<PAGE>
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EXHIBIT 10.8
$31,400,000
LEASE AGREEMENT
(Land)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
EXTREME NETWORKS, INC.
("Extreme")
June 1, 2000
(Santa Clara, California)
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[Land]
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TABLE OF CONTENTS
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Page
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1. Term............................................................................................................ 2
(a) Scheduled Term......................................................................................... 2
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(b) Election by Extreme to Terminate After Accelerating the Designated Sale Date........................... 2
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(c) Extension of the Term.................................................................................. 3
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2. Use and Condition of the Property............................................................................... 3
(a) Use.................................................................................................... 3
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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..................................................................... 4
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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 and Periods.................................... 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 Than 100%........ 6
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(d) Additional Rent........................................................................................ 7
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(e) No Demand or Setoff.................................................................................... 7
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(f) Default Interest and Order of Application.............................................................. 8
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4. Nature of this Agreement......................................................................................... 8
(a) "Net" Lease Generally.................................................................................. 8
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(b) No Termination......................................................................................... 8
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(c) Tax Reporting.......................................................................................... 9
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(d) Characterization of this Land Lease.................................................................... 9
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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.............................................................. 10
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(c) Extreme's Payment of Other Losses; General Indemnification............................................. 11
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(d) Exceptions and Qualifications to Indemnities........................................................... 13
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6. Environmental................................................................................................... 14
(a) Environmental Covenants by Extreme..................................................................... 14
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(b) Right of BNPLC to do Remedial Work Not Performed by Extreme............................................ 14
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(c) Environmental Inspections and Reviews.................................................................. 15
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(d) Communications Regarding Environmental Matters......................................................... 15
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7. Insurance Required and Condemnation............................................................................. 16
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[Land]
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<TABLE>
<S> <C>
(a) Liability Insurance.................................................................................... 16
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(b) Failure to Obtain Insurance............................................................................ 16
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(c) Condemnation........................................................................................... 16
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8. Application of Insurance and Condemnation Proceeds.............................................................. 16
(a) Collection and Application of Insurance and Condemnation Proceeds Generally............................ 17
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(b) Advances of Escrowed Proceeds to Extreme............................................................... 17
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(c) Application of Escrowed Proceeds as a Qualified Prepayment............................................. 17
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(d) Special Provisions Applicable After Completion by Extreme of the Initial Renovations................... 18
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(e) Special Provisions Applicable After an Event of Default................................................ 18
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(f) Extreme's Obligation to Restore........................................................................ 18
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(g) Takings of All or Substantially All of the Property.................................................... 18
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9. Additional Representations, Warranties and Covenants of Extreme Concerning the Property......................... 18
(a) Compliance with Covenants and Laws..................................................................... 18
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(b) Operation of the Property.............................................................................. 19
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(c) Debts for Construction, Maintenance, Operation or Development.......................................... 20
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(d) Repair, Maintenance, Alterations and Additions......................................................... 20
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(e) Permitted Encumbrances and Development Documents....................................................... 20
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(f) Books and Records Concerning the Property.............................................................. 21
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10. Financial Covenants, Reporting Covenants and Other Covenants Incorporated by Reference to Schedule 1............ 21
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11. Assignment and Subletting by Extreme............................................................................ 21
(a) BNPLC's Consent Required............................................................................... 21
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(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters.................................. 21
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(c) Consent Not a Waiver................................................................................... 21
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12. Assignment by BNPLC............................................................................................. 21
(a) Restrictions on Transfers.............................................................................. 21
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(b) Effect of Permitted Transfer or other Assignment by BNPLC.............................................. 22
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13. BNPLC'S Right of Access......................................................................................... 22
14. Events of Default............................................................................................... 23
15. Remedies........................................................................................................ 24
(a) Basic Remedies......................................................................................... 24
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(b) Notice Required So Long As the Purchase Option and Extreme's Initial Remarketing
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Rights and Obligations Continue Under the Purchase Agreement........................................... 26
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(c) Enforceability......................................................................................... 26
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(d) Remedies Cumulative.................................................................................... 26
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16. Default by BNPLC................................................................................................ 27
17. Quiet Enjoyment................................................................................................. 27
18. Surrender Upon Termination...................................................................................... 27
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[Land]
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<TABLE>
<S> <C>
19. Holding Over by Extreme......................................................................................... 28
20. Independent Obligations Evidenced by the Other Operative Documents.............................................. 28
</TABLE>
[Land]
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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]
(iv)
<PAGE>
LEASE AGREEMENT
(LAND)
This LEASE AGREEMENT (LAND) (this "Land Lease"), is made and dated as of
June 1, 2000 (the "Effective Date") by and between BNP LEASING CORPORATION, a
Delaware corporation ("BNPLC"), and EXTREME NETWORKS, INC., a Delaware
corporation ("Extreme").
RECITALS
Contemporaneously with the execution of this Land Lease, BNPLC and Extreme
are executing a Common Definitions and Provisions Agreement (Land) dated as of
the Effective Date (the "Common Definitions and Provisions Agreement (Land)"),
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
Common Definitions and Provisions Agreement (Land) and not otherwise defined in
this Land Lease are intended to have the respective meanings assigned to them in
the Common Definitions and Provisions Agreement (Improvements).
Pursuant to the Acquisition Contract, which covers the Land described in
Exhibit A, BNPLC is acquiring the Land and any appurtenances thereto and all
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existing Improvements thereon from Seller contemporaneously with the execution
of this Land Lease.
In anticipation of BNPLC's acquisition of the Land and the existing
Improvements thereon under the Acquisition Contract, BNPLC and Extreme have
reached agreement as to the terms and conditions upon which BNPLC is willing to
lease the Land to Extreme, and by this Land Lease BNPLC and Extreme desire to
evidence such agreement.
GRANTING CLAUSES
BNPLC does hereby LEASE, DEMISE and LET unto Extreme 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 Agreement) or BNPLC's rights appurtenant to the
Improvements, it being understood that the Other Lease Agreement constitutes a
separate lease of the Improvements and the appurtenances thereto, and only the
Improvements and the appurtenances thereto, from BNPLC to Extreme.
[Land]
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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 ? below, BNPLC
also hereby grants and assigns to Extreme 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 Extreme's rights
hereunder are expressly made subject and subordinate to the terms and conditions
of this Land Lease, the Premises Leases and all other Permitted Encumbrances,
and to any other claims or encumbrances not constituting Liens Removable by
BNPLC.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to Extreme and is accepted and is to be
used and possessed by Extreme 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
July, 2005, unless sooner terminated as expressly herein provided.
(b) Election by Extreme to Terminate After Accelerating the
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Designated Sale Date. Extreme shall be entitled to accelerate the Designated
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Sale Date (and thus accelerate the purchase of BNPLC's interest in the Property
by Extreme or by an Applicable Purchaser pursuant to the Purchase Agreement) by
sending a notice to BNPLC as provided in clause (2) of the definition of
"Designated Sale Date" in the Common Definitions and Provisions Agreement
(Land). In the event, because of Extreme'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, Extreme may terminate this Land Lease on
or after the Designated Sale Date; provided, however, as a condition to any such
termination by Extreme, Extreme must have done the following prior to the
termination:
(i) purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Purchase Agreement and satisfied all of Extreme's
other obligations under the 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 Purchase Agreement.
[Land]
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<PAGE>
(c) Extension of the Term. The Term may be extended at the option of
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Extreme for two successive periods of five years 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 Extreme 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 Common Definitions and Provisions
Agreement (Land), and (2) an adjustment to the Rent that Extreme 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 Extreme, each in its sole and absolute
discretion; (B) no Event of Default shall have occurred and be continuing at the
time of Extreme'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 Extreme must have agreed upon the Rent required for any
extension of the Term, neither Extreme nor BNPLC is willing to submit itself to
a risk of liability or loss of rights hereunder for being judged unreasonable.
Accordingly, both Extreme 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 Extreme 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 Extreme 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
---
Documents and the terms hereof, Extreme may use and occupy the Property during
the Term, but only for the following purposes and other lawful purposes
incidental thereto;
(i) constructing, maintaining and using Improvements on the Land for
purposes expressly permitted by and described in Paragraph 2(a) of the
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Other Lease Agreement; and
(ii) other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld (but Extreme
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 Extreme's compliance with the requirements of this Land Lease or
other Operative Documents).
Nothing in this subparagraph will prevent a tenant under a Premises Lease,
executed prior to the Effective Date, from using the space covered thereby for
purposes expressly authorized by the terms and conditions of such Premises
Lease.
(b) Condition of the Property. Extreme 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. Extreme 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 17. BNPLC shall not be responsible for any
latent or other defect or change of
[Land]
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<PAGE>
condition in the Land or in Improvements, fixtures and personal property forming
a part of the Property or for any violations with respect thereto of Applicable
Laws. Further, BNPLC shall not be required to furnish to Extreme 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 Extreme 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 Extreme 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, Extreme shall pay BNPLC rent ("Base Rent"), calculated as provided
below. 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 each Base Rent
Date, BNPLC shall notify Extreme in writing of the amount of each installment,
calculated as provided below. Any failure by BNPLC to so notify Extreme,
however, shall not constitute a waiver of BNPLC's right to payment, but absent
such notice Extreme shall not be in default hereunder for any underpayment
resulting therefrom if Extreme, 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 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 Pledge Agreement from time to time if
the Accounts (as defined in the Pledge Agreement) bore interest at the Deposit
Rate. BNPLC has agreed to such reduction to provide Extreme with the economic
equivalent of interest on such Collateral, and in return Extreme has agreed to
the provisions of the 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 Pledge
Agreement, an unnecessary and cumbersome periodic exchange of equal payments
will be avoided. It is not, however, the intent of BNPLC or Extreme to
understate Base Rent or interest for financial reporting purposes. Accordingly,
for purposes of any financial reports that this Land Lease requires of Extreme
from time to time, Extreme 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 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.
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[Land]
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<PAGE>
a0 For all Base Rent Periods subject to a LIBOR Period Election
of one month or three months, Base Rent shall be due in one
installment on the Base Rent Date upon which the Base Rent Period
ends.
b0 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.
c0 For Base Rent Periods subject to a LIBOR Period Election of
nine months, Base Rent shall be payable in three 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, with the second installment
becoming due on the first Business Day of the sixth calendar month
following the commencement of such Base Rent Period, and with the
third installment becoming due on the Base Rent Date upon which the
Base Rent Period ends.
d0 For Base Rent Periods subject to a LIBOR Period Election of
twelve months, Base Rent shall be payable in four 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, with the second installment
becoming due on the first Business Day of the sixth calendar month
following the commencement of such Base Rent Period, with the third
installment becoming due on the first Business Day of the ninth
calendar month following the commencement of such Base Rent Period,
and with the fourth installment becoming due on the Base Rent Date
upon which the Base Rent Period ends.
(ii) Special Adjustments to Base Rent Payment Dates and Periods.
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Notwithstanding the foregoing:
a0 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 Extreme must pay all accrued,
unpaid Base Rent for the Base Rent Period just ended.
b0 In addition to Base Rent due on a the first Business Day of
the first calendar month following a Failed Collateral Test Date,
Extreme 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).
c0 If Extreme or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent shall be
due on the date of purchase in addition to the purchase price and
other sums due BNPLC under the Purchase Agreement.
[Land]
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<PAGE>
(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 Rent
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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 forty-two and one-half basis points
(42.5/100 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 .425% x 30/360 = $1,770.83
(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
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Base 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
(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
[Land]
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<PAGE>
(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-five percent (55%);
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 forty-two
and one-half basis points (42.5/100 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 {(55% x .425%) + ([1 - 55%] x [6% + 2.25%])} x 30/360 = $16,442.41
(d) Additional Rent. All amounts which Extreme 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) No Demand or Setoff. Except as expressly provided herein, Extreme
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shall pay all Rent without notice or demand and without counterclaim, deduction,
setoff or defense.
(f) Default Interest and Order of Application. All Rent shall bear
-----------------------------------------
interest, if not paid when first due, at the Default Rate in effect from time to
time from the date due until paid; provided, that nothing herein contained will
be construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. BNPLC shall be
entitled to apply any amounts paid by or on behalf of Extreme 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
--------------------
subparagraph 5.(d) below, it is the intention of BNPLC and Extreme that Base
Rent and other payments herein specified shall be absolutely net to BNPLC and
that Extreme 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
[Land]
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<PAGE>
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 Lease
--------------
itself, this Land Lease shall not terminate, nor shall Extreme have any right to
terminate this Land Lease, nor shall Extreme be entitled to any abatement of the
Rent, nor shall the obligations of Extreme 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 Extreme's use or
development of all or any portion of the Property or any interference with such
use by governmental action or otherwise, (iv) any eviction of Extreme or of
anyone claiming through or under Extreme, (v) any default on the part of BNPLC
under this Land Lease or under any other agreement to which BNPLC and Extreme
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
(ix) any breach of a Premises Lease by any lessee thereunder, or (x) any other
cause whether similar or dissimilar to the foregoing. It is the intention of the
parties hereto that the obligations of Extreme hereunder shall be separate and
independent of the covenants and agreements of BNPLC, that Base Rent and all
other sums payable by Extreme hereunder shall continue to be payable in all
events and that the obligations of Extreme 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, Extreme waives to the extent permitted by Applicable Laws, except
as otherwise expressly provided herein, all rights to which Extreme 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 Extreme of any right Extreme 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 16: (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 13.(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 Extreme shall report this Land Lease and
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the 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 Purchase Agreement as a conditional sale for federal income tax reporting
purposes, BNPLC shall notify Extreme in writing of such challenge and consider
in good faith any reasonable suggestions by Extreme about an appropriate
response. In any event, Extreme 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
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
[Land]
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<PAGE>
covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to Extreme. The failure to so provide a copy of the notice to Extreme
shall not excuse Extreme from its obligations under this Paragraph; provided,
that if none of the officers of Extreme and none of the employees of Extreme
responsible for tax matters are aware of the challenge described in the notice
and such failure by BNPLC renders unavailable defenses that Extreme might
otherwise assert, or precludes actions that Extreme might otherwise take, to
minimize its obligations hereunder, then Extreme 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 Extreme 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 Extreme 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 the indemnities in excess of the penalties and interest that
would have accrued if Extreme had been promptly provided with a copy of the
notice, then Extreme 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
Extreme 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 Purchase Agreement, and (ii)
the Purchase Agreement shall constitute a separate and independent contract,
enforceable in accordance with the express terms and conditions set forth
therein. In this regard, Extreme acknowledges that Extreme asked BNPLC to
participate in the transactions evidenced by this Land Lease and the Purchase
Agreement as a landlord and owner of the Property, not as a lender. Although
other transactions might have been used to accomplish similar results, Extreme
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, Extreme cannot
equitably deny that this Land Lease and the Purchase Agreement should be
construed and enforced in accordance with their respective terms, rather than as
a mortgage or other security device, in any action brought by BNPLC to enforce
this Land Lease or the 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, Extreme 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, Extreme shall furnish
BNPLC with receipts showing payment of all Impositions prior to the applicable
delinquency date therefor.
Notwithstanding the foregoing, Extreme may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest Extreme shall not be deemed in default
under any of the provisions of this Land Lease because of the Imposition if (1)
Extreme diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (2) Extreme 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 Extreme 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, Extreme or an Affiliate of Extreme or any Applicable Purchaser
shall not purchase BNPLC's interest in the Property pursuant to the Purchase
Agreement for a price to BNPLC (when taken
[Land]
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<PAGE>
together with any additional payments made by Extreme pursuant to Paragraph
---------
1(A)(2) of the Purchase Agreement, in the case of a purchase by an Applicable
-------
Purchaser) equal to the Break Even Price.
(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 connection with the Property
because of any Banking Rules Change, then Extreme 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 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 Extreme by BNPLC's Parent or the other
Participant, shall be conclusive and binding upon Extreme, 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, Extreme 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 Extreme hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
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), Extreme 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 Extreme is notified that BNPLC or a Participant
intends to make the claim; provided, however, that Extreme 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 Extreme under this
subparagraph 5.(b) shall be due fifteen days after a notice requesting such
payment is received by Extreme.
(c) Extreme's Payment of Other Losses; General Indemnification.
----------------------------------------------------------
Subject only to the exceptions listed in subparagraph 5.(d) below:
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<PAGE>
(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 Operative Documents, (D) the making of
the Funding Advances, (E) the breach by Extreme of this Land Lease or any
other document executed by Extreme in connection herewith, (F) any failure
of the Property or Extreme 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 that survive the closing under the Acquisition
Contract, or (K) 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 Extreme, and Extreme 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 EXTREME OR REQUIRED OF EXTREME BY THIS LAND LEASE OR OTHER
- -
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
- - -
THE INDEMNITIES AND RELEASES ARE PROVIDED. EXTREME'S LIABILITY, HOWEVER,
FOR ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER
- -
OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH INDEMNITIES
- - -
ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE IS INTENDED TO
DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES AGAINST WHICH BNPLC AND
- -----
OTHER INTERESTED PARTIES ARE ENTITLED TO INDEMNIFICATION BY THIS LAND
- - -
LEASE.
-
(iii) Costs and expenses for which Extreme 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) Extreme's obligations under this subparagraph 5.(c) shall
survive the termination or expiration of this Land Lease. Any amount to be
paid by Extreme under this subparagraph 5.(c) shall be due fifteen days
after a notice requesting such payment is received by Extreme.
(v) If an Interested Party notifies Extreme of any claim or
proceeding included in, or any investigation or allegation concerning,
Losses for which Extreme is responsible pursuant to this subparagraph
5.(c), Extreme 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 Extreme, 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 Extreme and
the Interested Party and the Interested Party shall have reasonably
concluded that there are legal defenses
[Land]
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<PAGE>
available to it which are inconsistent with or in addition to those
available to Extreme, 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 Extreme shall pay or reimburse the Interested Party for all
Attorney's Fees incurred by the Interested Party because of the selection
of such separate counsel. If Extreme 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 Extreme, which consent will not be unreasonably withheld) the
claim, proceeding, investigation or allegation at Extreme's expense using
counsel selected by the Interested Party. Moreover, if any such failure by
Extreme continues for forty-five days or more after Extreme 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 Extreme's consent and without releasing
Extreme 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 Extreme 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 Common Definitions and Provisions
Agreement (Land), (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 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 Pledge Agreement. Further,
without limiting BNPLC's rights (as provided in other provisions of this
Land Lease and other Operative Documents) to include the following in the
calculation of Stipulated Loss Value and the Break Even Price or to collect
Base Rent, a Supplemental Payment and other amounts, the calculation of
which depends upon Stipulated Loss Value or the Break Even Price, BNPLC
acknowledges and agrees that nothing in subparagraph 4.(a) or the preceding
subparagraphs of this Paragraph 5 shall be construed to require Extreme to
pay or reimburse an Interested Party for costs paid by BNPLC with the
proceeds of the Initial Funding Advance as part of the Transaction
Expenses.
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 Extreme. The failure to so provide a copy of the
notice to Extreme shall not excuse Extreme from its obligations under
subparagraph 5.(c)(i); provided, that if Extreme is unaware of the matters
described in the notice and such failure renders unavailable defenses that
Extreme might otherwise assert, or precludes actions that Extreme might
otherwise take, to minimize its obligations, then Extreme 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 Extreme with a copy of a notice of an obligation covered by the
indemnity set out in subparagraph 5.(c)(i) and Extreme 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 Extreme had
been promptly
[Land]
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<PAGE>
provided with a copy of the notice, then Extreme will be excused from any
obligation to BNPLC (or any Affiliate of BNPLC) to pay the excess.
6 Environmental.
(a) Environmental Covenants by Extreme. Extreme covenants that:
----------------------------------
(i) Extreme shall not conduct or permit others to conduct
Hazardous Substance Activities, except Permitted Hazardous Substance Use
and Remedial Work.
(ii) Extreme 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, Extreme 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, Extreme shall retain independent
environmental consultants acceptable to BNPLC to evaluate any significant
new information generated during Extreme's implementation of the Remedial
Work and to discuss with Extreme whether such new information indicates the
need for any additional measures that Extreme should take to protect the
health and safety of persons (including employees, contractors and
subcontractors and their employees) or to protect the environment. Extreme
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 Extreme. If
-----------------------------------------------------------
Extreme's failure to cure any breach of the covenants set forth in subparagraph
6.(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 Extreme to BNPLC. As used in
this subparagraph, "Environmental Cure Period" means the period ending on the
earlier of: (1) one hundred eighty days after Extreme 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, Extreme or an Affiliate of Extreme or any Applicable Purchaser
shall not purchase BNPLC's interest in the Property pursuant to the Purchase
Agreement for a net price to BNPLC (when taken together with any Supplemental
Payment made by Extreme pursuant to Paragraph 1(A)(2) of the Purchase Agreement,
-----------------
in the case of a purchase by an Applicable Purchaser) equal to Stipulated Loss
Value.
(c) Environmental Inspections and Reviews. BNPLC reserves the right
-------------------------------------
to retain environmental consultants to review any environmental report prepared
by Extreme or to conduct BNPLC's own
[Land]
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<PAGE>
investigation to confirm whether Extreme is complying with the requirements of
this Paragraph 6. Extreme 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. Extreme 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 6 by Extreme
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) Extreme shall immediately advise BNPLC of (1) any
discovery of any event or circumstance which would render any of the
representations of Extreme herein or in the Closing Certificate concerning
environmental matters materially inaccurate or misleading if made at the
time of such discovery and assuming that Extreme was aware of all relevant
facts, (2) any Remedial Work (or change in Remedial Work) required or
undertaken by Extreme or its Affiliates in response to any (A) discovery of
any Hazardous Substances on, under or about the Property other than
Permitted Hazardous Substances or (B) any claim for damages resulting from
Hazardous Substance Activities, (3) Extreme'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 Extreme to comply with Environmental Laws affecting the
Property by any governmental authority responsible for enforcing
Environmental Laws. In such event, Extreme 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 Extreme proposes to
take with respect thereto, if any, to bring the Property into compliance
with Environmental Laws or to correct any breach by Extreme of this
Paragraph 6, 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) Extreme 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).
Extreme shall also provide BNPLC with copies of any correspondence from
third Persons which threaten litigation over any significant failure or
alleged significant failure of Extreme to maintain or operate the Property
in accordance with Environmental Laws.
(iii) Prior to Extreme's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
Extreme 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, Extreme shall meet with BNPLC to discuss
the submission, shall provide any additional information
[Land]
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<PAGE>
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
Extreme not to modify the submission in accordance with comments of BNPLC.
7 Insurance Required and Condemnation.
(a) Liability Insurance. Throughout the Term Extreme 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. Extreme 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 Failure to Obtain Insurance. If Extreme 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 Extreme has failed to obtain or for which Extreme has not provided the
required confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require Extreme 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 Extreme.
(c 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. Extreme 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 Escrowed
Proceeds, and all such proceeds will be applied as provided in Paragraph 8.
BNPLC is hereby authorized, in the name of Extreme, at any time when an Event of
Default shall have occurred and be continuing, or otherwise with Extreme'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.
8. Application of Insurance and Condemnation Proceeds.
(a Collection and Application of Insurance and Condemnation Proceeds
-----------------------------------------------------------------
Generally. This Paragraph 8 shall govern the application of proceeds received by
---------
BNPLC or Extreme 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 8.(d), Extreme will promptly pay
over to BNPLC any condemnation or other proceeds covered by this Paragraph 8
which Extreme may receive from any condemning authority or other third party.
All proceeds covered by this Paragraph 8, including those received by
[Land]
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<PAGE>
BNPLC from Extreme or third parties, shall be applied as follows:
(i First, proceeds covered by this Paragraph 8 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 Extreme 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 8, BNPLC shall hold and maintain such Remaining
Proceeds as Escrowed Proceeds in an interest bearing account, and all
interest earned on such account shall be added to and made a part of such
Escrowed Proceeds.
(b Advances of Escrowed Proceeds to Extreme. Except as otherwise
----------------------------------------
provided below in this Paragraph 8, BNPLC shall advance all Remaining Proceeds
held by it as Escrowed Proceeds to reimburse Extreme for the actual out-of-
pocket cost to Extreme of repairing or restoring the Property in accordance with
the requirements of this Land Lease and the other Operative Documents as the
applicable repair or restoration progresses and upon compliance by Extreme with
such terms, conditions and requirements as may be reasonably imposed by BNPLC.
In no event, however, shall BNPLC be required to pay Escrowed Proceeds to
Extreme in excess of the actual out-of-pocket cost to Extreme 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 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 Extreme; however, if such a
notice from Extreme 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 the last day of a Base
Rent Period, 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 Extreme will reimburse BNPLC upon
request for any such Breakage Costs that BNPLC incurs but does not deduct.
(d Special Provisions Applicable After Completion by Extreme of the
----------------------------------------------------------------
Initial Renovations. If, after Extreme has completed any Initial Renovations
-------------------
which Extreme elects to undertake as provided in the Other Lease, 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 Extreme's request, instruct
the condemning authority or insurer, as applicable, to pay the Remaining
Proceeds resulting therefrom directly to Extreme. Extreme 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 an Event of Default.
-------------------------------------------------------
Notwithstanding the foregoing,
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<PAGE>
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 8 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 Extreme or BNPLC for the out-of-pocket cost of repairing or
restoring the Property, or (B) as Qualified Prepayments.
(f Extreme's Obligation to Restore. Regardless of the adequacy of
-------------------------------
any Remaining Proceeds available to Extreme 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,
Extreme must:
(i 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 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
(ii restore the Property or the remainder thereof to a reasonably
safe and sightly condition.
(g Takings of All or Substantially All of the Property. In the event
---------------------------------------------------
of any taking of all or substantially all of the Property, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such a condemnation, then BNPLC shall be
entitled to recover the excess from Extreme 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 (ii) of the preceding subparagraph shall be considered a taking of
substantially all the Property for purposes of this Paragraph 8.
9. Additional Representations, Warranties and Covenants of Extreme
Concerning the Property. Extreme 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 Extreme obtains
available permits as the tenant under this Land Lease, in all material respects
with all Applicable Laws. Extreme 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, Extreme 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 Extreme does not promptly correct any
failure of the Property to comply with Applicable Laws that is the subject of a
written notice given to Extreme or BNPLC by any governmental authority, then for
purposes of the preceding sentence, Extreme 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, Extreme 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,
materially and adversely affect the value of the Property or the use of the
Property for purposes permitted by this Lease, Extreme 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
[Land]
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<PAGE>
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 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 (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 Extreme shall upon demand
pay BNPLC an amount equal to such reduction (as determined by BNPLC in good
faith) for application as a Qualified Prepayment. Extreme shall not permit any
drilling or exploration for, or extraction, removal or production of, minerals
from the surface or subsurface of the Property, and Extreme shall not do
anything that could reasonably be expected to significantly reduce the market
value of the Property. If Extreme 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, Extreme shall promptly
furnish a copy of such notice or claim to BNPLC.
Notwithstanding the foregoing, Extreme 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 Extreme shall not be deemed in
default hereunder because of the violation of such Applicable Law, if Extreme
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if Extreme 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 Extreme and any claims asserted against
BNPLC or the Property because of such violation must be paid by Extreme, 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, Extreme or an Affiliate of Extreme or any
Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a price to BNPLC (when taken together
with any additional payments made by Extreme pursuant to Paragraph 1(A)(2) of
-----------------
the Purchase Agreement, in the case of a purchase by an Applicable Purchaser)
equal to the Break Even Price.
(c Debts for Construction, Maintenance, Operation or Development.
-------------------------------------------------------------
Extreme 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 Extreme to remove Liens Removable
by BNPLC.
Notwithstanding the foregoing, Extreme 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 Extreme 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, Extreme 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) Extreme diligently prosecutes such contest to completion in a
manner reasonably satisfactory to BNPLC, and (3) Extreme 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 Extreme 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
[Land]
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<PAGE>
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, Extreme or an Affiliate of Extreme or any
Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a price to BNPLC (when taken together
with any additional payments made by Extreme pursuant to Paragraph 1(A)(2) of
-----------------
the Purchase Agreement, in the case of a purchase by an Applicable Purchaser)
equal to the Break Even Price.
(d Repair, Maintenance, Alterations and Additions. Extreme shall
----------------------------------------------
keep the Property in good order, operating condition and appearance and shall
cause all necessary repairs, renewals and replacements to be promptly made.
Extreme will not allow any of the Property to be materially misused, abused or
wasted.
(e Permitted Encumbrances and Development Documents. Extreme 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 (including the Premises Leases) or the
Development Documents. Without limiting the foregoing, Extreme 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, Extreme 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 Extreme 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. Extreme shall keep
-----------------------------------------
books and records that are accurate and complete in all material respects for
the Property and, subject to Paragraph 13.(c), will permit all such books and
records to be inspected and copied by BNPLC. This subparagraph shall not be
construed as requiring Extreme to regularly maintain separate books and records
relating exclusively to the Property; provided, however, that upon request,
Extreme shall construct or abstract from its regularly maintained books and
records information required by this subparagraph relating to the Property.
10. Financial Covenants, Reporting Covenants and Other Covenants
Incorporated by Reference to Schedule 1. Throughout the Term of this Land
----------
Lease, Extreme shall comply with the requirements of Schedule 1 attached hereto.
----------
11. Assignment and Subletting by Extreme.
(a BNPLC's Consent Required. Without the prior consent of BNPLC,
------------------------
Extreme shall not assign, transfer, mortgage, pledge or hypothecate this Land
Lease or any interest of Extreme hereunder and shall not sublet all or any part
of the Property, by operation of law or otherwise; provided, that this provision
shall not be construed to prohibit any sublease of space within Improvements
expressly permitted by the Other lease Agreement.
(b Standard for BNPLC's Consent to Assignments and Certain Other
-------------------------------------------------------------
Matters. Consents and approvals of BNPLC which are required by this Paragraph 11
-------
will not be unreasonably withheld or delayed, but Extreme 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 Extreme's compliance with the requirements of this
Land Lease.
[Land]
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<PAGE>
(c Consent Not a Waiver. No consent by BNPLC to a sale, assignment,
--------------------
transfer, mortgage, pledge or hypothecation of this Land Lease or Extreme'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 Extreme from liability hereunder; and any such consent shall apply
only to the specific transaction thereby authorized and shall not relieve
Extreme 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 Extreme hereunder.
12. 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 Operative Documents or any interest of BNPLC in and to the
Property during the Term without the prior consent of Extreme, which consent
Extreme 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, Extreme 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.
(b Effect of Permitted Transfer or other Assignment by BNPLC. If,
---------------------------------------------------------
without breaching subparagraph 12.(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, and Extreme 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 Operative Documents as defined in
the Common Definitions and Provisions Agreement (Land), but also the Operative
Documents as defined in the Other Common Definitions and Provisions Agreement.)
13. BNPLC'S Right Of Access.
(a During the Term, BNPLC and BNPLC's representatives may (subject
to subparagraphs 13.(c) and 13.(d)) enter the Property at any reasonable time
after five Business Days advance written notice to Extreme 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 Extreme has complied
with the requirements of this Land Lease or the other Operative Documents.
(b If Extreme 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 Extreme 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 Extreme to BNPLC. Further, BNPLC, upon making such payment,
shall be subrogated to all
[Land]
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<PAGE>
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 Extreme may be required to perform,
and the performance thereof by BNPLC shall not constitute a waiver of Extreme'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
Extreme or the subtenants or invitees of Extreme 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 Extreme under this Land Lease shall not
thereby be excused in any manner.
(c Extreme shall have no obligation to provide proprietary
information (as defined in the next sentence) to BNPLC, except and to the extent
that (1) BNPLC reasonably determines that BNPLC cannot accomplish the purposes
of BNPLC's inspection of the Property or exercise of other rights granted
pursuant to the various express provisions of this Land Lease and the other
Operative Documents without evaluating such information. For purposes of this
Land Lease "proprietary information" includes Extreme's intellectual property,
trade secrets and other confidential information of value to Extreme about,
among other things, Extreme's manufacturing processes, products, marketing and
corporate strategies, but in no event will "proprietary information" include any
disclosure of substances and materials (and their chemical composition) which
are or previously have been present in, on or under the Property at the time of
any inspections by BNPLC, nor will "proprietary information" include any
additional disclosures reasonably required to permit BNPLC to determine whether
the presence of such substances and materials has constituted a violation of
Environmental Laws. In addition, under no circumstances shall Extreme have any
obligation to disclose to BNPLC or any other party any proprietary information
of Extreme (including, without limitation, any pending applications for patents
or trademarks, any research and design and any trade secrets) except if and to
the limited extent reasonably necessary to comply with the express provisions of
this Land Lease or the other Operative Documents.
(d So long as Extreme 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 Extreme to maintain Extreme's security: (i) sign in at Extreme's security or
information desk if Extreme has such a desk on the premises, (ii) wear a
visitor's badge or other reasonable identification, (iii) permit an employee of
Extreme to observe such inspection or work, and (iv) comply with other similar
reasonable nondiscriminatory security requirements of Extreme that do not,
individually or in the aggregate, significantly interfere with inspections or
work of BNPLC authorized by this Land Lease.
14. Events of Default. Each of the following events shall be an "Event of
Default" by Extreme under this Land Lease:
(a Extreme shall fail to pay when due any installment of Rent due
hereunder and such failure shall continue for three (3) Business Days after
Extreme is notified in writing thereof.
(b Extreme shall fail to cause any representation or warranty of Extreme
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 14), or Extreme 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 14),
and in either case shall not cure such failure prior to the earlier of (A)
thirty days
[Land]
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<PAGE>
after written notice thereof is sent to Extreme 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 Extreme 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) Extreme 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 Extreme shall abandon the Property.
(d Extreme or any Subsidiary shall fail to make any payment or payments
of principal, premium or interest, of Debt of Extreme described in the next
sentence when due (taking into consideration the time Extreme 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 Common
Definitions and Provisions Agreement (Land)) of Extreme 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.
(e Extreme: (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 Extreme
and such judgments, decrees or orders shall continue unsatisfied and in effect
for a period of thirty consecutive days without Extreme'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 Extreme concerning the satisfaction or other
discharge of the same. (For purposes of this provision, no judgment, decree or
order will be considered "final" until Extreme's right to appeal, if any, shall
have expired or been exhausted.)
(g Extreme shall breach the requirements of Paragraph 10, 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 Extreme contained in subparagraphs 2(A) - (K)
of the Closing Certificate shall be false or misleading in any material respect.
(i Extreme shall fail to pay the full amount of any Supplemental
Payment required by the Purchase
[Land]
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<PAGE>
Agreement on the Designated Sale Date.
(j Extreme shall fail to comply with any term, provision or condition
of the Pledge Agreement after the expiration of any applicable notice and cure
period set forth in the Pledge Agreement.
15. Remedies.
(a Basic Remedies. At any time after an Event of Default and after
--------------
BNPLC has given any notice required by subparagraph 15.(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 15.(a)), to exercise any one
or more of the following remedies:
(i By notice to Extreme, BNPLC may terminate Extreme'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 Extreme's right to possession if Extreme fails to cure the
default within the time specified in the notice.
(ii Upon termination of Extreme's right to possession and
without further demand or notice, BNPLC may re-enter the Property in any
manner not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land may be
removed and stored in a warehouse or elsewhere at the expense and risk of
and for the account of Extreme.
(iii Upon termination of Extreme's right to possession, this Land
Lease shall terminate and BNPLC may recover from Extreme:
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 Extreme
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 Extreme proves
could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by Extreme's failure to perform
Extreme'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 Extreme's failure to perform
Extreme's obligations under the other Operative Documents.
The "worth at the time of award" of the amounts referred to in
subparagraph 15.(a)(iii)a) and subparagraph 15.(a)(iii)b) shall be
computed by allowing interest at the Default Rate. The "worth
[Land]
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<PAGE>
at the time of award" of the amount referred to in subparagraph
15.(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 Extreme has breached this Land Lease and abandoned the
Property, this Land Lease shall continue in effect for so long as BNPLC
does not terminate Extreme'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. Extreme's
right to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 15.(a)(i) hereof. The following shall not
constitute a termination of Extreme's right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Property;
b) The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Land Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or assignment by Extreme.
(b Notice Required So Long As the Purchase Option and Extreme's
------------------------------------------------------------
Initial Remarketing Rights and Obligations Continue Under the Purchase
----------------------------------------------------------------------
Agreement. So long as Extreme remains in possession of the Property and there
---------
has been no termination of the Purchase Option and Extreme's Initial Remarketing
Rights and Obligations as provided Paragraph 4 of the Purchase Agreement,
-----------
BNPLC's right to exercise remedies provided in subparagraph 15.(a) will be
subject to the condition precedent that BNPLC shall have notified Extreme, at a
time when an Event of Default shall have occurred and be continuing, of BNPLC's
intent to exercise remedies provided in subparagraph 15.(a) at least sixty days
prior to exercising the remedies. The condition precedent is intended to provide
Extreme with an opportunity to exercise the Purchase Option or Extreme's Initial
Remarketing Rights and Obligations before losing possession of the Property
pursuant to subparagraph 15.(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 15.(a) at any time after the earlier of (i) sixty days after BNPLC
has given such a notice to Extreme, (ii) any date upon which Extreme
relinquishes possession of the Property, or (iii) any termination of the
Purchase Option and Extreme's Initial Remarketing Rights and Obligations.
(c Enforceability. This Paragraph 15 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,
[Land]
-24-
<PAGE>
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
Extreme, 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 Extreme 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 Purchase Documents, and BNPLC shall not be required to give the
sixty day notice described in subparagraph 15.(b) as a condition precedent to
any acceleration of the Designated Sale Date or to taking any action to enforce
the Purchase Documents.
16. 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 Extreme specifying such default and specifying what
action Extreme believes is necessary to cure the default. If Extreme prevails in
any litigation brought against BNPLC because of BNPLC's failure to cure a
default within the time required by the preceding sentence, then Extreme shall
be entitled to an award against BNPLC for the monetary damages proximately
caused to Extreme by such default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 16 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 17 beyond the
Designated Sale Date.
17. Quiet Enjoyment. Provided Extreme 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 Extreme hereunder, BNPLC shall not during the Term disturb Extreme'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
Extreme for any monetary damages proximately caused thereby, but as more
specifically provided in subparagraph 4.(b) above, no such breach shall entitle
Extreme to terminate this Land Lease or excuse Extreme from its obligation to
pay Rent.
18. Surrender Upon Termination. Unless Extreme or an Applicable Purchaser
purchases or has purchased BNPLC's entire interest in the Property pursuant to
the terms of the Purchase Agreement and BNPLC's entire interest in the
Improvements and other "Property" under (and as defined in) the Other Purchase
Agreement, Extreme shall, upon the termination of Extreme's right to occupancy,
surrender to BNPLC the Property, including Improvements constructed by Extreme
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 Agreement, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this
Land Lease or the Other Lease Agreement and which have been completed by Extreme
in a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to Extreme or any party
claiming under Extreme, if not removed at the time of such termination and if
[Land]
-25-
<PAGE>
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 Extreme's risk and
expense.
Nothing in this Paragraph 18 will be construed to require Extreme to
surrender the Property to BNPLC during the continuation of any breach by BNPLC
of any obligation it has under the Purchase Agreement to convey the Property to
Extreme or an Applicable Purchaser.
19. Holding Over by Extreme. Should Extreme not purchase BNPLC's right,
title and interest in the Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Property after the termination of this 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 Extreme hereunder. No
payments of money by Extreme 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 Extreme.
20. Independent Obligations Evidenced by the Other Operative Documents.
Extreme acknowledges and agrees that nothing contained in this Land Lease shall
limit, modify or otherwise affect any of Extreme's obligations under the other
Operative Documents, which obligations are intended to be separate, independent
and in addition to, and not in lieu of, the obligations set forth herein. In the
event of any inconsistency between the express terms and provisions of the
Purchase Documents and the express terms and provisions of this Land Lease, the
express terms and provisions of the 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 Extreme's obligations under the Closing Certificate
following any expiration of termination of this Land Lease.
[The signature pages follow.]
[Land]
-26-
<PAGE>
IN WITNESS WHEREOF, Extreme and BNPLC have caused this Lease Agreement
(Land) to be executed as of June 1, 2000.
"Extreme"
EXTREME NETWORKS, INC.
By:___________________________
Name:______________________
Title:_____________________
<PAGE>
[Continuation of signature pages to Lease Agreement (Land) dated to be effective
June 1, 2000]
"BNPLC"
BNP LEASING CORPORATION
By: _______________________________
Lloyd G. Cox, Vice President
<PAGE>
Exhibit A
---------
Legal Description
All that certain real property situated in the City of Santa Clara, County of
Santa Clara, State of California, described as follows:
Being a portion of that certain 24.740 acre parcel as shown on that certain
Record of Survey filed in Book 447 of Maps, at Page 33, Santa Clara County
Records, described as follows:
Beginning at the Northwest corner of said 24.740 acre parcel; thence from said
point of beginning along the Northerly line of said 24.470 acre parcel N. 89
degrees 25 minutes 00 seconds E. 995.17 feet; thence leaving said Northerly
lines S. 0 degrees 10 minutes 00 seconds W. 705.02 feet to a point in the
Southerly line of said 24.740 acre parcel; thence along said Southerly line the
following courses: S. 89 degrees 25 minutes 00 seconds W. 181.82 feet; S. 2.00
feet and S. 89 degrees 25 minutes 00 seconds W. 760.70 feet; thence leaving said
Southerly line along a tangent curve to the right, with a radius of 50.00 feet,
through a central angle of 90 degrees 34 minutes 33 seconds for an arc length of
79.4 feet to a point in the Westerly line of said 24.470 acre parcel; thence
along said Westerly line N. 0 degrees 00 minutes 27 seconds W. 656.49 feet to
the point of beginning.
[Land]
<PAGE>
Exhibit B
---------
Insurance Requirements
I. LIABILITY INSURANCE:
A. Extreme 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 $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 Extreme 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) 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 Extreme Networks, Inc.
and BNP Leasing Corporation dated June 1, 2000)"; and
(b) provisions entitling BNPLC to 30 days' notice from the
insurer prior to any cancellation of 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.
[Land]
<PAGE>
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by Extreme of claims
against Extreme that might cause a reduction below seventy-five percent (75%) of
any aggregate limit of any policy.
B. Extreme's CGL insurance must be evidenced by ACORD 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.
C. 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.
D. Extreme 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 (ACORD
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 Extreme Networks, Inc. for whom this certificate
is executed and are in force at this time. In the event of cancellation of
coverage affecting the certificate holder, at least thirty days prior
notice shall be given to the certificate holder."
E. 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.
F. Extreme 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.
Exhibit B - Page 2
[Land]
<PAGE>
Exhibit C
---------
Notice of LIBOR Period Election
BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Re: Lease Agreement (Improvements) and Lease Agreement (Land), both dated
as of June 1, 2000, and both between Extreme Networks, 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__.
Extreme Networks, Inc.
Name:________________________
Title:_______________________
[cc all Participants]
[Land]
<PAGE>
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]
