Amended And Restated Lease Agreement

EXHIBIT 10.1


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$25,000,000


AMENDED AND RESTATED


LEASE AGREEMENT


BETWEEN


BNP LEASING CORPORATION


("BNPLC")


AND


SOLECTRON WASHINGTON, INC.


("SOLECTRON")


JULY 1, 1998


(EVERETT, WASHINGTON)


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PURSUANT TO AND AS MORE PARTICULARLY PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE, THIS LEASE AND THE PURCHASE AGREEMENT REFERENCED HEREIN ARE TO CONSTITUTE, FOR INCOME TAX PURPOSES ONLY, A FINANCING ARRANGEMENT OR CONDITIONAL SALE. AS PROVIDED IN SUBPARAGRAPH 26 OF THIS LEASE, BNPLC AND SOLECTRON EXPECT THAT SOLECTRON (AND NOT BNPLC) SHALL BE TREATED AS THE TRUE OWNER OF THE PROPERTY FOR INCOME TAX PURPOSES, THEREBY ENTITLING SOLECTRON (AND NOT BNPLC) TO TAKE DEPRECIATION DEDUCTIONS AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER.


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TABLE OF CONTENTS


Page
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1. TERM.................................................................................2


2. NO LEASE TERMINATION.................................................................3
(a) Status of Lease...............................................................3
(b) Waiver by Solectron...........................................................3


3. USE AND CONDITION OF THE PROPERTY....................................................4
(a) Use...........................................................................4
(b) Condition of the Property.....................................................4
(c) Consideration for and Scope of Waiver.........................................5


4. RENT.................................................................................5
(a) Base Rent Generally...........................................................5
(b) Calculation of and Due Dates for Base Rent....................................5
(i) Amount Payable On the Base Rent Commencement Date......................5
(ii) Determination of Payment Due Dates After the Base
Rent Commencement Date.................................................5
(iii) Base Rent Formula......................................................6


(c) Additional Rent...............................................................6
(d) Commitment Fees...............................................................6
(e) Administrative Agency Fees....................................................7
(f) No Demand or Setoff...........................................................7
(g) Default Interest and Order of Application.....................................7


5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY........................7
(a) "Net" Lease Generally.........................................................7
(b) Impositions...................................................................7
(c) Increased Costs; Capital Adequacy Charges.....................................8
(d) Solectron's Payment of Other Losses; General Indemnification..................8
(e) Withholding Taxes............................................................11


6. CONSTRUCTION........................................................................12
(a) Advances; Outstanding Construction Allowance.................................12
(b) Calculation of Carrying Costs................................................12
(c) Limits on the Amount of Carrying Costs................................13
(d) Construction Projects........................................................13
(i) Preconstruction Approvals by BNPLC....................................13
(ii) Scope Changes.........................................................14
(iii) Failure by BNPLC to Respond to a Request for Approval.................14
(iv) Responsibility for Construction.......................................14
(v) Construction Warranty by Solectron....................................15


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(vi) Value Added...........................................................15
(vii) Estoppel Letters Required.............................................15
(viii) Advances Not a Waiver.................................................16
(e) Conditions to Solectron's Right to Receive Construction Advances.............16
(i) Prior Notice..........................................................16
(ii) Amount of the Advances................................................16
a) Limit Dependent Upon the Maximum Construction Allowance.........16
b) Limit Dependent Upon Costs Previously Incurred by Solectron.....16
c) Limit Dependent Upon Projected Costs Yet to be Incurred.........16
d) Minimum Amount Imposed for Administrative Convenience...........16
(iii) Insurance.............................................................17
a) Title Insurance.................................................17
b) Builder's Risk Insurance........................................17
(iv) Progress of Construction..............................................17
(v) Evidence of Costs and Expenses to be Reimbursed.......................17
(vi) No Sale of BNPLC's Interest...........................................17
(vii) No Landlord's Election to Continue Construction or Event of Default...17
(viii) Certificate of No Default and Other Matters...........................17
(ix) Funding by Participants...............................................18
(f) Breakage Costs for Construction Advances Requested But Not Taken.............19
(g) Completion Notice............................................................19
(h) Landlord's Election to Continue Construction.................................19
(i) Take Control of the Property..........................................20
(ii) Continuation of Construction..........................................20
(iii) Arrange for Turnkey Construction......................................21
(iv) Suspension or Termination of Construction.............................21


7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC...........................21
(a) Cooperation of BNPLC to Facilitate Construction and Development..............21
(b) Actions Permitted by Solectron Without BNPLC's Consent.......................23
(c) Waiver of Landlord's Liens...................................................23
(d) Limited Representations by BNPLC Concerning Accounting Matters...............24
(e) Other Limited Representations by BNPLC.......................................25
(i) No Default or Violation...............................................25
(ii) No Suits..............................................................25
(iii) Enforceability........................................................25
(iv) Organization..........................................................25
(v) Not a Foreign Person..................................................25
(f) Keeping Proprietary Information Confidential.................................26


8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC............................26


9. ENVIRONMENTAL.......................................................................27
(a) Environmental Covenants by Solectron.........................................27
(b) Right of BNPLC to do Remedial Work Not Performed by Solectron................27
(c) Environmental Inspections and Reviews........................................28
(d) Communications Regarding Environmental Matters...............................28


10. INSURANCE REQUIRED AND CONDEMNATION.................................................29


(ii) 4


(a) Liability Insurance..........................................................29
(b) Property Insurance...........................................................29
(c) Failure to Obtain Insurance..................................................30
(d) Condemnation.................................................................30


11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS..................................31
(a) Collection of Insurance and Condemnation Proceeds Generally..................31
(b) Administration of Remaining Proceeds; Solectron's Obligation to Restore......31
(c) Special Provisions Concerning Event of Defaults and Qualified Payments.......32
(d) Takings of All or Substantially All of the Property..........................32
(e) Waiver of Subrogation........................................................32


12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON CONCERNING THE
PROPERTY............................................................................33
(a) Compliance with Covenants and Laws...........................................33
(b) Operation of Property........................................................33
(c) Debts for Construction, Maintenance, Operation or Development................34
(d) Repair, Maintenance, Alterations and Additions...............................34
(e) Compliance With Permitted Encumbrances and Development Contracts.............35
(f) Modification of Permitted Encumbrances and Development Contracts.............35
(g) Books and Records Concerning the Property....................................35


13. ASSIGNMENT AND SUBLETTING BY SOLECTRON..............................................35
(a) BNPLC's Consent Required.....................................................35
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters........36
(c) Consent Not a Waiver.........................................................36


14. ASSIGNMENT BY BNPLC.................................................................36
(a) Restrictions on Transfers....................................................36
(b) Effect of Permitted Transfer or other Assignment by BNPLC....................36


15. BNPLC'S RIGHT OF ACCESS.............................................................37


16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOLECTRON........................37
(a) Negative Covenants...........................................................37
(i) Multi employer ERISA Plans............................................37
(ii) Prohibited ERISA Transaction..........................................38
(b) Financial Statements; Required Notices; Certificates as to Default...........38
(c) No Default or Violation......................................................39
(d) No Suits.....................................................................39
(e) Enforceability...............................................................39
(f) Financial Matters............................................................39
(g) Organization.................................................................40
(h) ERISA........................................................................40
(i) Use of Proceeds..............................................................40
(j) Investment Company Act.......................................................40
(k) Omissions....................................................................40
(l) Not a Foreign Person.........................................................40
(m) Further Assurances...........................................................41


(iii)


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17. EVENTS OF DEFAULT...................................................................41
(a) Definition of Events of Default..............................................41


18. REMEDIES............................................................................43
(a) Basic Remedies...............................................................43
(b) Enforceability...............................................................45
(c) Remedies Cumulative..........................................................45


19. DEFAULT BY BNPLC....................................................................45


20. QUIET ENJOYMENT.....................................................................45


21. SURRENDER UPON TERMINATION..........................................................46


22. HOLDING OVER BY SOLECTRON...........................................................46


23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE PURCHASE AGREEMENT AND CLOSING CERTIFICATE.46


24. WAIVER OF JURY TRIAL................................................................47


25. MISCELLANEOUS.......................................................................47
(a) Notices......................................................................47
(b) Severability.................................................................49
(c) No Merger....................................................................49
(d) No Implied Waiver............................................................49
(e) NO IMPLIED REPRESENTATIONS BY BNPLC..........................................49
(f) Entire Agreement.............................................................49
(g) Binding Effect...............................................................50
(h) Time is of the Essence.......................................................50
(i) Governing Law................................................................50
(j) Paragraph Headings...........................................................50
(k) Other Terms and References...................................................50
(l) Not a Partnership, Etc.......................................................50


26. INCOME TAX REPORTING................................................................50


27. PROPRIETARY INFORMATION AND CONFIDENTIALITY.........................................52


(iv)


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EXHIBITS AND SCHEDULES


Exhibit A....................................................................Legal Description


Exhibit B...........................................................Permitted Encumbrance List


Exhibit C......................................Description of the initial Construction Project


Exhibit D.........................................................Contractor's Estoppel Letter


Exhibit E..........................................................Architect's Estoppel Letter


Exhibit F...................................................................Draw Request Forms


Exhibit G.......................................Standard Notice of Request for Action by BNPLC


Exhibit H....................................Notice of Request Requiring an Expedited Response


Exhibit I................................................................Intentionally Deleted


Exhibit J...............................................................Compliance Certificate


Exhibit K...........................................................Libor Period Election Form


Schedule 1.......................................................List of Development Documents


Schedule 2...........................List of Claims Pending or Threatened Against the Property


List of Defined Terms.......................................................Shared Definitions


(v)


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AMENDED AND RESTATED
LEASE AGREEMENT


This AMENDED AND RESTATED LEASE AGREEMENT (this "LEASE"), by and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and SOLECTRON WASHINGTON, INC., a California corporation ("SOLECTRON"), is dated as of July 1, 1998, the Effective Date. ("EFFECTIVE Date" and other capitalized terms used and not otherwise defined in this Lease are intended to have the meanings assigned to them in the List of Defined Terms attached to and made a part of this Lease.)


RECITALS


Pursuant to the Existing Contract, which covers the Land described in Exhibit A, BNPLC acquired the Land and any appurtenances thereto from Seller on or about December 1, 1997. Contemporaneously with the purchase of the Land, BNPLC leased it to Solectron pursuant to a Lease Agreement dated as of December 1, 1997 (the "PRIOR LEASE").


This Lease is intended to amend, restate and replace the Prior Lease in its entirety as of the Effective Date.


GRANTING CLAUSES


In consideration of the rent to be paid and the covenants and agreements to be performed by Solectron, as hereinafter set forth, BNPLC does hereby LEASE, DEMISE and LET unto Solectron for the term hereinafter set forth all right, title and interest of BNPLC, now owned or hereafter acquired, in and to:


(1) the Land;


(2) any and all Improvements;


(3) all easements and other rights appurtenant to the Land or to
the Improvements, whether now owned or hereafter acquired by BNPLC; and


(4) (A) any land lying within the right-of-way of any street,
open or proposed, adjoining the Land, (B) any sidewalks and alleys
adjacent to the Land and (C) any strips and gores between the Land and
abutting land.


BNPLC's interest in all property described in clauses (1) through (4) above are hereinafter referred to collectively as the "REAL PROPERTY".


To the extent, but only to the extent, that assignable rights or interests in, to or under the following have been or will be acquired by BNPLC under the Existing Contract or acquired by BNPLC pursuant to Paragraph 8 below, BNPLC also hereby grants and assigns to Solectron for the term of this Lease the right to use and enjoy (and, in the case of contract rights, to enforce) such rights or interests of BNPLC:


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(a) any goods, equipment, furnishings, furniture and other
tangible personal property of whatever nature that are located on the
Real Property and all renewals or replacements of or substitutions for
any of the foregoing;


(b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and


(c) any permits, licenses, franchises, certificates, and other
rights and privileges against third parties related to the Real
Property.


Such rights and interests of BNPLC, whether now existing or hereafter arising, are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property and the Personal Property are hereinafter sometimes collectively called the "PROPERTY."


However, the leasehold estate conveyed hereby and Solectron's rights hereunder are expressly made subject and subordinate to the terms and conditions of this Lease, to the matters listed in Exhibit B and all other Permitted Encumbrances, and to any other claims or encumbrances not constituting Liens Removable by BNPLC.


GENERAL TERMS AND CONDITIONS


The Property is leased by BNPLC to Solectron and is accepted and is to be used and possessed by Solectron upon and subject to the following terms and conditions:


1. TERM. The term of this Lease (the "TERM") shall commence on and include the Effective Date, and end on the first Business Day of July, 2003, unless sooner terminated as expressly herein provided. Solectron shall be entitled to accelerate the Designated Sale Date (and thus accelerate the purchase of BNPLC's interest in the Property by Solectron or by an Applicable Purchaser pursuant to the Purchase Agreement) by sending a notice to BNPLC as provided in clause (2) of the definition of "Designated Sale Date" in the List of Defined Terms. In the event, because of Solectron's election to so accelerate the Designated Sale Date or for any other reason, the Designated Sale Date occurs before the end of the scheduled Term, Solectron may terminate this Lease on or after the Designated Sale Date; provided, however, as a condition to any such termination by Solectron, Solectron must have done the following prior to the termination:


(a) purchased or caused an Applicable Purchaser to purchase the Property pursuant to the Purchase Agreement and satisfied all of Solectron's other obligations under the Purchase Agreement;


(b) paid to BNPLC all Base Rent, all Commitment Fees, all Administrative Agency Fees and all other Rent accrued through the Designated Sale Date; and


(c) paid any Breakage Costs caused by BNPLC's sale of the Property pursuant to the Purchase Agreement.


The Term may be extended at the option of Solectron for two successive periods of five (5) years each; provided, however, that prior to any such extension the following conditions must have been satisfied: (A) at least one hundred eighty (180) days prior to the commencement of any such extension, BNPLC and Solectron must have agreed in writing upon, and received the written consent and approval of BNPLC's Parent and all other Participants to (1) a corresponding extension not only to the date for the expiration of the Term specified above in this Section,


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but also to the date specified in clause (1) of the definition of Designated Sale Date in the List of Defined Terms attached hereto, and (2) an adjustment to the Rent that Solectron will be required to pay for the extension, it being expected that the Rent for the extension may be different than the Rent required for the original Term, and it being understood that the Rent for any extension must in all events be satisfactory to both BNPLC and Solectron, each in its sole and absolute discretion; (B) there must be no Event of Default continuing hereunder at the time of Solectron'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 BNPLC and Solectron must have agreed upon the Rent required for any extension of the Term, neither Solectron nor BNPLC is willing to submit itself to a risk of liability or loss of rights hereunder for being judged unreasonable. Accordingly, both Solectron and BNPLC hereby disclaim any obligation express or implied to be reasonable in negotiating the Rent for any such extension. Subject to the changes to the Rent payable during any extension of the Term as provided in this Paragraph, if Solectron 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 Solectron shall continue without interruption and without any loss of priority over other interests in or claims against the Property that may be created or arise after the date hereof and before the extension.


2. NO LEASE TERMINATION.


(a) Status of Lease. Except as expressly provided herein, this Lease shall not terminate, nor shall Solectron have any right to terminate this Lease, nor shall Solectron be entitled to any abatement of the Rent, nor shall the obligations of Solectron under this Lease be excused, for any reason whatsoever, including any of the following: (i) any damage to or the destruction of all or any part of the Property from whatever cause, (ii) the taking of the Property or any portion thereof by eminent domain or otherwise for any reason, (iii) the prohibition, limitation or restriction of Solectron'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 Solectron or of anyone claiming through or under Solectron (provided, that if Solectron is wrongfully evicted by BNPLC or by any third party lawfully exercising its rights under a Lien Removable by BNPLC, then Solectron will have the remedies described in Paragraph 19 below), (v) any default on the part of BNPLC under this Lease or under any other agreement to which BNPLC and Solectron are parties, (vi) the inadequacy in any way whatsoever of the design, construction, assembly or installation of any improvements, fixtures or tangible personal property included in the Property, it being understood that BNPLC has not made, does not make and will not make any representation express or implied as to the adequacy thereof, (vii) any latent or other defect in the Property or any change in the condition thereof or the existence with respect to the Property of any violations of Applicable Laws or (viii) any other cause whether similar or dissimilar to the foregoing. It is the intention of the parties hereto that the obligations of Solectron hereunder shall be separate and independent of the covenants and agreements of BNPLC, that the Base Rent and all other sums payable by Solectron hereunder shall continue to be payable in all events and that the obligations of Solectron hereunder shall continue unaffected, unless the requirement to pay or perform the same shall have been terminated or limited pursuant to an express provision of this Lease.


(b) Waiver by Solectron. Without limiting the foregoing, Solectron waives to the extent permitted by Applicable Laws, except as otherwise expressly provided herein, all rights to which Solectron may now or hereafter be entitled by law (including any such rights arising because of any implied "warranty of suitability" or other warranty un ...