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EXHIBIT 10.1
EXECUTION COPY
MASTER LEASE
THIS DOCUMENT SECURES FUTURE ADVANCES
Dated as of November 16 , 2000
between
PALM, INC.,
as the Lessee,
and
SOCIETE GENERALE FINANCIAL CORPORATION,
as the Lessor.
This Master Lease is subject to a lien in favor of the Administrative
Agent under the Loan Agreements. This Master Lease has been executed in several
counterparts. To the extent, if any, that this Master Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction), no lien on this Master Lease may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefor executed by Societe Generale, New
York Branch as Administrative Agent for the benefit of the Lenders, on or
following the signature page hereof.
This counterpart is not the original counterpart.
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TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS; INTERPRETATION............................................................ 1
1.1 Definitions; Interpretation..................................................... 1
ARTICLE II
MASTER LEASE........................................................................... 2
2.1 Acceptance and Lease of Property................................................ 2
2.2 Acceptance Procedure............................................................ 2
2.3 Lease Term ..................................................................... 2
2.4 Title........................................................................... 2
ARTICLE III
PAYMENT OF RENT........................................................................ 3
3.1 Rent............................................................................ 3
3.2 Payment of Rent................................................................. 3
3.3 Supplemental Rent............................................................... 3
3.4 Method of Payment............................................................... 4
3.5 Certain Payments................................................................ 4
ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT...................................................... 4
4.1 Quiet Enjoyment................................................................. 4
4.2 Right to Inspect................................................................ 4
ARTICLE V
NET LEASE, ETC......................................................................... 5
5.1 Net Lease....................................................................... 5
5.2 No Termination or Abatement..................................................... 6
ARTICLE VI
SUBLEASES AND ASSIGNMENTS.............................................................. 6
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6.1 Subletting...................................................................... 6
6.2 Assignment...................................................................... 6
ARTICLE VII
LESSEE ACKNOWLEDGMENTS................................................................. 7
7.1 Condition of the Property....................................................... 7
7.2 Risk of Loss.................................................................... 7
ARTICLE VIII
POSSESSION AND USE OF THE PROPERTY, ETC................................................ 8
8.1 Utility Charges................................................................. 8
8.2 Possession and Use of the Property.............................................. 8
8.3 Compliance with Requirements of Laws and Insurance
Requirements.................................................................... 8
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN......................................................... 9
9.1 Maintenance and Repair; Return.................................................. 9
ARTICLE X
MODIFICATIONS, ETC..................................................................... 10
10.1 Modifications, Substitutions and Replacements.................................. 10
ARTICLE XI
WARRANT OF TITLE; EASEMENTS............................................................ 11
11.1 Warrant of Title................................................................ 11
11.2 Grants and Releases of Easements; Lessor's Waivers.............................. 11
ARTICLE XII
PERMITTED CONTESTS..................................................................... 12
12.1 Permitted Contests in Respect of Applicable Law Other Than
Impositions................................................................... 12
ARTICLE XIII
INSURANCE.............................................................................. 13
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13.1 Insurance by the Lessee During the Interim Lease Term.......................... 13
13.2 Insurance by the Lessee During the Basic Lease Term............................ 13
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS....................................... 18
14.1 Casualty and Condemnation...................................................... 18
14.2 Environmental Matters.......................................................... 20
14.3 Notice of Environmental Matters................................................ 21
ARTICLE XV
TERMINATION OF LEASE................................................................... 21
15.1 Termination upon Certain Events................................................. 21
15.2 Termination Procedures.......................................................... 21
ARTICLE XVI
EVENTS OF DEFAULT ..................................................................... 22
16.1 Lease Events of Default......................................................... 22
16.2 Remedies........................................................................ 25
16.3 Waiver of Certain Rights........................................................ 30
ARTICLE XVII
LESSOR'S RIGHT TO CURE................................................................. 31
17.1 The Lessor's Right to Cure the Lessee's Lease Defaults.......................... 31
ARTICLE XVIII
PURCHASE PROVISIONS.................................................................... 31
18.1 Purchase of the Property........................................................ 31
18.2 Undeveloped Land Purchase Option................................................ 32
ARTICLE XIX
EXTENSION OF EXPIRATION DATE........................................................... 33
19.1 Extension of Expiration Date.................................................... 33
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ARTICLE XX
REMARKETING OPTION..................................................................... 33
20.1 Option to Remarket.............................................................. 33
20.2 No Duty to Solicit.............................................................. 37
ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR REMARKETING......................................... 37
21.1 Provisions Relating to the Exercise of the Purchase Option or Obligation
and Conveyance Upon Remarketing and Conveyance Upon Certain Other Events...... 37
ARTICLE XXII
ESTOPPEL CERTIFICATES.................................................................. 38
22.1 Estoppel Certificates........................................................... 38
ARTICLE XXIII
ACCEPTANCE OF SURRENDER................................................................ 38
23.1 Acceptance of Surrender......................................................... 38
ARTICLE XXIV
NO MERGER OF TITLE..................................................................... 39
24.1 No Merger of Title.............................................................. 39
ARTICLE XXV
INTENT OF THE PARTIES.................................................................. 39
25.1 Nature of Transaction........................................................... 39
ARTICLE XXVI
MISCELLANEOUS.......................................................................... 40
26.1 Survival; Severability; Etc..................................................... 40
26.2 Amendments and Modifications.................................................... 40
26.3 No Waiver....................................................................... 41
26.4 Notices ........................................................................ 41
26.5 Successors and Assigns.......................................................... 41
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26.6 Headings and Table of Contents.................................................. 41
26.7 Counterparts ................................................................... 41
26.8 GOVERNING LAW................................................................... 41
26.9 Liability Limited............................................................... 41
26.10 Priority........................................................................ 42
26.11 Original Master Lease........................................................... 42
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SCHEDULE
I Release Parcel Area Description
vi
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MASTER LEASE
THIS DOCUMENT SECURES FUTURE ADVANCES
THIS MASTER LEASE (this "Master Lease"), dated as of November 16,
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2000, between SOCIETE GENERALE FINANCIAL CORPORATION, a Delaware corporation, as
Lessor (in such capacity, the "Lessor") and PALM, INC., a Delaware corporation,
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as Lessee (in such capacity, the "Lessee").
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W I T N E S S E T H:
WHEREAS, pursuant to the Land Lease, dated as of September 5, 2000,
between the Lessor and the Lessee, the Lessor leased the Land to the Lessee;
WHEREAS, pursuant to the Participation Agreement, dated as of the date
hereof, among the Lessee, the Lessor and Societe Generale, New York Branch as
Administrative Agent and the Lenders party thereto (the "Lenders") under the
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Loan Agreements, the Lenders and the Lessor have agreed to finance the
Construction of Improvements on the Land;
WHEREAS, the Lessor, on each Funding Date, will finance the
Construction of Improvements on the Land and on the Initial Funding Date, will
finance certain Land Costs;
WHEREAS, the Lessee, as Construction Agent for the Lessor, will cause
the Construction of the Improvements to be effected pursuant to the Construction
Agency Agreement; and
WHEREAS, the Lessor and the Lessee desire to amend and restate the
Land Lease in its entirety so that the Lessor pursuant to this Master Lease will
lease to the Lessee the Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto restate the Land Lease and agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions; Interpretation. Capitalized terms used but not
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otherwise defined in this Master Lease have the respective meanings specified in
Appendix A to this Master Lease (as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time, "Appendix A"); and
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the rules of interpretation set forth in Appendix A shall apply to this Master
Lease.
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2
ARTICLE II
MASTER LEASE
2.1 Acceptance and Lease of Property. The Lessor hereby leases to the
--------------------------------
Lessee hereunder for the Lease Term, the Lessor's interest in the Land together
with any Improvements which may be constructed hereafter on the Land pursuant to
the Construction Agency Agreement and this Master Lease, and the Lessee hereby
leases from the Lessor for the Lease Term, the Lessor's interest in the Land,
together with any Improvements which hereafter may be constructed on the Land
pursuant to the Construction Agency Agreement and this Master Lease.
2.2 Acceptance Procedure. The Lessee hereby agrees that it accepts
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the Property and upon acceptance shall execute the Lease Supplement
(Improvements) with respect to the Improvements and the Lease Supplement (Land)
with respect to the Land.
2.3 Lease Term. The Interim Lease Term of this Master Lease shall
----------
commence on the Documentation Date and expire on the Completion Date, provided,
--------
however, if Construction does not commence within six (6) months of the
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Documentation Date, the Interim Lease Term shall expire on such date. The Basic
Lease Term (the "Basic Lease Term") of this Master Lease shall commence at the
----------------
end of the Interim Lease Term and shall end on the Expiration Date. In the event
that the Lessee does not notify the Lessor of its election of either the
Purchase Option or the Remarketing Option with respect to the Land then the
Lessee shall be deemed to have elected the Purchase Option pursuant to Section
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18.1. In the event the Basic Lease Term terminates on any day other than the day
----
following the last day of the then effective Interest Period, the Lessee shall
pay any Break Costs associated with the early termination of the Interest
Period.
2.4 Title. The Property is leased to the Lessee without any
-----
representation or warranty, express or implied, by the Lessor and subject to the
rights of parties in possession, the existing state of title (including, without
limitation, all Liens other than Lessor Liens) and all applicable Requirements
of Law. The Lessee shall in no event have any recourse against the Lessor for
any defect in or exception to title to the Property other than resulting from
Lessor Liens.
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3
ARTICLE III
PAYMENT OF RENT
3.1 Rent.
----
(a) During the Basic Lease Term for the Property, the Lessee shall
pay Basic Rent for the Property to the Lessor on each Basic Rent Payment Date,
on the date required under Section 20.1(g) hereof in connection with the
---------------
Lessee's exercise of the Remarketing Option and on any date on which this Master
Lease shall terminate with respect to the Property. The Land Portion of the
Basic Rent shall be paid as Rent for the Land and the Improvements Portion of
the Basic Rent shall be paid as Rent for the Improvements.
(b) The Lessee's inability or failure to take possession of all or
any portion of the Property upon Completion shall not delay or otherwise affect
the Lessee's obligation to pay Rent for the Property in accordance with the
terms of this Master Lease.
(c) Notwithstanding paragraph (a) of this Section 3.1, the Land
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Portion of the Basic Rent and the Improvement Portion of the Basic Rent will
accrue and be capitalized as provided in Section 3.7 of the Participation
-----------
Agreement, from the Documentation Date and ending on the Completion Date.
3.2 Payment of Rent. Rent shall be paid absolutely net to each Person
---------------
entitled thereto, so that this Master Lease shall yield to such Person the full
amount thereof, without setoff, deduction or reduction (except as permitted
under Section 3.5 hereof and Section 7.12 of the Participation Agreement and
----------- ------------
Section 21 of the Basic Term Pledge Agreement).
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3.3 Supplemental Rent. The Lessee shall pay to the Lessor or any
-----------------
other Person entitled thereto any and all Supplemental Rent promptly as the same
shall become due and payable, and if the Lessee fails to pay any Supplemental
Rent, the Lessor and such other Persons entitled to the receipt of such payment
shall have all rights, powers and remedies provided for herein or by law or
equity or otherwise. The Lessee shall pay to the Lessor, as Supplemental Rent,
among other things, on demand, to the extent permitted by applicable
Requirements of Law, interest at the applicable Overdue Rate on any installment
of Basic Rent not paid when due for the period for which the same shall be
overdue and on any payment of Supplemental Rent not paid when due or demanded by
the Lessor for the period from the due date or the date of any such demand, as
the case may be, until the same shall be paid. The expiration or other
termination of the Lessee's obligations to pay Basic Rent hereunder shall not
limit or modify the obligations of the Lessee with respect to Supplemental Rent.
Unless
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4
expressly provided otherwise in this Master Lease, in the event of any failure
on the part of the Lessee to pay and discharge any Supplemental Rent as and when
due, the Lessee shall also promptly pay and discharge any fine, penalty,
interest or cost which may be assessed or added under any agreement to which
Lessee is a party or which is authorized in writing by the Lessee with a third
party for nonpayment or late payment of such Supplemental Rent, all of which
shall also constitute Supplemental Rent.
3.4 Method of Payment. Each payment of Rent payable by the Lessee to
-----------------
the Lessor under this Master Lease or any other Operative Document shall be made
by the Lessee to the Lessor or any other person or persons entitled thereto
prior to 2:00 P.M., New York City time, to the Account in immediately available
funds consisting of Dollars on the date when such payment shall be due.
3.5 Certain Payments. Payments of Basic Rent, Supplemental Rent and
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other amounts payable hereunder in respect of amounts due to a Related Party
Lender are, as provided in Section 7.12 of the Participation Agreement and
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Section 2.9 of the Basic Term Loan Agreement, to be made net of amounts due to
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such Related Party Lender.
ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT
4.1 Quiet Enjoyment. Subject to Sections 2.4 and 4.2, and subject to
--------------- ------------ ---
the rights of the Lessor contained in Article XV and Article XVI and the other
---------- -----------
terms of the Operative Documents to which the Lessee is a party, the Lessee
shall peaceably and quietly have, hold and enjoy the Property for the Lease
Term, free of any claim or other action by the Lessor or anyone claiming by,
through or under the Lessor, other than any liens or matters arising or created
pursuant to the Operative Documents. Such right of quiet enjoyment is
independent of, and shall not affect the Lessor's rights otherwise to initiate
legal action to enforce the obligations of the Lessee under this Master Lease.
4.2 Right to Inspect. During the Lease Term, the Lessee shall upon
----------------
reasonable notice from the Lessor (except if there exists a Lease Default or an
emergency in which event notice will not be required), permit the Lessor, the
Administrative Agent, and their respective authorized representatives to have
access to and to inspect the Property.
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5
ARTICLE V
NET LEASE, ETC.
5.1 Net Lease. This Master Lease shall constitute a net lease. Any
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present or future law to the contrary notwithstanding, this Master Lease shall
not terminate, nor shall the Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the obligations of the Lessee hereunder be affected (except as
expressly herein permitted and by performance of the obligations in connection
therewith) by reason of: (i) any defect in the condition, merchantability,
design, construction, quality or fitness for use of the Property or any part
thereof, or the failure of the Property to comply with all Requirements of Law,
including any inability to occupy or use, as the case may be, the Property by
reason of such non-compliance; (ii) any damage to, removal, abandonment,
salvage, loss, contamination of or Release from, scrapping or destruction of or
any requisition or taking of the Property or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with the construction
on or any use of the Property or any part thereof including eviction; (iv) any
defect in title to or rights to the Property or any Lien on such title or rights
or on the Property (other than Lessor Liens); (v) any change, waiver, extension,
indulgence or other action or omission or breach in respect of any obligation or
liability of or by the Lessor, the Lenders or the Administrative Agent; (vi) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to the Lessee, the Lessor, the
Lenders, the Administrative Agent or any other Person, or any action taken with
respect to this Master Lease by any trustee or receiver of the Lessee, the
Lessor, the Lenders or the Administrative Agent or any other Person, or by any
court, in any such proceeding; (vii) any claim that the Lessee has or might have
against any Person, including without limitation the Lessor, the Lenders, the
Administrative Agent or any vendor, manufacturer, contractor of or for the
Property; (viii) any failure on the part of the Lessor to perform or comply with
any of the terms of this Master Lease, of any other Operative Document or of any
other agreement; (ix) any invalidity or unenforceability or illegality or
disaffirmance of this Master Lease against or by the Lessee or any provision
hereof or any of the other Operative Documents or any provision of any thereof;
(x) the impossibility or illegality of performance by the Lessee, the Lessor or
both; (xi) any action by any court, administrative agency or other Governmental
Authority; or (xii) any other cause or circumstances whether similar or
dissimilar to the foregoing and whether or not the Lessee shall have notice or
knowledge of any of the foregoing. The Lessee's agreement in the preceding
sentence shall not affect any claim, action or right the Lessee may have against
the Lessor or any other Person. The parties intend that the obligations of the
Lessee hereunder shall be covenants and agreements that are separate and
independent from any obligations of the Lessor hereunder or under any other
Operative Documents and the obligations of the Lessee shall continue unaffected
unless such obligations shall have been modified or terminated in accordance
with an express provision of this Master Lease.
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6
5.2 No Termination or Abatement. The Lessee shall remain obligated
---------------------------
under this Master Lease in accordance with its terms and shall not take any
action to terminate, rescind or avoid this Master Lease (except as provided
herein, including among such exceptions the right to exercise purchase options
hereunder), notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution, or other proceeding affecting the
Lessor or any Participant, or any action with respect to this Master Lease which
may be taken by any trustee, receiver or liquidator of the Lessor or any
Participant or by any court with respect to the Lessor or any Participant. The
Lessee hereby waives all right to terminate or surrender this Master Lease
(except as provided herein) or, except as a consequence of the payment of the
Lease Balance as a result of the payment of Casualty or Condemnation proceeds
pursuant to the terms of Section 14.1 of this Master Lease, or as a result of a
------------
purchase of the Property pursuant to Section 18.1, to avail itself of any
------------
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
with respect to the Lease Balance. The Lessee shall remain obligated under this
Master Lease in accordance with its terms and the Lessee hereby waives any and
all rights now or hereafter conferred by statute or otherwise to modify or to
avoid strict compliance with its obligations under this Master Lease and the
Operative Documents.
Notwithstanding any such statute or otherwise, the Lessee shall be bound by all
of the terms and conditions contained in this Master Lease.
ARTICLE VI
SUBLEASES AND ASSIGNMENTS
6.1 Subletting. The Lessee may from time to time, sublease the
----------
Property or any portion thereof to any Person and extend, modify or renew any
sublease without the approval of Lessor or Administrative Agent; provided,
--------
however, that: (i) no sublease or other relinquishment of possession of the
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Property shall in any way discharge or diminish any of the Lessee's obligations
to the Lessor hereunder, and the Lessee shall remain directly and primarily
liable under this Master Lease as to the Property, or portion thereof, so sublet
and (ii) each sublease shall be made subject and subordinate to this Master
Lease and to the rights of the Lessor hereunder and shall be set to terminate on
or prior to the Expiration Date.
6.2 Assignment. The Lessee may not assign this Master Lease or any of
----------
its rights or obligations hereunder in whole or in part to any Person except to
a Person that the Lessee merges or consolidates into pursuant to Section 10.2 of
------------
the Participation Agreement.
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7
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
7.1 Condition of the Property. THE LESSEE ACKNOWLEDGES AND AGREES
-------------------------
THAT IT IS LEASING THE LAND AND THE IMPROVEMENTS CONSTRUCTED THEREON "AS IS"
WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR,
THE LENDERS OR THE ADMINISTRATIVE AGENT AND IN EACH CASE SUBJECT TO (A) THE
EXISTING STATE OF TITLE (EXCLUDING LESSOR LIENS), (B) THE RIGHTS OF ANY PARTIES
IN POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR
PHYSICAL INSPECTION MIGHT SHOW, AND (D) VIOLATIONS OF REQUIREMENTS OF LAW WHICH
MAY EXIST ON THE DATE HEREOF. NEITHER THE LESSOR, THE LENDERS NOR THE
ADMINISTRATIVE AGENT HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN FOR LESSOR LIENS),
VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF
THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR
COVENANT (EXCEPT SECTION 4.1 HEREOF) WHATSOEVER, EXPRESS OR IMPLIED, WITH
-----------
RESPECT TO THE PROPERTY (OR ANY PART THEREOF) AND NEITHER THE LESSOR, THE
LENDERS NOR THE ADMINISTRATIVE AGENT SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF LAW.
7.2 Risk of Loss. Subject to the terms of Section 14.1, during the
------------ ------------
Lease Term the risk of loss of or decrease in the enjoyment and beneficial use
of the Property as a result of the damage or destruction thereof by fire,
earthquake, the elements, flood, gas explosion, sabotage, casualties, thefts,
riots, wars or otherwise is assumed by the Lessee, and except for loss or
damages arising from the gross negligence or willful misconduct of Lessor,
Lenders, the Administrative Agent or their respective agents, employees or
contractors, neither the Lessor, the Lenders nor the Administrative Agent shall
in any event be answerable or accountable to Lessee therefor.
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8
ARTICLE VIII
POSSESSION AND USE OF THE PROPERTY, ETC.
8.1 Utility Charges. The Lessee shall pay or cause to be paid all
---------------
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Property during the
Lease Term. The Lessee shall be entitled to receive any credit or refund with
respect to any utility charge paid by the Lessee and the amount of any credit or
refund received by the Lessor on account of any utility charges paid by the
Lessee, net of the costs and expenses reasonably incurred by the Lessor in
obtaining such credit or refund, shall be promptly paid over to the Lessee.
8.2 Possession and Use of the Property. The Property shall be used in
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a manner consistent with this Master Lease for any lawful purpose in accordance
with Applicable Law now or hereafter in effect; provided, that such use does not
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(i) result in a diminution in the value of the Property from that projected in
the Appraisal delivered on the Documentation Date with respect to the Property
or (ii) violate any restriction with respect to Hazardous Materials as they
relate to the Property pursuant to the Operative Documents. The Lessee shall
pay, or cause to be paid, all charges and costs required in connection with the
use of the Property as contemplated by this Master Lease. The Lessee shall not
commit or permit any waste of the Property or any part thereof.
8.3 Compliance with Requirements of Laws and Insurance Requirements.
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Subject to the terms of Article XII relating to permitted contests, the Lessee,
-----------
at its sole cost and expense, shall (a) comply in all material respects with all
Requirements of Law (including all Hazardous Materials Laws) and Insurance
Requirements relating to the Property, including the use, construction,
operation, maintenance, repair and restoration thereof and the remarketing
thereof pursuant to Article XX, whether or not compliance therewith shall
----------
require structural or extraordinary changes in the Improvements or interfere
with the use and enjoyment of the Property, and (b) procure, maintain and comply
with all licenses, permits, orders, approvals, consents and other authorizations
required for the construction, use, maintenance and operation of the Property
and for the use, operation, maintenance, repair and restoration of the
Improvements.
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9
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN
9.1 Maintenance and Repair; Return.
------------------------------
(a) From and after the Completion Date, the Lessee, at its sole cost
and expense, shall maintain the Property in good condition (ordinary wear and
tear excepted) and make all necessary repairs thereto, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary, structural
or nonstructural or foreseen or unforeseen, in each case as required by all
Requirements of Law and Insurance Requirements and in no event less than the
standards applied by the Lessee in the operation and maintenance of other
comparable properties owned or leased by the Lessee or its Affiliates.
(b) The Lessor shall under no circumstances be required to build any
improvements on the Property, make any repairs, replacements, alterations or
renewals of any nature or description to the Property, make any expenditure
whatsoever in connection with this Master Lease (other than for Advances made in
accordance with and pursuant to the terms of the Participation Agreement and the
Construction Agency Agreement) or maintain the Property in any way. The Lessee
waives any right to (i) require the Lessor to maintain, repair, or rebuild all
or any part of the Property or (ii) make repairs at the expense of the Lessor
pursuant to any Requirement of Law, Insurance Requirement, contract, agreement,
or covenant, condition or restriction in effect at any time during the Lease
Term.
(c) The Lessee shall, upon the Expiration Date (other than as a
result of the Lessee's purchase of the Property from the Lessor as provided
herein), vacate and surrender the Property to the Lessor subject to the Lessee's
obligations under Sections 8.3, 9.1(a), 10.1, 11.1, 14.1, 14.2 and 20.1. Title
------------ ------ ---- ---- ---- ---- ----
to all improvements, furnishings, furniture, fixtures and any personal property
of the Lessee which were not funded by the Lessor and the Lenders pursuant to
the Participation Agreement, located on or about the Property whether or not
affixed to the realty, shall, subject to the following sentence, be and remain
the property of the Lessee throughout the Lease Term, and at any time during the
Lease Term, and within thirty (30) days following the Expiration Date, the
Lessor may require that such improvements, furnishings, fixtures and personal
property be removed from the Property by the Lessee with any damages resulting
from such removal and the cost of removal being borne by the Lessee.
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10
ARTICLE X
MODIFICATIONS, ETC.
10.1 Modifications, Substitutions and Replacements. During the Lease
---------------------------------------------
Term, the Lessee, at its sole cost and expense, may at any time and from time to
time make alterations, renovations, improvements and additions to the Property
or any part thereof and substitutions and replacements therefor (collectively,
"Modifications"); provided, however, that:
------------- -------- -------
(i) except for any Modification required to be made pursuant to
a Requirement of Law (a "Required Modification"), no Modification
---------------------
shall reduce the Fair Market Sales Value of the Property by more than
$100,000 or diminish the capacity, efficiency, utility or remaining
useful life of the Property following the completion of such
Modification;
(ii) such Modifications shall be (and shall be done in a manner)
consistent with the Plans and Specifications for the Property;
(iii) such Modifications shall comply with Sections 8.3 and
------------
9.1(a); and
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(iv) the Lessee shall have provided notice to the Lessor of any
Modification the cost of which, individually or in the aggregate,
would exceed 10% of the Improvements Budget for the Property.
All Modifications shall remain part of the realty and shall be subject
to this Master Lease; provided, however, that Modifications that (x) are not
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Required Modifications, (y) were not financed by the Participants and (z) can be
removed without causing material damage to or diminution in the Fair Market
Sales Value of the Property or diminish the capacity, efficiency, utility or
remaining useful life of the Property shall be the property of the Lessee or
other third party and may be removed by Lessee during the Lease Term and up to
the Expiration Date and shall not be subject to this Master Lease. The Lessee
may place upon the Property any trade fixtures, machinery, equipment, inventory
or other property belonging to the Lessee or third parties, subject, however, to
the terms of Section 9.1; provided, however, that such trade fixtures,
----------- -------- -------
machinery, equipment, inventory or other property can be removed without causing
material damage to or diminution in the Fair Market Sales Value of the Property
below the Lease Balance; provided, further, however, that the Lessee shall keep
and maintain at the Property and shall not remove from the Property any Facility
Equipment financed or otherwise paid for by the Participants pursuant to the
Participation Agreement.
<PAGE>
11
ARTICLE XI
WARRANT OF TITLE; EASEMENTS
11.1 Warrant of Title.
----------------
(a) The Lessee agrees that except as otherwise provided herein
and subject to the terms of Article XII relating to permitted contests, the
-----------
Lessee shall not directly or indirectly create or allow to remain, and shall
promptly discharge at its sole cost and expense, any Lien (other than any Lessor
Lien or any Permitted Property Lien), defect, attachment, levy, title retention
agreement or claim upon the Property or any Lien, attachment, levy or claim with
respect to the Rent or with respect to any amounts held by the Lessor, the
Administrative Agent or the Collateral Agent pursuant to the Loan Agreements or
the other Operative Documents, other than Permitted Property Liens.
(b) Nothing contained in this Master Lease shall be construed as
constituting the consent or request of the Lessor or any other Participant,
expressed or implied, to or for the performance by any contractor, mechanic,
laborer, materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Property or any part thereof. NOTICE IS HEREBY GIVEN
THAT NEITHER THE LESSOR, THE LENDERS NOR THE ADMINISTRATIVE AGENT IS OR SHALL BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE
LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
THE LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES
OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR, THE LENDERS
OR THE ADMINISTRATIVE AGENT IN AND TO THE PROPERTY.
11.2 Grants and Releases of Easements; Lessor's Waivers. Provided that
--------------------------------------------------
no Lease Default or Lease Event of Default shall have occurred and be
continuing, and subject to the provisions of Articles VII, IX and X and Section
------------ -- - -------
8.3, the Lessor hereby consents in each instance to the following actions by the
---
Lessee as the Lessor's agent, and the Lessor hereby appoints the Lessee the
Lessor's attorney-in-fact, with full authority in the place and stead of the
Lessor to take such action or actions from time to time during the Lease Term,
but at the Lessee's sole cost and expense: (i) the granting of easements,
licenses, rights-of-way and other rights and privileges in the nature of
easements reasonably necessary or desirable for the use, repair, or maintenance
of the Property as herein provided; (ii) the release of existing easements or
other rights in the nature of easements which are for the benefit of the
Property; (iii) if required by applicable Governmental Authority in connection
with the Construction, the dedication or transfer of unimproved portions of the
Property for road, highway or other public
<PAGE>
12
purposes; (iv) the imposition of and the execution of amendments to any
covenants and restrictions; (v) the filing and processing of site development
permit amendments, parcel maps, tentative maps, development agreements and any
and all other permit applications, authorizations, entitlement, agreements with
any governmental authority or regulatory agency or amendments thereof, or other
documents reasonably required or beneficial for construction or Modification of
the Improvements, or amendments to Permitted Property Liens or governmental
permits or approvals affecting the Property; and (vi) the execution and filing
of tract or parcel maps subdividing the Land into lots or parcels or
reconfiguring existing lots or parcels; provided, however, that in each case (A)
-------- -------
such grant, release, dedication, transfer, imposition or amendment does not
reduce the Fair Market Sales Value of the Property, (B) such grant, release,
dedication, transfer, imposition or amendment in the Lessee's judgment is
reasonably necessary or beneficial in connection with the use, maintenance,
alteration or improvement of the Property, (C) such grant, release, dedication,
transfer, imposition or amendment will not cause the Property or any portion
thereof to fail to comply with the provisions of this Master Lease or any other
Operative Documents and all Requirements of Law (including, without limitation,
all applicable zoning, planning, building and subdivision ordinances, all
applicable restrictive covenants and all applicable architectural approval
requirements); (D) any and all governmental consents or approvals required prior
to such grant, release, dedication, transfer, imposition, annexation or
amendment have been obtained, and any and all filings required prior to such
action have been made; (E) the Lessee shall remain obligated under this Master
Lease and under any instrument executed by the Lessee consenting to the
assignment of the Lessor's interests in this Master Lease as security for
indebtedness, in each such case in accordance with their terms, substantially as
though such grant, release, dedication, transfer, imposition or amendment had
not been effected and (F) the Lessee shall pay and perform any obligations of
the Lessor under such grant, release, dedication, transfer, imposition or
amendment. Without limiting the effectiveness of the foregoing, the Lessor
shall, upon the request of the Lessee, and at the Lessee's sole cost and
expense, execute and deliver any instruments necessary or appropriate to confirm
any such grant, release, dedication, transfer, imposition or amendment to any
Person permitted under this Section 11.2(a) including landlord waivers with
---------------
respect to any of the foregoing.
ARTICLE XII
PERMITTED CONTESTS
12.1 Permitted Contests in Respect of Applicable Law Other Than
----------------------------------------------------------
Impositions. Except to the extent otherwise provided in Section 13.5(b) of the
----------- ---------------
Participation Agreement regarding Taxes and other Impositions, if, to the extent
and for so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable Law relating to the Property shall be prosecuted diligently and in
good faith in appropriate proceedings by the Lessee or (b) compliance with such
Applicable Law
<PAGE>
13
shall have been excused or exempted by a valid nonconforming use, variance
permit, waiver, extension or forbearance, then, provided no Lease Default or
Lease Event of Default has occurred and is continuing, the Lessee shall not be
required to comply with such Applicable Law but only if and so long as any such
test, challenge, appeal, proceeding, waiver, extension, forbearance or
noncompliance shall not, in the reasonable opinion of the Lessor and the
Administrative Agent, involve (A) any risk of criminal liability being imposed
on the Lessor, the Lenders or the Administrative Agent or (B) any risk of (1)
foreclosure, forfeiture or loss of the Property, or any material part thereof,
or (2) the nonpayment of Rent or (C) any substantial risk of (1) the sale of, or
the creation of any Lien (other than Permitted Property Lien) on, any part of
the Property, (2) civil liability being imposed on the Lessor, the Lenders, the
Administrative Agent, or the Property, or (3) enjoinment of, or interference
with, the use, possession or disposition of the Property in any material
respect. Lessor, at Lessee's sole cost and expense, shall execute and deliver to
Lessee such authorizations and other documents as may reasonably be required in
connection with any such permitted contest.
The Lessor will not be required to join in any proceedings pursuant to
this Section 12.1 unless a provision of any Applicable Law requires that such
------------
proceedings be brought by or in the name of the Lessor; and in that event the
Lessor will join in the proceedings or permit them or any part thereof to be
brought in its name if and so long as (i) the Lessee has not elected the
Remarketing Option and (ii) the Lessee pays all related expenses and indemnifies
the Lessor, the Lenders and the Administrative Agent with respect to such
proceedings.
ARTICLE XIII
INSURANCE
13.1 Insurance by the Lessee During the Interim Lease Term.
-----------------------------------------------------
During the Interim Lease Term, the Lessee shall procure or cause
others to procure and maintain at the Lessee's sole cost and expense and in full
force and effect the insurance required under the Construction Agency Agreement.
The parties acknowledge that any Advance made in accordance with Article III of
-----------
the Participation Agreement may be used to pay clause (l) of the definition of
----------
"Construction Costs"; provided, however, such payment shall not affect the
-------- -------
Lessee's obligations under Article V hereof.
---------
13.2 Insurance by the Lessee During the Basic Lease Term.
---------------------------------------------------
<PAGE>
14
(a) During the Basic Lease Term, the Lessee shall procure and carry,
or cause others to procure and carry, at the Lessee's sole cost and expense,
insurance policies with insurance companies authorized to do business in the
State of California (if required by law or regulation) with (i) a Best Insurance
Reports rating of "A-" or better and a financial size category of "VIII" or
higher, (ii) or a Standard & Poors financial strength rating of "BBB+" or
higher, or (iii) other companies acceptable to the Lessor.
(i) Workers' Compensation Insurance. Workers' compensation
-------------------------------
insurance as required by applicable California laws.
(ii) Employer's Liability Insurance. Employer's liability
------------------------------
insurance for the Lessee's liability arising out of injury to or death
of employees of the Lessee in the amount of $1,000,000 per accident.
(iii) General Liability Insurance. Liability insurance on an
---------------------------
occurrence basis against claims filed in the United States of America
and occurring in anywhere in the world for the Lessee's liability
arising out of claims for personal injury (including bodily injury and
death) and property damage. Such insurance shall provide coverage for
all operations of the Lessee with a $1,000,000 minimum limit per
occurrence for combined bodily injury and property damage; provided
that policy aggregates, if any, shall apply separately to claims
occurring with respect to the Project.
(iv) Automobile Liability Insurance. Automobile liability
------------------------------
insurance for the Lessee's liability arising out of claims for bodily
injury and property damage covering all owned (if any), leased, non-
owned and hired vehicles of the Lessee, including loading and
unloading, with a $1,000,000 minimum limit per accident for combined
bodily injury and property damage and containing appropriate no-fault
insurance provisions wherever applicable.
(v) Excess Liability Insurance. Excess liability insurance on
--------------------------
an occurrence basis covering claims (on at least a following form
basis) in excess of the underlying insurance described in the foregoing
subsections (ii), (iii) and (iv), with a $25,000,000 minimum limit per
occurrence, provided that aggregate limits of liability, if any, shall
apply separately to claims occurring with respect to the Project.
The amounts of insurance required in the foregoing subsections
(ii), (iii), (iv) and this subsection (v) may be satisfied by the
Lessee purchasing coverage in the amounts
<PAGE>
15
specified or by any combination of primary and excess insurance, so
long as the total amount of insurance meets the requirements specified
above.
(vi) Operational Property Damage Insurance. On or prior to the
-------------------------------------
end of the Construction Period or the expiration of the builder's risk
insurance, whichever comes first, property damage insurance on an "all
risk" basis insuring the Lessee and the Lessor, as their interests may
appear, including coverage against damage or loss caused by earth
movement (including but not limited to earthquake, landslide,
subsidence and volcanic eruption), flood, and boiler and machinery
accidents, and in form and substance reasonably satisfactory to the
Lessor and its Insurance Consultant.
(1) Property Insured. The property damage insurance shall
----------------
provide coverage for (i) the buildings, structures, boilers,
machinery, equipment, facilities, fixtures, supplies and other
properties constituting a part of the Improvements, (ii) the cost
of recreating plans, drawings or any other documents or computer
system records, (iii) electronic equipment, and (iv) foundations
and other property below the surface of the ground.
(2) Additional Coverages. The property damage insurance
--------------------
shall insure (i) attorney's fees, engineering and other
consulting costs, and permit fees directly incurred in order to
repair or replace damaged insured property, (ii) the cost of
preventive measures to reduce or prevent a loss (sue and labor),
(iii) increased cost of construction and loss to undamaged
property as the result of enforcement of building laws or
ordinances, (iv) debris removal, and (v) expediting expenses.
(3) Special Clauses. The property damage policy shall
---------------
include (i) a 72 hour clause for flood, windstorm and
earthquakes, (ii) an unintentional errors and omissions clause,
(iii) a requirement that the insurer pay losses within forty (40)
days after receipt of an acceptable proof of loss or partial
proof of loss, and (iv) an other insurance clause making this
insurance primary over any other insurance.
(4) Sum Insured. Losses shall be valued at their repair or
-----------
replacement cost, without deductible for physical depreciation or
obsolesce, including custom duties, taxes and fees. The property
damage policy shall insure the Property in an amount not less
than the "Full Insurable Value." For purposes of this subsection,
"Full Insurable Value" shall mean the full
<PAGE>
16
replacement value of the Improvements, including any equipment
and supplies, without deduction for physical depreciation and/or
obsolescence. The earth movement (which may be self insured
pursuant to Section 13.4) and flood shall be insured with a sub-
------------
limit of no less than $50,000,000.00; provided, however, that
-------- -------
such sub-limit for earth movement shall be adjusted by the
Lessee, if the Lessor determines that any of the parameters or
inputs listed on the earth movement study prepared by [____] and
attached hereto as Exhibit A shall change or be amended after the
---------
Documentation Date.
(vii) Endorsements. All policies of liability insurance (except
------------
for workers' compensation and employers' liability insurance) required
to be maintained by the Lessee shall be endorsed as follows:
(1) To name the Lessor, the Administrative Agent and the
Lenders as additional insureds with respect to the policies
required under Section 13.2(a)(iii) through (v) and to name the
------------------- -
Administrative Agent as loss payee under a standard form mortgage
endorsement under Section 13.2(a)(vi);
(2) To provide a severability of interests and cross
liability clause; and
(3) That the insurance shall be primary and not excess to
or contributing with any insurance or self-insurance maintained
by the Lessor or the Administrative Agent.
(viii) Waiver of Subrogation. The Lessee hereby waives any and
---------------------
every claim for recovery from the Lessor for any and all loss or
damage covered by any of the insurance policies to be maintained under
this Master Lease to the extent that such loss or damage is recovered
under any such policy.
(b) Conditions.
----------
(i) Loss Notification. The Lessee shall promptly notify the
-----------------
Lessor of any single loss or event likely to give rise to a claim
against an insurer for an amount in excess of $50,000 covered by any
insurance policies providing operational property damage.
<PAGE>
17
(ii) Policy Cancellation and Change. All policies of insurance
------------------------------
required to be maintained pursuant to this Article XIII shall be
------------
endorsed so that if at any time they are canceled, or their coverage
is reduced (by any party including the insured) so as to affect the
interests of the Lessor, such cancellation or reduction shall not be
effective as to the Lessor for sixty (60) days, except for non-payment
of premium which shall be for ten (10) days, after receipt by the
Lessor of written notice from such insurer of such cancellation or
reduction.
(iii) Separation of Interests. All policies (other than in
-----------------------
respect to liability or workers compensation insurance) shall insure
the interests of the Lessor regardless of any breach or violation by
the Lessee or any other Party of warranties, declarations or
conditions contained in such policies, any action or inaction of the
Lessees or others, or any foreclosure relating to the Project or any
change in ownership of all or any portion of the Project.
13.3 Evidence of Insurance. Prior to the end of the Construction
---------------------
Period and on an annual basis at least 10 days prior to each policy anniversary,
the Lessee shall furnish the Lessor and the Administrative Agent, acting on
behalf of the Lender, with (a) certificates of insurance or binders, in a form
acceptable to the Lessor and the Administrative Agent, evidencing all of the
insurance required by the provisions of this Article XIII and (b) a schedule of
------------
the insurance policies held by or for the benefit of the Lessee and required to
be in force by the provisions of this Article XIII. Such certificates of
------------
insurance/binders shall be executed by each insurer or by an authorized
representative of each insurer where it is not practical for such insurer to
execute the certificate itself. Such certificates of insurance/binders shall
identify underwriters, the type of insurance, the insurance limits and the
policy term and shall specifically list the special provisions enumerated for
such insurance required by this Article XIII. Upon request, the Lessee will
------------
promptly furnish the Lessor or the Administrative Agent, acting on behalf of the
Lenders, with copies of all insurance policies, binders and cover notes or other
evidence of such insurance relating to the insurance required to be maintained
by the Lessee.
13.4 Self-Insurance. During the Basic Lease Term, the Lessee shall
--------------
have the right to self-insure with respect to earthquake insurance required
under this Master Lease so long as (i) the Lessee is a publicly traded domestic
corporation whose stock is traded on a nationally recognized exchange; (ii) the
Lessee has not assigned this Master Lease; (iii) the Lessee maintains a
Consolidated Tangible Net Worth of at least $400 million according to its most
recent audited financial statements and (iv) the Lessee governs and manages its
self-insurance program in a manner consistent with programs managed by prudent
businesses in similar seismic zones whose stock is publicly traded on a
nationally recognized exchange. Upon request, the Lessee shall supply the Lessor
and the Administrative Agent from time to time with evidence reasonably
satisfactory to the Lessor and the
<PAGE>
18
Administrative Agent of the Lessee's net worth and the satisfaction of the
condition set forth in the above clauses (i)-(iv). If the Lessee elects to
self-insure, the Lessee shall be responsible for losses or liabilities which
would have been assumed by the insurance companies issuing the insurance
required of the Lessee under the Master Lease. The Lessee will notify the Lessor
in advance of any period for which it intends to self-insure and shall provide
the Lessor with satisfactory evidence of its compliance with these requirements
in order to give the Lessor an opportunity to confirm the satisfaction of the
conditions set forth in the above clauses (i)-(iv).
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
14.1 Casualty and Condemnation.
-------------------------
(a) Subject to the provisions of this Article XIV, if all or a
-----------
portion of the Property is damaged or destroyed in whole or in part by a
Casualty or if the use, access, occupancy, easement rights or title to the
Property or any part thereof, is the subject of a Condemnation, then:
(i) in the case of a Casualty, any insurance proceeds payable
with respect to such Casualty shall be paid to the Lessee for the sole
purpose of reconstruction, refurbishment and repair of the Property;
provided, that such reconstruction, refurbishment or repair can be
completed six (6) months prior to the end of the Lease Term and, the
Lessee shall have furnished the Lessor with a certificate from an
independent engineer reasonably acceptable to the Lessor as to the
timing of completion of such reconstruction, refurbishment or repair;
provided, further, that in the event that either (x) such
reconstruction, refurbishment or repair cannot be completed six (6)
months prior to the end of the Lease Term or (y) the Lessee shall
elect not to use such proceeds for the reconstruction, refurbishment
or repair of the Property, then the Lessee shall be deemed to have
exercised its option to purchase the Property notwithstanding any
limitations on purchase set forth in Article XVIII hereof and all such
-------------
insurance proceeds payable with respect to such Casualty shall be paid
to the Lessor to be applied towards the payment of the Lease Balance
in accordance with Section 7.2 of the Participation Agreement;
-----------
(ii) in the case of a Condemnation (that is not a Significant
Condemnation) of any part of the Property, any award or compensation
relating thereto shall be paid to the Lessee for the sole purpose of
restoration of the Property (provided, that such restoration can be
completed prior to the end of the Lease Term) provided, that in the
<PAGE>
19
event that such restoration cannot be completed prior to the end of
the Lease Term, then the Lessee shall be deemed to have exercised its
option to purchase the Property notwithstanding any limitation on
purchase set forth in Article XVIII hereof and all such award or
-------------
compensation payable with respect to such Condemnation shall be paid
to the Lessor to be applied towards the payment of the Lease Balance
in accordance with Section 7.2 of the Participation Agreement; and
-----------
(iii) in the case of a Significant Condemnation, then the Lessee
shall be deemed to have exercised its option to purchase the Property
notwithstanding any limitation on the purchase set forth in Article
-------
XVIII hereof and all such award or compensation payable with respect
-----
to such Condemnation shall be paid to the Lessor to be applied towards
the payment of the Lease Balance in accordance with Section 7.2 of the
-----------
Participation Agreement;
provided, however, that, in each case, if a Lease Default or a Lease Event of
Default shall have occurred and be continuing, such award, compensation or
insurance proceeds shall be paid directly to the Lessor or, if received by the
Lessee, shall be held in trust for the Lessor and the Administrative Agent, and
shall be paid immediately by the Lessee to the Account to be distributed in
accordance with Article VII of the Participation Agreement. All amounts held by
-----------
the Lessor or the Administrative Agent when a Lease Default or a Lease Event of
Default exists hereunder on account of any award, compensation or insurance
proceeds either paid directly to the Lessor or the Administrative Agent or
turned over to the Lessor or the Administrative Agent shall at the option of the
Lessor either be (i) paid to the Lessee for the repair of damage caused by such
Casualty or Condemnation in accordance with clause (d) of this Section 14.1, or
---------- ------------
(ii) applied to the repayment of the Lease Balance of the Property on the
Termination Date with respect to the Property in accordance with Article XV.
----------
(b) Provided no Lease Default or Lease Event of Default has occurred
and is continuing, the Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any such Casualty or Condemnation and shall pay
all expenses thereof. At the Lessee's reasonable request, and at the Lessee's
sole cost and expense, the Lessor and the Administrative Agent shall participate
in any such proceeding, action, negotiation, prosecution or adjustment. The
Lessor and the Lessee agree that this Master Lease shall control the rights of
the Lessor and the Lessee in and to any such award, compensation or insurance
payment.
(c) If the Lessor or the Lessee shall receive notice of a Casualty or
of an actual, pending or threatened Condemnation of the Property or any interest
therein, the Lessor or the Lessee,
<PAGE>
20
as the case may be, shall give notice thereof to the other and to the
Administrative Agent promptly after the receipt of such notice.
(d) If pursuant to this Section 14.1 and Section 15.1, this Master
------------ ------------
Lease shall continue in full force and effect following a Casualty or
Condemnation, the Lessee shall, at its sole cost and expense (and, without
limitation, if any award, compensation or insurance payment is not sufficient to
restore the Property in accordance with this clause (d), the Lessee shall pay
the shortfall), promptly and diligently repair any damage to the Property caused
by such Casualty or Condemnation in conformity with the requirements of Sections
--------
8.3 and 9.1, to restore the Property to at least the same condition, operative
--- ---
value and useful life as existed immediately prior to such Casualty or
Condemnation. Upon completion of such restoration, the Lessee shall furnish to
the Lessor (which, in turn, shall furnish to the Administrative Agent) an
architect's certificate of substantial completion and a Responsible Officer's
Certificate confirming that such restoration has been completed pursuant to this
Master Lease.
(e) In no event shall a Casualty or Condemnation affect the Lessee's
obligations to pay Rent pursuant to Section 3.1 and any other amounts hereunder
-----------
or to perform its obligations and pay any amounts due on the Expiration Date or
pursuant to Articles XVIII and XXI (except to the extent the Lessee has
-------------- ---
exercised its Purchase Option with respect to the Property).
(f) Any Excess Casualty/Condemnation Proceeds received by the Lessor
or the Administrative Agent in respect of a Casualty or Condemnation shall be
turned over to the Lessee.
14.2 Environmental Matters. If the Lessee gains knowledge of the
---------------------
existence of an Environmental Violation with respect to the Property, the Lessee
shall promptly notify the Lessor in writing of such Environmental Violation and
the Lessee shall within thirty (30) days of such notice deliver to the Lessor a
remediation plan with respect to such violation. If the cost of remedying the
Environmental Violation would exceed $2,500,000 and the Lessor elects not to
terminate this Master Lease with respect to the Property pursuant to Section
-------
15.1, or if the cost of remedying such Environmental Violation is less than
----
$2,500,000, then in each case, at the Lessee's sole cost and expense, the Lessee
shall promptly and diligently commence any response, clean up, remedial or other
action necessary to remove, clean up or remediate the Environmental Violation in
accordance with the terms of Section 8.3. The Lessee shall, upon completion of
-----------
remedial action by the Lessee, cause to be prepared by an environmental
consultant reasonably acceptable to the Lessor a report describing the
Environmental Violation and the actions taken by the Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in compliance in all material
respects with applicable Environmental Law or Hazardous Materials Laws together,
if appropriate under Applicable Law, a certificate of compliance or release
<PAGE>
21
from the applicable Governmental Authority. Each such Environmental Violation
shall be remedied prior to the Expiration Date and in accordance with the
provisions set forth above, unless the Property has been purchased by the Lessee
in accordance with Section 15.2 or Section 18.1(b). Nothing in this Article XIV
------------ --------------- -----------
shall reduce or limit the Lessee's obligations under Section 13.1, 13.2 or 13.3
------------ ---- ----
of the Participation Agreement.
14.3 Notice of Environmental Matters. Promptly, but in any event
-------------------------------
within fifteen (15) Business Days from the date the Lessee has knowledge thereof
pursuant to written notice from any Governmental Authority, the Lessee shall
provide the Lessor written notice of any pending or threatened claim, action or
proceeding involving any Environmental Law or any Hazardous Materials Laws or
any Release on or in connection with the Property. All such notices shall
describe in reasonable detail the nature of the claim, action or proceeding and
the Lessee's proposed response thereto. In addition, the Lessee shall provide to
the Lessor, within thirty (30) Business Days of receipt, copies of all written
communications with any Governmental Authority relating to any Environmental
Violation in connection with the Property. The Lessee shall also promptly
provide such detailed reports of any such material environmental claims.
ARTICLE XV
TERMINATION OF LEASE
15.1 Termination upon Certain Events. If any of the following occurs
-------------------------------
during the Basic Lease Term with respect to the Property:
(i) a Significant Condemnation occurs; or
(ii) an Environmental Violation occurs or is discovered the
cost of remediation of which would exceed $2,500,000;
and the Lessor shall have given written notice (a "Termination Notice") to the
------------------
Lessee that, as a consequence of such event this Master Lease is to be
terminated, then the Lessee shall be obligated to purchase the Property within
thirty (30) days after Lessee's receipt of the Termination Notice, by paying to
the Lessor an amount equal to the Lease Balance.
15.2 Termination Procedures. On the date of the payment by the Lessee
----------------------
of the Lease Balance in accordance with Section 15.1 (such date, the
------------
"Termination Date"), this Master Lease shall terminate and, concurrent with the
----------------
Lessor's receipt of such payment,
<PAGE>
22
(a) the Property shall be conveyed to the Lessee (or to the Lessee's
designee) "AS IS" and in its then present physical condition free of Lessor
Liens and the Lessor shall execute and deliver a grant deed, without
representation or warranty other than as provided under Applicable Law, of
the Property in recordable form together with a FIRPTA Affidavit; and
(b) in the case of a termination pursuant to clause (i) of Section
-------
15.1, the Lessor shall convey to the Lessee any Net Proceeds with respect
----
to the Significant Condemnation giving rise to the termination of this
Master Lease received by the Lessor or, at the request of the Lessee, such
amounts shall be applied towards payment of the Lease Balance.
ARTICLE XVI
EVENTS OF DEFAULT
16.1 Lease Events of Default. The occurrence of any one or more of the
-----------------------
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute a "Lease Event of
--------------
Default":
-------
(a) the Lessee shall fail to make payment of (i) any Basic Rent when
due and payable within two (2) Business Days of such Basic Rent Payment
Date, (ii) any Supplemental Rent due and payable within five (5) days after
receipt of written notice thereof, or (iii) the Lease Balance, Purchase
Price or Maximum Recourse Amount on the date due therefor; or
(b) the Lessee shall fail to deposit with the Collateral Agent, prior
to 3:00 P.M., New York City time, on the Business Day next succeeding
facsimile notice of the occurrence of a Deficiency Date, the Deficiency
Collateral;
(c) the Lessee shall not be in compliance with Section 10.2 of the
------------
Participation Agreement;
(d) the Lessee shall fail to observe or perform any term, covenant or
condition under this Master Lease or the other Operative Documents to which
it is party other than those described in clauses (a), (b), (c), (m) or (p)
of this Section 16.1, and, in each such case, such failure shall have
------------
continued unremedied for thirty (30) days after written notice; provided,
that such cure period shall be extended from thirty (30) days to ninety
(90) days if such term,
<PAGE>
23
covenant or condition is, without material prejudice to the Lessor and/or
the Lenders, curable or remediable and the Lessee is at all times during
such extended period diligently taking action reasonably satisfactory to
the Lessor and the Lenders to so cure or remedy default; provided, further,
-------- -------
that, for purposes of clarification, the failure by the Lessee to comply
with the foregoing clauses (a), (b), (c), (m) or (p) of this Section 16.1
------------
shall not be subject to any cure period except as expressly set forth in
such clauses (a), (b), (c), (m) or (p);
(e) any representation or warranty made or deemed made by the Lessee
herein or in any Operative Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with any Operative Document shall prove to have been
incorrect or false in any material respect on or as of the date made or
deemed made, unless the fact or condition which made such representation of
warranty incorrect or false is, without material prejudice to the Lessor
and/or the Lenders, curable or remediable and the Lessee is at all times
diligently taking action reasonably satisfactory to the Lessor and the
Administrative Agent to so cure or remedy such fact or condition in order
to make such representation and/or warranty true and correct in all
material respects, in which event the Lessee shall have one-hundred and
twenty (120) days from the date a Responsible Officer gains knowledge, by
receipt of notice or otherwise, that such representation or warranty was
incorrect or false to cure or remedy such default;
(f) a Construction Agency Agreement Event of Default shall have
occurred and be continuing and any applicable cure period relating thereto
shall have elapsed;
(g) any Operative Document or any Lien granted under any Operative
Document shall cease to be effective against, or cease to be the legal,
valid, binding and enforceable obligation of the Lessee, other than due to
any action taken by the Lessor or the Collateral Agent;
(h) the Lessee shall directly or indirectly contest the
effectiveness, validity, binding nature of enforceability of any Operative
Document or any Lien granted in favor of the Lessor or the Administrative
Agent under the Master Lease, the Lenders Mortgage, the Assignment of
Lease, Rent, Construction Period Pledge Agreement and CAA, the Construction
Agency Agreement, the Pledge Agreements and the Lessor Financing Statements
related thereto or any other Operative Document;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV
<PAGE>
24
of ERISA by any member of the ERISA Group, any Plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000;
(j) any judgments or orders for the payment of money, in any case not
covered by insurance, individually or in the aggregate in excess of
$10,000,000 shall be rendered against the Lessee and such judgment or order
shall continue unsatisfied and unstayed (pursuant to laws, rules or court
orders) for a period of thirty (30) days;
(k) a default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of the Lessee having a principal amount, individually or in
the aggregate, in excess of $10,000,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to
such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied
for any applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its expressed
maturity;
(l) the Guarantor shall breach any of its obligations under the
Guaranty or other Operative Documents to which it is party and the time for
cure of such breach, shall have elapsed;
(m) the Lessee shall fail to maintain the insurance required under
Article XIII hereof, including compliance with the requirements of Section
------------ -------
13.4 if the Lessee elects to self-insure with respect to earthquake
----
insurance;
(n) the Lessee shall (i) admit in writing its inability to pay its
debts generally as they become due, (ii) file a petition under the United
States bankruptcy laws or any other applicable insolvency law or statute of
the United States of America or any State or Commonwealth thereof or other
applicable jurisdiction, (iii) make a general assignment for the benefit of
its creditors, (iv) consent to the appointment of a receiver of itself or
the whole or any substantial part of its property, (v) fail to cause the
discharge of any custodian, trustee or receiver
<PAGE>
25
appointed for the Lessee or the whole or a substantial part of its property
within sixty (60) days after such appointment, or (vi) file a petition or
answer seeking or consenting to reorganization under the United States
bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof or other
applicable jurisdiction;
(o) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof or other
applicable jurisdiction shall be filed against the Lessee and not dismissed
within sixty (60) days from the date of its filing (provided, that the
--------
Lessee hereby expressly authorizes the Lessor and the Administrative Agent
to appear in any court conducting any such proceeding during such sixty
(60) day period to preserve, protect and defend their respective rights
under the Operative Documents), or a court of competent jurisdiction shall
enter an order or decree appointing, without the consent of the Lessee, a
receiver of the Lessee, or the whole or a substantial part of any of its
property, and such order or decree shall not be vacated or set aside within
sixty (60) days from the date of the entry thereof; or
(p) the Lessee exercises the Undeveloped Land Purchase Option set
forth in Section 18.2 during the Construction Period but fails to purchase
------------
the Loan Balance on the Completion Date as required under Section
-------
18.2(b)(iv) hereof and Section 10.1(b)(i)(B) of the Participation
----------- ---------------------
Agreement.
16.2 Remedies. If a Lease Event of Default shall have occurred and be
--------
continuing, the Lessor shall have the right to recover, by demand to the Lessee
and at the Lessor's election, and the Lessee shall pay to the Lessor, as and for
a final payment, but exclusive of the indemnities payable under the Operative
Documents, and in lieu of all damages beyond the date of such demand the sum of
(a) the Lease Balance, plus (b) all other amounts owing in respect of Basic Rent
and Supplemental Rent theretofore accruing under this Master Lease; provided,
--------
however, that if a Lease Event of Default has occurred pursuant to Section
------- -------
16.1(n) or (o), such final payment shall be immediately due and payable without
------- ---
demand or notice. Upon payment of the amount specified pursuant to the first
sentence of this Section 16.2, the Lessee shall be entitled to receive from the
------------
Lessor, at the Lessee's request and cost, an assignment of Lessor's right, title
and interest in the Property pursuant to the provisions of Section 21.1. It is
------------
the intent of the Lessor and the Lessee that the payment required to be made
pursuant to this Section 16.2 together with the payment of the Maximum Recourse
------------
Amount shall be treated as an obligation on the part of the Lessee to repay a
loan obligation to the Lessor in such amounts; provided, that the Lessee shall
--------
not be entitled to receive an assignment of Lessor's interest in the Property
unless the Lessee shall have paid in full the Lease Balance and all other
payments required hereunder.
<PAGE>
26
(a) The Lessor may, by facsimile notice to the Lessee, rescind or
terminate this Master Lease as of the date specified in such notice; provided,
--------
however (i) no reletting, reentry or taking of possession of the Property (or
-------
any portion thereof) by the Lessor will be construed as an election on the
Lessor's part to terminate this Master Lease unless a written notice of such
intention is given to the Lessee, (ii) notwithstanding any reletting, reentry or
taking of possession, the Lessor may at any time thereafter elect to terminate
this Master Lease for a continuing Lease Event of Default and (iii) no act or
thing done by the Lessor or any of its agents, representatives or employees and
no agreement accepting a surrender of the Property shall be valid unless the
same be made in writing and executed by the Lessor;
(b) The Lessor may (i) demand that the Lessee, and the Lessee shall
upon the written demand of the Lessor, return the Property promptly to the
Lessor in the manner and condition required by, and otherwise in accordance with
all of the provisions of, Articles VII and IX and Section 8.3 hereof as if the
------------ -- -----------
Property were being returned at the end of the Lease Term, and the Lessor shall
not be liable for the reimbursement of the Lessee for any costs and expenses
incurred by the Lessee in connection therewith and (ii) without prejudice to any
other remedy which the Lessor may have for possession of the Property, and to
the extent and in the manner permitted by Applicable Law, enter upon the
Property and take immediate possession of (to the exclusion of the Lessee) the
Property or any part thereof and expel or remove the Lessee and any other Person
who may be occupying the Property, by summary proceedings or otherwise, all
without liability to the Lessee for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by such
taking or otherwise and, in addition to the Lessor's other damages, the Lessee
shall be responsible for all costs and expenses incurred by the Lessor, the
Lenders and/or the Administrative Agent in connection with any reletting,
including, without limitation, reasonable brokers' fees and all costs of any
alterations or repairs made by the Lessor, the Lenders or the Administrative
Agent;
(c) As more fully set forth in the Memorandum of Lease, the Lessor
may sell all or any part of the Property, at public or private sale, as the
Lessor may determine and upon any such sale the Lessee's obligation to pay Basic
Rent with respect to the Property sold shall terminate;
(d) The Lessor may, at its option, elect not to terminate this Master
Lease with respect to the Property and continue to collect all Basic Rent,
Supplemental Rent, and all other amounts due to the Lessor (together with all
costs of collection) and enforce the Lessee's obligations under this Master
Lease as and when the same become due, or are to be performed, and at the option
of the Lessor, upon any abandonment of the Property by the Lessee or re-entry of
same by the Lessor, the Lessor may enforce, by suit or otherwise, all other
covenants and conditions hereof to be performed or complied with by the Lessee
hereunder and to exercise all other remedies permitted by Applicable Law.
<PAGE>
27
(e) Unless the Property has been sold, the Lessor may, whether or not
the Lessor shall have exercised or shall thereafter at any time exercise any of
its rights under clause (b), (c) or (d) of this Section 16.2 with respect to the
------------
Property or any portions thereof, demand, by written notice to the Lessee
specifying a date (a "Termination Date") not earlier than five (5) days after
----------------
the date of such notice, that the Lessee purchase, on such Termination Date for
a price equal to the Lease Balance, in accordance with the provisions of Article
-------
XXI;
---
(f) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, including any and all rights or remedies
under the Pledge Agreements, or proceed by appropriate court action (legal or
equitable) to enforce the terms hereof or to recover damages for the breach
hereof. Separate suits may be brought to collect any such damages for any
period(s), and such suits shall not in any manner prejudice the Lessor's right
to collect any such damages for any subsequent period(s), or the Lessor may
defer any such suit until after the expiration of the Lease Term, in which event
such suit shall be deemed not to have accrued until the expiration of the Lease
Term;
(g) The Lessor may retain and apply against the Lease Balance all
sums which the Lessor would, absent such Lease Event of Default, be required to
pay to, or turn over to, the Lessee pursuant to the terms of this Master Lease
and upon payment in full of the Lease Balance from such sums, the Property shall
be conveyed to Lessee in accordance with Section 21.1 of the Master Lease;
------------
(h) If a Lease Event of Default shall have occurred and be
continuing, the Lessor, to the extent permitted by Applicable Law, as a matter
of right and with notice to the Lessee, shall have the right to apply to any
court having jurisdiction to appoint a receiver or receivers of the Property,
and the Lessee hereby irrevocably consents to any such appointment. Any such
receiver(s) shall have all of the usual powers and duties of receivers in like
or similar cases and all of the powers and duties of the Lessor in case of
entry, and shall continue as such and exercise such powers until the date of
confirmation of the sale of the Property unless such receivership is sooner
terminated;
(i) To the maximum extent permitted by law, the Lessee hereby waives
the benefit of any appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of marshaling in the
event of any sale of the Property or any interest therein;
(j) The Lessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations secured hereby and to exercise
all rights and powers under this instrument or under any of the other Operative
Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the obligations secured hereby may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise.
<PAGE>
28
Neither the acceptance of this instrument nor its enforcement, shall prejudice
or in any manner affect the Lessor's right to realize upon or enforce any other
security now or hereafter held by the Lessor, it being agreed that the Lessor
shall be entitled to enforce this instrument and any other security now or
hereafter held by the Lessor in such order and manner as the Lessor may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to the Lessor is intended to be exclusive of any other remedy herein or
by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the
Operative Documents to the Lessor or to which it may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by the Lessor. In no event shall the Lessor, in the
exercise of the remedies provided in this instrument (including, without
limitation, in connection with the assignment of rents to Lessor, or the
appointment of a receiver and the entry of such receiver onto all or any part of
the Property), be deemed a "mortgagee in possession", and the Lessor shall not
in any way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies; and
(k) Grant; Foreclosure; Power of Sale. The Lessee hereby grants to
---------------------------------
the Lessor or, in deed of trust jurisdictions, to the trustee named in the
Memorandum of Lease for such jurisdictions, as trustee (together with all
successor trustees, the "Trustee"), IN TRUST, WITH POWER OF SALE, or a mortgage
-------
on, all of the Lessee's right, title and interest in and to the Property and,
upon the occurrence of a Lease Event of Default and following termination of
this Master Lease by the Lessor, the Lessor shall have the power and authority,
after proper notice and lapse of such time as may be required by law and by the
Master Lease, to cause the Trustee to sell the Property or any part thereof by
notifying the Trustee of that election and depositing with the Trustee this
instrument and receipts and evidence of expenditures made and secured hereby as
the Trustee may reasonably require. Upon receipt of any such notice from the
Lessor, the Trustee shall cause to be recorded, published and delivered to
Lessee such Notice of Default and Election to Sell as is then required by
applicable statutory authority and by this instrument, which notice shall set
forth, among other things, the nature of the breach(es) or default(s), the
action(s) required to effect a cure thereof and the time period within which
that cure may be effected. If no cure is effected within the statutory time
limits following recordation of the Notice of Default and Election to Sell and
after Notice of Sale has been given as required by the above-referenced
statutes, the Trustee may without further notice or demand sell and convey the
Property or any part thereof in accordance with the above-referenced statutes.
The Property or any part thereof may be sold as a whole or in separate lots,
parcels or items and in such order as the Lessor may direct, at public auction
to the highest bidder for cash in lawful money of the United States payable at
the time of sale. The Trustee shall deliver to such purchaser(s) a good and
sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty express or implied. The recitals in such deed of any matter
or fact shall be conclusive proof of the truthfulness
<PAGE>
29
thereof. Any Person, including the Lessee, the Trustee or the Lessor, may
purchase at any sale. After deducting all costs, fees and expenses of the Lessor
and the Trustee, including costs of evidence of title in connection with any
sale, the Lessor shall apply the proceeds of sale, in the following order of
priority, to payment of the following (collectively referred to herein as the
"Obligated Amounts"): (i) first, all amounts expended by or for the account of
-----------------
the Lessor under the terms hereof and not then repaid, with accrued interest at
the Overdue Rate; and (ii) second, all other amounts then due and owing
hereunder including, without limitation, all Basic Rent, Supplemental Rent, the
full amount of the Lease Balance as of the date of sale as if this Master Lease
had been terminated under Section 18.1, and all other amounts then payable by
------------
the Lessee under this Master Lease and the other Operative Documents, with the
Lessor having the right to apply the proceeds of sale to the amounts described
above in this clause (ii) in such order, proportion and priority as the Lessor
may elect in its sole and absolute discretion. To the extent permitted by
applicable statutes, the Trustee may postpone the sale of all or any portion of
the Property by public announcement at the time and place of sale, and from time
to time thereafter may again postpone that sale by public announcement or
subsequently noticed sale, and without further notice may make such sale at the
time fixed at the last postponement or may, in its discretion, give a new notice
of sale. A sale of less than all of the Property or any defective or irregular
sale made hereunder shall not exhaust the power of sale provided for herein, and
subsequent sales may be made hereunder until all of the Obligated Amounts have
been satisfied or the Property have been sold, without defect or irregularity.
No action of the Lessor or the Trustee based upon the provisions contained
herein or contained in the applicable statutes, including, without limitation,
the giving of the Notice of Default and Election to Sell or the Notice of Sale,
shall constitute an election of remedies which would preclude the Lessor from
pursuing judicial foreclosure before a completed sale pursuant to the power of
sale contained herein. The Lessor shall have the right, with the irrevocable
consent of the Lessee hereby given and evidenced by the execution of this
instrument, to obtain appointment of a receiver by any court of competent
jurisdiction without further notice to the Lessee, which receiver shall be
authorized and empowered to enter upon and take possession of the Property or
any part thereof, including all personal property used upon or in connection
with the real property herein conveyed, to let the Property or any part thereof,
to receive all the rents, issues and profits, if any, which may be due or become
due in respect to the leasing of the Property or any part thereof to another
party (herein, "Property Rents"), and apply the Property Rents after payment of
--------------
all necessary charges and expenses to reduction of the Obligated Amounts in such
order, proportion and priority as the Lessor may elect. At the option of the
Lessor, the receiver shall accomplish entry and taking possession of the
Property or any part thereof by actual entry and possession or by notice to the
Lessee. The receiver so appointed by a court of competent jurisdiction shall be
empowered to issue receiver's certificates for funds advanced by the Lessor for
the purpose of protecting the value of the Property or any part thereof as
security for the Obligated Amounts. The amounts evidenced by receiver's
certificates shall bear interest at the Overdue Rate and may be added to the
Obligated Amounts if the Lessee or a junior lienholder purchases the Property or
any part thereof at the trustee's
<PAGE>
30
sale. The Trustee or any successor acting hereunder may resign and thereupon be
discharged of the trusts hereunder upon thirty (30) days' prior written notice
to the Lessor. Regardless of whether the Trustee resigns, the Lessor may, from
time to time, substitute a successor or successors to any Trustee named herein
or acting hereunder in accordance with any statutory procedure for such
substitution; or if Lessor, in its sole and absolute discretion, so elects, and
if permitted by law, the Lessor may substitute such successors or successors by
recording, in the office of the recorder of the county or counties where the
Property is located, a document executed by the Lessor and containing the name
of the original Lessee and Lessor hereunder, the book and page where this
instrument (or a memorandum hereof) is recorded (and/or instrument number, as
applicable) and the name of the new Trustee, which instrument shall be
conclusive proof of proper substitution of such successor Trustee or Trustees,
who shall, without conveyance from the predecessor Trustee, succeed to the
rights, powers and duties hereunder. It is acknowledged that A POWER OF SALE HAS
BEEN GRANTED IN THIS INSTRUMENT; A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE
PROPERTY AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
DEFAULT BY THE LESSEE UNDER THIS INSTRUMENT.
The Lessor acknowledges and agrees that upon the declaration of an
Event of Default, to the maximum extent permitted by law, the Lessee waives any
right to contest the sum of the Lessor Balance and the Loan Balance as the
liquidated sum due upon acceleration of this instrument.
If, pursuant to the exercise by the Lessor of its remedies pursuant to
this Section 16.2, the Lease Balance and all other amounts due and owing from
------------
the Lessee under this Master Lease and the other Operative Documents have been
paid in full, then the Lessor shall remit to the Lessee any excess amounts
received by the Lessor. The obligation to deliver such excess to the Lessee
shall survive this Master Lease.
Notwithstanding any termination of this Master Lease pursuant to this
Section 16.2 or otherwise, the Lessor agrees that for thirty (30) days after the
------------
declaration of the occurrence of an Event of Default, Lessor shall forebear from
exercising the remedies set forth in clauses (c), (h), (j) or (k) of this
Section 16.2 during which time Lessee may tender to the Lessor in immediately
------------
available funds the Lease Balance and all past due and accrued and unpaid Rent
upon the receipt of which Lessor shall transfer the Property to the Lessee or
its designee in accordance with Article XXI hereof.
-----------
Notwithstanding the foregoing, the Lessor may exercise its rights against the
Collateral at any time after acceleration of the Lease Balance.
16.3 Waiver of Certain Rights. Subject to the foregoing, if this
------------------------
Master Lease shall be terminated pursuant to Section 16.2, the Lessee waives, to
------------
the fullest extent permitted by law, (a) any notice of re-entry or the
institution of legal proceedings to obtain re-entry or possession; (b) any
<PAGE>
31
right of redemption, re-entry or repossession except as expressly provided
herein; (c) the benefit of any laws now or hereafter in force exempting property
from liability for rent or for debt or limiting the Lessor with respect to the
election of remedies; and (d) any other rights which might otherwise limit or
modify any of the Lessor's rights or remedies under this Article XVI.
-----------
ARTICLE XVII
LESSOR'S RIGHT TO CURE
17.1 The Lessor's Right to Cure the Lessee's Lease Defaults. The
------------------------------------------------------
Lessor, with notice to the Lessee but without waiving or releasing any
obligation or Lease Event of Default, may (but shall be under no obligation to)
remedy any Lease Event of Default for the account and at the sole cost and
expense of the Lessee, including the failure by the Lessee to maintain the
insurance required by Article XIII, and may, to the fullest extent permitted by
------------
law, and notwithstanding any right of quiet enjoyment in favor of the Lessee,
enter upon the Property for such purpose and take all such action thereon as may
be necessary or appropriate therefor. No such entry shall be deemed an eviction
of the Lessee. All reasonable out-of-pocket costs and expenses so incurred
(including fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by the
Lessor, shall be paid by the Lessee to the Lessor as Supplemental Rent.
ARTICLE XVIII
PURCHASE PROVISIONS
18.1 Purchase of the Property.
------------------------
(a) Subject to the conditions contained herein, the Lessee shall have
the irrevocable option on any Business Day to purchase the Property at a price
(the "Purchase Price") equal to the Lease Balance on the date of such purchase
--------------
offset by any Deposit Taker Losses if such purchase is made during the Basic
Lease Term. The Lessee's exercise of its option pursuant to this Section 18.1
------------
shall be subject to the condition that the Lessee shall have delivered a
Purchase Notice to the Lessor not less than thirty (30) days prior to such
purchase, specifying the date of such purchase.
(b) Notwithstanding any other provision contained herein, if any
Environmental Violation shall not be remedied by the Lessee with respect to the
Property in accordance with Section 14.2 and the Lessor has not otherwise
------------
delivered a Termination Notice pursuant to Section 15.2 hereof
------------
<PAGE>
32
in the event the remedying of such Environmental Violation would exceed
$2,500,000, the Lessee shall be deemed to have made a timely election of an
option to purchase the Property in accordance with this Section 18.1.
------------
(c) If the Lessee exercises an option pursuant to this Section 18.1
------------
or 18.2 then, upon the Lessor's receipt of all amounts due in connection
----
therewith, the Lessor shall transfer to the Lessee or its designee all of the
Lessor's right, title and interest in and to the Property in accordance with the
procedures set forth in Section 21.1(a), such transfer to be effective as of the
---------------
date specified in the Purchase Notice. The Lessee may designate, in a notice
given to the Lessor not less than ten (10) Business Days prior to the closing of
such purchase (time being of the essence), the transferee or transferees to whom
the conveyance shall be made (if other than to the relevant Lessee), in which
case such conveyance shall (subject to the terms and conditions set forth
herein) be made to such designee; provided, however, that such designation of a
transferee or transferees shall not cause the Lessee to be released, fully or
partially, from any of its obligations under this Master Lease, including,
without limitation, the obligation to pay to the Lessor that portion of the
Lease Balance on the date specified in the applicable Purchase Notice.
18.2 Undeveloped Land Purchase Option.
--------------------------------
(a) On not less than thirty (30) days prior notice (the "Release
-------
Notice"), the Lessee may request that the Lessor consent to the purchase by the
------
Lessee, or its designee of a parcel of the Land which shall be located within
the Release Parcel Area (the "Release Parcel") which notice shall specify the
--------------
date of the closing for the sale of the Release Parcel (the "Release Parcel
--------------
Closing Date").
------------
(b) The Lessor shall not unreasonably withhold its consent to the
Lessee's purchase of the Release Parcel provided the following terms and
conditions are met:
(i) no Lease Default or Lease Event of Default shall have
occurred and be continuing;
(ii) the Release Parcel shall (x) be a separate lot from the
Land for tax purposes and subdivided pursuant to all Requirements of
Law and (y) be zoned to allow construction of not less than 250,000
buildable square feet; and
(iii) the remainder of the Land not constituting the Release
Parcel after conveyance of the Release Parcel shall (x) have adequate
and legal access for vehicular and pedestrian ingress and egress and
for all necessary utilities including water, sewer,
<PAGE>
33
electricity and gas, (y) not be configured in a manner that would
adversely effect its fair market value and (z) otherwise be in
compliance with all Requirements of Law.
(c) With the Release Notice, the Lessee shall provide the Lessor with
the information which the Lessor shall reasonably require to determine that the
Lessee is in compliance with all conditions required by Section 18.2(b) as of
---------------
the date of conveyance of the Release Parcel.
(d) The Release Price shall be paid to the Lessor and upon receipt by
the Lessor shall be applied to the Land Lease Balance.
(e) On the Release Parcel Closing Date, upon receipt of the Release
Price, the Lessor shall convey the Release Parcel to the Lessee pursuant to the
provisions of Section 18.1(c) hereof.
---------------
(f) All costs and expenses relating to the Release Parcel and
Lessee's obligations hereunder shall be paid for by the Lessee and the Lessor
shall not be responsible for any Transaction Expenses relating to the Release
Parcel.
ARTICLE XIX
EXTENSION OF EXPIRATION DATE
19.1 Extension of Expiration Date. The Lessee may extend the
----------------------------
Expiration Date subject to, and in accordance with, the terms and conditions of
Section 11.2 of the Participation Agreement.
------------
ARTICLE XX
REMARKETING OPTION
20.1 Option to Remarket. Subject to the fulfillment of each of the
------------------
conditions set forth in this Section 20.1, the Lessee shall have the option (the
------------
"Remarketing Option") to market the Property on behalf of the Lessor.
------------------
<PAGE>
34
The Lessee's effective exercise and consummation of the Remarketing
Option shall be subject to the due and timely fulfillment of each of the
following provisions as to the Property as of the dates set forth below:
(a) No earlier than twelve months and not later than six months prior
to the Expiration Date, the Lessee shall give to the Lessor written notice of
the Lessee's exercise of the Remarketing Option, which exercise shall be
irrevocable. Failure by the Lessee to give timely notice shall be deemed to be
an election by the Lessee, without further act thereby, of its Purchase Option
for the Property.
(b) Not more than six (6) months and not less than ninety (90) days
prior to the Expiration Date, the Lessee shall deliver to the Lessor an
Environmental Audit for the Property. Such Environmental Audit shall be prepared
by a nationally recognized environmental consultant selected by the Lessor and
shall contain conclusions reasonably satisfactory to the Lessor as to the
environmental status of the Property. If any such Environmental Audit indicates
any exceptions, the Lessee shall have also delivered prior to the Expiration
Date, a Phase Two environmental assessment by such environmental consultant and
a written statement by such environmental consultant indicating that all such
exceptions have been remedied in compliance with Applicable Law. As of the
Expiration Date, any Permitted Property Liens that were contested by the Lessee
shall have been removed.
(c) No Default or Event of Default shall have occurred and be
continuing.
(d) During the Marketing Period, the Lessee shall, as agent for the
Lessor, use reasonable commercial efforts to sell the Lessor's interest in the
Property on or before the Expiration Date and will attempt to obtain the lesser
of the Lease Balance or the highest purchase price therefor.
(e) The Lessee shall have obtained, at its cost and expense, all
required governmental and regulatory consents and approvals and shall have made
all filings as required by Applicable Law in order to carry out and complete the
transfer of the Property. As to the Lessor, any such sale shall be made on an
"as is, with all faults" basis without representation or warranty by the Lessor
other than the absence of Lessor Liens.
(f) The Lessee shall pay directly, and not from the sale proceeds,
the cost of all appraisals required under Section 13.2 of the Participation
------------
Agreement and under Section 20.1 of the Master Lease, the Lessee's attorneys'
------------
fees, all audit fees and other out-of-pocket expenses relating to such sale.
<PAGE>
35
(g) The Lessee shall pay to the Lessor concurrently with any sale on
or prior to the Expiration Date (or in the case of Supplemental Rent, to the
Person entitled thereto) an amount equal to the Maximum Recourse Amount plus all
accrued and unpaid Rent and all other amounts hereunder which have accrued or
will accrue prior to or as of the Expiration Date, in the type of funds
specified in Section 3.4 hereof, provided, however, with respect to any Land for
----------- -------- -------
which the Basic Lease Term has expired pursuant to Section 2.3 hereof the Lessee
-----------
shall pay to the Lessor on or prior to the end of the Basic Lease Term with
respect to the Land, an amount equal to the Land Lease Balance offset by any
Deposit Taker Losses.
(h) The gross proceeds (the "Gross Remarketing Proceeds") of the sale
--------------------------
of the Property (less any marketing, closing or other costs, prorations or
commissions related to the marketing of the Property), shall be paid directly to
the Lessor. The Gross Remarketing Proceeds shall be distributed as set forth in
Section 7.4 of the Participation Agreement; provided, however, that any sums due
----------- -------- -------
and payable to the Lessee shall only be paid if all Supplemental Rent has been
paid. The obligations of the Lessor under this paragraph shall survive the
expiration or termination of this Master Lease.
(i) No subleases affecting the Property shall be in effect on the
Expiration Date.
(j) The Lessee shall cause to be delivered to the Lessor on the
earlier of (i) thirty (30) days prior to the sale of the Property pursuant to
this Article XX and (ii) the Expiration Date, at the Lessee's sole cost and
----------
expense, a report from an Appraiser in form and substance satisfactory to the
Lessor and the Administrative Agent which shall separately state the Fair Market
Sales Value (Land) and Fair Market Sales Value (Improvements).
Upon the sale or return of the Property in accordance with the terms
hereof pursuant to the Remarketing Option, the Lessor will instruct the
Collateral Agent to return any outstanding Collateral to the Lessee.
If the Lessee elects the Remarketing Option in accordance with Section
-------
20.1 and the sale of the Property is not consummated prior to the end of the
----
Marketing Period, the Lessee shall, in addition to making the payment required
pursuant to Section 20.1(g) above, at its own cost and expense, do each of the
---------------
following:
(i) execute and deliver to the Lessor and the Lessor's title
insurance company an affidavit as to the absence of any Liens (other
than Permitted Property Liens of the type described in clause (i),
(v), (vii), (viii), (ix) or (x) Liens for taxes not
<PAGE>
36
yet due and Lessor Liens), and shall execute and deliver to the Lessor
a statement of termination of this Master Lease to the extent relating
to the Property;
(ii) on the Expiration Date, transfer possession of the
Property to the Lessor or any Person designated by the Lessor, by
surrendering the same into the possession of the Lessor or such
Person, as the case may be, in the condition required by this Section
-------
20.1 and in compliance with Applicable Law; and
----
(iii) after the Expiration Date, cooperate reasonably with the
Lessor and/or any Person designated by the Lessor to receive the
Property, which cooperation shall include reasonable efforts with
respect to the following, all of which the Lessee shall do on or
before the Expiration Date for the Property or as soon thereafter as
is reasonably practicable: providing copies of all books and records
regarding the maintenance and ownership of the Property and all know-
how, data and technical information relating thereto, providing a
current copy of the applicable Plans and Specifications, granting or
assigning all assignable licenses necessary for the operation and
maintenance of the Property and cooperating reasonably in seeking and
obtaining all necessary Governmental Action. The obligations of the
Lessee under this paragraph shall survive the expiration or
termination of this Master Lease.
Lessor shall have no obligation to approve any bid for the Property
except for bona fide all-cash bids which, together with amounts payable by the
Lessee under clause (g) hereof, in the aggregate is at least equal to the Lease
Balance and the acceptance of which will not subject the Lessor to any
additional liability. Except as expressly set forth herein, the Lessee shall
have no right, power or authority to bind the Lessor or any Participant in
connection with any proposed sale of the Property.
If one or more of the foregoing provisions (a) through (i) shall not
be fulfilled as of the Expiration Date with respect to the Property, then the
Remarketing Option shall be null and void (whether or not it has been
theretofore exercised by the Lessee), in which event all of the Lessee's rights
under this Section 20.1 shall immediately terminate and the Lessee shall
------------
purchase from the Lessor, and the Lessor shall convey to the respective Lessee,
on the Expiration Date all of the Lessor's interest in the Property for an
amount equal to the Lease Balance.
If an Event of Default occurs after the Lessee elects the Remarketing
Option, such election shall be automatically revoked and the Lessee shall be
deemed to have elected the Purchase Option.
<PAGE>
37
20.2 No Duty to Solicit. The Lessor shall have the right, but shall
------------------
be under no duty, to solicit bids, to inquire into the efforts of the Lessee to
obtain bids or otherwise to take action in connection with any such sale.
ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR REMARKETING
21.1 Provisions Relating to the Exercise of the Purchase Option or
-------------------------------------------------------------
Obligation and Conveyance Upon Remarketing and Conveyance Upon Certain Other
----------------------------------------------------------------------------
Events.
------
(a) In connection with any termination of this Master Lease with
respect to the Property pursuant to the terms of Article XV, in connection with
----------
any purchase or in connection with the Lessee's purchase of the Property (or a
portion thereof) in accordance with Section 18.1 or Section 18.2 or in
------------ ------------
connection with the Lessee's exercise of the purchase right under Section 16.2,
------------
then, upon the date on which this Master Lease is to terminate and upon the
payment of all amounts due under Section 5.1 of the Construction Agency
-----------
Agreement, as applicable, or upon tender by the Lessee of the amounts set forth
in Article XV, Section 16.2, 18.1 or 18.2 as applicable:
---------- ------------ ---- ----
(i) the Lessor shall execute and deliver to the Lessee (or to
the Lessee's designee) at the Lessee's sole cost and expense an
instrument of transfer, whether a bill of sale, grant deed or other
form of assignment, as the case may be, without representations or
warranties other than as provided by Applicable Law, relating to the
Lessor's entire interest in the Property (which shall include an
assignment of all of the Lessor's right, title and interest in and to
any Net Proceeds with respect to the Property not previously received
by the Lessor and an assignment of leases of the Property and rights
under Construction Documents warranties and other contracts) or, if
pursuant to Section 18.2, the Release Parcel only, in each case where
------------
necessary, in recordable form, and otherwise in conformity with local
custom and free and clear of any Lessor Liens together with a FIRPTA
Affidavit; and
(ii) the Property shall be conveyed to the Lessee "AS IS" and
in its then present physical condition.
(b) If the Lessee properly exercises the Remarketing Option and the
Property is sold, then the Lessee shall, on the Expiration Date, and at its own
cost, transfer possession of all of the Property to the independent purchaser(s)
thereof, in each case by surrendering the same into the
<PAGE>
38
possession of the Lessor or such purchaser(s), as the case may be, free and
clear of all Liens, in good condition (as modified by Modifications permitted by
this Master Lease), and in compliance with Applicable Law.
ARTICLE XXII
ESTOPPEL CERTIFICATES
22.1 Estoppel Certificates. At any time and from time to time upon not
---------------------
less than fifteen (15) Business Days' prior request by the Lessor or the Lessee
(the "Requesting Party"), the other party (whichever party shall have received
----------------
such request, the "Certifying Party") shall furnish to the Requesting Party a
----------------
certificate signed by an individual having the office of vice president or
higher in the Certifying Party certifying that this Master Lease is in full
force and effect (or that this Master Lease is in full force and effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and Supplemental Rent have been paid; to the best knowledge of the signer of
such certificate, whether or not the Requesting Party is in default under any of
its obligations hereunder (and, if so, the nature of such alleged default); and
such other matters under this Master Lease as the Requesting Party may
reasonably request. Any such certificate furnished pursuant to this Article XXII
------------
may be relied upon by the Requesting Party, and any existing or prospective
mortgagee, purchaser or lender, and any accountant or auditor, of, from or to
the Requesting Party (or any Affiliate thereof).
ARTICLE XXIII
ACCEPTANCE OF SURRENDER
23.1 Acceptance of Surrender. No surrender to the Lessor of this
-----------------------
Master Lease or of all or any of the Property or of any part of any thereof or
of any interest therein shall be valid or effective unless agreed to and
accepted in writing by the Lessor and, prior to the payment or performance of
all obligations under the Loan Agreements and termination of the Commitments,
the Administrative Agent, and no act by the Lessor, a Lender, the Administrative
Agent or any representative or agent of the Lessor, a Lender or the
Administrative Agent, other than a written acceptance, shall constitute an
acceptance of any such surrender.
<PAGE>
39
ARTICLE XXIV
NO MERGER OF TITLE
24.1 No Merger of Title. There shall be no merger of this Master Lease
------------------
or of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, in whole or in part,
(a) this Master Lease or the leasehold estate created hereby or any interest in
this Master Lease or such leasehold estate, (b) the fee or ground leasehold
estate in the Property, except as may expressly be stated in a written
instrument duly executed and delivered by the appropriate Person or (c) a
beneficial interest in the Lessor.
ARTICLE XXV
INTENT OF THE PARTIES
25.1 Nature of Transaction.
---------------------
(a) It is the intent of the parties that: (i) the Master Lease
constitutes an operating lease from Lessor to the Lessee for purposes of the
Lessee's financial reporting, (ii) the Master Lease and other transactions
contemplated will result in the Lessee being recognized as the owner of the
Property for Federal and state income tax and bankruptcy purposes, (iii) the
Memorandum of Lease grants to Lessor a Lien on the Lessee's interest in the
Property, and (iv) the obligations of the Lessee to pay Basic Rent and any part
of the Lease Balance shall be treated as payments of interest and principal,
respectively, for Federal and state income tax and bankruptcy purposes. The
Lessor shall be deemed to have a valid and binding security interest in and Lien
on the Lessee's interest in the Property, free and clear of all Liens other than
Permitted Property Liens, as security for the obligations of the Lessee under
the Operative Documents (it being understood and agreed that the Lessee does
hereby grant a Lien, and convey, transfer, assign, mortgage and warrant to
Lessor and its successors, transferees and assigns, for the benefit of the
Lessor and its successors, transferees and assigns, the Property and any
proceeds or products thereof, to have and hold the same as collateral security
for the payment and performance of the obligations of the Lessee under the
Operative Documents), each of the parties hereto agrees that it will not, nor
will it permit any Affiliate to at any time, take any action or fail to take any
action with respect to the preparation or filing of any income tax return,
including an amended income tax return, to the extent that such action or such
failure to take action would be inconsistent with the intention of the parties
expressed in this Section 25.1.
------------
<PAGE>
40
(b) Specifically, without limiting the generality of clause (a) of
this Section 25.1, the parties hereto intend and agree that in the event of any
------------
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth or other applicable jurisdiction
thereof affecting Lessee, Lessor, any Participant or any collection actions, the
transactions evidenced by the Operative Documents shall be regarded as loans
made by the Participants to the Lessee.
ARTICLE XXVI
MISCELLANEOUS
26.1 Survival; Severability; Etc. Anything contained in this Master
---------------------------
Lease to the contrary notwithstanding, all claims against and liabilities of the
Lessee or the Lessor arising from events commencing prior to the expiration or
earlier termination of this Master Lease shall survive such expiration or
earlier termination. If any term or provision of this Master Lease or any
application thereof shall be declared invalid or unenforceable, the remainder of
this Master Lease and any other application of such term or provision shall not
be affected thereby. If any right or option of the Lessee provided in this
Master Lease, including any right or option described in Article XIV, XV, XVIII
----------- -- -----
or XX, would, in the absence of the limitation imposed by this sentence, be
--
invalid or unenforceable as being in violation of the rule against perpetuities
or any other rule of law relating to the vesting of an interest in or the
suspension of the power of alienation of property, then such right or option
shall be exercisable only during the period which shall end twenty-one (21)
years after the date of death of the last survivor of the descendants of
Franklin D. Roosevelt, the former President of the United States and John D.
Rockefeller, the founder of the Standard Oil Company, known to be alive on the
date of the execution, acknowledgment and delivery of this Master Lease.
26.2 Amendments and Modifications. Subject to the requirements,
----------------------------
restrictions and conditions set forth in the Participation Agreement, neither
this Master Lease nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by the
Lessor and the Lessee.
26.3 No Waiver. No failure by the Lessor, any Participant or the
---------
Lessee to insist upon the strict performance of any term hereof or to exercise
any right, power or remedy upon a default hereunder, and no acceptance of full
or partial payment of Rent during the continuance of any such default, shall
constitute a waiver of any such default or of any such term. To the fullest
extent permitted by law, no waiver of any default shall affect or alter this
Master Lease, and this Master Lease shall continue in full force and effect with
respect to any other then existing or subsequent default.
<PAGE>
41
26.4 Notices. All notices, demands, requests, consents, approvals and
-------
other communications hereunder shall be in writing and directed to the address
described in, and deemed received in accordance with the provisions of, Section
-------
15.3 of the Participation Agreement.
----
26.5 Successors and Assigns. All the terms and provisions of this
----------------------
Master Lease shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
26.6 Headings and Table of Contents. The headings and table of
------------------------------
contents in this Master Lease are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
26.7 Counterparts. This Master Lease may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
26.8 GOVERNING LAW. THIS MASTER LEASE SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT AS TO MATTERS RELATING TO
THE CREATION OF THE LEASEHOLD ESTATES HEREUNDER AND THE EXERCISE OF RIGHTS AND
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. WITHOUT LIMITING THE
FOREGOING, IN THE EVENT THAT THIS MASTER LEASE IS DEEMED TO CONSTITUTE A
FINANCING WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN THE CREATION,
TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY, BUT THE LIEN CREATED
HEREBY AND THE CREATION AND THE ENFORCEMENT OF SAID LIEN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA.
26.9 Liability Limited. The parties hereto agree that except as
-----------------
specifically set forth in this Master Lease or in any other Operative Document,
the Lessor shall have no personal liability whatsoever to the Lessee, the
Lenders, the Administrative Agent or their respective successors and assigns for
any claim based on or in respect of this Master Lease or any of the other
Operative Documents or arising in any way from the transactions contemplated
hereby or thereby and the recourse shall be solely had against the Lessor's
interest in the Property; provided, however, that Lessor shall be liable in its
-------- -------
individual capacity for the removal of Lessor Liens and for its own willful
misconduct or gross negligence; and further provided nothing therein shall
impair or limit the rights of
<PAGE>
42
Lessee against the Administrative Agent or Lessor relating to any Collateral
held by either of them from time to time under the Operative Documents.
26.10 Priority. On or prior to the Expiration Date and as long as no
--------
Lease Event of Default has occurred and is continuing, the Lenders Mortgage
shall be subject and subordinate to this Master Lease and following the
Expiration Date or if a Lease Event of Default shall have occurred and be
continuing, then at the sole election of the Administrative Agent, this Master
Lease shall be subject and subordinate to the Lenders Mortgage without any
further act by any Person.
26.11 Original Master Lease. The single executed original of this
---------------------
Master Lease marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on
the signature page thereof and containing the receipt thereof of Societe
Generale, New York Branch as the Administrative Agent therefor on or following
the signature page thereof shall be the Original Executed Counterpart of this
Master Lease (the "Original Executed Counterpart"). To the extent that this
-----------------------------
Master Lease constitutes chattel paper, as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction, no security
interest in this Master Lease may be created through the transfer or possession
of any counterpart other than the Original Executed Counterpart.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Master Lease to be
duly executed and delivered as of the date first above written.
PALM, INC., as Lessee
By: /s/ Judy Bruner
------------------------------
Name: JUDY BRUNER
Title: CHIEF FINANCIAL OFFICER
SOCIETE GENERALE FINANCIAL
CORPORATION, as Lessor
By: /s/ illegible
------------------------------
Name: illegible
Title: Senior Vice President
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Master Lease is hereby
acknowledged as of the date hereof.
SOCIETE GENERALE, NEW YORK BRANCH,
as Administrative Agent
By: /s/ illegible
----------------------------
Name: Sean Rheuben
Title: Attorney-in-fact
<PAGE>
SCHEDULE I TO THE
MASTER LEASE
Release Parcel Area Description
The Release Parcel Area encompasses 14.11 acres bounded by Route 237,
North First Street and Holder Way; excludes all Improvements constructed on the
Land; and is limited to the following Assessor's Parcel Numbers (APN):
097-03-066;
097-03-081;
097-03-100;
097-03-101; and
0973-03-105.
<PAGE>
APPENDIX A to
Participation Agreement,
Master Lease,
Loan Agreements,
Construction Agency Agreement,
Lender Mortgage,
Pledge Agreements
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear contrary
--------------
intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative Document),
document or instrument means such agreement, document or instrument as
amended, supplemented, amended and restated or otherwise modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms of the other Operative Documents and reference to
any promissory note includes any promissory note which is an extension
or renewal thereof or a substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision
of any Applicable Law means that provision of such Applicable Law from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section
or other provision;
(vi) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or
Appendix, Schedule or Exhibit thereto;
<PAGE>
(vii) "hereunder", "hereof'", "hereto" and words of similar import
shall be deemed references to an Operative Document as a whole and not
to any particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(ix) relative to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding";
(x) with respect to any rights and obligations of the parties
under the Operative Documents, all such rights and obligations shall be
construed to the extent permitted by Applicable Law; and
(xi) reference to the obligations being paid and performed at any
time shall mean those obligations that are known at such time.
B. Computation of Time Periods. For purposes of computation of periods
---------------------------
of time under the Operative Documents, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
C. Accounting Terms and Determinations. Unless otherwise specified in
-----------------------------------
any Operative Document, all terms of an accounting character used therein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Lessee's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Lessee's and its consolidated Subsidiaries delivered
to the Lessor and Administrative Agent, for the benefit of the Lenders unless
with respect to any such change concurred in by the Lessee's independent public
accountants or required by GAAP, in determining compliance with any of the
provisions of any Operative Document, the Lessee shall have objected to
determining such compliance on such basis at the time of delivery of such
financial statements, in which event such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made.
D. Conflict in Operative Documents. If there is any conflict between
-------------------------------
any Operative Documents, such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.
E. Legal Representation of the Parties. The Operative Documents were
-----------------------------------
negotiated by the parties with the benefit of legal representation and any rule
of construction or
2
<PAGE>
interpretation otherwise requiring the Operative Document to be construed or
interpreted against any party shall not apply to any construction or
interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms
-------------
defined herein have the respective indicated meanings when used in each
Operative Document.
"Account" means the account established by the Lessor and the Tranche
A Lender with the Administrative Agent into which all payments by the Lessee
under the Operative Documents shall be made. The Account shall be specified on
Schedule II to the Participation Agreement, as such Schedule II may from time to
----------- -----------
time be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Acquisition Date" means September 5, 2000.
"Add Backs" means as of the last day of any Fiscal Quarter, the
cumulative total, for the period commencing on April 29, 2000 and ending on and
including such first mentioned date, of all goodwill attributable to
acquisitions during such period and all reductions in Consolidated Tangible
Assets attributable to the Lessee's purchase of its own capital stock during
such period, in each case as determined in accordance with GAAP.
"Adjusted Eurodollar Rate" means the applicable London Interbank
Offered Rate, as applicable to any Interest Period and, in the event any Lender
is required to maintain reserves against "Eurocurrency Liabilities" under
Regulation D by the F.R.S. Board, during such period the Adjusted Eurodollar
Rate shall mean a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Eurodollar Reserve Percentage.
"Administrative Agent" means Societe Generale, acting through its New
York Branch, as Administrative Agent under the Participation Agreement and the
other Operative Documents.
"Advance" means an advance of funds by the Administrative Agent to the
Construction Agent pursuant to Article III of the Participation Agreement.
-----------
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person (excluding any trustee under, or any committee
with responsibility for administering, any Pension Plan or welfare plan). For
purposes of this definition, "control" when used with respect to any Person
means the power to direct or cause the direction of the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"After Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all taxes required to be paid by the
3
<PAGE>
recipient (less any tax savings actually realized by the recipient as a result
of such payment) with respect to the receipt by the recipient of such amounts,
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Hazardous Materials Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations
by, any Governmental Authority, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including,
without limitation, wetlands) and those pertaining to the construction, use or
occupancy of the Property) or in each case affecting the Lessee, the Property or
any material interests in any other kind of property or asset, whether real,
personal or mixed, or tangible or intangible, of the Lessee.
"Appraisal" means, (i) with respect to the Land, an appraisal of the
Land prepared by an Appraiser, appraising the Fair Market Sales Value (Land) as
of the Acquisition Date and (ii) with respect to the Improvements, an appraisal
of the Improvements prepared by an Appraiser, appraising the Fair Market Sales
Value (Improvements) to be constructed on the Land in accordance with the Plans
and Specifications therefor as of the Completion Date and as of the Expiration
Date, and each such Appraisal complies in all material respects (as determined
by the judgment of counsel to the Administrative Agent and the Lessor) with all
of the provisions of the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended, the rules and regulations adopted pursuant thereto and
all other applicable Requirements of Law.
"Appraiser" means, as of the Documentation Date (a) with respect to
the Improvements, Marshall & Stevens, Incorporated, and (b) with respect to the
Land, Carneghi-Bautovich & Partners, Inc., and thereafter, an independent third
party reputable appraiser or appraisers selected by the Lessor and the
Administrative Agent with the consent of the Lessee (which consent shall not be
unreasonably withheld or delayed).
"Appurtenant Rights" means, with respect to the Land, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, hereditaments and other rights and
benefits at any time belonging or pertaining to the Land or the Improvements
thereon, including, without limitation, the use of any streets, ways, alleys,
vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land
and (ii) all permits, licenses and rights, whether or not of record, appurtenant
to the Land.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit B to the Construction Period Loan Agreement
---------
or Exhibit C to the Basic Term Loan Agreement.
---------
"Assignment of Lease, Rent, Construction Period Pledge Agreement and
CAA" means the Assignment of Lease, Rent, Rights Under the Construction Period
Pledge Agreement and CAA
4
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dated as of November 16, 2000 from the Lessor, as assignor, to the
Administrative Agent for the benefit of the Lenders, as assignee.
"Attributed Fair Market Sales Value (Improvements)" means, as of the
date of determination, the product of (a) the sum of the Gross Remarketing
Proceeds and the Property Completion Differential, if any, and (b) the Fair
Market Sales Value (Improvements) divided by the Fair Market Sales Value of the
Property.
"Attributed Fair Market Sales Value (Land)" means, as of the date of
determination, the product of (a) the sum of the Gross Remarketing Proceeds and
the Property Completion Differential, if any, and (b) the Fair Market Sales
Value (Land) divided by the Fair Market Sales Value of the Property.
"Available Commitment" means the aggregate of the Available Loan
Commitment and the Available Lessor Commitment.
"Available Lessor Commitment" means at any time, an amount equal to
the excess, if any, of (x) the Lessor Commitment over (y) the Lessor Balance.
"Available Loan Commitment" means at any time, an amount equal to the
excess, if any, of (x) the Loan Commitment over (y) the Loan Balance.
"Bankruptcy Code" is defined in Section 5.1(e) of each Loan Agreement.
-------------
"Base Rate" means, for any day, the rate per annum equal to one-half
of one percent above the Federal Funds Rate.
"Base Rate Loan(s)/Lessor Amount(s)" means a Loan or Lessor Amount, as
the case may be, bearing interest at the Base Rate.
"Basic Lease Term" is defined in Section 2.3 of the Master Lease.
-----------
"Basic Rent" means the aggregate of (i) the Lender Basic Rent and (ii)
the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent
is due.
"Basic Rent Payment Date" means the during the Commitment Period, the
last day of each Interest Period then in effect, and during the Basic Lease
Term, the Payment Set Date.
"Basic Term Loan Agreement" means the Basic Term Loan Agreement, to be
dated as of the Completion Date, among the Lessor, as borrower, the Lenders
party thereto and the Administrative Agent, as same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
5
<PAGE>
"Basic Term Pledge Agreement" means the Basic Term Pledge Agreement,
to be dated as of the Completion Date, among the Lessee as Grantor and the
Collateral Agent for the benefit of the Secured Parties thereunder, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Break Costs" means an amount equal to the amount, if any, required to
compensate any Participant for any additional losses (including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Participant to fund its
obligations under the Operative Documents) it may reasonably incur as a result
of (w) the Lessee's payment of Basic Rent other than on a Basic Rent Payment
Date for any reason, (x) any Advance not being made on the date specified
therefor in the applicable Funding Request (other than as a result of a breach
by such Participant, as the case may be, of its obligation under Section 3.1,
-----------
3.2 or 3.3, as the case may be, of the Participation Agreement to make Advances
--- ---
to the Lessee or make Lessor Amounts or Loans available to the Lessor), (y) the
Lessee's payment of the Lease Balance, or a portion thereof, on any date other
than a Basic Rent Payment Date, or (z) as a result of any conversion of the
Adjusted Eurodollar Rate in accordance with Section 13.7 of the Participation
------------
Agreement. A statement as to the amount of such loss, cost or expense, prepared
in good faith and in reasonable detail and submitted by such Participant, as the
case may be, to the Lessee, shall be presumed correct and binding on the Lessee
absent demonstrable error.
"Business Day" means (i) each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banks in San Francisco, California, New York,
New York or the Funding Office of any Other Lender are generally authorized or
obligated, by law or executive order, to close and (ii) relative to the payment
of Rent determined by reference to the Adjusted Eurodollar Rate, any day which
is a Business Day under clause (i) and is also a day on which dealings in
Dollars are carried on in the London interbank eurodollar market.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of a lessee in accordance with GAAP.
"Capital Lease Obligations" means the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Cash Collateral Account" has the meaning attributed to the term in
the Basic Term Pledge Agreement.
"Casualty" means any damage or destruction of all or any portion of
the Property as a result of a fire, flood, gas explosion, earthquake or other
casualty or catastrophe.
6
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"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. (S)(S)_9601 et seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986, as otherwise amended or
modified from time to time, or any successor statute thereto.
"Certifying Party" is defined in Section 22.1 of the Master Lease.
------------
"Change of Control" means as to the Lessee and Guarantor, (i) an event
or series of events by which any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 as in effect on the
Documentation Date) or related persons constituting a "group" (as such term is
used in Rule 13d-5 under the Securities Exchange Act of 1934 as in effect on the
Documentation Date), is or becomes or has the absolute, unconditional right to
become the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934 as in effect on the Documentation Date),
directly or indirectly, of 50% or more of the number of shares of voting stock
of the Lessee, and, in addition, (ii) after the occurrence of such event or
series of events, during any period of twelve (12) consecutive months,
individuals who, at the beginning of such period, constituted the board of
directors of the Lessee (together with any new director whose election by the
Lessee's board of directors whose nomination for election by the Lessee's
stockholders was approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason (other than due to death or disability) to constitute a majority of
the board of directors of the Lessee then in office.
"City of San Jose" means a municipal corporation, under the
Constitution and laws of the State of California and its charter with all powers
of a charter city granted by the Constitution of the State of California.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, damages, judgments, penalties, fines, claims, demands, settlements, costs
and expenses (including, without limitation, reasonable legal fees and expenses)
of any nature whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto.
"Collateral" means, with respect to the Construction Period, as
defined in Section 2.1 of the Construction Period Pledge Agreement and, with
-----------
respect to the Basic Lease Term, as defined in paragraph 3 of the Basic Term
-----------
Pledge Agreement.
"Collateral Account" is defined in Section 3.1 of the Construction
-----------
Period Pledge Agreement.
"Collateral Agent" means during the Construction Period pursuant to
the Construction Period Pledge Agreement, State Street Bank and Trust Company
and during the Basic Lease Term
7
<PAGE>
pursuant to the Basic Term Pledge Agreement, Societe Generale, New York Branch,
each collateral agent acting on behalf of the Lenders.
"Commencement of Construction" means the date that Construction
commences.
"Commitment Period" means the period from and including the
Documentation Date but excluding the date occurring on the earliest of (i) the
Final Commitment Termination Date, (ii) the date on which the Lease Balance
equals the Maximum Commitment Amount, subject to Section 4.3(b)(i) of the
----------------
Participation Agreement, (iii) the Final Funding Date for the Property and (iv)
the date on which the Commitments shall terminate as provided in the Operative
Documents.
"Commitments" means (i) as to the Tranche A Lender, the Tranche A Loan
Commitment, (ii) as to each Tranche B Lender, its respective Tranche B Loan
Commitment, and (iii) as to the Lessor, the Lessor Commitment.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Lessee within the meaning
of Section 4001 of ERISA or is part of a group which includes the Lessee and
which is treated as a single employer under Section 414 of the Code.
"Competitor" means any Person that manufactures, distributes or
markets computers, computer systems, computer components and peripherals or
provides web hosting or similar services or internet advisory and e-commerce
consulting services.
"Completed Property" means the Property after Completion has been
achieved.
"Completion" means, with respect to the Property, such time as the
conditions set forth in Section 6.3 of the Participation Agreement are satisfied
-----------
with respect thereto.
"Completion Certificate" is defined in Section 6.3(a) of the
-------------
Participation Agreement.
"Completion Date" means, with respect to the Property, the date
determined under Section 6.3 of the Participation Agreement.
-----------
"Compliance Certificate" means the certification required pursuant to
Section 10.1(a)(iii) of the Participation Agreement.
-------------------
"Condemnation" means, with respect to the Property, any condemnation,
requisition, confiscation, seizure or other taking or sale of the use, access,
occupancy, easement rights or title to the Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, the Property
or alter the pedestrian or vehicular traffic flow to the
8
<PAGE>
Property so as to result in change in access to the Property, or by or on
account of an eviction by paramount title or any transfer made in lieu of any
such proceeding or action.
"Consolidated EBITDAR" for any period, means the Consolidated Net
Income for such period plus, without duplication and to the extent reflected as
----
a charge in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) all scheduled rent under
Capital Leases and Operating Leases, (f) any extraordinary, unusual or non-
recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), and (g) any other non-cash charges, and minus, to the
-----
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary, unusual or non-
recurring income or gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of business) and (c)
any other non-cash income, all as determined on a consolidated basis.
"Consolidated Fixed Charge Coverage Ratio" for any period, means the
ratio of (a) Consolidated EBITDAR for such period to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges" for any period, with respect to each of
the Lessee and the Guarantor, means the sum (without duplication) of (a)
Consolidated Interest Expense for such period, (b) Consolidated Lease Expense
for such period and (c) scheduled payments made during such period on account of
principal of Indebtedness of the Lessee or the Guarantor (including scheduled
principal payments).
"Consolidated Interest Expense" for any period, with respect to each
of the Lessee and the Guarantor, means the total cash interest expense
(including that attributable to Capital Lease Obligations) of the Lessee or the
Guarantor for such period with respect to all outstanding Indebtedness of the
Lessee or the Guarantor (including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing) .
"Consolidated Lease Expense" for any period, with respect to each of
the Lessee and the Guarantor, means the aggregate amount of fixed and contingent
rentals payable by the Lessee or the Guarantor for such period with respect to
capital or operating leases of real and personal property, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period, with respect to each of the
Lessee and the Guarantor, means the consolidated net income (or loss) determined
on a consolidated basis in accordance with GAAP; provided that there shall be
--------
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Lessee or the Guarantor or is merged into or
9
<PAGE>
consolidated with the Lessee or the Guarantor, (b) the income (or deficit) of
any Person (other than a Subsidiary of the Lessee or the Guarantor) in which the
Lessee or the Guarantor has an ownership interest, except to the extent that any
such income is actually received by the Lessee or the Guarantor in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Lessee or the Guarantor to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation (other than under any
Operative Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Lessee or
the Guarantor in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Tangible Assets" means, as of any date of determination,
Consolidated Total Assets minus the following: (i) all assets which would be
classified as intangible assets in accordance with GAAP, including goodwill,
organizational expense, research and development expense, patent applications,
patents, trademarks, trade names, brands, copyrights, trade secrets, customer
lists, licenses, franchises and covenants not to compete; (ii) all unamortized
debt discount and expense; (iii) all treasury stock; and to the extent remaining
after consolidation (iv) all receivables from Affiliates, directors, officers or
employees of the Lessee or the Guarantor.
"Consolidated Tangible Net Worth" means, as of any date of
determination, Consolidated Tangible Assets minus Consolidated Total Liabilities
-----
plus (minus) the cumulative foreign currency translation adjustment as of such
---- -----
date, as determined in accordance with GAAP.
"Consolidated Total Assets" means, with respect to each of the Lessee
and Guarantor, as of any date of determination, the total assets of the Lessee
or the Guarantor on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Total Liabilities" means, with respect to each of the
Lessee and Guarantor, as of any date of determination, the total liabilities of
the Lessee on a consolidated basis, as determined in accordance with GAAP.
"Constituent Document" means, relative to any Person, its certificate
of incorporation, its by-laws and all shareholder agreements, voting trusts, its
partnership agreement, its certificate of limited partnership and similar
arrangements applicable to any of its authorized shares of capital stock or
partnership interests.
"Construction" means, with respect to the Land, the construction and
installation of all Improvements thereon contemplated by the Plans and
Specifications applicable to the Land.
"Construction Agency Agreement" means the Construction Agency
Agreement, dated as of November 16, 2000, among the Lessor and the Construction
Agent.
10
<PAGE>
"Construction Agency Agreement Default" means any event or condition
which, with the lapse of time or the giving of notice, or both, would constitute
a Construction Agency Agreement Event of Default.
"Construction Agency Agreement Event of Default" means a "Construction
Agency Agreement Event of Default" as defined in Section 5.1 of the Construction
-----------
Agency Agreement.
"Construction Agent" means the Lessee acting in the capacity of
construction agent under the Construction Agency Agreement.
"Construction Costs" means the fees, expenses, costs and other items
related to the development and construction of the Improvements and specified
below:
(a) the costs of development, architectural and engineering services
related to the Improvements, including the costs of preparation of studies,
surveys, reports, tests, plans and specifications;
(b) the costs of legal, accounting, the costs of the Insurance
Consultant and other services related to the Improvements;
(c) the fees and charges incurred in connection with securing all
Governmental Actions required to be taken, given or obtained in connection
with the development, construction, ownership, financing, maintenance or
operation of the Improvements;
(d) any title fees, premium and escrow costs and other expenses
relating to title insurance and the closings contemplated by the Operative
Documents;
(e) all expenses relating to any Environmental Audit and compliance
with Environmental Laws and Hazardous Materials Laws;
(f) fees and other expenses relating to Appraisals pursuant to the
Operative Documents;
(g) the costs incurred in connection with the acquisition,
construction, improvement, rehabilitation or extension of the Improvements
comprising a part of the Property and the provision of the necessary
services and utilities thereto;
(h) interest on the Loans and Yield on the Lessor Amounts during the
Construction Period with respect to the Construction Costs and the Land
Costs;
(i) any sales, use, property, real or personal, tangible or
intangible taxes incurred in connection with the Improvements;
11
<PAGE>
(j) any other items included in the construction budget;
(k) any other costs and expenses incurred in connection with the
construction, development and equipping of the Property including fees to
Participants and other Transaction Expenses;
(l) fees, expenses and premiums related to property insurance under
Section 2.9 of the Construction Agency Agreement;
-----------
(m) such other items as the Participants may reasonably approve in
writing.
"Construction Documents" is defined in Section 2.6 of the Construction
-----------
Agency Agreement.
"Construction Period" means, with respect to the Property, the period
commencing on the Commencement of Construction and ending on the earlier of (i)
the Completion Date and (ii) the Final Commitment Termination Date.
"Construction Period Loan Agreement" means the Construction Period
Loan Agreement, dated as of November 16, 2000, between the Lessor, as borrower,
the Lenders party thereto and the Administrative Agent acting on behalf of the
Lenders.
"Construction Period Pledge Agreement" means the Construction Period
Security and Control Agreement, dated as of November 16, 2000, among the Lessor,
the Lessee and the Collateral Agent for the benefit of the Secured Parties
thereunder as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Construction Period Property" means, at any date of determination,
the Property during the Construction Period.
"Construction Recourse Amount" means, as determined as of any date
with respect to the Construction Period Property, an amount equal to the sum of
(i) the Land Lease Balance plus (ii) 89.95% of the Project Costs.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain solvency or any balance sheet
item, level of income or financial condition of the primary obligor, or (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner or any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (d) otherwise to assure
12
<PAGE>
or hold harmless the holder of any such primary obligation against loss in
respect thereof. The amount of any Contingent Obligation shall be deemed equal
to the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or if indeterminable,
the maximum reasonably anticipated liability in respect thereof; provided,
--------
however, that the term "Contingent Obligation" shall not include endorsements of
-------
instruments for deposit or collection in the ordinary course of business.
"Contractual Obligations" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Deficiency Collateral" is defined in Section 14.1 of the
------------
Participation Agreement.
"Deficiency Date" is defined in Section 14.1 of the Participation
------------
Agreement.
"Deposit Taker Losses" means, the value of any Collateral that the
Collateral Agent shall fail to deliver to the Lessee, the Administrative Agent,
the Lender(s) or the Lessor in accordance with the Operative Documents during
the Basic Lease Term (as a result of the Collateral Agent's insolvency or
offsets by the Collateral Agent in violation of the Operative Documents).
"Development Agreement" means that certain Development Agreement
entered into as of August 5, 1997, by and between the City of San Jose and 3COM
Corporation, authorized by the City Council by adoption of Ordinance No. 25402,
recorded under Series No. 15206980 in the official records of Santa Clara County
on April 7, 2000, as amended by that certain First Amendment to Development
Agreement entered into by the parties as of March 21, 2000, authorized by the
City Council by adoption of Ordinance No. 26074.
"Documentation Date" is November 16, 2000, the date upon which all
conditions precedent in Section 6.1 of the Participation Agreement have been
satisfied.
"Documentation Date Land Lease Balance" means $221,525,168.20.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"End of the Term Report" is defined in Section 13.2(a) of the
---------------
Participation Agreement.
"Engagement Letter" means the Amended and Restated Engagement Letter,
dated November 7, 2000, between the Lessor, Societe Generale, New York Branch
and the Lessee.
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"Environmental Audit" means, with respect to the Property, a Phase One
environmental site assessment (the scope and performance of which meets or
exceeds the then most current ASTM Standard Practice E1527 for Environmental
Site Assessments: Phase One Environmental Site Assessment Process) of the
Property.
"Environmental Law" means any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes or decrees of any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment or
the use, storage, handling, disposal, transport, treatment or generation of
Hazardous Materials, as now or may at any time be in effect, including, without
limitation, the California Environmental Quality Act and any Requirement of Law
related to the protection of the Western Burrowing Owl (athene cunicularia
hypngaea) and any rules, regulations and guidance documents promulgated
thereunder.
"Environmental Violation" means, with respect to the Property, any
activity, occurrence or condition that violates or results in non-compliance
with any Environmental Law or Hazardous Materials Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means, with respect to the Lessee, the Lessee and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Lessee, are treated as a single employer under Section 414 of the Code.
"Eurodollar Loan(s)/Lessor Amount(s)" means a Loan or Lessor Amount,
as the case may be, bearing interest at the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage" means that percentage (expressed as a
decimal) which is in effect on any day that a reserve percentage is prescribed
by the F.R.S. Board for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a non-
United States office of any Bank to United States residents). The London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means with respect to the Lease, a Lease Event of
Default and with respect to the Construction Agency Agreement, a Construction
Agency Agreement Event of Default.
"Excess Casualty/Condemnation Proceeds" means the excess, if any, of
(x) the aggregate of all awards, compensation or insurance proceeds payable in
connection with a Casualty or
14
<PAGE>
Condemnation minus (y) that portion of the Lease Balance paid by the Lessee
pursuant to Article XV of the Master Lease with respect to such Casualty or
----------
Condemnation.
"Excess Sales Proceeds" means the excess, if any, of (x) the aggregate
of all proceeds received by the Lessor in connection with the Lessee's exercise
of the Remarketing Option under Article XX of the Master Lease, less all fees,
----------
costs and expenses of the Lessor in connection with the exercise of its rights
and remedies thereunder, minus (y) the outstanding Lease Balance.
-----
"Expiration Date" means September 5, 2007, unless the Master Lease
shall have been earlier terminated in accordance with the provisions thereof.
"Facility Equipment" means all equipment, apparatus, furnishings,
fittings and personal property of every kind and nature whatsoever purchased,
leased or otherwise acquired by the Lessor using the proceeds of the Loans and
Lessor Amounts and now or subsequently attached to, contained in or used or
usable in any way in connection with any operation or letting of the Property,
including but without limiting the generality of the foregoing, all screens,
awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm
doors and windows, shelving, display cases, counters, furniture and furnishings,
heating, electrical, switch gear, uninterrupted power supply, and mechanical
equipment, lighting, switchboards, plumbing, ventilation, air conditioning and
air-cooling apparatus, refrigerating, and incinerating equipment, escalators,
generators, elevators, stoves, ranges, laundry equipment, cleaning systems
(including window cleaning apparatus), telephones, communications systems
(including satellite dishes and antennae), computers, sprinkler systems and
other fire prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description.
"Fair Market Sales Value" means with respect to the Property, the sum
of the Fair Market Sales Value (Land) plus the Fair Market Sales Value
(Improvements).
"Fair Market Sales Value (Improvements)" means, with respect to the
Improvements, the amount, which in any event shall not be less than zero, that
would be paid in cash in an arm's-length transaction between an informed and
willing purchaser and an informed and willing seller, neither of whom is under
any compulsion to purchase or sell, respectively, for the ownership (or the
economic equivalent thereof) of the Improvements.
"Fair Market Sales Value (Land)" means, with respect to the Land, the
amount, which in any event shall not be less than zero, that would be paid in
cash in an arm's-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, for the ownership (or the economic equivalent
thereof) of the Land.
"Federal Funds Rate" means, for any day or period, as applicable, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) at
which Federal funds in the amount equal to the principal amount of the related
Loans or Lessor Amounts are offered in the interbank
15
<PAGE>
market to Societe Generale, New York Branch, as of 11:00 a.m., New York time, on
such day for such day or for such period, as applicable.
"Fees" means, collectively, the Transaction Expenses and all other
fees paid or payable to the Lessor, Societe Generale, New York Branch and/or the
Administrative Agent under the Participation Agreement and the other Operative
Documents.
"Final Commitment Termination Date" means the earlier of (a) the Final
Funding Date and (b) September 5, 2003.
"Final Funding" means the Advance made on the Final Funding Date.
"Final Funding Date" means the Completion Date at which time the
Construction Agent shall provide the Completion Certificate with attached
punchlist items to be funded by the Construction Agent, pursuant to Section
-------
6.3(a) of the Participation Agreement.
------
"Financial Officer" means, with respect to any Person, the chief
financial officer, principal accounting officer, treasurer, controller, or vice
president of finance of such Person.
"FIRPTA Affidavit" means, the certification of Nonforeign Status in
accordance with Internal Revenue Code Section 897 and Section 1445(b)(2) of the
Foreign Investment and Real Property Tax Act, as amended.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on the Friday closest in time to May 31.
"Fixture" mean all fixtures relating to the Improvements, including
all components thereof, located in or on such Improvements, together with all
replacements, modifications, alterations and additions thereto.
"Force Majeure Event" means, with respect to the Construction of the
Property, any event (the existence of which was not known and could not have
been discovered through the exercise of reasonable due diligence by the Lessee
or the Construction Agent prior to the Documentation Date) beyond the control of
the Lessee and the Construction Agent, including, but not limited to, strikes,
lockouts, adverse soil conditions, acts of God, adverse weather conditions,
inability to obtain labor or materials, government activities, civil commotion
and enemy action; but excluding any event, cause or condition that results from
the Construction Agent's financial condition or failure to pay or any event,
cause or condition which could have been avoided or which could be remedied
through the exercise of commercially reasonable efforts or the commercially
reasonable expenditure of funds.
16
<PAGE>
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Funding Date" is defined in Section 3.1(c) of the Participation
--------------
Agreement.
"Funding Office" means the office of each Participant identified on
Schedule II to the Participation Agreement as its Funding Office.
-----------
"Funding Request" means the Funding Request substantially in the form
of Exhibit A to the Participation Agreement.
"GAAP" means United States generally accepted accounting principles
(including principles of consolidation) applied on a basis consistent with those
which, are to be used in making the calculations for purposes of determining
compliance with the terms of the Operative Documents.
"Governmental Action" means all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Applicable Law, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the use, occupancy, zoning and operation of the Property as
provided in the Master Lease.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and having jurisdiction over the Property or the Operative
Documents, as applicable.
"Gross Remarketing Proceeds" is defined in Section 20.1(h) of the
---------------
Master Lease.
"Guarantor" means Palm, Inc., a Delaware corporation.
"Guaranty" means the Guaranty Agreement, dated as of November 16,
2000, made by the Guarantor to the Administrative Agent for the ratable benefit
of the Lenders.
"Hazardous Activity" means any activity, process, procedure or
undertaking that (a) directly or indirectly (i) produces, generates or creates
any Hazardous Material; (ii) causes or results in (or threatens to cause or
result in) the Release of any Hazardous Material into the environment (including
air, water vapor, surface water, groundwater, drinking water, land (including
surface or subsurface), plant, aquatic and animal life) or (iii) involves the
containment or storage of any Hazardous Material and (b) is regulated as
hazardous waste treatment, storage or disposal within the meaning of any
Hazardous Materials Law.
17
<PAGE>
"Hazardous Materials" means any hazardous, toxic or dangerous
materials, substances, chemicals, wastes or pollutants that from time to time
are defined by or pursuant to or are regulated under any Hazardous Materials
Laws, including asbestos, polychlorinated biphenyls, petroleum, petroleum
derivatives or by-products, other hydrocarbons, urea formaldehyde and any
material, substance, pollutant or waste that is defined as a hazardous waste
under RCRA or defined as a hazardous substance under CERCLA.
"Hazardous Materials Laws" means all laws, statutes, rules,
regulations or ordinances of Governmental Authority, now or hereafter in effect,
relating to the generation, recycling, use, reuse, sale, storage, handling,
transport, treatment or disposal of Hazardous Materials, including CERCLA, RCRA,
the Clean Air Act, 42 U.S.C. (S) 7401, et seq. ("CAA"), the Toxic Substances
---
Control Act, 15 U.S.C. (S)_2601 et seq. ("TSCA") and any rules, regulations and
----
guidance documents promulgated or published thereunder, and any statute, law,
rule, regulation or ordinance of Governmental Authority now or hereafter in
effect that relates to public health, safety or the discharge, emission or
disposal of Hazardous Materials in or to air, water, land or groundwater, to the
withdrawal or use of groundwater, to the use, handling or disposal of asbestos,
polychlorinated biphenyls, petroleum, petroleum derivatives or by-products,
other hydrocarbons or urea formaldehyde, to the treatment, storage, disposal or
management of Hazardous Materials, to exposure to Hazardous Materials or to the
transportation, storage, disposal, management or release of gaseous or liquid
substances, and any regulation, order, injunction, judgment, declaration, notice
or demand issued thereunder.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Lessee, any qualification or exception to such opinion or certification
which (a) is of a "going concern" or similar nature or (b) relates to the
limited scope of examination of matters relevant to such financial statement or
(c) relates to the treatment or classification of any item in such financial
statement and which, as a condition to its removal, would require an adjustment
to such item the effect of which would be to cause the Lessee to be in default
of any of its obligations under Section 10.2 of the Participation Agreement.
------------
"Impositions" means any and all liabilities, losses, expenses and
costs of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever imposed by any foreign,
United States Federal, state or local authority ("Taxes") (including, without
limitation, (i) real and personal property taxes, including personal property
taxes on any property covered by the Master Lease that is classified by
Governmental Authorities as personal property, and real estate or ad valorem
taxes in the nature of property taxes; (ii) sales taxes, use taxes and other
similar taxes (including rent taxes and intangibles taxes); (iii) any excise
taxes; (iv) real estate transfer taxes, conveyance taxes, mortgage taxes,
intangible taxes, stamp taxes and documentary recording taxes and fees; (v)
taxes that are, or are in the nature of, franchise, income, value added, gross
receipts, privilege and doing business taxes, license and registration fees or
taxes; and (vi) assessments on the Property, including all assessments for
public improvements or benefits, whether or not such improvements are commenced
or completed within the Lease Term), and in each case all interest, additions to
tax and penalties thereon, which at any time may be levied, assessed or imposed
upon or with respect to (a) any Tax Indemnitee, the Property or any part thereof
or interest therein, or
18
<PAGE>
the Lessee or any sublessee or user of the Property; (b) the financing,
refinancing, demolition, construction, substitution, subleasing, assignment,
control, condition, occupancy, servicing, maintenance, repair, ownership,
possession, purchase, rental, lease, activity conducted on, delivery, insuring,
use, operation, improvement, transfer, return or other disposition of the
Property or any part thereof or interest therein; (c) Notes or interest therein
or transfer thereof, (d) the Rent and all other rentals, receipts or earnings
arising from the Property or any part thereof or interest therein; (e) the
Operative Documents or any payment made or accrued pursuant thereto; (f) the
income or other proceeds received with respect to the Property or any part
thereof or interest therein upon the sale or disposition thereof; (g) any
contract (including the Construction Agency Agreement) relating to the
construction, acquisition or delivery of the Improvements or any part thereof or
interest therein; (h) the issuance of the Notes; or (i) otherwise in connection
with the transactions contemplated by the Operative Documents.
The term "Impositions" shall not mean or include the following Taxes,
unless such taxes are incurred or increased, directly or indirectly, by actions
of the Lessee on or after the Acquisition Date (other than actions specifically
required of the Lessee hereunder or under any other Operative Document):
(i) Taxes (other than Taxes that are, or are in the nature
of, sales, use, rental, value added, transfer or property taxes)
that are imposed on a Tax Indemnitee by the United States federal
government (other than any taxes imposed by means of withholding
at source) that are based on or measured by the net income
(including taxes based on capital gains and minimum taxes) of
such Person; provided that this clause (i) shall not be
--------
interpreted to prevent a payment from being made on an After Tax
Basis if such payment is otherwise required to be so made;
(ii) Taxes (other than Taxes that are, or are in the nature
of, sales, use, rental, value added, transfer or property taxes)
that are (x) imposed by any state or local jurisdiction or taxing
authority within any state or local jurisdiction to the extent
such Tax Indemnitee is organized or otherwise a taxpayer in such
jurisdiction without regard to the transactions contemplated by
the Operative Documents and (y) based upon or measured by the
gross or net income (including any minimum taxes, withholding
taxes or taxes on or measured by capital, net worth, excess
profits or items of tax preference or taxes that are capital
stock, franchise or doing business taxes), except that this
clause (ii) shall not apply to (and thus shall not exclude) any
such Taxes imposed on a Tax Indemnitee by a state (or any local
taxing authority thereof or therein) where the Property is
located, possessed or used under the Master Lease unless the Tax
Indemnitee was subject to such tax in such jurisdiction without
regard to the transaction contemplated by the Operative Documents
and the Master Lease; provided that this clause (ii) shall not be
--------
interpreted to prevent a payment from
19
<PAGE>
being made on an After Tax Basis if such payment is otherwise
required to be so made;
(iii) any Taxes imposed by the United States federal
government by means of withholding at the source if and to the
extent that such Taxes are not attributable to a change in
applicable Law after the effective date which such Person became
a Lender or Lessor, as the case may be;
(iv) any Tax to the extent, but only to such extent, it
relates to any act, event or omission that occurs, or relates to
a period, after the termination of the Master Lease, except when
such termination is the result of the exercise of remedies after
an Event of Default occurs, in which case such exclusion shall
commence only after the sale of all the Property (but not any Tax
or imposition that relates to any period prior to the termination
of the Master Lease);
(v) any interest, additions to tax or penalties imposed
on a Tax Indemnitee as a result of a Tax Indemnitee's failure to
file any return or other documents timely and as prescribed by
Applicable Law; provided that this clause (v) shall not apply (x)
if such interest or penalties arise as a result of a position
taken (or requested to be taken) by the Lessee in a contest
controlled by the Lessee under Section 13.5(b) of the
---------------
Participation Agreement or (y) if such failure is attributable to
a failure by the Lessee to fulfill its obligations under the
Master Lease with respect to any such return;
(vi) any Taxes imposed upon a Tax Indemnitee with respect
to any voluntary transfer, sale, financing or other voluntary
disposition of any interest in the Property or any part thereof,
or any interest therein (other than any transfer contemplated by
the terms of the Operative Documents in connection with (1) the
exercise by the Lessee of its Purchase Option or any termination
option or other purchase or sale of the Property by the Lessee,
(2) the occurrence of an Event of Default, (3) a Casualty or
Condemnation affecting the Property, or (4) any sublease,
modification or addition to the Property by the Lessee);
(vii) any Taxes imposed against or payable by a Tax
Indemnitee that would not have been imposed but for, the gross
negligence or willful misconduct of such Tax Indemnitee;
(viii) Taxes to the extent resulting from such Tax
Indemnitee's failure to comply with the provisions of Section
-------
13.5(b) of the Participation Agreement, which failure precludes
-------
the ability to conduct a contest pursuant to Section 13.5(b) of
---------------
the Participation Agreement (unless such failure is caused by the
Lessee's breach of its obligations);
20
<PAGE>
(ix) Taxes imposed on or with respect to or payable by a
Tax Indemnitee resulting from, or that would not have been
imposed but for the existence of, any Lessor Lien created by or
through such Tax Indemnitee or an Affiliate thereof and not
caused by acts or omissions of the Lessee, unless required to be
removed by the Lessee; and
(x) Taxes imposed on or with respect to or payable by a Tax
Indemnitee that would not have been imposed but for an amendment,
supplement, modification, consent or waiver to any Operative
Document not initiated, requested or consented to by the Lessee
unless such amendment, supplement, modification, consent or
waiver (A) arises due to, or in connection with there having
occurred, an Event of Default or (B) is required by the terms of
the Operative Documents or is executed in connection with any
amendment to the Operative Documents required by law;
Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in clauses (i) through (x) above shall not apply to any Taxes or any
----------- ---
increase in Taxes imposed on a Tax Indemnitee, to the extent that such tax
increase would not have occurred if on the Documentation Date and each Funding
Date the Lenders and the Lessor, through the Administrative Agent, had advanced
funds to the Lessee in the form of a loan in an amount equal to the Lease
Balance funded on such date secured by the Property, with debt service for such
loan equal to the Basic Rent payable on each Basic Rent Payment Date and a
principal balance at the maturity of such loan in an amount equal to the then
outstanding Lease Balance at the end of the term of the Master Lease.
"Improvement Advance Percentage" means the aggregate of the Lender
Improvement Advance Percentage and the Lessor Improvement Advance Percentage, as
set forth in Schedule I to the Participation Agreement.
----------
"Improvement Lease Balance" means the aggregate of the Improvement
Lessor Balance and the Improvement Loan Balance.
"Improvement Lessor Amount" means, during the Construction Period, the
product of the Lessor Improvement Advance Percentage and the Advances made for
Construction Costs pursuant to Article III of the Participation Agreement.
-----------
"Improvement Lessor Balance" means (i) during the Construction Period,
the Improvement Lessor Amount and (ii) thereafter, the amount determined in
clause (i) with all accrued and unpaid Yield thereon.
"Improvement Lessor Basic Rent" means the amount of accrued Yield due
on the Improvement Lessor Balance, determined in accordance with Section 4.1 of
-----------
the Participation Agreement as of any Basic Rent Payment Date and excluding any
interest at the applicable Overdue Rate on any installment of Improvement Lessor
Basic Rent not paid when due and any fine, penalty,
21
<PAGE>
interest or cost assessed or added under any agreement with a third party for
nonpayment or late payment of Improvement Lessor Basic Rent.
"Improvement Loan Amount" means, during the Construction Period, the
product of the Lender Improvement Advance Percentage and the Advances made for
Construction Costs pursuant to Article III of the Participation Agreement.
-----------
"Improvement Loan Balance" means (i) during the Construction Period,
the Improvement Loan Amount and (ii) thereafter, the amount determined in clause
(i) with all accrued and unpaid interest thereon.
"Improvement Loan Basic Rent" means the amount of accrued interest due
on the Improvement Loan Balance, determined in accordance with Section 4.2 of
-----------
the Participation Agreement as of any Basic Rent Payment Date and excluding any
interest at the applicable Overdue Rate on any installment of Improvement Loan
Basic Rent not paid when due and any fine, penalty, interest or cost assessed or
added under any agreement with a third party for nonpayment or late payment of
Improvement Loan Basic Rent.
"Improvement Portion" means, as of the date of calculation, that
portion of the Basic Rent which is the aggregate of the Improvement Lessor Basic
Rent and the Improvement Loan Basic Rent.
"Improvements" means the improvements to real property described in
Schedule I to the Lease Supplement (Improvements).
----------
"Improvements Budget" means, with respect to the Property, the budget
for the Construction of Improvements as agreed to by the Lessor and the Lessee.
"Indebtedness" of any Person means, without duplication (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business pursuant to ordinary
terms); (c) all reimbursement obligations with respect to surety bonds, letters
of credit, bankers' acceptances and similar instruments (in each case, to the
extent material or non-contingent); (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement (including holding title or security under synthetic
lease transactions) and including, without duplication, five times the aggregate
annual payments to be made on Operating Leases in the next succeeding twelve
months, or incurred under any similar financing, in either case with respect to
property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) all Capital Lease Obligations; (g)
all net obligations with respect to Rate Contracts; (h) all indebtedness
referred to in clauses (a) through (g) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or
22
<PAGE>
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (but only to the
extent of the lesser of such Indebtedness or the fair market value of the
property subject to such Lien); and (i) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (g) above.
"Indemnitee" means (i) during the Construction Period, only the Lessor
and, as to pre-existing environmental conditions, the Administrative Agent and
the Lenders, and (ii) thereafter each of the Lessor, the Lenders, any Other
Lender(s), the Administrative Agent, the Collateral Agent, the Trustee and their
respective Affiliates, successors, assigns, directors, shareholders, partners,
officers, employees and agents.
"Initial Funding Date" means the Funding Date to occur on the
Documentation Date or the first Funding Date to occur thereafter.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Insurance Consultant" means AON Risk Services.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Master Lease to be maintained by the
Lessee or required by the Construction Agency Agreement to be maintained, or
arranged on behalf of the Lessor, by the Construction Agent, and all
requirements of the issuer of any such policy.
"Intercreditor Agreement" means an agreement entered into during the
Construction Period between the Administrative Agent, the Tranche A Lender and
the Tranche B Lenders.
"Interest Period" means:
(a) with respect to any Loan or Lessor Amount advanced during
the Commitment Period:
(i) initially, the period commencing on the Funding Date
with respect to such Loan or Lessor Amount and ending on the day
preceding the next twelfth (12/th/) day of the month; and
(ii) thereafter, each period commencing on the day after the
last day of the preceding Interest Period and ending on the day
preceding the next succeeding twelfth (12/th/) day of the month;
and
23
<PAGE>
(b) with respect to the outstanding Lessor Balance or Loan
Balance during the Basic Lease Term:
(i) initially, the period commencing on the day the Basic
Lease Term begins and ending on the next Payment Set Date; and
(ii) thereafter, each period commencing on the day after the
last day of the preceding Interest Period applicable to such Loan
Balance or Lessor Balance and ending on the next Payment Set Date
or earlier if the Maturity Date.
The foregoing provisions relating to Interest Periods are subject to the
following:
(w) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(x) Interest Periods shall, to the fullest extent practicable,
be reset to commence on the twelfth (12th) day and end on the eleventh
(11/th/) day of the relevant month;
(y) any Interest Period that would otherwise extend beyond the
Commitment Period shall end on the last day of the Commitment Period;
and
(z) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
"Interim Lease Term" means, with respect to the Property, the period
commencing on the Documentation Date therefor and ending on the earlier of (i)
the Completion Date and (ii) the Outside Completion Date.
"Land" means the parcel of real property described on Schedule I to
----------
the Lease Supplemental (Land), and includes all Appurtenant Rights attached
thereto; provided, however, upon exercise of the Undeveloped Land Purchase
-------- -------
Option pursuant to Section 18.2 of the Master Lease, Land shall specifically
------------
exclude the Release Parcel.
"Land Acquisition Cost" means $218,591,127.49.
"Land Advance Percentage" means, the aggregate of the Lender Land
Advance Percentage and the Lessor Land Advance Percentage, as set forth in
Schedule I to the Participation Agreement.
----------
24
<PAGE>
"Land Costs" means the aggregate amount of the Advances made by the
Administrative Agent to the Construction Agent for (i) the Documentation Date
Land Lease Balance and (ii) Transaction Expenses related to the Land, as such
amount is set forth in the Funding Request, including without limitation:
(a) the costs of preparation of studies, surveys, reports, tests
and plans and specifications;
(b) the costs of legal services, accounting services, the
Insurance Consultant fees and other services related to the Land;
(c) the fees and charges incurred in connection with securing
all Governmental Actions required to be taken, given or obtained in
connection with the acquisition, financing and ownership of the Land;
(d) any title fees, premium and escrow costs and other expenses
relating to title insurance and the closings contemplated by the Land
Lease;
(e) all expenses relating to any Environmental Audit and
compliance with Environmental Laws and Hazardous Materials Law
relating to the Land;
(f) fees and other expenses for the Appraisal (with respect to
the Land Lease and the Master Lease) relating to the Land;
(g) any sales, use, property, real or personal, tangible or
intangible taxes incurred in connection with the Land;
(h) any other costs and expenses including fees to Participants
and other Transaction Expenses;
(i) fees, expenses and premiums related to property insurance
under Section 2.10 of the Construction Agency Agreement; and
------------
(j) such other items as the Participants may reasonably approve
in writing.
"Land Lease" means the Land Lease, dated as of September 5, 2000,
between the Lessor and the Lessee.
"Land Lease Balance" means the aggregate of the Land Lessor Balance
and the Land Loan Balance.
25
<PAGE>
"Land Lessor Amount" means, during the Construction Period, the
product of the Lessor Land Advance Percentage and the Advances made for Land
Costs pursuant to Article III of the Participation Agreement.
-----------
"Land Lessor Balance" means (i) during the Construction Period, the
Land Lessor Amount and (ii) thereafter, the amount determined in clause (i) with
all accrued and unpaid Yield thereon.
"Land Lessor Basic Rent" means the amount of accrued Yield due on the
Land Lessor Balance, determined in accordance with Section 4.1 of the
-----------
Participation Agreement as of any Basic Rent Payment Date and excluding any
interest at the applicable Overdue Rate on any installment of Land Lessor Basic
Rent not paid when due and any fine, penalty, interest or cost assessed or added
under any agreement with a third party for nonpayment or late payment of Land
Lessor Basic Rent.
"Land Loan Amount" means, during the Construction Period, the product
of the Lender Land Advance Percentage and the Advances made for Land Costs
pursuant to Article III of the Participation Agreement.
-----------
"Land Loan Balance" means (i) during the Construction Period, the Land
Loan Amount and (ii) thereafter, the amount determined in clause (i) with all
accrued and unpaid interest thereon.
"Land Loan Basic Rent" means the amount of accrued interest due on the
Land Loan Balance, determined in accordance with Section 4.2 of the
-----------
Participation Agreement as of any Basic Rent Payment Date and excluding any
interest at the applicable Overdue Rate on any installment of Land Loan Basic
Rent not paid when due and any fine, penalty, interest or cost assessed or added
under any agreement with a third party for nonpayment or late payment of Land
Loan Basic Rent.
"Land Portion" means, as of the date of calculation, that portion of
the Basic Rent which is the aggregate of the Land Lessor Basic Rent and the Land
Loan Basic Rent.
"Lease" means, collectively, the Master Lease, the Memorandum of Lease
and the Lease Supplements.
"Lease Balance" means, as of any date of determination, an amount
equal to the aggregate of the Loan Balance and the Lessor Balance.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" means a "Lease Event of Default" as defined
in Section 16.1 of the Master Lease.
------------
26
<PAGE>
"Lease Supplement (Improvements)" means that certain Lease Supplement
(Improvements), dated as of November 16, 2000, between the Lessor and the Lease.
"Lease Supplement (Land)" means that certain Lease Supplement (Land),
dated as of November 16, 2000, between the Lessor and the Lessee.
"Lease Supplements" means (i) the Lease Supplement (Land) and (ii) the
Lease Supplement (Improvements).
"Lease Term" means the period commencing on the first day of the
Interim Lease Term and ending on the Expiration Date.
"Lender(s)" means the Tranche A Lender and the Tranche B Lenders.
"Lender Basic Rent" means, the aggregate of the Land Loan Basic Rent
and the Improvement Loan Basic Rent.
"Lender Commitment Percentage" means, with respect to the Tranche A
Lender, the Tranche A Commitment Percentage and with respect to the Tranche B
Lender, the Tranche B Commitment Percentage.
"Lender Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Lenders' interest under the Lender Mortgage, the
Assignment of Lease, Rent, Construction Period Pledge Agreement and CAA and the
Master Lease.
"Lender Improvement Advance Percentage" means 85%.
"Lender Improvement Commitment" has the meaning set forth in Schedule
--------
I to the Participation Agreement, or as otherwise modified by the Administrative
-
Agent to the Lessee.
"Lender Land Advance Percentage" means 97%.
"Lender Land Commitment" has the meaning set forth in Schedule I to
----------
the Participation Agreement, or as otherwise modified in writing by the
Administrative Agent to the Lessee.
"Lender Mortgage" means the Deed of Trust, dated as of November 16,
2000 from the Lessor to the Lenders, joined in by the Lessee, creating a first
Lien on the Property securing the Notes and the other obligations of the Lessor
under the Loan Agreements.
"Lessee" means Palm, Inc., a Delaware corporation, and its successors
and assigns expressly permitted under the Master Lease.
27
<PAGE>
"Lessor" means Societe Generale Financial Corporation, a Delaware
corporation, together with its successors and assigns permitted pursuant to
Section 12.1 of the Participation Agreement.
------------
"Lessor Amount" is defined in Section 3.2 of the Participation
-----------
Agreement.
"Lessor Balance" means, as of any date of determination, an amount
equal to the aggregate of the Land Lessor Balance and the Improvement Lessor
Balance.
"Lessor Basic Rent" means the aggregate of the Land Lessor Basic Rent
and the Improvement Lessor Basic Rent.
"Lessor Commitment" means the aggregate of the Lessor Land Commitment
and the Lessor Improvement Commitment.
"Lessor Commitment Percentage" means the Lessor Land Advance
Percentage and the Lessor Improvement Advance Percentage.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Lessor's interest under the Master Lease in the
Property.
"Lessor Improvement Advance Percentage" means 15%.
"Lessor Improvement Commitment" has the meaning set forth in Schedule
--------
I to the Participation Agreement, or as otherwise modified in writing by the
-
Administrative Agent to the Lessee.
"Lessor Land Advance Percentage" means 3%.
"Lessor Land Commitment" has the meaning set forth in Schedule I to
--------
the Participation Agreement, or as otherwise modified in writing by the
Administrative Agent to the Lessee.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against any Participant or the
Administrative Agent, whether or not resulting from the transactions
contemplated by the Operative Documents, (b) any act or omission of any
Participant or the Administrative Agent which is not required or permitted by
the Operative Documents or is in violation of any of the terms of the Operative
Documents, (c) any claim against any Participant or the Administrative Agent,
with respect to Taxes or Transaction Expenses against which the Lessee is not
required to indemnify any Participant or the Administrative Agent, in its
individual capacity, pursuant to Article IX of the Participation Agreement or
----------
(d) any claim against the Lessor arising out of any transfer by the Lessor of
all or any portion of the interest of the Lessor in the Property or the
Operative Documents other than the transfer of title to or possession of the
Property by the Lessor pursuant to
28
<PAGE>
and in accordance with the Master Lease, the Loan Agreement, or the
Participation Agreement or pursuant to the exercise of the remedies set forth in
Section 16.2 of the Master Lease.
------------
"Lessor Margin" means, (i) during the Construction Period, the
applicable margin shall be 65 basis points and (ii) upon commencement of the
Basic Lease Term, the applicable margin shall be 35 basis points.
"Lessor Mortgage" means, with respect to the Property, the Memorandum
of Lease and any and all other security instruments in appropriate recordable
form in each relevant jurisdiction sufficient to grant to the Lessor a first
priority Lien on the Lessee's interest in the Property.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other right of or arrangement
with any creditor to have its claim satisfied out of any specified property or
asset with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or the
filing of, or agreement to execute as "debtor", any financing or continuation
statement under the Uniform Commercial Code of any jurisdiction or any federal,
state or local lien imposed pursuant to any Environmental Law.
"Loan Advance" means advances of funds made pursuant to the
Construction Period Loan Agreement.
"Loan Agreement Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute a Loan Agreement Event of
Default.
"Loan Agreement Event of Default" is defined in Section 6 of the
---------
Construction Period Loan Agreement and Section 5 of the Basic Term Loan
---------
Agreement.
"Loan Agreements" means, collectively, the Construction Period Loan
Agreement and the Basic Term Loan Agreement.
"Loan Balance" means, as of any date of determination, an amount equal
to the aggregate of the Land Loan Balance and the Improvement Loan Balance.
"Loan Commitment" means the aggregate of the Tranche A Loan Commitment
and the Tranche B Loan Commitment.
"Loan Documents" means the Loan Agreements and the Notes.
"Loan Margin" means, (i) during the Construction Period with respect
to the Tranche A Loans, the applicable margin set forth in the Loan Note issued
to the Tranche A Lender and with respect to any Tranche B Loan, the applicable
margin set forth in the Loan Note issued to such
29
<PAGE>
Tranche B Lender, or (ii) during the Basic Lease Term, so long as all of the
Loan Balance is held by a Related Party Lender, 0 basis points, provided,
--------
however if all of the Loan Balance is not held by a Related Party Lender, then
-------
with respect to the Tranche A Loans as agreed to in writing between the Lessee
and the Tranche A Lender and evidenced in the Note issued to such Tranche A
Lender pursuant to the Basic Term Loan Agreement and with respect to the Tranche
B Loan, as determined pursuant to Section 10.1(i)(B) of the Participation
------------------
Agreement.
"Loan Note" is defined in Section 2.2 of the Construction Period Loan
-----------
Agreement.
"Loan Purchase Price" is defined in Section 10.1(i) of the
---------------
Participation Agreement.
"Loans" means, collectively, the loans made by the Tranche A Lender
and Tranche B Lender pursuant to either of the Loan Agreements.
"London Interbank Offered Rate" or "LIBOR" means, as applicable to any
Eurodollar Loan, the rate per annum determined by the Administrative Agent on
the basis of the offered rate for deposits in Dollars of amounts equal or
comparable to the principal amount of such Eurodollar Loan offered for a period
comparable to such Interest Period, which rates appear on the Bloomberg Screen
Page as of 11:00 A.M., London time, two (2) Business Days prior to the first day
of each such Interest Period, provided that (i) if more than one such offered
rate appears on the Bloomberg Screen Page, the "London Interbank Offered Rate"
will be the arithmetic average (rounded upwards, if necessary, to the next
higher 1/100th of 1%) of such offered rates; and (ii) if no such offered rates
appear on such page, the "London Interbank Offered Rate" for such Interest
Period will be the rate per annum quoted by Societe Generale, New York Branch
prior to the first day of each such Interest Period, for deposits in Dollars
offered to leading banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Eurodollar Loan; provided,
--------
that in the event this rate is unavailable for such comparable period an
----
Interest Period based on a combination of shorter duration interest periods
shall be used.
"Marketing Period" means the period commencing on the date notice of
the exercise of the Remarketing Option is given, but at least twelve (12) months
prior to the Expiration Date and ending on the Expiration Date.
"Master Lease" means the (i) Master Lease, dated as of November 16,
2000, among the Lessor and the Lessee and (ii) the Lease Supplements.
"Material" and "Materially" mean material to (i) the ability of a
Person to perform its obligations under the Operative Documents to which it is a
party, or (ii) the value or condition of the Property.
"Material Adverse Effect" means a material adverse effect on (i) the
business, financial position, results of operations or prospects of the Lessee,
(ii) the ability of the Lessee to perform its
30
<PAGE>
obligation under the Operative Documents or (iii) any of the rights and remedies
of the Lessor, the Administrative Agent and/or the Lenders under any of the
Operative Documents.
"Maturity Date" means September 5, 2007, unless such Maturity Date is
extended pursuant to Section 2.7 of each Loan Agreement and Section 11.2 of the
----------- ------------
Participation Agreement, or an earlier date if a Default or Event of Default has
occurred or is continuing.
"Maximum Commitment Amount" means an amount equal to $460,000,000.
"Maximum Recourse Amount" means the maximum Rent payment that can be
made on the Expiration Date under the Master Lease without causing the Master
Lease to be treated as a Capital Lease for the purposes of SFAS No. 13 which
Maximum Recourse Amount shall be the sum of (i) the Land Lease Balance and (ii)
the highest portion of the Improvement Lease Balance that can be included in the
calculation pursuant to Paragraph 7(d) of SFAS No. 13; provided, however, that
-------- -------
with respect to clause (ii) hereof, in no event shall the amount be less than
the Improvement Loan Balance.
"Memorandum of Lease" means the Memorandum of Lease and Deed of Trust,
dated as of November 16, 2000, among the Lessor, Lessee and the Trustee.
"Modifications" is defined in Section 10.1 of the Master Lease.
------------
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has since its date of incorporation made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
period.
"Net Proceeds" means all amounts received by the Administrative Agent
in connection with any Casualty or Condemnation or any sale of the Property
pursuant to the Lessor's exercise of remedies under Section 16.2 of the Master
------------
Lease or the Lessee's exercise of the Remarketing Option under Article XX of the
----------
Master Lease, and all interest earned thereon, less any Impositions arising in
connection with such amounts, if any, and less the expense of claiming and
collecting such amounts, including all costs and expenses in connection
therewith for which the Lessor, the Administrative Agent or any Participant is
entitled to be reimbursed pursuant to the Lease.
"Notes" means, collectively, the Loan Notes issued pursuant to Section
-------
2.2 of the Construction Period Loan Agreement and the Notes issued pursuant to
--
Section 2.2 of the Basic Term Loan Agreement.
-----------
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured, direct or indirect, choate or
inchoate, sole, joint, several or joint and several, due or to become due,
heretofore or hereafter contracted or acquired) of the Lessee (whether as the
Lessee, the Construction Agent or the Guarantor) arising under or in connection
with the
31
<PAGE>
Operative Documents including (i) all obligations for Basic Rent, Lessor Balance
or Loan Balance, whether incurred on the Documentation Date or thereafter, (ii)
all obligations for Supplemental Rent and all other obligations and liabilities
of the Lessee, the Construction Agent, whether incurred on the Documentation
Date or thereafter, whether for fees, costs, indemnification or otherwise,
arising under any Operative Document, (iii) all out-of-pocket costs and
expenses, including attorneys' fees and legal expenses, incurred by the Lessor,
Administrative Agent or any Lenders to the extent set forth in the Operative
Documents in connection with such Indebtedness, obligations and liabilities, and
(iv) following the occurrence and during the continuance of a Lease Event of
Default or a Construction Agency Agreement Event of Default, all advances made
by the Lessor or any Lender for the maintenance, protection, preservation or
enforcement of, or realization upon, the collateral in which the Lenders and/or
Lessor have been granted a security interest pursuant to an Operative Document
(or any portion thereof) including advances for storage, transportation charges,
taxes, insurance, repairs and the like.
"Operating Lease" means, with respect to any Person, any leasing or
similar arrangement as which such Person is the obligor or lessee, which is not
a Capital Lease.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) Memorandum of Lease;
(d) the Loan Agreements;
(e) the Lender Mortgage;
(f) each Note;
(g) the Guaranty;
(h) the Assignment of Lease, Rent, Construction Period Pledge
Agreement and CAA;
(i) the Pledge Agreements;
(j) the Lessor Financing Statements;
(k) the Lender Financing Statements;
(l) the Construction Agency Agreement;
(m) the Engagement Letter;
(n) the Related Party Lender Note Assignment and Acceptance
Agreement; and
(o) the Lease Supplements.
"Other Lender(s)" means one or more other lenders executing an
Assignment and Acceptance under the Construction Period Loan Agreement or the
Basic Term Loan Agreement, other than Societe Generale, New York Branch and the
Related Party Lender.
32
<PAGE>
"Outside Completion Date" means with respect to the Construction
Period Property the earlier of (i) the date that is thirty (30) months after the
Commencement of Construction and (ii) the Final Commitment Termination Date.
"Overdue Interest" is defined in Section 4.1(a) of the Participation
--------------
Agreement.
"Overdue Rate" means, with respect to any Loan or Lessor Amount, the
Base Rate or the Adjusted Eurodollar Rate then in effect for such Loan or Lessor
Amount, as the case may be, plus two percent (2%), or the highest rate permitted
by Applicable Law (if any), whichever is less. In the event that the Overdue
Rate collected by any Participant is in violation of any usury or similar law,
then the Overdue Rate shall be reduced to the extent necessary to cause the
Overdue Rate to comply with any usury or similar law.
"Participant Balance" means, as of any date of determination, (i) with
respect to the Lenders, the Loan Balance or (ii) with respect to the Lessor, the
Lessor Balance.
"Participants" means, collectively, the Lenders and the Lessor, and
their respective successors and assigns and "Participant" means each Lender and
the Lessor.
"Participation Agreement" means the Participation Agreement, dated as
of November 16, 2000, among Palm, Inc., as Lessee, Construction Agent and
Guarantor, the Lessor, the Administrative Agent and the Lenders party thereto.
"Payment Set Date" means the twelfth (12th) day of the month of March,
June, September, and December.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Lessee or any corporation, trade or business that is, along with the Lessee, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time since its date of incorporation, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Permitted Property Liens" means, with respect to the Property, any of
the following:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents;
33
<PAGE>
(ii) The rights of any sublessee under a sublease permitted by
the terms of the Master Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 12.1 of the Master
------------
Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of
the Improvements or in connection with any Modifications or arising in
the ordinary course of business for amounts that either are not more
than thirty (30) days past due or are being diligently contested in
good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of proceedings to contest
Taxes set forth in Section 12.1 of the Master Lease;
------------
(v) Liens of any of the types referred to in clause (iv) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor
have been made), which bonding (or arrangements) shall comply with
applicable Requirements of Law, and has effectively stayed any
execution or enforcement of such Liens;
(vi) easements, rights of way and other encumbrances on title
to real property pursuant to Section 11.2 of the Master Lease;
------------
(vii) Lessor Liens; provided that the existence of such liens
-------- ----
shall not be deemed Lessee's authorization or recognition of such
liens; and
(viii) Liens described on the title insurance policy delivered
with respect to the Property pursuant to Section 6.1(m) of the
--------------
Participation Agreement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
Governmental Authority or any other entity.
"Phase of Construction" means a discrete portion of the Improvements
or an integral component of the Improvements which upon Completion can either
(i) be utilized by the Lessee independent of any of the other Improvements and
is suitable for the Lessee's use whether or not any other Improvements are
constructed or (ii) adds value as a component to the completion of the
Improvements.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time since its date of
incorporation been maintained, or contributed to, by any Person which was at
such time a member of
34
<PAGE>
the ERISA Group for employees of any Person which was at such time a member of
the ERISA Group.
"Plans and Specifications" means, with respect to the Property, all
plans and specifications for the Construction of Improvements, including but not
limited to, those described in Schedule I to the Construction Agency Agreement.
----------
"Pledge Agreements" means the Construction Period Pledge Agreement and
the Basic Term Pledge Agreement.
"Project" means the physical site and operations conducted at or
related to the physical site.
"Project Cost" means with respect to the Improvements the total amount
which may be capitalized in the project by the Lessor in accordance with GAAP
plus other costs related to the project paid to third parties other than lenders
or owners.
"Project Site" means the geographical premises of the Land and
Improvements.
"Property" means all Improvements (including all Facility Equipment)
to be constructed or installed on the Land and the Land.
"Purchase Notice" means an irrevocable written notice by the Lessee
delivered to the Lessor pursuant to Sections 18.1 and 18.2 of the Master Lease
------------- ----
or Section 3.2 of the Construction Agency Agreement, notifying the Lessor of the
-----------
Lessee's exercise of its option pursuant to such Section, and identifying the
Property to be purchased in accordance therewith and the proposed purchase date
therefor.
"Purchase Option" means the Lessee's/Construction Agent's option to
purchase the Property in accordance with the provisions of Sections 18.1 and
-------------
18.2 of the Master Lease and Section 3.2 of the Construction Agency Agreement.
---- -----------
"Purchase Price" is defined in Sections 18.1 of the Master Lease.
-------------
"Rate Contracts" means interest rate and currency swap agreements,
cap, floor and collar agreements, interest rate insurance, currency spot and
forward contracts and other agreements or arrangements designed to provide
protection against fluctuation in interest or currency exchange rates.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. (S) 6901
et seq., or as otherwise amended or modified or any successor statute thereto.
35
<PAGE>
"Related Party Lender" means the Lessee or any Affiliate thereof as
lender under the Basic Term Loan Agreement.
"Related Party Lender Note Assignment and Acceptance Agreement" means
the Related Party Lender Note Assignment and Acceptance Agreement, the form of
which is attached as Exhibit B to the Basic Term Loan Agreement.
---------
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Material.
"Release Parcel" is defined in Section 18.2 of the Master Lease.
------------
"Release Parcel Area" means the Release Parcel Area described in
Schedule I to the Master Lease.
"Release Price" means, as of the date of determination, the product of
(i) the amount of square feet of building space, excluding parking structures,
located on the Release Parcel divided by the aggregate 1,598,000 square feet of
-------
building space that can be constructed on the entire Property pursuant to the
Site Development Permit Amendment, expressed as a percent and (ii) the Land
Lease Balance.
"Remarketing Option" is defined in Section 20.1 of the Master Lease.
------------
"Rent" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Master Lease.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the PBGC has by regulation
waived the applicable notice requirement, or as to which the PBGC has announced
a policy of not enforcing penalties for failure to satisfy applicable notice
requirements.
"Required Collateral Balance" is defined in Section 14.1(b) of the
---------------
Participation Agreement.
"Required Lenders" means the Lenders holding a majority of the
outstanding Loan Balance, excluding any Related Party Lender and the Loan
Balance held thereby, or as otherwise agreed to by the Tranche A Lender and the
Tranche B Lenders as set forth in the Intercreditor Agreement.
"Required Modification" is defined in clause (i) of Section 10.1 of
---------- ------------
the Master Lease.
"Requirement of Law" means, as to any Person, (a) the partnership
agreement, certificate of incorporation, bylaws or other organizational or
governing documents of such Person, and
36
<PAGE>
(b) all statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of any Governmental Authority affecting the Property,
the acquisition of the Property, the Improvements or the demolition,
Construction, use or alteration thereof, whether now or hereafter enacted and in
force, including any that require repairs, modifications or alterations in or to
the Property or in any way limit the use and enjoyment thereof (including all
building, zoning and fire codes and the Americans with Disabilities Act of 1990,
42 U.S.C. (S) 1201 et. seq. and any other similar Federal, state or local laws
or ordinances and the regulations promulgated thereunder) and any that may
relate to environmental requirements (including all Environmental Laws and
Hazardous Materials Laws), and all permits, certificates of occupancy, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments which are either of
record or known to the Lessee affecting the Property or the Appurtenant Rights
and any easements, licenses or other agreements entered into pursuant to Section
-------
11.2 of the Master Lease.
----
"Responsible Officer" with respect to the Construction Agent, Lessee
or the Guarantor means, in connection with all financial matters, the Vice
President - Treasury, and in connection with all other matters, a Vice President
or higher.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Scheduled Payment Date" means each Payment Set Date.
"SEC" means the Securities and Exchange Commission.
"SFAS No. 13" means Statement of Financial Accounting Standards
("SFAS") No. 13, existing as of the Documentation Date.
----
"Shortfall Amount" means, as of the Expiration Date, an amount equal
to (i) the Lease Balance, minus (ii) the Maximum Recourse Amount received by the
Lessor from the Lessee pursuant to Section 20.1(g) of the Master Lease.
---------------
"Significant Condemnation" means (a) a Condemnation that involves a
taking of the Lessor's entire title to the Land and/or the Improvements, or (b)
a Condemnation that in the reasonable, good faith judgment of the Administrative
Agent and the Lessor (i) renders the Property unsuitable for continued use as
property of the type of the Property immediately prior to such Condemnation, or
(b) is so substantial in nature that restoration of the related property to
substantially its condition as it existed immediately prior to such Condemnation
would be impracticable or impossible.
"Significant Subsidiary" means any Subsidiary of the Lessee or the
Guarantor the assets of which represent 10% or more of the total assets of the
Lessee or the Guarantor and its Subsidiaries on a consolidated basis.
37
<PAGE>
"Single Employer Plan" means any Plan which is not a Multiemployer
Plan.
"Site Development Permit" means that certain Site Development Permit
File No. HSH 96-12-089 approved and issued on June 25, 1997 by James R.
Derryberry, Director of Planning, Building and Code Enforcement, City of San
Jose ("Director of Planning"), as amended by that certain Site Development
--------------------
Permit Amendment File No. HASH 96-01-089 approved and issued on July 23, 1998 by
the Director of Planning, as further amended by that certain Site Development
Permit Amendment File No. HASH 96-02-089 approved and issued on August 14, 1998
by the Director of Planning, as further amended by that certain Site Development
Permit Amendment File No. HASH 96-03-089 approved and issued on December 1, 1999
by the Director of Planning, and as further amended by the Site Development
Permit Amendment.
"Site Development Permit Amendment" means that certain Site
Development Permit Amendment File No HASH 96-04-089 approved and issued on
October 18, 2000 by the Director of Planning.
"Solvent" means with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person (including,
without limitation, its Consolidated Subsidiaries) is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person (including, without limitation, its Consolidated Subsidiaries), (ii)
the present fair saleable value of the assets of such Person (including, without
limitation, its Consolidated Subsidiaries) is not less than the amount that will
be required to pay the probable liability of such Person (including, without
limitation, its Consolidated Subsidiaries) on its debts as they become absolute
and matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, Contingent Obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or action, for which such Person's property (including, without
limitation, the property of its Consolidated Subsidiaries and other
Subsidiaries) would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability taking
into account any subrogation and contribution rights.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which more than 10% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person, or (ii) any partnership, joint venture,
limited liability company or other entity as to which such Person, directly or
indirectly, owns more than a 10% ownership, equity or similar interest of has
the power to direct or
38
<PAGE>
cause the direction of management and policies, or the power to elect the
managing general partner or the equivalent), of such partnership, joint venture,
limited liability company or other entity, as the case may be.
"Sufficient Collateral", during the Construction Period, means 103.0%
of the outstanding Lease Balance and, during the Basic Lease Term, means the
Required Collateral Balance.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor
or any other Person including, without limitation, the Administrative Agent
under the Master Lease, or under any of the other Operative Documents,
including, without limitation, Fees, Break Costs, the Maximum Recourse Amount,
the Shortfall Amount, amounts due pursuant to Section 13.2 of the Participation
------------
Agreement and payments pursuant to Sections 15.2 of the Master Lease and
-------------
Articles XVIII and XX of the Master Lease.
-------------- --
"Surplus Collateral" is defined in Section 14.2 of the Participation
------------
Agreement.
"Syndication Agent" means during the Construction Period, Societe
Generale, New York Branch and as of the Completion Date, in the event the
Related Party Lender does not hold all of the Loan Balance, Societe Generale,
New York Branch or such other financial institution selected by the Lessee and
reasonably acceptable to the Lenders.
"Syndication Date" means (i) the date after the Documentation Date and
up to but excluding the Completion Date that the Tranche A Lender proposes to
assign an amount of the Tranche A Loan Commitment and the Tranche A Loans
relating thereto, not to exceed $60 million, to the Tranche B Lenders pursuant
to Article II of the Participation Agreement and (ii) the date including and
----------
following the Completion Date that the Lenders propose to assign their Loans and
interest in the Operative Documents to one or more Other Lender(s) pursuant to
Section 10.1(i) of the Participation Agreement.
---------------
"Tax Indemnitee" means the Lenders, the Lessor, any Other Lenders, the
Administrative Agent, the Trustee, the Collateral Agent, their respective
Affiliates and their respective successors, assigns, directors, shareholders,
partners, officers, employees and agents.
"Taxes" is defined in the definition of "Impositions".
"Termination Date" is defined in Section 15.2 of the Master Lease.
------------
"Termination Notice" is defined in Section 15.1 of the Master Lease.
------------
"3COM" means 3COM Corporation, a Delaware corporation.
"Tranche A Commitment Percentage" means, at any time, the percentage
which such Tranche A Loan Commitment then constitutes of the Loan Commitment
(or, at any time after the Loan
39
<PAGE>
Commitment shall have expired or terminated, the percentage which the aggregate
principal amount of such Tranche A Loans then outstanding constitutes of the
aggregate principal amount of the Loans then outstanding).
"Tranche A Lender" means Societe Generale, New York Branch under each
of the Loan Agreements and its successors and assigns.
"Tranche A Loan Commitment" means, as to the Tranche A Lender, the
obligation of such Tranche A Lender to make Loans under the Loan Agreements
which when added to the Lessor Commitment shall not exceed $460 million, as such
Tranche A Loan Commitment may subsequently be reduced, but when aggregated with
the Lessor Commitment shall not be below $400 million, upon the execution and
delivery of an Assignment and Acceptance substantially in the form of Exhibit B
---------
to the Construction Period Loan Agreement to be entered into by one or more
Tranche B Lenders.
"Tranche A Loan Facility" means the Tranche A Loan Commitment and the
Loans made thereunder.
"Tranche A Loans" has the meaning set forth in Section 2.1 of each
-----------
Loan Agreement.
"Tranche B Commitment Percentage" means, as to any Tranche B Lender at
any time, the percentage which such Tranche B Loan Commitment then constitutes
of the Loan Commitment (or, at any time after the Loan Commitment shall have
expired or terminated, the percentage which the aggregate principal amount of
such Tranche B Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
"Tranche B Lenders" means one or more Other Lenders that become a
Tranche B Lender by assignment pursuant to Section 10.1 of the Construction
------------
Period Loan Agreement.
"Tranche B Loan Commitment" means, as to any Tranche B Lender, the
obligation of such Tranche B Lender to make Tranche B Loans under the Loan
Agreements in a principal amount as agreed to in its Assignment and Acceptance
substantially in the form of Exhibit B to the Construction Period Loan Agreement
---------
to be entered into by such Tranche B Lender, but not to exceed, in the
aggregate, $60 million.
"Tranche B Loan Facility" means the Tranche B Loan Commitments and the
Loans made thereunder.
"Tranche B Loans" has the meaning set forth in Section 2.1 of each
-----------
Loan Agreement.
"Transaction Expenses" means all costs, expenses and Impositions
incurred in connection with the preparation, execution and delivery of the
Operative Documents and the transactions contemplated by the Operative Documents
including without limitation:
40
<PAGE>
(a) the reasonable fees, out-of-pocket expenses and disbursements of
Simpson Thacher & Bartlett, special counsel for the Lessor and the
Administrative Agent, and such other reasonable fees, expenses and
disbursements of Gray Cary Ware & Freidenrich LLP, Clifford Chance Rogers &
Wells LLP, and Shipman & Goodwin LLP in negotiating the terms of the
Operative Documents and the other transaction documents, preparing for the
closing under, and rendering opinions in connection with, such transactions
and in rendering other services customary for counsel representing parties
to transactions of the types involved in the transactions contemplated by
the Operative Documents;
(b) the reasonable fees, out-of-pocket expenses and disbursements of
the Lessor, the Lenders and the Administrative Agent in connection with (1)
syndication of the Loan Commitment and the Loans as contemplated by the
Operative Documents, negotiating the terms of the Operative Documents,
preparing for the closing, and closing the transaction, (2) any amendment,
supplement, waiver or consent with respect to any Operative Documents
requested or approved by the Lessee and (3) any enforcement of any rights
or remedies against the Lessee in respect of the Operative Documents;
(c) any and all Taxes and fees incurred in recording, registering or
filing any Operative Document or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement
with any public office, registry or governmental agency in connection with
the transactions contemplated by the Operative Documents;
(d) any brokerage commissions paid or payable by the Lessee;
(e) any other reasonable fees, out-of-pocket expenses, disbursements
or cost of any party to the Operative Documents;
(f) any title fees, premiums and escrow costs and other expenses
relating to title insurance and the closings contemplated by the Operative
Documents;
(g) all fees, expenses and disbursements of each local counsel
retained in connection with the transactions contemplated by the Operative
Documents;
(h) all costs and expenses relating to surveys and Environmental
Audits for the Property;
(i) fees and other expenses relating to Appraisals;
(j) all fees, expenses and disbursements of the Collateral Agent and
of the Collateral Agent's counsel, experts and agents; and
41
<PAGE>
(k) costs of the Insurance Consultant and its experts and agents.
"Trustee" means the trustee from time to time named in the Memorandum
of Lease.
"U.S. Government Obligations" is defined in Section 1.1 of the
-----------
Construction Period Pledge Agreement.
"Uncompleted Property" is defined in Section 3.3 of the Construction
-----------
Agency Agreement.
"Undeveloped Land Purchase Option" is defined in Section 18.2 of the
------------
Master Lease.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Yield" is defined in Section 4.1(a) of the Participation Agreement.
--------------
"Yield Rate" means, the Adjusted Eurodollar Rate plus the Lessor
Margin.
42
<PAGE>
EXECUTION COPY
LEASE SUPPLEMENT (LAND)
dated as of November 16, 2000
between
PALM, INC.,
as the Lessee,
and
SOCIETE GENERALE FINANCIAL CORPORATION,
as the Lessor
This Lease Supplement (Land) is subject to a lien in favor of the
Administrative Agent under the Loan Agreements. This Lease Supplement (Land) has
been executed in several counterparts. To the extent, if any, that this Lease
Supplement (Land) constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no lien on
this Lease Supplement (Land) may be created through the transfer or possession
of any counterpart other than the original counterpart containing the receipt
therefor executed by SOCIETE GENERALE, NEW YORK BRANCH, as Administrative Agent
for the Lenders, on or following the signature page hereof.
This counterpart is not the original counterpart.
<PAGE>
THIS LEASE SUPPLEMENT (LAND) (this "Lease Supplement "), dated as of
----------------
November 16, 2000, between PALM, INC., a Delaware corporation, as the Lessee
(the "Lessee"), and SOCIETE GENERALE FINANCIAL CORPORATION, as the Lessor (the
------
"Lessor").
------
W I T N E S S E T H:
-------------------
WHEREAS, the Lessor is the record owner of the Land described in Schedule I
----------
attached hereto, and Appurtenant Rights located on such Land (such Land and the
Appurtenant Rights are collectively referred to herein as the "Land"); and
----
WHEREAS, the Lessor wishes to lease the Land to the Lessee and the Lessee
wishes to lease the Land from the Lessor;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to enter
into this Lease Supplement, as follows:
SECTION 1. Certain Terms. Capitalized terms used but not otherwise defined
-------------
in this Lease Supplement have the meanings specified in Appendix A to the Master
----------
Lease, dated as of November 16, 2000 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Master Lease"), among the
------------
Lessee and the Lessor; and the rules of interpretation specified in Appendix A
----------
shall apply to this Lease Supplement.
SECTION 2. Land. Effective upon the execution and delivery of this Lease
----
Supplement by the Lessor and the Lessee, the Land shall be subject to all terms
and provisions of the Master Lease relating to the Land. Subject to the terms
and conditions of the Master Lease, the Lessor hereby leases the Land to the
Lessee for the Term (as defined below) of this Lease Supplement, and the Lessee
hereby leases, expressly for the direct benefit of the Lessor, the Land from the
Lessor for the Term.
SECTION 3. Lease Term. The term of this Lease Supplement (the "Term") shall
---------- ----
commence on (and include) the date hereof and end on the Expiration Date, as
such Expiration Date may be extended from time to time in accordance with
Article XIX of the Master Lease, unless the Term with respect to the Land is
-----------
terminated at an earlier date in accordance with the terms and provisions of the
Master Lease and the other Operative Documents. For and in consideration of good
and valuable consideration paid by the Lessee to the Lessor as described in the
Master Lease, the Lessor hereby grants to the Lessee the right to purchase the
Land or to market and sell the Land during the Term of this Lease Supplement on
the terms set forth in Articles XVIII, XX, and XXI of the Master Lease and
----- -- ---
Section 3.2 of the Construction Agency Agreement.
-----------
SECTION 4. Basic Rent. During the Term of this Lease Supplement, Lessee
----------
shall pay to the Lessor the Land Portion of the Basic Rent in accordance with
Section 3.1 of the Master Lease.
-----------
<PAGE>
SECTION 5. Ratification. The terms and provisions of the Master Lease are
------------
hereby ratified and confirmed in all respects and remain in full force and
effect.
SECTION 6. GOVERNING LAW. THE MASTER LEASE AND THIS LEASE SUPPLEMENT SHALL
-------------
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF
EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND LIENS
HEREUNDER AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
CALIFORNIA.
SECTION 7. Counterpart Execution. This Lease Supplement may be executed in
---------------------
any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
SECTION 8. Original Lease Supplement (Land). The single executed original
-------------------------------
of this Lease Supplement (Land) marked "THIS COUNTERPART IS THE ORIGINAL
EXECUTED COUNTERPART" on the signature page thereof and containing the receipt
therefor of SOCIETE GENERALE, NEW YORK BRANCH, as Administrative Agent for the
Lenders, on or following the signature page thereof shall be the Original
Executed Counterpart of this Lease Supplement (Land) (the "Original Executed
-----------------
Counterpart"). To the extent that this Lease Supplement (Land) constitutes
-----------
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Lease
Supplement (Land) may be created through the transfer or possession of any
counterpart other than the Original Executed Counterpart.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
PALM, INC., as the Lessee
By:______________________________________
Name:
Title:
SOCIETE GENERALE FINANCIAL CORPORATION, as the
Lessor
By: /s/ illegible
----------------------------------------
Name: illegible
Title: Senior Vice President
<PAGE>
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Lease Supplement (Land) is
hereby acknowledged as of the date hereof.
SOCIETE GENERALE, NEW YORK BRANCH,
as Administrative Agent
By: /s/ Sean Rheuben
---------------------------------
Name: Sean Rheuben
Title: Attorney-in-fact
<PAGE>
SCHEDULE I TO
LEASE SUPPLEMENT
Legal Description of Land
<PAGE>
EXECUTION COPY
LEASE SUPPLEMENT (IMPROVEMENTS)
dated as of November 16, 2000
between
PALM, INC.
as the Lessee,
and
SOCIETE GENERALE FINANCIAL CORPORATION,
as the Lessor
This Lease Supplement (Improvements) is subject to a lien in favor of
the Administrative Agent under the Loan Agreements. This Lease Supplement
(Improvements) has been executed in several counterparts. To the extent, if any,
that this Lease Supplement (Improvements) constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no lien on this Lease Supplement (Improvements) may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefore executed by the SOCIETE GENERALE,
NEW YORK BRANCH, as Administrative Agent for the Lenders, on or following the
signature page hereof.
This counterpart is not the original counterpart.
<PAGE>
THIS LEASE SUPPLEMENT (IMPROVEMENTS) (this "Lease Supplement"), dated as of
----------------
November 16, 2000, between PALM, INC., a Delaware corporation, as Lessee (the
"Lessee"), and SOCIETE GENERALE FINANCIAL CORPORATION, as the Lessor (the
------
"Lessor").
------
W I T N E S S E T H:
WHEREAS, the Lessor is the record owner of the Land and the Appurtenant
Rights described in Schedule I attached hereto (such Land and Appurtenant Rights
are collectively referred to herein as the "Land") and the owner of all the
----
Improvements as described in Schedule II hereto (the "Improvements") located on
----------- ------------
the Land;
WHEREAS, the Lessor wishes to lease the Improvements to the Lessee and the
Lessee wishes to lease the Improvements from the Lessor; and
WHEREAS, the Lessor and the Lessee are parties to that certain Master
Lease, dated as of November 16, 2000 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Master Lease"), and the
------------
Lessor and the Construction Agent are parties to that certain Construction
Agency Agreement, dated as of November 16, 2000 ( the "Construction Agency
-------------------
Agreement");
---------
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to enter
into this Lease Supplement, as follows:
SECTION 1. Certain Terms. Capitalized terms used but not otherwise defined
-------------
in this Lease Supplement have the meanings specified in Appendix A to the Master
----------
Lease and the rules of interpretation specified in Appendix A shall apply to
----------
this Lease Supplement.
SECTION 2. Improvement. Effective upon the execution and delivery of this
-----------
Lease Supplement by the Lessor and the Lessee, the Improvements shall be subject
to all terms and provisions of the Master Lease relating to Improvements.
Subject to the terms and conditions of the Master Lease, the Lessor hereby
leases the Improvements to the Lessee for the Term (as defined below) of this
Lease Supplement, and the Lessee hereby leases, expressly for the direct benefit
of the Lessor, the Improvements from the Lessor for the Term.
SECTION 3. Lease Term. The term of this Lease Supplement (the "Term") shall
---------- ----
commence on (and include) the date hereof and end on the Expiration Date, as
such Expiration Date may be extended from time to time in accordance with
Article XIX of the Master Lease, unless the Term with respect to the
-----------
Improvements is terminated at an earlier date in accordance with the terms and
provisions of the Master Lease or the other Operative Documents. For and in
consideration of good and valuable consideration paid by the Lessee to the
Lessor as described in the Master Lease and the Construction Agency Agreement,
the Lessor has granted to the Lessee the right to purchase the Improvements or
to market and sell the Improvements during the Term
<PAGE>
of this Lease Supplement on the terms set forth in Articles XVIII, XX and XXI of
-------------- -- ---
the Master Lease and Section 3.2 of the Construction Agency Agreement.
SECTION 4. Rent. During the Term of this Lease Supplement, Lessee shall pay
----
to the Lessor the Improvements Portion of the Basic Rent in accordance with
Section 3.1 of the Master Lease.
-----------
SECTION 5. Ratification. The terms and provisions of the Master Lease are
------------
hereby ratified and confirmed in all respects and remain in full force and
effect.
SECTION 6. GOVERNING LAW. THE MASTER LEASE AND THIS LEASE SUPPLEMENT SHALL
-------------
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF
EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND LIENS
HEREUNDER AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
CALIFORNIA.
SECTION 7. Counterpart Execution. This Lease Supplement may be executed in
---------------------
any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
SECTION 8. Original Lease Supplement (Improvements). The single executed
----------------------------------------
original of this Lease Supplement (Improvements) marked "THIS COUNTERPART IS THE
ORIGINAL EXECUTED COUNTERPART" on the signature page thereof and containing the
receipt thereof of SOCIETE GENERALE, NEW YORK BRANCH, as Administrative Agent
for the Lenders, on or following the signature page thereof shall be the
Original Executed Counterpart of this Lease Supplement (Improvements) (the
"Original Executed Counterpart"). To the extent that this Lease Supplement
-----------------------------
(Improvements) constitutes chattel paper, as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction, no security
interest in this Lease Supplement (Improvements) may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
2
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
PALM, INC., as the Lessee
By:__________________________________
Name:
Title:
SOCIETE GENERALE FINANCIAL
CORPORATION, as the Lessor
By: /s/ illegible
----------------------------------
Name: illegible
Title: Senior Vice President
3
<PAGE>
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Lease Supplement
(Improvements) is hereby acknowledged as of the date hereof.
SOCIETE GENERALE, NEW YORK BRANCH,
as Administrative Agent
By: /s/ Sean Rheuben
---------------------------------
Name: Sean Rheuben
Title: Attorney-in-fact
4
<PAGE>
SCHEDULE I TO
LEASE SUPPLEMENT
Legal Description of Land
5
<PAGE>
SCHEDULE II TO
LEASE SUPPLEMENT
Description of Improvements
All buildings, structures, fixtures, Facility Equipment, and other
improvements of every kind existing at any time and from time to time and
constructed pursuant to the Construction Agency Agreement, or otherwise
purchased, with amounts advanced by the Lessor pursuant to the Participation
Agreement, on or under the Land, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time.
6
