______________________________________________________________
united states
securities and exchange commission
Washington, D. C. 20549
FORM 10-Q
X quarterly report pursuant to section 13 or 15(d) of
the securities exchange act of 1934
For the Quarterly Period Ended November 30, 1996
Commission File No. 0-12867
or
transition report pursuant to section 13 or 15(d) of
the securities exchange act of 1934
For the transition period from to
____________
3Com Corporation
(Exact name of registrant as specified in its charter)
California 94-2605794
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5400 Bayfront Plaza 95052
Santa Clara, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (408) 764-5000
Former name, former address and former fiscal year, if changed
since last report: N/A
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ....XX.... No ................
As of November 30, 1996, 175,961,677 shares of the
Registrant's Common Stock were outstanding.
______________________________________________________________
3Com Corporation
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
November 30, 1996 and May 31, 1996
Consolidated Statements of Income
Quarters and Six Months Ended November 30, 1996 and 1995
Consolidated Statements of Cash Flows
Six Months Ended November 30, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
3Com, EtherLink, and ONcore are registered trademarks and
CELLplex and SuperStack are trademarks of 3Com Corporation.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
3Com Corporation
Consolidated Balance Sheets
(Dollars in thousands)
November 30, May 31,
1996 1996
------------ -------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 350,141 $ 216,759
Temporary cash investments 392,237 282,578
Trade receivables 463,029 359,182
Inventories 235,353 241,018
Deferred income taxes 94,103 79,259
Other 88,342 60,915
---------- ----------
Total current assets 1,623,205 1,239,711
Property and equipment-net 309,032 246,652
Other assets 48,889 38,754
---------- ----------
Total $1,981,126 $1,525,117
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 177,275 $ 120,211
Accrued and other liabilities 252,964 211,620
Income taxes payable 131,463 82,690
---------- ----------
Total current liabilities 561,702 414,521
Long-term debt 110,225 110,000
Other long-term obligations 4,512 5,492
Deferred income taxes 28,950 16,299
Shareholders' Equity:
Preferred stock, no par value,
3,000,000 shares
authorized; none outstanding - -
Common stock, $.01 par value,
400,000,000 shares
authorized; shares outstanding:
November 30, 1996:
175,961,677; May 31, 1996:
168,799,586 712,320 597,452
Unamortized restricted stock grants (4,963) (4,487)
Notes receivable on common stock (139) -
Retained earnings 560,071 379,358
Unrealized gain on available-for-sale
securities 9,082 7,159
Accumulated translation adjustments (634) (677)
---------- ----------
Total shareholders' equity 1,275,737 978,805
---------- ----------
Total $1,981,126 $1,525,117
========== ==========
See notes to consolidated financial statements.
3Com Corporation
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Quarter Ended Six Months Ended
November 30, November 30,
1996 1995 1996 1995
---- ---- ---- ----
Sales $820,296 $563,544 $1,530,436 $1,060,833
Cost of sales 371,306 266,719 697,953 502,269
-------- -------- ---------- ----------
Gross Margin 448,990 296,825 832,483 558,564
-------- -------- ---------- ----------
Operating expenses:
Sales and marketing 164,086 118,920 306,756 221,131
Research and
development 80,228 56,082 151,121 107,630
General and administrative 35,558 22,902 65,596 43,843
Acquisition-related
charges 6,600 69,000 6,600 69,000
-------- ------- ---------- ----------
Total 286,472 266,904 530,073 441,604
-------- ------- ---------- ----------
Operating income 162,518 29,921 302,410 116,960
Other income-net 4,788 1,930 7,721 3,183
-------- ------- ---------- ----------
Income before income taxes 167,306 31,851 310,131 120,143
Income tax provision 61,737 15,506 112,990 46,377
-------- ------- ---------- ----------
Net income $ 105,569 $ 16,345 $ 197,141 $ 73,766
========== ========== ========== ==========
Net income per common and
equivalent share:
Primary $ .57 $ .09 $ 1.07 $ .42
Fully diluted $ .56 $ .09 $ 1.06 $ .42
Common and equivalent shares used
in computing per share amounts:
Primary 186,215 176,319 184,556 175,077
Fully diluted 187,137 176,396 185,154 175,459
See notes to consolidated financial statements.
3Com Corporation
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Six Months Ended
November 30,
------------
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 197,141 $ 73,766
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation and amortization 70,503 39,602
Deferred income taxes (3,426) 9,074
Adjustment to conform fiscal year of
pooled entity 4,850 (3,048)
Non-cash acquisition-related costs - 44,320
Changes in assets and liabilities,
net of effects of acquisitions:
Trade receivables (102,488) (98,674)
Inventories 5,766 (22,741)
Other current assets (25,779) (7,485)
Accounts payable 56,439 12,238
Accrued and other liabilities 39,338 21,872
Income taxes payable 99,278 9,482
---------- ----------
Net cash provided by operating activities 341,622 78,406
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (118,154) (87,073)
Purchase of temporary cash investments (211,257) (113,804)
Proceeds from temporary cash investments 103,214 147,701
Other-net (17,063) (3,391)
---------- ----------
Net cash used for investing activities (243,260) (56,567)
---------- ----------
Cash flows from financing activities:
Sale of stock 37,383 20,719
Repayments of notes payable and capital
lease obligations (1,386) (2,749)
Other-net (977) (308)
---------- ----------
Net cash provided by financing activities 35,020 17,662
---------- ----------
Increase in cash and cash equivalents 133,382 39,501
Cash and cash equivalents at beginning of period 216,759 159,908
---------- ----------
Cash and cash equivalents at end of period $ 350,141 $ 199,409
========== ==========
Non-cash operating, investing and financing activities:
Tax benefit on stock option transactions $ 50,505 $ 30,181
Unrealized net gain on available-for-sale
securities $ 1,923 $ 24,237
See notes to consolidated financial statements.
3Com Corporation
Notes to Consolidated Financial Statements
1. Basis of Presentation
On October 31, 1996, 3Com Corporation (the Company)
acquired OnStream Networks, Inc. (OnStream) which was
accounted for as a pooling-of-interests. All financial
data of the Company for the quarter ended August 31, 1996
has been restated to include the financial information of
OnStream in accordance with generally accepted accounting
principles and pursuant to Regulation S-X. Prior periods
have not been restated as the impact was not significant
to the Company's operations.
The unaudited consolidated financial statements
include the accounts of the Company and its wholly-owned
subsidiaries. All significant intercompany balances and
transactions have been eliminated. In the opinion of
management, these unaudited consolidated financial
statements include all adjustments necessary for a fair
presentation of the Company's financial position as of
November 30, 1996, and the results of operations and cash
flows for the quarters and six months ended November 30,
1996 and 1995.
The results of operations for the quarter and six
months ended November 30, 1996 may not necessarily be
indicative of the results to be expected for the fiscal
year ending May 31, 1997.
These financial statements should be read in
conjunction with the consolidated financial statements
and related notes thereto included in the Company's
Annual Report to shareholders and Form 10-K for the
fiscal year ended May 31, 1996.
2. Inventories consisted of (in thousands):
November 30, May 31,
1996 1996
---- ----
Finished goods $136,371 $132,363
Work-in-process 16,602 22,310
Raw materials 82,380 86,345
-------- --------
Total $235,353 $241,018
======== ========
3. Net Income Per Share
Net income per common and equivalent share is
computed based on the weighted average number of common
shares and the dilutive effects of stock options
outstanding during the period using the treasury stock
method. The effect of the assumed conversion of the
10.25% convertible subordinated notes was excluded from
the computation as it was antidilutive for the periods
presented.
4. Business Combination
On October 31, 1996, the Company acquired OnStream
by issuing approximately 3.4 million shares of its common
stock in exchange for all the outstanding stock of
OnStream. The Company also assumed and exchanged all
options to purchase OnStream stock for options to
purchase approximately 400,000 shares of the Company's
common stock. The acquisition was accounted for as a
pooling-of-interests. No significant adjustments were
required to conform the accounting policies of the
Company and OnStream. Financial data of the Company has
been restated for the quarter ended August 31, 1996 to
include the historical financial information of OnStream
for that period. As the historical operations of OnStream
were not significant to any period presented, the
Company's financial statements for prior years have not
been restated. The financial effect of the prior year's
results of operations of OnStream has been accounted for
as a $18.0 million charge against retained earnings in
the first quarter of fiscal 1997. Financial information
as of November 30, 1996 and for the
quarter and six months then ended reflects the Company's
and OnStream's operations for those periods. OnStream is
a provider of Asynchronous Transfer Mode (ATM) and
broadband wide area network (WAN) and access products.
The following table shows the effect on the results
of operations as restated for the quarter ended August
31, 1996.
Quarter ended
August 31,1996
--------------
(In thousands)
Sales:
3Com $706,968
OnStream 3,172
--------
Combined $710,140
========
Net income (loss):
3Com $ 93,113
OnStream (1,541)
--------
Combined $ 91,572
========
As a result of the acquisition, the Company recorded
acquisition-related charges, primarily transaction costs,
totaling $6.6 million in the second quarter of fiscal
1997.
5. Litigation
On October 13, 1995, the Company acquired Chipcom,
which had already been named as a defendant in the
litigation described below. Five complaints were filed
between May, 30, 1995 and June 16, 1995 that alleged
violations by the defendants of Sections 10(b) and 20(a)
of the Securities and Exchange Act of 1934, and sought
unspecified damages. The cases were consolidated for
pretrial purposes pursuant to an order entered by the
Court on June 15, 1995. The consolidated action is
entitled In re: Chipcom Securities Litigation, Civil
Action No. 95-111114-DPW. A Consolidated Complaint was
filed on September 13, 1995, and an Amended Consolidated
Complaint was filed on November 30, 1995.
The defendants' motion to dismiss the Amended
Consolidated Complaint was granted without leave to amend
on May 1, 1996. The dismissal covers all five cases. The
plaintiffs appealed the order granting the dismissal. On
October 1, 1996, the parties to these cases agreed upon
what the Company considers to be favorable financial
terms for settlement of all five cases, which amount the
Company does not consider material to its operations or
financial position. Pursuant to the contemplated
settlement, which would be subject to the approval of the
District Court, it is intended that all claims of all
persons which are related to the subject matter of the
Consolidated Complaint would be settled and released.
3Com Corporation
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Acquisition
During the second quarter of fiscal 1997, 3Com (the
Company) extended its WAN product solutions for enterprise
organizations, network service provider and Internet service
provider markets with the acquisition of OnStream Networks,
Inc. (OnStream), a provider of ATM and broadband WAN and
access products. The acquisition was completed on October 31,
1996. The Company issued approximately 3.4 million shares of
its common stock in exchange for all the outstanding stock of
OnStream. The Company also assumed and exchanged all options
to purchase OnStream stock for options to purchase
approximately 400,000 shares of the Company's common stock.
The acquisition was accounted for as a pooling-of-interests
and financial data of the Company for the quarter ended August
31, 1996 has been restated to include the financial
information of OnStream for such periods. See Note 4 of Notes
to Consolidated Financial Statements for additional
information on the Company's business combination.
Results of Operations
Quarters Ended November 30, 1996 and 1995
The Company achieved record sales in the second quarter
of fiscal 1997 totaling $820.3 million, an increase of $256.8
million or 46 percent from the corresponding quarter a year
ago. Compared with the first quarter of fiscal 1997, sales
for the second quarter of fiscal 1997 increased $110.2 million
or 16 percent.
The Company believes that the year-over-year increase in
second quarter sales is due to several factors, including
continued growth in the data networking market as the Internet,
corporate Intranets, client server applications and remote
access services stimulate customers to migrate to higher speed
technologies such as Fast Ethernet and ATM, the growth in the
PC market generated from a strong PC upgrade cycle, and the
strength of the Company's product offerings at the edge of the
network, including workgroup switches and hubs. The Company
also believes that the impact of a strong new product cycle in
systems and adapter products, the continuous expansion of
3Com's product offerings, and its ability to deliver complete
data networking solutions for different connectivity
environments contributed to the increase in second quarter
sales over the same period a year ago.
Sales of network systems products (i.e., internetworking
platforms, remote access servers, hubs, switching products and
customer service) in the second quarter of fiscal 1997
increased 41 percent from the same quarter one year ago. The
increase was led primarily by the SuperStackTM II stackable
systems, the ONcorer intelligent switching system, and the
CELLplexTM ATM High-Function switching family. Customer
service revenue is included in network systems products (in
previous years, this revenue was classified in the other
product category), and accordingly, all sales composition and
growth percentages reflect this reclassification. In the
second quarter of fiscal 1997, network systems products
represented 56 percent of total sales, compared to 58 percent
in the year-ago quarter.
Sales of network adapters in the second quarter of fiscal
1997 increased 55 percent from the year-ago period. The
increase in network adapter sales represented a significant
increase in unit volume partially offset by a decline in
average selling prices. The increase in sales was led
primarily by the Fast EtherLinkr PCI adapters, the EtherLink
III family of network adapters, and the EtherLink PC Card
adapters. In the second quarter of fiscal 1997, sales of
network adapters represented 43 percent of total sales,
compared to 40 percent in the year-ago quarter.
Sales of other products represented one percent of total
sales in the second quarter of fiscal 1997, compared with two
percent of total sales in the second quarter of fiscal 1996,
and is not significant to the Company's operations, as
expected.
International sales for the second quarter of fiscal 1997
comprised 53 percent of total sales, and increased 41 percent
over the same period a year ago. International sales
increased in all geographic regions, with especially strong
growth in the Asia Pacific and Latin America regions. The
Company believes that the growth in international sales is due
primarily to the Company's continued global expansion through
the opening of new sales offices, and the expansion of its
worldwide field sales, service and support programs. Sales in
the United States for the second quarter of fiscal 1997,
comprised 47 percent of total sales, compared to 46 percent in
the same period a year ago. Sales growth in the United States
was 51 percent when compared to the second quarter of fiscal
1996. The Company believes the sales growth in the United
States can be attributed primarily to increased sales to large
enterprises, and the enhancement of the Company's product
portfolio. The Company's operations were not significantly
impacted by fluctuations in foreign currency exchange rates in
the second quarters of fiscal 1997 and 1996.
Cost of sales as a percentage of sales was 45.3 percent
in the second quarter of fiscal 1997, compared to 47.3 percent
for the second quarter of fiscal 1996. The resulting
improvement in gross margin in the second quarter of fiscal
1997 primarily reflected an increased shipment mix of higher
margin workgroup switching and stackable hub system products,
and lower product material costs of certain adapter products.
Factors causing the increase in gross margin were partially
offset by a higher mix of certain lower margin adapter
products and increased provisions for excess and obsolete
inventories.
Total operating expenses in the second quarter of fiscal
1997 were $286.5 million, compared to $266.9 million, in the
second quarter of fiscal 1996. Excluding the acquisition-
related charge of $6.6 million for OnStream (see Note 4 of
Notes to Consolidated Financial Statements), total operating
expenses in the second quarter of fiscal 1997 were $279.9
million or 34.1 percent of sales. Excluding the acquisition-
related charge of $69.0 million in connection with the
acquisition of Chipcom Corporation (Chipcom), total operating
expenses in the second quarter of fiscal 1996 were $197.9
million, or 35.1 percent of sales.
Sales and marketing expenses in the second quarter of
fiscal 1997 increased $45.2 million or 38 percent compared to
the second quarter of fiscal 1996. As a percentage of sales,
sales and marketing expenses decreased to 20.0 percent in the
second quarter of fiscal 1997, from 21.1 percent in the
corresponding fiscal 1996 period. The decrease as a
percentage of sales is due in part to gains in efficiency
following assimilation of the separate sales, marketing and
support organizations initially present as a result of the
fiscal 1996 acquisition of Chipcom. One of the Company's
initiatives is to increase personnel in field sales, service
and support organizations to further serve its customers and
channel partners, which the Company anticipates may result in
an increase in sales and marketing expense as a percentage of
sales in future periods.
Research and development expenses in the second quarter
of fiscal 1997 increased $24.1 million or 43 percent from the
year-ago period. The increase in research and development
expenses was primarily attributable to the cost of developing
3Com's new products, primarily switching and network
management, and the Company's expansion into new technologies
and markets. As a percentage of sales, research and
development expenses decreased to 9.8 percent in the second
quarter of fiscal 1997, from 10.0 percent in the same period a
year ago. The Company believes the timely introduction of new
technologies and products is crucial to its success, and plans
to continue to make acquisitions to accelerate time to market
where appropriate. Most of the in-process research and
development projects acquired in connection with the Company's
business acquisitions have been completed. The Company estimates that
the remaining costs in connection with the completion of
outstanding acquired research and development projects are not
significant, and are primarily made up of labor costs for
design, prototype development and testing.
General and administrative expenses in the second quarter
of fiscal 1997 increased $12.7 million or 55 percent from the
same period a year ago. The increase in general and
administrative expenses reflected expansion of the Company's
infrastructure and higher provisions for bad debts as a result
of the increased volume of sales. As a percentage of sales,
such expenses increased to 4.3 percent in the second quarter
of fiscal 1997 from 4.1 percent the same period a year ago.
Other income (net) was $4.8 million in the second quarter
of fiscal 1997, compared to $1.9 million in the second quarter
of fiscal 1996. The increase was due primarily to interest
income, which increased due to larger cash and investment balances.
The Company's effective income tax rate was 36.9 percent
in the second quarter of fiscal 1997, compared to 48.7 percent
in the second quarter of 1996. Excluding the merger costs
associated with the OnStream acquisition, which were not tax
deductible, the effective tax rate was 35.5 percent in the
second quarter of fiscal 1997. Excluding the merger costs
associated with the Chipcom acquisition, which were not fully
tax deductible, the effective tax rate was 35.0 percent in the
second quarter of fiscal 1996.
Net income for the second quarter of fiscal 1997 was
$105.6 million, or $.56 per share, compared to net income of
$16.3 million, or $.09 per share, for the second quarter of
fiscal 1996. Excluding the merger costs associated with the
OnStream acquisition, net income was $112.2 million, or $.60
per share for the quarter ended November 30, 1996. Excluding
the merger costs associated with the Chipcom acquisition, net
income was $65.6 million, or $.37 per share for the quarter
ended November 30, 1995.
Six Months Ended November 30, 1996 and 1995
The Company achieved record sales for the first six
months of fiscal 1997 totaling $1,530.4 million, an increase
of $469.6 million or 44 percent from the corresponding period
a year ago. Sales of network systems products in the first
six months of fiscal 1997 represented 58 percent of total
sales and increased 40 percent from the same period one year
ago. Sales of network adapters in the first six months of
fiscal 1997 represented 42 percent of total sales and
increased 54 percent from the same period last year.
International sales comprised 51 percent of total sales and
increased 38 percent from the first six months of fiscal 1996,
while sales in the United States increased 51 percent from the
first six months of fiscal 1996.
Cost of sales as a percentage of sales was 45.6 percent
for the first six months of fiscal 1997, compared to 47.3
percent for the corresponding fiscal 1996 period. The
resulting improvement in gross margin in the first six months
of fiscal 1997 primarily reflected an increased shipment mix
of higher margin workgroup switching and stackable hub system
products, and lower product material costs of certain adapter
products. Factors causing the increase in gross margin were
partially offset by a higher mix of certain lower margin
adapter products and increased provisions for excess and
obsolete inventories.
Total operating expenses in the first six months of
fiscal 1997 were $530.1 million compared to $441.6 million in
the first six months of fiscal 1996. Excluding the $6.6
million charge associated with the OnStream acquisition, total
operating expenses in the first six months of fiscal 1997 were
$523.5 million, or 34.2 percent of sales. Excluding the $69.0
million charge associated with the Chipcom acquisition, total
operating expenses in the first six months of fiscal 1996 were
$372.6 million, or 35.1 percent of sales. The increase in
recurring operating expenses of $150.9 million, or 40 percent,
reflected increased selling costs related to higher sales
volume, the cost of developing and promoting the Company's
products and an increase in personnel when compared to the
corresponding period in fiscal 1996.
In the first six months of fiscal 1997, sales and
marketing expenses increased $85.6 million or 39 percent from
the prior year and decreased to 20.0 percent of sales,
compared to 20.8 percent of sales in fiscal 1996. The
decrease as a percentage of sales is due in part to gains in
efficiency following assimilation of the separate sales,
marketing and support organizations initially present as a
result of the fiscal 1996 acquisition of Chipcom. Research
and development expenses increased $43.5 million in the first
six months of fiscal 1997, but decreased as a percentage of
sales to 9.9 percent compared to 10.1 percent in fiscal 1996.
General and administrative expenses increased $21.8 million in
the first six months of fiscal 1997, and increased as a
percentage of sales to 4.3 percent compared to 4.1 percent in
the first six months of fiscal 1996.
Other income (net) was $7.7 million for the first six
months of fiscal 1997, compared to $3.2 million in the
corresponding period one year ago. The increase in other
income was due primarily to higher interest income, which
increased due to larger cash and investment balances.
The Company's effective income tax rate was approximately
36.4 percent in the first six months of fiscal 1997 compared
to approximately 38.6 percent in the first six months of
fiscal 1996. Excluding the merger costs associated with the
OnStream acquisition, which were not tax deductible, the
effective tax rate was 35.7 percent for the first six months
of fiscal 1997. Excluding the merger costs associated with
the Chipcom acquisition, which were not fully tax deductible,
the effective tax rate was 35.0 percent for the first six
months of fiscal 1996.
Net income for the first six months of fiscal 1997 was
$197.1 million, or $1.06 per share, compared to net income of
$73.8 million, or $.42 per share, for the first six months of
fiscal 1996. Excluding the aforementioned $6.6 million charge
associated with the acquisition of OnStream, net income was
$203.7 million, or $1.10 per share, for the first six months
of fiscal 1997. Excluding the merger costs associated with
the acquisition of Chipcom, net income was $123.0 million, or
$.70 per share, for the first six months of fiscal 1996.
Business Environment and Risk Factors
The Company's future operating results may be affected by
various trends and factors which the Company must successfully
manage in order to achieve favorable operating results. In
addition, there are trends and factors beyond the Company's
control which affect its operations. In accordance with the
provisions of the Private Securities Litigation Reform Act of
1995, the cautionary statements set forth below identify
important factors that could cause actual results to differ
materially from those in any forward-looking statements which
may be contained in this report. Such trends and factors
include, but are not limited to, adverse changes in general
economic conditions or conditions in the specific markets for
the Company's products, governmental regulation or
intervention affecting communications or data networking,
fluctuations in foreign exchange rates, and other factors,
including those listed below. The Company participates in a
highly volatile and rapidly growing industry which is
characterized by vigorous competition for market share and
rapid technological development carried out amidst uncertainty
over adoption of industry standards and protection of
proprietary intellectual property rights.
This could result in aggressive pricing practices and growing
competition, both from start-up companies and from well-
capitalized computer systems and communications companies.
The Company's ability to compete in this environment depends
upon a number of competitive and market factors, and is
subject to the risks set forth in this report.
The market for the Company's products is characterized by
rapidly changing technology. The Company's success depends,
in substantial part, on the timely and successful introduction
of new products. An unexpected change in one or more of the
technologies affecting data networking, or in market demand
for products based on a particular technology could have a
material adverse effect on the Company's operating results if
the Company does not respond timely and effectively to such
changes. The Company is engaged in research and development
activities in certain emerging LAN and WAN high-speed
technologies, such as ATM, ISDN, Fast Ethernet, Gigabit
Ethernet and data-over-cable. As the industry standardizes on
high-speed technologies, there can be no assurance that the
Company will be able to respond promptly and cost-effectively
to compete in the marketplace. In addition, if the PC
industry migrates toward standardizing the integration of
network interface capabilities on the PC motherboard, it could
have an adverse impact on the Company's adapter business.
A Company initiative is to increase the Company's direct
sales force and other skilled personnel, such as system and
development engineers. Should the Company's growth rate
continue at levels commensurate with historical trends, the
Company will need to further expand the recruitment of
qualified personnel. Recruiting and retaining skilled
personnel, especially in certain locations in which the
Company operates, is highly competitive. Unless the Company
can successfully recruit such personnel, the Company's ability
to achieve continued growth in sales and earnings may be
adversely affected.
Some key components of the Company's products are
currently available only from single sources. There can be no
assurance that in the future the Company's suppliers will be
able to meet the Company's demand for components in a timely
and cost-effective manner. The Company's operating results
and customer relationships could be adversely affected by
either an increase in prices for, or an interruption or
reduction in supply of, any key components.
The Company distributes a significant portion of its
products through third party distributors and resellers. Due
to consolidation in the distribution and reseller channels and
the Company's increased volume of sales into these channels,
the Company has experienced an increased concentration of
credit risk. While the Company continually monitors and
manages this risk, financial difficulties on the part of one
or more of the Company's resellers may have a material adverse
effect on the Company. Likewise, the Company's expansion into
certain emerging geographic markets, characterized by economic
and political instability and currency fluctuations, may
subject the Company's resellers to financial difficulties
which may have an adverse impact on the Company.
The Company will continue to invest during fiscal 1997 in
expanding its sales, marketing, service, logistics and
manufacturing operations worldwide. The Company's ability to
achieve continued sales and earnings growth may be adversely
affected unless the Company can successfully and timely
implement several projects, including the continued expansion
of the Company's direct sales force and the establishment of a
new manufacturing and distribution facility in the Asia
Pacific region.
Acquisitions of complementary businesses and
technologies, including technologies and products under
development, are an active part of the Company's overall
business strategy. Certain of the Company's major competitors
have also been engaged in merger and acquisition transactions.
Such consolidations by competitors are creating entities with
increased market share, customer base, technology and
marketing expertise, sales force size, or proprietary
technology in segments in which the Company competes. These
developments may adversely affect the Company's ability to
compete in such segments.
The Company has recently consummated the acquisition of
OnStream and has completed several other acquisitions in
recent years. There can be no assurance that products,
technologies, distribution channels, key personnel and
businesses of acquired companies will be effectively
assimilated into the Company's business or product offerings,
or that such integration will not adversely affect the
Company's business, financial condition or results of
operations. The difficulties of such integration may be
increased by the size and number of such acquisitions and the
requirements of coordinating geographically separated
organizations. There can be no assurance that any acquired
products, technologies or businesses will contribute at
anticipated levels to the Company's sales or earnings, that
the sales, earnings and technologies under development from
acquired businesses will not be adversely affected by the
integration process or other general factors. If the Company
is not successful in the integration of such acquisitions,
there could be an adverse impact on the financial results of
the Company. The high-growth nature of the computer
networking industry, coupled with critical time-to-market
factors, has caused increased competition and consolidation.
As a result, there has been a significant increase in the
acquisition cost of computer networking companies. Future
acquisitions are therefore more likely to result in costs that
are material to the Company's operations. There can be no
assurance that the Company will continue to be able to
identify and consummate suitable acquisition transactions in
the future. However, should the Company consummate
acquisitions in the future, the impact may result in increased
dilution of the Company's earnings.
The Company's business is characterized by the continuous
introduction of new products and the management of the
transition of those products from prior generations of
technology or product platforms. In each product transition
cycle, the Company faces the challenge of managing the
inventory of its older products, including materials, work-in-
process, and products held by resellers. If the Company is
not successful in managing these transitions, there could be
an adverse impact on the financial results of the Company.
The Company's products are covered by product warranties
and the Company may be subject to contractual commitments
concerning product features or performance. If unexpected
circumstances arise such that the product does not perform as
intended and the Company is not successful in resolving
product quality or performance issues, there could be an
adverse impact on sales and earnings.
The market price of the Company's common stock has been,
and may continue to be, extremely volatile. Factors such as
new product announcements by the Company or its competitors,
quarterly fluctuations in the Company's operating results,
challenges associated with integration of businesses and
general conditions in the data networking market, such as a
decline in industry growth rates, may have a significant
impact on the market price of the Company's common stock.
These conditions, as well as factors which generally affect
the market for stocks of high technology companies, could
cause the price of the Company's stock to fluctuate
substantially over short periods.
Notwithstanding the Company's increased geographical
diversification, the Company's corporate headquarters and a
large portion of its research and development activities and
other critical business operations are located in California,
near major earthquake faults. The Company's business,
financial condition and operating results could be materially
adversely affected in the event of a major earthquake.
Because of the foregoing factors, as well as other
factors affecting the Company's operating results, past trends
and performance should not be presumed by investors to be an
accurate indicator of future results or trends.
Liquidity and Capital Resources
Cash, cash equivalents and temporary cash investments at
November 30, 1996 were $742.4 million, increasing $243.0
million from May 31, 1996.
For the six months ended November 30, 1996, net cash
generated from operating activities was $341.6 million. Trade
receivables at November 30, 1996 increased $103.8 million from
May 31, 1996. Days sales outstanding in receivables was 51
days at November 30, 1996, compared to 49 days at May 31,
1996. Inventory levels at November 30, 1996 decreased $5.7
million from the prior fiscal year-end. Inventory turnover
increased to 6.4 turns at November 30, 1996, compared to 5.4
turns at May 31, 1996.
During the six months ended November 30, 1996, the
Company made approximately $118.2 million in capital
expenditures. Major capital expenditures included a purchase
of land in Santa Clara, California, upgrades and additions to
product manufacturing lines and facilities in Ireland,
purchases and upgrades of desktop systems, and the continuing
development of the Company's worldwide information systems.
During the first six months of fiscal 1997, the Company
received cash of $37.4 million from the sale of its common
stock to employees through its employee stock purchase and
option plans. In the second quarter of fiscal 1997, the
Company's board of directors voted to rescind the Company's
previously announced share repurchase program, as a result of
uncertainties regarding the SEC's Interpretation of Staff
Accounting Bulletin No. 96 (SAB 96). SAB 96 raises the
possibility that under certain circumstances, companies which
have announced share repurchase programs will not have the
flexibility to employ the pooling-of-interests method when
making acquisitions.
During the second quarter of fiscal 1997, 3Com
Technologies, a wholly-owned subsidiary of the Company, signed
a lease for 7 acres of land in Changi, Republic of Singapore.
The Company began construction of 325,000 square feet of
office and manufacturing space in December of 1996, and plans
to occupy the manufacturing facility in the third quarter of
fiscal 1998.
During the second quarter of fiscal 1997, the Company
purchased a 14.25 acre parcel of land and signed a two-year
lease for a 57.75 acre parcel of adjacent land near its
existing headquarters in Santa Clara. The lease arrangement
provides the Company with an option to purchase the related
property or at the end of the lease arrange for the sale of
the property to a third party with a maximum obligation of the
Company of up to $42.1 million to the seller of the property.
The Company plans to enter into a building lease and begin
construction of a research and development campus in July
1997, and expects to commence occupancy and begin lease
payments in the second quarter of fiscal 1999.
During the second quarter of 1997, the Company signed a
new lease for 495,000 square feet of office and manufacturing
space on its Santa Clara headquarters, which were initially
occupied in the first quarter of fiscal 1991. The new lease
term extends through November, 2001, with the option to extend
for up to two 5-year terms. This arrangement also provides
the Company with an option to purchase the related property or
at the end of the lease arrange for the sale of the property
to a third party with a maximum obligation of the Company of
up to $63.6 million to the seller of the property.
The Company leases and occupies 225,000 square feet of
office and manufacturing space adjacent to its existing
headquarters in Santa Clara (Phase I). The Company amended
this lease agreement on February 1, 1996 to add 150,000 square
feet of office and manufacturing space and a parking garage
(Phase II) to be built on adjacent land. The amended lease
expires in five years and provides the Company with an option
to purchase both Phase I and II properties, or at the end of
the lease arrange for the sale of the properties to a third
party with a maximum obligation of the Company of up to $57.8
million to the seller of the properties. The Company
anticipates that it will commence occupancy of and begin lease
payments on a significant portion of the Phase II property in
the fourth quarter of fiscal 1997.
The three aforementioned leases require the Company to
maintain specified financial covenants, all of which the
Company was in compliance with as of November 30, 1996.
As of November 30, 1996, the Company had outstanding
approximately $47 million in commitments primarily associated
with the purchase of land, construction and expansion of
office and manufacturing space in Singapore, Ireland and
Israel.
The Company had a $40 million revolving bank credit
agreement which expired December 31, 1996. In December 1996,
the Company renegotiated the revolving bank credit agreement,
which now provides for borrowings of up to $100 million, and
expires December 20, 1999. Payment of cash dividends are
permitted under the credit agreement, subject to certain
limitations based on net income levels of the Company. The
Company has not paid and does not anticipate it will pay cash
dividends on its Common stock. The credit agreement requires
the Company to maintain specified financial covenants. As of
November 30, 1996, no amount was outstanding under the credit
agreement and the Company was in compliance with all required
covenants.
Based on current plans and business conditions, the
Company believes that its existing cash and equivalents,
temporary cash investments, cash generated from operations and
the available revolving credit agreement will be sufficient to
satisfy anticipated operating cash requirements for at least
the next twelve months.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On October 13, 1995, the Company acquired Chipcom,
which had already been named as a defendant in the
litigation described below. Five complaints were filed
between May 30, 1995 and June 16, 1995 that alleged
violations by the defendants of Sections 10(b) and 20(a)
of the Securities and Exchange Act of 1934, and sought
unspecified damages. The cases were consolidated for
pretrial purposes pursuant to an order entered by the
Court on June 15, 1995. The consolidated action is
entitled In re: Chipcom Securities Litigation, Civil
Action No. 95-111114-DPW. A Consolidated Complaint was
filed on September 13, 1995, and an Amended Consolidated
Complaint was filed on November 30, 1995.
The defendants' motion to dismiss the Amended
Consolidated Complaint was granted without leave to amend
on May 1, 1996. The dismissal covers all five cases. The
plaintiffs appealed the order granting the dismissal. On
October 1, 1996, the parties to these cases agreed upon
what the Company considers to be favorable financial
terms for settlement of all five cases, which amount the
Company does not consider material to its operations or
financial position. Pursuant to the contemplated
settlement, which would be subject to the approval of the
District Court, it is intended that all claims of all
persons which are related to the subject matter of the
Consolidated Complaint would be settled and released.
Item 2. Changes in Securities
On September 26, 1996, the shareholders
approved the amendment of the Articles of Incorporation
to designate a par value of $.01 for each share of Common
stock.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of
Shareholders was held on September 26, 1996.
(b) Each of the persons named in the
Proxy Statement as a nominee for director was
elected and the proposals listed below were
approved. The following are the voting results
on each of the proposals:
Proposal I
----------
Election of Directors In Favor Withheld
--------------------- -------- --------
James L. Barksdale 147,202,309 1,493,215
Eric A. Benhamou 147,209,801 1,485,723
Gordon A. Campbell 147,193,365 1,502,159
Philip C. Kantz 147,193,377 1,502,147
Proposal II
-----------
To establish a par value of $.01 per
share for the Company's Common Stock
In Favor Opposed Abstain No Vote
-------- ------- ------- -------
147,087,983 148,160 323,956 1,135,425
Proposal III
------------
1983 Stock Option Plan limiting the
number of shares that may be granted
to any employee in any fiscal year.
139,214,018 7,990,989 355,092 1,135,425
Proposal IV
-----------
Ratification of appointment of
Deloitte & Touche LLP as the
Company's independent auditors for
fiscal 1997.
148,383,399 95,243 216,882 --
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
3.1 Amended and Restated Articles of
Incorporation (Exhibit 19.1 to Form 10-Q)
(6)
3.2 Certificate of Amendment of the
Amended and Restated Articles of
Incorporation (Exhibit 3.2 to Form 10-K)
(15)
3.3 Bylaws, as amended and restated
(Exhibit 4.2 to Form S-8) (10)
3.4 Certificate of Amendment of the
Amended and Restated Articles of
Incorporation (Exhibit 4.1 to Form S-8)
(23)
3.5 Certificate of Amendment of the
Amended and Restated Articles of
Incorporation, dated October 4, 1996, as
filed on October 9, 1996
4.1 Reference is made to Exhibit 3.1
(Exhibit 4.1 to Form 10-K) (15)
4.2 Indenture Agreement between 3Com
Corporation and The First National Bank of
Boston for the private placement of
convertible subordinated notes dated as of
November 1, 1994 (Exhibit 5.2 to Form 8-K)
(18)
4.3 Placement Agreement for the
private placement of convertible
subordinated notes dated November 8, 1994
(Exhibit 5.1 to Form 8-K) (18)
4.4 Amended and Restated Rights
Agreement dated December 31, 1994 (Exhibit
10.27 to Form 10-Q) (19)
10.1 1983 Stock Option Plan, as
amended (Exhibit 10.1 to Form 10-K) (7)*
10.2 Amended and Restated Incentive
Stock Option Plan (4)*
10.3 License Agreement dated March
19, 1981 (1)
10.4 First Amended and Restated 1984
Employee Stock Purchase Plan, as amended
(Exhibit 19.1 to Form 10-Q) (8)*
10.5 Second Amended and Restated 1984
Employee Stock Purchase Plan (Exhibit 10.5
to Form 10-Q)(24)*
10.6 License Agreement dated as of
June 1, 1986 (Exhibit 10.16 to Form 10-K)
(3)
10.7 3Com Corporation Director Stock
Option Plan, as amended (Exhibit 19.3 to
Form 10-Q) (8)*
10.8 Amended 3Com Corporation
Director Stock Option Plan (Exhibit 10.8
to Form 10-Q)(24)*
10.9 Bridge Communications, Inc. 1983
Stock Option Plan, as amended (Exhibit 4.7
to Form S-8) (2)*
10.10 3Com Headquarters Lease
dated December 1, 1988, as amended
(Exhibit 10.14 to Form 10-K) (7)
10.11 Ground Lease dated July 5,
1989 (Exhibit 10.19 to Form 10-K) (5)
10.12 Sublease Agreement dated
February 9, 1989 (Exhibit 10.20 to Form
10-K) (5)
10.13 Credit Agreement dated
April 21, 1993 (Exhibit 10.11 to Form 10-
K) (9)
10.14 Amendment to Credit
Agreement (Exhibit 10.20 to Form 10-Q)
(14)
10.15 Second Amendment to Credit
Agreement (Exhibit 10.21 to Form 10-Q)
(14)
10.16 3Com Corporation Restricted
Stock Plan dated July 9, 1991 (Exhibit
19.2 to Form 10-Q) (8)*
10.17 Amended 3Com Corporation
Restricted Stock Plan (Exhibit 10.17 to
Form 10-Q)(24)*
10.18 Form of Escrow and
Indemnification Agreement for Directors
and Officers (Exhibit 10.15 to Form 10-Q)
(11)
10.19 Agreement and Plan of
Reorganization dated December 16, 1993
among 3Com Corporation, 3Sub Corporation
and Synernetics, Inc. (Exhibit 7.1 to Form
8-K) (12)
10.20 Side Agreement Regarding
Agreement and Plan of Reorganization dated
January 14, 1993 among 3Com Corporation,
3Sub Corporation and Synernetics, Inc.
(Exhibit 7.2 to Form 8-K) (12)
10.21 Agreement and Plan of
Reorganization dated January 18, 1994
(Exhibit 7.2 to Form 8-K) (13)
10.22 Indemnification and Escrow
Agreement dated February 2, 1994 (Exhibit
7.3 to Form 8-K) (13)
10.23 1994 Stock Option Plan
(Exhibit 10.22 to Form 10-K) (15)*
10.24 Lease Agreement between BNP
Leasing Corporation, as Landlord, and 3Com
Corporation, as Tenant, effective as of
July 14, 1994 (Exhibit 10.23 to Form 10-Q)
(16)
10.25 Second amendment to Lease
Agreement between BNP Leasing Corporation,
as Landlord, and 3Com Corporation, as
Tenant, dated February 1, 1996 (25)
10.26 Purchase Agreement between
BNP Leasing Corporation and 3Com
Corporation, dated July 14, 1994 (Exhibit
10.24 to Form 10-Q) (16)
10.27 First amendment to Purchase
Agreement between BNP Leasing Corporation
and 3Com Corporation, dated February 1,
1996 (27)
10.28 Asset Purchase Agreement
dated September 18, 1994 among 3Com
Corporation, NiceCom, Ltd., and Nice
Systems, Ltd. (Exhibit 7.1 to Form 8-K)
(17)
10.29 First Amendment to Asset
Purchase Agreement dated October 17, 1994
among 3Com Corporation, NiceCom, Ltd., and
Nice Systems, Ltd. (Exhibit 7.2 to Form 8-
K) (17)
10.30 Acquisition and Exchange
Agreement dated March 22, 1995 among 3Com
Corporation and Shareholders of Sonix
Communications Limited (Exhibit 7.1 to
Form 8-K) (20)
10.31 Agreement and Plan of
Reorganization, dated March 21, 1995, by
and among 3Com Corporation, Anuinui
Acquisition Corporation and Primary Access
Corporation (Appendix A to prospectus
included in Form S-4) (21)
10.32 Amendment to Agreement and
Plan of Reorganization, dated May 30, 1995
by and among 3Com Corporation, Anuinui
Acquisition Corporation and Primary Access
Corporation (Appendix A-1 to prospectus
included in Form S-4) (21)
10.33 Escrow Agreement, dated
June 9, 1995 by and among 3Com
Corporation, The First National Bank of
Boston and Tench Coxe, Kathryn C. Gould
and William R. Stensrud as Shareholders'
Agents (Exhibit 10.27 to Form S-4) (21)
10.34 Agreement and Plan of
Merger dated as of July 26, 1995 among
3Com Corporation, Chipcom Acquisition
Corporation and Chipcom Corporation
(Exhibit 2.1 to Form S-4) (22)
10.35 Lease Agreement between BNP
Leasing Corporation, as Landlord, and 3Com
Corporation, as Tenant, effective as of
October 4, 1996
10.36 Purchase Agreement between
BNP Leasing Corporation and 3Com
Corporation, effective as of October 4,
1996
10.37 Lease Agreement between BNP
Leasing Corporation, as Landlord, and 3Com
Corporation, as Tenant, effective as of
November 20, 1996
10.38 Purchase Agreement between
BNP Leasing Corporation and 3Com
Corporation, effective as of November 20,
1996
* Indicates a management contract
or compensatory plan.
(1) Incorporated by reference to the
corresponding Exhibit previously filed as
an Exhibit to Registrant's Registration
Statement on Form S-1 filed January 25,
1984 (File No. 2-89045)
(2) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form S-8 filed October 13, 1987 (File No.
33-17848)
(3) Incorporated by reference to the
corresponding Exhibit or the Exhibit
identified in parentheses previously filed
as an Exhibit to Registrant's Form 10-K
filed August 29, 1987 (File No. 0-12867)
(4) Incorporated by reference to
Exhibit 10.2 to Registrant's Registration
Statement on Form S-4 filed on August 31,
1987 (File No. 33-16850)
(5) Incorporated by reference to the
corresponding Exhibit or the Exhibit
identified in parentheses previously filed
as an Exhibit to Registrant's Form 10-K
filed on August 28, 1989 (File No. 0-
12867)
(6) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed on January 2,
1991 (File No. 0-12867)
(7) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-K filed on August 27,
1991 (File No. 0-12867)
(8) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed January 10,
1992 (File No. 0-12867)
(9) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-K filed on August 27,
1993 (File No. 0-12867)
(10) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form S-8, filed on November 24, 1993 (File
No. 33-72158)
(11) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed on January
14, 1994 (File No. 0-12867)
(12) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 8-K filed on January 31,
1994 (File No. 0-12867)
(13) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 8-K filed on February
11, 1994 (File No. 0-12867)
(14) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed on April 13,
1994 (File No. 0-12867)
(15) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-K filed on August 31,
1994 (File No. 0-12867)
(16) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed on October
16, 1994 (File No. 0-12867)
(17) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 8-K filed on November 1,
1994 (File No. 0-12867)
(18) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 8-K filed on November
16, 1994 (File No. 0-12867)
(19) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 10-Q filed on January
13, 1995 (File No. 0-12867)
(20) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Form 8-K filed on May 16,
1995 (File No. 0-12867)
(21) Incorporated by reference to the
Exhibit or other item identified in
parentheses previously filed as an Exhibit
to or included in Registrant's
Registration Statement on Form S-4,
originally filed on March 23, 1995 (File
No. 33-58203)
(22) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form S-4, originally filed on August 31,
1995 (File No. 33-62297)
(23) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form S-8, filed on October 19, 1995 (File
No. 33-63547)
(24) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form 10-Q, filed on January 15, 1996 (File
No. 0-12867)
(25) Incorporated by reference to the
Exhibit identified in parentheses
previously filed as an Exhibit to
Registrant's Registration Statement on
Form 10-Q, filed on April 12, 1996 (File
No. 0-12867)
(b) Reports on Form 8-K
The Company filed one report on Form
8-K during the fiscal quarter covered by this
report as follows:
(i) Report on Form 8-K
filed on November 13, 1996, reporting
under Item 2 the completion of the
acquisition of OnStream Networks, Inc.
effective October 31, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
3Com Corporation
(Registrant)
Dated: January 13, 1997 By: /s/ Christopher B. Paisley
--------------------- -------------------------------------
Christopher B. Paisley
Senior Vice President Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 350,141
<SECURITIES> 392,237
<RECEIVABLES> 463,029
<ALLOWANCES> (35,456)
<INVENTORY> 235,353
<CURRENT-ASSETS> 1,623,205
<PP&E> 572,895
<DEPRECIATION> (263,863)
<TOTAL-ASSETS> 1,981,126
<CURRENT-LIABILITIES> 561,702
<BONDS> 0
<COMMON> 712,320
0
0
<OTHER-SE> 563,417
<TOTAL-LIABILITY-AND-EQUITY> 1,981,126
<SALES> 1,530,436
<TOTAL-REVENUES> 1,530,436
<CGS> 697,953
<TOTAL-COSTS> 1,004,709
<OTHER-EXPENSES> 199,062
<LOSS-PROVISION> 10,645
<INTEREST-EXPENSE> 5,889
<INCOME-PRETAX> 310,131
<INCOME-TAX> 112,990
<INCOME-CONTINUING> 197,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,141
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.06
</TABLE>
EXHIBIT 3.5
CERTIFICATE OF AMENDMENT
OF THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
3COM CORPORATION
The undersigned, Mark D. Michael, hereby certifies
that:
1. He is both a duly elected and acting Vice
President and the duly elected and acting Secretary of 3Com
Corporation, a California corporation (the "Corporation").
2. Article III of the amended and Restated Articles
of Incorporation of the Corporation is hereby amended to
read in full as follows:
"ARTICLE III
STOCK
This corporation is authorized to issue two classes of
shares, designated respectively "Common Stock" and
"Preferred Stock." Upon amendment of this Article to read
as herein set forth, the number of shares of Common Stock
which this corporation is authorized to issue is 400,000,000
and the number of shares of Preferred Stock which this
corporation is authorized to issue is 3,000,000. All the
authorized shares of Common Stock shall have a par value of
$0.01.
The Preferred Stock may be issued from time to time in
one or more series. The Board of Directors of this
Corporation is authorized to determine the designation of
any series, to fix the number of shares of any series, to
determine or alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock, and within the limits or
restrictions stated in any resolution or resolutions of the
Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not
below the number of shares of any such series then
outstanding) the number of shares of any such series
subsequent to the issue of shares of that series."
3. The foregoing amendment of the Amended and
Restated Articles of Incorporation has been duly approved by
the Board of Directors of the Corporation.
4. The foregoing amendment of the Amended and
Restated Articles of Incorporation has been duly approved by
the required vote of the shareholders of the Corporation in
accordance with Section 902 and 903 of the California
Corporations Code.
The total number of outstanding shares of the
Corporation entitled to vote with respect to the foregoing
amendment was 169,570,302 shares of Common Stock. The
number of shares voting in favor of the amendment equaled or
exceeded the vote required, such required vote being more
than a majority of the outstanding shares of Common Stock.
Executed at Santa Clara, California, on the 4th day of
October 1996.
/s/ Mark D. Michael
-------------------
Mark D. Michael, Vice President and
Secretary
The undersigned declares under penalty of perjury that
the matters set forth in the foregoing certificate are true
and correct of his own knowledge.
Executed at Santa Clara, California, on the 4th day of
October 1996.
/s/ Mark D. Michael
-------------------
Mark D. Michael, Vice President and
Secretary
Art1096.doc
RCF
EXHIBIT 10.35
$74,800,000.00
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
3COM CORPORATION,
AS TENANT
EFFECTIVE AS OF OCTOBER 4, 1996
(Great America Site - Phase I)
This Agreement is being facilitated by the following banks:
Banque Nationale de Paris
ABN AMRO Bank N.V.
TABLE OF CONTENTS
1. Definitions
(a) Active Negligence
(b) Additional Rent
(c) Administrative Fee
(d) Affiliate
(e) Applicable Laws
(f) Applicable Purchaser
(g) Attorneys' Fees
(h) Base Rent
(i) Base Rent Date
(j) Base Rent Period
(k) Breakage Costs
(l) Business Day
(m) Capital Adequacy Charges
(n) Closing Costs
(o) Change of Control Event
(p) Code
(q) Collateral
(r) Collateral Percentage
(s) Debt
(t) Default
(u) Default Rate
(v) Designated Sale Date
(w) Effective Rate
(x) Environmental Indemnity
(y) Environmental Laws
(z) Environmental Losses
(aa) Environmental Report
(ab) ERISA
(ac) ERISA Affiliate
(ad) ERISA Termination Event
(ae) Escrowed Proceeds
(af) Eurocurrency Liabilities
(ag) Eurodollar Rate Reserve Percentage
(ah) Event of Default
(ai) Excluded Taxes
(aj) Fair Market Value
(ak) Fed Funds Rate
(al) Funding Advances
(am) GAAP
(an) Hazardous Substance
(ao) Hazardous Substance Activity
(ap) Impositions
(aq) Improvements
(ar) Indemnified Party
(as) Initial Funding Advance
(at) Landlord's Parent
(au) LIBOR
(av) Lien
(aw) Losses
(ax) Ordinary Negligence
(ay) Participant
(az) Participation Agreement
(ba) Permitted Encumbrances
(bb) Permitted Hazardous Substance Use
(bc) Permitted Hazardous Substances
(bd) Permitted Transfer
(be) Person
(bf) Plan
(bg) Pledge Agreement
(bh) Prime Rate
(bi) Purchase Agreement
(bj) Purchase Price
(bk) Qualified Payments
(bl) Remaining Proceeds
(bm) Rent
(bn) Responsible Financial Officer
(bo) Spread
(bp) Stipulated Loss Value
(bq) Subsidiary
(br) Tenant's Knowledge
(bs) Term
(bt) Unfunded Benefit Liabilities
(bu) Upfront Fee
(bv) Voluntary Minimum Pledge Commitment
(bw) Other Terms and References
2. Term
3. Rental
(a) Base Rent
(b) Upfront Fee
(c) Administrative Fees
(d) Additional Rent
(e) Interest and Order of Application
(f) Net Lease
(g) No Demand or Setoff
4. Insurance and Condemnation Proceeds
5. No Lease Termination
(a) Status of Lease
(b) Waiver By Tenant
6. Purchase Agreement, Pledge Agreement and Environmental Indemnity
7. Use and Condition of Leased Property
(a) Use
(b) Condition
(c) Consideration of and Scope of Waiver
8. Other Representations, Warranties and Covenants of Tenant
(a) Financial Matters
(b) Existing Contract
(c) No Default or Violation
(d) Compliance with Covenants and Laws
(e) Environmental Representations
(f) No Suits
(g) Condition of Property
(h) Organization
(i) Enforceability
(j) Not a Foreign Person
(k) Omissions
(l) Existence
(m) Tenant Taxes
(n) Operation of Property
(o) Debts for Construction
(p) Impositions
(q) Repair, Maintenance, Alterations and Additions
(r) Insurance and Casualty
(s) Condemnation
(t) Protection and Defense of Title
(u) No Liens on the Leased Property
(v) Books and Records
(w) Financial Statements; Required Notices; Certificates as to
Default
(x) Further Assurances
(y) Fees and Expenses; General Indemnification; Increased Costs;
and Capital Adequacy Charges
(z) Liability Insurance
(aa) Permitted Encumbrances
(ab) Environmental
(ac) Affirmative Financial Covenants
(ad) Negative Covenants
(i) Liens
(ii) Transactions with Affiliates
(iii) Mergers; Sales of Assets
(v) Change of Business
(ae) ERISA
9. Representations, Warranties and Covenants of Landlord
(a) Title Claims By, Through or Under Landlord
(b) Actions Required of the Title Holder
(c) No Default or Violation
(d) No Suits
(e) Organization
(f) Enforceability
(g) Existence
(h) Not a Foreign Person
10. Assignment and Subletting
(a) Consent Required
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters
(c) Consent Not a Waiver
(d) Landlord's Assignment
11. Environmental Indemnification
(a) Indemnity
(b) Assumption of Defense
(c) Notice of Environmental Losses
(d) Rights Cumulative
(e) Survival of the Indemnity
12. Landlord's Right of Access
13. Events of Default
(a) Definition of Event of Default
(b) Remedies
(c) Enforceability
(d) Remedies Cumulative
(e) Waiver by Tenant
(f) No Implied Waiver
14. Default by Landlord
15. Quiet Enjoyment
16. Surrender Upon Termination
17. Holding Over by Tenant
18. Miscellaneous
(a) Notices
(b) Severability
(c) No Merger
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD
(e) Entire Agreement
(f) Binding Effect
(g) Time is of the Essence
(h) Termination of Prior Rights
(i) Governing Law
(j) Waiver of a Jury Trial
(k) Not a Partnership, Etc
(l) Tax Reporting
Exhibits and Schedules
Exhibit A Legal Description
Exhibit B Encumbrance List
Exhibit C Permitted Hazardous Substances
Exhibit D Resolution of Disputed Insurance Claims
Exhibit E Covenant Compliance Certificate
Exhibit F Certificate Setting Forth the Calculation of the Spread
Exhibit G List of Environmental Reports
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this "Lease"),
made to be effective as of October 4, 1996 (all references
herein to the "date hereof" or words of like effect shall
mean such effective date), by and between BNP LEASING
CORPORATION, a Delaware corporation (hereinafter called
"Landlord"), and 3COM CORPORATION, a California corporation
(hereinafter called "Tenant");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Real Property Purchase and Sale
Agreement dated as of September 30, 1996 (hereinafter called
the "Existing Contract") between Tenant and Dairy Associates,
L.P., a California limited partnership (hereinafter called
"Seller"), concerning the land described in Exhibit A
attached hereto (hereinafter called the "Land") and the
improvements on such Land, Landlord is acquiring the Land and
improvements from Seller contemporaneously with the execution
of this Lease;
WHEREAS, in anticipation of Landlord's acquisition of
the Land, the improvements on the Land and other rights and
interests hereinafter described, Landlord and Tenant have
reached agreement as to the terms and conditions upon which
Landlord is willing to lease the same to Tenant, and by this
Lease Landlord and Tenant desire to evidence such agreement;
NOW, THEREFORE, in consideration of the rent to be paid
and the covenants and agreements to be performed by Tenant,
as hereinafter set forth, Landlord does hereby LEASE, DEMISE
and LET unto Tenant for the term hereinafter set forth the
Land, together with:
(i) Landlord's interest in any and all buildings and
improvements now or hereafter erected on the Land,
including, but not limited to, the fixtures,
attachments, appliances, equipment, machinery and
other articles attached to such buildings and
improvements (hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or
hereafter
acquired by Landlord for use in connection with the
Land or Improvements or as a means of access thereto;
(iii) all right, title and interest of Landlord, now
owned or hereafter acquired, in and to (A) any land
lying within the right-of-way of any street, open or
proposed, adjoining the Land, (B) any and all
sidewalks and alleys adjacent to the Land and (C)
any strips and gores between the Land and abutting land
(except strips and gores, if any, between the Land and
abutting land owned by Landlord, with respect to which this
Lease shall cover only the portion thereof to the center
line between the Land and the abutting land owned by
Landlord).
The Land and all of the property described in items (i)
through (iii) above are hereinafter referred to
collectively as the "Real Property".
In addition to conveying the leasehold in the Real
Property as described above, Landlord hereby grants and
assigns to Tenant for the term of this Lease the right to
use and enjoy (and, to the extent the following consist of
contract rights, to enforce) any assignable interests or
rights in, to or under the following that have been
transferred to Landlord by Seller under the Existing
Contract: (a) any goods, equipment, furnishings, furniture,
chattels and personal property of whatever nature that are
located on the Real Property and all renewals or
replacements of or substitutions for any of the foregoing;
and (b) any general intangibles, permits, licenses,
franchises, certificates, and other rights and privileges.
All of the property, rights and privileges described above
in this paragraph are hereinafter collectively called the
"Personal Property". The Real Property and the Personal
Property are hereinafter sometimes collectively called the
"Leased Property."
Provided, however, the leasehold estate conveyed
hereby and Tenant's rights hereunder are expressly made
subject and subordinate to the Permitted Encumbrances (as
hereinafter defined) and to any other claims or
encumbrances not asserted by Landlord itself or by third
parties lawfully claiming through or under Landlord.
The Leased Property is leased by Landlord to Tenant
and is accepted and is to be used and possessed by Tenant
upon and subject to the following terms, provisions,
covenants, agreements and conditions:
2. Definitions. As used herein, the terms "Landlord,"
"Tenant,"
"Existing Contract," "Seller," "Land," "Improvements,"
"Real Property," "Personal Property" and "Leased Property"
shall have the meanings indicated above and the terms
listed immediately below shall have the following meanings:
(a) Active Negligence. "Active Negligence" of an
Indemnified Party
means, and is limited to, the negligent conduct of
activities on the Leased Property by the Indemnified Party
in a manner that proximately causes actual bodily injury or
property damage to occur. "Active Negligence" shall not
include (1) any negligent failure of Landlord to act when
the duty to act would not have been imposed but for
Landlord's status as owner of the Leased Property or as a
party to the transactions described in this Lease, (2) any
negligent failure of any other Indemnified Party to act when
the duty to act would not have been imposed but for such
party's contractual or other relationship to Landlord or
participation or facilitation in any manner, directly or
indirectly, of the transactions described in this Lease, or
(3) the exercise in a lawful manner by Landlord (or any
party lawfully claiming through or under Landlord) of any
remedy provided herein or in the Purchase Agreement.
(b) Additional Rent. "Additional Rent" shall have the
meaning
assigned to it in subparagraph 3.(d) below.
(c) Administrative Fee. "Administrative Fee" shall have the
meaning
assigned to it in subparagraph 3.(c).
(d) Affiliate. "Affiliate" of any Person means any other
Person
controlling, controlled by or under common control with
such Person. For purposes of this definition, the term
"control" when used with respect to any Person means the
power to direct the management of policies of such Person,
directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative
to the foregoing.
(e) Applicable Laws. "Applicable Laws" shall have the
meaning
assigned to it in subparagraph 8.(d) below.
(f) Applicable Purchaser. "Applicable Purchaser" means
any third
party designated by Tenant to purchase the Landlord's
interest in the Leased Property and in any Escrowed
Proceeds as provided in the Purchase Agreement.
(g) Attorneys' Fees. "Attorneys' Fees" means the reasonable
fees and
expenses of counsel to the parties incurring the same, which
may include fairly allocated costs of in-house counsel,
printing, photostating, duplicating and other expenses, air
freight charges, and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing
services under the supervision of
an attorney. Such terms shall also include, without
limitation, all such fees and expenses incurred with respect
to appeals, arbitrations and bankruptcy proceedings, and
whether or not any manner or proceeding is brought with
respect to the matter for which such fees and expenses were
incurred.
(h) Base Rent. "Base Rent" means the rent payable by Tenant
pursuant
to subparagraph 3.(a) below.
(i) Base Rent Date. "Base Rent Date" means November 1, 1996
and the
first Business Day of February, May, August and November of
each calendar year thereafter to and including the first
Business Day of November, 2001.
(j) Base Rent Period. "Base Rent Period" means (1) the
period
beginning on and including the date hereof and ending on but
not including the first Base Rent Period, and (2) each
successive period
of approximately three (3) months. Each successive Base Rent
Period after the first Base Rent Period shall begin on and
include the day on which the preceding Base Rent Period ends
and shall end on but not include the next following Base Rent
Date.
(k) Breakage Costs. "Breakage Costs" means any and all
costs, losses
or expenses incurred or sustained by Landlord's Parent or any
other Participant, for which Landlord's Parent or the other
Participant
shall expect reimbursement from Landlord, because of the
resulting liquidation or redeployment of deposits or other
funds used to make Funding Advances upon any termination of
this Lease by Tenant pursuant to Paragraph 2, if such
termination is effective as of any day other than a Base
Rent Date. Breakage Costs will include losses attributable
to any decline in LIBOR as of the effective date of
termination as compared to LIBOR used to determine the
Effective Rate then in effect. (However, if Landlord's
Parent or another Participant actually receives a profit
upon the liquidation or redeployment of deposits or other
funds used to make Funding Advances, because of any
increase in LIBOR, then such profit will be offset against
costs or expenses that would otherwise be charged as
Breakage Costs under this Lease.) Each determination by
Landlord's Parent of Breakage Costs shall, in the absence
of clear and demonstrable error, be conclusive and binding
upon Landlord and Tenant.
(l) Business Day. "Business Day" means any day that is
(1) not a
Saturday, Sunday or day on which commercial banks are
generally closed or required to be closed in New York City,
New York or San Francisco,
California, and (2) a day on which dealings in deposits of
dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely
for any reason, "Business Day" shall mean any day described
in clause (1).
(m) Capital Adequacy Charges. "Capital Adequacy
Charges" means any additional amounts Landlord's Parent or
any other Participant requires Landlord to pay as
compensation for an increase in required capital as provided
in subparagraph 8.(y)(iv).
(n) Closing Costs. "Closing Costs" means the excess of
$74,800,000 over the sums actually paid by Landlord for or
in connection with Landlord's acquisition of the Leased
Property (including the payment of amounts secured by any
lien to which the Real Property may be subject when it is
conveyed to Landlord) at the closing under the Existing
Contract, which excess will be advanced by or on behalf of
Landlord to pay costs incurred in connection with the
preparation and negotiation of this Lease, the Purchase
Agreement, the Pledge Agreement, the Environmental
Indemnity, the Participation Agreement and related
documents. To the extent that Landlord does not itself use
such excess to pay expenses incurred by Landlord in
connection with the preparation and negotiation of such
documents, the remainder thereof will be advanced to Tenant,
with the expectation that Tenant shall use any such amount
advanced for one or more of the following purposes: (1) the
payment or reimbursement of expenses incurred by Tenant in
connection with the preparation and negotiation of this
Lease, the Purchase Agreement, the Pledge Agreement and
related documents; (2) the payment or reimbursement of
expenses incurred by Tenant in connection with any
improvements Tenant may elect to make to the Leased Property
in accordance with the requirements and limitations imposed
by this Lease, including the planning, design, engineering
and permitting of thereof; (3) the maintenance of the Leased
Property; (4) the payment of the Upfront Fee and the first
Administrative Fee; or (5) the payment of Rents next due.
(o) Change of Control Event. "Change of Control
Event" means the occurrence of any merger or consolidation or
sale of assets involving Tenant that is prohibited by
subparagraph 8.(ad)(iii).
(p) Code. "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
(q) Collateral. "Collateral" shall have the meaning
assigned to it in the Pledge Agreement.
(r) Collateral Percentage. "Collateral Percentage" for
each Base Rent Period means the Collateral Percentage for such
period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of this Lease, the
Collateral Percentage for any Base Rent Period shall not
exceed a fraction; the numerator of which fraction
shall equal the value (determined as provided in the Pledge
Agreement) of all Collateral (a) that is, on the first day of
such Base Rent Period, held by the Deposit Takers under (and
as defined in) the Pledge Agreement subject to a Qualifying
Security Interest (as defined below), (b) that is free from
claims or security interests held or asserted by any third
party, and (c) that is not in excess of Stipulated Loss Value;
and the denominator of which fraction shall equal the
Stipulated Loss Value on the first day of such Base Rent
Period. "Qualifying Security Interest" means a first priority
perfected security interest under the Pledge Agreement which
is sufficient, for purposes of the laws and regulations which
govern minimum amounts of capital that each of Landlord's
Parent and other Participants (or their respective affiliates)
must maintain, to permit them to assign a risk weighting of no
more than twenty percent to the portion of their respective
Funding Advances equal to the Collateral their respective
Deposit Takers hold on deposit as provided by the
Pledge Agreement.
(s) Debt. "Debt" of any Person means (i) indebtedness of
such Person
for borrowed money, (ii) obligations of such Person evidenced
by
bonds, debentures, notes or other similar instruments,
(iii) obligations of such Person to pay the deferred purchase
price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, (v)
obligations of such Person, contingent or otherwise, under any
lease of real property or related documents (including a
separate purchase agreement) which provide that such Person
must purchase or cause another to purchase any interest in the
leased property and thereby guarantee a minimum residual value
of the leased property to the lessor; (vi) obligations under
direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to
in clauses (i) through (v) above,
(vii) liabilities of another Person secured by a Lien on,
or payable out of the proceeds of production from, property
of such Person even though such obligation shall not be
assumed by such Person (but in the case of such liabilities
not assumed by such Person, the liabilities shall
constitute Debt of such Person only to the extent of the
value of such Person's property encumbered by the Lien
securing such liabilities) and (viii) Unfunded Benefit
Liabilities.
(t) Default. "Default" means any event which, with the
passage of
time or the giving of notice or both, would (if not cured
within any applicable cure period) constitute an Event of
Default.
(u) Default Rate. "Default Rate" means a floating per
annum rate
equal to three percent (3%) above the Prime Rate. However,
in no event will the Default Rate exceed the maximum
interest rate permitted by law.
(v) Designated Sale Date. "Designated Sale Date" shall
have the
meaning assigned to it in the Purchase Agreement.
(w) Effective Rate. "Effective Rate" means:
(i) for each day during the short first Base Rent Period
ending
on November 1, 1996, the per annum rate which is fifty
basis points (50/100 of 1%) above the Fed Funds Rate on
that day; and
(ii) for each Base Rent Period after the first Base Rent
Period,
the per annum rate determined by dividing (A) LIBOR for
such
period, by (B) 100% minus the Eurodollar Rate Reserve
Percentage
for such period.
If LIBOR or the Eurodollar Rate Reserve Percentage changes
from Base Rent Period to Base Rent Period, then the
Effective Rate shall be automatically increased or
decreased, as the case may be, as of the date of the change
from Base Rent Period to Base Rent Period. If for any
reason Landlord's Parent determines that it is impossible
or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with
the preceding sentences, then the "Effective Rate" for that
Base Rent Period shall equal any published index or per
annum interest rate determined reasonably and in good faith
by Landlord's Parent to be a comparable rate at the
beginning of the first day of that period. A comparable
interest rate might be, for example, the then existing
yield on short term United States Treasury obligations (as
compiled by and published in the then most recently
published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a
fixed adjustment based on Landlord's Parent's comparison of
past eurodollar market rates to past yields on such
Treasury obligations. Any
determination by Landlord's Parent of the Effective Rate
hereunder shall, in the absence of clear and demonstrable
error, be conclusive and binding.
(x) Environmental Indemnity. "Environmental Indemnity"
means the
separate Environmental Indemnity Agreement dated as of the
date hereof executed by Tenant in favor of Landlord
covering the Land and certain other property described
therein, as such agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time.
(y) Environmental Laws. "Environmental Laws" means any
and all
existing and future Applicable Laws pertaining to safety,
health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including without
limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (as
amended, hereinafter called "CERCLA"), and the Resource
Conservation and Recovery Act of 1976, as amended by the
Used Oil Recycling Act of 1980, the Solid Waste Disposal
Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984 (as amended, hereinafter called "RCRA").
(z) Environmental Losses. "Environmental Losses" means
Losses
suffered or incurred by any Indemnified Party, directly or
indirectly, relating to or arising out of, based on or as a
result of: (i) any Hazardous Substance Activity; (ii) any
violation of Environmental Laws relating to the Leased
Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing,
action, or other proceeding by or before any governmental
or quasi-governmental agency or authority in connection
with any Hazardous Substance Activity; or (iv) any claim,
demand, cause of action or investigation, or any action or
other proceeding, whether meritorious or not, brought or
asserted against any Indemnified Party which directly or
indirectly relates to, arises from, is based on, or results
from any of the matters described in clauses (i), (ii), or
(iii) of this subparagraph 1.(z), or any allegation of any
such matters. ENVIRONMENTAL LOSSES INCURRED BY OR ASSERTED
AGAINST A PARTICULAR INDEMNIFIED PARTY SHALL INCLUDE LOSSES
RELATING TO OR ARISING OUT OF OR AS A RESULT OF ANY MATTERS
LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH MATTERS ARE
CAUSED BY THE ORDINARY NEGLIGENCE (AS DEFINED BELOW) OF
THAT PARTICULAR OR ANY OTHER INDEMNIFIED PARTY.
However, Losses incurred by or asserted against a
particular Indemnified Party and proximately caused by (and
attributed by any applicable principles of comparative
fault to) the wilful misconduct, Active Negligence or gross
negligence of any Indemnified Party will not constitute
Environmental Losses of such Indemnified Party for purposes
of this Lease.
(aa) Environmental Report. "Environmental Report" means,
collectively, the reports listed on Exhibit G attached
hereto.
(bb) ERISA. "ERISA" means the Employee Retirement Income
Security Act
of 1974, as amended from time to time, together with all rules
and regulations promulgated with respect thereto.
(cc) ERISA Affiliate. "ERISA Affiliate" means any Person who
for
purposes of Title IV of ERISA is a member of Tenant's
controlled
group, or under common control with Tenant, within the meaning
of Section 414 of the Code, and the regulations promulgated
and rulings issued thereunder.
(dd) ERISA Termination Event. "ERISA Termination Event" means
(i) the
occurrence with respect to any Plan of a) a reportable event
described in Sections 4043(b)(5) or (6) of ERISA or b) any
other reportable
event described in Section 4043(b) of ERISA other than a
reportable
event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver
by such corporation under Section 4043(a) of ERISA, or (ii)
the withdrawal of Tenant or any Affiliate of Tenant from a
Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate any
Plan or the treatment of any Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate any Plan by the
Pension Benefit Guaranty Corporation under Section 4042 of
ERISA, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan.
(ee) Escrowed Proceeds. "Escrowed Proceeds" shall mean any
proceeds that are received by Landlord from time to time
during the Term (and any interest earned thereon), which
Landlord is holding for the purposes specified in the next
sentence, from any party (1) under any casualty insurance
policy as a result of damage to the Leased Property, (2) as
compensation for any restriction placed upon the use or
development of the Leased Property or for the condemnation of
the Leased Property or any portion thereof, (3) because of any
judgment, decree or award for injury or damage to the Leased
Property or (4) under any title insurance policy or otherwise
as a result of any title defect or claimed title defect with
respect to the Leased Property; provided, however, in
determining "Escrowed Proceeds" there shall be deducted all
expenses and costs of every type, kind and nature (including
Attorneys' Fees) incurred by Landlord to collect such
proceeds; and provided, further, "Escrowed Proceeds" shall not
include any payment to Landlord by a Participant or an
Affiliate of Landlord that is made to compensate Landlord for
the Participant's or Affiliate's share of any Losses Landlord
may incur as a result of any of the events described in the
preceding clauses (1) through (4). "Escrowed Proceeds" shall
include only such proceeds as are held by Landlord (A)
pursuant to Paragraph 4 for the payment to Tenant for the
restoration or repair of the Leased Property or (B) for
application (generally, on the next following Base Rent Date
which is at least three (3) Business Days following Landlord's
receipt of such proceeds) as a Qualified Payment or as
reimbursement of costs incurred in connection with a Qualified
Payment. "Escrowed Proceeds" shall not include any proceeds
that have been applied as a Qualified Payment or to pay any
costs incurred in connection with a Qualified Payment. Until
Escrowed Proceeds are paid to Tenant pursuant to Paragraph 4
below or applied as a Qualified Payment or as reimbursement
for costs incurred in connection with a Qualified Payment,
Landlord shall keep the same deposited in an interest bearing
account, and all interest earned on such account shall be
added to and made a part of Escrowed Proceeds.
(ff) Eurocurrency Liabilities. "Eurocurrency
Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to
time.
(gg) Eurodollar Rate Reserve Percentage. "Eurodollar
Rate Reserve Percentage" means,
for purposes of determining the Effective Rate for any Base
Rent Period, the reserve percentage applicable two Business
Days before the first day of such period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to,
any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with deposits exceeding One Billion Dollars
with respect to liabilities or deposits consisting of or
including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is
determined) having a term comparable to such
period.
(hh) Event of Default. "Event of Default" shall have the
meaning assigned to it in
subparagraph 13.(a) below.
(ii) Excluded Taxes. "Excluded Taxes" shall mean (1) all
federal, state and local income taxes upon the
Base Rent, the Upfront Fee, the Administrative Fees and any
interest paid to Landlord pursuant to subparagraph 3.(e), (2)
any taxes imposed by any governmental authority outside the
United States, and (3) any transfer or change of ownership
taxes assessed because of Landlord's transfer or conveyance to
any third party of any rights or interest in this Lease, the
Purchase Agreement or the Leased Property, but excluding any
such taxes assessed because of any Permitted Transfer.
(jj) Fair Market Value. "Fair Market Value" shall have the
meaning assigned to it in the Purchase
Agreement.
(kk) Fed Funds Rate. "Fed Funds Rate" means, for any period,
a fluctuating interest rate (expressed as a
per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if
such
rates are not so published for any day which is a Business
Day, the average of the quotations for such day on such
transactions received by the Landlord's Parent from three
Federal funds brokers of recognized standing selected by
Landlord's Parent. All determinations of the Fed Funds Rate
by Landlord's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon Landlord
and Tenant.
(ll) Funding Advances. "Funding Advances" means the Initial
Funding Advance and any subsequent
advances made by Landlord's Parent or any other Participant to
or on behalf of Landlord in replacement of or renewal and
extension of all or part of the Initial Funding Advance. For
example, if after the date hereof a new Participant advances
funds to or on behalf of Landlord to Landlord's Parent or ABN
AMRO Bank N.V. in repayment of all or part of the Initial
Funding Advance, such advance of funds by the new Participant
shall constitute a Funding Advance hereunder.
(mm) GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in
effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements
referred to in subparagraph 8.(w) (except for changes
concurred in by Tenant's independent public accountants).
(nn) Hazardous Substance. "Hazardous Substance" means (i) any
chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in,
regulated under, or otherwise classified pursuant to, any
Environmental Laws as a "hazardous substance," "hazardous
material," "hazardous waste," "extremely
hazardous waste," "infectious waste," "toxic substance,"
"toxic pollutant," or any other formulation intended to
define, list or classify substances by reason of deleterious
properties, including, without limitation, ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or
reproductive toxicity; (ii) petroleum, any fraction of
petroleum, natural gas, natural gas liquids, liquified natural
gas, synthetic gas usable for fuel (or mixtures of natural gas
and such synthetic gas), and ash produced by a resource
recovery facility utilizing a municipal solid waste stream,
and drilling fluids, produced waters and other wastes
associated with the exploration,
development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos
containing material; (iv) "waste" as defined in section
13050(d) of the California Water Code; and (v) any other
material that, because of its quantity, concentration or
physical or chemical characteristics, poses a significant
present or potential hazard to human health or safety or to
the environment if released into the workplace or the
environment.
(oo) Hazardous Substance Activity. "Hazardous Substance
Activity" means any actual, proposed or
threatened use, storage, holding, existence, location, release
(including, without limitation, any spilling, leaking,
leaching, pumping, pouring, emitting, emptying, dumping,
disposing into the environment, and the continuing migration
into or through soil, surface water, groundwater or any body
of water), discharge, deposit, placement, generation,
processing, construction, treatment, abatement, removal,
disposal, disposition, handling or transportation of any
Hazardous Substance from, under, in, into or on the Leased
Property, including, without limitation, the movement or
migration of any Hazardous Substance from surrounding
property, surface water, groundwater or any body of water
under, in, into or onto the Leased Property and any residual
Hazardous Substance contamination in, on or under the Leased
Property.
(pp) Impositions. "Impositions" shall have the meaning
assigned to it in subparagraph 8.(p) below.
(qq) Improvements. "Improvements," as defined in the recitals
at the beginning of this Lease, shall include
not only existing improvements to the Land as of the date
hereof, if any, but also any new improvements or changes to
existing improvements made by Tenant.
(rr) Indemnified Party. "Indemnified Party" means each of (1)
Landlord and any of Landlord's successors
and assigns as to all or any portion of the Leased Property or
any interest therein (but excluding Tenant or any Applicable
Purchaser under the Purchase Agreement or any Person that
claims its interest in the Leased
Property through or under Tenant or through or under an
assignment from Landlord that does not constitute a Permitted
Transfer), (2) the Participants, and (3) any Affiliate,
officer, agent, director, employee or servant of any of the
parties described in clause (1) or (2) preceding.
(ss) Initial Funding Advance. "Initial Funding Advance" means
the advance of $74,800,000 made by
Landlord's Parent and another Participant to or on behalf of
Landlord on or prior to the date of this Lease to cover the
cost of Landlord's acquisition of the Leased Property and
Closing Costs.
(tt) Landlord's Parent. "Landlord's Parent" means Landlord's
Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France, together
with any Affiliates of such bank that directly or indirectly
provided or hereafter during the Term provide or maintain any
Funding Advances, and any
successors of such bank and such Affiliates.
(uu) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Base Rent Period,
the rate determined by Landlord's Parent to be the average
rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars
are offered or available to Landlord's Parent in the London
interbank market at approximately 11:00 a.m. (London time) on
the second Business Day preceding the first day of such
period. Landlord shall instruct Landlord's Parent to consider
deposits, for purposes of making the determination described
in the preceding sentence, that are offered: (i) for delivery
on the first day of such Base Rent Period, (ii) in an amount
equal or comparable to the total (projected on the applicable
date of determination by Landlord's Parent) Stipulated Loss
Value on the first day of such Base Rent Period, and (iii) for
a period of time equal or comparable to the Base Rent Period.
If Landlord's Parent so chooses, it may determine LIBOR for
any period by reference to the rate reported by the British
Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business
Day preceding the first day of such period; provided, however,
Tenant may notify Landlord
that Tenant objects to any future determination of LIBOR in
the manner provided by this sentence, in which case any
determination of LIBOR required more than three Business Days
after Landlord's receipt of such
notice shall be made as if this sentence had been struck from
this Lease. If for any reason Landlord's Parent determines
that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance
with the preceding sentences, or if Landlord's Parent shall
determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for
Landlord, Landlord's Parent or any other Participant to
provide or maintain any Funding Advances hereunder during any
Base Rent Period
for which Base Rent is computed by reference to LIBOR, then
"LIBOR" for that Base Rent Period shall equal the rate which
is fifty basis points (50/100 of 1%) above the Fed Funds Rate
for that period. All determinations of LIBOR by Landlord's
Parent shall, in the absence of clear and demonstrable error,
be binding and conclusive upon Landlord and Tenant.
(vv) Lien. "Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any
agreement to sell receivables with recourse, any lease in the
nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any
jurisdiction). Customary bankers' rights of set-off arising
by operation of law or by contract (however styled, if the
contract grants rights no
greater than those arising by operation of law) in connection
with working capital facilities, lines of credit, term loans
and letter of credit facilities and other contractual
arrangements entered into with banks in the ordinary course of
business are not "Liens" for the purposes of this Lease.
(ww) Losses. "Losses" means any and all losses, liabilities,
damages (whether actual, consequential,
punitive or otherwise denominated), demands, claims, actions,
judgments, causes of action, assessments, fines, penalties,
costs, and out-of-pocket expenses (including, without
limitation, Attorneys' Fees and the fees of outside
accountants and environmental consultants), of any and every
kind or character, foreseeable and unforeseeable, liquidated
and contingent, proximate and remote, known and unknown.
(xx) Ordinary Negligence. "Ordinary Negligence" of an
Indemnified Party means any negligent acts or
omissions of such party that does not for any reason
constitute Active Negligence as defined in this Lease.
(yy) Participant. "Participant" means any Person, including
Landlord's Parent, that agrees with Landlord
or another Participant to participate in all or some of the
risks and rewards to Landlord of this Lease and the Purchase
Agreement. As of the effective date hereof, the only
Participants are Landlord's Parent and ABN AMRO Bank N.V., but
such Participants and Landlord may agree to share in risks and
rewards of this Lease
and the Purchase Agreement with other Participants in the
future. However, no Person other than Landlord's Parent and
ABN AMRO Bank N.V. shall qualify as a Participant for purposes
of this Lease, the Purchase Agreement or any other agreement
to which 3COM is a party unless, with 3COM's prior written
approval
(such approval not to be unreasonably withheld) or when an
Event of Default had occurred and was continuing, such Person
became a party to the Pledge Agreement and to the
Participation Agreement by executing supplements to those
agreements as contemplated therein.
(zz) Participation Agreement. "Participation Agreement" means
the Participation Agreement dated the
date hereof between Landlord, Landlord's Parent and ABN AMRO
Bank N.V., pursuant to which Landlord's Parent and ABN AMRO
Bank N.V. have agreed to participate in certain risks and
rewards to Landlord of this Lease and the Purchase Agreement,
as such Participation Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in
accordance with its terms.
(aaa) Permitted Encumbrances. "Permitted Encumbrances"
means (i) the encumbrances and other matters
affecting the Leased Property that are set forth in Exhibit B
attached hereto and made a part hereof, and (ii) any
provisions of the Existing Contract or any other agreement
described therein that survived closing thereunder (but not
any deed of trust, mortgage or other agreement given to secure
the repayment of borrowed funds), and (iii) any easement
agreement or other document affecting title to the Leased
Property executed by Landlord at the request of or with the
consent of Tenant.
(bbb) Permitted Hazardous Substance Use. "Permitted
Hazardous Substance Use" means the use, storage
and offsite disposal of Permitted Hazardous Substances in
strict accordance with applicable Environmental Laws and with
due care given the nature of the Hazardous Substances
involved; provided, the scope and nature of such use, storage
and disposal shall not include the use of underground storage
tanks for any purpose other than the storage of water for fire
control, nor shall such scope and nature:
(1) exceed that reasonably required for the construction
of Improvements permitted by this Lease and for the operation
of the Leased Property for the purposes expressly permitted
under subparagraph 7.(a); or
(2) include any disposal, discharge or other release of
Hazardous Substances from operations on the Leased Property in
any manner that might allow such substances to reach the San
Francisco Bay, surface
water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works
or (B) with rainwater or storm water runoff in accordance with
Applicable Laws
and any permits obtained by Tenant that govern such runoff; or
(ii) any such disposal, discharge or other release of
Hazardous Substances for which no permits are required and
which are not otherwise regulated under applicable
Environmental Laws.
Further, notwithstanding anything to the contrary herein
contained, Permitted Hazardous Substance Use shall
not include any use of the Leased Property as a treatment,
storage or disposal facility (as defined by federal
Environmental Laws) for Hazardous Substances, including but
not limited to a landfill, incinerator or other waste disposal
facility.
(ccc) Permitted Hazardous Substances. "Permitted
Hazardous Substances" means Hazardous Substances
used and reasonably required for Tenant's operation of the
Leased Property for the purposes expressly permitted by
subparagraph 7.(a) in strict compliance with all Environmental
Laws and with due care given the nature of the Hazardous
Substances involved. Without limiting the generality of the
foregoing, Permitted Hazardous Substances shall include,
without limitation, usual and customary office and janitorial
products, and the materials listed on Exhibit C attached
hereto.
(ddd) Permitted Transfer. "Permitted Transfer" means any
one or more of the following: (1) the creation
or conveyance of rights and interests under the Participation
Agreement in favor of Landlord's Parent, ABN AMRO Bank N.V. or
future Participants; (2) subject to the last sentence of
subparagraph 10.(d), any
assignment or conveyance by Landlord of any lien or security
interest against the Leased Property (in contrast to a
conveyance of Landlord's fee estate in the Leased Property) or
of any interest in Rent, payments required by the Purchase
Agreement or payments to be generated from the Leased Property
after the Term, to any present or future Participant or to any
Affiliate of Landlord; (3) any agreement to exercise or
refrain from exercising rights or remedies hereunder or under
the Purchase Agreement, the Pledge Agreement or the
Environmental Indemnity made by Landlord with any present or
future Participant or Affiliate of Landlord; (4) any
assignment or conveyance by Landlord requested by Tenant or
required by any Permitted Encumbrance,
by the Purchase Agreement or by Applicable Laws; (5) any
assignment or conveyance by Landlord when an
Event of Default shall have occurred and be continuing; or (6)
any assignment or conveyance by Landlord after the Designated
Sale Date.
(eee) Person. "Person" means an individual, a
corporation, a partnership, an unincorporated organization,
an association, a joint stock company, a joint venture, a
trust, an estate, a government or agency or political
subdivision thereof or other entity, whether acting in an
individual, fiduciary or other capacity.
(fff) Plan. "Plan" means at any time an employee pension
benefit plan which is covered under Title IV of
ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by Tenant
or any Subsidiary for employees of Tenant or any Subsidiary or
(ii) maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer
makes contributions and to which Tenant or any Subsidiary is
then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
(ggg) Pledge Agreement. "Pledge Agreement" means the
Pledge Agreement dated as of the date hereof
between Landlord and Tenant, pursuant to which Tenant may
pledge certificates of deposit as security for Tenant's
obligations under the Purchase Agreement (and for the
corresponding obligations of Landlord to the Participants
under the Participation Agreement), as such Pledge Agreement
may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
(hhh) Prime Rate. "Prime Rate" means the prime interest
rate or equivalent charged by Landlord's Parent in
the United States as announced or published by Landlord's
Parent from time to time, which need not be the lowest
interest rate charged by Landlord's Parent. If for any reason
Landlord's Parent does not announce or publish a prime rate or
equivalent, the prime rate or equivalent announced or
published by either ABN AMRO Bank N.V. or Credit Commercial
de France as selected by Landlord shall be used as the Prime
Rate. The
prime rate or equivalent announced or published by such bank
need not be the lowest rate charged by it. The Prime Rate may
change from time to time after the date hereof without notice
to Tenant as of the effective time of each change in rates
described in this definition.
(iii) Purchase Agreement. "Purchase Agreement" means the
Purchase Agreement dated as of the date
hereof between Landlord and Tenant pursuant to which Tenant
has agreed to purchase or to arrange for the purchase by a
third party of the Leased Property, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
(jjj) Purchase Price. "Purchase Price" shall have the
meaning assigned to it in the Purchase Agreement.
(kkk) Qualified Payments. "Qualified Payments" means all
payments received by Landlord from time to
time during the Term from any party (1) under any casualty
insurance policy as a result of damage to the Leased Property,
(2) as compensation for any restriction placed upon the use or
development of the Leased
Property or for the condemnation of the Leased Property or any
portion thereof, (3) because of any judgment, decree or award
for injury or damage to the Leased Property or (4) under any
title insurance policy or
otherwise as a result of any title defect or claimed title
defect with respect to the Leased Property; provided, however,
that (x) in determining Qualified Payments, there shall be
deducted all expenses and costs of every kind, type and nature
(including taxes and Attorneys' Fees) incurred by Landlord
with respect to the collection of such payments, (y) Qualified
Payments shall not include any payment to Landlord by a
Participant or an Affiliate of Landlord that is made to
compensate Landlord for the Participant's or Affiliate's share
of any Losses Landlord may incur as a result of any of the
events described in the preceding clauses (1) through (4) and
(z) Qualified Payments shall not include any payments received
by Landlord that Landlord has paid to Tenant for the
restoration or repair of the Leased Property or that Landlord
is holding as Escrowed Proceeds. For purposes of computing
the total Qualified Payments (and other amounts dependent upon
Qualified
Payments, such as Stipulated Loss Value) paid to or received
by Landlord as of any date, payments described in the
preceding clauses (1) through (4) will be considered as
Escrowed Proceeds, not Qualified Payments, until they are
actually applied as Qualified Payments by Landlord, which
Landlord will do upon the first Base Rent Date which is at
least three (3) Business Days after Landlord's receipt of the
same unless postponement of such application is required by
other provisions of this Lease or consented to by Tenant in
writing. Thus, for example, condemnation proceeds actually
received by Landlord in the middle of a Base Rent Period will
not be considered as having been received by Landlord for
purposes of computing the total Qualified Payments unless and
until actually applied by Landlord as a Qualified Payment on a
subsequent Base Rent Date in accordance with Paragraph 4
below.
(lll) Remaining Proceeds. "Remaining Proceeds" shall have
the meaning assigned to it in subparagraph
4.(a)(ii).
(mmm) Rent. "Rent" means the Base Rent and all Additional
Rent.
(nnn) Responsible Financial Officer. "Responsible
Financial Officer" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of
Tenant.
(ooo) Spread. The "Spread" on any date will depend upon a
computation involving (a) the rating by
Standard and Poor's Corporation (the "S&P Rating") or the
rating by Moody's Investor Service, Inc. (the "Moody's
Ratings"), whichever rating is higher, of Tenant's senior,
unsecured debt on that date (whether such ratings are express
or published, implied ratings), and (b) the Debt to Capital
Ratio (as defined below) on that date, such computation to be
as follows:
(i) If (1) there is no S&P Rating for the senior, unsecured
debt of Tenant (express or published,
implied) or the S&P Rating is below BBB-, AND (2) there is no
Moody's Rating for senior, unsecured debt of Tenant (express
or published, implied) or the Moody's Rating is below Baa3,
AND (3) the Debt to Capital Ratio is greater than 0.30, then
the Spread will be fifty basis points (.500%).
(ii) If (1) the S&P Rating is BBB-, OR (2) the Moody's Rating
is Baa3, OR (3) the Debt to Capital
Ratio is equal to or less than 0.30 and more than 0.15, and if
Tenant does not qualify for a lower Spread pursuant to clause
(iii) or (iv) below, then the Spread will be forty-five basis
points (.450%).
(iii) If (1) the S&P Rating is BBB, OR (2) the Moody's
Rating is Baa2, OR (3) the Debt to Capital
Ratio is equal to or less than 0.15, and if Tenant does not
qualify for a lower Spread pursuant to clause (iv) below, then
the Spread will be thirty-seven and one-half basis points
(.375%).
(iv) If (1) the S&P Rating is above BBB, OR (2) the Moody's
Rating is above Baa2, then the
Spread will be thirty basis points (.300%).
For purposes of calculating the Spread, "Debt to Capital
Ratio" means the quotient determined by dividing
(A) funded Senior Debt (as defined in subparagraph
8.(ac)(ii)), by (B) the total Capitalization (as defined in
subparagraph 8.(ac)(ii)), including Subordinated Debt (as
defined in subparagraph 8.(ac)(ii)). The parties
believe it improbable that the ratings systems used by
Standard and Poor's Corporation and by Moody's
Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, Landlord
shall be entitled to select and use a comparable ratings
systems as a substitute for the S&P Rating or the Moody
Rating, as the case may be, for purposes of determining the
Spread. All determinations of the Spread by Landlord shall,
in the absence of clear and demonstrable error, be binding and
conclusive for purposes of this Lease. Further Landlord may,
but shall not be required, to rely on the determination of the
Spread set forth in any certificate delivered by Tenant
pursuant to subparagraph 8.(w)(iv) below, and no reduction in
the Spread will be effective because of an improvement in the
S&P Rating, the Moody's Rating or the Debt to Capital Ratio
before Tenant has notified Landlord thereof by delivery of
such a certificate.
(ppp) Stipulated Loss Value. "Stipulated Loss Value"
means the amount computed from time to time in
accordance with the formula specified in this definition.
Such amount shall equal the Initial Funding Advance (i.e.,
$74,800,000), LESS the amount (if any) of Qualified Payments
paid to Landlord on or prior to such date. Thus, for example,
if a determination of Stipulated Loss Value is required under
subparagraph 3.(a) on the first day of the applicable Base
Rent Period, but the Leased Property has been damaged by fire
or other casualty with the result that $500,000 of net
insurance proceeds have been paid to Landlord and retained by
Landlord as Qualified Payments, then the Stipulated Loss Value
as of the date of the required determination shall be
$74,300,000. Under no circumstances will any payment of Base
Rent or the Upfront Fee or any Administrative Fee reduce
Stipulated Loss Value.
(qqq) Subsidiary. "Subsidiary" means any corporation of
which Tenant and/or its other Subsidiaries own,
directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the
election of directors.
(rrr) Tenant's Knowledge. "Tenant's knowledge," "to the
knowledge of Tenant" and words of like effect
means the actual knowledge (with due investigation) of any of
the following employees of Tenant: Alan Groves, Vice President
and Corporate Controller; Christopher B. Paisley, Chief
Financial Officer; Abe Darwish, Director of Site Services; and
Walter Patti, Manager of Safety and Security. However, to the
extent Tenant's knowledge after the date hereof may become
relevant hereunder or under any certificate or other notice
provided by Tenant to Landlord in connection with this Lease,
"Tenant's knowledge" and words of like effect shall include
the then actual knowledge of other employees of Tenant (if
any) that have assumed responsibilities of the current
employees listed in the preceding sentence or that have
replaced such current employees. But none of the employees of
Tenant whose knowledge is now or may hereafter be relevant
shall be personally liable for the representations of Tenant
made herein.
(sss) Term. "Term" shall have the meaning assigned to it
in Paragraph 2 below.
(ttt) Unfunded Benefit Liabilities. "Unfunded Benefit
Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit
liabilities (within the meaning of Section 4001(a)(16)
of ERISA) under the Plan exceeds the fair market value of all
Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA for calculating the
potential liability of Tenant or any ERISA Affiliate of Tenant
under Title IV of ERISA.
(uuu) Upfront Fee. "Upfront Fee" shall have the meaning
assigned to it in subparagraph 3.(b).
(vvv) Voluntary Minimum Pledge Commitment. "Voluntary
Minimum Pledge Commitment" means an
agreement in form and substance reasonably satisfactory to
Landlord and the other parties to the Pledge
Agreement which Tenant may elect to execute in connection with
a casualty, condemnation or sale in lieu of condemnation
affecting the Leased Property and which modifies the Pledge
Agreement by establishing a
Minimum Collateral Percentage sufficient to require Tenant to
maintain Collateral under the Pledge Agreement
with a value of no less than the insurance, condemnation or
sale proceeds paid or to be paid because of the casualty,
condemnation or sale in lieu of condemnation until Tenant has
completed any related repairs or restoration required by this
Lease.
(www) Other Terms and References. Words of any gender
used in this Lease shall be held and construed to
include any other gender, and words in the singular number
shall be held to include the plural and vice versa, unless the
context otherwise requires. References herein to Paragraphs,
subparagraphs or other subdivisions shall refer to the
corresponding Paragraphs, subparagraphs or subdivisions of
this Lease, unless specific reference is made to another
document or instrument. References herein to any Schedule or
Exhibit shall refer to the corresponding Schedule or Exhibit
attached hereto, which shall be made a part hereof by such
reference.
All capitalized terms used in this Lease which refer to other
documents shall be deemed to refer to such other documents as
they may be renewed, extended, supplemented, amended or
otherwise modified from time to
time, provided such documents are not renewed, extended or
modified in breach of any provision contained herein or
therein or, in the case of any other document to which
Landlord is a party or of which Landlord is an intended
beneficiary, without the consent of Landlord. All accounting
terms not specifically defined herein shall be construed in
accordance with GAAP. The words "this Lease", "herein",
"hereof", "hereby", "hereunder" and words of similar import
refer to this Lease as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this
Paragraph" and "this subparagraph" and similar phrases refer
only to the Paragraphs or subparagraphs hereof in which the
phrase occurs. The word "or" is not exclusive. Other
capitalized terms are defined in the provisions that follow.
3. Term. The term of this Lease (herein called the "Term")
shall commence on and include the effective
date hereof, and end at 8:00 A.M. on the first Business Day of
November, 2001, unless extended or sooner
terminated as herein provided. Notwithstanding any other
provision of this Lease which may expressly restrict the early
termination hereof, and provided that Tenant is still in
possession of the Leased Property and has not breached its
obligation to make or have made any payment required by
Paragraph 2 of the Purchase Agreement
on any prior Designated Sale Date, Tenant may notify Landlord
of Tenant's election to terminate this Lease before the first
Business Day of November, 2001 by giving Landlord an
irrevocable notice of such election and
of the effective date of the termination, which notice must be
given (if at all) at least sixty (60) days prior to the
effective date of the termination. If Tenant elects to so
terminate this Lease, then on the date on which this Lease is
to be terminated, not only must Tenant pay all unpaid Rent,
Tenant must also pay any Breakage Costs resulting from the
termination and must satisfy its obligations under the
Purchase Agreement. The payment of
any unpaid Rent and Breakage Costs and the satisfaction of
Tenant's obligations under the Purchase Agreement shall be
conditions precedent to the effectiveness of any early
termination of this Lease by Tenant.
The Term may be extended at the option of Tenant for two
successive periods of five (5) years each; provided, however,
that prior to any such extension the following conditions must
have been satisfied: (A) at least one hundred eighty (180)
days prior to the commencement of any such extension, Landlord
and Tenant must have agreed in writing upon, and received the
written consent and approval of Landlord's Parent and all
other Participants to (1) a corresponding extension of the
date specified in clause (iii) of the definition of Designated
Sale Date in the Purchase Agreement, and (2) an adjustment to
the Rent that Tenant will be
required to pay for the extension, it being expected that the
Rent for the extension may be different than the Rent required
for the original Term, and it being understood that the Rent
for any extension must in all events be satisfactory to both
Landlord and Tenant, each in its sole and absolute discretion;
(B) there must be no Event of Default continuing hereunder at
the time of Tenant's exercise of its option to extend; and (C)
immediately prior to any such extension, this Lease must
remain in effect. With respect to the condition that Landlord
and Tenant must have agreed upon the Rent required for any
extension of the Term, neither Tenant nor Landlord is willing
to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both
Tenant and Landlord hereby disclaim any obligation express or
implied to be reasonable in negotiating the Rent for any such
extension. Subject to the changes to the Rent payable during
any extension of the Term as provided in this Paragraph, if
Tenant exercises its option to extend the Term as provided in
this Paragraph, this Lease shall continue in full force and
effect, and the leasehold estate hereby granted to Tenant
shall continue without interruption and without any loss of
priority over other interests in or claims against the Leased
Property that may be created or arise after the date hereof
and before the extension.
4. Rental.
(a) Base Rent. Tenant shall pay Landlord rent (herein called
"Base Rent") in arrears, in currency that at
the time of payment is legal tender for public and private
debts in the United States of America, in installments on each
Base Rent Date through the end of the Term. Each payment of
Base Rent must be received by
Landlord no later than 12:00 noon (San Francisco time) on the
date it becomes due; if received after 12:00 noon it will be
considered for purposes of this Lease as received on the next
following Business Day. Each installment of Base Rent shall
represent rent allocable to the Base Rent Period ending on the
date on which the installment is due. Landlord shall notify
Tenant in writing of the Base Rent due for each Base Rent
Period at least fifteen (15) days prior to the Base Rent Date
on which such period ends. Any failure by Landlord to so
notify Tenant shall not constitute a waiver of Landlord's
right to payment, but absent such notice Tenant shall
not be in default for any underpayment resulting therefrom if
Tenant, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated
and corrects any underpayment within three (3) Business Days
after being notified by Landlord of the underpayment. If
Tenant or any other Applicable Purchaser purchases Landlord's
interest in the Leased Property pursuant to the Purchase
Agreement, any Base Rent for the three (3) months ending on
the date of purchase (or if the date of Purchase is not a Base
Rent Date, then pro rated Base Rent for the Base Rent Period
which included the date of purchase) and all outstanding
Additional Rent shall be due on the Designated Sale Date in
addition to the purchase price and other sums due Landlord
under the Purchase Agreement.
Base Rent shall accrue for each day of the first Base
Rent Period, and the total Base Rent for the first Base Rent
Period shall equal the sum of Base Rent for all days during
such period. The Base Rent accruing for each day during such
period shall equal:
(1) (A) $74,800,000, times (B) one minus the Collateral
Percentage for the first Base Rent Period,
times (C) the sum of (i) the Effective Rate for such day and
(ii) the Spread calculated on the date of this Lease, divided
by (D) three hundred sixty (360); PLUS
(2) (A) $74,800,000, times (B) the Collateral Percentage for
the first Base Rent Period, times (C)
twenty-two and one-half basis points (22.5/100 of 1%), divided
by (D) three hundred sixty (360)
The Base Rent for each Base Rent Period after the first Base
Rent Period shall equal the sum of:
(1) (A) Stipulated Loss Value on the first day of such Base
Rent Period, times (B) one minus the
Collateral Percentage for such Base Rent Period, times (C) the
sum of (i) the Effective Rate for such Base Rent Period and
(ii) the Spread calculated on the tenth (10th) Business Day
prior to the day upon which
such Base Rent Period commences, times (D) the number of days
in such Base Rent Period, divided by (E) three hundred sixty
(360); PLUS (2) (A) Stipulated Loss Value on the first day of such
Base Rent Period, times (B) the Collateral Percentage for such
Base Rent Period, times (C) twenty-two and one-half basis
points (22.5/100 of 1%), times (D) the number of days in such
Base Rent Period, divided by (E) three hundred sixty (360)
Assume, only for the purpose of illustration: that a
hypothetical Base Rent Period contains exactly ninety (90)
days; that prior to the first day of such Base Rent Period a
total of $44,800,000 of Qualified
Payments have been received by Landlord, leaving a Stipulated
Loss Value of $30,000,000 (the Initial Funding Advance of
$74,800,000 less the Qualified Payments of $44,800,000); that
the Collateral Percentage for such Base Rent Period is forty
percent (40%); and that the Effective Rate for the applicable
Base Rent Period is 6%.
Under such assumptions, the Base Rent for the hypothetical
Base Rent Period will equal:
$30,000,000 x 60% x 6% x 90/360, or $270,000, PLUS
$30,000,000 x 40% x .225% x 90/360, or $6,750 = $276,750
To ease the administrative burden of this Lease and the
Pledge Agreement, clause (2) in the formulas above for
calculating Base Rent reflects a reduction in the Base Rent
equal to the interest that would accrue on any Collateral
required by the Pledge Agreement from time to time if the
Accounts (as defined in the Pledge Agreement) bore interest at
the Effective Rate. Landlord has agreed to such reduction in
the Base Rent to provide Tenant with the economic equivalent
of interest on such Collateral, and in return Tenant has
agreed to the provisions of the Pledge Agreement that excuse
the actual payment of interest on the Accounts. By
incorporating such reduction of Base Rent into the formulas
above, and by providing for noninterest bearing Accounts in
the Pledge Agreement, the parties will avoid an unnecessary
and cumbersome periodic exchange
of equal payments. It is not, however, the intent of Landlord
or Tenant to understate Base Rent or interest for financial
reporting purposes. Accordingly, for purposes of determining
Tenant's compliance with the affirmative financial covenants
set forth in subparagraph 8.(ac), and for purposes of any
financial reports that this Lease requires of Tenant from time
to time, Tenant may report Base Rent as if there had been no
such reduction and as if the Collateral from time to time
required by the Pledge Agreement had been maintained in
Accounts bearing interest at the Effective Rate.
(b) Upfront Fee. Upon execution and delivery of this Lease
by Landlord, Tenant shall pay Landlord an
upfront fee (the "Upfront Fee") as provided in the letter
dated August 20, 1996 (modifying a letter dated August 9,
1996) from Landlord to Tenant (less the deposit already paid
by Tenant pursuant to that letter which will be applied
against the Upfront Fee). The Upfront Fee shall represent
Additional Rent for the first Base Rent Period.
(c) Administrative Fees. Upon execution and delivery of this
Lease by Landlord, and again on each
anniversary of the date hereof prior to the Designated Sale
Date, Tenant shall pay Landlord an administrative fee (an
"Administrative Fee") as provided in the letter dated August
9, 1996 from Landlord to Tenant. Each
payment of an Administrative Fee shall represent Additional
Rent for the Base Rent Period during which it first becomes
due.
(d) Additional Rent. All amounts which Tenant is required to
pay to or on behalf of Landlord pursuant to
this Lease, together with every charge, premium, interest and
cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts,
other than Base Rent, are herein called "Additional Rent").
(e) Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the
Default Rate in effect from time to time from the date due
until paid; provided, that nothing herein contained will be
construed as permitting the charging or collection of interest
at a rate exceeding the maximum rate permitted under
Applicable Laws. Landlord shall be entitled to apply any
amounts paid by or on behalf of Tenant hereunder against any
Rent then past due in the order the same became due or in such
other order as Landlord may elect.
(f) Net Lease. It is the intention of Landlord and Tenant
that the Base Rent and all other payments herein
specified shall be absolutely net to Landlord. Tenant shall
pay all costs, expenses and obligations of every kind relating
to the Leased Property or this Lease which may arise or become
due, including, without limitation: (i) Impositions, including
any taxes payable by virtue of Landlord's receipt of amounts
paid to or on behalf of Landlord in accordance with this
subparagraph 3.(f), but not including any Excluded Taxes; (ii)
any Capital Adequacy Charges; (iii) any amount for which
Landlord is or becomes liable with respect to the Permitted
Encumbrances; and (iv) any costs incurred by Landlord
(including Attorneys' Fees) because of Landlord's acquisition
or ownership of the Leased Property or because of this Lease
or the transactions contemplated herein.
(g) No Demand or Setoff. The Base Rent and all Additional
Rent shall be paid without notice or demand
and without abatement, counterclaim, deduction, setoff or
defense, except as expressly provided herein.
5. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 4, and
so long as no Event of Default shall have
occurred and be continuing, Tenant shall be entitled to use
all casualty insurance and condemnation proceeds payable with
respect to the Leased Property during the Term for the
restoration and repair of the Leased Property or any remaining
portion thereof. Except as provided in the last sentence of
subparagraph 8.(r) and the last sentence of subparagraph
8.(s), all insurance and condemnation proceeds received with
respect to the Leased Property (including proceeds payable
under any insurance policy covering the Leased Property which
is maintained by Tenant) shall be paid to Landlord and applied
as follows:
(i) First, such proceeds shall be used to reimburse Landlord
for any costs and expenses, including
Attorneys' Fees, incurred in connection with the collection of
such proceeds.
(ii) Second, the remainder of such proceeds (the "Remaining
Proceeds"), shall be held by Landlord as
Escrowed Proceeds and applied to reimburse Tenant for the
actual cost of the repair, restoration or replacement of the
Leased Property. However, any Remaining Proceeds not needed
for such purpose shall be applied by Landlord as Qualified
Payments after Tenant notifies Landlord that they are not
needed for repairs, restoration or replacement.
Notwithstanding the foregoing, if an Event of Default shall
have occurred and be continuing, then Landlord shall be
entitled to receive and collect insurance or condemnation
proceeds payable with respect to the Leased Property, and
either, at the discretion of Landlord, (A) hold such proceeds
as Escrowed Proceeds until paid to Tenant as reimbursement for
the actual and reasonable cost of repairing, restoring or
replacing the Leased Property when Tenant has completed such
repair, restoration or replacement, or (B) apply such proceeds
(net of the deductions described in clause (i) above) as
Qualified Payments.
(b) Any Remaining Proceeds held by Landlord as Escrowed
Proceeds shall be deposited by Landlord in an
interest bearing account as provided in the definition of
Escrowed Proceeds and shall be paid to Tenant upon completion
of the applicable repair, restoration or replacement and upon
compliance by Tenant with such terms, conditions and
requirements as may be reasonably imposed by Landlord, but in
no event shall Landlord be required to pay any Escrowed
Proceeds to Tenant in excess of the actual cost to Tenant of
the applicable
repair, restoration or replacement, it being understood that
Landlord may retain any such excess as a Qualified Payment.
In any event, Tenant will not be entitled to any abatement or
reduction of the Base Rent or any other amount due hereunder
except to the extent that such excess Remaining Proceeds
result in Qualified Payments which reduce Stipulated Loss
Value (and thus payments computed on the basis of Stipulated
Loss Value) as provided in the definitions set out above.
Further, notwithstanding the inadequacy of the Remaining
Proceeds held by Landlord as Escrowed Proceeds, if any, or
anything herein to the contrary, Tenant must, after any taking
of less than all or substantially all of the Leased Property
by condemnation and after any damage to the
Leased Property by fire or other casualty, restore or improve
the Leased Property or the remainder thereof to a value no
less than Stipulated Loss Value (computed after the
application of any Remaining Proceeds as a Qualified Payment)
and to a safe and sightly condition. Any taking of so much of
the Leased Property as, in Landlord's reasonable judgment,
makes it impracticable to restore or improve the remainder
thereof as required by the preceding sentence shall be
considered a taking of substantially all the Leased Property
for purposes of this Paragraph 4.
(c) In the event of any taking of all or substantially all
of the Leased Property, Landlord shall be entitled to apply
all Remaining Proceeds as a Qualified Payment, notwithstanding
the foregoing. In addition, if Stipulated Loss Value
immediately prior to any taking of all or substantially all of
the Leased Property by condemnation exceeds the sum of the
Remaining Proceeds resulting from such condemnation, then
Landlord shall be entitled
to recover the excess from Tenant upon demand as an additional
Qualified Payment, whereupon this Lease shall terminate.
(d) Nothing herein contained shall be construed to prevent
Tenant from obtaining and applying as it deems appropriate any
separate award from any condemning authority or from any
insurer for a taking of or damage to Tenant's personal
property not included in the Leased Property or for moving
expenses or business interruption, provided, such award is not
combined with and does not reduce the award for any taking of
the
Leased Property, including Tenant's interest therein.
Further, notwithstanding anything to the contrary herein
contained, if Remaining Proceeds held by Landlord during the
term of this Lease shall exceed Stipulated Loss Value and any
Rent payable by Tenant, then Tenant may get the excess by
terminating this Lease in accordance with Paragraph 2 and
purchasing such excess (which will then be held by Landlord as
Escrowed Proceeds), together with any remaining interest of
Landlord in the Leased Property, pursuant to the Purchase
Agreement.
(e) Landlord and Tenant each waive any right of recovery
against the other, and the other's agents, officers or
employees, for any damage to the Leased Property or to the
personal property situated from time to time in or on the
Leased Property resulting from fire or other casualty covered
by a valid and collectible insurance policy; provided,
however, that the waiver set forth in this subparagraph 4.(e)
shall be effective insofar, but only insofar, as compensation
for such damage or loss is actually recovered by the waiving
party
(net of costs of collection) under the policy notwithstanding
the waivers set out in this paragraph. Tenant shall cause the
insurance policies required of Tenant by this Lease to be
properly endorsed, if necessary, to prevent any loss of
coverage because of the waivers set forth in this paragraph.
If such endorsements are not available, the waivers set forth
in this paragraph shall be ineffective to the extent that such
waivers would cause required insurance with respect to the
Leased Property to be impaired.
6. No Lease Termination.
(a) Status of Lease. Except as expressly provided herein,
this Lease shall not terminate, nor shall Tenant have any
right to terminate this Lease, nor shall Tenant be entitled to
any abatement of the Rent, nor shall the obligations of Tenant
under this Lease be excused, for any reason whatsoever,
including without limitation any of the following: (i) any
damage to or the destruction of all or any part of the Leased
Property from whatever cause, (ii) the taking of the Leased
Property or any portion thereof by eminent domain or otherwise
for any
reason, (iii) the prohibition, limitation or restriction of
Tenant's use of all or any portion of the Leased Property or
any interference with such use by governmental action or
otherwise, (iv) any eviction of Tenant or of
anyone claiming through or under Tenant by paramount title or
otherwise (provided, if Tenant is wrongfully evicted by
Landlord or by any third party lawfully claiming through or
under Landlord, other than Tenant or a third party claiming
through or under Tenant, then Tenant will have the remedies
described in Paragraph 14 below), (v) any default on the part
of Landlord under this Lease or under any other agreement to
which Landlord and Tenant are parties, (vi) the inadequacy in
any way whatsoever of the design or construction of any
improvements included in the Leased Property, it being
understood that Landlord has not made and will not make any
representation express or implied as to the adequacy thereof,
or (vii) any other cause whether
similar or dissimilar to the foregoing, any existing or future
law to the contrary notwithstanding. It is the intention of
the parties hereto that the obligations of Tenant hereunder
shall be separate and independent of the covenants and
agreements of Landlord, that the Base Rent and all other sums
payable by Tenant hereunder
shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected,
unless the requirement to pay or perform the same shall have
been terminated or limited pursuant to an express provision of
this Lease. However, nothing in this Paragraph shall be
construed as a waiver by Tenant of any right Tenant may have
at law or in equity to (i) recover monetary damages for any
default under this Lease by Landlord that Landlord fails to
cure within the period provided in Paragraph 14, (ii)
injunctive relief in case of the violation, or attempted or
threatened violation, by Landlord of any of the express
covenants, agreements, conditions or provisions of this Lease,
or (iii) a decree compelling performance of any of the express
covenants, agreements, conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the foregoing,
Tenant waives to the extent permitted by
Applicable Laws, except as otherwise expressly provided
herein, all rights to which Tenant may now or hereafter be
entitled by law (including any such rights arising because of
any implied "warranty of suitability"
or other warranty under Applicable Laws) (i) to quit,
terminate or surrender this Lease or the Leased Property or
any part thereof or (ii) to any abatement, suspension,
deferment or reduction of the Base Rent or any other sums
payable under this Lease.
7. Purchase Agreement, Pledge Agreement and Environmental
Indemnity. Tenant acknowledges and
agrees that nothing contained in this Lease shall limit,
modify or otherwise affect any of Tenant's obligations under
the Purchase Agreement, Pledge Agreement or Environmental
Indemnity, which obligations are intended
to be separate, independent and in addition to, and not in
lieu of, the obligations established by this Lease. In the
event of any inconsistency between the terms and provisions of
the Purchase Agreement, Pledge Agreement
or Environmental Indemnity and the terms and provisions of
this Lease, the terms and provisions of the
Purchase Agreement, Pledge Agreement or Environmental
Indemnity (as the case may be) shall control.
8. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the terms
hereof, Tenant may use and occupy the
Leased Property so long as no Event of Default occurs
hereunder, but only for the following purposes and
other lawful purposes incidental thereto:
(i) research and development of computer-related and other
electronic products;
(ii) administrative and office space; and
(iii) distribution and warehouse storage of computer-related
and other electronic products; and
(iv) assembly of computer-related and other electronic
products using components manufactured elsewhere,
but not including the manufacture of computer chips on-site;
and
(v) cafeteria, library, fitness center and other support
function uses that Tenant may provide to its employees.
Although the term "electronic products" in this subparagraph
may include products designed to detect, monitor, neutralize,
handle or process Hazardous Substances, the use of the Leased
Property by Tenant shall not include bringing Hazardous
Substances onto the Leased Property for the purpose of
researching, testing or demonstrating any such products.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the
Landlord's interest therein) in its present state, AS IS, and
without any representation or warranty, express or implied, as
to the condition of such property or as to the use which may
be made thereof. Tenant also accepts the Leased Property
without any representation or warranty, express or implied, by
Landlord regarding the title
thereto or the rights of any parties in possession of any part
thereof, except as set forth in subparagraph 9.(a). Landlord
shall not be responsible for any latent or other defect or
change of condition in the Land, Improvements, fixtures and
personal property forming a part of the Leased Property, and
the Rent hereunder
shall in no case be withheld or diminished because of any
latent or other defect in such property, any change in the
condition thereof or the existence with respect thereto of any
violations of Applicable Laws. Nor shall Landlord be required
to furnish to Tenant any facilities or service of any kind,
such as, but not limited to, water, steam, heat, gas, hot
water, electricity, light or power.
(c) Consideration of and Scope of Waiver. The provisions of
subparagraph 7.(b) above have been
negotiated by the Landlord and Tenant after due consideration
for the Rent payable hereunder and are intended to be a
complete exclusion and negation of any representations or
warranties of the Landlord, express or implied, with respect
to the Leased Property that may arise pursuant to any law now
or hereafter in effect, or otherwise. However, such exclusion
of representations and warranties by Landlord is not intended
to impair any representations or warranties made by other
parties, including Seller, the benefit of which is to pass to
Tenant during the Term because of the definition of Personal
Property and Leased Property above.
9. Other Representations, Warranties and Covenants of
Tenant. Tenant represents, warrants and
covenants as follows:
(a) Financial Matters. Tenant is solvent and has no
outstanding liens, suits, garnishments or court actions
which could render Tenant insolvent. There has not been filed
by or, to Tenant's knowledge, against Tenant a petition in
bankruptcy or a petition or answer seeking an assignment for
the benefit of creditors, the appointment of a receiver,
trustee, custodian or liquidator with respect to Tenant or any
significant portion of Tenant's property, reorganization,
arrangement, rearrangement, composition, extension,
liquidation or dissolution or similar relief under the federal
Bankruptcy Code or any state law. The financial statements
and all financial data heretofore delivered to Landlord
relating to Tenant have been prepared in accordance with GAAP
in all material respects. No material adverse change has
occurred in the financial position of Tenant as
reflected in Tenant's financial statements covering the fiscal
period ended May 31, 1996.
(b) Existing Contract. Except to the extent required of
Landlord under subparagraph 9.(b), Tenant shall satisfy all
surviving obligations of Tenant under the Existing Contract
and under other agreements described therein. Tenant agrees
to indemnify, defend and hold Landlord harmless from and
against any and all Losses imposed on or asserted against or
incurred by Landlord at any time and from time to time by
reason of, in connection with or arising out of any
obligations imposed by the Existing Contract or the other
agreements described therein. THE INDEMNITY SET OUT IN THIS
SUBPARAGRAPH SHALL APPLY EVEN IF
THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT
OF THE
ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF LANDLORD; provided,
such indemnity shall not
apply to Losses proximately caused by (and attributed by any
applicable principles of comparative fault to) the Active
Negligence, gross negligence or willful misconduct of
Landlord. Because Tenant hereby assumes and agrees to satisfy
all surviving obligations of Tenant under the Existing
Contract and the other agreements described therein, no
failure by Landlord to take any action required by the
Existing Contract or such other agreements (save and except
any actions required of Landlord under subparagraph 9.(b))
shall, for the purposes of this indemnity, be deemed to be
caused by the Active Negligence, gross negligence or willful
misconduct of
Landlord. The foregoing indemnity is in addition to the other
indemnities set out herein and shall not terminate upon the
closing of any sale of Landlord's interest in the Leased
Property pursuant to the provisions of the Purchase Agreement
or the termination of this Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease, the
Purchase Agreement, the Pledge Agreement and the Environmental
Indemnity do not and will not constitute a breach or default
under any other material agreement or contract to which Tenant
is a party or by which Tenant is bound or which affects the
Leased Property or Tenant's use, occupancy or operation of the
Leased Property or any part thereof and do not, to the
knowledge of Tenant, violate or contravene any law, order,
decree, rule or regulation to which Tenant is subject, and
such execution, delivery and performance by Tenant will not
result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or
security interest in, Tenant's property pursuant to the
provisions of any of the foregoing.
(d) Compliance with Covenants and Laws. The intended use
of the Leased Property by Tenant complies,
or will comply after Tenant obtains readily available permits,
in all material respects with all applicable restrictive
covenants, zoning ordinances and building codes, flood
disaster laws, applicable health, safety and environmental
laws and regulations, the Americans with Disabilities Act and
other laws pertaining to disabled persons, and all other
applicable laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions (all
of the foregoing are herein sometimes collectively called
"Applicable Laws"). Tenant has obtained or will promptly
obtain all utility, building, health and operating permits as
may be required for Tenant's use of the Leased Property by any
governmental authority or municipality having jurisdiction
over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge
and except as otherwise disclosed in the Environmental Report,
as of the date hereof: (i) no Hazardous Substances Activity
has occurred prior to the date of this Lease; (iii) neither
Tenant nor any prior owner or operator of the Leased Property
or any surrounding property has reported or been required to
report any release of any Hazardous Substances on or
from the Leased Property or the surrounding property pursuant
to any Environmental Law; (iv) neither Tenant nor any prior
owner or operator of the Leased Property or any surrounding
property has received any warning, citation, notice of
violation or other communication regarding a suspected or
known release or discharge of Hazardous Substances on or from
the Leased Property or regarding a suspected or known
violation of Environmental Laws concerning the Leased Property
from any federal, state or local agency; and (v) none of
the following are located on the Leased Property: asbestos;
urea formaldehyde foam insulation; transformers or other
equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts per
million; any other Hazardous Substances other than Permitted
Hazardous Substances; or any underground storage tank or
tanks. Further, Tenant represents that to its knowledge the
Environmental Report is not misleading or inaccurate in any
material respect.
(f) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to
Tenant's knowledge, threatened that will affect Tenant's
intended use of the Leased Property or the validity,
enforceability or priority of this Lease, or Tenant's use,
occupancy and operation of the Leased Property or any part
thereof, and Tenant is not in default with respect to any
order, writ, injunction, decree or demand of any court or
other governmental or regulatory authority that could
materially and adversely affect the business or assets of
Tenant and its Subsidiaries taken as a whole or Tenant's use,
occupancy or operation of the Leased Property. No
condemnation or other like proceedings are pending or, to
Tenant's knowledge, threatened against the Leased Property.
(g) Condition of Property. The Land as described in
Exhibit A is shown on the plat included as part of the
A.L.T.A. Survey prepared by Robert A. Smith, dated August 12,
1991, which was delivered to Landlord at
the request of Tenant, subject, however, to that certain Lot
Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records of Santa Clara County,
California. All material improvements on the Land as of the
date hereof are as shown on that survey, and except as shown
on that survey there are no easements or encroachments visible
or apparent from an inspection of the Real Property. Adequate
provision has been made for the Leased Property to be served
by electric, gas, storm and sanitary sewers, sanitary water
supply, telephone and other utilities required for the use
thereof. All streets, alleys and easements necessary to serve
the Leased Property have been completed and are serviceable.
The Leased Property is in a condition satisfactory for its use
and occupancy. Tenant is not aware of any latent or patent
material defects or deficiencies in the Real Property that,
either individually or in the aggregate, could materially and
adversely affect Tenant's use or occupancy or could reasonably
be anticipated to endanger life or limb.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of
California. Tenant has all requisite power and has procured
or will procure on a timely basis all governmental
certificates of authority, licenses, permits, qualifications
and other documentation required to lease and operate the
Leased Property. Tenant has the corporate power and adequate
authority, rights and franchises to own Tenant's property and
to carry on Tenant's business as now conducted and is duly
qualified and in good
standing in each state in which the character of Tenant's
business makes such qualification necessary
(including, without limitation, the State of California) or,
if it is not so qualified in a state other than California,
such failure does not have a material adverse effect on the
properties, assets, operations or businesses of Tenant
and its Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement, the
Pledge Agreement and the Environmental Indemnity are duly
authorized and do not require the consent or approval of any
governmental body or other regulatory authority that has not
heretofore been obtained and are not in contravention of or
conflict with any Applicable Laws or any term or provision of
Tenant's articles of incorporation or bylaws. This Lease, the
Purchase Agreement, the Pledge Agreement and the Environmental
Indemnity are valid, binding and legally enforceable
obligations of Tenant in accordance with their terms, except
as such enforcement is affected by bankruptcy, insolvency and
similar laws affecting the rights of creditors, generally, and
equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person"
within the meaning Sections 1445 and 7701 of
the Code (i.e., Tenant is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign
estate as those terms are defined in the Code and regulations
promulgated thereunder).
(k) Omissions. To Tenant's knowledge, none of Tenant's
representations or warranties contained in this
Lease or any document, certificate or written statement
furnished to Landlord by or on behalf of Tenant contains any
untrue statement of a material fact or omits a material fact
necessary in order to make the statements contained herein or
therein (when taken in their entireties) not misleading.
(l) Existence. Tenant shall continuously maintain its
existence and its qualification to do business in the
State of California.
(m) Tenant Taxes. Tenant shall comply with all applicable
tax laws and pay before the same become
delinquent all taxes imposed upon it or upon its property
where the failure to so comply or so pay would have a material
adverse effect on the financial condition or operations of
Tenant; except that Tenant may in good faith by appropriate
proceedings contest the validity, applicability or amount of
any such taxes and pending such contest Tenant shall not be
deemed in default under this subparagraph if (1) Tenant
diligently prosecutes such contest to completion in an
appropriate manner, and (2) Tenant promptly causes to be paid
any tax adjudged by
a court of competent jurisdiction to be due, with all costs,
penalties, and interest thereon, promptly after such judgment
becomes final; provided, however, in any event such contest
shall be concluded and the tax,
penalties, interest and costs shall be paid prior to the date
any writ or order is issued under which any of Tenant's
property that is material to the business of Tenant and its
Subsidiaries taken as a whole may be seized or sold because of
the nonpayment thereof.
(n) Operation of Property. Tenant shall operate the Leased
Property in a good and workmanlike manner
and in compliance with all Applicable Laws and will pay all
fees or charges of any kind in connection therewith. Tenant
shall not use or occupy, or allow the use or occupancy of, the
Leased Property in any manner which violates any Applicable
Law or which constitutes a public or private nuisance or which
makes void, voidable or cancelable any insurance then in force
with respect thereto. To the extent that any of the following
would, individually or in the aggregate, materially and
adversely affect the value of the Leased Property or Tenant's
use, occupancy or operations on the Leased Property, Tenant
shall not: (i) initiate or permit any zoning reclassification
of the Leased Property; (ii) seek any variance under existing
zoning ordinances applicable to the Leased Property; (iii) use
or permit the use of the Leased Property in a manner that
would result in such use becoming a nonconforming use under
applicable zoning ordinances or similar
laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Leased Property; or (v) consent
to the annexation of the Leased Property to any municipality.
If a change in the zoning or other Applicable
Laws affecting the permitted use or development of the Leased
Property shall occur that Landlord determines
will materially reduce the then-current market value of the
Leased Property, and if after such reduction the Stipulated
Loss Value shall substantially exceed the then-current market
value of the Leased Property in the reasonable judgment of
Landlord, then Tenant shall pay Landlord an amount equal to
such excess for application as a Qualified Payment. Tenant
shall make any payment required by the preceding sentence
within one hundred eighty (180) days after it is requested by
Landlord, and in any event shall make any such payment before
the end of the Term. Tenant shall not impose any restrictive
covenants or encumbrances upon the Leased Property without the
prior written consent of the Landlord; provided, that such
consent shall not be unreasonably withheld for any encumbrance
or restriction that is made expressly subject to this Lease,
as modified from time to time, and subordinate to Landlord's
interest in the Leased Property by an agreement in
form satisfactory to Landlord. Tenant shall not cause or
permit any drilling or exploration for, or extraction, removal
or production of, minerals from the surface or subsurface of
the Leased Property. Tenant shall not do any act whereby the
market value of the Leased Property may be materially
lessened. Tenant shall allow Landlord or its authorized
representative to enter the Leased Property at any reasonable
time to inspect the Leased Property and, after reasonable
notice, to inspect Tenant's books and records pertaining
thereto, and Tenant shall assist Landlord or Landlord's
representative in whatever way reasonably necessary to make
such inspections. If Tenant receives a written notice or
claim from any federal, state or other governmental entity
that the Leased Property is not in compliance in any material
respect with any Applicable Law, or that any action may be
taken against the owner of the Leased Property because the
Leased Property does not comply
with Applicable Law, Tenant shall promptly furnish a copy of
such notice or claim to Landlord. Notwithstanding the
foregoing, Tenant may in good faith, by appropriate
proceedings, contest the validity and applicability of any
Applicable Law with respect to the Leased Property, and
pending such contest Tenant shall not be deemed in default
hereunder because of a violation of such Applicable Law, if
Tenant diligently prosecutes such contest to completion in a
manner reasonably satisfactory to Landlord, and if Tenant
promptly causes the Leased Property to comply with any such
Applicable Law upon a final determination by a court of
competent jurisdiction that the same is valid and applicable
to the Leased Property; provided, that in any event such
contest shall be concluded and the violation of such
Applicable Law must be corrected and any claims asserted
against Landlord or the Leased Property because of such
violation must be paid by Tenant, all prior to the date that
(i) any criminal charges may be brought against Landlord or
any of its directors, officers or employees because of such
violation or (ii) any action may be taken by any governmental
authority against Landlord or any property owned by Landlord
(including the Leased Property) because of such violation.
(o) Debts for Construction. Tenant shall cause all debts
and liabilities incurred in the construction, maintenance,
operation and development of the Leased Property, including
without limitation all debts and liabilities for labor,
material and equipment and all debts and charges for utilities
servicing the Leased Property, to be promptly paid.
Notwithstanding the foregoing, Tenant may in good faith by
appropriate proceedings contest the validity, applicability or
amount of any asserted mechanic's or materialmen's lien and
pending such contest Tenant shall not be deemed in default
under this subparagraph (or subparagraphs 8.(t) or
8.(u)) because of the contested lien if (1) within sixty (60)
days after being asked to do so by Landlord, Tenant bonds over
to Landlord's satisfaction any contested liens alleged to
secure an amount in excess of $500,000 (individually or in the
aggregate) (2) Tenant diligently prosecutes such contest to
completion in a manner reasonably satisfactory to Landlord,
and (3) Tenant promptly causes to be paid any amount adjudged
by a court of competent jurisdiction to be due, with all costs
and interest thereon, promptly after such judgment becomes
final; provided, however, that in any event each such contest
shall be concluded and the lien, interest and costs shall be
paid prior to the date (i) any criminal action may be
instituted against Landlord or its directors, officers or
employees because of the nonpayment thereof or (ii) any writ
or order is issued under which any property
owned by Landlord (including the Leased Property) may be
seized or sold or any other action may be taken
against Landlord or any property owned by Landlord because of
the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or,
if requested by Landlord, will pay or cause to be paid prior
to delinquency) all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes,
levies, fees, charges, surcharges, assessments or penalties
which arise out of or are attributable to this Lease or which
are imposed upon Landlord or the Leased Property because of
the
ownership, leasing, occupancy, sale or operation of the Leased
Property, or any part thereof, or relating to or required to
be paid by the terms of any of the Permitted Encumbrances
(collectively, herein called the "Impositions"), excluding
only Excluded Taxes. If Landlord requires Tenant to pay any
Impositions directly
to the applicable taxing authority or other party entitled to
collect the same, Tenant shall furnish Landlord with receipts
showing payment of such Impositions and other amounts prior to
delinquency; except that Tenant may
in good faith by appropriate proceedings contest the validity,
applicability or amount of any asserted Imposition, and
pending such contest Tenant shall not be deemed in default of
this subparagraph (or subparagraphs 8.(t) or 8.(u)) because of
the contested Imposition if (1) within sixty (60) days after
being asked to do so by Landlord, Tenant bonds over to the
satisfaction of Landlord any lien asserted against the Leased
Property and alleged to secure an amount in excess of $500,000
because of the contested Imposition, (2)
Tenant diligently prosecutes such contest to completion in a
manner reasonably satisfactory to Landlord, and (3) Tenant
promptly causes to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all costs, penalties
and interest thereon, promptly after such judgment becomes
final; provided, however, that
in any event each such contest shall be concluded and the
Impositions, penalties, interest and costs shall be paid
prior to the date (i) any criminal action may be instituted
against Landlord or its directors, officers or employees
because of the nonpayment thereof or (ii) any writ or order is
issued under which any property owned by Landlord (including
the Leased Property) may be seized or sold or any other action
may be taken against Landlord or any property owned by
Landlord because of the nonpayment thereof.
(q) Repair, Maintenance, Alterations and Additions. Tenant
shall keep the Leased Property in good order,
repair, operating condition and appearance (ordinary wear and
tear excepted), causing all necessary repairs, renewals,
replacements, additions and improvements to be promptly made,
and will not allow any of the Leased Property to be materially
misused, abused or wasted or to deteriorate. Tenant shall
promptly replace any worn-out fixtures included within the
Leased Property with fixtures comparable to the replaced
fixtures when new and repair any damage caused by the removal
of such fixtures. Further, Tenant shall not, without the
prior written consent of Landlord, (i) remove from the Leased
Property any fixtures of significant value,
except such as are replaced by Tenant by articles of equal
value, free and clear of any Lien (and for purposes of this
clause "significant value" will mean any fixture that has a
value of more than $100,000 or that, when considered together
with all other fixtures removed and not replaced by Tenant by
articles of equal suitability and value, has an aggregate
value of $500,000 or more) or (ii) make any alteration to any
Improvements which significantly reduce the fair market value
or change the general character of the Leased Property, taken
as a whole, or which impair in any significant manner the
useful life or utility of the Improvements, taken as whole.
Notwithstanding the foregoing provisions of this
subparagraph 8.(q), Tenant may construct the following
substantial new Improvements to the Leased Property and modify
or remove existing Improvements
as reasonably required in connection with such construction:
(1) a new building and separate parking structure to be used
as a data center;
(2) an expansion of the cafeteria; and
(3) an elevated walkway between Building 100 (which
is on the Land) and Building 500 (which
is on land adjacent to the Land and is presently leased to
Tenant by Landlord pursuant to another lease agreement);
provided, however: no Event of Default has occurred and is
continuing; Tenant causes the construction to be performed in
a good and workmanlike manner and in accordance with
Applicable Laws; Tenant causes the construction to be
completed in a manner that does not significantly reduce the
fair market value of or change the general character of the
Leased Property, taken as a whole, or impair in any
significant manner the useful life or utility of the
Improvements, taken as whole; in the case of the elevated
walkway, Landlord must have approved (which approval will not
be unreasonably withheld) an agreement which negates any
easements or
rights that would run with the land or prevent the removal of
the walkway, except as expressly set forth in such agreement,
if the same Person should cease to own both Building 100 and
Building 500; and Tenant causes the construction to be
completed prior to any Designated Sale Date on which neither
Tenant nor any Applicable Purchaser purchases the Leased
Property pursuant to the Purchase Agreement for a price to
Landlord (when
taken together with any additional payments made by Tenant
pursuant to Paragraph 2(a)(ii) of the Purchase Agreement, in
the case of a purchase by an Applicable Purchaser) of not less
than the Purchase Price.
Upon request of Landlord made at any time when an Event of
Default shall have occurred and be
continuing, Tenant shall deliver to Landlord an inventory
describing and showing the make, model, serial number and
location of all fixtures and personalty, if any, included in
the Leased Property with a certification by Tenant that such
inventory is a true and complete schedule of all such fixtures
and personalty and that all items specified in the inventory
are covered hereby free and clear of any Lien other than the
Permitted Encumbrances described in Exhibit B.
(r) Insurance and Casualty. Throughout the Term, Tenant will
keep all Improvements (including all
alterations, additions and changes made to the Improvements)
which are located within the Leased Property insured under an
all-risk property insurance policy (excluding from coverage
damage by flood or earthquake, but not excluding other perils
normally included within the definitions of extended coverage,
vandalism and malicious mischief) in the amount of one hundred
percent (100%) of the replacement value with endorsements
for contingent liability from operation of building laws,
increased cost of construction and demolition costs which may
be necessary to comply with building laws. Tenant will be
responsible for determining the amount of property insurance
to be maintained, but such coverage will be on an agreed value
basis to eliminate the effects of coinsurance. Such insurance
shall be issued by an insurance company or companies rated by
the A.M. Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported financial
information rating of X or better. Any deductible applicable
to such insurance shall not exceed
$500,000. Such insurance shall cover not only the value of
Tenant's interest in the Improvements, but also the interest
of Landlord, and such insurance shall include provisions that
Landlord must be notified at least ten (10) days prior to any
cancellation or reduction of insurance coverage. With this
Lease Tenant shall deliver to Landlord a certificate from the
applicable insurer or its authorized agent evidencing the
insurance required by
this subparagraph and any additional insurance which shall be
taken out upon any part of the Leased Property. Thereafter,
Tenant shall deliver to Landlord certificates from the
applicable insurer or its authorized agent of renewals or
replacements of all such policies of insurance at least five
(5) days before any such insurance shall expire. Tenant
further agrees that all such policies shall provide that
proceeds thereunder will be payable to Landlord as Landlord's
interest may appear. If Tenant fails to obtain any insurance
required by this Lease or to provide confirmation of any such
insurance as required by this Lease, Landlord shall be
entitled (but not required) to obtain the insurance that
Tenant has failed to obtain or for which Tenant has not
provided the required confirmation and, without limiting
Landlord's other remedies under the circumstances, Landlord
may require Tenant to reimburse Landlord for the cost of such
insurance and to pay interest thereon computed at the Default
Rate from the date such cost was paid by Landlord until the
date of reimbursement by Tenant. In the event any of the
Leased Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which
insurance shall have been required hereunder, (i) Landlord
may, but shall not be obligated to, make proof of loss if not
made promptly by Tenant, (ii) each insurance company concerned
is hereby authorized and directed to make payment for such
loss directly to Landlord for application as required by
Paragraph 4, and (iii) Landlord's consent must be obtained for
any settlement, adjustment or compromise of
any claims for loss, damage or destruction under any policy or
policies of insurance (provided, that if any such claim is for
less than $2,000,000 and no Event of Default shall have
occurred and be continuing, Tenant alone shall have the right
to settle, adjust or compromise the claim as Tenant deems
appropriate; and, provided further, that any disagreement
between Landlord and Tenant about the amount for which any
such claim should
be settled shall, at the request of either party, be resolved
as provided in Exhibit D, unless an Event of Default shall
have occurred and be continuing, in which case Landlord alone
shall have the right to settle, adjust or compromise the claim
as Landlord deems appropriate). If any casualty shall result
in damage to or loss or destruction of the Leased Property in
excess of $1,000,000, Tenant shall give immediate notice
thereof to Landlord and Paragraph 4 shall apply.
Notwithstanding the foregoing provisions of this
subparagraph 8.(r), following any fire or other casualty
involving the Leased Property, if insurance proceeds totaling
not more than $2,000,000 are to be recovered as a result
thereof, or if in connection therewith Tenant shall have
executed a Voluntary Minimum Pledge Commitment and delivered
any additional Collateral required to satisfy such Voluntary
Minimum
Pledge Commitment, Tenant shall be entitled to receive
directly and hold such insurance proceeds, so long as no Event
of Default shall have occurred and be continuing and so long
as Tenant applies such proceeds towards the restoration,
replacement and repair of the Leased Property as required by
subparagraph 4.(b).
(s) Condemnation. Immediately upon obtaining knowledge of
the institution of any proceedings for the
condemnation of the Leased Property or any portion thereof, or
any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Leased
Property or any portion thereof, Tenant shall notify Landlord
of the pendency of such proceedings. Tenant shall, at its
expense, diligently prosecute any such proceedings and shall
consult with Landlord, its attorneys and experts and cooperate
with them as reasonably requested in the carrying on or
defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with
respect to the Leased Property and all judgments, decrees and
awards for injury or damage to the Leased Property shall be
paid to Landlord and applied as provided in Paragraph 4 above.
Landlord is hereby authorized, in the name of Tenant, to
execute and deliver valid acquittances for, and to appeal
from, any such judgment, decree or award concerning
condemnation of any of the Leased Property. Landlord shall
not be, in any event or circumstances, liable or
responsible for failure to collect, or to exercise diligence
in the collection of, any such proceeds, judgments, decrees or
awards.
Notwithstanding the foregoing provisions of this
subparagraph 8.(s), following any condemnation or sale in lieu
of condemnation involving the Leased Property, if condemnation
or sale proceeds totaling not more than $2,000,000 are to be
recovered as a result thereof, or if in connection therewith
Tenant shall have executed a Voluntary Minimum Pledge
Commitment and delivered any additional Collateral required to
satisfy such Voluntary Minimum Pledge Commitment, Tenant shall
be entitled to receive directly and hold such condemnation or
sale proceeds, so long as no Event of Default shall have
occurred and be continuing and so long as Tenant applies such
proceeds towards the restoration, replacement and repair of
the remainder of the Leased Property as required by
subparagraph 4.(b).
(t) Protection and Defense of Title. If any encumbrance or
title defect whatsoever affecting Landlord's fee
interest in the Leased Property is claimed or discovered
(excluding Permitted Encumbrances, this Lease and
any other encumbrance which is claimed by Landlord or lawfully
claimed through or under Landlord and
which is not claimed by, through or under Tenant) or if any
legal proceedings are instituted with respect to title to the
Leased Property, Tenant shall give prompt written notice
thereof to Landlord and at Tenant's own cost
and expense will promptly cause the removal of any such
encumbrance and cure any such defect and will take all
necessary and proper steps for the defense of any such legal
proceedings, including but not limited to the employment of
counsel, the prosecution or defense of litigation and the
release or discharge of all adverse claims. If Tenant fails
to promptly remove any such encumbrance or title defect (other
than a Lien Tenant is contesting as expressly permitted by and
in accordance with subparagraph 8.(o) or subparagraph 8.(p)),
Landlord (whether or not named as a party to legal proceedings
with respect thereto) shall be entitled to take such
additional steps as in its judgment may be necessary or proper
to remove such encumbrance or cure such defect or for the
defense of any such attack or legal proceedings or the
protection of Landlord's fee interest in the Leased Property,
including but not limited to the employment of counsel, the
prosecution or defense of litigation, the compromise or
discharge of any adverse claims made with respect to the
Leased Property, the removal of prior liens or security
interests, and all expenses (including Attorneys' Fees) so
incurred of every kind and character shall be a demand
obligation owing by Tenant.
For purposes of this subparagraph 8.(t), Tenant shall be
deemed to be acting promptly to remove any
encumbrance or to cure any title defect, other than a Lien
which Tenant has itself granted or authorized, so long as
Tenant (or a title insurance company obligated to do so) is in
good faith by appropriate proceedings contesting the validity
and applicability of the encumbrance or defect, and pending
such contest Tenant shall not be deemed in default under this
subparagraph because of the encumbrance or defect; provided,
with respect
to a contest of any encumbrance or title defect which is the
subject of subparagraphs 8.(o) or 8.(p), Tenant (or the
applicable title insurance company) must satisfy the
conditions and requirements for a permitted contest set forth
in those subparagraphs, and with respect to a contest of any
other encumbrance or title defect, Tenant (or the applicable
title insurance company) must:
(1) diligently prosecute the contest to completion
in a manner reasonably satisfactory to Landlord;
(2) immediately remove the encumbrance or cure the
defect, as and to the extent reasonably required to preserve
Landlord's indefeasible fee estate in the Leased Property and
to prevent any significant adverse impact the encumbrance or
defect may have on the value of the Leased Property, upon a
final determination by a court of competent jurisdiction that
the encumbrance or defect is valid and applicable to the
Leased Property; and
(3) in any event conclude the contest and remove the
encumbrance or cure the defect and pay any claims asserted
against Landlord or the Leased Property because of such
encumbrance or defect, all
prior to (i) any Designated Sale Date on which neither Tenant
nor any Applicable Purchaser purchases the Leased Property
pursuant to the Purchase Agreement for a price to Landlord
(when taken together with any additional payments made by
Tenant pursuant to Paragraph 2(a)(ii) of the Purchase
Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than the Purchase Price, (ii) the date
any criminal charges may be brought against Landlord or any of
its directors, officers or employees because of such
encumbrance or defect or (iii) the date any action may be
taken against Landlord or any property owned by Landlord
(including the Leased Property) by any governmental authority
or any other Person who has or claims rights superior to
Landlord because of the encumbrance or defect.
(u) No Liens on the Leased Property. Tenant shall not,
without the prior written consent of Landlord,
create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or
allow to remain, any Lien (except the lien for property taxes
or assessments assessed against the Leased Property which are
not delinquent and any Lien Tenant is contesting as expressly
permitted by and in
accordance with subparagraph 8.(o) or subparagraph 8.(p)),
against or covering the Leased Property or any part thereof
(other than any Lien which is lawfully claimed through or
under Landlord and which is not claimed by, through or under
Tenant) regardless of whether the same are expressly or
otherwise subordinate to this Lease or Landlord's interest in
the Leased Property, and should any prohibited Lien exist or
become attached hereafter in any manner to any part of the
Leased Property without the prior written consent of Landlord,
Tenant shall cause the same to be promptly discharged and
released to the satisfaction of Landlord.
(v) Books and Records. Tenant shall keep books and records
that are accurate and complete in all material
respects for the construction and maintenance of the Leased
Property and will permit all such books and
records (including without limitation all contracts,
statements, invoices, bills and claims for labor, materials
and services supplied for the construction and operation of
any Improvements) to be inspected and copied by
Landlord and its duly accredited representatives at all times
during reasonable business hours; provided that so long as
Tenant remains in possession of the Leased Property, Landlord
or Landlord's representative will,
before making any such inspection or copying any such
documents, if then requested to do so by Tenant to maintain
Tenant's security: (i) sign in at Tenant's security or
information desk if Tenant has such a desk on the premises,
(ii) wear a visitor's badge or other reasonable identification
provided by Tenant when Landlord or Landlord's representative
first arrives at the Leased Property, (iii) permit an employee
of Tenant to observe such inspection or work, and (iv) comply
with other similar reasonable nondiscriminatory security
requirements of Tenant that do not, individually or in the
aggregate, interfere with or delay inspections or copying by
Landlord authorized by this subparagraph.. This subparagraph
shall not be construed as requiring Tenant to regularly
maintain separate books and records relating exclusively to
the Leased Property; provided, however, that if requested by
Landlord at any time when an Event of Default shall have
occurred and be continuing, Tenant shall construct or abstract
from its regularly maintained books and records information
required by this subparagraph relating to the Leased Property.
(w) Financial Statements; Required Notices; Certificates
as to Default. Tenant shall deliver to Landlord and to each
Participant of which Tenant has been notified:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of Tenant,
a consolidated balance sheet of Tenant and its consolidated
Subsidiaries as of the end of such fiscal year and a
consolidated income statement and statement of cash flows of
Tenant and its consolidated Subsidiaries for such fiscal year,
all in reasonable detail and all prepared in accordance with
GAAP and accompanied by a report and opinion of accountants of
national standing selected by Tenant,
which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject
to any qualifications or exceptions as to the scope of the
audit nor to any qualification or exception which Landlord
determines, in Landlord's reasonable discretion, is
unacceptable; provided
that notwithstanding the foregoing, for so long as Tenant is a
company subject to the periodic reporting requirements of
Section 12 of the Securities Exchange Act of 1934, as amended,
Tenant shall be deemed to have satisfied its obligations under
this clause (i) so long as Tenant delivers to Landlord the
same annual report and report and opinion of accountants that
Tenant delivers to its shareholders;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of each
fiscal year of Tenant, the consolidated balance sheet of
Tenant and its consolidated Subsidiaries as of the end of such
quarter and the consolidated income statement and the
consolidated statement of cash flows of Tenant and its
consolidated Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such
quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by a Responsible Financial
Officer of Tenant (subject to year-end adjustments); provided
that notwithstanding the foregoing, for so long as Tenant is a
company subject to
the periodic reporting requirements of Section 12 of the
Securities Exchange Act of 1934, as amended,
Tenant shall be deemed to have satisfied its obligations under
this clause (ii) so long as Tenant delivers to Landlord the
same quarterly reports, certified by a Responsible Financial
Officer of Tenant (subject to year-end adjustments), that
Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph 8.(w)(ii) and 8.(w)(i), a
certificate of a Responsible Financial Officer of Tenant in
substantially the form attached hereto as Exhibit E: (i)
certifying that to the knowledge of Tenant no Default or Event
of Default under this Lease
has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a brief statement as
to the nature thereof and the action which is proposed to be
taken with respect thereto, (ii) certifying that the
representations of Tenant set forth in Paragraph 8 of this
Lease are true and correct in all material respects as of the
date thereof as though made on and as of the date thereof or,
if not then true and correct, a brief statement as to why such
representations are no longer true and correct, and (iii) with
computations demonstrating compliance with the financial
covenants contained in subparagraph 8.(ac);
(iv) promptly after any change in the rating of Tenant's
senior, unsecured debt by Standard and Poor's Corporation or
Moody's Investor Service, Inc. or in Tenant's Debt to Capital
Ratio (as defined in
subparagraph 1.(bo)), which will result in a change in the
Spread (as defined in subparagraph 1.(bo)), a certificate of a
Responsible Financial Officer of Tenant in substantially the
form attached hereto as Exhibit F with computations evidencing
Tenant's calculation of the Spread after giving effect to such
changes;
(v) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which
Tenant sends to Tenant's stockholders, and copies of all
regular, periodic and special reports, and all registration
statements (other than registration statements on Form S-8 or
any form substituted therefor) which Tenant files with the
Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any
national securities exchange;
(vi) as soon as possible and in any event within five (5)
Business Days after a Responsible Financial Officer of Tenant
becomes aware of the occurrence of each Default or Event of
Default with respect to the Affirmative Financial Covenants
described in subparagraph 9.(ae) or the Negative Covenants
described in subparagraph 9.(af), a statement of a Responsible
Financial Officer of Tenant setting forth details of such
Default or Event of Default and the action which Tenant has
taken and proposes to take with respect
thereto;
(vii) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect
(or, if there have been modifications, that this Lease is in
full effect as modified, and setting forth such modifications)
and the dates to which the Base Rent has been paid and either
stating that to the knowledge of Tenant no Default or Event of
Default under this Lease has occurred and is continuing or, if
a Default or Event of Default under this Lease has occurred
and is continuing, a brief statement as to the nature thereof;
it being intended that any such statement by Tenant may be
relied upon by any prospective purchaser or mortgagee of the
Leased Property and by any Participant; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Tenant, of
any of its Subsidiaries or of the Leased Property as Landlord
or any Participant through Landlord may
from time to time reasonably request.
Landlord is hereby authorized to deliver a copy of any
information or certificate delivered to it pursuant to this
subparagraph 8.(w) to any Participant and to any regulatory
body having jurisdiction over Landlord that
requires or requests it.
(x) Further Assurances. Tenant shall, on request of
Landlord, (i) promptly correct any defect, error or omission
which may be discovered in the contents of this Lease or in
any other instrument executed in
connection herewith or in the execution or acknowledgment
thereof; (ii) execute, acknowledge, deliver and record or file
such further instruments and do such further acts as may be
necessary, desirable or proper to carry out more effectively
the purposes of this Lease and to subject to this Lease any
property intended by the terms hereof to be covered hereby
including specifically, but without limitation, any renewals,
additions, substitutions, replacements or appurtenances to the
Leased Property; (iii) execute, acknowledge, deliver, procure
and record or file any document or instrument deemed advisable
by Landlord to protect its rights in
and to the Leased Property against the rights or interests of
third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do
such further acts as may be necessary, desirable or proper in
the reasonable determination of Landlord to enable Landlord,
Landlord's Parent and other Participants to comply with the
requirements or requests of any agency or authority having
jurisdiction over them.
(y) Fees and Expenses; General Indemnification; Increased
Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the proceeds
of the Initial Funding Advance as part of the Closing Costs,
Tenant shall pay (and shall indemnify and hold harmless
Landlord, Landlord's Parent and
any Person claiming through Landlord by reason of a Permitted
Transfer from and against) all Losses incurred by Landlord or
Landlord's Parent or any Person claiming through Landlord
through a Permitted Transfer in connection with or because of
(A) the ownership of any interest in or operation of the
Leased Property, (B) the negotiation or administration of this
Lease, the Purchase Agreement, the Pledge Agreement, the
Environmental Indemnity or the Participation Agreement
(excluding the negotiation or administration of the
Participation Agreement between Landlord and Landlord's
Parent), or (C) 3COM's request for assistance in identifying
any new Participant pursuant to Paragraph 18 of the Purchase
Agreement, whether such Losses are incurred at the time of
execution of this Lease or at any time during the Term. Costs
and expenses included in such Losses may include, without
limitation, all appraisal fees, filing and recording fees,
inspection fees, survey fees, taxes (other than Excluded
Taxes), brokerage fees and commissions, abstract fees, title
policy fees, Uniform Commercial Code search fees, escrow fees,
Attorneys' Fees and environmental consulting fees incurred by
Landlord with respect to the Leased Property. If Landlord
pays or reimburses Landlord's Parent for any such Losses,
Tenant shall reimburse Landlord for the same notwithstanding
that Landlord may have already received any payment from any
other Participant on account of such Losses, it being
understood that the other Participant may expect repayment
from Landlord when Landlord does collect the required
reimbursement from Tenant.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against)
all Losses, including Attorneys' Fees, incurred or expended by
Landlord or Landlord's Parent or any Person claiming through
Landlord through a Permitted Transfer or in connection with
(A) the breach by Tenant of any covenant of Tenant herein or
in any other instrument executed in connection herewith or (B)
Landlord's exercise in a lawful manner of any of Landlord's
remedies hereunder or under Applicable Law or Landlord's
protection of the Leased Property and Landlord's interest
therein as permitted hereunder or under Applicable Law.
(However, the indemnity in the preceding sentence shall not be
construed to make Tenant liable to both Landlord and any
Participant or other party claiming through Landlord for the
same damages. For example, so long as Landlord remains
entitled to recover any past due Base Rent from Tenant, no
Participant shall be entitled to collect a percentage of the
same Base Rent from Tenant.) Tenant shall further indemnify
and hold harmless Landlord and all other Indemnified Parties
against, and reimburse them for, all Losses which may be
imposed upon, asserted against or incurred or paid by them by
reason
of, on account of or in connection with any bodily injury or
death or damage to the property of third parties occurring in
or upon or in the vicinity of the Leased Property through any
cause whatsoever. THE
FOREGOING INDEMNITY FOR INJURY, DEATH OR PROPERTY DAMAGE SHALL
APPLY
EVEN WHEN INJURY, DEATH OR PROPERTY DAMAGE IN, ON OR IN THE
VICINITY OF
THE LEASED PROPERTY RESULTS IN WHOLE OR IN PART FROM THE
ORDINARY
NEGLIGENCE (AS DEFINED ABOVE) OF AN INDEMNIFIED PARTY;
provided, such indemnity
shall not apply to Losses suffered by an Indemnified Party
that were proximately caused by (and attributed by any
applicable principles of comparative fault to) the Active
Negligence, gross negligence or wilful misconduct of such
Indemnified Party.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage)
in or in the interpretation of any law or regulation or (B)
the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having
the force of law), there shall be
any increase in the cost to Landlord's Parent or any other
Participant of agreeing to make or making,
funding or maintaining advances to Landlord in connection with
the Leased Property, then Tenant shall from time to time, upon
demand by Landlord pay to Landlord for the account of
Landlord's Parent or such other Participant, as the case may
be, additional amounts sufficient to compensate Landlord's
Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of
reserve requirements applicable to Collateral held from time
to time by Landlord's Parent or other Participants pursuant to
the Pledge Agreement would be an increase covered by the
preceding sentence. A certificate as to the amount of any
increased cost covered by this subparagraph, submitted to
Landlord and Tenant by Landlord's Parent or the other
Participant, shall be conclusive and binding for purposes of
determining Tenant's obligations hereunder, absent clear and
demonstrable error.
(iv) Landlord's Parent or any other Participant may demand
additional payments (herein called "Capital Adequacy Charges")
if Landlord's Parent or the other Participant determines that
any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not
having the force of law) affects the amount of capital to be
maintained by it and that the amount of such capital is
increased by or based upon the existence of Funding Advances
made or to be made to Landlord to permit Landlord to maintain
Landlord's investment in the Leased Property. To the extent
that Landlord's Parent or the other Participant demands
Capital Adequacy Charges as compensation for the additional
capital requirements reasonably allocable to such advances,
Tenant shall pay to Landlord for the account of Landlord's
Parent or the other Participant, as the case may be, the
amount so demanded.
(v) Any amount to be paid to Landlord, Landlord's Parent or
any other Indemnified Party under this subparagraph 8.(y)
shall be a demand obligation owing by Tenant. Tenant's
indemnities and obligations under this subparagraph 8.(y)
shall survive the termination or expiration of this Lease with
respect to any circumstance or event existing or occurring
prior to such termination or expiration.
(z) Liability Insurance. Tenant shall maintain one or
more policies of commercial general liability insurance
against claims for bodily injury or death and property damage
occurring or resulting from any occurrence in or upon the
Leased Property, in standard form and with an insurance
company or companies rated by the A.M. Best Company of
Oldwick, New Jersey as having a policyholder's rating of A or
better and
a reported financial information rating of X or better, such
insurance to afford immediate protection, to the aggregate
limit of not less than $10,000,000 combined single limit for
bodily injury and property damage in respect of any one
accident or occurrence, with not more than $500,000 self-
insured retention. Such commercial general liability
insurance shall include blanket contractual liability coverage
which insures
contractual liability under the indemnifications set forth in
this Lease (other than the indemnifications set forth in
Paragraph 11 concerning environmental matters), but such
coverage or the amount thereof shall in no way
limit such indemnifications. The policy evidencing such
insurance shall name as additional insureds Landlord and all
Participants of which Tenant has been notified (including
Landlord's Parent and ABN AMRO Bank N.V.). Tenant shall
maintain with respect to each policy or agreement evidencing
such commercial general
liability insurance such endorsements as may be reasonably
required by Landlord and shall at all times deliver and
maintain with Landlord written confirmation (in form
satisfactory to Landlord) with respect to such insurance from
the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be
canceled or reduced without at least ten (10) days notice to
Landlord. Not less than five (5) days prior to the expiration
date of each policy of insurance required of Tenant pursuant
to this subparagraph, Tenant shall deliver to Landlord a
certificate evidencing a paid renewal policy or policies.
(aa) Permitted Encumbrances. Except to the extent
expressly required of Landlord by subparagraph 9.(b), Tenant
shall comply with and will cause to be performed all of the
covenants, agreements and obligations imposed upon the owner
of the Leased Property in the Permitted Encumbrances in
accordance with their respective terms and provisions. Tenant
shall not, without the prior written consent of Landlord,
modify or permit any modification of any Permitted Encumbrance
in any manner that could impose significant monetary
obligations upon Landlord or any subsequent owner of the
Leased Property, could significantly and adversely affect the
value of the Leased Property, could impose any lien to secure
payment or performance obligations against any part of the
Leased Property or would otherwise be material and adverse to
Landlord.
(bb) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased Property to be in
violation of, or do anything or permit
anything to be done which will subject the Leased Property to
any remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming
disclosure to the
applicable governmental authorities of all relevant facts,
conditions and circumstances pertaining to the Leased
Property;
b) not to conduct or authorize others to conduct Hazardous
Substance Activities on the Leased
Property, except Permitted Hazardous Substance Use;
c) to the extent required by Environmental Laws, to remove
Hazardous Substances from the
Leased Property (or if removal is prohibited by law, to take
whatever action is required by law) promptly upon discovery;
and
d) not to discharge or authorize the discharge of anything
(including Permitted Hazardous
Substances) from the Leased Property into groundwater or
surface water that would require any permit under applicable
Environmental Laws, other than storm water runoff.
If Tenant's failure to cure any breach of the covenants
listed above in this subparagraph (i) continues beyond the
Environmental Cure Period (as defined below), Landlord may, in
addition to any other
remedies available to it, after notifying Tenant of the
remediation efforts Landlord believes are needed, cause the
Leased Property to be freed from all Hazardous Substances (or
if removal is prohibited by law, to take whatever action is
required by law), and the cost of the removal shall be a
demand obligation owing
by Tenant to Landlord. Further, subject to the provisions of
subparagraph 11.(c) below, Tenant agrees to indemnify Landlord
against all Losses incurred by or asserted or proven against
Landlord in connection therewith. As used in this
subparagraph, "Environmental Cure Period" means the period
ending on the
earlier of: (1) one hundred and eighty days (180) after Tenant
is notified of the breach which must be cured within such
period, or such longer period as is reasonably required for
any cure that Tenant pursues with diligence pursuant to and in
accordance with an Approved Plan (as defined below), (2) the
date any writ or order is issued for the levy or sale of any
property owned by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of
its directors, officers or employees because of the breach
which must be cured within such period, (3) the end of the
Term. As used in this subparagraph, an "Approved Plan" means
a plan of remediation of a violation of Environmental Laws for
which Tenant
has obtained, within one hundred and eighty days (180) after
Tenant is notified of the applicable breach of the covenants
listed above in this subparagraph (i), the written approval of
the governmental authority with primary jurisdiction over the
violation and with respect to which no other governmental
authority asserting jurisdiction has claimed such plan is
inadequate.
(ii) Environmental Inspections and Reviews. Landlord reserves
the right to retain an independent
professional consultant to review any report prepared by
Tenant or to conduct Landlord's own investigation to confirm
whether Hazardous Substances Activities or the discharge of
anything into groundwater or surface water has occurred in
violation of the preceding subparagraph (i), but Landlord's
right to
reimbursement for the fees of such consultant shall be limited
to the following circumstances: (1) an Event of Default shall
have occurred; (2) Landlord shall have retained the consultant
to establish the condition of the Leased Property just prior
to any conveyance thereof pursuant to the Purchase Agreement
or just prior to the expiration of this Lease; (3) Landlord
shall have retained the consultant to satisfy any regulatory
requirements applicable to Landlord or its Affiliates; or (4)
Landlord shall have retained the consultant because Landlord
has been notified of a violation of Environmental Laws
concerning the Leased Property
or Landlord otherwise reasonably believes that Tenant has not
complied with the preceding subparagraph (i). Tenant grants
to Landlord and to Landlord's agents, employees, consultants
and contractors the right during reasonable business hours and
after reasonable notice to enter upon the Leased Property to
inspect the Leased Property and to perform such tests as are
reasonably necessary or appropriate to conduct a review or
investigation of Hazardous Substances on, or any discharge
into groundwater or surface water from, the Leased Property.
Without limiting the generality of the foregoing, Tenant
agrees that Landlord will have the same right, power and
authority to enter and inspect the Leased Property as is
granted to a secured lender under Section 2929.5 of the
California Civil Code. Tenant shall promptly reimburse
Landlord for the cost of any such inspections and tests, but
only when the inspections and tests are (1) ordered by
Landlord after an Event of Default; (2) ordered by Landlord to
establish the condition of the Leased Property just prior to
any conveyance thereof pursuant to the Purchase Agreement or
just prior to the expiration of this Lease; (3) ordered by
Landlord to satisfy any regulatory requirements applicable to
Landlord or its Affiliates; or (4) ordered because Landlord
has been notified of a violation of Environmental Laws
concerning the Leased Property or Landlord otherwise
reasonably believes that
Tenant has not complied with the preceding subparagraph (i).
(iii) Notice of Environmental Problems. Tenant shall
immediately advise Landlord of (i) any discovery of
any event or circumstance which would render any of the
representations contained in subparagraph 8.(e) inaccurate in
any material respect if made at the time of such discovery,
(ii) any remedial action taken by Tenant in response to any
(A) discovery of any Hazardous Substances other than Permitted
Hazardous Substances on, under or about the Leased Property or
(B) any claim for damages resulting from Hazardous Substance
Activities, (iii) Tenant's discovery of any occurrence or
condition on any real property adjoining
or in the vicinity of the Leased Property which could cause
the Leased Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions
under Environmental Laws, or (iv) any investigation or inquiry
affecting the Leased Property by any governmental authority in
connection
with any Environmental Laws. In such event, Tenant shall
deliver to Landlord within thirty (30) days after Landlord's
request, a preliminary written environmental plan setting
forth a general description of the action that Tenant proposes
to take with respect thereto, if any, to bring the Leased
Property into compliance with Environmental Laws or to correct
any breach by Tenant of the covenants listed above in
subparagraph (i), including, without limitation, any proposed
corrective work, the estimated cost and time of completion,
the name of the contractor and a copy of the construction
contract, if any, and such additional data, instruments,
documents, agreements or other materials or information as
Landlord may reasonably request.
(cc) Affirmative Financial Covenants.
(i) Quick Ratio. Tenant shall maintain a ratio of (A) Quick
Assets of Tenant and its Subsidiaries (determined on a
consolidated basis) to (B) the sum of Current Liabilities of
Tenant and its Subsidiaries (determined on a consolidated
basis), of not less than 1.00 to 1.00. As used in this
subparagraph 8.(ac), "Quick Assets" means the sum (without
duplication of any item) of the Collateral held and pledged
under the Pledge Agreement, plus unencumbered cash, plus
unencumbered short term cash investments, plus
other unencumbered marketable securities which are classified
as short term investments according to GAAP, plus the fair
market value of unencumbered Long-Term Investments, plus
unencumbered current net accounts receivable. For purposes of
determining Quick Assets, assets will be deemed to be
"unencumbered" if they are actually unencumbered or if they
are encumbered only by Liens, from which,
at the time of the applicable determination of Quick Assets,
Tenant is entitled to a release of such assets upon no more
than ninety days' notice, without any payment (other than the
payment of ministerial fees
and costs), without subjecting other assets to any Lien and
without otherwise satisfying any condition that is beyond
Tenant's control. As used herein "Long-Term Investments"
means those investments described
below (to the extent that they are not classified as short
term investments in accordance with GAAP), provided that such
investments shall have maturities of not longer than two
years, and shall be rated not less than A- by Standard &
Poor's Corporation or less than A by Moody's Investors
Service, Inc.:
(1) Securities issued or fully guaranteed
or fully insured by the United States government or any agency
thereof and backed by the full faith and credit of the United
States;
(2) Certificates of deposit, time deposits,
eurodollar time deposits, repurchase agreements, or banker's
acceptances that are issued by either one of the 50 largest
(in assets) banks in the United States or by one of the 100
largest (in assets) banks in the world; and
(3) Notes and municipal bonds.
As used in this subparagraph 8.(ac), "Current
Liabilities" means, with respect to any Person, all
liabilities of such Person treated as current liabilities in
accordance with GAAP, including without
limitation (a) all obligations payable on demand or within one
year after the date in which the determination is made and (b)
installment and sinking fund payments required to be made
within one year after the date
on which determination is made, but excluding all such
liabilities or obligations which are renewable or extendable
at the option of such Person to a date more than one year from
the date of determination.
(ii) Maximum Senior Debt to Capitalization. Throughout the
Term Tenant shall maintain a ratio of Senior Debt to
Capitalization of not more than 0.35 to 1.00. As used in this
subparagraph 8.(ac):
"Senior Debt" means the Debt of Tenant and its Subsidiaries
(determined on a
consolidated basis), minus the aggregate principal amount of
the Subordinated Debt.
"Capitalization" means the sum of the Debt of Tenant
and its Subsidiaries (determined on a consolidated basis),
including the aggregate principal amount of the Subordinated
Debt, plus Consolidated Tangible Net Worth of Tenant and its
Subsidiaries (determined on a consolidated
basis).
"Subordinated Debt" means the unsecured Debt of
Tenant in respect of the
$110,000,000 aggregate principal amount at maturity of 10
1/14% Convertible Subordinated Notes due 2001 issued pursuant
to the Indenture. However, such unsecured Debt shall be
included in Subordinated Debt for purposes hereof only to the
extent that it remains expressly subordinated to the payment
and performance obligations of Tenant in transactions of the
type and structure contemplated by this Lease and the Purchase
Agreement.
"Consolidated Tangible Net Worth" means, at any date of
determination thereof, the excess of consolidated total assets
on such date over consolidated total liabilities on such date;
provided, however, that Intangible Assets on such date shall
be excluded from any determination of consolidated total
assets on such date.
"Intangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of
Tenant and its consolidated Subsidiaries that are properly
classified as "intangible assets" in accordance with GAAP and,
in any event, shall include, without limitation, goodwill,
patents, trade names, trademarks, copyrights, franchises,
experimental expense, organization expense, unamortized debt
discount and expense, and deferred charges other than prepaid
insurance and prepaid taxes and current deferred taxes which
are classified on the balance sheet of Tenant and its
consolidated Subsidiaries as a current asset in accordance
with GAAP and in which classification Tenant's independent
public accountants concur.
"Indenture" means the Indenture dated as of November 1,
1994 by and between Tenant and the First National Bank of
Boston, as trustee.
(iii) Minimum Tangible Net Worth. Tenant shall not permit
its Consolidated Tangible Net Worth, on a consolidated basis,
at the end of any fiscal quarter to be less than the sum of:
(A) eighty percent (80%) of Consolidated Tangible Net Worth as
of May 31, 1996; plus (B) fifty percent (50%) of Tenant's net
income
(but without deducting any net losses for any period) earned
in each fiscal quarter, starting with the quarter ended August
31, 1996, and ending with the quarter which, at such time, is
the most recently ended fiscal quarter; less (C) the amount of
write-offs resulting from acquisitions after May 31, 1996,
such amount not to exceed an aggregate, cumulative amount of
$150,000,000.
(iv) Fixed Charge Ratio. Throughout the Term Tenant shall
maintain as of the last day of each fiscal quarter of Tenant a
ratio of (A) Adjusted EBIT of Tenant and its Subsidiaries
(determined on a consolidated basis) for the twelve (12) month
period ending on such date, to (B) Fixed Charges of Tenant and
its Subsidiaries (determined on a consolidated basis) for the
twelve (12) month period ending on such date, of not less than
2.00 to 1.00. As used in this clause (iv), "Adjusted EBIT"
means, for any accounting
period, net income (or net loss), plus the amounts (if any)
which, in the determination of net income (or net loss) for
such period, have been deducted for (a) gross interest
expense, (b) income tax expense (c) rent expense under leases
of property (excluding rent expense payable under any "Minor
Lease", which shall
mean a lease under which rent is less than $1,000,000 per
annum), (d) depreciation, and (e) non-recurring charges taken
in connection with the acquisition of in-process technologies,
in each case determined in accordance with GAAP. As used in
this clause (iv), "Fixed Charges" means, for any accounting
period,
the sum of (a) gross interest expense, plus (b) amortization
of principal or debt discount in respect of all Debt during
such period, plus (c) rent payable under all leases of
property during such period (excluding rent payable under any
Minor Lease), plus (d) taxes payable during such period.
(dd) Negative Covenants. Without the prior written consent
of Landlord in each case, neither Tenant nor any of its
Subsidiaries shall:
(i) Liens. Create, incur, assume or suffer to exist any
Lien, upon or with respect to any of its properties, now owned
or hereafter acquired; provided, however, that the following
shall be permitted except to the extent that they would
encumber any interest in the Leased Property in violation of
other provisions of this Lease or would encumber Collateral
covered by the Pledge Agreement:
a) Liens for taxes or assessments or other government charges
or levies if not yet due and payable
or if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained;
b) Liens that secure obligations incurred in the ordinary
course of business, that are not past due for more than thirty
(30) days (or that are being contested in good faith by
appropriate proceedings and for which appropriate reserves
have been established) and that:
(1) are imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's
and carrier's Liens, and other similar Liens; or
(2) encumber only equipment or other tangible personal
property and any proceeds thereof (including Liens created by
equipment leases) and are imposed to secure the payment of the
purchase price or other direct costs of acquiring the
equipment or other tangible personal property they encumber;
c) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than
ERISA);
d) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment
of money), leases, public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds,
or other similar obligations arising in the ordinary course of
business;
e) judgment and other similar Liens arising in connection
with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and
by appropriate proceedings;
f) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially
interfere with the occupation, use and enjoyment by Tenant or
any such Subsidiary of the property or assets encumbered
thereby in the normal course of its business or materially
impair the value of the property subject thereto;
g) Liens securing obligations of such a Subsidiary to Tenant
or to another such Subsidiary;
h) Liens incurred after the date of this Lease given to
secure the payment of the purchase price or other direct costs
incurred in connection with the acquisition, construction,
improvement or rehabilitation of assets, including Liens
existing on such assets at the time of acquisition thereof or
at the time of acquisition by Tenant or a Subsidiary of any
business entity (including a Subsidiary) then owning such
assets, whether or not such existing Liens were given to
secure the payment of
the purchase price of the assets to which they attach,
provided that (i) except in the case of Liens existing on
assets at the time of acquisition of a Subsidiary then owning
such assets, the Lien shall be created within six (6) months
of the later of the acquisition of, or the completion of the
construction or improvement in respect of, such assets and
shall attach solely to such assets, and (ii) except in the
case of Liens existing on assets at the time of acquisition of
a Subsidiary then owning such assets, at the time such Liens
are imposed, the aggregate amount remaining unpaid on all Debt
secured by Liens on such assets whether or not assumed by
Tenant or a Subsidiary shall not exceed
an amount equal to seventy-five percent (75%) of the lesser of
the total purchase price or fair market value, at the time
such Debt is incurred, of such assets;
i) existing mortgages and deeds of trust as of the date of
this Lease;
j) Liens created by the Lease Agreement dated as of July 14,
1994 between Landlord and Tenant, evidenced by a short form
dated July 15, 1994, recorded in Book N520, Page 1474 of the
Official Records of Santa Clara County, California, or by the
other agreements executed in connection therewith (including
the Pledge Agreement and Custodial Agreement referenced
therein);
k) Liens created by any real property lease, or related
documents (including a separate purchase agreement), executed
after the date hereof that requires Tenant or its Subsidiaries
to purchase or cause another to purchase any interest in the
property covered thereby and thus guarantee a
minimum residual value of the property to the landlord;
provided, that the value of all such leases (other than this
lease and the lease referenced in the preceding clause) shall
not exceed an aggregate, cumulative amount of $300,000,000
(for purposes of this clause, the "value" of a lease means the
amount, determined as of the date the lease became effective,
equal to the greater of (1) the present value of rentals and
other minimum lease payments required in connection with such
lease [calculated in accordance with FASB Statement 13 and
other GAAP relevant to the determination of the whether such
lease must be accounted for as capital leases] or (2) the fair
value of the property covered thereby);
l) Liens imposed to secure Debt incurred to finance the
acquisition of property which has been leased or sold by
Tenant or one of its Subsidiaries to another Person (other
than Tenant or a Subsidiary of Tenant) pursuant to a lease or
sales agreement providing for payments sufficient to
pay such Debt in full, provided such Debt is not a general
obligation of Tenant or its Subsidiaries, but rather is
payable only from the rentals or other sums payable under the
lease or sales agreement or from the property sold or leased
thereunder;
m) Liens not otherwise permitted by this subsection 8.(ad)(i)
(and not encumbering the Leased Property or any Collateral)
which secure the payment of Debt, provided that (i) at no time
does the sum of the aggregate amount of all outstanding Debt
secured by such Liens exceed $50,000,000,
and (i) such Liens do not constitute Liens against Tenant's
interest in any material Subsidiary or blanket Liens against
all or substantially all of the inventory, receivables,
general intangibles or equipment of Tenant or of any material
Subsidiary of Tenant (for purposes of this clause, a "material
Subsidiary" means any subsidiary whose assets represent a
substantial part of the total assets of Tenant and its
Subsidiaries, determined on a consolidated basis in accordance
with
GAAP); and
n) Liens incurred in connection with any renewals, extensions
or refundings of any Debt secured by Liens described in the
other clauses of this subsection 8.(ad)(i), provided that
there is no increase in the aggregate principal amount of Debt
secured thereby from that which was outstanding as of the date
of such renewal, extension or refunding and no additional
property is encumbered.
(ii) Transactions with Affiliates. Enter into any
transactions that individually or in the aggregate are
material to Tenant (including, without limitation, the
purchase, sale or exchange of property or the rendering of any
service) with any Affiliates, except upon fair and reasonable
terms no less favorable to Tenant than would be obtained in a
comparable arm's length transaction with a Person not an
Affiliate.
(iii) Mergers; Sales of Assets.
a) Except to the extent permitted by the last sentence of
this subparagraph 8.(ad), liquidate or dissolve, or merge,
consolidate with or into, or convey, transfer, lease, or
otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired), to any Person, or
enter into any joint venture,
partnership or other combination which involves the
investment, sale, lease, loan, or other disposition of the
business or all of the assets of Tenant and its Subsidiaries
or so much thereof as, in the reasonable opinion of Landlord,
constitutes a substantial portion of such business or assets.
b) Except to the extent permitted by the last
sentence of this subparagraph 8.(ad), acquire the assets or
business of any Person, other than in the ordinary course of
Tenant's business as presently conducted.
(iv) Sale of Receivables. Sell for less than the full face
value of, or otherwise sell for consideration other than cash,
any of its notes or accounts receivable. However, this
subparagraph (iv) shall not prohibit: a) a sale of receivables
for cash at a discount which is less than fifteen percent
(15%) of the face value of all receivables then outstanding on
the books of Tenant and its consolidated Subsidiaries, if such
sale and all other discounted sales of receivables permitted
by this clause a) during the same fiscal year of Tenant do
not affect more than fifteen percent (15%) of the individual
accounts (excluding intercompany accounts) comprising the
receivables of Tenant and its Subsidiaries; b) any license or
sale of products or services in the ordinary course of
business where payment for such transactions is made by credit
card, provided that the fees and discounts incurred by the
Tenant or the Subsidiary in connection therewith shall not
exceed the normal and customary fees and discounts incurred
for general credit card transactions through major credit card
issuers; or c) the delivery and endorsement to banks in the
ordinary course of business by Tenant or any of its
Subsidiaries of promissory notes received in payment of trade
receivables, where delivery and endorsement are made prior to
the date of maturity of such promissory notes, and the
retention by such banks of normal and customary fees and
discounts therefor, provided such practice is usual and
customary in the country where such activity occurs.
(v) Change of Business. Permit any significant change in the
nature of the business of Tenant and its Subsidiaries, taken
as whole, from that presently conducted.
Notwithstanding any contrary provisions of subparagraph
8.(ad)(iii), Tenant may engage in any of the following
transactions, provided that immediately prior to and
immediately after giving effect thereto, no Default or Event
of Default exists or would exist:
(i) merge with another entity if Tenant is the
corporation surviving the merger;
(ii) enter into joint ventures;
(iii) acquire the assets or business of another Person;
or
(iv) liquidate or dissolve Subsidiaries to the extent
that such liquidations and dissolutions
would not, in the aggregate, result in a material adverse
effect on the properties, assets, operations or businesses of
Tenant and its Subsidiaries, taken as a whole.
(ee) ERISA.
(i) Each Plan is in compliance in all material respects with,
and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code
and any other applicable
Federal or state law, and as of the date hereof no event or
condition is occurring or exists which would require a notice
from Tenant under clause 8.(ae)(ii).
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after
Tenant becomes aware that, any of the following has occurred,
with respect to which the potential aggregate liability to
Tenant relating thereto is $2,000,000 or more, and such notice
shall include a statement signed by a senior financial officer
of Tenant setting forth details of the following and the
response, if any, which Tenant or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or
notice required to be filed with or given to Pension Benefit
Guaranty Corporation by Tenant
or an ERISA Affiliate with respect to any of the following or
the events or conditions leading up it): (A) the assertion, to
secure any Unfunded Benefit Liabilities, of any Lien against
the assets of Tenant, against the assets of any Plan of Tenant
or any ERISA Affiliate of Tenant or against any interest of
Landlord or Tenant in the Leased Property or the Collateral
covered by the Pledge Agreement, or (B) the taking of any
action
by the Pension Benefit Guaranty Corporation or any other
governmental authority action against Tenant to terminate any
Plan of Tenant or any ERISA Affiliate of Tenant or to cause
the appointment of a trustee or receiver to administer any
such Plan.
10. Representations, Warranties and Covenants of Landlord.
Landlord represents, warrants and covenants
as follows:
(a) Title Claims By, Through or Under Landlord. Except by a
Permitted Transfer, Landlord shall not
assign, transfer, mortgage, pledge, encumber or hypothecate
this Lease or any interest of Landlord in and to the Leased
Property during the Term without the prior written consent of
Tenant. Landlord further agrees that
if any encumbrance or title defect affecting the Leased
Property is lawfully claimed through or under Landlord,
including any judgment lien lawfully filed against Landlord,
Landlord will at its own cost and expense remove any such
encumbrance and cure any such defect; provided, however,
Landlord shall not be responsible for (i) any Permitted
Encumbrances (regardless of whether claimed through or under
Landlord) or any other encumbrances not lawfully claimed
through or under Landlord, (ii) any encumbrances or title
defects claimed by, through or under Tenant, ABN AMRO Bank
N.V. or any other Participant (other than Landlord's Parent)
which Tenant shall have approved, or (iii) any encumbrance or
title defect arising because of Landlord's compliance with
subparagraph 9.(b) or any request made by Tenant.
(b) Actions Required of the Title Holder. So long as no
Event of Default shall have occurred and be
continuing, Landlord shall take any and all action required of
Landlord by the Permitted Encumbrances or otherwise required
of Landlord by Applicable Laws or reasonably requested by
Tenant (including granting any utility easements required in
connection with construction of Improvements); provided that
(i) actions Tenant may require of Landlord under this
subparagraph shall be limited to actions that can only be
taken by Landlord as the owner of the Leased Property, as
opposed to any action that can be taken by Tenant or any third
party (and the payment of any monetary obligation shall not be
an action required of Landlord under this subparagraph unless
Landlord shall first have received funds from Tenant, in
excess of any other amounts due
from Tenant hereunder, sufficient to pay such monetary
obligations), (ii) Tenant requests the action to be taken by
Landlord (which request must be specific and in writing, if
required by Landlord at the time the request is made) and
(iii) the action to be taken will not constitute a violation
of any Applicable Laws or compromise or constitute a waiver of
Landlord's rights hereunder or under the Purchase Agreement,
the Pledge Agreement or Environmental Indemnity or otherwise
be reasonably objectionable to Landlord. Any Losses incurred
by
Landlord because of any action taken pursuant to this
subparagraph shall be covered by the indemnification set forth
in subparagraph 8.(y). Further, for purposes of such
indemnification, any action taken by Landlord will be deemed
to have been made at the request of Tenant if made pursuant to
any request of Tenant's counsel or
of any officer of Tenant (or with their knowledge, and without
their objection) in connection with the closing under the
Existing Contract.
(c) No Default or Violation. The execution, delivery and
performance of this Lease do not contravene,
result in a breach of or constitute a default under any
material contract or agreement to which Landlord is a party or
by which Landlord is bound and do not, to the knowledge of
Landlord, violate or contravene any law, order, decree, rule
or regulation to which Landlord is subject.
(d) No Suits. To Landlord's knowledge there are no judicial
or administrative actions, suits or proceedings
involving the validity, enforceability or priority of this
Lease, and to Landlord's knowledge no such suits or
proceedings are threatened.
(e) Organization. Landlord is duly incorporated and legally
existing under the laws of Delaware and is or,
if necessary, will become duly qualified to do business in the
State of California. Landlord has or will obtain, at Tenant's
expense pursuant to the other provisions of this Lease, all
requisite power and all material governmental certificates of
authority, licenses, permits, qualifications and other
documentation necessary to own and lease the Leased Property
and to perform its obligations under this Lease.
(f) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement and
the Pledge Agreement by Landlord are duly authorized, are not
in contravention of or conflict with any term or
provision of Landlord's articles of incorporation or bylaws
and do not, to Landlord's knowledge, require the consent or
approval of any governmental body or other regulatory
authority that has not heretofore been obtained or conflict
with any Applicable Laws. This Lease, the Purchase Agreement
and the Pledge Agreement are valid, binding and legally
enforceable obligations of Landlord except as such enforcement
is
affected by bankruptcy, insolvency and similar laws affecting
the rights of creditors, generally, and equitable principles
of general application; provided, Landlord makes no
representation or warranty that conditions imposed by any
state or local Applicable Laws to the purchase, ownership,
lease or operation of the Leased Property have been satisfied.
(g) Existence. Landlord will continuously maintain its
existence and, after qualifying to do business in the
State of California if Landlord has not already done so,
Landlord will continuously maintain its right to do business
in that state to the extent necessary for the performance of
Landlord's obligations hereunder.
(h) Not a Foreign Person. Landlord is not a "foreign person"
within the meaning of the Sections 1445 and
7701 of the Code (i.e., Landlord is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and
regulations promulgated thereunder), and Landlord is not
subject to withholding under California Revenue and Taxation
Code Sections 18805, 18815,
and 26131.
11. Assignment and Subletting.
(a) Consent Required. During the term of this Lease, without
the prior written consent of Landlord first
had and received, Tenant shall not assign, transfer, mortgage,
pledge or hypothecate this Lease or any interest of Tenant
hereunder and shall not sublet all or any part of the Leased
Property, by operation of law or otherwise; provided, that, so
long as no Event of Default has occurred and is continuing,
Tenant shall be entitled without the consent of Landlord to
sublet all or any portion of the space in any then completed
Improvements if:
(i) any sublease by Tenant is made expressly
subject and subordinate to the terms hereof;
(ii) no sublease has a term longer than the
remainder of the then effective term of this Lease;
(iii) the use permitted by such sublease is
expressly limited to general office use or other uses approved
in advance by Landlord as uses that will not present
extraordinary risks of uninsured environmental or other
liability; and
(iv) no more than 245,000 square feet of the
space in any completed Improvements shall be subleased without
Landlord's prior consent to any Person that is neither (A) an
Affiliate of Tenant nor (B) the operator of a business in the
subleased space that is related to the operation of Tenant's
own business (such as another venturer in a joint venture with
Tenant).
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters. Consents and approvals
of Landlord which are required by this Paragraph 10 will not
be unreasonably withheld, but Tenant
acknowledges that Landlord's withholding of such consent or
approval shall be reasonable if Landlord determines in good
faith that (1) giving the approval may increase Landlord's
risk of liability for any existing or future environmental
problem, (2) giving the approval is likely to substantially
increase Landlord's administrative burden of complying with or
monitoring Tenant's compliance with the requirements of this
Lease, or (3) any transaction for which Tenant has requested
the consent or approval would negate Tenant's representations
in this Lease regarding ERISA or cause this Lease or the other
documents referenced herein to constitute a violation of any
provision of ERISA.
(c) Consent Not a Waiver. No consent by Landlord to a sale,
assignment, transfer, mortgage, pledge or
hypothecation of this Lease or Tenant's interest hereunder,
and no assignment or subletting of the Leased Property or any
part thereof in accordance with this Lease or otherwise with
Landlord's consent, shall release Tenant from liability
hereunder; and any such consent shall apply only to the
specific transaction thereby authorized and shall not relieve
Tenant from any requirement of obtaining the prior written
consent of Landlord to any further sale, assignment, transfer,
mortgage, pledge or hypothecation of this Lease or any
interest of Tenant hereunder.
(d) Landlord's Assignment. Landlord shall have the right to
transfer, assign and convey, in whole or in
part, the Leased Property and any and all of its rights under
this Lease by any conveyance that constitutes a Permitted
Transfer. (However, any Permitted Transfer shall be subject
to all of the provisions of each and every agreement
concerning the Leased Property then existing between Landlord
and Tenant, including without limitation this Lease and the
Purchase Agreement.) If Landlord sells or otherwise transfers
the Leased
Property and assigns its rights under this Lease, the Purchase
Agreement and the Pledge Agreement pursuant to
a Permitted Transfer, then to the extent Landlord's successor
in interest confirms its liability for the obligations imposed
upon Landlord by this Lease, the Purchase Agreement and the
Pledge Agreement on and subject to the
express terms and conditions set out herein and therein, the
original Landlord shall thereby be released from any
obligations thereafter arising under this Lease, the Purchase
Agreement and the Pledge Agreement, and Tenant will look
solely to each successor in interest of Landlord for
performance of such obligations. However, notwithstanding
anything to the contrary herein contained, if withholding
taxes are imposed on the rents and other amounts payable to
Landlord hereunder because of Landlord's assignment of this
Lease to any
citizen of, or any corporation or other entity formed under
the laws of, a country other than the United States, Tenant
shall not be required to compensate such assignee for the
withholding tax. Further, during the Term and so long as no
Event of Default has occurred and is continuing, Landlord
shall not decrease the percentage
of Base Rent it (and/or its Affiliates) is entitled to receive
and retain under the Participation Agreement below ten percent
(10%) without Tenant's consent, which consent will not be
unreasonably withheld.
12. Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume liability for
and to pay, indemnify, defend, and hold
harmless each and every Indemnified Party from and against any
and all Environmental Losses, subject only to the provisions
of subparagraph 11.(c) below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies Tenant of any claim,
demand, action, administrative or legal
proceeding, investigation or allegation as to which the
indemnity provided for in this Paragraph 11 applies, Tenant
shall assume on behalf of the Indemnified Party and conduct
with due diligence and in good faith
the investigation and defense thereof and the response thereto
with counsel selected by Tenant but reasonably satisfactory to
the Indemnified Party; provided, that the Indemnified Party
shall have the right to be represented by advisory counsel of
its own selection and at its own expense; and provided
further, that if any such claim, demand, action, proceeding,
investigation or allegation involves both Tenant and the
Indemnified Party and the Indemnified Party shall have been
advised in writing by counsel that there may
be legal defenses available to it which are inconsistent with
those available to Tenant, then the Indemnified Party shall
have the right to select separate counsel to participate in
the investigation and defense of and response to such claim,
demand, action, proceeding, investigation or allegation on its
own behalf, and Tenant shall pay or reimburse the Indemnified
Party for all Attorney's Fees incurred by the Indemnified
Party because of the selection of such separate counsel.
(ii) If any claim, demand, action, proceeding, investigation
or allegation arises as to which the indemnity
provided for in this Paragraph 11 applies, and Tenant fails to
assume promptly (and in any event within fifteen (15) days
after being notified of the claim, demand, action, proceeding,
investigation or allegation) the defense of the Indemnified
Party, then the Indemnified Party may contest (or settle, with
the prior written consent of Tenant, which consent will not be
unreasonably withheld) the claim, demand, action, proceeding,
investigation or allegation at Tenant's expense using counsel
selected by the Indemnified Party; provided, that if any such
failure by Tenant continues for thirty (30) days or more after
Tenant is notified thereof, no such contest need be made by
the Indemnified Party and settlement or full payment of any
claim may be made by the Indemnified Party without Tenant's
consent and without releasing Tenant from any obligations to
the Indemnified Party under this Paragraph 11 so long as, in
the written opinion of reputable counsel to the Indemnified
Party, the settlement or payment in full is clearly advisable.
(c) Notice of Environmental Losses. If an Indemnified Party
receives a written notice of Environmental
Losses that such Indemnified Party believes are covered by
this Paragraph 11, then such Indemnified Party will be
expected to promptly furnish a copy of such notice to Tenant.
The failure to so provide a copy of the notice to Tenant shall
not excuse Tenant from its obligations under this Paragraph
11; provided, that if Tenant is unaware of the matters
described in the notice and such failure renders unavailable
defenses that Tenant might otherwise assert, or precludes
actions that Tenant might otherwise take, to minimize its
obligations hereunder, then Tenant shall be excused from its
obligation to indemnify such Indemnified Party (and any
Affiliate of such Indemnified Party) against Environmental
Losses, if any, which would not have been incurred but for
such failure. For example, if Landlord fails to provide
Tenant with a copy of a notice of an obligation covered by the
indemnity set out in subparagraph 11.(a) and Tenant is not
otherwise already aware of such obligation, and if as a result
of such failure Landlord becomes liable for penalties and
interest covered by the indemnity in excess of the penalties
and interest that would have accrued if Tenant had been
promptly provided with a copy of the notice, then Tenant will
be excused from any obligation to Landlord (or any Affiliate
of Landlord) to pay the excess.
(d) Rights Cumulative. The rights of each Indemnified Party
under this Paragraph 11 shall be in addition
to any other rights and remedies of such Indemnified Party
against Tenant under the other provisions of this Lease or
under any other document or instrument now or hereafter
executed by Tenant, or at law or in equity
(including, without limitation, any right of reimbursement or
contribution pursuant to CERCLA).
(e) Survival of the Indemnity. Tenant's obligations under
this Paragraph 11 shall survive the termination or expiration
of this Lease. All obligations of Tenant under this Paragraph
11 shall be payable upon demand, and any amount due upon
demand to any Indemnified Party by Tenant which is not paid
shall bear interest
from the date of such demand at a floating interest rate equal
to the Default Rate, but in no event in excess of the maximum
rate permitted by law.
13. Landlord's Right of Access.
(a) Landlord and Landlord's representatives may enter the
Leased Property, after five (5) Business Days advance written
notice to Tenant (except in the event of an emergency, when no
advance notice will be required), for the purpose of making
inspections or performing any work Landlord is authorized to
undertake
by the next subparagraph. So long as Tenant remains in
possession of the Leased Property, Landlord or Landlord's
representative will, before making any such inspection or
performing any such work on the Leased Property, if then
requested to do so by Tenant to maintain Tenant's security:
(i) sign in at Tenant's security or information desk if Tenant
has such a desk on the premises, (ii) wear a visitor's badge
or other reasonable identification provided by Tenant when
Landlord or Landlord's representative first arrives at the
Leased Property, (iii) permit an employee of Tenant to observe
such inspection or work, and (iv) comply with other similar
reasonable nondiscriminatory security requirements of Tenant
that do not, individually or in the aggregate, interfere with
or delay inspections or work of Landlord authorized by this
Lease.
(b) If Tenant fails to perform any act or to take any action
which hereunder Tenant is required to perform or take, or to
pay any money which hereunder Tenant is required to pay, and
if such failure or action constitutes an Event of Default or
renders Landlord or any director, officer, employee or
Affiliate of Landlord at risk of criminal prosecution or
renders Landlord's interest in the Leased Property or any part
thereof at risk of forfeiture by forced sale or otherwise,
then in addition to any other remedies specified herein or
otherwise available, Landlord may, in Tenant's name or in
Landlord's own name, perform or cause to be performed such
act or take such action or pay such money. Any expenses so
incurred by Landlord, and any money so paid by Landlord, shall
be a demand obligation owing by Tenant to Landlord. Further,
Landlord, upon making such payment, shall be subrogated to all
of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any
duty upon the part of Landlord to do any work which under any
provision of this Lease Tenant may be required to perform, and
the performance thereof by Landlord shall not constitute a
waiver of Tenant's default. Landlord may during the progress
of any such work permitted by Landlord hereunder on or in the
Leased Property keep and store upon the Leased Property all
necessary materials, tools, and equipment. Landlord shall not
in any event be liable for inconvenience, annoyance,
disturbance, loss of business, or other damage to Tenant or
the subtenants of Tenant by reason of making such repairs or
the performance of any such work on or in the Leased Property,
or on account of bringing materials, supplies and equipment
into or through the Leased Property during the course of such
work (except for liability in connection with death or injury
or damage to the property of third parties caused by the
Active Negligence, gross negligence or wilful misconduct of
Landlord or its officers, employees, or agents in connection
therewith), and the obligations of Tenant under this Lease
shall not thereby be affected in any manner.
14. Events of Default.
(a) Definition of Event of Default. Each of the following
events shall be deemed to be an "Event of Default" by Tenant
under this Lease:
(i) Tenant shall fail to pay when due any installment of Rent
due hereunder and such failure shall continue for three (3)
Business Days after Tenant is notified thereof.
(ii) Tenant shall fail to cause any representation or
warranty of Tenant contained herein that is false or
misleading in any material respect when made to be made true
and not misleading (other than as described
in the other clauses of this subparagraph 13.(a)), or Tenant
shall fail to comply with any term, provision or covenant of
this Lease (other than as described in the other clauses of
this subparagraph 13.(a)), and in either case shall not cure
such failure prior to the earlier of (A) thirty (30) days
after written notice thereof is sent to Tenant or (B) the date
any writ or order is issued for the levy or sale of any
property owned by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of
its directors, officers or employees because of such failure;
provided, however, that so long as no such writ or order is
issued and no such criminal action is instituted, if such
failure is susceptible of cure but cannot with reasonable
diligence be cured within such thirty day period, and if
Tenant shall promptly have commenced
to cure the same and shall thereafter prosecute the curing
thereof with reasonable diligence, the period within which
such failure may be cured shall be extended for such further
period (not to exceed an additional sixty (60) days) as shall
be necessary for the curing thereof with reasonable diligence.
(iii) Tenant shall fail to comply with any term, provision or
condition of the Purchase Agreement or the
Pledge Agreement and, if the Purchase Agreement or Pledge
Agreement expressly provides a time within which Tenant may
cure such failure, Tenant shall not cure the failure within
such time.
(iv) Tenant shall abandon the Leased Property.
(v) Tenant shall fail to make any payment or payments of
principal, premium or interest, on any Debt of Tenant
described in the next sentence when due (taking into
consideration the time Tenant may have to cure such failure,
if any, under the documents governing such Debt). As used in
this clause 13.(a)(v), "Debt" shall mean only a Debt of Tenant
now existing or arising in the future, (A) payable to Landlord
or any Participant or any Affiliate of Landlord or any
Participant, the outstanding balance of which has become due
by reason of acceleration or maturity, or (B) payable to any
Person, with respect to which $5,000,000 or more is actually
due and payable because of acceleration or otherwise.
(vi) Tenant or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against Tenant or any of
its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of thirty (30)
consecutive days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against, or
the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its
property) shall occur; or Tenant or any of its Subsidiaries
shall take any corporate action to authorize
any of the actions set forth above in this clause (vi).
(vii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary
decreeing the dissolution of Tenant or such Subsidiary and
such order, judgment or decree remains unstayed and in effect
for more than sixty (60) days.
(viii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing a
split-up of Tenant or such Subsidiary which requires the
divestiture of assets representing a
substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the
consolidated assets of Tenant and its Subsidiaries (determined
in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary,
which shall have contributed a substantial part of the
consolidated net income of Tenant and its Subsidiaries
(determined in accordance with GAAP) for any
of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for
more than sixty (60) days.
(ix) A final judgment or order for the payment of money in an
amount (not covered by insurance) which exceeds $3,000,000
shall be rendered against Tenant or any of its Subsidiaries
and within sixty (60) days after the entry thereof, such
judgment or order is not discharged or execution thereof
stayed pending appeal, or within thirty (30) days after the
expiration of any such stay, such judgment is not discharged.
(x) Any ERISA Termination Event that Landlord determines
might constitute grounds for the termination of
any Plan or for the appointment by the appropriate United
States district court of a trustee to administer any Plan
shall have occurred and be continuing thirty (30) days after
written notice to such effect shall have been given to Tenant
by Landlord, or any Plan shall be terminated, or a trustee
shall be appointed by an appropriate United States district
court to administer any Plan, or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any Plan
or to appoint a trustee to administer any Plan.
(xi) A Change of Control Event not approved in advance by
Landlord shall occur.
(xii) The subordination provisions of the Indenture (as
defined in subparagraph 8.(ac)(ii) of this Lease) or any other
agreement or instrument governing the Subordinated Debt (as
defined in subparagraph 8.(ac)(ii)
of this Lease) shall be for any reason revoked or invalidated,
or otherwise cease to be in full force and effect; or the
Tenant or any of its Subsidiaries shall contest in any manner
the validity or enforceability of such subordination
provisions or shall deny that it has any further liability or
obligation thereunder; or the obligations of Tenant hereunder
or under the Purchase Agreement shall be for any reason
subordinated to
such Subordinated Debt or shall not have the priority over
such Subordinated Debt as contemplated by this Lease or by the
Indenture or by such subordination provisions.
Notwithstanding the foregoing, any Default that could become
an Event of Default under clause 13.(a)(ii) may be cured
within the earlier of the periods described in clauses (A) and
(B) thereof by Tenant's delivery to Landlord of a written
notice irrevocably exercising Tenant's option under the
Purchase Agreement to purchase
Landlord's interest in the Leased Property and designating as
the Designated Sale Date the next following date which is a
Base Rent Date and which is at least ten (10) days after the
date of such notice; provided, however, Tenant must, as a
condition to the effectiveness of its cure, on the date so
designated as the Designated Sale Date tender to Landlord the
full purchase price required by the Purchase Agreement and all
Rent and all other amounts then due or accrued and unpaid
hereunder (including reimbursement for any costs incurred by
Landlord in connection with the applicable Default hereunder,
regardless of whether Landlord shall have been reimbursed for
such costs in whole or in part by any Participants) and Tenant
must also furnish written confirmation that all indemnities
set forth herein (including specifically, but without
limitation, the general indemnity set forth in subparagraph
8.(y) and the environmental indemnity set forth in Paragraph
11 shall survive the payment of such amounts by Tenant to
Landlord and the conveyance of Landlord's interest in the
Leased Property to Tenant.
(b) Remedies. Upon the occurrence of an Event of Default
which is not cured within any applicable period
expressly permitted by subparagraph 13.(a), at Landlord's
option and without limiting Landlord in the exercise of any
other right or remedy Landlord may have on account of such
default, and without any further demand or notice except as
expressly described in this subparagraph 13.(b):
(i) By notice to Tenant, Landlord may terminate Tenant's
right to possession of the Leased Property. A notice given in
connection with unlawful detainer proceedings specifying a
time within which to cure a default shall terminate Tenant's
right to possession if Tenant fails to cure the default within
the time specified in the notice.
(ii) Upon termination of Tenant's right to possession and
without further demand or notice, Landlord may re-enter the
Leased Property and take possession of all improvements,
additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property in the
Leased Property may
be removed and stored in a warehouse or elsewhere at the
expense and risk of and for the account of Tenant.
(iii) Upon termination of Tenant's right to possession, this
Lease shall terminate and Landlord may recover from Tenant:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of
termination;
b) The worth at the time of award of the amount by which the
unpaid Rent which would have
been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have
been reasonably avoided;
c) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the
scheduled Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably
avoided; and
d) Any other amount necessary to compensate Landlord for all
the detriment proximately caused
by Tenant's failure to perform Tenant's obligations under this
Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, the
costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of
the Leased Property, removing persons or property therefrom,
placing the Leased Property in good order, condition, and
repair, preparing and altering the Leased Property for
reletting, all other costs and expenses of reletting, and any
loss incurred by Landlord as a result of Tenant's failure to
perform Tenant's obligations under the Purchase Agreement.
The "worth at the time of award" of the amounts
referred to in subparagraph 13.(b)(iii)a) and subparagraph
13.(b)(iii)b) shall be computed by allowing interest at ten
percent (10%) per annum or such other rate as may be the
maximum interest rate then permitted to be
charged under California law at the time of computation. The
"worth at the time of award" of the amount referred to in
subparagraph 13.(b)(iii)c) shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to
time by applicable California law.
(iv) The Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may
continue lease in force even after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable
limitations). Accordingly, even though Tenant has breached
this Lease and abandoned the Leased Property, this Lease shall
continue in effect for
so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all of Landlord's rights
and remedies under this Lease, including the right to recover
the Rent as it becomes due under this Lease. Tenant's right
to possession shall not be deemed to have been terminated by
Landlord except pursuant to subparagraph 13.(b)(i) hereof.
The following shall not constitute a termination of Tenant's
right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Leased Property;
b) The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest
under this Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or
assignment by Tenant.
(c) Enforceability. This Paragraph shall be enforceable to
the maximum extent not prohibited by
Applicable Law, and the unenforceability of any provision in
this Paragraph shall not render any other provision
unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred
upon or reserved to Landlord is intended
to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now
or hereafter existing under Applicable Law or in equity. In
addition to other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by Applicable Law,
to injunctive relief in case of the violation, or attempted or
threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease to be performed by
Tenant, or to a decree compelling performance of any of the
other covenants, agreements, conditions or provisions of this
Lease to be performed by Tenant, or to any other remedy
allowed to Landlord under Applicable Law or in equity.
Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain in proceedings for
bankruptcy or insolvency of Tenant by reason of the
termination of this Lease, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, the damages are
to be proved, whether or not the amount be greater, equal to,
or less than the amount of the loss or damages referred to
above. Without limiting the generality of the foregoing,
nothing contained herein shall modify, limit or impair any of
the rights and remedies of Landlord under the Purchase
Agreement, the Pledge Agreement or the Environmental
Indemnity.
(e) Waiver by Tenant. To the extent permitted by law, Tenant
hereby waives and surrenders for itself and
all claiming by, through and under it, including creditors of
all kinds, (i) any right and privilege which it or any of them
may have under any present or future constitution, statute or
rule of law to have a continuance of this Lease for the term
hereby demised after termination of Tenant's right of
occupancy by order or judgment of
any court or by any legal process or writ, or under the terms
of this Lease, or after the termination of this Lease as
herein provided, and (ii) the benefits of any present or
future constitution, or statute or rule of law which exempts
property from liability for debt or for distress for rent, and
(iii) the provisions of law relating to notice and/or delay in
levy of execution in case of eviction of a lessee for
nonpayment of rent.
(f) No Implied Waiver. The failure of Landlord to insist at
any time upon the strict performance of any
covenant or agreement or to exercise any option, right, power
or remedy contained in this Lease shall not be construed as a
waiver or a relinquishment thereof for the future. The waiver
of or redress for any violation by Tenant of any term,
covenant, agreement or condition contained in this Lease shall
not prevent a similar subsequent act from constituting a
violation. Any express waiver shall affect only the term or
condition specified in such waiver and only for the time and
in the manner specifically stated therein. A receipt by
Landlord of any Base Rent or other payment hereunder with
knowledge of the breach of any covenant or
agreement contained in this Lease shall not be deemed a waiver
of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed
in writing and signed by Landlord.
15. Default by Landlord. If Landlord should default in the
performance of any of its obligations under this
Lease, Landlord shall have the time reasonably required, but
in no event less than thirty (30) days, to cure such default
after receipt of written notice from Tenant specifying such
default and specifying what action Tenant believes is
necessary to cure the default. If Tenant prevails in any
litigation brought against Landlord because of Landlord's
failure to cure a default within the time required by the
preceding sentence, then Tenant shall be entitled to an award
against Landlord for the damages proximately caused to Tenant
by such default.
16. Quiet Enjoyment. Provided no Event of Default has
occurred and is continuing, Landlord shall not
during the Term disturb Tenant's peaceable and quiet enjoyment
of the Leased Property; however, such
enjoyment shall be subject to the terms, provisions,
covenants, agreements and conditions of this Lease and the
Permitted Encumbrances and any other claims or encumbrances
not lawfully made through or under Landlord,
to which this Lease is subject and subordinate as hereinabove
set forth. Any breach by Landlord of the
foregoing covenant of quiet enjoyment shall, subject to the
other provisions of this Lease, render Landlord liable to
Tenant for any monetary damages proximately caused thereby,
but as more specifically provided in Paragraph 5 above, no
such breach shall entitle Tenant to terminate this Lease or
excuse Tenant from its obligation to pay Base Rent and other
amounts hereunder.
17. Surrender Upon Termination. Unless Tenant or an
Applicable Purchaser purchases Landlord's entire
interest in the Leased Property pursuant to the terms of the
Purchase Agreement, Tenant shall, upon the termination of
Tenant's right to occupancy, surrender to Landlord the Leased
Property, including any buildings, alterations, improvements,
replacements or additions constructed by Tenant, with all
fixtures and furnishings included in the Leased Property, but
not including movable furniture and movable personal property
not covered by this Lease, free of all Hazardous Substances
(including Permitted Hazardous
Substances) and tenancies and, to the extent required by
Landlord, with all Improvements in the same condition as of
the date hereof, excepting only (i) ordinary wear and tear
(provided that the Leased Property shall have been maintained
as required by the other provisions hereof) and (ii)
alterations and additions which are expressly permitted by the
terms of this Lease and which have been completed by Tenant in
a good and workmanlike manner in accordance with all
Applicable Laws. Any movable furniture or movable personal
property belonging to Tenant or any party claiming under
Tenant, if not removed at the time of such termination and if
Landlord shall so elect, shall be deemed abandoned and become
the property of Landlord without any payment or offset
therefor. If Landlord shall not so elect, Landlord may remove
such property
from the Leased Property and store it at Tenant's risk and
expense. Tenant shall bear the expense of repairing any
damage to the Leased Property caused by such removal by
Landlord or Tenant.
18. Holding Over by Tenant. Should Tenant not purchase
Landlord's right, title and interest in the Leased
Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Leased Property after the
termination of this Lease without Landlord's written consent,
whether such termination occurs by lapse of time or otherwise,
such holding over shall constitute and be construed as a
tenancy from day to day only, at a daily Base Rent equal to:
(i) the unpaid Purchase Price on the day in question, times
(ii) the Holdover Rate (as defined below) for such day,
divided by (iii) 360; subject, however, to all of the terms,
provisions, covenants and agreements on the part of Tenant
hereunder. No payments of money by Tenant to Landlord after
the termination of this Lease shall reinstate, continue or
extend the Term of this Lease and no extension of this Lease
after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both
Landlord and Tenant; provided, however, following any breach
by Landlord of its obligations
to tender a deed and other documents on the Designated Sale
Date as provided in the Purchase Agreement,
Tenant may at its option continue its possession and use of
the Leased Property pursuant to this Lease, as if the Term had
been extended, for a period not to exceed 180 days after the
Designated Sale Date or such longer
time as may be proscribed by Applicable Law.
As used herein, the "Holdover Rate" means:
(1) for any day prior to the date on which Landlord
tenders a deed and other documents as required by the Purchase
Agreement (or is excused from its obligation to tender by
Tenant's breach or anticipatory repudiation of the Purchase
Agreement), a rate equal to the Fed Funds Rate on that day
plus
one hundred basis points;
(2) for any day on which or within ninety days after
Landlord tenders a deed and other documents as required by the
Purchase Agreement (or is excused from its obligation to
tender by Tenant's breach or anticipatory repudiation of the
Purchase Agreement), the per annum Prime Rate in effect for
such day; and
(3) for any day after the ninety days described in
the preceding clause, a rate which is three percent (3%) above
the per annum Prime Rate.
19. Miscellaneous.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending,
mailing or delivery of any notice or with reference to the
making of any payment by Tenant to Landlord, shall be deemed
to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to Landlord
hereunder shall be paid to Landlord in immediately available
funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: 3COM (Phase I)
or at such other place and in such other manner as Landlord
may designate in a notice to Tenant
(provided Landlord will not unreasonably designate a method of
payment other than wire transfer). Time
is of the essence as to all payments and other obligations of
Tenant under this Lease.
(ii) All notices, demands and other communications to be made
hereunder to the parties hereto shall be in writing (at the
addresses set forth below, or in the case of communications to
Participants, at the addresses for notice established by the
Participation Agreement) and shall be given by any of the
following means: (A) personal service, with proof of delivery
or attempted delivery retained; (B) electronic communication,
whether by telex, telegram or telecopying (if confirmed in
writing sent by United States first class mail, return receipt
requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by
notice to the other parties given in the same manner as
provided above. Any notice or other communication sent
pursuant to clause (A) or (C) hereof shall be deemed received
(whether or not actually received) upon first attempted
delivery at the proper notice address on any Business Day
between 9:00 A.M. and 5:00 P.M., and any notice or other
communication sent pursuant to clause (B)
hereof shall be deemed received upon dispatch by electronic
means.
Address of Landlord:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris,
San Francisco 180 Montgomery
Street
San Francisco, California 94104
Attention: Jennifer Cho
or Will La Herran Telecopy:
(415) 296-8954
And with a copy to:
Clint Shouse
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of Tenant:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Legal Dept.
Telecopy: (408) 764-6434
With copies to:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Real Estate Dept.
Telecopy: (408) 764-5718; and
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Treasury Dept.
Telecopy: (408) 764-8403; and
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan E. Rattner,
Esq. Telecopy: (415) 328-3029
(b) Severability. If any term or provision of this Lease or
the application thereof shall to any extent be
held by a court of competent jurisdiction to be invalid and
unenforceable, the remainder of this Lease, or the application
of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
(c) No Merger. There shall be no merger of this Lease or of
the leasehold estate hereby created with the
fee estate in the Leased Property or any part thereof by
reason of the fact that the same person may acquire or
hold, directly or indirectly, this Lease or the leasehold
estate hereby created or any interest in this Lease or in such
leasehold estate as well as the fee estate in the Leased
Property or any interest in such fee estate, unless all
Persons with an interest in the Leased Property that would be
adversely affected by any such merger
specifically agree in writing that such a merger shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S
AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT
TO THE LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN,
AND NO RIGHTS, EASEMENTS OR LICENSES ARE ACQUIRED BY TENANT BY
IMPLICATION OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH IN THE
PROVISIONS OF THIS LEASE, THE PURCHASE AGREEMENT AND THE
PLEDGE AGREEMENT.
(e) Entire Agreement. This Lease and the instruments
referred to herein supersede any prior negotiations
and agreements between the parties concerning the Leased
Property and no amendment or modification of this Lease shall
be binding or valid unless expressed in a writing executed by
both parties hereto.
(f) Binding Effect. All of the covenants, agreements, terms
and conditions to be observed and performed
by the parties hereto shall be applicable to and binding upon
their respective successors and, to the extent assignment is
permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to all
obligations of Tenant and all notices required
of Tenant under this Lease, but this paragraph shall not limit
Tenant's opportunity to prevent an Event of Default by curing
any breach within the cure period (if any) applicable under
subparagraph 13.(a).
(h) Termination of Prior Rights. Without limiting the rights
and obligations of Tenant under this Lease,
Tenant acknowledges that any and all rights or interest of
Tenant in and to the Land, the improvements to the Land and to
any other property included in the Leased Property (except
under this Lease and the Purchase Agreement) are hereby
superseded. Tenant quitclaims unto Landlord any rights or
interests Tenant has in or to the Land, the improvements to
the Land and to any other property included in the Leased
Property other than the rights and interests created by this
Lease and the Purchase Agreement.
(i) Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the
State of California.
(j) Waiver of a Jury Trial. LANDLORD AND TENANT EACH HEREBY
WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING
OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS BETWEEN
THEM RELATING TO
THIS LEASE OR THE LEASED PROPERTY. The scope of this waiver
is intended to be all-encompassing of
any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including,
without limitation, contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims.
Tenant and Landlord each acknowledge that this waiver is a
material inducement to enter into a business relationship,
that each has already relied on the waiver in entering into
this Lease and the other
documents referred to herein, and that each will continue to
rely on the waiver in their related future dealings. Tenant
and Landlord each further warrants and represents that it has
reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
LEASE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
LEASE OR THE LEASED PROPERTY.
In the event of litigation, this Lease may be filed as a
written consent to a trial by the court.
(k) Not a Partnership, Etc. NOTHING IN THIS LEASE IS
INTENDED TO BE OR TO CREATE ANY
PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
LANDLORD AND
TENANT. NEITHER THE EXECUTION OF THIS LEASE NOR THE
ADMINISTRATION OF THIS LEASE OR OTHER DOCUMENTS REFERENCED
HEREIN BY LANDLORD, NOR ANY OTHER
RIGHT, DUTY OR OBLIGATION OF LANDLORD UNDER OR PURSUANT TO
THIS LEASE OR SUCH
DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY
OBLIGATIONS OF
LANDLORD TO TENANT.
(l) Tax Reporting. Landlord and Tenant shall report this
Lease and the Purchase Agreement for federal
income tax purposes as a conditional sale unless prohibited
from doing so by the Internal Revenue Service. Similarly,
Tenant shall report all interest earned on Escrowed Proceeds
or the Collateral as Tenant's income for federal and state
income tax purposes. If the Internal Revenue Service shall
challenge Landlord's characterization of this Lease and the
Purchase Agreement as a conditional sale for federal income
tax reporting purposes, Landlord shall notify Tenant in
writing of such challenge and consider in good faith any
reasonable suggestions by Tenant about an appropriate
response. In any event, Tenant shall indemnify and
hold harmless Landlord from and against all liabilities,
costs, additional taxes and other expenses that may arise or
become due because of such challenge or because of any
resulting recharacterization required by the Internal Revenue
Service, including any additional taxes that may become due
upon any sale under the Purchase
Agreement to the extent (if any) that such additional taxes
are not offset by tax savings resulting from additional
depreciation deductions or other tax benefits to Landlord of
the recharacterization.
(m) IN WITNESS WHEREOF, this Lease is hereby executed in multiple
originals as of the effective date
above set forth.
"Landlord"
BNP LEASING CORPORATION
By: /s/ Lloyd G. Cox
--------------------
Lloyd G. Cox, Vice President
"Tenant"
3COM CORPORATION
By: /s/ Christopher B. Paisley
------------------------------
Christopher B. Paisley, Chief Financial Officer
Exhibit A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as
follows:
Parcel One
Parcel A, as shown on that certain Parcel Map recorded July 7,
1989, Book 602 of Maps, at pages 34 and 35, Records of Santa
Clara County, California.
EXCEPTING THEREFROM that portion described in that certain Lot
Line Adjustment dated August 16, 1991
in Book L826, at page 0826 of Official Records and described
as follows:
Beginning at the Southwest corner of said Parcel "A"; thence
on the Westerly and Northerly lines of said
Parcel "A" the following 5 courses:
1. North 00 12' 36" East a distance of 665.00 feet;
2. North 45 12' 36" East a distance of 64.00 feet;
3. North 00 12' 36" East a distance of 82.98 feet to a
point on a non-tangent curve the center of which
bears North 29 17' 50" West a distance of 9000.00 feet;
4. Northeasterly a distance of 79.37 feet on the arc of said
curve to the left through a central angle of 00
30' 19" (chord bears North 60 27' 01" East a distance of
79.37 feet, to a point on said curve;
5. North 66 32' 39" East, departing said curve, a distance
of 75.89 feet;
Thence South 62 07' 20" West a distance of 104.00 feet to a
point of curvature; thence Southwesterly a
distance of 9.53 feet on the arc of said 10136.00 foot radius
curve to the right through a central angle of 00 03' 14"
(chord bears South 62 08' 57" West a distance of 9.53 feet)
to a point on said curve; thence South 00 12' 36" West a
distance of 809.62 feet to a point on the South line of said
parcel "A"; thence North 89 47' 24" West, on said South line,
a distance of 83.50 feet to the point of beginning.
ALSO EXCEPTING THEREFROM that portion of said land as
condemned to the State of California by Order
recorded March 10, 1993 in Book M660, page 1700, described as
follows:
Being a portion of Parcel A, as shown on that certain Parcel
Map filed for record in Book 602 of Maps at pages 34 and 35
Santa Clara County Records described as follows:
Beginning at the Northeast corner of said Parcel A; thence
from said point of beginning, along the Northerly line of said
Parcel A, S 67 25' 20" W 39.39 feet; thence leaving said
Northerly line S 41 34' 47" E 73.60 feet to a point in the
Easterly line of said Parcel A; thence along said Easterly
line of N 10 04' 48" W 71.28 feet to the point of beginning.
Parcel Two
That portion of Parcel B, as shown on that certain Parcel Map
recorded July 7, 1989, Book 602 of Maps, at pages 34 and 35,
Records of Santa Clara County, California and described in
that certain Lot Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records and described as
follows:
Beginning at a point on the most Northerly Southeasterly line
of said Parcel "B" which bears South 66 32' 39" West a
distance of 226.19 feet from the most Easterly corner thereof;
thence South 10 57' 34" East a distance of 218.69 feet;
thence North 89 47' 24" West a distance of 324.26 feet;
thence North 77 17' 24" West a distance of 141.24 feet;
thence North 66 32' 39" East a distance of 458.33 feet to the
point of beginning.
APN: 104-52-006, 16
ARB: 104-01-046, 046.02, 046.02.01
Exhibit B
Permitted Encumbrances
This conveyance is subject to the following matters,
but only to the extent the same are still valid and in full
force and effect:
1. EASEMENT shown on map filed for record in Book 460 of
Maps, page 44 and 45, and incidents thereto
Purpose : Public Utility Easement
Affects : A portion of the Southerly 10 feet of
(Affects Parcels A and B)
2. DECLARATION of Reciprocal Easements, Covenants, and
Restrictions for the purpose stated herein
and subject to the terms and conditions therein, executed by
Dairy Associates, L.P., a California Limited Partnership,
recorded July 7, 1989 in Book L013, page 971 of Official
Records.
(Affects Parcels A and B)
Amendment No. 1 of Declaration of Reciprocal Easements,
Covenants and Restrictions recorded
August 16, 1991 in Book L826, page 830 of Official Records.
3. AGREEMENT on the terms and conditions contained therein,
For : Agreement regarding number of
required parking spaces
Between : The City of Santa Clara, a
municipal corporation
And : Dairy Associates, LP., a California
Limited Partnership
Recorded : March 6, 1990 in Book L278, page
2239, Official Records.
(Affects Parcels A and B)
4. EASEMENT for the purposes stated herein and incidents
thereto
Purpose : Construction and reconstructing,
installing, operating, maintaining, repairing and/or replacing
underground electrical distribution and/or communication
systems and appurtenances thereto, including a reasonable
right of ingress and egress over adjoining lands of Grantor
Granted to : City of Santa Clara, a California
municipal corporation
Recorded : April 4, 1990 in Book L310, page
1548, Official Records
Affects : As follows:
Beginning at a point in the Southerly line of Parcel 2 of
that Parcel Map filed for record in Book 460 of Maps at pages
44-45, Santa Clara County Records, distant thereon North 89
47' 24" West, 67.50 feet
from the Southeasterly corner of said Parcel 2; thence from
said point of beginning, the following forty-
eight courses: South 89 47' 24" East, 30.00 feet; North 0
12' 36" East, 19.10 feet; South 89 47' 24" West, 10.00 feet;
North 29 47' 24" West, 43.00 feet; North 18 32' 24" West,
89.00 feet; North 29 47'
24" West, 119 feet; North 0 12' 36" East, 235 feet; North 11
02' 24" West, 157 feet; South 78 57' 36" West, 6.00 feet;
North 21 02' 24" West, 119.00 feet; South 88 57' 36" West,
73.00 feet; South 58 57' 36" West, 51.00 feet; South 88 57'
36" West, 80.00 feet; North 46 02' 24" West, 11.00 feet;
South 43 57' 36" West, 15.00 feet; South 46 02' 24" East,
20.00 feet; North 43 57' 36" East, 9.86 feet; North 88 57'
36" East, 69.77 feet; South 1 02' 24" East, 22.00 feet; North
88 57' 36" East, 15.00 feet; North 1 02' 24" West, 24.78
feet; North 58 57' 36" East, 45.43 feet; North 88 57' 36"
East, 63.32 feet; South 21 02' 24" East, 145.68 feet; South
11 02' 24" East 121.11 feet; South 0 12' 36" West, 234.02
feet; North 89 47' 24" West, 63.00 feet; North 59 47' 24"
West, 10.00 feet; North 89 47' 24" West, 10.00 feet; South 60
12' 36" West, 10.00 feet; North 89 47' 24" West, 286.00
feet; North 0 12' 36" East,
20.00 feet; South 89 47' 24" East, 2.50 feet; North 0 12'
36" East, 15.00 feet; North 89 47' 24" West, 15.00 fee; South
0 12' 36" West, 294.00 feet; North 0 12' 36" East, 20.00
feet; South 89 47' 24" East, 2.50 feet; North 0 12' 36"
East, 15.00 feet; North 89 47' 24" West, 15.00 feet; South 0
12' 36" West,
15.00 feet; South 89 47' 24" East, 2.50 feet; South 0 12'
36" West, 170.00 feet; South 44 37' 45" East, 75.00 feet;
South 0 12' 36" West, 3.76 feet; thence, from a tangent
bearing South 85 11' 34" East, along the arc of a curve
concave to the South, having a radius of 1040 feet, through a
central angle of 4 30' 30" an arc length of 81.83 feet; and
the following nine courses; North 44 47' 24" West, 44.62
feet; North 89 47' 24" West, 53.50 feet; North 44 37' 45"
West, 55.39 feet; North 0 12' 36" East, 135.87 feet; South
89 47' 24" East, 684.55 feet; South 29 47' 24" East, 112.24
feet; South 18 32' 24" East, 89.00 feet; South 29 47' 24"
East, 21.30 feet; South 0 12' 36" West, 33.67 feet to the
point of beginning.
5. EASEMENT for the purposes stated herein and incidents
thereto
Purpose : Underground pipes
Granted to : Pacific Gas and Electric Company, a
California corporation
Recorded : October 22, 1990 in Book L515, page
1223, Official Records
Affects : Parcel A as shown upon the Parcel
Map filed for record in Book 602 of Parcel Maps at page 35,
Santa Clara County Records.
Reference is hereby made to the record for further
particulars and a map of said easement, no description was
recorded.
6. AGREEMENT on the terms and conditions contained therein,
For : Deferred obligation to construct
stoplight
Between : City of Santa Clara, California, a
municipal corporation
And : Dairy Associates, LP.
Recorded : December 17, 1990 in Book L568,
page 1565, Official Records.
(Affects Parcels A and B)
7. LACK OF ABUTTER'S RIGHTS to and from Route 237 - South
Bar Freeway, lying adjacent to the Northerly line of Parcels A & B of
said land, said rights having been released and relinquished
By : Dairy Associates, LP., a California
Limited Partnership
To : The State of California
Recorded : August 16, 1991 in Book L826, page
839, Official Records.
8. EASEMENT for the purposes stated herein and incidents thereto
Purpose : An easement for cut and fill slope
purposes
Granted to : The State of California
Recorded : August 16, 1991 in Book L826, page
839, Official Records
Affects : As follows:
Commencing at the most Southerly corner of Parcel 1
described in that certain Deed recorded August 16, 1991 in
Book L826, page 889, Official Records; thence along the
general Southerly line of said Parcel 1 the following courses:
from a tangent that bears N. 68 57' 08" E., along a curve to
the left with a radius of 10,136.00 feet, through an angle of
05 40' 34", an arc length of 1,004.14 feet, N. 01 05' 17"
E., 3.47 feet, and from a tangent that bears N. 61 34' 51"
E., along a curve to the left with a radius of
8999.52 feet, through an angle of 00 15' 40", an arc length
of 41.03 feet; thence leaving last said line S. 26 57' 54"
E., 26.28 feet; thence from a tangent that bears S. 63 02'
06" W., on a curve to the right with a radius of 10,158.00
feet, through an angle of 05 58' 01", an arc length of
1,057.88 feet to the Westerly line of the aforesaid Parcel B;
thence along last said line N. 00 50' 30" E., 23.71 feet to
the point of commencement.
Exhibit C
PERMITTED HAZARDOUS SUBSTANCES
(NOT a Comprehensive List)
It is anticipated that the following Hazardous Substances, and
others necessary for the use, occupancy, and operation of the
Leased Property in accordance with the terms and conditions of
this Lease, will be used by Tenant at the Leased Property:
Description C.A.S.#
Solder bars (lead) 7439-92-1
Solder paste
Lead 7439-91-1
Tin 7440-31-5
Solder paste remover
Sodium hydroxide 1310-73-2
Isopropyl alcohol
Isopropanol 67-63-0
S32-10M
Isopropanol 67-63-0
Methanol 67-56-1
Exhibit D
RESOLUTION OF DISPUTED INSURANCE CLAIMS
If Landlord and Tenant cannot agree upon the amount for
which any insurance claim against an insurer
should be settled after damage to the Leased Property by fire
or other casualty, and so long as neither Tenant nor Landlord
is authorized to determine such amount without the consent of
the other pursuant to subparagraph 8.(r), then either party
may require that the amount be determined as follows:
(i) Landlord and Tenant shall each appoint an experienced
architect who is familiar with construction costs
for comparable properties in the vicinity of the Leased
Property. Each party will make the appointment no later than
10 days after receipt of notice from the other party that the
dispute resolution process described in this Exhibit has been
invoked. The agreement of the two architects as to the
appropriate amount of the insurance settlement will be binding
upon Landlord and Tenant. If the two architects cannot agree
upon the settlement amount within 30 days following their
appointment, they shall within another 10 days agree
upon a third architect. Immediately thereafter, each of the
first two architects will submit his best estimate of the
appropriate settlement amount (together with a written report
supporting such estimate) to the third architect and the third
architect will choose between the two estimates. The estimate
chosen by the third architect as the closest to the amount
needed to repair and restore the Leased Property will be
binding upon Landlord and Tenant as the amount for which the
applicable insurance claim should be settled. (However,
no such estimate and nothing contained in this Exhibit will
limit Tenant's liability under other provisions of this Lease
for the repair and restoration of the Leased Property.)
Notification in writing of the estimate chosen by the third
architect shall be made to Landlord and Tenant within 15 days
following the selection
of the third architect.
(ii) If architects must be selected under the procedure set
out above and either Tenant or Landlord fails to
appoint an architect or fails to notify the other party of
such appointment within 10 days after receipt of notice that
the prescribed time for appointing the architects has passed,
then the other party's architect will determine the
appropriate settlement amount. All architects selected for
the dispute resolution process set out in this Exhibit will be
disinterested, reputable, qualified architects with at least
15 years experience designing and overseeing the construction
of properties comparable to the Leased Property.
(iii) If a third architect must be chosen under the
procedure set out above, he will be chosen on the basis of
objectivity and competence, not on the basis of his
relationship with the other architects or the parties to this
Lease, and the first two architects will be so advised.
Although the first two architects will be instructed to
attempt in good faith to agree upon the third architect, if
for any reason they cannot agree within the prescribed time,
either Landlord or Tenant may require the first two architects
to immediately submit its top choice for the third architect
to the then highest ranking officer of the San Francisco Bar
Association who will agree to help and who has no
attorney/client or other significant relationship to either
Landlord or Tenant. Such officer will have complete
discretion to select the most objective and competent third
architect from between the choice of each of the first two
architects, and will do so within 20 days after such choices
are submitted to him.
(iv) Either Landlord or Tenant may notify the architect
selected by the other party to demand the
submission of an estimate of the appropriate settlement amount
or a choice of a third architect as required under the
procedure described above; and if the submission of such an
estimate or choice is required but
the other party's architect fails to comply with the demand
within 5 days after receipt of such notice, then the
settlement amount or choice of the third architect, as the
case may be, selected by the other architect (i.e., the
notifying party's architect) will be binding upon Landlord and
Tenant.
(v) For the purposes of this Exhibit, "appropriate settlement
amount" and words of like effect means the
amount required to restore the Leased Property, less any
insurance deductible that clearly applies under the policy of
insurance which provides the coverage to be settled; and all
architects and other persons involved in the determination of
the settlement amount will be so advised.
Exhibit E
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho or Will La Herran
Re: 3Com Lease Agreement
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to
subparagraph 8.(w)(iii) of that certain Lease
Agreement dated as of October 4, 1996 (the "Lease Agreement,"
the terms defined therein being used herein
as therein defined) between 3Com Corporation (the "Tenant"),
and you.
2. Annex 1 attached hereto sets forth financial data
and computations evidencing the Tenant's
compliance with certain covenants of the Lease Agreement, all
of which data and computations are complete,
true and correct.
3. To the knowledge of Tenant no Default or Event of
Default under the Lease Agreement has
occurred and is continuing.
4. The representations of Tenant set forth in the Lease
Agreement are true and correct in all
material respects as of the date hereof as though made on and
as of the date hereof.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, ____
I. PARAGRAPH 8.(ac)(i): Quick Ratio
A. Unencumbered Cash and Cash Equivalents
and other "Quick Assets" as defined in
Paragraph 8.(ac)(i) of the Lease: $_____________
B. "Current Liabilities" as defined in
Paragraph 8.(ac)(i) of the Lease: $_____________
C. Ratio of A to B: _____ to 1.00
F. Minimum ratio computed as provided in
Paragraph 8.(ac)(i) of the Lease: 1.00 to 1.00
II. PARAGRAPH 8.(ac)(ii): Maximum Senior Debt to
Capitalization
A. Total "Debt" as defined
in Paragraph 1.(s) of
Tenant and its consolidated
Subsidiaries: $_____________
B. "Subordinated
Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease:
$_____________
C. "Senior Debt" as
defined in Paragraph 8.(ac)(ii)
of the Lease
(A - B): $_____________
D. Consolidated Tangible Net Worth
(from calculation below): $_____________
E. Capitalization as defined in
Paragraph 8.(ac)(ii) of the Lease
(A + D): $_____________
F. Ratio of B to E: _____ to 1.00
D. Maximum ratio: 0.35 to 1.00
III. PARAGRAPH 8.(ac)(iii): Minimum Tangible Net Worth
A. Reported stockholders equity: $_____________
B. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii)
of the Lease: $_____________
D. Consolidated Tangible Net Worth
(A - B): $_____________
E. Minimum computed as provided
in Paragraph 8.(ac)(iii) of the
Lease: $_____________
IV. PARAGRAPH 8.(ac)(iv): Fixed Charge Ratio
A. "Adjusted EBIT" as
defined in Paragraph
8.(ac)(iv) of the
Lease: $_____________
B. "Fixed Charges" as
defined in Paragraph
8.(ac)(iv) of the
Lease: $_____________
C. Ratio of A to B: _____ to 1.00
D. Minimum ratio: 2.00 to 1.00
Exhibit F
CERTIFICATE OF TENANT'S CALCULATION OF THE SPREAD
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho or Will La Herran
Re: 3Com Lease Agreement
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to
subparagraph 8.(w)(iv) of that certain Lease
Agreement dated as of October 4, 1996 (the "Lease Agreement,"
the terms defined therein being used herein
as therein defined) between 3Com Corporation, and you.
2. Annex 1 attached hereto sets forth financial data
and computations evidencing the Tenant's
computation of the Spread, all of which data and computations
are complete, true and correct.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Certificate of Tenant's Calculation of the Spread
As of the ________________, ____
I. S&P'S RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
II. MOODY'S RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
III. CALCULATION OF TENANT'S DEBT TO CAPITAL RATIO: _____________
A. Funded "Senior Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease: $_____________
B. Other outstanding Debt as defined in
Paragraph 1.(s) of the Lease: $_____________
C. Outstanding "Subordinated Debt" as
defined in Paragraph 8.(ac)(ii) of
the Lease: $_____________
D. Debt for purposes of this ratio
(A + B - C): $_____________
E. Reported stockholders equity: $_____________
F. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii)
of the Lease: $_____________
G. Consolidated Tangible Net Worth
(E - F): $_____________
H. Capital for purposes of this test
(A + B + G): $_____________
I. D divided by H: _____________
III. SPREAD AS DEFINED IN PARAGRAPH 1.(bo) OF THE LEASE: _____________
Exhibit G
LIST OF ENVIRONMENTAL REPORTS
(Phase I Property)
As used in this Lease, "Environmental Reports" means,
collectively, the following reports provided to BNPLC by 3COM
or acquired by BNPLC from its own consultants:
Tetra tech, 1996, Phase I Environmental Site Assessment
for 3COM Corporation, 5400
Bayfront Plaza, Santa Clara, California 95052-8145. September
30, 1996.
Tetra tech, 1996, Phase II Environmental Site
Investigation for 3COM Corporation, 5400
Bayfront Plaza, Santa Clara, California 95052-8145. October
2, 1996.
Levine-Fricke, 1989, Remedial Strategy Development for
Property at the Former Edelweiss Dairy, Santa Clara,
California. April 25, 1989.
Levine-Fricke, Installation of Three Ground Water
Monitoring Wells at the Former Edelweiss Dairy, 2955 Old
Mountain View-Alviso Road, Santa Clara, California. August
23, 1994 and DRAFT same title August 19, 1994.
Levine-Fricke, Proposed Ground Water Monitoring Sampling
and Analysis at the Former Edelweiss Dairy, 2955 Old Mountain
View-Alviso Road, Santa Clara, California. December,
1991.
Levine-Fricke, Analytical Results for four Ground Water
Samples and one Composite Soil Sample Collected at the Former
Edelweiss Dairy, 2955 Old Mountain View-Alviso Road, Santa
Clara, California. February 14, 1992.
Levine-Fricke, Analytical Results for four Ground Water
Samples and one Composite Soil Sample Collected at the Former
Edelweiss Dairy, 2955 Old Mountain View-Alviso Road, Santa
Clara, California. May 18, 1992.
Levine-Fricke, Analytical Report on Results of Ground
Water Monitoring at the Former Edelweiss Dairy, 2955 Old
Mountain View-Alviso Road, Santa Clara, California. October
1, 1992.
Levine-Fricke, Analytical Report on Results of Ground
Water Monitoring for 1992 at the Former Edelweiss Dairy, 2955
Old Mountain View-Alviso Road, Santa Clara, California.
March 8, 1993.
Levine-Fricke, Request for Case Closure at the Former
Edelweiss Dairy, 2955 Old Mountain
View-Alviso Road, Santa Clara, California. August, 1993.
Levine-Fricke, Case Closure at the Former Edelweiss Dairy,
2955 Old Mountain View-Alviso
Road, Santa Clara, California. March 7, 1994.
Levine-Fricke, Case Closure at the Former Edelweiss Dairy,
2955 Old Mountain View-Alviso
Road, Santa Clara, California. January 21, 1993.
Levine-Fricke, Phase I Environmental Site Assessment, 3COM
Phase I Parcel, Santa Clara,
California. June, 1994.
Santa Clara Fire Department, permit removing removal of two
gasoline tanks. October 19,
1984.
Levine-Fricke, remedial proposal, recommending further
characterization of the site including the establishment of a
groundwater monitoring system. April 19, 1989.
Levine-Fricke, Status Report on Soil Remediation at Former
Edelweiss Dairy and Future
3COM Corporate Campus, Santa Clara, California. June 13,
1989.
Levine-Fricke, letter to the California Water Quality
Control Board regarding its final soil status report.
February 5, 1990.
Levine-Fricke, Report of Quarterly Ground Water
Monitoring at the Former Edelweiss Dairy.
January 23, 1993.
Santa Clara Valley Water District ("SCVWD"), letter to
Regional Water Quality Control Board requesting concurrence on
case closure for the site. November 18, 1994.
SCVWD, "no action" letter to Dairy Associates, L.P.
December 2, 1994.
EXHIBIT 10.36
$74,800,000
PURCHASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
("BNPLC")
AND
3COM CORPORATION,
("3COM")
EFFECTIVE AS OF OCTOBER 4, 1996
(Great America Site - Phase I)
This Agreement is being facilitated by the
following banks:
Banque Nationale
de Paris
ABN AMRO Bank N.V.
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is made as of
October 4, 1996, by 3COM CORPORATION, a California corporation
("3COM") and BNP LEASING CORPORATION, a Delaware corporation
("BNPLC").
R E C I T A L S
A. BNPLC is acquiring the land described in Exhibit A
attached hereto and the improvements and certain fixtures
located thereon and is leasing the same to 3COM pursuant to
that certain Lease Agreement (as from time to time
supplemented, amended or restated, the "Lease") between 3COM
and BNPLC dated as of the date hereof. (The land described in
Exhibit A and any and all other real or personal property from
time to time covered by the Lease and included within the
"Leased Property" as defined therein are hereinafter
collectively referred to as the "Property".)
B. BNPLC is also concurrently herewith receiving a
separate environmental indemnity from 3COM pursuant to an
Environmental Indemnity Agreement (as from time to time
supplemented, amended or restated, the "Environmental
Indemnity") between 3COM and BNPLC dated as of the date
hereof.
C. 3COM has requested an option to purchase the
Property, which BNPLC is willing to provide on and subject to
the terms and conditions set out herein.
NOW, THEREFORE, in consideration of the above recitals
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Definitions. As used herein, the terms "3COM",
"BNPLC", "Property", "Lease" and "Environmental Indemnity"
shall have the meanings indicated above; terms with initial
capitals defined in the Lease and used but not defined herein
shall have the meanings assigned to them in the Lease; and the
terms listed immediately below shall have the following
meanings:
"Applicable Purchaser" means any third party designated
by 3COM to purchase the interest of BNPLC in the Property as
provided in Paragraph 2(a)(ii) below.
"Deposit Taker" shall have the meaning assigned to it in
the Pledge Agreement.
"Deposit Taker Losses" shall have the meaning assigned to
it in the Pledge Agreement.
"Designated Sale Date" means the earlier of:
(1) the effective date of any termination of
the Lease by 3COM pursuant to Paragraph 2 thereof;
(2) any date designated by BNPLC in a written
notice given by BNPLC to 3COM when an Event of Default by
3COM is continuing, provided the notice of the date so
designated is given by BNPLC at least thirty (30) days
before the date so designated; or
(3) the first Business Day in November, 2001.
"Direct Payments to Participants" means the amounts paid
or required to be paid directly to Participants on the
Designated Sale Date as provided in Section 6.2 of the Pledge
Agreement at the direction of and for 3COM by the collateral
agent appointed pursuant to the Pledge Agreement from all or
any part of the Collateral described therein.
"Fair Market Value" means the fair market value of the
Property on or about the Designated Sale Date (calculated
under the assumptions, whether or not then accurate, that 3COM
has maintained the Property in compliance with all Applicable
Laws [including Environmental Laws]; that 3COM has completed
the construction of any Improvements which was commenced prior
to the Designated Sale Date; that all such Improvements are
self-sufficient in the sense that any easements or offsite
facilities needed for their use will be available at no
additional cost to the owner of the Improvements; that 3COM
has repaired and restored the Property after any damage
following fire or other casualty; that 3COM has restored the
remainder of the Property after any partial taking by eminent
domain; that 3COM has completed any contests of and paid any
taxes due [other than Excluded Taxes] or other amounts secured
by or allegedly secured by a lien against the Property other
than Prohibited Encumbrances; that no conditions or
circumstances on or about the Property [such as the presence
of an endangered species] is discovered that will impede the
use or any development of the Property permitted by the Lease;
that any use or development of the Property as permitted by
the Lease will not be hindered or delayed because of the
limited availability of utilities or water; that without undue
cost or delay any purchaser paying fair market value for the
Property can obtain any necessary permits or licenses needed
to use the Property for the purposes permitted by the Lease;
and that 3COM has cured any title defects affecting the
Property other than Prohibited Encumbrances, all in accordance
with the standards and requirements of the Lease as though the
Lease were continuing in force) as determined by an
independent MAI appraiser selected by BNPLC, which appraiser
must have five (5) years or more experience appraising similar
properties in northern California.
"Qualified Deposit Taker" means one of the fifty largest
(measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world,
with debt ratings of at least (i) A- (in the case of long term
debt) and A-1 (in the case of short term debt) or the
equivalent thereof by Standard and Poor's Corporation, and
(ii) A (in the case of long term debt) and P-1 (in the case of
short term debt) or the equivalent thereof by Moody's Investor
Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by
Moody's Investor Service, Inc. will be discontinued or
changed, but if such ratings systems are discontinued or
changed, 3COM shall be entitled to select and use a comparable
ratings systems as a substitute for the S&P Rating or the
Moody Rating, as the case may be, for purposes of determining
the status of any bank as a Qualified Deposit Taker.
"Purchase Price" means an amount equal to Stipulated Loss
Value outstanding on the Designated Sale Date, plus all costs
and expenses (including appraisal costs, withholding taxes (if
any) and reasonable Attorneys' Fees, as defined in the Lease)
incurred in connection with any sale of the Property by BNPLC
hereunder or in connection with collecting sales proceeds due
hereunder, less the aggregate amounts (if any) of Direct
Payments to Participants and Deposit Taker Losses.
"Prohibited Encumbrance" means any lien or other title
defect encumbering the Property that is claimed by BNPLC
itself or lawfully claimed by a third party through or under
BNPLC, including any judgment lien lawfully filed against
BNPLC and including any tax lien assessed because of BNPLC's
failure to pay Excluded Taxes, but excluding the Lease and any
lien or other title defect that (i) is a Permitted Encumbrance
(as defined in the Lease), regardless of whether claimed by,
through or under BNPLC, (ii) is claimed by, through or under
3COM or any of the Participants approved by 3COM (other than
Landlord's Parent), or (iii) exists because of any breach by
3COM of the Lease, because of anything done or not done by
BNPLC in an effort to satisfy subparagraph 9(b) of the Lease,
or because of anything done or not done by BNPLC at the
request of 3COM.
"Remarketing Notice" shall have the meaning assigned to
it in Paragraph 2(b)(1) below.
"Required Documents" means the grant deed and other
documents that BNPLC must tender pursuant to Paragraph 3
below.
"Shortage Amount" means any amount payable to BNPLC by
3COM, rather than by the Applicable Purchaser, pursuant to
clause 2(a)(ii) below.
2. 3COM's Options and Obligations on the Designated
Sale Date.
(a) Choices. On the Designated Sale Date 3COM shall
have the right and the obligation to either:
(i) purchase BNPLC's interest in the Property
and in Escrowed Proceeds, if any, for a net cash
price equal to the Purchase Price; or
(ii) cause the Applicable Purchaser to purchase
BNPLC's interest in the Property and in Escrowed
Proceeds, if any, for a net cash price not less than
the lesser of (a) the Fair Market Value of the
Property, (b) fifteen percent (15%) of Stipulated
Loss Value outstanding immediately prior to the
purchase or (c) the Purchase Price. If, however,
the Fair Market Value is less than fifteen percent
(15%) of Stipulated Loss Value and less than the
Purchase Price, BNPLC may elect to keep the Property
and any Escrowed Proceeds rather than sell to the
Applicable Purchaser, in which case 3COM shall pay
BNPLC an amount equal to (A) eighty-five percent
(85%) of Stipulated Loss Value, less (B) the sum of
(x) any Escrowed Proceeds then held and to be
retained by BNPLC, (y) any Direct Payments to
Participants and (z) any Deposit Taker Losses.
Unless BNPLC elects to keep the Property pursuant to
the preceding sentence, 3COM must make a
supplemental payment to BNPLC on the Designated Sale
Date equal to the excess (if any) of the Purchase
Price over the net cash price actually paid to BNPLC
on the Designated Sale Date by the Applicable
Purchaser for BNPLC's interest in the Property and
in Escrowed Proceeds, if any. However, provided no
Event of Default has occurred and is continuing
under the Lease, and provided further that neither
3COM nor any Applicable Purchaser has failed to pay
any amount required to be paid by this Agreement on
the date such amount first became due, any
supplemental payment required by the preceding
sentence shall not exceed (1) eighty-five percent
(85%) of Stipulated Loss Value on the Designated
Sale Date, less (2) any Direct Payments to
Participants and any Deposit Taker Losses. Any
supplemental payment payable to BNPLC by 3COM,
rather than by the Applicable Purchaser, pursuant to
this clause (ii) is hereinafter referred to as the
"Shortage Amount." If the net cash price actually
paid by the Applicable Purchaser to BNPLC exceeds
the Purchase Price and all other sums that are then
due from 3COM to BNPLC, 3COM shall be entitled to
such excess.
If any amount payable to BNPLC pursuant to this subparagraph
2(a) is not actually paid to BNPLC on the Designated Sale
Date, 3COM shall pay interest on the past due amount computed
at the Default Rate from the Designated Sale Date. However,
Tenant shall be entitled to a reduction of the interest
required by the preceding sentence equal to the Base Rent, if
any, paid by Tenant as provided in Paragraph 17 of the Lease
for any holdover period after the Designated Sale Date.
(b) Election by 3COM. 3COM shall have the right to
elect whether it will satisfy the obligations set out in
clause (i) or (ii) of the preceding Paragraph 2(a); provided,
however, that the following conditions are satisfied:
(1) To give BNPLC the opportunity to have the
Fair Market Value determined by an appraiser as provided
in Paragraph 1(d) before the Designated Sale Date, 3COM
must, unless 3COM concedes that Fair Market Value will
not be less than fifteen percent (15%) of Stipulated Loss
Value on the Designated Sale Date, provide BNPLC with a
Remarketing Notice. "Remarketing Notice" means a notice
given by 3COM to BNPLC (and to each of the Participants)
no earlier than one hundred eighty (180) days before the
Designated Sale Date and no later than ninety (90) days
before the Designated Sale Date, specifying that 3COM
does not concede that the Fair Market Value is equal to
or greater than fifteen percent (15%) of the Stipulated
Loss Value. A Remarketing Notice will be required only
if 3COM does not concede that Fair Market Value will
equal or exceed fifteen percent (15%) of Stipulated Loss
Value on the Designated Sale Date. But if for any reason
(including but not limited to any acceleration of the
Designated Sale Date pursuant to clause (2) of the
definition of Designated Sale Date above) 3COM fails to
provide a Remarketing Notice within the time periods
specified in the definition of Remarketing Notice above,
Fair Market Value shall, for purposes of this Agreement,
be deemed to be no less than fifteen percent (15%) of
Stipulated Loss Value on the Designated Sale Date.
(2) To give BNPLC the opportunity to prepare
the Required Documents before the Designated Sale Date,
3COM must, if it is to elect to satisfy the obligations
set forth in clause (ii) of Paragraph 2(a), irrevocably
specify an Applicable Purchaser in notice to BNPLC given
at least seven (7) days prior to the Designated Sale
Date. If for any reason 3COM fails to so specify an
Applicable Purchaser, 3COM shall be deemed to have
irrevocably elected to satisfy the obligations set forth
in clause (i) of Paragraph 2(a).
(c) Termination of 3COM's Option To Purchase. Without
limiting BNPLC's right to require 3COM to satisfy the
obligations imposed by Paragraph 2(a), 3COM shall have no
further option hereunder to purchase the Property if either:
(1) 3COM shall have elected to satisfy its
obligations under clause (ii) of Paragraph 2(a) on a
Designated Sale Date and BNPLC shall have elected to keep the
Property on such Designated Sale Date in accordance with
clause (ii) of Paragraph 2(a); or
(2) 3COM shall have failed on a Designated Sale
Date to make or cause to be made all payments to BNPLC
required by this Agreement or by the Lease and such failure
shall have continued beyond the thirty (30) day period for
tender specified in the next sentence.
If BNPLC does not receive all payments due under the Lease and
all payments required hereunder on a Designated Sale Date,
3COM may nonetheless tender to BNPLC the full Purchase Price
and all amounts then due under the Lease, together with
interest on the total Purchase Price computed at the Default
Rate from the Designated Sale Date to the date of tender, and
if presented with such a tender within thirty (30) days after
the applicable Designated Sale Date, BNPLC must accept it and
promptly thereafter deliver any Escrowed Proceeds and a deed
and all other Required Documents listed in Paragraph 3.
(d) Payment to BNPLC. All amounts payable under the
preceding Paragraphs 2(a) or 2(c) by 3COM and, if applicable,
by the Applicable Purchaser must be paid directly to BNPLC,
and no payment to any other party shall be effective for the
purposes of this Agreement. In addition to the payments
required under Paragraph 2(a) hereunder, on the Designated
Sale Date 3COM must pay all amounts then due to BNPLC under
the Lease. BNPLC will remit any excess amounts due 3COM
pursuant to the last sentence of clause (ii) of Paragraph 2(a)
promptly after BNPLC's receipt of the same and in no event
later than thirty (30) days thereafter.
(e) Effect of Options on Subsequent Title Encumbrances.
It is the intent of BNPLC and 3COM that any conveyance of the
Property to 3COM or any Applicable Purchaser pursuant to this
Agreement shall cut off and terminate any interest in the
Property claimed by, through or under BNPLC, including the
Participants (but not any unsatisfied obligations to BNPLC
under the Lease, the Environmental Indemnity or this
Agreement), including but not limited to any Prohibited
Encumbrances and any leasehold or other interests conveyed by
BNPLC in the ordinary course of BNPLC's business. Anyone
accepting or taking any interest in the Property by or through
BNPLC after the date of this Agreement shall acquire such
interest subject to the rights and options granted 3COM
hereby. Further, 3COM and any Applicable Purchaser shall be
entitled to pay any payment required by this Agreement for the
purchase of the Property directly to BNPLC notwithstanding any
prior conveyance or assignment by BNPLC, voluntary or
otherwise, of any right or interest in this Agreement or the
Property, and neither 3COM nor any Applicable Purchaser shall
be responsible for the proper distribution or application of
any such payments by BNPLC.
3. Terms of Conveyance Upon Purchase. Immediately
after receipt of all payments to BNPLC required pursuant to
the preceding Paragraph 2, BNPLC must, unless it is to keep
the Property as permitted by Paragraph 2(a)(ii), deliver all
Escrowed Proceeds, if any, and convey all of its right, title
and interest in the Property by grant deed to 3COM or the
Applicable Purchaser, as the case may be, subject only to the
Permitted Encumbrances (as defined in the Lease) and any other
encumbrances that do not constitute Prohibited Encumbrances.
However, such conveyance shall not include the right to
receive any payment under the Lease then due BNPLC or that may
become due thereafter because of any expense or liability
incurred by BNPLC resulting in whole or in part from events or
circumstances occurring before such conveyance. All costs of
such purchase and conveyance of every kind whatsoever, both
foreseen and unforeseen, shall be the responsibility of the
purchaser, and the form of grant deed used to accomplish such
conveyance shall be substantially in the form attached as
Exhibit B. With such grant deed, BNPLC shall also tender to
3COM or the Applicable Purchaser, as the case may be, the
following, each fully executed and, where appropriate,
acknowledged on BNPLC's behalf by an officer of BNPLC: (1) a
Preliminary Change of Ownership Report in the form attached as
Exhibit C, (2) a Bill of Sale and Assignment of Contract
Rights and Intangible Assets in the form attached as Exhibit
D, (3) an Acknowledgment of Disclaimer of Representations and
Warranties, in the form attached as Exhibit E, which 3COM or
the Applicable Purchaser must execute and return to BNPLC, (5)
a Documentary Transfer Tax Request in the form attached as
Exhibit F, (6) a Secretary's Certificate in the form attached
as Exhibit G, (7) a letter to the title insurance company
insuring title to the Property in the form attached as Exhibit
H, and (8) a certificate concerning tax withholding in the
form attached as Exhibit I.
4. Survival of 3COM's Obligations.
(a) Status of this Agreement. Except as expressly
provided in the last sentence of this subparagraph and
elsewhere herein, this Agreement shall not terminate, nor
shall 3COM have any right to terminate this Agreement, nor
shall 3COM be entitled to any reduction of the Purchase Price
hereunder, nor shall the obligations of 3COM to BNPLC under
Paragraph 2 be affected by reason of (i) any damage to or the
destruction of all or any part of the Property from whatever
cause, (ii) the taking of or damage to the Property or any
portion thereof under the power of eminent domain or otherwise
for any reason, (iii) the prohibition, limitation or
restriction of 3COM's use of all or any portion of the
Property or any interference with such use by governmental
action or otherwise, (iv) any eviction of 3COM or any party
claiming under 3COM by paramount title or otherwise, (v)
3COM's prior acquisition or ownership of any interest in the
Property, (vi) any default on the part of BNPLC under this
Agreement, the Lease or any other agreement to which BNPLC is
a party, or (vii) any other cause, whether similar or
dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties
hereto that the obligations of 3COM hereunder (including
3COM's obligation to make payments under - and, if applicable,
to cause the Applicable Purchaser to make payments under -
Paragraph 2) shall be separate and independent of the
covenants and agreements of BNPLC. Accordingly, the Purchase
Price and the Shortage Amount, as the case may be under
Paragraph 2, shall continue to be payable in all events, and
the obligations of 3COM hereunder shall continue unaffected by
any breach of this Agreement by BNPLC. However, nothing in
this subparagraph, nor the performance without objection by
3COM of its obligations hereunder, shall be construed as a
waiver by 3COM of any right 3COM may have at law or in equity,
following any failure by BNPLC to tender a grant deed and the
other Required Documents as required by Paragraph 3 upon the
tender by 3COM and/or the Applicable Purchaser of the payments
required by Paragraph 2 and of the other documents to be
executed in favor of BNPLC at the closing of the sale
hereunder, to (i) recover monetary damages proximately caused
by such failure of BNPLC if BNPLC does not cure the failure
within thirty (30) days after 3COM demands a cure by written
notice to BNPLC, or (ii) a decree compelling performance of
BNPLC's obligation to so tender a grant deed and the Required
Documents.
(b) Remedies Under the Lease and the Environmental
Indemnity. No repossession of or re-entering upon the
Property or exercise of any other remedies available under the
Lease or the Environmental Indemnity shall relieve 3COM of its
liabilities and obligations hereunder, all of which shall
survive the exercise of remedies under the Lease and
Environmental Indemnity. 3COM acknowledges that the
consideration for this Agreement is separate and independent
of the consideration for the Lease and the Environmental
Indemnity, and 3COM's obligations hereunder shall not be
affected or impaired by any event or circumstance that would
excuse 3COM from performance of its obligations under the
Lease or the Environmental Indemnity.
5. Remedies Cumulative. No right or remedy herein
conferred upon or reserved to BNPLC is intended to be
exclusive of any other right or remedy BNPLC has with respect
to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing at law or in equity or
by statute. In addition to other remedies available under
this Agreement, either party shall be entitled, to the extent
permitted by applicable law, to a decree compelling
performance of any of the other party's agreements hereunder.
6. No Implied Waiver. The failure of either party to
this Agreement to insist at any time upon the strict
performance of any covenant or agreement of the other party or
to exercise any remedy contained in this Agreement shall not
be construed as a waiver or a relinquishment thereof for the
future. The waiver by either party of or redress for any
violation of any term, covenant, agreement or condition
contained in this Agreement shall not prevent a subsequent
act, which would have originally constituted a violation, from
having all the force and effect of an original violation. No
express waiver by either party shall affect any condition
other than the one specified in such waiver and that one only
for the time and in the manner specifically stated. A receipt
by BNPLC of any payment hereunder with knowledge of the breach
of this Agreement shall not be deemed a waiver of such breach,
and no waiver by either party of any provision of this
Agreement shall be deemed to have been made unless expressed
in writing and signed by the waiving party.
7. Attorneys' Fees and Legal Expenses. If either party
commences any legal action or other proceeding to enforce any
of the terms of this Agreement or the documents and agreements
referred to herein, or because of any breach by the other
party or dispute hereunder or thereunder, the successful or
prevailing party, shall be entitled to recover from the
nonprevailing party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute
is prosecuted to a final judgment. Any such Attorneys' Fees
incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from such
judgment, and the obligation for such Attorneys' Fees is
intended to be severable from other provisions of this
Agreement and not to be merged into any such judgment.
8. Estoppel Certificate. 3COM and BNPLC will each,
upon not less than twenty (20) days' prior written request by
the other, execute, acknowledge and deliver to the requesting
party a written statement certifying that this Agreement is
unmodified and in full effect (or, if there have been
modifications, that this Agreement is in full effect as
modified, and setting forth such modification) and either
stating that no default exists hereunder or specifying each
such default of which the signer may have knowledge. Any such
statement may be relied upon by any Participant or prospective
purchaser or assignee of BNPLC with respect to the Property.
Neither 3COM nor BNPLC shall be required to provide such a
certificate more frequently than once in any six month period;
provided, however, that if either party determines that there
is a significant business reason for requiring a current
certificate, including, without limitation, the need to
provide such a certificate to a prospective purchaser or
assignee, the other shall provide a certificate upon request
whether or not it had provided a certificate within the prior
six month period.
9. Notices. Each provision of this Agreement referring
to the sending, mailing or delivery of any notice or referring
to the making of any payment to BNPLC, shall be deemed to be
complied with when and if the following steps are taken:
(a) All payments required to be made by 3COM or the
Applicable Purchaser to BNPLC hereunder shall be paid to BNPLC
in immediately available funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: 3COM (Phase I
Transactions)
or at such other place and in such other manner as
BNPLC may designate in a notice to 3COM (provided BNPLC
will not unreasonably designate a method of payment other
than wire transfer). Time is of the essence as to all
payments to BNPLC under this Agreement. Any payments
required to be made by BNPLC to 3COM pursuant to the last
sentence of clause (ii) of Paragraph 2(a) shall be paid
to 3COM in immediately available funds at the address of
3COM set forth below or as 3COM may otherwise direct by
written notice sent in accordance herewith.
(b) All notices, demands and other communications to be
made hereunder to the parties hereto shall be in writing (at
the addresses set forth below) and shall be given by any of
the following means: (A) personal service, with proof of
delivery or attempted delivery retained; (B) electronic
communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified
first class mail, return receipt requested. Such addresses
may be changed by notice to the other parties given in the
same manner as provided above. Any notice or other
communication sent pursuant to clause (A) or (C) hereof shall
be deemed received (whether or not actually received) upon
first attempted delivery at the proper notice address on any
Business Day between 9:00 A.M. and 5:00 P.M., and any notice
or other communication sent pursuant to clause (B) hereof
shall be deemed received upon dispatch by electronic means.
Address of BNPLC:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention:Jennifer Cho or Will La
Herran
Telecopy: (415) 296-8954
And with a copy to:
Clint Shouse
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of 3COM:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Legal Dept. Mail Stop 1308
Telecopy: (408) 764-6434
With copies to:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Real Estate Dept. Mail
Stop 1220
Telecopy: (408) 764-5718; and
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Treasury Dept. Mail Stop 1307
Telecopy: (408) 764-8403; and
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan E. Rattner, Esq.
Telecopy: (415) 328-3029
10. Severability. Each and every covenant and agreement
of 3COM contained in this Agreement is, and shall be construed
to be, a separate and independent covenant and agreement. If
any term or provision of this Agreement or the application
thereof to any person or circumstances shall to any extent be
invalid and unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or
circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby. Further, the
obligations of 3COM hereunder, to the maximum extent possible,
shall be deemed to be separate, independent and in addition
to, not in lieu of, the obligations of 3COM under the Lease.
In the event of any inconsistency between the terms of this
Agreement and the terms and provisions of the Lease, the terms
and provisions of this Agreement shall control.
11. Entire Agreement. This Agreement and the documents
and agreements referred to herein set forth the entire
agreement between the parties concerning the subject matter
hereof and no amendment or modification of this Agreement
shall be binding or valid unless expressed in a writing
executed by both parties hereto.
12. Paragraph Headings. The paragraph headings
contained in this Agreement are for convenience only and shall
in no way enlarge or limit the scope or meaning of the various
and several paragraphs hereof.
13. Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include any other
gender and words in the singular number shall be held and
construed to include the plural, unless the context otherwise
requires.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA.
15. Successors and Assigns. The terms, provisions,
covenants and conditions hereof shall be binding upon 3COM and
BNPLC and their respective permitted successors and assigns
and shall inure to the benefit of 3COM and BNPLC and all
permitted transferees, mortgagees, successors and assignees of
3COM and BNPLC with respect to the Property; provided, that
the rights of BNPLC hereunder shall not pass to 3COM or any
Applicable Purchaser or any subsequent owner claiming through
them. Prior to the Designated Sale Date BNPLC may transfer,
assign and convey, in whole or in part, the Property and any
and all of its rights under this Agreement (subject to the
terms of this Agreement) by any conveyance that constitutes a
Permitted Transfer, but not otherwise. If BNPLC sells or
otherwise transfers the Property and assigns its rights under
this Agreement and the Lease pursuant to a Permitted Transfer,
then to the extent BNPLC's successor in interest confirms its
liability for the obligations imposed upon BNPLC by this
Agreement and the Lease on and subject to the express terms
set out herein and therein, BNPLC shall thereby be released
from any further obligations thereafter arising under this
Agreement and the Lease, and 3COM will look solely to each
successor in interest of BNPLC for performance of such
obligations.
16. WAIVER OF JURY TRIAL. BNPLC AND 3COM EACH HEREBY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LEASE, THIS
AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without
limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. 3COM
and BNPLC each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each
has already relied on the waiver in entering into this
Agreement and the other documents referred to herein, and that
each will continue to rely on the waiver in their related
future dealings. 3COM and BNPLC each further warrant and
represent that it has reviewed this waiver with its legal
counsel, and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LEASE, THIS AGREEMENT OR THE ENVIRONMENTAL
INDEMNITY. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
17. Security for 3COM's Obligations. 3COM's
obligations under this Agreement are secured by the Pledge
Agreement, reference to which is hereby made for a description
of the Collateral covered thereby and the rights and remedies
provided to BNPLC thereby. Although the collateral agent
appointed for BNPLC as provided in the Pledge Agreement shall
be entitled to hold all Collateral as security for the full
and faithful performance by 3COM of 3COM's covenants and
obligations under this Agreement, the Collateral shall not be
considered an advance payment of the Purchase Price or any
Shortage Amount or a measure of BNPLC's damages should 3COM
breach this Agreement. If 3COM does breach this Agreement and
fails to cure the same within any time specified herein for
the cure, BNPLC may, from time to time, without prejudice to
any other remedy and without notice to 3COM, require the
collateral agent to immediately apply the proceeds of any
disposition of the Collateral (and any cash included in the
Collateral) to amounts then due hereunder from 3COM. If BNPLC
assigns its interest in the Property before the Designated
Sale Date, BNPLC may also assign BNPLC's interest in the
Collateral to the assignee.
18. Replacement of Participants Proposed by 3COM. So
long as no Event of Default has occurred and is continuing,
BNPLC shall not unreasonably withhold its approval for a
substitution under the Participation Agreement of a new
Participant proposed by 3COM for any Participant, the Deposit
Taker for whom has ceased to be a Qualified Deposit Taker;
provided, however, that (A) the proposed substitution can be
accomplished without a release or breach by BNPLC of its
rights and obligations under the Participation Agreement or
the "Underlying Documents" described therein (including this
Purchase Agreement); (B) the new Participant will agree (by
executing Supplements to the Participation Agreement and
Pledge Agreement as therein contemplated and by other
agreements as may be reasonably required by BNPLC and 3COM) to
become a party to the Participation Agreement and to the
Pledge Agreement, to designate a Qualified Deposit Taker as
the Deposit Taker for it under the Pledge Agreement and to
accept a Percentage under the Participation Agreement equal to
the Percentage of the Participant to be replaced; (C) the new
Participant (or 3COM) will provide the funds required to pay
the termination fee by Section 6.4 of the Participation
Agreement to accomplish the substitution; (D) 3COM (or the new
Participant) agrees in writing to indemnify and defend BNPLC
for any and all Losses incurred by BNPLC in connection with or
because of the substitution, including the cost of preparing
supplements to the Participation Agreement and the Pledge
Agreement and including any cost of defending and paying any
claim asserted by the Participant to be replaced because of
the substitution (but not including any liability of BNPLC to
such Participant for damages caused by BNPLC's bad faith or
gross negligence in the performance of BNPLC's obligations
under the Participation Agreement prior to the substitution);
and (E) the new Participant shall be a reputable financial
institution having a net worth of no less than seven and one
half percent (7.5%) of total assets and total assets of no
less than $10,000,000,000.00 (all according to then recent
audited financial statements). BNPLC shall attempt in good
faith to assist (and cause its Affiliate, Banque Nationale de
Paris, to attempt in good faith to assist) 3COM in identifying
a new Participant that 3COM may propose to substitute for an
existing Participant pursuant to this Paragraph, as 3COM may
reasonably request from time to time. However, in no event
shall BNPLC itself, or any of its Affiliates, be required to
take the Percentage of any Participant to be replaced.
19. Security for BNPLC's Obligations. To secure 3COM's
right to recover any damages caused by a breach of Paragraph 3
by BNPLC, including any such breach caused by a rejection or
termination of this Agreement in any bankruptcy or insolvency
proceeding instituted by or against BNPLC, as debtor, BNPLC
does hereby grant to 3COM a lien and security interest against
all rights, title and interests of BNPLC from time to time in
and to the Property. 3COM may enforce such lien and security
interest judicially after any such breach by BNPLC, but not
otherwise. 3COM waives any right it has to seek a deficiency
judgement against BNPLC in any action brought for a judicial
foreclosure of such lien and security interest, and in
connection therewith, BNPLC hereby acknowledges that it shall
have no right of redemption following any such judicial
foreclosure pursuant to Cal. Code Civ. Procedure Section 729.
Contemporaneously with the execution of this Agreement, 3COM
and BNPLC will execute a memorandum of this Agreement which is
in recordable form and which specifically references the lien
granted in this Paragraph, and 3COM shall be entitled to
record such memorandum at any time prior to the Designated
Sale Date.
20. Not a Partnership, Etc. NOTHING IN THIS PURCHASE
AGREEMENT IS INTENDED TO BE OR TO CREATE ANY PARTNERSHIP,
JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN BNPLC AND
3COM. NEITHER THE EXECUTION OF THIS PURCHASE AGREEMENT NOR
THE ADMINISTRATION OF THIS PURCHASE AGREEMENT OR OTHER
DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER RIGHT,
DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO THIS PURCHASE
AGREEMENT OR SUCH DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY
FIDUCIARY OBLIGATIONS OF BNPLC TO 3COM.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT
BLANK]
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
"BNPLC"
BNP LEASING CORPORATION, a
Delaware corporation
By: /s/ Lloyd G. Cox
--------------------
Lloyd G. Cox, Vice
President
"3COM"
3COM CORPORATION, a
California corporation
By: /s/ Christopher B. Paisley
------------------------------
Christopher B. Paisley,
Chief Financial Officer
Exhibit A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
Parcel One
Parcel A, as shown on that certain Parcel Map recorded July 7,
1989, Book 602 of Maps, at pages 34 and 35, Records of Santa
Clara County, California.
EXCEPTING THEREFROM that portion described in that certain Lot
Line Adjustment dated August 16, 1991 in Book L826, at page
0826 of Official Records and described as follows:
Beginning at the Southwest corner of said Parcel "A"; thence
on the Westerly and Northerly lines of said Parcel "A" the
following 5 courses:
1. North 00 12' 36" East a distance of 665.00 feet;
2. North 45 12' 36" East a distance of 64.00 feet;
3. North 00 12' 36" East a distance of 82.98 feet to a
point on a non-tangent curve the center of which bears
North 29 17' 50" West a distance of 9000.00 feet;
4. Northeasterly a distance of 79.37 feet on the arc of
said curve to the left through a central angle of 00 30'
19" (chord bears North 60 27' 01" East a distance of
79.37 feet, to a point on said curve;
5. North 66 32' 39" East, departing said curve, a
distance of 75.89 feet;
Thence South 62 07' 20" West a distance of 104.00 feet to a
point of curvature; thence Southwesterly a distance of 9.53
feet on the arc of said 10136.00 foot radius curve to the
right through a central angle of 00 03' 14" (chord bears
South 62 08' 57" West a distance of 9.53 feet) to a point on
said curve; thence South 00 12' 36" West a distance of 809.62
feet to a point on the South line of said parcel "A"; thence
North 89 47' 24" West, on said South line, a distance of
83.50 feet to the point of beginning.
ALSO EXCEPTING THEREFROM that portion of said land as
condemned to the State of California by Order recorded March
10, 1993 in Book M660, page 1700, described as follows:
Being a portion of Parcel A, as shown on that certain Parcel
Map filed for record in Book 602 of Maps at pages 34 and 35
Santa Clara County Records described as follows:
Beginning at the Northeast corner of said Parcel A; thence
from said point of beginning, along the Northerly line of said
Parcel A, S 67 25' 20" W 39.39 feet; thence leaving said
Northerly line S 41 34' 47" E 73.60 feet to a point in the
Easterly line of said Parcel A; thence along said Easterly
line of N 10 04' 48" W 71.28 feet to the point of beginning.
Parcel Two
That portion of Parcel B, as shown on that certain Parcel Map
recorded July 7, 1989, Book 602 of Maps, at pages 34 and 35,
Records of Santa Clara County, California and described in
that certain Lot Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records and described as
follows:
Beginning at a point on the most Northerly Southeasterly line
of said Parcel "B" which bears South 66 32' 39" West a
distance of 226.19 feet from the most Easterly corner thereof;
thence South 10 57' 34" East a distance of 218.69 feet;
thence North 89 47' 24" West a distance of 324.26 feet;
thence North 77 17' 24" West a distance of 141.24 feet;
thence North 66 32' 39" East a distance of 458.33 feet to the
point of beginning.
APN: 104-52-006, 16
ARB: 104-01-046, 046.02, 046.02.01
Exhibit B
CORPORATION GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NAME: [3Com Corporation or the Applicable Purchaser]
ADDRESS: ___________________
ATTN: ___________________
CITY: ___________________
STATE: ___________________
Zip: ___________________
MAIL TAX STATEMENTS TO:
NAME: [3Com Corporation or the Applicable Purchaser]
ADDRESS: ___________________
ATTN: ___________________
CITY: ___________________
STATE: ___________________
Zip: ___________________
CORPORATION GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), hereby grants to [3COM or the Applicable Purchaser]
all of BNPLC's interest in the land situated in the County of
Santa Clara, State of California, described on Annex A
attached hereto and hereby made a part hereof, together with
the improvements currently located on such land and any
easements, rights-of-way, privileges, appurtenances and other
rights pertaining to such land; provided, however, that this
grant is subject to the following, as well as the Permitted
Encumbrances described on Annex B:
1. Real Estate Taxes not yet due and payable;
2. General or Special Assessments due and payable
after the date hereof; and
3. Encroachments, variations in area or in
measurements, boundary line disputes, roadways and
other matters not of record which would be disclosed by
a survey and inspection of the property conveyed
hereby.
BNP LEASING CORPORATION
Date: As of ____________ By:
Its: Vice President
Attest:
Its: Assistant Secretary
STATE OF TEXAS ) ) SS
COUNTY OF DALLAS )
On ___________________ before me,
, personally appeared
and
, personally known to
me (or proved to me on the basis of satisfactory evidence) to
be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same
in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of
which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature
Annex A
LEGAL DESCRIPTION
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
Parcel One
Parcel A, as shown on that certain Parcel Map recorded July 7,
1989, Book 602 of Maps, at pages 34 and 35, Records of Santa
Clara County, California.
EXCEPTING THEREFROM that portion described in that certain Lot
Line Adjustment dated August 16, 1991 in Book L826, at page
0826 of Official Records and described as follows:
Beginning at the Southwest corner of said Parcel "A"; thence
on the Westerly and Northerly lines of said Parcel "A" the
following 5 courses:
1. North 00 12' 36" East a distance of 665.00 feet;
2. North 45 12' 36" East a distance of 64.00 feet;
3. North 00 12' 36" East a distance of 82.98 feet to a
point on a non-tangent curve the center of which bears
North 29 17' 50" West a distance of 9000.00 feet;
4. Northeasterly a distance of 79.37 feet on the arc of
said curve to the left through a central angle of 00 30'
19" (chord bears North 60 27' 01" East a distance of 79.37
feet, to a point on said curve;
5. North 66 32' 39" East, departing said curve, a
distance of 75.89 feet;
Thence South 62 07' 20" West a distance of 104.00 feet to a
point of curvature; thence Southwesterly a distance of 9.53
feet on the arc of said 10136.00 foot radius curve to the
right through a central angle of 00 03' 14" (chord bears
South 62 08' 57" West a distance of 9.53 feet) to a point on
said curve; thence South 00 12' 36" West a distance of 809.62
feet to a point on the South line of said parcel "A"; thence
North 89 47' 24" West, on said South line, a distance of
83.50 feet to the point of beginning.
ALSO EXCEPTING THEREFROM that portion of said land as
condemned to the State of California by Order recorded March
10, 1993 in Book M660, page 1700, described as follows:
Being a portion of Parcel A, as shown on that certain Parcel
Map filed for record in Book 602 of Maps at pages 34 and 35
Santa Clara County Records described as follows:
Beginning at the Northeast corner of said Parcel A; thence
from said point of beginning, along the Northerly line of said
Parcel A, S 67 25' 20" W 39.39 feet; thence leaving said
Northerly line S 41 34' 47" E 73.60 feet to a point in the
Easterly line of said Parcel A; thence along said Easterly
line of N 10 04' 48" W 71.28 feet to the point of beginning.
Parcel Two
That portion of Parcel B, as shown on that certain Parcel Map
recorded July 7, 1989, Book 602 of Maps, at pages 34 and 35,
Records of Santa Clara County, California and described in
that certain Lot Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records and described as
follows:
Beginning at a point on the most Northerly Southeasterly line
of said Parcel "B" which bears South 66 32' 39" West a
distance of 226.19 feet from the most Easterly corner thereof;
thence South 10 57' 34" East a distance of 218.69 feet;
thence North 89 47' 24" West a distance of 324.26 feet;
thence North 77 17' 24" West a distance of 141.24 feet;
thence North 66 32' 39" East a distance of 458.33 feet to the
point of beginning.
APN: 104-52-006, 16
ARB: 104-01-046, 046.02, 046.02.01
Annex B
Permitted Encumbrances
[NOTE: TO THE EXTENT THAT SPECIFIC ENCUMBRANCES (OTHER THAN
"PROHIBITED LIENS") ARE IDENTIFIED IN ADDITION TO THOSE
DESCRIBED BELOW, SUCH ADDITIONAL ENCUMBRANCES WILL BE ADDED TO
THE LIST BELOW AND THIS "NOTE" WILL BE DELETED BEFORE THIS
DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES
APPROVED BY BNPLC AS "PERMITTED ENCUMBRANCES" FROM TIME TO
TIME BECAUSE OF 3COM'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL
TO AN ADJUSTMENT AS PROVIDED IN THE LEASE.]
This conveyance is subject to any encumbrances that do
not constitute "Prohibited Encumbrances" (as defined in the
Purchase Agreement pursuant to which this Deed is being
delivered), including County and city taxes for the Fiscal
Year _______, a lien not yet due or payable, and including the
following matters to the extent the same are still valid and
in force:
1. EASEMENT shown on map filed for record in Book 460
of Maps, page 44 and 45, and incidents thereto
Purpose : Public Utility Easement
Affects : A portion of the
Southerly 10 feet of
(Affects Parcels A and B)
2. DECLARATION of Reciprocal Easements, Covenants, and
Restrictions for the purpose stated herein and subject to
the terms and conditions therein, executed by Dairy
Associates, L.P., a California Limited Partnership,
recorded July 7, 1989 in Book L013, page 971 of Official
Records.
(Affects Parcels A and B)
Amendment No. 1 of Declaration of Reciprocal Easements,
Covenants and Restrictions recorded August 16, 1991 in Book
L826, page 830 of Official Records.
3. AGREEMENT on the terms and conditions contained
therein,
For : Agreement regarding
number of required parking spaces
Between : The City of Santa
Clara, a municipal corporation
And : Dairy Associates, LP.,
a California Limited Partnership
Recorded : March 6, 1990 in Book
L278, page 2239, Official Records.
(Affects Parcels A and B)
4. EASEMENT for the purposes stated herein and
incidents thereto
Purpose : Construction and
reconstructing, installing, operating,
maintaining, repairing and/or replacing
underground electrical distribution and/or
communication systems and appurtenances
thereto, including a reasonable right of
ingress and egress over adjoining lands of
Grantor
Granted to : City of Santa Clara, a
California municipal corporation
Recorded : April 4, 1990 in Book
L310, page 1548, Official Records
Affects : As follows:
Beginning at a point in the Southerly line of Parcel 2 of
that Parcel Map filed for record in Book 460 of Maps at
pages 44-45, Santa Clara County Records, distant thereon
North 89 47' 24" West, 67.50 feet from the Southeasterly
corner of said Parcel 2; thence from said point of
beginning, the following forty-eight courses: South 89
47' 24" East, 30.00 feet; North 0 12' 36" East, 19.10
feet; South 89 47' 24" West, 10.00 feet; North 29 47' 24"
West, 43.00 feet; North 18 32' 24" West, 89.00 feet; North
29 47' 24" West, 119 feet; North 0 12' 36" East, 235
feet; North 11 02' 24" West, 157 feet; South 78 57' 36"
West, 6.00 feet; North 21 02' 24" West, 119.00 feet; South
88 57' 36" West, 73.00 feet; South 58 57' 36" West, 51.00
feet; South 88 57' 36" West, 80.00 feet; North 46 02' 24"
West, 11.00 feet; South 43 57' 36" West, 15.00 feet; South
46 02' 24" East, 20.00 feet; North 43 57' 36" East, 9.86
feet; North 88 57' 36" East, 69.77 feet; South 1 02' 24"
East, 22.00 feet; North 88 57' 36" East, 15.00 feet; North
1 02' 24" West, 24.78 feet; North 58 57' 36" East, 45.43
feet; North 88 57' 36" East, 63.32 feet; South 21 02' 24"
East, 145.68 feet; South 11 02' 24" East 121.11 feet;
South 0 12' 36" West, 234.02 feet; North 89 47' 24" West,
63.00 feet; North 59 47' 24" West, 10.00 feet; North 89
47' 24" West, 10.00 feet; South 60 12' 36" West, 10.00
feet; North 89 47' 24" West, 286.00 feet; North 0 12' 36"
East, 20.00 feet; South 89 47' 24" East, 2.50 feet; North
0 12' 36" East, 15.00 feet; North 89 47' 24" West, 15.00
fee; South 0 12' 36" West, 294.00 feet; North 0 12' 36"
East, 20.00 feet; South 89 47' 24" East, 2.50 feet; North
0 12' 36" East, 15.00 feet; North 89 47' 24" West, 15.00
feet; South 0 12' 36" West, 15.00 feet; South 89 47' 24"
East, 2.50 feet; South 0 12' 36" West, 170.00 feet; South
44 37' 45" East, 75.00 feet; South 0 12' 36" West, 3.76
feet; thence, from a tangent bearing South 85 11' 34"
East, along the arc of a curve concave to the South, having
a radius of 1040 feet, through a central angle of 4 30'
30" an arc length of 81.83 feet; and the following nine
courses; North 44 47' 24" West, 44.62 feet; North 89 47'
24" West, 53.50 feet; North 44 37' 45" West, 55.39 feet;
North 0 12' 36" East, 135.87 feet; South 89 47' 24" East,
684.55 feet; South 29 47' 24" East, 112.24 feet; South 18
32' 24" East, 89.00 feet; South 29 47' 24" East, 21.30
feet; South 0 12' 36" West, 33.67 feet to the point of
beginning.
5. EASEMENT for the purposes stated herein and
incidents thereto
Purpose : Underground pipes
Granted to : Pacific Gas and
Electric Company, a California corporation
Recorded : October 22, 1990 in
Book L515, page 1223, Official Records
Affects : Parcel A as shown upon
the Parcel Map filed for record in Book 602
of Parcel Maps at page 35, Santa Clara County
Records.
Reference is hereby made to the record for further
particulars and a map of said easement, no description was
recorded.
6. AGREEMENT on the terms and conditions contained
therein,
For : Deferred obligation to
construct stoplight
Between : City of Santa Clara,
California, a municipal corporation
And : Dairy Associates, LP.
Recorded : December 17, 1990 in
Book L568, page 1565, Official Records.
(Affects Parcels A and B)
7. LACK OF ABUTTER'S RIGHTS to and from Route 237 -
South Bar Freeway, lying adjacent to the Northerly line of
Parcels A & B of said land, said rights having been
released and relinquished
By : Dairy Associates, LP.,
a California Limited Partnership
To : The State of
California
Recorded : August 16, 1991 in
Book L826, page 839, Official Records.
8. EASEMENT for the purposes stated herein and
incidents thereto
Purpose : An easement for cut
and fill slope purposes
Granted to : The State of
California
Recorded : August 16, 1991 in
Book L826, page 839, Official Records
Affects : As follows:
Commencing at the most Southerly corner of Parcel 1
described in that certain Deed recorded August 16, 1991 in
Book L826, page 889, Official Records; thence along the
general Southerly line of said Parcel 1 the following
courses: from a tangent that bears N. 68 57' 08" E.,
along a curve to the left with a radius of 10,136.00 feet,
through an angle of 05 40' 34", an arc length of 1,004.14
feet, N. 01 05' 17" E., 3.47 feet, and from a tangent that
bears N. 61 34' 51" E., along a curve to the left with a
radius of 8999.52 feet, through an angle of 00 15' 40", an
arc length of 41.03 feet; thence leaving last said line S.
26 57' 54" E., 26.28 feet; thence from a tangent that
bears S. 63 02' 06" W., on a curve to the right with a
radius of 10,158.00 feet, through an angle of 05 58' 01",
an arc length of 1,057.88 feet to the Westerly line of the
aforesaid Parcel B; thence along last said line N. 00 50'
30" E., 23.71 feet to the point of commencement.
EXHIBIT C
PRELIMINARY CHANGE OF OWNERSHIP REPORT
THIS REPORT IS NOT A PUBLIC DOCUMENT
(To be completed by transferee (buyer) prior to
transfer of the subject property in accordance with
Section 480.3 of the Revenue and Taxation Code.)
THIS
SPACE FOR
RECORDER'S
USE
SELLER/TRANSFEROR:
SELLER RECORDING DATE: DOCUMENT NO.
BUYER/TRANSFEREE:
ASSESSOR'S IDENTIFICATION NUMBER(S)
LA ------
Page Parcel
PROPERTY ADDRESS OR LOCATION:
No
Street
City
State Zip Code
MAIL TAX INFORMATION TO:
NAME:
ADDRESS:
Street No City
State Zip Code
FOR
ASSESSOR'S
USE ONLY
Cluster OC1 OC2 DT INT RC SP$ DTT $ #
Pcl.
A Preliminary Change in Ownership Report must be filed with each conveyance
in the County Recorder's office for the county where the property is
located; this particular form may be used in all 58 counties of California.
NOTICE: A lien for property taxes applies to your property on March 1
of each year for the taxes owing in the following fiscal year, July 1
through June 30. One-half of those taxes is due November 1 and one-
half is due February 1. The first installment becomes delinquent on
December 10 and the second installment becomes delinquent on April 10.
One tax bill is mailed before November 1 to the owner of record. IF
THIS TRANSFER OCCURS AFTER MARCH 1 AND ON OR BEFORE DECEMBER 31, YOU
MAY BE RESPONSIBLE FOR THE SECOND INSTALLMENT OF TAXES ON FEBRUARY 1.
The property which you acquired may be subject to a supplemental tax
assessment in an amount to be determined by the Santa Clara County
Assessor. For further information on your supplemental roll
obligation, please call the Santa Clara County Assessor at (___) ___-
____.
PART I: TRANSFER INFORMATION Please answer all questions.
YES NO
" " A. Is this transfer solely between husband and
wife (Addition of a spouse, death of a spouse, divorce
settlement, etc.)?
" " B. Is this transaction only a correction of the
name(s) of the person(s) holding title to the property (For
example, a name change upon marriage)?
" " C. Is this document recorded to create,
terminate, or reconvey a lender's interest in the property?
" " D. Is this transaction recorded only to create,
terminate, or reconvey a security interest (e.g., cosigner)?
" " E. Is this document recorded to substitute a
trustee under a deed of trust, mortgage, or other similar
document?
" " F. Did this transfer result in the creation of a
joint tenancy in which the seller (transferor) remains as one
of the joint tenants?
" " G. Does this transfer return property to the
person who created the joint tenancy (original transferor)?
" " H. Is this transfer of property:
1. to a trust for the benefit of the
grantor, or grantor's spouse?
2. to a trust revocable by the transferor?
3. to a trust from which the property
reverts to the grantor within 12 years?
" " I. If this property is subject to a lease, is the
remaining lease term 35 years or more including written
options?
" " J. Is this a transfer from parents to children or
from children to parents?
" " K. Is this transaction to replace a principal
residence by a person 55 years of age or older?
" " L. Is this transaction to replace a principal
residence by a person who is severely disabled as defined by
Revenue and Taxation Code Section 69.5?
If you checked yes to J, K or L, an applicable claim form must be filed
with the County Assessor.
Please provide any other information that would help the Assessor to
understand the nature of the transfer.
IF YOU HAVE ANSWERED "YES" TO ANY OF THE ABOVE QUESTIONS EXCEPT J, K, OR
L, PLEASE SIGN AND DATE.
OTHERWISE COMPLETE BALANCE OF THE FORM.
PART II: OTHER TRANSFER INFORMATION
A. Date of transfer if other than recording date.
B. Type of transfer. Please check appropriate box.
"
Purchase "Foreclosure "Gift " Trade or Exchange"
Merger, Stock or Partnership Acquisition "
Contract of Sale _ Date of Contract "Inheritance _ Date of Contract
" Other: Please explain: " Creation of a lease:
" Assignment of a lease; "Termination of a lease
Date lease began Original term in years (including written options)
Remaining term in years (including written options)
C. Was only a partial interest in the property transferred?
" Yes " No
If yes, indicate the percentage transferred %
Please answer, to the best of your knowledge, all applicable questions,
sign and date. If a question does not apply, indicate with "N/A".
PART 1: PURCHASE PRICE & TERMS OF SALE
(a) CASH DOWN PAYMENT OR Value of Trade or Exchange
(excluding closing cost)
(b) FIRST DEED OF TRUST @ % interest for years.
Pymts./Mo. = $ (Prin. & Int. only)
" FHA" Fixed Rate
"New Loan" Conventional
"Variable Rate
"Assumed Existing Loan Balance
"VA"
All Inclusive D.T. ($ Wrapped)
"Bank or Savings & Loan"
Cal-Vet
"Loan Carried by Seller"
Finance Company Balloon Payment " Yes " No
Due Date Amount $
(c) SECOND DEED OF TRUST @ % interest for years.
Pymts./Mo. = $
(Prin. & Int. only)
"Bank or Savings & Loan
"Fixed Rate
"New Loan
"Loan Carried by Seller
"Variable Rate
"Assumed Existing Loan Balance Balloon Payment " Yes " No
Due Date Amount $
(d) OTHER FINANCING:
Is other financing involved not covered in (b) or (c) above? " Yes " No
Type @ % interest for years.
Pymts./Mo. = $ (Prin. & Int. only)
"Bank or Savings & Loan
"Fixed Rate
"New Loan
"Loan Carried by Seller
"Variable Rate
"Assumed Existing Loan Balance Balloon Payment " Yes " No
Due Date Amount $
(e) IMPROVEMENT BOND
" Yes " No
Outstanding Balance:
Amount $ Amount $ Amount $
Amount $
Amount $
(f) TOTAL PURCHASE PRICE: (or acquisition price, if
traded or exchanged, include real estate commission if
paid.)
Total items A through E
$
(g) PROPERTY
PURCHASED: " Through a broker; "
Direct form seller; " Other
(Explain)
If purchased through a broker, provide broker's name and phone
no.:
Please explain any special terms or financing and many other
information that would
help the Assessor understand the purchase price and terms of sale.
PART 2: PROPERTY INFORMATION
(a) IS PERSONAL PROPERTY INCLUDED IN THE PURCHASE PRICE
(other than a
mobilehome subject
to local property
tax)?
" Yes
" No
If yes, enter the value of the personal property included in the
purchase price $ (Attach itemized list of
personal property)
(b) IS THIS
PROPERTY INTENDED
AS YOUR PRINCIPAL
RESIDENCE? "
Yes "
No
If yes, enter date of occupancy /
/, 19 or intended occupancy /
, 19
Month
Day
Month
Day
(c) TYPE OF PROPERTY TRANSFERRED:
"
Single-Family
residence
"Agricultural
"
Timeshare
"
Multiple-Family
residence
(no. of units: ) "
Coop/
Own-your-own "Mobilehome
"Commercial/Industrial
"Condominium
"Unimproved lot
" Other (Description: )
(d) DOES THE PROPERTY
PRODUCE INCOME? "
Yes " No
(e) IF THE ANSWER TO QUESTION D IS YES, IS THE INCOME FROM:
" Lease/Rent
" Contract
" Mineral rights
" Other - explain
(f) WHAT WAS THE CONDITION OF THE PROPERTY AT THE TIME OF SALE?
" Good " Average
" Fair " Poor
Enter here, or on an attached sheet, any other information that
would assist the Assessor in determining value of the property such
as the physical condition of the property, restrictions, etc.
I certify that the foregoing is true, correct and complete to the
best of my knowledge and belief.
Signed
Date
(New Owner/Corporate
Officer)
Please Print Name of New Owner/Corporate Officer
Phone No. where you are available from 8:00 a.m. - 5:00 p.m. (
)
(Note: The Assessor may contact you for further information)
If a document evidencing a change of ownership is presented to the
recorder for recordation without the concurrent filing of a PRELIMINARY
CHANGE OF OWNERSHIP REPORT, the recorder may charge an additional
recording fee of twenty dollars ($20).
Exhibit D
BILL OF SALE, ASSIGNMENT OF CONTRACT
RIGHTS AND INTANGIBLE ASSETS
Reference is made to that certain ______________ dated
_______, 1996 (the "Agreement") between 3Com Corporation, a
California Corporation, and Dairy Associates, L.P., a
California limited partnership ("Dairy"), pursuant to which
3Com Corporation named BNP LEASING CORPORATION ("Assignor") as
its designee and Dairy Associates, L. P. conveyed to Assignor
the real property described in Annex A attached hereto (the
"Property).
Assignor hereby sells, transfers and assigns unto [3COM
OR THE APPLICABLE PURCHASER, AS THE CASE MAY BE], a
_____________ ("Assignee"), all of Assignor's right, title
and interest in and to the following property, if any, to the
extent such property is assignable:
(a) any warranties, guaranties, indemnities and claims
Assignor may have under the Agreement or under any document
delivered by Dairy thereunder to the extent related to the
Property;
(b) all licenses, permits or similar consents (excluding
any prepaid utility reservations) from third parties to the
extent related to the Property;
(c) any pending or future award made because of any
condemnation affecting the Property or because of any
conveyance to be made in lieu thereof, and any unpaid award
for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or
injury to the Property;
(d) any goods, equipment, furnishings, furniture,
chattels and personal property of whatever nature that are
located on or about the Property; and
(e) any general intangibles, permits, licenses,
franchises, certificates, and other rights and privileges
owned by Assignor and used solely in connection with, or
relating solely to, the Property, including any such rights
and privileges conveyed to Assignor pursuant to the Agreement;
but excluding any rights or privileges of Assignor under (i)
the Environmental Indemnity, as defined in that certain
Purchase Agreement between Assignor and 3Com Corporation dated
as of October 4, 1996 (the "Purchase Agreement") (pursuant to
which this document is being delivered), (ii) the Lease, as
defined in the Purchase Agreement, to the extent rights under
the Lease relate to the period ending on the date hereof,
whether such rights are presently known or unknown, including
rights of the Assignor to be indemnified against claims of
third parties as provided in the Lease which may not presently
be known, and including rights to recover any accrued unpaid
rent under the Lease which may be outstanding as of the date
hereof, (iii) agreements between Assignor and Participants, as
defined in the Lease, or any modification or extension
thereof, and (iv) any other instrument being delivered to
Assignor contemporaneously herewith pursuant to the Purchase
Agreement.
Assignor does for itself and its heirs, executors and
administrators, covenant and agree to warrant and defend the
title to the property assigned herein against the just and
lawful claims and demands of any person claiming under or
through Assignor, but not otherwise; excluding, however, any
claim or demand arising by, through or under [3COM].
Assignee hereby assumes and agrees to keep, perform and
fulfill Assignor's obligations, if any, relating to any
permits or contracts, under which Assignor has rights being
assigned herein.
Executed: , _____.
ASSIGNOR:
BNP LEASING CORPORATION
a Delaware corporation
By:
Its:
ASSIGNEE:
[3COM, OR
THE APPLICABLE PURCHASER], a _________
corporation
By:
Its:
Annex A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
Parcel One
Parcel A, as shown on that certain Parcel Map recorded July 7,
1989, Book 602 of Maps, at pages 34 and 35, Records of Santa
Clara County, California.
EXCEPTING THEREFROM that portion described in that certain Lot
Line Adjustment dated August 16, 1991 in Book L826, at page
0826 of Official Records and described as follows:
Beginning at the Southwest corner of said Parcel "A"; thence
on the Westerly and Northerly lines of said Parcel "A" the
following 5 courses:
1. North 00 12' 36" East a distance of 665.00 feet;
2. North 45 12' 36" East a distance of 64.00 feet;
3. North 00 12' 36" East a distance of 82.98 feet to a
point on a non-tangent curve the center of which bears North
29 17' 50" West a distance of 9000.00 feet;
4. Northeasterly a distance of 79.37 feet on the arc of said
curve to the left through a central angle of 00 30' 19"
(chord bears North 60 27' 01" East a distance of 79.37
feet, to a point on said curve;
5. North 66 32' 39" East, departing said curve, a distance
of 75.89 feet;
Thence South 62 07' 20" West a distance of 104.00 feet to a
point of curvature; thence Southwesterly a distance of 9.53
feet on the arc of said 10136.00 foot radius curve to the
right through a central angle of 00 03' 14" (chord bears
South 62 08' 57" West a distance of 9.53 feet) to a point on
said curve; thence South 00 12' 36" West a distance of 809.62
feet to a point on the South line of said parcel "A"; thence
North 89 47' 24" West, on said South line, a distance of
83.50 feet to the point of beginning.
ALSO EXCEPTING THEREFROM that portion of said land as
condemned to the State of California by Order recorded March
10, 1993 in Book M660, page 1700, described as follows:
Being a portion of Parcel A, as shown on that certain Parcel
Map filed for record in Book 602 of Maps at pages 34 and 35
Santa Clara County Records described as follows:
Beginning at the Northeast corner of said Parcel A; thence
from said point of beginning, along the Northerly line of said
Parcel A, S 67 25' 20" W 39.39 feet; thence leaving said
Northerly line S 41 34' 47" E 73.60 feet to a point in the
Easterly line of said Parcel A; thence along said Easterly
line of N 10 04' 48" W 71.28 feet to the point of beginning.
Parcel Two
That portion of Parcel B, as shown on that certain Parcel Map
recorded July 7, 1989, Book 602 of Maps, at pages 34 and 35,
Records of Santa Clara County, California and described in
that certain Lot Line Adjustment dated August 16, 1991 in Book
L826, at page 0826 of Official Records and described as
follows:
Beginning at a point on the most Northerly Southeasterly line
of said Parcel "B" which bears South 66 32' 39" West a
distance of 226.19 feet from the most Easterly corner thereof;
thence South 10 57' 34" East a distance of 218.69 feet;
thence North 89 47' 24" West a distance of 324.26 feet;
thence North 77 17' 24" West a distance of 141.24 feet;
thence North 66 32' 39" East a distance of 458.33 feet to the
point of beginning.
APN: 104-52-006, 16
ARB: 104-01-046, 046.02, 046.02.01
Exhibit E
Acknowledgment of Disclaimer of Representations and
Warranties
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES (this "Certificate") is made as of
___________________, ____, by [3COM or the Applicable
Purchaser, as the case may be], a ___________________
("Grantee").
Contemporaneously with the execution of this Certificate,
BNP Leasing Corporation, a Delaware corporation ("BNPLC"), is
executing and delivering to Grantee (1) a Corporation Grant
Deed and (2) a Bill of Sale, Assignment of Contract Rights and
Intangible Assets (the foregoing documents and any other
documents to be executed in connection therewith are herein
called the "Conveyancing Documents" and any of the properties,
rights or other matters assigned, transferred or conveyed
pursuant thereto are herein collectively called the "Subject
Property").
Notwithstanding any provision contained in the
Conveyancing Documents to the contrary, Grantee acknowledges
that BNPLC makes no representations or warranties of any
nature or kind, whether statutory, express or implied, with
respect to environmental matters or the physical condition of
the Subject Property, and Grantee, by acceptance of the
Conveyancing Documents, accepts the Subject Property "AS IS,"
"WHERE IS," "WITH ALL FAULTS" and without any such
representation or warranty by Grantor as to environmental
matters, the physical condition of the Subject Property,
compliance with subdivision or platting requirements or
construction of any improvements. Without limiting the
generality of the foregoing, Grantee hereby further
acknowledges and agrees that warranties of merchantability and
fitness for a particular purpose are excluded from the
transaction contemplated by the Conveyancing Documents, as are
any warranties arising from a course of dealing or usage of
trade. Grantee hereby assumes all risk and liability (and
agrees that BNPLC shall not be liable for any special, direct,
indirect, consequential, or other damages resulting or arising
from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property,
except for damages proximately caused by (and attributed by
any applicable principles of comparative fault to) the wilful
misconduct, Active Negligence or gross negligence of BNPLC,
its agents or employees. As used in the preceding sentence,
"Active Negligence" of a party means, and is limited to, the
negligent conduct of activities actually on or about the
Property by that party in a manner that proximately causes
actual bodily injury or property damage to be incurred.
"Active negligence" shall not include (1) any negligent
failure of BNPLC to act when the duty to act would not have
been imposed but for BNPLC's status as owner of the Subject
Property or as a party to the transactions pursuant to which
BNPLC is delivering this instrument (the "Applicable
Transactions"), (2) any negligent failure of any other party
to act when the duty to act would not have been imposed but
for such party's contractual or other relationship to BNPLC or
participation or facilitation in any manner, directly or
indirectly, of the Applicable Transactions, or (3) the
exercise in a lawful manner by BNPLC (or any party lawfully
claiming through or under BNPLC) of any remedy provided in
connection with the Applicable Transactions.
The provisions of this Certificate shall be binding on
Grantee, its successors and assigns and any other party
claiming through Grantee. Grantee hereby acknowledges that
BNPLC is entitled to rely and is relying on this Certificate.
EXECUTED as of ________________, ____.
,
a
By:
Name:
Title:
Exhibit F
Documentary Transfer Tax Request
ACCOUNTABLE FORM #
DATE:
To: Santa Clara County Recorder
Subject: REQUEST THAT DOCUMENTARY TRANSFER TAX
DECLARATION BE MADE IN ACCORDANCE WITH REVENUE CODE
11932.
Re: Instrument Title: Corporation
Grant Deed
Name of Party Conveying Title: BNP Leasing
Corporation
The Documentary Transfer Tax is declared to be in the amount
of $_______________ for the referenced instrument and is:
" Computed on full value of property conveyed.
" Computed on full value less
liens/encumbrances remaining thereon at time of sale.
This separate declaration is made in accordance with
_________________________________. It is requested that the
amount paid be indicated on the face of the document after the
permanent copy has been made.
Sincerely,
Individual (or
his agent) who made, signed or issued
instrument
PART I
RECORDING REFERENCE DATA:
Serial # Date Recorded
SEPARATE PAPER AFFIXED TO INSTRUMENT:
"Tax paid" indicated on the face of instrument and the
separate request (DRA 3-A) was affixed for Recorder by:
Date
Documentary Transfer Tax Collector
Witnessed by: Date
Mail Clerk
(Note: Prepare photo for Recorder file.)
PART II ACCOUNTABLE FORM #
REFERENCE DATA: Title:
Serial: Date:
INSTRUCTIONS:
1. This slip must accompany document.
2. Mail Clerk hand carry document to Tax Collector
to indicate the amount of tax paid.
Exhibit G
SECRETARY'S CERTIFICATE
The undersigned, Secretary of BNP
Leasing Corporation, a Delaware corporation (the
"Corporation"), hereby certifies as follows:
1. That he is the duly, elected, qualified and acting
Secretary [or Assistant Secretary] of the Corporation and has
custody of the corporate records, minutes and corporate seal.
2. That the following named persons have been properly
designated, elected and assigned to the office in the
Corporation as indicated below; that such persons hold such
office at this time and that the specimen signature appearing
beside the name of such officer is his or her true and correct
signature.
[The following blanks must be completed with the names and
signatures of the officers who will be signing the deed and
other Required Documents on behalf of the Corporation.]
Name Title Signature
3. That the resolutions attached hereto and made a part
hereof were duly adopted by the Board of Directors of the
Corporation in accordance with the Corporation's Articles of
Incorporation and Bylaws. Such resolutions have not been
amended, modified or rescinded and remain in full force and
effect.
IN WITNESS WHEREOF, I have hereunto signed my name and
affixed the seal of the Corporation on this , day of
, .
[signature]
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION
WHEREAS, pursuant to that certain Purchase Agreement
(herein called the "Purchase Agreement") dated as of
October 4, 1996, by and between BNP Leasing Corporation (the
"Corporation") and [3COM OR THE APPLICABLE PURCHASER AS THE
CASE MAY BE] ("Purchaser"), the Corporation agreed to sell and
Purchaser agreed to purchase or cause the Applicable Purchaser
(as defined in the Purchase Agreement) to purchase the
Corporation's interest in the property (the "Property")
located in Santa Clara, California more particularly described
therein.
NOW THEREFORE, BE IT RESOLVED, that the Board of
Directors of the Corporation, in its best business judgment,
deems it in the best interest of the Corporation and its
shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in
accordance with the terms of the Purchase Agreement.
RESOLVED FURTHER, that the proper officers of the
Corporation, and each of them, are hereby authorized and
directed in the name and on behalf of the Corporation to cause
the Corporation to fulfill its obligations under the Purchase
Agreement.
RESOLVED FURTHER, that the proper officers of the
Corporation, and each of them, are hereby authorized and
directed to take or cause to be taken any and all actions and
to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and
agreements that shall be necessary, advisable or appropriate,
in such officer's sole and absolute discretion, to carry out
the intent and to accomplish the purposes of the foregoing
resolutions.
Exhibit H
BNP LEASING CORPORATION
717 N. HARWOOD
SUITE 2630
DALLAS, TEXAS 75201
,
[Title Insurance Company]
_________________
_________________
_________________
Re: Recording of Grant Deed to [3COM or the Applicable
Purchaser] ("Purchaser")
Ladies and Gentlemen:
BNP Leasing Corporation has executed and delivered to
Purchaser a Grant Deed in the form attached to this letter.
You are hereby authorized and directed to record the Grant
Deed at the request of Purchaser.
Sincerely,
Exhibit I
FIRPTA STATEMENT
Section 1445 of the Internal Revenue Code of 1986, as
amended, provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign
person. Sections 18805, 18815 and 26131 of the California
Revenue and Taxation Code, as amended, provide that a
transferee of a California real property interest must
withhold income tax if the transferor is a nonresident seller.
To inform [3COM or the Applicable Purchaser] (the
"Transferee") that withholding of tax is not required upon the
disposition of a California real property interest by
transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the
Seller:
1. The Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms
are defined in the Internal Revenue Code and Income Tax
Regulations);
2. The United States employer identification number for
the Seller is _____________________;
3.The office address of the Seller is ______________
__________________________________________.
[Note: BNPLC MUST INCLUDE EITHER ONE, BUT ONLY ONE, OF THE
FOLLOWING REPRESENTATIONS IN THE FIRPTA STATEMENT, BUT IF THE
ONE INCLUDED STATES THAT BNPLC IS DEEMED EXEMPT FROM
CALIFORNIA INCOME AND FRANCHISE TAX, THEN BNPLC MUST ALSO
ATTACH A WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE
TAX BOARD EVIDENCING THE SAME:
4. The Seller is qualified to do business in California.
OR
4. The Seller is deemed to be exempt from the withholding
requirement of California Revenue and Taxation Code Section
26131(e), as evidenced by the withholding certificate from the
California Franchise Tax Board which is attached.]
The Seller understands that this certification may be
disclosed to the Internal Revenue Service and/or to the
California Franchise Tax Board by the Transferee and that any
false statement contained herein could be punished by fine,
imprisonment, or both.
The Seller understands that the Transferee is relying on
this affidavit in determining whether withholding is required
upon said transfer. The Seller hereby agrees to indemnify and
hold the Transferee harmless from and against any and all
obligations, liabilities, claims, losses, actions, causes of
action, demands, rights, damages, costs, and expenses
(including but not limited to court costs and attorneys' fees)
incurred by the Transferee as a result of any false misleading
statement contained herein.
Under penalties of perjury I declare that I have examined
this certification and to the best of my knowledge and belief
it is true, correct and complete, and I further declare that I
have authority to sign this document on behalf of the Seller.
Dated: ___________, ____.
By:
Name:
Title:
Exhibit C - Page 6
EXHIBIT 10.37
$49,500,000
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
3COM CORPORATION,
AS TENANT
EFFECTIVE AS OF NOVEMBER 20, 1996
(North First Street Property)
This Agreement is being facilitated by the following banks:
Banque Nationale de Paris
ABN AMRO Bank N.V.
TABLE OF CONTENTS
1. Definitions
(a) Active Negligence
(b) Additional Rent
(c) Administrative Fee
(d) Affiliate
(e) Applicable Laws
(f) Applicable Purchaser
(g) Attorneys' Fees
(h) Base Rent
(i) Base Rent Date
(j) Base Rent Period
(k) Breakage Costs
(l) Business Day
(m) Capital Adequacy Charges
(n) Closing Costs
(o) Change of Control Event
(p) Code
(q) Collateral
(r) Collateral Percentage
(s) Debt
(t) Default
(u) Default Rate
(v) Designated Sale Date
(w) Effective Rate
(x) Environmental Indemnity
(y) Environmental Laws
(z) Environmental Losses
(aa) Environmental Report
(ab) ERISA
(ac) ERISA Affiliate
(ad) ERISA Termination Event
(ae) Escrowed Proceeds
(af) Eurocurrency Liabilities
(ag) Eurodollar Rate Reserve Percentage
(ah) Event of Default
(ai) Excluded Taxes
(aj) Fair Market Value
(ak) Fed Funds Rate
(al) Funding Advances
(am) GAAP
(an) Hazardous Substance
(ao) Hazardous Substance Activity
(ap) Impositions
(aq) Improvements
(ar) Indemnified Party
(as) Initial Funding Advance
(at) Landlord's Parent
(au) LIBOR
(av) Lien
(aw) Losses
(ax) Ordinary Negligence
(ay) Participant
(az) Participation Agreement
(ba) Permitted Encumbrances
(bb) Permitted Hazardous Substance Use
(bc) Permitted Hazardous Substances
(bd) Permitted Transfer
(be) Person
(bf) Plan
(bg) Pledge Agreement
(bh) Prime Rate
(bi) Purchase Agreement
(bj) Purchase Price
(bk) Qualified Payments
(bl) Remaining Proceeds
(bm) Rent
(bn) Responsible Financial Officer
(bo) Spread
(bp) Stipulated Loss Value
(bq) Subsidiary
(br) Tenant's Knowledge
(bs) Term
(bt) Unfunded Benefit Liabilities
(bu) Upfront Fee
(bv) Voluntary Minimum Pledge Commitment
(bw) Other Terms and References
2. Term
3. Rental
(a) Base Rent
(b) Upfront Fee
(c) Administrative Fees
(d) Additional Rent
(e) Interest and Order of Application
(f) Net Lease
(g) No Demand or Setoff
4. Insurance and Condemnation Proceeds
5. No Lease Termination
(a) Status of Lease
(b) Waiver By Tenant
6. Purchase Agreement, Pledge Agreement and Environmental Indemnity
7. Use and Condition of Leased Property
(a) Use
(b) Condition
(c) Consideration of and Scope of Waiver
8. Other Representations, Warranties and Covenants of Tenant
(a) Financial Matters
(b) Existing Contract
(c) No Default or Violation
(d) Compliance with Covenants and Laws
(e) Environmental Representations
(f) No Suits
(g) Condition of Property
(h) Organization
(i) Enforceability
(j) Not a Foreign Person
(k) Omissions
(l) Existence
(m) Tenant Taxes
(n) Operation of Property
(o) Debts for Construction
(p) Impositions
(q) Repair, Maintenance, Alterations and Additions
(r) Insurance and Casualty
(s) Condemnation
(t) Protection and Defense of Title
(u) No Liens on the Leased Property
(v) Books and Records
(w) Financial Statements; Required Notices;
Certificates as to Default
(x) Further Assurances
(y) Fees and Expenses; General Indemnification;
Increased Costs; and Capital Adequacy Charges
(z) Liability Insurance
(aa) Permitted Encumbrances
(ab) Environmental
(ac) Affirmative Financial Covenants
(ad) Negative Covenants
(i) Liens
(ii) Transactions with Affiliates
(iii) Mergers; Sales of Assets
(v) Change of Business
(ae) ERISA
9. Representations, Warranties and Covenants of Landlord
(a) Title Claims By, Through or Under Landlord
(b) Actions Required of the Title Holder
(c) No Default or Violation
(d) No Suits
(e) Organization
(f) Enforceability
(g) Existence
(h) Not a Foreign Person
10. Assignment and Subletting
(a) Consent Required
(b) Standard for Landlord's Consent to Assignments
and Certain Other Matters
(c) Consent Not a Waiver
(d) Landlord's Assignment
11. Environmental Indemnification
(a) Indemnity
(b) Assumption of Defense
(c) Notice of Environmental Losses
(d) Rights Cumulative
(e) Survival of the Indemnity
12. Landlord's Right of Access
13. Events of Default
(a) Definition of Event of Default
(b) Remedies
(c) Enforceability
(d) Remedies Cumulative
(e) Waiver by Tenant
(f) No Implied Waiver
14. Default by Landlord
15. Quiet Enjoyment
16. Surrender Upon Termination
17. Holding Over by Tenant
18. Miscellaneous
(a) Notices
(b) Severability
(c) No Merger
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD
(e) Entire Agreement
(f) Binding Effect
(g) Time is of the Essence
(h) Termination of Prior Rights
(i) Governing Law
(j) Waiver of a Jury Trial
(k) Not a Partnership, Etc
(l) Tax Reporting
Exhibits and Schedules
Exhibit A Legal Description
Exhibit B Encumbrance List
Exhibit C Intentionally Deleted
Exhibit D Intentionally Deleted
Exhibit E Covenant Compliance Certificate
Exhibit F Certificate Setting Forth the Calculation of the Spread
Exhibit G List of Environmental Reports
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this
"Lease"), made to be effective as of November 20, 1996 (all
references herein to the "date hereof" or words of like effect
shall mean such effective date), by and between BNP LEASING CORPORATION,
a Delaware corporation (hereinafter called "Landlord"), and 3COM
CORPORATION, a California corporation (hereinafter called "Tenant");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Sale Agreement dated as of July
16, 1996 (as amended, hereinafter called the "Existing
Contract") between Tenant and Metropolitan Life Insurance
Company, a New York corporation (hereinafter called "Seller"),
concerning the land described in Exhibit A attached hereto
(hereinafter called the "Land") and the improvements on such
Land, if any, Landlord is acquiring the Land and improvements
(if any) from Seller contemporaneously with the execution of
this Lease;
WHEREAS, in anticipation of Landlord's acquisition of
the Land, any improvements on the Land and other rights and
interests hereinafter described, Landlord and Tenant have
reached agreement as to the terms and conditions upon which
Landlord is willing to lease the same to Tenant, and by this
Lease Landlord and Tenant desire to evidence such agreement;
NOW, THEREFORE, in consideration of the rent to be
paid and the covenants and agreements to be performed by
Tenant, as hereinafter set forth, Landlord does hereby LEASE,
DEMISE and LET unto Tenant for the term hereinafter set forth
the Land, together with:
(i) Landlord's interest in any and all buildings and
improvements now or hereafter erected on the Land,
including, but not limited to, the fixtures, attachments,
appliances, equipment, machinery and other articles
attached to any such buildings and improvements
(hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or
hereafter acquired by Landlord for use in connection with the Land
or Improvements or as a means of access thereto;
(iii) all right, title and interest of Landlord, now
owned or hereafter acquired, in and to (A) any land lying within
the right-of-way of any street, open or proposed,
adjoining the Land, (B) any and all sidewalks and alleys
adjacent to the Land and (C) any strips and gores between
the Land and abutting land (except strips and gores, if any,
between the Land and abutting land owned by Landlord, with respect
to which this Lease shall cover only the portion thereof to the
center line between the Land and the abutting land owned
by Landlord).
The Land and all of the property described in items (i)
through (iii) above are hereinafter referred to collectively
as the "Real Property".
In addition to conveying the leasehold in the Real
Property as described above, Landlord hereby grants and
assigns to Tenant for the term of this Lease the right to use
and enjoy (and, to the extent the following consist of
contract rights, to enforce) any assignable interests or
rights in, to or under the following that have been
transferred to Landlord by Seller under the Existing
Contract: (a) any goods, equipment, furnishings, furniture,
chattels and personal property of whatever nature that are
located on the Real Property and all renewals or replacements
of or substitutions for any of the foregoing; and (b) any
general intangibles, permits, licenses, franchises,
certificates, and other rights and privileges. All of the
property, rights and privileges described above in this
paragraph are hereinafter collectively called the "Personal
Property". The Real Property and the Personal Property are
hereinafter sometimes collectively called the "Leased Property."
Provided, however, the leasehold estate conveyed
hereby and Tenant's rights hereunder are expressly made
subject and subordinate to the Permitted Encumbrances (as
hereinafter defined) and to any other claims or encumbrances
not asserted by Landlord itself or by third parties lawfully
claiming through or under Landlord.
The Leased Property is leased by Landlord to Tenant
and is accepted and is to be used and possessed by Tenant
upon and subject to the following terms, provisions,
covenants, agreements and conditions:
1. Definitions. As used herein, the terms "Landlord,"
"Tenant," "Existing Contract," "Seller," "Land," "Improvements,"
"Real Property," "Personal Property" and "Leased Property" shall
have the meanings indicated above and the terms listed
immediately below shall have the following meanings:
(a) Active Negligence. "Active Negligence" of an
Indemnified Party means, and is limited to, the negligent conduct
of activities on the Leased Property by the Indemnified Party in a manner
that proximately causes actual bodily injury or property
damage to occur. "Active Negligence" shall not include (1)
any negligent failure of Landlord to act when the duty to act
would not have been imposed but for Landlord's status as owner
of the Leased Property or as a party to the transactions
described in this Lease, (2) any negligent failure of any
other Indemnified Party to act when the duty to act would not
have been imposed but for such party's contractual or other
relationship to Landlord or participation or facilitation in
any manner, directly or indirectly, of the transactions
described in this Lease, or (3) the exercise in a lawful
manner by Landlord (or any party lawfully claiming through or
under Landlord) of any remedy provided herein or in the
Purchase Agreement.
(b) Additional Rent. "Additional Rent" shall have the
meaning assigned to it in subparagraph 3.(d) below.
(c) Administrative Fee. "Administrative Fee" shall have
the meaning assigned to it in subparagraph 3.(c).
(d) Affiliate. "Affiliate" of any Person means any other
Person controlling controlled by or under common control with such
Person. For purposes of this definition, the term "control"
when used with respect to any Person means the power to direct
the management of policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(e) Applicable Laws. "Applicable Laws" shall have the
meaning assigned to it in subparagraph 8.(d) below.
(f) Applicable Purchaser. "Applicable Purchaser" means any
third party designated by Tenant to purchase the Landlord's interest
in the Leased Property and in any Escrowed Proceeds as provided
in the Purchase Agreement.
(g) Attorneys' Fees. "Attorneys' Fees" means the reasonable
fees and expenses of counsel to the parties incurring the same, which may
include fairly allocated costs of in-house counsel, printing,
photostating, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals, librarians
and others not admitted to the bar but performing services under
the supervision of an attorney. Such terms shall also include, without
limitation, all such fees and expenses incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any
manner or proceeding is brought with respect to the matter for which such
fees and expenses were incurred.
(h) Base Rent. "Base Rent" means the rent payable by Tenant
pursuant to subparagraph 3.(a) below.
(i) Base Rent Date. "Base Rent Date" means December 2, 1996
and the first Business Day of February, May, August and November of each
calendar year thereafter to and including the first Business Day
of November, 1998.
(j) Base Rent Period. "Base Rent Period" means (1) the
period beginning on and including the date hereof and ending on but not
including the first Base Rent Date, (2) the period beginning on
and including the first Base Rent Date and ending on but not
including second Base Rent Date, and (3) each successive period
of approximately three (3) months. Each successive Base Rent
Period after the first Base Rent Period shall begin on and
include the day on which the preceding Base Rent Period ends and
shall end on but not include the next following Base Rent Date.
(k) Breakage Costs. "Breakage Costs" means any and all
costs, losses or expenses incurred or sustained by Landlord's Parent or any
other Participant, for which Landlord's Parent or the other Participant
shall expect reimbursement from Landlord, because of the
resulting liquidation or redeployment of deposits or other
funds used to make Funding Advances upon any termination of
this Lease by Tenant pursuant to Paragraph 2, if such
termination is effective as of any day other than a Base Rent
Date. Breakage Costs will include losses attributable to any
decline in LIBOR as of the effective date of termination as
compared to LIBOR used to determine the Effective Rate then
in effect. (However, if Landlord's Parent or another
Participant actually receives a profit upon the liquidation
or redeployment of deposits or other funds used to make
Funding Advances, because of any increase in LIBOR, then such
profit will be offset against costs or expenses that would
otherwise be charged as Breakage Costs under this Lease.)
Each determination by Landlord's Parent of Breakage Costs
shall, in the absence of clear and demonstrable error, be
conclusive and binding upon Landlord and Tenant.
(l) Business Day. "Business Day" means any day that is
(1) not a Saturday, Sunday or day on which commercial banks are
generally closed or required to be closed in New York City,
New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London
interbank market; provided that if such dealings are
suspended indefinitely for any reason, "Business Day" shall
mean any day described in clause (1).
(m) Capital Adequacy Charges. "Capital Adequacy Charges"
means any additional amounts Landlord's Parent or any other Participant
requires Landlord to pay as compensation for an increase in
required capital as provided in subparagraph 8.(y)(iv).
(n) Closing Costs. "Closing Costs" means the excess of
$49,500,000 over the sums actually paid by Landlord for or in connection
with Landlord's acquisition of the Leased Property (including
the payment of amounts secured by any lien to which the Real
Property may be subject when it is conveyed to Landlord) at
the closing under the Existing Contract, which excess will be
advanced by or on behalf of Landlord to pay costs incurred in
connection with the preparation and negotiation of this Lease,
the Purchase Agreement, the Pledge Agreement, the
Environmental Indemnity, the Participation Agreement and
related documents. To the extent that Landlord does not
itself use such excess to pay expenses incurred by Landlord in
connection with the preparation and negotiation of such
documents, the remainder thereof will be advanced to Tenant,
with the expectation that Tenant shall use any such amount advanced
for one or more of the following purposes: (1) the payment or reimbursement
of expenses incurred by Tenant in connection with the
preparation and negotiation of this Lease, the Purchase
Agreement, the Pledge Agreement and related documents; (2)
the payment or reimbursement of expenses incurred by Tenant
in connection with any improvements Tenant may elect to make
to the Leased Property in accordance with the requirements
and limitations imposed by this Lease, including the
planning, design, engineering and permitting of thereof; (3)
the maintenance of the Leased Property; (4) the payment of
the Upfront Fee and the first Administrative Fee; or (5) the
payment of Rents next due.
(o) Change of Control Event. "Change of Control Event"
means the occurrence of any merger or consolidation or sale
of assets involving Tenant that is prohibited by subparagraph
8.(ad)(iii).
(p) Code. "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
(q) Collateral. "Collateral" shall have the meaning
assigned to it in the Pledge Agreement.
(r) Collateral Percentage. "Collateral Percentage" for each
Base Rent Period means the Collateral Percentage for such period
determined under (and as defined in) the Pledge Agreement;
provided, however, for purposes of this Lease, the Collateral
Percentage for any Base Rent Period shall not exceed a fraction;
the numerator of which fraction shall equal the value
(determined as provided in the Pledge Agreement) of all
Collateral (a) that is, on the first day of such Base Rent
Period, held by the Deposit Takers under (and as defined in) the
Pledge Agreement subject to a Qualifying Security Interest (as
defined below), (b) that is free from claims or security
interests held or asserted by any third party, and (c) that is
not in excess of Stipulated Loss Value; and the denominator of
which fraction shall equal the Stipulated Loss Value on the
first day of such Base Rent Period. "Qualifying Security
Interest" means a first priority perfected security interest
under the Pledge Agreement which is sufficient, for purposes of
the laws and regulations which govern minimum amounts of capital
that each of Landlord's Parent and other Participants (or their
respective affiliates) must maintain, to permit them to assign a
risk weighting of no more than twenty percent to the portion of
their respective Funding Advances equal to the Collateral their
respective Deposit Takers hold on deposit as provided by the
Pledge Agreement.
(s) Debt. "Debt" of any Person means (i) indebtedness of
such Person for borrowed money, (ii) obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations of such Person to pay the deferred purchase
price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, (v)
obligations of such Person, contingent or otherwise, under any
lease of real property or related documents (including a
separate purchase agreement) which provide that such Person must
purchase or cause another to purchase any interest in the leased
property and thereby guarantee a minimum residual value of the
leased property to the lessor; (vi) obligations under direct or
indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (v) above, (vii) liabilities of another Person secured by a
Lien on, or payable out of the proceeds of production from, property of
such Person even though such obligation shall not be assumed
by such Person (but in the case of such liabilities not
assumed by such Person, the liabilities shall constitute Debt
of such Person only to the extent of the value
of such Person's property encumbered by the Lien securing
such liabilities) and (viii) Unfunded Benefit Liabilities.
(t) Default. "Default" means any event which, with the
passage of time or the giving of notice or both, would (if not cured
within any applicable cure period) constitute an Event of
Default.
(u) Default Rate. "Default Rate" means a floating per
annum rate equal to three percent (3%) above the Prime Rate. However,
in no event will the Default Rate exceed the maximum interest
rate permitted by law.
(v) Designated Sale Date. "Designated Sale Date" shall
have the meaning assigned to it in the Purchase Agreement.
(w) Effective Rate. "Effective Rate" means:
(i) for each day during the short first Base Rent Period
ending on December 2, 1996, the per annum rate which is fifty basis
points (50/100 of 1%) above the Fed Funds Rate on that day;
and
(ii) for each Base Rent Period after the first Base Rent
Period, the per annum rate determined by dividing (A) LIBOR for such
period, by (B) 100% minus the Eurodollar Rate Reserve
Percentage for such period.
If LIBOR or the Eurodollar Rate Reserve Percentage changes
from Base Rent Period to Base Rent Period, then the Effective
Rate shall be automatically increased or decreased, as the
case may be, as of the date of the change from Base Rent
Period to Base Rent Period. If for any reason Landlord's
Parent determines that it is impossible or unreasonably
difficult to determine the Effective Rate with respect to a
given Base Rent Period in accordance with the preceding
sentences, then the "Effective Rate" for that Base Rent
Period shall equal any published index or per annum interest
rate determined reasonably and in good faith by Landlord's
Parent to be a comparable rate at the beginning of the first
day of that period. A comparable interest rate might be, for
example, the then existing yield on short term United States
Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve
Statistical Release H.15(519) or its successor publication),
plus or minus a fixed adjustment based on Landlord's Parent's
comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by Landlord's
Parent of the Effective Rate hereunder shall, in the absence
of clear and demonstrable error, be conclusive and binding.
(x) Environmental Indemnity. "Environmental Indemnity"
means the separate Environmental Indemnity Agreement dated as of the
date hereof executed by Tenant in favor of Landlord covering
the Land and certain other property described therein, as
such agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time.
(y) Environmental Laws. "Environmental Laws" means any
and all existing and future Applicable Laws pertaining to safety,
health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including without limitation
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (as amended, hereinafter
called "CERCLA"), and the Resource Conservation and Recovery
Act of 1976, as amended by the Used Oil Recycling Act of
1980, the Solid Waste Disposal Act Amendments of 1980, and
the Hazardous and Solid Waste Amendments of 1984 (as amended,
hereinafter called "RCRA").
(z) Environmental Losses. "Environmental Losses" means
Losses suffered or incurred by any Indemnified Party,
directly or indirectly, relating to or arising out of, based
on or as a result of: (i) any Hazardous Substance Activity;
(ii) any violation of Environmental Laws relating to the
Leased Property or to the ownership, use, occupancy or
operation thereof; (iii) any investigation, inquiry, order,
hearing, action, or other proceeding by or before any
governmental or quasi-governmental agency or authority in
connection with any Hazardous Substance Activity; or (iv) any
claim, demand, cause of action or investigation, or any
action or other proceeding, whether meritorious or not,
brought or asserted against any Indemnified Party which
directly or indirectly relates to, arises from, is based on,
or results from any of the matters described in clauses (i),
(ii), or (iii) of this subparagraph 1.(z), or any allegation
of any such matters. ENVIRONMENTAL LOSSES INCURRED BY OR
ASSERTED AGAINST A PARTICULAR INDEMNIFIED PARTY SHALL INCLUDE
LOSSES RELATING TO OR ARISING OUT OF OR AS A RESULT OF ANY
MATTERS LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH
MATTERS ARE CAUSED BY THE ORDINARY NEGLIGENCE (AS DEFINED
BELOW) OF THAT PARTICULAR OR ANY OTHER INDEMNIFIED PARTY.
However, Losses incurred by or asserted against a particular
Indemnified Party and proximately caused by (and attributed
by any applicable principles of comparative fault to) the
wilful misconduct, Active Negligence or gross negligence of
any Indemnified Party will not constitute Environmental
Losses of such Indemnified Party for purposes of this Lease.
(aa) Environmental Report. "Environmental Report" means,
collectively, the reports listed on Exhibit G attached
hereto.
(bb) ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, together
with all rules and regulations promulgated with respect thereto.
(cc) ERISA Affiliate. "ERISA Affiliate" means any Person who
for purposes of Title IV of ERISA is a member of Tenant's
controlled group, or under common control with Tenant, within the meaning
of Section 414 of the Code, and the regulations promulgated and
rulings issued thereunder.
(dd) ERISA Termination Event. "ERISA Termination Event"
means (i) the occurrence with respect to any Plan of a) a
reportable event described in Sections 4043(b)(5) or (6) of
ERISA or b) any other reportable event described in Section 4043(b) of
ERISA other than a reportable event not subject to the provision for 30-day
notice to the Pension Benefit Guaranty Corporation pursuant to
a waiver by such corporation under Section 4043(a) of ERISA,
or (ii) the withdrawal of Tenant or any Affiliate of Tenant
from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii)
the filing of a notice of intent to terminate any Plan or the
treatment of any Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to
terminate any Plan by the Pension Benefit Guaranty Corporation
under Section 4042 of ERISA, or (v) any other event or
condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee
to administer, any Plan.
(ee) Escrowed Proceeds. "Escrowed Proceeds" shall mean any
proceeds that are received by Landlord from time to time
during the Term (and any interest earned thereon), which
Landlord is holding for the purposes specified in the next
sentence, from any party (1) under any casualty insurance
policy as a result of damage to the Leased Property, (2) as
compensation for any sale of a Parcel pursuant to subparagraph
9.(b) or for any restriction placed upon the use or
development of the Leased Property or for the condemnation of
the Leased Property or any portion thereof, (3) because of any
judgment, decree or award for injury or damage to the Leased
Property or (4) under any title insurance policy or otherwise as a
result of any title defect or claimed title defect with respect to the
Leased Property; provided, however, in determining "Escrowed
Proceeds" there shall be deducted all expenses and costs of
every type, kind and nature (including Attorneys' Fees)
incurred by Landlord to collect such proceeds; and provided,
further, "Escrowed Proceeds" shall not include any payment to
Landlord by a Participant or an Affiliate of Landlord that is
made to compensate Landlord for the Participant's or
Affiliate's share of any Losses Landlord may incur as a
result of any of the events described in the preceding
clauses (1) through (4). "Escrowed Proceeds" shall include
only such proceeds as are held by Landlord (A) pursuant to
Paragraph 4 for the payment to Tenant for the restoration or
repair of the Leased Property or (B) for application
(generally, on the next following Base Rent Date which is at
least three (3) Business Days following Landlord's receipt of
such proceeds) as a Qualified Payment or as reimbursement of
costs incurred in connection with a Qualified Payment.
"Escrowed Proceeds" shall not include any proceeds that have
been applied as a Qualified Payment or to pay any costs
incurred in connection with a Qualified Payment. Until
Escrowed Proceeds are paid to Tenant pursuant to Paragraph 4
below or applied as a Qualified Payment or as reimbursement
for costs incurred in connection with a Qualified Payment,
Landlord shall keep the same deposited in an interest bearing
account, and all interest earned on such account shall be
added to and made a part of Escrowed Proceeds.
(ff) Eurocurrency Liabilities. "Eurocurrency Liabilities"
has the meaning assigned to that term in Regulation D of the
Board of Governors of the Federal Reserve System, as in
effect from time to time.
(gg) Eurodollar Rate Reserve Percentage. "Eurodollar Rate
Reserve Percentage" means, for purposes of determining the
Effective Rate for any Base Rent Period, the reserve
percentage applicable two Business Days before the first day
of such period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with deposits
exceeding One Billion Dollars with respect to liabilities or
deposits consisting of or including Eurocurrency Liabilities
(or with respect to any other category or liabilities by
reference to which LIBOR is determined) having a term
comparable to such period.
(hh) Event of Default. "Event of Default" shall have the
meaning assigned to it in subparagraph 13.(a) below.
(ii) Excluded Taxes. "Excluded Taxes" shall mean (1) all
federal, state and local income taxes upon the Base Rent, the
Upfront Fee, the Administrative Fees and any interest paid to
Landlord pursuant to subparagraph 3.(e), (2) any taxes
imposed by any governmental authority outside the United
States, and (3) any transfer or change of ownership taxes
assessed because of Landlord's transfer or conveyance to any
third party of any rights or interest in this Lease, the
Purchase Agreement or the Leased Property, but excluding any
such taxes assessed because of any Permitted Transfer.
(jj) Fair Market Value. "Fair Market Value" shall have
the meaning assigned to it in the Purchase Agreement.
(kk) Fed Funds Rate. "Fed Funds Rate" means, for any
period, a fluctuating interest rate (expressed as a per annum
rate and rounded upwards, if necessary, to the next 1/16 of
1%) equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rates are not so published for any day
which is a Business Day, the average of the quotations for
such day on such transactions received by the Landlord's
Parent from three Federal funds brokers of recognized
standing selected by Landlord's Parent. All determinations
of the Fed Funds Rate by Landlord's Parent shall, in the
absence of clear and demonstrable error, be binding and
conclusive upon Landlord and Tenant.
(ll) Funding Advances. "Funding Advances" means the
Initial Funding Advance and any subsequent advances made by
Landlord's Parent or any other Participant to or on behalf of
Landlord in replacement of or renewal and extension of all or
part of the Initial Funding Advance. For example, if after
the date hereof a new Participant advances funds to or on
behalf of Landlord to Landlord's Parent, ABN AMRO Bank N.V. or
another of the original Participants in repayment of all or
part of the Initial Funding Advance, such advance of funds by
the new Participant shall constitute a Funding Advance
hereunder.
(mm) GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in effect from
time to time, applied on a basis consistent with those used in
the preparation of the financial statements referred to in
subparagraph 8.(w) (except for changes concurred in by
Tenant's independent public accountants).
(nn) Hazardous Substance. "Hazardous Substance" means (i)
any chemical, compound, material, mixture or substance that is
now or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a
"hazardous substance," "hazardous material," "hazardous
waste," "extremely hazardous waste," "infectious waste,"
"toxic substance," "toxic pollutant," or any other formulation
intended to define, list or classify substances by reason of
deleterious properties, including, without limitation,
ignitability, corrosiveness, reactivity, carcinogenicity,
toxicity or reproductive toxicity; (ii) petroleum, any
fraction of petroleum, natural gas, natural gas liquids,
liquified natural gas, synthetic gas usable for fuel (or
mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal
solid waste stream, and drilling fluids, produced waters and
other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources;
(iii) asbestos and any asbestos containing material; (iv)
"waste" as defined in section 13050(d) of the California Water
Code; and (v) any other material that, because of its
quantity, concentration or physical or chemical
characteristics, poses a significant present or potential
hazard to human health or safety or to the environment if
released into the workplace or the environment.
(oo) Hazardous Substance Activity. "Hazardous Substance
Activity" means any actual, proposed or threatened use, storage,
holding, existence, location, release (including, without
limitation, any spilling, leaking, leaching, pumping, pouring,
emitting, emptying, dumping, disposing into the environment, and
the continuing migration into or through soil, surface water,
groundwater or any body of water), discharge, deposit,
placement, generation, processing, construction, treatment,
abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into
or on the Leased Property, including, without limitation, the
movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of
water under, in, into or onto the Leased Property and any
residual Hazardous Substance contamination in, on or under the
Leased Property.
(pp) Impositions. "Impositions" shall have the meaning
assigned to it in subparagraph 8.(p) below.
(qq) Improvements. "Improvements," as defined in the
recitals at the beginning of this Lease, shall include not only
existing improvements to the Land as of the date hereof, if any,
but also any new improvements or changes to existing
improvements made by Tenant.
(rr) Indemnified Party. "Indemnified Party" means each of
(1) Landlord and any of Landlord's successors and assigns as to all or any
portion of the Leased Property or any interest therein (but
excluding Tenant or any Applicable Purchaser under the Purchase Agreement
or any Person that claims its interest in the Leased Property through or
under Tenant or through or under an assignment from
Landlord that does not constitute a Permitted Transfer), (2) the
Participants, and (3) any Affiliate, officer, agent, director,
employee or servant of any of the parties described in clause
(1) or (2) preceding.
(ss) Initial Funding Advance. "Initial Funding Advance"
means the advance of $49,500,000 made by Landlord's Parent and
another Participant to or on behalf of Landlord on or prior to
the date of this Lease to cover the cost of Landlord's
acquisition of the Leased Property and Closing Costs.
(tt) Landlord's Parent. "Landlord's Parent" means Landlord's
Affiliate, Banque Nationale de Paris, a bank organized and
existing under the laws of France, together with any Affiliates
of such bank that directly or indirectly provided or hereafter
during the Term provide or maintain any Funding Advances, and
any successors of such bank and such Affiliates.
(uu) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Base Rent Period, the rate determined by
Landlord's Parent to be the average rate of interest per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) of the
rates at which deposits of dollars are offered or available to
Landlord's Parent in the London interbank market at
approximately 11:00 a.m. (London time) on the second Business Day
preceding the first day of such period. Landlord shall instruct
Landlord's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered:
(i) for delivery on the first day of such Base Rent Period, (ii) in an
amount equal or comparable to the total (projected on the
applicable date of determination by Landlord's Parent)
Stipulated Loss Value on the first day of such Base Rent Period,
and (iii) for a period of time equal or comparable to the Base
Rent Period. If Landlord's Parent so chooses, it may determine
LIBOR for any period by reference to the rate reported by the
British Banker's Association on Page 3750 of the Telerate
Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period; provided,
however, Tenant may notify Landlord that Tenant objects to any
future determination of LIBOR in the manner provided by this
sentence, in which case any determination of LIBOR required more
than three Business Days after Landlord's receipt of such notice
shall be made as if this sentence had been struck from this
Lease. If for any reason Landlord's Parent determines that it
is impossible or unreasonably difficult to determine LIBOR with
respect to a given Base Rent Period in accordance with the
preceding sentences, or if Landlord's Parent shall determine
that it is unlawful (or any central bank or governmental
authority shall assert that it is unlawful) for Landlord,
Landlord's Parent or any other Participant to provide or
maintain any Funding Advances hereunder during any Base Rent
Period for which Base Rent is computed by reference to LIBOR,
then "LIBOR" for that Base Rent Period shall equal the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds
Rate for that period. All determinations of LIBOR by Landlord's
Parent shall, in the absence of clear and demonstrable error, be
binding and conclusive upon Landlord and Tenant.
(vv) Lien. "Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any agreement to sell
receivables with recourse, any lease in the nature thereof, and
the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction). Customary
bankers' rights of set-off arising by operation of law or by
contract (however styled, if the contract grants rights no
greater than those arising by operation of law) in
connection with working capital facilities, lines of credit,
term loans and letter of credit facilities and other contractual
arrangements entered into with banks in the ordinary course of
business are not "Liens" for the purposes of this Lease.
(ww) Losses. "Losses" means any and all losses, liabilities,
damages (whether actual, consequential, punitive or otherwise
denominated), demands, claims, actions, judgments, causes of
action, assessments, fines, penalties, costs, and out-of-pocket
expenses (including, without limitation, Attorneys' Fees and the
fees of outside accountants and environmental consultants), of
any and every kind or character, foreseeable and unforeseeable,
liquidated and contingent, proximate and remote, known and
unknown.
(xx) Ordinary Negligence. "Ordinary Negligence" of an
Indemnified Partymeans any negligent acts or omissions of such party
that does not for any reason constitute Active Negligence as defined in
this Lease.
(yy) Participant. "Participant" means any Person, including
Landlord's Parent, that agrees with Landlord or another Participant to
participate in all or some of the risks and rewards to Landlord
of this Lease and the Purchase Agreement. As of the effective
date hereof, the only Participants are Landlord's Parent, ABN
AMRO Bank N.V. and the other financial institutions that have
executed the original Participation Agreement, but such
Participants and Landlord may agree to share in risks and
rewards of this Lease and the Purchase Agreement with other
Participants in the future. However, no Person other than
Landlord's Parent, ABN AMRO Bank N.V. and the other financial
institutions that have executed the original Participation
Agreement shall qualify as a Participant for purposes of this
Lease, the Purchase Agreement or any other agreement to which
3COM is a party unless, with 3COM's prior written approval (such
approval not to be unreasonably withheld) or when an Event of
Default had occurred and was continuing, such Person became a
party to the Pledge Agreement and to the Participation Agreement
by executing supplements to those agreements as contemplated
therein.
(zz) Participation Agreement. "Participation Agreement"
means theParticipation Agreement dated the date hereof between Landlord,
Landlord's Parent, ABN AMRO Bank N.V. and other financial
institutions, pursuant to which Landlord's Parent, ABN AMRO Bank
N.V. and such other financial institutions have
agreed to participate in certain risks and rewards to Landlord
of this Lease and the Purchase Agreement, as such Participation
Agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its
terms.
(aaa) Permitted Encumbrances. "Permitted Encumbrances" means
(i) the encumbrances and other matters affecting the Leased Property
that are set forth in Exhibit B attached hereto and made a part
hereof, and (ii) any provisions
of the Existing Contract or any other agreement described
therein that survived closing thereunder (but not any deed of
trust, mortgage or other agreement given to secure the repayment
of borrowed funds), and (iii) any easement agreement or other
document affecting title to the Leased Property executed by
Landlord at the request of or with the consent of Tenant.
(bbb) Permitted Hazardous Substance Use. "Permitted Hazardous
Substance Use" means the use, storage and offsite disposal of Permitted
Hazardous Substances in strict accordance with applicable
Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of
such use, storage and disposal shall not include the use of
underground storage tanks for any purpose other than the storage
of water for fire control, nor shall such scope and nature:
(1) exceed that reasonably required for the construction
of Improvements permitted by this Lease and for the operation of
the Leased Property for th purposes expressly permitted under
subparagraph 7.(a); or (2) include any disposal, discharge or other
release of Hazardous Substances from operations on the Leased Property
in any manner that might allow such substances to reach the San Francisco
Bay, surface water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works or (B) with
rainwater or storm water runoff in accordance with Applicable
Laws and any permits obtained by Tenant that govern such runoff;
or (ii) any such disposal, discharge or other release of
Hazardous Substances for which no permits are required and which
are not otherwise regulated under applicable Environmental Laws.
Further, notwithstanding anything to the contrary herein
contained, Permitted Hazardous Substance Use shall not include
any use of the Leased Property as a treatment, storage or
disposal facility (as defined by federal Environmental Laws) for
Hazardous Substances, including but not limited to a landfill,
incinerator or other waste disposal facility.
(ccc) Permitted Hazardous Substances. "Permitted Hazardous
Substances" means Hazardous Substances used and reasonably
required for Tenant's operation of the Leased Property for the
purposes expressly permitted by subparagraph 7.(a) in strict
compliance with all Environmental Laws and with due care given
the nature of the Hazardous Substances involved. Without
limiting the generality of the foregoing, Permitted Hazardous
Substances shall include, without limitation, usual and
customary office and janitorial products.
(ddd) Permitted Transfer. "Permitted Transfer" means any one
or more of the following: (1) the creation or conveyance of
rights and interests under the Participation Agreement in favor
of Landlord's Parent, ABN AMRO Bank N.V. or other Participants;
(2) subject to the last sentence of subparagraph 10.(d), any
assignment or conveyance by Landlord of any lien or security
interest against the Leased Property (in contrast to a
conveyance of Landlord's fee estate in the Leased Property) or of any
interest in Rent, payments required by the Purchase Agreement or payments
to be generated from the Leased Property after the Term, to any
present or future Participant or to any Affiliate of Landlord;
(3) any agreement to exercise or refrain from exercising rights
or remedies hereunder or under the Purchase Agreement, the
Pledge Agreement or the Environmental Indemnity made by Landlord
with any present or future Participant or Affiliate of Landlord;
(4) any assignment or conveyance by Landlord requested by Tenant
or required by any Permitted Encumbrance, by the Purchase
Agreement or by Applicable Laws; (5) any assignment or
conveyance by Landlord when an Event of Default shall have
occurred and be continuing; or (6) any assignment or conveyance
by Landlord after the Designated Sale Date.
(eee) Person. "Person" means an individual, a corporation, a
partnership, an unincorporated organization, an association, a
joint stock company, a joint venture, a trust, an estate, a
government or agency or political subdivision thereof or other
entity, whether acting in an individual, fiduciary or other
capacity.
(fff) Plan. "Plan" means at any time an employee pension
benefit plan which is covered under Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Code
and is either (i) maintained by Tenant or any Subsidiary for
employees of Tenant or any Subsidiary or (ii) maintained
pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes
contributions and to which Tenant or any Subsidiary is then
making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
(ggg) Pledge Agreement. "Pledge Agreement" means the Pledge
Agreement dated as of the date hereof between Landlord and
Tenant, pursuant to which Tenant may pledge certificates of
deposit as security for Tenant's obligations under the Purchase
Agreement (and for the corresponding obligations of Landlord to
the Participants under the Participation Agreement), as such
Pledge Agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance
with its terms.
(hhh) Prime Rate. "Prime Rate" means the prime interest rate
or equivalent charged by Landlord's Parent in the United States
as announced or published by Landlord's Parent from time to time,
which need not be the lowest interest rate charged by Landlord's Parent.
If for any reason Landlord's Parent does not
announce or publish a prime rate or equivalent, the prime rate
or equivalent announced or published by either ABN AMRO Bank
N.V. or Credit Commercial de France as selected by Landlord
shall be used as the Prime Rate. The prime rate or equivalent
announced or published by such bank need not be the lowest rate
charged by it. The Prime Rate may change from time to time
after the date hereof without notice to Tenant as of the
effective time of each change in rates described in this
definition.
(iii) Purchase Agreement. "Purchase Agreement" means the
Purchase Agreement dated as of the date hereof between Landlord and
Tenant pursuant to which Tenant has agreed to purchase or to arrange
for the purchase by a third party of the Leased Property, as such
Purchase Agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance
with its terms.
(jjj) Purchase Price. "Purchase Price" shall have the meaning
assigned toit in the Purchase Agreement.
(kkk) Qualified Payments. "Qualified Payments" means all
payments received by Landlord from time to time during the Term from
any party (1) under any casualty insurance policy as a result of damage
to the Leased Property, (2) as compensation for any sale of a Parcel
pursuant to subparagraph 9.(b) or for any restriction placed upon the use
or development of the Leased Property or for the condemnation of the Leased
Property or any portion thereof, (3) because of any judgment,
decree or award for injury or damage to the Leased Property or
(4) under any title insurance policy or otherwise as a result of
any title defect or claimed title defect with respect to the
Leased Property; provided, however, that (x) in determining
Qualified Payments, there shall be deducted all expenses and
costs of every kind, type and nature (including taxes and
Attorneys' Fees) incurred by Landlord with respect to the
collection of such payments, (y) Qualified Payments shall not
include any payment to Landlord by a Participant or an Affiliate
of Landlord that is made to compensate Landlord for the
Participant's or Affiliate's share of any Losses Landlord may
incur as a result of any of the events described in the
preceding clauses (1) through (4) and (z) Qualified Payments
shall not include any payments received by Landlord that
Landlord has paid to Tenant for the restoration or repair of the
Leased Property or that Landlord is holding as Escrowed
Proceeds. For purposes of computing the total Qualified
Payments (and other amounts dependent upon Qualified Payments,
such as Stipulated Loss Value) paid to or received by Landlord
as of any date, payments described in the preceding clauses (1)
through (4) will be considered as Escrowed Proceeds, not
Qualified Payments, until they are actually applied as Qualified
Payments by Landlord, which Landlord will do upon the first Base
Rent Date which is at least three (3) Business Days after
Landlord's receipt of the same unless postponement of such
application is required by other provisions of this Lease or
consented to by Tenant in writing. Thus, for example,
condemnation proceeds actually received by Landlord in the
middle of a Base Rent Period will not be considered as having
been received by Landlord for purposes of computing the total
Qualified Payments unless and until actually applied by Landlord
as a Qualified Payment on a subsequent Base Rent Date in
accordance with Paragraph 4 below.
(lll) Remaining Proceeds. "Remaining Proceeds" shall have the
meaning assigned to it in subparagraph 4.(a)(ii).
(mmm) Rent. "Rent" means the Base Rent and all Additional
Rent.
(nnn) Responsible Financial Officer. "Responsible Financial
Officer" means the chief financial officer, the controller, the treasurer
or the assistant treasurer of Tenant.
(ooo) Spread. The "Spread" on any date will depend upon a
computation involving (a) the rating by Standard and Poor's Corporation
(the "S&P Rating") or the rating by Moody's Investor Service, Inc.
(the "Moody's Ratings"), whichever rating is higher, of Tenant's
senior, unsecured debt on that date (whether such ratings are
express or published, implied ratings), and (b) the Debt to
Capital Ratio (as defined below) on that date, such computation
to be as follows:
(i) If (1) there is no S&P Rating for the senior, unsecured
debt of Tenant (express or published, implied) or the S&P Rating is below
BBB-, AND (2) there is no Moody's Rating for senior, unsecured debt of
Tenant (express or published, implied) or the Moody's Rating is
below Baa3, AND (3) the Debt to Capital Ratio is greater than
0.30, then the Spread will be forty-two and one-half basis
points (.425%).
(ii) If (1) the S&P Rating is BBB-, OR (2) the Moody's Rating
is Baa3, OR (3) the Debt to Capital Ratio is equal to or less than 0.30
and more than 0.15, and if Tenant does not qualify for a lower
Spread pursuant to clause (iii) or (iv) below, then the Spread
will be thirty-seven and one-half basis points (.375%).
(iii) If (1) the S&P Rating is BBB, OR (2) the Moody's Rating
is Baa2, OR (3) the Debt to Capital Ratio is equal to or less than 0.15,
and if Tenant does not qualify for a lower Spread pursuant to clause
(iv) below, then the Spread will be thirty-two and one-half basis points
(.325%).
(iv) If (1) the S&P Rating is above BBB, OR (2) the Moody's
Rating is above Baa2, then the Spread will be twenty-seven and one-half
basis points (.275%). For purposes of calculating the Spread,
"Debt to Capital Ratio" means the quotient determined by dividing
(A) funded Senior Debt (as defined in subparagraph 8.(ac)(ii)), by (B)
the total Capitalization (as defined in subparagraph 8.(ac)(ii)),
including Subordinated Debt (as defined in subparagraph
8.(ac)(ii)). The parties believe it improbable that the ratings
systems used by Standard and Poor's Corporation and by Moody's
Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, Landlord shall
be entitled to select and use a comparable ratings systems as a
substitute for the S&P Rating or the Moody Rating, as the case
may be, for purposes of determining the Spread. All
determinations of the Spread by Landlord shall, in the absence
of clear and demonstrable error, be binding and conclusive for
purposes of this Lease. Further Landlord may, but shall not be
required, to rely on the determination of the Spread set forth
in any certificate delivered by Tenant pursuant to subparagraph
8.(w)(iv) below, and no reduction in the Spread will be
effective because of an improvement in the S&P Rating, the
Moody's Rating or the Debt to Capital Ratio before Tenant has
notified Landlord thereof by delivery of such a certificate.
(ppp) Stipulated Loss Value. "Stipulated Loss Value" means
the amount computed from time to time in accordance with the formula
specified in this definition. Such amount shall equal the
Initial Funding Advance (i.e., $49,500,000), LESS the amount
(if any) of Qualified Payments paid to Landlord on or prior to
such date. Thus, for example, if a determination of Stipulated
Loss Value is required under subparagraph 3.(a) on the first day
of the applicable Base Rent Period, but the Leased Property has
been damaged by fire or other casualty with the result that
$500,000 of net insurance proceeds have been paid to Landlord
and retained by Landlord as Qualified Payments, then the
Stipulated Loss Value as of the date of the required
determination shall be $49,000,000. Under no circumstances will
any payment of Base Rent or the Upfront Fee or any
Administrative Fee reduce Stipulated Loss Value.
(qqq) Subsidiary. "Subsidiary" means any corporation of which
Tenant and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the
ordinary voting power for the election of directors.
(rrr) Tenant's Knowledge. "Tenant's knowledge," "to the
knowledge of Tenant" and words of like effect means the actual knowledge
(with due investigation) of any of the following employees of Tenant: Alan
Groves, Vice President and Corporate Controller; Christopher B.
Paisley, Chief Financial Officer; Abe Darwish, Director of Site
Services; and Walter Patti, Manager of Safety and Security.
However, to the extent Tenant's knowledge after the date hereof
may become relevant hereunder or under any certificate or other
notice provided by Tenant to Landlord in connection with this
Lease, "Tenant's knowledge" and words of like effect shall
include the then actual knowledge of other employees of Tenant
(if any) that have assumed responsibilities of the current
employees listed in the preceding sentence or that have replaced
such current employees. But none of the employees of Tenant
whose knowledge is now or may hereafter be relevant shall be
personally liable for the representations of Tenant made herein.
(sss) Term. "Term" shall have the meaning assigned to it in
Paragraph 2 below.
(ttt) Unfunded Benefit Liabilities. "Unfunded Benefit
Liabilities" means, with respect to any Plan, the amount (if
any) by which the present value of all benefit liabilities
(within the meaning of Section 4001(a)(16) of ERISA) under the
Plan exceeds the fair market value of all Plan assets allocable
to such benefit liabilities, as determined on the most recent
valuation date of the Plan and in accordance with the provisions
of ERISA for calculating the potential liability of Tenant or
any ERISA Affiliate of Tenant under Title IV of ERISA.
(uuu) Upfront Fee. "Upfront Fee" shall have the meaning
assigned to it in subparagraph 3.(b).
(vvv) Voluntary Minimum Pledge Commitment. "Voluntary Minimum
Pledge Commitment" means an agreement in form and substance
reasonably satisfactory to Landlord and the other parties to the
Pledge Agreement which Tenant may elect to execute in connection
with a casualty, condemnation or sale in lieu of condemnation
affecting the Leased Property and which modifies the Pledge
Agreement by establishing a Minimum Collateral Percentage
sufficient to require Tenant to maintain Collateral under the
Pledge Agreement with a value of no less than the insurance,
condemnation or sale proceeds paid or to be paid because of the
casualty, condemnation or sale in lieu of condemnation until
Tenant has completed any related repairs or restoration required
by this Lease.
(www) Other Terms and References. Words of any gender used in
this Lease shall be held and construed to include any other
gender, and words in the singular number shall be held to
include the plural and vice versa, unless the context otherwise
requires. References herein to Paragraphs, subparagraphs
or other subdivisions shall refer to the corresponding
Paragraphs, subparagraphs or subdivisions of this Lease, unless
specific reference is made to another document or instrument.
References herein to any Schedule or Exhibit shall refer to the
corresponding Schedule or Exhibit attached hereto, which shall
be made a part hereof by such reference. All capitalized terms
used in this Lease which refer to other documents shall be
deemed to refer to such other documents as they may be renewed,
extended, supplemented, amended or otherwise modified from time
to time, provided such documents are not renewed, extended or
modified in breach of any provision contained herein or therein
or, in the case of any other document to which Landlord is a
party or of which Landlord is an intended beneficiary, without
the consent of Landlord. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. The
words "this Lease", "herein", "hereof", "hereby", "hereunder"
and words of similar import refer to this Lease as a whole and
not to any particular subdivision unless expressly so limited.
The phrases "this Paragraph" and "this subparagraph" and similar
phrases refer only to the Paragraphs or subparagraphs hereof in
which the phrase occurs. The word "or" is not exclusive. Other
capitalized terms are defined in the provisions that follow.
3. Term. The term of this Lease (herein called the "Term")
shall commence on and include the effective date hereof, and end
at 8:00 A.M. on the first Business Day of November, 1998, unless
extended or sooner terminated as herein provided.
Notwithstanding any other provision of this Lease which may
expressly restrict the early termination hereof, and provided
that Tenant is still in possession of the Leased Property and
has not breached its obligation to make or have made any payment
required by Paragraph 2 of the Purchase Agreement
on any prior Designated Sale Date, Tenant may notify Landlord of
Tenant's election to terminate this Lease before the first
Business Day of November, 1998, by giving Landlord an
irrevocable notice of such election and of the effective date of
the termination, which notice must be given (if at all)
at least sixty (60) days prior to the effective date of the
termination. If Tenant elects to so terminate this Lease, then
on the date on which this Lease is to be terminated, not only
must Tenant pay all unpaid Rent, Tenant must also pay any
Breakage Costs resulting from the termination and must satisfy
its obligations under the Purchase Agreement. The payment of
any unpaid Rent and Breakage Costs and the satisfaction of
Tenant's obligations under the Purchase Agreement shall be
conditions precedent to the effectiveness of any early
termination of this Lease by Tenant.
The Term may be extended at the option of Tenant for two
successive periods of five (5) years each; provided, however,
that prior to any such extension the following conditions must
have been satisfied: (A) at least one hundred eighty (180) days
prior to the commencement of any such extension, Landlord and
Tenant must have agreed in writing upon, and received the
written consent and approval of Landlord's Parent and all other
Participants to (1) a corresponding extension of the date
specified in clause (iii) of the definition of Designated Sale
Date in the Purchase Agreement, and (2) an adjustment to the
Rent that Tenant will be required to pay for the extension, it
being expected that the Rent for the extension may be different
than the Rent required for the original Term, and it being
understood that the Rent for any extension must in all events be
satisfactory to both Landlord and Tenant, each in its sole and
absolute discretion; (B) there must be no Event of Default
continuing hereunder at the time of Tenant's exercise of its
option to extend; and (C) immediately prior to any such
extension, this Lease must remain in effect. With respect to the
condition that Landlord and Tenant must have agreed upon the
Rent required for any extension of the Term, neither Tenant nor
Landlord is willing to submit itself to a risk of liability or
loss of rights hereunder for being judged unreasonable.
Accordingly, both Tenant and Landlord hereby disclaim any
obligation express or implied to be reasonable in negotiating
the Rent for any such extension. Subject to the changes to the
Rent payable during any extension of the Term as provided in
this Paragraph, if Tenant exercises its option to extend the
Term as provided in this Paragraph, this Lease shall continue in
full force and effect, and the leasehold estate hereby granted
to Tenant shall continue without interruption and without any
loss of priority over other interests in or claims against the
Leased Property that may be created or arise after the date
hereof and before the extension.
4. Rental.
(a) Base Rent. Tenant shall pay Landlord rent (herein
called "Base Rent")in arrears, in currency that at the time of payment
is legal tender for public and private debts in the United States of
America, in installments on each Base Rent Date through the end
of the Term. Each payment of Base Rent must be received by
Landlord no later than 12:00 noon (San Francisco time) on the
date it becomes due; if received after 12:00 noon it will be
considered for purposes of this Lease as received on the next
following Business Day. Each installment of Base Rent shall
represent rent allocable to the Base Rent Period ending on the
date on which the installment is due. Landlord shall notify
Tenant in writing of the Base Rent due for each Base Rent Period
at least fifteen (15) days prior to the Base Rent Date on which
such period ends. Any failure by Landlord to so notify Tenant
shall not constitute a waiver of Landlord's right to payment,
but absent such notice Tenant shall not be in default for any
underpayment resulting therefrom if Tenant, in good faith,
reasonably estimates the payment required, makes a timely
payment of the amount so estimated and corrects any underpayment
within three (3) Business Days after being notified by Landlord
of the underpayment. If Tenant or any other Applicable
Purchaser purchases Landlord's interest in the Leased Property
pursuant to the Purchase Agreement, any Base Rent for the three
(3) months ending on the date of purchase (or if the date of
Purchase is not a Base Rent Date, then pro rated Base Rent for
the Base Rent Period which included the date of purchase) and
all outstanding Additional Rent shall be due on the Designated
Sale Date in addition to the purchase price and other sums due
Landlord under the Purchase Agreement.
Base Rent shall accrue for each day of the first Base
Rent Period, and the total Base Rent for the first Base Rent
Period shall equal the sum of Base Rent for all days during such
period. The Base Rent accruing for each day during such period
shall equal:
(1) (A) $49,500,000, times (B) one minus the Collateral
Percentage for the first Base Rent Period, times (C) the sum of
(i) the Effective Rate for such day and (ii) the Spread
calculated on the date of this Lease, divided by (D) three
hundred sixty (360); PLUS
(2) (A) $49,500,000, times (B) the Collateral Percentage
for the first Base Rent Period, times (C) twenty two and one-
half basis points (22.5/100 of 1%), divided by (D) three hundred
sixty (360)
The Base Rent for each Base Rent Period after the first Base
Rent Period shall equal the sum of:
(1) (A) Stipulated Loss Value on the first day of such
Base Rent Period, times (B) one minus the Collateral Percentage
for such Base Rent Period, times (C) the sum of (i) the Effective Rate
for such Base Rent Period and (ii) the Spread calculated on the tenth (10th)
Business Day prior to the day upon which such Base Rent Period
commences, times (D) the number of days in such Base Rent
Period, divided by (E) three hundred sixty (360); PLUS
(2) (A) Stipulated Loss Value on the first day of such Base Rent
Period, times (B) the Collateral Percentage for such Base Rent
Period, times (C) twenty two and one-half basis points (0.225 of
1%), times (D) the number of days in such Base Rent Period,
divided by (E) three hundred sixty (360)
Assume, only for the purpose of illustration: that a
hypothetical Base Rent Period contains exactly ninety (90) days;
that prior to the first day of such Base Rent Period a total of
$19,500,000 of Qualified Payments have been received by
Landlord, leaving a Stipulated Loss Value of $30,000,000 (the
Initial Funding Advance of $49,500,000 less the Qualified
Payments of $19,500,000); that the Collateral Percentage for
such Base Rent Period is forty percent (40%); and that the
Effective Rate plus the Spread for the applicable Base Rent
Period is 6%. Under such assumptions, the Base Rent for the
hypothetical Base Rent Period will equal:
$30,000,000 x 60% x 6% x 90/360, or $270,000, PLUS
$30,000,000 x 40% x .225% x 90/360, or $6,750 = $276,750
To ease the administrative burden of this Lease and the
Pledge Agreement, clause (2) in the formulas above for
calculating Base Rent reflects a reduction in the Base Rent
equal to the interest that would accrue on any Collateral
required by the Pledge Agreement from time to time if the
Accounts (as defined in the Pledge Agreement) bore interest at
the Effective Rate. Landlord has agreed to such reduction in the
Base Rent to provide Tenant with the economic equivalent of
interest on such Collateral, and in return Tenant has agreed to
the provisions of the Pledge Agreement that excuse the actual
payment of interest on the Accounts. By incorporating such
reduction of Base Rent into the formulas above, and by providing
for noninterest bearing Accounts in the Pledge Agreement, the
parties will avoid an unnecessary and cumbersome periodic
exchange of equal payments. It is not, however, the intent of
Landlord or Tenant to understate Base Rent or interest for
financial reporting purposes. Accordingly, for purposes of
determining Tenant's compliance with the affirmative financial
covenants set forth in subparagraph 8.(ac), and for purposes of
any financial reports that this Lease requires of Tenant from
time to time, Tenant may report Base Rent as if there had been
no such reduction and as if the Collateral from time to time
required by the Pledge Agreement had been maintained in Accounts
bearing interest at the Effective Rate.
(b) Upfront Fee. Upon execution and delivery of this Lease
by Landlord, Tenant shall pay Landlord an upfront fee (the "Upfront Fee")
as provided in the letter dated August 20, 1996 (modifying a letter dated
August 9, 1996) from Landlord to Tenant (less the deposit
already paid by Tenant pursuant to that letter which will be
applied against the Upfront Fee). The Upfront Fee shall
represent Additional Rent for the first Base Rent Period.
(c) Administrative Fees. Upon execution and delivery of
this Lease by Landlord, and again on each anniversary of the date hereof
prior to the Designated Sale Date, Tenant shall pay Landlord an
administrative fee (an "Administrative Fee") as provided in the
letter dated August 9, 1996, from Landlord to Tenant. Each
payment of an Administrative Fee shall represent Additional Rent
for the Base Rent Period during which it first becomes due.
(d) Additional Rent. All amounts which Tenant is required
to pay to or on behalf of Landlord pursuant to this Lease, together with
every charge, premium, interest and cost set forth herein which
may be added for nonpayment or late payment thereof, shall
constitute rent (all such amounts, other than Base Rent, are
herein called "Additional Rent").
(e) Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the Default Rate in effect from
time to time from the date due until paid; provided, that nothing
herein contained will be construed as permitting the charging or
collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws.
Landlord shall be entitled to apply any amounts paid by or on
behalf of Tenant hereunder against any Rent then past due in the
order the same became due or in such other order as Landlord may
elect.
(f) Net Lease. It is the intention of Landlord and Tenant
that the Base Rent and all other payments herein specified shall be
absolutely net to Landlord. Tenant shall pay all costs, expenses and
obligations of every kind relating to the Leased Property or
this Lease which may arise or become due, including, without
limitation: (i) Impositions, including any taxes payable by
virtue of Landlord's receipt of amounts paid to or on behalf of
Landlord in accordance with this subparagraph 3.(f), but not
including any Excluded Taxes; (ii) any Capital Adequacy Charges;
(iii) any amount for which Landlord is or becomes liable with
respect to the Permitted Encumbrances; and (iv) any costs
incurred by Landlord (including Attorneys' Fees) because of
Landlord's acquisition or ownership of the Leased Property or
because of this Lease or the transactions contemplated herein.
(g) No Demand or Setoff. The Base Rent and all Additional
Rent shall be paid without notice or demand and without abatement,
counterclaim, deduction, setoff or defense, except as expressly
provided herein.
5. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 4, and
so long as no Event of Default shall have occurred and be continuing,
Tenant shall be entitled to use all casualty insurance and
condemnation proceeds payable with respect to the Leased
Property during the Term for the restoration and repair of the
Leased Property or any remaining portion thereof. Except as
provided in the last sentence of subparagraph 8.(s), all
insurance and condemnation proceeds received with respect to the
Leased Property (including proceeds payable under any insurance
policy covering the Leased Property which is maintained by
Tenant) shall be paid to Landlord and applied as follows:
(i) First, such proceeds shall be used to reimburse Landlord
for any costs and expenses, including Attorneys' Fees, incurred in
connection with the collection of such proceeds.
(ii) Second, the remainder of such proceeds (the "Remaining
Proceeds"), shall be held by Landlord as Escrowed Proceeds and applied to
reimburse Tenant for the actual cost of the repair, restoration
or replacement of the Leased Property. However, any Remaining
Proceeds not needed for such purpose shall be applied by
Landlord as Qualified Payments after Tenant notifies Landlord
that they are not needed for repairs, restoration or
replacement.
Notwithstanding the foregoing, if an Event of Default shall have
occurred and be continuing, then Landlord shall be entitled to
receive and collect insurance or condemnation proceeds payable
with respect to the Leased Property, and either, at the
discretion of Landlord, (A) hold such proceeds as Escrowed
Proceeds until paid to Tenant as reimbursement for the actual
and reasonable cost of repairing, restoring or replacing the
Leased Property when Tenant has
completed such repair, restoration or replacement, or (B) apply
such proceeds (net of the deductions described in clause (i)
above) as Qualified Payments.
(b) Any Remaining Proceeds held by Landlord as Escrowed
Proceeds shall be deposited by Landlord in an interest bearing
account as provided in the definition of Escrowed Proceeds and
shall be paid to Tenant upon completion of the applicable
repair, restoration or replacement and upon compliance by
Tenant with such terms, conditions and requirements as may be
reasonably imposed by Landlord, but in no event shall Landlord
be required to pay any Escrowed Proceeds to Tenant in excess of
the actual cost to Tenant of the applicable repair, restoration
or replacement, it being understood that Landlord may retain any
such excess as a Qualified Payment. In any event, Tenant will
not be entitled to any abatement or reduction of the Base Rent
or any other amount due hereunder except to the extent that such
excess Remaining Proceeds result in Qualified Payments which
reduce Stipulated Loss Value (and thus payments computed on the
basis of Stipulated Loss Value) as provided in the definitions
set out above. Further, notwithstanding the inadequacy of the
Remaining Proceeds held by Landlord as Escrowed Proceeds, if
any, or anything herein to the contrary, Tenant must, after any
taking of less than all or substantially all of the Leased
Property by condemnation and after any damage to the Leased
Property by fire or other casualty, restore or improve the
Leased Property or the remainder thereof to a value no less than
Stipulated Loss Value (computed after the application of any
Remaining Proceeds as a Qualified Payment) and to a safe and
sightly condition. Any taking of so much of the Leased Property
as, in Landlord's reasonable judgment, makes it impracticable to
restore or improve the remainder thereof as required by the
preceding sentence shall be considered a taking of substantially
all the Leased Property for purposes of this Paragraph 4.
(c) In the event of any taking of all or substantially all
of the Leased Property, Landlord shall be entitled to apply all
Remaining Proceeds as a Qualified Payment, notwithstanding the
foregoing. In addition, if Stipulated Loss Value immediately
prior to any taking of all or substantially all of the Leased
Property by condemnation exceeds the sum of the Remaining
Proceeds resulting from such condemnation, then Landlord shall
be entitled to recover the excess from Tenant upon demand as an
additional Qualified Payment, whereupon this Lease shall
terminate.
(d) Nothing herein contained shall be construed to prevent
Tenant from obtaining and applying as it deems appropriate any
separate award from any condemning authority or from any insurer
for a taking of or damage to Tenant's personal property not
included in the Leased Property or for moving expenses or
business interruption, provided, such award is not combined with
and does not reduce the award for any taking of the Leased
Property, including Tenant's interest therein. Further,
notwithstanding anything to the contrary herein contained, if
Remaining Proceeds held by Landlord during the term of this
Lease shall exceed Stipulated Loss Value and any Rent payable by
Tenant, then Tenant may get the excess by terminating this Lease
in accordance with Paragraph 2 and purchasing such excess (which
will then be held by Landlord
as Escrowed Proceeds), together with any remaining interest of
Landlord in the Leased Property, pursuant to the Purchase
Agreement.
(e) Landlord and Tenant each waive any right of recovery
against the other, and the other's agents, officers or
employees, for any damage to the Leased Property or to the
personal property situated from time to time in or on the Leased
Property resulting from fire or other casualty covered by a
valid and collectible insurance policy; provided, however, that
the waiver set forth in this subparagraph 4.(e) shall be
effective insofar, but only insofar, as compensation for such
damage or loss is actually recovered by the waiving
party (net of costs of collection) under the policy
notwithstanding the waivers set out in this paragraph. Tenant
shall cause the insurance policies required of Tenant by this
Lease to be properly endorsed, if necessary, to prevent any loss
of coverage because of the waivers set forth in this paragraph.
If such endorsements are not available, the waivers set forth in
this paragraph shall be ineffective to the extent that such
waivers would cause required insurance with respect to the
Leased Property to be impaired.
6. No Lease Termination.
(a) Status of Lease. Except as expressly provided herein,
this Lease shall not terminate, nor shall Tenant have any right
to terminate this Lease, nor shall Tenant be entitled to any
abatement of the Rent, nor shall the obligations of Tenant under
this Lease be excused, for any reason whatsoever, including
without limitation any of the following: (i) any damage to or
the destruction of all or any part of the Leased Property from
whatever cause, (ii) the taking of the Leased Property or any
portion thereof by eminent domain or otherwise for any reason,
(iii) the prohibition, limitation or restriction of Tenant's use
of all or any portion of the Leased Property
or any interference with such use by governmental action or
otherwise, (iv) any eviction of Tenant or of anyone claiming
through or under Tenant by paramount title or otherwise
(provided, if Tenant is wrongfully evicted by Landlord or by any
third party lawfully claiming through or under Landlord,
other than Tenant or a third party claiming through or under
Tenant, then Tenant will have the remedies described in
Paragraph 14 below), (v) any default on the part of Landlord
under this Lease or under any other agreement to which Landlord and
Tenant are parties, (vi) the inadequacy in any way whatsoever of the
design or construction of any improvements included in the Leased
Property, it being understood that Landlord has not made and
will not make any representation express or implied as to the
adequacy thereof, or (vii) any other cause whether similar or
dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties
hereto that the obligations of Tenant hereunder shall be
separate and independent of the covenants and agreements
of Landlord, that the Base Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events and
that the obligations of Tenant hereunder shall continue
unaffected, unless the requirement to pay or perform the same
shall have been terminated or limited pursuant to an express
provision of this Lease. However, nothing in this Paragraph
shall be construed as a waiver by Tenant of any right Tenant may
have at law or in equity to (i) recover monetary damages for any
default under this Lease by Landlord that Landlord fails to cure
within the period provided in Paragraph 14, (ii) injunctive
relief in case of the violation, or attempted or threatened
violation, by Landlord of any of the express covenants,
agreements, conditions or provisions of this Lease, or (iii) a
decree compelling performance of any of the express covenants,
agreements, conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the foregoing,
Tenant waives to the extent permitted by Applicable Laws, except
as otherwise expressly provided herein, all rights to which
Tenant may now or hereafter be entitled by law (including any
such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to
quit, terminate or surrender this Lease or the Leased Property
or any part thereof or (ii) to any abatement, suspension,
deferment or reduction of the Base Rent or any other sums
payable under this Lease.
7. Purchase Agreement, Pledge Agreement and Environmental
Indemnity. Tenant acknowledges and agrees that nothing contained
in this Lease shall limit, modify or otherwise affect any of
Tenant's obligations under the Purchase Agreement, Pledge
Agreement or Environmental Indemnity, which obligations are
intended to be separate, independent and in addition to, and not
in lieu of, the obligations established by this Lease. In the
event of any inconsistency between the terms and provisions of
the Purchase Agreement, Pledge Agreement or Environmental
Indemnity and the terms and provisions of this Lease, the terms
and provisions of the Purchase Agreement, Pledge Agreement or
Environmental Indemnity (as the case may be) shall control.
8. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the
terms hereof, Tenant may use and occupy the Leased Property so
long as no Event of Default occurs hereunder, but only as
reasonably necessary to develop the Land for use for the
following purposes and other lawful purposes incidental thereto:
(i) research and development of computer-related and other
electronic products; (ii) administrative and office space; and
(iii) distribution and warehouse storage of computer-related
and other electronic products; and (iv) assembly of computer-related and
other electronic products using components manufactured elsewhere,
but not including the manufacture of computer chips on-site; and
(v) cafeteria, library, fitness center and other support
function uses that Tenant may provide to its employees.
Although the term "electronic products" in this subparagraph may
include products designed to detect, monitor, neutralize, handle
or process Hazardous Substances, the use of the Leased Property
by Tenant shall not include bringing Hazardous Substances onto
the Leased Property for the purpose of researching, testing or
demonstrating any such products.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the Landlord's interest
therein) in its present state, AS IS, and without any
representation or warranty, express or implied, as to the
condition of such property or as to the use which may be made
thereof. Tenant also accepts the Leased Property without any
representation or warranty, express or implied, by Landlord
regarding the title thereto or the rights of any parties in
possession of any part thereof, except as set forth in
subparagraph 9.(a). Landlord shall not be responsible for any
latent or other defect or change of condition in the Land, or
Improvements, fixtures and personal property (if any) forming a
part of the Leased Property, and the Rent hereunder shall in no
case be withheld or diminished because of any latent or other
defect in such property, any change in the condition thereof or
the existence with respect thereto of any violations of
Applicable Laws. Nor shall Landlord be required to furnish to
Tenant any facilities or service of any kind, such as, but not
limited to, water, steam, heat, gas, hot water, electricity,
light or power.
(c) Consideration of and Scope of Waiver. The provisions of
subparagraph 7.(b) above have been negotiated by the Landlord
and Tenant after due consideration for the Rent payable
hereunder and are intended to be a complete exclusion and
negation of any representations or warranties of the Landlord,
express or implied, with respect to the Leased Property that may
arise pursuant to any law now or hereafter in effect, or
otherwise. However, such exclusion of representations and
warranties by Landlord is not intended to impair any
representations or warranties made by other parties, including
Seller, the benefit of which is to pass to Tenant during the
Term because of the definition of Personal Property and Leased
Property above.
9. Other Representations, Warranties and Covenants of
Tenant. Tenant represents, warrants and covenants as follows:
(a) Financial Matters. Tenant is solvent and has no
outstanding liens, suits, garnishments or court actions which
could render Tenant insolvent. There has not been filed by or,
to Tenant's knowledge, against Tenant a petition in bankruptcy
or a petition or answer seeking an assignment for the benefit of
creditors, the appointment of a receiver, trustee, custodian or
liquidator with respect to Tenant or any significant portion of
Tenant's property, reorganization, arrangement, rearrangement,
composition, extension, liquidation or dissolution or similar relief
under the federal Bankruptcy Code or any state law. The financial
statements and all financial data heretofore delivered to Landlord relating
to Tenant have been prepared in accordance with GAAP in all
material respects. No material adverse change has occurred in
the financial position of Tenant as reflected in Tenant's
financial statements covering the fiscal period ended May 31,
1996.
(b) Existing Contract. Except to the extent required of
Landlord under subparagraph 9.(b), Tenant shall satisfy all
surviving obligations of Tenant under the Existing Contract and
under other agreements described therein. Tenant agrees to
indemnify, defend and hold Landlord harmless from and against
any and all Losses imposed on or asserted against or incurred by
Landlord at any time and from time to time by reason of, in
connection with or arising out of any obligations imposed by the
Existing Contract or the other agreements described therein.
THE INDEMNITY SET OUT IN THIS SUBPARAGRAPH SHALL APPLY EVEN IF
THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF
THE ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF LANDLORD;
provided, such indemnity shall not apply to Losses proximately
caused by (and attributed by any applicable principles of
comparative fault to) the Active Negligence, gross negligence or
willful misconduct of Landlord. Because Tenant hereby assumes
and agrees to satisfy all surviving obligations of Tenant under
the Existing Contract and the other agreements described
therein, no failure by Landlord to take any action required by
the Existing Contract or such other agreements (save and except
any actions required of Landlord under subparagraph 9.(b))
shall, for the purposes of this indemnity, be deemed to be
caused by the Active Negligence, gross negligence or willful
misconduct of Landlord. The
foregoing indemnity is in addition to the other indemnities set
out herein and shall not terminate upon the closing of any sale
of Landlord's interest in the Leased Property pursuant to the
provisions of the Purchase Agreement or the termination of this
Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease, the Purchase Agreement, the
Pledge Agreement and the Environmental Indemnity do not and will
not constitute a breach or default under any other material
agreement or contract to which Tenant is a party or by which
Tenant is bound or which affects the Leased Property or Tenant's
use, occupancy or operation of the Leased Property or any part
thereof and do not, to the knowledge of Tenant, violate or
contravene any law, order, decree, rule or regulation to which
Tenant is subject, and such execution, delivery and performance
by Tenant will not result in the creation or imposition of (or
the obligation to create or impose) any lien, charge or
encumbrance on, or security interest in, Tenant's property pursuant to the
provisions of any of the foregoing.
(d) Compliance with Covenants and Laws. The intended use of
the Leased Property by Tenant complies, or will comply after
Tenant obtains readily available permits, in all material
respects with all applicable restrictive covenants, zoning
ordinances and building codes, flood disaster laws, applicable
health, safety and environmental laws and regulations, the
Americans with Disabilities Act and other laws pertaining to
disabled persons, and all other applicable laws, statutes,
ordinances, rules, permits, regulations, orders, determinations
and court decisions (all of the foregoing are herein sometimes
collectively called "Applicable Laws"). Tenant has obtained or
will promptly obtain all utility, building, health and operating
permits as may be required for Tenant's use of the Leased
Property by any governmental authority or municipality having
jurisdiction over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge
and except as otherwise disclosed in the Environmental Report,
as of the date hereof: (i) no Hazardous Substances Activity has occurred
prior to the date of this Lease; (iii) neither Tenant nor any prior owner
or operator of the Leased Property or any surrounding property has
reported or been required to report any release of any Hazardous
Substances on or from the Leased Property or the surrounding
property pursuant to any Environmental Law; (iv) neither Tenant
nor any prior owner or operator of the Leased Property or any
surrounding property has received any warning, citation, notice
of violation or other communication regarding a suspected or known release
or discharge of Hazardous Substances on or from the Leased Property
or regarding a suspected or known violation of Environmental
Laws concerning the Leased Property from any federal, state or
local agency; and (v) none of the following are located on the
Leased Property: asbestos; urea formaldehyde foam insulation;
transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls in excess of
fifty (50) parts per million; any other Hazardous Substances
other than Permitted Hazardous Substances; or any underground
storage tank or tanks. Further, Tenant represents that to its
knowledge the Environmental Report is not misleading or
inaccurate in any material respect.
(f) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to
Tenant's knowledge, threatened that will affect Tenant's
intended use of the Leased Property or the validity,
enforceability or priority of this Lease, or Tenant's use,
occupancy and operation of the Leased Property or any part
thereof, and Tenant is not in default with respect to any order,
writ, injunction, decree or demand of any court or other
governmental or regulatory authority that could materially and
adversely affect the business or assets of Tenant and its
Subsidiaries taken as a whole or Tenant's use, occupancy or
operation of the Leased Property.
No condemnation or other like proceedings are pending or, to
Tenant's knowledge, threatened against the Leased Property.
(g) Condition of Property. The Land as described in Exhibit
A is shown on the plat included as part of the A.L.T.A. Survey
prepared by Richard L. Gorman, dated July 25, 1996, which was delivered
to Landlord at the request of Tenant. All material improvements on the
Land as of the date hereof are as shown on that survey, and except as
shown on that survey there are no easements or encroachments
visible or apparent from an inspection of the Real Property.
Adequate provision has been made (or can be made at a cost that
is reasonable in connection with future development of the Land)
for the Leased Property to be served by electric, gas, storm and
sanitary sewers, sanitary water supply, telephone and other
utilities required for the use thereof. All streets, alleys and
easements necessary to serve the Leased Property have been
completed and are serviceable (or can be completed at a cost
that is reasonable in connection with future development of the
Land). No extraordinary circumstances (including any use of the
Land as a habitat for endangered species) exists that would
materially and adversely affect the future development of the
Land. Tenant is not aware of any latent or patent material
defects or deficiencies in the Real Property that, either
individually or in the aggregate, could materially and adversely
affect Tenant's use or occupancy or could reasonably be
anticipated to endanger life or limb.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of California. Tenant has
all requisite power and has procured or will procure on a timely
basis all governmental certificates of authority, licenses,
permits, qualifications and other documentation required to
lease and operate the Leased Property. Tenant has the corporate
power and adequate authority, rights and franchises to own
Tenant's property and to carry on Tenant's business as now
conducted and is duly qualified and in good standing in each
state in which the character of Tenant's business makes such
qualification necessary (including, without limitation, the
State of California) or, if it is not so qualified in a state
other than California, such failure does not have a material
adverse effect on the properties, assets, operations or
businesses of Tenant and its Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement, the Pledge Agreement and
the Environmental Indemnity are duly authorized and do not
require the consent or approval of any governmental body or
other regulatory authority that has not heretofore been obtained
and are not in contravention of or conflict with any Applicable
Laws or any term or provision of Tenant's articles of
incorporation or bylaws.
This Lease, the Purchase Agreement, the Pledge Agreement and the
Environmental Indemnity are valid, binding and legally
enforceable obligations of Tenant in accordance with their
terms, except as such enforcement is affected by bankruptcy,
insolvency and similar laws affecting the rights of creditors,
generally, and equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person"
within the meaning Sections 1445 and 7701 of the Code (i.e.,
Tenant is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate as those terms are
defined in the Code and regulations promulgated thereunder).
(k) Omissions. To Tenant's knowledge, none of Tenant's
representations or warranties contained in this Lease or any
document, certificate or written statement furnished to Landlord
by or on behalf of Tenant contains any untrue statement of a
material fact or omits a material fact necessary in order to
make the statements contained herein or therein (when taken in
their entireties) not misleading.
(l) Existence. Tenant shall continuously maintain its
existence and its qualification to do business in the State of
California.
(m) Tenant Taxes. Tenant shall comply with all applicable
tax laws and pay before the same become delinquent all taxes
imposed upon it or upon its property where the failure to so
comply or so pay would have a material adverse effect on the
financial condition or operations of Tenant; except
that Tenant may in good faith by appropriate proceedings contest
the validity, applicability or amount of any such taxes and
pending such contest Tenant shall not be deemed in default under
this subparagraph if (1) Tenant diligently prosecutes such
contest to completion in an appropriate manner, and (2) Tenant
promptly causes to be paid any tax adjudged by a court of
competent jurisdiction to be due, with all costs, penalties, and
interest thereon, promptly after such judgment becomes final;
provided, however, in any event such contest shall be concluded
and the tax, penalties, interest and costs shall be paid prior
to the date any writ or order is issued under which any of
Tenant's property that is material to the business of Tenant and
its Subsidiaries taken as a whole may be seized or sold because
of the nonpayment thereof.
(n) Operation of Property. Tenant shall operate the Leased
Property in a good and workmanlike manner and in compliance with
all Applicable Laws and will pay all fees or charges of any kind
in connection therewith. Tenant shall not use or occupy, or
allow the use or occupancy of, the Leased Property in any manner
which violates any Applicable Law or which constitutes a public
or private nuisance or which makes void, voidable or cancelable
any insurance then in force with respect thereto. To the extent
that any of the following would, individually or in the
aggregate, materially and adversely affect the value of the
Leased Property or Tenant's use, occupancy or operations on the
Leased Property, Tenant shall not: (i) initiate or permit any
zoning reclassification of the Leased Property; (ii) seek any
variance under existing zoning ordinances applicable to the
Leased Property; (iii) use or permit the use of the Leased
Property in a manner that would result in such use becoming a
nonconforming use under applicable zoning ordinances or similar
laws, rules or regulations; (iv) execute or file any subdivision
plat affecting the Leased Property; or (v) consent to the
annexation of the Leased Property to any municipality. If a
change in the zoning or other Applicable Laws affecting the
permitted use or development of the Leased Property shall occur
that Landlord determines will materially reduce the then-current
market value of the Leased Property, and if after such reduction
the Stipulated Loss Value shall substantially exceed the then-
current market value of the Leased Property in the reasonable
judgment of Landlord, then Tenant shall pay Landlord an amount
equal to such excess for application as a Qualified Payment.
Tenant shall make any payment required by the preceding sentence
within one hundred eighty (180) days after it is requested by
Landlord, and in any event shall make any such payment before
the end of the Term. Tenant shall not impose any restrictive
covenants or encumbrances upon the Leased Property without the
prior written consent of the Landlord; provided, that such
consent shall not be unreasonably withheld for any encumbrance
or restriction that is made expressly subject to this Lease, as
modified from time to time, and subordinate to Landlord's
interest in the Leased Property by an agreement in form
satisfactory to Landlord. Tenant shall not cause or permit any
drilling or exploration for, or extraction, removal or
production of, minerals from the surface or subsurface of the
Leased Property. Tenant shall not do any act whereby the market
value of the Leased Property may be materially lessened. Tenant
shall allow Landlord or its authorized representative to enter
the Leased Property at any reasonable time to inspect the Leased
Property and, after reasonable notice, to inspect Tenant's books
and records pertaining thereto, and Tenant shall assist Landlord
or Landlord's representative in whatever way reasonably
necessary to make such inspections. If Tenant receives a
written notice or claim from any federal, state or other
governmental entity that the Leased Property is not in
compliance in any material respect with any Applicable Law, or
that any action may be taken against the owner of the Leased
Property because the Leased Property does not
comply with Applicable Law, Tenant shall promptly furnish a copy
of such notice or claim to Landlord. Notwithstanding the
foregoing, Tenant may in good faith, by appropriate proceedings,
contest the validity and applicability of any Applicable Law
with respect to the Leased Property, and pending such contest
Tenant shall not be deemed in default hereunder because of a
violation of such Applicable Law, if Tenant diligently
prosecutes such contest to completion in a manner reasonably
satisfactory to Landlord, and if Tenant promptly causes the
Leased Property to comply with any such Applicable Law upon a
final determination by a court of competent jurisdiction that
the same is valid and applicable to the Leased Property;
provided, that in any event such contest shall be concluded and
the violation of such Applicable Law must be corrected and any
claims asserted against Landlord or the Leased Property because
of such violation must be paid by Tenant, all prior to the date
that (i) any criminal charges may be brought against Landlord or
any of its directors, officers or employees because of such
violation or (ii) any action may be taken by any governmental
authority against Landlord or any property owned by Landlord
(including the Leased Property) because of such violation.
(o) Debts for Construction. Tenant shall cause all debts
and liabilities incurred in the construction, maintenance,
operation and development of the Leased Property, including
without limitation all debts and liabilities for labor, material
and equipment and all debts and charges for utilities servicing
the Leased Property, to be promptly paid. Notwithstanding the
foregoing, Tenant may in good faith by appropriate proceedings
contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest Tenant
shall not be deemed in default under this subparagraph (or
subparagraphs 8.(t) or 8.(u)) because of the contested lien if
(1) within sixty (60) days after being asked to do so by
Landlord, Tenant bonds over to Landlord's satisfaction any
contested liens alleged to secure an amount in excess of
$500,000 (individually or in the aggregate) (2) Tenant
diligently prosecutes such contest to completion in a manner
reasonably satisfactory to Landlord, and (3) Tenant promptly
causes to be paid any amount adjudged by a court of competent jurisdiction
to be due, with all costs and interest thereon, promptly after such
judgment becomes final; provided, however, that in any event
each such contest shall be concluded and the lien, interest and
costs shall be paid prior to the date (i) any criminal action
may be instituted against Landlord or its directors, officers or
employees because of the nonpayment thereof or (ii) any writ or
order is issued under which any property owned by Landlord
(including the Leased Property) may be seized or sold or any
other action may be taken against Landlord or any property owned
by Landlord because of the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or,
if requested by Landlord, will pay or cause to be paid prior to
delinquency) all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes,
levies, fees, charges, surcharges, assessments or penalties
which arise out of or are attributable to this Lease or which
are imposed upon Landlord or the Leased Property because of the
ownership, leasing, occupancy, sale or operation of the Leased
Property, or any part thereof, or relating to or required to be
paid by the terms of any of the Permitted Encumbrances
(collectively, herein called the "Impositions"), excluding only
Excluded Taxes. If Landlord requires Tenant to pay any
Impositions directly to the applicable taxing authority or other
party entitled to collect the same, Tenant shall furnish Landlord with
receipts showing payment of such Impositions and other amounts prior to
delinquency; except that Tenant may in good faith by appropriate
proceedings contest the validity, applicability or amount of any
asserted Imposition, and pending such contest Tenant shall
not be deemed in default of this subparagraph (or subparagraphs
8.(t) or 8.(u)) because of the contested Imposition if (1)
within sixty (60) days after being asked to do so by Landlord,
Tenant bonds over to the satisfaction of Landlord any lien
asserted against the Leased Property and alleged to secure an
amount in excess of $500,000 because of the contested Imposition, (2)
Tenant diligently prosecutes such contest to completion in a
manner reasonably satisfactory to Landlord, and (3) Tenant
promptly causes to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all costs, penalties and
interest thereon, promptly after such judgment becomes final;
provided, however, that in any event each such contest shall be
concluded and the Impositions, penalties, interest and costs
shall be paid prior to the date (i) any criminal action may be
instituted against Landlord or its directors, officers or
employees because of the nonpayment thereof or (ii) any writ or
order is issued under which any property owned by Landlord
(including the Leased Property) may be seized or sold or any
other action may be taken against Landlord or any property owned
by Landlord because of the nonpayment thereof.
(q) Repair, Maintenance, Alterations and Additions. Tenant
shall keep the Leased Property in good order, repair, operating condition
and appearance (ordinary wear and tear excepted), causing all
necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the
Leased Property to be materially misused, abused or wasted or to
deteriorate. Further, Tenant shall not, without the prior
written consent of Landlord, construct or make any alteration to
any Improvements which significantly reduce the fair market
value of the Leased Property.
(r) Insurance and Casualty. Throughout the Term, Tenant
will keep any valuable Improvements insured against damage by fire and
other casualty in a commercially reasonable manner.
(s) Condemnation. Immediately upon obtaining knowledge of
the institution of any proceedings for the condemnation of the Leased
Property or any portion thereof, or any other similar governmental or
quasi-governmental proceedings arising out of injury or damage
to the Leased Property or any portion thereof, Tenant shall
notify Landlord of the pendency of such proceedings. Tenant
shall, at its expense, diligently prosecute any such proceedings
and shall consult with Landlord, its attorneys and experts and
cooperate with them as reasonably requested in the carrying on
or defense of any such proceedings.
All proceeds of condemnation awards or proceeds of sale in lieu
of condemnation with respect to the Leased Property and all
judgments, decrees and awards for injury or damage to the Leased
Property shall be paid to Landlord and applied as provided in
Paragraph 4 above. Landlord is hereby authorized, in the name
of Tenant, to execute and deliver valid acquittances for, and to
appeal from, any such judgment, decree or award concerning
condemnation of any of the Leased Property. Landlord shall not
be, in any event or circumstances, liable or responsible for
failure to collect, or to exercise diligence in the collection
of, any such proceeds, judgments, decrees or awards.
Notwithstanding the foregoing provisions of this
subparagraph 8.(s), following any condemnation or sale in lieu
of condemnation involving the Leased Property, if condemnation
or sale proceeds totaling not more than $2,000,000 are to be
recovered as a result thereof, or if in connection therewith
Tenant shall have executed a Voluntary Minimum Pledge Commitment
and delivered any additional Collateral required to satisfy such
Voluntary Minimum Pledge Commitment, Tenant shall be entitled to
receive directly and hold such condemnation or sale proceeds, so
long as no Event of Default shall have occurred and be
continuing and so long as Tenant applies such proceeds towards
the restoration, replacement and repair of the remainder of the
Leased Property as required by subparagraph 4.(b).
(t) Protection and Defense of Title. If any encumbrance or
title defect whatsoever affecting Landlord's fee interest in the Leased
Property is claimed or discovered (excluding Permitted Encumbrances,
this Lease and any other encumbrance which is claimed by Landlord or
lawfully claimed through or under Landlord and which is not claimed by,
through or under Tenant) or if any legal proceedings are instituted with
respect to title to the Leased Property, Tenant shall give prompt written
notice thereof to Landlord and at Tenant's own cost and expense will
promptly cause the removal of any such encumbrance and cure any such defect
and will take all necessary and proper steps for the defense of any such
legal proceedings, including but not limited to the employment of
counsel, the prosecution or defense of litigation and the release or
discharge of all adverse claims. If Tenant fails to promptly remove any
such encumbrance or title defect (other than a Lien Tenant is contesting as
expressly permitted by and in accordance with subparagraph 8.(o) or
subparagraph 8.(p)), Landlord (whether or not named as a party to legal
proceedings with respect thereto) shall be entitled to take such additional
steps as in its judgment may be necessary or proper to remove
such encumbrance or cure such defect or for the defense of any such
attack or legal proceedings or the protection of Landlord's fee
interest in the Leased Property, including but not limited to
the employment of counsel, the prosecution or defense of
litigation, the compromise or discharge of any adverse claims
made with respect to the Leased Property, the removal of prior
liens or security interests, and all expenses (including
Attorneys' Fees) so incurred of every kind and character shall
be a demand obligation owing by Tenant.
For purposes of this subparagraph 8.(t), Tenant shall be
deemed to be acting promptly to remove any encumbrance or to
cure any title defect, other than a Lien which Tenant has itself
granted or authorized, so long as Tenant (or a title insurance
company obligated to do so) is in good faith by appropriate
proceedings contesting the validity and applicability of the
encumbrance or defect, and pending such contest Tenant shall not
be deemed in default under this subparagraph because of the
encumbrance or defect; provided, with respect to a contest of
any encumbrance or title defect which is the subject of
subparagraphs 8.(o) or 8.(p), Tenant (or the applicable title
insurance company) must satisfy the conditions and requirements
for a permitted contest set forth in those subparagraphs, and
with respect to a contest of any other encumbrance or title
defect, Tenant (or the applicable title insurance company) must:
(1) diligently prosecute the contest to completion in a manner
reasonably satisfactory to Landlord;
(2) immediately remove the encumbrance or cure the
defect, as and to the extent reasonably required to preserve
Landlord's indefeasible fee estate in the Leased Property and to
prevent any significant adverse impact the encumbrance or defect
may have on the value of the Leased Property, upon a final
determination by a court of competent jurisdiction that the
encumbrance or defect is valid and applicable to the Leased
Property; and
(3) in any event conclude the contest and remove the
encumbrance or cure the defect and pay any claims asserted
against Landlord or the Leased Property because of such
encumbrance or defect, all prior to (i) any Designated Sale Date
on which neither Tenant nor any Applicable Purchaser purchases
the Leased Property pursuant to the Purchase Agreement for a
price to Landlord (when taken together with any additional
payments made by Tenant pursuant to Paragraph 2(a)(ii) of the
Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than the Purchase Price, (ii) the date
any criminal charges may be brought against Landlord or any of
its directors, officers or employees because of such encumbrance
or defect or (iii) the date any action may be taken against
Landlord or any property owned by Landlord (including the Leased
Property) by any governmental authority or any other Person who
has or claims rights superior to Landlord because of the
encumbrance or defect.
(u) No Liens on the Leased Property. Tenant shall not,
without the prior written consent of Landlord, create, place or permit
to be created or placed, or through any act or failure to act,
acquiesce in the placing of, or allow to remain, any Lien (except the
lien for property taxes or assessments assessed against the Leased Property
which are not delinquent and any Lien Tenant is contesting as expressly
permitted by and in accordance with subparagraph 8.(o) or
subparagraph 8.(p)), against or covering the Leased Property or
any part thereof (other than any Lien which is lawfully claimed
through or under Landlord and which is not claimed by, through
or under Tenant) regardless of whether the same are expressly or
otherwise subordinate to this Lease or Landlord's interest in
the Leased Property, and should any prohibited Lien exist or
become attached hereafter in any manner to any part of the
Leased Property without the prior written consent of Landlord,
Tenant shall cause the same to be promptly discharged and
released to the satisfaction of Landlord.
(v) Books and Records. Tenant shall keep books and records
that are accurate and complete in all material respects for the
construction and maintenance of the Leased Property and will
permit all such books and records (including without limitation
all contracts, statements, invoices, bills and claims for labor,
materials and services supplied for the construction and
operation of any Improvements) to be inspected and copied by
Landlord and its duly accredited representatives at all times
during reasonable business hours; provided that so long as
Tenant remains in possession of the Leased Property, Landlord or
Landlord's representative will, before making any such
inspection or copying any such documents, if then requested to
do so by Tenant to maintain Tenant's security: (i) sign in at
Tenant's security or information desk if Tenant has such a desk
on the premises, (ii) wear a visitor's badge or other reasonable
identification provided by Tenant when Landlord or Landlord's
representative first arrives at the Leased Property, (iii)
permit an employee of Tenant to observe such inspection or work,
and (iv) comply with other similar reasonable nondiscriminatory
security requirements of Tenant that do not, individually or in
the aggregate, interfere with or delay inspections or copying by
Landlord authorized by this subparagraph. This subparagraph
shall not be construed as requiring Tenant to regularly maintain
separate books and records relating exclusively to the Leased
Property; provided, however, that if requested by Landlord at
any time when an Event of Default shall have occurred and be
continuing, Tenant shall construct or abstract from its
regularly maintained books and records information required by
this subparagraph relating to the Leased Property.
(w) Financial Statements; Required Notices; Certificates as
to Default. Tenant shall deliver to Landlord and to each
Participant of which Tenant has been notified:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of Tenant, a
consolidated balance sheet of Tenant and its consolidated
Subsidiaries as of the end of such fiscal year and a
consolidated income statement and statement of cash flows of
Tenant and its consolidated Subsidiaries for such fiscal year,
all in reasonable detail and all prepared in accordance with
GAAP and accompanied by a report and opinion of accountants of
national standing selected by Tenant, which report and opinion
shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any qualifications or
exceptions as to the scope of the audit nor to any qualification
or exception which Landlord determines, in Landlord's reasonable
discretion, is unacceptable; provided that notwithstanding the
foregoing, for so long as Tenant is a company subject to the
periodic reporting requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, Tenant shall be deemed to have
satisfied its obligations under this clause (i) so long as
Tenant delivers to Landlord the same annual report and report
and opinion of accountants that Tenant delivers to its
shareholders;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of each
fiscal year of Tenant, the consolidated balance sheet of Tenant
and its consolidated subsidiaries as of the end of such quarter
and the consolidated income statement and the consolidated
statement of cash flows of Tenant and its consolidated
Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
all in reasonable detail and all prepared in accordance with GAAP and
certified by a Responsible Financial Officer of Tenant (subject to year-end
adjustments); provided that notwithstanding the foregoing, for so long as
Tenant is a company subject to the periodic reporting
requirements of Section 12 of the Securities Exchange Act of
1934, as amended, Tenant shall be deemed to have satisfied its
obligations under this clause (ii) so long as Tenant delivers to
Landlord the same quarterly reports, certified by a Responsible
Financial Officer of Tenant (subject to year-end adjustments),
that Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph 8.(w)(ii) and 8.(w)(i), a
certificate of a Responsible Financial Officer of Tenant in
substantially the form attached hereto as Exhibit E: (i)
certifying that to the knowledge of Tenant no Default or Event
of Default under this Lease has occurred and is continuing or,
if a Default or Event of Default has occurred and is continuing,
a brief statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, (ii) certifying
that the representations of Tenant set forth in Paragraph 8 of
this Lease are true and correct in all material respects as of
the date thereof as though made on and as of the date thereof
or, if not then true and correct, a brief statement as to why
such representations are no longer true and correct, and (iii)
with computations demonstrating compliance with the financial
covenants contained in subparagraph 8.(ac);
(iv) promptly after any change in the rating of Tenant's
senior, unsecured debt by Standard and Poor's Corporation or
Moody's Investor Service, Inc. or in Tenant's Debt to Capital
Ratio (as defined in subparagraph 1.(bo)), which will result in
a change in the Spread (as defined in subparagraph 1.(bo)), a
certificate of a Responsible Financial Officer of Tenant in
substantially the form attached hereto as Exhibit F with
computations evidencing Tenant's calculation of the Spread after
giving effect to such changes;
(v) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which Tenant
sends to Tenant's stockholders, and copies of all regular,
periodic and special reports, and all registration statements (other than
registration statements on Form S-8 or any form substituted therefor) which
Tenant files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any
national securities exchange;
(vi) as soon as possible and in any event within five (5)
Business Days after a Responsible Financial Officer of Tenant
becomes aware of the occurrence of each Default or Event of
Default with respect to the Affirmative Financial Covenants
described in subparagraph 9.(ae) or the Negative Covenants
described in subparagraph 9.(af), a statement of a Responsible
Financial Officer of Tenant setting forth details of such
Default or Event of Default and the action which Tenant has
taken and proposes to take with respect thereto;
(vii) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect (or,
if there have been modifications, that this Lease is in full
effect as modified, and setting forth such modifications) and
the dates to which the Base Rent has been paid and either
stating that to the knowledge of Tenant no Default or Event of
Default under this Lease has occurred and is continuing or, if a
Default or Event of Default under this Lease has occurred and is
continuing, a brief statement as to the nature thereof; it being
intended that any such statement by Tenant may be relied upon by
any prospective purchaser or mortgagee of the Leased Property
and by any Participant; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Tenant, of any of its
Subsidiaries or of the Leased Property as Landlord or any
Participant through Landlord may from time to time reasonably
request.
Landlord is hereby authorized to deliver a copy of any
information or certificate delivered to it pursuant to this
subparagraph 8.(w) to any Participant and to any regulatory body
having jurisdiction over Landlord that
requires or requests it.
(x) Further Assurances. Tenant shall, on request of
Landlord, (i) promptly correct any defect, error or omission
which may be discovered in the contents of this Lease or in any
other instrument executed in connection herewith or in the
execution or acknowledgment thereof; (ii) execute, acknowledge,
deliver and record or file such further instruments and do such
further acts as may be necessary, desirable or proper to carry
out more effectively the purposes of this Lease and to subject
to this Lease any property intended by the terms hereof to be
covered hereby including specifically, but without limitation,
any renewals, additions, substitutions, replacements or
appurtenances to the Leased Property; (iii) execute,
acknowledge, deliver, procure and record or file any document or
instrument deemed advisable by Landlord to protect its rights in
and to the Leased Property against the rights or interests of
third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do
such further acts as may be necessary, desirable or proper in
the reasonable determination of Landlord to enable Landlord,
Landlord's Parent and other Participants to comply with the
requirements or requests of any agency or authority having
jurisdiction over them.
(y) Fees and Expenses; General Indemnification; Increased
Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the proceeds
of the Initial Funding Advance as part of the Closing Costs,
Tenant shall pay (and shall indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against) all
Losses incurred by Landlord or Landlord's Parent or any Person
claiming through Landlord through a Permitted Transfer in
connection with or because of (A) the ownership of any interest
in or operation of the Leased Property, (B) the negotiation or
administration of this Lease, the Purchase Agreement, the Pledge
Agreement, the Environmental Indemnity or the Participation
Agreement (excluding the negotiation or administration of the
Participation Agreement between Landlord and Landlord's Parent),
or (C) 3COM's request for assistance in identifying any new Participant
pursuant to Paragraph 18 of the Purchase Agreement, whether such Losses
are incurred at the time of execution of this Lease or at any time
during the Term. Costs and expenses included in such Losses may
include, without limitation, all appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes (other than
Excluded Taxes), brokerage fees and commissions, abstract fees,
title policy fees, Uniform Commercial Code search fees, escrow
fees, Attorneys' Fees and environmental consulting fees incurred
by Landlord with respect to the Leased Property. If Landlord pays or
reimburses Landlord' Parent for any such Losses, Tenant shall reimburse
Landlord for the same notwithstanding that Landlord may have already received
any payment from any other Participant on account of such Losses, it
being understood that the other Participant may expect repayment
from Landlord when Landlord does collect the required
reimbursement from Tenant.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against) all
Losses, including Attorneys' Fees, incurred or expended by
Landlord or Landlord's Parent or any Person claiming through
Landlord through a Permitted Transfer or in connection with (A)
the breach by Tenant of any covenant of Tenant herein or in any
other instrument executed in connection herewith or (B)
Landlord's exercise in a lawful manner of any of Landlord's
remedies hereunder or under Applicable Law or Landlord's
protection of the Leased Property and Landlord's interest
therein as permitted hereunder or under Applicable Law.
(However, the indemnity in the preceding sentence shall not be
construed to make Tenant liable to both Landlord and any
Participant or other party claiming through Landlord for the
same damages. For example, so long as Landlord remains entitled
to recover any past due Base Rent from Tenant, no Participant
shall be entitled to collect a percentage of the same Base Rent
from Tenant.) Tenant shall further indemnify and hold harmless
Landlord and all other Indemnified Parties against, and
reimburse them for, all Losses which may be imposed upon, asserted against
or incurred or paid by them by reason of, on account of or in
connection with any bodily injury or death or damage to the
property of third parties occurring in or upon or in the
vicinity of the Leased Property through any cause whatsoever.
THE FOREGOING INDEMNITY FOR INJURY, DEATH OR PROPERTY DAMAGE
SHALL APPLY EVEN WHEN INJURY, DEATH OR PROPERTY DAMAGE IN, ON OR
IN THE VICINITY OF THE LEASED PROPERTY RESULTS IN WHOLE OR IN
PART FROM THE ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF AN
INDEMNIFIED PARTY; provided, such
indemnity shall not apply to Losses suffered by an Indemnified
Party that were proximately caused by (and attributed by any
applicable principles of comparative fault to) the Active
Negligence, gross negligence or wilful misconduct of such
Indemnified Party.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation
of any law or regulation or (B) the compliance with any
guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall
be any increase in the cost to Landlord's Parent or any other
Participant of agreeing to make or making, funding or
maintaining advances to Landlord in connection with the Leased
Property, then Tenant shall from time to time, upon demand by
Landlord pay to Landlord for the account of Landlord's Parent or
such other Participant, as the case may be, additional amounts
sufficient to compensate Landlord's Parent or the Participant
for such increased cost. An increase in costs resulting from
any imposition or increase of reserve requirements applicable to
Collateral held from time to time by Landlord's Parent or other
Participants pursuant to the Pledge Agreement would be an
increase covered by the preceding sentence. A certificate as to
the amount of any increased cost covered by this subparagraph,
submitted to Landlord and Tenant by Landlord's Parent or the
other Participant, shall be conclusive and binding for purposes
of determining Tenant's obligations hereunder, absent clear and
demonstrable error.
(iv) Landlord's Parent or any other Participant may demand
additional payments (herein called "Capital Adequacy Charges")
if Landlord's Parent or the other Participant determines that
any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not
having the force of law) affects the amount of capital to be
maintained by it and that the amount of such capital is
increased by or based upon the existence of Funding Advances
made or to be made to Landlord to permit Landlord to maintain
Landlord's investment in the Leased Property. To the extent
that Landlord's Parent or the other Participant demands Capital
Adequacy Charges as compensation for the additional capital
requirements reasonably allocable to such advances, Tenant shall
pay to Landlord for the account of Landlord's Parent or the
other Participant, as the case may be, the amount so demanded.
(v) Any amount to be paid to Landlord, Landlord's Parent or
any other Indemnified Party under this subparagraph 8.(y) shall
be a demand obligation owing by Tenant. Tenant's indemnities and
obligations under this subparagraph 8.(y) shall survive the termination
or expiration of this Lease with respect to any circumstance or
event existing or occurring prior to such termination or
expiration.
(z) Liability Insurance. Tenant shall maintain one or more
policies of commercial general liability insurance against
claims for bodily injury or death and property damage occurring
or resulting from any occurrence in or upon the Leased Property,
in standard form and with an insurance company or companies
rated by the A.M. Best Company of Oldwick, New Jersey as having
a policyholder's rating of A or better and a reported financial
information rating of X or better, such insurance to afford
immediate protection, to the aggregate limit of not less than
$10,000,000 combined single limit for bodily injury and property
damage in respect of any one accident or occurrence, with not
more than $500,000 self-insured retention. Such commercial
general liability insurance shall include blanket contractual
liability coverage which insures contractual liability under the
indemnifications set forth in this Lease (other than the indemnifications
set forth in Paragraph 11 concerning environmental matters), but such
coverage or the amount thereof shall in no way limit such
indemnifications. The policy evidencing such insurance shall
name as additional insureds Landlord and all Participants of
which Tenant has been notified (including Landlord's Parent, ABN
AMRO Bank N.V. and the other financial institutions that are
parties to the original Participation Agreement). Tenant shall
maintain with respect to each policy or agreement evidencing
such commercial general liability insurance such endorsements as
may be reasonably required by Landlord and shall at all times
deliver and maintain with Landlord written confirmation (in form
satisfactory to Landlord) with respect to such insurance from
the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be
canceled or reduced without at least ten (10) days notice to
Landlord. Not less than five (5) days prior to the expiration
date of each policy of insurance required of Tenant pursuant to
this subparagraph, Tenant shall
deliver to Landlord a certificate evidencing a paid renewal
policy or policies.
(aa) Permitted Encumbrances. Except to the extent expressly
required of Landlord by subparagraph 9.(b),
Tenant shall comply with and will cause to be performed all of
the covenants, agreements and obligations imposed upon the owner
of the Leased Property in the Permitted Encumbrances in
accordance with their respective terms and provisions. Tenant
shall not, without the prior written consent of Landlord, modify
or permit any modification of any Permitted Encumbrance in any
manner that could impose significant monetary obligations upon
Landlord or any subsequent owner of the Leased Property, could
significantly and adversely affect the value of the Leased
Property, could impose any lien to secure payment or performance
obligations against any part of the Leased Property or would
otherwise be material and adverse to Landlord.
(bb) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased Property to be in
violation of, or do anything or permit
anything to be done which will subject the Leased Property to
any remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming
disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances pertaining to the Leased Property;
b) not to conduct or authorize others to conduct Hazardous
Substance Activities on the Leased
Property, except Permitted Hazardous Substance Use;
c) to the extent required by Environmental Laws, to remove
Hazardous Substances from the
Leased Property (or if removal is prohibited by law, to take
whatever action is required by law) promptly upon discovery; and
d) not to discharge or authorize the discharge of anything
(including Permitted Hazardous Substances) from the Leased Property into
groundwater or surface water that would require any permit under applicable
Environmental Laws, other than storm water runoff.
If Tenant's failure to cure any breach of the covenants
listed above in this subparagraph (i) continues beyond the
Environmental Cure Period (as defined below), Landlord may, in
addition to any other remedies available to it, after notifying Tenant
of the remediation efforts Landlord believes are needed, cause the
Leased Property to be freed from all Hazardous Substances (or if
removal is prohibited by law, to take whatever action is
required by law), and the cost of the removal shall be a demand
obligation owing by Tenant to Landlord. Further, subject to the provisions
of subparagraph 11.(c) below, Tenant agrees to indemnify Landlord
against all Losses incurred by or asserted or proven against
Landlord in connection therewith. As used in this subparagraph,
"Environmental Cure Period" means the period ending on the
earlier of: (1) one hundred and eighty days (180) after Tenant
is notified of the breach which must be cured within such
period, or such longer period as is reasonably required for any
cure that Tenant pursues with diligence pursuant to and in
accordance with an Approved Plan (as defined below), (2) the
date any writ or order is issued for the levy or sale of any
property owned by Landlord (including the Leased Property) or
any criminal action is instituted against Landlord or any of its
directors, officers or employees because of the breach which
must be cured within such period, (3) the end of the Term. As
used in this subparagraph, an "Approved Plan" means a plan of
remediation of a violation of Environmental Laws for which
Tenant has obtained, within one hundred and eighty days (180) after
Tenant is notified of the applicable breach of the covenants
listed above in this subparagraph (i), the written approval of
the governmental authority with primary jurisdiction over the
violation and with respect to which no other governmental
authority asserting jurisdiction has claimed such plan is inadequate.
(ii) Environmental Inspections and Reviews. Landlord
reserves the right to retain an independent professional
consultant to review any report prepared by Tenant or to conduct
Landlord's own investigation to confirm whether Hazardous
Substances Activities or the discharge of anything into
groundwater or surface water has occurred in violation of the
preceding subparagraph (i), but Landlord's right to
reimbursement for the fees of such consultant shall be limited
to the following circumstances: (1) an Event of Default shall
have occurred; (2) Landlord shall have retained the consultant
to establish the condition of the Leased Property just prior to
any conveyance thereof pursuant to the Purchase Agreement or
just prior to the expiration of this Lease; (3) Landlord shall
have retained the consultant to satisfy any regulatory
requirements applicable to Landlord or its Affiliates; or (4)
Landlord shall have retained the consultant because Landlord has
been notified of a violation of Environmental Laws concerning
the Leased Property or Landlord otherwise reasonably believes that Tenant
has not complied with the preceding subparagraph (i). Tenant grants to
Landlord and to Landlord's agents, employees, consultants and
contractors the right during reasonable business hours and after
reasonable notice to enter upon the Leased Property to inspect
the Leased Property and to perform such tests as are reasonably
necessary or appropriate to conduct a review or investigation of
Hazardous Substances on, or any discharge into groundwater or
surface water from, the Leased Property. Without limiting the
generality of the foregoing, Tenant agrees that Landlord will
have the same right, power and authority to enter and inspect
the Leased Property as is granted to a secured lender under
Section 2929.5 of the California Civil Code. Tenant shall
promptly reimburse Landlord for the cost of any such inspections
and tests, but only when the inspections and tests are (1)
ordered by Landlord after an Event of Default; (2) ordered by
Landlord to establish the condition of the Leased Property just
prior to any conveyance thereof pursuant to the Purchase
Agreement or just prior to the expiration of this Lease; (3)
ordered by Landlord to satisfy any regulatory requirements
applicable to Landlord or its Affiliates; or (4) ordered because
Landlord has been notified of a violation of Environmental Laws
concerning the Leased Property or Landlord otherwise reasonably
believes that Tenant has not complied with the preceding subparagraph (i).
(iii) Notice of Environmental Problems. Tenant shall
immediately advise Landlord of (i) any discovery of any event or
circumstance which would render any of the representations
contained in subparagraph 8.(e) inaccurate in any material
respect if made at the time of such discovery, (ii) any remedial
action taken by Tenant in response to any (A) discovery of any
Hazardous Substances other than Permitted Hazardous Substances
on, under or about the Leased Property or (B) any claim for
damages resulting from Hazardous Substance Activities, (iii)
Tenant's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Leased Property
which could cause the Leased Property or any part thereof to be
subject to any ownership, occupancy, transferability or use
restrictions under Environmental Laws, or (iv) any investigation
or inquiry affecting the Leased Property by any governmental
authority in connection with any Environmental Laws. In such event, Tenant
shall deliver to Landlord within thirty (30) days after Landlord's
request, a preliminary written environmental plan setting forth
a general description of the action that Tenant proposes to take
with respect thereto, if any, to bring the Leased Property into
compliance with Environmental Laws or to correct any breach by
Tenant of the covenants listed above in subparagraph (i),
including, without limitation, any proposed corrective work, the
estimated cost and time of completion, the name of the
contractor and a copy of the construction contract, if any, and
such additional data, instruments, documents, agreements or
other materials or information as Landlord may reasonably
request.
(cc) Affirmative Financial Covenants.
(i) Quick Ratio. Tenant shall maintain a ratio of (A) Quick
Assets of Tenant and its Subsidiaries (determined on a
consolidated basis) to (B) the sum of Current Liabilities of
Tenant and its Subsidiaries (determined on a consolidated
basis), of not less than 1.00 to 1.00. As used in this
subparagraph 8.(ac), "Quick Assets" means the sum (without
duplication of any item) of the Collateral held and pledged
under the Pledge Agreement, plus unencumbered cash, plus
unencumbered short term cash investments, plus
other unencumbered marketable securities which are classified as
short term investments according to GAAP, plus the fair market
value of unencumbered Long-Term Investments, plus unencumbered
current net accounts receivable. For purposes of determining
Quick Assets, assets will be deemed to be "unencumbered" if they are
actually unencumbered or if they are encumbered only by Liens, from which,
at the time of the applicable determination of Quick Assets, Tenant is
entitled to a release of such assets upon no more than ninety days' notice,
without any payment (other than the payment of ministerial fees
and costs), without subjecting other assets to any Lien and
without otherwise satisfying any condition that is beyond
Tenant's control. As used herein "Long-Term Investments" means
those investments described below (to the extent that they are not
classified as short term investments in accordance with GAAP), provided
that such investments shall have maturities of not longer than two years,
and shall be rated not less than A- by Standard & Poor's
Corporation or less than A by Moody's Investors Service, Inc.:
(1) Securities issued or fully guaranteed or fully insured
by the United States government or any agency thereof and backed by the full
faith and credit of the United States;
(2) Certificates of deposit, time deposits, eurodollar time
deposits, repurchase agreements, or banker's acceptances that are
issued by either one of the 50 largest (in assets) banks in the
United States or by one of the 100 largest (in assets) banks in the world; and
(3) Notes and municipal bonds. As used in this subparagraph
8.(ac), "Current Liabilities" means, with respect to any Person, all
liabilities of such Person treated as current liabilities in accordance
with GAAP, including without limitation (a) all obligations payable on
demand or within one year after the date in which the determination is
made and (b) installment and sinking fund payments required to be made
within one year after the date on which determination is made, but excluding
all such liabilities or obligations which are renewable or extendable at
the option of such Person to a date more than one year from the
date of determination.
(ii) Maximum Senior Debt to Capitalization. Throughout the
Term Tenant shall maintain a ratio of Senior Debt to
Capitalization of not more than 0.35 to 1.00. As used in this
subparagraph 8.(ac):
"Senior Debt" means the Debt of Tenant and its Subsidiaries
(determined on a consolidated basis), minus the aggregate principal amount
of the Subordinated Debt.
"Capitalization" means the sum of the Debt of Tenant and its
Subsidiaries (determined on a consolidated basis), including the aggregate
principal amount of the Subordinated Debt, plus Consolidated Tangible Net
Worth of Tenant and its Subsidiaries (determined on a consolidated basis).
"Subordinated Debt" means the unsecured Debt of Tenant in respect
of the $110,000,000 aggregate principal amount at maturity of 10 1/14%
Convertible Subordinated Notes due 2001 issued pursuant to the
Indenture. However, such unsecured Debt shall be included in
Subordinated Debt for purposes hereof only to the extent that it
remains expressly subordinated to the payment and performance
obligations of Tenant in transactions of the type and structure
contemplated by this Lease and the Purchase Agreement.
"Consolidated Tangible Net Worth" means, at any
date of determination thereof, the excess of consolidated total
assets on such date over consolidated total liabilities on such
date; provided, however, that Intangible Assets on such date
shall be excluded from any determination of consolidated total
assets on such date.
"Intangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of Tenant
and its consolidated Subsidiaries that are properly classified
as "intangible assets" in accordance with GAAP and, in any
event, shall include, without limitation, goodwill, patents,
trade names, trademarks, copyrights, franchises, experimental
expense, organization expense, unamortized debt discount and
expense, and deferred charges other than prepaid insurance and
prepaid taxes and current deferred taxes which are classified on
the balance sheet of Tenant and its consolidated Subsidiaries as
a current asset in accordance with GAAP and in which
classification Tenant's independent public accountants concur.
"Indenture" means the Indenture dated as of
November 1, 1994 by and between Tenant and the First National
Bank of Boston, as trustee.
(iii) Minimum Tangible Net Worth. Tenant shall not permit its
Consolidated Tangible Net Worth, on a consolidated basis, at the
end of any fiscal quarter to be less than the sum of: (A) eighty
percent (80%) of Consolidated Tangible Net Worth as of May 31,
1996; plus (B) fifty percent (50%) of Tenant's net income
(but without deducting any net losses for any period) earned in
each fiscal quarter, starting with the quarter ended August 31,
1996, and ending with the quarter which, at such time, is the
most recently ended fiscal quarter; less (C) the amount of
write-offs resulting from acquisitions after May 31, 1996, such
amount not to exceed an aggregate, cumulative amount of
$150,000,000.
(iv) Fixed Charge Ratio. Throughout the Term Tenant shall
maintain as of the last day of each fiscal quarter of Tenant a
ratio of (A) Adjusted EBIT of Tenant and its Subsidiaries
(determined on a consolidated basis) for the twelve (12) month
period ending on such date, to (B) Fixed Charges of Tenant and
its Subsidiaries (determined on a consolidated basis) for the
twelve (12) month period ending on such date, of not less than
2.00 to 1.00. As used in this clause (iv), "Adjusted EBIT"
means, for any accounting period, net income (or net loss), plus the
amounts (if any) which, in the determination of net income (or net loss)
for such period, have been deducted for (a) gross interest expense, (b)
income tax expense (c) rent expense under leases of property (excluding
rent expense payable under any "Minor Lease", which shall mean a lease
under which rent is less than $1,000,000 per annum), (d) depreciation, and
(e) non-recurring charges taken in connection with the
acquisition of in-process technologies, in each case determined
in accordance with GAAP. As used in this clause (iv), "Fixed
Charges" means, for any accounting period,
the sum of (a) gross interest expense, plus (b) amortization of
principal or debt discount in respect of all Debt during such
period, plus (c) rent payable under all leases of property
during such period (excluding rent payable under any Minor
Lease), plus (d) taxes payable during such period.
(dd) Negative Covenants. Without the prior written consent
of Landlord in each case, neither Tenant nor any of its
Subsidiaries shall:
(i) Liens. Create, incur, assume or suffer to exist any Lien,
upon or with respect to any of its properties, now owned or
hereafter acquired; provided, however, that the following shall
be permitted except to the extent that they would encumber any
interest in the Leased Property in violation of other provisions
of this Lease or would encumber Collateral covered by the Pledge
Agreement:
a) Liens for taxes or assessments or other government charges
or levies if not yet due and payable
or if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained;
b) Liens that secure obligations incurred in the ordinary
course of business, that are not past due for more than thirty
(30) days (or that are being contested in good faith by
appropriate proceedings and for which appropriate reserves have
been established) and that:
(1) are imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's
and carrier's Liens, and other similar Liens; or
(2) encumber only equipment or other tangible personal property
and any proceeds thereof (including Liens created by equipment
leases) and are imposed to secure the payment of the purchase
price or other direct costs of acquiring the equipment or other
tangible personal property they encumber;
c) Liens under workmen's compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
d) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment
of money), leases, public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds, or
other similar obligations arising in the ordinary course of
business;
e) judgment and other similar Liens arising in connection with
court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and
by appropriate proceedings;
f) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially
interfere with the occupation, use and enjoyment by Tenant or
any such Subsidiary of the property or assets encumbered thereby
in the normal course of its business or materially impair the
value of the property subject thereto;
g) Liens securing obligations of such a Subsidiary to Tenant or
to another such Subsidiary;
h) Liens incurred after the date of this Lease given to secure
the payment of the purchase price or other direct costs incurred
in connection with the acquisition, construction, improvement or
rehabilitation of assets, including Liens existing on such
assets at the time of acquisition thereof or at the time of
acquisition by Tenant or a Subsidiary of any business entity
(including a Subsidiary) then owning such assets, whether or not
such existing Liens were given to secure the payment of
the purchase price of the assets to which they attach, provided
that (i) except in the case of Liens existing on assets at the
time of acquisition of a Subsidiary then owning such assets, the
Lien shall be created within six (6) months of the later of the
acquisition of, or the completion of the construction or
improvement in respect of, such assets and shall attach solely
to such assets, and (ii) except in the case of Liens existing on
assets at the time of acquisition of a Subsidiary then owning
such assets, at the time such Liens are imposed, the aggregate
amount remaining unpaid on all Debt secured by Liens on such
assets whether or not assumed by Tenant or a Subsidiary shall
not exceed an amount equal to seventy-five percent (75%) of the lesser of
the total purchase price or fair market value, at the time such
Debt is incurred, of such assets;
i) existing mortgages and deeds of trust as of the date of this
Lease;
j) Liens created by the Lease Agreement dated as of July 14,
1994 between Landlord and Tenant, evidenced by a short form
dated July 15, 1994, recorded in Book N520, Page 1474 of the
Official Records of Santa Clara County, California, or by the
other agreements executed in connection therewith (including the
Pledge Agreement and Custodial Agreement referenced therein);
k) Liens created by the Lease Agreement dated as of October 4,
1996 between Landlord and Tenant, evidenced by a short form
dated October 4, 1996, recorded in Series Number 13473188 of the
Official Records of Santa Clara County, California, or by the
other agreements executed in connection therewith (including the
Pledge Agreement referenced therein);
l) Liens created by any real property lease, or related
documents (including a separate purchase agreement), executed
after the date hereof that requires Tenant or its Subsidiaries
to purchase or cause another to purchase any interest in the
property covered thereby and thus guarantee a
minimum residual value of the property to the landlord;
provided, that the value of all such leases (other than this
lease and the lease referenced in the preceding clause) shall
not exceed an aggregate, cumulative amount of $250,100,000 (for
purposes of this clause, the "value" of a lease means the
amount, determined as of the date the lease became effective,
equal to the greater of (1) the present value of rentals and
other minimum lease payments required in connection with such
lease [calculated in accordance with FASB Statement 13 and other
GAAP relevant to the determination of the whether such lease
must be accounted for as capital leases] or (2) the fair value
of the property covered thereby);
m) Liens imposed to secure Debt incurred to finance the
acquisition of property which has been leased or sold by Tenant
or one of its Subsidiaries to another Person (other than Tenant
or a Subsidiary of Tenant) pursuant to a lease or sales
agreement providing for payments sufficient to
pay such Debt in full, provided such Debt is not a general
obligation of Tenant or its Subsidiaries, but rather is payable
only from the rentals or other sums payable under the lease or
sales agreement or from the property sold or leased thereunder;
n) Liens not otherwise permitted by this subsection 8.(ad)(i)
(and not encumbering the Leased Property or any Collateral)
which secure the payment of Debt, provided that (i) at no time
does the sum of the aggregate amount of all outstanding Debt
secured by such Liens exceed $50,000,000,
and (i) such Liens do not constitute Liens against Tenant's
interest in any material Subsidiary or blanket Liens against all
or substantially all of the inventory, receivables, general
intangibles or equipment of Tenant or of any material Subsidiary
of Tenant (for purposes of this clause, a "material Subsidiary"
means any subsidiary whose assets represent a substantial part
of the total assets of Tenant and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP); and
o) Liens incurred in connection with any renewals, extensions
or refundings of any Debt secured by Liens described in the
other clauses of this subsection 8.(ad)(i), provided that there
is no increase in the aggregate principal amount of Debt secured
thereby from that which was outstanding as of the date of such renewal,
extension or refunding and no additional property is encumbered.
(ii) Transactions with Affiliates. Enter into any transactions
that individually or in the aggregate are material to Tenant
(including, without limitation, the purchase, sale or exchange
of property or the rendering of any service) with any
Affiliates, except upon fair and reasonable terms no less
favorable to Tenant than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate.
(iii) Mergers; Sales of Assets.
a) Except to the extent permitted by the last sentence of
this subparagraph 8.(ad), liquidate or dissolve, or merge,
consolidate with or into, or convey, transfer, lease, or
otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired), to any Person, or enter into
any joint venture, partnership or other combination which involves the
investment, sale, lease, loan, or other disposition of the business or all
of the assets of Tenant and its Subsidiaries or so much thereof
as, in the reasonable opinion of Landlord, constitutes a
substantial portion of such business or assets.
b) Except to the extent permitted
by the last sentence of this subparagraph 8.(ad), acquire the
assets or business of any Person, other than in the ordinary
course of Tenant's business as presently conducted.
(iv) Sale of Receivables. Sell for less than the full face
value of, or otherwise sell for consideration other than cash,
any of its notes or accounts receivable. However, this
subparagraph (iv) shall not prohibit: a) a sale of receivables
for cash at a discount which is less than fifteen percent (15%)
of the face value of all receivables then outstanding on the
books of Tenant and its consolidated Subsidiaries, if such sale
and all other discounted sales of receivables permitted by this
clause a) during the same fiscal year of Tenant do
not affect more than fifteen percent (15%) of the individual
accounts (excluding intercompany accounts) comprising the
receivables of Tenant and its Subsidiaries; b) any license or
sale of products or services in the ordinary course of business
where payment for such transactions is made by credit card,
provided that the fees and discounts incurred by the Tenant or
the Subsidiary in connection therewith shall not exceed the
normal and customary fees and discounts incurred for general
credit card transactions through major credit card issuers; or
c) the delivery and endorsement to banks in the ordinary course
of business by Tenant or any of its Subsidiaries of promissory
notes received in payment of trade receivables, where delivery
and endorsement are made prior to the date of maturity of such
promissory notes, and the retention by such banks of normal and
customary fees and discounts therefor, provided such practice is
usual and customary in the country where such activity occurs.
(v) Change of Business. Permit any significant change in the
nature of the business of Tenant and its Subsidiaries, taken as
whole, from that presently conducted.
Notwithstanding any contrary provisions of subparagraph
8.(ad)(iii), Tenant may engage in any of the following
transactions, provided that immediately prior to and immediately
after giving effect thereto, no Default or Event of Default
exists or would exist:
(i) merge with another entity if Tenant is the
corporation surviving the merger;
(ii) enter into joint ventures;
(iii) acquire the assets or business of another
Person; or
(iv) liquidate or dissolve Subsidiaries to
the extent that such liquidations and dissolutions would not, in
the aggregate, result in a material adverse effect on the
properties, assets, operations or businesses of Tenant and its
Subsidiaries, taken as a whole.
(ee) ERISA.
(i) Each Plan is in compliance in all material respects with,
and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other
applicable Federal or state law, and as of the date hereof no event or
condition is occurring or exists which would require a notice
from Tenant under clause 8.(ae)(ii).
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after
Tenant becomes aware that, any of the following has occurred,
with respect to which the potential aggregate liability to
Tenant relating thereto is $2,000,000 or more, and such notice
shall include a statement signed by a senior financial officer
of Tenant setting forth details of the following and the
response, if any, which Tenant or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice
required to be filed with or given to Pension Benefit Guaranty
Corporation by Tenant
or an ERISA Affiliate with respect to any of the following or
the events or conditions leading up it): (A) the assertion, to
secure any Unfunded Benefit Liabilities, of any Lien against the
assets of Tenant, against the assets of any Plan of Tenant or
any ERISA Affiliate of Tenant or against any interest of
Landlord or Tenant in the Leased Property or the Collateral
covered by the Pledge Agreement, or (B) the taking of any action
by the Pension Benefit Guaranty Corporation or any other
governmental authority action against Tenant to terminate any
Plan of Tenant or any ERISA Affiliate of Tenant or to cause the
appointment of a trustee or receiver to administer any such
Plan.
10. Representations, Warranties and Covenants of Landlord.
Landlord represents, warrants and covenants as follows:
(a) Title Claims By, Through or Under Landlord. Except by a
Permitted Transfer, Landlord shall not assign, transfer,
mortgage, pledge, encumber or hypothecate this Lease or any
interest of Landlord in and to the Leased Property during the
Term without the prior written consent of Tenant. Landlord
further agrees that
if any encumbrance or title defect affecting the Leased Property
is lawfully claimed through or under Landlord, including any
judgment lien lawfully filed against Landlord, Landlord will at
its own cost and expense remove any such encumbrance and cure
any such defect; provided, however, Landlord shall not be
responsible for (i) any Permitted Encumbrances (regardless of
whether claimed through or under Landlord) or any other
encumbrances not lawfully claimed through or under Landlord,
(ii) any encumbrances or title defects claimed by, through or
under Tenant, ABN AMRO Bank N.V. or any other Participant (other
than Landlord's Parent)
which Tenant shall have approved, or (iii) any encumbrance or
title defect arising because of Landlord's compliance with
subparagraph 9.(b) or any request made by Tenant.
(b) Actions Required of the Title Holder. So long as no
Event of Default shall have occurred and be
continuing, Landlord shall take any and all action required of
Landlord by the Permitted Encumbrances or otherwise required of
Landlord by Applicable Laws or reasonably requested by Tenant
(including granting any utility easements required in connection
with construction of Improvements); provided that (i) actions
Tenant may require of Landlord under this subparagraph shall be
limited to actions that can only be taken by Landlord as the
owner of the Leased Property, as opposed to any action that can
be taken by Tenant or any third party (and the payment of any
monetary obligation shall not be an action required of Landlord
under this subparagraph unless Landlord shall first have
received funds from Tenant, in excess of any other amounts due
from Tenant hereunder, sufficient to pay such monetary
obligations), (ii) Tenant requests the action to be taken by
Landlord (which request must be specific and in writing, if
required by Landlord at the time the request is made) and (iii)
the action to be taken will not constitute a violation of any
Applicable Laws or compromise or constitute a waiver of
Landlord's rights hereunder or under the Purchase Agreement, the
Pledge Agreement or Environmental Indemnity or otherwise be
reasonably objectionable to Landlord.
So long as no Event of Default shall have
occurred and be continuing, Tenant shall have the option from
time to time during the Term to purchase one or more undeveloped
portions of the Real Property, consisting of one or more tracts
or lots of the Land which can be sold under Applicable Laws
separate and apart from the rest of the Land (each, a "Parcel"), for an
amount equal to the Release Price (as defined below) with
respect thereto. Tenant may exercise such option by delivering
to Landlord not less than ninety (90) days prior written notice,
which written notice shall describe the Parcel or Parcels to be
purchased, the date such Parcels are to be conveyed by Landlord
and an estimate by Tenant of the Release Price to be paid by
Tenant.
In each case Landlord's obligation to convey such Parcels to
Tenant shall be subject to Tenant's satisfaction of each of the
following conditions:
a) Landlord and Tenant shall have agreed upon, entered into
and recorded such reciprocal easements
relating to the Land and the Parcel to be so sold as they shall
deem necessary or reasonably required to preserve usefulness of
the Parcels and the remaining Land after the conveyance;
b) Tenant shall have paid to Landlord the Release Price for
such Parcels; and
c) Tenant shall have reimbursed Landlord for, and Landlord
shall have received, any new appraisal that
Landlord believes it should obtain in connection with the sale
to satisfy regulatory requirements applicable to Landlord,
Landlord's Parent or the Participants.
d) In addition to the Release Price, Tenant shall have paid
all costs and expenses necessary to consummate
the sale, including all legal fees of Landlord.
Upon Tenant's satisfaction of each of the foregoing conditions,
Landlord shall convey such Parcel or Parcels to Tenant pursuant
to a quitclaim transfer of all of Landlord's right, title and
interest therein on as "as is, where is, with all faults" basis
free and clear of encumbrances which are claimed by Landlord or
lawfully claimed through or under Landlord and which are not
claimed by, through or under Tenant, but otherwise without
recourse, representation or warranty of any kind.
As used in this subparagraph 9.(b), the "Release
Price" with respect to any Parcel or Parcels means the higher of
(1) $49,500,000 times a fraction, the numerator of which is the
square footage of such Parcel or Parcels, and the denominator of
which is the total square footage of all Land described in
Exhibit A, and (2) the sales price that Landlord must receive for the
Parcel or Parcels if, following the Landlord's sale of thereof
and application of the net sales proceeds paid to Landlord as a
Qualified Payment, the remaining Leased Property is to have a Remaining
Value (as defined below) of no less than sixty percent (60%) of
Stipulated Loss Value.
As used in this subparagraph 9.(b), "Remaining
Value" means the market value of the Leased Property that
Landlord will retain, taking into account any loss of
visibility, accessibility or development potential that may
result from Landlord's compliance with this subparagraph.
Remaining Value will be determined in accordance with the
following procedure, unless Landlord and Tenant otherwise agree
in a particular case:
(A) Landlord and Tenant shall each, within ten (10)
days after written notice from either to
the other, select an appraiser. If either Landlord or Tenant
fails to select an appraiser within the required period, then
the appraiser who has been timely selected shall conclusively
determine the Remaining Value in accordance with this clause
subparagraph within forty-five (45) days after his
or her selection.
(B) Upon the selection of the two appraisers as
provided above, such appraisers shall
proceed to determine the Remaining Value of the Leased Property
that Landlord will retain after any sale required by this
subparagraph. Such appraisals shall be submitted in writing no
later than forty-five (45) days after selection of the second
appraiser. If the Remaining Value as determined by such
appraisers is identical, such sum they determine shall be the
Remaining Value. In the event the lower appraisal is not lower
than five percent (5%) below the higher appraisal, then
Remaining Value shall be the sum of the two appraisal figures
divided by two (2). If either appraiser fails to timely submit
his or her appraisal, the timely submitted appraisal shall be
determinative of Remaining Value.
(C) In the event the lower appraisal is lower than
five percent (5%) below the higher
appraisal figure, then the two appraisers previously selected
shall select a third appraiser. The name of such appraiser
shall be submitted at the same time the written appraisals are
due. Such third appraiser shall then review the previously submitted
appraisals and select the one that, in his professional opinion,
more closely reflects the market value of the Leased Property
that Landlord will retain, such selection to be submitted in writing no
later than ten (10) days after selection of the third appraiser. Such
selection shall be determinative of Remaining Value.
(D) In making any such determination of Remaining
Value, the appraisers shall assume that
any improvements then located on the Leased Property (or
applicable portion thereof) or under construction constitute the
highest and best use, that Tenant will promptly complete all
construction which this Lease obligates Tenant to complete and
that neither this Lease nor the Purchase Agreement add any value to the
Leased Property. Each appraiser selected hereunder shall be an independent
MAI-designated appraiser with not less than ten (10) years' experience in
commercial real estate appraisal in Santa Clara County,
California and surrounding areas.
Any Losses (including appraisal fees) incurred
by Landlord because of any action taken pursuant to this
subparagraph 9.(b) shall be covered by the indemnification set
forth in subparagraph 8.(y). Further, for purposes of such
indemnification, any action taken by Landlord will be deemed to
have been made at the request of Tenant if made pursuant to any
request of Tenant's counsel or of any officer of Tenant (or
with their knowledge, and without their objection) in connection
with the closing under the Existing Contract or the closing of
any sale of a Parcel by Landlord pursuant to the foregoing
provisions.
(c) No Default or Violation. The execution, delivery and
performance of this Lease do not contravene,
result in a breach of or constitute a default under any material
contract or agreement to which Landlord is a party or by which
Landlord is bound and do not, to the knowledge of Landlord,
violate or contravene any law, order, decree, rule or regulation
to which Landlord is subject.
(d) No Suits. To Landlord's knowledge there are no judicial
or administrative actions, suits or proceedings
involving the validity, enforceability or priority of this
Lease, and to Landlord's knowledge no such suits or proceedings
are threatened.
(e) Organization. Landlord is duly incorporated and legally
existing under the laws of Delaware and is or,
if necessary, will become duly qualified to do business in the
State of California. Landlord has or will obtain, at Tenant's
expense pursuant to the other provisions of this Lease, all
requisite power and all material governmental certificates of
authority, licenses, permits, qualifications and other
documentation necessary to own and lease the Leased Property and
to perform its obligations under this Lease.
(f) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Agreement and
the Pledge Agreement by Landlord are duly authorized, are not in
contravention of or conflict with any term or provision of
Landlord's articles of incorporation or bylaws and do not, to
Landlord's knowledge, require the consent or approval of any
governmental body or other regulatory authority that has not
heretofore been obtained or conflict with any Applicable Laws.
This Lease, the Purchase Agreement and the Pledge
Agreement are valid, binding and legally enforceable obligations
of Landlord except as such enforcement is affected by
bankruptcy, insolvency and similar laws affecting the rights of
creditors, generally, and equitable principles of general
application; provided, Landlord makes no representation or
warranty that conditions imposed by any state or local
Applicable Laws to the purchase, ownership, lease or operation
of the Leased Property have been satisfied.
(g) Existence. Landlord will continuously maintain its
existence and, after qualifying to do business in the
State of California if Landlord has not already done so,
Landlord will continuously maintain its right to do business in
that state to the extent necessary for the performance of
Landlord's obligations hereunder.
(h) Not a Foreign Person. Landlord is not a "foreign person"
within the meaning of the Sections 1445 and
7701 of the Code (i.e., Landlord is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and
regulations promulgated thereunder), and
Landlord is not subject to withholding under California Revenue
and Taxation Code Sections 18805, 18815,
and 26131.
11. Assignment and Subletting.
(a) Consent Required. During the term of this Lease,
without the prior written consent of Landlord first had and
received, Tenant shall not assign, transfer, mortgage, pledge or
hypothecate this Lease or any interest of Tenant hereunder and
shall not sublet all or any part of the Leased Property, by
operation of law or otherwise; provided, that, so long as no
Event of Default has occurred and is continuing, Tenant shall be
entitled without the consent of Landlord to sublet all or any
portion of the space in any then completed Improvements if:
(i) any sublease by Tenant is made
expressly subject and subordinate to the terms hereof;
(ii) no sublease has a term longer
than the remainder of the then effective term of this Lease;
(iii) the use permitted by such
sublease is expressly limited to general office use or other
uses approved in advance by Landlord as uses that will not
present extraordinary risks of uninsured environmental or other
liability; and
(iv) no more than forty-five percent
of the space in any completed Improvements shall be subleased
without Landlord's prior consent to any Person that is neither
(A) an Affiliate of Tenant nor (B) the operator of a business in
the subleased space that is related to the operation of Tenant's
own business (such as another venturer in a joint venture with
Tenant).
(b) Standard for Landlord's Consent to Assignments and
Certain Other Matters. Consents and approvals
of Landlord which are required by this Paragraph 10 will not be
unreasonably withheld, but Tenant
acknowledges that Landlord's withholding of such consent or
approval shall be reasonable if Landlord determines in good
faith that (1) giving the approval may increase Landlord's risk
of liability for any existing or future environmental problem,
(2) giving the approval is likely to substantially increase
Landlord's administrative burden of complying with or monitoring
Tenant's compliance with the requirements of this
Lease, or (3) any transaction for which Tenant has requested the
consent or approval would negate Tenant's representations in
this Lease regarding ERISA or cause this Lease or the other
documents referenced herein to constitute a violation of any
provision of ERISA.
(c) Consent Not a Waiver. No consent by Landlord to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this
Lease or Tenant's interest hereunder, and no assignment or
subletting of the Leased Property or any part thereof in
accordance with this Lease or otherwise with Landlord's consent,
shall release Tenant from liability hereunder; and any such
consent shall apply only to the specific transaction thereby
authorized and shall not relieve Tenant from any requirement of
obtaining the prior written consent of Landlord to any further
sale, assignment, transfer, mortgage, pledge or hypothecation of
this Lease or any interest of Tenant hereunder.
(d) Landlord's Assignment. Landlord shall have the right to
transfer, assign and convey, in whole or in part, the Leased
Property and any and all of its rights under this Lease by any
conveyance that constitutes a Permitted Transfer. (However, any
Permitted Transfer shall be subject to all of the provisions of
each and every agreement concerning the Leased Property then
existing between Landlord and Tenant, including without
limitation this Lease and the Purchase Agreement.) If Landlord
sells or otherwise transfers the Leased Property and assigns its
rights under this Lease, the Purchase Agreement and the Pledge
Agreement pursuant to
a Permitted Transfer, then to the extent Landlord's successor in
interest confirms its liability for the obligations imposed upon
Landlord by this Lease, the Purchase Agreement and the Pledge
Agreement on and subject to the
express terms and conditions set out herein and therein, the
original Landlord shall thereby be released from any obligations
thereafter arising under this Lease, the Purchase Agreement and
the Pledge Agreement, and Tenant will look solely to each
successor in interest of Landlord for performance of such
obligations. However, notwithstanding anything to the contrary
herein contained, if withholding taxes are imposed on the rents
and other amounts payable to Landlord hereunder because of
Landlord's assignment of this Lease to any
citizen of, or any corporation or other entity formed under the
laws of, a country other than the United States, Tenant shall
not be required to compensate such assignee for the withholding
tax. Further, during the Term and so long as no Event of
Default has occurred and is continuing, Landlord shall not
decrease the percentage
of Base Rent it (and/or its Affiliates) is entitled to receive
and retain under the Participation Agreement below ten percent
(10%) without Tenant's consent, which consent will not be
unreasonably withheld.
12. Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume liability for
and to pay, indemnify, defend, and hold
harmless each and every Indemnified Party from and against any
and all Environmental Losses, subject only to the provisions of
subparagraph 11.(c) below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies Tenant of any claim,
demand, action, administrative or legal
proceeding, investigation or allegation as to which the
indemnity provided for in this Paragraph 11 applies, Tenant
shall assume on behalf of the Indemnified Party and conduct with
due diligence and in good faith the investigation and defense
thereof and the response thereto with counsel selected by Tenant
but reasonably satisfactory to the Indemnified Party; provided, that
the Indemnified Party shall have the right to be represented by
advisory counsel of its own selection and at its own expense;
and provided further, that if any such claim, demand, action,
proceeding, investigation or allegation involves both Tenant and
the Indemnified Party and the Indemnified Party shall have been
advised in writing by counsel that there may
be legal defenses available to it which are inconsistent with
those available to Tenant, then the Indemnified Party shall have
the right to select separate counsel to participate in the
investigation and defense of and response to such claim, demand,
action, proceeding, investigation or allegation on its own
behalf, and Tenant shall pay or reimburse the Indemnified Party
for all Attorney's Fees incurred by the Indemnified Party
because of the selection of such separate counsel.
(ii) If any claim, demand, action, proceeding, investigation
or allegation arises as to which the indemnity
provided for in this Paragraph 11 applies, and Tenant fails to
assume promptly (and in any event within fifteen (15) days after
being notified of the claim, demand, action, proceeding,
investigation or allegation) the defense of the Indemnified
Party, then the Indemnified Party may contest (or settle, with
the prior written consent of Tenant, which consent will not be
unreasonably withheld) the claim, demand, action, proceeding,
investigation or allegation at Tenant's expense using counsel
selected by the Indemnified Party; provided, that if any such
failure by Tenant continues for thirty (30) days or more after
Tenant is notified thereof, no such contest need be made by the
Indemnified Party and settlement or full payment of any claim
may be made by the Indemnified Party without Tenant's consent
and without releasing Tenant from any obligations to the
Indemnified Party under this Paragraph 11 so long as, in the
written opinion of reputable counsel to the Indemnified Party,
the settlement or payment in full is clearly advisable.
(c) Notice of Environmental Losses. If an Indemnified Party
receives a written notice of Environmental
Losses that such Indemnified Party believes are covered by this
Paragraph 11, then such Indemnified Party will be expected to
promptly furnish a copy of such notice to Tenant. The failure
to so provide a copy of the notice to Tenant shall not excuse
Tenant from its obligations under this Paragraph 11; provided,
that if Tenant is unaware of the matters described in the notice
and such failure renders unavailable defenses that Tenant might
otherwise assert, or precludes actions that Tenant might
otherwise take, to minimize its obligations hereunder, then
Tenant shall be excused from its obligation to indemnify such
Indemnified Party (and any Affiliate of such Indemnified Party)
against Environmental Losses, if any, which would not have been
incurred but for such failure. For example, if Landlord fails
to provide Tenant with a copy of a notice of an obligation
covered by the indemnity set out in subparagraph 11.(a) and
Tenant is not otherwise already aware of such obligation, and if
as a result of such failure Landlord becomes liable for
penalties and interest covered by the indemnity in excess of the
penalties and interest that would have accrued if Tenant had
been promptly provided with a copy of the notice, then Tenant
will be excused from any obligation to Landlord (or any
Affiliate of Landlord) to pay the excess.
(d) Rights Cumulative. The rights of each Indemnified Party
under this Paragraph 11 shall be in addition
to any other rights and remedies of such Indemnified Party
against Tenant under the other provisions of this Lease or under
any other document or instrument now or hereafter executed by
Tenant, or at law or in equity (including, without limitation,
any right of reimbursement or contribution pursuant to CERCLA).
(e) Survival of the Indemnity. Tenant's obligations under
this Paragraph 11 shall survive the termination
or expiration of this Lease. All obligations of Tenant under
this Paragraph 11 shall be payable upon demand, and any amount
due upon demand to any Indemnified Party by Tenant which is not
paid shall bear interest
from the date of such demand at a floating interest rate equal
to the Default Rate, but in no event in excess of the maximum
rate permitted by law.
13. Landlord's Right of Access.
(a) Landlord and Landlord's representatives may enter the
Leased Property, after five (5) Business Days advance written
notice to Tenant (except in the event of an emergency, when no
advance notice will be required), for the purpose of making
inspections or performing any work Landlord is authorized to
undertake
by the next subparagraph. So long as Tenant remains in
possession of the Leased Property, Landlord or Landlord's
representative will, before making any such inspection or
performing any such work on the Leased Property, if then
requested to do so by Tenant to maintain Tenant's security: (i)
sign in at Tenant's security or
information desk if Tenant has such a desk on the premises, (ii)
wear a visitor's badge or other reasonable identification
provided by Tenant when Landlord or Landlord's representative
first arrives at the Leased Property, (iii) permit an employee
of Tenant to observe such inspection or work, and (iv) comply
with other similar reasonable nondiscriminatory security
requirements of Tenant that do not, individually or in the
aggregate, interfere with or delay inspections or work of
Landlord authorized by this Lease.
(b) If Tenant fails to perform any act or to take any action
which hereunder Tenant is required to perform or take, or to pay
any money which hereunder Tenant is required to pay, and if such
failure or action constitutes an Event of Default or renders
Landlord or any director, officer, employee or Affiliate of
Landlord at risk of criminal prosecution or renders Landlord's
interest in the Leased Property or any part thereof at risk of
forfeiture by forced sale or otherwise, then in addition to any
other remedies specified herein or otherwise available, Landlord
may, in Tenant's name or in Landlord's own name, perform or
cause to be performed such act or take such action or pay such
money. Any expenses so incurred by Landlord, and any money so
paid by Landlord, shall be a demand obligation owing by Tenant
to Landlord. Further, Landlord, upon making such payment, shall
be subrogated to all of the rights of the person, corporation or
body politic receiving such payment. But nothing herein shall
imply any duty upon the part of Landlord to do any work which
under any provision of this Lease Tenant may be required to
perform, and the performance thereof by Landlord shall not
constitute a waiver of Tenant's default. Landlord may during
the progress of any such work permitted by Landlord hereunder on
or in the Leased Property keep and store upon the Leased
Property all necessary materials, tools, and equipment.
Landlord shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business, or other damage to
Tenant or the subtenants of Tenant by reason of making such
repairs or the performance of any such work on or in the Leased
Property, or on account of bringing materials, supplies and
equipment into or through the Leased Property during the course
of such work (except for liability in connection with death or
injury or damage to the property of third parties caused by the
Active Negligence, gross negligence or wilful misconduct of
Landlord or its officers, employees, or agents in connection
therewith), and the obligations of Tenant under this Lease shall
not thereby be affected in any manner.
14. Events of Default.
(a) Definition of Event of Default. Each of the following
events shall be deemed to be an "Event of Default" by Tenant
under this Lease:
(i) Tenant shall fail to pay when due any installment of Rent
due hereunder and such failure shall continue for three (3)
Business Days after Tenant is notified thereof.
(ii) Tenant shall fail to cause any representation or warranty
of Tenant contained herein that is false or misleading in any
material respect when made to be made true and not misleading
(other than as described
in the other clauses of this subparagraph 13.(a)), or Tenant
shall fail to comply with any term, provision or covenant of
this Lease (other than as described in the other clauses of this
subparagraph 13.(a)), and in either case shall not cure such
failure prior to the earlier of (A) thirty (30) days after
written notice thereof is sent to Tenant or (B) the date any
writ or order is issued for the levy or sale of any property
owned by Landlord (including the Leased Property) or any
criminal action is instituted against Landlord or any of its
directors, officers or employees because of such failure;
provided, however, that so long as no such writ or order is
issued and no such criminal action is instituted, if such
failure is susceptible of cure but cannot with reasonable
diligence be cured within such thirty day period, and if Tenant
shall promptly have commenced
to cure the same and shall thereafter prosecute the curing
thereof with reasonable diligence, the period within which such
failure may be cured shall be extended for such further period
(not to exceed an additional sixty (60) days) as shall be
necessary for the curing thereof with reasonable diligence.
(iii) Tenant shall fail to comply with any term, provision or
condition of the Purchase Agreement or the Pledge Agreement and,
if the Purchase Agreement or Pledge Agreement expressly provides
a time within which Tenant may cure such failure, Tenant shall
not cure the failure within such time.
(iv) Tenant shall abandon the Leased Property.
(v) Tenant shall fail to make any payment or payments of
principal, premium or interest, on any Debt of Tenant described
in the next sentence when due (taking into consideration the
time Tenant may have to cure such failure, if any, under the
documents governing such Debt). As used in this clause
13.(a)(v), "Debt" shall mean only a Debt of Tenant now existing
or arising in the future, (A) payable to Landlord or any
Participant or any Affiliate of Landlord or any Participant, the
outstanding balance of which has become due by reason of
acceleration or maturity, or (B) payable to any Person, with
respect to which $5,000,000 or more is actually due and payable
because of acceleration or otherwise.
(vi) Tenant or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against Tenant or any of
its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but
not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of thirty (30) consecutive
days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or
the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its
property) shall occur; or Tenant or any of its Subsidiaries
shall take any corporate action to authorize
any of the actions set forth above in this clause (vi).
(vii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary
decreeing the dissolution of Tenant or such Subsidiary and such
order, judgment or decree remains unstayed and in effect for
more than sixty (60) days.
(viii) Any order, judgment or decree is entered in any
proceedings against Tenant or any Subsidiary decreeing a split-
up of Tenant or such Subsidiary which requires the divestiture
of assets representing a
substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the
consolidated assets of Tenant and its Subsidiaries (determined
in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary,
which shall have contributed a substantial part of the
consolidated net income of Tenant and its Subsidiaries
(determined in accordance with GAAP) for any
of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for
more than sixty (60) days.
(ix) A final judgment or order for the payment of money in an
amount (not covered by insurance) which exceeds $3,000,000 shall
be rendered against Tenant or any of its Subsidiaries and within
sixty (60) days after the entry thereof, such judgment or order
is not discharged or execution thereof stayed pending appeal, or
within thirty (30) days after the expiration of any such stay,
such judgment is not discharged.
(x) Any ERISA Termination Event that Landlord determines might
constitute grounds for the termination of
any Plan or for the appointment by the appropriate United States
district court of a trustee to administer any Plan shall have
occurred and be continuing thirty (30) days after written notice
to such effect shall have been given to Tenant by Landlord, or
any Plan shall be terminated, or a trustee shall be appointed by
an appropriate United States district court to administer any
Plan, or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan.
(xi) A Change of Control Event not approved in advance by
Landlord shall occur.
(xii) The subordination provisions of the Indenture (as
defined in subparagraph 8.(ac)(ii) of this Lease) or any other
agreement or instrument governing the Subordinated Debt (as
defined in subparagraph 8.(ac)(ii)
of this Lease) shall be for any reason revoked or invalidated,
or otherwise cease to be in full force and effect; or the Tenant
or any of its Subsidiaries shall contest in any manner the
validity or enforceability of such subordination provisions or
shall deny that it has any further liability or obligation
thereunder; or the obligations of Tenant hereunder or under the
Purchase Agreement shall be for any reason subordinated to
such Subordinated Debt or shall not have the priority over such
Subordinated Debt as contemplated by this Lease or by the
Indenture or by such subordination provisions.
Notwithstanding the foregoing, any Default that could become an
Event of Default under clause 13.(a)(ii) may be cured within the
earlier of the periods described in clauses (A) and (B) thereof
by Tenant's delivery to Landlord of a written notice irrevocably
exercising Tenant's option under the Purchase Agreement to
purchase Landlord's interest in the Leased Property and
designating as the Designated Sale Date the next following date
which is a Base Rent Date and which is at least ten (10) days
after the date of such notice; provided, however, Tenant must,
as a condition to the effectiveness of its cure, on the date so
designated as the Designated Sale Date tender to Landlord the
full purchase price required by the Purchase Agreement and all
Rent and all other amounts then due or accrued and unpaid
hereunder (including reimbursement for any costs incurred by
Landlord in connection with the applicable Default hereunder,
regardless of whether Landlord shall have been reimbursed for
such costs in whole or in part by any Participants) and Tenant
must also furnish written confirmation that all indemnities set
forth herein (including specifically, but without limitation,
the general indemnity set forth in subparagraph 8.(y) and the
environmental indemnity set forth in Paragraph 11 shall survive
the payment of such amounts by Tenant to Landlord and the
conveyance of Landlord's interest in the Leased Property to
Tenant.
(b) Remedies. Upon the occurrence of an Event of Default
which is not cured within any applicable period expressly
permitted by subparagraph 13.(a), at Landlord's option and
without limiting Landlord in the exercise of any other right or
remedy Landlord may have on account of such default, and without
any further demand or notice except as expressly described in
this subparagraph 13.(b):
(i) By notice to Tenant, Landlord may terminate Tenant's right
to possession of the Leased Property. A notice given in
connection with unlawful detainer proceedings specifying a time
within which to cure a default shall terminate Tenant's right to
possession if Tenant fails to cure the default within the time
specified in the notice.
(ii) Upon termination of Tenant's right to possession and
without further demand or notice, Landlord may re-enter the
Leased Property and take possession of all improvements,
additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property in the
Leased Property may be removed and stored in a warehouse or
elsewhere at the expense and risk of and for the account of
Tenant.
(iii) Upon termination of Tenant's right to possession, this
Lease shall terminate and Landlord may recover from Tenant:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of
termination;
b) The worth at the time of award of the amount by which
the unpaid Rent which would have
been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have
been reasonably avoided;
c) The worth at the time of award of the amount by which
the unpaid Rent for the balance of the
scheduled Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided;
and
d) Any other amount necessary to compensate Landlord for
all the detriment proximately caused
by Tenant's failure to perform Tenant's obligations under this
Lease or which in the ordinary course of things would be likely
to result therefrom, including, but not limited to, the costs
and expenses (including Attorneys' Fees, advertising costs and
brokers' commissions) of recovering possession of the Leased
Property, removing persons or property therefrom, placing the
Leased Property in good order, condition, and repair, preparing
and altering the Leased Property for
reletting, all other costs and expenses of reletting, and any
loss incurred by Landlord as a result of Tenant's failure to
perform Tenant's obligations under the Purchase Agreement.
The "worth at the time of award" of the amounts
referred to in subparagraph 13.(b)(iii)a) and subparagraph
13.(b)(iii)b) shall be computed by allowing interest at ten
percent (10%) per annum or such other rate as may be the maximum
interest rate then permitted to be
charged under California law at the time of computation. The
"worth at the time of award" of the amount referred to in
subparagraph 13.(b)(iii)c) shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to
time by applicable California law.
(iv) The Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may
continue lease in force even after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable
limitations). Accordingly, even though Tenant has breached this
Lease and abandoned the Leased Property, this Lease shall
continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the
right to recover the Rent as it becomes due under this Lease.
Tenant's right to possession shall not be deemed to have been
terminated by Landlord except pursuant to subparagraph 13.(b)(i)
hereof. The following shall not constitute a termination of
Tenant's right to possession:
a) Acts of maintenance or preservation or efforts to relet
the Leased Property;
b) The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest
under this Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or
assignment by Tenant.
(c) Enforceability. This Paragraph shall be enforceable to
the maximum extent not prohibited by
Applicable Law, and the unenforceability of any provision in
this Paragraph shall not render any other
provision unenforceable.
(d) Remedies Cumulative. No right or remedy herein
conferred upon or reserved to Landlord is intended to be
exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now or
hereafter existing under Applicable Law or in equity. In
addition to other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by Applicable Law, to
injunctive relief in case of the violation, or attempted or
threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease to be performed by
Tenant, or to a decree compelling performance of any of the
other covenants, agreements, conditions or provisions of this
Lease to be performed by Tenant, or to any other remedy allowed
to Landlord under Applicable Law or in equity.
Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain in proceedings for
bankruptcy or insolvency of Tenant by reason of the termination
of this Lease, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing
the proceedings in which, the damages are to be proved, whether
or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the
generality of the foregoing, nothing contained herein shall
modify, limit or impair any of the rights and remedies of
Landlord under the Purchase Agreement, the Pledge Agreement or
the Environmental Indemnity.
(e) Waiver by Tenant. To the extent permitted by law,
Tenant hereby waives and surrenders for itself and
all claiming by, through and under it, including creditors of
all kinds, (i) any right and privilege which it or any of them
may have under any present or future constitution, statute or
rule of law to have a continuance of this Lease for the term
hereby demised after termination of Tenant's right of occupancy
by order or judgment of
any court or by any legal process or writ, or under the terms of
this Lease, or after the termination of this Lease as herein
provided, and (ii) the benefits of any present or future
constitution, or statute or rule of law which exempts property
from liability for debt or for distress for rent, and (iii) the
provisions of law relating to notice and/or delay in levy of
execution in case of eviction of a lessee for nonpayment of
rent.
(f) No Implied Waiver. The failure of Landlord to insist at
any time upon the strict performance of any covenant or
agreement or to exercise any option, right, power or remedy
contained in this Lease shall not be construed as a waiver or a
relinquishment thereof for the future. The waiver of or redress
for any violation by Tenant of any term, covenant, agreement or
condition contained in this Lease shall not prevent a similar
subsequent act from constituting a violation. Any express
waiver shall affect only the term or condition specified in such
waiver and only for the time and in the manner specifically
stated therein. A receipt by Landlord of any Base Rent or other
payment hereunder with knowledge of the breach of any covenant
or agreement contained in this Lease shall not be deemed a waiver
of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in
writing and signed by Landlord.
15. Default by Landlord. If Landlord should default in the
performance of any of its obligations under this
Lease, Landlord shall have the time reasonably required, but in
no event less than thirty (30) days, to cure such default after
receipt of written notice from Tenant specifying such default
and specifying what action Tenant believes is necessary to cure
the default. If Tenant prevails in any litigation brought
against Landlord because of Landlord's failure to cure a default
within the time required by the preceding sentence, then Tenant
shall be entitled to an award against Landlord for the damages
proximately caused to Tenant by such default.
16. Quiet Enjoyment. Provided no Event of Default has
occurred and is continuing, Landlord shall not during the Term
disturb Tenant's peaceable and quiet enjoyment of the Leased
Property; however, such
enjoyment shall be subject to the terms, provisions, covenants,
agreements and conditions of this Lease and the Permitted
Encumbrances and any other claims or encumbrances not lawfully
made through or under Landlord,
to which this Lease is subject and subordinate as hereinabove
set forth. Any breach by Landlord of the foregoing covenant of
quiet enjoyment shall, subject to the other provisions of this
Lease, render Landlord liable to Tenant for any monetary damages
proximately caused thereby, but as more specifically provided in
Paragraph 5 above, no such breach shall entitle Tenant to
terminate this Lease or excuse Tenant from its obligation to pay
Base Rent and other amounts hereunder.
17. Surrender Upon Termination. Unless Tenant or an
Applicable Purchaser purchases Landlord's entire interest in the
Leased Property pursuant to the terms of the Purchase Agreement,
Tenant shall, upon the termination of Tenant's right to
occupancy, surrender to Landlord the Leased Property, including
any buildings, alterations, improvements, replacements or
additions constructed by Tenant, with all fixtures and
furnishings included in the Leased Property, but not including
movable furniture and movable personal property not covered by
this Lease, free of all Hazardous Substances (including
Permitted Hazardous
Substances) and tenancies and, to the extent required by
Landlord, with all Improvements in the same condition as of the
date hereof, excepting only (i) ordinary wear and tear (provided
that the Leased Property shall have been maintained as required
by the other provisions hereof) and (ii) alterations and
additions which are expressly permitted by the terms of this
Lease and which have been completed by Tenant in a good and
workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal
property belonging to Tenant or any party claiming under Tenant,
if not removed at the time of such termination and if Landlord
shall so elect, shall be deemed abandoned and become the
property of Landlord without any payment or offset therefor. If
Landlord shall not so elect, Landlord may remove such property
from the Leased Property and store it at Tenant's risk and
expense. Tenant shall bear the expense of repairing any damage
to the Leased Property caused by such removal by Landlord or
Tenant.
18. Holding Over by Tenant. Should Tenant not purchase
Landlord's right, title and interest in the Leased
Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Leased Property after the termination of
this Lease without Landlord's written consent, whether such
termination occurs by lapse of time or otherwise, such holding
over shall constitute and be construed as a tenancy from day to
day only, at a daily Base Rent equal to: (i) the unpaid Purchase
Price on the day in question, times (ii) the Holdover Rate (as
defined below) for such day, divided by (iii) 360; subject,
however, to all of the terms, provisions, covenants and
agreements on the part of Tenant hereunder. No payments of
money by Tenant to Landlord after the termination of this Lease
shall reinstate, continue or extend the Term of this Lease and
no extension of this Lease after the termination thereof shall
be valid unless and until the same shall be reduced to writing
and signed by both Landlord and Tenant; provided, however,
following any breach by Landlord of its obligations
to tender a deed and other documents on the Designated Sale Date
as provided in the Purchase Agreement,
Tenant may at its option continue its possession and use of the
Leased Property pursuant to this Lease, as if the Term had been
extended, for a period not to exceed 180 days after the
Designated Sale Date or such longer
time as may be proscribed by Applicable Law.
As used herein, the "Holdover Rate" means:
(1) for any day prior to the date on which
Landlord tenders a deed and other documents as required by the
Purchase Agreement (or is excused from its obligation to tender
by Tenant's breach or anticipatory repudiation of the Purchase
Agreement), a rate equal to the Fed Funds Rate on that day plus
one hundred basis points;
(2) for any day on which or within ninety days
after Landlord tenders a deed and other documents as required by
the Purchase Agreement (or is excused from its obligation to
tender by Tenant's breach or anticipatory repudiation of the
Purchase Agreement), the per annum Prime Rate in effect for such
day; and
(3) for any day after the ninety days described
in the preceding clause, a rate which is three percent (3%)
above the per annum Prime Rate.
19. Miscellaneous.
(a) Notices. Each provision of this Lease, or of any
Applicable Laws with reference to the sending,
mailing or delivery of any notice or with reference to the
making of any payment by Tenant to Landlord, shall be deemed to
be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to Landlord
hereunder shall be paid to Landlord in immediately available
funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: 3COM (North First Street Property)
or at such other place and in such other manner as Landlord may
designate in a notice to Tenant
(provided Landlord will not unreasonably designate a method of
payment other than wire transfer). Time
is of the essence as to all payments and other obligations of
Tenant under this Lease.
(ii) All notices, demands and other communications to be made
hereunder to the parties hereto shall be in writing (at the
addresses set forth below, or in the case of communications to
Participants, at the addresses for notice established by the
Participation Agreement) and shall be given by any of the
following means: (A) personal service, with proof of delivery or
attempted delivery retained; (B) electronic communication,
whether by telex, telegram or telecopying (if confirmed in
writing sent by United States first class mail, return receipt
requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by
notice to the other parties given in the same manner as provided
above. Any notice or other communication sent pursuant to
clause (A) or (C) hereof shall be deemed received (whether or
not actually received) upon first attempted delivery at the
proper notice address on any Business Day between 9:00 A.M. and
5:00 P.M., and any notice or other communication sent pursuant
to clause (B)
hereof shall be deemed received upon dispatch by electronic
means.
Address of Landlord:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris, San
Francisco 180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho or Will
La Herran Telecopy: (415) 296-
8954
And with a copy to:
Clint Shouse
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of Tenant:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Legal Dept.
Telecopy: (408) 764-6434
With copies to:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Real Estate Dept.
Telecopy: (408) 764-5718; and
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Treasury Dept.
Telecopy: (408) 764-8403; and
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan E. Rattner, Esq.
Telecopy: (415) 328-3029
(b) Severability. If any term or provision of this Lease or
the application thereof shall to any extent be held by a court
of competent jurisdiction to be invalid and unenforceable, the
remainder of this Lease, or the application of such term or
provision other than to the extent to which it is invalid or
unenforceable, shall not be affected thereby.
(c) No Merger. There shall be no merger of this Lease or of
the leasehold estate hereby created with the fee estate in the
Leased Property or any part thereof by reason of the fact that
the same person may acquire or
hold, directly or indirectly, this Lease or the leasehold estate
hereby created or any interest in this Lease or in such
leasehold estate as well as the fee estate in the Leased
Property or any interest in such fee estate, unless all Persons
with an interest in the Leased Property that would be adversely
affected by any such merger
specifically agree in writing that such a merger shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT TO
THE LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO
RIGHTS, EASEMENTS OR LICENSES ARE ACQUIRED BY TENANT BY
IMPLICATION OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH IN THE
PROVISIONS OF THIS LEASE, THE PURCHASE AGREEMENT AND THE PLEDGE
AGREEMENT.
(e) Entire Agreement. This Lease and the instruments
referred to herein supersede any prior negotiations
and agreements between the parties concerning the Leased
Property and no amendment or modification of this Lease shall be
binding or valid unless expressed in a writing executed by both
parties hereto.
(f) Binding Effect. All of the covenants, agreements, terms
and conditions to be observed and performed
by the parties hereto shall be applicable to and binding upon
their respective successors and, to the extent assignment is
permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to
all obligations of Tenant and all notices required
of Tenant under this Lease, but this paragraph shall not limit
Tenant's opportunity to prevent an Event of Default by curing
any breach within the cure period (if any) applicable under
subparagraph 13.(a).
(h) Termination of Prior Rights. Without limiting the
rights and obligations of Tenant under this Lease,
Tenant acknowledges that any and all rights or interest of
Tenant in and to the Land, the improvements to the Land and to
any other property included in the Leased Property (except under
this Lease and the Purchase Agreement) are hereby superseded.
Tenant quitclaims unto Landlord any rights or interests Tenant
has in or to the Land, the improvements to the Land and to any
other property included in the Leased Property other than the
rights and interests created by this Lease and the Purchase
Agreement.
(i) Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the
State of California.
(j) Waiver of a Jury Trial. LANDLORD AND TENANT EACH HEREBY
WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING
OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS BETWEEN THEM
RELATING TO
THIS LEASE OR THE LEASED PROPERTY. The scope of this waiver is
intended to be all-encompassing of
any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including,
without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Tenant
and Landlord each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each has
already relied on the waiver in entering into this Lease and the
other
documents referred to herein, and that each will continue to
rely on the waiver in their related future dealings. Tenant and
Landlord each further warrants and represents that it has
reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS LEASE
OR THE LEASED PROPERTY.
In the event of litigation, this Lease may be filed as a written
consent to a trial by the court.
(k) Not a Partnership, Etc. NOTHING IN THIS LEASE IS
INTENDED TO BE OR TO CREATE ANY
PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
LANDLORD AND TENANT. NEITHER THE EXECUTION OF THIS LEASE NOR THE
ADMINISTRATION OF THIS LEASE OR OTHER DOCUMENTS REFERENCED
HEREIN BY LANDLORD, NOR ANY OTHER
RIGHT, DUTY OR OBLIGATION OF LANDLORD UNDER OR PURSUANT TO THIS
LEASE OR SUCH
DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY
OBLIGATIONS OF
LANDLORD TO TENANT.
(l) Tax Reporting. Landlord and Tenant shall report this
Lease and the Purchase Agreement for federal
income tax purposes as a conditional sale unless prohibited from
doing so by the Internal Revenue Service. Similarly, Tenant
shall report all interest earned on Escrowed Proceeds or the
Collateral as Tenant's income for federal and state income tax
purposes. If the Internal Revenue Service shall challenge
Landlord's characterization of this Lease and the Purchase
Agreement as a conditional sale for federal income tax reporting
purposes, Landlord shall notify Tenant in writing of such
challenge and consider in good faith any reasonable suggestions
by Tenant about an appropriate response. In any event, Tenant
shall indemnify and
hold harmless Landlord from and against all liabilities, costs,
additional taxes and other expenses that may arise or become due
because of such challenge or because of any resulting
recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale
under the Purchase
Agreement to the extent (if any) that such additional taxes are
not offset by tax savings resulting from additional depreciation
deductions or other tax benefits to Landlord of the
recharacterization.
(m) IN WITNESS WHEREOF, this Lease is hereby executed in multiple
originals as of the effective date
above set forth.
"Landlord"
BNP LEASING CORPORATION
By: /s/ Lloyd G. Cox
--------------------
Lloyd G. Cox, Vice President
"Tenant"
3COM CORPORATION
By: /s/ Christopher B. Paisley
------------------------------
Christopher B. Paisley, Chief Financial Officer
Exhibit A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa Clara,
State of California, described as follows:
PARCEL ONE:
All of Parcel 1, as shown upon that certain Map entitled,
"Amended Parcel Map," which Map was filed for
record in the Office of the Recorder of the County of Santa
Clara, State of California on December 22, 1983 in Book 523 of
Maps, at pages 7, 8 and 9.
EXCEPTING THEREFROM:
All that certain real property situated in the City of San Jose,
County of Santa Clara, State of California, being a portion of
Parcel 1, as shown on the Amended Parcel Map recorded in Book
523 of Maps at page 9, Santa
Clara County Records, being more particularly described as
follows:
Beginning at the most Westerly corner of said Parcel 1, being on
the Northeasterly line of North First Street; Thence N. 71 56'
56" E., 341.59 feet along the Northerly line of said Parcel 1;
Thence S. 37 32' 48" W., 281.82 feet to said Northeasterly line
of North First Street;
Thence along said Northeasterly line N. 52 27' 37" W., 193.00
feet to the true point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in Book
K267, page 156 Official Records, and being more particularly
described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
Parcel 1 as shown on the Amended Parcel Map recorded in Book 523
of Maps, at page 9, Santa
Clara County Records, being also a portion of Parcel 2 as
described in the deed recorded October 21, 1985 in
Book J492 of Official Records at page 1703, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985
at Series Number 8564627, Book J492 of Official Records at page
1698, Santa Clara County Records;
thence along the Southeasterly line of said parcel described in
said deed recorded October 21, 1985, N. 37 32' 48" E., 281.82
feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses: N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of 300.00 feet
through a central angle of 7 12' 34" for an arc length of 37.75
feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly line
of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet to
a line that is parallel with and 27.00 Southeasterly of said
Northwesterly line;
thence along said parallel line S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of 273.00 feet
through a central angle of 7 12' 34" for an arc length of 34.35
feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W., 77.00
feet to the point of beginning.
PARCEL TWO:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
that parcel of land described in the Deed recorded May 3, 1979
in Book E464 of Official Records at page 51, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523
of Maps at page 9, Santa Clara County Records, said corner being
on the Northeasterly line of North First Street;
thence along the Northerly line of said Parcel 1, N. 71 56' 56"
E, 341.59 feet to the true point of beginning; thence continuing
along said Northerly line N. 71 56' 56" E., 358.60 feet;
thence N. 45 14' 38" W., 168.87 feet;
thence S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of 300.00 feet
through a central angle of 7 12' 34" for an arc length of 37.75
feet;
thence S. 37 32' 48" W., 20.53 feet to the true point of
beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in Book
K267, page 156 Official Records, and being more particularly
described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
Parcel 1 as shown on the Amended Parcel Map recorded in Book 523
of Maps, at page 9, Santa
Clara County Records, being also a portion of Parcel 2 as
described in the deed recorded October 21, 1985 in
Book J492 of Official Records at page 1703, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series Number
8564627, Book J492 of Official Records at page 1698, Santa Clara
County Records;
thence along the Southeasterly line of said parcel described in
said deed recorded October 21, 1985, N. 37 32' 48" E., 281.82
feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses; N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of 300.00 feet
through a central angle of 7 12' 34" for an arc length of 37.75
feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly line
of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet to
a line that is parallel with and 27.00 Southeasterly of said
Northwesterly line;
thence along said parallel line S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of 273.00 feet
through a central angle of 7 12' 34" for an arc length of 34.35
feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W., 77.00
feet to the point of beginning.
PARCEL THREE:
Beginning at a 4" x 4" stake marked A.D.C.M.1, standing on the
Southerly line of the Alviso and Milpitas
Road, from which stake a stone Monument standing at the point of
intersection of the South line of the Alviso and Milpitas Road
with the center line of the San Jose and Alviso Road bears West
28.14 chains; running thence along the South line of the Alviso
and Milpitas Road East 38.88 chains to a 4"x4" stake marked
C.M.N.M.1; thence S. 7 20' E., 7.835 chains to a 4"x4" stake
marked C.M.N.M.2 standing on the Southerly line of the lands
formerly belonging to the Estate of John W. Meads; thence along
said Southerly line S. 88 55' W., 36.74 chains to a 4"x4" stake
marked M.4; thence S. 59 57' E., 1.322 chains to a 4" stake
marked M.3;
thence S. 71 48' W., 3.35 chains to a 4"x4" stake marked A
D.C.M. 3; thence N. 1 28' W. 5.02 chains to a 4"x4" stake
marked A D.C.M.2; thence N. 10 18' W., 5.474 chains to the
place of beginning, and being
Lot 2 as shown on the map accompanying the report of the sole
commissioner in the partition of the Estate of John W. Meads,
deceased.
EXCEPTING THEREFROM
A portion of that parcel of land described in the Deed recorded
September 21, 1966 as Instrument No. 3120626 in Book 7512, page
79, Official Records of Santa Clara County, said portion being
more particularly described as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records of
Santa Clara County; thence along
the Northerly line of said parcel (7512 OR 79) S. 89 01' 21"
E., 2959.87 feet and N. 74 49' 08" E.,
1314.86 feet to the Easterly line of last said parcel; thence
along last said line S. 6 22' 52" E., 76.47 feet; thence S. 80
54' 25" W., 72.96 feet to a line parallel with, and distant
67.83 feet Southerly, at right angles, from the course described
above as "N. 74 49' 08" E., 1314.86 feet"; thence along said
parallel line S. 74 49' 08" W., 1034.16 feet; thence along a
tangent curve to the right with a radius of 1395.00 feet through
an angle of 16 09' 31", an arc length of 393.42 feet to a line
parallel with and distant 65.59 feet Southerly, at right angles,
from the course described above as "S. 89 01' 21" E., 2959.87
feet"; thence along last said parallel line N. 89 01' 21" W.,
2767.11 feet to the Easterly line of said State of California
Parcel; thence along last said line N. 9 29' 21" W., 66.70 feet
to the point of commencement, as granted to the State of
California by Deed recorded February 17, 1970, Series No.
3764080, Book 8830, page 352 and Series
No. 3764081, Book 8830, page 355, Official Records, Santa Clara
County.
ALSO EXCEPTING THEREFROM:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
the parcel of land described in the Deed recorded July 26, 1984
in Book I749 of Official Records,
page 539, Santa Clara County Records, being more particularly
described as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at page 9,
Santa Clara County Records, said corner being on the
Northeasterly line of North First
Street; thence along the Northerly line of said Parcel 1, N. 71
56' 56" E., 787.15 feet to the Westerly line of said Parcel
described in the said Deed recorded July 26, 1984; thence along
said Westerly line N. 1 19' 04" W., 327.06 feet to the true
point of beginning; thence continuing along said Westerly line
N. 1 19' 04" W., 4.26 feet; thence N. 10 16' 10" W., 261.37
feet; thence leaving said Westerly line S. 89 50' 02" E.,
218.46 feet; thence S. 0 09' 58" W., 88.17 feet; thence
Southwesterly along a non-tangent curve to the left having a
radius of 325.00 feet whose radius point bears S. 43 03' 16"
E., through a central angle of 2 11' 22" for an arc length of
12.42 feet; thence S. 44 45' 22" W., 230.93 feet to the true
point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded
August 20, 1987 in Book K267, page 162 Official Records, and
being more particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
the parcel of land described in the Deed recorded July 26, 1984
in Book I749 of Official Records, at page 539, Santa Clara
County Records, being also a portion of the Parcel 4 as
described in the Deed recorded October 21, 1985 in Book J492 of
Official Records at page 1713, Santa Clara County Records, being
more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44 45'
22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet to
the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County
Records;
thence along said Southeasterly line N. 44 45' 22" E., 230.93
feet;
thence Northeasterly along a curve to the right having a radius
at 325.00 feet through a central angle of 45 24' 36" for an arc
length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of 2000.00
feet, through a central angle of 6 03' 43" for an arc length of
211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of 350.00 feet
through a central angle of 31 13' 08" for an arc length of
190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of 226.00 feet
through a central angle of 42 17' 12" for an arc length of
166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of 43.00 feet
through a central angle of 106 08' 43" for an arc length of
79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of 1065.00
feet through a central angle of 2 47' 46" for an arc length of
51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of 931.00 feet
through a central angle of 1 55' 58" for an arc length of 31.40
feet to a point on the Westerly line of Zanker Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet to
the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of 173.00 feet
through a central angle of 42 17' 12" for an arc length of
127.68 feet;
thence N. 64 40' 37" W., 358.91 feet;
thence along a curve to the left having a radius of 297.00 feet
through a central angle of 31 13' 08" for an arc length of
161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of 2053.00
feet through a central angle of 6 03' 43" for an arc length of
217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the Northwesterly
corner of Parcel 1 shown on the Parcel Map recorded in Book 531
of Maps at page 42 Santa Clara County Records;
thence along said Southerly line S. 88 44' 54" W., 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of 123.00 feet
through a central angle of 37 22' 50" for an arc length of
80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of 280.00 feet
through a central angle of 45 24' 36" for an arc length of
221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly line
of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet to
the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373,
page 560, Official Records and all that portion lying thereof
and being more particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21, 1985
in Book J492 of Official Records, at page 1708, Santa Clara
County Records; thence from said point of beginning, along the
Northerly prolongation of the Westerly line of said Parcel 3 N.
9 29' 16" W., 11.25 feet; thence leaving said Northerly
prolongation N. 88 43' 01" E., 202.59 feet; thence N. 89 49'
56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain 6.465
acre parcel described in the Deed from Edward S.J. Cali, et al,
to the State of California; recorded February 17, 1970 in Book
8830 of Official Records at page 352 Santa Clara County Records;
thence along said Southerly line S 89 01' 16" E., 1954.77 feet;
thence leaving said Southerly line S. 86 14' 18" E., 317.01
feet to a point in the general Northerly line of the 6.474 acre
parcel described in the Deed from Metropolitan Life Insurance
Company, a New York corporation
to the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the following courses: S 84 55' 33"
W. 51.74 feet; from a tangent bearing of S. 84 54' 26" W. along
a curve to the right with a radius of 1999.89 feet, through a
central angle of 6 03' 42" for an arc length of 211.58 feet; N.
89 01' 32" W. 2099.03 feet; and from a tangent bearing of N. 89
01' 57" W., along a curve
to the left with a radius of 324.98 feet, through a central
angle of 43 13' 13" for an arc length of 245.14 feet to the
Southeasterly corner of said Parcel 3; thence along the Easterly
line of said Parcel 3 N. 0 58' 29" E., 88.17 feet to the
Northeast corner of said Parcel 3; thence along the Northerly
line of said Parcel 3 N. 89 01' 31" W., 218.48 feet to the
point of beginning.
ALSO EXCEPTING THEREFROM:
Beginning at the Southwest corner of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California recorded February 17, 1970 in Book
8830 of Official Records at
page 352, Santa Clara County Records; thence from said point of
beginning, along the Southerly line of said 6.465 acre parcel S.
89 01' 16" E. 537.24 feet; thence leaving said Southerly line,
at right angles, S 0 58' 44" W. 6.61 feet; thence S. 89 49'
56" W. 330.95 feet; thence S. 88 43' 01" W. 202.59 feet to a
point in the Southerly prolongation of the Westerly line of said
6.465 acre parcel; thence along said Southerly prolongation N. 9
29' 16" W., 21.59 feet to the point of beginning.
PARCEL FOUR:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
that parcel of land described in the Deed recorded May 3, 1979
in Book E464 of Official Records, at page 51, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523
of Maps, at page 9, Santa Clara County Records, said corner
being on the Northeasterly line of North First Street; thence
along the Northerly line of said Parcel 1, N. 71 56' 56" E.,
700.27 feet to the true point of beginning; thence continuing
along said Northerly line N. 71 56' 56" E., 86.88 feet to the
Easterly line of said parcel of land described in the Deed
recorded May 3, 1979; thence along said Easterly line N. 1 19'
04" W., 289.58 feet; thence leaving said Easterly line S. 44
45' 22" W. 278.16 feet; thence S. 45 14' 38: E.,
168.87 feet to the true point of beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in Book
K267, page 162 Official Records, and being more particularly
described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
the parcel of land described in the Deed recorded July 26, 1984
in Book I749 of Official Records, at page 539, Santa Clara
County Records, being also a portion of the Parcel 4 as
described in the Deed recorded October 21, 1985 in Book J492 of
Official Records at page 1713, Santa Clara County Records, being
more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44 45'
22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet to
the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County
Records;
thence along said Southeasterly line N. 44 45' 22" E., 230.93
feet;
thence Northeasterly along a curve to the right having a radius
at 325.00 feet through a central angle of 45 24' 36" for an arc
length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of 2000.00
feet, through a central angle of 6 03' 43" for an arc length of
211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of 350.00 feet
through a central angle of 31 13' 08" for an arc length of
190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of 226.00 feet
through a central angle of 42 17' 12" for an arc length of
166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of 43.00 feet
through a central angle of 106 08' 43" for an arc length of
79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of 1065.00
feet through a central angle of 2 47' 46" for an arc length of
51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of 931.00 feet
through a central angle of 1 55' 58" for an arc length of 31.40
feet to a point on the Westerly line of Zanker Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet to
the Southerly line of said Parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of 173.00 feet
through a central angle of 42 17' 12" for an arc length of
127.68 feet;
thence N. 64 40' 37" W 358.91 feet;
thence along a curve to the left having a radius of 297.00 feet
through a central angle of 31 13' 08" for an arc length of
161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of 2053.00
feet through a central angle of 6 03' 43" for an arc length of
217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the Northwesterly
corner of Parcel 1 shown on the Parcel Map recorded in Book 531
of Maps at page 42 Santa Clara County Records;
thence along said Southerly line S. 88 44' 54" W. 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along said Southerly line S. 88 44' 54" W., 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of 123.00 feet
through a central angle of 37 22' 50" for an arc length of
80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of 280.00 feet
through a central angle of 45 24' 36" for an arc length of
221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly line
of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet to
the point of beginning.
PARCEL FIVE:
Beginning at a 4'x4' stake marked C.M.N.M.1., standing on the
Southerly line of the Alviso and Milpitas
Road, from which stake a stone monument standing at the point of
intersection of the Southerly line of the Alviso and Milpitas
Road with the center line of the San Jose and Alviso Road bears
West 67.02 chains; running thence along the South line of the
Alviso and Milpitas Road East 5.955 chains to a 4'x4' stake
marked M; thence still along the Southeasterly line of the
Alviso and Milpitas Road N. 73 54' E., 19.93 chains to a fence
post marked W.P. standing in fence line on the Westerly line of
lands now or formerly of Boots; thence
along said fence S. 7 15' E., 12.77 chains to a stake marked
M.1.; thence along the fence along the Northerly line of the
lands now or formerly of Nicholson, S. 88 55' W., 25.727 chains
to a 4'x4' stake marked C.M.N.M.2; thence N. 7 20' W., 7.835
chains to the place of beginning, and being Lot 3 as shown on
the Map accompanying the report of the sole commissioner in the
partition of the Estate of John W. Meads, deceased.
Excepting therefrom a portion of that parcel of land described
in the Deed recorded September 2, 1966 as instrument No. 3120626
in Book 7512, page 79, Official Records of Santa Clara County,
said portion being more particularly described as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records of
Santa Clara County; thence along
the Northerly line of said Parcel (7512 or 79) S. 89 01' 21"
E., 2959.87 feet and N. 74 49' 08" E.,
1314.86 feet to the Easterly line of last said parcel; thence
along last said line S. 6 22' 52" E., 76.47 feet; thence S. 80
54' 25" W., 72.96 feet to a line parallel with, and distant
67.83 feet Southerly, at right angles, from the course described
above as "N. 74 49' 08" E., 1314.86 feet"; thence along said
parallel line S. 74 49' 08" W., 1034.16 feet; thence along a
tangent curve to the right with a radius of 1395.00 feet through
an angle of 16 09' 31", an arc length of 393.42 feet to a line
parallel with and distant 65.59 feet Southerly, at right angles,
from the course described above as "S. 89 01' 21" E., 2959.87
feet"; thence along last said
parallel line N. 89 01' 21" W., 2767.11 feet to the Easterly
line of said State of California; thence along last said line N.
9 29' 21" W., 66.70 feet to the point of commencement, as
granted to the State of California by Deed recorded February 17,
1970, Series No. 3764080, Book 8830, page 352 and Series No.
3764081,
Book 8830, page 355, Official Records, Santa Clara County.
The bearings and distances used in the above excepted
description are on the California System Zone 3. Multiply the
above distances by 1.0000530 to obtain ground level distances.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded
August 20, 1987 in Book K267, page 162 Official Records, and
being more particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California, being a portion of
the parcel of land described in the Deed recorded July 26, 1984
in Book I749 of Official Records, at page 539, Santa Clara
County Records, being also a portion of the Parcel 4 as
described in the Deed recorded October 21, 1985 in Book J492 of
Official Records at page 1713, Santa Clara County Records, being
more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44 45'
22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet to
the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E., 230.93
feet;
thence Northeasterly along a curve to the right having a radius
at 325.00 feet through a central angle of 45 24' 36" for an arc
length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of 2000.00
feet, through a central angle of 6 03' 43" for an arc length of
211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of 350.00 feet
through a central angle of 31 13' 08" for an arc length of
190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of 226.00 feet
through a central angle of 42 17' 12" for an arc length of
166.80 feet to a point of reverse curvature;
thence along a curve lo the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of 43.00 feet
through a central angle of 106 08' 43" for an arc length of
79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of 1065.00
feet through a central angle of 2 47' 46" for an arc length of
51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of 931.00 feet
through a central angle of 1 55' 58" for an arc length of 31.40
feet to a point on the Westerly line of Zanker Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet to
the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of 173.00 feet
through a central angle of 42 17' 12" for an arc length of
127.68 feet;
thence N. 64 40' 37" W. 358.91 feet;
thence along a curve to the left having a radius of 297.00 feet
through a central angle of 31 13' 08" for an arc length of
161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of 2053.00
feet through a central angle of 6 03' 43" for an arc length of
217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the Northwesterly
corner of Parcel 1 shown on the Parcel Map recorded in Book 531
of Maps at page 42 Santa Clara County Records;
thence along said Southerly line S. 88 44' 54" W., 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of 123.00 feet
through a central angle of 37 22' 50" for an arc length of
80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of 280.00 feet
through a central angle of 45 24' 36" for an arc length of
221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly line
of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet to
the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded
August 20, 1987 in Book K267, page 162 Official Records, and
being more particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, State of California being a portion of
the parcel of land described in the Deed recorded July 26, 1984
in Book I749 of Official Records, at page 539, Santa Clara
County Records, being more particularly described as follows:
Beginning at the Northeasterly corner of said parcel, said
corner being on the Westerly line of Zanker Road
and Southerly line of Highway 237;
thence along the Easterly line of said Parcel, S. 7 05' 54" E.
99.01 feet;
thence Northerly along a non-tangent curve to the left having a
radius of 931.00 feet whose radius point bears S. 79 08' 59" W.
through a central angle of 3 39' 23" for an arc length of 59.41
feet to a point of compound curvature;
thence along a curve to the left having a radius of 43.00 feet
through a central angle of 85 24' 20" for an arc length of
64.10 feet to the Northerly line of said Parcel;
thence along said Northerly line N. 60 05' 16" E, 50.59 feet to
the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373,
page 560, Official Records and all that portion lying thereof
and being more particularly described as follows:
All that certain real property situate in the City of San Jose,
County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a
California general partnership, to John Arrillaga, et al,
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records; thence from said point of
beginning, along the Northerly prolongation of the Westerly line
of said Parcel 3, N. 9 29' 16" W., 11.25 feet; thence leaving
said Northerly prolongation N. 88 43' 01" E., 202.59 feet;
thence N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain 6.465
acre parcel described in the Deed from Edward
S.J. Cali, et al, to the State of California; recorded February
17, 1970 in Book 8830 of Official Records at page 352 Santa
Clara County Records; thence along said Southerly line S 89 01'
16" E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly line
of the 6.474 acre parcel described in the Deed from Metropolitan
Life Insurance Company, a New York corporation to the City of
San Jose, a municipal corporation of the State of California
recorded August 20, 1987 in Book K267 of Official Records at
page 162 Santa Clara County Records; thence along said general
Northerly line the
following courses; S 84 55' 33" W. 51.74 feet; from a tangent
bearing of S. 84 64' 26" W. along a curve to
the right with a radius of 1999.89 feet, through a central angle
of 6 03' 42" for an arc length of 211.58 feet N. 89 01' 32" W.
2099.03 feet and from a tangent bearing of N. 89 01' 57" W.,
along a curve to the left with a radius of 324.98 feet, through
a central angle of 43 13' 13" for an arc length of 245.14 feet
to the Southeasterly corner of said Parcel 3; thence along the
Easterly line of said Parcel 3 N. 0 58' 29" E.,
88.17 feet to the Northeast corner of said Parcel 3; thence
along the Northerly line of said Parcel 3 N. 89 01' 31" W.,
218.48 feet to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373,
page 560, Official Records and all that portion lying thereof
and being more particularly described as follows:
Beginning at the Northwest corner of that certain 0.019 acre
parcel described in the Deed from Metropolitan Life Insurance
Company, a New York Corporation, to the City of San Jose, a
municipal corporation of the
State of California, recorded August 20, 1987 in Book K267 of
Official Records at page 162 Santa Clara
County Records; thence from said point of beginning, along the
Southerly line of that certain 6.465 acre parcel of land
described in the Deed from Edward S.J. Cali, et al to the State
of California, recorded February 17, 1970 in Book 8830 of
Official Records at page 352 Santa Clara County Records, the
following courses: S 80 55' 58" W. 1034.16 feet; along a
tangent curve to the right with a radius of 1395.00 feet,
through a central angle of 16 09' 23" for an arc length of
393.37 feet and N. 89 01' 16" W. 275.13 feet; thence leaving
said Southerly line S. 86 14' 18" E. 317.01 feet to a point in
a Northerly line of that certain 6.474 acre parcel
described in said Deed to the City of San Jose; thence along
said Northerly line the following courses: N. 84 55' 33" E.
658.09 feet and along a tangent curve to the right with a radius
of 349.98 feet, through a central angle of 0 20' 33" for an arc
length of 2.09 feet; thence leaving said Northerly line N. 85
16' 06" E.
587.33 feet; thence along a tangent curve to the right with a
radius of 15.00 feet, through a central angle of 75 05' 51" for
an arc length of 19.66 feet; thence S. 19 35' 03" E. 467.07
feet; thence S. 49 41' 05 W.
25.15 feet to a point in said Northerly line; thence along said
Northerly line and a Westerly line of said
6.474 acre parcel the following courses: from a tangent bearing
of S. 77 14' 33" E along a curve to the left with a radius of
43.00 feet, through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature; thence
along a tangent curve to the right with a radius of 1064.94
feet, through a central angle of 2 47' 46" for an arc length of
51.97 feet; thence N. 0 35' 30" W. 358.63 feet; thence along a
tangent curve to the left with a radius of 830.95 feet, through
a central angle of 1 55' 59" for an arc length of 31.41 feet to
the Northeast corner of said 6.474 acre parcel; thence along the
Northerly prolongation of the Easterly line of said 6.474 acre
parcel N. 6 16' 05" W. 121.98 feet to the most Southerly corner
of said
0.019 acre parcel; thence along the Westerly line of said 0.019
acre parcel the following courses: from a tangent bearing of N.
10 01' 13" W. along a curve to the left with a radius of 930.95
feet, through a central angle of 3 39' 22" for an arc length of
59.41 feet; thence from a tangent bearing of N. 13 40' 35" W.
along a curve to the left with a radius of 43.00 feet, through a
central angle of 85 23' 27" for an arc length of 64.09 feet to
the point of beginning.
PARCEL SIX:
All of Parcel Two as shown upon that Parcel Map which filed for
record in the Office of the Recorder of the County of Santa
Clara, State of California on July 13, 1984 in Book 531 of Maps,
at pages 41 and 42.
APN: 097-03-59,79,80,84,85,86,87,88,90,93,102,103,104
ARB: 097-3-x5,x6,8,9,x15,x16,20,21,25.1,25.2
Exhibit B
Permitted Encumbrances
This conveyance is subject to the following matters,
but only to the extent the same are still valid and in full
force and effect:
1. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 7E
The above Assessment No. covers APN No. 097-03-079 and
097-03-093, but is being collected under APN No. 097-03-079.
Said matter affects a portion of Parcel One.
2. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 6Y
Said matter affects a portion of Parcel Three.
3. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 9Y
Said matter affects a portion of Parcel Three.
4. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 7Y
Said matter affects a portion of Parcel Three.
5. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 8Y
Said matter affects portions of Parcels Three and Five.
6. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 5Y
Said matter affects Parcel Four.
7. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 10Y
Said matter affects a portion of Parcel Five.
8. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 4E
Said matter affects Parcel Six.
9. EASEMENT for the purposes stated herein and incidents thereto
Purpose : A right of way for a covered wooden sewer
Granted to : The City of San Jose, a municipal corporation
Recorded : February 26, 1989 in Book 115 of Deeds, page 142
Affects : A strip of land twelve (12) feet wide,
the center line of which is described as follows:
Beginning in the Southerly line of land of the party of the first part at a
point from which the Southeasterly corner thereof bears N.88 55' East 12.35
feet distant and running thence N. 36 30' East 623 1/2 feet a little
more or less to a point in the Southerly line of the Alviso and Milpitas Road,
from which the Southwesterly corner of the land of J. Farney bears N. 19 30'
West 72 3/4 feet distant
THE EXACT location of said easement is not defined of record.
Said matter affects a portion of Parcel Three and Five.
10. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The right to excavate for, install, replace, maintain
and use for conveying gas pipe line with necessary appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : October 14, 1931 in Book 585, page 340, Official
Records
Affects : The said route of said pipe line shall
be as follows, namely:
Beginning at a point in the Easterly boundary line of said
premises (marked by a fence now upon the ground), from which a
4" x 4" white stake marking the Northeast corner of said
premises bears North 15 26 1/2' West 5.2 feet distant, and
running thence South 86 58' West 367.9 feet; thence North 89
04' West 259.6 feet; thence South 88 51' West
1135.53 feet; thence South 86 52 1/2' West 254.7 feet;
thence North 89 19 1/2' West 172.0 feet; thence South 88 42
1/2' West 1918.3 feet, more or less, to ta point in the
Southwesterly boundary line of said premises.
Said matter affects Parcels One and Six.
11. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The right to excavate for, install, replace, maintain
and use for conveying gas a pipe line with necessary appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : November 5, 1931 in Book 586, page 515,
Official Records
Affects : As follows:
Beginning at a point in the Southwesterly boundary line
of said premises (marked by the center line of the San Jose-
Alviso Road), from which a 2" x 4" post marking the point of
intersection of the Southwesterly boundary line of said road with the
Northerly boundary line of that certain 42.5 acre parcel of land conveyed
to Kenneth R. Burrell by F.C. Burrell, et ux, by deed dated June
13, 1930, and recorded in Vol. 522 of Official Records, at page 508 records
of said Santa Clara County, bears South 78 25' West 45.3 feet
distant, and running thence North 75 51 1/2' East 51.6 feet;
thence South 89 10' East 265.3 feet; thence North 89 16'
East 161.9 feet; thence North 88 00' East 425.0 feet; thence
North 72 54' minutes East 285.0 feet thence South 38 28' East 126.9
feet; thence North 88 42 1/2' East 35.0
feet, more or less, to a point in the Easterly boundary line of
said premises.
Said matter affects Parcels Two and Four.
12. EASEMENT for the purposes stated herein and incidents
thereto
Purpose : The right to excavate for, install,
replace, maintain and use for conveying gas a pipe line with necessary
appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : December 10, 1931 in Book 595, page 196,
Official Records
Affects : As follows:
Beginning at a point in the Southwesterly boundary line
of that certain 99.5 acre parcel of land described in that
certain mortgage from George E. Nicholson to Mollie F. Nicholson
dated December 18, 1913 and recorded in Book 216 of Mortgages at
page 255, records of said Santa Clara County, (said boundary
line being marked by a fence now upon the ground) from which a
4" x 4" post marked "M4"
set at the most Westerly corner of said 99.5 acre parcel of land
bears North 60 46 1/2' West 16.7 feet distant; and running
thence South 88 42 1/2' West 150.0 feet, more or less, to a
point in the Westerly boundary line of said premises.
Said matter affects Parcel Three.
13. EASEMENT for the purposes stated herein and incidents thereto
Purpose : A right of way for sewer purposes
Granted to : City of San Jose, a municipal corporation
Recorded : August 8, 1933 in Book 659, page 121,
Official Records
Affects : A right of way over, along and upon a
strip twelve (12) feet wide, the center line of which is described as follows:
Beginning at a point from which the Southeasterly corner of the land
Norman L. Meads bears N. 88 55' E., 1530 feet distant; thence N. 66 54' W.
513 feet to a point in the Southerly line of the Alviso and Milpitas Road,
from which the Southeasterly corner of the private road of F.W. Zanker lies
Northerly and across the Alviso and Milpitas Road, 67 feet a little more
or less.
Said matter affects Parcel Five.
14. WAIVER OF DAMAGES as contained in the Deed to the State of California
Recorded : February 17, 1970 in Book 8830, page 352,
Official Records
Said matter affects Parcels Three and Five.
15. THE EFFECT of the Rincon de los Esteros Project Redevelopment Plan and
Ordinances Nos. 17306, 19686, 19835, 20677, 20958, 21417, 21496, 21903, 22660,
22412, 22761, 22761.1 and 22961, 23703, 23732, 23761 and 23934
of the City of San Jose as recorded and as disclosed by
documents recorded July 11, 1975 in Book B502, Page 711; August
6, 1979 in Book E699, Page 245; August 6, 1979 in Book E699,
Page 277; December 21, 1979 in Book F37, Page 585; October 8,
1981 in Book G382, Page 605; July 28, 1982 in Book G929, Page
703; September 14, 1983 in Book H892, Page 200; January 10, 1984
in Book 1220, Page 271; December 17, 1987 in Book K394, page
143; May 5, 1988 in Book K524, page 526; May 5, 1988 in Book
K524, page 532; January 6, 1992 in Book L996, Page 508,
all of Official Records, and as disclosed by information
provided by the Redevelopment Agency of the City of San Jose.
16. EASEMENTS AND INCIDENTS THERETO, filed for record in the
Office of the County Recorder of the County of Santa Clara, State of
California, shown on the "Amended Parcel Map" filed for record on December
22, 1983 in Book 523 of Maps, at pages 7, 8 and 9
Purpose : Public Service Easement
Affects : Southwesterly 10 feet and Southeasterly
10 feet of Parcel One and Southwesterly 10 feet and Northwesterly 10 feet of
Parcel Six
17. EASEMENT for the purposes stated herein and incidents thereto
Purpose : To construct, install, inspect,
maintain, replace, remove and use facilities of such underground conduits,
pipes, manholes, service boxes, wires, cables, and electrical conductors;
aboveground marker posts, risers, and service pedestals; underground and
aboveground switches, fuses, terminals, and transformers with associated
concrete pads; and fixtures and appurtenances necessary to any and all
thereof
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : March 26, 1986 in Book J640, page 960,
Official Records
Affects : Strips of land of the uniform width of 10 feet
the center lines of which are delineated by the heavy dashed lines shown upon
the print of second party's Drawing No. SJB-1821 attached thereto and made
a part thereof; excepting therefrom the portion lying outside the boundary
lines of said lands.
Terms and conditions contained in the document hereinabove referred
to.
Said matter affects Parcel Six.
18. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Public Service Easements
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 156,
Official Records
Affects : As follows:
All that certain real property situated in the City of
San Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map recorded
in Book 523 of Maps at page 9, Santa Clara County Records, being
also a portion of Parcel as 2 described in the deed recorded
October 21, 1985 in Book J492 of Official Records at page 1703,
Santa Clara County Records, being more particularly described as
follows:
Strip 1
A strip of land 10.00 feet wide extending Northeasterly
from the Northeasterly line of the 10.00 feet wide P.S.E. along
North First Street, as shown on said Amended Parcel Map and
lying contiguous to and Southeasterly of a line that begins at a
point in the Northeasterly line of North First Street from which
the most Southerly corner of Parcel 1 as described in the Deed
recorded October 21, 1985 in Book J492 of
Official Records at page 1698, Santa Clara County Records, bears
N. 52 27' 12" W. 77.00 feet and running;
thence Northeasterly along a curve to the right having a
radius of 50.00 feet whose radius point bears N. 37 32' 48" E.,
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 37 32' 48" E., 251.93 feet to a point hereon
designated "Point A";
thence N. 37 32' 48" E., 0.42 feet;
thence along a curve to the right having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence N. 44 45' 22" E. 261.02 feet to the
Northeasterly line of said Parcel 2, the side line of said strip
shall be lengthened or shortened to terminate in said
Northeasterly line.
Strip 2
Beginning at a point herein above designated "Point A";
thence S. 37 32' 48" W., 31.00 feet; thence S. 52 27'
12" E., 25.00 feet; thence N. 37 32' 48" E., 31.00 feet; thence
N. 52 27' 12" W., 25.00 feet to the point of beginning.
Terms and conditions contained in the document
hereinabove referred to.
Said matter affects Parcels One.
19. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Public Service Easements
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 162,
Official Records
Affects : 10 foot wide strips over Parcels Three, Four
and Five and more fully described in said document
Terms and conditions contained in the document hereinabove referred to.
Said matter affects Parcels Three, Four and Five.
20. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Sanitary Sewer Easement
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 162,
Official Records
Affects : A 15 foot wide strip and a 20 foot wide
strip over Parcels Four and Five more fully described in said document
Terms and conditions contained in the document hereinabove referred
to.
Said matter affects Parcels Four and Five.
21. LACK OF ABUTTER'S RIGHTS to and from Freeway 237, lying adjacent to
the Northerly and Northeasterly line of Parcel Five, said rights having been
released and relinquished By : Final Order of Condemnation
To : The People of the State of California Acting
by and through the Department of Transportation
Recorded : March 30, 1994 in Book N373, page 0560,
Official Records.
22. Any rights, interests, or claims adverse to those of the vestee
herein which may exist or arise by reason of the following facts shown on a
survey plat entitled "ALTA/ACSM LAND TITLE SURVEY," dated July 15, 1996,
prepared by Bryan & Murphy Engineers, Planners, Surveyors, Job No. 67320.
a. The fact that a cyclone fence extends across the
Southerly line of Parcel Five.
b. The fact that a walkway exists in the public
services easement shown as
Exception No. 16 and that said walkway extends across the
Westerly lines of Parcel Six.
c. The fact that concrete landscaping extends
across the Easterly line of Parcel Six.
d. The fact that a 12 foot wall extends across the
Southerly line of Parcel Three.
Exhibit C
Intentionally deleted.
Exhibit D
Intentionally deleted.
Exhibit E
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho or Will La Herran
Re: 3Com Lease Agreement (North First Street Property)
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to subparagraph 8.
(w)(iii) of that certain Lease Agreement dated as of November 20,
1996 (the "Lease Agreement," the terms defined therein being used
herein as therein defined) between 3Com Corporation (the
"Tenant"), and you.
2. Annex 1 attached hereto sets forth financial data and
computations evidencing the Tenant's
compliance with certain covenants of the Lease Agreement, all of
which data and computations are complete,
true and correct.
3. To the knowledge of Tenant no Default or Event of
Default under the Lease Agreement has
occurred and is continuing.
4. The representations of Tenant set forth in the Lease
Agreement are true and correct in all
material respects as of the date hereof as though made on and as
of the date hereof.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, ____
I. PARAGRAPH 8.(ac)(i): Quick Ratio
A. Unencumbered Cash and Cash Equivalents
and other "Quick Assets" as defined in
Paragraph 8.(ac)(i) of the Lease:
$_____________
B. "Current Liabilities" as defined in
Paragraph 8.(ac)(i) of the Lease:
$_____________
C. Ratio of A to B: _____ to 1.00
F. Minimum ratio computed as provided in
Paragraph 8.(ac)(i) of the Lease: 1.00 to 1.00
II. PARAGRAPH 8.(ac)(ii): Maximum Senior Debt to
Capitalization
A. Total "Debt" as defined
in Paragraph 1.(s) of
Tenant and its consolidated
Subsidiaries: $_____________
B. "Subordinated
Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease:
$_____________
C. "Senior Debt" as
defined in Paragraph 8.(ac)(ii)
of the Lease
(A - B): $_____________
D. Consolidated Tangible Net Worth
(from calculation below):
$_____________
E. Capitalization as defined in
Paragraph 8.(ac)(ii) of the Lease
(A + D):
$_____________
F. Ratio of B to E: _____ to 1.00
D. Maximum ratio: 0.35 to 1.00
III. PARAGRAPH 8.(ac)(iii): Minimum Tangible Net Worth
A. Reported stockholders equity: $_____________
B. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii)
of the Lease: $_____________
D. Consolidated Tangible Net Worth
(A - B): $_____________
E. Minimum computed as
provided in Paragraph
8.(ac)(iii) of the Lease: $_____________
IV. PARAGRAPH 8.(ac)(iv): Fixed Charge Ratio
A. "Adjusted EBIT" as
defined in Paragraph
8.(ac)(iv) of the Lease: $_____________
B. "Fixed Charges" as
defined in Paragraph
8.(ac)(iv) of the Lease: $_____________
C. Ratio of A to B: _____ to 1.00
D. Minimum ratio: 2.00 to 1.00
Exhibit F
CERTIFICATE OF TENANT'S CALCULATION OF THE SPREAD
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho or Will La Herran
Re: 3Com Lease Agreement (North First Street Property)
Gentlemen:
I, the undersigned, the [chief financial officer,
controller, treasurer or the assistant treasurer] of 3Com
Corporation, do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to
subparagraph 8.(w)(iv) of that certain Lease
Agreement dated as of November 20, 1996 (the "Lease Agreement,"
the terms defined therein being used
herein as therein defined) between 3Com Corporation, and you.
2. Annex 1 attached hereto sets forth financial
data and computations evidencing the Tenant's
computation of the Spread, all of which data and computations
are complete, true and correct.
Executed this _____ day of ______________, ____.
3Com Corporation
Name:_________________________
Title:________________________
[cc all Participants]
Annex 1 To Certificate of Tenant's Calculation of the Spread
As of the ________________, ____
I. S&P'S RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
II. MOODY'S RATING OF TENANT'S SENIOR UNSECURED DEBT: _____________
III. CALCULATION OF TENANT'S DEBT TO CAPITAL RATIO: _____________
A. Funded "Senior Debt" as defined in
Paragraph 8.(ac)(ii) of the Lease: $_____________
B. Other outstanding Debt as defined in
Paragraph 1.(s) of the Lease: $_____________
C. Outstanding "Subordinated Debt" as
defined in Paragraph 8.(ac)(ii) of
the Lease: $_____________
D. Debt for purposes of this ratio
(A + B - C): $_____________
E. Reported stockholders equity: $_____________
F. "Intangible Assets" as
defined in Paragraph 8.(ac)(iii) of the
Lease: $_____________
G. Consolidated Tangible Net Worth
(E - F): $_____________
H. Capital for purposes of this test
(A + B + G): $_____________
I. D divided by H: _____________
III. SPREAD AS DEFINED IN PARAGRAPH 1.(bo) OF THE LEASE: _____________
Exhibit G
LIST OF ENVIRONMENTAL REPORTS
(North First Street Property)
1. AllWest 1996. Phase I Environmental Site Assessment for
North First Street Site, San Jose, CA 95134. July 9, 1996.
2. ENVIRON 1996. Phase I and Phase II Environmental Site
Assessment Report for Two Undeveloped Properties Located in San Jose, CA.
August 19, 1996.
3. Tetra tech 1996, Phase II Environmental Site
Investigation for 3COM Corporation, End of North First
Street, San Jose, California 95052-8145. September 24, 1996.
EXHIBIT 10.38
$49,500,000
PURCHASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
("BNPLC")
AND
3COM CORPORATION,
("3COM")
EFFECTIVE AS OF NOVEMBER 20, 1996
(North First Street Property)
This Agreement is being facilitated by the following banks:
Banque Nationale de Paris
ABN AMRO Bank N.V.
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is made as of
November 20, 1996, by 3COM CORPORATION, a California
corporation ("3COM") and BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC").
R E C I T A L S
A. BNPLC is acquiring the land described in Exhibit A
attached hereto and the improvements and fixtures located
thereon, if any, and is leasing the same to 3COM pursuant to
that certain Lease Agreement (as from time to time
supplemented, amended or restated, the "Lease") between 3COM
and BNPLC dated as of the date hereof. (The land described in
Exhibit A and any and all other real or personal property from
time to time covered by the Lease and included within the
"Leased Property" as defined therein are hereinafter
collectively referred to as the "Property".)
B. BNPLC is also concurrently herewith receiving a
separate environmental indemnity from 3COM pursuant to an
Environmental Indemnity Agreement (as from time to time
supplemented, amended or restated, the "Environmental
Indemnity") between 3COM and BNPLC dated as of the date
hereof.
C. 3COM has requested an option to purchase the
Property, which BNPLC is willing to provide on and subject to
the terms and conditions set out herein.
NOW, THEREFORE, in consideration of the above recitals
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Definitions. As used herein, the terms "3COM",
"BNPLC", "Property", "Lease" and "Environmental Indemnity"
shall have the meanings indicated above; terms with initial
capitals defined in the Lease and used but not defined herein
shall have the meanings assigned to them in the Lease; and the
terms listed immediately below shall have the following
meanings:
"Applicable Purchaser" means any third party designated
by 3COM to purchase the interest of BNPLC in the Property as
provided in Paragraph 2(a)(ii) below.
"Deposit Taker" shall have the meaning assigned to it in
the Pledge Agreement.
"Deposit Taker Losses" shall have the meaning assigned to
it in the Pledge Agreement.
"Designated Sale Date" means the earlier of:
(1) the effective date of any termination of
the Lease by 3COM pursuant to Paragraph 2 thereof;
(2) any date designated by BNPLC in a written
notice given by BNPLC to 3COM when an Event of Default by
3COM is continuing, provided the notice of the date so
designated is given by BNPLC at least thirty (30) days
before the date so designated; or
(3) the first Business Day in November, 1998.
"Direct Payments to Participants" means the amounts paid
or required to be paid directly to Participants on the
Designated Sale Date as provided in Section 6.2 of the Pledge
Agreement at the direction of and for 3COM by the collateral
agent appointed pursuant to the Pledge Agreement from all or
any part of the Collateral described therein.
"Fair Market Value" means the fair market value of the
Property on or about the Designated Sale Date (calculated
under the assumptions, whether or not then accurate, that 3COM
has maintained the Property in compliance with all Applicable
Laws [including Environmental Laws]; that 3COM has completed
the construction of any Improvements which was commenced prior
to the Designated Sale Date; that all such Improvements are
self-sufficient in the sense that any easements or offsite
facilities needed for their use will be available at no
additional cost to the owner of the Improvements; that 3COM
has repaired and restored the Property after any damage
following fire or other casualty; that 3COM has restored the
remainder of the Property after any partial taking by eminent
domain; that 3COM has completed any contests of and paid any
taxes due [other than Excluded Taxes] or other amounts secured
by or allegedly secured by a lien against the Property other
than Prohibited Encumbrances; that no conditions or
circumstances on or about the Property [such as the presence
of an endangered species] is discovered that will impede the
use or any development of the Property permitted by the Lease;
that any use or development of the Property as permitted by
the Lease will not be hindered or delayed because of the
limited availability of utilities or water; that without undue
cost or delay any purchaser paying fair market value for the
Property can obtain any necessary permits or licenses needed
to use the Property for the purposes permitted by the Lease;
and that 3COM has cured any title defects affecting the
Property other than Prohibited Encumbrances, all in accordance
with the standards and requirements of the Lease as though the
Lease were continuing in force) as determined by an
independent MAI appraiser selected by BNPLC, which appraiser
must have five (5) years or more experience appraising similar
properties in northern California.
"Qualified Deposit Taker" means one of the fifty largest
(measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world,
with debt ratings of at least (i) A- (in the case of long term
debt) and A-1 (in the case of short term debt) or the
equivalent thereof by Standard and Poor's Corporation, and
(ii) A (in the case of long term debt) and P-1 (in the case of
short term debt) or the equivalent thereof by Moody's Investor
Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by
Moody's Investor Service, Inc. will be discontinued or
changed, but if such ratings systems are discontinued or
changed, 3COM shall be entitled to select and use a comparable
ratings systems as a substitute for the S&P Rating or the
Moody Rating, as the case may be, for purposes of determining
the status of any bank as a Qualified Deposit Taker.
"Purchase Price" means an amount equal to Stipulated Loss
Value outstanding on the Designated Sale Date, plus all costs
and expenses (including appraisal costs, withholding taxes (if
any) and reasonable Attorneys' Fees, as defined in the Lease)
incurred in connection with any sale of the Property by BNPLC
hereunder or in connection with collecting sales proceeds due
hereunder, less the aggregate amounts (if any) of Direct
Payments to Participants and Deposit Taker Losses.
"Prohibited Encumbrance" means any lien or other title
defect encumbering the Property that is claimed by BNPLC
itself or lawfully claimed by a third party through or under
BNPLC, including any judgment lien lawfully filed against
BNPLC and including any tax lien assessed because of BNPLC's
failure to pay Excluded Taxes, but excluding the Lease and any
lien or other title defect that (i) is a Permitted Encumbrance
(as defined in the Lease), regardless of whether claimed by,
through or under BNPLC, (ii) is claimed by, through or under
3COM or any of the Participants approved by 3COM (other than
Landlord's Parent), or (iii) exists because of any breach by
3COM of the Lease, because of anything done or not done by
BNPLC in an effort to satisfy subparagraph 9(b) of the Lease,
or because of anything done or not done by BNPLC at the
request of 3COM.
"Remarketing Notice" shall have the meaning assigned to
it in Paragraph 2(b)(1) below.
"Required Documents" means the grant deed and other
documents that BNPLC must tender pursuant to Paragraph 3
below.
"Shortage Amount" means any amount payable to BNPLC by
3COM, rather than by the Applicable Purchaser, pursuant to
clause 2(a)(ii) below.
2. 3COM's Options and Obligations on the Designated
Sale Date.
(a) Choices. On the Designated Sale Date 3COM shall
have the right and the obligation to either:
(i) purchase BNPLC's interest in the Property
and in Escrowed Proceeds, if any, for a net cash
price equal to the Purchase Price; or
(ii) cause the Applicable Purchaser to purchase
BNPLC's interest in the Property and in Escrowed
Proceeds, if any, for a net cash price not less than
the lesser of (a) the Fair Market Value of the
Property, (b) fifteen percent (15%) of Stipulated
Loss Value outstanding immediately prior to the
purchase or (c) the Purchase Price. If, however,
the Fair Market Value is less than fifteen percent
(15%) of Stipulated Loss Value and less than the
Purchase Price, BNPLC may elect to keep the Property
and any Escrowed Proceeds rather than sell to the
Applicable Purchaser, in which case 3COM shall pay
BNPLC an amount equal to (A) eighty-five percent
(85%) of Stipulated Loss Value, less (B) the sum of
(x) any Escrowed Proceeds then held and to be
retained by BNPLC, (y) any Direct Payments to
Participants and (z) any Deposit Taker Losses.
Unless BNPLC elects to keep the Property pursuant to
the preceding sentence, 3COM must make a
supplemental payment to BNPLC on the Designated Sale
Date equal to the excess (if any) of the Purchase
Price over the net cash price actually paid to BNPLC
on the Designated Sale Date by the Applicable
Purchaser for BNPLC's interest in the Property and
in Escrowed Proceeds, if any. However, provided no
Event of Default has occurred and is continuing
under the Lease, and provided further that neither
3COM nor any Applicable Purchaser has failed to pay
any amount required to be paid by this Agreement on
the date such amount first became due, any
supplemental payment required by the preceding
sentence shall not exceed (1) eighty-five percent
(85%) of Stipulated Loss Value on the Designated
Sale Date, less (2) any Direct Payments to
Participants and any Deposit Taker Losses. Any
supplemental payment payable to BNPLC by 3COM,
rather than by the Applicable Purchaser, pursuant to
this clause (ii) is hereinafter referred to as the
"Shortage Amount." If the net cash price actually
paid by the Applicable Purchaser to BNPLC exceeds
the Purchase Price and all other sums that are then
due from 3COM to BNPLC, 3COM shall be entitled to
such excess.
If any amount payable to BNPLC pursuant to this subparagraph
2(a) is not actually paid to BNPLC on the Designated Sale
Date, 3COM shall pay interest on the past due amount computed
at the Default Rate from the Designated Sale Date. However,
Tenant shall be entitled to a reduction of the interest
required by the preceding sentence equal to the Base Rent, if
any, paid by Tenant as provided in Paragraph 17 of the Lease
for any holdover period after the Designated Sale Date.
(b) Election by 3COM. 3COM shall have the right to
elect whether it will satisfy the obligations set out in
clause (i) or (ii) of the preceding Paragraph 2(a); provided,
however, that the following conditions are satisfied:
(1) To give BNPLC the opportunity to have the
Fair Market Value determined by an appraiser as provided
in the definition of Fair Market Value above before the
Designated Sale Date, 3COM must, unless 3COM concedes
that Fair Market Value will not be less than fifteen
percent (15%) of Stipulated Loss Value on the Designated
Sale Date, provide BNPLC with a Remarketing Notice.
"Remarketing Notice" means a notice given by 3COM to
BNPLC (and to each of the Participants) no earlier than
one hundred eighty (180) days before the Designated Sale
Date and no later than ninety (90) days before the
Designated Sale Date, specifying that 3COM does not
concede that the Fair Market Value is equal to or greater
than fifteen percent (15%) of the Stipulated Loss Value.
A Remarketing Notice will be required only if 3COM does
not concede that Fair Market Value will equal or exceed
fifteen percent (15%) of Stipulated Loss Value on the
Designated Sale Date. But if for any reason (including
but not limited to any acceleration of the Designated
Sale Date pursuant to clause (2) of the definition of
Designated Sale Date above) 3COM fails to provide a
Remarketing Notice within the time periods specified in
the definition of Remarketing Notice above, Fair Market
Value shall, for purposes of this Agreement, be deemed to
be no less than fifteen percent (15%) of Stipulated Loss
Value on the Designated Sale Date.
(2) To give BNPLC the opportunity to prepare
the Required Documents before the Designated Sale Date,
3COM must, if it is to elect to satisfy the obligations
set forth in clause (ii) of Paragraph 2(a), irrevocably
specify an Applicable Purchaser in notice to BNPLC given
at least seven (7) days prior to the Designated Sale
Date. If for any reason 3COM fails to so specify an
Applicable Purchaser, 3COM shall be deemed to have
irrevocably elected to satisfy the obligations set forth
in clause (i) of Paragraph 2(a).
(c) Termination of 3COM's Option To Purchase. Without
limiting BNPLC's right to require 3COM to satisfy the
obligations imposed by Paragraph 2(a), 3COM shall have no
further option hereunder to purchase the Property if either:
(1) 3COM shall have elected to satisfy its
obligations under clause (ii) of Paragraph 2(a) on a
Designated Sale Date and BNPLC shall have elected to keep the
Property on such Designated Sale Date in accordance with
clause (ii) of Paragraph 2(a); or
(2) 3COM shall have failed on a Designated Sale
Date to make or cause to be made all payments to BNPLC
required by this Agreement or by the Lease and such failure
shall have continued beyond the thirty (30) day period for
tender specified in the next sentence.
If BNPLC does not receive all payments due under the Lease and
all payments required hereunder on a Designated Sale Date,
3COM may nonetheless tender to BNPLC the full Purchase Price
and all amounts then due under the Lease, together with
interest on the total Purchase Price computed at the Default
Rate from the Designated Sale Date to the date of tender, and
if presented with such a tender within thirty (30) days after
the applicable Designated Sale Date, BNPLC must accept it and
promptly thereafter deliver any Escrowed Proceeds and a deed
and all other Required Documents listed in Paragraph 3.
(d) Payment to BNPLC. All amounts payable under the
preceding Paragraphs 2(a) or 2(c) by 3COM and, if applicable,
by the Applicable Purchaser must be paid directly to BNPLC,
and no payment to any other party shall be effective for the
purposes of this Agreement. In addition to the payments
required under Paragraph 2(a) hereunder, on the Designated
Sale Date 3COM must pay all amounts then due to BNPLC under
the Lease. BNPLC will remit any excess amounts due 3COM
pursuant to the last sentence of clause (ii) of Paragraph 2(a)
promptly after BNPLC's receipt of the same and in no event
later than thirty (30) days thereafter.
(e) Effect of Options on Subsequent Title Encumbrances.
It is the intent of BNPLC and 3COM that any conveyance of the
Property to 3COM or any Applicable Purchaser pursuant to this
Agreement shall cut off and terminate any interest in the
Property claimed by, through or under BNPLC, including the
Participants (but not any unsatisfied obligations to BNPLC
under the Lease, the Environmental Indemnity or this
Agreement), including but not limited to any Prohibited
Encumbrances and any leasehold or other interests conveyed by
BNPLC in the ordinary course of BNPLC's business. Anyone
accepting or taking any interest in the Property by or through
BNPLC after the date of this Agreement shall acquire such
interest subject to the rights and options granted 3COM
hereby. Further, 3COM and any Applicable Purchaser shall be
entitled to pay any payment required by this Agreement for the
purchase of the Property directly to BNPLC notwithstanding any
prior conveyance or assignment by BNPLC, voluntary or
otherwise, of any right or interest in this Agreement or the
Property, and neither 3COM nor any Applicable Purchaser shall
be responsible for the proper distribution or application of
any such payments by BNPLC.
3. Terms of Conveyance Upon Purchase. Immediately
after receipt of all payments to BNPLC required pursuant to
the preceding Paragraph 2, BNPLC must, unless it is to keep
the Property as permitted by Paragraph 2(a)(ii), deliver all
Escrowed Proceeds, if any, and convey all of its right, title
and interest in the Property by grant deed to 3COM or the
Applicable Purchaser, as the case may be, subject only to the
Permitted Encumbrances (as defined in the Lease) and any other
encumbrances that do not constitute Prohibited Encumbrances.
However, such conveyance shall not include the right to
receive any payment under the Lease then due BNPLC or that may
become due thereafter because of any expense or liability
incurred by BNPLC resulting in whole or in part from events or
circumstances occurring before such conveyance. All costs of
such purchase and conveyance of every kind whatsoever, both
foreseen and unforeseen, shall be the responsibility of the
purchaser, and the form of grant deed used to accomplish such
conveyance shall be substantially in the form attached as
Exhibit B. With such grant deed, BNPLC shall also tender to
3COM or the Applicable Purchaser, as the case may be, the
following, each fully executed and, where appropriate,
acknowledged on BNPLC's behalf by an officer of BNPLC: (1) a
Preliminary Change of Ownership Report in the form attached as
Exhibit C, (2) a Bill of Sale and Assignment of Contract
Rights and Intangible Assets in the form attached as Exhibit
D, (3) an Acknowledgment of Disclaimer of Representations and
Warranties, in the form attached as Exhibit E, which 3COM or
the Applicable Purchaser must execute and return to BNPLC, (5)
a Documentary Transfer Tax Request in the form attached as
Exhibit F, (6) a Secretary's Certificate in the form attached
as Exhibit G, (7) a letter to the title insurance company
insuring title to the Property in the form attached as Exhibit
H, and (8) a certificate concerning tax withholding in the
form attached as Exhibit I.
4. Survival of 3COM's Obligations.
(a) Status of this Agreement. Except as expressly
provided in the last sentence of this subparagraph and
elsewhere herein, this Agreement shall not terminate, nor
shall 3COM have any right to terminate this Agreement, nor
shall 3COM be entitled to any reduction of the Purchase Price
hereunder, nor shall the obligations of 3COM to BNPLC under
Paragraph 2 be affected by reason of (i) any damage to or the
destruction of all or any part of the Property from whatever
cause, (ii) the taking of or damage to the Property or any
portion thereof under the power of eminent domain or otherwise
for any reason, (iii) the prohibition, limitation or
restriction of 3COM's use of all or any portion of the
Property or any interference with such use by governmental
action or otherwise, (iv) any eviction of 3COM or any party
claiming under 3COM by paramount title or otherwise, (v)
3COM's prior acquisition or ownership of any interest in the
Property, (vi) any default on the part of BNPLC under this
Agreement, the Lease or any other agreement to which BNPLC is
a party, or (vii) any other cause, whether similar or
dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties
hereto that the obligations of 3COM hereunder (including
3COM's obligation to make payments under - and, if applicable,
to cause the Applicable Purchaser to make payments under -
Paragraph 2) shall be separate and independent of the
covenants and agreements of BNPLC. Accordingly, the Purchase
Price and the Shortage Amount, as the case may be under
Paragraph 2, shall continue to be payable in all events, and
the obligations of 3COM hereunder shall continue unaffected by
any breach of this Agreement by BNPLC. However, nothing in
this subparagraph, nor the performance without objection by
3COM of its obligations hereunder, shall be construed as a
waiver by 3COM of any right 3COM may have at law or in equity,
following any failure by BNPLC to tender a grant deed and the
other Required Documents as required by Paragraph 3 upon the
tender by 3COM and/or the Applicable Purchaser of the payments
required by Paragraph 2 and of the other documents to be
executed in favor of BNPLC at the closing of the sale
hereunder, to (i) recover monetary damages proximately caused
by such failure of BNPLC if BNPLC does not cure the failure
within thirty (30) days after 3COM demands a cure by written
notice to BNPLC, or (ii) a decree compelling performance of
BNPLC's obligation to so tender a grant deed and the Required
Documents.
(b) Remedies Under the Lease and the Environmental
Indemnity. No repossession of or re-entering upon the
Property or exercise of any other remedies available under the
Lease or the Environmental Indemnity shall relieve 3COM of its
liabilities and obligations hereunder, all of which shall
survive the exercise of remedies under the Lease and
Environmental Indemnity. 3COM acknowledges that the
consideration for this Agreement is separate and independent
of the consideration for the Lease and the Environmental
Indemnity, and 3COM's obligations hereunder shall not be
affected or impaired by any event or circumstance that would
excuse 3COM from performance of its obligations under the
Lease or the Environmental Indemnity.
5. Remedies Cumulative. No right or remedy herein
conferred upon or reserved to BNPLC is intended to be
exclusive of any other right or remedy BNPLC has with respect
to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing at law or in equity or
by statute. In addition to other remedies available under
this Agreement, either party shall be entitled, to the extent
permitted by applicable law, to a decree compelling
performance of any of the other party's agreements hereunder.
6. No Implied Waiver. The failure of either party to
this Agreement to insist at any time upon the strict
performance of any covenant or agreement of the other party or
to exercise any remedy contained in this Agreement shall not
be construed as a waiver or a relinquishment thereof for the
future. The waiver by either party of or redress for any
violation of any term, covenant, agreement or condition
contained in this Agreement shall not prevent a subsequent
act, which would have originally constituted a violation, from
having all the force and effect of an original violation. No
express waiver by either party shall affect any condition
other than the one specified in such waiver and that one only
for the time and in the manner specifically stated. A receipt
by BNPLC of any payment hereunder with knowledge of the breach
of this Agreement shall not be deemed a waiver of such breach,
and no waiver by either party of any provision of this
Agreement shall be deemed to have been made unless expressed
in writing and signed by the waiving party.
7. Attorneys' Fees and Legal Expenses. If either party
commences any legal action or other proceeding to enforce any
of the terms of this Agreement or the documents and agreements
referred to herein, or because of any breach by the other
party or dispute hereunder or thereunder, the successful or
prevailing party, shall be entitled to recover from the
nonprevailing party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute
is prosecuted to a final judgment. Any such Attorneys' Fees
incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from such
judgment, and the obligation for such Attorneys' Fees is
intended to be severable from other provisions of this
Agreement and not to be merged into any such judgment.
8. Estoppel Certificate. 3COM and BNPLC will each,
upon not less than twenty (20) days' prior written request by
the other, execute, acknowledge and deliver to the requesting
party a written statement certifying that this Agreement is
unmodified and in full effect (or, if there have been
modifications, that this Agreement is in full effect as
modified, and setting forth such modification) and either
stating that no default exists hereunder or specifying each
such default of which the signer may have knowledge. Any such
statement may be relied upon by any Participant or prospective
purchaser or assignee of BNPLC with respect to the Property.
Neither 3COM nor BNPLC shall be required to provide such a
certificate more frequently than once in any six month period;
provided, however, that if either party determines that there
is a significant business reason for requiring a current
certificate, including, without limitation, the need to
provide such a certificate to a prospective purchaser or
assignee, the other shall provide a certificate upon request
whether or not it had provided a certificate within the prior
six month period.
9. Notices. Each provision of this Agreement referring
to the sending, mailing or delivery of any notice or referring
to the making of any payment to BNPLC, shall be deemed to be
complied with when and if the following steps are taken:
(a) All payments required to be made by 3COM or the
Applicable Purchaser to BNPLC hereunder shall be paid to BNPLC
in immediately available funds by wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: 3COM (North First Street
Property)
or at such other place and in such other manner as
BNPLC may designate in a notice to 3COM (provided BNPLC
will not unreasonably designate a method of payment other
than wire transfer). Time is of the essence as to all
payments to BNPLC under this Agreement. Any payments
required to be made by BNPLC to 3COM pursuant to the last
sentence of clause (ii) of Paragraph 2(a) shall be paid
to 3COM in immediately available funds at the address of
3COM set forth below or as 3COM may otherwise direct by
written notice sent in accordance herewith.
(b) All notices, demands and other communications to be
made hereunder to the parties hereto shall be in writing (at
the addresses set forth below) and shall be given by any of
the following means: (A) personal service, with proof of
delivery or attempted delivery retained; (B) electronic
communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified
first class mail, return receipt requested. Such addresses
may be changed by notice to the other parties given in the
same manner as provided above. Any notice or other
communication sent pursuant to clause (A) or (C) hereof shall
be deemed received (whether or not actually received) upon
first attempted delivery at the proper notice address on any
Business Day between 9:00 A.M. and 5:00 P.M., and any notice
or other communication sent pursuant to clause (B) hereof
shall be deemed received upon dispatch by electronic means.
Address of BNPLC:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention:Jennifer Cho
or Will La Herran
Telecopy: (415) 296-8954
And with a copy to:
Clint Shouse
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of 3COM:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Legal Dept. Mail Stop 1308
Telecopy: (408) 764-6434
With copies to:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Real Estate Dept. Mail
Stop 1220
Telecopy: (408) 764-5718; and
3Com Corporation
5400 Bayfront Plaza
Santa Clara, California 95052
Attn: Treasury Dept. Mail Stop 1307
Telecopy: (408) 764-8403; and
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attn: Jonathan E. Rattner, Esq.
Telecopy: (415) 328-3029
10. Severability. Each and every covenant and agreement
of 3COM contained in this Agreement is, and shall be construed
to be, a separate and independent covenant and agreement. If
any term or provision of this Agreement or the application
thereof to any person or circumstances shall to any extent be
invalid and unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or
circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby. Further, the
obligations of 3COM hereunder, to the maximum extent possible,
shall be deemed to be separate, independent and in addition
to, not in lieu of, the obligations of 3COM under the Lease.
In the event of any inconsistency between the terms of this
Agreement and the terms and provisions of the Lease, the terms
and provisions of this Agreement shall control.
11. Entire Agreement. This Agreement and the documents
and agreements referred to herein set forth the entire
agreement between the parties concerning the subject matter
hereof and no amendment or modification of this Agreement
shall be binding or valid unless expressed in a writing
executed by both parties hereto.
12. Paragraph Headings. The paragraph headings
contained in this Agreement are for convenience only and shall
in no way enlarge or limit the scope or meaning of the various
and several paragraphs hereof.
13. Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include any other
gender and words in the singular number shall be held and
construed to include the plural, unless the context otherwise
requires.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA.
15. Successors and Assigns. The terms, provisions,
covenants and conditions hereof shall be binding upon 3COM and
BNPLC and their respective permitted successors and assigns
and shall inure to the benefit of 3COM and BNPLC and all
permitted transferees, mortgagees, successors and assignees of
3COM and BNPLC with respect to the Property; provided, that
the rights of BNPLC hereunder shall not pass to 3COM or any
Applicable Purchaser or any subsequent owner claiming through
them. Prior to the Designated Sale Date BNPLC may transfer,
assign and convey, in whole or in part, the Property and any
and all of its rights under this Agreement (subject to the
terms of this Agreement) by any conveyance that constitutes a
Permitted Transfer, but not otherwise. If BNPLC sells or
otherwise transfers the Property and assigns its rights under
this Agreement and the Lease pursuant to a Permitted Transfer,
then to the extent BNPLC's successor in interest confirms its
liability for the obligations imposed upon BNPLC by this
Agreement and the Lease on and subject to the express terms
set out herein and therein, BNPLC shall thereby be released
from any further obligations thereafter arising under this
Agreement and the Lease, and 3COM will look solely to each
successor in interest of BNPLC for performance of such
obligations.
16. WAIVER OF JURY TRIAL. BNPLC AND 3COM EACH HEREBY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LEASE, THIS
AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without
limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. 3COM
and BNPLC each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each
has already relied on the waiver in entering into this
Agreement and the other documents referred to herein, and that
each will continue to rely on the waiver in their related
future dealings. 3COM and BNPLC each further warrant and
represent that it has reviewed this waiver with its legal
counsel, and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LEASE, THIS AGREEMENT OR THE ENVIRONMENTAL
INDEMNITY. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
17. Security for 3COM's Obligations. 3COM's
obligations under this Agreement are secured by the Pledge
Agreement, reference to which is hereby made for a description
of the Collateral covered thereby and the rights and remedies
provided to BNPLC thereby. Although the collateral agent
appointed for BNPLC as provided in the Pledge Agreement shall
be entitled to hold all Collateral as security for the full
and faithful performance by 3COM of 3COM's covenants and
obligations under this Agreement, the Collateral shall not be
considered an advance payment of the Purchase Price or any
Shortage Amount or a measure of BNPLC's damages should 3COM
breach this Agreement. If 3COM does breach this Agreement and
fails to cure the same within any time specified herein for
the cure, BNPLC may, from time to time, without prejudice to
any other remedy and without notice to 3COM, require the
collateral agent to immediately apply the proceeds of any
disposition of the Collateral (and any cash included in the
Collateral) to amounts then due hereunder from 3COM. If BNPLC
assigns its interest in the Property before the Designated
Sale Date, BNPLC may also assign BNPLC's interest in the
Collateral to the assignee.
18. Replacement of Participants Proposed by 3COM. So
long as no Event of Default has occurred and is continuing,
BNPLC shall not unreasonably withhold its approval for a
substitution under the Participation Agreement of a new
Participant proposed by 3COM for any Participant, the Deposit
Taker for whom has ceased to be a Qualified Deposit Taker;
provided, however, that (A) the proposed substitution can be
accomplished without a release or breach by BNPLC of its
rights and obligations under the Participation Agreement or
the "Underlying Documents" described therein (including this
Purchase Agreement); (B) the new Participant will agree (by
executing Supplements to the Participation Agreement and
Pledge Agreement as therein contemplated and by other
agreements as may be reasonably required by BNPLC and 3COM) to
become a party to the Participation Agreement and to the
Pledge Agreement, to designate a Qualified Deposit Taker as
the Deposit Taker for it under the Pledge Agreement and to
accept a Percentage under the Participation Agreement equal to
the Percentage of the Participant to be replaced; (C) the new
Participant (or 3COM) will provide the funds required to pay
the termination fee by Section 6.4 of the Participation
Agreement to accomplish the substitution; (D) 3COM (or the new
Participant) agrees in writing to indemnify and defend BNPLC
for any and all Losses incurred by BNPLC in connection with or
because of the substitution, including the cost of preparing
supplements to the Participation Agreement and the Pledge
Agreement and including any cost of defending and paying any
claim asserted by the Participant to be replaced because of
the substitution (but not including any liability of BNPLC to
such Participant for damages caused by BNPLC's bad faith or
gross negligence in the performance of BNPLC's obligations
under the Participation Agreement prior to the substitution);
and (E) the new Participant shall be a reputable financial
institution having a net worth of no less than seven and one
half percent (7.5%) of total assets and total assets of no
less than $10,000,000,000.00 (all according to then recent
audited financial statements). BNPLC shall attempt in good
faith to assist (and cause its Affiliate, Banque Nationale de
Paris, to attempt in good faith to assist) 3COM in identifying
a new Participant that 3COM may propose to substitute for an
existing Participant pursuant to this Paragraph, as 3COM may
reasonably request from time to time. However, in no event
shall BNPLC itself, or any of its Affiliates, be required to
take the Percentage of any Participant to be replaced.
19. Security for BNPLC's Obligations. To secure 3COM's
right to recover any damages caused by a breach of Paragraph 3
by BNPLC, including any such breach caused by a rejection or
termination of this Agreement in any bankruptcy or insolvency
proceeding instituted by or against BNPLC, as debtor, BNPLC
does hereby grant to 3COM a lien and security interest against
all rights, title and interests of BNPLC from time to time in
and to the Property. 3COM may enforce such lien and security
interest judicially after any such breach by BNPLC, but not
otherwise. 3COM waives any right it has to seek a deficiency
judgement against BNPLC in any action brought for a judicial
foreclosure of such lien and security interest, and in
connection therewith, BNPLC hereby acknowledges that it shall
have no right of redemption following any such judicial
foreclosure pursuant to Cal. Code Civ. Procedure Section 729.
Contemporaneously with the execution of this Agreement, 3COM
and BNPLC will execute a memorandum of this Agreement which is
in recordable form and which specifically references the lien
granted in this Paragraph, and 3COM shall be entitled to
record such memorandum at any time prior to the Designated
Sale Date.
20. Not a Partnership, Etc. NOTHING IN THIS PURCHASE
AGREEMENT IS INTENDED TO BE OR TO CREATE ANY PARTNERSHIP,
JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN BNPLC AND
3COM. NEITHER THE EXECUTION OF THIS PURCHASE AGREEMENT NOR
THE ADMINISTRATION OF THIS PURCHASE AGREEMENT OR OTHER
DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER RIGHT,
DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO THIS PURCHASE
AGREEMENT OR SUCH DOCUMENTS IS INTENDED TO BE OR TO CREATE ANY
FIDUCIARY OBLIGATIONS OF BNPLC TO 3COM.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
"BNPLC"
BNP LEASING CORPORATION, a Delaware corporation
By: /s/ Lloyd G. Cox
--------------------
Lloyd G. Cox, Vice President
"3COM"
3COM CORPORATION, a California corporation
By: /s/ Christopher B. Paisley
------------------------------
Christopher B. Paisley,
Chief Financial Officer
Exhibit A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
PARCEL ONE:
All of Parcel 1, as shown upon that certain Map entitled,
"Amended Parcel Map," which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of
California on December 22, 1983 in Book 523 of Maps, at pages
7, 8 and 9.
EXCEPTING THEREFROM:
All that certain real property situated in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1, as shown on the Amended Parcel Map
recorded in Book 523 of Maps at page 9, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 1, being
on the Northeasterly line of North First Street;
Thence N. 71 56' 56" E., 341.59 feet along the Northerly line
of said Parcel 1;
Thence S. 37 32' 48" W., 281.82 feet to said Northeasterly
line of North First Street;
Thence along said Northeasterly line N. 52 27' 37" W., 193.00
feet to the true point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses: N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL TWO:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records at page 51, Santa
Clara County Records, being more particularly described as
follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps at page 9,
Santa Clara County Records, said corner being on the
Northeasterly line of North First Street;
thence along the Northerly line of said Parcel 1, N. 71 56'
56" E, 341.59 feet to the true point of beginning;
thence continuing along said Northerly line N. 71 56' 56" E.,
358.60 feet;
thence N. 45 14' 38" W., 168.87 feet;
thence S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence S. 37 32' 48" W., 20.53 feet to the true point of
beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses; N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL THREE:
Beginning at a 4" x 4" stake marked A.D.C.M.1, standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone Monument standing at the point of intersection
of the South line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
28.14 chains; running thence along the South line of the
Alviso and Milpitas Road East 38.88 chains to a 4"x4" stake
marked C.M.N.M.1; thence S. 7 20' E., 7.835 chains to a 4"x4"
stake marked C.M.N.M.2 standing on the Southerly line of the
lands formerly belonging to the Estate of John W. Meads;
thence along said Southerly line S. 88 55' W., 36.74 chains
to a 4"x4" stake marked M.4; thence S. 59 57' E.,
1.322 chains to a 4" stake marked M.3;
thence S. 71 48' W., 3.35 chains to a 4"x4" stake marked A
D.C.M. 3; thence N. 1 28' W. 5.02 chains to a 4"x4" stake
marked A D.C.M.2; thence N. 10 18' W., 5.474 chains to the
place of beginning, and being Lot 2 as shown on the map
accompanying the report of the sole commissioner in the
partition of the Estate of John W. Meads, deceased.
EXCEPTING THEREFROM
A portion of that parcel of land described in the Deed
recorded September 21, 1966 as Instrument No. 3120626 in
Book 7512, page 79, Official Records of Santa Clara County,
said portion being more particularly described as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
parcel (7512 OR 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California Parcel;
thence along last said line N. 9 29' 21" W., 66.70 feet to
the point of commencement, as granted to the State of
California by Deed recorded February 17, 1970, Series
No. 3764080, Book 8830, page 352 and Series No. 3764081,
Book 8830, page 355, Official Records, Santa Clara County.
ALSO EXCEPTING THEREFROM:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
787.15 feet to the Westerly line of said Parcel described in
the said Deed recorded July 26, 1984; thence along said
Westerly line N. 1 19' 04" W., 327.06 feet to the true point
of beginning; thence continuing along said Westerly line N. 1
19' 04" W., 4.26 feet; thence N. 10 16' 10" W., 261.37 feet;
thence leaving said Westerly line S. 89 50' 02" E.,
218.46 feet; thence S. 0 09' 58" W., 88.17 feet; thence
Southwesterly along a non-tangent curve to the left having a
radius of 325.00 feet whose radius point bears S. 43 03' 16"
E., through a central angle of 2 11' 22" for an arc length of
12.42 feet; thence S. 44 45' 22" W., 230.93 feet to the true
point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W., 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3 N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the following courses: S 84 55'
33" W. 51.74 feet; from a tangent bearing of S. 84 54' 26" W.
along a curve to the right with a radius of 1999.89 feet,
through a central angle of 6 03' 42" for an arc length of
211.58 feet; N. 89 01' 32" W. 2099.03 feet; and from a
tangent bearing of N. 89 01' 57" W., along a curve to the
left with a radius of 324.98 feet, through a central angle of
43 13' 13" for an arc length of 245.14 feet to the
Southeasterly corner of said Parcel 3; thence along the
Easterly line of said Parcel 3 N. 0 58' 29" E., 88.17 feet to
the Northeast corner of said Parcel 3; thence along the
Northerly line of said Parcel 3 N. 89 01' 31" W., 218.48 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
Beginning at the Southwest corner of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California recorded February 17, 1970 in
Book 8830 of Official Records at page 352, Santa Clara County
Records; thence from said point of beginning, along the
Southerly line of said 6.465 acre parcel S. 89 01' 16" E.
537.24 feet; thence leaving said Southerly line, at right
angles, S 0 58' 44" W. 6.61 feet; thence S. 89 49' 56" W.
330.95 feet; thence S. 88 43' 01" W. 202.59 feet to a point
in the Southerly prolongation of the Westerly line of said
6.465 acre parcel; thence along said Southerly prolongation N.
9 29' 16" W., 21.59 feet to the point of beginning.
PARCEL FOUR:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records, at page 51,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
700.27 feet to the true point of beginning; thence continuing
along said Northerly line N. 71 56' 56" E., 86.88 feet to the
Easterly line of said parcel of land described in the Deed
recorded May 3, 1979; thence along said Easterly line N. 1
19' 04" W., 289.58 feet; thence leaving said Easterly line S.
44 45' 22" W. 278.16 feet; thence S. 45 14' 38: E.,
168.87 feet to the true point of beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said Parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55
feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W. 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
PARCEL FIVE:
Beginning at a 4'x4' stake marked C.M.N.M.1., standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone monument standing at the point of intersection
of the Southerly line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
67.02 chains; running thence along the South line of the
Alviso and Milpitas Road East 5.955 chains to a 4'x4' stake
marked M; thence still along the Southeasterly line of the
Alviso and Milpitas Road N. 73 54' E., 19.93 chains to a
fence post marked W.P. standing in fence line on the Westerly
line of lands now or formerly of Boots; thence along said
fence S. 7 15' E., 12.77 chains to a stake marked M.1.;
thence along the fence along the Northerly line of the lands
now or formerly of Nicholson, S. 88 55' W., 25.727 chains to
a 4'x4' stake marked C.M.N.M.2; thence N. 7 20' W.,
7.835 chains to the place of beginning, and being Lot 3 as
shown on the Map accompanying the report of the sole
commissioner in the partition of the Estate of John W. Meads,
deceased.
Excepting therefrom a portion of that parcel of land described
in the Deed recorded September 2, 1966 as instrument
No. 3120626 in Book 7512, page 79, Official Records of Santa
Clara County, said portion being more particularly described
as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
Parcel (7512 or 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California; thence along
last said line N. 9 29' 21" W., 66.70 feet to the point of
commencement, as granted to the State of California by Deed
recorded February 17, 1970, Series No. 3764080, Book 8830,
page 352 and Series No. 3764081, Book 8830, page 355, Official
Records, Santa Clara County.
The bearings and distances used in the above excepted
description are on the California System Zone 3. Multiply the
above distances by 1.0000530 to obtain ground level distances.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve lo the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W. 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the Northeasterly corner of said parcel, said
corner being on the Westerly line of Zanker Road and Southerly
line of Highway 237;
thence along the Easterly line of said Parcel, S. 7 05' 54"
E. 99.01 feet;
thence Northerly along a non-tangent curve to the left having
a radius of 931.00 feet whose radius point bears S. 79 08'
59" W. through a central angle of 3 39' 23" for an arc length
of 59.41 feet to a point of compound curvature;
thence along a curve to the left having a radius of 43.00 feet
through a central angle of 85 24' 20" for an arc length of
64.10 feet to the Northerly line of said Parcel;
thence along said Northerly line N. 60 05' 16" E, 50.59 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3, N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the
following courses; S 84 55' 33" W. 51.74 feet; from a tangent
bearing of S. 84 64' 26" W. along a curve to the right with a
radius of 1999.89 feet, through a central angle of 6 03' 42"
for an arc length of 211.58 feet N. 89 01' 32" W.
2099.03 feet and from a tangent bearing of N. 89 01' 57" W.,
along a curve to the left with a radius of 324.98 feet,
through a central angle of 43 13' 13" for an arc length of
245.14 feet to the Southeasterly corner of said Parcel 3;
thence along the Easterly line of said Parcel 3 N. 0 58' 29"
E., 88.17 feet to the Northeast corner of said Parcel 3;
thence along the Northerly line of said Parcel 3 N. 89 01'
31" W., 218.48 feet to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
Beginning at the Northwest corner of that certain 0.019 acre
parcel described in the Deed from Metropolitan Life Insurance
Company, a New York Corporation, to the City of San Jose, a
municipal corporation of the State of California, recorded
August 20, 1987 in Book K267 of Official Records at page 162
Santa Clara County Records; thence from said point of
beginning, along the Southerly line of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California, recorded February 17, 1970 in
Book 8830 of Official Records at page 352 Santa Clara County
Records, the following courses: S 80 55' 58" W.
1034.16 feet; along a tangent curve to the right with a radius
of 1395.00 feet, through a central angle of 16 09' 23" for an
arc length of 393.37 feet and N. 89 01' 16" W. 275.13 feet;
thence leaving said Southerly line S. 86 14' 18" E.
317.01 feet to a point in a Northerly line of that certain
6.474 acre parcel described in said Deed to the City of San
Jose; thence along said Northerly line the following courses:
N. 84 55' 33" E. 658.09 feet and along a tangent curve to
the right with a radius of 349.98 feet, through a central
angle of 0 20' 33" for an arc length of 2.09 feet; thence
leaving said Northerly line N. 85 16' 06" E. 587.33 feet;
thence along a tangent curve to the right with a radius of
15.00 feet, through a central angle of 75 05' 51" for an arc
length of 19.66 feet; thence S. 19 35' 03" E. 467.07 feet;
thence S. 49 41' 05 W. 25.15 feet to a point in said
Northerly line; thence along said Northerly line and a
Westerly line of said 6.474 acre parcel the following courses:
from a tangent bearing of S. 77 14' 33" E along a curve to
the left with a radius of 43.00 feet, through a central angle
of 106 08' 43" for an arc length of 79.66 feet to a point of
reverse curvature; thence along a tangent curve to the right
with a radius of 1064.94 feet, through a central angle of 2
47' 46" for an arc length of 51.97 feet; thence N. 0 35' 30"
W. 358.63 feet; thence along a tangent curve to the left with
a radius of 830.95 feet, through a central angle of 1 55' 59"
for an arc length of 31.41 feet to the Northeast corner of
said 6.474 acre parcel; thence along the Northerly
prolongation of the Easterly line of said 6.474 acre parcel N.
6 16' 05" W. 121.98 feet to the most Southerly corner of said
0.019 acre parcel; thence along the Westerly line of said
0.019 acre parcel the following courses: from a tangent
bearing of N. 10 01' 13" W. along a curve to the left with a
radius of 930.95 feet, through a central angle of 3 39' 22"
for an arc length of 59.41 feet; thence from a tangent bearing
of N. 13 40' 35" W. along a curve to the left with a radius
of 43.00 feet, through a central angle of 85 23' 27" for an
arc length of 64.09 feet to the point of beginning.
PARCEL SIX:
All of Parcel Two as shown upon that Parcel Map which filed
for record in the Office of the Recorder of the County of
Santa Clara, State of California on July 13, 1984 in Book 531
of Maps, at pages 41 and 42.
APN: 097-03-59,79,80,84,85,86,87,88,90,93,102,103,104
ARB: 097-3-x5,x6,8,9,x15,x16,20,21,25.1,25.2
Exhibit B
CORPORATION GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NAME: [3Com Corporation or the Applicable Purchaser]
ADDRESS:___________________
ATTN: ___________________
CITY: ___________________
STATE: ___________________
Zip: ___________________
MAIL TAX STATEMENTS TO:
NAME: [3Com Corporation or the Applicable Purchaser]
ADDRESS:___________________
ATTN: ___________________
CITY: ___________________
STATE: ___________________
Zip: ___________________
CORPORATION GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), hereby grants to [3COM or the Applicable Purchaser]
all of BNPLC's interest in the land situated in the County of
Santa Clara, State of California, described on Annex A
attached hereto and hereby made a part hereof, together with
the improvements currently located on such land and any
easements, rights-of-way, privileges, appurtenances and other
rights pertaining to such land; provided, however, that this
grant is subject to the following, as well as the Permitted
Encumbrances described on Annex B:
1. Real Estate Taxes not yet due and payable;
2. General or Special Assessments due and payable
after the date hereof; and
3. Encroachments, variations in area or in
measurements, boundary line disputes, roadways and
other matters not of record which would be disclosed by
a survey and inspection of the property conveyed
hereby.
BNP LEASING CORPORATION
Date: As of ____________ By:___________________________________
Its: Vice President
Attest:_______________________________
Its: Assistant Secretary
STATE OF TEXAS )
) SS
COUNTY OF DALLAS )
On _______________ before me,________________, personally appeared
____________________ and _______________________________, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the
persons whose names are subscribed to the within instrument and acknowledged
to me that they executed the same in their authorized capacities, and that
by their signatures on the instrument the person, or the entity upon behalf
of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature _____________________________
Annex A
LEGAL DESCRIPTION
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
PARCEL ONE:
All of Parcel 1, as shown upon that certain Map entitled,
"Amended Parcel Map," which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of
California on December 22, 1983 in Book 523 of Maps, at pages
7, 8 and 9.
EXCEPTING THEREFROM:
All that certain real property situated in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1, as shown on the Amended Parcel Map
recorded in Book 523 of Maps at page 9, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 1, being
on the Northeasterly line of North First Street;
Thence N. 71 56' 56" E., 341.59 feet along the Northerly line
of said Parcel 1;
Thence S. 37 32' 48" W., 281.82 feet to said Northeasterly
line of North First Street;
Thence along said Northeasterly line N. 52 27' 37" W., 193.00
feet to the true point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses: N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL TWO:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records at page 51, Santa
Clara County Records, being more particularly described as
follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps at page 9,
Santa Clara County Records, said corner being on the
Northeasterly line of North First Street;
thence along the Northerly line of said Parcel 1, N. 71 56'
56" E, 341.59 feet to the true point of beginning;
thence continuing along said Northerly line N. 71 56' 56" E.,
358.60 feet;
thence N. 45 14' 38" W., 168.87 feet;
thence S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence S. 37 32' 48" W., 20.53 feet to the true point of
beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses; N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL THREE:
Beginning at a 4" x 4" stake marked A.D.C.M.1, standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone Monument standing at the point of intersection
of the South line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
28.14 chains; running thence along the South line of the
Alviso and Milpitas Road East 38.88 chains to a 4"x4" stake
marked C.M.N.M.1; thence S. 7 20' E., 7.835 chains to a 4"x4"
stake marked C.M.N.M.2 standing on the Southerly line of the
lands formerly belonging to the Estate of John W. Meads;
thence along said Southerly line S. 88 55' W., 36.74 chains
to a 4"x4" stake marked M.4; thence S. 59 57' E.,
1.322 chains to a 4" stake marked M.3;
thence S. 71 48' W., 3.35 chains to a 4"x4" stake marked A
D.C.M. 3; thence N. 1 28' W. 5.02 chains to a 4"x4" stake
marked A D.C.M.2; thence N. 10 18' W., 5.474 chains to the
place of beginning, and being Lot 2 as shown on the map
accompanying the report of the sole commissioner in the
partition of the Estate of John W. Meads, deceased.
EXCEPTING THEREFROM
A portion of that parcel of land described in the Deed
recorded September 21, 1966 as Instrument No. 3120626 in
Book 7512, page 79, Official Records of Santa Clara County,
said portion being more particularly described as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
parcel (7512 OR 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California Parcel;
thence along last said line N. 9 29' 21" W., 66.70 feet to
the point of commencement, as granted to the State of
California by Deed recorded February 17, 1970, Series
No. 3764080, Book 8830, page 352 and Series No. 3764081,
Book 8830, page 355, Official Records, Santa Clara County.
ALSO EXCEPTING THEREFROM:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
787.15 feet to the Westerly line of said Parcel described in
the said Deed recorded July 26, 1984; thence along said
Westerly line N. 1 19' 04" W., 327.06 feet to the true point
of beginning; thence continuing along said Westerly line N. 1
19' 04" W., 4.26 feet; thence N. 10 16' 10" W., 261.37 feet;
thence leaving said Westerly line S. 89 50' 02" E.,
218.46 feet; thence S. 0 09' 58" W., 88.17 feet; thence
Southwesterly along a non-tangent curve to the left having a
radius of 325.00 feet whose radius point bears S. 43 03' 16"
E., through a central angle of 2 11' 22" for an arc length of
12.42 feet; thence S. 44 45' 22" W., 230.93 feet to the true
point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W., 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3 N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the following courses: S 84 55'
33" W. 51.74 feet; from a tangent bearing of S. 84 54' 26" W.
along a curve to the right with a radius of 1999.89 feet,
through a central angle of 6 03' 42" for an arc length of
211.58 feet; N. 89 01' 32" W. 2099.03 feet; and from a
tangent bearing of N. 89 01' 57" W., along a curve to the
left with a radius of 324.98 feet, through a central angle of
43 13' 13" for an arc length of 245.14 feet to the
Southeasterly corner of said Parcel 3; thence along the
Easterly line of said Parcel 3 N. 0 58' 29" E., 88.17 feet to
the Northeast corner of said Parcel 3; thence along the
Northerly line of said Parcel 3 N. 89 01' 31" W., 218.48 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
Beginning at the Southwest corner of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California recorded February 17, 1970 in
Book 8830 of Official Records at page 352, Santa Clara County
Records; thence from said point of beginning, along the
Southerly line of said 6.465 acre parcel S. 89 01' 16" E.
537.24 feet; thence leaving said Southerly line, at right
angles, S 0 58' 44" W. 6.61 feet; thence S. 89 49' 56" W.
330.95 feet; thence S. 88 43' 01" W. 202.59 feet to a point
in the Southerly prolongation of the Westerly line of said
6.465 acre parcel; thence along said Southerly prolongation N.
9 29' 16" W., 21.59 feet to the point of beginning.
PARCEL FOUR:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records, at page 51,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
700.27 feet to the true point of beginning; thence continuing
along said Northerly line N. 71 56' 56" E., 86.88 feet to the
Easterly line of said parcel of land described in the Deed
recorded May 3, 1979; thence along said Easterly line N. 1
19' 04" W., 289.58 feet; thence leaving said Easterly line S.
44 45' 22" W. 278.16 feet; thence S. 45 14' 38: E.,
168.87 feet to the true point of beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said Parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55
feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W. 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
PARCEL FIVE:
Beginning at a 4'x4' stake marked C.M.N.M.1., standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone monument standing at the point of intersection
of the Southerly line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
67.02 chains; running thence along the South line of the
Alviso and Milpitas Road East 5.955 chains to a 4'x4' stake
marked M; thence still along the Southeasterly line of the
Alviso and Milpitas Road N. 73 54' E., 19.93 chains to a
fence post marked W.P. standing in fence line on the Westerly
line of lands now or formerly of Boots; thence along said
fence S. 7 15' E., 12.77 chains to a stake marked M.1.;
thence along the fence along the Northerly line of the lands
now or formerly of Nicholson, S. 88 55' W., 25.727 chains to
a 4'x4' stake marked C.M.N.M.2; thence N. 7 20' W.,
7.835 chains to the place of beginning, and being Lot 3 as
shown on the Map accompanying the report of the sole
commissioner in the partition of the Estate of John W. Meads,
deceased.
Excepting therefrom a portion of that parcel of land described
in the Deed recorded September 2, 1966 as instrument
No. 3120626 in Book 7512, page 79, Official Records of Santa
Clara County, said portion being more particularly described
as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
Parcel (7512 or 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California; thence along
last said line N. 9 29' 21" W., 66.70 feet to the point of
commencement, as granted to the State of California by Deed
recorded February 17, 1970, Series No. 3764080, Book 8830,
page 352 and Series No. 3764081, Book 8830, page 355, Official
Records, Santa Clara County.
The bearings and distances used in the above excepted
description are on the California System Zone 3. Multiply the
above distances by 1.0000530 to obtain ground level distances.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve lo the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W. 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the Northeasterly corner of said parcel, said
corner being on the Westerly line of Zanker Road and Southerly
line of Highway 237;
thence along the Easterly line of said Parcel, S. 7 05' 54"
E. 99.01 feet;
thence Northerly along a non-tangent curve to the left having
a radius of 931.00 feet whose radius point bears S. 79 08'
59" W. through a central angle of 3 39' 23" for an arc length
of 59.41 feet to a point of compound curvature;
thence along a curve to the left having a radius of 43.00 feet
through a central angle of 85 24' 20" for an arc length of
64.10 feet to the Northerly line of said Parcel;
thence along said Northerly line N. 60 05' 16" E, 50.59 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3, N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the
following courses; S 84 55' 33" W. 51.74 feet; from a tangent
bearing of S. 84 64' 26" W. along a curve to the right with a
radius of 1999.89 feet, through a central angle of 6 03' 42"
for an arc length of 211.58 feet N. 89 01' 32" W.
2099.03 feet and from a tangent bearing of N. 89 01' 57" W.,
along a curve to the left with a radius of 324.98 feet,
through a central angle of 43 13' 13" for an arc length of
245.14 feet to the Southeasterly corner of said Parcel 3;
thence along the Easterly line of said Parcel 3 N. 0 58' 29"
E., 88.17 feet to the Northeast corner of said Parcel 3;
thence along the Northerly line of said Parcel 3 N. 89 01'
31" W., 218.48 feet to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
Beginning at the Northwest corner of that certain 0.019 acre
parcel described in the Deed from Metropolitan Life Insurance
Company, a New York Corporation, to the City of San Jose, a
municipal corporation of the State of California, recorded
August 20, 1987 in Book K267 of Official Records at page 162
Santa Clara County Records; thence from said point of
beginning, along the Southerly line of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California, recorded February 17, 1970 in
Book 8830 of Official Records at page 352 Santa Clara County
Records, the following courses: S 80 55' 58" W.
1034.16 feet; along a tangent curve to the right with a radius
of 1395.00 feet, through a central angle of 16 09' 23" for an
arc length of 393.37 feet and N. 89 01' 16" W. 275.13 feet;
thence leaving said Southerly line S. 86 14' 18" E.
317.01 feet to a point in a Northerly line of that certain
6.474 acre parcel described in said Deed to the City of San
Jose; thence along said Northerly line the following courses:
N. 84 55' 33" E. 658.09 feet and along a tangent curve to
the right with a radius of 349.98 feet, through a central
angle of 0 20' 33" for an arc length of 2.09 feet; thence
leaving said Northerly line N. 85 16' 06" E. 587.33 feet;
thence along a tangent curve to the right with a radius of
15.00 feet, through a central angle of 75 05' 51" for an arc
length of 19.66 feet; thence S. 19 35' 03" E. 467.07 feet;
thence S. 49 41' 05 W. 25.15 feet to a point in said
Northerly line; thence along said Northerly line and a
Westerly line of said 6.474 acre parcel the following courses:
from a tangent bearing of S. 77 14' 33" E along a curve to
the left with a radius of 43.00 feet, through a central angle
of 106 08' 43" for an arc length of 79.66 feet to a point of
reverse curvature; thence along a tangent curve to the right
with a radius of 1064.94 feet, through a central angle of 2
47' 46" for an arc length of 51.97 feet; thence N. 0 35' 30"
W. 358.63 feet; thence along a tangent curve to the left with
a radius of 830.95 feet, through a central angle of 1 55' 59"
for an arc length of 31.41 feet to the Northeast corner of
said 6.474 acre parcel; thence along the Northerly
prolongation of the Easterly line of said 6.474 acre parcel N.
6 16' 05" W. 121.98 feet to the most Southerly corner of said
0.019 acre parcel; thence along the Westerly line of said
0.019 acre parcel the following courses: from a tangent
bearing of N. 10 01' 13" W. along a curve to the left with a
radius of 930.95 feet, through a central angle of 3 39' 22"
for an arc length of 59.41 feet; thence from a tangent bearing
of N. 13 40' 35" W. along a curve to the left with a radius
of 43.00 feet, through a central angle of 85 23' 27" for an
arc length of 64.09 feet to the point of beginning.
PARCEL SIX:
All of Parcel Two as shown upon that Parcel Map which filed
for record in the Office of the Recorder of the County of
Santa Clara, State of California on July 13, 1984 in Book 531
of Maps, at pages 41 and 42.
APN: 097-03-59,79,80,84,85,86,87,88,90,93,102,103,104
ARB: 097-3-x5,x6,8,9,x15,x16,20,21,25.1,25.2
Annex B
Permitted Encumbrances
[NOTE: TO THE EXTENT THAT SPECIFIC ENCUMBRANCES (OTHER THAN
"PROHIBITED LIENS") ARE IDENTIFIED IN ADDITION TO THOSE
DESCRIBED BELOW, SUCH ADDITIONAL ENCUMBRANCES WILL BE ADDED TO
THE LIST BELOW AND THIS "NOTE" WILL BE DELETED BEFORE THIS
DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES
APPROVED BY BNPLC AS "PERMITTED ENCUMBRANCES" FROM TIME TO
TIME BECAUSE OF 3COM'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL
TO AN ADJUSTMENT AS PROVIDED IN THE LEASE.]
This conveyance is subject to any encumbrances that do
not constitute "Prohibited Encumbrances" (as defined in the
Purchase Agreement pursuant to which this Deed is being
delivered), including County and city taxes for the Fiscal
Year _______, a lien not yet due or payable, and including the
following matters to the extent the same are still valid and
in force:
1. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 7E
The above Assessment No. covers APN No. 097-03-079 and
097-03-093, but is being collected under APN No. 097-03-079.
Said matter affects a portion of Parcel One.
2. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 6Y
Said matter affects a portion of Parcel Three.
3. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 9Y
Said matter affects a portion of Parcel Three.
4. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 7Y
Said matter affects a portion of Parcel Three.
5. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 8Y
Said matter affects portions of Parcels Three and Five.
6. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 5Y
Said matter affects Parcel Four.
7. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 10Y
Said matter affects a portion of Parcel Five.
8. Bond for Reassessment District #93-210 Consolidated Refunding
Bond No. : 24J
Assessment No. : 4E
Said matter affects Parcel Six.
9. EASEMENT for the purposes stated herein and incidents thereto
Purpose : A right of way for a covered wooden sewer
Granted to : The City of San Jose, a municipal corporation
Recorded : February 26, 1989 in Book 115 of Deeds, page 142
Affects : A strip of land twelve (12) feet wide, the center
line of which is described as follows:
Beginning in the Southerly line of land of the party of
the first part at a point from which the Southeasterly
corner thereof bears N.88 55' East 12.35 feet distant and
running thence N. 36 30' East 623 1/2 feet a little more
or less to a point in the Southerly line of the Alviso and
Milpitas Road, from which the Southwesterly corner of the
land of J. Farney bears N. 19 30' West 72 3/4 feet distant
THE EXACT location of said easement is not defined of record.
Said matter affects a portion of Parcel Three and Five.
10. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The right to excavate for, install, replace,
maintain and use for conveying gas pipe line
with necessary appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : October 14, 1931 in Book 585, page 340
Official Records
Affects : The said route of said pipe line shall be as
follows, namely:
Beginning at a point in the Easterly boundary line of
said premises (marked by a fence now upon the ground), from
which a 4" x 4" white stake marking the Northeast corner of
said premises bears North 15 26 1/2' West 5.2 feet
distant, and running thence South 86 58' West 367.9 feet;
thence North 89 04' West 259.6 feet; thence South 88 51'
West 1135.53 feet; thence South 86 52 1/2' West 254.7
feet; thence North 89 19 1/2' West 172.0 feet; thence
South 88 42 1/2' West 1918.3 feet, more or less, to ta
point in the Southwesterly boundary line of said premises.
THE EXACT location of said easement is not defined of record.
Said matter affects Parcels One and Six.
11. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The right to excavate for, install, replace,
maintain and use for conveying gas a pipe line
with necessary appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : November 5, 1931 in Book 586, page 515,
Official Records
Affects : As follows:
Beginning at a point in the Southwesterly boundary line
of said premises (marked by the center line of the San
Jose-Alviso Road), from which a 2" x 4" post marking the
point of intersection of the Southwesterly boundary line of
said road with the Northerly boundary line of that certain
42.5 acre parcel of land conveyed to Kenneth R. Burrell by
F.C. Burrell, et ux, by deed dated June 13, 1930, and
recorded in Vol. 522 of Official Records, at page 508
records of said Santa Clara County, bears South 78 25'
West 45.3 feet distant, and running thence North 75 51
1/2' East 51.6 feet; thence South 89 10' East 265.3 feet;
thence North 89 16' East 161.9 feet; thence North 88 00'
East 425.0 feet; thence North 72 54' minutes East 285.0
feet thence South 38 28' East 126.9 feet; thence North 88
42 1/2' East 35.0 feet, more or less, to a point in the
Easterly boundary line of said premises.
THE EXACT location of said easement is not defined of record.
Said matter affects Parcels Two and Four.
12. EASEMENT for the purposes stated herein and incidents thereto
Purpose : The right to excavate for, install, replace,
maintain and use for conveying gas a pipe line
with necessary appliances
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : December 10, 1931 in Book 595, page 196,
Official Records
Affects : As follows:
Beginning at a point in the Southwesterly boundary line
of that certain 99.5 acre parcel of land described in that
certain mortgage from George E. Nicholson to Mollie F.
Nicholson dated December 18, 1913 and recorded in Book 216
of Mortgages at page 255, records of said Santa Clara
County, (said boundary line being marked by a fence now
upon the ground) from which a 4" x 4" post marked "M4" set
at the most Westerly corner of said 99.5 acre parcel of
land bears North 60 46 1/2' West 16.7 feet distant; and
running thence South 88 42 1/2' West 150.0 feet, more or
less, to a point in the Westerly boundary line of said
premises.
THE EXACT location of said easement is not defined of record.
Said matter affects Parcel Three.
13. EASEMENT for the purposes stated herein and incidents thereto
Purpose : A right of way for sewer purposes
Granted to : City of San Jose, a municipal corporation
Recorded : August 8, 1933 in Book 659, page 121,
Official Records
Affects : A right of way over, along and upon a strip
twelve (12) feet wide, the center line of
which is described as follows:
Beginning at a point from which the Southeasterly corner
of the land Norman L. Meads bears N. 88 55' E., 1530 feet
distant; thence N. 66 54' W. 513 feet to a point in the
Southerly line of the Alviso and Milpitas Road, from which
the Southeasterly corner of the private road of F.W. Zanker
lies Northerly and across the Alviso and Milpitas Road, 67
feet a little more or less.
Said matter affects Parcel Five.
14. WAIVER OF DAMAGES as contained in the Deed to the State of California
Recorded : February 17, 1980 in Book 8830, page 352,
Official Records
Said matter affects Parcels Three and Five.
15. THE EFFECT of the Rincon de los Esteros Project Redevelopment Plan and
Ordinances Nos. 17306, 19686, 19835, 20677, 20958, 21417, 21496, 21903,
22660, 22412, 22761, 22761.1 and 22961, 23703, 23732, 23761 and 23934
of the City of San Jose as recorded and as disclosed by documents
recorded July 11, 1975 in Book B502, Page 711; August 6, 1979 in Book
E699, Page 245; August 6, 1979 in Book E699, Page 277; December 21,
1979 in Book F37, Page 585; October 8, 1981 in Book G382, Page 605;
July 28, 1982 in Book G929, Page 703; September 14, 1983 in Book H892,
Page 200; January 10, 1984 in Book 1220, Page 271; December 17, 1987
in Book K394, page 143; May 5, 1988 in Book K524, page 526; May 5, 1988
in Book K524, page 532; January 6, 1992 in Book L996, Page 508, all of
Official Records, and as disclosed by information provided by the
Redevelopment Agency of the City of San Jose.
16. EASEMENTS AND INCIDENTS THERETO, filed for record in the Office of the
County Recorder of the County of Santa Clara, State of California,
shown on the "Amended Parcel Map" filed for record on December 22, 1983
in Book 523 of Maps, at pages 7, 8 and 9
Purpose : Public Service Easement
Affects : Southwesterly 10 feet and Southeasterly 10
feet of Parcel One and Southwesterly 10 feet
and Northwesterly 10 feet of Parcel Six
17. EASEMENT for the purposes stated herein and incidents thereto
Purpose : To construct, install, inspect, maintain,
replace, remove and use facilities of such
underground conduits, pipes, manholes,
service boxes, wires, cables, and electrical
conductors; aboveground marker posts, risers,
and service pedestals; underground and
aboveground switches, fuses, terminals, and
transformers with associated concrete pads;
and fixtures and appurtenances necessary to
any and all thereof
Granted to : Pacific Gas and Electric Company, a California
corporation
Recorded : March 26, 1986 in Book J640, page 960,
Official Records
Affects : Strips of land of the uniform width of 10 feet
the center lines of which are delineated by
the heavy dashed lines shown upon the print of
second party's Drawing No. SJB-1821 attached
thereto and made a part thereof; excepting
therefrom the portion lying outside the
boundary lines of said lands.
Terms and conditions contained in the document hereinabove referred to.
Said matter affects Parcel Six.
18. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Public Service Easements
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 156,
Official Records
Affects : As follows:
All that certain real property situated in the City of
San Jose, County of Santa Clara, State of California, being
a portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps at page 9, Santa Clara County
Records, being also a portion of Parcel as 2 described in
the deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being
more particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending Northeasterly
from the Northeasterly line of the 10.00 feet wide P.S.E.
along North First Street, as shown on said Amended Parcel
Map and lying contiguous to and Southeasterly of a line
that begins at a point in the Northeasterly line of North
First Street from which the most Southerly corner of Parcel
1 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1698, Santa Clara
County Records, bears N. 52 27' 12" W. 77.00 feet and
running;
thence Northeasterly along a curve to the right having a
radius of 50.00 feet whose radius point bears
N. 37 32' 48" E., through a central angle of 90 00' 00"
for an arc length of 78.54 feet;
thence N. 37 32' 48" E., 251.93 feet to a point hereon
designated "Point A";
thence N. 37 32' 48" E., 0.42 feet;
thence along a curve to the right having a radius of
273.00 feet through a central angle of 7 12' 34" for an
arc length of 34.35 feet;
thence N. 44 45' 22" E. 261.02 feet to the Northeasterly
line of said Parcel 2, the side line of said strip shall be
lengthened or shortened to terminate in said Northeasterly
line.
Strip 2
Beginning at a point herein above designated "Point A";
thence S. 37 32' 48" W., 31.00 feet; thence S. 52 27'
12" E., 25.00 feet; thence N. 37 32' 48" E., 31.00 feet;
thence N. 52 27' 12" W., 25.00 feet to the point of
beginning.
Terms and conditions contained in the document hereinabove
referred to.
Said matter affects Parcels One.
19. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Public Service Easements
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 162,
Official Records
Affects : 10 foot wide strips over Parcels Three, Four
and Five and more fully described in said
document
Terms and conditions contained in the document hereinabove referred
to.
Said matter affects Parcels Three, Four and Five.
20. EASEMENT for the purposes stated herein and incidents thereto
Purpose : Sanitary Sewer Easement
Granted to : City of San Jose
Recorded : August 20, 1987 in Book K267, page 162,
Official Records
Affects : A 15 foot wide strip and a 20 foot wide strip
over Parcels Four and Five more fully described
in said document
Terms and conditions contained in the document hereinabove referred
to.
Said matter affects Parcels Four and Five.
21. LACK OF ABUTTER'S RIGHTS to and from Freeway 237, lying adjacent to
the Northerly and Northeasterly line of Parcel Five, said rights
having been released and relinquished
By : Final Order of Condemnation
To : The People of the State of California Acting
by and through the Department of Transportation
Recorded : March 30, 1994 in Book N373, page 0560,
Official Records.
22. Any rights, interests, or claims adverse to those of
the vestee herein which may exist or arise by reason of the
following facts shown on a survey plat entitled "ALTA/ACSM
LAND TITLE SURVEY," dated July 15, 1996, prepared by Bryan
& Murphy Engineers, Planners, Surveyors, Job No. 67320.
a. The fact that a cyclone fence extends across the
Southerly line of Parcel Five.
b. The fact that a walkway exists in the public services
easement shown as Exception No. 16 and that said walkway
extends across the Westerly lines of Parcel Six.
c. The fact that concrete landscaping extends across the
Easterly line of Parcel Six.
d. The fact that a 12 foot wall extends across the Southerly
line of Parcel Three.
EXHIBIT C
PRELIMINARY CHANGE OF OWNERSHIP REPORT
THIS REPORT IS NOT A PUBLIC DOCUMENT
(To be completed by transferee (buyer) prior to
transfer of the subject property in accordance with
Section 480.3 of the Revenue and Taxation Code.)
THIS SPACE FOR RECORDER'S USE
SELLER/TRANSFEROR:
SELLER RECORDING DATE: DOCUMENT NO.
BUYER/TRANSFEREE:
ASSESSOR'S IDENTIFICATION NUMBER(S)
LA ------ Page Parcel
PROPERTY ADDRESS OR LOCATION:
No Street
City State Zip Code
MAIL TAX INFORMATION TO:
NAME:
ADDRESS:
Street No City State Zip Code
FOR ASSESSOR'S USE ONLY
Cluster ______
OC1 _________ OC2 _________
DT _________ INT _________
RC _________ SP$ _________
DTT $_________ # Pcl._________
A Preliminary Change in Ownership Report must be filed with each conveyance
in the County Recorder's office for the county where the property is located;
this particular form may be used in all 58 counties of California.
NOTICE: A lien for property taxes applies to your property on March 1
of each year for the taxes owing in the following fiscal year, July 1
through June 30. One-half of those taxes is due November 1 and one-
half is due February 1. The first installment becomes delinquent on
December 10 and the second installment becomes delinquent on April 10.
One tax bill is mailed before November 1 to the owner of record. IF
THIS TRANSFER OCCURS AFTER MARCH 1 AND ON OR BEFORE DECEMBER 31, YOU
MAY BE RESPONSIBLE FOR THE SECOND INSTALLMENT OF TAXES ON FEBRUARY 1.
The property which you acquired may be subject to a supplemental tax
assessment in an amount to be determined by the Santa Clara County
Assessor. For further information on your supplemental roll
obligation, please call the Santa Clara County Assessor at (___) ___-
____.
PART I: TRANSFER INFORMATION Please answer all questions.
YES NO
" " A. Is this transfer solely between husband and
wife (Addition of a spouse, death of a spouse, divorce
settlement, etc.)?
" " B. Is this transaction only a correction of the
name(s) of the person(s) holding title to the property (For
example, a name change upon marriage)?
" " C. Is this document recorded to create,
terminate, or reconvey a lender's interest in the property?
" " D. Is this transaction recorded only to create,
terminate, or reconvey a security interest (e.g., cosigner)?
" " E. Is this document recorded to substitute a
trustee under a deed of trust, mortgage, or other similar
document?
" " F. Did this transfer result in the creation of a
joint tenancy in which the seller (transferor) remains as one
of the joint tenants?
" " G. Does this transfer return property to the
person who created the joint tenancy (original transferor)?
" " H. Is this transfer of property:
1. to a trust for the benefit of the
grantor, or grantor's spouse?
2. to a trust revocable by the transferor?
3. to a trust from which the property
reverts to the grantor within 12 years?
" " I. If this property is subject to a lease, is the
remaining lease term 35 years or more including written
options?
" " J. Is this a transfer from parents to children or
from children to parents?
" " K. Is this transaction to replace a principal
residence by a person 55 years of age or older?
" " L. Is this transaction to replace a principal
residence by a person who is severely disabled as defined by
Revenue and Taxation Code Section 69.5?
If you checked yes to J, K or L, an applicable claim form must be filed
with the County Assessor.
Please provide any other information that would help the Assessor to
understand the nature of the transfer.
IF YOU HAVE ANSWERED "YES" TO ANY OF THE ABOVE QUESTIONS EXCEPT J, K, OR
L, PLEASE SIGN AND DATE.
OTHERWISE COMPLETE BALANCE OF THE FORM.
PART II: OTHER TRANSFER INFORMATION
A. Date of transfer if other than recording date.
B. Type of transfer. Please check appropriate box.
__Purchase __Foreclosure __Gift
__Trade or Exchange __Merger, Stock or Partnership Acquisition
__Contract of Sale--Date of Contract____________________
__Inheritance--Date of Contract____________________
__Other: Please explain:
__Creation of a lease __Assignment of a lease __Termination of a lease
Date lease began____________________
Original term in years (including written options)__________________
Remaining term in years (including written options)_________________
C. Was only a partial interest in the property transferred? __Yes __No
If yes, indicate the percentage transferred ____%
Please answer, to the best of your knowledge, all applicable questions,
sign and date. If a question does not apply, indicate with "N/A".
PART 1: PURCHASE PRICE & TERMS OF SALE
(a) CASH DOWN PAYMENT OR Value of Trade or Exchange (excluding closing cost)
Amount $______
(b) FIRST DEED OF TRUST @____% interest for ____years. Pymts./Mo.= $___
(Prin. & Int. only) Amount $______
__FHA __Fixed Rate __New Loan
__Conventional __Variable Rate __Assumed Existing Loan Balance
__VA __All Inclusive D.T. ($________ Wrapped)
__Bank or Savings & Loan
__Cal-Vet __Loan Carried by Seller __Finance Company
Balloon Payment __Yes __No Due Date______ Amount $______ Amount $______
(c) SECOND DEED OF TRUST @________% interest for ____ years.
Pymts./Mo. = $________ (Prin. & Int. only)
__Bank or Savings & Loan __Fixed Rate __New Loan
__Loan Carried by Seller __Variable Rate __Assumed Existing Loan Balance
Balloon Payment __Yes __No Due Date______ Amount $______ Amount $____
(d) OTHER FINANCING: Is other financing involved not covered in (b) or (c)
above? __Yes __No
Type____ @____% interest for ____ years. Pymts./Mo. = $_____(Prin. & Int.
only)
__Bank or Savings & Loan __Fixed Rate __New Loan
__Loan Carried by Seller __Variable Rate __Assumed Existing Loan Balance
Balloon Payment __Yes __No Due Date______ Amount $______ Amount $____
(e) IMPROVEMENT BOND __Yes __No Outstanding Balance:____________
(f) TOTAL PURCHASE PRICE: (or acquisition price,
if traded or exchanged, include real estate
commission if paid.) $
Total items A through E ____________
(g) PROPERTY PURCHASED: __Through a broker;
__Direct form seller;
__Other (Explain)______________________________
If purchased through a broker, provide broker's name and phone no.:
Please explain any special terms or financing and many other information
that would help the Assessor understand the purchase price and terms of
sale.
PART 2: PROPERTY INFORMATION
(a) IS PERSONAL PROPERTY INCLUDED IN THE PURCHASE PRICE
(other than a mobilehome subject to local property tax)?
__Yes __No
If yes, enter the value of the personal property included in the
purchase price $__________ (Attach itemized list of personal property)
(b) IS THIS PROPERTY INTENDED AS YOUR PRINCIPAL RESIDENCE?
__Yes __No
If yes, enter date of occupancy ________/________/, 19__
Month Day
or intended occupancy ________/________/, 19__
Month Day
(c) TYPE OF PROPERTY TRANSFERRED:
__Single-Family residence
__Agricultural
__Timeshare
__Multiple-Family residence (no. of units:__)
__Coop/Own-your-own
__Mobilehome
__Commercial/Industrial
__Condominium
__Unimproved lot
__Other (Description:__________________________)
(d) DOES THE PROPERTY PRODUCE INCOME? __Yes __No
(e) IF THE ANSWER TO QUESTION D IS YES, IS THE INCOME FROM:
__Lease/Rent
__Contract
__Mineral rights
__Other - explain
(f) WHAT WAS THE CONDITION OF THE PROPERTY AT THE TIME OF SALE?
__Good __Average __Fair __Poor
Enter here, or on an attached sheet, any other information that
would assist the Assessor in determining value of the property such
as the physical condition of the property, restrictions, etc.
I certify that the foregoing is true, correct and complete to the
best of my knowledge and belief.
Signed _____________________________
Date _______________________________
(New Owner/Corporate Officer)
Please Print Name of New Owner/Corporate Officer
Phone No. where you are available from 8:00 a.m. - 5:00 p.m. (____)
(Note: The Assessor may contact you for further information)
If a document evidencing a change of ownership is presented to the recorder
for recordation without the concurrent filing of a PRELIMINARY CHANGE OF
OWNERSHIP REPORT, the recorder may charge an additional recording fee of
twenty dollars ($20).
Exhibit D
BILL OF SALE, ASSIGNMENT OF CONTRACT
RIGHTS AND INTANGIBLE ASSETS
Reference is made to that certain ______________ dated
_______, 1996 (the "Agreement") between 3Com Corporation, a
California Corporation, and Metropolitan Life Insurance
Company, a New York corporation ("Metropolitan"), pursuant to
which 3Com Corporation named BNP LEASING CORPORATION
("Assignor") as its designee and Metropolitan conveyed to
Assignor the real property described in Annex A attached
hereto (the "Property).
Assignor hereby sells, transfers and assigns unto [3COM
OR THE APPLICABLE PURCHASER, AS THE CASE MAY BE], a
_____________ ("Assignee"), all of Assignor's right, title
and interest in and to the following property, if any, to the
extent such property is assignable:
(a) any warranties, guaranties, indemnities and claims
Assignor may have under the Agreement or under any document
delivered by Metropolitan thereunder to the extent related to
the Property;
(b) all licenses, permits or similar consents (excluding
any prepaid utility reservations) from third parties to the
extent related to the Property;
(c) any pending or future award made because of any
condemnation affecting the Property or because of any
conveyance to be made in lieu thereof, and any unpaid award
for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or
injury to the Property;
(d) any goods, equipment, furnishings, furniture,
chattels and personal property of whatever nature that are
located on or about the Property; and
(e) any general intangibles, permits, licenses,
franchises, certificates, and other rights and privileges
owned by Assignor and used solely in connection with, or
relating solely to, the Property, including any such rights
and privileges conveyed to Assignor pursuant to the Agreement;
but excluding any rights or privileges of Assignor under (i)
the Environmental Indemnity, as defined in that certain
Purchase Agreement between Assignor and 3Com Corporation dated
as of November 20, 1996 (the "Purchase Agreement") (pursuant
to which this document is being delivered), (ii) the Lease, as
defined in the Purchase Agreement, to the extent rights under
the Lease relate to the period ending on the date hereof,
whether such rights are presently known or unknown, including
rights of the Assignor to be indemnified against claims of
third parties as provided in the Lease which may not presently
be known, and including rights to recover any accrued unpaid
rent under the Lease which may be outstanding as of the date
hereof, (iii) agreements between Assignor and Participants, as
defined in the Lease, or any modification or extension
thereof, and (iv) any other instrument being delivered to
Assignor contemporaneously herewith pursuant to the Purchase
Agreement.
Assignor does for itself and its heirs, executors and
administrators, covenant and agree to warrant and defend the
title to the property assigned herein against the just and
lawful claims and demands of any person claiming under or
through Assignor, but not otherwise; excluding, however, any
claim or demand arising by, through or under [3COM].
Assignee hereby assumes and agrees to keep, perform and
fulfill Assignor's obligations, if any, relating to any
permits or contracts, under which Assignor has rights being
assigned herein.
Executed: ____________, _____.
ASSIGNOR:
BNP LEASING CORPORATION
a Delaware corporation
By:
Its:
ASSIGNEE:
[3COM, OR THE APPLICABLE PURCHASER], a _________ corporation
By:
Its:
Annex A
Legal Description
REAL PROPERTY in the City of Santa Clara, County of Santa
Clara, State of California, described as follows:
PARCEL ONE:
All of Parcel 1, as shown upon that certain Map entitled,
"Amended Parcel Map," which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of
California on December 22, 1983 in Book 523 of Maps, at pages
7, 8 and 9.
EXCEPTING THEREFROM:
All that certain real property situated in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1, as shown on the Amended Parcel Map
recorded in Book 523 of Maps at page 9, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 1, being
on the Northeasterly line of North First Street;
Thence N. 71 56' 56" E., 341.59 feet along the Northerly line
of said Parcel 1;
Thence S. 37 32' 48" W., 281.82 feet to said Northeasterly
line of North First Street;
Thence along said Northeasterly line N. 52 27' 37" W., 193.00
feet to the true point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses: N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL TWO:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records at page 51, Santa
Clara County Records, being more particularly described as
follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps at page 9,
Santa Clara County Records, said corner being on the
Northeasterly line of North First Street;
thence along the Northerly line of said Parcel 1, N. 71 56'
56" E, 341.59 feet to the true point of beginning;
thence continuing along said Northerly line N. 71 56' 56" E.,
358.60 feet;
thence N. 45 14' 38" W., 168.87 feet;
thence S. 44 45' 22" W., 261.02 feet;
thence along a curve to the left having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence S. 37 32' 48" W., 20.53 feet to the true point of
beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to the City of San
Jose, a municipal corporation recorded August 20, 1987 in
Book K267, page 156 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of Parcel 1 as shown on the Amended Parcel Map
recorded in Book 523 of Maps, at page 9, Santa Clara County
Records, being also a portion of Parcel 2 as described in the
deed recorded October 21, 1985 in Book J492 of Official
Records at page 1703, Santa Clara County Records, being more
particularly described as follows:
Beginning at the most Southerly corner of the parcel of land
described in the deed recorded October 21, 1985 at Series
Number 8564627, Book J492 of Official Records at page 1698,
Santa Clara County Records;
thence along the Southeasterly line of said parcel described
in said deed recorded October 21, 1985, N. 37 32' 48" E.,
281.82 feet to the Northwesterly line of said Parcel 2;
thence along said Northwesterly line the following three
courses; N. 37 32' 48" E., 20.53 feet;
thence along a curve to the right having a radius of
300.00 feet through a central angle of 7 12' 34" for an arc
length of 37.75 feet;
thence N. 44 45' 22" E., 261.02 feet to the Northeasterly
line of said Parcel 2;
thence along said Northeasterly S 45 14' 38" E., 27.00 feet
to a line that is parallel with and 27.00 Southeasterly of
said Northwesterly line;
thence along said parallel line S. 44 45' 22" W.,
261.02 feet;
thence along a curve to the left having a radius of
273.00 feet through a central angle of 7 12' 34" for an arc
length of 34.35 feet;
thence S. 37 32' 48" W., 252.35 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet to the Northeasterly line of North First Street;
thence along said Northeasterly line N. 52 27' 12" W.,
77.00 feet to the point of beginning.
PARCEL THREE:
Beginning at a 4" x 4" stake marked A.D.C.M.1, standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone Monument standing at the point of intersection
of the South line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
28.14 chains; running thence along the South line of the
Alviso and Milpitas Road East 38.88 chains to a 4"x4" stake
marked C.M.N.M.1; thence S. 7 20' E., 7.835 chains to a 4"x4"
stake marked C.M.N.M.2 standing on the Southerly line of the
lands formerly belonging to the Estate of John W. Meads;
thence along said Southerly line S. 88 55' W., 36.74 chains
to a 4"x4" stake marked M.4; thence S. 59 57' E.,
1.322 chains to a 4" stake marked M.3;
thence S. 71 48' W., 3.35 chains to a 4"x4" stake marked A
D.C.M. 3; thence N. 1 28' W. 5.02 chains to a 4"x4" stake
marked A D.C.M.2; thence N. 10 18' W., 5.474 chains to the
place of beginning, and being Lot 2 as shown on the map
accompanying the report of the sole commissioner in the
partition of the Estate of John W. Meads, deceased.
EXCEPTING THEREFROM
A portion of that parcel of land described in the Deed
recorded September 21, 1966 as Instrument No. 3120626 in
Book 7512, page 79, Official Records of Santa Clara County,
said portion being more particularly described as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
parcel (7512 OR 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California Parcel;
thence along last said line N. 9 29' 21" W., 66.70 feet to
the point of commencement, as granted to the State of
California by Deed recorded February 17, 1970, Series
No. 3764080, Book 8830, page 352 and Series No. 3764081,
Book 8830, page 355, Official Records, Santa Clara County.
ALSO EXCEPTING THEREFROM:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
787.15 feet to the Westerly line of said Parcel described in
the said Deed recorded July 26, 1984; thence along said
Westerly line N. 1 19' 04" W., 327.06 feet to the true point
of beginning; thence continuing along said Westerly line N. 1
19' 04" W., 4.26 feet; thence N. 10 16' 10" W., 261.37 feet;
thence leaving said Westerly line S. 89 50' 02" E.,
218.46 feet; thence S. 0 09' 58" W., 88.17 feet; thence
Southwesterly along a non-tangent curve to the left having a
radius of 325.00 feet whose radius point bears S. 43 03' 16"
E., through a central angle of 2 11' 22" for an arc length of
12.42 feet; thence S. 44 45' 22" W., 230.93 feet to the true
point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W., 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3 N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the following courses: S 84 55'
33" W. 51.74 feet; from a tangent bearing of S. 84 54' 26" W.
along a curve to the right with a radius of 1999.89 feet,
through a central angle of 6 03' 42" for an arc length of
211.58 feet; N. 89 01' 32" W. 2099.03 feet; and from a
tangent bearing of N. 89 01' 57" W., along a curve to the
left with a radius of 324.98 feet, through a central angle of
43 13' 13" for an arc length of 245.14 feet to the
Southeasterly corner of said Parcel 3; thence along the
Easterly line of said Parcel 3 N. 0 58' 29" E., 88.17 feet to
the Northeast corner of said Parcel 3; thence along the
Northerly line of said Parcel 3 N. 89 01' 31" W., 218.48 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
Beginning at the Southwest corner of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California recorded February 17, 1970 in
Book 8830 of Official Records at page 352, Santa Clara County
Records; thence from said point of beginning, along the
Southerly line of said 6.465 acre parcel S. 89 01' 16" E.
537.24 feet; thence leaving said Southerly line, at right
angles, S 0 58' 44" W. 6.61 feet; thence S. 89 49' 56" W.
330.95 feet; thence S. 88 43' 01" W. 202.59 feet to a point
in the Southerly prolongation of the Westerly line of said
6.465 acre parcel; thence along said Southerly prolongation N.
9 29' 16" W., 21.59 feet to the point of beginning.
PARCEL FOUR:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of that parcel of land described in the Deed recorded
May 3, 1979 in Book E464 of Official Records, at page 51,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the most Westerly corner of Parcel 1 as shown on
the Amended Parcel Map recorded in Book 523 of Maps, at
page 9, Santa Clara County Records, said corner being on the
Northeasterly line of North First Street; thence along the
Northerly line of said Parcel 1, N. 71 56' 56" E.,
700.27 feet to the true point of beginning; thence continuing
along said Northerly line N. 71 56' 56" E., 86.88 feet to the
Easterly line of said parcel of land described in the Deed
recorded May 3, 1979; thence along said Easterly line N. 1
19' 04" W., 289.58 feet; thence leaving said Easterly line S.
44 45' 22" W. 278.16 feet; thence S. 45 14' 38: E.,
168.87 feet to the true point of beginning.
EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve to the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said Parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W., 72.55
feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W. 69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
PARCEL FIVE:
Beginning at a 4'x4' stake marked C.M.N.M.1., standing on the
Southerly line of the Alviso and Milpitas Road, from which
stake a stone monument standing at the point of intersection
of the Southerly line of the Alviso and Milpitas Road with the
center line of the San Jose and Alviso Road bears West
67.02 chains; running thence along the South line of the
Alviso and Milpitas Road East 5.955 chains to a 4'x4' stake
marked M; thence still along the Southeasterly line of the
Alviso and Milpitas Road N. 73 54' E., 19.93 chains to a
fence post marked W.P. standing in fence line on the Westerly
line of lands now or formerly of Boots; thence along said
fence S. 7 15' E., 12.77 chains to a stake marked M.1.;
thence along the fence along the Northerly line of the lands
now or formerly of Nicholson, S. 88 55' W., 25.727 chains to
a 4'x4' stake marked C.M.N.M.2; thence N. 7 20' W.,
7.835 chains to the place of beginning, and being Lot 3 as
shown on the Map accompanying the report of the sole
commissioner in the partition of the Estate of John W. Meads,
deceased.
Excepting therefrom a portion of that parcel of land described
in the Deed recorded September 2, 1966 as instrument
No. 3120626 in Book 7512, page 79, Official Records of Santa
Clara County, said portion being more particularly described
as follows:
Commencing at the Northeasterly corner of that parcel of land
described in the Deed to the State of California, recorded
November 15, 1957 in Volume 3937, page 635, Official Records
of Santa Clara County; thence along the Northerly line of said
Parcel (7512 or 79) S. 89 01' 21" E., 2959.87 feet and N. 74
49' 08" E., 1314.86 feet to the Easterly line of last said
parcel; thence along last said line S. 6 22' 52" E.,
76.47 feet; thence S. 80 54' 25" W., 72.96 feet to a line
parallel with, and distant 67.83 feet Southerly, at right
angles, from the course described above as "N. 74 49' 08" E.,
1314.86 feet"; thence along said parallel line S. 74 49' 08"
W., 1034.16 feet; thence along a tangent curve to the right
with a radius of 1395.00 feet through an angle of 16 09' 31",
an arc length of 393.42 feet to a line parallel with and
distant 65.59 feet Southerly, at right angles, from the course
described above as "S. 89 01' 21" E., 2959.87 feet"; thence
along last said parallel line N. 89 01' 21" W., 2767.11 feet
to the Easterly line of said State of California; thence along
last said line N. 9 29' 21" W., 66.70 feet to the point of
commencement, as granted to the State of California by Deed
recorded February 17, 1970, Series No. 3764080, Book 8830,
page 352 and Series No. 3764081, Book 8830, page 355, Official
Records, Santa Clara County.
The bearings and distances used in the above excepted
description are on the California System Zone 3. Multiply the
above distances by 1.0000530 to obtain ground level distances.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California, being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being also a portion of the
Parcel 4 as described in the Deed recorded October 21, 1985 in
Book J492 of Official Records at page 1713, Santa Clara County
Records, being more particularly described as follows:
Beginning at the most Westerly corner of said Parcel 4;
thence along the Northwesterly line of said Parcel 4, N. 44
45' 22" E., 278.16 feet to the Westerly line of said parcel
described in said Deed recorded July 26, 1984;
thence along said Westerly line N. 1 19' 04" W., 37.49 feet
to the Southeasterly line of Parcel 3 as described in the deed
recorded October 21, 1985 in Book J492 of Official Records, at
page 1708, Santa Clara County Records;
thence along said Southeasterly line N. 44 45' 22" E.,
230.93 feet;
thence Northeasterly along a curve to the right having a
radius at 325.00 feet through a central angle of 45 24' 36"
for an arc length of 257.58 feet;
thence S. 89 50' 02" E., 2099.12 feet;
thence along a curve to the left, having a radius of
2000.00 feet, through a central angle of 6 03' 43" for an arc
length of 211.60 feet;
thence N. 84 06' 15" E., 709.89 feet;
thence along a curve to the right having a radius of
350.00 feet through a central angle of 31 13' 08" for an arc
length of 190.71 feet;
thence S. 64 40' 37" E., 358.91 feet;
thence along a curve to the right having a radius of
226.00 feet through a central angle of 42 17' 12" for an arc
length of 166.80 feet to a point of reverse curvature;
thence along a curve lo the left having a radius 173.00 feet
through a central angle of 55 40' 26" for an arc length of
168.10 feet to a point of compound curvature;
thence along a curve, to the left having a radius of
43.00 feet through a central angle of 106 08' 43" for an arc
length of 79.66 feet to a point of reverse curvature;
thence along a curve to the right having a radius of
1065.00 feet through a central angle of 2 47' 46" for an arc
length of 51.97 feet;
thence N. 1 24' 49" W, 358.65 feet;
thence along a curve to the left having a radius of
931.00 feet through a central angle of 1 55' 58" for an arc
length of 31.40 feet to a point on the Westerly line of Zanker
Road;
thence along said Westerly line S 7 05' 54" E., 546.38 feet
to the Southerly line of said parcel described in said deed
recorded July 26, 1984;
thence along said Southerly line S. 88 44' 54" W.,
72.55 feet;
thence Northwesterly along a non-tangent curve to the right
having a radius of 226.00 feet whose radius point bears N. 0
26' 07" E., through a central angle of 67 10' 28" for an arc
length of 264.97 feet to a point of reverse curvature;
thence along a curve to the left having a radius of
173.00 feet through a central angle of 42 17' 12" for an arc
length of 127.68 feet;
thence N. 64 40' 37" W. 358.91 feet;
thence along a curve to the left having a radius of
297.00 feet through a central angle of 31 13' 08" for an arc
length of 161.83 feet;
thence S. 84 06' 15" W., 709.89 feet;
thence along a curve to the right having a radius of
2053.00 feet through a central angle of 6 03' 43" for an arc
length of 217.71 feet;
thence N. 89 50' 02" W., 1574.68 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence S. 0 09' 58" W., 247.88 feet;
thence along curve to the right having a radius of 177.00 feet
through a central angle of 37 22' 50" for an arc length of
115.48 feet to said Southerly line, being also the
Northwesterly corner of Parcel 1 shown on the Parcel Map
recorded in Book 531 of Maps at page 42 Santa Clara County
Records;
thence along said Southerly line S. 88 44' 54" W.,
69.29 feet;
thence leaving said line N. 37 32' 48" E., 43.41 feet;
thence along a curve to the left having a radius of
123.00 feet through a central angle of 37 22' 50" for an arc
length of 80.25 feet;
thence N. 0 09' 58" E., 247.88 feet;
thence along a curve to the left having a radius of 50.00 feet
through a central angle of 90 00' 00" for an arc length of
78.54 feet;
thence N. 89 50' 02" W., 365.69 feet;
thence along a curve to the left having a radius of
280.00 feet through a central angle of 45 24' 36" for an arc
length of 221.92 feet;
thence S. 44 45' 22" W., 532.74 feet to the Southwesterly
line of said Parcel 4;
thence along said Southwesterly N. 45 14' 38" W., 27.00 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion described in the Grant Deed to The City of San
Jose, a municipal corporation, recorded August 20, 1987 in
Book K267, page 162 Official Records, and being more
particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, State of California being a
portion of the parcel of land described in the Deed recorded
July 26, 1984 in Book I749 of Official Records, at page 539,
Santa Clara County Records, being more particularly described
as follows:
Beginning at the Northeasterly corner of said parcel, said
corner being on the Westerly line of Zanker Road and Southerly
line of Highway 237;
thence along the Easterly line of said Parcel, S. 7 05' 54"
E. 99.01 feet;
thence Northerly along a non-tangent curve to the left having
a radius of 931.00 feet whose radius point bears S. 79 08'
59" W. through a central angle of 3 39' 23" for an arc length
of 59.41 feet to a point of compound curvature;
thence along a curve to the left having a radius of 43.00 feet
through a central angle of 85 24' 20" for an arc length of
64.10 feet to the Northerly line of said Parcel;
thence along said Northerly line N. 60 05' 16" E, 50.59 feet
to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
All that certain real property situate in the City of San
Jose, County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel 3 as described in
the Deed from Highway 237 Associates, a California general
partnership, to John Arrillaga, et al, recorded October 21,
1985 in Book J492 of Official Records, at page 1708, Santa
Clara County Records; thence from said point of beginning,
along the Northerly prolongation of the Westerly line of said
Parcel 3, N. 9 29' 16" W., 11.25 feet; thence leaving said
Northerly prolongation N. 88 43' 01" E., 202.59 feet; thence
N. 89 49' 56" E. 330.95 feet; thence N. 0 58' 44" E.,
6.61 feet to a point in the Southerly line of that certain
6.465 acre parcel described in the Deed from Edward S.J. Cali,
et al, to the State of California; recorded February 17, 1970
in Book 8830 of Official Records at page 352 Santa Clara
County Records; thence along said Southerly line S 89 01' 16"
E., 1954.77 feet; thence leaving said Southerly line S. 86
14' 18" E., 317.01 feet to a point in the general Northerly
line of the 6.474 acre parcel described in the Deed from
Metropolitan Life Insurance Company, a New York corporation to
the City of San Jose, a municipal corporation of the State of
California recorded August 20, 1987 in Book K267 of Official
Records at page 162 Santa Clara County Records; thence along
said general Northerly line the
following courses; S 84 55' 33" W. 51.74 feet; from a tangent
bearing of S. 84 64' 26" W. along a curve to the right with a
radius of 1999.89 feet, through a central angle of 6 03' 42"
for an arc length of 211.58 feet N. 89 01' 32" W.
2099.03 feet and from a tangent bearing of N. 89 01' 57" W.,
along a curve to the left with a radius of 324.98 feet,
through a central angle of 43 13' 13" for an arc length of
245.14 feet to the Southeasterly corner of said Parcel 3;
thence along the Easterly line of said Parcel 3 N. 0 58' 29"
E., 88.17 feet to the Northeast corner of said Parcel 3;
thence along the Northerly line of said Parcel 3 N. 89 01'
31" W., 218.48 feet to the point of beginning.
ALSO EXCEPTING THEREFROM:
That portion thereof as shown in that Final Order of
Condemnation recorded March 30, 1994 in Book N373, page 560,
Official Records and all that portion lying thereof and being
more particularly described as follows:
Beginning at the Northwest corner of that certain 0.019 acre
parcel described in the Deed from Metropolitan Life Insurance
Company, a New York Corporation, to the City of San Jose, a
municipal corporation of the State of California, recorded
August 20, 1987 in Book K267 of Official Records at page 162
Santa Clara County Records; thence from said point of
beginning, along the Southerly line of that certain 6.465 acre
parcel of land described in the Deed from Edward S.J. Cali, et
al to the State of California, recorded February 17, 1970 in
Book 8830 of Official Records at page 352 Santa Clara County
Records, the following courses: S 80 55' 58" W.
1034.16 feet; along a tangent curve to the right with a radius
of 1395.00 feet, through a central angle of 16 09' 23" for an
arc length of 393.37 feet and N. 89 01' 16" W. 275.13 feet;
thence leaving said Southerly line S. 86 14' 18" E.
317.01 feet to a point in a Northerly line of that certain
6.474 acre parcel described in said Deed to the City of San
Jose; thence along said Northerly line the following courses:
N. 84 55' 33" E. 658.09 feet and along a tangent curve to
the right with a radius of 349.98 feet, through a central
angle of 0 20' 33" for an arc length of 2.09 feet; thence
leaving said Northerly line N. 85 16' 06" E. 587.33 feet;
thence along a tangent curve to the right with a radius of
15.00 feet, through a central angle of 75 05' 51" for an arc
length of 19.66 feet; thence S. 19 35' 03" E. 467.07 feet;
thence S. 49 41' 05 W. 25.15 feet to a point in said
Northerly line; thence along said Northerly line and a
Westerly line of said 6.474 acre parcel the following courses:
from a tangent bearing of S. 77 14' 33" E along a curve to
the left with a radius of 43.00 feet, through a central angle
of 106 08' 43" for an arc length of 79.66 feet to a point of
reverse curvature; thence along a tangent curve to the right
with a radius of 1064.94 feet, through a central angle of 2
47' 46" for an arc length of 51.97 feet; thence N. 0 35' 30"
W. 358.63 feet; thence along a tangent curve to the left with
a radius of 830.95 feet, through a central angle of 1 55' 59"
for an arc length of 31.41 feet to the Northeast corner of
said 6.474 acre parcel; thence along the Northerly
prolongation of the Easterly line of said 6.474 acre parcel N.
6 16' 05" W. 121.98 feet to the most Southerly corner of said
0.019 acre parcel; thence along the Westerly line of said
0.019 acre parcel the following courses: from a tangent
bearing of N. 10 01' 13" W. along a curve to the left with a
radius of 930.95 feet, through a central angle of 3 39' 22"
for an arc length of 59.41 feet; thence from a tangent bearing
of N. 13 40' 35" W. along a curve to the left with a radius
of 43.00 feet, through a central angle of 85 23' 27" for an
arc length of 64.09 feet to the point of beginning.
PARCEL SIX:
All of Parcel Two as shown upon that Parcel Map which filed
for record in the Office of the Recorder of the County of
Santa Clara, State of California on July 13, 1984 in Book 531
of Maps, at pages 41 and 42.
APN: 097-03-59,79,80,84,85,86,87,88,90,93,102,103,104
ARB: 097-3-x5,x6,8,9,x15,x16,20,21,25.1,25.2
Exhibit E
Acknowledgment of Disclaimer of Representations and Warranties
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES (this "Certificate") is made as of
___________________, ____, by [3COM or the Applicable
Purchaser, as the case may be], a ___________________
("Grantee").
Contemporaneously with the execution of this Certificate,
BNP Leasing Corporation, a Delaware corporation ("BNPLC"), is
executing and delivering to Grantee (1) a Corporation Grant
Deed and (2) a Bill of Sale, Assignment of Contract Rights and
Intangible Assets (the foregoing documents and any other
documents to be executed in connection therewith are herein
called the "Conveyancing Documents" and any of the properties,
rights or other matters assigned, transferred or conveyed
pursuant thereto are herein collectively called the "Subject
Property").
Notwithstanding any provision contained in the
Conveyancing Documents to the contrary, Grantee acknowledges
that BNPLC makes no representations or warranties of any
nature or kind, whether statutory, express or implied, with
respect to environmental matters or the physical condition of
the Subject Property, and Grantee, by acceptance of the
Conveyancing Documents, accepts the Subject Property "AS IS,"
"WHERE IS," "WITH ALL FAULTS" and without any such
representation or warranty by Grantor as to environmental
matters, the physical condition of the Subject Property,
compliance with subdivision or platting requirements or
construction of any improvements. Without limiting the
generality of the foregoing, Grantee hereby further
acknowledges and agrees that warranties of merchantability and
fitness for a particular purpose are excluded from the
transaction contemplated by the Conveyancing Documents, as are
any warranties arising from a course of dealing or usage of
trade. Grantee hereby assumes all risk and liability (and
agrees that BNPLC shall not be liable for any special, direct,
indirect, consequential, or other damages resulting or arising
from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property,
except for damages proximately caused by (and attributed by
any applicable principles of comparative fault to) the wilful
misconduct, Active Negligence or gross negligence of BNPLC,
its agents or employees. As used in the preceding sentence,
"Active Negligence" of a party means, and is limited to, the
negligent conduct of activities actually on or about the
Property by that party in a manner that proximately causes
actual bodily injury or property damage to be incurred.
"Active negligence" shall not include (1) any negligent
failure of BNPLC to act when the duty to act would not have
been imposed but for BNPLC's status as owner of the Subject
Property or as a party to the transactions pursuant to which
BNPLC is delivering this instrument (the "Applicable
Transactions"), (2) any negligent failure of any other party
to act when the duty to act would not have been imposed but
for such party's contractual or other relationship to BNPLC or
participation or facilitation in any manner, directly or
indirectly, of the Applicable Transactions, or (3) the
exercise in a lawful manner by BNPLC (or any party lawfully
claiming through or under BNPLC) of any remedy provided in
connection with the Applicable Transactions.
The provisions of this Certificate shall be binding on
Grantee, its successors and assigns and any other party
claiming through Grantee. Grantee hereby acknowledges that
BNPLC is entitled to rely and is relying on this Certificate.
EXECUTED as of ________________, ____.
____________________, a____________________
By:
Name:
Title:
Exhibit F
Documentary Transfer Tax Request
ACCOUNTABLE FORM #____________________
DATE:____________________
To: Santa Clara County Recorder
Subject: REQUEST THAT DOCUMENTARY TRANSFER TAX
DECLARATION BE MADE IN ACCORDANCE WITH REVENUE CODE
11932.
Re: Instrument Title: Corporation Grant Deed
Name of Party Conveying Title: BNP Leasing Corporation
The Documentary Transfer Tax is declared to be in the amount
of $_______________ for the referenced instrument and is:
__Computed on full value of property conveyed.
__Computed on full value less liens/encumbrances remaining
thereon at time of sale.
This separate declaration is made in accordance with
_________________________________. It is requested that the
amount paid be indicated on the face of the document after the
permanent copy has been made.
Sincerely,
Individual (or his agent) who made, signed or issued instrument
PART I
RECORDING REFERENCE DATA:
Serial #____________ Date Recorded____________________
SEPARATE PAPER AFFIXED TO INSTRUMENT:
"Tax paid" indicated on the face of instrument and the
separate request (DRA 3-A) was affixed for Recorder by:
__________________________________ Date______________
Documentary Transfer Tax Collector
Witnessed by:_____________________ Date______________
Mail Clerk
(Note: Prepare photo for Recorder file.)
PART II ACCOUNTABLE FORM #
REFERENCE DATA: Title:
Serial: ____________ Date:_______________
INSTRUCTIONS:
1. This slip must accompany document.
2. Mail Clerk hand carry document to Tax Collector
to indicate the amount of tax paid.
Exhibit G
SECRETARY'S CERTIFICATE
The undersigned,____________________ Secretary of BNP
Leasing Corporation, a Delaware corporation (the "Corporation"),
hereby certifies as follows:
1. That he is the duly, elected, qualified and acting
Secretary [or Assistant Secretary] of the Corporation and has
custody of the corporate records, minutes and corporate seal.
2. That the following named persons have been properly
designated, elected and assigned to the office in the
Corporation as indicated below; that such persons hold such
office at this time and that the specimen signature appearing
beside the name of such officer is his or her true and correct
signature.
[The following blanks must be completed with the names and
signatures of the officers who will be signing the deed and
other Required Documents on behalf of the Corporation.]
Name Title Signature
3. That the resolutions attached hereto and made a part
hereof were duly adopted by the Board of Directors of the
Corporation in accordance with the Corporation's Articles of
Incorporation and Bylaws. Such resolutions have not been
amended, modified or rescinded and remain in full force and
effect.
IN WITNESS WHEREOF, I have hereunto signed my name and
affixed the seal of the Corporation on this ______, day of
____________, ____.
_________________________ [signature]
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION
WHEREAS, pursuant to that certain Purchase Agreement
(herein called the "Purchase Agreement") dated as of
November ___, 1996, by and between BNP Leasing Corporation
(the "Corporation") and [3COM OR THE APPLICABLE PURCHASER AS
THE CASE MAY BE] ("Purchaser"), the Corporation agreed to sell
and Purchaser agreed to purchase or cause the Applicable
Purchaser (as defined in the Purchase Agreement) to purchase
the Corporation's interest in the property (the "Property")
located in Santa Clara, California more particularly described
therein.
NOW THEREFORE, BE IT RESOLVED, that the Board of
Directors of the Corporation, in its best business judgment,
deems it in the best interest of the Corporation and its
shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in
accordance with the terms of the Purchase Agreement.
RESOLVED FURTHER, that the proper officers of the
Corporation, and each of them, are hereby authorized and
directed in the name and on behalf of the Corporation to cause
the Corporation to fulfill its obligations under the Purchase
Agreement.
RESOLVED FURTHER, that the proper officers of the
Corporation, and each of them, are hereby authorized and
directed to take or cause to be taken any and all actions and
to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and
agreements that shall be necessary, advisable or appropriate,
in such officer's sole and absolute discretion, to carry out
the intent and to accomplish the purposes of the foregoing
resolutions.
Exhibit H
BNP LEASING CORPORATION
717 N. HARWOOD
SUITE 2630
DALLAS, TEXAS 75201
____________, ______
[Title Insurance Company]
_________________
_________________
_________________
Re: Recording of Grant Deed to [3COM or the Applicable
Purchaser] ("Purchaser")
Ladies and Gentlemen:
BNP Leasing Corporation has executed and delivered to
Purchaser a Grant Deed in the form attached to this letter.
You are hereby authorized and directed to record the Grant
Deed at the request of Purchaser.
Sincerely,
Exhibit I
FIRPTA STATEMENT
Section 1445 of the Internal Revenue Code of 1986, as
amended, provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign
person. Sections 18805, 18815 and 26131 of the California
Revenue and Taxation Code, as amended, provide that a
transferee of a California real property interest must
withhold income tax if the transferor is a nonresident seller.
To inform [3COM or the Applicable Purchaser] (the
"Transferee") that withholding of tax is not required upon the
disposition of a California real property interest by
transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the
Seller:
1. The Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms
are defined in the Internal Revenue Code and Income Tax
Regulations);
2. The United States employer identification number for
the Seller is _____________________;
3.The office address of the Seller is ______________
__________________________________________.
[Note: BNPLC MUST INCLUDE EITHER ONE, BUT ONLY ONE, OF THE
FOLLOWING REPRESENTATIONS IN THE FIRPTA STATEMENT, BUT IF THE
ONE INCLUDED STATES THAT BNPLC IS DEEMED EXEMPT FROM
CALIFORNIA INCOME AND FRANCHISE TAX, THEN BNPLC MUST ALSO
ATTACH A WITHHOLDING CERTIFICATE FROM THE CALIFORNIA FRANCHISE
TAX BOARD EVIDENCING THE SAME:
4. The Seller is qualified to do business in California.
OR
4. The Seller is deemed to be exempt from the withholding
requirement of California Revenue and Taxation Code Section
26131(e), as evidenced by the withholding certificate from the
California Franchise Tax Board which is attached.]
The Seller understands that this certification may be
disclosed to the Internal Revenue Service and/or to the
California Franchise Tax Board by the Transferee and that any
false statement contained herein could be punished by fine,
imprisonment, or both.
The Seller understands that the Transferee is relying on
this affidavit in determining whether withholding is required
upon said transfer. The Seller hereby agrees to indemnify and
hold the Transferee harmless from and against any and all
obligations, liabilities, claims, losses, actions, causes of
action, demands, rights, damages, costs, and expenses
(including but not limited to court costs and attorneys' fees)
incurred by the Transferee as a result of any false misleading
statement contained herein.
Under penalties of perjury I declare that I have examined
this certification and to the best of my knowledge and belief
it is true, correct and complete, and I further declare that I
have authority to sign this document on behalf of the Seller.
Dated: ___________, ____.
By:
Name:
Title:
[North First Street Property]
