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EXHIBIT 10.58
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LEASE AGREEMENT
(PHASE V - LAND)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
NETWORK APPLIANCE, INC.
("NAI")
MARCH 1, 2000
(SUNNYVALE, CALIFORNIA)
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TABLE OF CONTENTS
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1. Term....................................................................................... 2
(a) Scheduled Term...................................................................... 2
(b) Intentionally Deleted............................................................... 2
(c) Intentionally Deleted............................................................... 2
(d) Election by NAI to Terminate After Accelerating the Designated Sale Date............ 2
(e) Extension of the Term............................................................... 3
2. Use and Condition of the Property.......................................................... 3
(a) Use................................................................................. 3
(b) Condition of the Property........................................................... 4
(c) Consideration for and Scope of Waiver............................................... 4
3. Rent....................................................................................... 4
(a) Base Rent Generally................................................................. 4
(b) Impact of Collateral Upon Formulas.................................................. 4
(c) Calculation of and Due Dates for Base Rent.......................................... 5
(i) Amount Payable for Base Rent Periods Ending On or Prior to the
Base Rent Commencement Date............................................ 5
(ii) Determination of Payment Due Dates After the Base Rent
Commencement Date, Generally........................................... 5
(iii) Special Adjustments to Base Rent Payment Dates and Periods............. 6
(iv) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is 100%................ 6
(v) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is Greater Than
Zero and Less Than 100%................................................ 7
(vi) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is Zero................ 8
(d) Additional Rent..................................................................... 8
(e) Intentionally Deleted............................................................... 8
(f) Intentionally Deleted............................................................... 8
(g) Intentionally Deleted............................................................... 8
(h) Intentionally Deleted............................................................... 9
(i) No Demand or Setoff................................................................. 9
(j) Default Interest and Order of Application........................................... 9
4. Nature of this Agreement................................................................... 9
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(a) "Net" Lease Generally............................................................... 9
(b) No Termination...................................................................... 9
(c) Tax Reporting....................................................................... 10
(d) Characterization of this Land Lease................................................. 11
5. Payment of Executory Costs and Losses Related to the Property.............................. 11
(a) Impositions......................................................................... 11
(b) Increased Costs; Capital Adequacy Charges........................................... 11
(c) NAI's Payment of Other Losses; General Indemnification.............................. 12
(d) Exceptions and Qualifications to Indemnities........................................ 14
6. Intentionally Deleted...................................................................... 15
7. Intentionally Deleted...................................................................... 15
8. Environmental.............................................................................. 15
(a) Environmental Covenants by NAI...................................................... 15
(b) Right of BNPLC to do Remedial Work Not Performed by NAI............................. 16
(c) Environmental Inspections and Reviews............................................... 16
(d) Communications Regarding Environmental Matters...................................... 16
9. Insurance Required and Condemnation........................................................ 17
(a) Liability Insurance................................................................. 17
(b) Intentionally Deleted............................................................... 17
(c) Failure to Obtain Insurance......................................................... 17
(d) Condemnation........................................................................ 17
(e) Waiver of Subrogation............................................................... 18
10. Application of Insurance and Condemnation Proceeds......................................... 18
(a) Collection and Application of Insurance and Condemnation Proceeds
Generally........................................................................... 18
(b) Advances of Escrowed Proceeds to NAI................................................ 19
(c) Application of Escrowed Proceeds as a Qualified Prepayment.......................... 19
(d) Special Provisions Applicable After an Event of Default............................. 19
(e) NAI's Obligation to Restore......................................................... 19
(f) Takings of All or Substantially All of the Property on or after the
Base Rent Commencement Date......................................................... 20
11. Additional Representations, Warranties and Covenants of NAI Concerning the
Property................................................................................... 20
(a) Compliance with Covenants and Laws.................................................. 20
(b) Operation of the Property........................................................... 20
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(c) Debts for Construction, Maintenance, Operation or Development....................... 21
(d) Repair, Maintenance, Alterations and Additions...................................... 22
(e) Permitted Encumbrances and Development Documents.................................... 22
(f) Books and Records Concerning the Property........................................... 22
12. Financial Covenants and Other Covenants Incorporated by Reference to Schedule 1............ 23
13. Financial Statements and Other Reports..................................................... 23
(a) Financial Statements; Required Notices; Certificates................................ 23
14. Assignment and Subletting by NAI........................................................... 24
(a) BNPLC's Consent Required............................................................ 24
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters............... 24
(c) Consent Not a Waiver................................................................ 25
15. Assignment by BNPLC........................................................................ 25
(a) Restrictions on Transfers........................................................... 25
(b) Effect of Permitted Transfer or other Assignment by BNPLC........................... 25
16. BNPLC's Right of Access.................................................................... 25
17. Events of Default.......................................................................... 26
18. Remedies................................................................................... 28
(a) Basic Remedies...................................................................... 28
(b) Notice Required So Long As the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Continue Under the Purchase Agreement............ 29
(c) Enforceability...................................................................... 30
(d) Remedies Cumulative................................................................. 30
19. Default by BNPLC........................................................................... 30
20. Quiet Enjoyment............................................................................ 31
21. Surrender Upon Termination................................................................. 31
22. Holding Over by NAI........................................................................ 31
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23. Independent Obligations Evidenced by the Other Operative Documents......................... 32
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EXHIBITS AND SCHEDULES
Exhibit A Legal Description
Exhibit B Insurance Requirements
Exhibit C LIBOR Period Election Form
Schedule 1 Financial Covenants and Other Requirements
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LEASE AGREEMENT
(PHASE V - LAND)
This LEASE AGREEMENT (PHASE V - LAND) (this "LAND LEASE"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of March
1, 2000, the Effective Date. ("EFFECTIVE DATE" and other capitalized terms used
and not otherwise defined in this Land Lease are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement (Phase V -
Land) executed by BNPLC and NAI contemporaneously with this Land Lease. By this
reference, the Common Definitions and Provisions Agreement (Phase V - Land) is
incorporated into and made a part of this Land Lease for all purposes.)
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 Land Lease.
In anticipation of BNPLC's acquisition of the Land under the Existing
Contract, BNPLC and NAI have reached agreement as to the terms and conditions
upon which BNPLC is willing to lease the Land to NAI, and by this Land Lease
BNPLC and NAI desire to evidence such agreement.
GRANTING CLAUSES
BNPLC does hereby LEASE, DEMISE and LET unto NAI 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) all easements and other rights appurtenant to the Land, whether
now owned or hereafter acquired by BNPLC; and
(3) (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 any
abutting land not owned or leased by BNPLC.
BNPLC's interest in all property described in clauses (1) through (3) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include any Improvements (now existing or those to be constructed as
provided in the Other Lease Agreement and the Construction Management Agreement)
or BNPLC's rights appurtenant to the Improvements, it being understood that the
Other Lease Agreement constitutes a separate lease of the Improvements and the
appurtenances thereto, and only the Improvements and the appurtenances thereto,
from BNPLC to NAI.
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 7 below,
BNPLC also hereby grants and assigns to NAI for the term of this Land
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Lease the right to use and enjoy (and, in the case of contract rights, to
enforce) such rights or interests of BNPLC:
(a) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances (including the right to receive
rents under and to otherwise enforce the Premises Lease) and Development
Documents; and
(b) 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 NAI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Land Lease, to the Premises Lease 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 NAI and is accepted and is to be used
and possessed by NAI upon and subject to the following terms and conditions:
1. TERM.
(a) Scheduled Term. The term of this Land Lease (the "TERM") shall
commence on and include the Effective Date, and end on the first Business Day of
March, 2005, unless sooner terminated as expressly herein provided.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Election by NAI to Terminate After Accelerating the Designated
Sale Date. NAI shall be entitled to accelerate the Designated Sale Date (and
thus accelerate the purchase of BNPLC's interest in the Property by NAI 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 Common Definitions and Provisions Agreement (Phase V - Land). In the event,
because of NAI'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, NAI may terminate this Land Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI 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 NAI's
other obligations under the Purchase Agreement;
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(ii) (paid to BNPLC all Base Rent 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 NAI for two successive periods of five years each; provided, however, that
prior to any such extension the following conditions must have been satisfied:
(A) at least ninety days prior to the commencement of any such extension, BNPLC
and NAI must have agreed in writing upon, and received the 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 Common Definitions and Provisions Agreement (Phase V
- Land), and (2) an adjustment to the Rent that NAI 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 NAI, each in its sole and absolute discretion; (B) no Event of Default shall
have occurred and be continuing at the time of NAI's exercise of its option to
extend; and (C) immediately prior to any such extension, this Land Lease must
remain in effect. With respect to the condition that BNPLC and NAI must have
agreed upon the Rent required for any extension of the Term, neither NAI nor
BNPLC is willing to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both NAI 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 NAI exercises its
option to extend the Term as provided in this Paragraph, this Land Lease shall
continue in full force and effect, and the leasehold estate hereby granted to
NAI 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. USE AND CONDITION OF THE PROPERTY.
(a) Use. Subject to the Permitted Encumbrances, the Development
Documents and the terms hereof, NAI may use and occupy the Property during the
Term, but only for the following purposes.
(i) constructing, maintaining and using Improvements on the Land
for purposes expressly permitted by and described in Paragraph 2(a) of
the Other Lease Agreement; and
(ii) other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but NAI acknowledges that BNPLC's
withholding of such approval shall be reasonable if BNPLC determines in
good faith that (1) giving the approval may materially increase BNPLC's
risk of liability for any existing or future environmental problem, or
(2) giving the approval is likely to substantially increase BNPLC's
administrative burden of complying with or monitoring NAI's compliance
with the requirements of this Land Lease or other Operative Documents).
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Nothing in this subparagraph will prevent a tenant under a Premises
Lease executed by NAI, as Landlord, prior to or concurrently with the
Effective Date, from using the space covered thereby for purposes
expressly authorized by the terms and conditions of such Premises Lease.
(b) Condition of the Property. NAI ACKNOWLEDGES THAT IT HAS
CAREFULLY AND FULLY INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY IN ITS
PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO THE USE WHICH MAY BE MADE
THEREOF. NAI ALSO ACCEPTS THE PROPERTY WITHOUT ANY COVENANT, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS AFFILIATES REGARDING THE TITLE
THERETO OR THE RIGHTS OF ANY PARTIES IN POSSESSION OF ANY PART THEREOF, EXCEPT
AS EXPRESSLY SET FORTH IN PARAGRAPH 20. BNPLC SHALL NOT BE RESPONSIBLE FOR ANY
LATENT OR OTHER DEFECT OR CHANGE OF CONDITION IN THE PROPERTY OR FOR ANY
VIOLATIONS WITH RESPECT THERETO OF APPLICABLE LAWS. FURTHER, THOUGH NAI MAY
OBTAIN FROM THIRD PARTIES ANY FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY
REASON OF THE ASSIGNMENT AND LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE 2 OF
THIS LAND LEASE, BNPLC SHALL NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR
SERVICES OF ANY KIND, INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING,
ELECTRICITY, LIGHT OR POWER.
(c) Consideration for and Scope of Waiver. The provisions of
subparagraph 2(b) above have been negotiated by BNPLC and NAI after due
consideration for the Rent payable hereunder and are intended to be a complete
exclusion and negation of any representations or warranties of BNPLC or its
Affiliates, express or implied, with respect to the Property that may arise
pursuant to any law now or hereafter in effect or otherwise, except as expressly
set forth herein.
However, such exclusion of representations and warranties by BNPLC is
not intended to impair any representations or warranties made by other parties,
the benefit of which may pass to NAI during the Term because of the definition
of Personal Property and Property above.
3. RENT.
(a) Base Rent Generally. On each Base Rent Date through the end of
the Term, NAI shall pay BNPLC rent ("BASE RENT"). Each payment of Base Rent must
be received by BNPLC no later than 10:00 a.m. (Pacific time) on the date it
becomes due; if received after 10:00 a.m. (Pacific time) it will be considered
for purposes of this Land Lease as received on the next following Business Day.
At least five days prior to any Base Rent Date upon which an installment of Base
Rent shall become due, BNPLC shall notify NAI in writing of the amount of each
installment, calculated as provided below. Any failure by BNPLC to so notify
NAI, however, shall not constitute a waiver of BNPLC's right to payment, but
absent such notice NAI shall not be in default hereunder for any underpayment
resulting therefrom if NAI, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.
(b) Impact of Collateral Upon Formulas . To ease the administrative
burden of this Land Lease and the Pledge Agreement, the formulas for calculating
Base Rent set out below in subparagraph 3(c) reflect a reduction in the Base
Rent equal to the interest that would accrue on any Collateral provided in
accordance with the requirements of the Pledge Agreement from time to time if
the Accounts (as defined in the Pledge Agreement) bore interest at the Effective
Rate. BNPLC has agreed to such reduction to provide NAI with the economic
equivalent of interest on such Collateral, and
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in return NAI has agreed to the provisions of the Pledge Agreement that excuse
the actual payment of interest on the Accounts. By incorporating such reduction
of Base Rent into the formulas below, and by providing for noninterest bearing
Accounts in the Pledge Agreement, the parties will avoid an unnecessary and
cumbersome periodic exchange of equal payments. It is not, however, the intent
of BNPLC or NAI to understate Base Rent or interest for financial reporting
purposes. Accordingly, for purposes of any financial reports that this Land
Lease requires of NAI from time to time, NAI may report Base Rent as if there
had been no such reduction and as if the Collateral from time to time provided
in accordance with the requirements of the Pledge Agreement had been maintained
in Accounts bearing interest at the Effective Rate.
(c) Calculation of and Due Dates for Base Rent. Payments of Base
Rent shall be calculated and become due as follows:
(i) Amount Payable for Base Rent Periods Ending On or Prior to the
Base Rent Commencement Date. The Base Rent for any Base Rent Period that
ends prior to the Base Rent Commencement Date shall be payable on the
Base Rent Date upon which such period ends and shall equal:
- Stipulated Loss Value (Building 4/Land) on the first day of
such Base Rent Period, times
- the sum of (a) the Effective Rate with respect to such Base
Rent Period, plus (b) the Unsecured Spread for the period
from and including the first day of such Base Rent Period,
times
- the number of days in the such Base Rent Period, divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that Stipulated Loss
Value (Building 4/Land) on the first day of a hypothetical Base Rent
Period that ends prior to the Base Rent Commencement Date is $5,000,000;
that the Effective Rate for the Base Rent Period is 6%; that the
Unsecured Spread is one hundred fifty basis points (150/100 of 1%) upon
the commencement of such Base Rent Period; and that such Base Rent
Period contains exactly thirty days. Under such assumptions, the Base
Rent for the hypothetical Base Rent Period will equal:
$5,000,000 x (6% + 1.50%) x 30/360 = $31,250
Base Rent for any Base Rent Period ending on the Base Rent
Commencement Date will also be calculated pursuant to the formula set
out in this subparagraph and will be payable on the Base Rent
Commencement Date, if (consistent with the parties expectations as of
the Effective Date) the Base Rent Commencement Date (Building 4) occurs
prior to the Base Rent Commencement Date (Building 5).
(ii) Determination of Payment Due Dates After the Base Rent
Commencement Date, Generally. For all Base Rent Periods subject to a
LIBOR Period Election of one month or three months, Base Rent shall be
due in one installment on the Base Rent Date upon which the Base
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Rent Period ends. For Base Rent Periods subject to a LIBOR Period
Election of six months, Base Rent shall be payable in two installments,
with the first installment becoming due on the Base Rent Date that
occurs on the first Business Day of the third calendar month following
the commencement of such Base Rent Period, and with the second
installment becoming due on the Base Rent Date upon which the Base Rent
Period ends.
(iii) Special Adjustments to Base Rent Payment Dates and Periods.
Notwithstanding the foregoing:
a) Any Base Rent Period that begins before, and does not
otherwise end before, a Failed Collateral Test Date shall end
upon but not include such Failed Collateral Test Date, and such
Failed Collateral Test Date shall constitute a Base Rent Date,
upon which NAI must pay all accrued, unpaid Base Rent for the
Base Rent Period just ended.
b) Consistent with clause (3) of the definition of LIBOR
Period Election in the Common Definitions and Provisions
Agreement (Phase V - Land), each successive Base Rent Date after
any such Failed Collateral Test Date shall be the first Business
Day of the first calendar month following the calendar month
which includes the preceding Base Rent Date, so long as any
Mandatory Collateral Period shall continue.
c) In addition to Base Rent due on a Failed Collateral
Test Date, NAI must pay the Breakage Costs, if any, resulting
from any early ending of a Base Rent Period on the Failed
Collateral Test Date pursuant to the preceding clause
3.(c)(iii)a).
d) If NAI or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent
shall be due on the date of purchase in addition to the purchase
price and other sums due BNPLC under the Purchase Agreement.
(iv) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is 100%. Each
installment of Base Rent payable for any Base Rent Period that commences
on or after the Base Rent Commencement Date and during which the
Collateral Percentage is one hundred percent (100%) shall equal:
- Stipulated Loss Value on the first day of such Base Rent
Period, times
- the Secured Spread for the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, times
- the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
- three hundred sixty.
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Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent
(100%); that prior to the first day of such Base Rent Period Qualified
Prepayments have been received by BNPLC, leaving a Stipulated Loss Value
of $20,000,000; that the Secured Spread is thirty basis points (30/100
of 1%); and that such Base Rent Period contains exactly thirty days.
Under such assumptions, the Base Rent for the hypothetical Base Rent
Period will equal:
$20,000,000 x .30% x 30/360 = $5,000
(v) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is Greater Than Zero and
Less Than 100%. Each installment of Base Rent payable for any Base Rent
Period that commences on or after the Base Rent Commencement Date and
during which the Collateral Percentage is greater than zero and less
than one hundred percent (100%) shall equal:
- Stipulated Loss Value on the first day of such Base Rent
Period, times
- the sum of:
(A) the product of:
(1) the Collateral Percentage for such Base
Rent Period, times
(2) the Secured Spread for the period from
and including the preceding Base Rent
Date to but not including the Base Rent
Date upon which the installment is due,
plus
(B) the product of:
(1) one minus the Collateral Percentage for
such Base Rent Period, times
(2) the sum of (a) the Effective Rate with
respect to such Base Rent Period, plus
(b) the Unsecured Spread for the period
from and including the preceding Base
Rent Date to but not including the Base
Rent Date upon which the installment is
due, times
- the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is forty percent (40%);
that prior to the first day of such Base Rent Period Qualified
Prepayments have been received by BNPLC, leaving a Stipulated Loss Value
of $20,000,000; that the Effective Rate for the Base Rent Period is 6%;
that the Secured Spread is
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thirty basis points (30/100 of 1%); that upon the commencement of such
Base Rent Period the Unsecured Spread is one hundred fifty basis points
(150/100 of 1%); and that such Base Rent Period contains exactly thirty
days. Under such assumptions, the Base Rent for the hypothetical Base
Rent Period will equal:
$20,000,000 x {(40% x .30%) + ([1 - 40%] x [6% + 1.50%])} x 30/360 = $77,000
(vi) Base Rent Formula for Periods After the Base Rent Commencement
Date and During Which The Collateral Percentage is Zero. Each
installment of Base Rent payable for any Base Rent Period that commences
on or after the Base Rent Commencement Date and during which the
Collateral Percentage is zero shall equal:
- Stipulated Loss Value on the first day of such Base Rent
Period, times
- the sum of (a) the Effective Rate with respect to such Base
Rent Period, plus (b) the Unsecured Spread for the period
from and including the preceding Base Rent Date to but not
including the Base Rent Date upon which the installment is
due, times
- the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is zero percent (0%);
that prior to the first day of such Base Rent Period Qualified
Prepayments have been received by BNPLC, leaving a Stipulated Loss Value
of $20,000,000; that the Effective Rate for the Base Rent Period is 6%;
that the Unsecured Spread is one hundred fifty basis points (150/100 of
1%) upon the commencement of such Base Rent Period; and that such Base
Rent Period contains exactly thirty days. Under such assumptions, the
Base Rent for the hypothetical Base Rent Period will equal:
$20,000,000 x (6% + 1.50%) x 30/360 = $125,000
(d) Additional Rent. All amounts which NAI is required to pay to or
on behalf of BNPLC pursuant to this Land Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "ADDITIONAL RENT", and together Base Rent and Additional
Rent are herein sometimes called "RENT").
(e) Intentionally Deleted.
(f) Intentionally Deleted.
(g) Intentionally Deleted.
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(h) Intentionally Deleted.
(i) No Demand or Setoff. Except as expressly provided herein, NAI
shall pay all Rent without notice or demand and without counterclaim, deduction,
setoff or defense.
(j) Default Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the Default Rate in effect from time to
time from the date due until paid; provided, that nothing herein contained will
be construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. BNPLC shall be
entitled to apply any amounts paid by or on behalf of NAI against any Rent then
past due in the order the same became due or in such other order as BNPLC may
elect.
4. NATURE OF THIS AGREEMENT.
(a) "Net" Lease Generally. Subject only to the exceptions listed in
subparagraph 5(d) below, it is the intention of BNPLC and NAI that Base Rent and
other payments herein specified shall be absolutely net to BNPLC and that NAI
shall pay all costs, expenses and obligations of every kind relating to the
Property or this Land Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Land Lease or the transactions contemplated herein.
However, neither this subparagraph 4(a) nor the indemnity in this
subparagraph 5(c)(i) shall be construed to make NAI liable for (I) an allocation
of general overhead or internal administrative expenses of BNPLC or any other
Interested Party or (II) any duplicate payment of the same Loss to both BNPLC
and another Interested Party. (If, for example, BNPLC were required to make a
$10 fine because of a failure of the Property to comply with Applicable Laws,
and a Participant were required by the Participation Agreement to reimburse
BNPLC for 20% of the $10, NAI would not be required by this subparagraph 4(a) or
by subparagraph 5(c)(i) to pay both $10 to BNPLC and $2 to the Participant on
account of the fine.)
(b) No Termination. Except as expressly provided in this Land Lease
itself, this Land Lease shall not terminate, nor shall NAI have any right to
terminate this Land Lease, nor shall NAI be entitled to any abatement of the
Rent, nor shall the obligations of NAI under this Land 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 NAI's use or
development of all or any portion of the Property or any interference with such
use by governmental action or otherwise, (iv) any eviction of NAI or of anyone
claiming through or under NAI, (v) any default on the part of BNPLC under this
Land Lease or under any other agreement to which BNPLC and NAI are parties, (vi)
the inadequacy in any way whatsoever of 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
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<PAGE> 15
hereto that the obligations of NAI hereunder shall be separate and independent
of the covenants and agreements of BNPLC, that Base Rent and all other sums
payable by NAI hereunder shall continue to be payable in all events and that the
obligations of NAI 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 Land Lease. Without limiting the foregoing, NAI waives
to the extent permitted by Applicable Laws, except as otherwise expressly
provided herein, all rights to which NAI may now or hereafter be entitled by law
(including any such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to quit, terminate or
surrender this Land Lease or the Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.
However, nothing in this subparagraph 4(b) shall be construed as a
waiver by NAI of any right NAI may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Land Lease that continues
beyond the period for cure provided in Paragraph 19: (i) the recovery of
monetary damages, (ii) injunctive relief in case of the violation, or attempted
or threatened violation, by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Land Lease which are binding upon BNPLC
(including the confidentiality provisions set forth in subparagraph 16(c)
below), or (iii) a decree compelling performance by BNPLC of any of the express
covenants, agreements, conditions or provisions of this Land Lease which are
binding upon BNPLC.
(c) Tax Reporting. BNPLC and NAI shall report this Land Lease and
the Purchase Agreement for federal income tax purposes as a conditional sale
unless prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Land Lease and
the Purchase Agreement as a conditional sale for federal income tax reporting
purposes, BNPLC shall notify NAI in writing of such challenge and consider in
good faith any reasonable suggestions by NAI about an appropriate response. In
any event, NAI shall (subject only to the limitations set forth in this
subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice to NAI shall not
excuse NAI from its obligations under this Paragraph; provided, that if none of
the officers of NAI and none of the employees of NAI responsible for tax matters
are aware of the challenge described in the notice and such failure by BNPLC
renders unavailable defenses that NAI might otherwise assert, or precludes
actions that NAI might otherwise take, to minimize its obligations hereunder,
then NAI shall be excused from its obligation to indemnify BNPLC against
liabilities, costs, additional taxes and other expenses, if any, which would not
have been incurred but for such failure. For example, if BNPLC fails to provide
NAI with a copy of a notice of a challenge by the Internal Revenue Service
covered by the indemnities set out in this Land Lease and NAI is not otherwise
already aware of such challenge, and if as a result of such failure BNPLC
becomes liable for penalties and interest covered by the indemnities in excess
of the
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<PAGE> 16
penalties and interest that would have accrued if NAI had been promptly provided
with a copy of the notice, then NAI will be excused from any obligation to BNPLC
to pay the excess.
(d) Characterization of this Land Lease. For purposes of
determining the appropriate financial accounting for this Land Lease and for
purposes of determining their respective rights and remedies under state law,
BNPLC and NAI believe and intend that (i) this Land Lease constitutes a true
lease, not a mere financing arrangement, enforceable in accordance with its
express terms, and the preceding subparagraph is not intended to affect the
enforcement of any other provisions of this Land Lease or the Purchase
Agreement, and (ii) the Purchase Agreement shall constitute a separate and
independent contract, enforceable in accordance with the express terms and
conditions set forth therein. In this regard, NAI acknowledges that NAI asked
BNPLC to participate in the transactions evidenced by this Land Lease and the
Purchase Agreement as a landlord and owner of the Property, not as a lender.
Although other transactions might have been used to accomplish similar results,
NAI expects to receive certain material accounting and other advantages through
the use of a lease transaction. Accordingly, and notwithstanding the reporting
for income tax purposes described in the preceding subparagraph, NAI cannot
equitably deny that this Land Lease and the Purchase Agreement should be
construed and enforced in accordance with their respective terms, rather than as
a mortgage or other security device, in any action brought by BNPLC to enforce
this Land Lease or the Purchase Agreement.
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.
(a) Impositions. Subject only to the exceptions listed in
subparagraph 5(d) below, NAI shall pay or cause to be paid prior to delinquency
all ad valorem taxes assessed against the Property and other Impositions. If
requested by BNPLC from time to time, NAI shall furnish BNPLC with receipts
showing payment of all Impositions prior to the applicable delinquency date
therefor.
Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest NAI shall not be deemed in default under
any of the provisions of this Land Lease because of the Imposition if (1) NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (2) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs,
penalties and interest thereon, promptly after such judgment becomes final;
provided, however, in any event each such contest shall be concluded and the
contested Impositions must be paid by NAI prior to the earlier of (i) the date
that any criminal prosecution is instituted or overtly threatened against BNPLC
or its directors, officers or employees because of the nonpayment thereof or
(ii) the date any writ or order is issued under which any property owned or
leased by BNPLC (including the Property) may be seized or sold or any other
action is taken against BNPLC or against any property owned or leased by BNPLC
because of the nonpayment thereof, or (iii) any Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.
(b) Increased Costs; Capital Adequacy Charges. Subject only to the
exceptions listed in subparagraph 5(d) below:
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<PAGE> 17
(i) If after the Effective Date there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then NAI shall from time
to time, pay to BNPLC for the account of BNPLC's Parent or such other
Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of reserve
requirements applicable to Collateral held from time to time by BNPLC's
Parent or other Participants pursuant to the Pledge Agreement would be
an increase covered by the preceding sentence. A certificate as to the
amount of such increased cost, submitted to BNPLC and NAI by BNPLC's
Parent or the other Participant, shall be conclusive and binding upon
NAI, absent clear and demonstrable error.
(ii) BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount
of capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made
to BNPLC to permit BNPLC to maintain BNPLC's investment in the Property.
To the extent that BNPLC's Parent or another Participant demands Capital
Adequacy Charges as compensation for the additional capital requirements
reasonably allocable to such investment or advances, NAI shall pay to
BNPLC for the account of BNPLC's Parent or the other Participant, as the
case may be, the amount so demanded. Without limiting the foregoing,
BNPLC and NAI hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
Pledge Agreement will cause a zero percent (0%) risk weight to be
assigned to a percentage (equal to the Collateral Percentage) of the
collective investment of BNPLC and the Participants in the Property
pursuant to 12 Code of Federal Regulations, part 225, as from time to
time supplemented or amended, or pursuant to any other similar or
successor statute or regulation applicable to BNPLC and the
Participants. If and so long as such risk weight is increased the
assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of
return to BNPLC, BNPLC's Parent and any other Participants (net of their
costs of maintaining required capital) that they would have enjoyed from
this Land Lease absent such increase.
(iii) Any amount required to be paid by NAI under this subparagraph
5(b) shall be due ten days after a demand for such payment is received
by NAI.
(c) NAI's Payment of Other Losses; General Indemnification. Subject
only to the exceptions listed in subparagraph 5(d) below:
(i) All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time
and from time to time by reason of, in connection with or arising out of
(A) their ownership or alleged ownership of any interest in the Property
or the Rents, (B) the use and operation of the Property, (C) the
negotiation, administration or enforcement of the Operative Documents,
(D) the making of the Initial Funding Advance, (E) the Premises Lease,
(F) the breach by NAI of this Land Lease or any other document executed
by NAI in connection herewith, (G) any failure of the Property or NAI
itself to comply with Applicable Laws, (H) Permitted Encumbrances, (I)
Hazardous Substance
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<PAGE> 18
Activities, including those occurring prior to Effective Date, (J) any
obligations under the Existing Contract related to the Property that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever, shall be paid by NAI, and NAI
shall indemnify and defend BNPLC and other Interested Parties from and
against all such Losses.
(ii) THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT
OF BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH
IN THE PRECEDING SUBPARAGRAPH 5(c)(i), SHALL APPLY EVEN IF AND WHEN THE
SUBJECT MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE
OUT OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED
PARTY. FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF
INSURANCE OBTAINED BY NAI OR REQUIRED OF NAI BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
THE INDEMNITIES AND RELEASES ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH
INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE
IS INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES
AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
INDEMNIFICATION BY THIS LAND LEASE.
(iii) Costs and expenses for which NAI shall be responsible
pursuant to this subparagraph will include appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes, brokerage fees and
commissions, abstract fees, title policy fees, Uniform Commercial Code
search fees, escrow fees and Attorneys' Fees incurred by BNPLC with
respect to the Property, whether such costs and expenses are incurred at
the time of execution of this Land Lease or at any time during the Term.
(iv) NAI's obligations under this subparagraph 5(c) shall survive
the termination or expiration of this Land Lease. Any amount to be paid
by NAI under this subparagraph 5(c) shall be due ten days after a demand
for such payment is received by NAI.
(v) If an Interested Party notifies NAI of any claim or proceeding
included in, or any investigation or allegation concerning, Losses for
which NAI is responsible pursuant to this subparagraph 5(c), NAI shall
assume on behalf of the Interested Party and conduct with due diligence
and in good faith the investigation and defense thereof and the response
thereto with counsel selected by NAI, but satisfactory to the Interested
Party; provided, that the Interested Party shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both NAI and the Interested Party
and the Interested Party shall have reasonably concluded that there are
legal defenses available to it which are inconsistent with or in
addition to those available to NAI, then the Interested Party shall have
the right to select separate counsel to participate in the investigation
and defense of and response to such claim, proceeding,
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<PAGE> 19
investigation or allegation on its own behalf, and NAI shall pay or
reimburse the Interested Party for all Attorney's Fees incurred by the
Interested Party because of the selection of such separate counsel. If
NAI fails to assume promptly (and in any event within fifteen days after
being notified of the applicable claim, proceeding, investigation or
allegation) the defense of the Interested Party, then the Interested
Party may contest (or settle, with the prior consent of NAI, which
consent will not be unreasonably withheld) the claim, proceeding,
investigation or allegation at NAI's expense using counsel selected by
the Interested Party. Moreover, if any such failure by NAI continues for
forty-five days or more after NAI is notified of any such claim,
proceeding, investigation or allegation, the Interested Party may elect
not to contest or continue contesting the same and instead, in
accordance with the written advice of counsel, settle (or pay in full)
all claims related thereto without NAI's consent and without releasing
NAI from any obligations to the Interested Party under this subparagraph
5(c).
(d) Exceptions and Qualifications to Indemnities.
(i) BNPLC acknowledges and agrees that nothing in subparagraph 4(a)
or the preceding subparagraphs of this Paragraph 5 shall be construed to require
NAI to pay or reimburse an Interested Party for (w) any costs or expenses
incurred by BNPLC or any transferee to accomplish any Permitted Transfers
described in clauses (2), (3), (4), (6) or (7) of the definition thereof in the
Common Definitions and Provisions Agreement (Phase V - Land), (x) Excluded
Taxes, (y) Losses incurred or suffered by such Interested Party that are
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of that Interested Party, or
(z) Losses incurred or suffered by Participants in connection with their
negotiation or execution of the Participation Agreement or Pledge Agreement (or
supplements making them parties thereto) or in connection with any due diligence
they may undertake before entering into the Participation Agreement or Pledge
Agreement. Further, without limiting BNPLC's rights (as provided in other
provisions of this Land Lease and other Operative Documents) to include the
following in the calculation of Stipulated Loss Value or the Break Even Price or
collect Base Rent, a Supplemental Payment and other amounts, the calculation of
which depends upon the Stipulated Loss Value or the Break Even Price, BNPLC
acknowledges and agrees that nothing in subparagraph 4(a) or the preceding
subparagraphs of this Paragraph 5 shall be construed to require NAI to pay or
reimburse an Interested Party for:
a) costs paid by BNPLC with the proceeds of the Initial Funding
Advance as part of the Transaction Expenses; or
b) Construction Advances made under (and as defined in) the
Construction Management Agreement or the Other Lease
Agreement, including costs and expenditures incurred or paid
by or on behalf of BNPLC after any Landlord's Election to
Continue Construction under (and as defined in) the Other
Lease Agreement, to the extent that such costs and
expenditures are considered to be Construction Advances
pursuant to subparagraph 6(e) of the Other Lease Agreement.
Further, if an Interested Party receives a written notice of Losses
that such Interested Party believes are covered by the indemnity in
subparagraph 5(c)(i), then such Interested Party will be expected
to promptly furnish a copy of such notice to NAI. The failure to
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<PAGE> 20
so provide a copy of the notice to NAI shall not excuse NAI from
its obligations under subparagraph 5(c)(i); provided, that if NAI
is unaware of the matters described in the notice and such failure
renders unavailable defenses that NAI might otherwise assert, or
precludes actions that NAI might otherwise take, to minimize its
obligations, then NAI shall be excused from its obligation to
indemnify such Interested Party (and any Affiliate of such
Interested Party) against the Losses, if any, which would not have
been incurred or suffered but for such failure. For example, if
BNPLC fails to provide NAI with a copy of a notice of an obligation
covered by the indemnity set out in subparagraph 5(c)(i) and NAI is
not otherwise already aware of such obligation, and if as a result
of such failure BNPLC becomes liable for penalties and interest
covered by the indemnity in excess of the penalties and interest
that would have accrued if NAI had been promptly provided with a
copy of the notice, then NAI will be excused from any obligation to
BNPLC (or any Affiliate of BNPLC) to pay the excess.
6. INTENTIONALLY DELETED.
7. INTENTIONALLY DELETED.
8. ENVIRONMENTAL.
(a) Environmental Covenants by NAI. NAI covenants that:
(i) NAI shall not conduct or permit others to conduct Hazardous
Substance Activities, except Permitted Hazardous Substance Use and
Remedial Work.
(ii) NAI shall not discharge or permit the discharge of anything on
or from the Property that would require any permit under applicable
Environmental Laws, other than (1) storm water runoff, (2) waste water
discharges through a publicly owned treatment works, (3) discharges that
are a necessary part of any Remedial Work, and (4) other similar
discharges consistent with the definition herein of Permitted Hazardous
Substance Use, in each case in strict compliance with Environmental
Laws.
(iii) Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions
of this Land Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict
compliance with Environmental Laws.
(iv) If requested by BNPLC in connection with any Remedial Work
required by this subparagraph, NAI shall retain independent
environmental consultants acceptable to BNPLC to evaluate any
significant new information generated during NAI's implementation of the
Remedial Work and to discuss with NAI whether such new information
indicates the need for any additional measures that NAI should take to
protect the health and safety of persons (including employees,
contractors and subcontractors and their employees) or to protect the
environment. NAI shall implement any such additional measures to the
extent required with respect to the Property by Environmental Laws or
otherwise believed by BNPLC to be
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reasonably required and to the extent not inconsistent with the other
provisions of this Land Lease.
(b) Right of BNPLC to do Remedial Work Not Performed by NAI. If
NAI's failure to cure any breach of the covenants set forth in subparagraph 8(a)
continues beyond the Environmental Cure Period (as defined below), BNPLC may, in
addition to any other remedies available to it, conduct all or any part of the
Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.
(c) Environmental Inspections and Reviews. BNPLC reserves the right
to retain environmental consultants to review any report prepared by NAI or to
conduct BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph 8. NAI grants to BNPLC and to BNPLC's agents,
employees, consultants and contractors the right to enter upon the Property at
any time to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. NAI shall
promptly reimburse BNPLC for the fees of its environmental consultants and the
costs of any such inspections and tests.
(d) Communications Regarding Environmental Matters.
(i) NAI shall immediately advise BNPLC of (1) any discovery of any
event or circumstance which would render any of the representations of NAI
herein or in the Closing Certificate concerning environmental matters materially
inaccurate or misleading if made at the time of such discovery and assuming that
NAI was aware of all relevant facts, (2) any Remedial Work (or change in
Remedial Work) required or undertaken by NAI or its Affiliates in response to
any (A) discovery of any Hazardous Substances on, under or about the Property
other than Permitted Hazardous Substances or (B) any claim for damages resulting
from Hazardous Substance Activities, (3) NAI's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Property
which could cause the Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions under Environmental
Laws, or (4) any investigation or inquiry of any failure or alleged failure by
NAI to comply with Environmental Laws affecting the Property by any governmental
authority responsible for enforcing Environmental Laws. In such event, NAI shall
deliver to BNPLC within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action that NAI
proposes to take with respect thereto, if any, to bring the
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<PAGE> 22
Property into compliance with Environmental Laws or to correct any
breach by NAI of this Paragraph 8, including any proposed Remedial Work,
the estimated cost and time of completion, the name of the contractor
and a copy of the construction contract, if any, and such additional
data, instruments, documents, agreements or other materials or
information as BNPLC may request.
(ii) NAI shall provide BNPLC with copies of all material written
communications with federal, state and local governments, or agencies
relating to the matters listed in the preceding clause (i). NAI shall
also provide BNPLC with copies of any correspondence from third Persons
which threaten litigation over any significant failure or alleged
significant failure of NAI to maintain or operate the Property in
accordance with Environmental Laws.
(iii) Prior to NAI's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
NAI shall, to the extent practicable, deliver to BNPLC a draft of the
proposed submission (together with the proposed date of submission), and
in good faith assess and consider any comments of BNPLC regarding the
same. Promptly after BNPLC's request, NAI shall meet with BNPLC to
discuss the submission, shall provide any additional information
requested by BNPLC and shall provide a written explanation to BNPLC
addressing the issues raised by comments (if any) of BNPLC regarding the
submission, including a reasoned analysis supporting any decision by NAI
not to modify the submission in accordance with comments of BNPLC.
9. INSURANCE REQUIRED AND CONDEMNATION.
(a) Liability Insurance. Throughout the Term NAI shall maintain
commercial general liability insurance against claims for bodily and personal
injury, death and property damage occurring in or upon or resulting from any
occurrence in or upon the Property under one or more insurance policies that
satisfy the requirements set forth in Exhibit B. NAI shall deliver and maintain
with BNPLC for each liability insurance policy required by this Land Lease
written confirmation of the policy and the scope of the coverage provided
thereby issued by the applicable insurer or its authorized agent, which
confirmation must also satisfy the requirements set forth in Exhibit B.
(b) Intentionally Deleted.
(c) Failure to Obtain Insurance. If NAI fails to obtain any
insurance or to provide confirmation of any such insurance as required by this
Land Lease, BNPLC shall be entitled (but not required) to obtain the insurance
that NAI has failed to obtain or for which NAI has not provided the required
confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require NAI to reimburse BNPLC for the cost of such
insurance and to pay interest thereon computed at the Default Rate from the date
such cost was paid by BNPLC until the date of reimbursement by NAI (provided,
however, that any such insurance cost paid by BNPLC prior to the Base Rent
Commencement Date will be charged against the Construction Allowance under, and
as defined in, the Construction Management Agreement as if it had been paid by
NAI).
(d) Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Property or any
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<PAGE> 23
portion thereof, each party shall notify the other (provided, however, BNPLC
shall have no liability for its failure to provide such notice) of the pendency
of such proceedings. NAI shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, its attorneys and experts and
cooperate with them as requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds of sale in lieu of
condemnation with respect to the Property and all judgments, decrees and awards
for injury or damage to the Property shall be paid to BNPLC as Escrowed
Proceeds, and all such proceeds will be applied as provided in Paragraph 10.
BNPLC is hereby authorized, in the name of NAI, at any time when an Event of
Default shall have occurred and be continuing, or otherwise with NAI's prior
consent, to execute and deliver valid acquittances for, and to appeal from, any
such judgment, decree or award concerning condemnation of any of the Property.
BNPLC shall not be in any event or circumstances liable or responsible for
failure to collect, or to exercise diligence in the collection of, any such
proceeds, judgments, decrees or awards.
(e) Waiver of Subrogation. NAI, for itself and for any Person
claiming through it (including any insurance company claiming by way of
subrogation), waives any and every claim which arises or may arise in its favor
against BNPLC or any other Interested Party and the officers, directors, and
employees of the Interested Parties for any and all Losses, to the extent that
NAI is compensated by insurance or would be compensated by the insurance
policies contemplated in this Land Lease, but for any deductible or self-insured
retention maintained under such insurance or but for a failure of NAI to
maintain the insurance as required by this Land Lease. NAI agrees to have such
insurance policies properly endorsed so as to make them valid notwithstanding
this waiver, if such endorsement is required to prevent a loss of insurance.
10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.
(a) Collection and Application of Insurance and Condemnation
Proceeds Generally. This Paragraph 10 shall govern the application of proceeds
received by BNPLC or NAI during the Term from any third party (1) as
compensation for any restriction placed upon the use or development of the
Property or for the condemnation of the Property or any portion thereof, or (2)
because of any judgment, decree or award for injury or damage to the Property
(e.g.,damage resulting from a third party's release of Hazardous Materials onto
the Property); excluding, however, any funds paid to BNPLC by BNPLC's Parent, by
an Affiliate of BNPLC or by any Participant that is made to compensate BNPLC for
any Losses BNPLC may suffer or incur in connection with this Land Lease or the
Property. NAI will promptly pay over to BNPLC any insurance, condemnation or
other proceeds covered by this Paragraph 10 which NAI may receive from any
insurer, condemning authority or other third party. All proceeds covered by this
Paragraph 10, including those received by BNPLC from NAI or third parties, shall
be applied as follows:
(i) First, proceeds covered by this Paragraph 10 will be used to
reimburse BNPLC for any costs and expenses, including Attorneys' Fees,
that BNPLC incurred to collect the proceeds.
(ii) Second, the proceeds remaining after such reimbursement to
BNPLC (hereinafter, the "REMAINING PROCEEDS") will be applied, as
hereinafter more particularly provided, either as a Qualified Prepayment
or to reimburse NAI or BNPLC for the actual out-of-pocket costs of
repairing or restoring the Property. Until, however, any Remaining
Proceeds received by BNPLC are applied by BNPLC as a Qualified
Prepayment or applied by BNPLC to reimburse costs of
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repairs to or restoration of the Property pursuant to this Paragraph 10,
BNPLC shall hold and maintain such Remaining Proceeds as Escrowed
Proceeds in an interest bearing account, and all interest earned on such
account shall be added to and made a part of such Escrowed Proceeds.
(b) Advances of Escrowed Proceeds to NAI. Except as otherwise
provided below in this Paragraph 10, BNPLC shall advance all Remaining Proceeds
held by it as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket
cost to NAI of repairing or restoring the Property in accordance with the
requirements of this Land Lease and the other Operative Documents as the
applicable repair or restoration progresses and upon compliance by NAI with such
terms, conditions and requirements as may be reasonably imposed by BNPLC. In no
event, however, shall BNPLC be required to pay Escrowed Proceeds to NAI in
excess of the actual out-of-pocket cost to NAI of the applicable repair or
restoration, as evidenced by invoices or other documentation satisfactory to
BNPLC, it being understood that BNPLC may retain and apply any such excess as a
Qualified Prepayment.
(c) Application of Escrowed Proceeds as a Qualified Prepayment.
Provided no Event of Default shall have occurred and be continuing, BNPLC shall
apply any Remaining Proceeds paid to it (or other amounts available for
application as a Qualified Prepayment) as a Qualified Prepayment on any date
that BNPLC is directed to do so by a notice from NAI; however, if such a notice
from NAI specifies an effective date for a Qualified Prepayment that is less
than five Business Days after BNPLC's actual receipt of the notice, BNPLC may
postpone the date of the Qualified Prepayment to any date not later than five
Business Days after BNPLC's receipt of the notice. In any event, except when
BNPLC is required by the preceding sentence to apply Remaining Proceeds or other
amounts as a Qualified Prepayment on a Base Rent Date, BNPLC may deduct Breakage
Costs incurred in connection with any Qualified Prepayment from the Remaining
Proceeds or other amounts available for application as the Qualified Prepayment,
and NAI will reimburse BNPLC upon request for any such Breakage Costs that BNPLC
incurs but does not deduct.
(d) Special Provisions Applicable After an Event of Default.
Notwithstanding the foregoing, when any Event of Default shall have occurred and
be continuing, BNPLC shall be entitled to receive and collect all insurance,
condemnation or other proceeds governed by this Paragraph 10 and to apply all
Remaining Proceeds, when and to the extent deemed appropriate by BNPLC in its
sole discretion, either (A) to the reimbursement of NAI or BNPLC for the
out-of-pocket cost of repairing or restoring the Property, or (B) as Qualified
Prepayments.
(e) NAI's Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, and notwithstanding other
provisions of this Land Lease to the contrary, if the Property is damaged by
fire or other casualty or less than all or substantially all of the Property is
taken by condemnation, NAI must:
A) increase the value of the Property or the remainder thereof by
restoring the same (in a manner consistent with the requirements and
limitations imposed by this Land Lease and the other Operative Documents
or otherwise acceptable to BNPLC), or decrease Stipulated Loss Value by
tendering a payment to BNPLC for application as a Qualified Prepayment,
as necessary to cause Current AS IS Market Value to be not less than
sixty percent (60%) of Stipulated Loss Value; and
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B) restore the Property or the remainder thereof to a reasonably
safe and sightly condition.
(f) Takings of All or Substantially All of the Property on or after
the Base Rent Commencement Date. In the event of any taking of all or
substantially all of the Property on or after the Base Rent Commencement Date,
BNPLC shall be entitled to apply all Remaining Proceeds as a Qualified
Prepayment. In addition, if Stipulated Loss Value immediately prior to any such
taking exceeds the sum of the Remaining Proceeds resulting from such
condemnation, then BNPLC shall be entitled to recover the excess from NAI upon
demand as an additional Qualified Prepayment, whereupon this Land Lease shall
terminate. Any taking of so much of the Real Property as, in BNPLC's reasonable
good faith judgment, makes it impracticable to restore or improve the remainder
thereof as required by part (2) of the preceding subparagraph shall be
considered a taking of substantially all the Property for purposes of this
Paragraph 10.
11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI
CONCERNING THE PROPERTY. NAI represents, warrants and covenants as
follows:
(a) Compliance with Covenants and Laws. The use of the Property
permitted by this Land Lease complies, or will comply after NAI obtains
available permits as the tenant under this Land Lease, in all material respects
with all Applicable Laws. NAI has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for any
construction upon or use of the Property permitted by this Land Lease.
(b) Operation of the Property. During the Term, NAI shall operate
the Property in a good and workmanlike manner and substantially in compliance
with all Applicable Laws and will pay or cause to be paid all fees or charges of
any kind in connection therewith. (If NAI does not promptly correct any failure
of the Property to comply with Applicable Laws that is the subject of a written
notice given to NAI or BNPLC by any governmental authority, then for purposes of
the preceding sentence, NAI shall be considered not to have maintained the
Property "substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under (and as defined in) the Construction
Management Agreement or materially and adversely affect the value of the
Property or NAI's use, occupancy or operations on the Property, NAI shall not,
without BNPLC's prior consent: (i) initiate or permit any zoning
reclassification of the Property; (ii) seek any variance under existing zoning
ordinances applicable to the Property; (iii) use or permit the use of the
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations; (iv)
execute or file any subdivision plat affecting the Property; or (v) consent to
the annexation of the Property to any municipality. If (A) a change in the
zoning or other Applicable Laws affecting the permitted use or development of
the Property shall occur after the Base Rent Commencement Date that reduces the
value of the Property, or (B) conditions or circumstances on or about the
Property are discovered after the Base Rent Commencement Date (such as the
presence of an endangered species) which substantially
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impede development and thereby reduce the value of the Property, and if after
any such reduction under clause (A) or (B) preceding the Current AS IS Market
Value of the Property is less than sixty percent (60%) of Stipulated Loss Value,
then NAI shall pay BNPLC upon request the amount by which Current AS IS Market
Value is less than sixty percent (60%) of Stipulated Loss Value, for application
as a Qualified Prepayment. During the Term, NAI shall not cause or permit any
drilling or exploration for, or extraction, removal or production of, minerals
from the surface or subsurface of the Property, and NAI shall not do any act
whereby the market value of the Property may reasonably be expected to be
materially lessened. During the Term, if NAI receives a written notice or claim
from any federal, state or other governmental entity that the Property is not in
compliance in any material respect with any Applicable Law, or that any action
may be taken against the owner of the Property because the Property does not
comply with Applicable Law, NAI shall promptly furnish a copy of such notice or
claim to BNPLC.
Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPLC or
the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken by any governmental
authority against BNPLC or any property owned by BNPLC (including the Property)
because of such violation, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.
(c) Debts for Construction, Maintenance, Operation or Development.
NAI shall cause all debts and liabilities incurred in the construction,
maintenance, operation or development of the Property, including all debts and
liabilities for labor, material and equipment and all debts and charges for
utilities servicing the Property, to be promptly paid; provided, that nothing in
this subparagraph will be construed to require NAI to remove Liens Removable by
BNPLC.
Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest NAI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, NAI bonds over to BNPLC's
reasonable satisfaction all such contested liens against the Property alleged to
secure an amount in excess of $500,000 (individually or in the aggregate), (2)
NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (3) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final; provided, however,
that in any event each such contest shall be
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concluded and the lien, interest and costs must be paid by NAI prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or its directors, officers or employees because of the
nonpayment thereof, (ii) the date that any writ or order is issued under which
the Property or any other property in which BNPLC has an interest may be seized
or sold or any other action is taken against BNPLC or any property in which
BNPLC has an interest because of the nonpayment thereof, or (iii) a Designated
Sale Date upon which, for any reason, NAI or an Affiliate of NAI or any
Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a price to BNPLC (when taken together
with any additional payments made by NAI pursuant to Paragraph 1(A)(2) of the
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to the Break Even Price.
(d) Repair, Maintenance, Alterations and Additions. NAI shall keep
the Property in good order, operating condition and appearance and shall cause
all necessary repairs, renewals and replacements to be promptly made. NAI will
not allow any of the Property to be materially misused, abused or wasted. NAI
shall not, without the prior consent of BNPLC, make material new Improvements or
alter Improvements in any material respect , except as part of the work
performed in accordance with the Construction Management Agreement. Without
limiting the foregoing, NAI will notify BNPLC before making any significant
alterations to the Improvements after the completion of the Construction
Project. Nothing in this subparagraph, however, is intended to limit NAI's
rights and obligations under other express provisions of the Other Lease
Agreement and the Construction Management Agreement with respect to the
Construction Project.
(e) Permitted Encumbrances and Development Documents. NAI shall
during the Term comply with and will cause to be performed all of the covenants,
agreements and obligations imposed upon the owner of any interest in the
Property by the Permitted Encumbrances (including the Premises Lease) or the
Development Documents. Without limiting the foregoing, NAI shall cause all
amounts to be paid when due, the payment of which is secured by any Lien against
the Property created by the Permitted Encumbrances. Without the prior consent of
BNPLC, NAI shall not enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance or Development Document that would
create or expand or purport to create or expand obligations or restrictions
which would encumber BNPLC's interest in the Property. (Whether BNPLC must give
any such consent requested by NAI during the Term of this Land Lease shall be
governed by subparagraph 3(A) of the Closing Certificate and Agreement.)
(f) Books and Records Concerning the Property. NAI shall keep books
and records that are accurate and complete in all material respects for the
Property and, subject to Paragraph 16(c), will permit all such books and records
to be inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.
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12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1. Throughout the Term of this Land Lease, NAI shall comply with the
requirements of Schedule 1 attached hereto.
13. FINANCIAL STATEMENTS AND OTHER REPORTS.
(a) Financial Statements; Required Notices; Certificates.
Throughout the Term of this Land Lease, NAI shall deliver to BNPLC and to each
Participant:
(i) as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of NAI, a consolidated balance
sheet of NAI and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash
flows of NAI and its Consolidated Subsidiaries for such fiscal year, all
in reasonable detail and all prepared in accordance with GAAP and
accompanied by a report and opinion of accountants of national standing
selected by NAI, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be
subject to any qualifications or exceptions as to the scope of the audit
nor to any qualification or exception which BNPLC determines, in BNPLC's
reasonable discretion, is unacceptable;
(ii) as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of NAI,
the consolidated balance sheet of NAI and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and
the consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail
and all prepared in accordance with GAAP and certified by the chief
financial officer or controller of NAI (subject to year-end
adjustments);
(iii) together with the financial statements furnished in
accordance with subparagraph 13(a)(i) and 13(a)(ii), a certificate of
the chief financial officer or controller of NAI: (i) certifying that to
the knowledge of NAI no Default or Event of Default under this Land
Lease has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a brief statement as to the
nature thereof and the action which is proposed to be taken with respect
thereto, (ii) certifying that the representations of NAI set forth in
the Operative Documents are true and correct in all material respects as
of the date thereof as though made on and as of the date thereof or, if
not then true and correct, a brief statement as to why such
representations are no longer true and correct, and (iii) with
computations demonstrating compliance with the financial covenants
contained in Schedule 1;
(iv) within five days after the end of each calendar month, a
certificate of the chief financial officer or controller of NAI
certifying that at the end of the preceding calendar month, NAI had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;
(v) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which NAI sends to
NAI's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which NAI files
with the Securities and
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Exchange Commission or any governmental authority which may be
substituted therefor, or with any national securities exchange;
(vi) upon request by BNPLC, a statement in writing certifying that
the Operative Documents are unmodified and in full effect (or, if there
have been modifications, that the Operative Documents are in full effect
as modified, and setting forth such modifications) and the dates to
which the Base Rent has been paid and either stating that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default
under this Land Lease has occurred and is continuing, a brief statement
as to the nature thereof; it being intended that any such statement by
NAI may be relied upon by any prospective purchaser or mortgagee of the
Property and by the Participants
(vii) as soon as possible after, and in any event within ten days
after NAI becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to NAI relating
thereto is $500,000 or more, a notice signed by a senior financial
officer of NAI setting forth details of the following and the response,
if any, which NAI or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by NAI or an ERISA Affiliate with respect to any of the
following or the events or conditions leading up to the following): (A)
the assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of NAI, against the assets of any Plan or
Multiemployer Plan or against any interest of BNPLC or NAI in the
Property, or (B) the taking of any action by the PBGC or any other
governmental authority against NAI to terminate any Plan of NAI or any
ERISA Affiliate of NAI or to cause the appointment of a trustee or
receiver to administer any such Plan ; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of NAI, of any of its Subsidiaries
or of the Property as BNPLC or any Participant through BNPLC may from
time to time reasonably request.
BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.
14. ASSIGNMENT AND SUBLETTING BY NAI.
(a) BNPLC's Consent Required. Without the prior consent of BNPLC,
NAI shall not assign, transfer, mortgage, pledge or hypothecate this Land Lease
or any interest of NAI hereunder and shall not sublet all or any part of the
Property, by operation of law or otherwise; provided, that this provision will
not be construed to prohibit (I) any sublease of space within Improvements
expressly permitted by the Other Lease Agreement and (II) subject to
subparagraph 14(c) below, this provision shall not be construed to prohibit any
Premises Lease described in the Other Common Definitions and Provisions
Agreement or any transfer or sublease by a lessee thereunder which is authorized
by the Premises Lease.
(b) Standard for BNPLC's Consent to Assignments and Certain Other
Matters. Consents and approvals of BNPLC which are required by this Paragraph 14
will not be unreasonably withheld or delayed, but NAI acknowledges that BNPLC's
withholding of such consent or approval
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shall be reasonable if BNPLC determines in good faith that (1) giving the
approval may materially increase BNPLC's risk of liability for any existing or
future environmental problem, or (2) giving the approval is likely to increase
BNPLC's administrative burden of complying with or monitoring NAI's compliance
with the requirements of this Land Lease.
(c) Consent Not a Waiver. No consent by BNPLC to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this Land Lease or
NAI's interest hereunder, and no assignment or subletting of the Property or any
part thereof in accordance with this Land Lease or otherwise with BNPLC's
consent, shall release NAI from liability hereunder; and any such consent shall
apply only to the specific transaction thereby authorized and shall not relieve
NAI from any requirement of obtaining the prior consent of BNPLC to any further
sale, assignment, transfer, mortgage, pledge or hypothecation of this Land Lease
or any interest of NAI hereunder.
15. ASSIGNMENT BY BNPLC.
(a) Restrictions on Transfers. Except by a Permitted Transfer,
BNPLC shall not assign, transfer, mortgage, pledge, encumber or hypothecate this
Land Lease or the other Operative Documents or any interest of BNPLC in and to
the Property during the Term without the prior consent of NAI, which consent NAI
may withhold in its sole discretion. Further, notwithstanding anything to the
contrary herein contained, if withholding taxes are imposed on the rents and
other amounts payable to BNPLC hereunder because of BNPLC's assignment of this
Land Lease to any citizen of, or any corporation or other entity formed under
the laws of, a country other than the United States, NAI shall not be required
to compensate BNPLC or any such assignee for the withholding tax. If, in breach
of this subparagraph, BNPLC transfer the Property or any part thereof by a
conveyance or that does not constitute a Permitted Transfer, with the result
that additional transfer taxes or other Impositions are assessed against the
Property or the owner thereof, BNPLC shall be required to pay such additional
transfer taxes or other Impositions.
(b) Effect of Permitted Transfer or other Assignment by BNPLC. If,
without breaching subparagraph 15(a), BNPLC sells or otherwise transfers the
Property and assigns all of its rights under this Land Lease and the other
Operative Documents, then BNPLC shall thereby be released from any obligations
arising after such assumption under this Land Lease or the other Operative
Documents, and NAI shall look solely to each successor in interest of BNPLC for
performance of such obligations.
16. BNPLC'S RIGHT OF ACCESS.
(a) During the Term, BNPLC and BNPLC's representatives may (subject
to subparagraph 16(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Land Lease or the other Operative Documents.
(b) If NAI fails to perform any act or to take any action required
of it by this Land Lease or the Closing Certificate, or to pay any money which
NAI is required by this Land Lease or the Closing Certificate to pay, and if
such failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or
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renders BNPLC's interest in the Property or any part thereof at risk of
forfeiture by forced sale or otherwise, then in addition to any other remedies
specified herein or otherwise available, BNPLC may, perform or cause to be
performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Land Lease NAI may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of NAI's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to NAI or the subtenants or invitees of NAI by reason of making
such repairs or the performance of any such work on or in the Property, or on
account of bringing materials, supplies and equipment into or through the
Property during the course of such work (except for any liability in excess of
the liability insurance limits established in Exhibit B resulting from death or
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of NAI under this Land Lease shall not thereby
be excused in any manner.
(c) NAI shall have no obligation to provide proprietary information
(as defined in the next sentence) to BNPLC, except and to the extent that (1)
BNPLC reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Land Lease and the other Operative Documents
without evaluating such information. For purposes of this Land Lease
"PROPRIETARY INFORMATION" includes NAI's intellectual property, trade secrets
and other confidential information of value to NAI about, among other things,
NAI's manufacturing processes, products, marketing and corporate strategies, but
in no event will "proprietary information" include any disclosure of substances
and materials (and their chemical composition) which are or previously have been
present in, on or under the Property at the time of any inspections by BNPLC,
nor will "proprietary information" include any additional disclosures reasonably
required to permit BNPLC to determine whether the presence of such substances
and materials has constituted a violation of Environmental Laws. In addition,
under no circumstances shall NAI have any obligation to disclose to BNPLC or any
other party any proprietary information of NAI (including, without limitation,
any pending applications for patents or trademarks, any research and design and
any trade secrets) except if and to the limited extent reasonably necessary to
comply with the express provisions of this Land Lease or the other Operative
Documents.
17. EVENTS OF DEFAULT. Each of the following events shall be an "EVENT
OF Default" by NAI under this Land Lease:
(a) NAI shall fail to pay when due any installment of Rent due
hereunder and such failure shall continue for three (3) Business Days after NAI
is notified in writing thereof.
(b) NAI shall fail to cause any representation or warranty of NAI
contained herein or in the Closing Certificate that was false or misleading in
any material respect when made to be made true and not misleading (other than as
described in the other clauses of this Paragraph 17), or NAI shall fail to
comply with any term, provision or covenant of this Land Lease or the Closing
Certificate (other
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than as described in the other clauses of this Paragraph 17), and in either case
shall not cure such failure prior to the earlier of (A) thirty days after
written notice thereof is sent to NAI or (B) the date any writ or order is
issued for the levy or sale of any property owned by BNPLC (including the
Property) or any criminal prosecution is instituted or overtly threatened
against BNPLC or any of its directors, officers or employees because of such
failure; provided, however, that so long as no such writ or order is issued and
no such criminal prosecution is instituted or overtly threatened, the period
within which such failure may be cured by NAI shall be extended for a further
period (not to exceed an additional sixty days) as shall be necessary for the
curing thereof with diligence, if (but only if) (x) such failure is susceptible
of cure but cannot with reasonable diligence be cured within such thirty day
period, (y) NAI shall promptly have commenced to cure such failure and shall
thereafter continuously prosecute the curing thereof with reasonable diligence
and (z) the extension of the period for cure will not, in any event, cause the
period for cure to extend beyond five days prior to the expiration of this Land
Lease.
(c) NAI shall abandon the Property.
(d) NAI or any Subsidiary shall fail to make any payment or
payments of principal, premium or interest, of Debt of NAI described in the next
sentence when due (taking into consideration the time NAI may have to cure such
failure, if any, under the documents governing such Debt). As used in this
clause "DEBT" shall include only Debt (as defined in the Common Definitions and
Provisions Agreement (Phase V - Land)) of NAI or any of its Subsidiaries now
existing or arising in the future (a) payable to BNPLC or any Affiliate of
BNPLC, or (B) payable to any other Person and with respect to which $3,000,000
or more is actually due and payable because of acceleration or otherwise.
(e) NAI: (a) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such debts become due; or (b)
shall make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (c) shall file any petition or application to
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (d) shall have had any such
petition or application filed against it; or (e) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (f)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty days or more.
(f) One or more final judgments, decrees or orders for the
payment of money in excess of $3,000,000 in the aggregate shall be rendered
against NAI and such judgments, decrees or orders shall continue unsatisfied and
in effect for a period of thirty consecutive days without NAI's having obtained
an agreement (or after the expiration or termination of an agreement) of the
Persons entitled to enforce such judgment, decrees or orders not to enforce the
same pending negotiations with NAI concerning the satisfaction or other
discharge of the same.
(g) NAI shall breach the requirements of Paragraph 12, which by
reference to Schedule 1 establishes certain financial covenants and other
requirements.
(h) as of the effective date of this Land Lease, any of the
representations or warranties of NAI contained in subparagraphs 2(A) - (J) of
the Closing Certificate shall be false or misleading in any material respect.
27
<PAGE> 33
(i) NAI shall fail to pay the full amount of any Supplemental
Payment required by the Purchase Agreement on the Designated Sale Date or shall
fail to provide Collateral as and when due pursuant to the Pledge Agreement
Documents.
(j)NAI shall fail to comply with any term, provision or condition
of the Pledge Agreements after the expiration of any applicable notice and cure
period set forth in the Pledge Agreement.
18. REMEDIES.
(a) Basic Remedies. At any time after an Event of Default and after
BNPLC has given any notice required by subparagraph 18(b), BNPLC shall be
entitled at BNPLC's option (and without limiting BNPLC in the exercise of any
other right or remedy BNPLC may have, and without any further demand or notice
except as expressly described in this subparagraph 18(a)), to exercise any one
or more of the following remedies:
(i) By notice to NAI, BNPLC may terminate NAI's right to
possession of the Property. A notice given in connection with unlawful
detainer proceedings specifying a time within which to cure a default
shall terminate NAI's right to possession if NAI fails to cure the
default within the time specified in the notice.
(ii) Upon termination of NAI's right to possession and without
further demand or notice, BNPLC may re-enter the Property in any manner
not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land may
be removed and stored in a warehouse or elsewhere at the expense and
risk of and for the account of NAI.
(iii) Upon termination of NAI's right to possession, this Land
Lease shall terminate and BNPLC may recover from NAI:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of termination;
b) The worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss
that NAI proves could have been reasonably avoided;
c) The worth at the time of award of the amount by which
the unpaid Rent for the balance of the scheduled Term after the
time of award exceeds the amount of such rental loss that NAI
proves could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by NAI's failure to perform
NAI's obligations under this Land Lease or which in the ordinary
course of things would be likely to result therefrom, including
the costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of the
Property, removing persons or property therefrom, placing the
Property in good order, condition, and repair, preparing and
28
<PAGE> 34
altering the Property for reletting, all other costs and expenses
of reletting, and any loss incurred by BNPLC as a result of NAI's
failure to perform NAI's obligations under the other Operative
Documents.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18(a)(iii)a and subparagraph 18(a)(iii)b) shall be
computed by allowing interest at the Default Rate. The "WORTH AT
THE TIME OF AWARD" of the amount referred to in subparagraph
18(a)(iii)c) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable
California law.
(iv) BNPLC shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in force even after
lessee's breach and abandonment and recover rent as it becomes due, if
lessee has right to sublet or assign, subject only to reasonable
limitations). Accordingly, even if NAI has breached this Land Lease and
abandoned the Property, this Land Lease shall continue in effect for so
long as BNPLC does not terminate NAI's right to possession, and BNPLC
may enforce all of BNPLC's rights and remedies under this Land Lease,
including the right to recover the Rent as it becomes due under this
Land Lease. NAI's right to possession shall not be deemed to have been
terminated by BNPLC except pursuant to subparagraph 18(a)(i) hereof. The
following shall not constitute a termination of NAI's right to
possession:
a) Acts of maintenance or preservation or efforts to relet
the Property;
b) The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Land Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or assignment by NAI.
(b) Notice Required So Long As the Purchase Option and NAI's
Initial Remarketing Rights and Obligations Continue Under the Purchase
Agreement. So long as NAI remains in possession of the Property and
there has been no termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations as provided Paragraph 4 of the
Purchase Agreement, BNPLC's right to exercise remedies provided in
subparagraph 18(a) will be subject to the condition precedent that BNPLC
shall have notified NAI, at a time when an Event of Default shall have
occurred and be continuing, of BNPLC's intent to exercise remedies
provided in subparagraph 18(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing
Rights and Obligations before losing possession of the Property pursuant
to subparagraph 18(a). The condition precedent is not, however, intended
to extend any period for curing an Event of Default. Accordingly, if an
Event of Default has occurred, and regardless of whether any Event of
Default is then continuing, BNPLC may proceed immediately to exercise
remedies provided in subparagraph 18(a) at any time after the earlier of
(i) sixty days after BNPLC has given such a notice to NAI, (ii) any date
upon which NAI relinquishes possession
29
<PAGE> 35
of the Property, or (iii) any termination of the Purchase Option and NAI's
Initial Remarketing Rights and Obligations.
(c) Enforceability. This Paragraph 18 shall be enforceable to the
maximum extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy shall be cumulative and in addition to any
other right or remedy given to BNPLC hereunder or now or hereafter existing in
favor of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Land Lease, BNPLC shall be entitled, to the extent permitted by
Applicable Law or in equity, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Land Lease, or to a decree compelling
performance of any of the other covenants, agreements, conditions or provisions
of this Land Lease to be performed by NAI, or to any other remedy allowed to
BNPLC at law or in equity. Nothing contained in this Land Lease shall limit or
prejudice the right of BNPLC to prove for and obtain in proceedings for
bankruptcy or insolvency of NAI by reason of the termination of this Land Lease,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the generality of the
foregoing, nothing contained herein shall modify, limit or impair any of the
rights and remedies of BNPLC under the Purchase Documents, and BNPLC shall not
be required to give the sixty day notice described in subparagraph 18(b) as a
condition precedent to any acceleration of the Designated Sale Date or to taking
any action to enforce the Purchase Documents.
19. DEFAULT BY BNPLC. If BNPLC should default in the performance of any
of its obligations under this Land Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.
30
<PAGE> 36
20. QUIET ENJOYMENT. Provided NAI pays the Base Rent and all Additional
Rent payable hereunder as and when due and payable and keeps and fulfills all of
the terms, covenants, agreements and conditions to be performed by NAI
hereunder, BNPLC shall not during the Term disturb NAI's peaceable and quiet
enjoyment of the Property; however, such enjoyment shall be subject to the
terms, provisions, covenants, agreements and conditions of this Land Lease, to
Permitted Encumbrances, to Development Documents and to any other claims not
constituting Liens Removable by BNPLC. If any Lien Removable by BNPLC is claimed
against the Property, BNPLC will remove the Lien Removable by BNPLC promptly.
Any breach by BNPLC of this Paragraph shall render BNPLC liable to NAI for any
monetary damages proximately caused thereby, but as more specifically provided
in subparagraph 4(b) above, no such breach shall entitle NAI to terminate this
Land Lease or excuse NAI from its obligation to pay Rent.
21. SURRENDER UPON TERMINATION. Unless NAI or an Applicable Purchaser
purchases or has purchased BNPLC's entire interest in the Property pursuant to
the terms of the Purchase Agreement and BNPLC's entire interest in the
Improvements and other "Property" under (and as defined in) the Other Purchase
Agreement, NAI shall, upon the termination of NAI's right to occupancy,
surrender to BNPLC the Property, including Improvements constructed by NAI and
fixtures and furnishings included in the Property, free of all Hazardous
Substances (including Permitted Hazardous Substances) and tenancies and with all
Improvements in substantially the same condition as of the date the same were
initially completed, excepting only (i) ordinary wear and tear that occurs
between the maintenance, repairs and replacements required by other provisions
of this Land Lease or the Other Lease Agreement, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this
Land Lease or the Other Lease Agreement and which have been completed by NAI in
a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to NAI or any party
claiming under NAI, if not removed at the time of such termination and if BNPLC
shall so elect, shall be deemed abandoned and become the property of BNPLC
without any payment or offset therefor. If BNPLC shall not so elect, BNPLC may
remove such property from the Property and store it at NAI's risk and expense.
22. HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title
and interest in the Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Property after the termination of this Land
Lease without BNPLC's consent, whether such termination occurs by lapse of time
or otherwise, such holding over shall constitute and be construed as a tenancy
from day to day only, at a daily Base Rent equal to: (i) Stipulated Loss Value
on the day in question, times (ii) the Default Rate for such day; divided by
(iii) three hundred and sixty; subject, however, to all of the terms,
provisions, covenants and agreements on the part of NAI hereunder. No payments
of money by NAI to BNPLC after the termination of this Land Lease shall
reinstate, continue or extend the Term of this Land Lease and no extension of
this Land Lease after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both BNPLC and NAI.
31
<PAGE> 37
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS.
NAI acknowledges and agrees that nothing contained in this Land Lease shall
limit, modify or otherwise affect any of NAI's obligations under the other
Operative Documents, which obligations are intended to be separate, independent
and in addition to, and not in lieu of, the obligations set forth herein. In the
event of any inconsistency between the express terms and provisions of the
Purchase Documents and the express terms and provisions of this Land Lease, the
express terms and provisions of the Purchase Documents shall control. In the
event of any inconsistency between the express terms and provisions of the
Closing Certificate and the express terms and provisions of this Land Lease, the
express terms and provisions of this Land Lease shall control; provided, nothing
herein will limit or impair NAI's obligations under the Closing Certificate
following any expiration of termination of this Land Lease.
[The signature pages follow.]
32
<PAGE> 38
IN WITNESS WHEREOF, NAI and BNPLC have caused this Land Lease to be
executed as of March 1, 2000.
"NAI"
NETWORK APPLIANCE, INC.
By:
---------------------------------------
Jeffry R. Allen, Chief Financial Officer
<PAGE> 39
[Continuation of signature pages to Land Lease dated to be effective as of March
1, 2000.]
"BNPLC"
BNP LEASING CORPORATION
By:
----------------------------------------
Lloyd G. Cox, Vice President
<PAGE> 40
EXHIBIT A
LEGAL DESCRIPTION
The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:
All of Parcel 1 as shown upon that certain map entitled, "Parcel Map lying
within the City of Sunnyvale, being a resubdivision of Parcel 5, as shown on Map
recorded in Book 413 of Maps, at Page 53, Santa Clara County Records, City of
Sunnyvale, Santa Clara County, California," which Map was filed for record in
the office of the Recorder of the County of Santa Clara, State of California on
July 18, 1978 in Book 423 of Maps, at Page 13.
Excepting therefrom, the following described property granted to the Santa Clara
County Transit District March 28, 1997 under Series No. 13654560:
All of that certain real property situated in the City of Sunnyvale, County of
Santa Clara, State of California, and being a portion of Parcel 1, as said
Parcel 1 is shown on that certain Parcel Map filed in Book 423 of Maps, Page 13,
Records of Santa Clara County, California, and more particularly described as
follows:
Beginning at the point of intersection of the centerlines of Fair Oaks Avenue
and Crossman Road as said Avenue and Road are shown on said Parcel Map; thence
Northerly along said centerline of Crossman Road, North 18 degrees 37' 09" East
82.70 feet; thence Easterly at a right angle from said centerline of Crossman
Road, 71 degrees 22' 51" East 54.89 feet to a point on a curve on the Easterly
line of said Crossman Road; thence from a tangent bearing of South 9 degrees 32'
30" West along said Easterly line of Crossman Road and along said curve concave
Easterly with a radius of 108.99 feet through a central angle of 11 degrees 34'
1" in an arc length of 22.00 feet the true point of this description; thence
continuing Southerly and Southeasterly along said Easterly line of Crossman Road
the following four (4) described courses: (1) continuing along said curve (from
a tangent bearing of South 2 degrees 01' 41" East) concave Easterly with a
radius of 108.99 feet through a central angle of 23 degrees 25' 59" an arc
length of 44.58 feet; (2) South 25 degrees 27' 40" East 79.86 feet to a curve;
(3) Southeasterly along said curve concave Northeasterly with a radius of 108.99
feet, through a central angle of 9 degrees 00' 00" in an arc length of 17.12
feet; (4) South 34 degrees 27' 40" East 23.31 feet to the Northeasterly line of
said Fair Oaks Avenue; thence Southeasterly along said Northeasterly line of
Fair Oaks Avenue South 50 degrees 50' 59" East 139.04 feet; thence leaving said
Northeasterly line of Fair Oaks Avenue North 34 degrees 36' 17" West 57.40 feet;
thence North 50 degrees 50' 13" West 32.20 feet; thence North 34 degrees 36' 17"
West 205.73 feet to the true point of beginning.
<PAGE> 41
EXHIBIT B
INSURANCE REQUIREMENTS
I. LIABILITY INSURANCE:
A. NAI must maintain commercial general liability ("CGL") insurance on
an occurrence basis, affording immediate protection to the limit of not less
than $20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Land Lease (though such coverage or the
amount thereof shall in no way limit such indemnifications).
B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election under (and as defined in) the
Other Lease Agreement, or shall have previously exercised an Issue 97-10
Election. After the expiration of NAI's right to exercise any Issue 97-10
Election, and provided no Issue 97-10 Election has been exercised by NAI, NAI
may increase any deductible or self-insured retention applicable to such
insurance, but not to an amount in excess of $500,000.
C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Land Lease, and the insurance company
or companies providing the CGL insurance, must be acceptable to BNPLC. BNPLC
shall have the right from time to time and at any time to review and approve
such policy forms (including endorsements) and the insurance company or
companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until NAI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:
(i) Forms: CGL Insurance must be provided on Insurance
Services Office ("ISO") forms CG 0001 1093 or CG 0001
0196 or equivalent substitute forms providing the same
or greater coverage.
(ii) Rating Requirements: Insurance must be provided through
insurance or reinsurance companies rated by the A.M.
Best Company of Oldwick, New Jersey as having a
policyholder's rating of A or better and a reported
financial information rating of X or better.
(iii) Required Endorsements: CGL Insurance must be endorsed to
provide or include:
(a) in any policy containing a general aggregate limit,
ISO form amendment "Aggregate Limits of Insurance Per
Location" CG 2504 1185 or equivalent substitute form;
(b) a waiver of subrogation, using ISO form CG 2404 1093
or equivalent substitute form (and under the commercial
umbrella, if any), in favor of "BNP Leasing Corporation
and other Interested Parties (as defined in the Common
<PAGE> 42
Definitions and Provisions Agreement (Phase V - Land)
between Network Appliance, Inc. and BNP Leasing
Corporation dated March 1, 2000)";
(c) ISO additional insured form CG 2026 1185 or
equivalent substitute form, without modification (and
under the commercial umbrella, if any), designating as
additional insureds "BNPLC and other Interested Parties,
as defined in the Common Definitions and Provisions
Agreement (Phase V - Land) between Network Appliance,
Inc. and BNP Leasing Corporation dated March 1, 2000)";
and
(d) provisions entitling BNPLC to 30 days' notice from
the insurer prior to any cancellation, nonrenewal or
material modification to the CGL coverage.
(iv) Other Insurance: Each policy to contain standard CGL
"other insurance" wording, unmodified in any way that
would make it excess over or contributory with the
additional insured's own commercial general liability
coverage.
II. INTENTIONALLY DELETED.
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by NAI of claims
against NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.
B. Intentionally Deleted..
C. NAI's CGL insurance must be evidenced by ACORD form 25 "Certificate
of Insurance" completed and interlineated in a manner satisfactory to BNPLC to
show compliance with the requirements of this Exhibit. Copies of endorsements to
the CGL insurance must be attached to such form.
D. Such evidence of required insurance must be delivered upon execution
of this Land Lease and new certificate or evidence of insurance must be
delivered no later than 10 days prior to expiration of existing policy.
E. NAI shall not cancel, fail to renew, or make or permit any material
reduction in any of the policies or certificates described in this Exhibit
without the prior written consent of BNPLC. The certificates (ACORD forms 25)
described in this Exhibit must contain the following express provision:
"This is to certify that the policies of insurance described
herein have been issued to the insured Network Appliance, Inc.
for whom this certificate is executed and are in force at this
time. In the event of cancellation, non-renewal, or material
reduction in coverage affecting the certificate holder, at least
sixty days prior notice shall be given to the certificate
holder."
F. The limits of liability under the liability insurance required by
this Land Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no
Exhibit B-Page 2
<PAGE> 43
event shall the total limits of liability available for any one occurrence or
accident be less than those required by this Exhibit.
G. NAI shall provide copies, certified as complete and correct by an
authorized agent of the applicable insurer, of all insurance policies required
by this Exhibit within ten days after receipt of a request for such copies from
BNPLC.
Exhibit B-Page 3
<PAGE> 44
EXHIBIT C
NOTICE OF LIBOR PERIOD ELECTION
BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: George Fung
Re: Lease Agreement (Phase V - Improvements) and Lease Agreement (Phase
V - Land), both dated as of March 1, 2000, and both between Network Appliance,
Inc., as tenant, and BNP Leasing Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements shall be:
________________ month(s),
beginning with the first Base Rent Period that commences on or after:
--------------, ----.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF "LIBOR PERIOD
ELECTION" IN THE COMMON DEFINITIONS AND PROVISIONS AGREEMENTS REFERENCED IN THE
LEASE AGREEMENTS, OR IF THE DATE SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF
THE LIBOR PERIOD ELECTION IS LESS THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF
THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON
YOU BELIEVE THIS NOTICE IS DEFECTIVE.
Executed this _____ day of ______________, 2000.
<PAGE> 45
Network Appliance, Inc.
Name:
-------------------------------------
Title:
------------------------------------
[cc all Participants]
Exhibit C-Page 2
<PAGE> 46
SCHEDULE 1
FINANCIAL COVENANTS
This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase V Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of March 1, 2000 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase V - Land) (the
"LAND LEASE" and, together with the Improvements Lease, the "LEASES") dated to
be effective as of the Effective Date, between BNPLC and NAI, (c) the Pledge
Agreement (Phase V - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)") dated
to be effective as of the Effective Date, among BNPLC, NAI, and Banque Nationale
de Paris, as a Participant and as agent for any financial institutions that
become Participants thereunder from time to time, and (d) the Pledge Agreement
(Phase V - Land) (collectively with the Pledge Agreement (Improvements), the
"PLEDGE AGREEMENTS") dated to be effective as of the Effective Date, among
BNPLC, NAI, and Banque Nationale de Paris, as a Participant and as agent for any
financial institutions that become Participants thereunder from time to time.
PART I - DEFINED TERMS
In this Schedule 1, capitalized terms used but not defined herein shall
have the meaning assigned to them in the Leases or the Common Definitions and
Provisions Agreements referenced in the Leases; and the following capitalized
terms shall have the following meanings:
"ADJUSTED NET INCOME" means, for any fiscal period of NAI, the
aggregate net income earned (or net losses incurred) during such
period by NAI and its Subsidiaries (determined on a consolidated
basis), plus any Permitted Non-Cash Charges deducted in
determining such net income (or net loss).
"ADJUSTED EBIT" means, for any accounting period, net income (or
net loss) of NAI and its Subsidiaries (determined on a
consolidated basis), plus the amounts (if any) which, in the
determination of net income (or net loss) for such period, have
been deducted for (a) interest expense, (b) income tax expense
(c) rent expense under leases of property, and (d) Permitted
Non-Cash Charges.
"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and
the earlier of the following dates after each fiscal quarter of
NAI that ends after the Base Rent Commencement Date : (1) the
seventh Business Day after the release by NAI of its financial
statements for the fiscal quarter; or (2) the first Business Day
of the third calendar month following the end of the fiscal
quarter.
"CONSOLIDATED TANGIBLE NET WORTH" means the excess of (1) the
total assets, other than Intangible Assets, of NAI and its
Subsidiaries (determined on a consolidated basis) over (2) the
total liabilities of NAI and its Subsidiaries (determined on a
consolidated basis).
"DEBT" as used in this Exhibit shall have the meaning assigned
to it in the Common Definitions and Provisions Agreements, where
"Debt" of any Person is defined to mean (without duplication of
any item): (a) indebtedness of such Person for borrowed money;
Schedule 1-Page 1
<PAGE> 47
(b) indebtedness of such Person for the deferred purchase price
of property or services (except trade payables and accrued
expenses constituting current liabilities in the ordinary course
of business); (c) the face amount of any outstanding letters of
credit issued for the account of such Person; (d) obligations of
such Person arising under acceptance facilities; (e) guaranties,
endorsements (other than for collection in the ordinary course
of business) and other contingent obligations of such Person to
purchase, to provide funds for payment, to provide funds to
invest in any Person, or otherwise to assure a creditor against
loss; (f) obligations of others secured by any Lien on property
of such Person; (g) obligations of such Person as lessee under
Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any lease of property or related
documents (including a separate purchase agreement) which
provide that such Person or any of its Affiliates must purchase
or cause another Person to purchase any interest in the leased
property and thereby guarantee a minimum residual value of the
leased property to the lessor. For purposes of this definition,
the amount of the obligations described in clause (h) of the
preceding sentence with respect to any lease classified
according to GAAP as an "operating lease," shall equal the sum
of (1) the present value of rentals and other minimum lease
payments required in connection with such lease [calculated in
accordance with SFAS 13 and other GAAP relevant to the
determination of the whether such lease must be accounted for as
an operating lease or capital lease], plus (2) the fair value of
the property covered by the lease; provided, however, that such
amount shall not exceed the price, as of the date a
determination of Debt is required hereunder, for which the
lessee can purchase the leased property pursuant to any valid
ongoing purchase option if, upon such a purchase, the lessee
shall be excused from paying rentals or other minimum lease
payments that would otherwise accrue after the purchase.
"FIXED CHARGES" means, for any accounting period, the sum
(without duplication of any item) of the following charges or
costs incurred or paid by NAI and its Subsidiaries (determined
on a consolidated basis): (a) gross interest expense, plus (b)
amortization of principal or debt discount in respect of all
Debt during such period, plus (c) rent payable under all leases
of property during such period, plus (d) taxes payable during
such period.
"INTANGIBLE ASSETS" means assets of NAI and its Subsidiaries
(determined on a consolidated basis) that are properly
classified as "INTANGIBLE ASSETS" in accordance with GAAP and,
in any event, shall include goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, and
deferred charges (other than prepaid insurance, prepaid taxes
and current deferred taxes to the extent any such prepaid or
deferred items are classified on the balance sheet of NAI and
its consolidated Subsidiaries as current assets in accordance
with GAAP and with the concurrence of NAI's independent public
accountants).
"MANDATORY COLLATERAL PERIOD" means any period during which,
notwithstanding any contrary designation of a Collateral
Percentage by NAI under the Pledge Agreements, the Collateral
Percentage for purposes of the Pledge Agreements shall be one
hundred percent (100%), determined as set forth in Part III of
this Schedule 1.
Schedule 1-Page 2
<PAGE> 48
"PERMITTED NON-CASH CHARGES" means the amounts (if any) which,
in the determination of net income (or net loss) for any
relevant fiscal period, have been deducted by NAI or its
Subsidiaries for non-cash charges made to write down goodwill or
research and development costs in connection with acquisitions
permitted by this Schedule 1.
"QUICK RATIO" means the ratio of:
(A) the sum (without duplication of any item) of the
following assets of NAI and its Subsidiaries (determined on a
consolidated basis): Collateral delivered and pledged under the
Pledge Agreements in accordance with the requirements thereof
(if any); plus unencumbered cash; plus unencumbered short term
cash investments; plus other unencumbered marketable securities
which are classified as short term investments in accordance
with GAAP; plus unencumbered accounts receivable, computed net
of reserves for uncollectible amounts as determined in
accordance with GAAP, to
(B) the sum (without duplication of any item) of (1) all
liabilities of NAI and its Subsidiaries (determined on a
consolidated basis) treated as current liabilities in accordance
with GAAP, plus (2) other obligations included in total Debt of
NAI and its Subsidiaries (determined on a consolidated basis),
the payment of which is due on demand or will become due within
one year after the date on which the applicable determination of
Quick Ratio is required hereunder.
"ROLLING FOUR QUARTER PERIOD" means a period of four consecutive
fiscal quarters of NAI, the last of which quarters ends after
December 31, 1999.
PART II - FINANCIAL COVENANTS FOR LEASE AGREEMENT
NAI covenants that it shall not at any time suffer or permit:
1. Minimum Unencumbered Cash and Cash Equivalents. The sum (without
duplication of any item) of the unrestricted cash, Collateral delivered
and pledged under the Pledge Agreements in accordance with the
requirements thereof (if any), unencumbered short term cash investments
and unencumbered marketable securities classified as short term
investments according to GAAP of NAI and its Subsidiaries (determined on
a consolidated basis) to be less than total Debt of NAI and its
Subsidiaries (determined on a consolidated basis).
2. Minimum Tangible Net Worth. Consolidated Tangible Net Worth to be less
than the sum of: (a) ninety percent of the Consolidated Tangible Net
Worth as of October 30, 1998; plus (b) seventy-five percent of NAI's net
income (computed without deduction for net losses in any fiscal quarter)
earned in each fiscal quarter since October 30, 1998; plus (c)
one-hundred percent of the net proceeds of sales of stock in NAI or its
Subsidiaries (other than sales to NAI or its Subsidiaries) after October
30, 1998; less (d) Permitted Non-Cash Charges for any period after
October 30, 1998.
3. Minimum Quick Ratio. The Quick Ratio to be less than 1.50 to 1.00.
Schedule 1-Page 3
<PAGE> 49
4. Minimum Fixed Charge Coverage. The ratio of (a) Adjusted EBIT for any
Rolling Four Quarter Period to (b) Fixed Charges for the same Rolling
Four Quarter Period, to be less than 1.50 to 1.00.
5. Minimum Profitability. Adjusted Net Income to be less than $1.00 in more
than one fiscal quarter of any Rolling Four Quarter Period.
6. Maximum Leverage Ratio. the ratio of (a) total Debt of NAI and its
Subsidiaries (determined on a consolidated basis) at the end of any
Rolling Four Quarter Period to (b) the Adjusted EBIT for the same Four
Quarter Rolling Period, to exceed 3.00 to 1.00.
PART II - TESTS FOR MANDATORY COLLATERAL PERIODS
If, as of the end of the latest fiscal quarter of NAI ending before any
Collateral Test Date, NAI shall have either:
(A) failed to maintain a ratio of (1) the sum (without
duplication of any item) of Collateral delivered and pledged
under the Pledge Agreements in accordance with the requirements
thereof (if any), unencumbered cash, unencumbered short term
cash investments and unencumbered marketable securities
classified as short term investments according to GAAP of NAI
and its Subsidiaries (determined on a consolidated basis) to (2)
all Debt of NAI and its Subsidiaries (determined on a
consolidated basis), of at least 1.5 to 1.00; or
(B) failed to maintain a ratio of (i) all Debt of NAI
and its Subsidiaries (determined on a consolidated basis) to
(ii) Consolidated Tangible Net Worth of NAI, of no more than
0.45 to 1.00;
such Collateral Test Date shall constitute a "FAILED COLLATERAL TEST DATE" for
purposes of the determination of Mandatory Collateral Periods. A Mandatory
Collateral Period shall commence on each Failed Collateral Test, and such
Mandatory Collateral Period shall continue until the second of any two
subsequent CONSECUTIVE Collateral Test Dates, neither of which constitutes a
Failed Collateral Test Date.
For purposes of illustration only, assume that the following dates are
consecutive Collateral Test Dates, some of which are Failed Collateral Test
Dates and some of which are not, as indicated opposite each date:
<TABLE>
<CAPTION>
Date Failed Collateral Test Date?
---- ----------------------------
<S> <C>
February 15, 2001 Yes
May 12, 2001 No
August 16, 2001 Yes
November 11, 2001 No
February 18, 2002 No
May 14, 2002 Yes
August 18, 2002 Yes
</TABLE>
Schedule 1-Page 4
<PAGE> 50
<TABLE>
<S> <C>
November 18, 2002 No
February 15, 2003 No
</TABLE>
Under these assumptions, the entire period from February 15, 2001 to February
18, 2002 falls within one or more Mandatory Collateral Periods. Also, the entire
period commencing May 14, 2002 and ending February 15, 2003 falls within one or
more Mandatory Collateral Periods. The period from February 18, 2002 to May 14,
2002 does not constitute Mandatory Collateral Period.
PART III - OTHER COVENANTS
Without limiting NAI's obligations under the other provisions of the Operative
Documents, during the Term, NAI shall not, without the prior written consent of
BNPLC in each case:
A. Liens. Create, incur, assume or suffer to exist, or permit any of its
Consolidated Subsidiaries to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
provided that the following shall be permitted except to the extent that they
would encumber any interest in the Property in violation of other provisions of
the Operative Documents:
1. Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if they are being contested in good
faith by appropriate proceedings and for which appropriate reserves are
maintained;
2. Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which
are not past due for more than thirty (30) days, or which are being
contested in good faith by appropriate proceedings and for which
appropriate reserves have been established;
3. Liens under workmen's compensation, unemployment insurance,
social security or similar laws (other than ERISA);
4. Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money),
leases, public or statutory obligations, surety, stay, appeal,
indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
5. Judgment and other similar Liens against assets other than the
Property or any part thereof in an aggregate amount not in excess of
$3,000,000 arising in connection with court proceedings; provided that
the execution or other enforcement of such Liens is effectively stayed
and the claims secured thereby are being actively contested in good
faith by appropriate proceedings;
6. Easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by NAI or any such Consolidated
Subsidiary of the property or assets encumbered thereby in the normal
course of its business or materially impair the value of the property
subject thereto;
Schedule 1-Page 5
<PAGE> 51
7. Liens securing obligations of such a Consolidated Subsidiary
to NAI or to another such Consolidated Subsidiary;
8. Liens not otherwise permitted by this subparagraph A (and not
encumbering the Property or any Collateral) incurred in connection with
the incurrence of additional Debt or asserted to secure Unfunded Benefit
Liabilities, provided that (a) the sum of the aggregate principal amount
of all outstanding obligations secured by Liens incurred pursuant to
this clause shall not at any time exceed five percent (5%) of
Consolidated Tangible Net Worth at such time; and (b) such Liens do not
constitute Liens against NAI's interest in any material Subsidiary or
blanket Liens against all or substantially all of the inventory,
receivables, general intangibles or equipment of NAI or of any material
Subsidiary of NAI (for purposes of this clause, a "material Subsidiary"
means any subsidiary whose assets represent a substantial part of the
total assets of NAI and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP); and
9. Liens incurred in connection with any renewals, extensions or
refundings of any Debt secured by Liens described in the preceding
clauses of this subparagraph A, provided that there is no increase in
the aggregate principal amount of Debt secured thereby from that which
was outstanding as of the date of such renewal, extension or refunding
and no additional property is encumbered.
B. Transactions with Affiliates. Enter into or permit any Subsidiary of
NAI to enter into any material transactions (including, without limitation, the
purchase, sale or exchange of property or the rendering of any service) with any
Affiliates of NAI except on terms (1) that would not cause or result in a
Default by NAI under the financial covenants set forth in Part II of this
Schedule, and (2) that are no less favorable to NAI or the relevant Subsidiary
than those that would have been obtained in a comparable transaction on an arm's
length basis from an unrelated Person.
C. Compliance. Fail to preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; or fail to comply with the provisions of all documents
pursuant to which NAI is organized and/or which govern NAI's continued existence
and with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to NAI and/or its business.
D. Insurance. Fail to maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of NAI,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to BNPLC, or fail to deliver to BNPLC from
time to time at BNPLC's request schedules setting forth all insurance then in
effect.
E. Facilities. fail to keep all properties useful or necessary to NAI's
business in good repair and condition, or to from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall be
fully and efficiently preserved and maintained.
F. Taxes and Other Liabilities. Fail to pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as NAI may in good faith contest
or as to which a bona fide dispute may arise, and (b) for which NAI has made
provisions, to
Schedule 1-Page 6
<PAGE> 52
BNPLC's satisfaction, for eventual payment thereof in the event that NAI is
obligated to make such payment.
G. Capital Expenditures. Make any additional investment in fixed assets
in any fiscal year in excess of an aggregate of twenty percent (20%) of NAI's
total assets as of the end of the prior fiscal year.
H. Merger, Consolidation, Transfer of Assets. Merge into or consolidate
with any other entity (unless NAI is the surviving entity and remains in
compliance of all provisions of the Operative Documents); or make any
substantial change in the nature of NAI's business as conducted as of the date
hereof; or sell, lease, transfer or otherwise dispose of all or a substantial or
material portion of NAI's assets except in the ordinary course of its business.
I. Loans, Advances, Investments. Make any loans or advances to or
investments in any person or entity, except (a) any of the foregoing existing as
of, and disclosed to BNPLC prior to, the date hereof, (b) loans to employees for
travel advances, relocation loans and other loans in the ordinary course of
business, (c) investments in accordance with NAI's investment policy, as in
effect from time to time, (d) existing investments in subsidiaries and joint
ventures which have been disclosed to BNPLC in writing prior to the date hereof,
and new investments in subsidiaries and joint ventures in amounts up to an
aggregated of $10,000,000.00, (e) loans to employees, officers, directors to
finance or refinance the purchase of equity securities of NAI.
J. Dividends, Distributions. Declare or pay any dividend or distribution
either in cash, stock or any other property on NAI's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of
any class of NAI's stock now or hereafter outstanding.
Schedule 1-Page 7
<PAGE> 53
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE V - LAND)
BETWEEN
BNP LEASING CORPORATION
AND
NETWORK APPLIANCE, INC.
DATED AS OF MARCH 1, 2000
<PAGE> 54
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - LIST OF DEFINED TERMS...................................................................1
"Active Negligence".........................................................................1
"Additional Rent"...........................................................................2
"Adjusted EBIT".............................................................................2
"Advance Date"..............................................................................2
"Affiliate".................................................................................2
"Applicable Laws"...........................................................................2
"Applicable Purchaser"......................................................................2
"Attorneys' Fees"...........................................................................2
"Banking Rules Change"......................................................................2
"Base Rate".................................................................................3
"Base Rent".................................................................................3
"Base Rent Commencement Date"...............................................................3
"Base Rent Commencement Date (Building 4)"..................................................3
"Base Rent Commencement Date (Building 5)"..................................................3
"Base Rent Commencement Deadline"...........................................................3
"Base Rent Date"............................................................................3
"Base Rent Period"..........................................................................4
"BNPLC".....................................................................................4
"BNPLC's Parent"............................................................................4
"Breakage Costs"............................................................................4
"Break Even Price"..........................................................................5
"Business Day"..............................................................................5
"Capital Adequacy Charges"..................................................................5
"Capital Lease".............................................................................5
"Closing Certificate".......................................................................5
"Code"......................................................................................5
"Collateral"................................................................................5
"Collateral Percentage".....................................................................5
"Common Definitions and Provisions Agreement (Phase V - Land)"..............................6
"Completion Notice (Building 4)"............................................................6
"Completion Notice (Final)".................................................................6
"Construction Management Agreement".........................................................6
"Construction Project"......................................................................6
"Current AS IS Market Value"................................................................6
"Debt"......................................................................................7
"Default"...................................................................................8
</TABLE>
(i)
<PAGE> 55
<TABLE>
<S> <C>
"Default Rate"..............................................................................8
"Defaulting Participant"....................................................................8
"Deposit Taker".............................................................................8
"Deposit Taker Losses"......................................................................8
"Designated Sale Date"......................................................................8
"Development Documents".....................................................................9
"Direct Payments to Participants"...........................................................9
"Effective Date"............................................................................9
"Effective Rate"............................................................................9
"Environmental Laws"........................................................................9
"Environmental Cutoff Date"................................................................10
"Environmental Losses".....................................................................10
"Environmental Reports"....................................................................10
"ERISA"....................................................................................10
"ERISA Affiliate"..........................................................................10
"Escrowed Proceeds"........................................................................10
"Established Misconduct"...................................................................11
"Eurocurrency Liabilities".................................................................11
"Eurodollar Rate Reserve Percentage".......................................................11
"Event of Default".........................................................................12
"Excluded Taxes"...........................................................................12
"Existing Contract"........................................................................12
"Failed Collateral Test Date"..............................................................12
"Fed Funds Rate"...........................................................................12
"GAAP".....................................................................................12
"Hazardous Substance"......................................................................12
"Hazardous Substance Activity".............................................................13
"Impositions"..............................................................................13
"Improvements".............................................................................13
"Initial Funding Advance"..................................................................13
"Interested Party".........................................................................14
"Issue 97-1 Non-performance-related Subjective Event of Default"...........................14
"Land".....................................................................................14
"Land Lease"...............................................................................14
"LIBOR"....................................................................................15
"LIBOR Period Election"....................................................................15
"Lien".....................................................................................15
"Liens Removable by BNPLC".................................................................16
"Losses"...................................................................................16
"Mandatory Collateral Period"..............................................................16
"Material Environmental Communication".....................................................16
"Maximum Remarketing Obligation"...........................................................17
"Minimum Extended Remarketing Price".......................................................17
"Multiemployer Plan".......................................................................17
"NAI"......................................................................................17
"NAI's Extended Remarketing Period"........................................................17
</TABLE>
(ii)
<PAGE> 56
<TABLE>
<S> <C>
"NAI's Extended Remarketing Right".........................................................17
"NAI's Initial Remarketing Rights and Obligations".........................................17
"Operative Documents"......................................................................17
"Other Common Definitions and Provisions Agreement"........................................17
"Other Lease Agreement"....................................................................17
"Other Purchase Agreement".................................................................17
"Participant"..............................................................................17
"Participation Agreement"..................................................................18
"PBGC".....................................................................................18
"Permitted Encumbrances"...................................................................18
"Permitted Hazardous Substance Use"........................................................18
"Permitted Hazardous Substances"...........................................................19
"Permitted Transfer".......................................................................19
"Person"...................................................................................19
"Personal Property"........................................................................19
"Plan".....................................................................................19
"Pledge Agreement".........................................................................19
"Premises Lease"...........................................................................20
"Prime Rate"...............................................................................20
"Property".................................................................................20
"Purchase Agreement".......................................................................20
"Purchase Documents".......................................................................20
"Purchase Option"..........................................................................20
"Qualified Affiliate"......................................................................20
"Qualified Prepayments"....................................................................20
"Real Property"............................................................................21
"Remedial Work"............................................................................21
"Rent".....................................................................................21
"Residual Risk Percentage".................................................................21
"Responsible Financial Officer"............................................................21
"Sale Closing Documents"...................................................................21
"Secured Spread"...........................................................................21
"Seller"...................................................................................21
"Stipulated Loss Value"....................................................................22
"Stipulated Loss Value (Building 4/Land)"..................................................22
"Subsidiary"...............................................................................22
"Supplemental Payment".....................................................................23
"Term".....................................................................................23
"Third Party Price"........................................................................23
"Third Party Sale Notice"..................................................................23
"Third Party Sale Proposal"................................................................23
"Third Party Target Price".................................................................23
"Transaction Expenses".....................................................................23
"Unfunded Benefit Liabilities".............................................................23
"Unsecured Spread".........................................................................23
"Voluntary Retention of the Property"......................................................24
</TABLE>
(iii)
<PAGE> 57
<TABLE>
<S> <C>
ARTICLE II - RULES OF INTERPRETATION...............................................................24
1. Notices.............................................................................24
2. Severability........................................................................26
3. No Merger...........................................................................26
4. No Implied Waiver...................................................................26
5. Entire and Only Agreements..........................................................27
6. Binding Effect......................................................................27
7. Time is of the Essence..............................................................27
8. Governing Law.......................................................................27
9. Paragraph Headings..................................................................27
10. Negotiated Documents................................................................27
11. Terms Not Expressly Defined in an Operative Document................................27
12. Other Terms and References..........................................................27
13. Execution in Counterparts...........................................................28
14. Not a Partnership, Etc..............................................................28
</TABLE>
(iv)
<PAGE> 58
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE V - LAND)
This Common Definitions and Provisions Agreement (Phase V - Land), by
and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is dated as of March
1, 2000, the Effective Date.
RECITALS
Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase V - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Land Lease (as defined below) and the Purchase Agreement (as
defined below), both of which concern the Property (as defined below). Each of
the Closing Certificate, the Land Lease and the Purchase Agreement (together
with this Common Definitions and Provisions Agreement (Phase V - Land) and the
Pledge Agreement [as defined below], the "OPERATIVE DOCUMENTS") are intended to
create separate and independent obligations upon the parties thereto. However,
NAI and BNPLC intend that all of the Operative Documents share certain
consistent definitions and other miscellaneous provisions. To that end, the
parties are executing this Common Definitions and Provisions Agreement (Phase II
- Land) and incorporating it by reference into each of the other Operative
Documents.
AGREEMENTS
ARTICLE I - LIST OF DEFINED TERMS
UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL
HAVE THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:
"ACTIVE NEGLIGENCE" of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Land Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Land, the Improvements or any interest in any other
Property or as a party to the transactions described in the Land Lease or the
other Operative Documents or in the Other Lease Agreement or the Other Purchase
Agreement, (2) any negligent failure of any other Interested Party to act when
the duty to act would not have been imposed but for such party's contractual or
other relationship to BNPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Land Lease or other
Operative Documents or in the Other Lease Agreement or Other Purchase Agreement,
or (3) the exercise in a lawful manner by BNPLC (or any party lawfully claiming
through or under BNPLC) of any right or remedy provided in or under
Page 1
<PAGE> 59
the Land Lease or the other Operative Documents or in the Other Lease Agreement
or Other Purchase Agreement.
"ADDITIONAL RENT" shall have the meaning assigned to it in subparagraph
3(d) of the Land Lease.
"ADJUSTED EBIT" shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Land Lease and to the Pledge Agreement.
"ADVANCE DATE" means the first Business Day of every calendar month,
beginning with the first Business Day in April, 2000 and continuing regularly
thereafter to and including the Base Rent Commencement Date.
"AFFILIATE" of any Person means any other Person controlling, controlled
by or under common control with such Person. For purposes of this definition,
the term "control" when used with respect to any Person means the power to
direct the management of policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"APPLICABLE LAWS" means any or all of the following, to the extent
applicable to NAI or the Property or the Land Lease or the other Operative
Documents: restrictive covenants; zoning ordinances and building codes; flood
disaster laws; health, safety and environmental laws and regulations; the
Americans with Disabilities Act and other laws pertaining to disabled persons;
and other laws, statutes, ordinances, rules, permits, regulations, orders,
determinations and court decisions.
"APPLICABLE PURCHASER" means any third party designated by NAI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.
"ATTORNEYS' FEES" means the expenses and reasonable fees of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.
"BANKING RULES CHANGE" means either: (1) the introduction of or any
change in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).
Page 2
<PAGE> 60
"BASE RATE" for any Base Rent Period means a rate equal to the higher of
(1) the Prime Rate in effect on the first day of such period, or (2) the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for that
period.
"BASE RENT" means the rent payable by NAI pursuant to subparagraph 3(a)
of the Land Lease.
"BASE RENT COMMENCEMENT DATE" means the later of (1) the Base Rent
Commencement Date (Building 4), or (2) the Base Rent Commencement Date (Building
5). If, contrary to the expectations of BNPLC and NAI as of the Effective Date,
the Base Rent Commencement Date (Building 4) and the Base Rent Commencement Date
(Building 5) occur on the same day, that day shall constitute the Base Rent
Commencement Date.
"BASE RENT COMMENCEMENT DATE (BUILDING 4)" means the earlier of (A) the
first Business Day of the first calendar month to follow by twenty days or more
the day upon which any Completion Notice (Building 4) or Completion Notice
(Final) is given, or (B) the Base Rent Commencement Deadline.
"BASE RENT COMMENCEMENT DATE (BUILDING 5)" means the earlier of (A) the
first Business Day of the first calendar month to follow by twenty days or more
the day upon which any Completion Notice (Final) is given, or (B) the Base Rent
Commencement Deadline.
"BASE RENT COMMENCEMENT DEADLINE" shall have the meaning assigned to it
in the Other Common Definitions and Provisions Agreement.
"BASE RENT DATE" means a date upon which Base Rent must be paid under
the Land Lease, all of which dates shall be the first Business Day of a calendar
month. Any first Business Day of a calendar month that falls after the Base Rent
Commencement Date (Building 4) and on or before the Base Rent Commencement Date
shall constitute a Base Rent Date. The first Base Rent Date after the Base Rent
Commencement Date shall be determined as follows:
a) If a LIBOR Period Election of one month is in effect on
the Base Rent Commencement Date, then the first Business Day of
the first calendar month following the Base Rent Commencement
Date shall be the first Base Rent Date thereafter.
b) If the LIBOR Period Election in effect on the Base Rent
Commencement Date is three months or six months, then the first
Business Day of the third calendar month following the Base Rent
Commencement Date shall be the first Base Rent Date thereafter.
Each successive Base Rent Date after the first Base Rent Date following the Base
Rent Commencement Date shall be the first Business Day of the first or third
calendar month following the calendar month which includes the preceding Base
Rent Date, determined as follows:
(1) If a LIBOR Period Election of one month is in effect
on a Base Rent Date, then the first Business Day of the first
calendar month following such Base Rent Date shall be the next
following Base Rent Date.
Page 3
<PAGE> 61
(2) If a LIBOR Period Election of three months or six
months is in effect on a Base Rent Date, then the first Business
Day of the third calendar month following such Base Rent Date
shall be the next following Base Rent Date.
Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of January, 2001 and a LIBOR Period Election of two months
commences on the Base Rent Commencement Date, then the first Base Rent Date
shall be the first Business Day of March, 2001.
"BASE RENT PERIOD" means a period for which Base Rent must be paid under
the Land Lease, each of which periods shall correspond to the LIBOR Period
Election for such period. The first Base Rent Period shall begin on and include
the Base Rent Commencement Date (Building 4), and each successive Base Rent
Period shall begin on and include the Base Rent Date upon which the preceding
Base Rent Period ends. Any Base Rent Period which begins prior to the Base Rent
Commencement Date shall end on but not include the first Business Day of the
first calendar month after such Base Rent Period begins. The Base Rent Period
that begins on and includes the Base Rent Commencement Date, and each successive
Base Rent Period thereafter, shall end on but not include the first or second
Base Rent Date after the Base Rent Date upon which such period began, determined
as follows:
(1) If the LIBOR Period Election for a Base Rent Period is
one month or three months, then such Base Rent Period shall end
on the first Base Rent Date after the Base Rent Date upon which
such period began.
(2) If the LIBOR Period Election for a Base Rent Period is
six months, then such Base Rent Period shall end on the second
Base Rent Date after the Base Rent Date upon which such period
began.
The determination of Base Rent Periods can be illustrated by two examples:
1) If NAI makes a LIBOR Period Election of three months
for a hypothetical Base Rent Period beginning on the first
Business Day in January, 2002, then such Base Rent Period will
end on but not include the first Base Rent Date after it begins;
that is, such Base Rent Period will end on the first Business Day
in April, 2002, the third calendar month after January, 2002.
2) If, however, NAI makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2002, then such Base Rent Period will
end on but not include the second Base Rent Date after it begins;
that is, the first Business Day in July, 2002.
"BNPLC" means BNP Leasing Corporation, a Delaware corporation.
"BNPLC'S PARENT" means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.
"BREAKAGE COSTS" means any and all costs, losses or expenses incurred or
sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or
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the Participant shall request reimbursement from BNPLC, because of the resulting
liquidation or redeployment of deposits or other funds:
(1) used to make or maintain the Initial Funding Advance
upon application of a Qualified Prepayment or upon any sale of
the Property pursuant to the Purchase Agreement, if such
application or sale occurs on any day other than an Advance Date
or the last day of a Base Rent Period; or
(2) used to make or maintain the Initial Funding Advance
upon the acceleration of the end of any Base Rent Period pursuant
subparagraph 3(c)(iii) of the Land Lease.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.
"BREAK EVEN PRICE" shall have the meaning assigned to it in subparagraph
1(B)(1) of the Purchase Agreement.
"BUSINESS DAY" means any day that is (1) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in New
York City, New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (1).
"CAPITAL ADEQUACY CHARGES" means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5(b)(ii) of the Land Lease.
"CAPITAL LEASE" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP or for federal income tax
purposes.
"CLOSING CERTIFICATE" means the Closing Certificate and Agreement dated
as of March 1, 2000 executed by NAI in favor of BNPLC, as such Closing
Certificate may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning assigned to it in the Pledge
Agreement.
"COLLATERAL PERCENTAGE" for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Land Lease, the Collateral
Percentage for any Base Rent Period shall not exceed a fraction; the numerator
of which fraction shall equal the value (determined as provided in the Pledge
Agreement) of
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all Collateral (a) that is, on the first day of such period, held by the Deposit
Takers under (and as defined in) the Pledge Agreement subject to a Qualifying
Security Interest (as defined below), (b) that is free from claims or security
interests held or asserted by any third party, and (c) that is not in excess of
Stipulated Loss Value; and the denominator of which fraction shall equal the
Stipulated Loss Value on the first day of such period. "QUALIFYING SECURITY
INTEREST" means a first priority perfected security interest under the Pledge
Agreement.
"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE V - LAND)" means
this Agreement, which is incorporated by reference into each of the other
Operative Documents.
"COMPLETION NOTICE (BUILDING 4)" means a notice given by NAI to BNPLC as
described in subparagraph 1(B) of the Construction Management Agreement,
advising BNPLC when the renovation of the portion of the Improvements designated
by NAI as "Building 4" are substantially complete and ready for occupancy by
NAI.
"COMPLETION NOTICE (FINAL)" means (1) a notice required by subparagraph
1(B) of the Construction Management Agreement from NAI to BNPLC, advising BNPLC
when construction of the Construction Project is substantially complete, or (2)
a notice permitted by subparagraph 6.(g) of the Improvements Lease from BNPLC to
NAI, advising NAI after any Landlord's Election to Complete Construction when
construction of the Construction Project is substantially complete or that BNPLC
no longer intends to continue such construction.
"CONSTRUCTION MANAGEMENT AGREEMENT" means the Construction Management
Agreement dated as of March 1, 2000 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"CONSTRUCTION PROJECT" means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.
"CURRENT AS IS MARKET VALUE" means an amount equal to the fair market
value of BNPLC's interest in the Property (or any applicable portion thereof),
AS IS, WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a
determination of Current AS IS Market Value is required by the express terms of
any Operative Document, it will be determined accordance with the following
procedure unless BNPLC and NAI have otherwise agreed in writing upon a Current
AS IS Market Value at that time:
(a) BNPLC and NAI shall each, within ten days after written
notice from either to the other, select an appraiser. If
either BNPLC or NAI fails to select an appraiser within
the required period, then the appraiser who has been
timely selected shall conclusively determine the fair
market value of the Property (or applicable portion
thereof) in accordance with this definition within
forty-five days after his or her selection.
(b) Upon the selection of the two appraisers as provided
above, such appraisers shall
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proceed to determine the fair market value of BNPLC's
interest in the Property (or applicable portion thereof)
in accordance with this clause (v). Such appraisals
shall be submitted in writing no later than forty-five
days after selection of the second appraiser. If the
fair market value as determined by such appraisers is
identical, such sum shall be Current AS IS Market Value.
If the fair market value indicated by the lower
appraisal differs from the fair market value indicated
by the higher appraisal by less than five percent (5%)
of the fair market value indicated by the higher
appraisal, then Current AS IS Market Value shall be the
sum of the two appraisal figures divided by two (2). If
either appraiser fails to timely submit his or her
appraisal, the timely submitted appraisal shall be
determinative of Current AS IS Market Value.
(c) If the fair market value indicated by the lower
appraisal differs from the fair market value indicated
by the higher appraisal by more than five percent (5%)
of the fair market value indicated by the higher
appraisal, then the two appraisers previously selected
shall select a third appraiser. The name of such
appraiser shall be submitted at the same time the
written appraisals are due. Such third appraiser shall
then review the previously submitted appraisals and
select the one that, in his professional opinion, more
closely reflects the fair market value of BNPLC's
interest in the Property (or applicable portion
thereof), such selection to be submitted in writing no
later than ten days after selection of the third
appraiser. Such selection shall be determinative of
Current AS IS Market Value.
(d) In making any such determination of fair market value,
the appraisers shall assume that any improvements then
located on the Property (or applicable portion thereof)
or under construction thereon constitute the highest and
best use, and that neither the Land Lease nor the
Purchase Agreement add any value to the Property. Each
appraiser selected hereunder shall be an independent
MAI-designated appraiser with not less than ten years'
experience in commercial real estate appraisal in
Sunnyvale, California and surrounding areas.
"DEBT" of any Person means (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such Person
for the deferred purchase price of property or services (except trade payables
and accrued expenses constituting current liabilities in the ordinary course of
business); (c) the face amount of any outstanding letters of credit issued for
the account of such Person; (d) obligations of such Person arising under
acceptance facilities; (e) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to provide funds to invest in
any Person, or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations of such
Person as lessee under Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any lease of property or related documents
(including a separate purchase agreement) which provide that such Person or any
of its Affiliates must purchase or cause another Person to purchase any interest
in the leased property and thereby guarantee a minimum residual value of the
leased property to the lessor. For purposes of this definition, the amount of
the obligations described in clause (h) of the preceding sentence with respect
to any lease classified
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according to GAAP as an "operating lease," shall equal the sum of (1) the
present value of rentals and other minimum lease payments required in connection
with such lease [calculated in accordance with SFAS 13 and other GAAP relevant
to the determination of the whether such lease must be accounted for as an
operating lease or capital lease], plus (2) the fair value of the property
covered by the lease; provided, however, that such amount shall not exceed the
price, as of the date a determination of Debt is required hereunder, for which
the lessee can purchase the leased property pursuant to any valid ongoing
purchase option if, upon such a purchase, the lessee shall be excused from
paying rentals or other minimum lease payments that would otherwise accrue after
the purchase.
"DEFAULT" means any event which, with the passage of time or the giving
of notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"DEFAULT RATE" means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.
"DEFAULTING PARTICIPANT" shall have the meaning assigned to it in
Section 1 of the Participation Agreement.
"DEPOSIT TAKER" shall have the meaning assigned to it in the Pledge
Agreement.
"DEPOSIT TAKER LOSSES" shall have the meaning assigned to it in the
Pledge Agreement.
"DESIGNATED SALE DATE" means the earlier of:
(1) the first Business Day of March, 2005; or
(2) any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC; provided, that to be
effective for purposes of this definition, any such notice from
NAI to BNPLC must designate a Business Day that is more than
thirty days after the date of such notice; and provided, further,
to be effective for purposes of this definition, the notice must
include an express, unconditional, unequivocal and irrevocable
acknowledgment by NAI that because of NAI's election to
accelerate the Designated Sale Date, the Maximum Remarketing
Obligation will equal the Break Even Price under the Purchase
Agreement; or
(3) any Business Day designated as such in a notice given
by BNPLC to NAI after the effective date of any termination of
the Construction Management Agreement as provided in
subparagraphs 5(D) or 5(E) thereof; provided, that to be
effective for purposes of this definition, any such notice from
BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice; or
(4) [intentionally deleted]; or
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(5) any Business Day designated as such in a notice given
by BNPLC to NAI when any Event of Default has occurred and is
continuing; provided, that to be effective for purposes of this
definition, any such notice from BNPLC to NAI must designate a
Business Day that is more than thirty days after the date of such
notice.
"DEVELOPMENT DOCUMENTS" means the contracts, ordinances and other
documents described in Exhibit C attached to the Closing Certificate, as the
same may be modified from time to time in accordance with the Land Lease and the
Closing Certificate, and any applications, permits or certificates concerning or
affecting the use or development of the Property that may be submitted, issued
or executed from time to time as contemplated in such contracts, ordinances and
other documents or that BNPLC may hereafter execute, approve or consent to at
the request of NAI.
"DIRECT PAYMENTS TO PARTICIPANTS" means the amounts paid or required to
be paid directly to Participants on the Designated Sale Date as provided in
Section 6.2 of the Pledge Agreement at the direction of and for NAI by the
collateral agent appointed pursuant to the Pledge Agreement from all or any part
of the Collateral described therein.
"EFFECTIVE DATE" means March 1, 2000.
"EFFECTIVE RATE" means for each Base Rent Period, the per annum rate
determined by dividing (A) LIBOR for such Base Rent Period, as the case may be,
by (B) one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
for such Base Rent Period. If LIBOR or the Eurodollar Rate Reserve Percentage
changes from Base Rent Period to Base Rent Period, then the Effective Rate shall
be automatically increased or decreased as of the date of such change, as the
case may be, without prior notice to NAI. If for any reason BNPLC determines
that it is impossible or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with the foregoing, then
the "EFFECTIVE RATE" for that Base Rent Period shall equal any published index
or per annum interest rate determined in good faith by BNPLC's Parent to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on BNPLC's Parent's comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by BNPLC of the Effective Rate
under this definition shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.
"ENVIRONMENTAL LAWS" means any and all existing and future Applicable
Laws pertaining to safety, health or the environment, or to Hazardous Substances
or Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "CERCLA"), and the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, "RCRA").
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"ENVIRONMENTAL CUTOFF DATE" means the later of the dates upon which (i)
the Land Lease terminates, or (ii) NAI surrenders possession and control of the
Property and ceases to have interest in the Land or Improvements or rights with
respect thereto under any of the Operative Documents.
"ENVIRONMENTAL LOSSES" means Losses suffered or incurred by BNPLC or any
other Interested Party, directly or indirectly, relating to or arising out of,
based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable Environmental Laws
relating to the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity that occurs or is
alleged to have occurred on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Interested Party which directly or indirectly relates to, arises from, is based
on, or results from any of the matters described in clauses (i), (ii), or (iii)
of this definition or any allegation of any such matters. For purposes of
determining whether Losses constitute "Environmental Losses," as the term is
used in the Land Lease, any actual or alleged Hazardous Substance Activity or
violation of Environmental Laws relating to the Property will be presumed to
have occurred prior to the Environmental Cutoff Date unless NAI establishes by
clear and convincing evidence to the contrary that the relevant Hazardous
Substance Activity or violation of Environmental Laws did not occur or commence
prior to the Environmental Cutoff Date.
"ENVIRONMENTAL REPORTS" means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I Environmental Site Assessment for 1260 Crossman Avenue
Property, Sunnyvale, California, dated September 1999 by Romig Consulting
Engineers.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA
is a member of NAI's controlled group, or under common control with NAI, within
the meaning of Section 414 of the Internal Revenue Code, and the regulations
promulgated and rulings issued thereunder.
"ESCROWED PROCEEDS" means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Escrowed Proceeds" there shall be deducted all expenses and costs of every
type, kind and nature (including Attorneys' Fees) incurred by BNPLC to collect
such proceeds. Notwithstanding the foregoing, "Escrowed Proceeds" will not
include (A) any payment to BNPLC by a Participant or an Affiliate of BNPLC that
is made to compensate
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BNPLC for the Participant's or Affiliate's share of any Losses BNPLC may incur
as a result of any of the events described in the preceding clauses (1) through
(4), (B) any money or proceeds that have been applied as a Qualified Prepayment
or to pay any Breakage Costs or other costs incurred in connection with a
Qualified Prepayment, (C) any money or proceeds that, after no less than ten
days notice to NAI, BNPLC returns or pays to a third party because of BNPLC's
good faith belief that such return or payment is required by law, (D) any money
or proceeds paid by BNPLC to NAI or offset against any amount owed by NAI, or
(E) any money or proceeds used by BNPLC in accordance with the Land Lease for
repairs or the restoration of the Property or to obtain development rights or
the release of restrictions that will inure to the benefit of future owners or
occupants of the Property. Until Escrowed Proceeds are paid to NAI pursuant to
Paragraph 10 of the Land Lease, transferred to a purchaser under the Purchase
Agreement as therein provided or applied as a Qualified Prepayment or as
otherwise described in the preceding sentence, BNPLC shall keep the same
deposited in one or more interest bearing accounts, and all interest earned on
such account shall be added to and made a part of Escrowed Proceeds.
"ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition, "conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent environmental
consultant engaged by that Person), but only to the extent that the agent is, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, (x) acting
within the scope of the authority granted to him by such Person, (y) not acting
with the consent or approval of or under the direction of NAI or NAI's
Affiliates, employees or agents, and (z) not acting in good faith to mitigate
Losses that such Person may suffer because of a breach or repudiation by NAI of
the Land Lease or the Purchase Documents.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for purposes of determining
the Effective Rate for any Base Rent Period, the reserve percentage applicable
two Business Days before the first day of such period under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for BNPLC's
Parent with respect to liabilities or deposits consisting of or including
Eurocurrency Liabilities (or with respect to any other
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category or liabilities by reference to which LIBOR is determined) having a term
comparable to such period.
"EVENT OF DEFAULT" shall have the meaning assigned to it in subparagraph
17 of the Land Lease.
"EXCLUDED TAXES" means (1) all federal, state and local income taxes
upon Base Rent, any interest paid to BNPLC or any Participant pursuant to
subparagraph 3(j) of the Land Lease, and any additional compensation claimed by
BNPLC pursuant to subparagraph 5(b)(ii) of the Land Lease; (2) any transfer or
change of ownership taxes assessed because of BNPLC's transfer or conveyance to
any third party of any rights or interest in the Land Lease, the Purchase
Agreement or the Property (other than any such taxes assessed because of any
Permitted Transfer under clauses (1), (3), (4), (5), (6) or (7) of the
definition of Permitted Transfer in this Agreement), (3) all federal, state and
local income taxes upon any amounts paid as reimbursement for or to satisfy
Losses incurred by BNPLC or any Participant to the extent such taxes are offset
by a corresponding reduction of BNPLC's or the applicable Participant's income
taxes because of BNPLC's or such Participant's deduction of the reimbursed
Losses from its taxable income or because of any tax credits attributable
thereto. If, however, a change in Applicable Laws after the Effective Date
results in an increase in such taxes for any reason other than an increase in
the applicable tax rates (e.g., a disallowance of deductions that would
otherwise be available against payments described in clause (A) of this
definition), then for purposes of the Operative Documents, the term "Excluded
Taxes" will not include the increase in such taxes attributable to the change.
"EXISTING CONTRACT" means the Purchase Agreement covering the Land
between NAI and Seller, dated September 9, 1999.
"FAILED COLLATERAL TEST DATE" means any date upon which commences a
Mandatory Collateral Period as described in Part III of Schedule 1 attached to
the Land Lease.
"FED FUNDS RATE" means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon NAI.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
subparagraph 13(a) of the Land Lease (except for changes with which NAI's
independent public accountants concur).
"HAZARDOUS SUBSTANCE" means (i) any chemical, compound, material,
mixture or substance that is now or hereafter defined or listed in, regulated
under, or otherwise classified pursuant to, any
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Environmental Laws as a "hazardous substance," "hazardous material," "hazardous
waste," "extremely hazardous waste or substance," "infectious waste," "toxic
substance," "toxic pollutant," or any other formulation intended to define, list
or classify substances by reason of deleterious properties, including
ignitability, corrosiveness, reactivity, carcinogenicity, toxicity or
reproductive toxicity; (ii) petroleum, any fraction of petroleum, natural gas,
natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or
mixtures of natural gas and such synthetic gas), and ash produced by a resource
recovery facility utilizing a municipal solid waste stream, and drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iii) asbestos and
any asbestos containing material; and (v) any other material that, because of
its quantity, concentration or physical or chemical characteristics, poses a
significant present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment.
"HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property.
"IMPOSITIONS" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Land Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.
"IMPROVEMENTS" means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.
"INITIAL FUNDING ADVANCE" means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate
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closing certificate executed by NAI as of the Effective Date. To the extent that
BNPLC does not itself use the entire Initial Funding Advance to pay Transaction
Expenses incurred by BNPLC, the remainder thereof will be advanced to NAI, with
the understanding that NAI shall use any such amount advanced for one or more of
the following purposes: (1) the payment or reimbursement of Transaction Expenses
incurred by NAI; (2) the maintenance of the Property; or (3) the payment of
Rents next due.
"INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.
"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT" means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph 17(e) of the Land
Lease, the occurrence of which event cannot be objectively determined. For
example, an Event of Default under subparagraph 17(e) of the Land Lease
resulting solely from a failure of NAI to "generally" pay its debts as such
debts become due (in contrast to a failure of NAI to pay Rent to BNPLC as it
becomes due under the Land Lease) would constitute an Issue 97-1
Non-performance-related Subjective Event of Default. In no event, however, will
the term "Issue 97-1 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of NAI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by NAI of
the provisions set forth in Schedule 1 attached to the Land Lease (which set
forth financial covenants), (3) any failure of NAI to use, maintain and insure
the Property in accordance with the requirements of the Land Lease, or (4) any
failure of NAI to pay the full amount of any Supplemental Payment on the
Designated Sale Date as required by the Purchase Agreement. Except as provided
in subparagraph 1(A)(2)(c)(i) of the Purchase Agreement, the characterization of
any Event of Default as an Issue 97-1 Non-performance-related Subjective Event
of Default will not affect the rights or remedies available to BNPLC because of
the Event of Default.
"LAND" means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Land Lease and the Purchase Agreement.
"LAND LEASE" means the Lease Agreement (Phase V - Land") dated as of
March 1, 2000 between BNPLC, as landlord, and NAI, as tenant, pursuant to which
NAI has agreed to lease BNPLC's interest in the Property, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
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"LIBOR" means, for purposes of determining the Effective Rate for each
Base Rent Period, the rate determined by BNPLC's Parent to be the average rate
of interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of
the rates at which deposits of dollars are offered or available to BNPLC's
Parent in the London interbank market at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such period. BNPLC shall
instruct BNPLC's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered: (i) for
delivery on the first day of such Base Rent Period, as the case may be, (ii) in
an amount equal or comparable to the total (projected on the applicable date of
determination by BNPLC's Parent) Stipulated Loss Value on the first day of such
period, and (iii) for a time equal or comparable to the length of such period.
If BNPLC's Parent so chooses, it may determine LIBOR for any period by reference
to the rate reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason BNPLC's
Parent determines that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance with the foregoing,
or if BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain the Initial Funding Advance
during any Base Rent Period for which Base Rent is computed by reference to
LIBOR, then "LIBOR" for that period shall equal the Base Rate for that period.
All determinations of LIBOR by BNPLC's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon NAI.
"LIBOR PERIOD ELECTION" for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit C attached to the Land Lease. (For purposes of the
Land Lease a LIBOR Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on the Base Rent Date, or Base
Rent Commencement Date, upon which such Base Rent Period begins.) Any LIBOR
Period Election so designated by NAI shall remain in effect for the entire Base
Rent Period specified in NAI's notice to BNPLC (provided such Base Rent Period
commences at least ten Business Days after BNPLC's receipt of the notice) and
for all subsequent Base Rent Periods until a new designation becomes effective
in accordance with the provisions set forth in this definition. Notwithstanding
the foregoing, however: (1) NAI shall not be entitled to designate a LIBOR
Period Election that would cause a Base Rent Period to extend beyond the end of
the scheduled Term; (2) changes in the LIBOR Period Election shall become
effective only upon the commencement of a new Base Rent Period; (3) for each
Base Rent Period that commences prior the Base Rent Commencement Date or that
occurs within any Mandatory Collateral Period, the LIBOR Period Election shall
be one month; (4) no LIBOR Period Election designated by NAI hereunder shall be
different than the LIBOR Period Election specified under (and as defined in) the
Other Common Definitions and Provisions Agreement; and (5) if NAI fails to make
a LIBOR Period Election consistent with the foregoing requirements for any Base
Rent Period, or if an Event of Default shall have occurred and be continuing on
the third Business Day preceding the commencement of any Base Rent Period, the
LIBOR Period Election for such Base Rent Period shall be deemed to be one month.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing
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of or agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction). In addition, for purposes of subparagraph A.(8) of
Part IV of Schedule 1 attached to the Land Lease, "Lien" includes any Liens
under ERISA relating to Unfunded Benefit Liabilities of which NAI is required to
notify BNPLC under subparagraph 13(a)(vii) of the Land Lease (irrespective of
whether NAI actually notifies BNPLC as required thereunder).
"LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPLC itself, (2) by third parties lawfully claiming through or
under BNPLC (which for purposes of the Land Lease shall include any judgment
liens established against the Property because of a judgment rendered against
BNPLC and shall also include any liens established against the Property to
secure past due Excluded Taxes), or (3) by third parties lawfully claiming under
a deed or other instrument duly executed by BNPLC; provided, however, Liens
Removable by BNPLC shall not include (A) any Permitted Encumbrances or
Development Documents (regardless of whether claimed through or under BNPLC),
(B) the Operative Documents or any other document executed by BNPLC with the
knowledge of (and without objection by) NAI's counsel contemporaneously with the
execution and delivery of the Operative Documents, (C) Liens which are neither
lawfully claimed through or under BNPLC (as described above) nor claimed under a
deed or other instrument duly executed by BNPLC, (D) Liens claimed by NAI or
claimed through or under a conveyance made by NAI, (E) Liens arising because of
BNPLC's compliance with Applicable Law, the Operative Documents, Permitted
Encumbrances, the Development Documents or any written request made by NAI, (F)
Liens securing the payment of property taxes or other amounts assessed against
the Property by any governmental authority, other than to secure the payment of
past due Excluded Taxes or to secure damages caused by (and attributed by any
applicable principles of comparative fault to) BNPLC's own Established
Misconduct, (G) Liens resulting from or arising in connection with any breach by
NAI of the Operative Documents; or (H) Liens resulting from or arising in
connection with any Permitted Transfer that occurs more than thirty days after
any Designated Sale Date upon which, for any reason, NAI or an Affiliate of NAI
or any Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a cash price to BNPLC (when taken
together with any Supplemental Payment made by NAI pursuant to Paragraph 1(A)(2)
of the Purchase Agreement, in the case of a purchase by an Applicable Purchaser)
equal to the Break Even Price.
"LOSSES" means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs and expenses (including Attorneys'
Fees and the fees of outside accountants and environmental consultants), of any
and every kind or character, foreseeable and unforeseeable, liquidated and
contingent, proximate and remote.
"MANDATORY COLLATERAL PERIOD" shall have the meaning assigned to it in
Part I of Schedule 1 attached to the Land Lease and to the Pledge Agreement.
"MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between NAI
or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by
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implementation of or response to said communication), a material change in the
scope, duration, or nature of any Remedial Work.
"MAXIMUM REMARKETING OBLIGATION" shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.
"MINIMUM EXTENDED REMARKETING PRICE" shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
3(37) of ERISA to which contributions have been made by NAI or any ERISA
Affiliate during the preceding six years and which is covered by Title IV of
ERISA.
"NAI" means Network Appliance, Inc., a California corporation.
"NAI'S EXTENDED REMARKETING PERIOD" shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.
"NAI'S EXTENDED REMARKETING RIGHT" shall have the meaning assigned to it
in subparagraph 2(A) of the Purchase Agreement.
"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS" shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.
"OPERATIVE DOCUMENTS" means the Closing Certificate, the Land Lease, the
Purchase Agreement, the Pledge Agreement and this Common Definitions and
Provisions Agreement (Phase V - Land).
"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT" means the Common
Definitions and Provisions Agreement (Phase V - Improvements), dated as of the
March 1, 2000, between BNPLC and NAI, as such Common Definitions and Provisions
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"OTHER LEASE AGREEMENT" means the Lease Agreement (Phase V -
Improvements), dated as of March 1, 2000, between BNPLC and NAI, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"OTHER PURCHASE AGREEMENT" means the Purchase Agreement (Phase V -
Improvements), dated as of March 1, 2000, between BNPLC and NAI, as such
Purchase Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
"PARTICIPANT" means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Land Lease
and the Purchase Documents. As of the Effective Date, the only Participant is
BNPLC's Parent, but BNPLC may agree after the Effective Date to share in risks
and rewards of the Land Lease and the
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Purchase Documents with other Participants. However, no Person other than
BNPLC's Parent and its Affiliates shall qualify as a Participant for purposes of
the Operative Documents or other agreements concerning the Property to which NAI
is a party unless such Person, during the continuance of an Event of Default or
otherwise with NAI's prior written approval (which approval will not be
unreasonably withheld), became a party to the Pledge Agreement and to the
Participation Agreement by executing supplements to those agreements as
contemplated therein.
"PARTICIPATION AGREEMENT" means the Participation Agreement between
BNPLC and BNPLC's Parent dated as of the March 1, 2000, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Land Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) the
Premises Lease, (iv) any Liens securing the payment of Impositions which are not
delinquent or claimed to be delinquent or which are being contested in
accordance with subparagraph 5(a) of the Land Lease, and (iv) mechanics' and
materialmen's liens for amounts not past due or claimed to be past due or which
are being contested in accordance with subparagraph 11(c) of the Land Lease.
"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:
(1) exceed that reasonably required for the construction
of the Construction Project in accordance with the Other Lease
Agreement and the Construction Management Agreement or for the
operation of the Property for the purposes expressly permitted
under subparagraph 2(a) of the Land Lease; or
(2) include any disposal, discharge or other release of
Hazardous Substances from the Property in any manner that might
allow such substances to reach surface water or groundwater,
except (i) through a lawful and properly authorized discharge (A)
to a publicly owned treatment works or (B) with rainwater or
storm water runoff in accordance with Applicable Laws and any
permits obtained by NAI that govern such runoff; or (ii) any such
disposal, discharge or other release of Hazardous Substances for
which no permits are required and which are not otherwise
regulated under applicable Environmental Laws.
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Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.
"PERMITTED HAZARDOUS SUBSTANCES" means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by NAI and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2(a) of the Land Lease, in either
case in strict compliance with all Environmental Laws and with due care given
the nature of the Hazardous Substances involved. Without limiting the generality
of the foregoing, Permitted Hazardous Substances shall include usual and
customary office, laboratory and janitorial products.
"PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in the Land and the Property;
(3) any assignment or conveyance by BNPLC or its permitted successors or assigns
to any present or future Participant of any lien or security interest against
the Property (in contrast to a conveyance of BNPLC's fee estate in the Land and
Improvements) or of any interest in Rent, payments required by or under the
Purchase Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of NAI under the Operative Documents; (4) any agreement to exercise or
refrain from exercising rights or remedies under the Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by NAI or required by any Permitted Encumbrance, by the
Purchase Agreement, by the Existing Contract, by any other Development Contract
or by Applicable Laws; or (6) any assignment or conveyance after a Designated
Sale Date on which NAI shall not have purchased or caused an Applicable
Purchaser to purchase BNPLC's interest in the Property and, if applicable, after
the expiration of the thirty day cure period specified in Paragraph 4(D) of the
Purchase Agreement.
"PERSON" means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.
"PERSONAL PROPERTY" shall have the meaning assigned to it on page 2 of
the Land Lease.
"PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by NAI or any ERISA
Affiliate of NAI during the preceding six years and which is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"PLEDGE AGREEMENT" means the Pledge Agreement (Phase V - Land) dated as
of the date hereof between BNPLC and NAI, pursuant to which NAI may pledge
certificates of deposit as security for NAI's obligations under the Purchase
Agreement (and for the corresponding obligations of BNPLC to
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the Participants under the Participation Agreement), as such Pledge Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
"PREMISES LEASE" means the sublease of space within the Improvements,
between NAI, as landlord, and Lockheed Martin, a Maryland corporation, as
tenant, executed of even date herewith, and any subleases or other transfers
under and permitted by the terms of any such lease.
"PRIME RATE" means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPLC shall be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from time to time after the Effective Date without notice to NAI as
of the effective time of each change in rates described in this definition.
"PROPERTY" means the Personal Property and the Real Property,
collectively. Any rights, titles and interests acquired by BNPLC under the
Existing Contract, to the extent not covered by the Land Lease and thus not
encompassed within this definition of Property, are intended to be covered by
the Other Lease Agreement and encompassed within the term "Property" as defined
in the Other Common Definitions and Provisions Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement (Phase V - Land) dated
as of March 1, 2000 between BNPLC and NAI, as such Purchase Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"PURCHASE DOCUMENTS" means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.
"PURCHASE OPTION" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.
"QUALIFIED AFFILIATE" means any Person that is one hundred percent
(100%) owned, directly or indirectly, by Banque Nationale de Paris or any
successor of such bank; provided, that such Person can make (and has in writing
made) the same representations to NAI that BNPLC has made in Paragraphs 3(D) and
3(E) of the Closing Certificate; and, provided, further, that such Person is not
insolvent.
"QUALIFIED PREPAYMENTS" means any payments received by BNPLC from time
to time during the Term (1) under any property insurance policy as a result of
damage to the Property, (2) as compensation for any restriction placed upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof, (3) because of any judgment, decree or award for
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injury or damage to the Property or (4) under any title insurance policy or
otherwise as a result of any title defect or claimed title defect with respect
to the Property; provided, however, that (x) in determining the amount of
"Qualified Prepayments", there shall be deducted all expenses and costs of every
kind, type and nature (including taxes, Breakage Costs and Attorneys' Fees)
incurred by BNPLC with respect to the collection or application of such
payments, (y) "Qualified Prepayments" shall not include any payment to BNPLC by
a Participant or an Affiliate of BNPLC that is made to compensate BNPLC for the
Participant's or Affiliate's share of any Losses BNPLC may incur as a result of
any of the events described in the preceding clauses (1) through (4) and (z)
"Qualified Prepayments" shall not include any payments received by BNPLC that
BNPLC has paid or is obligated to pay to NAI for the restoration or repair of
the Property or that BNPLC is holding as Escrowed Proceeds pursuant to Paragraph
10 of the Land Lease or any other provision of the Land Lease. For purposes of
computing the total Qualified Prepayments (and other amounts dependent upon
Qualified Prepayments, such as Stipulated Loss Value) paid to or received by
BNPLC as of any date, payments described in the preceding clauses (1) through
(4) will be considered as Escrowed Proceeds, not Qualified Prepayments, until
they are actually applied as Qualified Prepayments by BNPLC as provided in the
Paragraph 10 of the Land Lease.
"REAL PROPERTY" shall have the meaning assigned to it on page 1 of the
Land Lease.
"REMEDIAL WORK" means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.
"RENT" means the Base Rent and all Additional Rent.
"RESIDUAL RISK PERCENTAGE" means fifteen percent (15%).
"RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.
"SALE CLOSING DOCUMENTS" shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.
"SECURED SPREAD" means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any Mandatory
Collateral Period, the Secured Spread shall equal one-half of the Unsecured
Spread for the same period.
"SELLER" means Trinet Essential Facilities XII, Inc., a Maryland
corporation.
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"STIPULATED LOSS VALUE" as of any date means the amount equal to the sum
of the Initial Funding Advance, minus all funds actually received by BNPLC and
applied as Qualified Prepayments on or prior to such date. Under no
circumstances will any payment of Base Rent reduce Stipulated Loss Value.
"STIPULATED LOSS VALUE (BUILDING 4/LAND)" as of any date means the
amount equal to the sum of portion of Stipulated Loss Value attributable to the
portion of the Land under or used primarily to support the portion of the
Improvements known as "Building 4" (in this definition, the "Building 4 Land")
determined in accordance with the following provisions:
(1) The Initial Funding Advance will be allocated between
Stipulated Loss Value (Building 4/Land) and the remainder of
Stipulated Loss Value as reasonably determined by NAI, subject to
the approval of BNPLC, in a manner that fairly reflects the cost
of the Building 4 Land under or used primarily to support
Building 4 relative to the cost of all the Land.
(2) The application of Qualified Prepayments, if any, will
be allocated between Stipulated Loss Value (Building 4/Land) and
the remainder of Stipulated Loss Value as determined by NAI,
subject to the approval of BNPLC, in a manner that fairly
reflects the impact upon the value of the Building 4 Land,
relative to the value of all Land, resulting from the event or
circumstances that generated such Qualified Prepayments. (For
example, condemnation proceeds paid because of a taking of a
portion of the Building 4 Land, and no other part of the Land,
would, if applied as Qualified Prepayments, reduce Stipulated
Loss Value (Building 4/Land) dollar for dollar.)
(3) In any Completion Notice (Building 4), as defined in
the Other Common Definitions and Provisions Agreement, NAI will
specify its determination of Stipulated Loss Value (Building
4/Land), as well as NAI's determination of the Stipulated Loss
Value (Building 4) under and as defined in the Other Common
Definitions and Provisions Agreement, which determinations will
be binding upon NAI for purposes of the Operative Documents
unless BNPLC notifies NAI of BNPLC's disapproval of such
determinations, in which case BNPLC shall itself be entitled to
make such determinations.
(4) In any event, if NAI has not notified BNPLC of NAI's
determination of Stipulated Loss Value (Building 4/Land) at the
time a determination thereof is needed under the Operative
Documents, BNPLC shall itself be entitled to make such
determination in goof faith on the basis of any information then
available to BNPLC, and any such determination by BNPLC shall, in
the absence of clear and demonstrable error, be binding and
conclusive for purposes of the Operative Documents.
"SUBSIDIARY" means, with respect to any Person, any Affiliate of which
at least a majority of the securities or other ownership interests having
ordinary voting power then exercisable for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by such Person.
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"SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.
"TERM" shall have the meaning assigned to it in subparagraph 1(a) of the
Land Lease.
"THIRD PARTY PRICE" shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.
"THIRD PARTY SALE NOTICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"THIRD PARTY SALE PROPOSAL" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"THIRD PARTY TARGET PRICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan or
Multiemployer Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA) under
the Plan or Multiemployer Plan exceeds the market value of all Plan or
Multiemployer assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan or Multiemployer Plan and in accordance
with the provisions of ERISA for calculating the potential liability of NAI or
any ERISA Affiliate of NAI under Title IV of ERISA.
"UNSECURED SPREAD" means, for each period beginning on and including the
Base Rent Commencement Date or a Base Rent Date and ending on but not including
the next Base Rent Date, the amount established as described below in this
definition on the date (in this definition, the "SPREAD TEST DATE") that is two
Business Days prior to such period by reference to the ratio calculated by
dividing (1) Adjusted EBIT for the then latest Rolling Four Quarters Period that
ended prior to (and for which NAI has reported earnings as necessary to compute
Adjusted EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined
on a consolidated basis) as of the end of such Rolling Four Quarters Period. The
Unsecured Spread shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:
(a) for any period commencing on or prior to the first Business
Day of April, 2000, the Unsecured Spread will be the amount indicated
for Level III in the pricing grid below;
(b) promptly after earnings are reported by NAI for the latest
quarter in any Rolling Four Quarters Period, NAI must notify BNPLC of
any resulting change in the Unsecured Spread under this definition, and
no reduction in the Unsecured Spread from one period to the next will be
effective for purposes of the Operative Documents unless, prior to the
Spread Test Date for
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<PAGE> 81
the next period, NAI shall have provided BNPLC with a written notice
setting forth and certifying the calculation under this definition that
justifies the reduction; and
(c) notwithstanding anything to the contrary in this definition,
on any date when an Event of Default has occurred and is continuing, the
Unsecured Spread shall equal the Default Rate less the Effective Rate.
<TABLE>
<CAPTION>
LEVELS RATIO OF TOTAL DEBT TO ADJUSTED EBIT UNSECURED SPREAD
-------- ------------------------------------ ------------------
<S> <C> <C>
Level I less than 0.5 125.0 basis points
Level II greater than or equal to 0.5, but 137.5 basis points
less than 1.0
Level III greater than or equal to 1.0, but 150.0 basis points
less than 1.5
Level IV greater than or equal to 1.5, but 175.0 basis points
less than 2.0
Level V greater than or equal to 2.0 200.0 basis points
</TABLE>
All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the Land
Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.
"VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election made
by BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase Agreement.
ARTICLE II - RULES OF INTERPRETATION
THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:
1. NOTICES. The provision of any Operative Document, or of any
Applicable Laws with reference to the sending, mailing or delivery of any notice
or demand under any Operative Document or with reference to the making of any
payment required under any Operative Document, shall be deemed to be complied
with when and if the following steps are taken:
(i) All Rent and other amounts required to be paid by NAI
to BNPLC shall be paid to BNPLC in immediately available funds by wire
transfer to:
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<PAGE> 82
Federal Reserve Bank of New York
ABA 026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Land Lease (Phase V)
or at such other place and in such other manner as BNPLC may
designate in a notice to NAI.
(ii) All Collateral required to be paid by NAI to the
Agent shall be paid in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Payment
or at such other place and in such other manner as Agent may
designate in a notice to NAI.
(iii) All notices, demands, approvals, consents and other
communications to be made under any Operative Document to or by the
parties thereto must, to be effective for purpose of such Operative
Document, be in writing. Notices, demands and other communications
required or permitted under any Operative Document are to be sent to the
addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (B) hereof shall be deemed received upon such personal
service or upon dispatch by electronic means, and, if sent pursuant to
clause (C) shall be deemed received five days following deposit in the
mail.
Address of BNPLC:
BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191
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<PAGE> 83
With a copy to:
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Gavin Holles
Telecopy: (415) 296-8954
And for draw requests and funding notices, with a
copy to:
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: George Fung
Telecopy: (415) 956-4230
Address of NAI:
Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452
2. SEVERABILITY. If any term or provision of any Operative Document or
the application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of such document, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
3. NO MERGER. There shall be no merger of the Land Lease or of the
leasehold estate created by the Land Lease with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Land Lease or the leasehold estate created hereby
and any other interest in the Property, unless all Persons with an interest in
the Property that would be adversely affected by any such merger specifically
agree in writing that such a merger shall occur. There shall be no merger of the
Purchase Agreement or of the purchase options or obligations created by the
Purchase Agreement with any other interest in the Property by reason of the fact
that the same person may acquire or hold, directly or indirectly, the Land Lease
or the leasehold estate created hereby and any other interest in the Property,
unless all Persons with an interest in the Property that would be adversely
affected by any such merger specifically agree in writing that such a merger
shall occur.
4. NO IMPLIED WAIVER. The failure of BNPLC or NAI to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in any Operative Document shall not be
construed as a waiver or a relinquishment thereof for the future. The failure of
Agent to insist at any time upon the strict performance of any covenant or
agreement or to exercise any option, right, power or remedy contained in the
Pledge Agreement shall not be construed as a waiver or a relinquishment thereof
for the future. The waiver of or redress for any breach of any
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<PAGE> 84
Operative Document by any party thereto shall not prevent a similar subsequent
act from constituting a violation. Any express waiver of any provision of any
Operative Document shall affect only the term or condition specified in such
waiver and only for the time and in the manner specifically stated therein. No
waiver by any party to any Operative Document of any provision therein shall be
deemed to have been made unless expressed in writing and signed by the party to
be bound by the waiver. A receipt by BNPLC of any Rent with knowledge of the
breach by NAI of any covenant or agreement contained in the Land Lease or any
other Operative Document shall not be deemed a waiver of such breach. A receipt
by Agent of any Collateral or other payment under the Pledge Agreement with
knowledge of the breach by NAI of any covenant or agreement contained in the
Pledge Agreement shall not be deemed a waiver of such breach.
5. ENTIRE AND ONLY AGREEMENTS. The Operative Documents supersede any
prior negotiations and agreements between BNPLC, Agent and NAI concerning the
Property or the Collateral, and no amendment or modification of any Operative
Document shall be binding or valid unless expressed in a writing executed by all
parties to such Operative Document.
6. BINDING EFFECT. Except to the extent, if any, expressly provided to
the contrary in any Operative Document with respect to assignments thereof, all
of the covenants, agreements, terms and conditions to be observed and performed
by the parties to the Operative Documents shall be applicable to and binding
upon their respective successors and, to the extent assignment is permitted
thereunder, their respective assigns.
7. TIME IS OF THE ESSENCE. Time is of the essence as to all obligations
of NAI and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.
8. GOVERNING LAW. Each Operative Document shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the "UCC," as defined in the Pledge
Agreement).
9. PARAGRAPH HEADINGS. The paragraph and section headings contained in
the Operative Documents are for convenience only and shall in no way enlarge or
limit the scope or meaning of the various and several provisions thereof.
10. NEGOTIATED DOCUMENTS. All the parties to each Operative Document and
their counsel have reviewed and revised or requested revisions to such Operative
Document, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party shall not apply to the construction or
interpretation of any Operative Documents or any amendments thereof.
11. TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT. As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase V - Land), but is defined in
another Operative Document, shall have the meaning ascribed to it in the other
Operative Document.
12. OTHER TERMS AND REFERENCES. Words of any gender used in each
Operative Document shall be held and construed to include any other gender, and
words in the singular number
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<PAGE> 85
shall be held to include the plural and vice versa, unless the context otherwise
requires. References in any Operative Document to Paragraphs, subparagraphs,
Sections, subsections or other subdivisions shall refer to the corresponding
Paragraphs, subparagraphs, Sections, subsections or subdivisions of that
Operative Document, unless specific reference is made to another document or
instrument. References in any Operative Document to any Schedule or Exhibit
shall refer to the corresponding Schedule or Exhibit attached to that Operative
Document, which shall be made a part thereof by such reference. All capitalized
terms used in each Operative Document which refer to other documents shall be
deemed to refer to such other documents as they may be renewed, extended,
supplemented, amended or otherwise modified from time to time, provided such
documents are not renewed, extended or modified in breach of any provision
contained in the Operative Documents or, in the case of any other document to
which BNPLC is a party or of which BNPLC is an intended beneficiary, without the
consent of BNPLC. All accounting terms used but not specifically defined in any
Operative Document shall be construed in accordance with GAAP. The words "this
[Agreement]", "herein", "hereof", "hereby", "hereunder" and words of similar
import when used in each Operative Document refer to that Operative Document as
a whole and not to any particular subdivision unless expressly so limited. The
phrases "this Paragraph", "this subparagraph", "this Section", "this subsection"
and similar phrases used in any operative document refer only to the Paragraph,
subparagraph, Section, subsection or other subdivision described in which the
phrase occurs. As used in the Operative Documents the word "or" is not
exclusive. As used in the Operative Documents, the words "include", "including"
and similar terms shall be construed as if followed by "without limitation to".
13. EXECUTION IN COUNTERPARTS. To facilitate execution, each Operative
Document may be executed in as many identical counterparts as may be required.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart. All counterparts, taken together, shall collectively constitute a
single instrument. It shall not be necessary in making proof of any Operative
Document to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages.
14. NOT A PARTNERSHIP, ETC. NOTHING IN ANY OPERATIVE DOCUMENT IS
INTENDED TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE
BETWEEN BNPLC AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE
ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY
OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE
DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
NAI.
[The signature pages follows.]
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<PAGE> 86
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase V - Land) to be executed as of March 1, 2000.
"NAI"
NETWORK APPLIANCE, INC.
By:
----------------------------------------
Jeffry R. Allen, Chief Financial Officer
<PAGE> 87
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase V - Land) dated to be effective March 1, 2000.]
"BNPLC"
BNP LEASING CORPORATION
By:
----------------------------------------
Lloyd G. Cox, Vice President
