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EXHIBIT 10.16.2
AMENDMENT #1 TO LEASE
(50 MINUTEMAN)
1. Parties.
This Amendment, dated as of March 19, 1997, is between 50 Minuteman
Limited Partnership ("Landlord") and PictureTel Corporation ("Tenant").
2. Recitals.
2.1 Landlord and Tenant have entered into a Lease, dated August 26, 1996,
for improved property located at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. This
Lease, together with all amendments thereto, collectively is called the "Lease."
Unless otherwise defined, terms used herein have the same meanings as those used
in the Lease.
2.2 Landlord and Tenant wish to amend the Lease. To accomplish this, for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties agree and the Lease is amended as follows:
3. Amendments.
3.1 In Section 7.1(d), the phrase "(other than pursuant to Section 4(b))"
is inserted after the phrase "terms of this Lease" in the third line thereof.
3.2 In Section 18.3, the first two sentences are deleted and replaced by
the following:
"Landlord will not unreasonably withhold or delay its consent
to an assignment or sublease by Tenant, but Landlord may withhold
its consent to any other Transfer (including, without limitation,
any hypothecation or assignment for security purposes) arbitrarily
and in its sole discretion."
3.3 In Section 19.4, the second to last paragraph beginning with the words
"In any case..." is deleted.
3.4 The phrase "(or its successor)" is added after the phrase "Bank of
Boston" in the sixth line of Section 22.2(e) and the fourth line of Section
24.17(a).
3.5 Section 24.17(b) is deleted and the following is substituted therefor:
"(b) Each loan obtained from time to time by Landlord in
compliance with this Lease which is secured by the Letter of Credit
(other than the initial mortgage construction loan) sometimes is
referred to as the "Letter of Credit Loan." Until and unless the
Letter of Credit is drawn upon, starting as of one (1) year after
the Commencement Date, and on each annual anniversary thereafter
(or, if the Letter of Credit Loan has not funded within one (1) year
after the Commencement Date, then starting as of fifteen (15) months
and fifteen (15) days after the Commencement Date, and on each
annual anniversary thereafter), the face amount of the Letter of
Credit shall be reduced in an amount equal to the annual principal
reduction that would result from a direct reduction loan
amortization schedule, assuming an interest rate equal to the
interest rate used to calculate principal amortization under the
Letter of Credit Loan (such schedule to be provided or approved by
the lender of the Letter of Credit Loan), which will have the effect
of reducing the Letter of Credit to zero over the initial term of
the Lease (as it may be extended pursuant to Section 4(b)) .
However, subject to the foregoing but
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notwithstanding anything else to the contrary, even if the Letter of
Credit has been drawn upon, if and to the extent that those amounts
are repaid to Tenant, Tenant shall thereupon cause the face amount,
and the amount that may again be drawn, under the Letter of Credit
to be increased by an amount equal to the amount so repaid. (For
example, if $2 Million were to be drawn under the Letter of Credit
pursuant to Section 24.17(f), and if that $2 Million were then
repaid, the face amount and the amount that could be drawn under the
Letter of Credit again would be $7.8 Million.) Tenant shall cause
the Letter of Credit to be renewed continuously on the same terms as
described above for successive one (1)-year terms (or longer terms)
so that the Letter of Credit is continuously maintained for a term
expiring at the end of the initial term of the Lease (as it may be
extended pursuant to Section 4(b)). Each succeeding Letter of Credit
shall be effective on or before the date that the then-existing
Letter of Credit expires. Tenant's failure to deliver these renewals
of the Letter of Credit to the beneficiary at least thirty (30) days
prior to each expiration date shall be a default under this Lease,
and at the beneficiary's option, and notwithstanding anything to the
contrary, the beneficiary shall have the immediate right thereon and
thereafter to draw under the Letter of Credit for all or any portion
thereof; provided, however, that if Tenant delivers the required
renewal of the Letter of Credit to the beneficiary before the
expiration of the existing Letter of Credit and before the
beneficiary has drawn under the existing Letter of Credit, then
Tenant shall be deemed to have cured such default."
3.6 Section 24.17(d) is deleted.
3.7 Exhibit "J" attached hereto is incorporated as part of and in addition
to the rest of Exhibit "J" attached to the Lease.
3.8 Tenant did not exercise and no longer has a third Purchase Option, and
so Section 4 of Addendum #2 is deleted.
3.9 Addendum #3, Addendum #4 and Addendum #5 are deleted, and Addendum #3,
Addendum #4 and Addendum #5 attached to this Amendment, respectively, are
substituted therefor.
4. No Other Changes.
Except as set forth above, the Lease remains unchanged and in full force
and effect.
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Amendment as of the date in Article 1 above.
50 MINUTEMAN LIMITED PARTNERSHIP PICTURETEL CORPORATION
By: Niuna-50 Minuteman, Inc.,
its general partner
By: /s/ Authorized Signatory
__________________________
Name:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title:
__________________________ Authorized Signature
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
By: /s/ Authorized Signatory
__________________________
Name:
Title:
Authorized Signature
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ADDENDUM #3
NET PROCEEDS
1. Cash Proceeds. "Cash Proceeds" means: all cash proceeds actually
received by or on behalf of Landlord that Landlord is permitted to retain (for
example, if Landlord must refund an overpayment to Tenant or a third party, the
amount refunded will not be deemed to be "retained" by Landlord nor shall it be
a part of Cash Proceeds hereunder) from the sale, leasing (including base rent
and additional rent), assignment, subleasing, initial financing (including,
without limitation, the initial financing secured by the Premises and any
financing secured by the Letter of Credit, but subject, however, to Addendum
#7), refinancing, encumbrance, Condemnation or other disposition of all or any
portion of the Premises or any interest therein (including any additional
buildings constructed on the Premises), and any casualty and rental insurance
proceeds received by or on behalf of Landlord that Landlord is permitted to
retain in connection with all or any portion of the Premises, any loans,
advances or capital contributions made to Landlord, indemnities paid by Tenant
to Landlord and any interest or investment income received by Landlord on such
cash proceeds. Notwithstanding the foregoing, Cash Proceeds do not include any
amounts paid to or receivable by Landlord for, as a result of or in connection
with: an exercise of any Purchase Options; Tenant's defaults, or any judgments,
settlements or awards paid by Tenant or its Affiliates; amounts drawn under the
Letter of Credit or the application(s) of any cash security deposit, or any late
charges or interest payable by Tenant; the Transfer of any interest in Landlord
or in any of its partners or other Control Affiliates; or development fees,
management fees or fees in lieu thereof payable to Landlord or its Affiliates
pursuant to this Lease or in connection with Landlord's Work or in connection
with the construction of any additional buildings on the Premises or the
enlargement or other modification of the Building or the rest of the Premises;
or any Net Proceeds distributed or distributable to Landlord pursuant to Section
3 below.
2. Costs. "Costs" means: all bona fide costs and expenses of any type paid
by Landlord or its Affiliates, or reasonably anticipated by Landlord to be
payable by Landlord or its Affiliates, for, as a result of or in connection with
all or any portion of the Premises or any interest therein or any ownership,
operation, management, maintenance, repair, restoration, replacement,
improvement, leasing (other than the payment of Net Proceeds hereunder),
financing, refinancing or Transfer by Landlord thereof (whether or not included
as part of Operating Costs, but not including any sale or conveyance to any of
Landlord's Control Affiliates), or the establishment and maintenance of
Landlord's existence in good standing as an entity, or any rights or Liabilities
in connection with any of the foregoing, including, without limitation, costs
and expenses for: the acquisition, sale or other disposition of all or any
portion of the Premises and any rights appurtenant thereto (including, without
limitation, all costs for due diligence, investigations, remedial work, closing
costs, escrow and title fees, legal fees, professional fees and commissions);
Landlord's Work and all other labor, services and materials supplied to or for
the benefit of the Premises (including any additional buildings constructed on
the Premises) and/or Tenant under or in connection with this Lease (including,
without limitation, costs for designers, architects, engineers, draftsmen,
supervision, permits and approvals, development fees (other than those payable
to Landlord or its Affiliates which are excluded from Cash Proceeds as set forth
in Section 1 above), fees, profit and savings payable to construction managers,
contractors and subcontractors, and all other reasonably related "hard" and
"soft" costs); financing, refinancing and encumbrance of the Premises or any
interest therein (including, without limitation, payment of all principal,
interest, fees, commissions, appraisals, escrow and title fees, other closing
costs, interest rate ▇▇▇▇▇▇, "caps" or "flors," and other costs in connection
therewith and other amounts owed under any of the loan documents); the repayment
of all bona fide capital contributions, loans or advances made by Landlord or
its partners or their respective Affiliates (including, without limitation, the
repayment of such amounts and commercially reasonable interest on such loans and
a commercially reasonable rate of return on
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such contributions or advances, which in any case will be at least equal to the
Bank of Boston's (or its successor's) prime rate plus one percent (1%), or the
maximum rate permitted by law, whichever is less, and commercially reasonable
closing costs, commissions and/or loan fees or similar fees in order to obtain
such loans, contributions or advances); the payment and performance of all of
Landlord's Liabilities and the exercise of Landlord's rights under or in
connection with this Lease or the Premises or agreements in connection therewith
(including, without limitation, costs for Taxes, Operating Costs, amounts in
connection with Hazardous Substances and environmental protection, compliance
will all Laws, indemnity and defense costs, and other costs in connection
therewith and other amounts owed under any of the loan documents); attorneys'
fees and other costs in connection with the defense or prosection of any
litigation, proceedings, claims or counterclaims or as otherwise deemed
necessary by Landlord; judgments, claims, awards or settlements, whether due to
the fault of Landlord or its partners or otherwise; an amount per calendar year
equal to forty percent (40%) of an amount (the "Tax Payments") equal to:
Landlord's taxable income (if any) in the prior calendar year (other than the
taxable income resulting solely from the sale or the conveyance of the Premises)
less the amounts paid to Landlord for that prior calendar year pursuant to this
Subclause of this Section 2, and if in any year the Tax Payments are not fully
paid, then the unpaid Tax Payments shall cumulate and be paid as Costs as soon
as there are sufficient Cash Proceeds; the preparation of Landlord's annual
audited financial statements and any other information to be provided y Landlord
under this Lease (including audits of Net Proceeds) and tax returns; corporate
or partnership license fees, filing fees, business and franchise taxes and fees,
and similar charges; and reserves deemed reasonably necessary by Landlord in
connection with any of the foregoing. Unless otherwise specifically agreed and
set forth in this Lease (e.g., with respect to the interest rate on loans or the
return on capital, or with respect to management fees or fees in lieu thereof,
or budgeted development fees), amounts payable as Costs by Landlord to any of
its Affiliates for services rendered shall not exceed the prevailing rates that
would be payable to unaffiliated third parties in an arms-length transaction.
Costs do not include any of the above amounts which are directly paid by Tenant
or which are funded by insurance.
3. Payment of Net Proceeds. "Net Proceeds" means, from time to time, an
amount equal to the positive amount, if any, obtained by taking an amount equal
to the current amount of Cash Proceeds and deducting therefrom an amount equal
to the current amount of Costs. Prior to any distribution of Net Proceeds to any
of Landlord's Control Affiliates, Landlord first will pay to Tenant Net Proceeds
in amount equal to: the unrepaid Reconstruction Costs (if any) until the
Reconstruction Costs have been repaid in full; and the unrepaid Cure Payments
(if any) until the unrepaid Cure Payments have been repaid in full; and the
reasonable costs and expenses incurred by Tenant in good faith to third parties
in validly exercising its Right of Self Help as set forth in Section 14.4, but
excluding therefrom any of such costs and expenses that otherwise would qualify
as Operating Costs under Article 7. Thereafter, Landlord will pay to Tenant
one-half (1/2) of all Net Proceeds available for distribution at the same times
as Net Proceeds are distributed by Landlord to its Control Affiliates. These
payments to Tenant will be deemed to be a reduction in Tenant's rent already
paid from time to time under this Lease (although they may not be credited,
offset or deducted against Tenant's current or future rent payments owed).
Payments of Net Proceeds to Tenant during any year shall be subject to an annual
reconciliation for that year (which shall occur after the end of that year), and
any amounts overpaid to Tenant or owed by Landlord shall be adjusted in cash
between the parties within thirty (30) days after such annual reconciliation is
delivered. Upon Tenant's written request in each instance, Landlord will furnish
to Tenant reasonable backup information for its annual reconciliations,
including copies of Landlord's most recent financial statements. Within ninety
(90) days after delivery of each of Landlord's annual reconciliations, and upon
at least fourteen (14) days' prior written notice to Landlord, not more than
once in each calendar year Tenant may audit Landlord's books and records
applicable to the period after the last annual reconciliation in order to verify
the accuracy of Landlord's calculation of Net Proceeds. Such audit will be
conducted only during regular business hours where Landlord maintains its books
and records (which Landlord agrees will be in Massachusetts or California) and
Tenant will deliver a copy of the audit to Landlord within
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fifteen (15) days after receipt by Tenant. All audits will be conducted at
Tenant's cost and expense and shall be conducted only by Tenant or its
designated professional representatives.
4. Termination of Rights. Notwithstanding anything to the contrary, as of
the date of the first occurrence of any or all of the following, at Landlord's
election all of Tenant's rights and Landlord's obligations under or in
connection with this Addendum will terminate and lapse completely, except that
the entity that is the Landlord immediately prior to the occurrence of any or
all of the following shall remain obligated to pay to Tenant (or at such
entity's election credit against amounts owed by Tenant to such entity) Tenant's
share of undistributed Net Proceeds (if any) existing as of the date of such
occurrence:
(a) The termination or expiration of this Lease in accordance with
its terms.
(b) A default by Tenant under this Lease.
(c) The closing of any Purchase Option, or the closing of another
bona fide sale or other conveyance by Landlord of all or any portion of the
Premises, or any interest therein (which shall not be deemed to include an
interest in Landlord), which sale or conveyance is not prohibited under this
Lease, but Tenant's rights and Landlord's obligations with respect to Net
Proceeds shall continue with respect to the portions of the Premises or
interests therein, if any, still retained by Landlord and with respect to any
Net Proceeds received by Landlord in connection with such sale or other
conveyance (except with respect to a sale pursuant to a Purchase Option or a
sale associated with an "LC Return" as defined in Subsection (d) below).
(d) The sale or other conveyance by Landlord of all or any portion
of the Premises or any interest therein, which sale or conveyance is not
prohibited under this Lease, provided that prior to or on or about the closing
of such sale or conveyance, the Letter of Credit is returned to Tenant undrawn
(or if drawn upon, with any outstanding LC Advances repaid in full) and with no
obligation on the part of Tenant to supply additional Letters of Credit under
this Lease, and in such event Tenant shall not have any continuing rights nor
shall Landlord have any continuing obligations with respect to Net Proceeds,
whether received by Landlord in connection with such sale or conveyance or
otherwise. The return of the Letter of Credit to Tenant as described above is
called the "LC Return."
5. Unaffected Parties. Notwithstanding anything to the contrary, Tenant's
rights and Landlord's obligations under this Addendum will not be binding on and
will not affect or otherwise apply in any way to:
(a) Any party that, in a bona fide transaction, purchases or
otherwise acquires all or any portion of the Premises or any interest therein,
or its successors, assigns and purchasers, or their respective Affiliates
(unless any such sale or conveyance is prohibited under this Lease); or
(b) Landlord's Mortgagees, whether or not they take title to or
acquire all or any portion of the Premises or any interest therein, and their
successors, assigns and purchasers, or their respective Affiliates.
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6. Personal Rights. Notwithstanding anything to the contrary, the rights
granted to Tenant under or in connection with this Addendum are granted to and
may be exercised only by the Tenant originally named in this Lease, and they may
not be exercised by anyone else (other than by an assignee to whom such rights
have been entirely assigned pursuant to a valid assignment of this Lease, if at
the time of such assignment the assignor and the assignee deliver to Landlord a
jointly executed written notice stating unconditionally that the assignee has
the right to exercise such rights), and Tenant shall not, and shall not have the
right or power to, otherwise assign or Transfer any of these rights. If at the
time of a valid assignment the assignor and the assignee deliver to Landlord a
jointly executed written notice directing Landlord to pay a portion of the Net
Proceeds otherwise payable to the assignee instead to the assignor, then
Landlord will continue to pay that portion of the Net Proceeds to the assignor
until and unless Landlord receives from the assignor and the assignee a jointly
executed written notice changing such direction to Landlord and then Landlord
shall pay in accordance with the new direction.
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ADDENDUM #4
PURCHASE OPTIONS
1. Grant and Exercise. Provided that this Lease is in full force and
effect and subject to the terms hereof, Landlord grants to Tenant two (2)
options (the "Purchase Options") to purchase the Premises from Landlord, which
Purchase Options must be exercised during the following periods:
(a) The first (1st) Purchase Option can be exercised only during the
first month of the fifth (5th) Lease Year.
(b) The second (2nd) Purchase Option can be exercised only during
the first month of the tenth (10th) Lease Year.
The Purchase Options can be exercised only by Tenant delivering unconditional
written notice of exercise to Landlord as and when required together with a
cashier's check or the wire transfer of funds to Landlord in an amount equal to
five percent (5%) of the total purchase price under the applicable Purchase
Option. These funds shall be placed by Landlord into a separate interest-bearing
account or other mutually agreeable investment instrument and these funds and
all interest earned thereon collectively are called the "Deposit." When and if
the closing under the applicable Purchase Option occurs, the Deposit shall be
credited against the cash portion of the purchase price payable by Tenant
thereunder. If the Deposit is in excess of the cash portion of the purchase
price payable by Tenant, the excess shall be returned to Tenant as of the
closing. If for any reason Landlord does not actually receive this unconditional
written notice of exercise and the Deposit as and when required, at Landlord's
option the applicable Purchase Option will lapse and become null and void.
At Landlord's election, the Purchase Options and all of Tenant's
rights and Landlord's obligations under this Addendum and Addendum #5 shall
lapse and become null and void if: (i) Tenant defaults under the rest of this
Lease at any time prior to the exercise of a Purchase Option or any closing
thereunder; or (ii) Tenant defaults under this Addendum, or defaults in
connection with any closing under, or fails to close as required after the
exercise of, a Purchase Option (a "Purchase Option Default"). If Tenant commits
a Purchase Option Default Tenant also shall waive as against Landlord and its
Affiliates all Liabilities and defaults (if any) of or by any of them under this
Lease that directly arise from or in connection with the Purchase Option
Default, and Landlord shall retain the Deposit as its sole and liquidated
damages for the Purchase Option Default, and if Tenant commits more than one
Purchase Option Default, at Landlord's election the Purchase Options and all of
Tenant's rights and Landlord's obligations under this Addendum and Addendum #5
shall lapse and become null and void. (A Purchase Option Default is not the same
as a default described in Section 4(c) of this Addendum.)
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2. Purchase Price.
(a) The cash portion of the purchase price for the Premises shall be
payable by cashier's check or wire transfer of immediately available funds to or
at the direction of Landlord and will be payable in full on or before the
scheduled closing date. In addition to the cash portion of the purchase price,
as of the closing Tenant shall either repay in full all mortgage loan(s) secured
by the Premises, and any other loan secured by the Letter of Credit (if separate
from such mortgage loan(s)), other than those that are Unpermitted Financing
(the "Existing Loans") (including, without limitation, any prepayment or
"breakage" fees or similar charges) or assume the Existing Loans, and in any
case Tenant will cause the lender(s) to release Landlord and its Affiliates as
of the closing from all Liabilities in connection with the Existing Loans and
Tenant shall indemnify and hold Landlord and its Affiliates harmless from all
further Liabilities in connection with the Existing Loans. In addition to the
purchase price, Tenant shall pay all closing costs of any type (other than
Landlord's attorneys' fees and costs), including, without limitation,
commissions (if any) and the costs of deed stamps and documentary and transfer
taxes and fees, surveys, title insurance, escrows, recording and other similar
fees and costs. Base rent will be prorated between the parties as of the closing
date, but there will be no other prorations or adjustments.
(b) The cash portion of the purchase price for the Premises shall be
never be less than zero, but otherwise shall be equal to the following amounts:
(i) For the first (1st) Purchase Option, an amount equal to:
(x) ten (10) times the "Current Base Rent Amount" (defined below); less (y) the
"Existing Mortgage Balance" (as defined below). The "Current Base Rent Amount"
means the scheduled annual base rent payable under this Lease as of the date of
closing, without any deductions, offsets or abatements of any type, and
including, without limitation, scheduled annual base rent payable in connection
with any other space leased or agreed to be leased from Landlord in a new
building or new buildings, or an enlargement of the Building, on the Premises.
If an agreement has been entered into to lease such other space or a right to
lease such other space has been exercised prior to closing but the full base
rent applicable thereto has not commenced or cannot be accurately determined as
of the closing, then the scheduled annual base rent applicable to that Purchase
Option shall be reasonably estimated by Landlord. (As a hypothetical example, if
the scheduled annual base rent at the closing is $2,352,900, the Current Base
Rent Amount for the first (1st) Purchase Option would be $2,352,900.) The
"Existing Mortgage Balance" means the outstanding principal balance (not
including any prepayment or "breakage" fees or similar charges) as of the
closing date under an exercised Purchase Option of any Existing Loans.
(ii) For the second (2nd) Purchase Option, an amount equal to:
(x) eight and one-half (8 1/2) times the Current Base Rent Amount; less (y) the
Existing Mortgage Balance. As a hypothetical example, if the second (2nd)
Purchase Option is validly exercised, the Current Base Rent Amount is
$2,352,900, and as of the closing the Existing Mortgage Balance is $13 Million,
then the cash portion of the purchase price payable to Landlord would be only
$6,999,650 and Tenant would repay or assume the existing $13 Million mortgage
loan secured by the Premises, for a total purchase price of $19,999,650.
3. Closing. The closing under an exercised Purchase Option will occur at a
location in Massachusetts and on a date specified by Landlord pursuant to
written notice to Tenant, which date will be: during the last four (4) months of
the fifth (5th) Lease Year (for the first (1st Purchase Option); and during the
last four (4) months of the tenth (10th) Lease Year (for the second (2nd)
Purchase Option). At the closing, Landlord will execute and deliver to Tenant a
Massachusetts Quitclaim Deed (which will be subject to all matters of record and
all title and survey exceptions), an affidavit of Landlord stating Landlord's
U.S. taxpayer identification number and that Landlord is not a "foreign person"
within the meaning of Section 1445(f)(3) of
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the Internal Revenue Code of 1986, as amended or Landlord shall provide the
necessary forms if Landlord is a "foreign person") , and a blanket assignment to
Tenant of all third party guaranties, warranties, permits, certificates,
consents and approvals pertaining to the Premises that are assignable by
Landlord, to the extent assignable at no cost or Liabilities to Landlord (unless
Tenant advances such costs and discharges such Liabilities, in which case they
shall be assigned to the extent assignable by Landlord).
4. Additional Terms.
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(a) Tenant specifically acknowledges and agrees that Landlord will
sell and Tenant will purchase the Premises on an "as is with all faults" basis,
subject to all exceptions to and defects of title, whether or not of record (but
subject also to Tenant's rights and Landlord's obligations as set forth below),
and that Tenant will not rely on nor will Landlord or any of its Affiliates be
deemed to have made, any representations or warranties of any kind, express or
implied including, without limitation, those in connection with the physical
condition of the Premises (including, without limitation, any matters involving
Hazardous Substances or compliance with any Laws), or the nature of title to the
Premises, or the advisability of Tenant's purchase of the Premises). However,
until and unless Tenant otherwise agrees in writing or defaults Landlord will
not voluntarily execute any documents affecting title that materially adversely
affect Tenant's operations or that render title to the Premises unmarketable
(but easements, dedications or other documents for access, drainage, utilities
or services (including cabling), curb cuts, or as otherwise may be needed to
comply with applicable Laws or to enable Landlord to meet its obligations under
this Lease or in connection with the construction of any new building(s) or the
enlargement of the Building per this Lease, will not be deemed to be violations
of this restriction). If this restriction is violated after the exercise of a
Purchase Option, Tenant shall have the right to terminate that Purchase Option
without liability and receive the Deposit back. Notwithstanding the foregoing,
even if Tenant has validly exercised a Purchase Option, Tenant shall have the
right to terminate that Purchase Option without liability (except for Landlord's
out-of-pocket costs) and shall not be required to close the purchase if, after
the exercise of the Purchase Option but prior to closing, there is a casualty
that causes damage of the type and to the extent described in Section 16.2(b)(x)
such that Tenant otherwise would have the right to terminate this Lease, and in
the reasonable judgement of a qualified independent contractor hired by Landlord
it will take more than two (2) years from the date of the damage to restore
access or restore or replace the destroyed parking spaces or substantially
complete the repairs that Landlord would have been required to make, and Tenant
notifies Landlord of its intent to terminate within thirty (30) days after
receiving the notice from Landlord's contractor, which shall be provided as soon
as reasonably practicable after the damage occurs. If these circumstances occur,
the closing date shall be extended as necessary to accommodate this thirty
(30)-day period. If Tenant does not so terminate, or if Tenant is not permitted
to so terminate as a result of a casualty, as of the closing Landlord will
assign to Tenant all casualty insurance proceeds otherwise payable to Landlord
on account of the damage and all rights and claims in connection therewith
(other than those which Landlord was entitled to receive for the period and/or
for the work and services performed prior to the closing). Notwithstanding
anything to the contrary, if Landlord is in the process of repairing or
rebuilding casualty damage and Tenant subsequently validly exercises a Purchase
Option: Landlord will continue the process of repairing or rebuilding as
otherwise required in this Lease until the closing date under the Purchase
Option; Tenant will be deemed to have waived its right to terminate this Lease
under Article 16, and its right to terminate the Purchase Option in connection
with that casualty or any repairs or rebuilding in connection therewith;
Landlord will assign to Tenant as of the closing all casualty insurance proceeds
otherwise payable to Landlord on account of the damage and all rights and claims
in connection therewith (other than those which Landlord was entitled to receive
for the period and/or for the work and services performed prior to the closing),
and Landlord shall assign to Tenant and Tenant shall assume all rights and
Liabilities of Landlord under the contracts entered into in connection with the
repair or rebuilding to the extent assignable and Tenant shall indemnify
Landlord and its Affiliates for and hold them harmless from all Liabilities in
connection therewith; and Landlord shall be obligated to continue to repair or
rebuild after the closing date only if and to the extent actually agreed to by
Landlord and Tenant in good faith and in writing at the time.
(b) As of the closing, Tenant and its Affiliates will be deemed to
have released and discharged Landlord and its Affiliates from, and to have
waived, all Liabilities of any type, known or unknown, including, without
limitation, Liabilities under or in connection with this Lease and/or the
Premises (except as set forth in the last sentence of Subsection (c) below). As
a condition to closing, Landlord may require that Landlord's Mortgagees release
Landlord and its
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Affiliates from Liabilities under or in connection with any Superior Leases or
Mortgages. From and after the closing, Tenant shall indemnify, defend and hold
Landlord free and harmless from all Liabilities under or in connection with this
Lease and/or the Premises and/or the purchase thereof (except as set forth in
the last sentence of Subsection (c) below).
(c) Time is of the essence in this Addendum. If Tenant defaults
hereunder after the closing under a Purchase Option or Tenant or Landlord
defaults under any of the documents delivered by it in connection therewith, in
addition to any rights and remedies available to each of the respective parties,
each party shall have all rights and remedies at law and in equity, all of which
are cumulative and not exclusive, including, without limitation, the right to
require specific performance. The exercise of a Purchase Option or any closing
as a result thereof shall not relieve Tenant or Landlord from any Liabilities
for any defaults under this Lease, nor will they extinguish Liabilities for any
indemnities or other obligations that survive pursuant to the terms of the rest
of this Lease or this Addendum.
(d) Notwithstanding anything to the contrary, as of the date of the
first occurrence of any of the following, at Landlord's election all of Tenant's
rights and Landlord's obligations under or in connection with this Addendum will
lapse and become null and void upon:
(i) The expiration of the Lease term (as validly extended) or
termination of this Lease in accordance with its terms prior to the exercise of
a Purchase Option or any closing thereunder; or
(ii) The bona fide purchase or other acquisition of all or
substantially all of the Premises by any person or entity (including, without
limitation, Tenant or its Affiliates) other than by any of Landlord's Control
Affiliates prior to the exercise of a Purchase Option and other than any sale or
conveyance which is prohibited under this Lease; or
(iii) [INTENTIONALLY OMITTED]
(e) Notwithstanding anything to the contrary, Tenant's rights and
Landlord's obligations under or in connection with this Addendum will not be
binding on and will not affect or otherwise apply in any way to Landlord's
Mortgagees or their successors, assigns and purchasers, or their respective
Affiliates, whether or not they take title to or acquire all or substantially
all of the Premises.
5. Personal Rights. Notwithstanding anything to contrary, the Purchase
Options are granted only to and may be exercised only by the Tenant originally
named in this Lease, and they may not be exercised by anyone else (other than by
an assignee to whom the right to exercise a Purchase Option has been assigned
pursuant to a valid assignment of this Lease, if at the time of such assignment
the assignor and the assignee deliver to Landlord a jointly executed written
notice stating unconditionally that the assignee has the right to exercise such
Purchase Option) and Tenant shall not, and shall not have the right or power to,
otherwise assign or otherwise Transfer any of the Purchase Options or any rights
in connection therewith. Tenant may assign this Lease without granting to the
assignee the right to exercise any or all of the Purchase Options, and in such
event Tenant will retain the rights to exercise any Purchase Options whose
exercise rights have not been validly assigned as set forth in this Addendum, if
and only if Tenant has not become a Released Assignor in connection with its
assignment of this Lease.
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ADDENDUM #5
RIGHT OF FIRST OFFER TO PURCHASE
1. Grant of Rights.
(a) Subject to the terms of this Addendum, before Landlord sells or
conveys the Premises during the initial Lease term (other than pursuant to a
sale or conveyance to any of Landlord's Control Affiliates) Landlord shall
notify Tenant in writing (the "Offer Notice") of the purchase price and the
terms of payment thereof (e.g., all cash, or cash and purchase money financing
or assumption of debt) that Landlord intends to accept for the Premises (the
"Offer Price").
(b) Within ninety (90) days after delivery of the Offer Notice,
Tenant shall notify Landlord in writing that it unconditionally elects one of
the three (3) following alternatives:
(i) To purchase the Premises for the applicable Offer Price
and otherwise on the terms of this Addendum. (Tenant's election of the
alternative described in this Subsection (i) is referred to as the "Purchase
Election.")
(ii) To cause Landlord not to sell the Property, which
prohibition on sale shall be effective only during the first ten (10) Lease
Years. (Tenant's valid election of the alternative described in this Subsection
(ii) is referred to as the "No-sale Election.")
(iii) To permit Landlord to sell or convey the Premises in
accordance with this Addendum and to continue to lease the Premises on the terms
of this Lease. (Tenant's election of the alternative described in this
Subsection (iii) is called the "Existing Lease Election.")
(c) TIME IS ABSOLUTELY OF THE ESSENCE. If for any reason Landlord
does not actually receive Tenant's unconditional written notice of election as
and when required during the first nine (9) Lease Years, Tenant shall be deemed
to have elected the No-sale Election. If for any reason Landlord does not
actually receive Tenant's unconditional written notice of election as and when
required after the first nine (9) Lease Years, Tenant shall be deemed to have
elected the Existing Lease Election. At Landlord's election, all of Tenant's
rights and Landlord's obligations under or in connection with this Addendum and
Addendum #4 shall lapse and become null and void if Tenant defaults hereunder or
under the rest of this Lease at any time prior to any closing hereunder, or if
Tenant defaults in connection with any closing hereunder or fails to close as
required after its election of the Purchase Election (an "Offer Default"). Any
amounts payable under this Addendum in connection with the Purchase Election are
deemed to be amounts payable under the Lease, and any default hereunder will be
deemed to be a default under the Lease and in such case Landlord shall be
entitled to all rights and remedies hereunder and under the rest of the Lease,
including, without limitation, the right to require specific performance from
Tenant. If Tenant commits an Offer Default, Tenant also shall indemnify and hold
Landlord harmless from and against all Liabilities incurred by Landlord that
arise from or in connection with the Offer Default.
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2. Purchase Election. If Tenant validly exercises the Purchase
Election, then Landlord shall sell and Tenant shall purchase the Premises and
the following terms and conditions of Addendum #4 are incorporated herein and
shall apply with respect to this Addendum and such sale and purchase as if it
were the sale and purchase under an exercised Purchase Option: Section 2(a)
(except that the applicable purchase price and the terms of the payment thereof
shall be as set forth in the Offer Price, or if there is an outstanding mortgage
or mortgages on the Premises at such time Tenant shall assume the mortgage(s)
and the cash portion of the Offer Price shall be deemed reduced by the
outstanding principal balance of the mortgage(s) assumed); Section 3 (except
that the closing date will be a date specified by Landlord that will be at least
three (3) months but no more than six (6) months after Tenant's notice of
election); and Sections 4(a), (b), (c) and (e).
3. No-sale Election. If Tenant validly elects the No-sale Election,
then:
(a) Until and unless Tenant otherwise agrees in writing, or Tenant
defaults under this Lease or Tenant's rights under this Addendum #5 terminate,
or the tenth (10th) Lease Year expires (whichever is earliest), Landlord will
not sell or convey the Premises except to one of Landlord's Control Affiliates
or to Tenant or one of its Related Entities or pursuant to the exercise of a
Purchase Option; and
(b) If Tenant validly elects the No-sale Election with respect to a
particular Offer Notice and the No-sale Election subsequently terminates or
expires, if Landlord wishes to proceed with the transaction which is the subject
of that particular Offer Notice, Landlord shall deliver to Tenant another Offer
Notice for that transaction, and Tenant shall have the right to elect the
Purchase Election or the Existing Lease Election in connection therewith in
accordance with Section 1(b) of this Addendum, except that Tenant shall make
such election within thirty (30) days after delivery of the new Offer Notice,
rather than ninety (90) days as otherwise provided in Section 1(b).
4. Existing Lease Election.
(a) If Tenant validly elects (or is deemed to have elected) the
Existing Lease Election, then for the next twelve (12) months after Tenant's
election, Landlord may not sell or convey the Premises (other than pursuant to a
sale or conveyance to any of Landlord's Control Affiliates) for a purchase price
which is less than ninety-seven percent (97%) of the applicable Offer Price
without first delivering to Tenant a new Offer Notice with an Offer Price equal
to such new, lower purchase price. If Landlord delivers such a new Offer Notice,
then Tenant shall have the right to elect either the Purchase Election or the
No-sale Election (if the tenth (10th) Lease Year has not yet ended) or the
Existing Lease Election in accordance with the procedures established in Section
1 above, except that Tenant will have forty-five (45) days, and not ninety (90)
days, within which to respond to Landlord's new Offer Notice. If within twelve
(12) months after Tenant validly elects (or is deemed to have elected) the
Existing Lease Election in accordance with this Section 3 Landlord has not
executed a binding agreement to sell or convey the Premises for a purchase price
which is equal to or greater than ninety-seven percent (97%) of the new, lower
Offer Price, or if Landlord has entered into such a binding agreement within the
twelve (12)-month period but fails to close thereunder, then the terms and
conditions in Section 1 above again will apply.
(b) If Tenant validly elects (or is deemed to have elected) the
Existing Lease Election, then Tenant will have the right, upon written request
to Landlord, to participate reasonably and in good faith with Landlord in the
negotiations conducted by Landlord to sell or convey the Premises, which
negotiations will be subject to Landlord's control and direction. Tenant
acknowledges and agrees that the manner and substance of these negotiations are
critical to Landlord, and so Tenant will support Landlord's negotiating
positions (provided that, unless Tenant otherwise agrees, such negotiating
positions do not attempt to change Tenant's rights and
14
obligations under this Lease) and will not attempt to delay, obstruct or hinder
these negotiations. Landlord will have the right at any time and in its sole
discretion to suspend, terminate or continue such negotiations and, subject to
Subsection (a) above, Articles 6 and 7 of this Addendum and the parenthetical in
the preceding sentence, to accept or reject terms offered by prospective buyers
and to execute documents and agreements, binding or otherwise, in connection
with a sale or conveyance of the Premises. Tenant shall not have the right or
power nor shall it attempt to bind Landlord in connection with a sale or
conveyance of the Premises or to deal directly or negotiate alone with any
prospective buyer or its agents without Landlord's prior written consent.
5. Termination of Rights. Notwithstanding anything to contrary, at
Landlord's election all of Tenant's rights and Landlord's obligations under or
in connection with this Addendum will lapse and become null and void upon:
(a) The termination or expiration of the Lease term in accordance
with its terms, prior to any closing hereunder; or
(b) The bona fide purchase or other acquisition of all or
substantially all of the Premises other than by any of Landlord's Control
Affiliates prior to the valid exercise of the Purchase Election hereunder and
other than any sale or conveyance which is prohibited under this Lease; or
(c) As set forth in Section 9 below; or
(d) At the end of the initial Lease term.
6. No Sale to Direct Competitors. Unless and until Tenant's rights
under this Addendum have lapsed or terminated, Landlord shall not sell or convey
the Premises to: AT&T, Intel, VTEL Corp., and Sony.
7. Restrictions on Landlord's Sale Rights. In addition to the other
restrictions and limitations set forth in this Addendum on Landlord's right to
sell or convey the Premises, until and unless Tenant defaults hereunder or the
rest of the Lease, or the Lease expires or terminates, Landlord agrees that it
will not sell or convey the Premises to anyone other than Tenant or any of its
Control Affiliates or any of Landlord's Control Affiliates: for the first five
(5) Lease Years; or other than for cash or cash equivalents (which will be
deemed to include, without limitation, purchase money financing and/or the
purchaser assuming or taking subject to debt).
8. Unaffected Parties. Notwithstanding anything to the contrary,
Tenant's rights and Landlord's obligations under or in connection with this
Addendum will not be binding on and will not affect or otherwise apply in any
way to Landlord's Mortgagees or their successors, assigns and purchasers or
their respective Affiliates, whether or not they take title to or acquire all or
substantially all of the Premises.
9. Personal Rights. Notwithstanding anything to contrary, the rights of
Tenant in this Addendum are granted only to and may be exercised only by the
Tenant originally named in this Lease, and they may not be exercised by anyone
else (other than by an assignee to whom such rights have been entirely assigned
pursuant to a valid assignment of this Lease pursuant to which Tenant has become
a Released Assignor, if at the time of such assignment the assignor and the
assignee deliver to Landlord a jointly executed written notice stating
unconditionally that the assignee has the right to exercise such rights) and
Tenant shall not, and shall not have the right or power to, otherwise assign or
otherwise Transfer any of its rights under or in connection this Addendum.
Tenant may assign this Lease without granting to the assignee the rights of
Tenant under this Addendum, and in such event: Tenant will retain those rights
if and only if
15
Tenant has not become a Released Assignor in connection with its valid
assignment of this Lease; and Tenant no longer will have the right thereafter to
exercise the No-sale Election, and if Tenant fails to make its written election
as and when required it will be deemed to have elected the Existing Lease
Election.