transfer taxes or other Impositions.
[Land]
-24-
(b Effect of Permitted Transfer or other Assignment by BNPLC. If,
---------------------------------------------------------
without breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the
Property and assigns to the transferee all of BNPLC's rights under this Land
Lease and under the other Operative Documents, and if the transferee expressly
assumes all of BNPLC's obligations under this Land Lease and under the other
Operative Documents, then BNPLC shall thereby be released from any obligations
arising after such assumption under this Land Lease or under the other Operative
Documents (other than any liability for a breach of any continuing obligation to
provide Construction Advances under the Construction Management Agreements), and
Zhone shall look solely to each successor in interest of BNPLC for performance
of such obligations. (As used in this subparagraph, "Operative Documents" is
intended to mean not only the Land Operative Documents, but also the Other
Operative Documents.)
16. BNPLC's Right of Access.
(a During the Term, BNPLC and BNPLC's representatives may (subject
to subparagraphs 16.(c) and 16.(d)) enter the Property at any reasonable time
after five Business Days advance written notice to Zhone for the purpose of
making inspections or performing any work BNPLC is authorized to undertake by
the next subparagraph or for the purpose confirming whether Zhone has complied
with the requirements of the Land Operative Documents and the Other Operative
Documents.
(b If Zhone fails to perform any act or to take any action required
of it by this Land Lease or the Closing Certificate, or to pay any money which
Zhone is required by this Land Lease or the Closing Certificate to pay, and if
such failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by Zhone 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 Land Lease Zhone may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of Zhone'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 Zhone or the subtenants or invitees of Zhone 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 any liability in excess of
the liability insurance limits established in Exhibit B resulting from death or
---------
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of Zhone under this Land Lease shall not thereby
be excused in any manner.
(c Zhone 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, without evaluating such
information, accomplish the purposes of BNPLC's inspection of the Property or
exercise of other rights granted pursuant to the various express provisions of
the Land Operative Documents and the Other Operative Documents. For purposes of
this Land Lease "proprietary information" includes Zhone's intellectual
property, trade secrets and other confidential information of value to Zhone
about, among other things, Zhone's manufacturing processes, products, marketing
and corporate strategies, but in no event will
[Land]
-25-
"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. In addition, under
no circumstances shall Zhone have any obligation to disclose to BNPLC or any
other party any proprietary information of Zhone (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 the Land Operative Documents and the Other
Operative Documents.
(d So long as Zhone remains in possession of the Property, BNPLC or
BNPLC's representative will, before making any inspection or performing any work
on the Property authorized by this Land Lease, if then requested to do so by
Zhone to maintain Zhone's security: (i) sign in at Zhone's security or
information desk if Zhone has such a desk on the premises, (ii) wear a visitor's
badge or other reasonable identification, (iii) permit an employee of Zhone to
observe such inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Zhone that do not, individually or in
the aggregate, significantly interfere with inspections or work of BNPLC
authorized by this Land Lease.
17. Events of Default. Each of the following events shall be an "Event
of Default" by Zhone under this Land Lease:
(a Zhone shall fail to pay when due any installment of Rent due hereunder
and such failure shall continue for three (3) Business Days after Zhone is
notified in writing thereof.
(b Zhone shall fail to cause any representation or warranty of Zhone
contained herein or in the Closing Certificate that was false or misleading in
any material respect when made to be made true and not misleading (other than as
described in the other clauses of this Paragraph 17), or Zhone shall fail to
comply with any term, provision or covenant of this Land Lease or the Closing
Certificate (other than as described in the other clauses of this Paragraph 17),
and in either case shall not cure such failure prior to the earlier of (A)
thirty days after written notice thereof is sent to Zhone or (B) the date any
writ or order is issued for the levy or sale of any property owned by BNPLC
(including the Property) or any criminal prosecution is instituted or overtly
threatened 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 prosecution is instituted or overtly threatened, the
period within which such failure may be cured by Zhone shall be extended for a
further period (not to exceed an additional sixty 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) Zhone 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 any event,
cause the period for cure to extend beyond five days prior to the expiration of
this Land Lease.
(c Zhone shall abandon the Property.
(d Zhone or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of Zhone described in the next sentence
when due (taking into consideration the time Zhone may have to cure such
failure, if any, under the documents governing such Debt). As used in this
clause 14(a)(v), "Debt" shall include only Debt (as defined in the Land CDPA) of
Zhone or any of its Subsidiaries now existing or arising in the future (1)
payable to any Interested Party, or (2) payable to any other Person and with
respect to which $5,000,000 or more is actually due and payable because of
acceleration or otherwise.
[Land]
-26-
(e) Zhone: (a) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (b) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (c) shall file any petition or application to
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (d) shall have had any such
petition or application filed against it; or (e) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (f)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty days or more.
(f) One or more final judgments, decrees or orders for the payment of
money in excess of $5,000,000 in the aggregate shall be rendered against Zhone
and such judgments, decrees or orders shall continue unsatisfied and in effect
for a period of thirty consecutive days without Zhone's having obtained an
agreement (or after the expiration or termination of an agreement) of the
Persons entitled to enforce such judgment, decrees or orders not to enforce the
same pending negotiations with Zhone concerning the satisfaction or other
discharge of the same. (For purposes of this provision, no judgment, decree or
order will be considered "final" until Zhone's right to appeal, if any, shall
have expired or been exhausted.)
(g) Zhone shall breach the requirements of Paragraph 12, which by
reference to Schedule 1 establishes certain financial covenants and other
----------
requirements.
(h) as of the effective date of this Land Lease, any of the
representations or warranties of Zhone contained in subparagraphs 2(A) - (J) of
the Closing Certificate shall be false or misleading in any material respect.
(i) Zhone shall fail to pay the full amount of any Land Supplemental
Payment required by the Land Purchase Agreement on the Designated Sale Date.
(j) Zhone shall fail to comply with any term, provision or condition of
the Land Pledge Agreement after the expiration of any applicable notice and cure
period set forth in the Land Pledge Agreement.
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 remedies:
(i) By notice to Zhone, BNPLC may terminate Zhone'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 Zhone's right to possession if Zhone fails to cure the default
within the time specified in the notice.
(ii) Upon termination of Zhone'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
[Land]
-27-
persons in possession thereof. Any property on the Land may be removed and
stored in a warehouse or elsewhere at the expense and risk of and for the
account of Zhone.
(iii) Upon termination of Zhone's right to possession, this Land
Lease shall terminate and BNPLC may recover from Zhone:
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 Zhone
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 Zhone proves
could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by Zhone's failure to perform Zhone's
obligations under this Land Lease or which in the ordinary course of
things would be likely to result therefrom, including 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 Zhone's failure to perform Zhone's
obligations under the other Land 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 the Default Rate. 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.
(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 Zhone has breached this Land Lease and abandoned the
Property, this Land Lease shall continue in effect for so long as BNPLC
does not terminate Zhone's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Land Lease, including the right
to recover the Rent as it becomes due under this Land Lease. Zhone'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 Zhone's right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Property;
[Land]
-28-
b) The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Land Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or assignment by Zhone.
(b) Notice Required So Long As the Purchase Option and the Land
-----------------------------------------------------------
Supplemental Payment Obligation Continue Under the Land Purchase Agreement. So
--------------------------------------------------------------------------
long as Zhone remains in possession of the Property and there has been no
termination of the Purchase Option and the Land Supplemental Payment Obligation
as provided Paragraph 4 of the Land 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 Zhone, at a time when an
Event of Default shall have occurred and be continuing, 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 Zhone
with an opportunity to exercise the Purchase Option or Zhone's Initial
Remarketing Rights 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 Zhone, (ii) any date upon which Zhone relinquishes possession
of the Property, or (iii) any termination of the Purchase Option and the Land
Supplemental Payment Obligation.
(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 such right and remedy shall be cumulative and in addition to
any other right or remedy given to BNPLC hereunder or now or hereafter existing
in favor of BNPLC under Applicable Law or in equity. In addition to other
remedies provided in this Land 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 Land Lease, or to a decree
compelling performance of any of the other covenants, agreements, conditions or
provisions of this Land Lease to be performed by Zhone, or to any other remedy
allowed to BNPLC at law or in equity. Nothing contained in this Land Lease shall
limit or prejudice the right of BNPLC to prove for and obtain in proceedings for
bankruptcy or insolvency of Zhone by reason of the termination of this Land
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 Land Purchase Documents, and BNPLC
shall not be required to give the sixty day notice described in subparagraph
18.(b) as a condition precedent to any acceleration of the Designated Sale Date
or to taking any action to enforce the Land Purchase Documents.
19. Default by BNPLC. If BNPLC should default in the performance of any
of its obligations under this Land 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 Zhone specifying such default and specifying what action
Zhone believes is necessary to cure the default. If Zhone prevails in any
litigation brought against BNPLC because of
[Land]
-29-
BNPLC's failure to cure a default within the time required by the preceding
sentence, then Zhone shall be entitled to an award against BNPLC for the
monetary damages proximately caused to Zhone by such default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.
20. Quiet Enjoyment. Provided Zhone 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 Zhone hereunder, BNPLC shall not during the Term disturb Zhone's peaceable
and quiet enjoyment of the Property; however, such enjoyment shall be subject to
the terms, provisions, covenants, agreements and conditions of this Land 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, BNPLC will remove the Lien Removable by BNPLC
promptly. Any breach by BNPLC of this Paragraph shall render BNPLC liable to
Zhone for any monetary damages proximately caused thereby, but as more
specifically provided in subparagraph 4.(b) above, no such breach shall entitle
Zhone to terminate this Land Lease or excuse Zhone from its obligation to pay
Rent.
21. Surrender Upon Termination. Unless Zhone or an Applicable Purchaser
purchases or has purchased BNPLC's entire interest in the Land and Improvements
pursuant to the Land Purchase Agreement and the Other Purchase Agreements, Zhone
shall, upon the termination of Zhone's right to occupancy, surrender to BNPLC
the Property, including Improvements constructed by Zhone and fixtures and
furnishings included in the Property, free of all Hazardous Substances
(including Permitted Hazardous Substances) and tenancies and 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 Land Lease or the Other Lease Agreements, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this
Land Lease or the Other Lease Agreements and which have been completed by Zhone
in a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to Zhone or any party
claiming under Zhone, if not removed at the time of such termination and if
BNPLC shall so elect, shall be deemed abandoned and become the property of BNPLC
without any payment or offset therefor. If BNPLC shall not so elect, BNPLC may
remove such property from the Property and store it at Zhone's risk and expense.
Nothing in this Paragraph 21 will be construed to require Zhone to
surrender the Property to BNPLC during the continuation of any breach by BNPLC
of any obligation it has under the Land Purchase Agreement to convey the
Property to Zhone or an Applicable Purchaser.
22. Holding Over by Zhone. Should Zhone not purchase BNPLC's right,
title and interest in the Property as provided in the Land Purchase Agreement,
but nonetheless continue to hold the Property after the termination of this Land
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) the Default Rate for such day; divided by
(iii) three hundred and sixty; subject, however, to all of the terms,
provisions, covenants and agreements on the part of Zhone hereunder. No payments
of money by Zhone to BNPLC after the termination of this Land Lease shall
reinstate, continue or extend the Term of this Land Lease and no extension of
this Land Lease after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both BNPLC and Zhone.
[Land]
-30-
23. Independent Obligations Evidenced by the other Operative Documents.
Zhone acknowledges and agrees that nothing contained in this Land Lease shall
limit, modify or otherwise affect any of Zhone's obligations under the other
Land Operative Documents or 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
express terms and provisions of the Land Purchase Documents and the express
terms and provisions of this Land Lease, the express terms and provisions of the
Land Purchase Documents shall control. In the event of any inconsistency between
the express terms and provisions of the Closing Certificate and the express
terms and provisions of this Land Lease, the express terms and provisions of
this Land Lease shall control; provided, nothing herein will limit or impair
Zhone's obligations under the Closing Certificate following any expiration of
termination of this Land Lease.
24. Amendment and Restatement. This Land Lease amends, restates and
replaces the Prior Lease Agreement referenced in the recitals at the beginning
of this agreement.
[The signature pages follow.]
[Land]
-31-
IN WITNESS WHEREOF, Zhone and BNPLC have caused this Lease Agreement (Land)
to be executed as of August 1, 2000.
"Zhone"
ZHONE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
---------------------
Title: Corporate Controller
--------------------
[Continuation of signature pages to Lease Agreement (Land) dated to be effective
as of August 1, 2000]
"BNPLC"
BNP LEASING CORPORATION
By: /s/ Xxxxx X. Xxx
----------------------------
Xxxxx X. Xxx, Vice President
Exhibit A
---------
Legal Description
All that certain real property situate in the City of Oakland, State of
California, described as follows:
Being a portion of Lot 12, as shown on Parcel Map No. 6003, filed in Book 205 of
Parcel Maps, at Pages 94 through 98, Alameda County Records, more particularly
described as follows:
Commencing at the most southerly corner of said Lot 12; Thence along the
southwesterly line of said Xxx 00, Xxxxx 00(xxxxxxx) 50' 24" West, 628.68 feet
to the point of beginning; Thence continuing along the southwesterly line of
said Xxx 00, Xxxxx 00(xxxxxxx) 50' 24" West, 1029.21 feet; Thence along the
southeasterly line of said Xxx 00, Xxxxx 00(xxxxxxx) 09' 36" West 14.00 feet;
Thence along the southwesterly line of said Xxx 00, Xxxxx 00(xxxxxxx) 50' 24"
East, 253.55 feet to the beginning of a curve, concave southwesterly, having a
radius of 392.21 feet; Thence northerly along the arc of said curve, through a
central angle of 3(degrees) 51' 45", an arc distance of 26.44 feet to the
intersection of a line drawn parallel with and 85.00 feet southeasterly of the
northwesterly line of said Lot 12, a radial line through said point bears North
52(degrees) 17' 51" East; Thence parallel with the northwesterly line of said
Xxx 00, Xxxxx 00(xxxxxxx) 09' 36" East, 476.93 feet to a point that is 5 feet
southwesterly of the northeasterly line of said Lot 12; Thence along a line that
is parallel with and 5 feet southwesterly of the said northeasterly line of Xxx
00, Xxxxx 00(xxxxxxx) 00' 30" East, 69.44 feet to the beginning of a curve,
concave southwesterly, having a radius of 1949.00 feet; Thence southeasterly
along the arc of said curve, through a central angle of 6(degrees) 10' 18", an
arc distance of 209.94 feet; Thence continuing along a line that is parallel
with and 5 feet southwesterly of the said northeasterly line of Xxx 00, Xxxxx
00(xxxxxxx)00' 00" Xxxx, 1030.61 feet to the intersection with a line drawn
perpendicular with the southwesterly line of said Lot 12, distant thereon 628.68
feet from the most southerly corner of said Lot 12; Thence southwesterly along
said perpendicular line, South 56(degrees) 09' 36" West, 480.72 feet to the
Point of Beginning.
The basis of bearings for Parcel Map No. 6003 is the North American Datum of
1983, Xxxx 0, 0000 Xxxxxxxxxx Published in 1986, as shown on Record of Survey
990, filed in Book 18 of Records of Survey, at Pages 50 through 60, Alameda
County Records. All distances in this description are grid distances. To
convert to ground distances, multiply grid distances by 1.0000708.
Assessor's Parcel No. 041-3902-015 (Portion)
[Land]
[SUBSTITUTE A PAGE COPIED FROM A SURVEY OF THE LAND, MARKED TO SHOW THE
"BUILDING 3 SITE" HERE.]
[Land]
Exhibit A - Page 2
Exhibit B
---------
Insurance Requirements
I. LIABILITY INSURANCE:
A. Zhone must maintain commercial general liability ("CGL") insurance on
an occurrence basis, affording 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. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Land Lease (though such coverage or the
amount thereof shall in no way limit such indemnifications).
B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when Zhone shall continue to have
the right to exercise any Issue 97-10 Election under (and as defined in) any of
the Other Operative Documents, or shall have previously exercised any such Issue
97-10 Election. After the expiration of Zhone's right to exercise any such Issue
97-10 Election, and provided no such Issue 97-10 Election has been exercised by
Zhone, Zhone may increase any deductible or self-insured retention applicable to
such insurance, but not to an amount in excess of $500,000.
C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Land 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 Zhone 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 0196 or equivalent
substitute forms providing the same or greater coverage.
(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 X or
better.
(3) Required Endorsements: CGL Insurance must be endorsed to provide
---------------------
or include:
(a) in any policy containing a general aggregate limit, ISO form
amendment "Aggregate Limits of Insurance Per Location" CG 2504
1185 or equivalent substitute form;
(c) a waiver of subrogation, using ISO form CG 2404 1093 or
equivalent substitute form (and under the commercial umbrella, if
any), in favor of "BNP Leasing Corporation and other Interested
Parties (as defined in the Common Definitions and Provisions
Agreement
[Land]
(Land) between Zhone Technologies, Inc. and BNP Leasing
Corporation dated August 1, 2000)";
(c) ISO additional insured form CG 2026 1185 or equivalent
substitute form, without modification (and under the commercial
umbrella, if any), designating as additional insureds "BNPLC and
other Interested Parties, as defined in the Common Definitions
and Provisions Agreement (Land) between Zhone Technologies, Inc.
and BNP Leasing Corporation dated August 1, 2000)"; and
(d) 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. INTENTIONALLY DELETED.
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by Zhone of claims
against Zhone that might cause a reduction below seventy-five percent (75%) of
any aggregate limit of any policy.
B. Intentionally Deleted.
C. Zhone'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. Copies of endorsements to
the CGL insurance must be attached to such form.
D. Such evidence of required insurance must be delivered upon execution
of this Land Lease and new certificate or evidence of insurance must be
delivered no later than 10 days prior to expiration of existing policy.
E. Zhone shall not cancel, fail to renew, or make or permit any material
reduction in any of the policies or certificates described in this Exhibit
without the prior written consent of BNPLC. The certificates (XXXXX forms 25)
described in this Exhibit must contain the following express provision:
"This is to certify that the policies of insurance described herein have
been issued to the insured Zhone Technologies, Inc. for whom this
certificate is executed and are in force at this time. In the event of
cancellation, non-renewal, or material reduction in coverage affecting the
certificate holder, at least sixty days prior notice shall be given to the
certificate holder."
F. The limits of liability under the liability insurance required by this
Land Lease may be provided by a single policy of insurance or by a combination
of primary and umbrella policies, but in no event shall the total limits of
liability available for any one occurrence or accident be less than those
required by this Exhibit.
[Land]
Exhibit B - Page 2
G. Zhone shall provide copies, certified as complete and correct by an
authorized agent of the applicable insurer, of all insurance policies required
by this Exhibit within ten days after receipt of a request for such copies from
BNPLC.
[Land]
Exhibit B - Page 3
Exhibit C
---------
Notice of LIBOR Period Election
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Lease Agreement (Improvements - Buildings 1&2), Lease Agreement
(Improvements - Building 3) and Lease Agreement (Land), all dated as of August
1, 2000, and all between Zhone Technologies, 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 two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements 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 COMMON DEFINITIONS AND PROVISIONS AGREEMENTS REFERENCED IN THE
LEASE AGREEMENTS, 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 ______________, 20__.
Zhone Technologies, Inc.
Name:__________________________________________
Title:_________________________________________
[cc all Participants]
[Land]
Schedule 1
----------
FINANCIAL COVENANTS
[DRAFTING NOTE: TK WILL MANUALLY SUBSTITUTE THE FINAL SCHEDULE 1 (A SEPARATE
--------------
WORD PROCESSING FILE) FOR THIS PAGE IN THE EXECUTION COPIES OF THIS DOCUMENT.]
[Land]
COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(LAND)
between
BNP LEASING CORPORATION
and
ZHONE TECHNOLOGIES, INC.
Dated as of August 1, 2000
TABLE OF CONTENTS
Page
----
ARTICLE I - LIST OF DEFINED TERMS:
Acquisition Contract............................................ 1
Active Negligence............................................... 1
Additional Rent................................................. 2
Advance Date.................................................... 2
Affiliate....................................................... 2
Agent........................................................... 2
Applicable Laws................................................. 2
Applicable Purchaser............................................ 2
Attorneys' Fees................................................. 2
Banking Rules Change............................................ 2
Base Rate....................................................... 3
Base Rent....................................................... 3
Base Rent Date.................................................. 3
Base Rent Period................................................ 3
BNPLC........................................................... 4
BNPLC's Parent.................................................. 4
Breakage Costs.................................................. 4
Buildings 1&2 Land Percentage................................... 4
Building 3 Land Percentage...................................... 4
Business Day.................................................... 4
Capital Adequacy Charges........................................ 5
Capital Lease................................................... 5
Closing Certificate............................................. 5
CMA Termination Event........................................... 5
Code............................................................ 5
Collateral...................................................... 5
Collateral Percentage........................................... 5
Collateral Test Date............................................ 5
Commitment Fees................................................. 5
Construction Management Agreements.............................. 5
Construction Projects........................................... 5
Debt............................................................ 5
Default......................................................... 6
Default Rate.................................................... 6
Defaulting Participant.......................................... 6
Deposit Rate.................................................... 6
Deposit Taker................................................... 6
Deposit Taker Losses............................................ 6
Designated Sale Date............................................ 6
Development Documents........................................... 7
Direct Payments to Participants................................. 7
Effective Date.................................................. 7
Effective Rate.................................................. 7
[Land] (i)
Page
----
Effective Rate/Deposit Rate Difference.......................... 8
Environmental Laws.............................................. 8
Environmental Cutoff Date....................................... 8
Environmental Losses............................................ 8
Environmental Reports........................................... 8
ERISA........................................................... 9
ERISA Affiliate................................................. 9
Established Misconduct.......................................... 9
Eurocurrency Liabilities........................................ 9
Eurodollar Rate Reserve Percentage.............................. 9
Event of Default................................................ 10
Excluded Taxes.................................................. 10
Failed Collateral Test Date..................................... 10
Fed Funds Rate.................................................. 10
Funding Advances................................................ 10
GAAP............................................................ 10
Hazardous Substance............................................. 11
Hazardous Substance Activity.................................... 11
Impositions..................................................... 11
Improvements.................................................... 11
Interested Party................................................ 11
Issue 97-1 Non-performance-related Subjective Event of Default.. 12
Land............................................................ 12
Land Break Even Amount.......................................... 12
Land CDPA....................................................... 12
Land Escrowed Proceeds.......................................... 12
Land Lease...................................................... 13
Land Operative Documents........................................ 13
Land Pledge Agreement........................................... 13
Land Purchase Agreement......................................... 13
Land Purchase Documents......................................... 13
Land Sale Closing Documents..................................... 13
Land Supplemental Payment....................................... 13
Land Supplemental Payment Obligation............................ 14
Land Third Party Price.......................................... 14
Last Building Base Rent Commencement Date....................... 14
LIBOR........................................................... 14
LIBOR Period Election........................................... 14
Lien............................................................ 15
Liens Removable by BNPLC........................................ 15
Losses.......................................................... 15
Material Environmental Communication............................ 15
Maximum Remarketing Obligation.................................. 16
Minimum Collateral Percentage................................... 16
Minimum Extended Remarketing Price.............................. 16
Multiemployer Plan.............................................. 16
[Land] (ii)
Page
----
Other Common Definitions and Provisions Agreements.............. 16
Other Lease Agreements.......................................... 16
Other Operative Documents....................................... 16
Other Purchase Agreements....................................... 16
Participant..................................................... 16
Participation Agreement......................................... 17
PBGC............................................................ 17
Permitted Encumbrances.......................................... 17
Permitted Hazardous Substance Use............................... 17
Permitted Hazardous Substances.................................. 18
Permitted Transfer.............................................. 18
Person.......................................................... 18
Personal Property............................................... 18
Plan............................................................ 18
Prime Rate...................................................... 19
Prior Funding Advances.......................................... 19
Property........................................................ 19
Purchase Money Lien............................................. 19
Purchase Money Note............................................. 19
Purchase Option................................................. 19
Qualified Affiliate............................................. 19
Qualified Prepayments........................................... 19
Real Property................................................... 20
Remedial Work................................................... 20
Rent............................................................ 20
Residual Risk Percentage........................................ 20
Responsible Financial Officer................................... 20
Secured Spread.................................................. 20
Seller.......................................................... 20
Stipulated Loss Value........................................... 20
Subsidiary...................................................... 20
Term............................................................ 21
Third Party Sale Notice......................................... 21
Third Party Sale Proposal....................................... 21
Third Party Target Price........................................ 21
Unfunded Benefit Liabilities.................................... 21
Unsecured Spread................................................ 21
Voluntary Retention of the Property............................. 21
Zhone........................................................... 21
Zhone's Extended Remarketing Period............................. 21
Zhone's Extended Remarketing Right.............................. 21
Zhone's Initial Remarketing Rights.............................. 21
ARTICLE II - PROVISIONS USED IN COMMON:
1. Notices.................................................... 22
[Land] (iii)
Page
----
2. Severability................................................. 23
3. No Merger.................................................... 23
4. No Implied Waiver............................................ 24
5. Entire and Only Agreements................................... 24
6. Binding Effect............................................... 24
7. Time is of the Essence....................................... 24
8. Governing Law................................................ 24
9. Paragraph Headings........................................... 24
10. Negotiated Documents......................................... 25
11. Terms Not Expressly Defined in a Land Operative Document..... 25
12. Other Terms and References................................... 25
13. Execution in Counterparts.................................... 25
14. Not a Partnership, Etc....................................... 26
15. Amendment and Restatement.................................... 26
[Land] (iv)
COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(LAND)
This Common Definitions and Provisions Agreement (Land) (this "Land CDPA"),
by and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
ZHONE TECHNOLOGIES, INC., a Delaware corporation ("Zhone"), is dated as of
August 1, 2000, the Effective Date.
RECITALS
Contemporaneously with the execution of this Land CDPA, BNPLC and Zhone are
executing the Closing Certificate (as defined below), the Land Lease (as defined
below) and the Land Purchase Agreement (as defined below), all of which concern
the Property (as defined below). Each of the Closing Certificate, the Land Lease
and the Land Purchase Agreement (together with this Land CDPA and the Land
Pledge Agreement [as defined below], the "Land Operative Documents") are
intended to create separate and independent obligations upon the parties
thereto. However, Zhone and BNPLC intend that all of the Land Operative
Documents share certain consistent definitions and other miscellaneous
provisions. To that end, the parties are executing this Land CDPA and
incorporating it by reference into each of the other Land Operative Documents.
Zhone and BNPLC previously executed that Common Definitions and Provisions
Agreement (Phase I - Land) dated January 20, 2000 (the "Prior Common Definitions
and Provisions Agreement"). Zhone and BNPLC have agreed to amend, restate and
replace the Prior Common Definitions and Provisions Agreement with this Land
CDPA as provided in Section 15 of Article II below.
AGREEMENTS
ARTICLE I - LIST OF DEFINED TERMS
Unless a clear contrary intention appears, the following terms shall have
the respective indicated meanings as used herein and in the other Land Operative
Documents:
"Acquisition Contract" means the Purchase and Sale Agreement executed on or
about the Effective Date, between Seller and Zhone covering the Land described
in Exhibit A attached to the Land Lease, the interests of Zhone therein having
---------
being assigned to BNPLC pursuant to the assignment dated as of the Effective
Date between Zhone and BNPLC, with the consent and approval of Seller.
"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
Zhone does not carry (and is not obligated by the Land 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 Land, the Improvements or any interest in any other
Property or as a party to the transactions described in any of the Land
Operative Documents or the Other Operative Documents, (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 any of the Land Operative Documents or the Other
Operative Documents, 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 any of the Land Operative
Documents or the Other Operative Documents.
"Additional Rent" shall have the meaning assigned to it in subparagraph
------------
3.(d) of the Land Lease.
-----
"Advance Date" means the first Business Day of every calendar month,
beginning with the first Business Day in September, 2000 and continuing
regularly thereafter to and including the Last Building 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.
"Agent" means the Person acting as "Agent" for BNPLC and Participants under
(and as defined in) the Land Pledge Agreement from time to time.
"Applicable Laws" means any or all of the following, to the extent
applicable to Zhone or the Property or the Land Lease or the other Land
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 Zhone to
purchase BNPLC's interest in the Property and in any Land Escrowed Proceeds as
provided in the Land Purchase Agreement.
"Attorneys' Fees" means the expenses and reasonable fees 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 fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.
"Banking Rules Change" means either: (1) the introduction of or any change
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 (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).
"Base Rate" for any Base Rent Period means a rate equal to the higher of
(1) the Prime Rate in effect on the first day of such period, or (2) the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for that
period.
"Base Rent" means the rent payable by Zhone pursuant to subparagraph 3.(a)
------------------
of the Land Lease.
Common Definitions and Provisions Agreement (Land) - Page 2
"Base Rent Date" means a date upon which Base Rent must be paid under the
Land Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be the first Business Day of the first
calendar month after the Effective 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 Last Building Base Rent Commencement Date falls on the
first Business Day of September, 2001 and a LIBOR Period Election of two months
commences on the Last Building Base Rent Commencement Date, then the first Base
Rent Date shall be the first Business Day of November, 2001.
"Base Rent Period" means a period for which Base Rent must be paid under
the Land 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 Effective 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 shall end on but not include the first or second Base Rent Date
after the Base Rent Date upon which such period began, determined as follows:
(1) If the LIBOR Period Election for a Base Rent Period is one
month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
-----
began.
(2) If the LIBOR Period Election for a Base Rent Period is six
months, then such Base Rent Period shall end on the second Base Rent
------
Date after the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by two examples:
1) If Zhone makes a LIBOR Period Election of three months for a
hypothetical Base Rent Period beginning on the first Business Day in
January, 2002, 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, 2002, the third
calendar month after January, 2002.
2) If, however, Zhone makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2002, 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, 2002.
"BNPLC" means BNP Leasing Corporation, a Delaware corporation.
Common Definitions and Provisions Agreement (Land) - Page 3
"BNPLC's Parent" means BNPLC's Affiliate, BNP Paribas, 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 Prepayment or upon any sale of the Property pursuant to the Land
Purchase Agreement, if such application or sale occurs on any day other
than an Advance Date or the last day of a Base Rent Period; or
(2) used to make or maintain Funding Advances upon the acceleration of
the end of any Base Rent Period pursuant subparagraph 3.(c)(ii) of the Land
----------------------
Lease.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon Zhone.
"Buildings 1&2 Land Percentage" means 50%, which is the approximate
percentage of the total acreage of the Land that, according to Zhone, is
properly allocated to the Improvements covered by the Lease Agreement
(Improvements - Buildings 1&2) between Zhone and BNPLC (in contrast to the
portion of the Land properly allocated to the Improvements covered by the Lease
Agreement (Improvements - Building 3) between Zhone and BNPLC.
"Building 3 Land Percentage" means 50%, which is the approximate percentage
of the total acreage of the Land that, according to Zhone, is properly allocated
to the Improvements covered by the Lease Agreement (Improvements -Building 3)
between Zhone and BNPLC (in contrast to the portion of the Land properly
allocated to the Improvements covered by the Lease Agreement (Improvements -
Buildings 1&2) between Zhone and BNPLC.
"Business Day" means any day that is (1) not a Saturday, Sunday or day on
which commercial banks are generally closed or required to be closed in New York
City, New York or San Francisco, California, and (2) a day on which dealings in
deposits of dollars are transacted in the London interbank market; provided that
if such dealings are suspended indefinitely for any reason, "Business Day" shall
mean any day described in clause (1).
"Capital Adequacy Charges" means any additional amounts BNPLC's Parent or
any other Participant requests BNPLC to pay as compensation for an increase in
required capital as provided in subparagraph 5.(b)(ii) of the Land Lease.
----------------------
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP or for federal income tax
purposes.
"Closing Certificate" means the Closing Certificate and Agreement dated as
of the Effective Date, between Zhone and BNPLC, as such agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
Common Definitions and Provisions Agreement (Land) - Page 4
"CMA Termination Event" means any event that would constitute a CMA
Termination Event under (and as defined in) either of the Construction
Management Agreements.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning assigned to it in the Land Pledge
Agreement.
"Collateral Percentage" for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Land Pledge
Agreement; provided, however, for purposes of the Land Lease, the Collateral
Percentage for any Base Rent Period shall not exceed a fraction; the numerator
of which fraction shall equal the value (determined as provided in the Land
Pledge Agreement) of all Collateral (a) that is, on the first day of such
period, held by the Deposit Takers under (and as defined in) the Land Pledge
Agreement subject to a Qualifying Security Interest (as defined below), (b) that
is free from claims or security interests held or asserted by any third party,
and (c) that is not in excess of Stipulated Loss Value; and the denominator of
which fraction shall equal the Stipulated Loss Value on the first day of such
period. "Qualifying Security Interest" means a first priority perfected security
interest under the Land Pledge Agreement.
"Collateral Test Date" shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Land Lease and to the Land Pledge Agreement.
----------
"Commitment Fees" shall have the meaning assigned to it in subparagraph
------------
3.(f) of the Land Lease.
-----
"Construction Management Agreements" means the Construction Management
Agreement (Buildings 1&2) and the Construction Management Agreement (Building
3), both dated as of the Effective Date and both between BNPLC and Zhone, as
such agreements may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with their terms.
"Construction Projects" means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in exhibits designated as Exhibit B attached to the
---------
Construction Management Agreements.
"Debt" of any Person means (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such Person
for the deferred purchase price of property or services (except trade payables
and accrued expenses constituting current liabilities in the ordinary course of
business); (c) the face amount of any outstanding letters of credit issued for
the account of such Person; (d) obligations of such Person arising under
acceptance facilities; (e) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to provide funds to invest in
any Person, or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations of such
Person as lessee under Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any "synthetic" or other lease of property or
related documents (including a separate purchase agreement) which obligate such
Person or any of its Affiliates (whether by purchasing or causing another Person
to purchase any interest in the leased property or otherwise) to guarantee a
minimum residual value of the leased property to the lessor. For purposes of
this definition, the amount of the obligations described in clause (h) of the
preceding sentence with respect to any lease classified according to GAAP as an
"operating lease," shall equal the sum of (1) the present value of rentals and
other minimum lease payments required in connection with such lease [calculated
in accordance with SFAS 13 and other GAAP relevant to the determination of the
whether such lease must be accounted for as an operating lease or capital
lease], plus (2) the fair value of the property covered by the lease; provided,
however,
Common Definitions and Provisions Agreement (Land) - Page 5
that such amount shall not exceed the price, as of the date a determination of
Debt is required hereunder, for which the lessee can purchase the leased
property pursuant to any valid ongoing purchase option if, upon such a purchase,
the lessee shall be excused from paying rentals or other minimum lease payments
that would otherwise accrue after the purchase.
"Default" means any event which, with the passage of time or the giving of
notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"Default Rate" means, 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.
"Defaulting Participant" shall have the meaning assigned to it in Section 1
---------
of the Participation Agreement.
"Deposit Rate" means, for any Base Rent Period, the rate computed by
subtracting (1) twelve and one-half basis points (12.5/100 of 1%), from (2)
LIBOR for such Base Rent Period.
"Deposit Taker" shall have the meaning assigned to it in the Land Pledge
Agreement.
"Deposit Taker Losses" shall have the meaning assigned to it in the Land
Pledge Agreement.
"Designated Sale Date" means the earlier of:
(1) the first Business Day of August, 2005; or
(2) any Business Day designated as the "Designated Sale Date" under
(and as defined in) this Land CDPA and the Other Common Definitions and
Provisions Agreements in an irrevocable, unconditional notice given by
Zhone to BNPLC; provided, that any such notice will be effective for
purposes of this definition only if its satisfies all of the following
conditions:
(A) the notice must designate a Business Day as the Designated
Sale Date that is at least thirty days after the date of BNPLC's
receipt of such notice;
(B) the notice must be given before Zhone has made any Issue 97-
10 Election under (and as defined in) any of the Other Operative
Documents;
(C) the notice must include an express, unconditional,
unequivocal and irrevocable (i) waiver by Zhone of any remaining right
Zhone may have to make any such Issue 97-10 Elections, and (ii)
acknowledgment and agreement by Zhone that, because of Zhone's
election to accelerate the Designated Sale Date, the Maximum
Remarketing Obligation will equal the Land Break Even Amount under
each of the Land Purchase Agreement and the Other Purchase Agreements;
or
(3) any Business Day designated as such in a notice given by BNPLC to
Zhone when any Event of Default has occurred and is continuing; provided,
that if the Business Day so designated by
Common Definitions and Provisions Agreement (Land) - Page 6
BNPLC is not at least thirty days after the date of such notice, the notice
will be of no effect for purposes of this definition;
(4) any Business Day designated as such in a notice given by BNPLC to
Zhone after the effective date of any termination of either of the
Construction Management Agreements by BNPLC as provided in subparagraph
------------
4(E) thereof; or
----
(5) any Business Day designated as such in a notice given by BNPLC to
Zhone after Zhone has given a notice exercising or attempting to exercise
any Issue 97-10 Election under (and as defined in) any of the Other
Operative Documents.
"Development Documents" means the contracts, ordinances and other documents
described in Exhibit C attached to the Closing Certificate, as the same may be
---------
modified from time to time in accordance with the Land Operative Documents and
the Other Operative Documents, 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 Zhone.
"Direct Payments to Participants" means the amounts paid or required to be
paid directly to Participants on the Designated Sale Date as provided in Section
-------
6.2 of the Land Pledge Agreement at the direction of and for Zhone by the
---
collateral agent appointed pursuant to the Land Pledge Agreement from all or any
part of the Collateral described therein.
"Effective Date" means August 1, 2000.
"Effective Rate" means for each Base Rent Period, the per annum rate
determined by dividing (A) LIBOR for such Base Rent Period, as the case may be,
by (B) one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
for such Base Rent Period. If LIBOR or the Eurodollar Rate Reserve Percentage
changes 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 Zhone. If for any reason BNPLC determines
that it is impossible or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with the foregoing, then
the "Effective Rate" for that 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 Zhone.
"Effective Rate/Deposit Rate Difference" means, for any Base Rent Period,
the difference (not less than zero) computed by subtracting (1) the Deposit Rate
for such Base Rent Period, from (2) the Effective Rate for such Base Rent
Period.
"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
Common Definitions and Provisions Agreement (Land) - Page 7
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 Cutoff Date" means the later of the dates upon which (i) the
Land Lease terminates, or (ii) Zhone surrenders possession and control of the
Property and ceases to have interest in the Land or Improvements or rights with
respect thereto under any of the Land Operative Documents or the Other Operative
Documents.
"Environmental Losses" means Losses suffered or incurred by BNPLC or any
other Interested Party, directly or indirectly, relating to or arising out of,
based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable 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 on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Interested Party which directly or indirectly 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," as the term is
used in the Land Lease, 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 Environmental Cutoff Date unless Zhone establishes by
clear and convincing evidence to the contrary that the relevant Hazardous
Substance Activity or violation of Environmental Laws did not occur or commence
prior to the Environmental Cutoff Date.
"Environmental Reports" means collectively the following reports (whether
one or more), which were provided by Zhone to BNPLC prior to the Effective Date:
(a) Phase II Site Investigation + Oakport Parcel, dated January 1991, prepared
by Baseline Environmental Consulting, Emeryville, CA; (b) Phase II Environmental
Assessment at the Edgewater Drive Property and Oakport Development Site, dated
April 16, 1993, prepared by Xxxxx & Associates, Oakland, CA; (c) Phase II
Environmental Assessment at the Edgewater Drive Property and Oakport Development
Site, Appendix E/Part 1, dated April 16, 1993, prepared by Xxxxx & Associates,
Oakland, CA; (d) Phase II Environmental Assessment at the Edgewater Drive
Property and Oakport Development Site, Appendix E/Part 2, dated April 16, 0000,
Xxxxx & Xxxxxxxxxx, Xxxxxxx, XX; (e) Geotehnical Investigation Report,
Price/Costco Wholesale Store, Oakland, CA, dated June 28, 1994, prepared by
Klienfelder; (f) Letter from the Port of Oakland to Xxxxx Xxxxxxx of the City of
Oakland, dated December 14, 1999; (g) Letter from Baseline Environmental
Consulting to Xxxxx Xxxxxxx of the City of Oakland, dated December 6, 1999; and
(h) Phase I Environmental Site Assessment for Oakport Road site, Oakland, CA.,
dated December 13, 1999.
"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 Zhone's controlled group, or under common control with Zhone, within
the meaning of Section 414 of the Internal Revenue Code, and the regulations
promulgated and rulings issued thereunder.
"Established Misconduct" of a Person means, and is limited to: (1) if the
Person is bound by the Land Operative Documents or the Participation Agreement,
a breach by such Person of the express provisions of the
Common Definitions and Provisions Agreement (Land) - Page 8
Land Operative Documents or the Participation Agreement, as applicable, 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 Zhone or Zhone'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 Zhone of the Land Lease or the Land Purchase Documents.
"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 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
---------------
of the Land Lease.
"Excluded Taxes" means (1) all federal, state and local income taxes upon
Base Rent, any interest paid to BNPLC or any Participant pursuant to
subparagraph 3.(j) of the Land Lease, and any additional compensation claimed by
------------------
BNPLC pursuant to subparagraph 5.(b)(ii) of the Land Lease; (2) any transfer or
----------------------
change of ownership taxes assessed because of BNPLC's transfer or conveyance to
any third party of any rights or interest in the Land Lease, the Land Purchase
Agreement or the Property (other than any such taxes assessed because of any
Permitted Transfer under clauses (1), (3), (5) or (6) of the definition of
Permitted Transfer in this Agreement), (3) 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. 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 (A) of this definition), then for purposes
of the Land Operative Documents, the term "Excluded Taxes" will not include the
increase in such taxes attributable to the change.
"Failed Collateral Test Date" means any Collateral Test Date upon which the
Minimum Collateral Percentage is increased as described in Part III of Schedule
--------
1 attached to the Land Pledge Agreement with the
-
Common Definitions and Provisions Agreement (Land) - Page 9
result that the Minimum Collateral Percentage then exceeds the Collateral
Percentage that would, but for Section 3.3 of the Land Pledge Agreement,
otherwise be in effect thereunder.
"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 Zhone.
"Funding Advances" means (1) the Prior Funding Advances, (2) any Post
Closing Advance, and (3) all future advances made by BNPLC's Parent or any other
Participant to or on behalf of BNPLC to allow BNPLC to maintain its investment
in the Property.
"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 13.(a) of the Land Lease (except for changes with which Zhone's
-------------------
independent public accountants concur).
"Hazardous Substance" means (i) any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a "hazardous
substance," "hazardous material," "hazardous waste," "extremely hazardous waste
or substance," "infectious waste," "toxic substance," "toxic pollutant," or any
other formulation intended to define, list or classify substances by reason of
deleterious properties, including ignitability, corrosiveness, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic
gas usable for fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos containing material; and
(v) any other material that, because of its quantity, concentration or physical
or chemical characteristics, poses a significant present or potential hazard to
human health or safety or to the environment if released into the workplace or
the environment.
"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.
Common Definitions and Provisions Agreement (Land) - Page 10
"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 Land 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 Land 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.
"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) Zhone or any
Person that cannot lawfully claim an interest in the Property except through or
under a conveyance from Zhone, or (c) any Applicable Purchaser under the Land
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 Zhone of a provision in any
Land Operative Document or Other Operative Document, the occurrence of which
breach cannot be objectively determined, or (B) any other event described in
subparagraph 17.(e) of the Land Lease, the occurrence of which event cannot be
-------------------
objectively determined. For example, an Event of Default under subparagraph
------------
17.(e) of the Land Lease resulting solely from a failure of Zhone to "generally"
------
pay its debts as such debts become due (in contrast to a failure of Zhone to pay
Rent to BNPLC as it becomes due under the Land Lease) would constitute an Issue
97-1 Non-performance-related Subjective Event of Default. Likewise, an Event of
Default resulting solely from a breach by Zhone of Paragraph L of Part IV of
Schedule 1 attached to the Land Lease would constitute an Issue 97-1 Non-
performance-related Subjective Event of Default. In no event, however, will the
term "Issue 97-1 Non-performance-related Subjective Event of Default" include an
Event of Default resulting from (1) a failure of Zhone to make any payment
required to BNPLC under the Land Operative Documents or the Other Operative
Documents, (2) a breach by Zhone of the provisions set forth in Part II of
Schedule 1 attached to the Land Lease (which set forth financial covenants), (3)
----------
any failure of Zhone to use, maintain and insure the Property in accordance with
the requirements of the Land Lease, or (4) any failure of Zhone to pay the full
amount of any Land Supplemental Payment on the Designated Sale Date as required
by the Land Purchase Agreement. Except as provided in subparagraph 1(A)(3) of
--------------------
the Land Purchase Agreement, the characterization of any Event of Default as an
Issue 97-1 Non-performance-related Subjective Event of Default will not affect
the rights or remedies available to BNPLC because of the Event of Default.
"Land" means the land described in Exhibit A attached to the Closing
---------
Certificate, the Land Lease and the Land Purchase Agreement.
Common Definitions and Provisions Agreement (Land) - Page 11
"Land Break Even Amount" shall have the meaning assigned to it in
subparagraph 1(B)(1) of the Land Purchase Agreement.
--------------------
"Land CDPA" means this Agreement, which is incorporated by reference into
each of the other Land Operative Documents.
"Land 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 physical
damage to the Property or (4) as compensation 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 "Land
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, "Land 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 Prepayment or to pay any Breakage Costs or other costs
incurred in connection with a Qualified Prepayment, (C) any money or proceeds
that, after no less than ten days notice to Zhone, 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 Zhone or offset
against any amount owed by Zhone, or (E) any money or proceeds used by BNPLC in
accordance with the Land 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 Land Escrowed
Proceeds are paid to Zhone pursuant to Paragraph 10 of the Land Lease,
------------
transferred to a purchaser under the Land Purchase Agreement as therein provided
or applied as a Qualified Prepayment or as otherwise described in the preceding
sentence, BNPLC shall keep the same deposited in one or more interest bearing
accounts, and all interest earned on such account shall be added to and made a
part of Land Escrowed Proceeds.
"Land Lease" means the Lease Agreement (Land) dated as of Effective Date
between BNPLC, as landlord, and Zhone, as tenant, pursuant to which Zhone has
agreed to lease BNPLC's interest in the Land, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"Land Operative Documents" means the Closing Certificate, the Land Lease,
the Land Purchase Agreement, the Land Pledge Agreement and this Land CDPA.
"Land Pledge Agreement" means the Pledge Agreement (Land) dated as of the
Effective Date among BNPLC, Zhone, BNP Paribas and Xxxxx Fargo Bank, N.A.
(pursuant to which Zhone may pledge certificates of deposit as security for
Zhone's obligations under the Land Purchase Agreement and for the corresponding
obligations of BNPLC to the Participants under the Participation Agreement), as
such agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
"Land Purchase Agreement" means the Purchase Agreement (Land) dated as of
Effective Date between BNPLC and Zhone, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
Common Definitions and Provisions Agreement (Land) - Page 12
"Land Purchase Documents" means collectively (1) the Land Purchase
Agreement, (2) the Memorandum of Purchase Agreement (Land) executed by BNPLC and
Zhone as of the Effective Date and recorded to provide notice of the Land
Purchase Agreement; and (3) the Land Pledge Agreement and all financing
statements, notices, acknowledgments and certificates of deposit executed or
delivered from time to time by Zhone, BNPLC or the other parties to the Land
Pledge Agreement pursuant to and as expressly provided therein.
"Land Sale Closing Documents" shall have the meaning assigned to it in
subparagraph 1(C) of the Land Purchase Agreement.
-----------------
"Land Supplemental Payment" shall have the meaning assigned to it in
subparagraph 1(A)(3) of the Land Purchase Agreement.
--------------------
"Land Supplemental Payment Obligation" shall have the meaning assigned to
it in subparagraph 1(A)(3) of the Land Purchase Agreement.
--------------------
"Land Third Party Price" shall have the meaning assigned to it in
subparagraph 1(B)(2) of the Land Purchase Agreement.
--------------------
"Last Building Base Rent Commencement Date" means the later of the
"Buildings 1&2 Base Rent Commencement Date" or the "Building 3 Base Rent
Commencement Date" (as such terms are defined in the Other Common Definitions
and Provisions Agreements).
"LIBOR" means, for purposes of determining the Effective Rate for each 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 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 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
Base Rent Period for which Base Rent is computed by reference to LIBOR, then
"LIBOR" for that period shall equal the Base 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 Zhone.
"LIBOR Period Election" for any Base Rent Period means a period of one
month, three months or six months as designated by Zhone at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit C attached to the Land Lease. (For purposes of the
---------
Land Lease a LIBOR Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on the Last Building Base Rent
Commencement Date or Base Rent Date upon which such Base Rent Period begins.)
Any LIBOR Period Election so designated by Zhone shall remain in effect for the
entire Base
Common Definitions and Provisions Agreement (Land) - Page 13
Rent Period specified in Zhone's notice to BNPLC (provided such Base Rent Period
commences at least ten Business Days after BNPLC's receipt of the notice) and
for all subsequent Base Rent Periods until a new designation becomes effective
in accordance with the provisions set forth in this definition. Notwithstanding
the foregoing, however: (1) Zhone 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; (3) no LIBOR
Period Election designated by Zhone hereunder shall be different than the LIBOR
Period Election specified under (and as defined in) the Other Common Definitions
and Provisions Agreements, and for any Base Rent Period that ends on or prior to
the Last Building Base Rent Commencement Date, the LIBOR Period Election shall
be one month; and (4) if Zhone 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). In addition, for purposes of subparagraph A.(8) of Part IV
------------------ -------
of Schedule 1 attached to the Land Lease, "Lien" includes any Liens under ERISA
----------
relating to Unfunded Benefit Liabilities of which Zhone is required to notify
BNPLC under subparagraph 13.(a)(vii) of the Land Lease (irrespective of whether
------------------------
Zhone actually notifies BNPLC as required thereunder).
"Liens Removable by BNPLC" means, and is limited to, Liens encumbering the
Property that are asserted (1) other than as contemplated in the Land Operative
Documents or the Other Operative Documents, by BNPLC itself, (2) by third
parties lawfully claiming through or under BNPLC (which for purposes of the Land
Lease shall include any judgment liens established against the Property because
of a judgment rendered against BNPLC and shall also include any liens
established against the Property to secure past due Excluded Taxes), or (3) by
third parties lawfully claiming under a deed or other instrument duly executed
by BNPLC; provided, however, Liens Removable by BNPLC shall not include (A) any
Permitted Encumbrances or Development Documents (regardless of whether claimed
through or under BNPLC), (B) the Land Operative Documents, the Other Operative
Documents or any other document executed by BNPLC with the knowledge of (and
without objection by) Zhone's counsel contemporaneously with the execution and
delivery of the Land 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 Zhone or claimed
through or under a conveyance made by Zhone, (E) Liens arising because of
BNPLC's compliance with Applicable Law, the Land Operative Documents, the Other
Operative Documents, Permitted Encumbrances, the Development Documents or any
written request made by Zhone, (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, (G) Liens resulting from or arising in
connection with any breach by Zhone of the Land Operative Documents or the Other
Operative Documents; or (H) Liens resulting from or arising in connection with
any Permitted Transfer that occurs more than thirty days after any Designated
Sale Date upon which, for any reason, Zhone or an Affiliate of Zhone or any
Applicable Purchaser shall not purchase BNPLC's interest in the Land and all
Improvements pursuant to the Land Purchase Agreement and the Other Purchase
Agreements.
Common Definitions and Provisions Agreement (Land) - Page 14
"Losses" means the following: 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.
"Material Environmental Communication" means a communication between Zhone
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 Remarketing Obligation" shall have the meaning indicated in
subparagraph 1(A)(3) of the Land Purchase Agreement.
--------------------
"Minimum Collateral Percentage" means the percentage established as such
from time to time as described in Part III of Schedule 1 attached to the Land
----------
Lease and the Land Pledge Agreement.
"Minimum Extended Remarketing Price" shall have the meaning assigned to it
in subparagraph 2(B) of the Land Purchase Agreement.
-----------------
"Multiemployer Plan" means a multiemployer plan as defined in Section 3(37)
of ERISA to which contributions have been made by Zhone or any ERISA Affiliate
during the preceding six years and which is covered by Title IV of ERISA.
"Other Common Definitions and Provisions Agreements" means the Common
Definitions and Provisions Agreement (Improvements - Buildings 1&2) and the
Common Definitions and Provisions Agreements (Improvements - Building 3), both
dated as of the Effective Date and both between BNPLC and Zhone, as such
agreements may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with their terms.
"Other Lease Agreements" means the Lease Agreement (Improvements -
Buildings 1&2) and the Lease Agreement (Improvements - Building 3), both dated
as of the Effective Date and both between BNPLC and Zhone, as such agreements
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with their terms.
"Other Operative Documents" means, collectively, all documents (other than
the Closing Certificate) comprising "Buildings 1&2 Operative Documents" or
"Building 3 Operative Documents" as described in recitals at the beginning of
the Other Common Definitions and Provisions Agreements.
"Other Purchase Agreements" means the Purchase Agreement (Improvements -
Buildings 1&2) and the Purchase Agreement (Improvements - Building 3), both
dated as of the Effective Date and both between BNPLC and Zhone, as such
agreements may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with their terms.
"Participant" means BNPLC's Parent and any other Person that, upon becoming
a party to the Participation Agreement and the Land Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Land Lease
and the Land Purchase Documents. As of the Effective Date, the only Participant
is BNPLC's Parent and Xxxxx Fargo Bank, N.A., but BNPLC may agree after the
Effective Date to share in risks and rewards of the Land
Common Definitions and Provisions Agreement (Land) - Page 15
Lease and the Land Purchase Documents with other Participants. However, no
-------
Person other than Parent and its Affiliates shall qualify as a Participant for
purposes of the Land Operative Documents or other agreements concerning the
Property to which Zhone is a party unless such Person, during the continuance of
an Event of Default or otherwise with Zhone's prior written approval (which
approval will not be unreasonably withheld), became a party to the Land Pledge
Agreement and to the Participation Agreement by executing supplements to those
agreements as contemplated therein.
"Participation Agreement" means the Participation Agreement dated as of the
Effective Date between BNPLC, BNPLC's Parent and Xxxxx Fargo Bank, N.A.
(pursuant to which BNPLC's Parent and Xxxxx Fargo Bank, N.A. have agreed to
participate in the risks and rewards to BNPLC of the Land Operative Documents
and the Other Operative Documents), as such Participation Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms. It is understood, however, that the
Participation Agreement expressly makes Zhone a third party beneficiary of the
Participant's obligations thereunder to make advances to BNPLC in connection
with the Construction Advances contemplated in the Construction Management
Agreements and with any Post-Closing Advance under the Land Lease. Thus,
Zhone's consent will be required to any amendment of the Participation Agreement
that limits or excuses such obligations. It is also understood that the
Participation Agreement (as more particularly described therein) amends,
restates and replaces a prior Participation Agreement, certain provisions of
which Zhone was a third party beneficiary, and Zhone has given its consent to
such amendment, restatement and replacement of the prior Participation
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
---------
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of Zhone
(including the Other Lease Agreements, the Other Purchase Agreements and all
documents executed by BNPLC pursuant to the Other Purchase Agreements), (iii)
any ground lease executed pursuant to the Other Purchase Agreements, (iv) any
Liens securing the payment of Impositions which are not delinquent or claimed to
be delinquent or which are being contested in accordance with subparagraph 5.(a)
------------------
of the Land Lease, (v) mechanics' and materialmen's liens for amounts not past
due or claimed to be past due or which are being contested in accordance with
subparagraph 11.(c) of the Land Lease; and (vi) all terms and conditions of the
-------------------
Acquisition Contract or any other agreement made with the City of Oakland in
connection with or pursuant to the Acquisition Contract, to the extent such
terms and conditions survive the closing under the Acquisition Contract and
affect title to the Property.
"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 Projects in accordance with the Other Lease Agreements and the
Construction Management Agreements or for the operation of the Property for
the purposes expressly permitted under subparagraph 2.(a) of the Land
------------------
Lease; or
Common Definitions and Provisions Agreement (Land) - Page 16
(2) include any disposal, discharge or other release of Hazardous
Substances from the Property in any manner that might allow such substances
to reach surface water or groundwater, except (i) through a lawful and
properly authorized discharge (A) to a publicly owned treatment works or
(B) with rainwater or storm water runoff in accordance with Applicable Laws
and any permits obtained by Zhone 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 Zhone and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2.(a) of the Land 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 by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to BNP Paribas (through its
San Xxxxxxxxx Xxxxxx or otherwise), as BNPLC's Parent, or any other Qualified
Affiliate of BNPLC, provided that Zhone must be notified before any such
conveyance to BNP Paribas or another Qualified Affiliate of (A) any interest in
the Property or any portion thereof by an assignment or other document which
will be recorded in the real property records of Alameda County, California or
(B) BNPLC's entire interest in the Land and the Property; (3) any assignment or
conveyance by BNPLC or its permitted successors or assigns 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 in the Land and Improvements) or
of any interest in Rent, payments required by or under the Land Purchase
Documents 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
Zhone under the Land Operative Documents and the Other Operative Documents; (4)
any agreement to exercise or refrain from exercising rights or remedies under
the Land Operative Documents or under the Other Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by Zhone or required by any Permitted Encumbrance, by the
Land Purchase Agreement or Other Purchase Agreements, by the Acquisition
Contract or any other agreement made with the City of Oakland in connection with
or pursuant to the Acquisition Contract, by any other Development Contract or by
Applicable Laws; or (6) any assignment or conveyance after a Designated Sale
Date on which Zhone shall not have purchased or caused an Applicable Purchaser
to purchase BNPLC's interest in the Property and, if applicable, after the
expiration of the thirty day cure period specified in Paragraph 4(B) of the Land
--------------
Purchase Agreement.
"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
Land Lease.
Common Definitions and Provisions Agreement (Land) - Page 17
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Zhone or any ERISA Affiliate of
Zhone during the preceding six years and which is covered by Title IV of ERISA,
other than a Multiemployer Plan.
"Post Closing Advance" shall have the meaning assigned to it in Paragraph 6
-----------
of the Land Lease.
"Post Closing Advance" shall have the meaning assigned to it in Paragraph 6
-----------
of the Land Lease.
"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 Zhone as of the
effective time of each change in rates described in this definition.
"Prior Funding Advances" means the advances made prior to the Effective
Date by BNPLC's Parent (directly or through one or more of its Affiliates) or by
Participants to or on behalf of BNPLC to cover the cost of BNPLC's acquisition
of the Property (including $300,000 advanced and ultimately paid to Zhone as
consideration for stock warrants that Zhone granted to Seller contemporaneously
with BNPLC's acquisition of the Land) and other costs related to the documents
being amended, restated and replaced by the Land Operative Documents. The amount
of the Prior Funding Advances will be confirmed by a separate closing
certificate executed by Zhone as of the Effective Date. (Such amount equals the
outstanding balance on the Effective Date of "Stipulated Loss Value" under and
as defined in the lease that is being amended, restated and replaced by the
Buildings 1&2 Lease and the Building 3 Lease.)
"Property" means the Personal Property and the Real Property, collectively.
All rights, titles and interests acquired by BNPLC under the Acquisition
Contract are, to the extent not covered by the Land Lease and thus not
encompassed within this definition of Property, intended to be covered by the
Other Lease Agreements and encompassed within the term "Property" as defined in
the Other Common Definitions and Provisions Agreements.
"Purchase Money Lien" shall have the meaning assigned to it in Paragraph 6
-----------
of the Land Lease.
"Purchase Money Note" shall have the meaning assigned to it in Paragraph 6
-----------
of the Land Lease.
"Purchase Option" shall have the meaning assigned to it in subparagraph
------------
1(A)(1) of the Land Purchase Agreement.
-------
"Qualified Affiliate" means any Person that is one hundred percent (100%)
owned, directly or indirectly, by BNP Paribas or any successor of such bank;
provided, that such Person can make (and has in writing made) the same
representations to Zhone that BNPLC has made in Paragraphs 3(E) and 3(F) of the
------------------------
Closing Certificate; and, provided, further, that such Person is not insolvent.
"Qualified Prepayments" means 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
Common Definitions and Provisions Agreement (Land) - Page 18
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
Prepayments", 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 Prepayments" 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
Prepayments" shall not include any payments received by BNPLC that BNPLC has
paid or is obligated to pay to Zhone for the restoration or repair of the
Property or that BNPLC is holding as Land Escrowed Proceeds pursuant to
Paragraph 10 of the Land Lease or any other provision of the Land Lease. For
------------
purposes of computing the total Qualified Prepayments (and other amounts
dependent upon Qualified Prepayments, such as Stipulated Loss Value) paid to or
received by BNPLC as of any date, payments described in the preceding clauses
(1) through (4) will be considered as Land Escrowed Proceeds, not Qualified
Prepayments, until they are actually applied as Qualified Prepayments by BNPLC
as provided in the Paragraph 10 of the Land Lease.
------------
"Real Property" shall have the meaning assigned to it on page 1 of the Land
Lease.
"Remedial Work" means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other 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 Zhone pursuant to
Development Documents or any recommendations or proposals made therein.
"Rent" means the Base Rent and all Additional Rent.
"Residual Risk Percentage" means fifteen percent (15%).
"Responsible Financial Officer" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of Zhone.
"Secured Spread" means forty-five basis points (45/100 of 1%) per annum.
"Seller" means the REDEVELOPMENT AGENCY OF THE CITY OF OAKLAND, a community
redevelopment agency organized and existing under the California Community
Redevelopment Law.
"Stipulated Loss Value" as of any date means the amount equal to the sum of
the Prior Funding Advances, plus the Post Closing Advance if it is made on or
prior to such date, minus all funds actually received by BNPLC and applied as
Qualified Prepayments on or prior to such date. Under no circumstances will any
payment of Base Rent or Commitment Fees reduce Stipulated Loss Value.
"Subsidiary" means, with respect to any Person, any Affiliate of which at
least a majority of the securities or other ownership interests having ordinary
voting power then exercisable for the election of directors or other persons
performing similar functions are at the time owned directly or indirectly by
such Person.
Common Definitions and Provisions Agreement (Land) - Page 19
"Term" shall have the meaning assigned to it in subparagraph 1.(a) of the
------------------
Land Lease.
"Third Party Sale Notice" shall have the meaning assigned to it in
subparagraph 2(C) of the Land Purchase Agreement.
-----------------
"Third Party Sale Proposal" shall have the meaning assigned to it in
subparagraph 2(C) of the Land Purchase Agreement.
-----------------
"Third Party Target Price" shall have the meaning assigned to it in
subparagraph 2(C) of the Land Purchase Agreement.
-----------------
"Unfunded Benefit Liabilities" means, with respect to any Plan or
Multiemployer 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 or Multiemployer Plan exceeds the market value of all Plan or
Multiemployer assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan or Multiemployer Plan and in accordance
with the provisions of ERISA for calculating the potential liability of Zhone or
any ERISA Affiliate of Zhone under Title IV of ERISA.
"Unsecured Spread" means two hundred twenty-five basis points (225/100 of
1%) per annum.
"Voluntary Retention of the Property" means an affirmative election made by
BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(A)(2)(a) of the Land Purchase
-----------------------
Agreement.
"Zhone" means Zhone Technologies, Inc., a Delaware corporation.
"Zhone's Extended Remarketing Period" shall have the meaning assigned to it
in subparagraph 2(A) of the Land Purchase Agreement.
-----------------
"Zhone's Extended Remarketing Right" shall have the meaning assigned to it
in subparagraph 2(A) of the Land Purchase Agreement.
-----------------
"Zhone's Initial Remarketing Rights" shall have the meaning assigned to it
in subparagraph 1(A)(2) of the Land Purchase Agreement.
--------------------
Common Definitions and Provisions Agreement (Land) - Page 20
ARTICLE II - RULES OF INTERPRETATION
The following provisions will apply to and govern the interpretation of
each of the Land Operative Documents:
1. Notices. The provision of any Land Operative Document, or of any
Applicable Laws with reference to the sending, mailing or delivery of any notice
or demand under any Land Operative Document or with reference to the making of
any payment required under any Land Operative Document, shall be deemed to be
complied with when and if the following steps are taken:
(i) All Rent and other amounts required to be paid by Zhone to BNPLC
shall be paid to BNPLC in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 000000000 BNP Paribas
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Zhone Oakland Synthetic Land Lease
or at such other place and in such other manner as BNPLC may designate in a
notice to Zhone.
(ii) All Collateral required to be paid by Zhone to the Agent shall be
paid in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 000000000 BNP Paribas
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Zhone Collateral Payment
or at such other place and in such other manner as Agent may designate in a
notice to Zhone.
Common Definitions and Provisions Agreement (Land) - Page 21
(iii) All notices, demands, approvals, consents and other
communications to be made under any Land Operative Document to or by the
parties thereto must, to be effective for purpose of such Land Operative
Document, be in writing. Notices, demands and other communications required
or permitted under any Land Operative Document 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 (B) hereof shall be deemed
received upon such personal service or upon dispatch by electronic means,
and, if sent pursuant to clause (C) shall be deemed received five days
following deposit in the mail.
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:
--------------
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx or Xxxxxx Xxxxx
Telecopy: (000) 000-0000
And for draw requests and funding notices, with a copy
------------------------------------------------------
to:
--
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx/Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Address of Zhone:
----------------
Zhone Technologies, Inc.
Attn: Xxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Common Definitions and Provisions Agreement (Land) - Page 22
2. Severability. If any term or provision of any Land Operative
Document or the application thereof shall to any extent be held by a court of
competent jurisdiction to be invalid and unenforceable, the remainder of such
document, 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.
3. No Merger. There shall be no merger of the Land Lease or of the
leasehold estate created by the Land Lease with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Land 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. There shall be no merger of the
Land Purchase Agreement or of the purchase options or obligations created by the
Land Purchase Agreement with any other interest in the Property by reason of the
fact that the same person may acquire or hold, directly or indirectly, the Land
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.
4. No Implied Waiver. The failure of BNPLC or Zhone 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 any Land Operative Document shall
not be construed as a waiver or a relinquishment thereof for the future. The
failure of Agent 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 the Land Pledge Agreement shall not be construed as a waiver or a
relinquishment thereof for the future. The waiver of or redress for any breach
of any Land Operative Document by any party thereto shall not prevent a similar
subsequent act from constituting a violation. Any express waiver of any
provision of any Land Operative Document shall affect only the term or condition
specified in such waiver and only for the time and in the manner specifically
stated therein. No waiver by any party to any Land Operative Document of any
provision therein shall be deemed to have been made unless expressed in writing
and signed by the party to be bound by the waiver. A receipt by BNPLC of any
Rent with knowledge of the breach by Zhone of any covenant or agreement
contained in the Land Lease or any other Land Operative Document shall not be
deemed a waiver of such breach. A receipt by Agent of any Collateral or other
payment under the Land Pledge Agreement with knowledge of the breach by Zhone of
any covenant or agreement contained in the Land Pledge Agreement shall not be
deemed a waiver of such breach.
5. Entire and Only Agreements. The Land Operative Documents
supersede any prior negotiations and agreements between BNPLC, Agent and Zhone
concerning the Property or the Collateral, and no amendment or modification of
any Land Operative Document shall be binding or valid unless expressed in a
writing executed by all parties to such Land Operative Document.
6. Binding Effect. Except to the extent, if any, expressly provided
to the contrary in any Land Operative Document with respect to assignments
thereof, all of the covenants, agreements, terms and conditions to be observed
and performed by the parties to the Land Operative Documents shall be applicable
to and binding upon their respective successors and, to the extent assignment is
permitted thereunder, their respective assigns.
7. Time is of the Essence. Time is of the essence as to all
obligations of Zhone and BNPLC and all notices required of Zhone and BNPLC under
the Land Operative Documents.
8. Governing Law. Each Land Operative Document shall be governed by
and construed in accordance with the laws of the State of California without
regard to conflict or choice of laws (subject,
Common Definitions and Provisions Agreement (Land) - Page 23
however, in the case of the Land Pledge Agreement to any contrary provisions of
the "UCC," as defined in the Land Pledge Agreement).
9. Paragraph Headings. The paragraph and section headings contained
in the Land Operative Documents are for convenience only and shall in no way
enlarge or limit the scope or meaning of the various and several provisions
thereof.
10. Negotiated Documents. All the parties to each Land Operative
Document and their counsel have reviewed and revised or requested revisions to
such Land Operative Document, and the usual rule of construction that any
ambiguities are to be resolved against the drafting party shall not apply to the
construction or interpretation of any Land Operative Documents or any amendments
thereof.
11. Terms Not Expressly Defined in a Land Operative Document. As used
in any Land Operative Document, a capitalized term that is not defined therein
or in this Land CDPA, but that is defined in another Land Operative Document,
shall have the meaning ascribed to it in the other Land Operative Document.
Further, as used in any Land Operative Document, a capitalized term that is not
defined therein or in this Land CDPA or in another Land Operative Document, but
that is defined in any of the Other Operative Documents, shall have the meaning
ascribed to it in the Other Operative Documents. But if the meaning given any
such capitalized term in one of the Other Operative Documents is different than
the meaning assigned to it another of the Other Operative Documents, the term
will be construed broadly for purposes of the Land Operative Documents to
include anything that would fall within one or more of the definitions of the
term in the Other Operative Documents.
12. Other Terms and References. Words of any gender used in each Land
Operative Document 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 in any Land Operative Document
to Paragraphs, subparagraphs, Sections, subsections or other subdivisions shall
refer to the corresponding Paragraphs, subparagraphs, Sections, subsections or
subdivisions of that Land Operative Document, unless specific reference is made
to another document or instrument. References in any Land Operative Document to
any Schedule or Exhibit shall refer to the corresponding Schedule or Exhibit
attached to that Land Operative Document, which shall be made a part thereof by
such reference. All capitalized terms used in each Land Operative Document 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 in the Land Operative Documents 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 in any Land Operative Document shall be construed
in accordance with GAAP. The words "this [Agreement]", "herein", "hereof",
"hereby", "hereunder" and words of similar import when used in each Land
Operative Document refer to that Land Operative Document as a whole and not to
any particular subdivision unless expressly so limited. The phrases "this
Paragraph", "this subparagraph", "this Section", "this subsection" and similar
phrases used in any Land Operative Document refer only to the Paragraph,
subparagraph, Section, subsection or other subdivision described in which the
phrase occurs. As used in the Land Operative Documents the word "or" is not
exclusive. As used in the Land Operative Documents, the words "include",
"including" and similar terms shall be construed as if followed by "without
limitation to".
13. Execution in Counterparts. To facilitate execution, each Land
Operative Document may be executed in as many identical counterparts as may be
required. It shall not be necessary that the signature of, or on behalf of, each
party, or that the signature of all persons required to bind any party,
Common Definitions and Provisions Agreement (Land) - Page 24
appear on each counterpart. All counterparts, taken together, shall collectively
constitute a single instrument. It shall not be necessary in making proof of any
Land Operative Document to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the parties
hereto. Any signature page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures thereon and
thereafter attached to another counterpart identical thereto except having
attached to it additional signature pages.
14. Not a Partnership, Etc. NOTHING IN ANY LAND OPERATIVE DOCUMENT IS
INTENDED TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE
BETWEEN BNPLC AND ZHONE. NEITHER THE EXECUTION OF ANY LAND OPERATIVE DOCUMENT
NOR THE ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC,
NOR ANY OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY LAND
OPERATIVE DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF
BNPLC TO ZHONE.
15. Amendment and Restatement. This Land CDPA amends, restates and
replaces the Prior Common Definitions and Provisions Agreement referenced in the
recitals at the beginning of this agreement.
[The signature pages follows.]
Common Definitions and Provisions Agreement (Land) - Page 25
IN WITNESS WHEREOF, Zhone and BNPLC have caused this Common Definitions and
Provisions Agreement (Land) to be executed as of August 1, 2000.
"Zhone"
ZHONE TECHNOLOGIES, INC.
By: ________________________________________
Name:___________________________________
Title:__________________________________
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Land) dated to be effective as of August 1, 2000]
"BNPLC"
BNP LEASING CORPORATION
By: ________________________________________
Xxxxx X. Xxx, Vice President
