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Exhibit 10.36
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LEASE AGREEMENT
(PHASE III - LAND)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
NETWORK APPLIANCE, INC.
("NAI")
JUNE 16, 1999
(SUNNYVALE, CALIFORNIA)
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TABLE OF CONTENTS
Page
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1. TERM 2
(a) Scheduled Term 2
(b) Intentionally Deleted 2
(c) Intentionally Deleted 2
(d) Election by NAI to Terminate After Accelerating the
Designated Sale Date 2
(e) Extension of the Term 3
2. USE AND CONDITION OF THE PROPERTY 3
(a) Use 3
(b) Condition of the Property 3
(c) Consideration for and Scope of Waiver 4
3. RENT 4
(a) Base Rent Generally 4
(b) Impact of Collateral Upon Formulas 4
(c) Calculation of and Due Dates for Base Rent 5
(i) Determination of Payment Due Dates, Generally 5
(ii) Special Adjustments to Base Rent Payment Dates
and Periods 5
(iii) Base Rent Formula for Periods During Which
The Collateral Percentage is 100% 5
(iv) Base Rent Formula for Periods During Which The
Collateral Percentage is Greater Than Zero and
Less Than 100% 6
(v) Base Rent Formula for Periods During Which The
Collateral Percentage is Zero 7
(d) Additional Rent 7
(e) Intentionally Deleted 8
(f) Intentionally Deleted 8
(g) Intentionally Deleted 8
(h) Intentionally Deleted 8
(i) No Demand or Setoff 8
(j) Default Interest and Order of Application 8
4. NATURE OF THIS AGREEMENT 8
(a) "Net" Lease Generally 8
(b) No Termination 8
(c) Tax Reporting 9
(d) Characterization of this Land Lease 10
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY 10
(a) Impositions 10
(b) Increased Costs; Capital Adequacy Charges 10
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(c) NAI's Payment of Other Losses; General Indemnification 11
(d) Exceptions and Qualifications to Indemnities 13
6. INTENTIONALLY DELETED 14
7. INTENTIONALLY DELETED 14
8. ENVIRONMENTAL 14
(a) Environmental Covenants by NAI 14
(b) Right of BNPLC to do Remedial Work Not Performed by NAI 14
(c) Environmental Inspections and Reviews 15
(d) Communications Regarding Environmental Matters 15
9. INSURANCE REQUIRED AND CONDEMNATION 16
(a) Liability Insurance 16
(b) Intentionally Deleted 16
(c) Failure to Obtain Insurance 16
(d) Condemnation 16
(e) Waiver of Subrogation 17
10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS 17
(a) Collection and Application of Insurance and Condemnation
Proceeds Generally 17
(b) Advances of Escrowed Proceeds to NAI 17
(c) Application of Escrowed Proceeds as a Qualified Prepayment 18
(d) Special Provisions Applicable After an Event of Default 18
(e) NAI's Obligation to Restore 18
(f) Takings of All or Substantially All of the Property on or
after the Base Rent Commencement Date 18
11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI
CONCERNING THE PROPERTY 19
(a) Compliance with Covenants and Laws 19
(b) Operation of the Property 19
(c) Debts for Construction, Maintenance, Operation or Development 20
(d) Repair, Maintenance, Alterations and Additions 20
(e) Permitted Encumbrances and Development Documents 21
(f) Books and Records Concerning the Property 21
12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE
TO SCHEDULE 1 21
13. FINANCIAL STATEMENTS AND OTHER REPORTS 21
(a) Financial Statements; Required Notices; Certificates 21
14. ASSIGNMENT AND SUBLETTING BY NAI 23
(a) BNPLC's Consent Required 23
(b) Standard for BNPLC's Consent to Assignments and Certain
Other Matters 23
(c) Consent Not a Waiver 23
15. ASSIGNMENT BY BNPLC 23
(a) Restrictions on Transfers 23
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(b) Effect of Permitted Transfer or other Assignment by BNPLC 24
16. BNPLC'S RIGHT OF ACCESS 24
17. EVENTS OF DEFAULT 25
18. REMEDIES 26
(a) Basic Remedies 26
(b) Notice Required So Long As the Purchase Option and NAI's
Initial Remarketing Rights and Obligations Continue Under
the Purchase Agreement 28
(c) Enforceability 28
(d) Remedies Cumulative 28
19. DEFAULT BY BNPLC 28
20. QUIET ENJOYMENT 29
21. SURRENDER UPON TERMINATION 29
22. HOLDING OVER BY NAI 29
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS 29
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 III - LAND)
This LEASE AGREEMENT (PHASE III - LAND) (this "LAND LEASE"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of
[EFFECTIVE DATE], the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Land Lease are intended to have the
meanings assigned to them in the Common Definitions and Provisions Agreement
(Phase III - Land) executed by BNPLC and NAI contemporaneously with this Land
Lease. By this reference, the Common Definitions and Provisions Agreement (Phase
III - Land) is incorporated into and made a part of this Land Lease for all
purposes.)
RECITALS
Pursuant to the Existing Contracts, which covers the Land described in
Exhibit , BNPLC is acquiring the Land and any appurtenances thereto from Seller
contemporaneously with the execution of this Land Lease.
In anticipation of BNPLC's acquisition of the Land under the Existing
Contracts, BNPLC and NAI have reached agreement as to the terms and conditions
upon which BNPLC is willing to lease the Land to NAI, and by this Land Lease
BNPLC and NAI desire to evidence such agreement.
GRANTING CLAUSES
BNPLC does hereby LEASE, DEMISE and LET unto NAI for the term
hereinafter set forth all right, title and interest of BNPLC, now owned or
hereafter acquired, in and to:
(1) the Land;
(2) all easements and other rights appurtenant to the Land, whether
now owned or hereafter acquired by BNPLC; and
(3) (A) any land lying within the right-of-way of any street, open
or proposed, adjoining the Land, (B) any sidewalks and alleys adjacent
to the Land and (C) any strips and gores between the Land and any
abutting land not owned or leased by BNPLC.
BNPLC's interest in all property described in clauses (1) through (3) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include any Improvements (now existing or those to be constructed as
provided in the Other Lease Agreement and the Construction Management Agreement)
or BNPLC's rights appurtenant to the Improvements, it being understood that the
Other Lease Agreement constitutes a separate lease of the Improvements and the
appurtenances thereto, and only the Improvements and the appurtenances thereto,
from BNPLC to NAI.
To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contracts or acquired by BNPLC pursuant to Paragraph 7 below,
BNPLC also hereby grants and assigns to NAI for the term of this Land Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such
rights or interests of BNPLC:
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(a) the benefits, if any, conferred upon the owner of the Real Property by
the Permitted Encumbrances and Development Documents; and
(b) any permits, licenses, franchises, certificates, and other rights and
privileges against third parties related to the Real Property.
Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."
However, the leasehold estate conveyed hereby and NAI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Land Lease, to the Permitted Encumbrances, and to any other claims or
encumbrances not constituting Liens Removable by BNPLC.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to NAI and is accepted and is to be used
and possessed by NAI upon and subject to the following terms and conditions:
1. TERM.
(a) Scheduled Term. The term of this Land Lease (the "TERM") shall commence
on and include the Effective Date, and end on the first Business Day of July,
2004, unless sooner terminated as expressly herein provided.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Election by NAI to Terminate After Accelerating the Designated Sale
Date.
NAI shall be entitled to accelerate the Designated Sale Date (and thus
accelerate the purchase of BNPLC's interest in the Property by NAI or by an
Applicable Purchaser pursuant to the Purchase Agreement) by sending a notice to
BNPLC as provided in clause (2) of the definition of "Designated Sale Date" in
the Common Definitions and Provisions Agreement (Phase II - Land). In the event,
because of NAI's election to so accelerate the Designated Sale Date or for any
other reason, the Designated Sale Date occurs before the end of the scheduled
Term, NAI may terminate this Land Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI must have
done the following prior to the termination:
(i) purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Purchase Agreement and satisfied all of NAI's
other obligations under the Purchase Agreement;
(ii) paid to BNPLC all Base Rent and all other Rent due on or before
or accrued through the Designated Sale Date; and
(iii) paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to the Purchase Agreement.
(e) Extension of the Term . The Term may be extended at the option of NAI
for two successive periods of five years each; provided, however, that prior to
any such extension the following conditions must have been satisfied: (A) at
least ninety days prior to the commencement of any such extension, BNPLC and NAI
must have agreed in writing upon, and received the consent and approval of
BNPLC's Parent and all other Participants to (1) a corresponding extension not
only to
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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 II - Land), and
(2) an adjustment to the Rent that NAI will be required to pay for the
extension, it being expected that the Rent for the extension may be different
than the Rent required for the original Term, and it being understood that the
Rent for any extension must in all events be satisfactory to both BNPLC and NAI,
each in its sole and absolute discretion; (B) no Event of Default shall have
occurred and be continuing at the time of NAI's exercise of its option to
extend; and (C) immediately prior to any such extension, this Land Lease must
remain in effect. With respect to the condition that BNPLC and NAI must have
agreed upon the Rent required for any extension of the Term, neither NAI nor
BNPLC is willing to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both NAI and BNPLC hereby
disclaim any obligation express or implied to be reasonable in negotiating the
Rent for any such extension. Subject to the changes to the Rent payable during
any extension of the Term as provided in this Paragraph, if NAI exercises its
option to extend the Term as provided in this Paragraph, this Land Lease shall
continue in full force and effect, and the leasehold estate hereby granted to
NAI shall continue without interruption and without any loss of priority over
other interests in or claims against the Property that may be created or arise
after the date hereof and before the extension.
2. USE AND CONDITION OF THE PROPERTY.
(a) Use . Subject to the Permitted Encumbrances, the Development Documents
and the terms hereof, NAI may use and occupy the Property during the Term, but
only for the following purposes.
(i) constructing, maintaining and using Improvements on the Land for
purposes expressly permitted by and described in Paragraph 2(a) of the
Other Lease Agreement; and
(ii) other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but NAI acknowledges that BNPLC's
withholding of such approval shall be reasonable if BNPLC determines in
good faith that (1) giving the approval may materially increase BNPLC's
risk of liability for any existing or future environmental problem, or
(2) giving the approval is likely to substantially increase BNPLC's
administrative burden of complying with or monitoring NAI's compliance
with the requirements of this Land Lease or other Operative Documents).
(b) Condition of the Property.
NAI ACKNOWLEDGES THAT IT HAS CAREFULLY AND FULLY INSPECTED THE PROPERTY AND
ACCEPTS THE PROPERTY IN ITS PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO
THE USE WHICH MAY BE MADE THEREOF. NAI ALSO ACCEPTS THE PROPERTY WITHOUT ANY
COVENANT, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS
AFFILIATES REGARDING THE TITLE THERETO OR THE RIGHTS OF ANY PARTIES IN
POSSESSION OF ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 20.
BNPLC SHALL NOT BE RESPONSIBLE FOR ANY LATENT OR OTHER DEFECT OR CHANGE OF
CONDITION IN THE PROPERTY OR FOR ANY VIOLATIONS WITH RESPECT THERETO OF
APPLICABLE LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES ANY
FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT AND
LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE 2 OF THIS LAND LEASE, BNPLC SHALL
NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY KIND,
INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER.
(c) Consideration for and Scope of Waiver . The provisions of subparagraph
2.(b) above have been negotiated by BNPLC and NAI after due consideration for
the Rent payable hereunder and are intended to be a complete exclusion and
negation of any representations or warranties of BNPLC or its Affiliates,
express or implied, with respect to the Property that may arise pursuant to any
law now or hereafter in effect or otherwise, except as expressly set forth
herein.
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However, such exclusion of representations and warranties by BNPLC is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to NAI during the Term because of the definition of
Personal Property and Property above.
3. RENT.
(a) Base Rent Generally . On each Base Rent Date through the end of the
Term, NAI shall pay BNPLC rent ("BASE RENT"). Each payment of Base Rent must be
received by BNPLC no later than 10:00 a.m. (Pacific time) on the date it becomes
due; if received after 10:00 a.m. (Pacific time) it will be considered for
purposes of this Land Lease as received on the next following Business Day. At
least five days prior to any Base Rent Date upon which an installment of Base
Rent shall become due, BNPLC shall notify NAI in writing of the amount of each
installment, calculated as provided below. Any failure by BNPLC to so notify
NAI, however, shall not constitute a waiver of BNPLC's right to payment, but
absent such notice NAI shall not be in default hereunder for any underpayment
resulting therefrom if NAI, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.
(b) Impact of Collateral Upon Formulas . To ease the administrative burden
of this Land Lease and the Pledge Agreement, the formulas for calculating Base
Rent set out below in subparagraph 3.(c) reflect a reduction in the Base Rent
equal to the interest that would accrue on any Collateral provided in accordance
with the requirements of the Pledge Agreement from time to time if the Accounts
(as defined in the Pledge Agreement) bore interest at the Effective Rate. BNPLC
has agreed to such reduction to provide NAI with the economic equivalent of
interest on such Collateral, and in return NAI has agreed to the provisions of
the Pledge Agreement that excuse the actual payment of interest on the Accounts.
By incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in the Pledge Agreement, the parties
will avoid an unnecessary and cumbersome periodic exchange of equal payments. It
is not, however, the intent of BNPLC or NAI to understate Base Rent or interest
for financial reporting purposes. Accordingly, for purposes of any financial
reports that this Land Lease requires of NAI from time to time, NAI may report
Base Rent as if there had been no such reduction and as if the Collateral from
time to time provided in accordance with the requirements of the Pledge
Agreement had been maintained in Accounts bearing interest at the Effective
Rate.
(c) Calculation of and Due Dates for Base Rent . Payments of Base Rent shall
be calculated and become due as follows:
(i) Determination of Payment Due Dates, 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.
(ii) 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.
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b) Consistent with clause (3) of the definition of LIBOR
Period Election in the Common Definitions and Provisions
Agreement (Phase II - Land), each successive Base Rent Date
after any such Failed Collateral Test Date shall be the first
Business Day of the first calendar month following the calendar
month which includes the preceding Base Rent Date, so long as
any Mandatory Collateral Period shall continue.
c) In addition to Base Rent due on a Failed Collateral Test
Date, NAI must pay the Breakage Costs, if any, resulting from
any early ending of a Base Rent Period on the Failed Collateral
Test Date pursuant to the preceding clause .
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.
(iii) Base Rent Formula for Periods During Which The Collateral
Percentage is 100% . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is one hundred
percent (100%) shall equal:
o Stipulated Loss Value on the first day of such Base Rent
Period, times
o 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
o 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
o 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
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
(iv) Base Rent Formula for Periods During Which The Collateral
Percentage is Greater Than Zero and Less Than 100% . Each installment of
Base Rent payable for any Base Rent Period during which the Collateral
Percentage is greater than zero and less than one hundred percent (100%)
shall equal:
o Stipulated Loss Value on the first day of such Base Rent
Period, times
o the sum of:
(A) the product of:
(1) the Collateral Percentage for such Base
Rent Period, times
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(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
o 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
o three hundred sixty.
Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is forty
percent (40%); that prior to the first day of such Base Rent Period
Qualified Prepayments have been received by BNPLC, leaving a Stipulated
Loss Value of $20,000,000; that the Effective Rate for the Base Rent
Period is 6%; that the Secured Spread is 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
(v) Base Rent Formula for Periods During Which The Collateral
Percentage is Zero . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is zero shall equal:
o Stipulated Loss Value on the first day of such Base Rent
Period, times
o 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
o 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
o three hundred sixty.
Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is zero
percent (0%); that prior to the first day of such Base Rent Period
Qualified Prepayments have been received by BNPLC, leaving a Stipulated
Loss Value of $20,000,000; that the Effective Rate for the Base Rent
Period is 6%; that the Unsecured Spread is one hundred fifty basis
points (150/100 of 1%) upon the commencement of such Base Rent Period;
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and that such Base Rent Period contains exactly thirty days. Under such
assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:
$20,000,000 x (6% + 1.50%) x 30/360 = $125,000
(d) Additional Rent . All amounts which NAI is required to pay to or on
behalf of BNPLC pursuant to this Land Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "ADDITIONAL Rent", and together Base Rent and Additional
Rent are herein sometimes called "RENT").
(e) Intentionally Deleted .
(f) Intentionally Deleted .
(g) Intentionally Deleted .
(h) Intentionally Deleted .
(i) No Demand or Setoff . Except as expressly provided herein, NAI shall pay
all Rent without notice or demand and without counterclaim, deduction, setoff or
defense.
(j) Default Interest and Order of Application . All Rent shall bear
interest, if not paid when first due, at the Default Rate in effect from time to
time from the date due until paid; provided, that nothing herein contained will
be construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. BNPLC shall be
entitled to apply any amounts paid by or on behalf of NAI against any Rent then
past due in the order the same became due or in such other order as BNPLC may
elect.
4. NATURE OF THIS AGREEMENT.
(a) "Net" Lease Generally . Subject only to the exceptions listed in
subparagraph 5.(d) below, it is the intention of BNPLC and NAI that Base Rent
and other payments herein specified shall be absolutely net to BNPLC and that
NAI shall pay all costs, expenses and obligations of every kind relating to the
Property or this Land Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Land Lease or the transactions contemplated herein.
However, neither this subparagraph 4.(a) nor the indemnity in this
subparagraph 5.(c)(i) shall be construed to make NAI liable for (I) an
allocation of general overhead or internal administrative expenses of BNPLC or
any other Interested Party or (II) any duplicate payment of the same Loss to
both BNPLC and another Interested Party. (If, for example, BNPLC were required
to make a $10 fine because of a failure of the Property to comply with
Applicable Laws, and a Participant were required by the Participation Agreement
to reimburse BNPLC for 20% of the $10, NAI would not be required by this
subparagraph 4.(a) or by subparagraph 5.(c)(i) to pay both $10 to BNPLC and $2
to the Participant on account of the fine.)
(b) No Termination . Except as expressly provided in this Land Lease itself,
this Land Lease shall not terminate, nor shall NAI have any right to terminate
this Land Lease, nor shall NAI be entitled to any abatement of the Rent, nor
shall the obligations of NAI under this Land Lease be excused, for any reason
whatsoever, including any of the following: (i) any damage to or the destruction
of all or any part of the Property from whatever cause, (ii) the taking of the
Property or any
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portion thereof by eminent domain or otherwise for any reason, (iii) the
prohibition, limitation or restriction of NAI's use or development of all or any
portion of the Property or any interference with such use by governmental action
or otherwise, (iv) any eviction of NAI or of anyone claiming through or under
NAI, (v) any default on the part of BNPLC under this Land Lease or under any
other agreement to which BNPLC and NAI are parties, (vi) the inadequacy in any
way whatsoever of the Property (it being understood that BNPLC has not made,
does not make and will not make any representation express or implied as to the
adequacy thereof), (vii) any latent or other defect in the Property or any
change in the condition thereof or the existence with respect to the Property of
any violations of Applicable Laws, or (viii) any other cause whether similar or
dissimilar to the foregoing. It is the intention of the parties hereto that the
obligations of NAI hereunder shall be separate and independent of the covenants
and agreements of BNPLC, that Base Rent and all other sums payable by NAI
hereunder shall continue to be payable in all events and that the obligations of
NAI hereunder shall continue unaffected, unless the requirement to pay or
perform the same shall have been terminated or limited pursuant to an express
provision of this Land Lease. Without limiting the foregoing, NAI waives to the
extent permitted by Applicable Laws, except as otherwise expressly provided
herein, all rights to which NAI may now or hereafter be entitled by law
(including any such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to quit, terminate or
surrender this Land Lease or the Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.
However, nothing in this subparagraph 4.(b) shall be construed as a
waiver by NAI of any right NAI may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Land Lease that continues
beyond the period for cure provided in Paragraph 19: (i) the recovery of
monetary damages, (ii) injunctive relief in case of the violation, or attempted
or threatened violation, by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Land Lease which are binding upon BNPLC
(including the confidentiality provisions set forth in subparagraph 16.(c)
below), or (iii) a decree compelling performance by BNPLC of any of the express
covenants, agreements, conditions or provisions of this Land Lease which are
binding upon BNPLC.
(c) Tax Reporting . BNPLC and NAI shall report this Land Lease and the
Purchase Agreement for federal income tax purposes as a conditional sale unless
prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Land Lease and
the Purchase Agreement as a conditional sale for federal income tax reporting
purposes, BNPLC shall notify NAI in writing of such challenge and consider in
good faith any reasonable suggestions by NAI about an appropriate response. In
any event, NAI shall (subject only to the limitations set forth in this
subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice to NAI shall not
excuse NAI from its obligations under this Paragraph; provided, that if none of
the officers of NAI and none of the employees of NAI responsible for tax matters
are aware of the challenge described in the notice and such failure by BNPLC
renders unavailable defenses that NAI might otherwise assert, or precludes
actions that NAI might otherwise take, to minimize its obligations hereunder,
then NAI shall be excused from its obligation to indemnify BNPLC against
liabilities, costs, additional taxes and other expenses, if any, which would not
have been incurred but for such failure. For example, if BNPLC fails to provide
NAI with a copy of a notice of a challenge by the Internal Revenue Service
covered by the indemnities set out in this Land Lease and NAI is not otherwise
already aware of such challenge, and if as a result of such failure BNPLC
becomes liable for penalties and interest covered by the indemnities in excess
of the 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.
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(d) Characterization of this Land Lease . For purposes of determining the
appropriate financial accounting for this Land Lease and for purposes of
determining their respective rights and remedies under state law, BNPLC and NAI
believe and intend that (i) this Land Lease constitutes a true lease, not a mere
financing arrangement, enforceable in accordance with its express terms, and the
preceding subparagraph is not intended to affect the enforcement of any other
provisions of this Land Lease or the Purchase Agreement, and (ii) the Purchase
Agreement shall constitute a separate and independent contract, enforceable in
accordance with the express terms and conditions set forth therein. In this
regard, NAI acknowledges that NAI asked BNPLC to participate in the transactions
evidenced by this Land Lease and the Purchase Agreement as a landlord and owner
of the Property, not as a lender. Although other transactions might have been
used to accomplish similar results, NAI expects to receive certain material
accounting and other advantages through the use of a lease transaction.
Accordingly, and notwithstanding the reporting for income tax purposes described
in the preceding subparagraph, NAI cannot equitably deny that this Land Lease
and the Purchase Agreement should be construed and enforced in accordance with
their respective terms, rather than as a mortgage or other security device, in
any action brought by BNPLC to enforce this Land Lease or the Purchase
Agreement.
5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.
(a) Impositions . Subject only to the exceptions listed in subparagraph
5.(d) below, NAI shall pay or cause to be paid prior to delinquency all ad
valorem taxes assessed against the Property and other Impositions. If requested
by BNPLC from time to time, NAI shall furnish BNPLC with receipts showing
payment of all Impositions prior to the applicable delinquency date therefor.
Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest NAI shall not be deemed in default under
any of the provisions of this Land Lease because of the Imposition if (1) NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (2) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs,
penalties and interest thereon, promptly after such judgment becomes final;
provided, however, in any event each such contest shall be concluded and the
contested Impositions must be paid by NAI prior to the earlier of (i) the date
that any criminal prosecution is instituted or overtly threatened against BNPLC
or its directors, officers or employees because of the nonpayment thereof or
(ii) the date any writ or order is issued under which any property owned or
leased by BNPLC (including the Property) may be seized or sold or any other
action is taken against BNPLC or against any property owned or leased by BNPLC
because of the nonpayment thereof, or (iii) any Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.
(b) Increased Costs; Capital Adequacy Charges . Subject only to the
exceptions listed in subparagraph 5.(d) below:
(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.
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(ii) BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount
of capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made
to BNPLC to permit BNPLC to maintain BNPLC's investment in the Property.
To the extent that BNPLC's Parent or another Participant demands Capital
Adequacy Charges as compensation for the additional capital requirements
reasonably allocable to such investment or advances, NAI shall pay to
BNPLC for the account of BNPLC's Parent or the other Participant, as the
case may be, the amount so demanded. Without limiting the foregoing,
BNPLC and NAI hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
Pledge Agreement will cause a zero percent (0%) risk weight to be
assigned to a percentage (equal to the Collateral Percentage) of the
collective investment of BNPLC and the Participants in the Property
pursuant to 12 Code of Federal Regulations, part 225, as from time to
time supplemented or amended, or pursuant to any other similar or
successor statute or regulation applicable to BNPLC and the
Participants. If and so long as such risk weight is increased the
assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of
return to BNPLC, BNPLC's Parent and any other Participants (net of their
costs of maintaining required capital) that they would have enjoyed from
this Land Lease absent such increase.
(iii) Any amount required to be paid by NAI under this subparagraph
5.(b) shall be due ten days after a demand for such payment is received
by NAI.
(c) NAI's Payment of Other Losses; General Indemnification . Subject only to
the exceptions listed in subparagraph 5.(d) below:
(i) All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time
and from time to time by reason of, in connection with or arising out of
(A) their ownership or alleged ownership of any interest in the Property
or the Rents, (B) the use and operation of the Property, (C) the
negotiation, administration or enforcement of the Operative Documents,
(D) the making of the Initial Funding Advance, (E) the breach by NAI of
this Land Lease or any other document executed by NAI in connection
herewith, (F) any failure of the Property or NAI itself to comply with
Applicable Laws, (G) Permitted Encumbrances, (H) Hazardous Substance
Activities, including those occurring prior to Effective Date, (I) any
obligations under the Existing Contracts related to the Property that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever, shall be paid by NAI, and NAI
shall indemnify and defend BNPLC and other Interested Parties from and
against all such Losses.
(ii) THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF
BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN
THE PRECEDING SUBPARAGRAPH 5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE
SUBJECT MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE
OUT OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED
PARTY. FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF
INSURANCE OBTAINED BY NAI OR REQUIRED OF NAI BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
THE INDEMNITIES AND RELEASES ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH
INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE
IS INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES
AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
INDEMNIFICATION BY THIS LAND LEASE.
(iii) Costs and expenses for which NAI shall be responsible pursuant
to this subparagraph 5.(c) will include appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes, brokerage fees and
commissions, abstract fees, title policy
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fees, Uniform Commercial Code search fees, escrow fees and Attorneys'
Fees incurred by BNPLC with respect to the Property, whether such costs
and expenses are incurred at the time of execution of this Land Lease or
at any time during the Term.
(iv) NAI's obligations under this subparagraph 5.(c) shall survive
the termination or expiration of this Land Lease. Any amount to be paid
by NAI under this subparagraph 5.(c) shall be due ten days after a
demand for such payment is received by NAI.
(v) If an Interested Party notifies NAI of any claim or proceeding
included in, or any investigation or allegation concerning, Losses for
which NAI is responsible pursuant to this subparagraph 5.(c), NAI shall
assume on behalf of the Interested Party and conduct with due diligence
and in good faith the investigation and defense thereof and the response
thereto with counsel selected by NAI, but satisfactory to the Interested
Party; provided, that the Interested Party shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both NAI and the Interested Party
and the Interested Party shall have reasonably concluded that there are
legal defenses available to it which are inconsistent with or in
addition to those available to NAI, then the Interested Party shall have
the right to select separate counsel to participate in the investigation
and defense of and response to such claim, proceeding, 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 II - Land), (x) Excluded Taxes, (y) Losses incurred or suffered
by such Interested Party that are proximately caused by (and attributed
by any applicable principles of comparative fault to) the Established
Misconduct of that Interested Party, or (z) Losses incurred or suffered
by Participants in connection with their negotiation or execution of the
Participation Agreement or Pledge Agreement (or supplements making them
parties thereto) or in connection with any due diligence they may
undertake before entering into the Participation Agreement or Pledge
Agreement. Further, without limiting BNPLC's rights (as provided in
other provisions of this Land Lease and other Operative Documents) to
include the following in the calculation of Stipulated Loss Value or the
Break Even Price or collect Base Rent, a Supplemental Payment and other
amounts, the calculation of which depends upon the Stipulated Loss Value
or the Break Even Price, BNPLC acknowledges and agrees that nothing in
subparagraph or the preceding subparagraphs of this Paragraph shall be
construed to require NAI to pay or reimburse an Interested Party for:
a) costs paid by BNPLC with the proceeds of the Initial
Funding Advance as part of the Transaction Expenses; or
b) Construction Advances made under (and as defined in) the
Construction Management Agreement or the Other Lease Agreement,
including costs and expenditures incurred or paid by or on
behalf of BNPLC after any
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Landlord's Election to Continue Construction under (and as
defined in) the Other Lease Agreement, to the extent that such
costs and expenditures are considered to be Construction
Advances pursuant to subparagraph 6(e) of the Lease Agreement.
Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in
subparagraph 5.(c)(i), then such Interested Party will be expected to
promptly furnish a copy of such notice to NAI. The failure to 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) [Intentionally Deleted.].
6. INTENTIONALLY DELETED.
7. INTENTIONALLY DELETED.
8. ENVIRONMENTAL.
(a) Environmental Covenants by NAI . NAI covenants that:
(i) NAI shall not conduct or permit others to conduct Hazardous
Substance Activities, except Permitted Hazardous Substance Use and
Remedial Work.
(ii) NAI shall not discharge or permit the discharge of anything on
or from the Property that would require any permit under applicable
Environmental Laws, other than (1) storm water runoff, (2) waste water
discharges through a publicly owned treatment works, (3) discharges that
are a necessary part of any Remedial Work, and (4) other similar
discharges consistent with the definition herein of Permitted Hazardous
Substance Use, in each case in strict compliance with Environmental
Laws.
(iii) Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions
of this Land Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict
compliance with Environmental Laws.
(iv) If requested by BNPLC in connection with any Remedial Work
required by this subparagraph, NAI shall retain independent
environmental consultants acceptable to BNPLC to evaluate any
significant new information generated during NAI's implementation of the
Remedial Work and to discuss with NAI whether such new information
indicates the need for any additional measures that NAI should take to
protect the health and safety of persons (including employees,
contractors and subcontractors and their employees) or to protect the
environment. NAI shall implement any such additional measures to the
extent required with respect to the Property by Environmental Laws or
otherwise believed by BNPLC to be reasonably required and to the extent
not inconsistent with the other provisions of this Land Lease.
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(b) Right of BNPLC to do Remedial Work Not Performed by NAI . If NAI's
failure to cure any breach of the covenants set forth in subparagraph 8.(a)
continues beyond the Environmental Cure Period (as defined below), BNPLC may, in
addition to any other remedies available to it, conduct all or any part of the
Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.
(c) Environmental Inspections and Reviews . BNPLC reserves the right to
retain environmental consultants to review any report prepared by NAI or to
conduct BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph . 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 , 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
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with the proposed date of submission), and in good faith assess and
consider any comments of BNPLC regarding the same. Promptly after
BNPLC's request, NAI shall meet with BNPLC to discuss the submission,
shall provide any additional information requested by BNPLC and shall
provide a written explanation to BNPLC addressing the issues raised by
comments (if any) of BNPLC regarding the submission, including a
reasoned analysis supporting any decision by NAI not to modify the
submission in accordance with comments of BNPLC.
9. INSURANCE REQUIRED AND CONDEMNATION.
(a) Liability Insurance . Throughout the Term NAI shall maintain commercial
general liability insurance against claims for bodily and personal injury, death
and property damage occurring in or upon or resulting from any occurrence in or
upon the Property under one or more insurance policies that satisfy the
requirements set forth in Exhibit . NAI shall deliver and maintain with BNPLC
for each liability insurance policy required by this Land Lease written
confirmation of the policy and the scope of the coverage provided thereby issued
by the applicable insurer or its authorized agent, which confirmation must also
satisfy the requirements set forth in Exhibit .
(b) Intentionally Deleted .
(c) Failure to Obtain Insurance . If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Land Lease, BNPLC
shall be entitled (but not required) to obtain the insurance that NAI has failed
to obtain or for which NAI has not provided the required confirmation and,
without limiting BNPLC's other remedies under the circumstances, BNPLC may
require NAI to reimburse BNPLC for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date such cost was paid
by BNPLC until the date of reimbursement by NAI (provided, however, that any
such insurance cost paid by BNPLC prior to the Base Rent Commencement Date will
be charged against the Construction Allowance under, and as defined in, the
Construction Management Agreement as if it had been paid by NAI).
(d) Condemnation . Immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Property or any portion thereof,
or any other similar governmental or quasi-governmental proceedings arising out
of injury or damage to the Property or any portion thereof, each party shall
notify the other (provided, however, BNPLC shall have no liability for its
failure to provide such notice) of the pendency of such proceedings. NAI shall,
at its expense, diligently prosecute any such proceedings and shall consult with
BNPLC, its attorneys and experts and cooperate with them as requested in the
carrying on or defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with respect to the Property
and all judgments, decrees and awards for injury or damage to the Property shall
be paid to BNPLC as Escrowed Proceeds, and all such proceeds will be applied as
provided in Paragraph 10. BNPLC is hereby authorized, in the name of NAI, at any
time when an Event of Default shall have occurred and be continuing, or
otherwise with NAI's prior consent, to execute and deliver valid acquittances
for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Property. BNPLC shall not be in any event or
circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.
(e) Waiver of Subrogation . NAI, for itself and for any Person claiming
through it (including any insurance company claiming by way of subrogation),
waives any and every claim which arises or may arise in its favor against BNPLC
or any other Interested Party and the officers, directors, and employees of the
Interested Parties for any and all Losses, to the extent that NAI is compensated
by insurance or would be compensated by the insurance policies contemplated in
this Land Lease, but for any deductible or self-insured retention maintained
under such insurance or but for a failure of NAI to maintain the insurance as
required by this Land Lease. NAI agrees to have such insurance policies properly
endorsed so as to make them valid notwithstanding this waiver, if such
endorsement is required to prevent a loss of insurance.
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10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.
(a) Collection and Application of Insurance and Condemnation Proceeds
Generally . This Paragraph shall govern the application of proceeds received by
BNPLC or NAI during the Term from any third party (1) as compensation for any
restriction placed upon the use or development of the Property or for the
condemnation of the Property or any portion thereof, or (2) because of any
judgment, decree or award for injury or damage to the Property (e.g., damage
resulting from a third party's release of Hazardous Materials onto the
Property); excluding, however, any funds paid to BNPLC by BNPLC's Parent, by an
Affiliate of BNPLC or by any Participant that is made to compensate BNPLC for
any Losses BNPLC may suffer or incur in connection with this Land Lease or the
Property. NAI will promptly pay over to BNPLC any insurance, condemnation or
other proceeds covered by this Paragraph 10 which NAI may receive from any
insurer, condemning authority or other third party. All proceeds covered by this
Paragraph 10, including those received by BNPLC from NAI or third parties, shall
be applied as follows:
(i) First, proceeds covered by this Paragraph 10 will be used to
reimburse BNPLC for any costs and expenses, including Attorneys' Fees,
that BNPLC incurred to collect the proceeds.
(ii) Second, the proceeds remaining after such reimbursement to BNPLC
(hereinafter, the "REMAINING PROCEEDS") will be applied, as hereinafter
more particularly provided, either as a Qualified Prepayment or to
reimburse NAI or BNPLC for the actual out-of-pocket costs of repairing
or restoring the Property. Until, however, any Remaining Proceeds
received by BNPLC are applied by BNPLC as a Qualified Prepayment or
applied by BNPLC to reimburse costs of 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 , BNPLC shall advance all Remaining Proceeds held by it
as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to NAI
of repairing or restoring the Property in accordance with the requirements of
this Land Lease and the other Operative Documents as the applicable repair or
restoration progresses and upon compliance by NAI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC. In no event, however,
shall BNPLC be required to pay Escrowed Proceeds to NAI in excess of the actual
out-of-pocket cost to NAI of the applicable repair or restoration, as evidenced
by invoices or other documentation satisfactory to BNPLC, it being understood
that BNPLC may retain and apply any such excess as a Qualified Prepayment.
(c) Application of Escrowed Proceeds as a Qualified Prepayment . Provided no
Event of Default shall have occurred and be continuing, BNPLC shall apply any
Remaining Proceeds paid to it (or other amounts available for application as a
Qualified Prepayment) as a Qualified Prepayment on any date that BNPLC is
directed to do so by a notice from NAI; however, if such a notice from NAI
specifies an effective date for a Qualified Prepayment that is less than five
Business Days after BNPLC's actual receipt of the notice, BNPLC may postpone the
date of the Qualified Prepayment to any date not later than five Business Days
after BNPLC's receipt of the notice. In any event, except when BNPLC is required
by the preceding sentence to apply Remaining Proceeds or other amounts as a
Qualified Prepayment on an Advance Date or Base Rent Date, BNPLC may deduct
Breakage Costs incurred in connection with any Qualified Prepayment from the
Remaining Proceeds or other amounts available for application as the Qualified
Prepayment, and NAI will reimburse BNPLC upon request for any such Breakage
Costs that BNPLC incurs but does not deduct.
(d) Special Provisions Applicable After an Event of Default .
Notwithstanding the foregoing, when any Event of Default shall have occurred and
be continuing, BNPLC shall be entitled to receive and collect all insurance,
condemnation or other proceeds governed by this Paragraph 10 and to apply all
Remaining Proceeds, when and to the extent deemed
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appropriate by BNPLC in its sole discretion, either (A) to the reimbursement of
NAI or BNPLC for the out-of-pocket cost of repairing or restoring the Property,
or (B) as Qualified Prepayments.
(e) NAI's Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, and notwithstanding other
provisions of this Land Lease to the contrary, if the Property is damaged or
less than all or substantially all of the Property is taken by condemnation, NAI
must:
A) increase the value of the Property or the remainder
thereof by restoring the same (in a manner consistent with the
requirements and limitations imposed by this Land Lease and the
other Operative Documents or otherwise acceptable to BNPLC), or
decrease Stipulated Loss Value by tendering a payment to BNPLC
for application as a Qualified Prepayment, as necessary to cause
Current AS IS Market Value to be not less than sixty percent
(60%) of Stipulated Loss Value; and
B) restore the Property or the remainder thereof to a
reasonably safe and sightly condition.
(f) Takings of All or Substantially All of the Property on or after the Base
Rent Commencement Date. In the event of any taking of all or substantially all
of the Property on or after the Base Rent Commencement Date, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such condemnation, then BNPLC shall be
entitled to recover the excess from NAI upon demand as an additional Qualified
Prepayment, whereupon this Land Lease shall terminate. Any taking of so much of
the Real Property as, in BNPLC's reasonable good faith judgment, makes it
impracticable to restore or improve the remainder thereof as required by part
(2) of the preceding subparagraph shall be considered a taking of substantially
all the Property for purposes of this Paragraph 10.
11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING
THE PROPERTY. NAI represents, warrants and covenants as follows:
(a) Compliance with Covenants and Laws. The use of the Property
permitted by this Land Lease complies, or will comply after NAI obtains
available permits as the tenant under this Land Lease, in all material respects
with all Applicable Laws. NAI has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for any
construction upon or use of the Property permitted by this Land Lease.
(b) Operation of the Property. During the Term, NAI shall operate the
Property in a good and workmanlike manner and substantially in compliance with
all Applicable Laws and will pay or cause to be paid all fees or charges of any
kind in connection therewith. (If NAI does not promptly correct any failure of
the Property to comply with Applicable Laws that is the subject of a written
notice given to NAI or BNPLC by any governmental authority, then for purposes of
the preceding sentence, NAI shall be considered not to have maintained the
Property "substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under (and as defined in) the Construction
Management Agreement or materially and adversely affect the value of the
Property or NAI's use, occupancy or operations on the Property, NAI shall not,
without BNPLC's prior consent: (i) initiate or permit any zoning
reclassification of the Property; (ii) seek any variance under existing zoning
ordinances applicable to the Property; (iii) use or permit the use of the
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations; (iv)
execute or file any subdivision plat affecting the Property; or (v) consent to
the annexation of the Property to any municipality. If (A) a change in the
zoning or
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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 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. NAI shall
not, without the prior consent of BNPLC, make material new Improvements or alter
Improvements in any material respect, except as part of the work performed in
accordance with the Construction Management Agreement. Without limiting the
foregoing, NAI will notify BNPLC before making any significant alterations to
the Improvements after the completion of the Construction Project. Nothing in
this subparagraph, however, is intended to limit NAI's rights and obligations
under other express provisions of the Other Lease Agreement and the Construction
Management Agreement with respect to the Construction Project.
(e) Permitted Encumbrances and Development Documents . NAI shall during the
Term comply with and will cause to be performed all of the covenants, agreements
and obligations imposed upon the owner of any interest in the Property by the
Permitted Encumbrances or the Development Documents. Without limiting the
foregoing, NAI shall cause all amounts to be paid when due, the payment of which
is secured by any Lien against the Property created by the Permitted
Encumbrances. Without the prior consent of BNPLC, NAI shall not enter into,
initiate, approve or consent to any modification of any Permitted Encumbrance or
Development Document that would create or expand or purport to create or expand
obligations or restrictions which would encumber BNPLC's interest in the
Property. (Whether BNPLC must give any such consent requested by NAI during the
Term of this Land Lease shall be governed by subparagraph 3(A) of the Closing
Certificate and Agreement.)
(f) Books and Records Concerning the Property . NAI shall keep books and
records that are accurate and complete in all material respects for the Property
and, subject to Paragraph 16.(c), will permit all such books and records to be
inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.
12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1.
Throughout the Term of this Land Lease, NAI shall comply with the
requirements of Schedule 1 attached hereto.
13. FINANCIAL STATEMENTS AND OTHER REPORTS.
(a) Financial Statements; Required Notices; Certificates . Throughout the
Term of this Land Lease, NAI shall deliver to BNPLC and to each Participant:
(i) as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of NAI, a consolidated balance
sheet of NAI and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash
flows of NAI and its Consolidated Subsidiaries for such fiscal year, all
in reasonable detail and all prepared in accordance with GAAP and
accompanied by a report and opinion of accountants of national standing
selected by NAI, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be
subject to any qualifications or exceptions as to the scope of the audit
nor to any qualification or exception which BNPLC determines, in BNPLC's
reasonable discretion, is unacceptable;
(ii) as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of NAI,
the consolidated balance sheet of NAI and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and
the consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable
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detail and all prepared in accordance with GAAP and certified by the
chief financial officer or controller of NAI (subject to year-end
adjustments);
(iii) together with the financial statements furnished in accordance
with subparagraph 13.(a)(i) and 13.(a)(ii), a certificate of the chief
financial officer or controller of NAI: (i) certifying that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a brief statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, (ii)
certifying that the representations of NAI set forth in the Operative
Documents are true and correct in all material respects as of the date
thereof as though made on and as of the date thereof or, if not then
true and correct, a brief statement as to why such representations are
no longer true and correct, and (iii) with computations demonstrating
compliance with the financial covenants contained in Schedule 1;
(iv) within five days after the end of each calendar month, a
certificate of the chief financial officer or controller of NAI
certifying that at the end of the preceding calendar month, NAI had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;
(v) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which NAI sends to
NAI's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which NAI files
with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange;
(vi) upon request by BNPLC, a statement in writing certifying that
the Operative Documents are unmodified and in full effect (or, if there
have been modifications, that the Operative Documents are in full effect
as modified, and setting forth such modifications) and the dates to
which the Base Rent has been paid and either stating that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default
under this Land Lease has occurred and is continuing, a brief statement
as to the nature thereof; it being intended that any such statement by
NAI may be relied upon by any prospective purchaser or mortgagee of the
Property and by the Participants
(vii) as soon as possible after, and in any event within ten days
after NAI becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to NAI relating
thereto is $500,000 or more, a notice signed by a senior financial
officer of NAI setting forth details of the following and the response,
if any, which NAI or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by NAI or an ERISA Affiliate with respect to any of the
following or the events or conditions leading up to the following): (A)
the assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of NAI, against the assets of any Plan or
Multiemployer Plan or against any interest of BNPLC or NAI in the
Property, or (B) the taking of any action by the PBGC or any other
governmental authority against NAI to terminate any Plan of NAI or any
ERISA Affiliate of NAI or to cause the appointment of a trustee or
receiver to administer any such Plan ; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of NAI, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC may from time to time
reasonably request.
BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.
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14. ASSIGNMENT AND SUBLETTING BY NAI.
(a) BNPLC's Consent Required . Without the prior consent of BNPLC, NAI shall
not assign, transfer, mortgage, pledge or hypothecate this Land Lease or any
interest of NAI hereunder and shall not sublet all or any part of the Property,
by operation of law or otherwise; provided, that this provision will not be
construed to prohibit any sublease of space within Improvements expressly
permitted by the Other Lease Agreement.
(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 Land Lease.
(c) Consent Not a Waiver . No consent by BNPLC to a sale, assignment,
transfer, mortgage, pledge or hypothecation of this Land Lease or NAI's interest
hereunder, and no assignment or subletting of the Property or any part thereof
in accordance with this Land Lease or otherwise with BNPLC's consent, shall
release NAI from liability hereunder; and any such consent shall apply only to
the specific transaction thereby authorized and shall not relieve NAI from any
requirement of obtaining the prior consent of BNPLC to any further sale,
assignment, transfer, mortgage, pledge or hypothecation of this Land Lease or
any interest of NAI hereunder.
15. ASSIGNMENT BY BNPLC.
(a) Restrictions on Transfers . Except by a Permitted Transfer, BNPLC shall
not assign, transfer, mortgage, pledge, encumber or hypothecate this Land Lease
or the other Operative Documents or any interest of BNPLC in and to the Property
during the Term without the prior consent of NAI, which consent NAI may withhold
in its sole discretion. Further, notwithstanding anything to the contrary herein
contained, if withholding taxes are imposed on the rents and other amounts
payable to BNPLC hereunder because of BNPLC's assignment of this Land Lease to
any citizen of, or any corporation or other entity formed under the laws of, a
country other than the United States, NAI shall not be required to compensate
BNPLC or any such assignee for the withholding tax. If, in breach of this
subparagraph, BNPLC transfer the Property or any part thereof by a conveyance or
that does not constitute a Permitted Transfer, with the result that additional
transfer taxes or other Impositions are assessed against the Property or the
owner thereof, BNPLC shall be required to pay such additional transfer taxes or
other Impositions.
(b) Effect of Permitted Transfer or other Assignment by BNPLC . If, without
breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the Property
and assigns all of its rights under this Land Lease and the other Operative
Documents, then BNPLC shall thereby be released from any obligations arising
after such assumption under this Land Lease or the other Operative Documents,
and NAI shall look solely to each successor in interest of BNPLC for performance
of such obligations.
16. BNPLC'S RIGHT OF ACCESS.
(a) During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraph 16.(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Land Lease or the other Operative Documents.
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(b) If NAI fails to perform any act or to take any action required of it by
this Land Lease or the Closing Certificate, or to pay any money which NAI is
required by this Land Lease or the Closing Certificate to pay, and if such
failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Land Lease NAI may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of NAI's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to NAI or the subtenants or invitees of NAI by reason of making
such repairs or the performance of any such work on or in the Property, or on
account of bringing materials, supplies and equipment into or through the
Property during the course of such work (except for any liability in excess of
the liability insurance limits established in Exhibit resulting from death or
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of NAI under this Land Lease shall not thereby
be excused in any manner.
(c) NAI shall have no obligation to provide proprietary information (as
defined in the next sentence) to BNPLC, except and to the extent that (1) BNPLC
reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Land Lease and the other Operative Documents
without evaluating such information. For purposes of this Land Lease
"PROPRIETARY INFORMATION" includes NAI's intellectual property, trade secrets
and other confidential information of value to NAI about, among other things,
NAI's manufacturing processes, products, marketing and corporate strategies, but
in no event will "proprietary information" include any disclosure of substances
and materials (and their chemical composition) which are or previously have been
present in, on or under the Property at the time of any inspections by BNPLC,
nor will "proprietary information" include any additional disclosures reasonably
required to permit BNPLC to determine whether the presence of such substances
and materials has constituted a violation of Environmental Laws. In addition,
under no circumstances shall NAI have any obligation to disclose to BNPLC or any
other party any proprietary information of NAI (including, without limitation,
any pending applications for patents or trademarks, any research and design and
any trade secrets) except if and to the limited extent reasonably necessary to
comply with the express provisions of this Land Lease or the other Operative
Documents.
17. EVENTS OF DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" by NAI under this Land Lease:
(a) NAI shall fail to pay when due any installment of Rent due hereunder and
such failure shall continue for three (3) Business Days after NAI is notified in
writing thereof.
(b) NAI shall fail to cause any representation or warranty of NAI contained
herein or in the Closing Certificate that was false or misleading in any
material respect when made to be made true and not misleading (other than as
described in the other clauses of this Paragraph 17), or NAI shall fail to
comply with any term, provision or covenant of this Land Lease or the Closing
Certificate (other 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
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be necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI shall promptly have commenced to cure
such failure and shall thereafter continuously prosecute the curing thereof with
reasonable diligence and (z) the extension of the period for cure will not, in
any event, cause the period for cure to extend beyond five days prior to the
expiration of this Land Lease.
(c) NAI shall abandon the Property.
(d) NAI or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of NAI described in the next sentence
when due (taking into consideration the time NAI may have to cure such failure,
if any, under the documents governing such Debt). As used in this clause
14(a)(v), "DEBT" shall include only Debt (as defined in the Common Definitions
and Provisions Agreement (Phase II - Land)) of NAI or any of its Subsidiaries
now existing or arising in the future (a) payable to BNPLC or any Affiliate of
BNPLC, or (B) payable to any other Person and with respect to which $3,000,000
or more is actually due and payable because of acceleration or otherwise.
(e) NAI: (a) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have had any such petition or application
filed against it; or (e) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty days or more.
(f) One or more final judgments, decrees or orders for the payment of money
in excess of $3,000,000 in the aggregate shall be rendered against NAI and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty consecutive days without NAI's having obtained an agreement (or
after the expiration or termination of an agreement) of the Persons entitled to
enforce such judgment, decrees or orders not to enforce the same pending
negotiations with NAI concerning the satisfaction or other discharge of the
same.
(g) NAI shall breach the requirements of Paragraph 12, which by reference to
Schedule 1 establishes certain financial covenants and other requirements.
(h) as of the effective date of this Land Lease, any of the representations
or warranties of NAI contained in subparagraphs 2(A) - (J) of the Closing
Certificate shall be false or misleading in any material respect.
(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:
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(i) By notice to NAI, BNPLC may terminate NAI's right to possession
of the Property. A notice given in connection with unlawful detainer
proceedings specifying a time within which to cure a default shall
terminate NAI's right to possession if NAI fails to cure the default
within the time specified in the notice.
(ii) Upon termination of NAI's right to possession and without
further demand or notice, BNPLC may re-enter the Property in any manner
not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land may
be removed and stored in a warehouse or elsewhere at the expense and
risk of and for the account of NAI.
(iii) Upon termination of NAI's right to possession, this Land Lease
shall terminate and BNPLC may recover from NAI:
a) The worth at the time of award of the unpaid Rent which
had been earned at the time of termination;
b) The worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss
that NAI proves could have been reasonably avoided;
c) The worth at the time of award of the amount by which
the unpaid Rent for the balance of the scheduled Term after the
time of award exceeds the amount of such rental loss that NAI
proves could be reasonably avoided; and
d) Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by NAI's failure to perform
NAI's obligations under this Land Lease or which in the ordinary
course of things would be likely to result therefrom, including
the costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of the
Property, removing persons or property therefrom, placing the
Property in good order, condition, and repair, preparing and
altering the Property for reletting, all other costs and
expenses of reletting, and any loss incurred by BNPLC as a
result of NAI's failure to perform NAI's obligations under the
other Operative Documents.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall
be computed by allowing interest at the Default Rate. The "WORTH
AT THE TIME OF AWARD" of the amount referred to in subparagraph
18.(a)(iii)c) shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable
California law.
(iv) BNPLC shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in force even after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable limitations).
Accordingly, even if NAI has breached this Land Lease and abandoned the
Property, this Land Lease shall continue in effect for so long as BNPLC
does not terminate NAI's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Land Lease, including the
right to recover the Rent as it becomes due under this Land Lease. NAI's
right to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 18.(a)(i) hereof. The following shall
not constitute a termination of NAI's right to possession:
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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 Land Lease; or
c) Reasonable withholding of consent to an assignment or
subletting, or terminating a subletting or assignment by NAI.
(b) Notice Required So Long As the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Continue Under the Purchase Agreement . So
long as NAI remains in possession of the Property and there has been no
termination of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations as provided Paragraph 4 of the Purchase Agreement, BNPLC's right to
exercise remedies provided in subparagraph 18.(a) will be subject to the
condition precedent that BNPLC shall have notified NAI, at a time when an Event
of Default shall have occurred and be continuing, of BNPLC's intent to exercise
remedies provided in subparagraph 18.(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing Rights
and Obligations before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPLC may proceed immediately to exercise remedies provided in subparagraph
18.(a) at any time after the earlier of (i) sixty days after BNPLC has given
such a notice to NAI, (ii) any date upon which NAI relinquishes possession of
the Property, or (iii) any termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.
(c) Enforceability . This Paragraph shall be enforceable to the maximum
extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.
(d) Remedies Cumulative . No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy shall be cumulative and in addition to any
other right or remedy given to BNPLC hereunder or now or hereafter existing in
favor of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Land Lease, BNPLC shall be entitled, to the extent permitted by
Applicable Law or in equity, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Land Lease, or to a decree compelling
performance of any of the other covenants, agreements, conditions or provisions
of this Land Lease to be performed by NAI, or to any other remedy allowed to
BNPLC at law or in equity. Nothing contained in this Land Lease shall limit or
prejudice the right of BNPLC to prove for and obtain in proceedings for
bankruptcy or insolvency of NAI by reason of the termination of this Land Lease,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the generality of the
foregoing, nothing contained herein shall modify, limit or impair any of the
rights and remedies of BNPLC under the Purchase Documents, and BNPLC shall not
be required to give the sixty day notice described in subparagraph 18.(b) as a
condition precedent to any acceleration of the Designated Sale Date or to taking
any action to enforce the Purchase Documents.
19. DEFAULT BY BNPLC. If BNPLC should default in the performance of any of
its obligations under this Land Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.
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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 Land Lease, to Permitted
Encumbrances, to Development Documents and to any other claims not constituting
Liens Removable by BNPLC. If any Lien Removable by BNPLC is claimed against the
Property, BNPLC will remove the Lien Removable by BNPLC promptly. Any breach by
BNPLC of this Paragraph shall render BNPLC liable to NAI for any monetary
damages proximately caused thereby, but as more specifically provided in
subparagraph 4.(b) above, no such breach shall entitle NAI to terminate this
Land Lease or excuse NAI from its obligation to pay Rent.
21. SURRENDER UPON TERMINATION. Unless NAI or an Applicable Purchaser
purchases or has purchased BNPLC's entire interest in the Property pursuant to
the terms of the Purchase Agreement and BNPLC's entire interest in the
Improvements and other "Property" under (and as defined in) the Other Purchase
Agreement, NAI shall, upon the termination of NAI's right to occupancy,
surrender to BNPLC the Property, including Improvements constructed by NAI and
fixtures and furnishings included in the Property, free of all Hazardous
Substances (including Permitted Hazardous Substances) and tenancies and with all
Improvements in substantially the same condition as of the date the same were
initially completed, excepting only (i) ordinary wear and tear that occurs
between the maintenance, repairs and replacements required by other provisions
of this Land Lease or the Other Lease Agreement, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this
Land Lease or the Other Lease Agreement and which have been completed by NAI in
a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to NAI or any party
claiming under NAI, if not removed at the time of such termination and if BNPLC
shall so elect, shall be deemed abandoned and become the property of BNPLC
without any payment or offset therefor. If BNPLC shall not so elect, BNPLC may
remove such property from the Property and store it at NAI's risk and expense.
22. HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title and
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Land Lease without
BNPLC's consent, whether such termination occurs by lapse of time or otherwise,
such holding over shall constitute and be construed as a tenancy from day to day
only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the day in
question, times (ii) the Default Rate for such day; divided by (iii) three
hundred and sixty; subject, however, to all of the terms, provisions, covenants
and agreements on the part of NAI hereunder. No payments of money by NAI to
BNPLC after the termination of this Land Lease shall reinstate, continue or
extend the Term of this Land Lease and no extension of this Land Lease after the
termination thereof shall be valid unless and until the same shall be reduced to
writing and signed by both BNPLC and NAI.
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS. NAI
acknowledges and agrees that nothing contained in this Land Lease shall limit,
modify or otherwise affect any of NAI's obligations under the other Operative
Documents, which obligations are intended to be separate, independent and in
addition to, and not in lieu of, the obligations set forth herein. In the event
of any inconsistency between the express terms and provisions of the Purchase
Documents and the express terms and provisions of this Land Lease, the express
terms and provisions of the Purchase Documents shall control. In the event of
any inconsistency between the express terms and provisions of the Closing
Certificate and the express terms and provisions of this Land Lease, the express
terms and provisions of this Land Lease shall control; provided, nothing herein
will limit or impair NAI's obligations under the Closing Certificate following
any expiration of termination of this Land Lease.
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[The signature pages follow.]
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IN WITNESS WHEREOF, NAI and BNPLC have caused this Land Lease Agreement
to be executed as of [EFFECTIVE DATE].
"NAI"
NETWORK APPLIANCE, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
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[Continuation of signature pages to Lease Agreement dated to be effective
[EFFECTIVE DATE]]
"BNPLC"
BNP LEASING CORPORATION
By:______________________________________
Henry Setina, Vice President
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Exhibit A
LEGAL DESCRIPTION
The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:
PARCEL ONE:
All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.
Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:
Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14(degrees) 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38(degrees)
52' 02" East 134.85 feet; thence North 51(degrees) 07' 58" West 49.68; thence
North 38(degrees) 52' 02" East 87.23 feet to the Northerly line of last said
Parcel A; thence along said Northerly line North 75(degrees) 07' 58" West 44.97
feet to the point of beginning.
Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:
Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:
Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14E 51' 33" West 186.10 feet to a point on the Northeasterly line of that parcel
of land described in the deed to Santa Clara Valley Transit District, recorded
October 24, 1997 as Instrument No. 13912192, Official Records in said Office of
the Recorder of the County of Santa Clara, said point being on a non-tangent
curve concave Southwesterly and having a radius of 1002.05 feet, a radial line
through said point bears North 45(degrees) 01' 56" East; thence Northwesterly
along said Northeasterly line and along said curve through a central angle of
04(degrees) 20' 28" an arc length of 75.92 feet; thence leaving said
Northeasterly line non-tangent from last said curve North 38(degrees) 52' 02"
East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.
PARCEL TWO:
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Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.
Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.
PARCEL THREE:
A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:
Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:
Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.
Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45E
01' 56" East, through a central angle of 4E 20' 28" for an arc length of 75.92
feet to the true point of beginning; thence North 38E 52' 02" East 82.92 feet;
thence Southeasterly along a non-tangent curve to the left with a radius of
78.00 feet, from which a radial line bears South 38E 52' 02" West, through a
central angle of 28E 09' 05" for an arc length of 38.32 feet; thence North 38E
52' 02" East 177.73 feet; thence Northwesterly along a curve to the left with a
radius of 17.00 feet through a central angle of 90E 00' 00" for an arc length of
26.70 feet; thence North 51E 07' 58" West 19.80 feet; thence the following three
courses: North 38E 52' 02" East 12.69 feet North 51E 07' 58" West 49.68 feet;
North 38E 52' 02" East 87.23 feet to the Northeasterly line of said Parcel A, as
shown upon that certain Parcel Map filed for record in Book 216 at Page 2;
thence South 75E 07' 58" East 13.45 feet along said Northeasterly line; thence
South 38E 52' 02" West 74.94 feet; thence Southerly along a non-tangent curve to
the left with a radius of 14.00 feet, from which a radial line bears North 88E
46' 22" West, through a central angle of 52E 21' 36" for an arc length of 12.79
feet; thence South 51E 07' 58" East 85.87 feet; thence South 38E 52' 02" West
252.96 feet; North 51E 07' 58" West 41.72 feet; thence Southwesterly along a
non-tangent curve to the left with a radius of 20.00 feet, from which a radial
line bears North 10E 35' 40" West, through a central angle of 40E 32' 18" for an
arc length of 14.15 feet; thence South 38E 52' 02" West 29.48 feet; thence
Southerly along a tangent curve to the left with a radius of 20.00 feet, through
a central angle of 60E 45' 15" for an arc length 21.21 feet to a point on
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said Northeasterly line of said parcel of land described in the deed to Santa
Clara Valley Transit District; thence Northwesterly along said Northeasterly
line along a non-tangent curve to the left with a radius of 1002.05 feet, from
which a radial line bears North 42E 01' 23" East, through a central angle of 1E
19' 55" for an arc length of 23.29 feet to the True Point of Beginning.
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Exhibit B
INSURANCE REQUIREMENTS
I. LIABILITY INSURANCE:
A. NAI must maintain commercial general liability ("CGL") insurance
on an occurrence basis, affording immediate protection to the limit of not less
than $20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Land Lease (though such coverage or the
amount thereof shall in no way limit such indemnifications).
B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election under (and as defined in) the
Other Lease Agreement, or shall have previously exercised an Issue 97-10
Election. After the expiration of NAI's right to exercise any Issue 97-10
Election, and provided no Issue 97-10 Election has been exercised by NAI, NAI
may increase any deductible or self-insured retention applicable to such
insurance, but not to an amount in excess of $500,000.
C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Land Lease, and the insurance company
or companies providing the CGL insurance, must be acceptable to BNPLC. BNPLC
shall have the right from time to time and at any time to review and approve
such policy forms (including endorsements) and the insurance company or
companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until NAI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:
(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 II - Land) between Network
Appliance, Inc. and BNP Leasing Corporation dated [EFFECTIVE
DATE])";
(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 II - Land) between
Network Appliance, Inc. and BNP Leasing Corporation dated
[EFFECTIVE DATE])"; and
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(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. INTENTIONALLY DELETED.
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by NAI of claims against
NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.
B. Intentionally Deleted.
C. NAI's CGL insurance must be evidenced by ACORD form 25
"Certificate of Insurance" completed and interlineated in a manner satisfactory
to BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the CGL insurance must be attached to such form.
D. Such evidence of required insurance must be delivered upon
execution of this Land Lease and new certificate or evidence of insurance must
be delivered no later than 10 days prior to expiration of existing policy.
E. NAI shall not cancel, fail to renew, or make or permit any
material reduction in any of the policies or certificates described in this
Exhibit without the prior written consent of BNPLC. The certificates (ACORD
forms 25) described in this Exhibit must contain the following express
provision:
"This is to certify that the policies of insurance described herein have
been issued to the insured Network Appliance, Inc. for whom this certificate is
executed and are in force at this time. In the event of cancellation,
non-renewal, or material reduction in coverage affecting the certificate holder,
at least sixty days prior notice shall be given to the certificate holder."
F. The limits of liability under the liability insurance required
by this Land Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.
G. NAI shall provide copies, certified as complete and correct by
an authorized agent of the applicable insurer, of all insurance policies
required by this Exhibit within ten days after receipt of a request for such
copies from BNPLC.
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Exhibit C
NOTICE OF LIBOR PERIOD ELECTION
BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Re: Lease Agreement (Phase III - Improvements) and Lease Agreement
(Phase III Land), both dated as of [EFFECTIVE DATE], 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 ______________, 19___.
Network Appliance, Inc.
Name:____________________________________
Title:___________________________________
[cc all Participants]
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Schedule 1
FINANCIAL COVENANTS
This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase III - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of [EFFECTIVE DATE] (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase III - 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 III - 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 III - Land) (collectively with the Pledge Agreement
(Improvements), the "PLEDGE AGREEMENTS") dated to be effective as of the
Effective Date, among BNPLC, NAI, and Banque Nationale de Paris, as a
Participant and as agent for any financial institutions that become Participants
thereunder from time to time.
PART I - DEFINED TERMS
In this Schedule 1, capitalized terms used but not defined herein shall
have the meaning assigned to them in the Leases or the Common Definitions and
Provisions Agreements referenced in the Leases; and the following capitalized
terms shall have the following meanings:
"ADJUSTED NET INCOME" means, for any fiscal period of NAI, the aggregate net
income earned (or net losses incurred) during such period by NAI and its
Subsidiaries (determined on a consolidated basis), plus any Permitted Non-Cash
Charges deducted in determining such net income (or net loss).
"ADJUSTED EBIT" means, for any accounting period, net income (or net loss) of
NAI and its Subsidiaries (determined on a consolidated basis), plus the amounts
(if any) which, in the determination of net income (or net loss) for such
period, have been deducted for (a) interest expense, (b) income tax expense (c)
rent expense under leases of property, and (d) Permitted Non-Cash Charges.
"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and the earlier of
the following dates after each fiscal quarter of NAI that ends after the Base
Rent Commencement Date: (1) the seventh Business Day after the release by NAI of
its financial statements for the fiscal quarter; or (2) the first Business Day
of the third calendar month following the end of the fiscal quarter.
"CONSOLIDATED TANGIBLE NET WORTH" means the excess of (1) the total assets,
other than Intangible Assets, of NAI and its Subsidiaries (determined on a
consolidated basis) over (2) the total liabilities of NAI and its Subsidiaries
(determined on a consolidated basis).
"DEBT" as used in this Exhibit shall have the meaning assigned to it in the
Common Definitions and Provisions Agreements, where "Debt" of any Person is
defined to mean (without duplication of any item): (a) indebtedness of such
Person for borrowed money; (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 credits 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
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Affiliates must purchase or cause another Person to purchase any interest in the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor. For purposes of this definition, the amount of the
obligations described in clause (h) of the preceding sentence with respect to
any lease classified according to GAAP as an "operating lease," shall equal the
sum of (1) the present value of rentals and other minimum lease payments
required in connection with such lease [calculated in accordance with SFAS 13
and other GAAP relevant to the determination of the whether such lease must be
accounted for as an operating lease or capital lease], plus (2) the fair value
of the property covered by the lease; provided, however, that such amount shall
not exceed the price, as of the date a determination of Debt is required
hereunder, for which the lessee can purchase the leased property pursuant to any
valid ongoing purchase option if, upon such a purchase, the lessee shall be
excused from paying rentals or other minimum lease payments that would otherwise
accrue after the purchase.
"FIXED CHARGES" means, for any accounting period, the sum (without duplication
of any item) of the following charges or costs incurred or paid by NAI and its
Subsidiaries (determined on a consolidated basis): (a) gross interest expense,
plus (b) amortization of principal or debt discount in respect of all Debt
during such period, plus (c) rent payable under all leases of property during
such period, plus (d) taxes payable during such period.
"INTANGIBLE ASSETS" means assets of NAI and its Subsidiaries (determined on a
consolidated basis) that are properly classified as "INTANGIBLE ASSETS" in
accordance with GAAP and, in any event, shall include goodwill, patents, trade
names, trademarks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, and deferred charges (other than
prepaid insurance, prepaid taxes and current deferred taxes to the extent any
such prepaid or deferred items are classified on the balance sheet of NAI and
its consolidated Subsidiaries as current assets in accordance with GAAP and with
the concurrence of NAI's independent public accountants).
"MANDATORY COLLATERAL PERIOD" means any period during which, notwithstanding any
contrary designation of a Collateral Percentage by NAI under the Pledge
Agreements, the Collateral Percentage for purposes of the Pledge Agreements
shall be one hundred percent (100%), determined as set forth in Part III of this
Schedule 1.
"PERMITTED NON-CASH CHARGES" means the amounts (if any) which, in the
determination of net income (or net loss) for any relevant fiscal period, have
been deducted by NAI or its Subsidiaries for non-cash charges made to write down
goodwill or research and development costs in connection with acquisitions
permitted by this Schedule 1.
"QUICK RATIO" means the ratio of:
(A) the sum (without duplication of any item) of the following
assets of NAI and its Subsidiaries (determined on a consolidated basis):
Collateral delivered and pledged under the Pledge Agreements in
accordance with the requirements thereof (if any); plus unencumbered
cash; plus unencumbered short term cash investments; plus other
unencumbered marketable securities which are classified as short term
investments in accordance with GAAP; plus unencumbered accounts
receivable, computed net of reserves for uncollectible amounts as
determined in accordance with GAAP, to
(B) the sum (without duplication of any item) of (1) all
liabilities of NAI and its Subsidiaries (determined on a consolidated
basis) treated as current liabilities in accordance with GAAP, plus (2)
other obligations included in total Debt of NAI and its Subsidiaries
(determined on a consolidated basis), the payment of which is due on
demand or will become due within one year after the date on which the
applicable determination of Quick Ratio is required hereunder.
"ROLLING FOUR QUARTER PERIOD" means a period of four consecutive fiscal quarters
of NAI, the last of which quarters ends after December 31, 1999.
2
41
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
42
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 both:
(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; and
(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
43
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 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.
5
44
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
45
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE III - LAND)
BETWEEN
BNP LEASING CORPORATION
AND
NETWORK APPLIANCE, INC.
DATED AS OF [EFFECTIVE DATE]
46
TABLE OF CONTENTS
Page
----
ARTICLE I - LIST OF DEFINED TERMS:
ACTIVE NEGLIGENCE ........................................................................... 1
ADDITIONAL RENT ............................................................................. 1
ADJUSTED EBIT ............................................................................... 1
ADVANCE DATE ................................................................................ 2
AFFILIATE ................................................................................... 2
APPLICABLE LAWS ............................................................................. 2
APPLICABLE PURCHASER ........................................................................ 2
ATTORNEYS' FEES ............................................................................. 2
BANKING RULES CHANGE ........................................................................ 2
BASE RATE ................................................................................... 2
BASE RENT ................................................................................... 2
BASE RENT COMMENCEMENT DATE.................................................................. 2
BASE RENT DATE .............................................................................. 3
BASE RENT PERIOD ............................................................................ 3
BNPLC ....................................................................................... 4
BNPLC'S PARENT .............................................................................. 4
BREAKAGE COSTS .............................................................................. 4
BREAK EVEN PRICE ............................................................................ 4
BUSINESS DAY ................................................................................ 4
CAPITAL ADEQUACY CHARGES..................................................................... 4
CAPITAL LEASE ............................................................................... 5
CLOSING CERTIFICATE ......................................................................... 5
CODE ........................................................................................ 5
COLLATERAL .................................................................................. 5
COLLATERAL PERCENTAGE........................................................................ 5
COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND)................................ 5
CONSTRUCTION MANAGEMENT AGREEMENT............................................................ 5
CONSTRUCTION PROJECT ........................................................................ 5
CURRENT AS IS MARKET VALUE................................................................... 5
DEBT ........................................................................................ 6
DEFAULT ..................................................................................... 7
DEFAULT RATE ................................................................................ 7
DEFAULTING PARTICIPANT....................................................................... 7
DEPOSIT TAKER ............................................................................... 7
DEPOSIT TAKER LOSSES ........................................................................ 7
DESIGNATED SALE DATE ........................................................................ 7
DEVELOPMENT DOCUMENTS........................................................................ 7
DIRECT PAYMENTS TO PARTICIPANTS.............................................................. 8
EFFECTIVE DATE .............................................................................. 8
EFFECTIVE RATE .............................................................................. 8
ENVIRONMENTAL LAWS .......................................................................... 8
47
Page
----
ENVIRONMENTAL CUTOFF DATE.................................................................... 8
ENVIRONMENTAL LOSSES ........................................................................ 8
ENVIRONMENTAL REPORTS........................................................................ 9
ERISA ....................................................................................... 9
ERISA AFFILIATE ............................................................................. 9
ESCROWED PROCEEDS ........................................................................... 9
ESTABLISHED MISCONDUCT...................................................................... 10
EUROCURRENCY LIABILITIES.................................................................... 10
EURODOLLAR RATE RESERVE PERCENTAGE.......................................................... 10
EVENT OF DEFAULT ........................................................................... 10
EXCLUDED TAXES ............................................................................. 10
EXISTING CONTRACTS ......................................................................... 11
FAILED COLLATERAL TEST DATE................................................................. 11
FED FUNDS RATE ............................................................................. 11
GAAP ....................................................................................... 11
HAZARDOUS SUBSTANCE ........................................................................ 11
HAZARDOUS SUBSTANCE ACTIVITY................................................................ 11
IMPOSITIONS ................................................................................ 12
IMPROVEMENTS ............................................................................... 12
INITIAL FUNDING ADVANCE..................................................................... 12
INTERESTED PARTY ........................................................................... 12
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT.............................. 12
LAND ....................................................................................... 13
LAND LEASE ................................................................................. 13
LIBOR ...................................................................................... 13
LIBOR PERIOD ELECTION....................................................................... 13
LIEN ....................................................................................... 14
LIENS REMOVABLE BY BNPLC.................................................................... 14
LOSSES ..................................................................................... 14
MANDATORY COLLATERAL PERIOD................................................................. 15
MATERIAL ENVIRONMENTAL COMMUNICATION........................................................ 15
MAXIMUM REMARKETING OBLIGATION.............................................................. 15
MINIMUM EXTENDED REMARKETING PRICE.......................................................... 15
MULTIEMPLOYER PLAN ......................................................................... 15
NAI. ....................................................................................... 15
NAI'S EXTENDED REMARKETING PERIOD........................................................... 15
NAI'S EXTENDED REMARKETING RIGHT............................................................ 15
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS............................................ 15
OPERATIVE DOCUMENTS ........................................................................ 15
OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT........................................... 15
OTHER LEASE AGREEMENT....................................................................... 15
OTHER PURCHASE AGREEMENT.................................................................... 16
PARTICIPANT ................................................................................ 16
PARTICIPATION AGREEMENT..................................................................... 16
PBGC ....................................................................................... 16
PERMITTED ENCUMBRANCES...................................................................... 16
PERMITTED HAZARDOUS SUBSTANCE USE........................................................... 16
48
Page
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PERMITTED HAZARDOUS SUBSTANCES.............................................................. 17
PERMITTED TRANSFER ......................................................................... 17
PERSON ..................................................................................... 17
PERSONAL PROPERTY .......................................................................... 17
PLAN ....................................................................................... 17
PLEDGE AGREEMENT ........................................................................... 18
PRIME RATE ................................................................................. 18
PROPERTY ................................................................................... 18
PURCHASE AGREEMENT ......................................................................... 18
PURCHASE DOCUMENTS ......................................................................... 18
PURCHASE OPTION ............................................................................ 18
QUALIFIED AFFILIATE ........................................................................ 18
QUALIFIED PREPAYMENTS....................................................................... 18
REAL PROPERTY .............................................................................. 19
REMEDIAL WORK .............................................................................. 19
RENT ....................................................................................... 19
RESIDUAL RISK PERCENTAGE.................................................................... 19
RESPONSIBLE FINANCIAL OFFICER............................................................... 19
SALE CLOSING DOCUMENTS...................................................................... 19
SECURED SPREAD ............................................................................. 19
SELLER ..................................................................................... 19
STIPULATED LOSS VALUE....................................................................... 19
SUBSIDIARY ................................................................................. 19
SUPPLEMENTAL PAYMENT ....................................................................... 20
TERM ....................................................................................... 20
THIRD PARTY PRICE .......................................................................... 20
THIRD PARTY SALE NOTICE..................................................................... 20
THIRD PARTY SALE PROPOSAL................................................................... 20
THIRD PARTY TARGET PRICE.................................................................... 20
TRANSACTION EXPENSES ....................................................................... 20
UNFUNDED BENEFIT LIABILITIES................................................................ 20
UNSECURED SPREAD ........................................................................... 20
VOLUNTARY RETENTION OF THE PROPERTY......................................................... 21
ARTICLE II - PROVISIONS USED IN COMMON:
1 NOTICES ................................................................................ 21
2 SEVERABILITY ........................................................................... 23
3 NO MERGER .............................................................................. 23
4 NO IMPLIED WAIVER ...................................................................... 24
5 ENTIRE AND ONLY AGREEMENTS.............................................................. 24
6 BINDING EFFECT 24
7 TIME IS OF THE ESSENCE.................................................................. 24
8 GOVERNING LAW 24
9 PARAGRAPH HEADINGS...................................................................... 24
10 NEGOTIATED DOCUMENTS.................................................................... 25
11 TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT.................................... 25
12 OTHER TERMS AND REFERENCES...............................................................25
13 EXECUTION IN COUNTERPARTS................................................................25
14 NOT A PARTNERSHIP, ETC...................................................................25
49
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE III - LAND)
This Common Definitions and Provisions Agreement (Phase III - Land), by
and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is dated as of
[EFFECTIVE DATE], the Effective Date.
RECITALS
Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase II - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Land Lease (as defined below) and the Purchase Agreement (as
defined below), both of which concern the Property (as defined below). Each of
the Closing Certificate, the Land Lease and the Purchase Agreement (together
with this Common Definitions and Provisions Agreement (Phase II - Land) and the
Pledge Agreement [as defined below], the "OPERATIVE DOCUMENTS") are intended to
create separate and independent obligations upon the parties thereto. However,
NAI and BNPLC intend that all of the Operative Documents share certain
consistent definitions and other miscellaneous provisions. To that end, the
parties are executing this Common Definitions and Provisions Agreement (Phase II
- - Land) and incorporating it by reference into each of the other Operative
Documents.
AGREEMENTS
LIST OF DEFINED TERMS
UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL
HAVE THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:
"ACTIVE NEGLIGENCE " of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Land Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Land, the Improvements or any interest in any other
Property or as a party to the transactions described in the Land Lease or the
other Operative Documents or in the Other Lease Agreement or the Other Purchase
Agreement, (2) any negligent failure of any other Interested Party to act when
the duty to act would not have been imposed but for such party's contractual or
other relationship to BNPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Land Lease or other
Operative Documents or in the Other Lease Agreement or Other Purchase Agreement,
or (3) the exercise in a lawful manner by BNPLC (or any party lawfully claiming
through or under BNPLC) of any right or remedy provided in or under the Land
Lease or the other Operative Documents or in the Other Lease Agreement or Other
Purchase Agreement.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 1
50
"ADDITIONAL RENT " shall have the meaning assigned to it in subparagraph
of the Land Lease.
"ADJUSTED EBIT " shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Land Lease and to the Pledge Agreement.
"ADVANCE DATE " means the first Business Day of every calendar month,
beginning with the first Business Day in May, 1999 and continuing regularly
thereafter to and including the Base Rent Commencement Date.
"AFFILIATE " of any Person means any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, the term "control" when used with respect to any Person means the
power to direct the management of policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"APPLICABLE LAWS " means any or all of the following, to the extent
applicable to NAI or the Property or the Land Lease or the other Operative
Documents: restrictive covenants; zoning ordinances and building codes; flood
disaster laws; health, safety and environmental laws and regulations; the
Americans with Disabilities Act and other laws pertaining to disabled persons;
and other laws, statutes, ordinances, rules, permits, regulations, orders,
determinations and court decisions.
"APPLICABLE PURCHASER " means any third party designated by NAI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.
"ATTORNEYS' FEES " means the expenses and reasonable fees of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.
"BANKING RULES CHANGE " means either: (1) the introduction of or any
change in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).
"BASE RATE " for any Base Rent Period means a rate equal to the higher
of (1) the Prime Rate in effect on the first day of such period, or (2) the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for that
period.
"BASE RENT " means the rent payable by NAI pursuant to subparagraph of
the Land Lease.
"BASE RENT COMMENCEMENT DATE " shall mean the earlier of (1) the first
Business Day of October, 2000, or (2) the "Base Rent Commencement Date" under
and as defined in the Other Common Definitions and Provisions Agreement.
"BASE RENT DATE " means a date upon which Base Rent must be paid under
the Land Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be determined as follows:
Common Definitions and Provisions Agreement (Phase II - Land) - Page 2
51
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.
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.
Each successive Base Rent Date after the first Base Rent 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 September, 1999 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 November, 1999.
"BASE RENT PERIOD " means a period for which Base Rent must be paid
under the Land Lease, each of which periods shall correspond to the LIBOR Period
Election for such period. The first Base Rent Period shall begin on and include
the Base Rent Commencement Date, and each successive Base Rent Period shall
begin on and include the Base Rent Date upon which the preceding Base Rent
Period ends. Each Base Rent Period, including the first Base Rent Period, shall
end on but not include the first or second Base Rent Date after the Base Rent
Date upon which such period began, determined as follows:
(1) If the LIBOR Period Election for a Base Rent Period is
one month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
began.
(2) If the LIBOR Period Election for a Base Rent Period is
six months, then such Base Rent Period shall end on the second Base Rent
Date after the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by two examples:
1) If NAI makes a LIBOR Period Election of three months for
a hypothetical Base Rent Period beginning on the first Business Day in
January, 2001, 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, 2001, the third calendar
month after January, 2001.
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, 2001, 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, 2001.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 3
52
"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 the Initial Funding Advance
upon application of a Qualified Prepayment or upon any sale of the
Property pursuant to the Purchase Agreement, if such application or sale
occurs on any day other than an Advance Date or the last day of a Base
Rent Period; or
(2) used to make or maintain the Initial Funding Advance
upon the acceleration of the end of any Base Rent Period pursuant
subparagraph 3.(c)(ii) of the Land Lease.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.
"BREAK EVEN PRICE " shall have the meaning assigned to it in
subparagraph 1(B)(1) of the Purchase Agreement.
"BUSINESS DAY " means any day that is (1) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in New
York City, New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (1).
"CAPITAL ADEQUACY CHARGES " means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(b)(ii) of the Land Lease.
"CAPITAL LEASE " means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP or for federal income tax
purposes.
"CLOSING CERTIFICATE " means the Amended and Restated Closing
Certificate and Agreement dated as of [EFFECTIVE DATE] executed by NAI in favor
of BNPLC, as such Closing Certificate may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms.
"CODE " means the Internal Revenue Code of 1986, as amended.
"COLLATERAL " shall have the meaning assigned to it in the Pledge
Agreement.
"COLLATERAL PERCENTAGE " for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Land Lease, the Collateral
Common Definitions and Provisions Agreement (Phase II - Land) - Page 4
53
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.
"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND) " means
this Agreement, which is incorporated by reference into each of the other
Operative Documents.
"CONSTRUCTION MANAGEMENT AGREEMENT " means the Construction Management
Agreement dated as of June 16, 1999 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"CONSTRUCTION PROJECT " means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.
"CURRENT AS IS MARKET VALUE " means an amount equal to the fair market
value of BNPLC's interest in the Property (or any applicable portion thereof),
AS IS, WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a
determination of Current AS IS Market Value is required by the express terms of
any Operative Document, it will be determined accordance with the following
procedure unless BNPLC and NAI have otherwise agreed in writing upon a Current
AS IS Market Value at that time:
(A) BNPLC and NAI shall each, within ten days after written notice
from either to the other, select an appraiser. If either BNPLC
or NAI fails to select an appraiser within the required period,
then the appraiser who has been timely selected shall
conclusively determine the fair market value of the Property (or
applicable portion thereof) in accordance with this definition
within forty-five days after his or her selection.
(B) Upon the selection of the two appraisers as provided above, such
appraisers shall proceed to determine the fair market value of
BNPLC's interest in the Property (or applicable portion thereof)
in accordance with this clause (v). Such appraisals shall be
submitted in writing no later than forty-five days after
selection of the second appraiser. If the fair market value as
determined by such appraisers is identical, such sum shall be
Current AS IS Market Value. If the fair market value indicated
by the lower appraisal differs from the fair market value
indicated by the higher appraisal by less than five percent (5%)
of the fair market value indicated by the higher appraisal, then
Current AS IS Market Value shall be the sum of the two appraisal
figures divided by two (2). If either appraiser fails to timely
submit his or her appraisal, the timely submitted appraisal
shall be determinative of Current AS IS Market Value.
(C) If the fair market value indicated by the lower appraisal
differs from the fair market value indicated by the higher
appraisal by more than five percent (5%) of the fair market
value indicated by the higher appraisal, then the two appraisers
previously selected shall select a third appraiser. The name of
such appraiser shall be submitted at the same time the written
appraisals are due. Such third appraiser shall then review the
previously submitted appraisals and select the one that, in his
professional opinion, more closely reflects the fair market
value of BNPLC's interest in the Property (or applicable portion
thereof), such selection to be submitted in writing no later
Common Definitions and Provisions Agreement (Phase II - Land) - Page 5
54
than ten days after selection of the third appraiser. Such
selection shall be determinative of Current AS IS Market Value.
(D) In making any such determination of fair market value, the
appraisers shall assume that any improvements then located on
the Property (or applicable portion thereof) or under
construction thereon constitute the highest and best use, and
that neither the Land Lease nor the Purchase Agreement add any
value to the Property. Each appraiser selected hereunder shall
be an independent MAI-designated appraiser with not less than
ten years' experience in commercial real estate appraisal in
Sunnyvale, California and surrounding areas.
"DEBT " of any Person means (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such Person
for the deferred purchase price of property or services (except trade payables
and accrued expenses constituting current liabilities in the ordinary course of
business); (c) the face amount of any outstanding letters of credit issued for
the account of such Person; (d) obligations of such Person arising under
acceptance facilities; (e) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to provide funds to invest in
any Person, or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations of such
Person as lessee under Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any lease of property or related documents
(including a separate purchase agreement) which provide that such Person or any
of its Affiliates must purchase or cause another Person to purchase any interest
in the leased property and thereby guarantee a minimum residual value of the
leased property to the lessor. For purposes of this definition, the amount of
the obligations described in clause (h) of the preceding sentence with respect
to any lease classified according to GAAP as an "operating lease," shall equal
the sum of (1) the present value of rentals and other minimum lease payments
required in connection with such lease [calculated in accordance with SFAS 13
and other GAAP relevant to the determination of the whether such lease must be
accounted for as an operating lease or capital lease], plus (2) the fair value
of the property covered by the lease; provided, however, that such amount shall
not exceed the price, as of the date a determination of Debt is required
hereunder, for which the lessee can purchase the leased property pursuant to any
valid ongoing purchase option if, upon such a purchase, the lessee shall be
excused from paying rentals or other minimum lease payments that would otherwise
accrue after the purchase.
"DEFAULT " means any event which, with the passage of time or the giving
of notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"DEFAULT RATE " means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.
"DEFAULTING PARTICIPANT " shall have the meaning assigned to it in
Section 1 of the Participation Agreement.
"DEPOSIT TAKER " shall have the meaning assigned to it in the Pledge
Agreement.
"DEPOSIT TAKER LOSSES " shall have the meaning assigned to it in the
Pledge Agreement.
"DESIGNATED SALE DATE " means the earlier of:
(1) the first Business Day of May, 2004; or
Common Definitions and Provisions Agreement (Phase II - Land) - Page 6
55
(2) any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC; provided, that to be
effective for purposes of this definition, any such notice from NAI to
BNPLC must designate a Business Day that is more than thirty days after
the date of such notice; and provided, further, to be effective for
purposes of this definition, the notice must include an express,
unconditional, unequivocal and irrevocable acknowledgment by NAI that
because of NAI's election to accelerate the Designated Sale Date, the
Maximum Remarketing Obligation will equal the Break Even Price under the
Purchase Agreement; or
(3) any Business Day designated as such in a notice given by
BNPLC to NAI after the effective date of any termination of the
Construction Management Agreement as provided in subparagraphs 5(D) or
5(E) thereof; provided, that to be effective for purposes of this
definition, any such notice from BNPLC to NAI must designate a Business
Day that is more than thirty days after the date of such notice; or
(4) [Intentionally Deleted]; or
(5) any Business Day designated as such in a notice given by
BNPLC to NAI when any Event of Default has occurred and is continuing;
provided, that to be effective for purposes of this definition, any such
notice from BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice.
"DEVELOPMENT DOCUMENTS " means the contracts, ordinances and other
documents described in Exhibit C attached to the Closing Certificate, as the
same may be modified from time to time in accordance with the Land Lease and the
Closing Certificate, and any applications, permits or certificates concerning or
affecting the use or development of the Property that may be submitted, issued
or executed from time to time as contemplated in such contracts, ordinances and
other documents or that BNPLC may hereafter execute, approve or consent to at
the request of NAI.
"DIRECT PAYMENTS TO PARTICIPANTS " means the amounts paid or required to
be paid directly to Participants on the Designated Sale Date as provided in
Section 6.2 of the Pledge Agreement at the direction of and for NAI by the
collateral agent appointed pursuant to the Pledge Agreement from all or any part
of the Collateral described therein.
"EFFECTIVE DATE " means [EFFECTIVE DATE].
"EFFECTIVE RATE " means for each Base Rent Period, the per annum rate
determined by dividing (A) LIBOR for such Base Rent Period, as the case may be,
by (B) one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
for such Base Rent Period. If LIBOR or the Eurodollar Rate Reserve Percentage
changes from Base Rent Period to Base Rent Period, then the Effective Rate shall
be automatically increased or decreased as of the date of such change, as the
case may be, without prior notice to NAI. If for any reason BNPLC determines
that it is impossible or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with the foregoing, then
the "EFFECTIVE RATE" for that Base Rent Period shall equal any published index
or per annum interest rate determined in good faith by BNPLC's Parent to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on BNPLC's Parent's comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by BNPLC of the Effective Rate
under this definition shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 7
56
"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 Land Lease terminates, or (ii) NAI surrenders possession and control of the
Property and ceases to have interest in the Land or Improvements or rights with
respect thereto under any of the Operative Documents.
"ENVIRONMENTAL LOSSES " means Losses suffered or incurred by BNPLC or
any other Interested Party, directly or indirectly, relating to or arising out
of, based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable Environmental Laws
relating to the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity that occurs or is
alleged to have occurred on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Interested Party which directly or indirectly relates to, arises from, is based
on, or results from any of the matters described in clauses (i), (ii), or (iii)
of this definition or any allegation of any such matters. For purposes of
determining whether Losses constitute "Environmental Losses," as the term is
used in the Land Lease, any actual or alleged Hazardous Substance Activity or
violation of Environmental Laws relating to the Property will be presumed to
have occurred prior to the Environmental Cutoff Date unless NAI establishes by
clear and convincing evidence to the contrary that the relevant Hazardous
Substance Activity or violation of Environmental Laws did not occur or commence
prior to the Environmental Cutoff Date.
"ENVIRONMENTAL REPORTS " means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I dated March 1997 by Hygeienetics Environmental Services,
Inc.; Phase I dated June 1998 by Dames & Moore; and, an Asbestos Containing
Material Survey conducted in 1989 by Vesar, Inc.
"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,
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57
"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 Land Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph of the Land Lease,
transferred to a purchaser under the Purchase Agreement as therein provided or
applied as a Qualified Prepayment or as otherwise described in the preceding
sentence, BNPLC shall keep the same deposited in one or more interest bearing
accounts, and all interest earned on such account shall be added to and made a
part of Escrowed Proceeds.
"ESTABLISHED MISCONDUCT " of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition, "conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent environmental
consultant engaged by that Person), but only to the extent that the agent is, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, (x) acting
within the scope of the authority granted to him by such Person, (y) not acting
with the consent or approval of or under the direction of NAI or NAI's
Affiliates, employees or agents, and (z) not acting in good faith to mitigate
Losses that such Person may suffer because of a breach or repudiation by NAI of
the Land Lease or the Purchase Documents.
"EUROCURRENCY LIABILITIES " shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE RESERVE PERCENTAGE " means, for purposes of determining
the Effective Rate for any Base Rent Period, the reserve percentage applicable
two Business Days before the first day of such period under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for BNPLC's
Parent with respect to liabilities or deposits consisting of or including
Eurocurrency Liabilities (or with respect to any other 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 of the Land Lease.
"EXCLUDED TAXES " means (1) all federal, state and local income taxes
upon Base Rent, any interest paid to BNPLC or any Participant pursuant to
subparagraph of the Land Lease, and any additional compensation claimed by BNPLC
pursuant to subparagraph of the Land Lease; (2) any transfer or change of
ownership taxes assessed because of BNPLC's
Common Definitions and Provisions Agreement (Phase II - Land) - Page 9
58
transfer or conveyance to any third party of any rights or interest in the Land
Lease, the Purchase Agreement or the Property (other than any such taxes
assessed because of any Permitted Transfer under clauses (1), (3), (4), (5), (6)
or (7) of the definition of Permitted Transfer in this Agreement), (3) all
federal, state and local income taxes upon any amounts paid as reimbursement for
or to satisfy Losses incurred by BNPLC or any Participant to the extent such
taxes are offset by a corresponding reduction of BNPLC's or the applicable
Participant's income taxes because of BNPLC's or such Participant's deduction of
the reimbursed Losses from its taxable income or because of any tax credits
attributable thereto. If, however, a change in Applicable Laws after the
Effective Date results in an increase in such taxes for any reason other than an
increase in the applicable tax rates (e.g., a disallowance of deductions that
would otherwise be available against payments described in clause (A) of this
definition), then for purposes of the Operative Documents, the term "Excluded
Taxes" will not include the increase in such taxes attributable to the change.
"EXISTING CONTRACTS " means the Option Agreement and Ground Lease
covering the Land between NAI and Seller, both dated June 11, 1998.
"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.
"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 of the Land Lease (except for changes with which NAI's independent
public accountants concur).
"HAZARDOUS SUBSTANCE " means (i) any chemical, compound, material,
mixture or substance that is now or hereafter defined or listed in, regulated
under, or otherwise classified pursuant to, any Environmental Laws as a
"hazardous substance," "hazardous material," "hazardous waste," "extremely
hazardous waste or substance," "infectious waste," "toxic substance," "toxic
pollutant," or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or reproductive toxicity;
(ii) petroleum, any fraction of petroleum, natural gas, natural gas liquids,
liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas
and such synthetic gas), and ash produced by a resource recovery facility
utilizing a municipal solid waste stream, and drilling fluids, produced waters
and other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iii) asbestos and any asbestos
containing material; and (v) any other material that, because of its quantity,
concentration or physical or chemical characteristics, poses a significant
present or potential hazard to human health or safety or to the environment if
released into the workplace or the environment.
"HAZARDOUS SUBSTANCE ACTIVITY " means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement,
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59
generation, processing, construction, treatment, abatement, removal, disposal,
disposition, handling or transportation of any Hazardous Substance from, under,
in, into or on the Property, including the movement or migration of any
Hazardous Substance from surrounding property, surface water, groundwater or any
body of water under, in, into or onto the Property and any resulting residual
Hazardous Substance contamination in, on or under the Property. "HAZARDOUS
SUBSTANCE ACTIVITY" also means any existence of Hazardous Substances on the
Property that would cause the Property or the owner or operator thereof to be in
violation of, or that would subject the Property to any remedial obligations
under, any Environmental Laws, including CERCLA and RCRA, assuming disclosure to
the applicable governmental authorities of all relevant facts, conditions and
circumstances pertaining to the Property.
"IMPOSITIONS " means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Land Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.
"IMPROVEMENTS " means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.
"INITIAL FUNDING ADVANCE " means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate closing certificate executed by NAI as of the Effective Date. To the
extent that BNPLC does not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC, the remainder thereof will be advanced
to NAI, with the understanding that NAI shall use any such amount advanced for
one or more of the following purposes: (1) the payment or reimbursement of
Transaction Expenses incurred by NAI; (2) the maintenance of the Property; or
(3) the payment of Rents next due.
"INTERESTED PARTY " means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.
"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT " means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph of the Land Lease,
the occurrence of which event cannot be objectively determined. For example, an
Event of
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60
Default under subparagraph 17.(e) of the Land Lease resulting solely from a
failure of NAI to "generally" pay its debts as such debts become due (in
contrast to a failure of NAI to pay Rent to BNPLC as it becomes due under the
Land Lease) would constitute an Issue 97-1 Non-performance-related Subjective
Event of Default. In no event, however, will the term "Issue 97-1
Non-performance-related Subjective Event of Default" include an Event of Default
resulting from (1) a failure of NAI to make any payment required to BNPLC under
the Operative Documents, (2) a breach by NAI of the provisions set forth in
Schedule 1 attached to the Land Lease (which set forth financial covenants), (3)
any failure of NAI to use, maintain and insure the Property in accordance with
the requirements of the Land Lease, or (4) any failure of NAI to pay the full
amount of any Supplemental Payment on the Designated Sale Date as required by
the Purchase Agreement. Except as provided in subparagraph 1(A)(2)(c)(i) of the
Purchase Agreement, the characterization of any Event of Default as an Issue
97-1 Non-performance-related Subjective Event of Default will not affect the
rights or remedies available to BNPLC because of the Event of Default.
"LAND " means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Land Lease and the Purchase Agreement.
"LAND LEASE " means the Lease Agreement (Phase III - Land") dated as of
[EFFECTIVE DATE] 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.
"LIBOR " means, for purposes of determining the Effective Rate for each
Base Rent Period, the rate determined by BNPLC's Parent to be the average rate
of interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of
the rates at which deposits of dollars are offered or available to BNPLC's
Parent in the London interbank market at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such period. BNPLC shall
instruct BNPLC's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered: (i) for
delivery on the first day of such Base Rent Period, as the case may be, (ii) in
an amount equal or comparable to the total (projected on the applicable date of
determination by BNPLC's Parent) Stipulated Loss Value on the first day of such
period, and (iii) for a time equal or comparable to the length of such period.
If BNPLC's Parent so chooses, it may determine LIBOR for any period by reference
to the rate reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason BNPLC's
Parent determines that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance with the foregoing,
or if BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain the Initial Funding Advance
during any Base Rent Period for which Base Rent is computed by reference to
LIBOR, then "LIBOR" for that period shall equal the Base Rate for that period.
All determinations of LIBOR by BNPLC's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon NAI.
"LIBOR PERIOD ELECTION " for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit attached to the Land Lease. (For purposes of the
Land Lease a LIBOR Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on the Base Rent Commencement
Date or Base Rent 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)
Common Definitions and Provisions Agreement (Phase II - Land) - Page 12
61
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 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 Land Lease, "Lien" includes any Liens under ERISA
relating to Unfunded Benefit Liabilities of which NAI is required to notify
BNPLC under subparagraph 13.(a)(vii) of the Land Lease (irrespective of whether
NAI actually notifies BNPLC as required thereunder).
"LIENS REMOVABLE BY BNPLC " means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPLC itself, (2) by third parties lawfully claiming through or
under BNPLC (which for purposes of the Land Lease shall include any judgment
liens established against the Property because of a judgment rendered against
BNPLC and shall also include any liens established against the Property to
secure past due Excluded Taxes), or (3) by third parties lawfully claiming under
a deed or other instrument duly executed by BNPLC; provided, however, Liens
Removable by BNPLC shall not include (A) any Permitted Encumbrances or
Development Documents (regardless of whether claimed through or under BNPLC),
(B) the Operative Documents or any other document executed by BNPLC with the
knowledge of (and without objection by) NAI's counsel contemporaneously with the
execution and delivery of the Operative Documents, (C) Liens which are neither
lawfully claimed through or under BNPLC (as described above) nor claimed under a
deed or other instrument duly executed by BNPLC, (D) Liens claimed by NAI or
claimed through or under a conveyance made by NAI, (E) Liens arising because of
BNPLC's compliance with Applicable Law, the Operative Documents, Permitted
Encumbrances, the Development Documents or any written request made by NAI, (F)
Liens securing the payment of property taxes or other amounts assessed against
the Property by any governmental authority, other than to secure the payment of
past due Excluded Taxes or to secure damages caused by (and attributed by any
applicable principles of comparative fault to) BNPLC's own Established
Misconduct, (G) Liens resulting from or arising in connection with any breach by
NAI of the Operative Documents; or (H) Liens resulting from or arising in
connection with any Permitted Transfer that occurs more than thirty days after
any Designated Sale Date upon which, for any reason, NAI or an Affiliate of NAI
or any Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a cash price to BNPLC (when taken
together with any Supplemental Payment made by NAI pursuant to Paragraph 1(A)(2)
of the Purchase Agreement, in the case of a purchase by an Applicable Purchaser)
equal to the Break Even Price.
"LOSSES " means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs and expenses (including Attorneys'
Fees and the fees of outside accountants and environmental consultants), of any
and every kind or character, foreseeable and unforeseeable, liquidated and
contingent, proximate and remote.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 13
62
"MANDATORY COLLATERAL PERIOD " shall have the meaning assigned to it in
Part I of Schedule 1 attached to the Land Lease and to the Pledge Agreement.
"MATERIAL ENVIRONMENTAL COMMUNICATION " means a communication between
NAI or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.
"MAXIMUM REMARKETING OBLIGATION " shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.
"MINIMUM EXTENDED REMARKETING PRICE " shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.
"MULTIEMPLOYER PLAN " means a multiemployer plan as defined in Section
3(37) of ERISA to which contributions have been made by NAI or any ERISA
Affiliate during the preceding six years and which is covered by Title IV of
ERISA.
"NAI " means Network Appliance, Inc., a California corporation.
"NAI'S EXTENDED REMARKETING PERIOD " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.
"NAI'S EXTENDED REMARKETING RIGHT " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.
"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS " shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.
"OPERATIVE DOCUMENTS " means the Closing Certificate, the Land Lease,
the Purchase Agreement, the Pledge Agreement and this Common Definitions and
Provisions Agreement (Phase II - Land).
"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT " means the Common
Definitions and Provisions Agreement (Phase III - Improvements), dated as of the
June 16, 1999, 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 III -
Improvements), dated as of June 16, 1999, 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 III -
Improvements), dated as of June 16, 1999, between BNPLC and NAI, as such
Purchase Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
"PARTICIPANT " means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
Common Definitions and Provisions Agreement (Phase II - Land) - Page 14
63
participate in all or some of the risks and rewards to BNPLC of the Land Lease
and the Purchase Documents. As of the Effective Date, the only Participant is
BNPLC's Parent, but BNPLC may agree after the Effective Date to share in risks
and rewards of the Land Lease and the 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 June 16, 1999, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Land Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"PBGC " means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES " means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) any
ground lease executed pursuant to the Other Purchase Agreement, (iv) any Liens
securing the payment of Impositions which are not delinquent or claimed to be
delinquent or which are being contested in accordance with subparagraph 5.(a) of
the Land Lease, and (iv) mechanics' and materialmen's liens for amounts not past
due or claimed to be past due or which are being contested in accordance with
subparagraph 11.(c) of the Land Lease.
"PERMITTED HAZARDOUS SUBSTANCE USE " means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:
(1) exceed that reasonably required for the construction of
the Construction Project in accordance with the Other Lease Agreement
and the Construction Management Agreement or for the operation of the
Property for the purposes expressly permitted under subparagraph 2.(a)
of the Land Lease; or
(2) include any disposal, discharge or other release of
Hazardous Substances from the Property in any manner that might allow
such substances to reach surface water or groundwater, except (i)
through a lawful and properly authorized discharge (A) to a publicly
owned treatment works or (B) with rainwater or storm water runoff in
accordance with Applicable Laws and any permits obtained by NAI that
govern such runoff; or (ii) any such disposal, discharge or other
release of Hazardous Substances for which no permits are required and
which are not otherwise regulated under applicable Environmental Laws.
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.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 15
64
"PERMITTED HAZARDOUS SUBSTANCES " means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by NAI and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2.(a) of the Land Lease, in either
case in strict compliance with all Environmental Laws and with due care given
the nature of the Hazardous Substances involved. Without limiting the generality
of the foregoing, Permitted Hazardous Substances shall include usual and
customary office, laboratory and janitorial products.
"PERMITTED TRANSFER " means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in the Land and the Property;
(3) any assignment or conveyance by BNPLC or its permitted successors or assigns
to any present or future Participant of any lien or security interest against
the Property (in contrast to a conveyance of BNPLC's fee estate in the Land and
Improvements) or of any interest in Rent, payments required by or under the
Purchase Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of NAI under the Operative Documents; (4) any agreement to exercise or
refrain from exercising rights or remedies under the Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by NAI or required by any Permitted Encumbrance, by the
Purchase Agreement, by the Existing Contracts, by any other Development Contract
or by Applicable Laws; or (6) any assignment or conveyance after a Designated
Sale Date on which NAI shall not have purchased or caused an Applicable
Purchaser to purchase BNPLC's interest in the Property and, if applicable, after
the expiration of the thirty day cure period specified in Paragraph 4(D) of the
Purchase Agreement.
"PERSON " means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.
"PERSONAL PROPERTY " shall have the meaning assigned to it on page 2 of
the Land Lease.
"PLAN " means any employee benefit or other plan established or
maintained, or to which contributions have been made, by NAI or any ERISA
Affiliate of NAI during the preceding six years and which is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"PLEDGE AGREEMENT " means the Pledge Agreement (Phase III - Land) dated
as of the date hereof between BNPLC and NAI, pursuant to which NAI may pledge
certificates of deposit as security for NAI's obligations under the Purchase
Agreement (and for the corresponding obligations of BNPLC to 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.
"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
Common Definitions and Provisions Agreement (Phase II - Land) - Page 16
65
time to time after the Effective Date without notice to NAI as of the effective
time of each change in rates described in this definition.
"PROPERTY " means the Personal Property and the Real Property,
collectively. Any rights, titles and interests acquired by BNPLC under the
Existing Contracts, to the extent not covered by the Land Lease and thus not
encompassed within this definition of Property, are intended to be covered by
the Other Lease Agreement and encompassed within the term "Property" as defined
in the Other Common Definitions and Provisions Agreement.
"PURCHASE AGREEMENT " means the Purchase Agreement (Phase III - Land)
dated as of [EFFECTIVE DATE] between BNPLC and NAI, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
"PURCHASE DOCUMENTS " means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.
"PURCHASE OPTION " shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.
"QUALIFIED AFFILIATE " means any Person that is one hundred percent
(100%) owned, directly or indirectly, by Banque Nationale de Paris or any
successor of such bank; provided, that such Person can make (and has in writing
made) the same representations to NAI that BNPLC has made in Paragraphs 3(D) and
3(E) of the Closing Certificate; and, provided, further, that such Person is not
insolvent.
"QUALIFIED PREPAYMENTS " means any payments received by BNPLC from time
to time during the Term (1) under any property insurance policy as a result of
damage to the Property, (2) as compensation for any restriction placed upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof, (3) because of any judgment, decree or award for 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 of the Land
Lease or any other provision of the Land Lease. For purposes of computing the
total Qualified Prepayments (and other amounts dependent upon Qualified
Prepayments, such as Stipulated Loss Value) paid to or received by BNPLC as of
any date, payments described in the preceding clauses (1) through (4) will be
considered as Escrowed Proceeds, not Qualified Prepayments, until they are
actually applied as Qualified Prepayments by BNPLC as provided in the Paragraph
10 of the Land Lease.
"REAL PROPERTY " shall have the meaning assigned to it on page 1 of the
Land Lease.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 17
66
"REMEDIAL WORK " means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.
"RENT " means the Base Rent and all Additional Rent.
"RESIDUAL RISK PERCENTAGE " means fifteen percent (15%).
"RESPONSIBLE FINANCIAL OFFICER " means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.
"SALE CLOSING DOCUMENTS " shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.
"SECURED SPREAD " means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any 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 475 Java Drive Associates, L.P., a California limited
partnership.
"STIPULATED LOSS VALUE " as of any date means the amount equal to the
sum of the Initial Funding Advance, minus all funds actually received by BNPLC
and applied as Qualified Prepayments on or prior to such date. Under no
circumstances will any payment of Base Rent reduce Stipulated Loss Value.
"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 Land Lease.
"THIRD PARTY PRICE " shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.
"THIRD PARTY SALE NOTICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"THIRD PARTY SALE PROPOSAL " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 18
67
"THIRD PARTY TARGET PRICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.
"TRANSACTION EXPENSES " means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.
"UNFUNDED BENEFIT LIABILITIES " means, with respect to any Plan or
Multiemployer Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA) under
the Plan or Multiemployer Plan exceeds the market value of all Plan or
Multiemployer assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan or Multiemployer Plan and in accordance
with the provisions of ERISA for calculating the potential liability of NAI or
any ERISA Affiliate of NAI under Title IV of ERISA.
"UNSECURED SPREAD " means, for each period beginning on and including
the Base Rent Commencement Date or a Base Rent Date and ending on but not
including the next Base Rent Date, the amount established as described below in
this definition on the date (in this definition, the "SPREAD TEST DATE") that is
two Business Days prior to such period by reference to the ratio calculated by
dividing (1) Adjusted EBIT for the then latest Rolling Four Quarters Period that
ended prior to (and for which NAI has reported earnings as necessary to compute
Adjusted EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined
on a consolidated basis) as of the end of such Rolling Four Quarters Period. The
Unsecured Spread shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:
(a) for any period commencing on or prior to the first
Business Day of January, 2000, the Unsecured Spread will be the amount
indicated for Level III in the pricing grid below;
(b) promptly after earnings are reported by NAI for the
latest quarter in any Rolling Four Quarters Period, NAI must notify
BNPLC of any resulting change in the Unsecured Spread under this
definition, and no reduction in the Unsecured Spread from one period to
the next will be effective for purposes of the Operative Documents
unless, prior to the Spread Test Date for 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
============================================================================
Common Definitions and Provisions Agreement (Phase II - Land) - Page 19
68
All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the Land
Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.
"VOLUNTARY RETENTION OF THE PROPERTY " means an affirmative election
made by BNPLC to keep the Property pursuant to, and under the circumstances
described in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase
Agreement.
ARTICLE II - RULES OF INTERPRETATION
THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:
1 NOTICES . The provision of any Operative Document, or of any Applicable
Laws with reference to the sending, mailing or delivery of any notice or demand
under any Operative Document or with reference to the making of any payment
required under any Operative Document, shall be deemed to be complied with when
and if the following steps are taken:
(i) All Rent and other amounts required to be paid by NAI to BNPLC
shall be paid to BNPLC in immediately available funds by wire transfer
to:
Federal Reserve Bank of New York
ABA 026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Land Lease
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.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 20
69
(iii) All notices, demands, approvals, consents and other
communications to be made under any Operative Document to or by the
parties thereto must, to be effective for purpose of such Operative
Document, be in writing. Notices, demands and other communications
required or permitted under any Operative Document are to be sent to the
addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (B) hereof shall be deemed received upon such personal
service or upon dispatch by electronic means, and, if sent pursuant to
clause (C) shall be deemed received five days following deposit in the
mail.
Address of BNPLC:
BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191
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) 296-8954
Address of NAI:
Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452
Common Definitions and Provisions Agreement (Phase II - Land) - Page 21
70
2 SEVERABILITY . If any term or provision of any Operative Document or the
application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of such document, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.
3 NO MERGER . There shall be no merger of the Land Lease or of the
leasehold estate created by the Land Lease with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Land Lease or the leasehold estate created hereby
and any other interest in the Property, unless all Persons with an interest in
the Property that would be adversely affected by any such merger specifically
agree in writing that such a merger shall occur. There shall be no merger of the
Purchase Agreement or of the purchase options or obligations created by the
Purchase Agreement with any other interest in the Property by reason of the fact
that the same person may acquire or hold, directly or indirectly, the Land Lease
or the leasehold estate created hereby and any other interest in the Property,
unless all Persons with an interest in the Property that would be adversely
affected by any such merger specifically agree in writing that such a merger
shall occur.
4 NO IMPLIED WAIVER . The failure of BNPLC or NAI to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in any Operative Document shall not be
construed as a waiver or a relinquishment thereof for the future. The failure of
Agent to insist at any time upon the strict performance of any covenant or
agreement or to exercise any option, right, power or remedy contained in the
Pledge Agreement shall not be construed as a waiver or a relinquishment thereof
for the future. The waiver of or redress for any breach of any Operative
Document by any party thereto shall not prevent a similar subsequent act from
constituting a violation. Any express waiver of any provision of any Operative
Document shall affect only the term or condition specified in such waiver and
only for the time and in the manner specifically stated therein. No waiver by
any party to any Operative Document of any provision therein shall be deemed to
have been made unless expressed in writing and signed by the party to be bound
by the waiver. A receipt by BNPLC of any Rent with knowledge of the breach by
NAI of any covenant or agreement contained in the Land Lease or any other
Operative Document shall not be deemed a waiver of such breach. A receipt by
Agent of any Collateral or other payment under the Pledge Agreement with
knowledge of the breach by NAI of any covenant or agreement contained in the
Pledge Agreement shall not be deemed a waiver of such breach.
5 ENTIRE AND ONLY AGREEMENTS . The Operative Documents supersede any prior
negotiations and agreements between BNPLC, Agent and NAI concerning the Property
or the Collateral, and no amendment or modification of any Operative Document
shall be binding or valid unless expressed in a writing executed by all parties
to such Operative Document.
6 BINDING EFFECT . Except to the extent, if any, expressly provided to the
contrary in any Operative Document with respect to assignments thereof, all of
the covenants, agreements, terms and conditions to be observed and performed by
the parties to the Operative Documents shall be applicable to and binding upon
their respective successors and, to the extent assignment is permitted
thereunder, their respective assigns.
7 TIME IS OF THE ESSENCE . Time is of the essence as to all obligations of
NAI and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.
Common Definitions and Provisions Agreement (Phase II - Land) - Page 22
71
8 GOVERNING LAW . Each Operative Document shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the "UCC," as defined in the Pledge
Agreement).
9 PARAGRAPH HEADINGS . The paragraph and section headings contained in the
Operative Documents are for convenience only and shall in no way enlarge or
limit the scope or meaning of the various and several provisions thereof.
10 NEGOTIATED DOCUMENTS . All the parties to each Operative Document and
their counsel have reviewed and revised or requested revisions to such Operative
Document, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party shall not apply to the construction or
interpretation of any Operative Documents or any amendments thereof.
11 TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT . As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase II - Land), but is defined in
another Operative Document, shall have the meaning ascribed to it in the other
Operative Document.
12 OTHER TERMS AND REFERENCES . Words of any gender used in each Operative
Document shall be held and construed to include any other gender, and words in
the singular number 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.
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72
14 NOT A PARTNERSHIP, ETC . NOTHING IN ANY OPERATIVE DOCUMENT IS INTENDED
TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
BNPLC AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE
ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY
OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE
DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
NAI.
[The signature pages follows.]
Common Definitions and Provisions Agreement (Phase II - Land) - Page 24
73
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase II - Land) to be executed as of [EFFECTIVE
DATE].
"NAI"
NETWORK APPLIANCE, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
Common Definitions and Provisions Agreement (Phase II - Land) - Page 25
74
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase II - Land) dated to be effective [EFFECTIVE DATE]]
"BNPLC"
BNP LEASING CORPORATION
By:______________________________________
Henry Setina, Vice President
Common Definitions and Provisions Agreement (Phase II - Land) - Page 26