Lease Agreement Dated 10/20/98

50,000,000


LEASE AGREEMENT


BETWEEN


BNP LEASING CORPORATION


("BNPLC")


AND


SOLECTRON GEORGIA CORPORATION


("SGC")


OCTOBER 20, 1998


(GWINNETT COUNTY, GEORGIA)


================================================================================


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 SGC EXPECT THAT SGC (AND NOT BNPLC) SHALL BE TREATED AS THE TRUE OWNER OF THE PROPERTY FOR INCOME TAX PURPOSES, THEREBY ENTITLING SGC (AND NOT BNPLC) TO TAKE DEPRECIATION DEDUCTIONS AND OTHER TAX BENEFITS AVAILABLE TO THE OWNER. 34083.1


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TABLE OF CONTENTS


Page
---- 1. TERM...............................................................................2
(a) Scheduled Term................................................................2
(b) Automatic Termination as of the Base Rent Commencement Date Resulting
From an Election by SGC to Terminate the Purchase Option and SGC's Initial
Remarketing Rights and Obligations............................................3
(c) Election by BNPLC to Terminate After an Issue 97-10 Election..................3
(d) Election by SGC to Terminate After Accelerating the Designated Sale Date......3
(e) Extension of the Term.........................................................3


2. NO LEASE TERMINATION...............................................................4
(a) Status of Lease...............................................................4
(b) Waiver by SGC.................................................................4


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


4. RENT...............................................................................6
(a) Base Rent Generally...........................................................6
(b) Calculation of and Due Dates for Base Rent....................................6
(i) Amount Payable On the Base Rent Commencement Date.......................6
(ii) Determination of Subsequent Payment Due Dates...........................6
(iii) Base Rent Formula.......................................................6
(c) Additional Rent...............................................................7
(d) Commitment Fees...............................................................7
(e) Administrative Agency Fees....................................................7
(f) Issue 97-10 Prepayments.......................................................7
(g) No Demand or Setoff...........................................................8
(h) Default Interest and Order of Application.....................................8


5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY......................8
(a) "Net" Lease Generally.........................................................8
(b) Impositions...................................................................8
(c) Increased Costs; Capital Adequacy Charges.....................................9
(d) SGC's Payment of Other Losses; General Indemnification........................9
(e) Exceptions and Qualifications to Indemnities.................................11
(f) Withholding Taxes............................................................12


6. CONSTRUCTION OF NEW IMPROVEMENTS AND ACQUISITION OF EXISTING IMPROVEMENTS.........13


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(a) Advances; Outstanding Construction Allowance.................................13
(b) Calculation of Carrying Costs................................................13
(i) Carrying Costs Formula.................................................13
(ii) Limits on the Amount of Carrying Costs.................................14
(c) SGC's Right to Control the Construction Project..............................14
(d) Landlord's Election to Continue Construction.................................14
(i) Take Control of the Property...........................................14
(ii) Continuation of Construction...........................................14
(iii) Arrange for Turnkey Construction.......................................15
(iv) Suspension or Termination of Construction..............................15
(e) Powers Coupled With an Interest..............................................16
(f) Completion Notice............................................................16


7. OTHER OBLIGATIONS OF AND LIMITED REPRESENTATIONS BY BNPLC.........................16
(a) Cooperation of BNPLC to Facilitate Construction and Development..............16
(b) Actions Permitted by SGC Without BNPLC's Consent.............................17
(c) Waiver of Landlord's Liens...................................................18
(d) Limited Representations by BNPLC Concerning Accounting Matters...............18
(e) Other Limited Representations by BNPLC.......................................19
(i) No Default or Violation................................................19
(ii) No Suits...............................................................19
(iii) Enforceability.........................................................20
(iv) Organization...........................................................20
(v) Not a Foreign Person...................................................20
(f) Keeping Proprietary Information Confidential.................................20


8. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC..........................20


9. ENVIRONMENTAL.....................................................................21
(a) Environmental Covenants by SGC...............................................21
(b) Right of BNPLC to do Remedial Work Not Performed by SGC......................22
(c) Environmental Inspections and Reviews........................................22
(d) Communications Regarding Environmental Matters...............................23


10. INSURANCE REQUIRED AND CONDEMNATION...............................................23
(a) Liability Insurance..........................................................23
(b) Property Insurance...........................................................24
(c) Failure to Obtain Insurance..................................................24
(d) Condemnation.................................................................24


11. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS................................25
(a) Collection of Insurance and Condemnation Proceeds Generally..................25
(b) Administration of Remaining Proceeds; SGC's Obligation to Restore............25
(c) Special Provisions Concerning CMA Termination Events, Events of Default
and Qualified Payments.......................................................26
(d) Takings of All or Substantially All of the Property..........................26
(e) Waiver of Subrogation........................................................26


(ii) 4


12. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SGC
CONCERNING THE PROPERTY...........................................................27
(a) Compliance with Covenants and Laws...........................................27
(b) Operation of Property........................................................27
(c) Debts for Construction, Maintenance, Operation or Development................28
(d) Repair, Maintenance, Alterations and Additions...............................28
(e) Compliance With Permitted Encumbrances and Development Contracts.............28
(f) Modification of Permitted Encumbrances and Development Contracts.............29
(g) Books and Records Concerning the Property....................................29


13. ASSIGNMENT AND SUBLETTING BY SGC..................................................29
(a) BNPLC's Consent Required.....................................................29
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters........29
(c) Consent Not a Waiver.........................................................30


14. ASSIGNMENT BY BNPLC...............................................................30
(a) Restrictions on Transfers....................................................30
(b) Effect of Permitted Transfer or other Assignment by BNPLC....................30


15. BNPLC'S RIGHT OF ACCESS...........................................................30


16. OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF SGC............................31
(a) Negative Covenants...........................................................31
(i) Multi employer ERISA Plans............................................31
(ii) Prohibited ERISA Transaction..........................................31
(b) Financial Statements; Required Notices; Certificates as to Default...........31
(c) No Default or Violation......................................................32
(d) No Suits.....................................................................32
(e) Enforceability...............................................................32
(f) Financial Matters............................................................33
(g) Organization.................................................................33
(h) ERISA........................................................................33
(i) Use of Proceeds..............................................................33
(j) Investment Company Act.......................................................34
(k) Omissions....................................................................34
(l) Not a Foreign Person.........................................................34
(m) Further Assurances...........................................................34


17. EVENTS OF DEFAULT.................................................................34
(a) Definition of Events of Default..............................................34


18. REMEDIES..........................................................................36
(a) Basic Remedies...............................................................36
(b) Notice Required So Long As SGC 's Purchase Option and Initial Remarketing
Rights and Obligations Continue Under the Purchase Agreement.................38
(c) Enforceability...............................................................38
(d) Remedies Cumulative..........................................................38


19. DEFAULT BY BNPLC..................................................................39


(iii) 5


20. QUIET ENJOYMENT...................................................................39


21. SURRENDER UPON TERMINATION........................................................39


22. HOLDING OVER BY SGC...............................................................39


23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS................40


24. WAIVER OF JURY TRIAL..............................................................40


25. MISCELLANEOUS.....................................................................40
(a) Notices......................................................................40
(b) Severability.................................................................42
(c) No Merger....................................................................42
(d) No Implied Waiver............................................................42
(e) NO IMPLIED REPRESENTATIONS BY BNPLC..........................................42
(f) Entire Agreement.............................................................42
(g) Binding Effect...............................................................43
(h) Time is of the Essence.......................................................43
(i) Governing Law................................................................43
(j) Paragraph Headings...........................................................43
(k) Other Terms and References...................................................43
(l) Not a Partnership, Etc.......................................................43


26. INCOME TAX REPORTING..............................................................43


27. PROPRIETARY INFORMATION AND CONFIDENTIALITY.......................................44


28. USURY SAVINGS CLAUSE..............................................................45


EXHIBITS AND SCHEDULES


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


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


Notice by SGC of Election Not to Make Construction-Period Exhibit C......................................................Indemnity Payment


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


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


Exhibit F.................................................Insurance Requirements


Exhibit G.................................................Compliance Certificate


Exhibit H.............................................Libor Period Election Form


(iv) 6


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


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


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


(v) 7


LEASE AGREEMENT


This LEASE AGREEMENT (this "LEASE"), by and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and SOLECTRON GEORGIA CORPORATION, a Georgia corporation ("SGC"), is dated as of October 20, 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 is acquiring the Land and any appurtenances thereto from Seller contemporaneously with the execution of this Lease.


In anticipation of BNPLC's acquisition of the Land, BNPLC and SGC have reached agreement as to the terms and conditions upon which BNPLC is willing to lease the Land to SGC and to lease to SGC the improvements to be acquired pursuant to the Existing Contract or constructed on the Land as hereinafter provided, and by this Lease BNPLC and SGC desire to evidence such agreement.


GRANTING CLAUSES


In consideration of the rent to be paid and the covenants and agreements to be performed by SGC, as hereinafter set forth, BNPLC does hereby LEASE, DEMISE and LET unto SGC 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 acquired from Seller pursuant to the
Existing Contract, contemporaneously with the execution of this Lease or in
the future as provided in the Existing Contract;


(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 SGC 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:


(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;


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


(c) any permits, licenses, franchises, certificates, and other rights
and privileges against third parties (including the lessee under the Ground
Lease) 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 SGC'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 (including the Ground Lease), and to any other claims or encumbrances not constituting Liens Removable by BNPLC. FURTHER, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT:


(1) SGC SHALL NOT INTERFERE WITH (AND NO RIGHT OR ESTATE IN THE
PROPERTY IS GRANTED TO SGC HEREBY OR BY ANY OTHER OPERATIVE DOCUMENT THAT
WOULD ENTITLE SGC TO INTERFERE WITH) THE RIGHTS OF THE LESSEE UNDER THE
GROUND LEASE TO THE POSSESSION AND QUIET ENJOYMENT OF THE PORTION OF THE
LAND COVERED BY THE GROUND LEASE.


(2) BNPLC AND SGC INTEND THAT THE RIGHTS OF THE LESSEE UNDER THE
GROUND LEASE SHALL CONTINUE ON AND SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH THEREIN, UNAFFECTED BY THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT OR
THE EXERCISE BY BNPLC OR SGC OF ANY RIGHTS OR REMEDIES PROVIDED HEREIN OR
IN THE OTHER OPERATIVE DOCUMENTS.


(3) IF, WHETHER BY SUBSEQUENT WRITTEN AGREEMENT OF BNPLC AND SGC OR
OTHERWISE, THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT SHOULD TERMINATE
DURING THE TERM OF THE GROUND LEASE, THE GROUND LEASE SHALL SURVIVE SUCH
TERMINATION.


GENERAL TERMS AND CONDITIONS


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


1. TERM.


(a) Scheduled Term. This Lease is intended to be an effective and binding obligation upon BNPLC and SGC throughout the period (the "TERM") commencing on and including the Effective Date and ending on the first Business Day of October, 2003, unless extended or sooner terminated as expressly herein provided; however, the rights of SGC as the tenant hereunder to the use, occupancy and possession of the Land and the Improvements will not commence until the Base Rent Commencement Date. Prior to the Base Rent Commencement Date, SGC will have the right under and pursuant to the rights and authority granted to it by the Construction Management Agreement to the use, occupancy and possession of the Land and the Improvements in its capacity


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as construction manager. Such right of SGC as construction manager will be to the exclusion of BNPLC, but subject to the terms and conditions set forth therein, herein and in the other Operative Documents, so long as the Construction Management Agreement remains in force.


(b) Automatic Termination as of the Base Rent Commencement Date Resulting From an Election by SGC to Terminate the Purchase Option and SGC's Initial Remarketing Rights and Obligations. If SGC terminates the Purchase Option and SGC's Initial Remarketing Rights and Obligations prior to the Base Rent Commencement Date pursuant to subparagraph 4(B) of the Purchase Agreement, then this Lease shall terminate automatically on the Base Rent Commencement Date. Just as any such termination of the Purchase Option and SGC's Initial Remarketing Rights and Obligations shall be subject to the condition (set forth in subparagraph 4(B) of the Purchase Agreement) that SGC pay an Issue 97-10 Prepayment to BNPLC, so too will the termination of this Lease pursuant to this subparagraph be subject the condition that SGC make the Issue 97-10 Prepayment to BNPLC.


(c) Election by BNPLC to Terminate After an Issue 97-10 Election. BNPLC shall be entitled to terminate this Lease, as BNPLC deems appropriate in its sole and absolute discretion, at any time after receiving a notice given by SGC to make or attempt to make any Issue 97-10 Election. Upon any termination of this Lease by BNPLC pursuant to this subparagraph, SGC must pay to BNPLC an Issue 97-10 Prepayment.


(d) Election by SGC to Terminate After Accelerating the Designated Sale Date. Provided SGC has not made any Issue 97-10 Election, SGC shall be entitled to accelerate the Designated Sale Date (and thus accelerate the purchase of BNPLC's interest in the Property by SGC 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 SGC'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, SGC may terminate this Lease on or after the Designated Sale Date; provided, however, as a condition to any such termination by SGC, SGC must have done the following prior to the termination:


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


(ii) paid to BNPLC all Base Rent, all Commitment Fees, all
Administrative Agency Fees and all other Rent due on or before or accrued
through the Designated Sale Date; and


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


(e) Extension of the Term. The Term may be extended at the option of SGC 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 SGC 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, 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 SGC 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 SGC, each in its sole and absolute discretion; (B) there must be no Event of Default continuing hereunder at the time of SGC's exercise of its option to extend; (C) prior to any such extension, SGC must have


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completed the Construction Project in accordance with the Construction Management Agreement and must not have made any Issue 97-10 Election; and (D) immediately prior to any such extension, this Lease must remain in effect. With respect to the condition that BNPLC and SGC must have agreed upon the Rent required for any extension of the Term, neither SGC nor BNPLC is willing to submit itself to a risk of liability or loss of rights hereunder for being judged unreasonable. Accordingly, both SGC 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 SGC 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 SGC 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 SGC have any right to terminate this Lease, nor shall SGC be entitled to any abatement of the Rent, nor shall the obligations of SGC 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 SGC'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 SGC or of anyone claiming through or under SGC (provided, that if SGC is wrongfully evicted by BNPLC or by any third party lawfully exercising its rights under a Lien Removable by BNPLC, then SGC 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 SGC are part ...