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EXHIBIT 10.59
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LEASE AGREEMENT
(PHASE V - IMPROVEMENTS)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
NETWORK APPLIANCE, INC.
("NAI")
MARCH 1, 2000
(SUNNYVALE, CALIFORNIA)
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TABLE OF CONTENTS
Page
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1. TERM..............................................................................................................2
(a) Scheduled Term......................................................................................2
(b) Automatic Termination as of the Base Rent Commencement Date Resulting From an Election by NAI to
Terminate the Purchase Option and NAI's Initial Remarketing Rights and Obligations..................2
(c) Election by BNPLC to Terminate After an Issue 97-10 Election........................................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..................................................................5
(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) Additional Amount Payable On the Base Rent Commencement Date.........................6
(iii) Determination of Payment Due Dates After the Base Rent
Commencement Date, Generally.........................................................6
(iv) Special Adjustments to Base Rent Payment Dates and Periods...........................6
(v) Base Rent Formula for Periods After the Base Rent Commencement Date and
During Which The Collateral Percentage is 100%.......................................6
(vi) 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
(vii) 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) Arrangement Fee.....................................................................................8
(f) Commitment Fees.....................................................................................9
(g) Administrative Agency Fees..........................................................................9
(h) [Intentionally deleted].............................................................................9
(i) Issue 97-10 Prepayments.............................................................................9
(j) No Demand or Setoff.................................................................................9
(k) Default Interest and Order of Application...........................................................9
4. NATURE OF THIS AGREEMENT.........................................................................................10
(a) "Net"Lease Generally...............................................................................10
(b) No Termination.....................................................................................10
(c) Tax Reporting......................................................................................11
(d) Characterization of this Improvements Lease........................................................11
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5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY....................................................12
(a) Impositions........................................................................................12
(b) Increased Costs; Capital Adequacy Charges..........................................................12
(c) NAI's Payment of Other Losses; General Indemnification.............................................13
(d) Exceptions and Qualifications to Indemnities.......................................................14
6. CONSTRUCTION.....................................................................................................16
(a) Construction Advances; Outstanding Construction Allowance..........................................16
(b) Calculation of Carrying Costs, Generally...........................................................16
(c) Limits on the Amount of Carrying Costs.............................................................17
(d) NAI's Right to Control the Construction Project....................................................17
(e) Landlord's Election to Continue Construction.......................................................17
(f) Powers Coupled With an Interest....................................................................19
(g) Final Completion Notice............................................................................19
7. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC.........................................................19
8. ENVIRONMENTAL....................................................................................................20
(a) Environmental Covenants by NAI.....................................................................20
(b) Right of BNPLC to do Remedial Work Not Performed by NAI............................................20
(c) Environmental Inspections and Reviews..............................................................20
(d) Communications Regarding Environmental Matters.....................................................21
9. INSURANCE REQUIRED AND CONDEMNATION..............................................................................22
(a) Liability Insurance................................................................................22
(b) Property Insurance.................................................................................22
(c) Failure to Obtain Insurance........................................................................22
(d) Condemnation.......................................................................................22
(e) Waiver of Subrogation..............................................................................23
10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS...............................................................23
(a) Collection and Application of Insurance and Condemnation Proceeds Generally........................23
(b) Advances of Escrowed Proceeds to NAI...............................................................23
(c) Special Provisions Applicable After a CMA Termination Event or an Event of Default.................24
(d) NAI's Obligation to Restore........................................................................24
(e) Takings of All or Substantially All of the Property on or after the Base Rent Commencement Date....25
11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING THE PROPERTY..............................25
(a) Compliance with Covenants and Laws.................................................................25
(b) Operation of the Property..........................................................................25
(c) Debts for Construction, Maintenance, Operation or Development......................................26
(d) Repair, Maintenance, Alterations and Additions.....................................................27
(e) Permitted Encumbrances and Development Documents...................................................27
(f) Books and Records Concerning the Property..........................................................27
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12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO SCHEDULE 1..................................27
13. FINANCIAL STATEMENTS AND OTHER REPORTS...........................................................................27
(a) Financial Statements; Required Notices; Certificates...............................................27
14. ASSIGNMENT AND SUBLETTING BY NAI.................................................................................29
(a) BNPLC's Consent Required...........................................................................29
(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters..............................29
(c) Consent Not a Waiver...............................................................................29
15. ASSIGNMENT BY BNPLC..............................................................................................30
(a) Restrictions on Transfers..........................................................................30
(b) Effect of Permitted Transfer or other Assignment by BNPLC..........................................30
16. BNPLC'S RIGHT OF ACCESS..........................................................................................30
17. EVENTS OF DEFAULT................................................................................................31
18. REMEDIES.........................................................................................................32
(a) Basic Remedies.....................................................................................32
(b) Notice Required So Long As the Purchase Option and NAI's Initial Remarketing Rights
and Obligations Continue Under the Purchase Agreement..............................................34
(c) Enforceability.....................................................................................34
19. DEFAULT BY BNPLC.................................................................................................34
20. QUIET ENJOYMENT..................................................................................................35
21. SURRENDER UPON TERMINATION.......................................................................................35
22. HOLDING OVER BY NAI..............................................................................................35
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS...............................................35
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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 - IMPROVEMENTS)
This LEASE AGREEMENT (PHASE V - IMPROVEMENTS) (this "IMPROVEMENTS
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 Improvements Lease are
intended to have the meanings assigned to them in the Common Definitions and
Provisions Agreement (Phase V - Improvements) executed by BNPLC and NAI
contemporaneously with this Improvements Lease. By this reference, the Common
Definitions and Provisions Agreement (Phase V - Improvements) is incorporated
into and made a part of this Improvements Lease for all purposes.)
RECITALS
Pursuant to the Existing Contract, which covers the Land described in
Exhibit A, BNPLC is acquiring the Land and the Improvements and any
appurtenances thereto from Seller contemporaneously with the execution of this
Improvements Lease.
In anticipation of BNPLC's acquisition of the Improvements under the
Existing Contract, BNPLC and NAI have reached agreement as to the terms and
conditions upon which BNPLC is willing to lease the Improvements to NAI, and by
this Improvements 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) any and all Improvements; and
(2) all easements and other rights appurtenant to the
Improvements, whether now owned or hereafter acquired by BNPLC.
BNPLC's interest in all property described in clauses (1) and (2) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include the Land itself, it being understood that the Other Lease
Agreement will constitute a separate lease of the Land and the appurtenances
thereto, and only the Land 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 Improvements
Lease the right to use and enjoy (and, in the case of contract rights, to
enforce) such rights or interests of BNPLC:
(a) any goods, equipment, furnishings, furniture and other
tangible personal property of whatever nature that are located on the
Land and all renewals or replacements of or substitutions for any of the
foregoing;
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(b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances (including the right to receive
rents under and to otherwise enforce the Premises Lease) and Development
Documents; and
(c) any permits, licenses, franchises, certificates, and other
rights and privileges against third parties related to the Real
Property.
Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."
However, the leasehold estate conveyed hereby and NAI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Improvements 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 Improvements 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) Automatic Termination as of the Base Rent Commencement Date
Resulting From an Election by NAI to Terminate the Purchase Option and NAI's
Initial Remarketing Rights and Obligations. If NAI terminates the Purchase
Option and NAI's Initial Remarketing Rights and Obligations prior to the Base
Rent Commencement Date pursuant to subparagraph 4(B) of the Purchase Agreement,
then this Improvements Lease shall terminate automatically on the Base Rent
Commencement Date. Just as any such termination of the Purchase Option and NAI's
Initial Remarketing Rights and Obligations shall be subject to the condition
(set forth in subparagraph 4(B) of the Purchase Agreement) that NAI pay an Issue
97-10 Prepayment to BNPLC, so too will the termination of this Improvements
Lease pursuant to this subparagraph be subject the condition that NAI make the
Issue 97-10 Prepayment to BNPLC.
(c) Election by BNPLC to Terminate After an Issue 97-10 Election. By
notice to NAI BNPLC shall be entitled to terminate this Improvements Lease, as
BNPLC deems appropriate in its sole and absolute discretion, at any time after
receiving a notice given by NAI to make any Issue 97-10 Election. Upon any
termination of this Improvements Lease by BNPLC pursuant to this subparagraph,
NAI shall become obligated to pay to BNPLC an Issue 97-10 Prepayment, which
obligation will survive the termination of this Improvements Lease.
(d) Election by NAI to Terminate After Accelerating the Designated
Sale Date. Provided NAI has not made any Issue 97-10 Election, 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 - Improvements). In the event,
because of NAI's election to so accelerate the
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Designated Sale Date or for any other reason, the Designated Sale Date occurs
before the end of the scheduled Term, NAI may terminate this Improvements 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;
(ii) paid to BNPLC all Base Rent, all Commitment Fees and
all other Rent due on or before or accrued through the Designated
Sale Date; and
(iii) paid any Breakage Costs caused by BNPLC's sale of
the Property pursuant to the Purchase Agreement.
(e) Extension of the Term. The Term may be extended at the option of
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 -
Improvements), 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; (C) prior to any such extension, NAI must have completed the
Construction Project in accordance with the Construction Management Agreement
and must not have made any Issue 97-10 Election; and (D) immediately prior to
any such extension, this Improvements 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 Improvements 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 and other lawful purposes incidental
thereto:
(i) construction and development of the Construction
Project;
(ii) administrative and office space;
(iii) activities related to NAI's research and development
or production of
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products that are of substantially the same type and character as
those regularly sold by NAI in the ordinary course of its business as
of the Effective Date;
(iv) cafeteria and other support facilities that NAI may
provide to its employees; and
(v) other lawful purposes (including NAI's research and
development or production of products that are not of substantially
the same type and character as those regularly sold by NAI in the
ordinary course of its business as of the Effective Date) 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 Improvements Lease or other Operative Documents).
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 Land or in Improvements, fixtures and personal
property forming a part of 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 of this Improvements 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 the Base Rent Commencement Date and 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 Improvements Lease as
received on the next following Business Day. At least five days prior to any
Base Rent Commencement
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Date or 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 Improvements 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 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 Improvements 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) 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) on the first day of a hypothetical Base Rent Period that ends prior
to the Base Rent Commencement Date is $10,000,000; 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:
$10,000,000 x (6% + 1.50%) x 30/360 = $62,500
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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) Additional Amount Payable On the Base Rent Commencement
Date. In addition to any Base Rent payable as provided in the last sentence of
the preceding subparagraph 3(c)(i), Base Rent shall be payable on the Base Rent
Commencement Date equal the difference (if any) between (a) the total amount
that would have been added to the Outstanding Construction Allowance as Carrying
Costs on such date if not for the limit set forth in subparagraph 66(e)(ii), and
(b) the Carrying Costs actually added on such date to the Outstanding
Construction Allowance.
(iii) 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 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.
(iv) 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 -
Improvements), 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.
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.
(v) 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:
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- 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.
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 the Construction Allowance
has been fully funded, but 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
(vi) 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
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- 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 the
Construction Allowance has been fully funded, but 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 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
(vii) 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 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
the Construction Allowance has been fully funded, but a total
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 Improvements 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) Arrangement Fee. Upon execution and delivery of this
Improvements Lease by BNPLC, an Arrangement Fee (the "ARRANGEMENT FEE") will be
paid to BNPLC from the Initial Funding
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Advance (and thus be included in Stipulated Loss Value) in the amount provided
in the letter dated as of February 11, 2000 from BNPLC to NAI.
(f) Commitment Fees. For each Construction Period NAI shall pay
BNPLC a fee (a "COMMITMENT FEE") from Construction Advances made pursuant to the
Construction Management Agreement equal to:
- the Commitment Fee Rate for such Construction Period, times an amount
equal to:
(i) the Maximum Construction Allowance, less
(ii) the Funded Construction Allowance on the first day of such
Construction Period; times
- the number of days in such Construction Period; divided by
- three hundred sixty.
NAI shall pay Commitment Fees in arrears on the first Business Day of
May, August, November and February of each calendar year, beginning
with the first Business Day of May 2000 and continuing regularly
throughout the Term so long as Commitment Fees have accrued and
remain unpaid. However, if any Commitment Fees shall have accrued and
remain unpaid on the Designated Sale Date, such accrued unpaid
Commitment Fees shall be due on the Designated Sale Date.
(g) Administrative Agency Fees. Upon execution and delivery of this
Improvements Lease by BNPLC, an administrative agency fee (an "ADMINISTRATIVE
AGENCY FEE") will be paid to BNPLC from the Initial Funding Advance (and thus be
included in Stipulated Loss Value) in the amount provided in the letter dated as
of February 11, 2000 from BNPLC to NAI. Also, on each anniversary of the date
hereof, NAI shall pay to BNPLC an administrative agency fee (also, an
"ADMINISTRATIVE AGENCY FEE") in the amount set forth in the letter agreement
dated as of February 11, 2000 from BNPLC to NAI.
(h) [Intentionally deleted]
(i) Issue 97-10 Prepayments. Following any Issue 97-10 Election or
any CMA Termination Event under (and as defined in) the Construction Management
Agreement, NAI shall make an Issue 97-10 Prepayment to BNPLC within three
Business Days after receipt of any demand for such a payment. BNPLC may demand
an Issue 97-10 Prepayment pursuant to this subparagraph at any time and from
time to time (as Project Costs increase) after any Issue 97-10 Election or CMA
Termination Event.
(j) 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.
(k) 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.
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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,
the Arrangement Fees, the Upfront Syndication Fees, Administrative Agency Fees,
Commitment Fees 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 Improvements 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 Improvements Lease or the transactions
contemplated herein.
However, neither this subparagraph 4(a) nor the indemnity in this
subparagraph 4(a) 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 Improvements
Lease itself, this Improvements Lease shall not terminate, nor shall NAI have
any right to terminate this Improvements Lease, nor shall NAI be entitled to any
abatement of the Rent, nor shall the obligations of NAI under this Improvements
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 Improvements Lease or under any other agreement to
which BNPLC and NAI are parties, (vi) the inadequacy in any way whatsoever of
the design, construction, assembly or installation of any improvements, fixtures
or tangible personal property included in the Property (it being understood that
BNPLC has not made, does not make and will not make any representation express
or implied as to the adequacy thereof), (vii) any latent or other defect in the
Property or any change in the condition thereof or the existence with respect to
the Property of any violations of Applicable Laws, (viii) any breach of the
Premises Lease by the lessee thereunder or (ix) any other cause whether similar
or dissimilar to the foregoing. It is the intention of the parties 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 Improvements 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 Improvements 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
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remove a Lien Removable by BNPLC or because of any other default by BNPLC under
this Improvements 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 Improvements
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 Improvements Lease which are binding upon BNPLC.
(c) Tax Reporting. BNPLC and NAI shall report this Improvements 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 Improvements
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 Improvements 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 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 Improvements Lease. For purposes of
determining the appropriate financial accounting for this Improvements Lease and
for purposes of determining their respective rights and remedies under state
law, BNPLC and NAI believe and intend that (i) this Improvements 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 Improvements
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 Improvements 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 Improvements
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
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BNPLC to enforce this Improvements 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 Improvements 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:
(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 or to make Construction Advances. 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
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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 Improvements Lease
absent such increase.
(iii) Any amount required to be paid by NAI under this
subparagraph 5(d) 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 Funding Advances, (E) the Construction Project or the
Premises Lease; (F) the breach by NAI of this Improvements 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 Activities, including
those occurring prior to Effective Date, (J) any obligations under the
Existing Contract 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
IMPROVEMENTS 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 IMPROVEMENTS 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 IMPROVEMENTS LEASE.
(iii) Costs and expenses for which NAI shall be responsible
pursuant to this
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subparagraph 5(c) 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 Improvements Lease or at any time during
the Term. Such costs and expenses will also include Attorneys' Fees or
other costs incurred to evaluate lien releases and other information
submitted by NAI with requests for Construction Advances.
(iv) NAI's obligations under this subparagraph 5(c) shall
survive the termination or expiration of this Improvements 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, 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 - Improvements), (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 Improvements
Lease and other Operative Documents) to include the following in the
calculation
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of the Outstanding Construction Allowance, Stipulated Loss Value, the
Break Even Price and the Maximum Permitted Prepayment (as applicable) or
to collect Base Rent, Issue 97-10 Prepayments, a Supplemental Payment
and other amounts, the calculation of which depends upon the Outstanding
Construction Allowance, Stipulated Loss Value, the Break Even Price, and
the Maximum Permitted Prepayment, 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, including costs and
expenditures incurred or paid by or on behalf of BNPLC after any
Landlord's Election to Continue Construction, to the extent that
such costs and expenditures are considered to be Construction
Advances pursuant to subparagraph 6(e).
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 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.
(ii) Notwithstanding anything to the contrary in subparagraph
4(a) or the preceding subparagraphs of this Paragraph 5, NAI's liability
for payments required by the preceding subparagraphs of this Paragraph
5, and not excused by the preceding subparagraph 5(c)(i), prior to
substantial completion of the Construction Project ("Construction-Period
Indemnity Payments") shall be subject to the following provisions:
a) NAI may decline to pay any Construction-Period
Indemnity Payments other than the following (it being understood
that NAI's payment of the following Construction-Period
Indemnity Payments shall not be subject to any abatement or
deferral by anything contained in this subparagraph 5(d)(ii)):
(1) Construction-Period Indemnity Payments eligible
for reimbursement to NAI under the terms and
conditions of the Construction Management
Agreement; and
(2) Construction-Period Indemnity Payments that
constitute Absolute NAI Construction
Obligations.
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b) Any Construction-Period Indemnity Payment NAI is
excused from paying by this subparagraph 5(d)(ii), together with
interest thereon at the Default Rate, will be included in the
calculation of the Break Even Price under (and as defined in)
the Purchase Agreement.
6. CONSTRUCTION.
(a) Construction Advances; Outstanding Construction Allowance. The
Construction Management Agreement entitles NAI to receive from BNPLC - subject
to the terms and conditions set forth in the Construction Management Agreement -
Construction Advances on Advance Dates from time to time to pay or reimburse NAI
for the costs of the Construction Project and certain other costs described in
the Construction Management Agreement. In addition, BNPLC may from time to time
make expenditures or incur costs constituting Construction Advances after a
Landlord's Election to Continue Construction as described in subparagraph 6(e).
As used herein, references to the "Outstanding Construction Allowance" mean the
difference on the date in question (but not less than zero) of (A) the total
Construction Advances made by or on behalf of BNPLC on or prior to the date in
question, plus (B) all Carrying Costs added on or prior to the date in question,
less (C) any funds received and applied as Qualified Prepayments on or prior to
the date in question. Charges ("CARRYING COSTS") shall accrue as described below
for each Construction Period and will be added to (and thereafter be included
in) the Outstanding Construction Allowance on the last day of such Construction
Period (i.e., generally on the Advance Date upon which such Construction Period
ends). However, if for any reason Stipulated Loss Value (and thus the
Outstanding Construction Allowance included as a component thereof) must be
determined as of any date between Advance Dates, the Outstanding Construction
Allowance determined on such date shall include not only Carrying Costs added on
or before the immediately preceding Advance Date computed as described below,
but also Carrying Costs accruing on and after such preceding Advance Date to but
not including the date in question.
(b) Calculation of Carrying Costs, Generally. Carrying Costs accruing
for any Construction Period shall equal:
- the sum on the first day of such Construction Period of (i) Stipulated
Loss Value under (and as defined in) the Common Definitions and Provisions
Agreement (Phase V Improvements) and (ii) Stipulated Loss Value under (and as
defined in) the Other Common Definitions and Provisions Agreement, times
- the sum of (a) the Effective Rate with respect to such Construction
Period, plus (b) the Unsecured Spread for such Construction Period, times
- the number of days in the period from and including the preceding
Advance Date to but not including the Advance Date upon which the period ends,
divided by
- three hundred sixty.
Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Construction Period is
zero percent (0%); that on the first day of such Construction
Period Combined Stipulated Loss Value is $15,000,000; that the
Effective Rate for the Construction Period is 6%; that the
Unsecured Spread for such Construction Period is one hundred
fifty basis points (150/100 of 1%); and that such Construction
Period contains exactly thirty days. Under such assumptions, the
Carrying Costs for the hypothetical Construction Period will
equal:
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$15,000,000 x (6% + 1.50%) x 30/360 = $93,750
(c) Limits on the Amount of Carrying Costs. Notwithstanding the
foregoing, the total amount of Carrying Costs that will be charged against the
Construction Allowance and added to Stipulated Loss value shall be subject to
the following limitations:
(i) Any Construction Periods which commence on or after the Base
Rent Commencement Date (Building 4) and end on or before the Base Rent
Commencement Date (Building 5) shall also constitute a Base Rent
Periods. For any such Construction Period, Carrying Costs as computed in
accordance with formula set out in the preceding subparagraph will be
reduced by the sum of (1) Base Rent paid for the same period in
accordance with subparagraph 5, plus (2) Base Rent (under and as defined
in the Other Lease) paid for the same period in accordance with
subparagraph 3(c)(i) of the Other Lease.
(ii) Because the Construction Allowance available to NAI under
the Construction Management Agreement is limited in amount to the
Maximum Construction Allowance, and because Carrying Costs are to be
charged against the Construction Allowance, Carrying Costs added to the
Outstanding Construction Allowance on the Base Rent Commencement Date
shall not exceed the amount that can be added without causing the Funded
Construction Allowance to exceed the Maximum Construction Allowance. If,
because of an extension of the Base Rent Commencement Deadline by BNPLC
(as described in the definition thereof in the Common Definitions and
Provisions Agreement (Phase V - Improvements)) or because of any
Landlord's Election to Continue Construction, the Funded Construction
Allowance already exceeds the Maximum Construction Allowance on the Base
Rent Commencement Date, then no Carrying Costs will be added to the
Outstanding Construction Allowance on the Base Rent Commencement Date.
(d) NAI's Right to Control the Construction Project. Subject to
BNPLC's rights under subparagraph 6.(e) of this Improvements Lease, the
Construction Management Agreement grants to NAI the sole right and
responsibility for designing and constructing the Construction Project, it being
understood that although title to all Improvements will pass directly to BNPLC
(as more particularly provided in Paragraph 7), BNPLC's obligation with respect
to the Construction Project shall be limited to the making of advances under and
subject to the conditions set forth in the Construction Management Agreement. No
contractor or other third party shall be entitled to require BNPLC to make
advances as a third party beneficiary of this Improvements Lease or of the
Construction Management Agreement or otherwise.
(e) Landlord's Election to Continue Construction. Without limiting
BNPLC's other rights and remedies under this Improvements Lease, and without
terminating this Improvements Lease or NAI's obligations hereunder or under any
of the other documents referenced herein, in the event of any termination of the
Construction Management Agreement as provided in subparagraph 5(D) or
subparagraph 5(E) thereof, BNPLC shall be entitled (but not obligated) to take
whatever action it deems necessary or appropriate by the use of legal
proceedings or otherwise to continue or complete the Construction Project in a
manner substantially consistent (to the extent practicable under Applicable
Laws) with the general description of the Construction Project set forth in
Exhibit B to the Construction Management Agreement and with the permitted use of
the Property set forth in subparagraph 2(a). (As used herein, "Landlord's
Election to Continue Construction" means any election by BNPLC to continue or
complete the Construction Project pursuant to the preceding sentence.) After any
Landlord's Election to Continue Construction, BNPLC may do any one or more of
the following pursuant to this subparagraph without further notice and
regardless of whether any Event of Default is then continuing:
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(i) Take Control of the Property. BNPLC may cause NAI and any
contractors or other parties on the Property to vacate the Property until the
Construction Project is complete or BNPLC elects not to continue work on the
Construction Project.
(ii) Continuation of Construction. BNPLC may perform or cause to
be performed any work to complete or continue the construction of the
Construction Project. In this regard, so long as work ordered or undertaken by
BNPLC is substantially consistent (to the extent practicable under Applicable
Laws) with the general description of the Construction Project set forth in
Exhibit B to the Construction Management Agreement and the permitted use of the
Property set forth in subparagraph 2(a), BNPLC shall have complete discretion
to:
a) proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;
b) establish and extend construction deadlines as BNPLC from
time to time deems appropriate, without obligation to adhere to the
deadlines for Construction Milestones set forth in the Construction
Management Agreement;
c) hire, fire and replace architects, engineers, contractors,
construction managers and other consultants as BNPLC from time to time
deems appropriate, without obligation to use, consider or compensate
architects, engineers, contractors, construction managers or other
consultants previously selected or engaged by NAI;
d) determine the compensation that any architect, engineer,
contractor, construction manager or other consultant engaged by BNPLC
will be paid, and the terms and conditions that will govern the payment
of such compensation (including whether payment will be due in advance,
over the course of construction or on some other basis and including
whether contracts will be let on a fixed price basis, a cost plus a fee
basis or some other basis), as BNPLC from time to time deems
appropriate;
e) pay, settle or compromise existing or future bills and claims
which are or may be liens against the Property or as BNPLC considers
necessary or desirable for the completion of the Construction Project or
the removal of any clouds on title to the Property;
f) prosecute and defend all actions or proceedings in connection
with the construction of the Construction Project;
g) select and change interior and exterior finishes for the
Improvements and landscaping as BNPLC from time to time deems
appropriate; and
h) generally do anything that NAI itself might have done if NAI
had satisfied or obtained BNPLC's waiver of the conditions specified
therein.
(iii) Arrange for Turnkey Construction. Without limiting the
generality of the foregoing, BNPLC may engage any contractor or real estate
developer BNPLC believes to be reputable to take over and complete construction
of the Construction Project on a "turnkey" basis.
(iv) Suspension or Termination of Construction. Notwithstanding
any Landlord's Election to Continue Construction, BNPLC may subsequently elect
at any time to suspend or terminate further construction without obligation to
NAI.
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For purposes of this Improvements Lease and other Operative
Documents (including the determination of the Outstanding Construction
Allowance, Stipulated Loss Value, the Break Even Price and the Maximum
Permitted Prepayment), after any Landlord's Election to Continue
Construction, all costs and expenditures incurred or paid by or on
behalf of BNPLC to complete or continue construction as provided in this
subparagraph shall be considered Construction Advances and Project
Costs, regardless of whether they cause the Funded Construction
Allowance to exceed the Maximum Construction Allowance. Further, as used
in the preceding sentence, "costs incurred" by BNPLC will include costs
that BNPLC has become obligated to pay to any third party that is not an
Affiliate of BNPLC (including any contractor), even if the payments for
which BNPLC has become so obligated will constitute prepayments for work
or services to be rendered after payment and notwithstanding that
BNPLC's obligations for the payments may be conditioned upon matters
beyond BNPLC's control. For example, even if a construction contract
between BNPLC and a contractor excused BNPLC from making further
progress payments to the contractor upon NAI's failure to make any
required Issue 97-10 Prepayment hereunder, the obligation to make a
progress payment would nonetheless be "incurred" by BNPLC, for purposes
of determining whether BNPLC has incurred costs considered to be Project
Costs and Construction Advances, when BNPLC's obligation to pay it
became subject only to NAI's payment of an Issue 97-10 Prepayment or
other conditions beyond BNPLC's control. If and to the extent, however,
BNPLC does incur costs considered as Construction Advances under this
subparagraph, but (1) BNPLC does not actually pay the costs and after
incurring them BNPLC is fully and finally excused from the obligation to
pay them for any reason other than a breach by NAI of this Improvements
Lease or other Operative Documents, or (2) BNPLC receives a refund of
such costs, then the costs BNPLC is excused from paying or refunded to
BNPLC shall be considered Qualified Prepayments.
(f) Powers Coupled With an Interest. BNPLC's rights under
subparagraph 6(e) are intended to constitute powers coupled with an interest
which cannot be revoked.
(g) Final Completion Notice. After any Landlord's Election to
Continue Construction, BNPLC may provide a notice (a "COMPLETION NOTICE
(FINAL)") to NAI, advising NAI that construction of the Construction Project is
substantially complete or that BNPLC no longer intends to continue such
construction at that time.
7. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. All
Improvements constructed during the term of this Improvements Lease shall be
owned by BNPLC and shall constitute "Property" covered by this Improvements
Lease. Further, to the extent heretofore or hereafter acquired (in whole or in
part) with any portion of the Initial Funding Advance or with any Construction
Advances or with other funds for which NAI has received or hereafter receives
reimbursement from the Initial Funding Advance or Construction Advances, all
furnishings, furniture, chattels, permits, licenses, franchises, certificates
and other personal property of whatever nature shall have been acquired on
behalf of BNPLC by NAI, shall be owned by BNPLC and shall constitute "Property"
covered by this Improvements Lease, as shall all renewals or replacements of or
substitutions for any such Property. NAI shall not authorize or permit the
transfer of title to the Improvements or to any other such Property to pass
through NAI or NAI's Affiliates before it is transferred to BNPLC from
contractors, suppliers, vendors or other third Persons. Nothing herein shall
constitute authorization of NAI by BNPLC to bind BNPLC to any construction
contract or other agreement with a third Person, but any construction contract
or other agreement executed by NAI for the acquisition or construction of
Improvements or other components of the Property may provide for the transfer of
title as required by the preceding sentence. Upon request of BNPLC, but not more
often than once in any period of twelve consecutive months, NAI shall deliver to
BNPLC an inventory describing all significant items of Personal Property (and,
in the case of tangible personal property, showing the make, model, serial
number and
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location thereof) other than Improvements, with a certification by NAI that such
inventory is true and complete and that all items specified in the inventory are
covered by this Improvements Lease free and clear of any Lien other than the
Permitted Encumbrances or Liens Removable by BNPLC.
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 Improvements 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 reasonably required and to the extent
not inconsistent with the other provisions of this Improvements 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
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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
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.
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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 Improvements
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) Property Insurance. Throughout the Term NAI will keep all
Improvements (including all alterations, additions and changes made to the
Improvements) insured against fire and other casualty under one or more property
insurance policies that satisfy the requirements set forth in Exhibit B. NAI
shall deliver and maintain with BNPLC for each property insurance policy
required by this Improvements 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. If any of the Property is destroyed or damaged by fire,
explosion, windstorm, hail or by any other casualty against which insurance
shall have been required hereunder, (i) BNPLC may, but shall not be obligated
to, make proof of loss if not made promptly by NAI after notice from BNPLC, (ii)
each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to BNPLC for application as required by Paragraph
10, and (iii) BNPLC may settle, adjust or compromise any and all claims for
loss, damage or destruction under any policy or policies of insurance (provided,
that if any such claim is for less than $500,000, if no CMA Termination Event
shall have occurred and no Event of Default shall have occurred and be
continuing, NAI shall have the right to settle, adjust or compromise the claim
as NAI deems appropriate; and, provided further, that so long as no CMA
Termination Event shall have occurred and no Event of Default shall have
occurred and be continuing, BNPLC must provide NAI with at least forty-five days
notice of BNPLC's intention to settle any such claim before settling it unless
NAI shall already have approved of the settlement by BNPLC). If any casualty
shall result in damage to or loss or destruction of the Property, NAI shall give
immediate notice thereof to BNPLC and Paragraph 10 shall apply.
(c) Failure to Obtain Insurance. If NAI fails to obtain any insurance
or to provide confirmation of any such insurance as required by this
Improvements 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 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 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
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authorized, in the name of NAI, at any time after a CMA Termination Event or
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 Improvements 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 Improvements 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) under any
property insurance policy as a result of damage to the Property (including
proceeds payable under any insurance policy covering the Property which is
maintained by NAI), (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, or (3) because of any judgment, decree or award for injury or
damage to 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 Improvements 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 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 Improvements Lease and the other Operative Documents as the
applicable repair or restoration progresses and upon compliance by NAI with such
terms, conditions and
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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.
(b) Application of Escrowed Proceeds as a Qualified Prepayment.
Provided NAI has completed the Construction Project pursuant to the Construction
Management Agreement and 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 an Advance Date
or 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.
(c) Special Provisions Applicable After a CMA Termination Event or an
Event of Default. Notwithstanding the foregoing, after any CMA Termination
Event, and 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.
(d) NAI's Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, and notwithstanding other
provisions of this Improvements Lease to the contrary:
(i) If, prior to the Base Rent Commencement Date, the Property
is damaged by fire or other casualty or any part of the Property is
taken by condemnation, NAI shall to the maximum extent possible, as part
of the Work contemplated in the Construction Management Agreement,
restore the Property or the remainder thereof and continue construction
of the Construction Project on and subject to the terms and conditions
set forth in the Construction Management Agreement. However, any
additional costs required to complete the Construction Project resulting
from such a casualty or taking prior to the Base Rent Commencement Date
shall, to the extent not covered by Remaining Proceeds paid to NAI as
provided in this Improvements Lease, be subject to reimbursement by
BNPLC under the Construction Management Agreement on the same terms and
conditions that apply to reimbursements of other costs of the Work
thereunder.
(ii) If, on or after the Base Rent Commencement Date, 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 or improving the same (in a manner
consistent with the requirements and limitations imposed by this
Improvements Lease and the other Operative Documents or
otherwise acceptable to BNPLC), or decrease Stipulated Loss
Value by tendering a
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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
b) restore the Property or the remainder thereof to a
reasonably safe and sightly condition.
(e) 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 Improvements 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 Improvements Lease complies, or will comply after NAI obtains
available permits as the tenant under this Improvements 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
the construction contemplated herein and the use of the Property permitted by
this Improvements 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 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 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
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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 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
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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, and
NAI shall promptly replace any worn-out fixtures and Personal Property with
fixtures and Personal Property comparable to the replaced items when new. NAI
shall not, without the prior consent of BNPLC, (i) remove from the Property any
fixture or Personal Property having significant value except such as are
replaced by NAI by fixtures or Personal Property of equal suitability and value,
free and clear of any lien or security interest (and for purposes of this clause
"significant value" will mean any fixture or Personal Property that has a value
of more than $100,000 or that, when considered together with all other fixtures
and Personal Property removed and not replaced by NAI by items of equal
suitability and value, has an aggregate value of $500,000 or more) or (ii) 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 this
Improvements Lease 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 Improvements 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
(including all contracts, statements, invoices, bills and claims for labor,
materials and services supplied for the construction and operation of any
Improvements) 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.
12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1. Throughout the Term of this Improvements 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 Improvements Lease, NAI shall deliver to BNPLC and to each
Participant:
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(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)(ii) and, 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 Improvements
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 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 Improvements
Lease has occurred and is continuing or, if a Default or Event of
Default under this Improvements 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
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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
Improvements 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
subject to subparagraph 14(c) below, (I) this provision shall not be construed
to prohibit any Premises Lease described in the Common Definitions and
Provisions Agreement (Phase V - Improvements) or any transfer or sublease by a
lessee thereunder which is authorized by the Premises Lease, and (II) if (and
after) NAI completes the Construction Project pursuant to the Construction
Management Agreement and so long as no Event of Default has occurred and is
continuing: (1) NAI shall be entitled to sublet no more than forty-nine percent
(49%) (computed on the basis of square footage) of the useable space in then
existing and completed building Improvements, if any, so long as (i) any
sublease by NAI is made expressly subject and subordinate to the terms hereof,
and (ii) such sublease has a term equal to or less than the remainder of the
then effective Term of this Improvements Lease; and (2) NAI shall be entitled to
assign or transfer this Improvements Lease or any interest of NAI hereunder to
an Affiliate of NAI if both NAI and its Affiliate confirm their joint and
several liability hereunder by written notice given to BNPLC.
(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 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 Improvements Lease.
(c) Consent Not a Waiver. No consent by BNPLC to a sale, assignment,
transfer, mortgage, pledge or hypothecation of this Improvements Lease or NAI's
interest hereunder, and no assignment or subletting of the Property or any part
thereof in accordance with this Improvements 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
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requirement of obtaining the prior consent of BNPLC to any further sale,
assignment, transfer, mortgage, pledge or hypothecation of this Improvements
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
Improvements 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 Improvements 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 Improvements Lease and the
other Operative Documents, then BNPLC shall thereby be released from any
obligations arising after such assumption under this Improvements Lease or the
other Operative Documents (other than any liability for a breach of any
continuing obligation to provide Construction Advances under the Construction
Management Agreement), 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 Improvements Lease or the other Operative Documents.
(b) If NAI fails to perform any act or to take any action required
of it by this Improvements Lease or the Closing Certificate, or to pay any money
which NAI is required by this Improvements 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 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 Improvements
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
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through the Property during the course of such work (except for any liability in
excess of the liability insurance limits established in Exhibit 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 Improvements 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 Improvements Lease and the other Operative
Documents without evaluating such information. For purposes of this Improvements
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 Improvements 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 Improvements 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 Construction Management Agreement or 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 Improvements Lease or of the Construction Management Agreement
or the Closing Certificate (other 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 Improvements 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
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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 -
Improvements)) 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 Improvements 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.
(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.
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(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 in the
Improvements 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
Improvements 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 Improvements 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 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 Improvements
Lease and abandoned the Property, this Improvements 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 Improvements Lease, including the right to recover the Rent
as it becomes due under this Improvements 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:
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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 Improvements 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 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.
(c) 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 Improvements 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 Improvements Lease, or to a decree
compelling performance of any of the other covenants, agreements, conditions or
provisions of this Improvements Lease to be performed by NAI, or to any other
remedy allowed to BNPLC at law or in equity. Nothing contained in this
Improvements 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 Improvements 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 Improvements 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
34
40
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.
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 Improvements
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 Improvements 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 Improvements Lease or the Other Lease Agreement, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this
Improvements 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
Improvements 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 Improvements Lease shall
reinstate, continue or extend the Term of this Improvements Lease and no
extension of this Improvements 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.
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS.
NAI acknowledges and agrees that nothing contained in this Improvements Lease
shall limit, modify or
35
41
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 Improvements 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 Construction
Management Agreement or the Closing Certificate and the express terms and
provisions of this Improvements Lease, the express terms and provisions of this
Improvements Lease shall control; provided, nothing herein will limit or impair
NAI's obligations under the Construction Management Agreement or the Closing
Certificate following any expiration of termination of this Improvements Lease.
[The signature pages follow.]
36
42
IN WITNESS WHEREOF, NAI and BNPLC have caused this Improvements Lease to
be executed as of March 1, 2000.
"NAI"
NETWORK APPLIANCE, INC.
By:
-----------------------------------------
Jeffry R. Allen, Chief Financial Officer
43
[Continuation of signature pages to Improvements Lease dated to be
effective as of March 1, 2000.]
"BNPLC"
BNP LEASING CORPORATION
By:
-----------------------------------------
Lloyd G. Cox, Vice President
44
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(degree) 37' 09" East
82.70 feet; thence Easterly at a right angle from said centerline of Crossman
Road, 71(degree) 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(degree) 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(degree) 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(degree) 01' 41" East) concave Easterly with a
radius of 108.99 feet through a central angle of 23(degree) 25' 59" an arc
length of 44.58 feet; (2) South 25(degree) 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(degree) 00' 00" in an arc length of 17.12
feet; (4) South 34(degree) 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(degree) 50' 59" East 139.04 feet; thence leaving said
Northeasterly line of Fair Oaks Avenue North 34(degree) 36' 17" West 57.40 feet;
thence North 50(degree) 50' 13" West 32.20 feet; thence North 34(degree) 36' 17"
West 205.73 feet to the true point of beginning.
1
Exhibit A
45
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 Improvements 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, 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 Improvements 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:
(1) 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.
(2) 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.
(3) 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
Definitions and Provisions Agreement (Phase V -
Improvements) between Network Appliance, Inc. and BNP
Leasing Corporation dated March 1, 2000)";
1
Exhibit B
46
(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 - Improvements) 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.
(4) 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. PROPERTY INSURANCE: From and after the commencement of any construction
of Improvements on or about the Land or the delivery of any materials in
anticipation of such construction:
A. NAI must maintain property insurance in "special form" (including
theft) or against "all risks," providing the broadest available coverage for all
Improvements (as defined in the Common Provisions and Definitions Agreement but
excluding those Improvements to be demolished by NAI prior to the commencement
of construction contemplated in the Construction Management Agreement) and
equipment included in the Property, on a blanket basis if multiple buildings are
involved, with no exclusions for vandalism, malicious mischief, or sprinkler
leakage, and including coverage against earthquake and all coverage perils
normally included within the definitions of extended coverage, vandalism,
malicious mischief and, if the Property is in a flood zone, flood. In addition,
boiler and machinery coverage must be maintained at all times by endorsement to
the property insurance policy or by separate policy. Also, during any period of
significant construction on any Improvements, the property insurance must
include builder's completed value risk insurance for such Improvements, with no
protective safeguard endorsement, and (without limiting the other requirements
of this Exhibit) builder's completed value risk insurance must provide the
following coverages:
(1) materials and supplies at other locations awaiting installation;
(2) materials and supplies in transit to the worksite for
installation;
(3) loss of use or consequential loss;
(4) pollutant cleanup and removal;
(5) freezing;
(6) collapse during construction, resulting from fault, defect,
error or omission in design, plan, specification or workmanship;
(7) construction ordinance or law;
(8) mechanical or electrical breakdown;
(9) debris removal additional limit;
2
Exhibit B
47
(10) preservation of property;
(11) fire department service charge;
(12) additional interest on construction loan due to delays in the
completion of construction;
(13) loss of rental income;
(14) legal/professional fees (in the amount of no less than
$1,500,000) and other soft costs as reasonably determined by
NAI, subject to BNPLC's approval.
B. The property insurance required hereby must provide coverage in the
amount no less than replacement value (exclusive of land, foundation, footings,
excavations and grading) with endorsements for contingent liability from
operation of building laws, increased cost of construction and demolition costs
which may be necessary to comply with building laws. Subject to the approval of
BNPLC, NAI will be responsible for determining the amount of property insurance
to be maintained from time to time, but NAI must maintain such coverage on an
agreed value basis to eliminate the effects of coinsurance.
C. Any deductible or self-insured retention applicable to the property
insurance shall not exceed $50,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election; provided, that with respect to earthquake
coverage the deductible may be as high as five percent of the value of the
Improvements. 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, provided the increased amount shall not exceed (1) $500,000 for all
coverages other than earthquake coverage, and (2) for earthquake coverage only,
five percent of the aggregate amount of the property insurance required to
satisfy this Improvements Lease, calculated as described in the preceding
paragraph.
D. The property insurance shall cover not only the value of NAI's
interest in the Improvements, but also the interest of BNPLC, with BNPLC shown
as an insured as its interests may appear.
E. The forms of insurance policies (including endorsements) used to
provide the property insurance required by this Improvements Lease, and the
insurance company or companies providing the property 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 such 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:
(1) Rating Requirements: Insurance to be provided through insurance or
reinsurance companies rated by the A.M. Best Company of Oldwick, New
Jersey as having (a) a policyholder's rating of A or better, (b) a
reported financial information rating of no less than X, and (c) in the
case of each insurance or reinsurance company, a reported financial
information rating which indicates an adjusted policyholders' surplus
equal to or greater than the underwriting exposure that such company has
under the insurance or reinsurance it is providing for the Property.
3
Exhibit B
48
(2) Required Endorsements: NAI's property insurance must be endorsed to
provide or include:
(a) a waiver of subrogation in favor of "BNPLC and other
Interested Parties, as defined in the Common Definitions
and Provisions Agreement (Phase V - Improvements)
between Network Appliance, Inc. and BNP Leasing
Corporation dated March 1, 2000)";
(b) that NAI's insurance is primary, with any policies of
BNPLC or other Interested Parties being excess,
secondary and noncontributing;
(c) that the protection afforded to BNPLC by such insurance
shall not be reduced or impaired by acts or omissions of
NAI or any other beneficiary or insured; and
(d) that BNPLC must be notified at least thirty days prior
to any cancellation, nonrenewal or reduction of
insurance coverage.
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. NAI's property insurance must be evidenced by ACORD form 27 "Evidence
of Property Insurance" completed and interlineated in a manner satisfactory to
BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the property insurance must be attached to such form.
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 Improvements 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 27 and
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 Improvements Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.
4
Exhibit B
49
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.
5
Exhibit B
50
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.
Network Appliance, Inc.
Name:
--------------------------
Title:
-------------------------
[cc all Participants]
Exhibit C
51
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:
1. "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).
2. "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.
3. "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.
4. "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).
5. "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; (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
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Schedule 1
52
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.
6. "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.
7. "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).
8. "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.
9. "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.
10. "QUICK RATIO" means the ratio of:
2
Schedule 1
53
(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.
11. "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.
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.
3
Schedule 1
54
PART III - 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:
Date Failed Collateral Test Date?
---- ----------------------------
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
November 18, 2002 No
February 15, 2003 No
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 IV - 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:
4
Schedule 1
55
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;
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
5
Schedule 1
56
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 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.
6
Schedule 1
57
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE V - IMPROVEMENTS)
BETWEEN
BNP LEASING CORPORATION
AND
NETWORK APPLIANCE, INC.
DATED AS OF MARCH 1, 2000
58
TABLE OF CONTENTS
Page
----
LIST OF DEFINED TERMS........................................................................1
"Absolute NAI Construction Obligations".......................................1
"Active Negligence"...........................................................2
"Additional Rent".............................................................3
"Administrative Agency Fee"...................................................3
"Adjusted EBIT"...............................................................3
"Advance Date"................................................................3
"Affiliate"...................................................................3
"Applicable Laws".............................................................3
"Applicable Purchaser"........................................................3
"Arrangement Fee".............................................................3
"Attorneys' Fees".............................................................3
"Balance of Unpaid Construction-Period Indemnity Payments"....................3
"Banking Rules Change"........................................................3
"Base Rate"...................................................................4
"Base Rent"...................................................................4
"Base Rent Commencement Date".................................................4
"Base Rent Commencement Date (Building 4)"....................................4
"Base Rent Commencement Date (Building 5)"....................................4
"Base Rent Commencement Deadline".............................................4
"Base Rent Date"..............................................................5
"Base Rent Period"............................................................5
"BNPLC".......................................................................6
"BNPLC's Parent"..............................................................6
"Breakage Costs"..............................................................6
"Break Even Price"............................................................6
"Business Day"................................................................6
"Capital Adequacy Charges"....................................................7
"Capital Lease"...............................................................7
"Carrying Costs"..............................................................7
"Closing Certificate".........................................................7
"CMA Suspension Event"........................................................7
"CMA Suspension Notice".......................................................7
"CMA Suspension Period".......................................................7
"CMA Termination Event".......................................................7
"Code"........................................................................7
"Collateral"..................................................................7
"Collateral Percentage".......................................................7
"Commitment Fee Rate".........................................................7
"Common Definitions and Provisions Agreement (Phase V - Improvements)"........8
"Completion Notice (Building 4)"..............................................8
"Completion Notice (Final)"...................................................8
"Construction Advances".......................................................9
"Construction Advance Request"................................................9
"Construction Allowance"......................................................9
"Construction Management Agreement"...........................................9
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59
"Construction Milestone"......................................................9
"Construction Period".........................................................9
"Construction-Period Indemnity Payments"......................................9
"Construction Project"........................................................9
"Current AS IS Market Value"..................................................9
"Debt".......................................................................10
"Default"....................................................................11
"Defaulting Participant".....................................................11
"Default Rate"...............................................................11
"Defective Work".............................................................11
"Deposit Taker"..............................................................11
"Deposit Taker Losses".......................................................11
"Designated Sale Date".......................................................11
"Development Documents"......................................................11
"Direct Payments to Participants"............................................12
"Effective Date".............................................................12
"Effective Rate".............................................................12
"Environmental Laws".........................................................12
"Environmental Cutoff Date"..................................................12
"Environmental Losses".......................................................12
"Environmental Reports"......................................................13
"ERISA"......................................................................13
"ERISA Affiliate"............................................................13
"Escrowed Proceeds"..........................................................13
"Established Misconduct".....................................................13
"Eurocurrency Liabilities"...................................................14
"Eurodollar Rate Reserve Percentage".........................................14
"Event of Default"...........................................................14
"Excluded Taxes".............................................................14
"Existing Contract"..........................................................14
"Failed Collateral Test Date"................................................15
"Fed Funds Rate".............................................................15
"FOCB Notice"................................................................15
"Funded Construction Allowance"..............................................15
"Funding Advances"...........................................................15
"Future Work"................................................................15
"GAAP".......................................................................15
"Hazardous Substance"........................................................15
"Hazardous Substance Activity"...............................................16
"Impositions"................................................................16
"Improvements"...............................................................16
"Improvements Lease".........................................................16
"Initial Funding Advance"....................................................16
"Interested Party"...........................................................16
"Issue 97-1 Non-performance-related Subjective Event of Default".............17
"Issue 97-10 Election".......................................................17
"Issue 97-10 Prepayment".....................................................17
"Land".......................................................................17
"Landlord's Election to Continue Construction"...............................17
"LIBOR"......................................................................17
"LIBOR Period Election"......................................................18
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60
"Lien".......................................................................18
"Liens Removable by BNPLC"...................................................18
"Losses".....................................................................19
"Mandatory Collateral Period"................................................19
"Material Environmental Communication".......................................19
"Maximum Construction Allowance".............................................19
"Maximum Permitted Termination Fees".........................................19
"Maximum Permitted Prepayment"...............................................19
"Maximum Remarketing Obligation".............................................20
"Minimum Extended Remarketing Price".........................................20
"Multiemployer Plan".........................................................20
"NAI"........................................................................20
"NAI's Extended Remarketing Period"..........................................20
"NAI's Extended Remarketing Right"...........................................20
"NAI's Initial Remarketing Rights and Obligations"...........................20
"Normal Tenant Improvements".................................................20
"Notice of NAI's Intent to Terminate"........................................20
"Operative Documents"........................................................20
"Other Common Definitions and Provisions Agreement"..........................20
"Other Lease Agreement"......................................................20
"Other Purchase Agreement"...................................................20
"Outstanding Construction Allowance".........................................21
"Participant"................................................................21
"Participation Agreement"....................................................21
"PBGC".......................................................................21
"Period".....................................................................21
"Permitted Encumbrances".....................................................21
"Permitted Hazardous Substance Use"..........................................21
"Permitted Hazardous Substances".............................................22
"Permitted Transfer "........................................................22
"Person".....................................................................22
"Personal Property"..........................................................22
"Plan".......................................................................22
"Pledge Agreement"...........................................................23
"Pre-Commencement Casualty"..................................................23
"Preemptive Notice"..........................................................23
"Premises Lease".............................................................23
"Prime Rate".................................................................23
"Prior Work".................................................................23
"Project Costs"..............................................................23
"Projected Cost Overruns"....................................................24
"Property"...................................................................24
"Purchase Agreement".........................................................24
"Purchase Documents".........................................................24
"Purchase Option"............................................................24
"Qualified Affiliate"........................................................24
"Qualified Prepayments"......................................................25
"Real Property"..............................................................25
"Reimbursable Construction-Period Costs".....................................25
"Remedial Work"..............................................................25
"Rent".......................................................................25
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"Residual Risk Percentage"...................................................25
"Responsible Financial Officer"..............................................25
"Sale Closing Documents".....................................................25
"Scope Change"...............................................................25
"Secured Spread".............................................................26
"Seller".....................................................................26
"Stipulated Loss Value"......................................................26
"Stipulated Loss Value (Building 4)".........................................26
"Subsidiary".................................................................27
"Supplemental Payment".......................................................27
"Term".......................................................................27
"Third Party Contract".......................................................27
"Third Party Price"..........................................................27
"Third Party Sale Notice"....................................................27
"Third Party Sale Proposal"..................................................27
"Third Party Target Price"...................................................27
"Transaction Expenses".......................................................27
"Unfunded Benefit Liabilities"...............................................27
"Unsecured Spread"...........................................................27
"Upfront Syndication Fees"...................................................28
"Voluntary NAI Construction Contributions"...................................28
"Voluntary Retention of the Property"........................................28
"Work".......................................................................28
RULES OF INTERPRETATION.....................................................................29
1. Notices......................................................................29
2. Severability.................................................................30
3. No Merger....................................................................30
4. No Implied Waiver............................................................31
5. Entire and Only Agreements...................................................31
6. Binding Effect...............................................................31
7. Time is of the Essence.......................................................31
8. Governing Law................................................................31
9. Paragraph Headings...........................................................31
10. Negotiated Documents.........................................................31
11. Terms Not Expressly Defined in an Operative Document.........................32
12. Other Terms and References...................................................32
13. Execution in Counterparts....................................................32
14. Not a Partnership, Etc.......................................................32
iv
62
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE V - IMPROVEMENTS)
This Common Definitions and Provisions Agreement (Phase V -
Improvements), 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 Improvements Lease (as defined below), the Construction Management
Agreement (as defined below), and the Purchase Agreement (as defined below), all
of which concern the Property (as defined below). Each of the Closing
Certificate, the Improvements Lease, the Construction Management Agreement and
the Purchase Agreement (together with this Common Definitions and Provisions
Agreement (Phase V - Improvements) 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 V - Improvements) 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:
"ABSOLUTE NAI CONSTRUCTION OBLIGATIONS" means the following:
(1) Construction-Period Indemnity Payments required
because of or in connection with or arising out of Environmental
Losses incurred or suffered by any Interested Party;
(2) Construction-Period Indemnity Payments required
because of or in connection with or arising out of Losses
incurred or suffered by BNPLC that BNPLC would not have incurred
or suffered but for any act or any omission of NAI or of any
NAI's contractors or subcontractors during the period that the
Construction Management Agreement remains in force or during any
other period that NAI remains in possession or control of the
Construction Project (excluding, however, as described below
certain Losses consisting of claims related to any failure by NAI
to complete the Construction Project);
(3) Construction-Period Indemnity Payments required
because of or in connection with or arising out of Losses
incurred or suffered by BNPLC that would not have been incurred
but for any fraud, misapplication of funds (including
Construction Advances), illegal acts, or willful misconduct on
the part of the NAI or its employees or agents or any other party
for whom NAI is responsible; and
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63
(4) Construction-Period Indemnity Payments required
because of or in connection with or arising out of Losses
incurred or suffered by BNPLC that would not have been incurred
but for any bankruptcy proceeding involving NAI.
For purposes of clause (2) of this definition, "acts and omissions of
NAI" shall include (i) any decision by NAI to make a Scope Change
without the prior approval of BNPLC, (ii) any failure of NAI to maintain
insurance required by the Improvements Lease or the Construction
Management Agreement, (iii) any decision not to continue or complete
Work under the Construction Management Agreement because of a change in
NAI's facility needs or in NAI's plans to meet its facility needs (such
as, for example, a decision by NAI to lease or acquire another less
expensive facility as an alternative to the Improvements), (iv) any
failure by NAI to reserve termination rights in Third Party Contracts as
required by subparagraph 1(A)(2)(b) of the Construction Management
Agreement, and (v) any other breach by NAI of the Construction
Management Agreement.
Thus, for example, if a third party asserts a claim for damages against
BNPLC because of injuries the third party sustained while on the Land as
a result of NAI's breach of its obligation under the Construction
Management Agreement to keep the Land and the Improvements thereon in a
reasonably safe condition as Work progresses under NAI's direction and
control, then any Construction-Period Indemnity Payment required because
of such third party claim will constitute an Absolute NAI Construction
Obligation under clause (2) of this definition. Similarly, if a claim
against BNPLC by a third party injured on the Land during the progress
of the Work is uninsured or under-insured only because of NAI's failure
to obtain liability insurance in accordance with the requirements of the
Improvements Lease (the premiums for which insurance are reimbursable
from Construction Advances as provided in the Construction Management
Agreement), then Construction-Period Indemnity Payments to BNPLC for the
uninsured or under-insured Losses arising out of the third party claim
will constitute Absolute NAI Construction Obligations under clause (2)
of this definition.
It is understood, however, that a failure of NAI to complete
construction of the Construction Project will not necessarily constitute
a breach of the Construction Management Agreement, given that NAI may
elect to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof. In the event the Construction Management
Agreement is terminated by NAI pursuant to subparagraph 5(D) thereof or
by BNPLC pursuant to subparagraph 5(E) thereof, clause (2) of this
definition will not be construed to include Construction-Period
Indemnity Payments, the sole reason for which are Losses suffered by
BNPLC consisting of claims related to NAI's failure to complete the
Construction Project.
"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 Improvements 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 Improvements
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 Improvements 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
2
64
provided in or under the Improvements 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 Improvements Lease.
"ADMINISTRATIVE AGENCY FEE" shall have the meaning assigned to it in
subparagraph 3.(g) of the Improvements Lease.
"ADJUSTED EBIT" shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Improvements Lease and to the Pledge Agreement.
"ADVANCE DATE" means, regardless of whether any Construction Advance
shall actually be made thereon, 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 Improvements 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.
"ARRANGEMENT FEE" shall have the meaning assigned to it in subparagraph
3(e) of the Improvements Lease.
"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.
"BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have
the meaning assigned to it in subparagraph 1(B)(1) of the Purchase Agreement.
"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
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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).
"BASE RATE" for any Construction Period or 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 Improvements 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" means the earlier of (1) the first
Business Day of September, 2001, or (2) the first Business Day of the first
calendar month upon which the Funded Construction Allowance shall equal or
exceed the Maximum Construction Allowance. For example, if on the first Business
Day of November, 2000 construction of the Construction Project is continuing,
the Funded Construction Allowance is $22,055,000 (before adding any Carrying
Costs for the preceding month) and the Maximum Construction Allowance is
$22,065,000, and if Carrying Costs of $17,500 would be added to the Funded
Construction Allowance on such day if the Construction Allowance were not
limited to the Maximum Construction Allowance, then (absent an extension by
BNPLC as described below) such day shall be the Base Rent Commencement Deadline
and on such day $10,000 will be added to the Funded Construction Allowance as
Carrying Cost and $7,500 will be payable as Base Rent pursuant to subparagraph
3.(c)(i) of the Improvements Lease. Notwithstanding the forgoing, if for any
reason (including a termination of the Construction Management Agreement) NAI
has not completed the Construction Project thirty days in advance of the
scheduled Base Rent Commencement Deadline determined pursuant to the first
sentence of this definition, BNPLC shall be entitled (but not obligated) to
extend the Base Rent Commencement Deadline one or more times and at any time
before the Construction Project actually is complete and ready for occupancy. To
so extend the Base Rent Commencement Deadline, BNPLC shall notify NAI thereof
and of the date to which the Base Rent Commencement Deadline is extended, which
may be the first Business Day of any calendar month designated by BNPLC in the
notice of extension, provided that BNPLC will not so designate any date more
than sixty days after the date upon which the Construction Project is expected
by BNPLC (at the time of the designation) to be complete.
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"BASE RENT DATE" means a date upon which Base Rent must be paid under
the Improvements 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 (and also an Advance 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.
(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 Improvements 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:
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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 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 Funding Advances 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 the last day of a Construction Period or Base Rent
Period; or
(2) reserved to provide a Construction Advance that NAI
requests, but thereafter declines to take for any reason, or that NAI
requests but is not permitted to take because of its failure to satisfy
any of the conditions specified in the Construction Management
Agreement; or
(3) used to make or maintain Funding Advances upon the
acceleration of the end of any Base Rent Period pursuant subparagraph
3(c)(iv) of the Improvements 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).
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"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 Improvements
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.
"CARRYING COSTS" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(a) of the Improvements Lease.
"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.
"CMA SUSPENSION EVENT" shall have the meaning assigned to it in
subparagraph 5(A) of the Construction Management Agreement.
"CMA SUSPENSION NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(1) of the Construction Management Agreement.
"CMA SUSPENSION PERIOD" shall have the meaning assigned to it in
subparagraph 5(C) of the Construction Management Agreement.
"CMA TERMINATION EVENT" shall have the meaning assigned to it in
subparagraph 5(B)(3) of the Construction Management Agreement.
"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 Improvements 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 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.
"COMMITMENT FEE RATE" means, for each Construction Period, the amount
established as described below in this definition on the date (in this
definition, the "CFR TEST DATE") that is two Business Days prior to such
Construction Period by reference to the ratio calculated be 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.
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The Commitment Fee Rate shall be established at the Level in the pricing grid
below which corresponds to such ratio; provided, that:
(a) for any Construction Period commencing on or prior to
the first Business Day of April, 2000, the Commitment Fee Rate
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 Commitment Fee Rate
under this definition, and no reduction in the Commitment Fee
Rate from one period to the next will be effective for purposes
of the Operative Documents unless, prior to the CFR Test Date for
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 Commitment Fee Rate shall equal the amount
indicated for Level V in the pricing grid below.
LEVELS RATIO OF TOTAL DEBT TO ADJUSTED EBIT COMMITMENT FEE RATE
-------- ------------------------------------ -------------------
Level I less than 0.50 25.0 basis points
Level II greater than or equal to 0.50, but 25.0 basis points
less than 1.0
Level III greater than or equal to 1.0, but 32.5 basis points
less than 1.5
Level IV greater than or equal to 1.5, but 50.0 basis points
less than 2.0
Level V greater than or equal to 2.0 50.0 basis points
All determinations of the Commitment Fee Rate by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the
Improvements Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Commitment Fee Rate set forth in any notice delivered by
NAI as described above in clause (b) of this definition.
"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE V - IMPROVEMENTS)"
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.
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"CONSTRUCTION ADVANCES" means (1) actual advances of funds made by or on
behalf of BNPLC to or on behalf of NAI pursuant to Paragraph 2 of the
Construction Management Agreement, and (2) amounts considered as Construction
Advances pursuant to subparagraph 6.(e) of the Improvements Lease.
"CONSTRUCTION ADVANCE REQUEST" shall have the meaning assigned to it in
subparagraph 2(C)(1) of the Construction Management Agreement.
"CONSTRUCTION ALLOWANCE" means the allowance, consisting of Construction
Advances and Carrying Costs, which is to be provided for the Construction
Project as more particularly described in the Construction Management Agreement
and Paragraph 6 of the Improvements Lease.
"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 MILESTONE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.
"CONSTRUCTION PERIOD" means each successive period of approximately one
month, with the first Construction Period beginning on and including the
Effective Date and ending on but not including the first Advance Date. Each
successive Construction Period after the first Construction Period shall begin
on and include the day on which the preceding Construction Period ends and shall
end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the earlier of the Base
Rent Commencement Date or any Designated Sale Date upon which NAI or any
Applicable Purchaser shall purchase BNPLC's interest in the Property pursuant to
the Purchase Agreement.
"CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have the meaning assigned
to it in subparagraph 5.(d)(ii) of the Improvements Lease.
"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 proceed to determine the fair market value of
BNPLC's interest in the Property (or applicable
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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 Improvements 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 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.
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"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.
"DEFAULTING PARTICIPANT" shall have the meaning assigned to it in
Section 1 of the Participation Agreement.
"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.
"DEFECTIVE WORK" shall have the meaning assigned to it in subparagraph
1(A)(2)(f) of the Construction Management 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; or
(2) any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC before NAI has made an
Issue 97-10 Election; 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 (A) waiver by NAI of
any remaining right NAI may have under any of the Operative
Documents to make any Issue 97-10 Election, and (B)
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) the first Business Date after any termination by NAI
of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations as provided in subparagraph 4(B) of the Purchase
Agreement; or
(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
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accordance with the Improvements 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 Construction Period and for each Base
Rent Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or 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 Construction Period or Base Rent Period in accordance with
the foregoing, then the "EFFECTIVE RATE" for that Construction Period or 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 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").
"ENVIRONMENTAL CUTOFF DATE" means the later of the dates upon which (i)
the Improvements 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
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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 Improvements 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 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 Improvements 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 Improvements
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
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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 Improvements 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 Construction Period or 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 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 Improvements Lease.
"EXCLUDED TAXES" means (1) all federal, state and local income taxes
upon Base Rent, Administrative Agency Fees, Commitment Fees, any interest paid
to BNPLC or any Participant pursuant to subparagraph 3(k) of the Improvements
Lease, and any additional compensation claimed by BNPLC pursuant to subparagraph
5(b)(ii) of the Improvements Lease; (2) any transfer or change of ownership
assessed because of BNPLC's transfer or conveyance to any third party of any
rights or interest in the Improvements Lease, the Purchase Agreement or the
Property (other than any such 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 upon any amounts
paid as reimbursement for or to satisfy Losses incurred by BNPLC or any
Participant to the extent such 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 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" 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.
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"FAILED COLLATERAL TEST DATE" shall have the meaning indicated in Part
III of Schedule 1 attached to the Improvements 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.
"FOCB NOTICE" shall have the meaning assigned to it in subparagraph
5(B)(1) of the Construction Management Agreement.
"FUNDED CONSTRUCTION ALLOWANCE" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Prepayments deducted on or prior to
that day in the calculation of such Outstanding Construction Allowance, less any
Voluntary NAI Construction Contributions added on or prior to that day in the
calculation of such Qualified Prepayments.
"FUNDING ADVANCES" means (1) the Initial Funding Advance and (2) all
future advances made by BNPLC's Parent or any other Participant to or on behalf
of BNPLC to allow BNPLC to provide the Construction Allowance.
"FUTURE WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.
"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 Improvements 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 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.
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"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 Improvements 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. "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.
"IMPROVEMENTS LEASE" means the Lease Agreement (Phase V - Improvements")
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.
"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 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 payment or reimbursement of
expenses incurred by NAI in connection with the Construction Project, including
the planning, design, engineering, construction and permitting of thereof; (3)
the maintenance of the Property; or (4) 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
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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
Improvements Lease, the occurrence of which event cannot be objectively
determined. For example, an Event of Default under subparagraph 17(e) of the
Improvements 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 Improvements 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 Improvements 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 Improvements
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.
"ISSUE 97-10 ELECTION" means any of the following elections by NAI: (1)
an election to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof; and (2) an election to terminate NAI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B) of the
Purchase Agreement.
"ISSUE 97-10 PREPAYMENT" means a payment to BNPLC, required by
subparagraph 3.(i) of the Improvements Lease or by subparagraphs 4(B) or 4(C) of
the Purchase Agreement, equal in each case to (A) the Maximum Permitted
Prepayment, computed as of the date on which the payment becomes due, less (B)
the accreted value of any prior payments actually received by BNPLC from NAI
constituting Issue 97-10 Prepayments or Voluntary NAI Construction
Contributions. For purposes of the preceding sentence, "accreted value" of a
payment shall mean the amount of the payment plus an amount equal to the
interest that would have accrued on the payment if it bore interest at the
Effective Rate.
"LAND" means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Improvements Lease and the Purchase
Agreement.
"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(e) of the Improvements Lease.
"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or 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
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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 Construction Period or 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 Construction Period or 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
Funding Advances during any Construction Period or Base Rent Period for which
Carrying Costs or 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 attached to the Improvements Lease. (For purposes
of the Improvements 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 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 Improvements 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 Improvements 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 Improvements Lease shall include any
judgment liens established against the Property because of a judgment rendered
against
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BNPLC and shall also include any liens established against the Property to
secure past due Excluded), 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 or other amounts assessed against the
Property by any governmental authority, other than to secure the payment of past
due Excluded 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 Improvements 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 implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.
"MAXIMUM CONSTRUCTION ALLOWANCE" means an amount equal to $51,000,000,
less the sum of the Initial Funding Advance under and defined in the Other
Common Definitions and Provisions Agreement and the Initial Funding Advance
under and as defined in this Agreement.
"MAXIMUM PERMITTED TERMINATION FEES" shall have the meaning indicated in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.
"MAXIMUM PERMITTED PREPAYMENT" as of any date means the amount equal to
the lesser of the following:
(1) eighty-nine and nine-tenths of one percent (89.9%) of
the aggregate of (i) all Project Costs paid or incurred on or
prior to such date, plus (ii) ninety-seven percent (97%) of (a)
Carrying Costs added to the Outstanding Construction Allowance on
or prior to such date, and (b) Commitment Fees reimbursed
pursuant to the Construction Management Agreement on or prior to
such date, plus (iii) any Upfront Syndication Fees paid to
Participants pursuant to the Closing Certificate and Agreement
and reimbursed
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pursuant to the Construction Management Agreement on or prior to
such date; or
(2) eighty-nine and nine-tenths of one percent (89.9%) of
Stipulated Loss Value on such date.
"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.
"NORMAL TENANT IMPROVEMENTS" shall have the meaning assigned to it in
subparagraph 3(A) of the Construction Management Agreement.
"NOTICE OF NAI'S INTENT TO TERMINATE" shall have the meaning assigned to
it in subparagraph 5(D) of the Construction Management Agreement.
"OPERATIVE DOCUMENTS" means the Closing Certificate, the Improvements
Lease, the Construction Management Agreement, the Purchase Agreement, the Pledge
Agreement and this Common Definitions and Provisions Agreement (Phase V -
Improvements).
"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT" means the Common
Definitions and Provisions Agreement (Phase V - Land), dated as of 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 - Land),
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 -
Land), dated 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.
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"OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to
it in subparagraph 6.(a) of the Improvements Lease.
"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 Improvements
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 Improvements Lease and the 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 Effective Date, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Improvements 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. It is understood, however, that
because the Participation Agreement expressly makes NAI a third party
beneficiary of the Participant's obligations thereunder to make advances to
BNPLC in connection with Construction Advances under the Construction Management
Agreement, NAI's consent will be required to any amendment of the Participation
Agreement that purports to limit or excuse such obligations.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERIOD" means a Construction Period or a Base Rent Period, as the
context requires.
"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 Improvements 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
Improvements 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 Improvements
Lease and the Construction Management Agreement or for the
operation of the Property for the purposes expressly permitted
under subparagraph 2(a) of the Improvements Lease; or
(2) include any disposal, discharge or other release of
Hazardous Substances
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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.
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 Improvements 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 of the
Improvements 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.
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"PLEDGE AGREEMENT" means the Pledge Agreement (Phase V - Improvements)
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 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.
"PRE-COMMENCEMENT CASUALTY" shall have the meaning assigned to it in
subparagraph 1(A)(2)(a) of the Construction Management Agreement.
"PREEMPTIVE NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.
"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.
"PRIOR WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.
"PROJECT COSTS" means the following:
(a) costs incurred for the Work (as defined in the Construction
Management Agreement), including not only hard costs incurred for the new
Improvements described in Exhibit C attached to the Construction Management
Agreement, but also the following costs to the extent reasonably incurred in
connection with the Construction Project:
- soft costs, such as architectural fees, engineering fees and fees and
costs paid in connection with obtaining project permits and approvals required
by governmental authorities or the Development Documents,
- site preparation costs, and
- costs of offsite and other public improvements required as conditions
of governmental approvals for the Construction Project;
(b) costs incurred to maintain insurance required by (and consistent
with the requirements of) the Improvements Lease prior to the Base Rent
Commencement Date, and costs of repairing any damage to the Improvements by fire
or other casualty prior to the Base Rent Commencement Date, to the extent
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such cost is not covered by insurance proceeds made available to NAI as provided
in the Improvements Lease;
(c) a fraction of the cost of any title insurance policy or binder
provided to BNPLC in connection with its acquisition of the Land and
Improvements, the numerator of which fraction is the difference computed by
subtracting the price paid by BNPLC for the Land from the maximum dollar amount
of coverage provided by the title insurance, and the denominator of which
fraction is equal to such maximum dollar amount of coverage;
(d) Impositions that have accrued or become due under the Improvements
Lease prior to the Base Rent Commencement Date; and
(e) cancellation or termination fees or other compensation payable by
NAI or BNPLC pursuant to any contract concerning the Construction Project made
by NAI or BNPLC with any general contractor, architect, engineer or other third
party because of any election by NAI or BNPLC to cancel or terminate such
contract.
Project Costs will include costs incurred by BNPLC to continue or complete the
Construction Project after any Landlord's Election to Continue Construction as
provided in subparagraph 6.(e) of the Improvements Lease.
"PROJECTED COST OVERRUNS" shall have the meaning assigned to it in
subparagraph 4(A) of the Construction Management Agreement.
"PROPERTY" means the Personal Property and the Real Property,
collectively. The fee interest in the Land itself will not be included in the
Property. Any rights, titles and interests acquired by BNPLC under the Existing
Contract, to the extent not covered by the Improvements 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.
"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.
"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.
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"QUALIFIED PREPAYMENTS" means (A) any Issue 97-10 Prepayments received
by BNPLC, (B) any Voluntary NAI Construction Contributions received by BNPLC
pursuant to subparagraph 4(C) of the Construction Management Agreement, and (C)
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 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 Improvements Lease
or any other provision of the Improvements Lease. For purposes of computing the
total Qualified Prepayments (and other amounts dependent upon Qualified
Prepayments, such as Stipulated Loss Value and the Outstanding Construction
Allowance) 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 Improvements Lease.
"REAL PROPERTY" shall have the meaning assigned to it on page of the
Improvements Lease.
"REIMBURSABLE CONSTRUCTION-PERIOD COSTS" shall have the meaning assigned
to it in Paragraph 2 of the Construction Management Agreement.
"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.
"SCOPE CHANGE" shall have the meaning assigned to it in subparagraph
1(A)(1)(b) of the Construction Management Agreement.
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"SECURED SPREAD" means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any period
commencing on a Failed Collateral Test Date and continuing through the next
Collateral Test Date (under and as defined in Schedule 1 attached to the Lease)
that does not constitute a Failed Collateral Test Date, the Secured Spread shall
equal one-half of the Unsecured Spread.
"SELLER" means Trinet Essential Facilities II, Inc., a Maryland
corporation.
"STIPULATED LOSS VALUE" as of any date means the amount equal to the sum
of the Initial Funding Advance plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
such date, 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, the Arrangement Fee, the Upfront Syndication Fees, or Administrative
Agency Fees or Commitment Fees reduce Stipulated Loss Value.
"STIPULATED LOSS VALUE (BUILDING 4)" as of any date means the amount
equal to the sum of portion of Stipulated Loss Value attributable to the portion
of the Improvements known as "Building 4," determined in accordance with the
following provisions:
(1) All Funding Advances (including the Initial Funding
Advance) will be allocated between Stipulated Loss Value
(Building 4) 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 Building 4 relative
to the cost of both buildings included in the Improvements. In
the case of each Construction Advance, the allocation so
determined by NAI will be set forth in the Construction Advance
Request submitted for such advance, as contemplated in the form
of request attached as an exhibit to the Construction Management
Agreement.
(2) The application of Qualified Prepayments, if any, will
be allocated between Stipulated Loss Value (Building 4) 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 Building 4, relative to the value of
both buildings included in the Improvements, resulting from the
event or circumstances that generated such Qualified Prepayments.
(For example, insurance proceeds paid because of a fire damaging
only Building 4 would, if applied as Qualified Prepayments,
reduce Stipulated Loss Value (Building 4) dollar for dollar.)
(3) In any Completion Notice (Building 4), NAI will
specify its determination of Stipulated Loss Value (Building 4),
as well as NAI's determination of the Stipulated Loss Value
(Building 4/Land) 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) at the time a
determination thereof is needed under the Operative Documents,
BNPLC shall itself be entitled to make such determination in good
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.
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"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.
"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
Improvements Lease.
"THIRD PARTY CONTRACT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.
"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 Construction Period or any 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;
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(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 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.
LEVELS RATIO OF TOTAL DEBT TO ADJUSTED EBIT UNSECURED SPREAD
-------- ------------------------------------ ------------------
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
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
Improvements 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.
"UPFRONT SYNDICATION FEES" shall have the meaning assigned to it in
subparagraph 2(M) of the Closing Certificate and Agreement.
"VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS" shall have the meaning
assigned to it in subparagraph 4(C) of the Construction Management Agreement.
"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.
"WORK" shall have the meaning assigned to it in subparagraph 1(A)(2)(a)
of the Construction Management Agreement.
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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:
Federal Reserve Bank of New York
ABA 026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Improvements 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 advances paid to NAI by BNPLC under the
Construction Management Agreement or in connection therewith shall be
paid to NAI in immediately available funds at such place and in such
manner as NAI may reasonably designate from time to time by notice to
BNPLC signed by a Responsible Financial Officer of NAI.
(iv) 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)
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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
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 Improvements Lease or of
the leasehold estate created by the Improvements 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 Improvements 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 Improvements Lease or the
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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 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 Improvements 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.
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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 - Improvements), 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 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 follow.]
32
94
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase V - Improvements) to be executed as of March 1,
2000.
"NAI"
NETWORK APPLIANCE, INC.
By:
---------------------------------------
Jeffrey R. Allen, Chief Financial
Officer
95
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase V - Improvements) dated to be effective March 1, 2000]
"BNPLC"
BNP LEASING CORPORATION
By:
----------------------------------------
Lloyd G. Cox, Vice President