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Exhibit 10.37
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PLEDGE AGREEMENT
(PHASE III - LAND)
AMONG
BNP LEASING CORPORATION
("BNPLC")
BANQUE NATIONALE DE PARIS, AS AGENT
("AGENT")
NETWORK APPLIANCE, INC.
("NAI")
AND
PARTICIPANTS AS DESCRIBED HEREIN
JUNE 16, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INTERPRETATION -1-
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement -1-
Section 1.2 Definitions -1-
ACCOUNT -2-
ACCOUNT OFFICE -2-
AGENT -2-
BNPLC -2-
BNPLC'S CORRESPONDING OBLIGATIONS TO PARTICIPANTS -2-
CASH COLLATERAL -2-
CERTIFICATE OF DEPOSIT -2-
COLLATERAL -2-
COLLATERAL IMBALANCE -2-
COLLATERAL PERCENTAGE -2-
DEFAULT -3-
DEPOSIT TAKER -3-
DEPOSIT TAKER LOSSES -3-
DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT -3-
DISQUALIFIED DEPOSIT TAKER -3-
EVENT OF DEFAULT -3-
FAILED COLLATERAL TEST DATE -4-
INITIALLY QUALIFIED DEPOSIT TAKER -4-
LIEN -4-
MATERIAL LEASE DEFAULT -5-
MANDATORY COLLATERAL PERIOD -5-
MINIMUM COLLATERAL VALUE -5-
NAI -5-
NAI'S PURCHASE AGREEMENT OBLIGATIONS -5-
NOTICE OF SECURITY INTEREST -6-
OTHER LIABLE PARTY -6-
PARTICIPANTS -6-
PARTICIPATION AGREEMENT -6-
PERCENTAGE -6-
QUALIFIED PLEDGE -6-
SECURED OBLIGATIONS -6-
SUPPLEMENT -6-
TRANSACTION DOCUMENTS -6-
VALUE -6-
Section 1.3 Attachments -7-
Section 1.4 Amendment of Defined Instruments -7-
Section 1.5 References and Titles -7-
ARTICLE II SECURITY INTEREST -7-
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Section 2.1 Pledge and Grant of Security Interest -7-
Section 2.2 Return of Collateral After the Secured Obligations are Satisfied in Full -8-
ARTICLE III DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE -8-
Section 3.1 Determination of Minimum Collateral Percentage Generally -8-
Section 3.2 Limitations on NAI's Right to Lower the Collateral Percentage -8-
Section 3.3 Mandatory Collateral Periods -8-
ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS -9-
Section 4.1 Qualification of Deposit Takers Generally -9-
Section 4.2 Existing Deposit Takers -9-
Section 4.3 Replacement of Participants Proposed by NAI -9-
Section 4.4 Mandatory Substitution for Disqualified Deposit Takers -10-
Section 4.5 Voluntary Substitution of Deposit Takers -10-
Section 4.6 Delivery of Notice of Security Interest by NAI and Agent -10-
Section 4.7 Constructive Possession of Collateral -10-
Section 4.8 Attempted Setoff by Deposit Takers -11-
Section 4.9 Deposit Taker Losses -11-
Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply with this
Agreement -11-
ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL -11-
Section 5.1 Delivery of Funds by NAI -11-
Section 5.2 Transition Account -12-
Section 5.3 Allocation of Cash Collateral Among Deposit Takers -12-
Section 5.4 Issuance and Redemption of Certificates of Deposit -12-
Section 5.5 Status of the Accounts Under the Reserve Requirement Regulations -13-
Section 5.6 Acknowledgment by NAI that Requirements of this Agreement are
Commercially Reasonable -13-
ARTICLE VI WITHDRAWAL OF CASH COLLATERAL -13-
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date -13-
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to the Participants -14-
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC -14-
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by Disqualified
Deposit Takers -14-
ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI -15-
Section 7.1 Representations of NAI -15-
Section 7.2 Covenants of NAI -15-
ARTICLE VIII AUTHORIZED ACTION BY AGENT -17-
Section 8.1 Power of Attorney -17-
ARTICLE IX DEFAULT AND REMEDIES -17-
Section 9.1 Remedies -17-
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ARTICLE X OTHER RECOURSE -18-
Section 10.1 Recovery Not Limited -18-
ARTICLE XI PROVISIONS CONCERNING AGENT -18-
Section 11.1 Appointment and Authority -18-
Section 11.2 Exculpation, Agent's Reliance, Etc -19-
Section 11.3 Participant's Credit Decisions -19-
Section 11.4 Indemnity -19-
Section 11.5 Agent's Rights as Participant and Deposit Taker -20-
Section 11.6 Investments -20-
Section 11.7 Benefit of Article XI -20-
Section 11.8 Resignation -20-
ARTICLE XII MISCELLANEOUS -21-
Section 12.1 Provisions Incorporated From Other Operative Documents -21-
Section 12.2 Cumulative Rights, etc -21-
Section 12.3 Survival of Agreements -21-
Section 12.4 Other Liable Party -21-
Section 12.5 Termination -21-
Attachment 1 Form of Certificate of Deposit
Attachment 2 Supplement to Pledge Agreement (Phase III - Land)
Attachment 3 Notice of NAI's Election to Change the Collateral Percentage
Attachment 4 Notice of Security Interest
Attachment 5 Examples of Calculations
Attachment 6 Notice of NAI's Requirement to Withdraw Excess Cash Collateral
Attachment 7 Notice of NAI's Requirement of Direct Payments to Participants
Attachment 8 Notice of NAI's Requirement of Direct Payments to Participants
Attachment 9 Notice of NAI's Requirement of a Withdrawal
of Cash Collateral from a Disqualified Deposit Taker
Schedule 1 Financial Covenants and Negative Covenants
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PLEDGE AGREEMENT
(PHASE III - LAND)
This PLEDGE AGREEMENT (PHASE III - LAND) (this "AGREEMENT") is made as
of [EFFECTIVE DATE] (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and
BANQUE NATIONALE DE PARIS, acting in its capacity as agent for BNPLC and the
Participants (in such capacity, "AGENT"), is made and dated as of the Effective
Date.
RECITALS
A. NAI and BNPLC are parties to: (i) a Common Definitions and
Provisions Agreement (Phase III - Land) dated as of the Effective Date (the
"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE III - LAND)"); and (ii) a
Purchase Agreement (Phase III - Land) dated as of the Effective Date (the
"PURCHASE AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL
PAYMENT" (as defined in the Common Definitions and Provisions Agreement (Phase
III - Land)), in consideration of the rights granted to NAI by the Purchase
Agreement.
B. Pursuant to a Participation Agreement dated as of June 16, 1999
(the "PARTICIPATION AGREEMENT"), BNPLC's Parent has agreed with BNPLC to
participate in the risks and rewards to BNPLC of the Purchase Agreement and
other Operative Documents (as defined in the Common Definitions and Provisions
Agreement (Phase III - Land)), and the parties to this Agreement anticipate that
other financial institutions may become parties to the Participation Agreement
as Participants, agreeing to participate in the risks and rewards to BNPLC of
the Purchase Agreement and other Operative Documents.
C. NAI may from time to time deliver cash collateral for its
obligations to BNPLC under the Purchase Agreement and for BNPLC's corresponding
obligations to Participants under the Participation Agreement. This Agreement
sets forth the terms and conditions governing such cash collateral.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement .
All capitalized terms used in this Agreement which are defined in Article I of
the Common Definitions and Provisions Agreement (Phase III - Land) and not
otherwise defined herein shall have the same meanings herein as set forth in the
Common Definitions and Provisions Agreement (Phase III - Land). All terms used
in this Agreement which are defined in the UCC and not otherwise defined herein
shall have the same meanings herein as set forth therein, except where the
context otherwise requires.
Section 1.2 Definitions . When used in this Agreement, the following
terms shall have the following respective meanings:
"ACCOUNT" shall mean any deposit account maintained by a
Deposit Taker into which Cash Collateral may be deposited at any time,
excluding the Transition Account.
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"ACCOUNT OFFICE" shall mean, with respect to any Account
maintained by any Deposit Taker, the office of such Deposit Taker in
California or New York at which such Account is maintained as specified
in the applicable Deposit Taker's Acknowledgment and Agreement.
"AGENT" shall have the meaning given to that term in the
introductory paragraph hereof.
"BNPLC" shall have the meaning given to that term in the
introductory paragraph hereof.
"BNPLC'S CORRESPONDING OBLIGATIONS TO PARTICIPANTS" shall mean
BNPLC's obligations under the Participation Agreement to pay
Participants their respective Percentages of (or amounts equal to their
respective Percentages of) sums "actually received by BNPLC" (as defined
in the Participation Agreement) in satisfaction of NAI's Purchase
Agreement Obligations; provided, however, any modification of the
Participation Agreement executed after the date hereof without NAI's
written consent shall not be considered for purposes of determining
BNPLC's Corresponding Obligations to Participants under this Agreement.
"CASH COLLATERAL" shall mean (i) all money of NAI which NAI has
delivered to Agent for deposit with a Deposit Taker pursuant to this
Agreement, and (ii) any additional money delivered to Agent as
Collateral pursuant to Section 4.9.
"CERTIFICATE OF DEPOSIT" shall mean a certificate of deposit
issued by a Deposit Taker as required by Section 5.4 below to evidence
an Account into which Cash Collateral has been deposited pursuant to
this Agreement. Each Certificate of Deposit shall be issued in an amount
equal to the Value of the Account which it evidences and shall otherwise
be in the form set forth as ATTACHMENT 1.
"COLLATERAL" shall have the meaning given to that term in
Section 2.1 hereof.
"COLLATERAL IMBALANCE" shall mean on any date prior to the
Designated Sale Date that the Value (without duplication) of Accounts
maintained by and Certificates of Deposit issued by the Deposit Taker
for any Participant (other than a Disqualified Deposit Taker) does not
equal such Participant's Percentage, multiplied by the lesser of (1) the
Minimum Collateral Value in effect on such date, or (2) the aggregate
Value of all Collateral subject to this Agreement on such date. For
purposes of determining whether a Collateral Imbalance exists, the Value
of any Accounts maintained by a bank that is acting as Deposit Taker for
two or more Participants will be deemed to be held for them in
proportion to their respective Percentages, and the Value of any
Accounts maintained by a bank as Deposit Taker for both a Participant
and BNPLC (as in the case of BNPLC's Parent acting as Deposit Taker for
itself, as a Participant, and for BNPLC) will be deemed to be held for
the Participant only to the extent necessary to prevent or mitigate a
Collateral Imbalance and otherwise for BNPLC.
"COLLATERAL PERCENTAGE" shall mean the percentage designated by
NAI or required during a Mandatory Collateral Period pursuant to Article
III.
"DEFAULT" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the
passage of any requisite periods of time, constitute an Event of
Default.
"DEPOSIT TAKER" for BNPLC shall mean BNPLC's Parent and for
each Participant shall mean the Participant itself; provided, that each
of BNPLC and the Participants, for itself only, may from time to time
designate another Deposit Taker as provided in Sections 4.4 and 4.5
below.
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"DEPOSIT TAKER LOSSES" shall mean the Value of any Cash
Collateral delivered to a Deposit Taker, but that the Deposit Taker will
not (because of the insolvency of the Deposit Taker, offsets by the
Deposit Taker in violation of the Deposit Taker's Acknowledgment and
Agreement, or otherwise) return to NAI or return to Agent for
disposition or application as provided herein or as required by
applicable law.
"DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT" shall have the
meaning given to that term in subSection 4.1.2 hereof.
"DISQUALIFIED DEPOSIT TAKER" shall mean any Deposit Taker with
whom Agent may decline to deposit Collateral pursuant to Section 4.1.
"EVENT OF DEFAULT" shall mean the occurrence of any of the
following:
(a) the failure by NAI to pay all or any part of
NAI's Purchase Agreement Obligations when due, after giving
effect to any applicable notice and grace periods expressly
provided for in the Purchase Agreement;
(b) the failure by NAI to provide funds as and when
required by Section of this Agreement, if within seven Business
Days after such failure commences NAI does not (1) cure such
failure by delivering the funds required by Section 5.1, and (2)
pay to BNPLC as additional Rent under the Land Lease an amount
equal to interest at the Default Rate (as defined in the Land
Lease) on such funds for the period from which they were first
due to the date of receipt by Agent;
(c) the failure of the pledge or security interest
contemplated herein in the Transition Account or any Account,
Certificate of Deposit or Cash Collateral to be a Qualified
Pledge (regardless of the characterization of the Transition
Account or any Accounts, Certificates of Deposit or Cash
Collateral as deposit accounts, instruments or general
intangibles under the UCC), if within five Business Days after
NAI becomes aware of such failure, NAI does not (1) notify
Agent, BNPLC and the Participants of such failure, and (2) cure
such failure, and (3) to the extent required by Section 7.2.9,
pay to BNPLC any additional Base Rent that has accrued under the
Land Lease because of (or that would have accrued if BNPLC had
been aware of) such failure, together with interest at the
Default Rate on any such additional Base Rent;
(d) the failure of any representation herein by NAI
to be true (other than a failure described in another clause of
this definition of Event of Default), if such failure is not
cured within thirty days after NAI receives written notice
thereof from Agent;
(e) the failure of any representation made by NAI in
subSection 7.1.1 to be true, if within fifteen (15) days after
NAI becomes aware of such failure, NAI does not (1) notify
Agent, BNPLC and the Participants of such failure, and (2) cure
such failure, and (3) pay to BNPLC any additional Base Rent that
has accrued under the Land Lease because of (or that would have
accrued if BNPLC had been aware of) such failure, and (4) pay to
BNPLC interest at the Default Rate on any such additional Base
Rent;
(f) the failure by NAI timely and properly to
observe, keep or perform any covenant, agreement, warranty or
condition herein required to be observed, kept or performed
(other than a failure described in another clause of this
definition of Event of Default), if such failure is not cured
within thirty days after NAI receives written notice thereof
from Agent; and
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(g) the failure by BNPLC to pay when due on or after
the Designated Sale Date any of BNPLC's Corresponding
Obligations to Participants, after giving effect to any
applicable notice and grace periods expressly provided for in
the Participation Agreement.
Notwithstanding the foregoing, if ever the aggregate Value of Cash
Collateral held by Agent and the Deposit Takers EXCEEDS the Minimum
Collateral Value then in effect, a failure of the pledge or security
interest contemplated herein in SUCH EXCESS Cash Collateral to be a
valid, perfected, first priority pledge or security interest shall not
constitute an Event of Default under this Agreement. Accordingly, to
provide a cure as required to avoid an Event of Default under clauses
(c) or (e) of this definition, NAI could deliver additional Cash
Collateral - the pledge of which or security interest in which created
by this Agreement is a Qualified Pledge sufficient in amount to cause
the aggregate Value of the Cash Collateral then held by Agent and the
Deposit Takers subject to a Qualified Pledge hereunder to equal or
exceed the Minimum Collateral Value.
"FAILED COLLATERAL TEST DATE " means any date upon which
commences a Mandatory Collateral Period as described in Part III of
Schedule 1.
"INITIALLY QUALIFIED DEPOSIT TAKER " means (1) Banque Nationale
de Paris, acting through any branch, office or agency that can lawfully
maintain an Account as a Deposit Taker hereunder, and (2) any of the
fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, with debt
ratings of at least (i) A- (in the case of long term debt) and A-1 (in
the case of short term debt) or the equivalent thereof by Standard and
Poor's Corporation, and (ii) A3 (in the case of long term debt) and P-2
(in the case of short term debt) or the equivalent thereof by Moody's
Investor Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by Moody's
Investor Service, Inc. will be discontinued or changed, but if such
ratings systems are discontinued or changed, NAI shall be entitled to
select and use a comparable ratings systems as a substitute for the S&P
Rating or the Moody Rating, as the case may be, for purposes of
determining the status of any bank as an Initially Qualified Deposit
Taker.
"LIEN " shall mean, with respect to any property or assets, any
right or interest therein of a creditor to secure indebtedness of any
kind which is owed to him or any other arrangement with such creditor
which provides for the payment of such indebtedness out of such property
or assets or which allows him to have such indebtedness satisfied out of
such property or assets prior to the general creditors of any owner
thereof, including any lien, mortgage, security interest, pledge,
deposit, production payment, rights of a vendor under any title
retention or conditional sale agreement or lease substantially
equivalent thereto, tax lien, mechanic's or materialman's lien, or any
other charge or encumbrance for security purposes, whether arising by
law or agreement or otherwise, but excluding any right of setoff which
arises without agreement in the ordinary course of business. "Lien" also
means any filed financing statement, any registration with an issuer of
uncertificated securities, or any other arrangement which would serve to
perfect a Lien described in the preceding sentence, regardless of
whether such financing statement is filed, such registration is made, or
such arrangement is undertaken before or after such Lien exists.
"MATERIAL LEASE DEFAULT " shall mean any of the following:
(1) any "Event of Default" under and as defined in
the Land Lease, including any such Event of Default consisting
of a failure of NAI to comply with the requirements of Exhibit I
attached to the Land Lease; and
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(2)(a) any failure of NAI to make any payment required
by and when first due under the Land Lease, regardless of
whether any period provided in the Land Lease for the cure of
such failure by NAI shall have expired, and (b) any other
default, event or condition which would, with the giving of any
requisite notices and the passage of any requisite periods of
time, constitute an "Event of Default" under and as defined in
the Land Lease, if such other default, event or failure involves
a material noncompliance with Applicable Law. (For purposes of
this definition, "material" noncompliance with Applicable Law
will include any noncompliance, the correction of which has been
requested by a governmental authority, or because of which a
threat of action against the Property or BNPLC has been asserted
by a governmental authority.)
"MANDATORY COLLATERAL PERIOD" shall mean any period, as
determined in accordance with Part III of Schedule 1, during which NAI
is required to maintain a Collateral Percentage of one hundred percent
(100%) pursuant to Section 3.2.
"MINIMUM COLLATERAL VALUE" shall mean (1) as of the Designated
Sale Date or any prior date, an amount equal to the Collateral
Percentage multiplied by the Stipulated Loss Value determined as of that
date in accordance with the Land Lease; and (2) as of any date after the
Designated Sale Date, an amount equal to the Break Even Price plus any
unpaid interest accrued on past due amounts payable pursuant to
Paragraph 1(a) of the Purchase Agreement.
"NAI" shall have the meaning given to that term in the
introductory paragraph hereof.
"NAI'S PURCHASE AGREEMENT OBLIGATIONS" shall mean all of NAI's
obligations under the Purchase Agreement, including (i) NAI's obligation
to pay any Supplemental Payment as required under subparagraph 1(A) of
the Purchase Agreement, and (ii) any damages incurred by BNPLC because
of (A) NAI's breach of the Purchase Agreement or (B) the rejection by
NAI of the Purchase Agreement in any bankruptcy or insolvency
proceeding.
"NOTICE OF SECURITY INTEREST" shall have the meaning given to
that term in subSection 4.1.1 hereof.
"OTHER LIABLE PARTY" shall mean any Person, other than NAI, who
may now or may at any time hereafter be primarily or secondarily liable
for any of the Secured Obligations or who may now or may at any time
hereafter have granted to Agent a pledge of or security interest in any
of the Collateral.
"PARTICIPANTS" shall mean BNPLC's Parent and any other
financial institutions which may hereafter become parties to (i) this
Agreement by completing, executing and delivering to NAI and Agent a
Supplement, and (ii) the Participation Agreement.
"PARTICIPATION AGREEMENT" shall have the meaning given to such
term in Recital B hereof.
"PERCENTAGE" shall mean with respect to each Participant and
the Deposit Taker for such Participant, such Participant's "Percentage"
under and as defined in the Participation Agreement for purposes of
computing such Participant's right thereunder to receive payments of (or
amounts equal to a percentage of) any sales proceeds or Supplemental
Payment received by BNPLC under the Purchase Agreement. Percentages may
be adjusted from time to time as provided in the Participation Agreement
or as provided in supplements thereto executed as provided in the
Participation Agreement.
"QUALIFIED PLEDGE" means a pledge or security interest that
constitutes a valid, perfected, first priority pledge or security
interest.
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"SECURED OBLIGATIONS" shall mean and include both NAI's
Purchase Agreement Obligations and BNPLC's Corresponding Obligations to
Participants.
"SUPPLEMENT" shall mean a supplement to this Agreement in the
form of ATTACHMENT 2.
"TRANSACTION DOCUMENTS" shall mean, collectively, this
Agreement, the Land Lease, the Purchase Agreement and the Participation
Agreement.
"TRANSITION ACCOUNT" shall have the meaning given it in Section
5.2.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of California from time to time, and the Uniform Commercial Code
as in effect in any other jurisdiction which governs the perfection or
non-perfection of the pledge of and security interests in the Collateral
created by this Agreement.
"VALUE" shall mean with respect to any Account, Certificate of
Deposit or Cash Collateral on any date, a dollar value determined as
follows (without duplication):
(a) cash shall be valued at its face amount on such
date;
(b) an Account shall be valued at the principal
balance thereof on such date; and
(c) a Certificate of Deposit shall be valued at the
face amount thereof.
Section 1.3 Attachments. All attachments to this Agreement are a part
hereof for all purposes.
Section 1.4 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including
references to the Land Lease, Purchase Agreement and Participation Agreement)
also refer to and include all valid renewals, extensions, amendments,
modifications, supplements or restatements of any such agreement, instrument or
document; provided that nothing contained in this Section shall be construed to
authorize any Person to execute or enter into any such renewal, extension,
amendment, modification, supplement or restatement.
Section 1.5 References and Titles. All references in this Agreement to
Attachments, Articles, Sections, subsections, and other subdivisions refer to
the Attachments, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any subdivision are for convenience only and do not constitute any part of
any such subdivision and shall be disregarded in construing the language
contained in this Agreement. The words "this Agreement", "herein", "hereof",
"hereby", "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited. The
phrases "this Article," "this Section" and "this subsection" and similar phrases
refer only to the Articles, Sections or subsections hereof in which the phrase
occurs. The word "or" is not exclusive, and the word "including" (in all of its
forms) means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless the
context otherwise requires.
ARTICLE II SECURITY INTEREST
Section 2.1 Pledge and Grant of Security Interest. As security for the
Secured Obligations, NAI hereby pledges and assigns to Agent (for the ratable
benefit of BNPLC and the Participants) and grants to Agent (for the ratable
benefit of BNPLC and the Participants) a continuing security interest and lien
in and against all right, title and
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interest of NAI in and to the following property, whether now owned or hereafter
acquired by NAI (collectively and severally, the "COLLATERAL"):
(a) All Cash Collateral, all Accounts, the Transition
Account and all Certificates of Deposit issued from time to time and
general intangibles arising therefrom or relating thereto (however,
"general intangibles" as used in this clause shall not include any
general intangibles not related to Cash Collateral, Accounts, the
Transition Account or Certificates of Deposit issued from time to time,
and thus will not include, without limitation, any intellectual property
of NAI); and all documents, instruments and agreements evidencing the
same; and all extensions, renewals, modifications and replacements of
the foregoing; and any interest or other amounts payable in connection
therewith; and
(b) All proceeds of the foregoing (including whatever is
receivable or received when Collateral or proceeds is invested, sold,
collected, exchanged, returned, substituted or otherwise disposed of,
whether such disposition is voluntary or involuntary, including rights
to payment and return premiums and insurance proceeds under insurance
with respect to any Collateral, and all rights to payment with respect
to any cause of action affecting or relating to the Collateral).
The pledge, assignment and grant of a security interest made by NAI hereunder is
for security of the Secured Obligations only; the parties to this Agreement do
not intend that NAI's delivery of the Collateral to Agent as herein provided
will constitute an advance payment of any Secured Obligations or liquidated
damages, nor do the parties intend that the Collateral increase the dollar
amount of the Secured Obligations.
Section 2.2 Return of Collateral After the Secured Obligations are
Satisfied in Full. If any proceeds of Collateral remain after all Secured
Obligations have been paid in full, Agent will deliver or direct the Deposit
Takers to deliver such proceeds to NAI or other Persons entitled thereto by law.
ARTICLE III DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE
Section 3.1 Determination of Minimum Collateral Percentage Generally.
Effective as of the date of this Agreement, and until a new Collateral
Percentage becomes effective, the Collateral Percentage is zero percent (0%).
Subject to the provisions of this Article III, NAI may from time to time
designate a new Collateral Percentage between 0% and 100% by written notice
delivered to Agent, BNPLC and the Participants in the form of ATTACHMENT 3. Any
new Collateral Percentage so designated shall not become effective, however,
until the commencement of the later of (A) the first Base Rent Period to
commence on or after the first Business Day of January, 2001, or (B) the next
following Base Rent Period which is at least ten Business Days after the receipt
of such notice by Agent, BNPLC and the Participants. Further, after the first
change in the Collateral Percentage resulting from a designation by NAI of a
Collateral Percentage greater than zero percent (0%), any subsequent change
resulting from NAI's designation of a new Collateral Percentage shall not become
effective before the first Business Day of the first Base Rent Period that
commences at least ninety days after the effective date of the last preceding
change in the Collateral Period. In any event, if NAI provides more than one
notice of a change in the Collateral Percentage to be effective on a particular
Base Rent Date, then the latest such notice from NAI which satisfies the
requirements of this Section (and of Sections and ) will control. After any
Collateral Percentage becomes effective as provided in this Article, it shall
remain in effect until a different Collateral Percentage becomes effective as
provided in this Article.
Section 3.2 Limitations on NAI's Right to Lower the Collateral
Percentage. Notwithstanding the foregoing, no designation by NAI of a new
Collateral Percentage will be effective to reduce the Collateral Percentage if
the designation is given, or the reduction would otherwise become effective, on
or after the Designated Sale Date or when any of the following shall have
occurred and be continuing:
3.2.1 any Material Lease Default;
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3.2.2 any Event of Default under and as defined in this Agreement;
3.2.3 any Default under and as defined in this Agreement - excluding,
however, any such Default limited to a failure of NAI described in
clause (c) or clause (e) of the definition of Event of Default above,
with respect to which the time for cure specified in clause (c) or
clause (e), as applicable, has not expired.
Section 3.3 Mandatory Collateral Periods. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.
ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS
Section 4.1 Qualification of Deposit Takers Generally. Agent may
decline to deposit or maintain Collateral hereunder with any Person designated
as a Deposit Taker, if such Person has failed to satisfy or no longer satisfies
the following requirements:
4.1.1 Such Person must have received from Agent and NAI a completed,
executed Notice of Security Interest in the form of ATTACHMENT 4 (a
"NOTICE OF SECURITY INTEREST") which specifically identifies any and all
Accounts in which such Person shall hold Cash Collateral delivered to it
pursuant to this Agreement and which designates Account Offices with
respect to all such Accounts in New York or California.
4.1.2 Such Person must have executed the Acknowledgment and Agreement
at the end of such Notice of Security Interest (the "DEPOSIT TAKER'S
ACKNOWLEDGMENT AND Agreement") and returned the same to Agent. Further,
such Person must have complied with the Deposit Taker's Acknowledgment
and Agreement, and the representations set forth therein with respect to
such Person must continue to be true and correct.
4.1.3 Such Person must be a commercial bank, organized under the laws
of the United States of America or a state thereof or under the laws of
another country which is doing business in the United States of America;
must be authorized to maintain deposit accounts for others through
Account Offices in New York or California (as specified in the Deposit
Taker's Acknowledgment and Agreement); and must be an Affiliate of BNPLC
or the Participant for whom such Person will act as Deposit Taker or
must have a combined capital, surplus and undivided profits of at least
$500,000,000.
4.1.4 Such Person must have complied with the provisions in this
Agreement applicable to Deposit Takers, including the provisions of
Section concerning the issuance and redemption of Certificates of
Deposit.
Section 4.2 Existing Deposit Takers. BNPLC's Parent (as Deposit Taker
for itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subSections and .
Section 4.3 Replacement of Participants Proposed by NAI. So long as no
Event of Default has occurred and is continuing, BNPLC shall not unreasonably
withhold its approval for a substitution under the Participation Agreement of a
new Participant proposed by NAI for any Participant, the Deposit Taker for whom
would no longer meet the requirements for an Initially Qualified Deposit Taker;
provided, however, that (A) the proposed substitution
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can be accomplished without a release or breach by BNPLC of its rights and
obligations under the Participation Agreement; (B) the new Participant will
agree (by executing a Supplement and a supplement to the Participation Agreement
as contemplated therein and by other agreements as may be reasonably required by
BNPLC and NAI) to become a party to the Participation Agreement and to this
Agreement, to designate an Initially Qualified Deposit Taker as the Deposit
Taker for it under this Agreement and to accept a Percentage under the
Participation Agreement equal to the Percentage of the Participant to be
replaced; (C) the new Participant (or NAI) will provide the funds required to
pay the termination fee by Section 6.4 of the Participation Agreement to
accomplish the substitution; (D) NAI (or the new Participant) agrees in writing
to indemnify and defend BNPLC for any and all Losses incurred by BNPLC in
connection with or because of the substitution, including the cost of preparing
supplements to the Participation Agreement and this Agreement and including any
cost of defending and paying any claim asserted by the Participant to be
replaced because of the substitution (but not including any liability of BNPLC
to such Participant for damages caused by BNPLC's bad faith or gross negligence
in the performance of BNPLC's obligations under the Participation Agreement
prior to the substitution); (E) the new Participant shall be a reputable
financial institution having a net worth of no less than seven and one half
percent (7.5%) of total assets and total assets of no less than
$10,000,000,000.00 (all according to then recent audited financial statements);
and (F) in no event will BNPLC be required to approve a substitution pursuant to
this Section 4.3 which will replace a Participant that is an Affiliate of BNPLC.
BNPLC shall attempt in good faith to assist (and cause BNPLC's Parent to attempt
in good faith to assist) NAI in identifying a new Participant that NAI may
propose to substitute for an existing Participant pursuant to this Section, as
NAI may reasonably request from time to time. However, in no event shall BNPLC
itself, or any of its Affiliates, be required to take the Percentage of any
Participant to be replaced.
Section 4.4 Mandatory Substitution for Disqualified Deposit Takers. If
any Deposit Taker shall cease to satisfy the requirements set forth in Section
4.1, the party for whom such Disqualified Deposit Taker has been designated as
Deposit Taker (i.e., BNPLC or the applicable Participant) shall promptly (1)
provide notice thereof to Agent and NAI, and (2) designate a substitute Deposit
Taker and cause the substitute to satisfy the requirements set forth in Section
4.1. Pending the designation of the substitute and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral held by the
Disqualified Deposit Taker and deposit such Collateral with other Deposit
Takers, subject to Section 5.3 below.
Section 4.5 Voluntary Substitution of Deposit Takers. With the written
approval of Agent, which approval will not be unreasonably withheld, BNPLC or
any Participant may at any time designate for itself a new Deposit Taker (in
replacement of any prior Deposit Taker acting for it hereunder); provided, the
Person so designated has satisfied the requirements set forth in Section 4.1;
and, provided further, unless the designation of a new Deposit Taker is required
by Section 4.4 to replace a Disqualified Deposit Taker, at the time of the
replacement such Person must be an Initially Qualified Deposit Taker.
Section 4.6 Delivery of Notice of Security Interest by NAI and Agent.
To the extent required for the designation of a new Deposit Taker by BNPLC or
any Participant pursuant to Section 4.5, or to permit the substitution or
replacement of a Deposit Taker for BNPLC or any Participant as provided in
Sections 4.4 and 4.5, NAI and Agent shall promptly execute and deliver any
properly completed Notice of Security Interest requested by BNPLC or the
applicable Participant.
Section 4.7 Constructive Possession of Collateral. The possession by a
Deposit Taker of any deposit accounts, money, instruments, chattel paper or
other property constituting Collateral or evidencing Collateral shall be deemed
to be possession by Agent or a person designated by Agent, for purposes of
perfecting the security interest granted to Agent hereunder pursuant to the UCC
or other Applicable Law; and notifications to a Deposit Taker by other Persons
holding any such property, and Acknowledgments, receipts or confirmations from
any such Persons delivered to a Deposit Taker, shall be deemed notifications to,
or Acknowledgments, receipts or confirmations from,
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financial intermediaries, bailees or agents (as applicable) of such Deposit
Taker for the benefit of Agent for the purposes of perfecting such security
interests under Applicable Law.
Section 4.8 Attempted Setoff by Deposit Takers. By delivery of a
Deposit Taker's Acknowledgment and Agreement, each Deposit Taker shall be
required to agree not to setoff or attempt a setoff, WITHOUT IN EACH CASE FIRST
OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, Secured Obligations owed to
it against any Collateral held by it from time to time. Further, by delivery of
a Deposit Taker's Acknowledgment and Agreement, each Deposit Taker shall be
required to agree not to setoff or attempt a setoff, WITHOUT IN EACH CASE FIRST
OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF BOTH NAI AND AGENT, obligations
owed to it other than Secured Obligations against any Collateral held by it from
time to time. Any Deposit Taker for BNPLC or a Participant shall not be
permitted by BNPLC or the applicable Participant, as the case may be, to violate
such agreements. However, NAI acknowledges and agrees (without limiting its
right to recover damages from a Deposit Taker that violates such agreements)
that Agent shall not be responsible for, or be deemed to have taken any action
against NAI because of, any Deposit Taker's violation of such agreements; and,
neither BNPLC nor any Participant shall be responsible for, or be deemed to have
taken any action against NAI because of, any violation of such agreements by a
Deposit Taker for another party.
Section 4.9 Deposit Taker Losses. Agent shall not be responsible for
any Deposit Taker Losses. However, Deposit Taker Losses with respect to a
Deposit Taker for a particular Participant shall reduce the amount of BNPLC's
Corresponding Obligations to Participants which are payable to such Participant
as provided in Section 2.2 of the Participation Agreement. Further, when Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant are
incurred in excess of the payments of Secured Obligations that such Participant
would then have been entitled to receive under the Participation Agreement but
for such Deposit Taker Losses, such Participant must immediately pay the excess
to Agent as additional Collateral hereunder, failing which NAI may recover any
damages suffered by it because of the Deposit Taker Losses from such Deposit
Taker or such Participant.
Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply
with this Agreement. Any Participant, the Deposit Taker for whom has failed to
comply with the requirements of this Agreement or any Notices of Security
Interest and any Deposit Taker's Acknowledgments and Agreements (the
"RESPONSIBLE PARTICIPANT") must defend, indemnify, and hold harmless BNPLC,
Agent and the other Participants from and against any Losses resulting from such
failure. Without limiting the foregoing, if the failure of a Deposit Taker for a
Responsible Participant to comply strictly with the terms of this Agreement
(including, without limitation, the provisions of Section 5.4 concerning the
issuance and redemption of Certificates of Deposit and the requirement that any
cash deposits be held in a deposit account located in either New York or
California) causes, in whole or in part, the security interest of Agent in the
Collateral held by such Deposit Taker to be unperfected, then any and all Losses
suffered as a result of such nonperfection shall be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.
ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL
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Section 5.1 Delivery of Funds by NAI. On each Base Rent Date, NAI must
deliver to Agent, subject to the pledge and security interest created hereby,
funds as Cash Collateral then needed (if any) to cause the Value of the
Collateral to be no less than the Minimum Collateral Value. Each delivery of
funds required by the preceding sentence must be received by Agent no later than
12:00 noon (San Francisco time) on the date it is required; if received after
12:00 noon it will be considered for purposes of the Land Lease as received on
the next following Business Day. At least five Business Days prior to any Base
Rent Date upon which it is expected that NAI will be required to deliver
additional funds pursuant to this Section, NAI shall notify BNPLC, Agent and
each of the Participants thereof and of the amount NAI expects to deliver to
Agent as Cash Collateral on the applicable Base Rent Date. In addition to
required deliveries of Cash Collateral as provided in the foregoing provisions,
NAI may on any date (whether or not a Base Rent Date) deliver additional Cash
Collateral to Agent as necessary to prevent any Default from becoming an Event
of Default. Upon receipt of any funds delivered to it by NAI as Cash Collateral,
Agent shall immediately deposit the same with the Deposit Takers in accordance
with the requirements of Sections 5.3 and 5.4 below.
Section 5.2 Transition Account. Pending deposit in the Accounts or
other application as provided herein, all Cash Collateral received by Agent
shall be credited to and held by Agent in an account (the "TRANSITION ACCOUNT")
styled "NAI Collateral Account, held for the benefit of BNP Leasing Corporation
and the Participants," separate and apart from all other property and funds of
NAI or other Persons, and no other property or funds shall be deposited in the
Transition Account. The books and records of Agent shall reflect that the
Transition Account and all Cash Collateral on deposit therein are owned by NAI,
subject to a pledge and security interest in favor of Agent for the benefit of
BNPLC and Participants.
Section 5.3 Allocation of Cash Collateral Among Deposit Takers. Funds
received by Agent from NAI as Cash Collateral will be allocated for deposit
among the Deposit Takers as follows:
6.4
first, to the extent possible the funds will be allocated as required to
rectify and prevent any Collateral Imbalance; and
second, the funds will be allocated to the Deposit Taker for BNPLC,
unless the Deposit Taker for BNPLC has become a Disqualified Deposit
Taker, in which case the funds will be allocated to other Deposit Takers
who are not Disqualified Deposit Takers as Agent deems appropriate.
Further, if for any reason a Collateral Imbalance is determined by Agent to
exist, Agent shall, as required to rectify or mitigate the Collateral Imbalance,
promptly reallocate Collateral among Deposit Takers by withdrawing Cash
Collateral from some Accounts and redepositing it in other Accounts. (If any
party to this Agreement believes that the Value of the Accounts held by a
particular Deposit Taker causes a Collateral Imbalance to exist, that party will
promptly notify BNPLC, NAI and Agent.) Subject to the foregoing, and provided
that Agent does not thereby create or exacerbate a Collateral Imbalance, Agent
may withdraw and redeposit Cash Collateral in order to reallocate the same among
Deposit Takers from time to time as Agent deems appropriate. For purposes of
illustration only, examples of the allocations required by this Section are set
forth in ATTACHMENT 5.
Section 5.4 Issuance and Redemption of Certificates of Deposit. Upon
the receipt of any deposit of Cash Collateral from Agent, each Deposit Taker
shall issue a Certificate of Deposit evidencing the Account into which such
deposit is made and deliver such Certificate of Deposit to Agent for the benefit
of BNPLC and the Participants. Each Certificate of Deposit shall be issued in an
amount equal to the Value of the Account which it evidences and shall otherwise
be in the form set forth as ATTACHMENT 1 to this Agreement. Upon depositing any
Cash Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has issued a
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Certificate of Deposit may require the surrender of the Certificate of Deposit
as a condition to a withdrawal from the Account evidenced thereby, including any
withdrawal required or permitted by this Agreement. Upon surrender of a
Certificate of Deposit in connection with a withdrawal of less than all of the
Cash Collateral in the Account evidenced thereby, the applicable Deposit Taker
will concurrently issue a new Certificate of Deposit to Agent, evidencing the
balance of the Cash Collateral remaining on deposit in the Account after the
withdrawal. Notwithstanding the foregoing, if any Certificate of Deposit held by
Agent shall be destroyed, lost or stolen, the Deposit Taker that issued the
Certificate, upon the written request of Agent, shall issue a new Certificate of
Deposit to Agent in lieu of and in substitution for the Certificate of Deposit
so destroyed, lost or stolen. However, as applicant for the substitute
Certificate of Deposit, Agent must indemnify (at no cost to NAI) the applicable
Deposit Taker against any liability on the Certificate of Deposit destroyed,
lost or stolen, and Agent shall furnish to the Deposit Taker an affidavit of an
officer of Agent setting forth the fact of destruction, loss or theft and
confirming the status of Agent as holder of the Certificate of Deposit
immediately prior to the destruction, loss or theft. If any Certificate of
Deposit held by Agent shall become mutilated, the Deposit Taker that issued the
Certificate, upon the written request of Agent, shall issue a new Certificate of
Deposit to Agent in exchange and substitution for the mutilated Certificate of
Deposit. Agent shall hold all Certificates of Deposit for the benefit of BNPLC
and the Participants, subject to the pledge and security interest created
hereby.
Section 5.5 Status of the Accounts Under the Reserve Requirement
Regulations. Deposit Takers shall be permitted to structure the Accounts as
nonpersonal time deposits under 12 C.F.R., Part II, Chapter 204 (commonly known
as "Regulation D"). Accordingly, each Deposit Taker may require at least seven
days advance notice of any withdrawal or transfer of funds from Accounts it
maintains and may limit the number of withdrawals or transfers from such
Accounts to no more than six in any calendar month, notwithstanding anything to
the contrary herein or in any deposit agreement that NAI and any Deposit Taker
may enter into with respect to any Account. As necessary to satisfy the seven
days notice requirement with respect to withdrawals by Agent when required by
NAI pursuant to the provisions below, Agent shall notify Deposit Takers promptly
after receipt of any notice from NAI described in subSection 6.1.2 or 6.2.1
in Section 6.3.
Section 5.6 Acknowledgment by NAI that Requirements of this Agreement
are Commercially Reasonable. NAI acknowledges and agrees that the requirements
set forth herein concerning receipt, deposit, withdrawal, allocation,
application and distribution of Cash Collateral by Agent, including the
requirements and time periods set forth in the next Article, are commercially
reasonable.
ARTICLE VI WITHDRAWAL OF CASH COLLATERAL
NAI may not withdraw Cash Collateral, except as follows:
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date.
NAI may require Agent to present Certificates of Deposit for payment and
withdraw Cash Collateral from Accounts on any date prior to the Designated Sale
Date and to deliver such Cash Collateral to NAI (which delivery shall be free
and clear of all liens and security interests hereunder); provided, however,
that in each case:
6.1.1 Such withdrawal and delivery of the Cash Collateral to NAI will
not cause the Value of the remaining Collateral to be less than the
Minimum Collateral Value.
6.1.2 by a notice in the form of ATTACHMENT 6, NAI must give Agent,
BNPLC and the Participants notice of the required withdrawal at least
ten days prior to the date upon which the withdrawal is to occur.
6.1.3 No Default or Event of Default shall have occurred and be
continuing at the time NAI gives the notice required by the preceding
subsection or on the date upon which the withdrawal is required.
17
6.1.4 NAI must pay to Agent any and all costs incurred by Agent in
connection with the withdrawal.
6.1.5 Agent shall determine the Accounts from which to make any
withdrawal required by NAI pursuant to this Section as necessary to
prevent or mitigate any Collateral Imbalance.
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants. To reduce the "Break Even
Price" or "Supplemental Payment" required under (and as defined in) the Purchase
Agreement (and, thus, to reduce the Secured Obligations), NAI may require Agent
to withdraw Cash Collateral then held by or for Agent pursuant to this Agreement
on the Designated Sale Date and to deliver the same on the Designated Sale Date
or on any date thereafter prior to an Event of Default (which delivery shall be
free and clear of all liens and security interests hereunder) directly to the
Participants in proportion to their respective rights to payment of BNPLC's
Corresponding Obligations to Participants and for application thereto or the
reduction thereof pursuant to Section 2.2 of the Participation Agreement;
provided, that:
6.2.1 by a notice in the form of ATTACHMENT 7, NAI must have notified
Agent, BNPLC and each of the Participants of the required withdrawal and
payment to Participants at least ten days prior to the date upon which
it is to occur;
6.2.2 the required withdrawal shall be made as determined by Agent,
first, from the Accounts maintained by the Deposit Takers for the
Participants, and then (to the extent necessary) from the Accounts
maintained by the Deposit Taker for BNPLC; and
6.2.3 in any event, no withdrawals or payments directly to
Participants shall be required by this Section 6.2 (or permitted over
the objection of BNPLC) in excess of those required to satisfy BNPLC's
Corresponding Obligations to Participants or to reduce such obligations
to zero under the Participation Agreement.
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC. To satisfy NAI's Purchase Agreement
Obligations, NAI may require Agent to withdraw any Cash Collateral held by the
Deposit Taker for BNPLC pursuant to this Agreement on the Designated Sale Date
and to deliver the same on the Designated Sale Date or on any date thereafter
prior to an Event of Default (which delivery shall be free and clear of all
liens and security interests hereunder) directly to BNPLC as a payment on behalf
of NAI of amounts due under the Purchase Agreement; provided, that by a notice
in the form of ATTACHMENT 8, NAI must have notified Agent and BNPLC of the
required withdrawal and payment to BNPLC at least ten days prior to the date
upon which it is to occur.
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by
Disqualified Deposit Takers. NAI may from time to time prior to the Designated
Sale Date (regardless of the existence of any Default or Event of Default)
require Agent to withdraw any or all Cash Collateral from any Account maintained
by a Disqualified Deposit Taker and deposit it, still subject to the pledge and
grant of security interest hereunder, with other Deposit Takers who are not
Disqualified Deposit Takers (in accordance with the requirements of Sections 5.3
and 5.4) on any date prior to the Designated Sale Date; provided, that by a
notice in the form of ATTACHMENT 9, NAI must have notified Agent, BNPLC and each
of the Participants of the required withdrawal at least ten days prior to the
date upon which it is to occur.
ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI
Section 7.1 Representations of NAI. NAI represents to BNPLC, Agent and
the Participants as follows:
18
7.1.1 NAI is the legal and beneficial owner of the Collateral (or, in
the case of after-acquired Collateral, at the time NAI acquires rights
in the Collateral, will be the legal and beneficial owner thereof). No
other Person has (or, in the case of after-acquired Collateral, at the
time NAI acquires rights therein, will have) any right, title, claim or
interest (by way of Lien, purchase option or otherwise) in, against or
to the Collateral, except for rights created hereunder.
7.1.2 Agent has (or in the case of after-acquired Collateral, at the
time NAI acquires rights therein, will have) a valid, first priority,
perfected pledge of and security interest in the Collateral, regardless
of the characterization of the Collateral as deposit accounts,
instruments or general intangibles under the UCC, but assuming that the
representations of each Deposit Taker in its Deposit Taker's
Acknowledgment and Agreement are true.
7.1.3 NAI has delivered to Agent, together with all necessary stock
powers, endorsements, assignments and other necessary instruments of
transfer, the originals of all documents, instruments and agreements
evidencing Accounts, Certificates of Deposit or Cash Collateral.
7.1.4 NAI's chief executive office is located at the address of NAI
set forth in Article II of the Common Definitions and Provisions
Agreement (Phase III - Land) or at another address in California
specified in a notice that NAI has given to Agent as required by
Section 7.2.4.
7.1.5 To the knowledge of NAI, neither the ownership or the intended
use of the Collateral by NAI, nor the pledge of Accounts or the grant of
the security interest by NAI to Agent herein, nor the exercise by Agent
of its rights or remedies hereunder, will (i) violate any provision of
(a) Applicable Law, (b) the articles or certificate of incorporation,
charter or bylaws of NAI, or (c) any agreement, judgment, license, order
or permit applicable to or binding upon NAI, or (ii) result in or
require the creation of any Lien, charge or encumbrance upon any assets
or properties of NAI except as expressly contemplated in this Agreement.
Except as expressly contemplated in this Agreement, to the knowledge of
NAI no consent, approval, authorization or order of, and no notice to or
filing with any court, governmental authority or third party is required
in connection with the pledge or grant by NAI of the security interest
contemplated herein or the exercise by Agent of its rights and remedies
hereunder.
Section 7.2 Covenants of NAI. NAI hereby agrees as follows:
7.2.1 NAI, at NAI's expense, shall promptly procure, execute and
deliver to Agent all documents, instruments and agreements and perform
all acts which are necessary, or which Agent may reasonably request, to
establish, maintain, preserve, protect and perfect the Collateral, the
pledge thereof to Agent or the security interest granted to Agent
therein and the first priority of such pledge or security interest or to
enable Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
preceding sentence, NAI shall (A) procure, execute and deliver to Agent
all stock powers, endorsements, assignments, financing statements and
other instruments of transfer requested by Agent, (B) deliver to Agent
promptly upon receipt all originals of Collateral consisting of
instruments, documents and chattel paper, (C) cause the security
interest of Agent in any Collateral consisting of securities to be
recorded or registered in the books of any financial intermediary or
clearing corporation requested by Agent, and (D) reimburse Agent upon
request for any legal opinion Agent may elect to obtain from a
nationally recognized commercial law firm authorized to practice in New
York concerning the enforceability, first priority and perfection of
Agent's security interest in any Collateral maintained in New York, if
BNPLC or any Participant should at any time elect to use a Deposit Taker
that will maintain one or more Accounts in New York.
19
7.2.2 NAI shall not use or consent to any use of any Collateral in
violation of any provision of the this Agreement or any other
Transaction Document or any Applicable Law.
7.2.3 NAI shall pay promptly when due all taxes and other governmental
charges, all Liens and all other charges now or hereafter imposed upon,
relating to or affecting any Collateral.
7.2.4 Without thirty days' prior written notice to Agent, NAI shall
not change NAI's name or place of business (or, if NAI has more than one
place of business, its chief executive office).
7.2.5 NAI shall appear in and defend, on behalf of Agent, any action
or proceeding which may affect NAI's title to or Agent's interest in the
Collateral.
7.2.6 Subject to the express rights of NAI under Article VI, NAI shall
not surrender or lose possession of (other than to Agent or a Deposit
Taker pursuant hereto), sell, encumber, lease, rent, option, or
otherwise dispose of or transfer any Collateral or right or interest
therein, and NAI shall keep the Collateral free of all Liens.
7.2.7 NAI will not take any action which would in any manner impair
the value or enforceability of Agent's pledge of or security interest in
any Collateral, nor will NAI fail to take any action which is required
to prevent (and which NAI knows is required to prevent) an impairment of
the value or enforceability of Agent's pledge of or security interest in
any Collateral.
7.2.8 NAI shall pay (and shall indemnify and hold harmless Agent from
and against) all Losses incurred by Agent in connection with or because
of (A) the interest acquired by Agent in any Collateral pursuant to this
Agreement, or (B) the negotiation or administration of this Agreement,
whether such Losses are incurred at the time of execution of this
Agreement or at any time in the future. Costs and expenses included in
such Losses may include, without limitation, all filing and recording
fees, taxes, UCC search fees and Attorneys' Fees incurred by Agent with
respect to the Collateral.
7.2.9 Without limiting the foregoing, within five Business Days after
NAI becomes aware of any failure of the pledge or security interest
contemplated herein in the Transition Account or any Account,
Certificate of Deposit or Cash Collateral to be a valid, perfected,
first priority pledge or security interest (regardless of the
characterization of the Transition Account or any Accounts, Certificates
of Deposit or Cash Collateral as deposit accounts, instruments or
general intangibles under the UCC), NAI shall notify Agent, BNPLC and
the Participants of such failure. In addition, if the failure would not
exist but for NAI's delivery of Cash Collateral to Agent subject to
prior Liens or other claims by one or more third parties, or but for the
grant by NAI itself of any Lien or other interest in the Collateral to
one or more third parties, then, in addition to any other remedies
available to BNPLC or Agent under the circumstances, NAI must pay to
BNPLC any additional Base Rent that has accrued under the Land Lease
because of (or that would have accrued if BNPLC had been aware of) the
failure, together with interest at the Default Rate on any such
additional Base Rent.
ARTICLE VIII AUTHORIZED ACTION BY AGENT
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Section 8.1 Power of Attorney. NAI hereby irrevocably appoints Agent as
NAI's attorney-in-fact for the purpose of authorizing Agent to perform (but
Agent shall not be obligated to and shall incur no liability to NAI or any third
party for failure to perform) any act which NAI is obligated by this Agreement
to perform, and to exercise, consistent with the other provisions of this
Agreement, such rights and powers as NAI might exercise with respect to the
Collateral during any period in which a Default or Event of Default has occurred
and is continuing, including the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension, reorganization,
deposit, merger, consolidation or other agreement pertaining to, or deposit,
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any indebtedness of NAI relating to the Collateral;
and (f) execute UCC financing statements and other documents, instruments and
agreements required hereunder. NAI agrees that such care as Agent gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Agent's possession; provided, however, that Agent shall
not be obligated to NAI to give any notice or take any action to preserve rights
against any other Person in connection with the Secured Obligations or with
respect to the Collateral.
ARTICLE IX DEFAULT AND REMEDIES
Section 9.1 Remedies. In addition to all other rights and remedies
granted to Agent, BNPLC or the Participants by this Agreement, the Land Lease,
the Purchase Agreement, the Participation Agreement, the UCC and other
Applicable Laws, Agent may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies, all of which will be in furtherance of its rights as a secured party
under the UCC:
(a) Agent may collect, receive, appropriate or realize upon
the Collateral or otherwise foreclose or enforce the pledge of or
security interests in any or all Collateral in any manner permitted by
Applicable Law or in this Agreement; and
(b) Agent may notify any or all Deposit Takers to pay all or
any portion of the Collateral held by such Deposit Taker(s) directly to
Agent.
Agent shall distribute the proceeds of all Collateral received by Agent after
the occurrence of an Event of Default to BNPLC and the Participants for
application to the Secured Obligations. If any proceeds of Collateral remain
after all Secured Obligations have been paid in full, Agent will deliver or
direct the Deposit Takers to deliver such proceeds to NAI or other Persons
entitled thereto. In any case where notice of any sale or disposition of any
Collateral is required, NAI hereby agrees that seven (7) Business Days notice of
such sale or disposition is reasonable.
ARTICLE X OTHER RECOURSE
21
Section 10.1 Recovery Not Limited. To the fullest extent permitted by
applicable law, NAI waives any right to require that Agent, BNPLC or the
Participants proceed against any other Person, exhaust any Collateral or other
security for the Secured Obligations, or to have any Other Liable Party joined
with NAI in any suit arising out of the Secured Obligations or this Agreement,
or pursue any other remedy in their power. NAI waives any and all notice of
acceptance of this Agreement. NAI further waives notice of the creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations of any Other Liable Party from time to time and any defense
arising by reason of any disability or other defense of any Other Liable Party
or by reason of the cessation from any cause whatsoever of the liability of any
Other Liable Party. Until all of the Secured Obligations shall have been paid in
full, NAI shall have no right to subrogation, reimbursement, contribution or
indemnity against any Other Liable Party and NAI waives the right to enforce any
remedy which Agent, BNPLC or any Participant has or may hereafter have against
any Other Liable Party, and waives any benefit of and any right to participate
in any other security whatsoever now or hereafter held by Agent, BNPLC or any
Participant. NAI authorizes Agent, BNPLC and the Participants, without notice or
demand and without any reservation of rights against NAI and without affecting
NAI's liability hereunder or on the Secured Obligations, from time to time to
(a) take or hold any other property of any type from any other Person as
security for the Secured Obligations, and exchange, enforce, waive and release
any or all of such other property, (b) after any Event of Default, apply or
require the application of the Collateral (in accordance with this Agreement) or
such other property in any order they may determine and to direct the order or
manner of sale thereof as they may determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
Other Liable Party with respect to any or all of the Secured Obligations or
other security for the Secured Obligations, and (d) release or substitute any
Other Liable Party.
ARTICLE XI PROVISIONS CONCERNING AGENT
In the event of any conflict between the following and other provisions
in this Agreement, the following will control:
Section 11.1 Appointment and Authority. BNPLC and each Participant
hereby irrevocably authorizes Agent, and Agent hereby undertakes, to take all
actions and to exercise such powers under this Agreement as are specifically
delegated to Agent by the terms hereof, together with all other powers
reasonably incidental thereto. The relationship of Agent to the Participants is
only that of one commercial bank acting as collateral agent for others, and
nothing herein shall be construed to constitute Agent a trustee or other
fiduciary for any Participant or anyone claiming through or under a Participant
nor to impose on Agent duties and obligations other than those expressly
provided for in this Agreement. With respect to any matters not expressly
provided for in this Agreement and any matters which this Agreement places
within the discretion of Agent, Agent shall not be required to exercise any
discretion or take any action, and it may request instructions from BNPLC and
Participants with respect to any such matter, in which case it shall be required
to act or to refrain from acting (and shall be fully protected and free from
liability to all Participants in so acting or refraining from acting) upon the
instructions of the Majority, as defined in the Participation Agreement,
including itself as a Participant and BNPLC; provided, however, that Agent shall
not be required to take any action which exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to this Agreement
or the other documents referenced herein or to Applicable Law.
Section 11.2 Exculpation, Agent's Reliance, Etc. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement, INCLUDING THEIR NEGLIGENCE OF ANY KIND, EXCEPT THAT EACH
SHALL BE LIABLE FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Without
limiting the generality of the foregoing, Agent (1) may treat the rights of any
Participant under its Participation Agreement as continuing until Agent receives
written notice of the assignment or transfer of those rights in accordance with
such Participation Agreement, signed by such Participant and in form
satisfactory to Agent; (2) may consult with legal counsel (including counsel for
NAI), independent public accountants and other experts selected by it and shall
not be liable for any action taken or
22
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts, unless the action taken or omitted constitutes
misconduct; (3) makes no warranty or representation and shall not be responsible
for any statements, warranties or representations made in or in connection with
this Agreement or the other documents referenced herein; (4) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of the Transaction Documents on the part of
any party thereto, or to inspect the property (including the books and records)
of any party thereto; (5) shall not be responsible to any Participant for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Transaction Document or any instrument or document furnished in
connection therewith; (6) may rely upon the representations and warranties of
NAI, Participants and Deposit Takers in exercising its powers hereunder; and (6)
shall incur no liability under or in respect of the Transaction Documents by
acting upon any notice, consent, certificate or other instrument or writing
(including any telecopy, telegram, cable or telex) believed by it to be genuine
and signed or sent by the proper Person or Persons.
Section 11.3 Participant's Credit Decisions. Each Participant
acknowledges that it has, independently and without reliance upon Agent or any
other Participant, made its own analysis of NAI and the transactions
contemplated hereby and its own independent decision to enter into the
Transaction Documents to which it is a party. Each Participant also acknowledges
that it will, independently and without reliance upon Agent or any other
Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Transaction Documents.
Section 11.4 Indemnity. Each Participant agrees to indemnify Agent (to
the extent not reimbursed by NAI within ten days after demand) from and against
such Participant's Percentage of any and all Losses of any kind or nature
whatsoever which to any extent (in whole or in part) may be imposed on, incurred
by, or asserted against Agent growing out of, resulting from or in any other way
associated with any of the Collateral, the Transaction Documents and the
transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LOSSES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED,
IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,
PROVIDED ONLY THAT NO PARTICIPANT SHALL BE OBLIGATED UNDER THIS SECTION TO
INDEMNIFY AGENT FOR THAT PORTION, IF ANY, OF ANY LOSS WHICH IS PROXIMATELY
CAUSED BY AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED IN A FINAL JUDGMENT RENDERED AGAINST AGENT. Cumulative of the
foregoing, each Participant agrees to reimburse Agent promptly upon demand for
such Participant's Percentage share of any costs and expenses to be paid to
Agent by NAI hereunder to the extent that Agent is not timely reimbursed by NAI
as provided in subsection 7.2.8. As used in this Section the term "Agent" shall
refer not only to the Person designated as such in the introductory paragraph of
this Agreement, but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.
Section 11.5 Agent's Rights as Participant and Deposit Taker. In its
capacity as a Participant, Banque Nationale de Paris shall have the same rights
and obligations as any Participant and may exercise such rights as though it
were not Agent. In its capacity as a Deposit Taker, Banque Nationale de Paris
shall have the same rights and obligations as any Deposit Taker and may exercise
such rights as though it were not Agent. Banque Nationale de Paris and any of
its Affiliates may accept deposits from, lend money to, act as Trustee under
indentures of, and generally engage in any kind of business with NAI or its
Affiliates, all as if Banque Nationale de Paris were not designated as the Agent
hereunder and without any duty to account therefor to any other Participant.
Section 11.6 Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute any funds which it has received
hereunder, or whenever Agent in good faith determines that there is any dispute
among BNPLC and Participants about how such funds should be distributed, Agent
may choose to defer distribution
23
of the funds which are the subject of such uncertainty or dispute. If Agent in
good faith believes that the uncertainty or dispute will not be promptly
resolved, or if Agent is otherwise required to invest funds pending
distribution, Agent shall invest such funds pending distribution, all interest
on any such investment shall be distributed upon the distribution of such
investment and in the same proportion and to the same Persons as such
investment. All moneys received by Agent for distribution to BNPLC or
Participants shall be held by Agent pending such distribution solely as Agent
hereunder, and Agent shall have no equitable title to any portion thereof.
Section 11.7 Benefit of Article XI. The provisions of this Article
(other than the following Section 11.8) are intended solely for the benefit of
Agent, BNPLC and Participants, and NAI shall not be entitled to rely on any such
provision or assert any such provision in a claim or defense against Agent,
BNPLC or any Participant. Agent, BNPLC and Participants may waive or amend such
provisions as they desire without any notice to or consent of NAI.
Section 11.8 Resignation. Agent may resign at any time by giving
written notice thereof to BNPLC, Participants and NAI. Upon any such resignation
the Majority (as defined in the Participation Agreement) shall have the right to
appoint a successor Agent, subject to NAI's consent, such consent not to be
unreasonably withheld. A successor must be appointed for any retiring Agent, and
such Agent's resignation shall become effective when such successor accepts such
appointment. If, within thirty days after the date of the retiring Agent's
resignation, no successor Agent has been appointed and has accepted such
appointment, then the retiring Agent may appoint a successor Agent, which shall
be a commercial bank organized or licensed to conduct a banking or trust
business under the laws of the United States of America or of any state thereof.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder, the provisions
of this Article 10.1 shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
ARTICLE XII MISCELLANEOUS
Section 12.1 Provisions Incorporated From Other Operative Documents.
Reference is made to the Common Definitions and Provisions Agreement (Phase III
- - Land), to the Purchase Agreement and to the Participation Agreement for a
statement of the terms thereof. Without limiting the generality of the
foregoing, the provisions of Article II of the Common Definitions and Provisions
Agreement (Phase III - Land) are incorporated into this Agreement for all
purposes as if set forth in this Article.
Section 12.2 Cumulative Rights, etc. Except as herein expressly
provided to the contrary, the rights, powers and remedies of Agent, BNPLC and
the Participants under this Agreement shall be in addition to all rights, powers
and remedies given to them by virtue of any Applicable Law, any other
Transaction Document or any other agreement, all of which rights, powers, and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing their respective rights hereunder. NAI waives any right to
require Agent, BNPLC or any Participant to proceed against any Person or to
exhaust any Collateral or to pursue any remedy in Agent's, BNPLC's or such
Participant's power.
Section 12.3 Survival of Agreements. All representations and warranties
of NAI herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Transaction Documents and the creation of the Secured Obligations and
continue until terminated or released as provided herein.
Section 12.4 Other Liable Party. Neither this Agreement nor the
exercise by Agent or the failure of Agent to exercise any right, power or remedy
conferred herein or by law shall be construed as relieving any Other Liable
Party from liability on the Secured Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any
24
other agreement evidencing or securing the Secured Obligations to which NAI or
any Other Liable Party may be a party, and notwithstanding the reorganization,
death, incapacity or bankruptcy of any Other Liable Party, or any other event or
proceeding affecting any Other Liable Party.
Section 12.5 Termination. Following the Designated Sale Date, upon
satisfaction in full of all Secured Obligations and upon written request for the
termination hereof delivered by NAI to Agent, (i) this Agreement and the pledge
and security interest created hereby shall terminate and all rights to the
Collateral shall revert to NAI and (ii) Agent will, upon NAI's request and at
NAI's expense execute and deliver to NAI such documents as NAI shall reasonably
request to evidence such termination and release.
[The signature pages follow.]
25
IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of
[EFFECTIVE DATE].
"NAI"
NETWORK APPLIANCE, INC.
By:______________________________________
26
[Continuation of signature pages to Pledge Agreement (Phase III - Land) dated to
be effective [EFFECTIVE DATE]]
"BNPLC"
BNP LEASING CORPORATION
By:______________________________________
Henry Setina, Vice President
27
[Continuation of signature pages to Pledge Agreement (Phase III - Land) dated to
be effective [EFFECTIVE DATE]]
"AGENT"
BANQUE NATIONALE DE PARIS
By:______________________________________
Name:_________________________________
Title:________________________________
By:______________________________________
Name:_________________________________
Title:________________________________
"PARTICIPANT"
BANQUE NATIONALE DE PARIS
By:______________________________________
Name:_________________________________
Title:________________________________
By:______________________________________
Name:_________________________________
Title:________________________________
28
ATTACHMENT 1
TO PLEDGE AGREEMENT
CERTIFICATE OF DEPOSIT
(No. _________)
[_________, _____]
[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]
PAYABLE TO
THE ORDER OF: BANQUE NATIONALE DE PARIS, as Agent under the Pledge Agreement
(Phase III - Land) dated [EFFECTIVE DATE], among Network
Appliance, Inc., BNP Leasing Corporation, Banque Nationale de
Paris and any other financial institutions which are from time to
time Participants under such Pledge Agreement (Phase III - Land)
and Banque Nationale de Paris, acting in its capacity as agent
for BNPLC and the Participants
Dollars
in current funds, without interest, seven days after presentment of this
certificate properly endorsed.
The bank issuing this certificate acknowledges and certifies that on the date
indicated above the payee deposited the dollar amount indicated above, and that
such amount shall be payable as provided above.
-----------------------------------------
Authorized Signature
1
29
ATTACHMENT 2
TO PLEDGE AGREEMENT
SUPPLEMENT TO PLEDGE AGREEMENT
[_________, ____]
Banque Nationale de Paris
- -------------------------
- -------------------------
- -------------------------
Network Appliance, Inc.
- -------------------------
- -------------------------
- -------------------------
1. Reference is made to the Pledge Agreement (Phase III - Land) (the
"PLEDGE AGREEMENT") dated [EFFECTIVE DATE] among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"). Unless otherwise defined herein, all capitalized terms used
in this Supplement have the respective meanings given to those terms in the
Pledge Agreement.
2. The undersigned hereby certifies to Agent and NAI that the undersigned
has become a party to the Participation Agreement by executing a supplement as
provided therein and that its Percentage thereunder is ______%.
3. The undersigned, by executing and delivering this Supplement to NAI and
Agent, hereby agrees to become a party to the Pledge Agreement and agrees to be
bound by all of the terms thereof applicable to Participants. The Deposit Taker
for the undersigned shall be _________________, until such time as another
Deposit Taker for the undersigned shall be designated in accordance with
Sections 4.4 or 4.5 of the Pledge Agreement. The undersigned certifies to Agent
and NAI that such Deposit Taker is an Initially Qualified Deposit Taker and
satisfies the requirements for a Deposit Taker set forth in Section of the
Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Supplement as of the day
and year indicated above.
[ ]
By:______________________________________
Name:_________________________________
Title:________________________________
1
30
ATTACHMENT 3
TO PLEDGE AGREEMENT
NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE
[________, _____]
Banque Nationale de Paris
[address of BNP]
Re: Pledge Agreement (Phase III - Land) (the "PLEDGE AGREEMENT") dated
[EFFECTIVE DATE] among Network Appliance, Inc., BNP Leasing Corporation,
Banque Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement and Banque
Nationale de Paris, acting in its capacity as agent for BNPLC and the
Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings assigned
to them in the Pledge Agreement referenced above. This letter constitutes notice
to you, as Agent under the Pledge Agreement, that pursuant to Section 3.1 of the
Pledge Agreement, NAI elects to change the Collateral Percentage to:
__________ percent (___%),
on the following Base Rent Date:
_________, ____
NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:
____________________________ Dollars ($__________),
will result in an expected new Minimum Collateral Value of:
____________________________ Dollars ($__________).
[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:
Because of the increase in the Collateral Percentage which will result from this
notice and the corresponding increase in the Minimum Collateral Value, NAI will
deliver additional Cash Collateral to you as required by Section of the Pledge
Agreement no later than 12:00 noon (San Francisco time) on the Base Rent Date
specified above, in the amount of:
1
31
____________________________ Dollars ($__________).]
To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:
1. NAI is giving this notice to you, BNPLC and the
Participants at least ten Business Days prior to the Base Rent Date
specified above, and such Base Rent Date is the commencement of a Base
Rent Period.
2. No Event of Default or other event or circumstance that
would, pursuant to Section of the Pledge Agreement, preclude NAI from
designating the new Collateral Percentage above has occurred and is
continuing, and NAI does not anticipate that on the Base Rent Date
specified above there will have occurred and be continuing any such
Event of Default or other event or circumstance.
3. No Mandatory Collateral Period shall be in effect as of
the effective date specified above.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
ABOVE ARE NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY
IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
[cc BNPLC and all Participants]
2
32
ATTACHMENT 4
TO PLEDGE AGREEMENT
NOTICE OF SECURITY INTEREST
[_________, _____]
[Name of Deposit Taker]
[Address of Deposit Taker]
1. Reference is made to the Pledge Agreement (Phase III - Land) (the
"PLEDGE AGREEMENT") dated [EFFECTIVE DATE] among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"). Unless otherwise defined herein, all capitalized terms used
in this Notice have the respective meanings given to those terms in the Pledge
Agreement.
2. NAI has informed Agent that NAI has established with the addressee of
this Notice (the "DEPOSIT TAKER") the following non-interest bearing Account(s)
to be maintained at the following Account Office(s):
Account Account Account
Type Office Number
------- ------- -------
Time Deposit _______ _______
Time Deposit _______ _______
Time Deposit _______ _______
NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the Deposit Taker
to issue Certificates of Deposit payable to the order of Agent as provided in
the Pledge Agreement.
3. NAI and Agent hereby notify Deposit Taker that, pursuant to the Pledge
Agreement, NAI has granted to Agent, for the ratable benefit of BNPLC and the
Participants as security for the Secured Obligations, a pledge of and security
interest in all Accounts and other Collateral maintained by NAI with Deposit
Taker, including the Account(s) described in Section 2 above.
4. In furtherance of such grant, NAI and Agent hereby authorize and direct
Deposit Taker to:
(a) hold all Collateral for Agent and as Agent's bailee,
separate and apart from all other property and funds of NAI and all
other Persons and to permit no other funds to be deposited or credited
to the Account(s);
3
33
(b) make a notation in its books and records of the interest
of Agent in the Collateral and that the Account(s) and all deposits
therein or sums credited thereto are subject to a pledge and security
interest in favor of Agent;
(c) issue and redeem Certificates of Deposit evidencing the
Account(s), as directed by Agent pursuant to the Pledge Agreement;
(d) take such other steps as Agent may reasonably request to
record, maintain, validate and perfect its pledge of and security
interest in the Collateral; and
(e) upon receipt of notice from Agent that an Event of
Default has occurred, transfer and deliver to Agent or its nominee,
together with all necessary endorsements, all or such portion of the
Collateral held by Deposit Taker as Agent shall direct; provided,
however, that in connection therewith the Deposit Taker may require
compliance by Agent with the provisions in Section 5.4 of the Pledge
Agreement for redemption of any outstanding Certificates of Deposit
which evidence the Account(s).
5. NAI and Agent agree that (a) the possession by Deposit Taker of all
money, instruments, chattel paper and other property constituting Collateral
shall be deemed to be possession by Agent or a person designated by Agent, for
purposes of perfecting the security interest granted to Agent hereunder pursuant
to Section 9305, 8313 or 8213 of the UCC (as the case may be), and (b)
notifications by Deposit Taker to other Persons holding any such property, and
Acknowledgments, receipts or confirmations from such Persons delivered to
Deposit Taker, shall be deemed notifications to, or Acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Deposit Taker for the benefit of Agent for the purposes of perfecting
such security interests under applicable law.
6. As contemplated by the Pledge Agreement, please acknowledge Deposit
Taker's receipt of, and consent to, this notice and confirm the representations
and agreements set forth in the Acknowledgment and Agreement attached hereto by
executing the same and returning this letter to Agent. For your files, a copy of
this letter is enclosed which you may retain. The authorizations and directions
set forth herein may not be revoked or modified without the written consent of
Agent.
"AGENT"
BANQUE NATIONALE DE PARIS
By:______________________________________
Name:_________________________________
Title:________________________________
By:______________________________________
Name:_________________________________
Title:________________________________
2
34
"NAI"
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
3
35
ACKNOWLEDGMENT AND AGREEMENT
OF DEPOSIT TAKER
Deposit Taker hereby acknowledges receipt of, and consents to, the above
notice, acknowledges that it will hold the Collateral for Agent and as Agent's
bailee, agrees to comply with the authorizations and directions set forth above
and represents to and agrees with NAI and Agent as follows:
(a) Deposit Taker is a commercial bank, organized under the
laws of the United States of America or a state thereof or under the
laws of another country which is doing business in the United States of
America. Deposit Taker is authorized to maintain deposit accounts for
others through the Account Offices specified in the above notice, and
Deposit Taker will not move the accounts described in the above notice
to other offices without the prior written authorization of Agent and
NAI.
(b) Deposit Taker has a combined capital, surplus and
undivided profits of at least $500,000,000.
(c) The information set forth above regarding the Account(s)
is accurate. Such Account(s) is (are) currently open and Deposit Taker
has no prior notice of any other pledge, security interest, Lien,
adverse claim or interest in such Account(s).
(e) Deposit Taker shall promptly notify NAI and Agent if the
representations made by Deposit Taker above cease to be true and
correct.
(f) Deposit Taker shall not (i) allow the withdrawal of
funds from any Account by any Person other than Agent, or (ii) WITHOUT
IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT,
setoff or attempt to setoff any Secured Obligations owed to Deposit
Taker against any Collateral held from time to time by Deposit Taker, or
(iii) WITHOUT IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN
AUTHORIZATION OF BOTH NAI AND AGENT, setoff or attempt to setoff any
obligations owed to Deposit Taker other than Secured Obligations,
against any Collateral held from time to time by Deposit Taker.
[ ]
By:______________________________________
Name:_________________________________
Title:________________________________
[Date]
4
36
ATTACHMENT 5
TO PLEDGE AGREEMENT
EXAMPLES OF CALCULATIONS REQUIRED
TO AVOID A COLLATERAL IMBALANCE
The examples below are provided to illustrate the calculations required
for allocations of Cash Collateral in a manner that will avoid a Collateral
Imbalance. The examples are not intended to reflect actual numbers under this
Agreement or actual Percentages of BNPLC or any of the Participants; nor are the
examples intended to provide a formula for the allocations that would be
appropriate in every case. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.
EXAMPLE NO. 1
Assumptions:
1. Two Participants ("Participant A" and "Participant B") are parties to
the Participation Agreement with BNPLC. Participant A's Percentage is
50% and Participant B's Percentage is 45%, leaving BNPLC with a
Percentage of 5%.
2. On the Base Rent Commencement Date, Funding Advances (including those to
cover Carrying Costs under the Land Lease) totaled $12,000,000,
resulting in a Stipulated Loss Value of $12,000,000, allocable as
follows:
A. BNPLC's Parent (providing BNPLC's share) (5%) $600,000
B. Participant A (50%) 6,000,000
C. Participant B (45%) 5,400,000
-----------
TOTAL $12,000,000
3. The Minimum Collateral Value on the Base Rent Commencement Date was
$7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
Loss Value).
4. On the Base Rent Commencement Date, NAI had delivered to Agent Cash
Collateral of $7,200,000, equal to the Minimum Collateral Value, as
required by Section 5.1 of this Agreement.
Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:
A. BNPLC's Deposit Taker (5% of Minimum Collateral Value) $ 360,000
B. Participant A's Deposit Taker (50% of Minimum Collateral Value) 3,600,000
C. Participant B's Deposit Taker (45% of Minimum Collateral Value) 3,240,000
----------
TOTAL $7,200,000
1
37
EXAMPLE NO. 2
Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:
1. Effective as of the first Base Rent Date, NAI increased its Collateral
Percentage from 60% to 80%, raising the Minimum Collateral Value to
$9,600,000. Because of such increase, NAI also delivered an additional
$2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
bringing the total of all Cash Collateral delivered by NAI to $9,600,000
as required by Section 5.1 of this Agreement.
2. Also effective as of the first Base Rent Date, a new Participant
approved by NAI ("Participant C") became a party to this Agreement and
the Participation Agreement, taking a Percentage of 20%. Simultaneously,
Participant A and Participant B entered into supplements to the
Participation Agreement which reduced their Percentages to 40% and 35%,
respectively.
Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPLC and the Participants with the
following amounts:
A. BNPLC's Deposit Taker (5% of Minimum Collateral Value) $ 480,000
B. Participant A's Deposit Taker (40% of Minimum Collateral Value) 3,840,000
C. Participant B's Deposit Taker (35% of Minimum Collateral Value) 3,360,000
D. Participant C's Deposit Taker (20% of Minimum Collateral Value) 1,920,000
----------
TOTAL $9,600,000
Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:
A. BNPLC's Deposit Taker ($480,000 less $360,000 already on deposit) $ 120,000
B. Participant A's Deposit Taker ($3,840,000 less $3,600,000 already on deposit) 240,000
C. Participant B's Deposit Taker ($3,360,000 less $3,240,000 already on deposit) 120,000
D. Participant C's Deposit Taker ($1,920,000 less $0 already on deposit) 1,920,000
----------
TOTAL $2,400,000
EXAMPLE NO. 3
Assumptions: Assume the same facts as in Example No. 2, except that:
1. Instead of increasing its Collateral Percentage from 60% to 80%, NAI
increased its Collateral Percentage to 70% on the first Base Rent Date,
raising the Minimum Collateral Value to $8,400,000. Because of such
increase, NAI delivered an additional $1,200,000 as additional Cash
Collateral to Agent on the first Base Rent Date, bringing the total of
all Cash Collateral delivered by NAI to $8,400,000 as required by
Section 5.1 of this Agreement.
2
38
Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPLC and the Participants with the
following amounts:
A. BNPLC's Deposit Taker (5% of Minimum Collateral Value) $ 420,000
B. Participant A's Deposit Taker (40% of Minimum Collateral Value) 3,360,000
C. Participant B's Deposit Taker (35% of Minimum Collateral Value) 2,940,000
D. Participant C's Deposit Taker (20% of Minimum Collateral Value) 1,680,000
----------
TOTAL $8,400,000
Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:
A. BNPLC's Deposit Taker ($420,000 less $360,000 already on deposit) $ 60,000
B. Participant A's Deposit Taker ($3,360,000 less $3,600,000 already on deposit) (240,000)
C. Participant B's Deposit Taker ($2,940,000 less $3,240,000 already on deposit) (300,000)
D. Participant C's Deposit Taker ($1,680,000 less $0 already on deposit) 1,680,000
---------
TOTAL $1,200,000
NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.
3
39
ATTACHMENT 6
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL
[________, _____]
Banque Nationale de Paris
[address of BNP]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent under
the Pledge Agreement, that pursuant to Section 6.1 of the Pledge Agreement, NAI
requires you to withdraw from the Accounts and return to NAI the following
amount:
____________________________ Dollars ($__________)
on the following date:
__________, ____
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that:
1. Your withdrawal and delivery of the amount specified above to NAI will
not cause the Value of the remaining Collateral to be less than the
Minimum Collateral Value. After giving effect to such withdrawal, the
Collateral remaining in the Accounts maintained by the Deposit Takers
will be:
____________________________ Dollars ($__________),
40
and the Minimum Collateral Value on the date specified above will equal:
____________________________ Dollars ($__________).
Such Minimum Collateral Value equals the Collateral Percentage of:
__________ percent (___%),
times the Stipulated Loss Value of:
____________________________ Dollars ($__________).
2. NAI is giving this notice to you, BNPLC and the Participants at least
ten days prior to the Base Rent Date specified above.
3. No Default or Event of Default has occurred and is continuing as of the
date of this notice, and NAI does not anticipate that any Default or Event of
Default will have occurred and be continuing on the date upon which the
withdrawal is required.
4. NAI agrees that you may determine the Accounts from which to make any
withdrawal required by NAI pursuant to this Section as necessary to prevent or
mitigate any Collateral Imbalance.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS ABOVE ARE
NOT CORRECT OR IF THE DATE FOR WITHDRAWAL SPECIFIED ABOVE IS LESS THAN TEN DAYS
AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY NAI
IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.
41
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Takers seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to avoid a Collateral
Imbalance.
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
[cc BNPLC and all Participants]
42
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH EXCESS COLLATERAL
[________, _____]
Deposit Takers on the
Attached Distribution List
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned,
as Agent under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires Agent to withdraw from the Accounts and return to NAI
the amounts listed below on the following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:
Deposit Taker Account No. Amount
- ------------- ----------- ------
1._______________ ________________ $_______________
2._______________ ________________ $_______________
3._______________ ________________ $_______________
4._______________ ________________ $_______________
TOTAL WITHDRAWALS: $_______________
BANQUE NATIONALE DE PARIS, AS AGENT
Name:____________________________________
Title:___________________________________
[cc BNPLC and NAI]
43
ATTACHMENT 7
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENTS TO PARTICIPANTS
[_________, _____]
Banque Nationale de Paris
[address of BNP]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent under
the Pledge Agreement, that pursuant to Section 6.2 of the Pledge Agreement, NAI
requires you to withdraw from the Accounts and pay directly to the Participants
(in proportion to their respective Percentages) the following amount:
____________________________ Dollars ($__________)
on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):
__________, ____
The amount specified above equals the following percentage (equal to the
aggregate of all Participant's Percentages):
__________ percent (___%),
times the total of all Cash Collateral presently pledged under the Pledge
Agreement:
____________________________ Dollars ($__________).
1
44
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you, BNPLC and the
Participants at least ten days prior to the date of required withdrawal and
payment specified above.
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Takers seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to comply with
subSection 6.2.2 of the Pledge Agreement.
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
[cc BNPLC and all Participants]
45
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH COLLATERAL FOR
DIRECT PAYMENTS TO PARTICIPANTS
[________, _____]
Deposit Takers on the
Attached Distribution List
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned,
as Agent under the Pledge Agreement, that pursuant to Section 6.2 of the Pledge
Agreement, NAI requires Agent to withdraw from the Accounts and pay to the
Participants (in proportion to their respective Percentages) the amounts listed
below on the following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:
Deposit Taker Account No. Amount
- ------------- ----------- ------
1._______________ ________________ $_______________
2._______________ ________________ $_______________
3._______________ ________________ $_______________
4._______________ ________________ $_______________
TOTAL WITHDRAWALS: $_______________
BANQUE NATIONALE DE PARIS, AS AGENT
Name:____________________________________
Title:___________________________________
[cc BNPLC and NAI]
46
ATTACHMENT 8
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENT TO BNPLC
[_________, _____]
Banque Nationale de Paris
[address of BNP]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent under
the Pledge Agreement, that pursuant to Section 6.3 of the Pledge Agreement, NAI
requires you to withdraw from the Account maintained by the Deposit Taker for
BNPLC and pay directly to BNPLC on behalf of NAI as a payment required by the
Purchase Agreement the following amount:
____________________________ Dollars ($__________)
on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):
__________, ____
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you and BNPLC at least ten
days prior to the date of required withdrawal and payment specified above.
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to the
Deposit Taker for BNPLC seven days prior to the withdrawal of Cash Collateral
required by this notice. For your convenience, we have attached a letter as
Annex 1 to this notice that you might execute and send to the Deposit Taker for
BNPLC to advise it of your intent to withdraw and of your presentment of
Certificates of Deposit as required in connection therewith. The attached letter
also sets forth the amount NAI believes you must withdraw to comply with Section
6.3 of the Pledge Agreement.
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
[cc BNPLC]
1
47
Annex 1
TO NAI'S NOTICE OF REQUIREMENT OF
DIRECT PAYMENT TO BNPLC
[_________, _____]
[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned,
as Agent under the Pledge Agreement, that pursuant to Section 6.3 of the Pledge
Agreement, NAI requires Agent to withdraw from the Account maintained by you, as
Deposit Taker for BNPLC, the sum of:
____________________________ Dollars ($__________)
and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw such
amount from the following Account maintained by you as Deposit Taker for BNPLC,
and with this letter the undersigned is presenting Certificate(s) of Deposit as
required in connection with such withdrawal.
BANQUE NATIONALE DE PARIS, AS AGENT
Name:____________________________________
Title:___________________________________
[cc BNPLC and NAI]
2
48
ATTACHMENT 9
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER
[_________, _____]
Banque Nationale de Paris
[address of BNP]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent under
the Pledge Agreement, that pursuant to Section 6.4 of the Pledge Agreement, NAI
requires you to withdraw from the following Account maintained by the following
Deposit Taker:
Deposit Taker Account No.
------------- -----------
------------- -----------
Cash Collateral in the following amount:
____________________________ Dollars ($__________)
and to deposit such Cash Collateral with other Deposit Takers who are not
Disqualified Deposit Takers no later than ten days after the date upon which you
receive this notice.
To assure you that NAI has the right to require such withdrawal, and to
induce you to comply with this notice, NAI certifies to you that the Deposit
Taker specified above has become a Disqualified Deposit Taker because it no
longer satisfies the requirements listed in Section 4.1 of the Pledge Agreement.
Specifically, such Deposit Taker no longer satisfies the following requirements:
[NAI MUST INSERT HERE A DESCRIPTION OF WHICH REQUIREMENTS THE DEPOSIT TAKER NO
LONGER SATISFIES AND HOW NAI HAS DETERMINED THAT THE REQUIREMENTS ARE NO LONGER
SATISFIED,
1
49
ALL IN SUFFICIENT DETAIL TO PERMIT THE PARTICIPANT FOR WHOM SUCH
DEPOSIT TAKER HAS BEEN MAINTAINING AN ACCOUNT TO RESPOND IF IT BELIEVES THAT NAI
IS IN ERROR.]
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to the
Deposit Taker specified above seven days prior to the withdrawal of Cash
Collateral required by this notice. For your convenience, we have attached a
letter as Annex 1 to this notice that you might execute and send to such Deposit
Taker to advise it of your intent to withdraw and of your presentment of
Certificates of Deposit as required in connection therewith. The attached letter
also sets forth the amount NAI believes you must withdraw to comply with
Section 6.4 of the Pledge Agreement.
Network Appliance, Inc.
By:______________________________________
Name:_________________________________
Title:________________________________
[cc BNPLC]
2
50
Annex 1
TO NAI'S NOTICE OF REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER
[_________, _____]
[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]
Re: Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, acting in its
capacity as agent for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned,
as Agent under the Pledge Agreement, that pursuant to Section 6.4 of the Pledge
Agreement, NAI has advised Agent that you are a Disqualified Deposit Taker, and
NAI requires Agent to withdraw from the Account maintained by you, as a Deposit
Taker under the Pledge Agreement, the sum of:
____________________________ Dollars ($__________)
no later than the following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw such
amount from the Account maintained by you as Deposit Taker (Account No.
__________), and with this letter the undersigned is presenting Certificate(s)
of Deposit as required in connection with such withdrawal.
BANQUE NATIONALE DE PARIS, AS AGENT
Name:____________________________________
Title:___________________________________
[cc BNPLC and NAI]
3