Termination to Build Agreement - Centigram Communications Corp. and Sobrato Interests III
January 9, 1998
CENTIGRAM COMMUNICATIONS CORPORATION
91 East Tasman Drive
San Jose, CA. 95134
Attn: Tom Brunton
Re: Termination of Build to Suit Leases and Loan to Sobrato Interests
III
Dear Mr. Brunton:
As you are aware, under that certain Option to Terminate Certain Leases
dated March, 1997 (the "Option Agreement") between Sobrato Interests III
("Sobrato III") and Centigram Communications Corporation ("Centigram"),
Sobrato was granted the option to terminate the leases referred to
therein. This letter serves to notify Centigram that Sobrato Interests
III has elected to terminate the two build to suit leases that Sobrato,
as landlord, and Centigram, as tenant, previously entered into covering
certain property located at the corner of Guadalupe Parkway and North
First Street (and which leases are referred to in the aforementioned
Option Agreement). This letter further serves to confirm that, as of the
date of this letter, Sobrato and Centigram each waive and release the
other from all right, obligations, costs, damages, liabilities and
claims under, relating to or arising out of the aforementioned two build
to suit leases. The preceding to the contrary notwithstanding, Sobrato
agrees to promptly return to Centigram the letter of credit or letters
of credit that Centigram previously delivered to Sobrato in the total
principal amount of $280,000 as a security deposit under the
aforementioned two build to suit leases. In consideration of Sobrato
terminating the two build to suit leases referred to above, Centigram
agrees to make an unsecured loan to Sobrato in the amount of Two Million
Two Hundred Fortytwo Thousand Six Hundred Twenty Dollars ($2,242,620).
The loan shall bear interest at the rate of nine percent (9%) per annum
and shall be fully amortized over a ten year term, with monthly
principal and interest payments to be in the amount of $28,408.56 (or
more at Sobrato's election). Such principal and interest payments shall
commence to be made on the first day of March, 1998 and continue to be
paid by Sobrato Interests III on the first day of each month thereafter
for one hundred nineteen successive months, with the entire balance of
principal and interest due and payable on February 1, 2008. The loan
shall be evidenced by an Unsecured Promissory Note in the form and
content of Exhibit A attached hereto. A copy of the amortization
schedule applicable to the loan is attached hereto as Exhibit B. The
loan is scheduled to fund on February 1, 1998 and Sobrato agrees to
execute and deliver the Unsecured Promissory Note in favor of Centigram
concurrently with or prior to the funding of the loan. Sobrato and
Centigram shall coordinate the execution and delivery of the Unsecured
Promissory Note and the funding of the loan.
If Centigram is in agreement with the foregoing, please execute a copy
of this letter attached and return the same to me as soon as possible.
Thank you for your cooperation in this matter.
Very truly yours,
SOBRATO ITERESTS III, a California limited partnership
By: John Michael Sobrato 1985 Separate Property Trust
Its: Trustee
AGREED AND ACCEPTED:
CENTIGRAM COMMUNICATIONS CORPORATION, a Delaware corporation
By: Tom Brunton
Its: VP Controller & Treasurer
UNSECURED PROMISSORY NOTE
$2,242,620
San Jose, California
February 1, 1998
For value received, the undersigned, SOBRATO INTERESTS III, a
California limited partnership ("Borrower"), promises to pay to
CENTIGRAM COMMUNICATIONS CORPORATION, a Delaware corporation, or order
("Lender") at 91 East Tasman Drive, San Jose, CA 95134 Attn: Accounts
Receivable, or at such other place as may be designated in writing by
Lender, the principal sum of TWO MLLION TWO HUNDRED FORTY-TWO THOUSAND
SIX HUNDRED TWENTY DOLLARS ($2,242,620), with interest thereon rate of
nine percent (9%) per annum until fully paid. Interest shall be
calculated on a 360 day year consisting of twelve months containing
thirty days each. The principal amount owing hereunder shall be fully
amortized over a ten year period at the interest rate set forth above,
and Borrower shall pay to Lender on the first day of each month,
commencing on March 1, 1998, and continuing on the first day of each
month thereafter for one hundred nineteen successive months, the sum of
Twenty-eight Thousand Four Hundred Eight and 56/100 Dollars ($28,408.56)
or more. On February 1, 2008 (the "Maturity Date"), the entire balance
of principal and interest unpaid shall be due and payable. All sums
owing hereunder are payable in lawful money of the United States of
America
If Borrower shall fail to make any payment required hereunder on
or before ten (10) days following the date on which it becomes due,
Borrower shall pay, at Lender's option, a late or collection charge
equal to four percent (4%) of the amount of such unpaid payment.
From and after the Maturity Date, or such earlier date on which
all sums owing under this Note become due and payable by acceleration or
otherwise, all sums owing under this Note shall bear interest until paid
in full at a rate equal to five percent (5%) per annum in excess of the
rate of interest specified above (based on a 360 day year consisting of
twelve (12) months containing thirty (30) days each).
All payments on this Note shall be applied first to the payment of
any costs, fees, late charges or other charges incurred in connection
with the indebtedness evidenced hereby; next to the payment of accrued
interest; then to the reduction the principal balance; or in such other
order as Lender shall require.
If Borrower shall fail to pay when due any part or installment of
principal or interest or other sums payable hereunder and such failure
continues for fourteen (14) days following delivery of written notice to
Borrower that such payment is past due, then Lender, at its sole option,
shall have the right to declare all sums owing under this Note
immediately due and payable.
Borrower shall have the right to pay, without penalty or premium,
all or any portion of the outstanding principal amount of this Note.
Lender shall apply all such prepayments first to the payment of any
costs, fees, late charges or other charges incurred in connection with
the indebtedness evidenced hereby; next to the payment of accrued
interest; then to the outstanding principal amount of this note in
inverse order of maturity, or, at the option of Lender, in the regular
order of maturity; or in such other order as Lender shall require.
Borrower shall pay to Lender all sums owing under this Note
without deduction, offset or counterclaim of any kind. Lender shall
have the right to assign this Note and any or all payments owing
hereunder to a third party or parties without the consent of Borrower.
If any attorney is engaged by Lender to enforce any provision of
this Note, or as a consequence of any default or breach hereunder, with
or without the filing of any legal action
or proceeding, then Borrower shall immediately pay to Lender on demand
all attorneys' fees and other costs incurred by Lender, together with
interest thereon from the date of such demand until paid at the rate
applicable to the principal owing hereunder as if such unpaid attorneys'
fees and costs had been added to the principal
No previous waiver and no failure or delay by Lender in acting
with respect to the terms of this Note shall constitute a waiver of any
breach, default or failure of condition under this note. A waiver of any
term of this Note must be made in writing and shall be limited to the
express written terms of such waiver.
Borrower waives presentment; demand; notice of dishonor, notice of
default or delinquency; notice of acceleration; notice of protest and
nonpayment; notice of costs, expenses or losses and interest thereon;
notice of interest on interest and late charges; and diligence in taking
any action to collect any sums owing under this Note. Time is of the
essence with respect to every provision hereof this Note shall be
construed and enforced in accordance with the laws of the State of
California, except to the extent that Federal laws preempt the laws of
the State of California, and all persons and entities in any manner
obligated under this Note consent to the jurisdiction of any Federal or
State Court in the State of California having proper venue and also
consent to service of process by any means authorized by California or
Federal law.
BORROWER:
SOBRATO INTERESTS III, a California limited partnership
By: John Michael Sobrato 1985 Separate Property Trust