Exhibit 10.5
LEASE AGREEMENT
BETWEEN
NETWORK APPLIANCE, INC.
(“NAI”)
AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)
December 15, 2005

 

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TABLE OF CONTENTS

              Page  
1 Term; Lease Obligations Deferred Until Completion of Initial Improvements;
Termination Prior to Lease Commencement
    2  
(A) Scheduled Term; Deferral of Obligations
    3  
(B) Option of BNPPLC to Terminate
    3  
(C) Automatic Termination
    3  
(D) Extension of the Term
    3  
 
       
2 Use and Condition of the Property
    4  
(A) Use
    4  
(B) Condition of the Property
    5  
(C) Consideration for and Scope of Waiver
    5  
 
       
3 Rent
    6  
(A) Base Rent Generally
    6  
(B) Calculation of and Due Dates for Base Rent
    6  
(1) Determination of Payment Due Dates Generally
    6  
(2) Special Adjustments to Base Rent Payment Dates and Periods
    6  
(3) Base Rent Formula
    7  
(4) Fixed Rate Lock
    7  
(C) Early Termination of Fixed Rate Lock
    8  
(D) Additional Rent
    9  
(E) Administrative Fees.
    9  
(F) No Demand or Setoff
    9  
(G) Default Interest and Order of Application
    9  
(H) Calculations by BNPPLC Are Conclusive
    9  
 
       
4 Nature of this Agreement
    9  
(A) “Net” Lease Generally
    9  
(B) No Termination
    10  
(C) Characterization of this Lease
    11  
 
       
5 Payment of Executory Costs and Losses Related to the Property
    13  
(A) Local Impositions
    13  
(B) Increased Costs; Capital Adequacy Charges
    13  
(C) NAI’s Payment of Other Losses; General Indemnification
    15  
(D) Exceptions and Qualifications to Indemnities
    19  
(E) Refunds and Credits Related to Losses Paid by NAI
    23  
(F) Reimbursement of Excluded Taxes Paid by NAI
    25  
 
       
6 Replacement of Participants.
    25  
(A) NAI’s Right to Substitute Participants
    25  

 

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TABLE OF CONTENTS
(Continued)

              Page  
(B) Conditions to Replacement of Participants
    25  
 
       
7 Items Included in the Property
    26  
(A) Status of Property
    26  
(B) Changes in the Land Covered by the Ground Lease
    27  
 
       
8 Environmental
    27  
(A) Environmental Covenants by NAI
    27  
(B) Right of BNPPLC to do Remedial Work Not Performed by NAI
    27  
(C) Environmental Inspections and Reviews
    28  
(D) Communications Regarding Environmental Matters
    29  
 
       
9 Insurance Required and Condemnation
    30  
(A) Liability Insurance
    30  
(B) Property Insurance
    30  
(C) Failure to Obtain Insurance
    31  
(D) Condemnation
    31  
(E) Waiver of Subrogation
    31  
 
       
10 Application of Insurance and Condemnation Proceeds
    32  
(A) Collection and Application of Insurance and Condemnation Proceeds Generally
    32  
(B) Advances of Escrowed Proceeds to NAI
    32  
(C) Application of Escrowed Proceeds as a Qualified Prepayment
    33  
(D) Right of NAI to Receive and Apply Remaining Proceeds Below a Certain Level
    33  
(E) Special Provisions Applicable After a 97-10/Event or Event of Default
    33  
(F) NAI’s Obligation to Restore
    34  
(G) Takings of All or Substantially All of the Property on or after the
Completion Date
    34  
(H) If Remaining Proceeds Exceed the Lease Balance
    34  
 
       
11 Additional Representations, Warranties and Covenants of NAI Concerning the
Property
    34  
(A) Operation and Maintenance
    34  
(B) Debts for Construction, Maintenance, Operation or Development
    35  
(C) Repair, Maintenance, Alterations and Additions
    36  

(ii)

 

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TABLE OF CONTENTS
(Continued)

              Page
(D) Permitted Encumbrances
    37  
(E) Books and Records Concerning the Property
    37  
 
       
12 Assignment and Subletting by NAI
    37  
(A) BNPPLC’s Consent Required
    37  
(B) Standard for BNPPLC’s Consent to Assignments and Certain Other Matters
    38  
(C) Consent Not a Waiver
    39  
 
       
13 Assignment by BNPPLC
    39  
(A) Restrictions on Transfers
    39  
(B) Effect of Permitted Transfer or other Assignment by BNPPLC
    39  
 
       
14 BNPPLC’s Right to Enter and to Perform for NAI
    39  
(A) Right to Enter
    39  
(B) Performance for NAI
    40  
(C) Building Security
    40  
 
       
15 Remedies
    40  
(A) Traditional Lease Remedies
    40  
(B) Foreclosure Remedies
    43  
(C) Notice Required So Long As the Purchase Option Continues Under the Purchase
Agreement
    43  
(D) Enforceability
    43  
(E) Remedies Cumulative
    44  
 
       
16 Default by BNPPLC
    44  
 
       
17 Quiet Enjoyment
    44  
18 Surrender Upon Termination
    45  
 
       
19 Holding Over by NAI
    45  
 
       
20 Recording Memorandum
    45  
 
       
21 Independent Obligations Evidenced by Other Operative Documents
    45  
 
       
22 Proprietary Information and Confidentiality
    45  

(iii)

 

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TABLE OF CONTENTS
(Continued)

              Page  
(A) Proprietary Information
    46  
(B) Confidentiality
    46  

      Exhibits and Schedules
Exhibit A
  Legal Description
Exhibit B
  California Lien and Foreclosure Provisions

(iv)

 

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LEASE AGREEMENT
     This LEASE AGREEMENT (this “Lease”), dated as of December 15, 2005 (the
“Effective Date”), is made by and between BNP PARIBAS LEASING CORPORATION
(“BNPPLC”), a Delaware corporation, and NETWORK APPLIANCE, INC. (“NAI”), a
Delaware corporation.
RECITALS
     Contemporaneously with the execution of this Lease, BNPPLC and NAI are
executing a Common Definitions and Provisions Agreement dated as of the
Effective Date (the “Common Definitions and Provisions Agreement”), which by
this reference is incorporated into and made a part of this Lease for all
purposes. As used in this Lease, capitalized terms defined in the Common
Definitions and Provisions Agreement and not otherwise defined in this Lease are
intended to have the respective meanings assigned to them in the Common
Definitions and Provisions Agreement.
     At the request of NAI and to facilitate the transactions contemplated in
the other Operative Documents, pursuant to the Ground Lease, BNPPLC is acquiring
a leasehold estate in the Land described in Exhibit A and any existing
improvements on the Land from NAI contemporaneously with the execution of this
Lease.
     In anticipation of BNPPLC’s acquisition of the leasehold estate under the
Ground Lease and other property described below, BNPPLC and NAI have reached
agreement as to the terms and conditions upon which BNPPLC is willing to
sublease the Land to NAI and to lease to NAI any existing Improvements and the
Improvements to be constructed on the Land as hereinafter provided, and by this
Lease BNPPLC and NAI desire to evidence such agreement.
GRANTING CLAUSES
     BNPPLC does hereby LEASE, DEMISE and LET unto NAI for the Term (as
hereinafter defined) all right, title and interest of BNPPLC, now owned or
hereafter acquired, in and to:
     (1) the Land, including the leasehold estate in the Land acquired by BNPPLC
under the Ground Lease;
     (2) any and all Improvements;
     (3) all easements and other rights appurtenant to the leasehold estate
created by the Ground Lease or to the Improvements; and
     (4) (A) any land lying within the right-of-way of any street, open or
proposed, adjoining the Land, (B) any sidewalks and alleys adjacent to the Land,
and (C) any strips

 

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     and gores between the Land and abutting land.
BNPPLC’s interest in all property described in clauses (1) through (4) above is
hereinafter referred to collectively as the “Real Property”.
     To the extent, but only to the extent, that assignable rights or interests
in, to or under the following have been or will be acquired by BNPPLC under the
Ground Lease or as described in subparagraph 7(A) below, BNPPLC also hereby
grants and assigns to NAI for the term of this Lease the right to use and enjoy
(and, in the case of contract rights, to enforce) such rights or interests of
BNPPLC:
     (a) any goods, equipment, furnishings, furniture and other tangible
personal property of whatever nature that are located on the Real Property and
all renewals or replacements of or substitutions for any of the foregoing
(collectively, the “Tangible Personal Property”);
     (b) the benefits, if any, conferred upon the owner of the Real Property by
the Permitted Encumbrances; and
     (c) any permits, licenses, franchises, certificates, and other rights and
privileges against third parties related to the Real Property, including
warranties, if any, given by vendors from whom any Tangible Personal Property
was or may be acquired.
Such rights and interests of BNPPLC, whether now existing or hereafter arising,
are hereinafter collectively called the “Personal Property”. The Real Property
and the Personal Property are hereinafter sometimes collectively called the
“Property.”
     However, the leasehold estate conveyed by this Lease and NAI’s rights
hereunder are expressly made subject and subordinate to the terms and conditions
of this Lease and the Ground Lease, to the matters listed in Exhibit B to the
Closing Certificate and all other Permitted Encumbrances, and to any other
claims or encumbrances not constituting Liens Removable by BNPPLC.
GENERAL TERMS AND CONDITIONS
     The Property is leased by BNPPLC to NAI and is accepted and is to be used
and possessed by NAI upon and subject to the following terms and conditions:
1 Term; Lease Obligations Deferred Until Completion of Initial Improvements;
Termination Prior to Lease Commencement.
Lease Agreement — Page 2

 

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     (A) Scheduled Term; Deferral of Obligations. The term of this Lease (the
“Term”) will not commence until a Completion Date occurs either (1) because of a
Completion Notice given by NAI to BNPPLC, as required by subparagraph 2(B) of
the Construction Management Agreement after NAI substantially completes the
Construction Project, or (2) because of a Completion Notice given by BNPPLC to
NAI as described in subparagraph 8(C) of the Construction Management Agreement,
advising NAI (after an Owner’s Election to Complete Construction) that
construction of the Construction Project is substantially complete.
     The Term will begin on and include any such Completion Date (herein
sometimes called the "Lease Commencement Date”) and will end on the first
Business Day of July, 2012\, unless the Term is extended as provided in
subparagraph 1(D) or sooner terminated as expressly provided in other provisions
of this Lease.
     BNPPLC and NAI intend to be legally bound by this Lease when it is executed
by them. They also intend, however, that this Lease will not impose any payment
obligations upon either of them prior to the Lease Commencement Date.
Accordingly, neither NAI nor BNPPLC will have any obligation to make any
payments under this Lease until the Lease Commencement Date, and if this Lease
terminates before the Lease Commencement Date pursuant to subparagraph 1(B) or
subparagraph 1(C) , the Term will never commence and neither party will have any
obligation for payments by reason of this Lease following the termination.
     Nothing in this subparagraph 1(A) nor any other provision of this Lease
will defer or terminate the rights and obligations of the parties under the
other Operative Documents. Unlike this Lease, the other Operative Documents
will, when executed, immediately impose payment obligations upon BNPPLC and NAI.
     (B) Option of BNPPLC to Terminate. BNPPLC will have the option to terminate
this Lease, which BNPPLC may exercise by notice to NAI, at any time after any
97-10/Event or after BNPPLC’s receipt of a Pre-lease Force Majeure Notice. Such
option may be exercised by BNPPLC as it deems appropriate in its sole and
absolute discretion.
     (C) Automatic Termination. If NAI elects to accelerate the Designated Sale
Date (as provided in the definition thereof in the Common Definitions and
Provisions Agreement) prior to the Lease Commencement Date, or if a Termination
of NAI’s Work occurs under and as provided in the Construction Management
Agreement before the Lease Commencement Date, then this Lease will terminate
automatically before the Term begins.
     (D) Extension of the Term. The Term may be extended at the option of NAI
for up to two successive periods of five years each; provided, however, that
prior to each such extension the following conditions must have been satisfied:
(A) NAI must have delivered a notice of its election to exercise the option at
least one hundred eighty days prior to the end of the Term, and
Lease Agreement — Page 3

 

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prior to the commencement of any such extension BNPPLC and NAI must have agreed
in writing upon, and received the written consent and approval of BNPPLC’s
Parent and all Participants (other than Participants being replaced at the
request of NAI as provided in Paragraph 6) to, (1) a corresponding extension of
the date specified in clause (1) of the definition of Designated Sale Date in
the Common Definitions and Provisions Agreement and of the term of the Ground
Lease, and (2) an adjustment to the Rent that NAI will be required to pay during
the extension, it being expected that the Rent for the extension may be
different than the Rent required for the original Term or any prior extension,
and it being understood that the Rent for any extension must in all events be
satisfactory to both BNPPLC and NAI, each in its sole and absolute discretion;
(B) at the time of NAI’s exercise of its option to extend, no Event of Default
has occurred and is continuing, and no Event of Default will result from the
extension; (C) immediately prior to any such extension, this Lease must then
remain in effect; and (D) if this Lease has been assigned by NAI, then NAI must
have executed a guaranty (or confirmed an existing guaranty, if applicable),
guaranteeing NAI’s assignee’s obligations under the Operative Documents
throughout such extended Term. With respect to the condition that BNPPLC and NAI
must have agreed upon the Rent required for any extension of the Term, neither
NAI nor BNPPLC is willing to submit itself to a risk of liability or loss of
rights hereunder for being judged unreasonable. Accordingly, NAI and BNPPLC will
each have sole and absolute discretion in making its determination, and both NAI
and BNPPLC hereby disclaim any obligation express or implied to be reasonable in
negotiating the Rent for any such extension. Subject to the changes to the Rent
and satisfaction of the other conditions listed in this subparagraph, if NAI
exercises its option to extend the Term as provided in this subparagraph, this
Lease will continue in full force and effect, and the leasehold estate hereby
granted to NAI will continue without interruption and without any loss of
priority over other interests in or claims against the Property that may be
created or arise after the Effective Date and before the extension.
2 Use and Condition of the Property.
     (A) Use. Subject to the Permitted Encumbrances, NAI may use and occupy the
Property during the Term, but only for the following purposes and other lawful
purposes incidental thereto:
     (1) construction and development of the Construction Project;
     (2) administrative and office space;
     (3) activities related to NAI’s research and development or production of
products that are of substantially the same type and character as those
regularly sold by NAI in the ordinary course of its business as of the Effective
Date;
     (4) cafeteria and other support facilities that NAI may provide to its
employees;
Lease Agreement — Page 4

 

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     and
     (5) other lawful purposes (including NAI’s research and development or
production of products that are not of substantially the same type and character
as those regularly sold by NAI in the ordinary course of its business as of the
Effective Date) approved in advance and in writing by BNPPLC, which approval
will not be unreasonably withheld after completion of the Construction Project
(but NAI acknowledges that BNPPLC’s withholding of such approval shall be
reasonable if BNPPLC determines in good faith that (1) giving the approval may
materially increase BNPPLC’s risk of liability for any existing or future
environmental problem, or (2) giving the approval is likely to substantially
increase BNPPLC’s administrative burden of complying with or monitoring NAI’s
compliance with the requirements of this Improvements Lease or other Operative
Documents).
     (B) Condition of the Property. NAI acknowledges that it has carefully and
fully inspected the Property and accepts the Property in its present state, AS
IS, and without any representation or warranty, express or implied, as to the
condition of such property or as to the use which may be made thereof. NAI also
accepts the Property without any covenant, representation or warranty, express
or implied, by BNPPLC or its Affiliates regarding the title thereto or the
rights of any parties in possession of any part thereof, except as expressly set
forth in Paragraph. BNPPLC will not be responsible for any latent or other
defect or change of condition in the Land, Improvements or other Property or for
any violations with respect thereto of Applicable Laws. Further, BNPPLC will not
be required to furnish to NAI any facilities or services of any kind, including
water, phone, sewer, steam, heat, gas, air conditioning, electricity, light or
power.
     (C) Consideration for and Scope of Waiver. The provisions of subparagraph
2(B) have been negotiated by BNPPLC and NAI as being consistent with the Rent
payable under this Lease, and such provisions are intended to be a complete
exclusion and negation of any representations or warranties of BNPPLC or its
Affiliates, express or implied, with respect to the Property that may arise
pursuant to any law now or hereafter in effect or otherwise, except as expressly
set forth herein.
     However, such exclusion of representations and warranties by BNPPLC is not
intended to impair any representations or warranties made by other parties,
including any architects, engineers or contractors engaged to work on the
Construction Project, the benefit of which may pass to NAI during the Term
because of the definition of Personal Property and Property above.
Lease Agreement — Page 5

 

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3 Rent.
     (A) Base Rent Generally. On each Base Rent Date through the end of the
Term, NAI must pay BNPPLC rent (“Base Rent”), calculated as provided below .
Each payment of Base Rent must be received by BNPPLC no later than 2:00 p.m.
(Eastern time) on the date it becomes due; if received after 2:00 p.m. (Eastern
time) it will be considered for purposes of this Lease as received on the next
following Business Day. At least five days prior to any Base Rent Date upon
which an installment of Base Rent becomes due, BNPPLC will notify NAI in writing
of the amount of each installment, calculated as provided below. Any failure by
BNPPLC to so notify NAI, however, will not constitute a waiver of BNPPLC’s right
to payment, but absent such notice NAI will not be in default hereunder for any
underpayment resulting therefrom if NAI, in good faith, reasonably estimates the
payment required, makes a timely payment of the amount so estimated and corrects
any underpayment within three Business Days after being notified by BNPPLC of
the underpayment.
     (B) Calculation of and Due Dates for Base Rent. Payments of Base Rent will
be calculated and become due as follows:
     (1) Determination of Payment Due Dates Generally. For Base Rent Periods
subject to a LIBOR Period Election of six months, Base Rent will be payable in
two installments, with the first installment becoming due on the Base Rent Date
that occurs on the first Business Day of the third calendar month following the
commencement of such Base Rent Period, and with the second installment becoming
due on the Base Rent Date upon which the Base Rent Period ends. For all other
Base Rent Periods, Base Rent will be due in one installment on the Base Rent
Date upon which the Base Rent Period ends.
     (2) Special Adjustments to Base Rent Payment Dates and Periods.
Notwithstanding the foregoing, if NAI or any Applicable Purchaser purchases
BNPPLC’s interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent will be due on the
date of purchase in addition to the purchase price and other sums due to BNPPLC
under the Purchase Agreement.
Lease Agreement — Page 6

 

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     (3) Base Rent Formula. Each installment of Base Rent payable for any Base
Rent Period will equal:

  •   the Lease Balance on the first day of such Base Rent Period, less Losses
(if any) that BNPPLC suffered or incurred prior to the Term and that qualify as
Pre-lease Force Majeure Losses (as defined in the Construction Management
Agreement), times     •   the sum of the Effective Rate and the Spread, times  
  •   the number of days in the period from and including the preceding Base
Rent Date to but not including the Base Rent Date upon which the installment is
due, divided by     •   three hundred sixty.

     Only for the purpose of illustration, assume the following for a
hypothetical Base Rent Period: that prior to the first day of such Base Rent
Period the Construction Allowance has been fully funded, and no Pre-lease Force
Majeure Losses have occurred, but Qualified Prepayments have been received by
BNPPLC, leaving a Lease Balance of $50,000,000; that the Effective Rate for the
Base Rent Period is 6%; that the Spread is one hundred fifty basis points
(150/100 of 1%); and that such Base Rent Period contains exactly thirty days.
Under such assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:
$50,000,000 x [6% + 1.50%] x 30/360 = $312,500.
     (4) Fixed Rate Lock. At any time during the Term, NAI may deliver a notice
in the form attached to the Common Definitions and Provisions Agreement as Annex
2 (a “Fixed Rate Lock Notice”), requesting that BNPPLC establish a fixed rate
for use in the calculation of the Effective Rate hereunder (a “Fixed Rate Lock”)
for all Base Rent Periods commencing on or after a date specified in such
notice, which date must be the first Business Day of a calendar month (the
“Fixed Rate Lock Date”). Promptly after receiving a Fixed Rate Lock Notice,
BNPPLC will enter into an Interest Rate Swap with BNP Paribas (the “Fixed Rate
Swap”); except that BNPPLC may decline to enter into the Fixed Rate Swap and to
establish a Fixed Rate Lock, if:
     (a) NAI does not deliver the Fixed Rate Lock Notice to BNPPLC at least ten
Business days prior to the Fixed Rate Lock Date specified therein;
     (b) NAI specifies a Fixed Rate Lock Date in the Fixed Rate Lock
Lease Agreement — Page 7

 

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Notice that is prior to the end of any Base Rent Period which commenced before
BNPPLC receives the Fixed Rate Lock Notice;
     (c) any notice has been given to accelerate the Designated Sale Date as
provided in the definition thereof in the Common Definitions and Provisions
Agreement;
     (d) the estimate of the Fixed Rate (hereinafter defined) specified by NAI
in the Fixed Rate Lock Notice is for any reason less than the fixed rate
available to BNPPLC under any Interest Rate Swap proposed by BNP Paribas;
     (e) at the time the Fixed Rate Lock Notice is given, the Interest Rate Swap
requested thereby is contrary to any Applicable Laws or any interpretation
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency (including, without limitation, any such requirement imposed
by the Board of Governors of the United States Federal Reserve System); or
     (f)  any event has occurred or circumstance exists that constitutes a
Default, an Event of Default or a 97-10/Event.
The notional principal amount of the Fixed Rate Swap will equal the Lease
Balance on the date such notice is given. The fixed rate used to calculate
payments required of BNPPLC under the Fixed Rate Swap, as the counterparty
designated the fixed rate payor, will constitute the “Fixed Rate” for purposes
of this Lease.
     (C) Early Termination of Fixed Rate Lock. After a Fixed Rate Lock is
established, BNPPLC may cause or suffer a termination in whole or in part of the
Fixed Rate Swap in the event that (i) NAI fails to make any payment of Base Rent
required hereunder on the Base Rent Date when it first becomes due, (ii) the
Designated Sale Date occurs before the date specified in clause (1) of the
definition thereof in the Common Definitions and Provisions Agreement, (iii) for
any reason a Qualified Prepayment is applied to reduce the Lease Balance,
(iv) the Lease Balance on the Fixed Rate Lock Date is less than the notional
amount of the Fixed Rate Swap for any reason. NAI must reimburse to BNPPLC any
Fixed Rate Settlement Amount charged to BNPPLC in connection with such a
termination, and if the termination is a complete, rather than a partial,
termination of the Fixed Rate Swap then in effect, it will for purposes of this
Lease constitute a termination of the Fixed Rate Lock itself. Further, if BNPPLC
is charged penalties or interest because of its failure to make a timely payment
required under the Fixed Rate Swap, and if BNPPLC’s failure to make the timely
payment was caused by NAI’s failure to make a
Lease Agreement — Page 8

 

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timely payment of Base Rent or other amounts due hereunder or under other
Operative Documents, then such penalties or interest will constitute Losses
against which BNPPLC is entitled to be indemnified pursuant to subparagraph
5(C). If a Fixed Rate Lock is terminated as provided in this subparagraph, NAI
shall have no right to require BNPPLC to enter into another Interest Rate Swap
in order to establish a new fixed rate.
     (D) Additional Rent. All amounts which NAI is required to pay to or on
behalf of BNPPLC pursuant to this Lease, together with every charge, premium,
interest and cost set forth herein which may be added for nonpayment or late
payment thereof, will constitute rent (all such amounts, other than Base Rent,
are herein called “Additional Rent”; and, collectively, Base Rent and Additional
Rent are herein sometimes called "Rent”).
     (E) Administrative Fees. On each anniversary of the Effective Date after
the Completion Date and prior to the Designated Sale Date, NAI must pay BNPPLC
an administrative agency fee (an “Administrative Fee”) as provided in the Term
Sheet. Each payment of an Administrative Fee will represent Additional Rent for
the first Base Rent Period during which it first becomes due.
     (F) No Demand or Setoff. Except as expressly provided herein, NAI must pay
all Rent without notice or demand and without counterclaim, deduction, setoff or
defense.
     (G) Default Interest and Order of Application. All Rent will bear interest,
if not paid when first due, at the Default Rate in effect from time to time from
the date due until paid; provided, that nothing herein contained will be
construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. BNPPLC may apply any
amounts paid by or on behalf of NAI against any Rent then past due in the order
the same became due or in such other order as BNPPLC elects.
     (H) Calculations by BNPPLC Are Conclusive. All calculations by BNPPLC of
Base Rent, Additional Rent or any amount needed to calculate Base Rent
(including the Effective Rate for any Base Rent Period and the Lease Balance) or
Additional Rent will, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.
4 Nature of this Agreement.
     (A) “Net” Lease Generally. Subject only to the exceptions listed in
subparagraph 5(D) below, it is the intention of BNPPLC and NAI that Base Rent
and other payments herein specified will be absolutely net to BNPPLC and that
NAI must pay all costs, expenses and obligations of every kind relating to the
Property or this Lease which may arise or become due. Further, it is understood
that all amounts payable by NAI to BNPPLC under this Lease and the other
Operative Documents are expressed as minimum payments to be made net of any
deduction
Lease Agreement — Page 9

 

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or withholding required under any Applicable Laws.
     (B) No Termination. Except as expressly provided in this Lease itself, this
Lease will not terminate, nor will NAI have any right to terminate this Lease,
nor will NAI be entitled to any abatement of or setoff against the Rent, nor
will the obligations of NAI under this Lease be excused, for any reason
whatsoever, including any of the following: (i) any damage to or the destruction
of all or any part of the Property from whatever cause, (ii) the taking of the
Property or any portion thereof by eminent domain or otherwise for any reason,
(iii) the prohibition, limitation or restriction of NAI’s use or development of
all or any portion of the Property or any interference with such use by
governmental action or otherwise, (iv) any eviction of NAI or of anyone claiming
through or under NAI, (v) any default on the part of BNPPLC under this Lease or
any of the other Operative Documents or any other agreement to which BNPPLC and
NAI are parties, (vi) the inadequacy in any way whatsoever of the design,
construction, assembly or installation of any improvements, fixtures or tangible
personal property included in the Property (it being understood that BNPPLC has
not made, does not make and will not make any representation express or implied
as to the adequacy thereof), (vii) any latent or other defect in the Property or
any change in the condition thereof or the existence with respect to the
Property of any violations of Applicable Laws, (viii) NAI’s ownership of any
interest in the Property, or (ix) any other cause, whether similar or dissimilar
to the foregoing, any existing or future law to the contrary notwithstanding. It
is the intention of the parties hereto that the obligations of NAI hereunder be
separate and independent of the covenants and agreements of BNPPLC, that Base
Rent and all other sums payable by NAI hereunder continue to be payable in all
events and that the obligations of NAI hereunder continue unaffected, unless the
requirement to pay or perform the same have been terminated or limited pursuant
to an express provision of this Lease. Without limiting the foregoing, NAI
waives to the extent permitted by Applicable Laws, except as otherwise expressly
provided herein, all rights to which NAI may now or hereafter be entitled by law
(including any such rights arising because of any “warranty of suitability” or
other warranties implied as a matter of law) (i) to quit, terminate or surrender
this Lease or the Property or any part thereof or (ii) to any abatement,
suspension, deferment or reduction of the Rent.
     However, nothing in this subparagraph 4(B) will be construed as a waiver by
NAI of any right NAI may have at law or in equity to the following remedies,
whether because of BNPPLC’s failure to remove a Lien Removable by BNPPLC or
because of any other default by BNPPLC under this Lease: (i) the recovery of
monetary damages in the case of any default that continues beyond the period for
cure provided in Paragraph 16, (ii) injunctive relief in case of the violation,
or attempted or threatened violation, by BNPPLC of any of the express covenants,
agreements, conditions or provisions of this Lease which are binding upon BNPPLC
(including the confidentiality provisions set forth in subparagraph 22(B)
below), or (iii) a decree compelling performance by BNPPLC of any of the express
covenants, agreements, conditions or provisions of this Lease which are binding
upon BNPPLC.
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(C) Characterization of this Lease.
     (1) Both NAI and BNPPLC intend that (A) for the purposes of determining the
proper accounting for this Lease by NAI, BNPPLC will be treated as the owner and
landlord of the Property and NAI will be treated as the tenant of the Property,
and (B) for income tax purposes and real estate, commercial law (including
bankruptcy) and regulatory purposes, (1) this Lease and the other Operative
Documents will be treated as a financing arrangement, (2) BNPPLC will be deemed
a lender making loans to NAI in the principal amount equal to the Lease Balance,
which loans are secured by the Property, and (3) NAI will be treated as the
owner of the Property and will be entitled to all tax benefits available to the
owner of the Property. Consistent with such intent, by the provisions set forth
in Exhibit B, NAI is granting to BNPPLC a lien upon and mortgaging and
warranting title to the leasehold estate in the Land created by the Ground Lease
and the Improvements and all rights, titles and interests of NAI in and to other
Property, WITH POWER OF SALE, to secure all obligations (monetary or otherwise)
of NAI arising under or in connection with any of the Operative Documents.
Without limiting the generality of the foregoing, NAI and BNPPLC desire that
their intent as set forth in this subparagraph be given effect both in the
context of any bankruptcy, insolvency or receivership proceedings concerning NAI
or BNPPLC and in other contexts. Accordingly, NAI and BNPPLC expect that in the
event of any bankruptcy, insolvency or receivership proceedings affecting NAI or
BNPPLC or any enforcement or collection actions arising out of such proceedings,
the transactions evidenced by this Lease and the other Operative Documents will
be characterized and treated as loans made to NAI by BNPPLC, as an unrelated
third party lender to NAI, secured by the Property.
     (2) Notwithstanding the foregoing, NAI acknowledges and agrees that none of
BNPPLC or the other Interested Parties has made, or will be deemed to have made,
in the Operative Documents or otherwise, any representations or warranties
concerning how this Lease and the other Operative Documents will be
characterized or treated under applicable accounting rules, income tax,
regulatory, commercial or real estate law, bankruptcy, insolvency or
receivership law or any other rules or requirements concerning the tax,
accounting or legal characteristics of the Operative Documents. NAI further
acknowledges and agrees that it is sophisticated and knowledgeable regarding all
such matters and that it has, as it deemed appropriate, obtained from and relied
upon its own professional accountants, counsel and other advisors for such tax,
accounting and legal advice concerning the Operative Documents.
     (3) In any event, NAI will be required by subparagraph 5(C) below to
indemnify and hold harmless BNPPLC from and against all actual additional taxes
that may arise or become due because of any refusal of taxing authorities to
recognize and
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give effect to the intention of the parties as set forth in subparagraph 4(C)(1)
(“Unexpected Recharacterization Taxes”), including any actual, additional income
or capital gain tax that may become due because of payments to BNPPLC of the
purchase price upon any sale under the Purchase Agreement resulting from any
insistence of such taxing authorities that BNPPLC be treated as the “true owner”
of the Property for tax purposes (a “Forced Recharacterization”); provided,
however, NAI will not be required to pay or reimburse Unexpected
Recharacterization Taxes to the extent that they are, in any given tax year,
eliminated or offset by actual savings to BNPPLC because of additional
depreciation deductions or other tax benefits available to BNPPLC in the same
year only by reason of the Forced Recharacterization (“Unexpected Tax Savings”).
To the extent Unexpected Recharacterization Taxes are eliminated or offset by
Unexpected Tax Savings in a given tax year, including the tax year in which any
sale under the Purchase Agreement occurs (the “Year of Sale”), such Unexpected
Recharacterization Taxes will constitute Excluded Taxes as provided in clause
(D) of the definition thereof in the Common Definitions and Provisions
Agreement. Also, for purposes of this provision, it is understood that any
depreciation deductions first available to BNPPLC in tax years prior to the Year
of Sale and resulting from a Forced Recharacterization (“Prior Year Depreciation
Deductions”) will be considered “available to BNPPLC” in the Year of Sale (and
thus will eliminate or offset any Unexpected Recharacterization Taxes resulting
from the recapture of such Prior Year Depreciation Deductions upon a sale under
the Purchase Agreement) to the extent that (A) such Prior Year Depreciation
Deductions are not otherwise used to generate Unexpected Tax Savings or
Unexpected Net Tax Benefits (as defined below), and (B) the tax laws and
regulations applicable in the Year of Sale effectively permit BNPPLC to carry
over the Prior Year Depreciation Deductions to the Year of Sale by allowing
BNPPLC to carry over net operating losses from the years in which the Prior Year
Depreciation Deductions were first available to BNPPLC to the Year of Sale.
     (4) After any Forced Recharacterization, BNPPLC will make a reasonable
effort to determine whether Unexpected Tax Savings exceed Unexpected
Recharacterization Taxes in any given tax year (any such excess being
hereinafter called an “Unexpected Net Tax Benefit”); and if BNPPLC does
determine that an Unexpected Net Tax Benefit has been realized and the amount
thereof, BNPPLC will notify NAI of the same and either credit the amount thereof
against payments otherwise then due or to become due from NAI under this Lease
or the other Operative Documents or pay the amount of such Unexpected Net Tax
Benefit to NAI. It is understood, however, that the tax position of BNPPLC (and
the consolidated tax group of which it is a part) may, in any given tax year, be
such that no Unexpected Net Tax Benefit exists or can be determined with a
reasonable effort on the part of BNPPLC. Therefore, BNPPLC makes no
representation that NAI will receive any credits or payments pursuant to this
provision after any Forced Recharacterization. Also, the determination by BNPPLC
of the amount of any Unexpected Net Tax Benefit will be conclusive absent clear
and manifest error, as will any determination by BNPPLC that the amount
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of any Unexpected Net Tax Benefit in a given tax year cannot be calculated with
a reasonable effort. If NAI is dissatisfied with any such determination by
BNPPLC prior to the Designated Sale Date, NAI will be entitled to accelerate the
Designated Sale Date (as provided in clause (2) of the definition thereof),
after which NAI may purchase or cause an Applicable Purchaser to purchase the
Property on the accelerated Designated Sale Date pursuant to the Purchase
Agreement.
5 Payment of Executory Costs and Losses Related to the Property.
     (A) Local Impositions. Subject only to the exceptions listed in
subparagraph 5(D) below, NAI must pay or cause to be paid prior to delinquency
all Local Impositions. If requested by BNPPLC from time to time, NAI must
furnish BNPPLC with receipts or other appropriate evidence showing payment of
all Local Impositions at least ten days prior to the applicable delinquency date
therefor.
     Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted Local
Imposition, and pending such contest NAI will not be deemed in default under any
of the provisions of this Lease because of the Local Imposition if (1) NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPPLC, and (2) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs,
penalties and interest thereon, promptly after such judgment becomes final;
provided, however, in any event each such contest must be concluded and the
contested Local Impositions must be paid by NAI prior to the earlier of (i) the
date that any criminal prosecution is instituted or overtly threatened against
BNPPLC or its directors, officers or employees because of the nonpayment thereof
or (ii) the date any writ or order is issued under which any property owned or
leased by BNPPLC (including the Property) may be seized or sold or any other
action is taken or overtly threatened against BNPPLC or against any property
owned or leased by BNPPLC because of the nonpayment thereof, or (iii) any
Designated Sale Date upon which, for any reason, NAI or an Affiliate of NAI or
any Applicable Purchaser does not purchase BNPPLC’s interest in the Property
pursuant to the Purchase Agreement for a price (when taken together with any
Supplemental Payment paid by NAI pursuant to the Purchase Agreement, in the case
of a purchase by an Applicable Purchaser) equal to the Break Even Price.
     (B) Increased Costs; Capital Adequacy Charges. Subject only to the
exceptions listed in subparagraph 5(D) below:
     (1) If there is any increase in the cost to BNPPLC’s Parent or any
Participant of agreeing to make or making, funding or maintaining advances to
BNPPLC in connection with the Property because of any Banking Rules Change, then
NAI must from
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time to time (after receipt of a request from BNPPLC’s Parent or such
Participant as provided below) pay to BNPPLC for the account of BNPPLC’s Parent
or such Participant, as the case may be, additional amounts sufficient to
compensate BNPPLC’s Parent or the Participant for such increased cost. A
certificate as to the amount of such increased cost, submitted to BNPPLC and NAI
by BNPPLC’s Parent or the Participant, will be conclusive and binding upon NAI,
absent clear and demonstrable error.
     (2) BNPPLC’s Parent or any Participant may demand additional payments
(“Capital Adequacy Charges”) if BNPPLC’s Parent or the Participant determines
that any Banking Rules Change affects the amount of capital to be maintained by
it and that the amount of such capital is increased by or based upon the
existence of advances made or to be made to or for BNPPLC to permit BNPPLC to
maintain BNPPLC’s investment in the Property. To the extent that BNPPLC’s Parent
or any Participant demands Capital Adequacy Charges as compensation for the
additional capital requirements reasonably allocable to such investment or
advances, NAI must pay to BNPPLC for the account of BNPPLC’s Parent or the
Participant, as the case may be, the amount so demanded.
     (3) Notwithstanding the foregoing provisions of this subparagraph 5(B), NAI
will not be obligated to pay any claim for compensation pursuant to this
subparagraph 5(B) that arises or accrues (a) as a result of any change in the
rating assigned to BNPPLC by rating agencies or bank regulators in regard to
BNPPLC’s creditworthiness, record keeping or failure to comply with Applicable
Laws (including U.S. banking regulations applicable to subsidiaries of a bank
holding company), or (b) more than nine months prior to the date NAI is notified
of the intent of BNPPLC’s Parent or a Participant to make a claim for such
charges; provided, that if the Banking Rules Change which results in a claim for
compensation is retroactive, then the nine month period will be extended to
include the period of the retroactive effect of such Banking Rules Change.
Further, BNPPLC will cause BNPPLC’s Parent and any Participant that is an
Affiliate of BNPPLC to use commercially reasonable efforts to reduce or
eliminate any claim for compensation pursuant to this subparagraph 5(B),
including a change in the office of BNPPLC’s Parent or such Participant through
which it provides and maintains Funding Advances if such change will avoid the
need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of BNPPLC’s Parent or such Participant, be otherwise
disadvantageous to it. It is understood that NAI may also request similar
commercial reasonable efforts on the part of any Participant that is not an
Affiliate of BNPPLC, but if a claim for additional compensation by any such
Participant is not eliminated or waived, then NAI may request that BNPPLC
replace such Participant as provided in Paragraph 6. Nothing in this
subparagraph will be construed to require BNPPLC’s Parent or any Participant to
create any new office through which to make or maintain Funding Advances.
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     (4) Any amount required to be paid by NAI under this subparagraph 5(B) will
be due ten days after a notice requesting such payment is received by NAI from
BNPPLC’s Parent or the applicable Participant.
     (C) NAI’s Payment of Other Losses; General Indemnification. Subject only to
the exceptions listed in subparagraph 5(D) below:
     (1) Agreement to Indemnify. As directed by BNPPLC, NAI must pay, reimburse,
indemnify, defend, protect and hold harmless BNPPLC and all other Interested
Parties from and against all Losses (including Environmental Losses) asserted
against or incurred or suffered by any of them at any time and from time to time
by reason of, in connection with, arising out of, or in any way related to the
following:

  •   the ownership or alleged ownership of any interest in the Property or the
Rents;     •   the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, possession, use,
operation, maintenance, management, rental, lease, sublease, repossession,
condition (including defects, whether or not discoverable), destruction, repair,
alteration, modification, restoration, addition or substitution, storage,
transfer of title, redelivery, return, sale or other disposition of all or any
part of or interest in the Property;     •   the imposition of any Lien (or
incurring of any liability to refund or pay over any amount as a result of any
Lien) against all or any part of or interest in the Property;     •   any
failure of the Property or NAI itself to comply with Applicable Laws;     •  
Permitted Encumbrances or any violation thereof;     •   Hazardous Substance
Activities, including those occurring prior to the Term;     •   the
negotiation, administration or enforcement of the Operative Documents or the
Participation Agreement;     •   the making or maintenance of Funding Advances;

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  •   any Interest Rate Swap that BNPPLC enters into as described in
subparagraph 3(B)(4) of this Lease;     •   the breach by NAI of this Lease, any
other Operative Document or any other document executed by NAI pursuant to or in
connection with any Operative Document;     •   any obligations of BNPPLC under
the Closing Certificate or the Ground Lease; or     •   any bodily or personal
injury or death or property damage occurring in or upon or in the vicinity of
the Property through any cause whatsoever.

NAI’s obligations under this indemnity will apply whether or not any Interested
Party is also indemnified as to the applicable Loss by another Interested Party
and whether or not the Loss arises or accrues because of any condition of the
Property or other circumstance concerning the Property prior to the Effective
Date.
Further, in the event, for income tax purposes, an Interested Party must include
in its taxable income any payment or reimbursement from NAI which is required by
this indemnity (in this provision, the “Original Indemnity Payment”), and yet
the Interested Party is not entitled during the same taxable year to a
corresponding and equal deduction from its taxable income for the Loss paid or
reimbursed by such Original Indemnity Payment (in this provision, the
“Corresponding Loss”), then NAI must also pay to such Interested Party on demand
the additional amount (in this provision, the “Additional Indemnity Payment”)
needed to gross up the Original Indemnity Payment for any and all resulting
additional income taxes. That is, NAI must pay an Additional Indemnity Payment
as is needed so that the Corresponding Loss (computed net of the reduction, if
any, of the Interested Party’s income taxes because of credits or deductions
that are attributable to the Interested Party’s payment or deemed payment of the
Corresponding Loss and that are recognized for tax purposes in the same taxable
year during which the Interested Party must recognize the Original Indemnity
Payment as income) will not exceed the difference computed by subtracting
(i) all income taxes (determined for this purpose based on the highest marginal
income tax rate applicable to corporations for the relevant period or periods
and the highest applicable state or local marginal rates of such taxing
authority applicable to corporations for the relevant period or periods) imposed
upon the Interested Party with respect to the Original Indemnity Payment and the
Additional Indemnity Payment, from (ii) the sum of the Original Indemnity
Payment and the Additional Indemnity Payment. (With regard to any payment or
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\

reimbursement of an Original Indemnity Payment, “After Tax Basis” means that
such payment or reimbursement is or will be made together with the additional
amount needed to gross up such Original Indemnity Payment as described in this
provision.)
     (2) Scope of Indemnities and Releases. Every indemnity and release provided
in this Lease and the other Operative Documents for the benefit of BNPPLC or
other Interested Parties, including the indemnity set forth in subparagraph
5(C)(1), will apply even if and when the subject matter of the indemnity or
release arises out of or results from the negligence or strict liability of
BNPPLC or any other Interested Party. Further, all such indemnities and releases
will apply even if insurance obtained by NAI or required of NAI by this Lease or
the other Operative Documents is not adequate to cover Losses against or for
which the indemnities and releases are provided. (However, NAI’s liability for
any failure to obtain insurance required by this Lease or the other Operative
Documents will not be limited to Losses against which indemnities are provided,
it being understood that the parties have agreed upon insurance requirements for
reasons that extend beyond providing a source of payment for Losses against
which BNPPLC and other Interested Parties may be indemnified by NAI.)
     (3) Nonexclusive List of Costs Covered by Indemnity. Costs and expenses for
which NAI is responsible on an After Tax Basis pursuant to this subparagraph
5(C) will include all of the following, except to the extent that the following
are included in the Initial Advance or in the calculation of any Break Even
Price or Make Whole Amount paid to BNPPLC pursuant to the Purchase Agreement:

  •   appraisal fees;     •   Uniform Commercial Code search fees;     •  
filing and recording fees;     •   inspection fees and expenses;     •  
brokerage fees and commissions;     •   survey fees;     •   title policy
premiums and escrow fees;

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  •   any Breakage Costs or Fixed Rate Settlement Amount;     •   Attorneys’
Fees incurred by BNPPLC with respect to the drafting, negotiation,
administration or enforcement of this Lease or the other Operative Documents;
and     •   all taxes (except Excluded Taxes) related to the Property or to the
transactions contemplated in the Operative Documents.

Such costs and expenses will also include all rent or other payments required of
BNPPLC under the Ground Lease, so long as this Lease remains in force or NAI
remains in possession of the Property or is entitled to possession by this
Lease. (It is understood, however, that with respect to payments which are
required by the Ground Lease from BNPPLC to NAI and for which NAI is required to
reimburse BNPPLC, such payments and the corresponding reimbursements will be
offset and deemed paid by offsetting book entries rather than by an actual
transfer of funds back and forth between the parties.)
(4) Defense and Settlement of Indemnified Claims.
     (a) By notice to NAI BNPPLC may direct NAI to assume on behalf of BNPPLC or
any other Interested Party and to conduct with due diligence and in good faith
the defense of and the response to any claim, proceeding or investigation
included in or concerning any Loss for which NAI is responsible pursuant to
subparagraph 5(C)(1). NAI must promptly comply with any such direction using
counsel selected by NAI and reasonably satisfactory to BNPPLC to represent
BNPPLC or the applicable Interested Party. In the event NAI fails to promptly
comply with any such direction from BNPPLC, BNPPLC or any other affected
Interested Party may contest or settle the claim, proceeding or investigation
using counsel of its own selection at NAI’s expense, subject to subparagraph
5(D)(3) if that subparagraph is applicable.
     (b) Also, although subparagraphs 5(D)(3) and 5(D)(4) will apply to tort
claims asserted against any Interested Party related to the Property, the right
of an Interested Party to be indemnified pursuant to this subparagraph 5(C) for
taxes or other payments made to satisfy governmental requirements (“Government
Mandated Payments”) will not be conditioned in any way upon NAI having consented
to or approved of, or having been provided with an opportunity to defend against
or contest, such Government Mandated Payments. In all cases, however, including
those which may involve Government Mandated Payments, the rights of each
Interested Party to be indemnified will be subject to
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     subparagraph 5(D)(5).
     (5) Payments Due. Any amount to be paid by NAI under this subparagraph 5(C)
will be due ten days after a notice requesting such payment is given to NAI,
subject to any applicable contest rights expressly granted to NAI by other
provisions of this Lease.
     (6) Survival. NAI’s obligations under this subparagraph 5(C) will survive
the termination or expiration of this Lease with respect to Losses suffered by
any Interested Party on or prior to, or by reason of any actual or alleged
occurrence or circumstances on or prior to, the later of the dates upon which
(a) this Lease terminates or expires, or (b) NAI surrenders possession and
control of the Property.
(D) Exceptions and Qualifications to Indemnities.
     (1) Exceptions. BNPPLC acknowledges and agrees that nothing in Paragraph 4
or the preceding subparagraphs of this Paragraph 5 will be construed to require
NAI to pay or reimburse:
     • Excluded Taxes; or
     • Losses incurred or suffered by any Interested Party that are proximately
caused by (and attributed by any applicable principles of comparative fault to)
the Established Misconduct of that Interested Party; or
     • Losses that result from any Liens Removable by BNPPLC; or
     • Losses incurred or suffered by any of the Participants in connection with
the negotiation or execution of the Participation Agreement (or supplements
making them parties thereto) or in connection with any due diligence
Participants may undertake before entering into the Participation Agreement; or
     • Local Impositions or other Losses contested, if and so long as they are
contested, by NAI in accordance with any of the provisions of this Lease or
other Operative Documents which expressly authorize such contests; or
     • transaction expenses or other Losses caused by or necessary to accomplish
any conveyance by BNPPLC to BNPPLC’s Parent or a Qualified Affiliate which
constitutes a Permitted Transfer only by reason of clause (3) of the definition
of Permitted Transfer in the Common Definitions and Provisions Agreement ; or
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     • any amount which may from time to time be payable by BNPPLC to any
Participant representing the excess of “Base Rent” as defined in the
Participation Agreement over Base Rent as defined in and calculated pursuant to
this Lease and the Common Definitions and Provisions Agreement; or
     • any decline in the value of the Property solely by reason of decline in
general market conditions and not because of any breach of this Lease or other
Operative Documents by NAI.
Further, without limiting BNPPLC’s rights (as provided in other provisions of
this Lease and other Operative Documents) to include the following in the
calculation of the Lease Balance, the Break Even Price and the Make Whole Amount
(as applicable) or to collect Base Rent, a Supplemental Payment and other
amounts, the calculation of which depends upon the Lease Balance, BNPPLC
acknowledges and agrees that nothing in Paragraph 4 or the preceding
subparagraphs of this Paragraph 5 will be construed to require NAI to pay or
reimburse an Interested Party for costs paid by BNPPLC with the proceeds of the
Initial Advance as part of the Transaction Expenses or with Construction
Advances.
     (2) Notice of Claims. If an Interested Party receives a written notice of a
claim for taxes or a claim alleging a tort or other unlawful conduct that the
Interested Party believes is covered by the indemnity in subparagraph 5(C)(1),
then such Interested Party will be expected to promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice will not excuse
NAI from its obligations under subparagraph 5(C)(1); except that if such failure
continues for more than fifteen days after the notice is received by such
Interested Party and NAI is unaware of the matters described in the notice, with
the result that NAI is unable to assert defenses or to take other actions which
could minimize its obligations, then NAI will be excused from its obligation to
indemnify such Interested Party (and any Affiliate of such Interested Party)
against Losses, if any, which would not have been incurred or suffered but for
such failure. For example, if BNPPLC fails to provide NAI with a copy of a
notice of an overdue tax obligation covered by the indemnity set out in
subparagraph 5(C)(1) and NAI is not otherwise already aware of such obligation,
and if as a result of such failure BNPPLC becomes liable for penalties and
interest covered by the indemnity in excess of the penalties and interest that
would have accrued if NAI had been promptly provided with a copy of the notice,
then NAI will be excused from any obligation to BNPPLC (or any Affiliate of
BNPPLC) to pay the excess.
     (3) Withholding of Consent to Settlements Proposed by NAI. With regard to
any tort claim against an Interested Party for which NAI undertakes to defend
the Interested Party as provided in subparagraph 5(C)(4)(a), if the Interested
Party unreasonably refuses to consent to a settlement of the claim which is
proposed by NAI
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and which will meet the conditions listed in the next sentence, NAI’s liability
for the cost of continuing the defense and for any other amounts payable in
respect of the claim will be limited to the total cost for which the settlement
proposed by NAI would have been accomplished but for the unreasonable refusal to
consent. Any such settlement proposed by NAI must meet the following conditions:
(A) at the time of the settlement by NAI, NAI must pay all amounts required to
release the Interested Party and its property interests from any further
obligation for or liens securing the applicable claim and from any interest,
penalties and other related liabilities, and (B) the settlement or compromise
must not involve an admission of fraud or criminal wrongdoing or result in some
other material adverse consequence to the Interested Party.
     (4) Settlements Without the Prior Consent of NAI.
     (a) Except as otherwise provided in subparagraph 5(D)(4)(b), if any
Interested Party settles any tort claim for which it is entitled to be
indemnified by NAI without NAI’s consent, then NAI may, by notice given to the
Interested Party no later than ten days after NAI is notified of the settlement,
elect to pay Reasonable Settlement Costs to the Interested Party in lieu of a
payment or reimbursement of actual settlement costs. (With respect to any tort
claim asserted against an Interested Party, “Reasonable Settlement Costs” means
the maximum amount that a prudent Person in the position of the Interested
Party, but able to pay any amount, might reasonably agree to pay to settle the
tort claim, taking into account the nature and amount of the claim, the relevant
facts and circumstances known to such Interested Party at the time of settlement
and the additional Attorneys Fees’ and other costs of defending the claim which
could be anticipated but for the settlement.) After making an election to pay
Reasonable Settlement Costs with regard to a particular tort claim and a
particular Interested Party, NAI will have no right to rescind or revoke the
election, despite any subsequent determination that Reasonable Settlement Costs
exceed actual settlement costs. It is understood that Reasonable Settlement
Costs may be more or less than actual settlement costs and that a final
determination of Reasonable Settlement Costs may not be possible until after NAI
must decide between paying Reasonable Settlement Costs or paying actual
settlement costs.
     (b) Notwithstanding the foregoing, NAI will have no right to elect to pay
Reasonable Settlement Costs in lieu of actual settlement costs if an Interested
Party settles claims without NAI’s consent at any time when an Event of Default
has occurred and is continuing or after a failure by NAI to conduct with due
diligence and in good faith the defense of and the response to any claim,
proceeding or investigation as provided in subparagraph 5(C)(4)(a).
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     (c) Except as provided in this subparagraph 5(D)(4), no settlement by any
Interested Party of any claim made against it will excuse NAI from any
obligation to indemnify the Interested Party against the settlement costs or
other Losses suffered by reason of, in connection with, arising out of, or in
any way related to such claim.
     (5) No Authority to Admit Wrongdoing by NAI or to Bind NAI to any
Settlement. No Interested Party will under any circumstances have any authority
to bind NAI to an admission of wrongdoing or responsibility to any third party
claimant with regard to matters for which such Interested Party claims a right
to indemnification from NAI under this Lease.
Further, nothing herein contained, including the foregoing provisions concerning
settlements by Interested Parties of indemnified Losses, will be construed as
authorizing any Interested Party to bind NAI to do or refrain from doing
anything to satisfy a third party claimant. If, for example, a claim is made by
a Governmental Authority that NAI must refrain from some particular conduct on
or about the Land in order to comply with Applicable Laws, BNPPLC cannot bind
NAI (and will not purport to bind NAI) to any agreement to refrain from such
conduct or otherwise prevent NAI from continuing to contest the claim by reason
of any provision set forth herein.
Moreover, so long as this Lease continues, no Interested Party may settle any
claim involving the Property by executing any agreement (including any consent
decree proposed by any Governmental Authority) which purports to prohibit, limit
or impose conditions upon any use of the Property by NAI without the prior
written consent of NAI. In the case of any proposed settlement of a claim
asserted by a Governmental Authority against BNPPLC, NAI will not unreasonably
withhold such consent. However, for purposes of determining whether it is
reasonable for NAI to withhold such consent, any diligent ongoing undertaking by
NAI to contest such the claim on behalf of BNPPLC will be relevant.
Subject to the foregoing provisions in this subparagraph 5(D)(5), any Interested
Party may agree for itself (and only for itself) to act or refrain from doing
anything as demanded or requested by a third party claimant; provided, however,
in no event will such an agreement impede NAI from continuing to exercise its
rights to operate its business on the Property or elsewhere in any lawful manner
deemed appropriate by NAI, nor will any such agreement limit or impede NAI’s
right to contest claims raised by any third party claimants (including
Governmental Authorities) that NAI is not complying or has not complied with
Applicable Laws.
     (6) Defense of Tax Claims. This Lease does not grant to NAI any right to
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control the defense of or contest any tax claim for which an Interested Party
may have a right to indemnity under subparagraph 5(C), other than the right to
contest Local Impositions as provided in subparagraph 5(A), nor does this Lease
grant to NAI the right to inspect the income tax returns, books or records of
any Interested Party. Nevertheless, if a tax claim is asserted against BNPPLC
for which it is entitled to be indemnified pursuant to subparagraph 5(C), BNPPLC
will consider in good faith any defenses and strategies proposed by NAI with
regard to such claim, provided that NAI has delivered to BNPPLC at NAI’s expense
an opinion of reputable tax counsel to the effect that there is a reasonable
basis (as defined in ABA Formal Opinion 85-532) for contesting such claim.
Further, if any such tax claim is asserted against BNPPLC which involves
assertions that apply not only to the transactions contemplated by this Lease,
but also to other similar transactions in which BNPPLC has participated, then
BNPPLC will not settle the claim on a basis that results in a disproportionately
greater tax burden with respect to the transactions contemplated herein than
with respect to such other similar transactions. For example, if taxing
authorities assert that both this Lease and other comparable lease agreements
made by BNPPLC are not financing arrangements as intended by the parties
thereto, and on the basis of such assertions the taxing authorities claim that
BNPPLC owes income taxes which are not Excluded Taxes, then BNPPLC will not
settle the claim in a manner that would cause NAI’s liability under subparagraph
5(C) to be disproportionately greater than the indemnity obligation of another
similarly situated tenant of BNPPLC under another lease agreement with an
indemnity provision comparable to subparagraph 5(C). Also, BNPPLC will not grant
to another tenant the right to dictate to BNPPLC the tax position BNPPLC must
take in regard to the Property or the Operative Documents, except that BNPPLC
may include provisions comparable to the foregoing in other leases to assure
other tenants against a disproportionately greater burden than NAI will bear in
regard to any settlement of a tax claim by BNPPLC.
     (7) Indemnified Parties Other than Landlord. As a condition to making any
indemnity payment for Losses directly to any Interested Party other than BNPPLC
itself, NAI may require the Interested Party to confirm and agree in writing
that it will be obligated to make the payments to NAI as provided in
subparagraph 5(E) in the event the Interested Party subsequently receives a
refund of the Losses covered by such indemnity payment.
(E) Refunds and Credits Related to Losses Paid by NAI.
     (1) If BNPPLC receives a refund of any Losses paid, reimbursed or advanced
by NAI pursuant to this Paragraph 5 that has not already been accounted for in
the After Tax Basis calculation described in subparagraph 5(C)(1), BNPPLC will
promptly pay to NAI the amount of such refund, plus or minus any net tax
benefits or detriments realized by BNPPLC as a result of the refund and such
payment to NAI; provided, that the amount
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payable to NAI will not exceed the amount of the indemnity payment in respect of
such refunded Losses that was made by NAI. If it is subsequently determined that
BNPPLC was not entitled to the refund, the portion of the refund that is repaid
or recaptured will be treated as a Loss for which NAI must indemnify BNPPLC
pursuant to this Paragraph 5 without regard to subparagraph 5(D). If, in
connection with any such refund, BNPPLC also receives an amount representing
interest on such refund, BNPPLC will promptly pay to NAI the amount of such
interest, plus or minus any net tax benefits or detriments realized by BNPPLC as
a result of the receipt or accrual of the interest and as a result of such
payment to NAI; provided, that BNPPLC will not be required to make any such
payment in respect of the interest (if any) that is fairly attributable to a
period for which NAI had not yet paid, reimbursed or advanced the Losses
refunded to BNPPLC.
     (2) If any Interested Party (other than BNPPLC itself) receives a refund of
any Loss paid, reimbursed or advanced by NAI pursuant to this Paragraph 5 that
has not already been accounted for in the After Tax Basis calculation described
in subparagraph 5(C)(1), NAI may demand (and enforce the demand pursuant to any
agreement previously delivered by the Interested Party as provided in
subparagraph 5(D)(7)) that such Interested Party promptly pay to NAI the amount
of such refund, plus or minus any net tax benefits or detriments realized by
such Interested Party as a result of the refund and such payment to NAI;
provided, that the amount payable to NAI will not exceed the amount of the
indemnity payment in respect of such refunded Losses that was made by NAI. If it
is subsequently determined that such Interested Party was not entitled to the
refund, the portion of the refund that is repaid or recaptured will be treated
as a Loss for which NAI must indemnify such Interested Party pursuant to this
Paragraph 5 without regard to subparagraph 5(D). If, in connection with any such
refund, such Interested Party also receives an amount representing interest on
such refund, NAI may demand that such Interested Party promptly pay to NAI the
amount of such interest, plus or minus any net tax benefits or detriments
realized by such Interested Party as a result of the receipt or accrual of the
interest and as a result of such payment to NAI; provided, that such Interested
Party will not be required to make any such payment in respect of the interest
(if any) which is fairly attributable to a period before NAI paid, reimbursed or
advanced the Losses refunded to such Interested Party.
     (3) With respect to Losses incurred or suffered by an Interested Party and
paid or reimbursed by NAI on an After Tax Basis, if taxes of such Interested
Party which are not subject to indemnification by NAI are reduced because of
such Losses (whether by reason of a deduction, credit or otherwise) and such
reduction was not taken into account in the calculation of the required
reimbursement or payment by NAI, then for purposes of this subparagraph 5(E)
such reduction will be considered a “refund”.
     (4) Notwithstanding the foregoing, in no event will BNPPLC or any other
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Interested Party be required to make any payment to NAI pursuant to this
subparagraph 5(E) when an Event of Default has occurred and is continuing.
     (F) Reimbursement of Excluded Taxes Paid by NAI. If NAI is ever required
(by laws imposing withholding tax obligations or otherwise) to pay Excluded
Taxes that any Interested Party should have paid, but failed to pay when due, in
connection with this Lease, such Interested Party must reimburse NAI for such
Excluded Taxes (together with any additional amount required to preserve for NAI
the full amount of such reimbursement after related taxes are considered,
calculated in the same manner that an Additional Indemnity Payment would be
calculated under subparagraph ? in the case of a reimbursement owed by NAI to an
Interested Party) within 30 days after such Interested Party’s receipt of a
written demand for such reimbursement by NAI.
6 Replacement of Participants.
     (A) NAI’s Right to Substitute Participants. So long as no Event of Default
exists, and subject to the terms and conditions set forth in subparagraph 6(B),
if any Participant which is not an Affiliate of BNPPLC (in this Paragraph, the
“Unrelated Participant”) (1) declines to approve the Rent for an extension of
this Lease under subparagraph 1(D), or (2) makes a demand for compensation under
subparagraph 5(B), NAI may request that BNPPLC execute Participation Agreement
Supplements (as defined in the Participation Agreement) as needed to transfer
the rights of the Unrelated Participant thereunder to one or more new
Participants (in this subparagraph, whether one or more, the "New Participants”)
designated by NAI who are willing and able to accept such interests, to make
Funding Advances as necessary to terminate the Unrelated Participant’s right to
payments in respect of Base Rent and the Lease Balance under the Operative
Documents. BNPPLC will execute such Participation Agreement Supplements within
ten Business Days of the later to occur of such request by NAI and satisfaction
of all conditions set forth in subparagraph 6(B).
     (B) Conditions to Replacement of Participants. NAI and BNPPLC, working
together, will endeavor in good faith to identify New Participants that are
willing to replace any Unrelated Participant described in the preceding
subparagraph and that are acceptable to both NAI and BNPPLC. (The term New
Participants may include new parties to the Participation Agreement and it may
include existing Participants that increase their Funding Advances as needed to
replace the Unrelated Participant.) However, nothing contained herein will be
construed to require BNPPLC itself to increase its Percentage (as defined in the
Participation Agreement) to replace an Unrelated Participant, and nothing herein
contained will be construed to require BNPPLC itself to provide or to obtain
from its Affiliates Funding Advances to replace the Funding Advances that an
Unrelated Participant has provided or agreed to provide. Also, New Participants
will be subject to the approval of BNPPLC; provided, that BNPPLC must not
unreasonably withhold its approval for the substitution of any New Participant
proposed by NAI
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for any Unrelated Participant so long as (i) no Event of Default has occurred
and is continuing, (ii) BNPPLC determines it can give such approval without
violating Applicable Laws, without breaching its obligations under the
Participation Agreement, and without waiving rights or remedies it has under
this Lease or the other Operative Documents, (iii) BNPPLC or BNPPLC’s Parent is
not involved in any material litigation adverse to the New Participant in any
pending lawsuit or other legal proceeding, and (iv) all of the conditions listed
in the next sentence are satisfied. Any substitution of New Participants for an
Unrelated Participant as provided in this Paragraph will be subject to the
following conditions:
     (1) the proposed substitution does not include a waiver of rights by BNPPLC
against any Unrelated Participant or require BNPPLC to pay any amounts
out-of-pocket that is not reimbursed concurrently by NAI or the New
Participants;
     (2) the New Participants must become parties to the Participation Agreement
(by executing supplements to that agreement as provided therein) and must
provide all funds due to the Unrelated Participant being replaced because of the
termination of the Unrelated Participants rights to receive payments in respect
of Net Cash Flow and Net Sales Proceeds (both as defined in the Participation
Agreement);
     (3) the obligations of BNPPLC to the New Participants must not exceed the
obligations that BNPPLC would have had to the Unrelated Participant if there had
been no substitution, other than those for which NAI is liable.
Upon consummation of any such substitution NAI must pay to the replaced
Participant Breakage Costs, if any, incurred by the replaced Participant because
of the substitution.
7 Items Included in the Property
     (A) Status of Property. All Improvements on the Land from time to time will
constitute “Property” covered by this Lease. Further, as provided in the
Construction Management Agreement, to the extent heretofore or hereafter
acquired by NAI (in whole or in part) with any portion of the Initial Advance or
with any Construction Advances or with other funds for which NAI receives
reimbursement from the Initial Advance or Construction Advances, all
furnishings, furniture, chattels, permits, licenses, franchises, certificates
and other personal property of whatever nature will be deemed to have been
acquired on behalf of BNPPLC by NAI and will constitute “Property” covered by
this Lease, as will all renewals or replacements of or substitutions for any
such Property. Upon request of BNPPLC, but not more often than once in any
period of twelve consecutive months, NAI will deliver to BNPPLC an inventory
describing all significant items of Personal Property (and, in the case of
tangible personal property, showing the make, model, serial number and location
thereof) other than Improvements, with a certification by NAI that such
inventory is true and complete and that all
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items specified in the inventory are covered by this Lease free and clear of any
Lien other than the Permitted Encumbrances or Liens Removable by BNPPLC.
     (B) Changes in the Land Covered by the Ground Lease. Upon any amendment of
the definition of the “Land” covered by the Ground Lease, the “Land” as defined
in and covered by this Lease and the other Operative Documents will also be so
amended.
8 Environmental.
     (A) Environmental Covenants by NAI.
          (1) NAI will not conduct or permit others to conduct Hazardous
Substance Activities on the Property, except Permitted Hazardous Substance Use
and Remedial Work.
          (2) NAI will not discharge or permit the discharge of anything
(including Permitted Hazardous Substances) on or from the Property that would
require any permit under applicable Environmental Laws, other than (i) storm
water runoff, (ii) waste water discharges through a publicly owned treatment
works, (iii) discharges that are a necessary part of any Remedial Work, and
(iv) other similar discharges consistent with the definition herein of Permitted
Hazardous Substance Use which do not significantly increase the risk of
Environmental Losses to BNPPLC, in each case in strict compliance with
Environmental Laws.
          (3) Following any discovery that Remedial Work is required by
Environmental Laws or is otherwise reasonably believed by BNPPLC to be required,
and to the extent not inconsistent with the other provisions of this Lease, NAI
must promptly perform and diligently and continuously pursue such Remedial Work.
          (4) If requested by BNPPLC in connection with any Remedial Work
required by this subparagraph, NAI must retain environmental consultants
reasonably acceptable to BNPPLC to evaluate any significant new information
generated during NAI’s implementation of the Remedial Work and to discuss with
NAI whether such new information indicates the need for any additional measures
that NAI should take to protect the health and safety of persons (including
employees, contractors and subcontractors and their employees) or to protect the
environment. NAI must implement any such additional measures to the extent
required with respect to the Property by Environmental Laws or otherwise
reasonably believed by BNPPLC to be required.
     (B) Right of BNPPLC to do Remedial Work Not Performed by NAI. If NAI’s
failure to perform any Remedial Work required as provided in subparagraph 8(A)
continues beyond the
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Environmental Cure Period (as defined below), BNPPLC may, in addition to any
other remedies available to it, conduct all or any part of the Remedial Work. To
the extent that Remedial Work is done by BNPPLC pursuant to the preceding
sentence (including any removal of Hazardous Substances), the cost thereof will
be a demand obligation owing by NAI to BNPPLC. As used in this subparagraph,
“Environmental Cure Period” means the period ending on the earlier of: (1)
ninety days after NAI is notified of the breach which must be cured within such
period or, if during such ninety days NAI initiates the Remedial Work and
diligently and continuously pursues it in accordance with a timetable accepted
and approved by applicable Governmental Authorities (which may include delays
waiting for permits or other authorizations), the date by which such Remedial
Work is to be completed according to such timetable, (2) the date that any writ
or order is issued for the levy or sale of any property owned by BNPPLC
(including the Property) because of such breach, (3) the date that any criminal
action is instituted or overtly threatened against BNPPLC or any of its
directors, officers or employees because of such breach, or (4) any Designated
Sale Date upon which, for any reason, NAI or an Affiliate of NAI or any
Applicable Purchaser does not purchase BNPPLC’s interest in the Property
pursuant to the Purchase Agreement for a net price to BNPPLC (when taken
together with any Supplemental Payment paid by NAI pursuant to the Purchase
Agreement, in the case of a purchase by an Applicable Purchaser) equal to the
Break Even Price.
     (C) Environmental Inspections and Reviews. BNPPLC reserves the right to
retain environmental consultants to review any report prepared by NAI or to
conduct BNPPLC’s own investigation to confirm whether NAI is complying with the
requirements of this Paragraph 8. NAI grants to BNPPLC and to BNPPLC’s agents,
employees, consultants and contractors the right to enter upon the Property
during reasonable hours and after reasonable notice to inspect the Property and
to perform such tests as BNPPLC deems reasonably necessary or appropriate to
review or investigate Hazardous Substances in, on, under or about the Property
or any discharge or reasonably suspected discharge of Hazardous Substances into
groundwater or surface water from the Property. NAI must promptly reimburse
BNPPLC for the fees of its environmental consultants and the costs of any such
inspections and tests; provided, however, BNPPLC’s right to reimbursement for
the fees of any consultant engaged as provided in this subparagraph or for the
costs of any inspections or test undertaken as provided in this subparagraph
will be limited to the following circumstances: (1) an Event of Default has
occurred and is continuing at the time of such engagement, tests or inspections;
(2) NAI has not exercised the Purchase Option and BNPPLC has retained the
consultant to establish the condition of the Property prior to any conveyance
thereof pursuant to the Purchase Agreement or to the expiration of this Lease;
(3) BNPPLC has retained the consultant to satisfy any regulatory requirements
applicable to BNPPLC or its Affiliates; (4) BNPPLC has retained the consultant
because it has reason to believe, and does in good faith believe, that a
significant violation of Environmental Laws concerning the Property has
occurred; or (5) BNPPLC has retained the consultant because BNPPLC has been
notified of a possible violation of Environmental Laws concerning the Property
by any Governmental Authority having jurisdiction.
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     (D) Communications Regarding Environmental Matters.
     (1) NAI must promptly advise BNPPLC and Participants of (i) any discovery
known to NAI of any event or circumstance which would render any of the
representations of NAI herein or in any of the other Operative Documents
concerning environmental matters materially inaccurate or misleading if made at
the time of such discovery and assuming that NAI was aware of all relevant
facts, (ii) any Remedial Work (or change in Remedial Work) required or
undertaken by NAI or its Affiliates in response to any (A) discovery of any
Hazardous Substances on, under or about the Property other than Permitted
Hazardous Substances or (B) any claim for damages resulting from Hazardous
Substance Activities, (iii) any discovery known to NAI of any occurrence or
condition on any real property adjoining or in the vicinity of the Property
which would or could reasonably be expected to cause the Property or any part
thereof to be subject to any ownership, occupancy, transferability or use
restrictions under Environmental Laws, or (iv) any investigation or inquiry
known to NAI of any failure or alleged failure by NAI to comply with
Environmental Laws affecting the Property by any Governmental Authority
responsible for enforcing Environmental Laws. In such event, NAI will deliver to
BNPPLC within thirty days after BNPPLC’s request, a preliminary written
environmental plan setting forth a general description of the action that NAI
proposes to take with respect thereto, if any, to bring the Property into
compliance with Environmental Laws or to correct any breach by NAI of this
Paragraph 8, including any proposed Remedial Work, the estimated cost and time
of completion, the name of the contractor and a copy of the construction
contract, if any, and such additional data, instruments, documents, agreements
or other materials or information as BNPPLC may reasonably request.
     (2) NAI will provide BNPPLC and Participants with copies of all material
written communications with Governmental Authorities relating to the matters
listed in the preceding clause (1). NAI will also provide BNPPLC and
Participants with copies of any correspondence from third Persons which threaten
litigation over any significant failure or alleged significant failure of NAI to
maintain or operate the Property in accordance with Environmental Laws.
     (3) Prior to NAI’s submission of a communication to any regulatory agency
or third party which causes, or potentially could cause (whether by
implementation of or response to said communication), a material change in the
scope, duration, or nature of any Remedial Work, NAI must, to the extent
practicable, deliver to BNPPLC and Participants a draft of the proposed
submission (together with the proposed date of submission), and in good faith
assess and consider any comments of BNPPLC regarding the same. Promptly after
BNPPLC’s request, NAI will meet with BNPPLC to discuss the submission, will
provide any additional information reasonably requested by BNPPLC
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and will provide a written explanation to BNPPLC addressing the issues raised by
comments (if any) of BNPPLC regarding the submission.
9 Insurance Required and Condemnation.
     (A) Liability Insurance. Throughout the Term NAI must maintain commercial
general liability insurance against claims for bodily and personal injury, death
and property damage occurring in or upon or resulting from any occurrence in or
upon the Property under one or more insurance policies that satisfy the Minimum
Insurance Requirements. NAI must deliver and maintain with BNPPLC for each
liability insurance policy required by this Lease written confirmation of the
policy and the scope of the coverage provided thereby issued by the applicable
insurer or its authorized agent, which confirmation must also satisfy the
Minimum Insurance Requirements.
     (B) Property Insurance.
     (1) Throughout the Term NAI must keep all Improvements (including all
alterations, additions and changes made to the Improvements) insured against
fire and other casualty under one or more property insurance policies that
satisfy the Minimum Insurance Requirements. NAI must deliver and maintain with
BNPPLC for each property insurance policy required by this Lease written
confirmation of the policy and the scope of the coverage provided thereby issued
by the applicable insurer or its authorized agent, which confirmation must also
satisfy the Minimum Insurance Requirements.
     (2) If any of the Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which insurance is required
hereunder, (a) BNPPLC may, but will not be obligated to, make proof of loss if
not made promptly by NAI after notice from BNPPLC, (b) each insurance company
concerned is hereby authorized and directed to make payment for such loss
directly to BNPPLC (or, if so instructed by BNPPLC, to NAI) for application as
required by Paragraph 10, and (c) BNPPLC will be entitled, in its own name or in
the name of NAI or in the name of both, to settle, adjust or compromise any and
all claims for loss, damage or destruction under any policy or policies of
insurance; except that, if any such claim is for less than $1,000,000, if no
97-10/Event has occurred and if no Event of Default has occurred and is
continuing, NAI alone will have the right to settle, adjust or compromise the
claim as NAI deems appropriate; and, except that, so long as no 97-10/Event has
occurred and no Event of Default has occurred and is continuing, BNPPLC must
provide NAI with at least forty-five days notice of BNPPLC’s intention to settle
any such claim before settling it unless NAI has already approved of the
settlement by BNPPLC.
     (3) BNPPLC will not in any event or circumstances be liable or responsible
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for failure to collect, or to exercise diligence in the collection of, any
insurance proceeds.
     (4) If any casualty results in damage to or loss or destruction of the
Property, NAI must give prompt notice thereof to BNPPLC and Paragraph 10 will
apply.
     (C) Failure to Obtain Insurance. If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Lease, BNPPLC
will be entitled (but not required) to obtain the insurance that NAI has failed
to obtain or for which NAI has not provided the required confirmation and,
without limiting BNPPLC’s other remedies under the circumstances, BNPPLC may
require NAI to reimburse BNPPLC for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date such cost was paid
by BNPPLC until the date of reimbursement by NAI.
     (D) Condemnation. Immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Property or any portion thereof,
or any other similar governmental or quasi-governmental proceedings arising out
of injury or damage to the Property or any portion thereof, each party will
promptly notify the other (provided, however, BNPPLC will have no liability for
its failure to provide such notice) of the pendency of such proceedings. (As
used herein, “condemnation of the Property” or words of like effect will include
any indirect condemnation by means of a taking of the Land or the Existing
Appurtenant Easements or any part thereof.) NAI must, at its expense, diligently
prosecute any such proceedings and must consult with BNPPLC, its attorneys and
experts and cooperate with them as reasonably requested in the carrying on or
defense of any such proceedings. BNPPLC is hereby authorized, in its own name or
in the name of NAI or in the name of both, at any time after a 97-10/Event or
when an Event of Default has occurred and is continuing, but not otherwise
without NAI’s prior consent, to execute and deliver valid acquittances for, and
to appeal from, any such judgment, decree or award concerning condemnation of
any of the Property. BNPPLC will not in any event or circumstances be liable or
responsible for failure to collect, or to exercise diligence in the collection
of, any such proceeds, judgments, decrees or awards.
     Notwithstanding the foregoing provisions of this subparagraph, if
condemnation proceeds totaling not more than $1,000,000 are to be recovered as a
result of a taking of less than all or substantially all of the Property, NAI
may directly receive and hold such proceeds so long as no Event of Default has
occurred and is continuing and so long as NAI applies such proceeds as required
herein.
     (E) Waiver of Subrogation. NAI, for itself and for any Person claiming
through it (including any insurance company claiming by way of subrogation),
waives any and every claim which arises or may arise in its favor against BNPPLC
or any other Interested Party to recover Losses for which NAI is compensated by
insurance or would be compensated by the insurance contemplated in this Lease,
but for any deductible or self-insured retention maintained under
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such insurance or but for a failure of NAI to maintain the insurance as required
by this Lease. NAI agrees to have such insurance policies properly endorsed so
as to make them valid notwithstanding this waiver, if such endorsement is
required to prevent a loss of insurance.
10 Application of Insurance and Condemnation Proceeds.
     (A) Collection and Application of Insurance and Condemnation Proceeds
Generally. This Paragraph 10 will govern the application of proceeds received by
BNPPLC or NAI during the Term from any third party (1) under any property
insurance policy as a result of damage to the Property (including proceeds
payable under any insurance policy covering the Property which is maintained by
NAI), (2) as compensation for any restriction placed upon the use or development
of the Property or for the condemnation of the Property or any portion thereof,
or (3) because of any judgment, decree or award for injury or damage to the
Property (e.g.,damage resulting from a third party’s release of Hazardous
Materials onto the Property); excluding, however, any funds paid to BNPPLC by
BNPPLC’s Parent, by an Affiliate of BNPPLC or by any Participant that is made to
compensate BNPPLC for any Losses BNPPLC may suffer or incur in connection with
this Lease or the Property. Except as provided in subparagraph 10(D), NAI must
promptly pay over to BNPPLC any insurance, condemnation or other proceeds
covered by this Paragraph 10 which NAI may receive from any insurer, condemning
authority or other third party. All proceeds covered by this Paragraph 10,
including those received by BNPPLC from NAI or third parties, will be applied as
follows:
     (1) First, proceeds covered by this Paragraph 10 will be used to reimburse
BNPPLC for any reasonably costs and expenses, including Attorneys’ Fees, that
BNPPLC incurred to collect the proceeds.
     (2) Second, the proceeds remaining after such reimbursement to BNPPLC
(hereinafter, the “Remaining Proceeds”) will be applied, as hereinafter more
particularly provided, either as a Qualified Prepayment or to reimburse NAI or
BNPPLC for the actual out-of-pocket costs of repairing or restoring the
Property. Until, however, any Remaining Proceeds received by BNPPLC are applied
by BNPPLC as a Qualified Prepayment or applied by BNPPLC to reimburse costs of
repairs to or restoration of the Property pursuant to this Paragraph 10, BNPPLC
will hold and maintain such Remaining Proceeds as Escrowed Proceeds in an
interest bearing account, and all interest earned on such account will be added
to and made a part of such Escrowed Proceeds.
     (B) Advances of Escrowed Proceeds to NAI. Except as otherwise provided
below in this Paragraph 10, BNPPLC will advance all Remaining Proceeds held by
it as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to
NAI of repairing or restoring the Property in accordance with the requirements
of this Lease and the other Operative Documents as the applicable repair or
restoration, progresses and upon compliance by NAI with such terms,
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conditions and requirements as may be reasonably imposed by BNPPLC to assure the
completion of such repair or restoration with available funds. So long as any
Lease Balance remains outstanding, however, BNPPLC will not be required to pay
Escrowed Proceeds to NAI in excess of the actual out-of-pocket cost to NAI of
the applicable repair or restoration, as evidenced by invoices or other
documentation reasonably satisfactory to BNPPLC, it being understood that BNPPLC
may retain and, after NAI has completed the applicable repair or restoration and
been reimbursed to out-of-pocket cost thereof, apply any such excess (or so much
thereof as is needed to reduce the Lease Balance to zero) as a Qualified
Prepayment.
     (C) Application of Escrowed Proceeds as a Qualified Prepayment. Provided no
97-10/Event has occurred and no Event of Default has occurred and is continuing,
BNPPLC will apply any Remaining Proceeds paid to it (or other amounts available
for application as a Qualified Prepayment) as a Qualified Prepayment on any date
that BNPPLC is directed to do so by a notice from NAI; however, if such a notice
from NAI specifies an effective date for a Qualified Prepayment that is less
than five Business Days after BNPPLC’s actual receipt of the notice, BNPPLC may
postpone the date of the Qualified Prepayment to any date not later than five
Business Days after BNPPLC’s receipt of the notice. In any event, BNPPLC may
deduct Breakage Costs or any Fixed Rate Settlement Amount incurred in connection
with any Qualified Prepayment from the Remaining Proceeds or other amounts
available for application as the Qualified Prepayment, and NAI must reimburse
BNPPLC upon request for any such Breakage Costs or Fixed Rate Settlement Amount
that BNPPLC incurs but does not deduct.
     (D) Right of NAI to Receive and Apply Remaining Proceeds Below a Certain
Level. If, after the Completion Date, any condemnation of any portion of the
Property or any casualty resulting in the diminution, destruction, demolition or
damage to any portion of the Property will (in the good faith judgment of
BNPPLC) reduce the then current “AS IS” market value by less than $1,000,000 and
(in the good faith estimation of BNPPLC) be unlikely to result in Remaining
Proceeds of more than $1,000,000, and if no 97-10/Event has occurred and no
Event of Default has occurred and is continuing, then BNPPLC will, upon NAI’s
request, instruct the condemning authority or insurer, as applicable, to pay the
Remaining Proceeds resulting therefrom directly to NAI. NAI must apply any such
Remaining Proceeds to the repair or restoration of the Property to a safe and
secure condition and to a value of no less than the value before taking or
casualty.
     (E) Special Provisions Applicable After a 97-10/Event or Event of Default.
Notwithstanding the foregoing, after any 97-10/Event, and when any Event of
Default has occurred and is continuing, BNPPLC will be entitled to receive and
collect all insurance, condemnation or other proceeds governed by this
Paragraph 10 and to apply all Remaining Proceeds, when and to the extent deemed
appropriate by BNPPLC in its sole discretion, either (A) to the reimbursement of
NAI or BNPPLC for the out-of-pocket cost of repairing or restoring the Property,
or (B) as Qualified Prepayments.
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     (F) NAI’s Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, if on or after the Completion
Date, the Property is damaged by fire or other casualty or less than all or
substantially all of the Property is taken by condemnation, NAI must promptly
restore or improve the Property or the remainder thereof to a value no less than
the Lease Balance and to a reasonably safe and sightly condition. If for some
reason NAI is unable to restore the Property or remainder thereof to a value of
no less than the Lease Balance, then NAI must nevertheless promptly restore the
Property or remainder thereof to a reasonably safe and sightly condition and pay
to BNPPLC for application as a Qualified Prepayment the amount (if any), as
determined by BNPPLC, needed to reduce the Lease Balance to no more than the
then current “AS IS” market value of the Property or remainder thereof.
     (G) Takings of All or Substantially All of the Property on or after the
Completion Date. In the event of any taking of all or substantially all of the
Property on or after the Completion Date, BNPPLC will be entitled to apply all
Remaining Proceeds (or so much thereof as is required to reduce the Lease
Balance to zero) as a Qualified Prepayment. Any taking of so much of the
Property as, in BNPPLC’s good faith judgment, makes it impracticable to restore
or improve the remainder thereof as required by part (1) of the preceding
subparagraph will be considered a taking of substantially all the Property for
purposes of this Paragraph 10.
     (H) If Remaining Proceeds Exceed the Lease Balance. Notwithstanding the
various provisions of this Lease authorizing BNPPLC to apply Remaining Proceeds
received by it during the Term as a Qualified Prepayment, in the event any such
Remaining Proceeds exceed the sum of (i) all payments thereof to NAI, (ii) any
application thereof to cover the costs of repairing or restoring the Property
and (iii) the Lease Balance, then the excess will not be applied as a Qualified
Prepayment, but rather will constitute Escrowed Proceeds which must, if NAI
exercises the Purchase Option pursuant to the Purchase Agreement, be delivered
to NAI as provided therein.
11 Additional Representations, Warranties and Covenants of NAI Concerning the
Property. NAI represents, warrants and covenants as follows:
     (A) Operation and Maintenance. NAI must operate and maintain the Property
in a good and workmanlike manner and in compliance with Applicable Laws in all
material respects and pay or cause to be paid all fees or charges of any kind
due in connection therewith. (If NAI does not promptly correct any failure of
the Property to comply with Applicable Laws that is the subject of a written
complaint or demand for corrective action given by any Governmental Authority to
NAI, or to BNPPLC and forwarded by it to NAI, then for purposes of the preceding
sentence, NAI will be considered not to have maintained the Property “in
compliance with all Applicable Laws in all material respects” whether or not the
noncompliance would be material in the absence of the complaint or demand.) NAI
will not use or occupy, or allow the use or occupancy of, the Property in any
manner which violates any Applicable Laws or which
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constitutes a public or private nuisance or which makes void, voidable or
cancelable any insurance then in force with respect to the Property. To the
extent that any of the following would, individually or in the aggregate,
increase the likelihood of a 97-10/Event or materially and adversely affect the
value of the Property or the use of the Property for purposes permitted by this
Lease, NAI will not, without BNPPLC’s prior consent: (i) initiate or permit any
zoning reclassification of the Property; (ii) seek any variance under existing
zoning ordinances applicable to the Property; (iii) use or permit the use of the
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations;
(iv) execute or file any subdivision plat affecting the Property; or (v) consent
to the annexation of the Property to any municipality. NAI will not cause or
permit any drilling or exploration for, or extraction, removal or production of,
minerals from the surface or subsurface of the Property, and NAI will not do
anything that could reasonably be expected to significantly reduce the market
value of the Property. If NAI receives a notice or claim from any Governmental
Authority that the Property is not in compliance with any Applicable Law, or
that any action may be taken against BNPPLC because the Property does not comply
with any Applicable Law, NAI must promptly furnish a copy of such notice or
claim to BNPPLC.
     Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI will not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest must be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPPLC
or the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken or overtly threatened
by any Governmental Authority against BNPPLC or any property owned by BNPPLC
(including the Property) because of such violation, or (iii) a Designated Sale
Date upon which, for any reason, NAI or an Affiliate of NAI or any Applicable
Purchaser does not purchase BNPPLC’s interest in the Property pursuant to the
Purchase Agreement for a price to BNPPLC (when taken together with any
Supplemental Payment paid by NAI pursuant to the Purchase Agreement, in the case
of a purchase by an Applicable Purchaser) equal to the Break Even Price.
     (B) Debts for Construction, Maintenance, Operation or Development. NAI must
cause all debts and liabilities incurred in the construction, maintenance,
operation or development of the Property, including invoices for labor, material
and equipment and all debts and charges for utilities servicing the Property, to
be promptly paid.
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     Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
statutory liens in the nature of contractors’, mechanics’ or materialmens’
liens, and pending such contest NAI will not be deemed in default under this
subparagraph because of the contested lien if (1) within thirty days after being
asked to do so by BNPPLC, NAI bonds over to BNPPLC’s reasonable satisfaction all
such contested liens against the Property alleged to secure an amount in excess
of $1,000,000 (individually or in the aggregate), (2) NAI diligently prosecutes
such contest to completion in a manner reasonably satisfactory to BNPPLC, and
(3) NAI promptly causes to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all costs and interest thereon, promptly after such
judgment becomes final; provided, however, that in any event each such contest
must be concluded and the lien, interest and costs must be paid by NAI prior to
the earlier of (i) the date that any criminal prosecution is instituted or
overtly threatened against BNPPLC or its directors, officers or employees
because of the nonpayment thereof, (ii) the date that any writ or order is
issued under which the Property or any other property in which BNPPLC has an
interest may be seized or sold or any other action is taken or overtly
threatened against BNPPLC or any property in which BNPPLC has an interest
because of the nonpayment thereof, or (iii) a Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser does not
purchase BNPPLC’s interest in the Property pursuant to the Purchase Agreement
for a price to BNPPLC (when taken together with any Supplemental Payment paid by
NAI pursuant to the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to the Break Even Price.
     (C) Repair, Maintenance, Alterations and Additions. NAI must keep the
Property in good order, operating condition and appearance and must cause all
necessary repairs, renewals and replacements to be promptly made. NAI will not
allow any of the Property to be materially misused, abused or wasted, and NAI
will promptly replace any worn-out fixtures and tangible Personal Property with
fixtures and personal property comparable to the replaced items when new. NAI
will not, without the prior consent of BNPPLC, (i) remove from the Property any
fixture or Personal Property having significant value except such as are
replaced by NAI by fixtures or Personal Property of equal suitability and value,
free and clear of any lien or security interest (and for purposes of this clause
“significant value” will mean any fixture or Personal Property that has a value
of more than $100,000 or that, when considered together with all other fixtures
and Personal Property removed and not replaced by NAI by items of equal
suitability and value, has an aggregate value of $500,000 or more) or (ii) make
material new Improvements or alter Improvements in any material respect
following completion of the Work contemplated in the Construction Management
Agreement.
     However, provided that no 97-10/Event has occurred, and so long as no Event
of Default has occurred and is continuing, BNPPLC will not unreasonably withhold
a consent requested by NAI pursuant to the preceding sentence for the
construction or alteration of Improvements. NAI acknowledges, however, that
BNPPLC’s refusal or failure to give such consent will be deemed
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reasonable if BNPPLC believes in good faith that the construction or alteration
for which NAI is requesting consent could have a material adverse impact upon
the value of the Property (taken as whole), or if NAI has not provided BNPPLC
with adequate information to allow BNPPLC to properly evaluate such impact on
value.
     Without limiting the foregoing, NAI must notify BNPPLC before making any
significant alterations to the Improvements after the completion of the
Construction Project, regardless of the impact on the value of the Property
expected to result from such alterations.
     (D) Permitted Encumbrances. NAI must comply with and will cause to be
performed all of the covenants, agreements and obligations imposed upon the
owner of any interest in the Property by the Permitted Encumbrances. Without
limiting the foregoing, NAI must cause all amounts to be paid when due, the
payment of which is secured by any Lien against the Property created by the
Permitted Encumbrances. Without the prior consent of BNPPLC, NAI will not create
any new Permitted Encumbrance or enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance that would create or expand or purport
to create or expand obligations or restrictions which would encumber BNPPLC’s
interest in the Property or be binding upon BNPPLC itself. (Whether BNPPLC must
give any such consent requested by NAI during the Term of this Lease will be
governed by subparagraph 4(C) of the Closing Certificate.)
     (E) Books and Records Concerning the Property. NAI must keep books and
records that are accurate and complete in all material respects for the Property
and, subject to Paragraph 22, must permit all such books and records (including
all contracts, statements, invoices, bills and claims for labor, materials and
services supplied for the construction and operation of any Improvements) to be
inspected and copied by BNPPLC during normal business hours. (BNPPLC will not
over the objection of NAI inspect or copy such materials more than once in any
twelve month period unless BNPPLC believes in good faith that more frequent
inspection and copying is required to determine whether a Default or an Event of
Default has occurred and is continuing or to assess the effect thereof or to
properly exercise remedies with respect thereto.) This subparagraph will not be
construed as requiring NAI to regularly maintain separate books and records
relating exclusively to the Property, but NAI will as reasonably requested from
time to time by BNPPLC construct or abstract from its regularly maintained books
and records information required by this subparagraph relating to the Property.
12 Assignment and Subletting by NAI.
     (A) BNPPLC’s Consent Required. Without the prior consent of BNPPLC, NAI
will not assign, transfer, mortgage, pledge or hypothecate this Lease or any
interest of NAI hereunder and will not sublet all or any part of the Property,
by operation of law or otherwise, except as follows:
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     (1) So long as no 97-10/Event has occurred and no Event of Default has
occurred and is continuing, NAI may sublet (a) to Affiliates of NAI, or (b) no
more than thirty-three percent (33%) (computed on the basis of square footage)
of the useable space in then existing and completed building Improvements to
Persons who are not NAI’s Affiliates, subject to the conditions that (i) any
such sublease by NAI must be made expressly subject and subordinate to the terms
hereof, (ii) the sublease must have a term equal to or less than the remainder
of the then effective Term of this Lease, and (iii) the use permitted by the
sublease must be expressly limited to uses consistent with subparagraph 2(A) or
other uses approved in advance by BNPPLC as uses that will not present any
extraordinary risk of uninsured environmental or other liability.
     (2) So long as no 97-10/Event has occurred and no Event of Default has
occurred and is continuing, NAI may assign all of its rights under this Lease
and the other Operative Documents to an Affiliate of NAI, subject to the
conditions that (a) the assignment must be in writing and must unconditionally
provide that the Affiliate assumes all of NAI’s obligations hereunder and
thereunder, and (b) NAI must execute an unconditional guaranty of the
obligations assumed by the Affiliate in form satisfactory to BNPPLC, confirming
(x) that notwithstanding the assignment NAI will remain primarily liable for all
of the obligations undertaken by NAI under the Operative Documents, (y) that
such guaranty is a guaranty of payment and not merely of collection, and
(z) that NAI waives to the extent permitted by Applicable Law all defenses
otherwise available to guarantors or sureties.
     (B) Standard for BNPPLC’s Consent to Assignments and Certain Other Matters.
Consents and approvals of BNPPLC which are required by this Paragraph 12 will
not be unreasonably withheld, but NAI acknowledges that BNPPLC’s withholding of
such consent or approval will be reasonable if BNPPLC determines in good faith
that (1) giving the approval may increase BNPPLC’s risk of liability for any
existing or future environmental problem, (2) giving the approval is likely to
substantially increase BNPPLC’s administrative burden of complying with or
monitoring NAI’s compliance with the requirements of this Lease, or (3) any
transaction for which NAI has requested the consent or approval would negate
NAI’s representations in the Operative Documents regarding ERISA or cause any of
the Operative Documents (or any exercise of BNPPLC’s rights thereunder) to
constitute a violation of any provision of ERISA. Further, NAI acknowledges that
BNPPLC may reasonably require, as a condition to giving its consent to any
assignment by NAI, that NAI execute an unconditional guaranty providing that NAI
will remain primarily liable for all of the tenant’s obligations hereunder and
under other Operative Documents. Any such guaranty must be a guaranty of payment
and not merely of collection, must provide that NAI waives to the extent
permitted by Applicable Law all defenses otherwise available to guarantors or
sureties, and must otherwise be in a form satisfactory to BNPPLC.
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     (C) Consent Not a Waiver. No consent by BNPPLC to a sale, assignment,
transfer, mortgage, pledge or hypothecation of this Lease or NAI’s interest
hereunder, and no assignment or subletting of the Property or any part thereof
in accordance with this Lease or otherwise with BNPPLC’s consent, will release
NAI from liability hereunder; and any such consent will apply only to the
specific transaction thereby authorized and will not relieve NAI from any
requirement of obtaining the prior consent of BNPPLC to any further sale,
assignment, transfer, mortgage, pledge or hypothecation of this Lease or any
interest of NAI hereunder.
13 Assignment by BNPPLC.
     (A) Restrictions on Transfers. Except by a Permitted Transfer, BNPPLC will
not assign, transfer, mortgage, pledge, encumber or hypothecate this Lease or
the other Operative Documents or any interest of BNPPLC in and to the Property
during the Term without the prior consent of NAI, which consent NAI may withhold
in its sole discretion. Further, notwithstanding anything to the contrary herein
contained, if withholding taxes are imposed on the Rents payable to BNPPLC
hereunder because of BNPPLC’s assignment of this Lease to any citizen of, or any
corporation or other entity formed under the laws of, a country other than the
United States, NAI will not be required to compensate BNPPLC or any such
assignee for the withholding tax.
     (B) Effect of Permitted Transfer or other Assignment by BNPPLC. If by a
Permitted Transfer BNPPLC sells or otherwise transfers the Property and assigns
to the transferee all of BNPPLC’s rights under this Lease and under the other
Operative Documents, and if the transferee expressly assumes all of BNPPLC’s
obligations under this Lease and under the other Operative Documents, then
BNPPLC will thereby be released from any obligations arising after such
assumption under this Lease or under the other Operative Documents (other than
any liability for a breach of any continuing obligation to provide Construction
Advances under the Construction Management Agreement), and NAI must look solely
to each successor in interest of BNPPLC for performance of such obligations.
14 BNPPLC’s Right to Enter and to Perform for NAI .
     (A) Right to Enter. BNPPLC and BNPPLC’s representatives may, subject to
subparagraph 14(C), enter the Property for the purpose of making inspections or
performing any work BNPPLC is authorized to undertake by the next subparagraph
or for the purpose confirming whether NAI has complied with the requirements of
this Lease or the other Operative Documents. So long as no Event of Default has
occurred and is continuing and no apparent emergency exists which would justify
immediate entry, BNPPLC will give NAI at least two Business Days notice before
making any such entry over the objection of NAI and will limit any such entry to
normal business hours.
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     (B) Performance for NAI. If NAI fails to perform any act or to take any
action required of it by this Lease or the Closing Certificate, or to pay any
money which NAI is required by this Lease or the Closing Certificate to pay, and
if such failure or action constitutes an Event of Default or renders BNPPLC or
any director, officer, employee or Affiliate of BNPPLC at risk of criminal
prosecution or renders BNPPLC’s interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPPLC may, perform or cause
to be performed such act or take such action or pay such money. Any expenses so
incurred by BNPPLC, and any money so paid by BNPPLC, will be a demand obligation
owing by NAI to BNPPLC. Further, upon making such payment, BNPPLC will be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein will imply any duty upon the part of
BNPPLC to do any work which under any provision of this Lease NAI may be
required to perform, and the performance thereof by BNPPLC will not constitute a
waiver of NAI’s default. BNPPLC may during the progress of any such work by
BNPPLC keep and store upon the Property all necessary materials, tools, and
equipment. BNPPLC will not in any event be liable for inconvenience, annoyance,
disturbance, loss of business, or other damage to NAI or the subtenants or
invitees of NAI by reason of the performance of any such work, or on account of
bringing materials, supplies and equipment into or through the Property during
the course of such work, and the obligations of NAI under this Lease will not
thereby be excused in any manner.
     (C) Building Security. So long as NAI remains in possession of the
Property, BNPPLC or BNPPLC’s representative will, before making any inspection
or performing any work on the Property authorized by this Lease, do the
following
     (1) BNPPLC will give NAI at least 24 hours notice, unless BNPPLC believes
in good faith that an emergency may exist or a Default has occurred and is
continuing, because of which significant damage to the Property or other
significant Losses may be sustained if BNPPLC delays entry to the Property; and
     (2) if then requested to do so by NAI in order to maintain NAI’s security,
BNPPLC or its representative will: (i) sign in at NAI’s security or information
desk if NAI has such a desk on the premises, (ii) wear a visitor’s badge or
other reasonable identification, (iii) permit an employee of NAI to observe such
inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of NAI that do not, individually or in
the aggregate, significantly interfere with inspections or work of BNPPLC
authorized by this Lease.
15 Remedies.
     (A) Traditional Lease Remedies. At any time after an Event of Default and
after BNPPLC has given any notice required by subparagraph 15(C), BNPPLC will be
entitled at
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BNPPLC’s option (and without limiting BNPPLC in the exercise of any other right
or remedy BNPPLC may have, and without any further demand or notice except as
expressly described in this subparagraph 15(A)), to exercise any one or more of
the following remedies:
     (1) By notice to NAI, BNPPLC may terminate NAI’s right to possession of the
Property. However, only a notice clearly and unequivocally confirming that
BNPPLC has elected to terminate NAI’s right of possession will be effective for
purposes of this provision.
     (2) Upon termination of NAI’s right to possession as provided in the
immediately preceding subsection (1) and without further demand or notice,
BNPPLC may re-enter the Property in any manner not prohibited by Applicable Laws
and take possession of all improvements, additions, alterations, equipment and
fixtures thereon and remove any persons in possession thereof. Any personal
property on the Land may be removed and stored in a warehouse or elsewhere, and
in such event the cost of any such removal and storage will be at the expense
and risk of and for the account of NAI.
     (3) Upon termination of NAI’s right to possession as provided in the
immediately preceding subsection (1), this Lease will terminate and BNPPLC may
recover from NAI (subject to the limitations set forth in subparagraph ?)
damages which include the following:
     (a) the worth at the time of award of the unpaid Rent which had been earned
at the time of termination;
     (b) costs and expenses actually incurred by BNPPLC to repair damage to the
Property that NAI was obligated to (but failed to) repair prior to the
termination;
     (c) the sum of the following (“Lease Termination Damages”):
     1) the worth at the time of award of the amount by which the unpaid Rent
which would have been earned after termination until the time of award exceeds
the amount of such rental loss that NAI proves could have been reasonably
avoided;
     2) the worth at the time of award of the amount by which the unpaid Rent
for the balance of the scheduled Term after the time of award exceeds the amount
of such rental loss that NAI proves could be reasonably avoided;
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     3) any other amount necessary to compensate BNPPLC for all the detriment
proximately caused by NAI’s failure to perform NAI’s obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including the costs and expenses of preparing and altering the
Property for reletting and all other costs and expenses of reletting (including
Attorneys’ Fees, advertising costs and brokers’ commissions), and
     (d) such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable California law.
The “worth at the time of award” of the amounts referred to in subparagraph
15(A)(3)(a) and subparagraph 15(A)(3)(c)1) will be computed by allowing interest
at the Default Rate. The “worth at the time of award” of the amount referred to
in subparagraph 15(A)(3)(c)2) will be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).
Notwithstanding the foregoing, the total Lease Termination Damages which BNPPLC
may recover from NAI will be limited in amount to the extent required, if any,
to prevent (I) the sum of recoverable Lease Termination Damages, plus any
Supplemental Payment that BNPPLC has received or remains entitled to recover
pursuant to the Purchase Agreement, from being more than the Maximum Remarketing
Obligation; provided, however, if a Supplemental Payment is owed to BNPPLC
according to the Purchase Agreement, but NAI fails to pay it, this limitation
upon BNPPLC’s right to recover Lease Termination Damages will be of no effect.
For purposes of this provision, “Maximum Remarketing Obligation” is intended to
have the meaning assigned to it in the Purchase Agreement and is intended to be
computed as of the date any award of Lease Termination Damages to BNPPLC as if
such date was the Designated Sale Date.
     (4) Even after a breach of this Lease or abandonment of the Property by
NAI, BNPPLC may continue this Lease in force and recover rent as it becomes due.
Accordingly, despite any breach or abandonment by NAI, this Lease will continue
in effect for so long as BNPPLC does not terminate NAI’s right to possession,
and BNPPLC may enforce all of BNPPLC’s rights and remedies under this Lease,
including the right to recover the Rent as it becomes due under this Lease.
NAI’s right to possession will not be deemed to have been terminated by BNPPLC
except pursuant to subparagraph 15(A)(1) hereof. The following will not
constitute a termination of NAI’s right to possession:
     (a) Acts of maintenance or preservation or efforts to relet the Property;
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     (b) The appointment of a receiver upon the initiative of BNPPLC to protect
BNPPLC’s interest under this Lease; or
     (c) Reasonable withholding of consent to an assignment or subletting, or
terminating a subletting or assignment by NAI.
     (B) Foreclosure Remedies. At any time when an Event of Default has occurred
and is continuing, BNPPLC may notify NAI of BNPPLC’s intent to pursue remedies
described in Exhibit B, and at any time thereafter, regardless of whether the
Event of Default is continuing, if NAI has not already purchased the Property or
caused an Applicable Purchaser to purchase the Property pursuant to the Purchase
Agreement, (i) BNPPLC will have the power and authority, to the extent provided
by law, after proper notice and lapse of such time as may be required by law, to
sell or arrange for a sale to foreclose\ its lien and security interest granted
in Exhibit B, and (ii) BNPPLC, in lieu of or in addition to exercising any power
of sale granted in Exhibit B, may proceed by a suit or suits in equity or at
law, whether for a foreclosure or sale of the Property, or against NAI for the
Lease Balance, or for the specific performance of any covenant or agreement
herein contained or in aid of the execution of any power herein granted, or for
the appointment of a receiver pending any foreclosure or sale of the Property,
or for the enforcement of any other appropriate legal or equitable remedy.
     (C) Notice Required So Long As the Purchase Option Continues Under the
Purchase Agreement. After the Term actually commences and so long as NAI remains
in possession of the Property and there has been no termination of the Purchase
Option as provided in Paragraph 6(B) of the Purchase Agreement, BNPPLC’s right
to exercise remedies provided in subparagraph 15(A) or to complete any
foreclosure sale as provided in subparagraph 15(B) will be subject to the
condition precedent that BNPPLC has notified NAI, at a time when an Event of
Default has occurred and is continuing and no less than thirty days prior to
exercising such remedies or completing such a sale, of BNPPLC’s intent to do so.
The condition precedent is intended to provide NAI with an opportunity to
exercise the Purchase Option before losing possession of the Property because of
the remedies enumerated in subparagraph 15(A) or because of a sale authorized by
subparagraph 15(B). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPPLC may proceed immediately to exercise remedies provided in subparagraph
15(A) or complete a sale authorized by subparagraph 15(B) at any time after the
earlier of (i) thirty days after BNPPLC has given such a notice to NAI, (ii) any
date upon which NAI relinquishes possession of the Property, or (iii) any
termination of the Purchase Option.
     (D) Enforceability. This Paragraph 15 will be enforceable to the maximum
extent not prohibited by Applicable Laws, and the unenforceability of any
provision in this Paragraph will not render any other provision unenforceable.
Lease Agreement — Page 43

 

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     (E) Remedies Cumulative. No right or remedy herein conferred upon or
reserved to BNPPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy will be cumulative and in addition to any
other right or remedy given to BNPPLC hereunder or now or hereafter existing in
favor of BNPPLC under Applicable Laws, except as otherwise expressly provided in
this subparagraph ?. In addition to other remedies provided in this Lease,
BNPPLC will be entitled, to the extent permitted by Applicable Law or in equity,
to injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of this
Lease, or to a decree compelling performance of any of the other covenants,
agreements, conditions or provisions of this Lease to be performed by NAI, or to
any other remedy allowed to BNPPLC at law or in equity. Nothing contained in
this Lease will limit or prejudice the right of BNPPLC to prove for and obtain
in proceedings for bankruptcy or insolvency of NAI by reason of the termination
of this Lease, an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, the
damages are to be proved, whether or not the amount be greater, equal to, or
less than the amount of the loss or damages referred to above. Without limiting
the generality of the foregoing, nothing contained herein will modify, limit or
impair any of the rights and remedies of BNPPLC under the Purchase Agreement,
and BNPPLC will not be required to give the thirty day notice described in
subparagraph 15(C) as a condition precedent to any acceleration of the
Designated Sale Date or to taking any action to enforce the Purchase Agreement.
However, to prevent a double recovery, BNPPLC acknowledges that BNPPLC’s right
to recover Lease Termination Damages may be limited by the last provision of
subparagraph 15(A)(3) above in the event BNPPLC collects or remains entitled to
collect a Supplemental Payment as provided in the Purchase Agreement.
16 Default by BNPPLC. If BNPPLC should default in the performance of any of its
obligations under this Lease, BNPPLC will have the time reasonably required, but
in no event less than thirty days, to cure such default after receipt of notice
from NAI specifying such default and specifying what action NAI believes is
necessary to cure the default.
17 Quiet Enjoyment. Provided NAI pays the Base Rent and all Additional Rent
payable hereunder as and when due and payable and keeps and fulfills all of the
terms, covenants, agreements and conditions to be performed by NAI hereunder,
BNPPLC will not during the Term disturb NAI’s peaceable and quiet enjoyment of
the Property; however, such enjoyment will be subject to the terms and
conditions of this Lease, to the Ground Lease, to Permitted Encumbrances and to
any other claims not constituting Liens Removable by BNPPLC. If any Lien
Removable by BNPPLC is established against the Property, BNPPLC will remove the
Lien Removable by BNPPLC promptly. Any breach by BNPPLC of this Paragraph will
render BNPPLC liable to NAI for any monetary damages proximately caused thereby,
but as more specifically provided in subparagraph 4(B) above, no such breach
will entitle NAI to terminate this Lease or excuse NAI from its obligation to
pay Rent.
Lease Agreement — Page 44

 

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18 Surrender Upon Termination. Unless NAI or an Applicable Purchaser is
purchasing or has purchased BNPPLC’s entire interest in the Property pursuant to
the terms of the Purchase Agreement, NAI must, upon the termination of NAI’s
right to occupancy, surrender to BNPPLC the Property, including Improvements
constructed by NAI and fixtures and furnishings included in the Property, free
of all Hazardous Substances (including Permitted Hazardous Substances) and
tenancies and with all Improvements in substantially the same condition as of
the date the same were initially completed, excepting only (i) ordinary wear and
tear that occurs between the maintenance, repairs and replacements required by
other provisions of this Lease, and (ii) demolition, alterations and additions
which are expressly permitted by the terms of this Lease and which have been
completed by NAI in a good and workmanlike manner in accordance with all
Applicable Laws. Any movable furniture or movable personal property belonging to
NAI or any party claiming under NAI, if not removed at the time of such
termination and if BNPPLC so elects, will be deemed abandoned and become the
property of BNPPLC without any payment or offset therefor. If BNPPLC does not so
elect, BNPPLC may remove such property from the Property and store it at NAI’s
risk and expense. NAI must bear the expense of repairing any damage to the
Property caused by such removal by BNPPLC or NAI.
19 Holding Over by NAI. Should NAI not purchase BNPPLC’s right, title and
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Lease without
objection by BNPPLC, whether such termination occurs by lapse of time or
otherwise, such holding over will constitute and be construed as a tenancy from
day to day only on and subject to all of the terms, provisions, covenants and
agreements on the part of NAI hereunder. No payments of money by NAI to BNPPLC
after the termination of this Lease will reinstate, continue or extend the Term
of this Lease and no extension of this Lease after the termination thereof will
be valid unless and until the same is reduced to writing and signed by both
BNPPLC and NAI.
20 Recording Memorandum. Contemporaneously with the execution of this Lease, the
parties will execute and record a memorandum of this Lease for purposes of
effecting constructive notice to all Persons of NAI’s rights hereunder.
21 Independent Obligations Evidenced by Other Operative Documents. NAI
acknowledges and agrees that nothing contained in this Lease will limit, modify
or otherwise affect any of NAI’s obligations under the other Operative
Documents, which obligations are intended to be separate, independent and in
addition to, and not in lieu of, the obligations set forth herein. Further, in
the event of any inconsistency between the express terms and provisions of the
Purchase Agreement and the express terms and provisions of this Lease, the
express terms and provisions of the Purchase Agreement will control.
22 Proprietary Information and Confidentiality.
Lease Agreement — Page 45

 

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     (A) Proprietary Information. NAI will have no obligation to provide
proprietary information (as defined in the next sentence) to BNPPLC, except and
to the extent (1) expressly required by other terms and conditions of the
Operative Documents, or (2) requested by BNPPLC in connection with any
inspection of the Property pursuant to the various provisions hereof and, in
BNPPLC’s reasonably determination, required to allow BNPPLC to accomplish the
purposes of such inspection. (Before NAI delivers any such proprietary
information in connection with any inspection of the Property, NAI may require
that BNPPLC confirm and ratify the confidentiality agreements covering such
proprietary information set forth herein.) For purposes of this Lease and the
other Operative Documents, “proprietary information” means NAI’s intellectual
property, trade secrets and other confidential information of value to NAI
(including, among other things, information about NAI’s manufacturing processes,
products, marketing and corporate strategies) that (1) is received by any
representative of BNPPLC at the time of any on-site visit to the Property or
(2) otherwise delivered to BNPPLC by or on behalf of NAI and labeled
“proprietary” or “confidential” or by some other similar designation to identify
it as information which NAI considers to be proprietary or confidential.
     (B) Confidentiality. BNPPLC will endeavor in good faith to use reasonable
precautions to keep confidential any proprietary information that BNPPLC may
receive from NAI or otherwise discover with respect to NAI or NAI’s business in
connection with the administration of this Lease or any investigation by BNPPLC
hereunder. This provision will not, however, render BNPPLC liable for any
disclosures of proprietary information made by it or its employees or
representatives, unless the disclosure is intentional and made for no reason
other than to damage NAI’s business. Also, this provision will not apply to
disclosures: (i) specifically and previously authorized in writing by NAI;
(ii) to any assignee of BNPPLC as to any interest in the Property so long as
such assignee has agreed in writing to use its reasonable efforts to keep such
information confidential in accordance with the terms of this paragraph;
(iii) to legal counsel, accountants, auditors, environmental consultants and
other professional advisors to BNPPLC so long as BNPPLC informs such persons in
writing (if practicable) of the confidential nature of such information and
directs them to treat such information confidentially; (iv) to regulatory
officials having jurisdiction over BNPPLC or BNPPLC’s Parent (although the
disclosing party will request confidential treatment of the disclosed
information, if practicable); (v) as required by legal process (although the
disclosing party will request confidential treatment of the disclosed
information, if practicable); (vi) of information which has previously become
publicly available through the actions or inactions of a person other than
BNPPLC not, to BNPPLC’s knowledge, in breach of an obligation of confidentiality
to NAI; (vii) to any Participant so long as the Participant is bound by and has
not repudiated a confidentiality provision concerning NAI’s proprietary
information set forth in the Participation Agreement; or (vii) that are
reasonably believed by BNPPLC to be necessary or helpful to the determination or
enforcement of any contractual or other rights which BNPPLC has or may have
against NAI or its Affiliates or which BNPPLC has or may have concerning the
Property (provided, that BNPPLC must cooperate with NAI as NAI may reasonably
request to mitigate any risk that such
Lease Agreement — Page 46

 

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disclosures will result in subsequent disclosures of proprietary information
which are not necessary or helpful to any such determination or enforcement;
such cooperation to include, for example, BNPPLC’s agreement not to oppose a
motion by NAI to seal records containing proprietary information in any court
proceeding initiated because of a dispute between the parties over the Property
or the Operative Documents).
Further, notwithstanding any other contrary provision contained in this Lease or
the other Operative Documents, BNPPLC and NAI (and each of their respective
employees, representatives or other agents) may disclose, without limitation of
any kind, the tax treatment and tax structure of the transactions contemplated
by this Lease and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and tax
structure, other than any information for which non-disclosure is reasonably
necessary in order to comply with applicable securities laws and other than any
information the disclosure of which would waive the attorney-client privilege,
the tax advisor privilege under Section 7525 of the Internal Revenue Code, or
similar privileges.
[The signature pages follow.]
Lease Agreement — Page 47

 

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     IN WITNESS WHEREOF, this Lease is executed to be effective as of
December 15, 2005.

              BNP PARIBAS LEASING CORPORATION, a
Delaware corporation
 
       
 
  By:   /s/  Lloyd G. Cox
 
       
 
      Lloyd G. Cox, Managing Director

Lease Agreement — Signature Page

 

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[Continuation of signature pages for Lease dated as of December 15, 2005]

              NETWORK APPLIANCE, INC., a Delaware
corporation
 
       
 
  By:   /s/  Steven Gomo
 
       
 
      Steven Gomo, Chief Financial Officer

Lease Agreement — Signature Page

 

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Exhibit A
Legal Description
Parcel 1, as shown on that certain Parcel Map which filed for record in the
office of the recorder of the County of Santa Clara, State of California on
July 7, 1994, in Book 657 of Parcel Maps, Page 9.
APN: 110-32-6
ARB: 110-3-x65
TOGETHER WITH, easements appurtenant to Parcel 1 as described in Exhibit A
attached to the Ground Lease.

 

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Exhibit B
California Foreclosure Provisions
Without limiting any of the provisions set forth in the body of this Lease or
other attachments to this Lease, the following provisions are included in and
made a part of this Lease for all purposes:
GRANT OF LIEN AND SECURITY INTEREST.
     NAI, for and in consideration of the sum of Ten Dollars ($10.00) to NAI in
hand paid by Lloyd G. Cox, Trustee, of Dallas County, Texas (in this Exhibit
called the “Trustee”), in order to secure the recovery of the Lease Balance by
BNPPLC and the payment of all of the other obligations, covenants, agreements
and undertakings of NAI under this Lease or other Operative Documents (in this
Exhibit called the “Secured Obligations”), does hereby irrevocably GRANT,
BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN and SET OVER to the Trustee, IN TRUST
WITH POWER OF SALE, for the benefit of BNPPLC, the leasehold interest in the
Land created by the Ground Lease, together with (i) all the buildings and other
improvements now on or hereafter located thereon; (ii) all materials, equipment,
fixtures or other property whatsoever now or hereafter attached or affixed to or
installed in said buildings and other improvements, including, but not limited
to, all heating, plumbing, lighting, water heating, refrigerating, incinerating,
ventilating and air conditioning equipment, utility lines and equipment (whether
owned individually or jointly with others), sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, engines, machines,
elevators, motors, cabinets, shades, blinds, partitions, window screens, screen
doors, storm windows, awnings, drapes, and floor coverings, and all fixtures,
accessions and appurtenances thereto, and all renewals or replacements of or
substitutions for any of the foregoing, all of which are hereby declared to be
permanent fixtures and accessions to the freehold and part of the realty
conveyed herein as security for the obligations mentioned hereinabove; (iii) all
easements and rights of way now and at any time hereafter used in connection
with any of the foregoing property or as a means of ingress to or egress from
the Land or for utilities to said property; (iv) all interests of NAI in and to
any streets, ways, alleys and/or strips of land adjoining said land or any part
thereof; (v) all rents, issues, profits, royalties, bonuses, income and other
benefits derived from or produced by the Land or Improvements; (vi) all leases
or subleases of the Land or Improvements or any part thereof now or hereafter in
effect, including all security or other deposits, advance or prepaid rents, and
deposits or payments of similar nature; (vii) all options to purchase or lease
the Land or Improvements or any part thereof or interest therein, and any
greater estate in the Land or Improvements now owned or hereafter acquired by
NAI; (viii) all right, title, estate and interest of every kind and nature, at
law or in equity, which NAI now has or may hereafter acquire in the Land or
Improvements; and (ix) all other claims and demands with respect to the Land or
Improvements or the Collateral (as hereinafter defined), including all claims or
demands to all proceeds of all insurance now or hereafter in effect with respect
to the Land, Improvements or Collateral, all awards made for the taking by
condemnation or the power of eminent domain, or by any proceeding or purchase in
lieu thereof, of the Land, Improvements or Collateral, or any part thereof, or
any damage or injury thereto, all awards resulting from a change of grade of

 

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streets, and all awards for severance damages; and (vi) all rights, estates,
powers and privileges appurtenant or incident to the foregoing.
     TO HAVE AND TO HOLD the foregoing property (in this Exhibit called the
“Mortgaged Property”) unto the Trustee, IN TRUST, and his successors or
substitutes in this trust and to his or their successors and assigns upon the
terms, provisions and conditions herein set forth for the benefit of BNPPLC.
     In order to secure the Secured Obligations, NAI also hereby grants to
BNPPLC a security interest in: all components of the Property which constitute
personalty, whether owned by NAI now or hereafter, and all fixtures, accessions
and appurtenances thereto, and all renewals or replacements of or substitutions
for any of the foregoing (including all building materials and equipment now or
hereafter delivered to said premises and intended to be installed or in or
incorporated as part of the Improvements); all rents and other amounts from and
under leases of all or any part of the Property; all issues, profits and
proceeds from all or any part of the Property; all proceeds (including premium
refunds) of each policy of insurance relating to the Property; all proceeds from
the taking of the Property or any part thereof or any interest therein or right
or estate appurtenant thereto by eminent domain or by purchase in lieu thereof;
all permits, licenses, franchises, certificates, and other rights and privileges
obtained in connection with the Property; all plans, specifications, maps,
surveys, reports, architectural, engineering and construction contracts, books
of account, insurance policies and other documents, of whatever kind or
character, relating to the use, construction upon, occupancy, leasing, sale or
operation of the Property; all proceeds and other amounts paid or owing to NAI
under or pursuant to any and all contracts and bonds relating to the
construction, erection or renovation of the Property; and all oil, gas and other
hydrocarbons and other minerals produced from or allocated to the Property and
all products processed or obtained therefrom, the proceeds thereof, and all
accounts and general intangibles under which such proceeds may arise, together
with any sums of money that may now or at any time hereafter become due and
payable to NAI by virtue of any and all royalties, overriding royalties,
bonuses, delay rentals and any other amount of any kind or character arising
under any and all present and future oil, gas and mining leases covering the
Property or any part thereof (all of the property described in this section are
collectively called the “Collateral” in this Exhibit) and all proceeds of the
Collateral. (The Mortgaged Property and the Collateral are in this Exhibit
sometimes collectively called the “Security”.)
FORECLOSURE BY POWER OF SALE
     Upon the occurrence of any Event of Default, the Trustee, its successor or
substitute, and/or BNPPLC is authorized and empowered to execute all written
notices then required by law to cause the Security to be sold under power of
sale to satisfy the Secured Obligations. Trustee shall give and record such
notices as the law then requires as a condition precedent to a trustee’s sale.
When the minimum period of time required by law after giving all required
notices has elapsed, Trustee, without notice to or demand upon NAI except as
otherwise required by law,
Exhibit B to Lease Agreement — Page 2

 

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shall sell the Security at the time and place of sale fixed by it in the notice
of sale, at one or several sales, either as a whole or in separate parcels and
in such manner and order, all as BNPPLC or Trustee in its sole discretion may
determine, at public auction to the highest bidder for cash, in lawful money of
the United States, payable at the time of sale (the obligations hereby secured
being the equivalent of cash for purposes of said sale). NAI shall have no right
to direct the order in which the Security is sold or to require that the
Security be sold in separate lots or parcels or items. The sale by the Trustee
of less than the whole of the Mortgaged Property shall not exhaust the power of
sale herein granted, and the Trustee is specifically empowered to make
successive sale or sales under such power until the whole of the Mortgaged
Property shall be sold; and, if the proceeds of such sale of less than the whole
of the Mortgaged Property shall be less than the aggregate of the indebtedness
secured hereby and the expense of executing this trust as provided herein, the
rights and remedies of BNPPLC hereunder and the lien hereof shall remain in full
force and effect as to the unsold portion of the Mortgaged Property just as
though no sale or sales had been made; provided, however, that NAI shall never
have any right to require the sale of less than the whole of the Mortgaged
Property but BNPPLC shall have the right, at its sole election, to request the
Trustee to sell less than the whole of the Mortgaged Property. Subject to
requirements and limits imposed by law, including California Civil Code § 2924g,
Trustee may postpone sale of all or any portion of the Security by public
announcement at such time and place of sale and from time to time may postpone
the sale by public announcement at the time and place fixed by the preceding
postponement. Any person or entity, including Trustee, NAI or BNPPLC, may
purchase at the sale, and NAI hereby covenants to warrant and defend the title
of such purchaser or purchasers. Trustee shall deliver to the purchaser at such
sale a deed conveying the Security or portion thereof so sold, but without any
covenant or warranty, express or implied. At any such sale (i) NAI hereby
agrees, in its behalf and in behalf of its heirs, executors, administrators,
successors, personal representatives and assigns, that any and all recitals made
in any deed of conveyance given by Trustee of any matters or facts stated
therein, including without limitation, the identity of BNPPLC, the occurrence or
existence of any default, the acceleration of the maturity of any of the Secured
Obligations, the request to sell, the notice of sale, the giving of notice to
all debtors legally entitled thereto, the time, place, terms, and manner of
sale, and receipt, distribution and application of the money realized therefrom,
and the due and proper appointment of a substitute Trustee and any other act or
thing duly done by BNPPLC or by Trustee hereunder, shall be taken by all courts
of law and equity as prima facie evidence that the statement or recitals state
facts and are without further question to be so accepted as conclusive proof of
the truthfulness thereof, and NAI hereby ratifies and confirms every act that
Trustee or any substitute Trustee hereunder may lawfully do in the premises by
virtue hereof; and (ii) the purchaser may disaffirm any easement granted, or
rental, lease or other contract made, in violation of any provision of any of
the Operative Documents, and may take immediate possession of the Security free
from, and despite the terms, of, such grant of easement and rental or lease
contract.
BNPPLC may elect to cause the Security or any part thereof to be sold under the
power of sale herein granted in any manner permitted by applicable law. In
connection with any sale or sales
Exhibit B to Lease Agreement — Page 3

 

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hereunder, BNPPLC may elect to treat any portion of the Security which consists
of a right in action or which is property that can be severed from the Security
without causing structural damage thereto as if the same were personal property,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the real property. Any sale of any personal property hereunder
shall be conducted in any manner permitted by the California Uniform Commercial
Code (in this Exhibit called the “Code”). Where any portion of the Security
consists of real property and personal property or fixtures, whether or not such
personal property is located on or within the real property, BNPPLC may elect in
its discretion to exercise its rights and remedies against any or all of the
real property, personal property and fixtures, in such order and manner as is
now or hereafter permitted by applicable law. Without limiting the generality of
the foregoing, BNPPLC may, in its sole and absolute discretion and without
regard to the adequacy of its security, elect to proceed against any or all of
the real property, personal property and fixtures in any manner permitted by the
Code; and if BNPPLC elects to sell both personal property and real property
together as permitted by the Code, the power of sale herein granted shall be
exercisable with respect to all or any of the real property, personal property
and fixtures covered hereby, as designated by BNPPLC, and Trustee is hereby
authorized and empowered to conduct any such sale of any real property, personal
property and fixtures in accordance with the procedures applicable to real
property. Where any portion of the Security consists of real property and
personal property, any reinstatement of the Secured Obligations, following
default and an election by BNPPLC to accelerate the maturity of said
obligations, which is made by NAI or any other person or entity permitted to
exercise the right of reinstatement under § 2924c of the California Civil Code
or any successor statute, shall, in accordance with the terms of Code, not
prohibit BNPPLC or Trustee from conducting a sale or other disposition of any
personal property or fixtures or from otherwise proceeding against or continuing
to proceed against any personal property or fixtures in any manner permitted by
the Code, nor shall any such reinstatement invalidate, rescind or otherwise
affect any sale, disposition or other proceeding held, conducted or instituted
with respect to any personal property or fixtures prior to such reinstatement or
pending at the time of such reinstatement. Any sums paid to BNPPLC in effecting
any reinstatement pursuant to § 2924c of the California Civil Code shall be
applied to the indebtedness secured hereby, and to BNPPLC’s reasonable costs and
expenses in the manner required by § 2924c. Should BNPPLC elect to sell any
portion of the Security which is real property, or which is personal property or
fixtures that BNPPLC has elected to sell together with the real property in
accordance with the laws governing a sale of real property, BNPPLC or Trustee
shall give such notice of default and election to sell as may then be required
by law, and without the necessity of any demand on NAI, Trustee, at the time(s)
and place(s) specified in the notice of sale, shall sell said real property, and
all estate, right, title, interest, claim and demand therein, and equity and
right of redemption thereof, at such times and places as required or permitted
by law, upon such terms as BNPPLC or Trustee may fix and specify in the notice
of sale or as may be required by law. If the Security consists of several lots,
parcels or items of property, BNPPLC may: (i) designate the order in which such
lots, parcels or items shall be offered for sale or sold, or (ii) elect to sell
such lots, parcels or items through a single sale, or through two or more
successive sales, or in any other manner BNPPLC deems in
Exhibit B to Lease Agreement — Page 4

 

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its best interest. Should BNPPLC desire that more than one sale or other
disposition of the Mortgaged Property be conducted, BNPPLC may, at its option,
cause the same to be conducted simultaneously, or successively, on the same day,
or on such different days or times and in such order as BNPPLC may deem to be in
its best interests, and no such sale shall exhaust the power of sale herein
granted or terminate or otherwise affect the lien granted by NAI herein on, or
the security interests of BNPPLC in, any part of the Security not sold, until
all of the indebtedness secured hereby has been fully paid and satisfied. In the
event BNPPLC elects to dispose of the Security through more than one sale, NAI
agrees to pay the costs and expenses of each such sale and of any judicial
proceedings wherein the same may be made, including reasonable compensation to
BNPPLC and Trustee, their agents and counsel, and to pay all expenses,
liabilities and advances made or incurred by BNPPLC and Trustee (or either of
them) in connection with such sale or sale, together with interest on all such
advances made by BNPPLC and Trustee (or either of them) at the Default Rate..
JUDICIAL FORECLOSURE
     This instrument shall be effective as a mortgage as well as a deed of trust
and upon the occurrence of an Event of Default may be foreclosed as to any of
the Security in any manner permitted by the laws of the State of California or
of any other state in which any part of the Security is situated, and any
foreclosure suit may be brought by the Trustee or by BNPPLC. In the event a
foreclosure hereunder shall be commenced by the Trustee, or his substitute or
successor, BNPPLC may at any time before the sale of the Security direct the
said Trustee to abandon the sale, and may then institute suit for the collection
of the Secured Obligations and for the judicial foreclosure of this instrument.
It is agreed that if BNPPLC should institute a suit for the collection of the
Secured Obligations and for the foreclosure of this instrument, BNPPLC may at
any time before the entry of a final judgment in said suit dismiss the same, and
require the Trustee, his substitute or successor to exercise the power of sale
granted herein to sell the Security in accordance with the provisions of this
instrument.
BNPPLC AS PURCHASER
     BNPPLC shall have the right to become the purchaser at any sale held by any
Trustee or substitute or successor or by any receiver or public officer, and any
BNPPLC purchasing at any such sale shall have the right to credit upon the
amount of the bid made therefor, to the extent necessary to satisfy such bid,
the outstanding Lease Balance and other Secured Obligations owing to such
BNPPLC.
UNIFORM COMMERCIAL CODE REMEDIES
     Upon the occurrence of an Event of Default, BNPPLC may exercise its rights
of enforcement with respect to the Collateral under the California Uniform
Commercial Code, as
Exhibit B to Lease Agreement — Page 5

 

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amended, and in conjunction with, in addition to or in substitution for those
rights and remedies:
     (a) BNPPLC may enter upon the Land to take possession of, assemble and
collect the Collateral or to render it unusable; and
     (b) BNPPLC may require NAI to assemble the Collateral and make it available
at a place BNPPLC designates which is mutually convenient to allow BNPPLC to
take possession or dispose of the Collateral; and
     (c) written notice mailed to NAI as provided herein ten (10) days prior to
the date of public sale of the Collateral or prior to the date after which
private sale of the Collateral will be made shall constitute reasonable notice;
and
     (d) any sale made pursuant to the provisions of this section shall be
deemed to have been a public sale conducted in a commercially reasonable manner
if held contemporaneously with the sale of the Mortgaged Property under power of
sale as provided herein upon giving the same notice with respect to the sale of
the Collateral hereunder as is required for such sale of the Mortgaged Property
under power of sale; and
     (e) in the event of a foreclosure sale, whether made by the Trustee
exercising the power of sale granted herein, or under judgment of a court, the
Collateral and the Mortgaged Property may, at the option of BNPPLC, be sold as a
whole; and
     (f) it shall not be necessary that BNPPLC take possession of the Collateral
or any part thereof prior to the time that any sale pursuant to the provisions
of this section is conducted and it shall not be necessary that the Collateral
or any part thereof be present at the location of such sale; and
     (g) prior to application of proceeds of disposition of the Collateral to
the Secured Obligations, such proceeds shall be applied to the reasonable
expenses of retaking, holding, preparing for sale or lease, selling, leasing and
the like and the reasonable attorney’s fees and legal expenses incurred by
BNPPLC; and
     (h) any and all statements of fact or other recitals made in any bill of
sale or assignment or other instrument evidencing any foreclosure sale hereunder
as to nonpayment of the Secured Obligations or as to the occurrence of any Event
of Default, or as to BNPPLC having declared any of the Secured Obligations to be
due and payable, or as to notice of time, place and terms of sale and of the
properties to be sold having been duly given, or as to any other act or thing
having been duly done by BNPPLC, shall be taken as prima facie evidence of the
truth of the facts so stated and recited; and
     (i) BNPPLC may appoint or delegate any one or more persons as agent to
Exhibit B to Lease Agreement — Page 6

 

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perform any act or acts necessary or incident to any sale held by BNPPLC,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of BNPPLC.
APPOINTMENT OF A RECEIVER
     In addition to all other remedies herein provided for, if any Event of
Default occurs or continues after the Designated Sale Date,, BNPPLC shall as a
matter of right be entitled to the appointment of a receiver or receivers for
all or any part of the Security, whether such receivership be incident to a
proposed sale of such property or otherwise, and without regard to the adequacy
of the security or the value of the Security or the solvency of any person or
persons liable for the payment of the Secured Obligations, and NAI does hereby
irrevocably consent to the appointment of such receiver or receivers, waives any
and all defenses to such appointment and agrees not to oppose any application
therefor by BNPPLC, but nothing herein is to be construed to deprive BNPPLC of
any other right, remedy or privilege it may now have under the law to have a
receiver appointed. Any such receiver or receivers shall have all of the usual
powers and duties of receivers in like or similar cases and shall continue as
such and exercise all such powers until the date of confirmation of sale of the
Security unless such receivership is sooner terminated. Any money advanced by
BNPPLC in connection with any such receivership shall be a demand obligation
owing by NAI to BNPPLC and shall bear interest from the date of making such
advancement by BNPPLC until paid at the Default Rate and shall be a part of the
Secured Obligations and shall be secured by this lien and by any other
instrument securing the Secured Obligations.
PROVISIONS CONCERNING THE TRUSTEE
     Trustee accepts this trust when a Short Form Lease or memorandum
referencing the provisions of this Exhibit, duly executed and acknowledged, is
made a public record as provided by law. The trust hereby created shall be
irrevocable by NAI.
     In the event the Trustee takes any action pursuant to the provisions of
this Exhibit, NAI shall pay to Trustee reasonable compensation for services
rendered in the administration of this trust, which shall be in addition to any
required reimbursement for Attorney’s Fees or other expenses.
     BNPPLC may appoint a substitute to replace and act as the Trustee hereunder
in any manner now or hereafter provided by law, or in lieu thereof, BNPPLC may
from time to time, by an instrument in writing, appoint substitutes as successor
or successors to any Trustee named herein or acting hereunder, which instrument,
executed and acknowledged by BNPPLC and recorded in the Office of the Recorder
of the county in which the Property is located, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall thereupon
and without conveyance from the predecessor Trustee, succeed to all its title,
estate,
Exhibit B to Lease Agreement — Page 7

 

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rights, powers and duties. Such instrument must contain the name of the original
NAI, Trustee and BNPPLC hereunder, the instrument number of this Deed of Trust,
and the name and address of the successor Trustee. In the event the Secured
Obligations are at any time owned by more than one person or entity, the holder
or holders of not less than a majority in the amount of such Secured Obligations
shall have the right and authority to make the appointment of a successor or
substitute trustee provided for in the preceding sentences. Such appointment and
designation by BNPPLC or by the holder or holders of not less than a majority of
the Secured Obligations shall be full evidence of the right and authority to
make the same and of all facts therein recited. If BNPPLC is a corporation and
such appointment is executed in its behalf by an officer of such corporation,
such appointment shall be conclusively presumed to be executed with authority
and shall be valid and sufficient without proof of any action by the board of
directors or any superior officer of the corporation. Upon the making of any
such appointment and designation, all of the estate and title of the Trustee in
the Security shall vest in the named successor or substitute trustee and he
shall thereupon succeed to and shall hold, possess and execute all the rights,
powers, privileges, immunities and duties herein conferred upon the Trustee; but
nevertheless, upon the written request of BNPPLC or of the successor or
substitute Trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor or substitute Trustee all of the
estate and title in the Security of the Trustee so ceasing to act, together with
all the rights, powers, privileges, immunities and duties herein conferred upon
the Trustee, and shall duly assign, transfer and deliver any of the properties
and moneys held by said Trustee hereunder to said successor or substitute
Trustee. All references herein to the Trustee shall be deemed to refer to the
Trustee (including any successor or substitute appointed and designated as
herein provided) from time to time acting hereunder. NAI hereby ratifies and
confirms any and all acts which the herein named Trustee or his successor or
successors, substitute or substitutes, in this trust, shall do lawfully by
virtue hereof.
     THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT OR ACT DONE BY
THE TRUSTEE IN GOOD FAITH, OR BE OTHERWISE RESPONSIBLE OR ACCOUNTABLE UNDER ANY
CIRCUMSTANCES WHATSOEVER (INCLUDING THE TRUSTEE’S NEGLIGENCE), EXCEPT FOR THE
TRUSTEE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. The Trustee shall have the
right to rely on any instrument, document or signature authorizing or supporting
any action taken or proposed to be taken by him hereunder, believed by him in
good faith to be genuine. All moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other moneys
(except to the extent required by law), and the Trustee shall be under no
liability for interest on any moneys received by him hereunder. NAI WILL
REIMBURSE THE TRUSTEE FOR, AND INDEMNIFY AND SAVE HIM HARMLESS AGAINST, ANY AND
ALL LIABILITY AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) WHICH MAY BE
INCURRED BY HIM IN THE PERFORMANCE OF HER DUTIES HEREUNDER (INCLUDING ANY
LIABILITY AND EXPENSES RESULTING FROM THE TRUSTEE’S OWN NEGLIGENCE). The
foregoing indemnity shall not terminate upon release, foreclosure or
Exhibit B to Lease Agreement — Page 8

 

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other termination of this instrument.
MISCELLANEOUS
     BNPPLC may resort to any security given by this instrument or to any other
security now existing or hereafter given to secure the payment of the Secured
Obligations, in whole or in part, and in such portions and in such order as may
seem best to BNPPLC in its sole and uncontrolled discretion, and any such action
shall not in anywise be considered as a waiver of any of the rights, benefits,
liens or security interests evidenced by this instrument.
     To the full extent NAI may do so, NAI agrees that NAI will not at any time
insist upon, plead, claim or take the benefit or advantage of any law now or
hereafter in force pertaining to the rights and remedies of sureties or
redemption, and NAI, for NAI and NAI’s successors and assigns, and for any and
all persons ever claiming any interest in the Security, to the extent permitted
by law, hereby waives and releases all rights of redemption, valuation,
appraisement, stay of execution, notice of intention to mature or declare due
the whole of the Secured Obligations, notice of election to mature or declare
due the whole of the Secured Obligations and all rights to a marshaling of the
assets of NAI, including the Security, or to a sale in inverse order of
alienation in the event of foreclosure of the liens and security interests
hereby created. NAI shall not have or assert any right under any statute or rule
of law pertaining to the marshaling of assets, sale in inverse order of
alienation, the exemption of homestead, the administration of estates of
decedents or other matters whatever to defeat, reduce or affect the right of
BNPPLC under the terms of this instrument to a sale of the Security for the
collection of the Secured Obligations without any prior or different resort for
collection, or the right of BNPPLC under the terms of this instrument to the
payment of the Secured Obligations out of the proceeds of sale of the Security
in preference to every other claimant whatever. If any law referred to in this
section and now in force, of which NAI or NAI’s successors and assigns and such
other persons claiming any interest in the Security might take advantage despite
this provision, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to preclude the application of this provision.
     In the event there is a foreclosure sale hereunder and at the time of such
sale NAI or NAI’s successors or assigns or any other persons claiming any
interest in the Security by, through or under NAI are occupying or using the
Security, or any part thereof, each and all shall immediately become the tenant
of the purchaser at such sale. Such tenancy shall be a tenancy from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per
day based upon the value of the property occupied, such rental to be due daily
to the purchaser. In the event the tenant fails to surrender possession of said
property upon demand, the purchaser shall be entitled to institute and maintain
an action to obtain possession in any court of competent jurisdiction in
California.
     NAI agrees to pay BNPPLC for each statement of BNPPLC (as beneficiary)
regarding the
Exhibit B to Lease Agreement — Page 9

 

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obligations secured hereby the maximum fee allowed by law or, if there is no
maximum fee, such reasonable fee as is then charged by BNPPLC for rendering such
statement.
     Notwithstanding any contrary provisions regarding the giving of notices in
the Common Definitions or Provisions Agreement or other Operative Documents, any
service of a notice required by California Civil Code §2924 shall be considered
complete when the requirements of that statute are met.
     All rights of action under this Exhibit be enforced by BNPPLC or Trustee
without the possession of any instruments secured hereby and without the
production thereof or of this Lease or other Operative Documents at any trial or
other proceeding relative thereto.
Exhibit B to Lease Agreement — Page 10

 

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COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
between
BNP PARIBAS LEASING CORPORATION
and
NETWORK APPLIANCE, INC.
Dated as of December 15, 2005

 

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TABLE OF CONTENTS

              Page
ARTICLE I — LIST OF DEFINED TERMS
    1  
97-10/Event
    1  
97-10/Maximum Permitted Prepayment
    1  
97-10/Prepayment
    1  
97-10/Project Costs
    1  
97-10/Pronouncement
    1  
ABR
    2  
ABR Period Election
    2  
Active Negligence
    2  
Additional Rent
    3  
Adjusted EBITDA
    3  
Administrative Fees
    3  
Advance Date
    3  
Affiliate
    3  
After Tax Basis
    3  
Applicable Laws
    3  
Applicable Purchaser
    3  
Arrangement Fee
    3  
Attorneys’ Fees
    3  
Balance of Unpaid Construction Period Losses
    4  
Banking Rules Change
    4  
Base Rent
    4  
Base Rent Commencement Date
    4  
Base Rent Date
    4  
Base Rent Period
    5  
BNPPLC
    6  
BNPPLC’s Parent
    6  
Breakage Costs
    6  
Break Even Price
    6  
Business Day
    6  
Capital Adequacy Charges
    7  
Carrying Costs
    7  
Closing Certificate
    7  
Closing Letter
    7  
Code
    7  
Commitment Fees
    7  
Common Definitions and Provisions Agreement
    7  
Completion Date
    7  
Completion Notice
    7  
Constituent Documents
    7  

 

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TABLE OF CONTENTS
(Continued)

              Page
Construction Advances
    7  
Construction Advance Request
    8  
Construction Allowance
    8  
Construction Management Agreement
    8  
Construction Period
    8  
Construction Project
    8  
Covered Construction Period Losses
    8  
Default
    8  
Default Rate
    8  
Defective Work
    8  
Designated Sale Date
    9  
Effective Date
    9  
Effective Rate
    9  
Eligible Financial Institution
    10  
Environmental Cutoff Date
    11  
Environmental Laws
    11  
Environmental Losses
    11  
Environmental Report
    11  
ERISA
    12  
ERISA Affiliate
    12  
ERISA Termination Event
    12  
Escrowed Proceeds
    12  
Established Misconduct
    13  
Eurocurrency Liabilities
    14  
Eurodollar Rate Reserve Percentage
    14  
Event of Default
    14  
Excluded Taxes
    16  
Fed Funds Rate
    17  
Fixed Rate
    18  
Fixed Rate Lock
    18  
Fixed Rate Lock Date
    18  
Fixed Rate Lock Termination
    18  
Fixed Rate Lock Termination Date
    18  
Fixed Rate Lock Notice
    18  
Fixed Rate Loss
    18  
Fixed Rate Settlement Amount
    18  
Fixed Rate Swap
    19  
Floating Rate Payor
    19  

(ii)

 

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TABLE OF CONTENTS
(Continued)

              Page
FOCB Notice
    19  
Force Majeure Event
    19  
Fully Subordinated or Removable
    19  
Funded Construction Allowance
    20  
Funding Advances
    20  
Future Work
    20  
GAAP
    20  
Ground Lease
    20  
Hazardous Substance
    20  
Hazardous Substance Activity
    20  
Improvements
    21  
Increased Commitment
    21  
Increased Funding Commitment
    21  
Increased Time Commitment
    21  
Indebtedness
    21  
Initial Advance
    23  
Interested Party
    23  
Interest Rate Swap
    23  
Land
    23  
Lease
    24  
Lease Balance
    24  
Lease Termination Damages
    24  
Liabilities
    24  
LIBOR
    24  
LIBOR Period Election
    25  
Lien
    26  
Liens Removable by BNPPLC
    26  
Local Impositions
    27  
Losses
    27  
Market Quotation
    27  
Maximum Construction Allowance
    28  
Maximum Remarketing Obligation
    28  
Minimum Insurance Requirements
    28  
Multiemployer Plan
    28  
Notice of NAI’s Intent to Terminate
    28  
Notice of NAI’s Intent to Terminate Because of a Force Majeure Event
    28  
Notice of Termination by NAI
    28  
Operative Documents
    28  

(iii)

 

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TABLE OF CONTENTS
(Continued)

              Page
Outstanding Construction Allowance
    28  
Owner’s Election to Continue Construction
    28  
NAI
    28  
NAI’s Estimate of Force Majeure Excess Costs
    28  
NAI’s Estimate of Force Majeure Delays
    29  
NAI’s Initial Remarketing Right
    29  
Participant
    29  
Participation Agreement
    29  
Permitted Encumbrances
    29  
Permitted Hazardous Substance Use
    30  
Permitted Hazardous Substances
    30  
Permitted Transfer
    30  
Person
    31  
Personal Property
    31  
Plan
    31  
Pre-lease Casualty
    31  
Pre-lease Force Majeure Delays
    31  
Pre-lease Force Majeure Event
    31  
Pre-lease Force Majeure Event Notice
    31  
Pre-lease Force Majeure Excess Costs
    32  
Pre-lease Force Majeure Losses
    32  
Prime Rate
    32  
Prior Work
    32  
Projected Cost Overruns
    32  
Property
    32  
Purchase Agreement
    32  
Purchase Option
    32  
Qualified Affiliate
    32  
Qualified Income Payments
    32  
Qualified Prepayments
    33  
Real Property
    34  
Reimbursable Construction-Period Costs
    34  
Remedial Work
    34  
Rent
    34  
Responsible Financial Officer
    34  
Rolling Four Quarters Period
    34  
Scope Change
    34  
Spread
    34  

(iv)

 

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TABLE OF CONTENTS
(Continued)

              Page
Subsidiary
    35  
Supplemental Payment
    35  
Supplemental Payment Obligation
    35  
Tangible Personal Property
    35  
Target Completion Date
    35  
Term
    35  
Term Sheet
    35  
Termination of NAI’s Work
    36  
Third Party Contract
    36  
Third Party Contract/Termination Fees
    36  
Total Debt
    36  
Transaction Expenses
    36  
Unfunded Benefit Liabilities
    36  
Work
    36  
Work/Suspension Event
    36  
Work/Suspension Notice
    36  
Work/Suspension Period
    36  
 
       
ARTICLE II — SHARED PROVISIONS
    37  
1.       Notices
    37  
2.       Severability
    38  
3.       No Merger
    39  
4.       No Implied Waiver
    39  
5.       Entire and Only Agreements
    39  
6.       Binding Effect
    39  
7.       Time is of the Essence
    39  
8.       Governing Law
    39  
9.       Paragraph Headings
    40  
10.     Negotiated Documents
    40  
11.     Terms Not Expressly Defined in an Operative Document
    40  
12.     Other Terms and References
    40  
13.     Execution in Counterparts
    41  
14.     Not a Partnership, Etc
    41  
15.     No Fiduciary Relationship Intended
    41  

(v)

 

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TABLE OF CONTENTS
(Continued)

          Page   Annexes  
Annex 1
ABR Period Election Form
 
   
Annex 2
Fixed Rate Lock Notice Form
 
   
Annex 3
LIBOR Period Election Form
 
   
Annex 4
Minimum Insurance Requirements
 
   
Annex 5
Participation Agreement Form

(vi)

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COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
     This COMMON DEFINITIONS AND PROVISIONS AGREEMENT (this “Agreement”), dated
as of December 15, 2005 (the “Effective Date”), is made by and between BNP
PARIBAS LEASING CORPORATION (“BNPPLC”), a Delaware corporation, and NETWORK
APPLIANCE, INC. (“NAI”), a Delaware corporation.
RECITALS
     Contemporaneously with the execution of this Common Definitions and
Provisions Agreement, NAI and BNPPLC are executing the Closing Certificate (as
defined below), the Ground Lease (as defined below), the Lease (as defined
below), the Construction Management Agreement (as defined below) and the
Purchase Agreement (as defined below), all of which concern NAI or the Property
(as defined below). Each of the Closing Certificate, the Ground Lease, the
Lease, the Construction Management Agreement and the Purchase Agreement
(together with this Common Definitions and Provisions Agreement, the “Operative
Documents”) are intended to create separate and independent obligations upon the
parties thereto. However, NAI and BNPPLC intend that all of the Operative
Documents share certain consistent definitions and other miscellaneous
provisions. To that end, the parties are executing this Common Definitions and
Provisions Agreement and incorporating it by reference into each of the other
Operative Documents.
AGREEMENTS
ARTICLE I — LIST OF DEFINED TERMS
     Unless a clear contrary intention appears, the following terms will have
the respective indicated meanings as used herein and in the other Operative
Documents:
     “97-10/Event” has the meaning indicated in the Construction Management
Agreement.
     “97-10/Maximum Permitted Prepayment” has the meaning indicated in the
Construction Management Agreement .
     “97-10/Prepayment” has the meaning indicated in the Construction Management
Agreement.
     “97-10/Project Costs”has the meaning indicated in the Construction
Management Agreement.
     “97-10/Pronouncement” has the meaning indicated in the Construction
Management Agreement.

 

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     “ABR” means, for any day, a fluctuating rate of interest per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the higher of (a) the
Prime Rate in effect on such day and (b) the Fed Funds Rate in effect one day
prior to such day plus 1/4 of 1% per annum. For any period (including any Base
Rent Period), “ABR” means the average of the ABR for each day during such
period.
     Notwithstanding the foregoing, for purposes of computing the Effective Rate
for the first short Construction Period that ends on the first day of December,
2005, ABR will equal the average of the daily “cost of funds” rates that
BNPPLC’s Parent charges internally to its Houston Branch for the overnight use
of funds on each day of such period.
     “ABR Period Election” means an election to have the Effective Rate for any
Construction Period or Base Rent Period calculated by reference to the ABR,
rather than by reference to LIBOR or a Fixed Rate. The first Construction Period
will be subject to an ABR Period Election, and NAI may (subject to the
limitations and qualifications set forth in this definition) make any subsequent
Construction Period or Base Rent Period subject to an ABR Period Election by a
notice given to BNPPLC in the form attached as Annex 1 at least five Business
Days prior to the commencement of such Construction Period or Base Rent Period.
After an ABR Period Election becomes effective, it will remain in effect for all
subsequent Construction Periods or Base Rent Periods until the Fixed Rate Lock
Date for any Fixed Rate Lock or a different election is made in accordance with
the provisions of this definition and the definitions of LIBOR Period Election.
In no event will changes in any ABR Period Election or LIBOR Period Election
become effective except upon the commencement of a new Construction Period or
Base Rent Period. (For purposes of the Operative Documents, a Base Rent Period
Election for any Construction Period or Base Rent Period will also be considered
in effect on the Advance Date, Base Rent Commencement Date or Base Rent Date
upon which such period begins.)
     “Active Negligence” of any Person means, and is limited to, the negligent
conduct on the Property (and not mere omissions) by such Person or by others
acting and authorized to act on such Person’s behalf in a manner that
proximately causes actual bodily injury or property damage for which NAI does
not carry (and is not obligated by the Construction Management Agreement or the
Lease to carry) insurance. “Active Negligence” will not include (1) any
negligent failure of BNPPLC to act when the duty to act would not have been
imposed but for BNPPLC’s status as owner of any interest in the Land, the
Improvements or any other Property or as a party to the transactions described
in the Lease or the other Operative Documents, (2) any negligent failure of any
other Interested Party to act when the duty to act would not have been imposed
but for such party’s contractual or other relationship to BNPPLC or
participation or facilitation in any manner, directly or indirectly, of the
transactions described in the Lease or other Operative Documents, or
Common Definitions and Provisions Agreement — Page 2

 

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(3) the exercise in a lawful manner by BNPPLC (or any party lawfully claiming
through or under BNPPLC) of any right or remedy provided in or under the Lease
or the other Operative Documents.
     “Additional Rent” has the meaning indicated in subparagraph 3(F) of the
Lease.
     “Adjusted EBITDA” has the meaning indicated in subparagraph 3(A) of the
Closing Certificate.
     “Administrative Fees” means the fees identified as such in subparagraph
3(E) of the Lease and subparagraph 3(A) of the Construction Management
Agreement.
     “Advance Date” means, regardless of whether any Construction Advance is
actually made on such date, the first Business Day of every calendar month,
beginning with the first Business Day in December, 2005 and continuing regularly
thereafter to and including the Base Rent Commencement Date, which will be the
last Advance Date.
     “Affiliate” of any Person means any other Person controlling, controlled by
or under common control with such Person. For purposes of this definition, the
term “control” when used with respect to any Person means the power to direct
the management of policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.
     “After Tax Basis” has the meaning indicated in subparagraph 5(C)(1) of the
Lease.
     “Applicable Laws” means any or all of the following, to the extent
applicable to BNPPLC, NAI, the Property or the Operative Documents, after giving
effect to the contractual choice of law provisions in the Operative Documents:
restrictive covenants; zoning ordinances and building codes; flood disaster
laws; health, safety and environmental laws and regulations; the Americans with
Disabilities Act and other laws pertaining to disabled persons; and other laws,
statutes, ordinances, rules, permits, regulations, orders, determinations and
court decisions.
     “Applicable Purchaser” means any third party designated by NAI to purchase
BNPPLC’s interest in the Property and in any Escrowed Proceeds as provided in
the Purchase Agreement.
     “Arrangement Fee” has the meaning indicated in the Construction Management
Agreement.
     “Attorneys’ Fees” means the expenses and reasonable fees of counsel to the
parties incurring the same, including costs or expenses of in-house counsel
(whether or not accounted
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for as general overhead or administrative expenses) and printing, photostating,
duplicating and other expenses, air freight charges, and fees billed for law
clerks, paralegals, librarians and others not admitted to the bar but performing
services under the supervision of an attorney. Such terms will also include all
such expenses and reasonable fees incurred with respect to appeals, arbitrations
and bankruptcy proceedings, and whether or not any manner of proceeding is
brought with respect to the matter for which such fees and expenses were
incurred.
     “Balance of Unpaid Construction Period Losses” has the meaning indicated in
the Purchase Agreement.
     “Banking Rules Change” means either: (1) the introduction of or any change
after the Effective Date (other than any change by way of imposition or increase
of reserve requirements included in the Eurodollar Rate Reserve Percentage) in
any law or regulation applicable to BNPPLC, BNPPLC’s Parent or any Participant,
or in the generally accepted interpretation by the institutional lending
community of any such law or regulation, or in the interpretation of any such
law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPPLC, BNPPLC’s Parent or any Participant with any new guideline
or new request issued after the Effective Date from any central bank or other
governmental authority (whether or not having the force of law).
     “Base Rent” means the rent payable by NAI pursuant to subparagraph 3(A) of
the Lease.
     “Base Rent Commencement Date” means the first day that is both the first
Business Day of a calendar month and more than fifteen days after the Completion
Date.
     “Base Rent Date” means a date upon which Base Rent must be paid under the
Lease, all of which dates will be the first Business Day of a calendar month.
The first Base Rent Date will be determined as follows:
     a) If an ABR Period Election or a LIBOR Period Election of one month is in
effect on the Base Rent Commencement Date, then the first Business Day of the
first calendar month following the Base Rent Commencement Date will be the first
Base Rent Date.
     b) If a LIBOR Period Election of three months or six months is in effect on
the Base Rent Commencement Date, then the first Business Day of the third
calendar month following the Base Rent Commencement Date will be the first Base
Rent Date.
Each successive Base Rent Date after the first Base Rent Date will be the first
Business Day of the first or third calendar month following the calendar month
which includes the preceding Base Rent Date, determined as follows:
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     (1) If an ABR Period Election or a LIBOR Period Election of one month is in
effect on a Base Rent Date, or if a Fixed Rate Lock commences or continues on a
Base Rent Date, then the first Business Day of the first calendar month
following such Base Rent Date will be the next following Base Rent Date.
     (2) If a LIBOR Period Election of three months or longer is in effect on a
Base Rent Date, then the first Business Day of the third calendar month
following such Base Rent Date will be the next following Base Rent Date.
Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of September, 2006 and a LIBOR Period Election of three months
commences on the Base Rent Commencement Date, then the first Base Rent Date will
be the first Business Day of December, 2006.
     “Base Rent Period” means a period for which Base Rent must be paid under
the Lease, each of which periods will correspond to the ABR Period Election or
LIBOR Period Election for the period (except when a Fixed Rate Lock continues in
effect). The first Base Rent Period will begin on and include the Base Rent
Commencement Date, and each successive Base Rent Period will begin on and
include the Base Rent Date upon which the preceding Base Rent Period ends. Each
Base Rent Period, including the first Base Rent Period, will end on but not
include the first or second Base Rent Date after the Base Rent Date upon which
such period began, determined as follows:
     (1) If an ABR Period Election or a LIBOR Period Election of one month or
three months is in effect for a Base Rent Period, or if a Fixed Rate Lock
commences or continues on the first day of the Base Rent Period, then such Base
Rent Period will end on the first Base Rent Date after the Base Rent Date upon
which such period began.
     (2) If a LIBOR Period Election of six months is in effect for a Base Rent
Period, then such Base Rent Period will end on the second Base Rent Date after
the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by two examples:
     1) If NAI makes a LIBOR Period Election of three months for a hypothetical
Base Rent Period beginning on the first Business Day in January, 2007, then such
Base Rent Period will end on but not include the first Base Rent Date after it
begins; that is, such Base Rent Period will end on the first Business Day in
April, 2007, the third calendar month after January, 2007.
     2) If, however, NAI makes a LIBOR Period Election of six months for the
hypothetical Base Rent Period beginning the first Business Day in January, 2007,
then
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such Base Rent Period will end on but not include the second Base Rent Date
after it begins; that is, the first Business Day in July, 2007.
     “BNPPLC” means BNPPLC Leasing Corporation, a Delaware corporation.
     “BNPPLC’s Parent” means BNP Paribas, a bank organized and existing under
the laws of France, and any successors of such bank.
     “Breakage Costs” means any and all costs, losses or expenses incurred or
sustained by BNPPLC’s Parent (as a Participant or otherwise) or any Participant,
for which BNPPLC’s Parent or the Participant requests reimbursement from BNPPLC,
because of:
     (1) the resulting liquidation or redeployment of deposits or other funds
that were used to make or maintain Funding Advances upon application of a
Qualified Prepayment or upon any sale of the Property pursuant to the Purchase
Agreement, if such application or sale occurs on any day other than the last day
of a Construction Period or Base Rent Period; or
     (2) the resulting liquidation or redeployment of deposits or other funds
that were reserved to provide a Construction Advance requested by NAI, if and
when the Construction Advance is not made as anticipated, either because NAI
declined to accept the Construction Advance for any reason or because NAI failed
to satisfy any of the conditions to such Construction Advance specified in the
Construction Management Agreement; or
     (3) the resulting liquidation or redeployment of deposits or other funds
that were used to make or maintain Funding Advances upon the acceleration of the
end of any Construction Period or Base Rent Period because of an acceleration of
the Designated Sale date as described in clauses (2) or (3) of the definition
thereof.
Breakage Costs will include, for example, losses on Funding Advances maintained
by BNPPLC’s Parent or any Participant which are attributable to any decline in
LIBOR as of the effective date of any application described in the clause
(1) preceding, as compared to the LIBOR used to determine the Effective Rate
then in effect. Each determination of Breakage Costs by BNPPLC’s Parent or by
any Participant, as applicable, will be conclusive and binding upon NAI in the
absence of clear and demonstrable error.
     “Break Even Price” has the meaning indicated in the Purchase Agreement.
     “Business Day” means any day that is (1) not a Saturday, Sunday or day on
which commercial banks are generally closed or required to be closed in New York
City, New York, and (2) a day on which dealings in deposits of dollars are
transacted in the London interbank
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market;provided, that if such dealings are suspended indefinitely for any
reason, “Business Day” will mean any day described in clause (1).
     “Capital Adequacy Charges” means any additional amounts BNPPLC’s Parent or
any Participant requests BNPPLC to pay as compensation for an increase in
required capital as provided in subparagraph 5(B)(2) of the Lease.
     “Carrying Costs” has the meaning indicated in the Construction Management
Agreement.
     “Closing Certificate” means the Closing Certificate and Agreement dated as
of the Effective Date executed by NAI and BNPPLC, as such Closing Certificate
and Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.
     “Closing Letter” means the letter agreement dated as of the Effective Date
between BNPPLC and NAI confirming the amount of the Initial Advance and the
Transactions Expenses paid from the Initial Advance.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Commitment Fees” has the meaning indicated in the Construction Management
Agreement.
     “Common Definitions and Provisions Agreement” means this Agreement, which
is incorporated by reference into each of the other Operative Documents, as this
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
     “Completion Date” has the meaning indicated in the Construction Management
Agreement.
     “Completion Notice” has the meaning indicated in the Construction
Management Agreement.
     “Constituent Documents” of any entity means the organizational documents
pursuant to which such entity was created and is governed, such as the articles
of incorporation and bylaws of a corporation, the articles of organization and
regulations of a limited liability company or the partnership agreement of a
partnership.
     “Construction Advances” has the meaning indicated in the Construction
Management Agreement.
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     “Construction Advance Request” has the meaning indicated in the
Construction Management Agreement.
     “Construction Allowance” has the meaning indicated in the Construction
Management Agreement.
     “Construction Management Agreement” means the Construction Management
Agreement dated as of the Effective Date between BNPPLC and NAI, as such
Construction Management Agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms.
     “Construction Period” means each successive period of approximately one
month, with the first Construction Period beginning on and including the
Effective Date and ending on but not including the first Advance Date. Each
successive Construction Period after the first Construction Period will begin on
and include the day on which the preceding Construction Period ends and will end
on but not include the next following Advance Date, until the last Construction
Period, which will end on but not include the earlier of the Base Rent
Commencement Date or any Designated Sale Date upon which NAI or any Applicable
Purchaser purchases BNPPLC’s interest in the Property pursuant to the Purchase
Agreement.
     “Construction Project” has the meaning indicated in the Construction
Management Agreement.
     “Covered Construction Period Losses” has the meaning indicated in the
Construction Management Agreement.
     “Default” means any event or circumstance which constitutes, or which would
with the passage of time or the giving of notice or both (if not cured within
any applicable cure period) constitute, an Event of Default.
     “Default Rate” means, a floating per annum rate equal to two percent (2%)
above ABR, except that for purposes of computing interest accruing for any
period that commences thirty or more days after the Designated Sale Date on any
97-10/Prepayment, Base Rent or Supplemental Payment that has become due, but
remains to be paid to BNPPLC by NAI, the Default Rate will mean a floating per
annum rate equal to five percent (5%) above ABR. Notwithstanding the foregoing,
in no event will the “Default Rate” at any time exceed the maximum interest rate
permitted by Applicable Laws.
     “Defective Work” has the meaning indicated in the Construction Management
Agreement.
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     “Designated Sale Date” means the earlier of:
     (1) the first Business Day of July, 2012; or
     (2) any Business Day designated as the “Designated Sale Date” for purposes
of this Agreement and the other Operative Documents in an irrevocable,
unconditional notice given by NAI to BNPPLC before any 97-10/Event has occurred;
provided, that if the Business Day so designated by NAI as the Designated Sale
Date is not at least thirty days after the date of such notice, the notice will
be of no effect for purposes of this definition; and provided, further, that to
be effective, any such notice must include an irrevocable waiver by NAI of any
remaining right it may have under subparagraph 6(B) of the Purchase Agreement to
terminate the Supplemental Payment Obligation; or
     (3) any Business Day designated as the “Designated Sale Date” for purposes
of this Agreement and the other Operative Documents in a notice given by BNPPLC
to NAI:
• after an Event of Default and after the Completion Date; or
• after a 97-10/Event or after BNPPLC’s receipt of a Pre-lease Force Majeure
Notice from NAI or; or
• following any change in the zoning or other Applicable Laws after the
Completion Date affecting the permitted use or development of the Property that,
in BNPPLC’s judgment, materially reduces the value of the Property; or
• following any discovery of conditions or circumstances on or about the
Property after the Completion Date, such as the presence of an endangered
species, which are likely to substantially impede the use or development of the
Property and thereby, in BNPPLC’s judgment, materially reduce the value of the
Property; or
     (4) any date upon which the Lease terminates pursuant to subparagraph 1(B)
or subparagraph 1(C) of the Lease.
     “Effective Date” means December 15, 2005.
     “Effective Rate” means, for each Construction Period and for each Base Rent
Period, a per annum rate determined as follows:
     (1) In the case of any Construction Period or Base Rent Period subject to a
LIBOR Period Election, the Effective Rate will equal the rate per annum
determined by dividing (A) LIBOR for such Construction Period or Base Rent
Period, by (B) one
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hundred percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period.
     (2) In the case of any Construction Period or Base Rent Period that is not
subject to a LIBOR Period Election, the Effective Rate will equal the ABR for
such Construction Period or Base Rent Period.
     (3) Notwithstanding the foregoing, for any Base Rent Period that begins on
or after the Fixed Rate Lock Date applicable to a Fixed Rate Lock and that ends
before or on the date such Fixed Rate Lock is terminated as provided in
subparagraph 3(C) of the Lease, the Effective Rate will equal the Fixed Rate.
So long as any LIBOR Period Election remains in effect, as LIBOR or the
Eurodollar Rate Reserve Percentage changes from Construction Period to
Construction Period or from Base Rent Period to Base Rent Period, the Effective
Rate will be automatically increased or decreased, as the case may be, without
prior notice to NAI. Also, during any period when no LIBOR Period Election or
Fixed Rate Lock is in effect, as the ABR changes from Construction Period to
Construction Period or from Base Rent Period to Base Rent Period, the Effective
Rate will be automatically increased or decreased, as the case may be, without
prior notice to NAI.
If for any reason BNPPLC determines that it is impossible or unreasonably
difficult to determine the Effective Rate with respect to a given Construction
Period or Base Rent Period in accordance with the foregoing, then the “Effective
Rate” for that Construction Period or Base Rent Period will equal any published
index or per annum interest rate determined in good faith by BNPPLC to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on BNPPLC’s comparison of past eurodollar market rates to past yields on such
Treasury obligations.
“Eligible Financial Institution” means (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $5,000,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (“OECD”) or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country, and
having total assets in excess of $5,000,000,000; provided, that such bank is
acting through a branch or agency located in the United States; (c) the central
bank of any country which is a member of the OECD; and (d) a finance company,
insurance company or other financial institution (whether a corporation,
partnership or other entity, but excluding any savings and loan association)
which is engaged in making, purchasing or otherwise investing in commercial
loans
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in the ordinary course of its business, and having total assets in excess of
$5,000,000,000; provided, however, that in no event shall any bank or other
Person qualify as an Eligible Financial Institution at any time when it has
outstanding obligations with a credit rating less than investment grade from
Standard & Poor’s, a division of the McGraw-Hill Companies, or Moody’s Investors
Service, Inc. or another nationally recognized rating service.
     “Environmental Cutoff Date” means the later of the dates upon which (i) the
Lease terminates or NAI’s interests in the Property are sold at foreclosure as
provided in Exhibit B attached to the Lease, or (ii) NAI surrenders possession
and control of the Property and ceases to have interest in the Land or
Improvements or rights with respect thereto under any of the Operative
Documents.
     “Environmental Laws” means any and all existing and future Applicable Laws
pertaining to safety, health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, and the Resource Conservation and
Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984.
     “Environmental Losses” means Losses suffered or incurred by BNPPLC or any
other Interested Party, directly or indirectly, relating to or arising out of,
based on or as a result of any of the following: (i) any Hazardous Substance
Activity that occurs or is alleged to have occurred on or prior to the
Environmental Cutoff Date; (ii) any violation of any applicable Environmental
Laws relating to the Land or the Property or to the ownership, use, occupancy or
operation thereof that occurs or is alleged to have occurred in whole or in part
on or prior to the Environmental Cutoff Date; (iii) any investigation, inquiry,
order, hearing, action, or other proceeding by or before any governmental or
quasi-governmental agency or authority in connection with any Hazardous
Substance Activity that occurs or is alleged to have occurred in whole or in
part on or prior to the Environmental Cutoff Date; or (iv) any claim, demand,
cause of action or investigation, or any action or other proceeding, whether
meritorious or not, brought or asserted against any Interested Party which
directly or indirectly relates to, arises from, is based on, or results from any
of the matters described in clauses (i), (ii), or (iii) of this definition or
any allegation of any such matters. For purposes of determining whether Losses
constitute “Environmental Losses,” as the term is used in the Lease, any actual
or alleged Hazardous Substance Activity or violation of Environmental Laws
relating to the Land or the Property will be presumed to have occurred prior to
the Environmental Cutoff Date unless NAI establishes by clear and convincing
evidence to the contrary that the relevant Hazardous Substance Activity or
violation of Environmental Laws did not occur or commence prior to the
Environmental Cutoff Date.
     “Environmental Report” means, collectively, the following reports, which
were
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provided by NAI to BNPPLC prior to the Effective Date: (1) Phase I Environmental
Site Assessment for 1330-1350 Geneva and 1345-1347 Crossman Avenue, Sunnyvale,
California, dated November 1999 by Romig Consulting Engineers, and (2).Phase I
Environmental Site Assessment for 1260 Crossman Avenue Property, Sunnyvale,
California, dated September 1999 by Romig Consulting Engineers.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
     “ERISA Affiliate” means any Person who for purposes of Title IV of ERISA is
a member of NAI’s controlled group, or under common control with NAI, within the
meaning of Section 414 of the Internal Revenue Code, and the regulations
promulgated and rulings issued thereunder.
     “ERISA Termination Event” means (a) the occurrence with respect to any Plan
of (1) a reportable event described in Sections 4043(b)(5) or (6) of ERISA or
(2) any other reportable event described in Section 4043(b) of ERISA other than
a reportable event not subject to the provision for thirty-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of NAI or any ERISA
Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate any Plan or the treatment of any Plan amendment as
a termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
     “Escrowed Proceeds” means, subject to the exclusions specified in the next
sentence, any money that is received by BNPPLC from time to time during the Term
(and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any Governmental Authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof (including any indirect condemnation by means of a taking of any
of the Land or appurtenant easements), (3) because of any judgment, decree or
award for physical damage to the Property or (4) as compensation under any title
insurance policy or otherwise as a result of any title defect or claimed title
defect with respect to the Property; provided, however, in determining the
amount of “Escrowed Proceeds” there will be deducted all expenses and costs of
every type, kind and nature (including Attorneys’ Fees) incurred by BNPPLC to
collect such proceeds. Notwithstanding the foregoing, “Escrowed Proceeds” will
not include (A) any payment to BNPPLC by a Participant or an Affiliate of BNPPLC
that is made to compensate BNPPLC for the Participant’s or Affiliate’s share of
any Losses BNPPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4), (B) any money or proceeds that have
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been applied as a Qualified Prepayment or to pay any Breakage Costs, Fixed Rate
Settlement Amount or other costs incurred in connection with a Qualified
Prepayment, (C) any money or proceeds that, after no less than ten days notice
to NAI, BNPPLC returns or pays to a third party because of BNPPLC’s good faith
belief that such return or payment is required by law, (D) any money or proceeds
paid by BNPPLC to NAI or offset against any amount owed by NAI, or (E) any money
or proceeds used by BNPPLC in accordance with the Lease for repairs or the
restoration of the Property or to obtain development rights or the release of
restrictions that will inure to the benefit of future owners or occupants of the
Property. Until Escrowed Proceeds are paid to NAI pursuant to Paragraph 10 of
the Lease, transferred to a purchaser under the Purchase Agreement as therein
provided or applied as a Qualified Prepayment or as otherwise described in the
preceding sentence, BNPPLC will keep the same deposited in one or more interest
bearing accounts, and all interest earned on such account will be added to and
made a part of Escrowed Proceeds.
     “Established Misconduct” of a Person means, and is limited to:
     (1) if the Person is bound by the Operative Documents or the Participation
Agreement, conduct of such Person that constitutes a breach by it of the express
provisions of the Operative Documents or the Participation Agreement, as
applicable, and that continues beyond any period for cure provided therein, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and
     (2) conduct of such Person or its Affiliates that has been determined to
constitute willful misconduct or Active Negligence in or as a necessary element
of a final judgment rendered against such Person by a court with jurisdiction to
make such determination.
In no event, however, will Established Misconduct include actions of any Person
undertaken in good faith to mitigate Losses that such Person may suffer because
of a breach or repudiation by NAI of any of the Operative Documents. Further,
negligence other than Active Negligence will not in any event constitute
Established Misconduct. For purposes of this definition, “conduct of a Person”
will consist of (1) the conduct of any employee of that Person to the extent
(and only to the extent) that the employee is acting within the scope of his
employment by that Person, and (2) the conduct of an agent of that Person (such
as an independent environmental consultant engaged by that Person), but only to
the extent that the agent is (a) acting within the scope of the authority
granted to him by such Person, and (b) not acting with the consent or approval
of or at the request of or under the direction of NAI or NAI’s Affiliates,
employees or agents. Established Misconduct of one Interested Party will not be
attributed to a second Interested Party unless the second Interested Party is an
Affiliate of the first, and it is understood that BNPPLC has not been
authorized, and nothing in the Participation Agreement will be construed as
authorizing BNPPLC, to act as an “agent” for any Participant as the term is used
in this definition.
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     “Eurocurrency Liabilities” has the meaning indicated in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
     “Eurodollar Rate Reserve Percentage” means, for purposes of determining the
Effective Rate for any Construction Period or Base Rent Period, the reserve
percentage applicable two Business Days before the first day of such period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) for BNPPLC’s Parent with respect to liabilities or deposits
consisting of or including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is determined) having
a term comparable to such period.
     “Event of Default” means any of the following:
     (A) NAI fails to pay when due any installment of Base Rent or
Administrative Fees required by the Lease, and such failure continues for three
Business Days after NAI is notified in writing thereof.
     (B) NAI fails to pay the full amount of any 97-10/Prepayment when due as
provided in the Construction Management Agreement or fails to pay the full
amount of any Supplemental Payment as provided in the Purchase Agreement on the
Designated Sale Date.
     (C) NAI fails to pay when first due any amount required by the Operative
Documents (other than Base Rent or Administrative Fees required as provided in
the Lease, any 97-10/Prepayment required as provided in the Construction
Management Agreement or any Supplemental Payment required as provided in the
Purchase Agreement) and such failure continues for ten Business Days after NAI
is notified thereof.
     (D) NAI fails to cause any representation or warranty of NAI contained in
any of the Operative Documents that was false or misleading in any material
respect when made to be made true and not misleading (other than as described in
the other clauses of this definition), or NAI fails to comply with any provision
of the Operative Documents (other than as described in the other clauses of this
definition), and in either case does not cure such failure prior to the earlier
of (A) thirty days after notice thereof is given to NAI or (B) the date any writ
or order is issued for the levy or sale of any property owned by BNPPLC
(including the Property) or any criminal prosecution is instituted or overtly
threatened against BNPPLC or any of its directors, officers or employees because
of such failure; provided, however, that so long as no such writ or order is
issued and no such criminal prosecution is instituted or overtly threatened, the
period within which such failure may be cured by NAI will be extended for a
further period (not to exceed an additional one hundred twenty days) as is
necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI promptly commences to cure such failure
and thereafter
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continuously prosecutes the curing thereof with reasonable diligence and (z) the
extension of the period for cure will not, in any event, cause the period for
cure to extend to or beyond the Designated Sale Date.
     (E) NAI abandons any material part of the Property.
     (F) NAI or any Subsidiary of NAI fails to pay any principal of or premium
or interest on any of its Indebtedness which is outstanding in a principal
amount of at least $25,000,000 when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure continues after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or any other event
occurs or condition exists under any agreement or instrument relating to any
such Indebtedness and continues after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate the maturity of such Indebtedness; or any such
Indebtedness is declared by the creditor to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Indebtedness is required to be made, in each case prior to the stated maturity
thereof.
     (G) NAI or any Subsidiary of NAI is generally not paying its debts as such
debts become due, or admits in writing its inability to pay its debts generally,
or makes a general assignment for the benefit of creditors; or any proceeding is
instituted by or against NAI or any Subsidiary of NAI seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding remains
undismissed or unstayed for a period of sixty consecutive days, or any of the
actions sought in such proceeding (including the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) occurs; or NAI or
any Subsidiary of NAI takes any corporate action to authorize any of the actions
set forth above in this clause.
     (H) Any order, judgment or decree is entered in any proceedings against NAI
or any of NAI’s Subsidiaries decreeing its dissolution and such order, judgment
or decree remains unstayed and in effect for more than sixty days.
     (I) Any order, judgment or decree is entered in any proceedings against NAI
or any of NAI’s Subsidiaries decreeing a divestiture of any of assets that
represent a substantial part, or the divestiture of the stock of any of NAI’s
Subsidiaries whose assets represent a substantial part, of the total assets of
NAI and its Subsidiaries (determined on a consolidated basis in accordance
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with GAAP) or which requires the divestiture of assets, or stock of any of NAI’s
Subsidiaries, which have contributed a substantial part of the net income of NAI
and its Subsidiaries (determined on a consolidated basis in accordance with
GAAP) for any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more than sixty
days.
     (J) A judgment or order for the payment of money in an amount (not covered
by insurance) which exceeds $25,000,000 is rendered against NAI or any of NAI’s
Subsidiaries and either (i) enforcement proceedings is commenced by any creditor
upon such judgment, or (ii) within thirty days after the entry thereof, such
judgment or order is not discharged or execution thereof stayed pending appeal,
or within thirty days after the expiration of any such stay, such judgment is
not discharged.
     (K) Any ERISA Termination Event occurs that BNPPLC determines in good faith
would constitute grounds for a termination of any Plan or for the appointment by
the appropriate United States district court of a trustee to administer any Plan
and such ERISA Termination Event is continuing thirty days after notice to such
effect is given to NAI by BNPPLC, or any Plan is terminated, or a trustee is
appointed by a United States district court to administer any Plan, or the
Pension Benefit Guaranty Corporation institutes proceedings to terminate any
Plan or to appoint a trustee to administer any Plan.
     (L) NAI enters into any transaction which would cause any of the Operative
Documents or any other document executed in connection herewith (or any exercise
of BNPPLC’s rights hereunder or thereunder) to constitute a non-exempt
prohibited transaction under ERISA.
     (M) NAI fails to comply with the financial covenants set forth in
subparagraph 3(B) of the Closing Certificate.
     “Excluded Taxes” means:
     (A) taxes upon or measured by net income to the extent such taxes are
payable in respect of Base Rent or other Qualified Income Payments;
     (B) transfer or change of ownership taxes assessed because of BNPPLC’s
transfer or conveyance to any third party of any rights or interest in the
Improvements Lease, the Purchase Agreement or the Property (other than any such
taxes assessed because of any Permitted Transfer under clauses (1), (4) or
(5) of the definition of Permitted Transfer in this Agreement);
     (C) federal, state and local income taxes upon any amounts paid as
reimbursement for or to satisfy Losses incurred by BNPPLC or any Participant to
the extent, but only to the extent, such taxes are offset by a corresponding
reduction of BNPPLC’s or the applicable Participant’s
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income taxes which are not otherwise subject to reimbursement or indemnification
by NAI because of BNPPLC’s or such Participant’s deduction of the reimbursed
Losses from its taxable income or because of any tax credits attributable
thereto;
     (D) income taxes that are (i) payable by BNPPLC in respect of any Qualified
Prepayment or any net sales proceeds paid to BNPPLC upon a sale of the Property
because of Forced Recharacterization as described in subparagraph 4(C)(3) of the
Lease, and (ii) offset in the same taxable period by a reduction in the taxes of
BNPPLC which are not otherwise subject to reimbursement or indemnification by
NAI resulting from depreciation deductions or other tax benefits available to
BNPPLC only because of the refusal of the tax authorities to treat the Lease and
other Operative Documents as a financing arrangement;
     (E) any withholding taxes that subparagraph 13(A) of the Lease excuses NAI
from paying or requires BNPPLC to pay; and
     (F) any franchise taxes payable by BNPPLC, but only to the extent that such
franchise taxes would be payable by BNPPLC even if the transactions contemplated
by the Lease and the other Operative Documents were characterized for tax
purposes as a mere financing arrangement and not as a lease or sale.
It is understood that if tax rates used to calculate income taxes which
constitute Excluded Taxes under clause (1) of this definition are increased, the
resulting increase will not be subject to reimbursement or indemnification by
NAI. If, however, a change in Applicable Laws after the Effective Date, as
applied to the transactions contemplated by the Operative Documents on a
stand-alone basis, results in an increase in such income taxes for any reason
other than an increase in the applicable tax rates (e.g., a disallowance of
deductions that would otherwise be available against payments described in
clause (1) of this definition), then for purposes of the Operative Documents,
the term “Excluded Taxes” will not include the actual increase in such taxes
attributable to the change. Accordingly, BNPPLC or any Participant may recover
any such net increase from NAI pursuant to subparagraph 5(B) of the Lease.
It is also understood that nothing in this definition of “Excluded Taxes” will
prevent any Original Indemnity Payment (as defined in subparagraph 5(C)(1) of
the Lease) from being paid on an After Tax Basis.
     “Fed Funds Rate” means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal on each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for each day during
such period on such transactions received
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by BNPPLC’s Parent from three Federal funds brokers of recognized standing
selected by BNPPLC’s Parent.
     “Fixed Rate” means the fixed rate of interest established by BNPPLC’s
execution of an Interest Rate Swap as described in subparagraph 3(B)(4) of the
Lease.
     “Fixed Rate Lock” shall have the meaning assigned to it in subparagraph
3(B)(4) of the Lease.
     “Fixed Rate Lock Date” shall have the meaning assigned to it in
subparagraph 3(B)(4) of the Lease.
     “Fixed Rate Lock Termination” means any termination in whole or in part of
the Fixed Rate Swap as described in the first and second sentences of
subparagraph 3(C) of the Lease.
     “Fixed Rate Lock Termination Date” means the date upon which a Fixed Rate
Lock Termination is effective. In the case of a Fixed Rate Lock Termination that
results from BNPPLC’s receipt of a Qualified Prepayment, the date such Qualified
Prepayment is applied to reduce the Lease Balance shall constitute the Fixed
Rate Lock Termination Date. In the case of any Fixed Rate Lock Termination
resulting from an acceleration of the Designated Sale Date as provided in
clauses (2) or (3) the definition thereof in the this Common Definitions and
Provisions Agreement, the Fixed Rate Lock Termination Date shall constitute the
Designated Sale Date.
     “Fixed Rate Lock Notice” shall have the meaning assigned to it in
subparagraph 3(B)(4) of the Lease.
     “Fixed Rate Loss” means an amount reasonably determined in good faith by
the Floating Rate Payor to be its total losses and costs in connection with any
Fixed Rate Lock Termination. Fixed Rate Loss will include any loss of bargain,
cost of funding or, at the election of the Floating Rate Payor but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position. The Floating
Rate Payor will be expected to determine the Fixed Rate Loss as of the date of
the relevant Fixed Rate Lock Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable.
The Floating Rate Payor may (but need not) determine its Fixed Rate Loss by
reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.
     “Fixed Rate Settlement Amount” means, with respect to any Fixed Rate Lock
Termination:
     (a) the Market Quotation for such Fixed Rate Lock Termination, if a Market
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Quotation can be determined and if (in the reasonable belief of the Floating
Rate Payor as the party making the determination) determining a Market Quotation
would produce a commercially reasonable result; or
(b) the Fixed Rate Loss, if any, for such Fixed Rate Lock Termination if a
Market Quotation cannot be determined or would not (in the reasonable belief of
the Floating Rate Payor as the party making the determination) produce a
commercially reasonable result.
     “Fixed Rate Swap” shall have the meaning assigned to it in subparagraph
3(B)(4) of the Lease.
     “Floating Rate Payor” means BNP Paribas or any successor or assign of BNP
Paribas under an Interest Rate Swap.
     “FOCB Notice” has the meaning indicated in the Construction Management
Agreement.
     “Force Majeure Event” has the meaning indicated in the Construction
Management Agreement.
     “Fully Subordinated or Removable” means, with respect to any Lien
encumbering the Land or any appurtenant easement, that such Lien is, either by
operation of Applicable Laws or by the express terms of documents which grant or
create such Lien:
     (1) fully subject and subordinate to the Ground Lease and to all rights and
property interests of the BNPPLC under the Operative Documents; or
     (2) subject to release and removal by BNPPLC or any subsequent owner of the
Property at any time after a Designated Sale Date without any requirement that
BNPPLC or the subsequent owner compensate the holder of such Lien or make any
other significant payment in connection with such release and removal;
provided, however, a Lien will not qualify as Fully Subordinated or Removable
under clause (1) preceding if a purchase of the Land by BNPPLC pursuant to the
purchase option set forth in the Ground Lease (as such option may be modified
from time to time by agreement of lessor and lessee under the Ground Lease) will
not, by operation of law or the express agreement of the holder of the Lien,
effectively cut off and terminate such Lien insofar as it applies to or affects
the Improvements and the Land purchased by BNPPLC; and, provided further, a Lien
will not qualify as Fully Subordinated or Removable under clause (2) preceding
if it provides or includes a power of sale or other right or remedy in favor of
the holder of such Lien which could result in a foreclosure sale or other
forfeiture of BNPPLC’s rights or interests under the Ground Lease or in the
Property.
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     “Funded Construction Allowace” has the meaning indicated in the
Construction Management Agreement.
     “Funding Advances” means all advances made by BNPPLC’s Parent or any
Participant to or on behalf of BNPPLC to allow BNPPLC to make the Initial
Advance and to provide the Construction Allowance or maintain its investment in
the Property.
     “Future Work” has the meaning indicated in the Construction Management
Agreement.
     “GAAP” means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in
subparagraph 2(A)(4) of the Closing Certificate (except for changes with which
NAI’s independent public accountants concur).
     “Governmental Authority” means (1) the United States, the state, the
county, the municipality, and any other political subdivision in which the Land
is located, and (2) any other nation, state or other political subdivision or
agency or instrumentality thereof having or asserting jurisdiction over NAI or
the Property.
     “Ground Lease” means the Ground Lease of the Land dated as of the Effective
Date, from NAI to BNPPLC, as such Ground Lease may be extended, supplemented,
amended, restated or otherwise modified from time to time in accordance with its
terms.
     “Hazardous Substance” means (i) any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a “hazardous
substance,” “hazardous material,” “hazardous waste,” “extremely hazardous waste
or substance,” “infectious waste,” “toxic substance,” “toxic pollutant,” or any
other formulation intended to define, list or classify substances by reason of
deleterious properties, including ignitability, corrosiveness, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic
gas usable for fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos containing material; and
(iv) any other material that, because of its quantity, concentration or physical
or chemical characteristics, is the subject of regulation under Applicable Law
or poses a significant present or potential hazard to human health or safety or
to the environment if released into the workplace or the environment.
     “Hazardous Substance Activity” means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil,
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surface water, groundwater or any body of water), discharge, deposit, placement,
generation, processing, construction, treatment, abatement, removal, disposal,
disposition, handling or transportation of any Hazardous Substance from, under,
in, into or on Land or the Property, including the movement or migration of any
Hazardous Substance from surrounding property, surface water, groundwater or any
body of water under, in, into or onto the Property and any resulting residual
Hazardous Substance contamination in, on or under the Property. “Hazardous
Substance Activity” also means any existence of Hazardous Substances on the
Property that would cause the Property or the owner or operator thereof to be in
violation of, or that would subject the Land or the Property to any remedial
obligations under, any Environmental Laws, assuming disclosure to the applicable
Governmental Authorities of all relevant facts, conditions and circumstances
pertaining to the Property.
     “Improvements” means any and all (1) buildings and other real property
improvements previously or hereafter erected on the Land, and (2) equipment
(e.g., HVAC systems, elevators and plumbing fixtures) attached to the buildings
or other real property improvements, the removal of which would cause structural
or other material damage to the buildings or other real property improvements or
would materially and adversely affect the value or use of the buildings or other
real property improvements.
     “Increased Commitment” has the meaning indicated in the Construction
Management Agreement.
     “Increased Funding Commitment” has the meaning indicated in the
Construction Management Agreement.
     “Increased Time Commitment” has the meaning indicated in the Construction
Management Agreement.
     “Indebtedness” of any Person means (without duplication of any item)
Liabilities of such Person in any of the following categories:
          (A) Liabilities for borrowed money;
          (B) Liabilities constituting an obligation to pay the deferred
purchase price of property or services;
          (C) Liabilities evidenced by a bond, debenture, note or similar
instrument;
          (D) Liabilities which (1) would under GAAP be shown on such Person’s
balance sheet as a liability, and (2) are payable more than one year from the
date of creation thereof (other than reserves for taxes and reserves for
contingent obligations);
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          (E) Liabilities constituting principal under leases capitalized in
accordance with GAAP;
          (F) Liabilities arising under conditional sales or other title
retention agreements;
          (G) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting obligations to
purchase or acquire or to otherwise protect or insure a creditor against loss in
respect of Liabilities of any other Person (such as obligations under working
capital maintenance agreements, agreements to keep-well, or agreements to
purchase Liabilities, assets, goods, securities or services), but excluding
endorsements in the ordinary course of business of negotiable instruments in the
course of collection;
          (H) Liabilities (for example, repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements) consisting of an
obligation to purchase or redeem securities or other property, if such
Liabilities arises out of or in connection with the sale or issuance of the same
or similar securities or property;
          (I) Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor;
          (J) Liabilities with respect to payments received in consideration of
oil, gas, or other commodities yet to be acquired or produced at the time of
payment (including obligations under “take-or-pay” contracts to deliver gas in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment);
          (K) Liabilities with respect to other obligations to deliver goods or
services in consideration of advance payments therefor; or
          (L) Liabilities under any “synthetic” or other lease of property or
related documents (including a separate purchase agreement) which obligate such
Person or any of its Affiliates (whether by purchasing or causing another Person
to purchase any interest in the leased property or otherwise) to guarantee a
minimum residual value of the leased property to the lessor.
For purposes of this definition, the amount of Liabilities described in the last
clause of the preceding sentence with respect to any lease classified according
to GAAP as an “operating lease,” will equal the sum of (1) the present value of
rentals and other minimum lease payments required in connection with such lease
[calculated in accordance with SFAS 13 and other GAAP relevant to the
determination of the whether such lease must be accounted for as an operating
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lease or capital lease], plus (2) the fair value of the property covered by the
lease; except that such amount will not exceed the price, as of the date a
determination of Indebtedness is required hereunder, for which the lessee can
purchase the leased property pursuant to any valid ongoing purchase option if,
upon such a purchase, the lessee will be excused from paying rentals or other
minimum lease payments that would otherwise accrue after the purchase.
Notwithstanding the foregoing, the “Indebtedness” of any Person will not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor.
     “Initial Advance ” has the meaning indicated in the Construction Management
Agreement.
     “Interested Party” means each of following Persons and their Affiliates:
(1) BNPPLC and its successors and permitted assigns as to the Property or any
part thereof or any interest therein, (2) BNPPLC’s Parent, and (3) any
Participants and their successors and permitted assigns under the Participation
Agreement; provided, however, none of the following Persons will constitute an
Interested Party: (a) any Person to whom BNPPLC may transfer an interest in the
Property by a conveyance that is not a Permitted Transfer and others that cannot
lawfully claim an interest in the Property except through or under a transfer by
such a Person, (b) NAI and its Affiliates, (c) any Person claiming through or
under a conveyance made by NAI after any purchase by NAI of BNPPLC’s interest in
the Property pursuant to the Purchase Agreement, or (d) any Applicable Purchaser
designated by NAI under the Purchase Agreement who purchases the Property
pursuant to a sale arranged by NAI and any Person that cannot lawfully claim an
interest in the Property except through or under a conveyance from such an
Applicable Purchaser.
     “Interest Rate Swap” means an interest rate exchange transaction, entered
into between BNPPLC, as the fixed rate payor, and BNP Paribas, as the swap
counterparty and floating rate payor, under the them most recent form of Master
Agreement published by the International Swaps and Derivatives Association,
Inc., as supplemented by the definitions and such schedules, annexes, exhibits
and supplements as are agreed upon by the parties thereto, pursuant to which BNP
Paribas agrees to pay monthly to BNPPLC a floating rate of interest equal to
LIBOR and BNPPLC agrees to pay monthly to BNP Paribas a fixed rate of interest
for a term that commences on the Fixed Rate Lock Date and ends on the last day
of the scheduled Term of the Lease. The notional principal amount used for any
such interest rate exchange transaction will equal the Lease Balance calculated
as of the date such transaction is entered into.
     “Land” means the land described in Exhibit A attached to the Closing
Certificate, the Lease, the Ground Lease and the Purchase Agreement.
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     “Lease” means the Lease Agreement dated as of the Effective Date between
BNPPLC, as landlord, and NAI, as tenant, pursuant to which NAI has agreed to
lease BNPPLC’s interest in the Property, as such Lease Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
     “Lease Balance” as of any date means the amount equal to the sum of the
Initial Advance, plus the sum of all Construction Advances, Carrying Costs and
other amounts added to the Outstanding Construction Allowance as provided in the
Construction Management Agreement on or prior to such date, minus all funds
actually received by BNPPLC and applied as Qualified Prepayments on or prior to
such date. Under no circumstances will any payment of Base Rent or other
Qualified Income Payments reduce the Lease Balance.
     “Lease Termination Damages” has the meaning indicated in subparagraph? of
the Lease.
     “Liabilities” means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
     “LIBOR” means, for purposes of determining the Effective Rate for any
Construction Period or Base Rent Period, the per annum rate equal to:
          (a) the offered rate for deposits in U.S. dollars which appears on
Moneyline Telerate Page 3750, British Bankers Association Interest Settlement
Rates as of 11:00 a.m., London time, on the day that is two London Banking Days
(hereinafter defined) prior to the day upon which such Base Rent Period begins
(the “Reset Date”), or
          (b) if no such rate appears on Moneyline Telerate Page 3750, the rate
per annum determined by BNPPLC’s Parent on the basis of rates offered for
deposits in U.S. dollars by four major banks in the London interbank market
selected by BNPPLC’s Parent (“Reference Banks”) at approximately 11:00 a.m.,
London time, on the day that is two London Banking Days preceding the Reset Date
to prime banks in the London interbank market for a period corresponding as
nearly as possible to such Base Rent Period. If this clause (b) applies,
BNPPLC’s Parent will request the principal London office of each of the
Reference banks to provide a quotation of its rate. If at least two quotations
are provided, “LIBOR” for the applicable Base Rent Period will be the arithmetic
mean of the quotations. If, however, fewer than two quotations are provided as
requested, “LIBOR” for the applicable Base Rent Period will be the arithmetic
mean of the rates quoted by major banks in New York selected by BNPPLC’s Parent,
at approximately 11:00 a.m., New York time, on the Reset Date for loans in U.S.
dollars to leading U.S. banks for a period corresponding as nearly as possible
to such Base Rent Period.
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As used in this definition, “London Banking Day” means any day on which
commercial banks are open for general business (including dealings in foreign
exchange and foreign currency deposits) in London, England.
     “LIBOR Period Election” means an election to have the Effective Rate for
any Construction Period or Base Rent Period calculated by reference to LIBOR,
rather than by reference to the ABR or the Fixed Rate, and to have such period
extend for approximately one month, three months or six months. Subject to the
limitations and qualifications set forth in this definition, NAI may make any
Construction Period or Base Rent Period subject to a LIBOR Period Election by a
notice given to BNPPLC in the form attached as Annex 3 at least five Business
Days prior to the commencement of such Construction Period or Base Rent Period.
After a LIBOR Period Election becomes effective, it will remain in effect for
all subsequent Construction Periods or Base Rent Periods until a different
election is made in accordance with the provisions of this definition and the
definition of ABR Period Election above. (For purposes of the Construction
Management Agreement and the Lease a LIBOR Period Election for any Construction
Period or Base Rent Period will also be considered the LIBOR Period Election in
effect on the Advance Date, Base Rent Commencement Date or Base Rent Date upon
which such period begins.) Notwithstanding the foregoing:

  •   No LIBOR Period Election for a period of more than one month will be
effective prior to the Completion Date.     •   No LIBOR Period Election will be
effective that would cause a Base Rent Period to extend beyond the end of the
scheduled Term or beyond a Fixed Rate Lock Date.     •   No LIBOR Period
Election will commence or continue during any period that begins on or after the
Fixed Rate Lock Date applicable to a Fixed Rate Lock and that ends before or on
the date such Fixed Rate Lock is terminated as provided in subparagraph 3(C) of
the Lease.     •   Changes in any ABR Period Election or LIBOR Period Election
will become effective only upon the commencement of a new Construction Period or
Base Rent Period.     •   In the event BNPPLC determines that it would be
unlawful (or any central bank or governmental authority asserts that it would be
unlawful) for BNPPLC, BNPPLC’s Parent or any Participant to provide or maintain
Funding Advances during a Construction Period or Base Rent Period if the
Carrying Costs or Base Rent accrued during such period at a rate based upon
LIBOR, NAI will be deemed to have made such Construction Period or Base Rent
Period subject to an ABR Period Election, not a LIBOR Period Election.

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  •   If for any reason (including BNPPLC’s receipt of a notice from NAI
purporting to make a LIBOR Period Election that is contrary to the foregoing
provisions), BNPPLC is unable to determine with certainty whether a particular
Construction Period or Base Rent Period is subject to a specific LIBOR Period
Election of one month, three months or six months, or if any Event of Default
has occurred and is continuing on the third Business Day preceding the
commencement of a particular Construction Period or Base Rent Period, NAI will
be deemed to have made an ABR Period Election for that particular Construction
Period or Base Rent Period.

     “Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
     “Liens Removable by BNPPLC” means, and is limited to, Liens encumbering the
Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPPLC itself or by BNPPLC’s Parent, (2) by third parties lawfully
claiming through or under BNPPLC (which for purposes of the Operative Documents
will include any judgment liens established against the Property because of a
judgment rendered against BNPPLC and will also include any liens established
against the Property to secure past due Excluded Taxes), or (3) by third parties
claiming under a deed or other instrument duly executed by BNPPLC; provided,
however, Liens Removable by BNPPLC will not include (A) any Permitted
Encumbrances (regardless of whether claimed through or under BNPPLC), (B) the
Operative Documents or any other document executed by BNPPLC with the knowledge
of (and without objection by) NAI or NAI’s counsel contemporaneously with the
execution and delivery of the Operative Documents, (C) Liens which are neither
lawfully claimed through or under BNPPLC (as described above) nor claimed under
a deed or other instrument duly executed by BNPPLC, (D) Liens claimed by NAI or
claimed through or under a conveyance made by NAI other than NAI’s conveyance of
the leasehold estate to BNPPLC under the Ground Lease, (E) Liens arising because
of BNPPLC’s compliance with Applicable Law, the Operative Documents, Permitted
Encumbrances or any written request made by NAI, (F) Liens securing the payment
of property taxes or other amounts assessed against the Property by any
Governmental Authority, other than to secure the payment of past due Excluded
Taxes or to secure damages caused by (and attributed by any applicable
principles of comparative fault to) BNPPLC’s own Established Misconduct,
(G) Liens resulting from or arising in connection with any breach by NAI of the
Operative Documents; or (H) Liens resulting from or arising in connection with
any Permitted Transfer that occurs more than thirty days after any Designated
Sale Date upon which, for any reason, NAI or any Applicable Purchaser does not
purchase BNPPLC’s interest in the Property pursuant to the Purchase Agreement
for a price (when taken together with any Supplemental Payment paid by NAI
pursuant to the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) equal to the Break Even Price.
Common Definitions and Provisions Agreement — Page 26

 

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     “Local Impositions” means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes (other than taxes
on net income and corporate franchise taxes), levies, fees, charges, surcharges,
assessments, interest, additions to tax, or penalties imposed by the State of
California or any agency or political subdivision thereof upon BNPPLC or any
owner of the Property or any part of or interest in the Property because of
(i) the Lease or other Operative Documents, (ii) the status of record title to
the Property, (iii) the ownership, leasing, occupancy, sale or operation of the
Property or any part thereof or interest therein, or (iv) the Permitted
Encumbrances; excluding, however, Excluded Taxes. “Local Impositions” will
include any real estate taxes imposed because of a change of use or ownership of
the Property resulting from, or occurring on or prior to the date of, any sale
by BNPPLC pursuant to the Purchase Agreement.
     “Losses” means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs of settlement and other costs and
expenses (including Attorneys’ Fees and the fees of outside accountants and
environmental consultants), of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote, known and
unknown.
     “Market Quotation” means, with respect to any Fixed Rate Lock Termination,
an amount determined by the Floating Rate Payor on the basis of quotations from
Reference Market-makers. Each quotation will be for an amount, if any, that
would be paid by the Floating Rate Payor in consideration of an agreement
between it and the quoting Reference Market-maker to enter into a transaction
(the “Replacement Transaction”) that would have the effect of preserving for the
Floating Rate Payor the economic equivalent of any payment or delivery (whether
the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) that would, but for the
occurrence of the relevant Fixed Rate Lock Termination, have been required under
the Fixed Rate Swap. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith,
agree. The Floating Rate Payor (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on the effective
date of or as soon as reasonably practicable after the relevant Fixed Rate Lock
Termination. The date and time as of which those quotations are to be obtained
will be selected in good faith by the Floating Rate Payor. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Fixed Rate Lock Termination cannot be determined.
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     “Material Adverse Effect” means a material adverse effect on (a) the
assets, operations or businesses of NAI, (b) the ability of NAI to perform any
of its obligations under the Operative Documents, (c) the rights of or benefits
available to the BNPPLC under the Operative Documents, (d) the value, utility or
useful life of the Property or (e) the priority, perfection or status of any of
BNPPLC’s interests in the Property or in any of the Operative Documents.
     “Maximum Construction Allowance” has the meaning indicated in the
Construction Management Agreement.
     “Maximum Remarketing Obligation” has the meaning indicated in the Purchase
Agreement.
     “Minimum Insurance Requirements” means the insurance requirements outlined
in Annex 4 attached to this Agreement.
     “Multiemployer Plan” means a multiemployer plan as defined in Section 3(37)
of ERISA to which contributions have been made by NAI or any ERISA Affiliate
during the preceding six years and which is covered by Title IV of ERISA.
     “Notice of NAI’s Intent to Terminate” has the meaning indicated in the
Construction Management Agreement.
     “Notice of NAI’s Intent to Terminate Because of a Force Majeure Event” has
the meaning indicated in the Construction Management Agreement.
     “Notice of Termination by NAI” has the meaning indicated in the
Construction Management Agreement.
     “Operative Documents” means the Closing Certificate, the Ground Lease, the
Lease, the Construction Management Agreement, the Purchase Agreement and this
Common Definitions and Provisions Agreement.
     “Outstanding Construction Allowance” has the meaning indicated in the
Construction Management Agreement.
     “Owner’s Election to Continue Construction” has the meaning indicated in
the Construction Management Agreement.
     “NAI” means Network Appliance, Inc., a Delaware corporation.
     “NAI’s Estimate of Force Majeure Excess Costs” has the meaning indicated in
the Construction Management Agreement.
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     “NAI’s Estimate of Force Majeure Delays” has the meaning indicated in the
Construction Management Agreement.
     “NAI’s Initial Remarketing Right” has the meaning indicated in the Purchase
Agreement.
     “Participant” means any Person other than BNPPLC that from time to time, by
executing a Participation Agreement or supplements as contemplated therein,
becomes a party to the Participation Agreement and thereby agrees to participate
in all or some of the risks and rewards to BNPPLC of the Operative Documents;
provided, however, no such Person will qualify as a Participant for purposes of
the Operative Documents unless approved to be a Participant by NAI. As of the
Effective Date, there are no Participants, but BNPPLC may from time to time
request NAI’s approval for prospective Participants. NAI will not unreasonably
withhold or delay any approval required for any prospective Participant which is
an Eligible Financial Institution. However, as to any prospective Participant
that is not an Eligible Financial Institution, NAI may withhold such approval in
its sole discretion. Further, it is understood that if giving such approval will
increase NAI’s liability for withholding taxes or other taxes not constituting
Excluded Taxes under tax laws or regulations then in effect, NAI may reasonably
refuse to give such approval.
     “Participation Agreement” means a Participation Agreement in substantially
the form attached to this Agreement as Annex 5, pursuant to which one or more
other Persons agree with BNPPLC to participate in the risks and rewards to
BNPPLC of the Operative Documents, as such Participation Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms. It is understood, however, that because any
such Participation Agreement will expressly make NAI a third party beneficiary
of each Participant’s obligations thereunder to make advances to BNPPLC in
connection with Construction Advances under the Construction Management
Agreement, NAI’s consent will be required to any amendment of the Participation
Agreement that limits or excuses such obligations.
     “Permitted Encumbrances” means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPPLC at the request of or with the consent of NAI,
(iii) any Liens securing the payment of Local Impositions which are not
delinquent or claimed to be delinquent or which are being contested in
accordance with subparagraph 5(A) of the Lease, (iv) statutory liens, if any, in
the nature of contractors’, mechanics’ or materialmen’s liens for amounts not
past due or claimed to be past due for more than thirty days or which are being
contested in accordance with subparagraph 11(B) of the Lease, (v) Liens which
are Fully Subordinated or Removable, and (vi) any documents or maps which NAI
executes and records, with the consent of BNPPLC as provided in subparagraph
4(C) of the Closing Certificate, to establish a condominium regime that covers
the Property and other adjacent properties.
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     “Permitted Hazardous Substance Use” means the use, generation, storage and
offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal will not:
     (1) exceed that reasonably required for the construction of the
Construction Project in accordance with the Construction Management Agreement or
for the use and operation of the Property for the purposes expressly permitted
under subparagraph 2(A) of the Lease; or
     (2) include any disposal, discharge or other release of Hazardous
Substances from the Property in any manner that might allow such substances to
reach surface water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works or (B) with
rainwater or storm water runoff in accordance with Applicable Laws and any
permits obtained by NAI that govern such runoff; or (ii) any such disposal,
discharge or other release of Hazardous Substances for which no permits are
required and which are not otherwise regulated under applicable Environmental
Laws.
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use will not include any use of the Property (including as a
landfill, incinerator or other waste disposal facility) in a manner that
requires a treatment, storage or disposal permit under the Resource Conservation
and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984..
     “Permitted Hazardous Substances” means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use and operation of the Property by NAI and its permitted subtenants and
assigns for the purposes expressly permitted by subparagraph 2(A) of the Lease,
in either case in strict compliance with all Environmental Laws and with due
care given the nature of the Hazardous Substances involved. Without limiting the
generality of the foregoing, Permitted Hazardous Substances will include usual
and customary office, laboratory and janitorial products.
     “Permitted Transfer” means any one or more of the following:
     (1) the creation or conveyance by BNPPLC of rights and interests in favor
of Participants pursuant to the Participation Agreement;
     (2) any lien, security interest or assignment covering the Property or the
Rents which is granted by BNPPLC in favor of Participants or an agent appointed
for them to secure their rights under the Participation Agreement, and any
subsequent assignment or
Common Definitions and Provisions Agreement — Page 30

 

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conveyance made to accomplish a foreclosure of such lien or security interest,
provided that such lien, security interest or assignment and any such subsequent
assignment or conveyance are all made expressly subject to the rights of NAI
under the Operative Documents;
     (3) other than as described in the preceding clauses, any conveyance to
BNPPLC’s Parent or to any Qualified Affiliate of BNPPLC of all or any interest
in or rights with respect to the Property or any portion thereof, provided that
NAI must be notified before any such conveyance to BNPPLC’s Parent or a
Qualified Affiliate which will be recorded in the real property records of the
county in which the Land is situated;
     (4) any assignment or conveyance by BNPPLC requested by NAI or required by
any Permitted Encumbrance, by the Purchase Agreement or by Applicable Laws; or
     (5) any assignment or conveyance after a Designated Sale Date on which NAI
does not purchase or cause an Applicable Purchaser to purchase BNPPLC’s interest
in the Property and, if applicable, after the expiration of the thirty day cure
period specified in Paragraph 3(A) of the Purchase Agreement.
     “Person” means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.
     “Personal Property” has the meaning indicated on page 2 of the Lease.
     “Plan” means any employee benefit or other plan established or maintained,
or to which contributions have been made, by NAI or any ERISA Affiliate during
the preceding six years and which is covered by Title IV of ERISA, including any
Multiemployer Plan.
     “Pre-lease Casualty” has the meaning indicated in the Construction
Management Agreement.
     “Pre-lease Force Majeure Delays” has the meaning indicated in the
Construction Management Agreement.
     “Pre-lease Force Majeure Event” has the meaning indicated in the
Construction Management Agreement.
     “Pre-lease Force Majeure Event Notice” has the meaning indicated in the
Construction Management Agreement.
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     “Pre-lease Force Majeure Excess Costs” has the meaning indicated in the
Construction Management Agreement.
     “Pre-lease Force Majeure Losses” has the meaning indicated in the
Construction Management Agreement.
     “Prime Rate” means the prime interest rate or equivalent charged by
BNPPLC’s Parent in the United States of America as announced or published by
BNPPLC’s Parent from time to time, which need not be the lowest interest rate
charged by BNPPLC’s Parent. If for any reason BNPPLC’s Parent does not announce
or publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPPLC will be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from time to time after the Effective Date without notice to NAI as
of the effective time of each change in rates described in this definition.
     “Prior Work” has the meaning indicated in the Construction Management
Agreement.
     “Projected Cost Overruns” has the meaning indicated in the Construction
Management Agreement.
     “Property” means the Personal Property and the Real Property, collectively.
The fee interest in the Land itself will not be included in the Property, but
the leasehold estate conveyed to BNPPLC under the Ground Lease will be included.
     “Purchase Agreement” means the Purchase Agreement dated as of the Effective
Date between BNPPLC and NAI, as such Purchase Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
     “Purchase Option” has the meaning indicated in the Purchase Agreement.
     “Qualified Affiliate” means any Person that, like BNPPLC, (i) is one
hundred percent (100%) owned, directly or indirectly, by BNPPLC’s Parent or any
successor of such bank, (ii) can make (and has in writing made) the same
representations to NAI that BNPPLC has made in subparagraphs 4(A) and 4(B) of
the Closing Certificate, and (iii) is an
     entity organized under the laws of the State of Delaware or another state
within the United States of America.
     “Qualified Income Payments” means: (A) Base Rent; (B) payments that are
made to BNPPLC only because the following amounts are capitalized (i.e.,the
added to the Lease Balance) as described in subparagraph 3 of the Construction
Management Agreement: the Arrangement Fee, Administrative Fees, Commitment Fees,
Increased Cost Charges and Capital Adequacy Charges; (C) payments of the
following made to BNPPLC to satisfy the Lease: Administrative Fees, Increased
Cost Charges and Capital
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Adequacy Charges; (D) any interest paid to BNPPLC or any Participant pursuant to
subparagraph 3(G) of the Lease; (E) payments by BNPPLC to Participants required
under the Participation Agreements because of BNPPLC’s receipt of payments
described in the preceding clauses (A) through (D).
     “Qualified Prepayments” means any payments received by BNPPLC from time to
time during the Term (1) under any property insurance policy as a result of
damage to the Property, (2) as compensation for any restriction placed upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof (including any indirect condemnation by means of a taking of
any of the Land or appurtenant easements), (3) because of any judgment, decree
or award for injury or damage to the Property, or (4) under any title insurance
policy or otherwise as a result of any title defect or claimed title defect with
respect to the Property. For the purposes of determining the amount of any
Qualified Prepayment and other amounts dependent upon Qualified Prepayments
(e.g., the Lease Balance, the Outstanding Construction Allowance and the Break
Even Price):
          (i) there shall be deducted all expenses and costs of every kind, type
and nature (including taxes and Attorneys’ Fees) incurred by BNPPLC with respect
to the collection or application of such payments;
          (ii) Qualified Prepayments shall not include any payment to BNPPLC by
a Participant or an Affiliate of BNPPLC that is made to compensate BNPPLC for
the Participant’s or Affiliate’s share of any Losses BNPPLC may incur as a
result of any of the events described in the preceding clauses (1) through (4);
          (iii) Qualified Prepayments shall not include any payments received by
BNPPLC that BNPPLC has paid or is obligated to pay to NAI for the repair,
restoration or replacement of the Property or that BNPPLC is holding as Escrowed
Proceeds in accordance with the Paragraph 10 of the Lease or other provisions of
the Operative Documents;
          (iv) payments described in the preceding clauses (i) through
(iii) will be considered as Escrowed Proceeds, not Qualified Prepayments, until
they are actually applied as Qualified Prepayments by BNPPLC as provided in
Paragraph 10 of the Lease; and
          (v) in no event will interest that accrues under the Purchase
Agreement on a past due Supplemental Payment constitute a Qualified Prepayment.
For purposes of computing the total Qualified Prepayments (and other amounts
dependent upon Qualified Prepayments, such as the Lease Balance, the Outstanding
Construction Allowance and
Common Definitions and Provisions Agreement — Page 33

 

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the Break Even Price) paid to or received by BNPPLC as of any date, payments
described in the preceding clauses (1) through (4) will be considered as
Escrowed Proceeds, not Qualified Prepayments, until they are actually applied as
Qualified Prepayments by BNPPLC as provided in the Paragraph 10 of the Lease.
     “Real Property” has the meaning indicated on page of the Lease.
     “Reimbursable Construction-Period Costs” has the meaning indicated in the
Construction Management Agreement.
     “Remedial Work” means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other required remedial plans
that any governmental agency or political subdivision requires or approves (or
could reasonably be expected to require if it was aware of all relevant
circumstances concerning the Property), whether by judicial order or otherwise,
because of the presence of or suspected presence of Hazardous Substances in, on,
under or about the Property or because of any prior Hazardous Substance
Activity.
     “Rent” means the Base Rent and all Additional Rent.
     “Responsible Financial Officer” means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.
     “Rolling Four Quarters Period” has the meaning indicated in subparagraph
3(A) of the Closing Certificate.
     “Scope Change” has the meaning indicated in the Construction Management
Agreement.
     “Spread” means, for Construction Period and for any period beginning on and
including the Base Rent Commencement Date or a Base Rent Date and ending on but
not including the next Base Rent Date, the amount established as of the date (in
this definition, the “Spread Test Date”) that is two Business Days prior to such
period by reference to the pricing grid below, based upon the ratio calculated
by dividing (1) Adjusted EBITDA for the then latest Rolling Four Quarters Period
that ended prior to (and for which NAI has reported earnings as necessary to
compute Adjusted EBITDA) into (2) the Total Debt of NAI and its Subsidiaries
(determined on a consolidated basis) as of the end of such Rolling Four Quarters
Period. In each case, the Spread will be established at the Level in the pricing
grid below which corresponds to such ratio; provided, that:
          (a) promptly after earnings are reported by NAI for the latest quarter
in any Rolling Four Quarters Period, NAI must notify BNPPLC of any resulting
change in the Spread under this definition, and no reduction in the Spread from
one period to the next
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     will be effective for purposes of the Operative Documents unless, prior to
the Spread Test Date for the next period, NAI shall have provided BNPPLC with a
written notice setting forth and certifying the calculation under this
definition that justifies the reduction; and
     (c) notwithstanding anything to the contrary in this definition, after any
97-10/Event and on any date when an Event of Default has occurred and is
continuing, the Unsecured Spread will equal the Default Rate less the Effective
Rate.

          Levels   Ratio of Total Debt to Adjusted EBITDA   Spread
Level I
  less than 0.5   57.5 basis points
Level II
  greater than or equal to 0.5, but less than 1.0   75.0 basis points
Level III
  greater than or equal to 1.0   95.0 basis points
 
       

All determinations of the Spread by BNPPLC will, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of the Operative
Documents. Further BNPPLC may, but will not be required, to rely on the
determination of the Spread set forth in any notice delivered by NAI as
described above in clause (a) of this definition.
     “Subsidiary” means, with respect to any Person, any Affiliate of which at
least a majority of the securities or other ownership interests having ordinary
voting power then exercisable for the election of directors or other persons
performing similar functions are at the time owned directly or indirectly by
such Person.
     “Supplemental Payment” has the meaning indicated in the Purchase Agreement.
     “Supplemental Payment Obligation” has the meaning indicated in the Purchase
Agreement.
     “Tangible Personal Property” has the meaning indicated on page 2 of the
Lease.
     “Target Completion Date” has the meaning indicated in the Construction
Management Agreement.
     “Term” has the meaning indicated in subparagraph 1(A) of the Lease.
     “Term Sheet” means the letter dated as of September 7, 2005 from BNPPLC to
NAI
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concerning the Property.
     “Termination of NAI’s Work” has the meaning indicated in the Construction
Management Agreement.
     “Third Party Contract” has the meaning indicated in the Construction
Management Agreement.
     “Third Party Contract/Termination Fees” has the meaning indicated in the
Construction Management Agreement.
     “Total Debt” has the meaning indicated in subparagraph 3(A) of the Closing
Certificate.
     “Transaction Expenses” means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.
     “Unfunded Benefit Liabilities” means, with respect to any Plan, the amount
(if any) by which the present value of all benefit liabilities (within the
meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the market value
of all Plan assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan and in accordance with the provisions of
ERISA for calculating the potential liability of NAI or any ERISA Affiliate
under Title IV of ERISA.
     “Work” has the meaning indicated in the Construction Management Agreement.
     “Work/Suspension Event” has the meaning indicated in the Construction
Management Agreement.
     “Work/Suspension Notice” has the meaning indicated in the Construction
Management Agreement.
     “Work/Suspension Period” has the meaning indicated in the Construction
Management Agreement.
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ARTICLE II — SHARED PROVISIONS
     The following provisions will apply to and govern the construction of this
Agreement and the other Operative Documents (including attachments), except to
the extent (if any) a clear, contrary intent is expressed herein or therein:
     1. Notices. The provision of any Operative Document, or of any Applicable
Laws with reference to the sending, mailing or delivery of any notice or demand
under any Operative Document or with reference to the making of any payment
required under any Operative Document, will be deemed to be complied with when
and if the following steps are taken:
     (i) All Rent and other amounts required to be paid by NAI to BNPPLC must be
paid to BNPPLC in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
BNP Paribas — New York Branch
Favor: BNP Paribas Leasing Corporation
ABA 026 007 689
/AC/ 0200-517000-070-78
Reference: Network Appliance, Inc./California-Lease
or at such other place and in such other manner as BNPPLC may designate in a
notice to NAI.
     (ii) All advances paid to NAI by BNPPLC under the Construction Management
Agreement or in connection therewith will be paid by wire transfer to:
Wells Fargo Bank
San Francisco, CA
ABA#121000248
Acct#4311-790562
Account of: Network Appliance
Reference: BNP Lease
or at such other place and in such other manner as NAI may reasonably designate
from time to time by notice to BNPPLC signed by a Responsible Financial Officer
of NAI.
     (iii) All notices, demands, approvals, consents and other communications to
be made under any Operative Document to or by the parties thereto must, to be
effective for purpose of such Operative Document, be in writing. Notices,
demands and other communications required or permitted under any Operative
Document are to be sent to
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the addresses set forth below (or in the case of communications to Participants,
at the addresses set forth in Schedule 1 to the Participation Agreement) and
will be given by any of the following means: (A) personal service (including
local and overnight courier), with proof of delivery or attempted delivery
retained; (B) electronic communication, whether by electronic mail or
telecopying (if confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by notice to the other
parties given in the same manner as provided above. Any notice or other
communication sent pursuant to clause (A) or (B) hereof will be deemed received
upon such personal service or upon dispatch by electronic means, and, if sent
pursuant to clause (C) will be deemed received five days following deposit in
the mail.
Address of BNPPLC:
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director
Telecopy: (972) 788-9140
Address of NAI:
Network Appliance, Inc.
7301 Kit Creek Road
Research Triangle Park, NC 27709
Attention: Ingemar Lanevi
Telecopy: (919) 476-5750
With a copy to:
Network Appliance, Inc.
495 East Java Drive
Sunnyvale, California 94089
Attention: Mr. Thom Bryant
Telecopy: (408)-822-4463
     2. Severability. If any term or provision of any Operative Document or the
application thereof is to any extent held by a court of competent jurisdiction
to be invalid and unenforceable, the remainder of such document, or the
application of such term or provision other than to the extent to which it is
invalid or unenforceable, will not be affected thereby.
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     3. No Merger. There will be no merger of the Lease or of the leasehold
estate created by the Lease or of the mortgage and security interest granted in
subparagraph 4(C)(1) of the Lease with any other interest in the Property by
reason of the fact that the same person may acquire or hold, directly or
indirectly, the Lease or the leasehold estate created hereby or such mortgage
and security interest and any other interest in the Property, unless all Persons
with an interest in the Property that would be adversely affected by any such
merger specifically agree in writing that such a merger has occurred. There will
be no merger of the Purchase Agreement or of the purchase options or obligations
created by the Purchase Agreement with any other interest in the Property by
reason of the fact that the same person may acquire or hold, directly or
indirectly, the rights and options granted by the Purchase Agreement and any
other interest in the Property, unless all Persons with an interest in the
Property that would be adversely affected by any such merger specifically agree
in writing that such a merger has occurred.
     4. No Implied Waiver. The failure of BNPPLC or NAI to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in any Operative Document will not be
construed as a waiver or a relinquishment thereof for the future. The waiver of
or redress for any breach of any Operative Document by any party thereto will
not prevent a similar subsequent act from constituting a violation. Any express
waiver of any provision of any Operative Document will affect only the term or
condition specified in such waiver and only for the time and in the manner
specifically stated therein. No waiver by any party to any Operative Document of
any provision therein will be deemed to have been made unless expressed in
writing and signed by the party to be bound by the waiver. A receipt by BNPPLC
of any Rent with knowledge of the breach by NAI of any covenant or agreement
contained in the Lease or any other Operative Document will not be deemed a
waiver of such breach.
     5. Entire and Only Agreements. The Operative Documents supersede any prior
negotiations and agreements between BNPPLC and NAI concerning the Property, and
no amendment or modification of any Operative Document will be binding or valid
unless expressed in a writing executed by all parties to such Operative
Document.
     6. Binding Effect. Except to the extent, if any, expressly provided to the
contrary in any Operative Document with respect to assignments thereof, all of
the covenants, agreements, terms and conditions to be observed and performed by
the parties to the Operative Documents will be applicable to and binding upon
their respective successors and, to the extent assignment is permitted
thereunder, their respective assigns.
     7. Time is of the Essence. Time is of the essence as to all obligations of
NAI and BNPPLC and all notices required of NAI and BNPPLC under the Operative
Documents.
     8. Governing Law. Each Operative Document will be governed by and construed
in accordance with the laws of the State of California without regard to
conflict or choice of laws.
Common Definitions and Provisions Agreement — Page 39

 

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     9. Paragraph Headings. The paragraph and section headings contained in the
Operative Documents are for convenience only and will in no way enlarge or limit
the scope or meaning of the various and several provisions thereof.
     10. Negotiated Documents. All parties to each Operative Document and their
counsel have reviewed and revised or requested revisions to such Operative
Document, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party will not apply to the construction or
interpretation of any Operative Documents or any amendments thereof.
     11. Terms Not Expressly Defined in an Operative Document. As used in any
Operative Document, a capitalized term that is not defined therein or in this
Agreement, but is defined in another Operative Document, will have the meaning
ascribed to it in the other Operative Document.
     12. Other Terms and References. Words of any gender used in each Operative
Document will be held and construed to include any other gender, and words in
the singular number will be held to include the plural and vice versa, unless
the context otherwise requires. References in any Operative Document to
Paragraphs, subparagraphs, Sections, subsections or other subdivisions refer to
the corresponding Paragraphs, subparagraphs, Sections, subsections or
subdivisions of that Operative Document, unless specific reference is made to
another document or instrument. References in any Operative Document to any
Schedule or Exhibit refer to the corresponding Schedule or Exhibit attached to
that Operative Document, which are made a part thereof by such reference. All
capitalized terms used in each Operative Document which refer to other documents
will be deemed to refer to such other documents as they may be renewed,
extended, supplemented, amended or otherwise modified from time to time,
provided such documents are not renewed, extended or modified in breach of any
provision contained in the Operative Documents or, in the case of any other
document to which BNPPLC is a party or of which BNPPLC is an intended
beneficiary, without the consent of BNPPLC. All accounting terms used but not
specifically defined in any Operative Document will be construed in accordance
with GAAP. The words “this [Agreement]”, “herein”, “hereof”, “hereby”,
“hereunder” and words of similar import when used in each Operative Document
refer to that Operative Document as a whole and not to any particular
subdivision unless expressly so limited. The phrases “this Paragraph”, “this
subparagraph”, “this Section”, “this subsection” and similar phrases used in any
operative document refer only to the Paragraph, subparagraph, Section,
subsection or other subdivision described in which the phrase occurs. As used in
the Operative Documents the word “or” is not exclusive. As used in the Operative
Documents, the words “include”, “including” and similar terms will be construed
as if followed by “without limitation to”. The rule of ejusdem generis will not
be applied to limit the generality of a term in any of the Operative Documents
when followed by specific examples. When used to qualify any
Common Definitions and Provisions Agreement — Page 40

 

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representation or warranty made by a Person, the phrases “to the knowledge of
[such Person]” or “to the best knowledge of [such Person]” are intended to mean
only that such Person does not have knowledge of facts or circumstances which
make the representation or warranty false or misleading in some material
respect; such phrases are not intended to suggest that the Person does indeed
know the representation or warranty is true.
     13. Execution in Counterparts. To facilitate execution, each of the
Operative Documents may be executed in multiple identical counterparts. It will
not be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts, taken together, will collectively constitute a single
instrument. But it will not be necessary in making proof of any of the Operative
Documents to produce or account for more than a single counterpart containing
the respective signatures of, or on behalf of, each of the parties to such
document. Any signature page may be detached from one counterpart and then
attached to a second counterpart with identical provisions without impairing the
legal effect of the signatures on the signature page. Signing and sending a
counterpart (or a signature page detached from the counterpart) by facsimile or
other electronic means to another party will have the same legal effect as
signing and delivering an original counterpart to the other party. A copy
(including a copy produced by facsimile or other electronic means) of any
signature page that has been signed by or on behalf of a party to any of the
Operative Documents will be as effective as the original signature page for the
purpose of proving such party’s agreement to be bound.
     14. Not a Partnership, Etc. Nothing in any Operative Document is intended
to create any partnership, joint venture, or other joint enterprise between
BNPPLC and NAI.
     15. No Fiduciary Relationship Intended. Neither the execution of the
Operative Documents or other documents referenced in this Agreement nor
administration thereof by BNPPLC will create any fiduciary obligations of BNPPLC
to NAI Moreover, BNPPLC and NAI disclaim any intent to create any fiduciary or
special relationship between themselves under or by reason of the Operative
Documents or the transactions described therein or any other documents or
agreements referenced therein.
[The signature pages follow.]
Common Definitions and Provisions Agreement — Page 41

 

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     IN WITNESS WHEREOF, this Common Definitions and Provisions Agreement is
executed to be effective as of December 15, 2005.

                  BNP PARIBAS LEASING CORPORATION, a Delaware
corporation    
 
           
 
  By:   /s/  Lloyd G. Cox    
 
           
 
      Lloyd G. Cox, Managing Director    

Common Definitions and Provisions Agreement — Signature Page

 

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[Continuation of signature pages for Common Definitions and Provisions Agreement
dated as of December 15, 2005]

                  NETWORK APPLIANCE, INC., a Delaware corporation    
 
           
 
  By:   /s/  Steven Gomo    
 
           
 
      Steven Gomo, Chief Financial Officer    

Common Definitions and Provisions Agreement — Signature Page

 

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Annex 1
Notice of ABR Period Election
[Date]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director
Telecopy: (972) 788-9140
Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement dated as of
December 15, 2005, between you, BNP Paribas Leasing Corporation, and the
undersigned, Network Appliance, Inc.. This letter constitutes notice of our
election to make the first Construction Period or Base Rent Period beginning on
or after                                        , 20                     subject
to an ABR Period Election.
     We understand that until a different election becomes effective as provided
in definitions of “ABR Period Election” and “LIBOR Period Election” in the
Common Definitions and Provisions Agreement, all subsequent Construction Periods
or Base Rent Periods will also be subject to an ABR Period Election.
NOTE: YOU ARE ENTITLED TO DISREGARD THIS NOTICE IF THE DATE SPECIFIED ABOVE
CONCERNING THE COMMENCEMENT OF THE ABR PERIOD ELECTION IS LESS THAN TEN BUSINESS
DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY US
IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.

                      NETWORK APPLIANCE, INC., a Delaware         corporation  
 
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               

[cc all Participants]

 

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Annex 2
Fixed Rate Lock Notice
[Date]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director
Telecopy: (972) 788-9140
Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement dated as of
December 15, 2005, between you, BNP Paribas Leasing Corporation, and the
undersigned, Network Appliance, Inc.. By this letter, which is given pursuant to
subparagraph 3(B)(4) of the Lease, NAI requests that BNPPLC promptly establish a
Fixed Rate for a notional amount equal to the Lease Balance as of the date of
this letter for use in the calculation of the Effective Rate for all Base Rent
Periods commencing on or after the following Fixed Rate Lock Date:
                                        , 20                    .
     As contemplated in the conditions set forth in subparagraph 3(B)(4) of the
Lease, such Fixed Rate Lock Date is the first Business Day of a calendar month
which falls after the projected Base Rent Commencement Date; such Fixed Rate
Lock Date does not fall prior to the end of any Base Rent Period which has
commenced or will commence before BNPPLC receives this notice; and NAI expects
BNPPLC to receive this notice more than ten days prior to such Fixed Rate Lock
Date.
     In an earlier phone conversation today between a representative of NAI and
                     at the New York Branch of BNP Paribas, NAI requested an
estimate from BNP Paribas of the Fixed Rate that would be established by BNPPLC
and BNP Paribas entering into an Interest Rate Swap. The estimate provided by
telephone was:                      percent (                    %) per annum.
     By this letter, NAI confirms that it will accept such a rate or any lower
rate as the Fixed Rate for purposes of the Lease.
NOTE: BNPPLC shall be entitled to disregard this notice if the conditions to a
Fixed Rate Lock, as specified in subparagraph 3(B)(4) of the Lease, have not
been satisfied. However, NAI requests that BNPPLC notify NAI immediately if for
any reason BNPPLC believes this notice will not be effective.

 

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                      NETWORK APPLIANCE, INC., a Delaware         corporation  
 
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               

[cc all Participants]
Annex 2 — Page 2

 

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Annex 3
Notice of LIBOR Period Election
[Date]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director
Telecopy: (972) 788-9140
Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement dated as of
December 15, 2005, between you, BNP Paribas Leasing Corporation, and the
undersigned, Network Appliance, Inc.. This letter constitutes notice of our
election to make the first Construction Period or Base Rent Period beginning on
or after                                        , 20                     subject
to a LIBOR Period Election of                                          month(s).
     We understand that until a different election becomes effective as provided
in definitions of “ABR Period Election” and “LIBOR Period Election” in the
Common Definitions and Provisions Agreement, all subsequent Construction Periods
or Base Rent Periods will also be subject to the same LIBOR Period Election.
NOTE: YOU ARE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF “LIBOR PERIOD
ELECTION” IN THE COMMON DEFINITIONS AND PROVISIONS AGREEMENT, OR IF THE DATE
SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR PERIOD ELECTION IS LESS
THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT
YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS
DEFECTIVE.

                      NETWORK APPLIANCE, INC., a Delaware         corporation  
 
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               

[cc all Participants]

 

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Annex 4
Minimum Insurance Requirements
A. PROVISIONS APPLICABLE BOTH BEFORE AND AFTER THE COMPLETION DATE.
     1. Other Requirements Not Affected: The insurance coverages required by
this Annex represent minimum requirements of BNPPLC and other Interested Parties
and are not to be construed to modify or limit NAI’s indemnities or other
agreements in the Agreement to which this Annex is attached or in any other
Operative Document. Such required coverages do not constitute a representation
or determination by BNPPLC of the minimum insurance coverages NAI should
maintain for its own protection.
     2. Requirements Apply Only to the Property: Further, the insurance
coverages required by this Annex apply only to the Property, it being understood
that nothing in this Annex is intended to impose minimum insurance requirements
upon NAI with respect to other properties owned or leased by NAI.
     3. Failure to Obtain: Failure of BNPPLC to demand certificate or other
evidence of full compliance with these insurance requirements, or failure of
BNPPLC to identify a deficiency from evidence that is provided, will not be
construed as a waiver of NAI’s obligation to maintain required insurance.
     4. Copies of Policies: NAI must provide to BNPPLC, at the offices of NAI,
copies of all insurance policies required herein within ten (10) days after
receipt of a request for such copies from BNPPLC or as soon as practicable if
policies are in the process of being issued by the applicable insurer. Such
copies must be certified as complete and correct by an authorized representative
of the applicable insurer, subject to availability from the insurance company.
     5. Inconsistent Endorsements. The insurance policies maintained to comply
with these requirements will contain no endorsements that restrict, limit, or
exclude coverages in any manner that is inconsistent with these express
requirements without the prior express written approval of BNPPLC.
     6. Limits of Liability. The limits of liability necessary to satisfy these
requirements may be provided by a single policy of insurance or by a combination
of primary and umbrella/excess policies, but in no event will the total limits
of liability available for any one occurrence or accident be less than the
amount required herein.
     7. Additional Insured Status. Additional insured status will be provided in
favor
Annex 4 — Page 1

 

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of BNPPLC and other Interested Parties on all liability insurance required
herein except workers’ compensation and employer’s liability. Such additional
insured status will be provided on a basis that neither limits coverage to the
additional insured by reason of its negligence (sole or otherwise) nor excludes
coverage for completed operations with respect to construction of the
Improvements.
     8. Primary Liability. The insurance policies maintained to comply with
these requirements will be primary to all insurance available to BNPPLC and
other Interested Parties, collectively or individually, with BNPPLC and other
Interested Parties’ insurance being excess, secondary and non-contributing
(except in the case of workers’ compensation and employer’s liability
insurance). Where necessary, coverage will be endorsed to provide such primary
liability.
B. PROVISIONS APPLICABLE BEFORE THE COMPLETION DATE.
     1. General Terms and Conditions.
A. Definitions: For purposes of this Annex:
“Construction Period Policies” means insurance policies that satisfy the minimum
requirements set forth in this Annex and that NAI has obtained or required its
Contractors to obtain with respect to the Property prior to the Completion Date.
“Contractor” will include subcontractors of any tier.
“ISO” means Insurance Services Office.
B. Status and Rating of Insurance Company. All insurance coverages required
herein prior to the Completion Date will be written through insurance companies
admitted to do business in the State of California and rated upon each renewal
no less than A-: VII in the then most current edition of A.M. Best’s Key Rating
Guide.
C. Waiver of Subrogation. All insurance coverages carried by NAI with respect to
the Construction Project, whether required herein or not, will provide a waiver
of subrogation in favor of BNPPLC and other Interested Parties.
D. Release and Waiver: Without limiting other waivers or provisions in favor of
BNPPLC and other Interested Parties in any of the Operative Documents or other
attachments thereto, NAI hereby releases, and agrees to cause all Contractors
performing any Work prior to the Completion Date (other than subcontractors
providing goods and/or
Annex 4 — Page 2

 

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services with a value of less than $100,000) to release, BNPPLC and all other
Interested Parties from any and all claims or causes of action whatsoever that
NAI and/or such Contractors might otherwise now or hereafter have resulting from
or in any way connected with any loss covered by insurance, whether required
herein or not, or which would have been covered by insurance required herein but
for a failure of NAI and/or its Contractors to maintain such insurance.
E. Initial Insurance Representations to BNPPLC and Other Interested Parties: NAI
represents, acknowledges and agrees that:
     1. Any Construction Period Policies not previously obtained will be
obtained by NAI (or by the primary Contractor engaged by NAI to perform the
Work), and the initial premiums for all Construction Period Policies will be
paid, before NAI requests Construction Advances that cause the Lease Balance to
exceed $2,000,000; and notwithstanding anything to the contrary in the
Construction Management Agreement, BNPPLC may refuse to fund any Construction
Advances that would cause the Lease Balance to exceed $2,000,000 prior to such
time as BNPPLC is satisfied that NAI has obtained and paid the premiums for the
Construction Period Policies. Moreover, in the case of the Builder’s Risk
Policy, the premium must be paid or prepaid for the entire period through the
projected Completion Date before the Lease Balance exceeds $2,000,000.
     2. The coverages provided by the Construction Period Policies will not be
terminated or modified to reduce, limit or qualify coverages in any material
respect without BNPPLC’s prior written consent in each case by reason of any act
or omission on the part of NAI or anyone acting for or authorized to act for NAI
(including any Contractor engaged by NAI to obtain the Construction Period
Policies for NAI). Without limiting the foregoing, NAI will not do or authorize
any act or omission that could cause the coverage provided with respect to any
Improvements by the Builder’s Risk Policy to expire or lapse before the
Completion Date.
     3. NAI must notify BNPPLC with reasonable promptness of any possible damage
claims known to NAI that NAI believes are, individually or taken together,
reasonably likely to a exceed seventy-five percent (75%) of any aggregate limit
of the Builder’s Risk Policy required herein.
     4. NAI will endeavor in good faith to cause each certificate of
Annex 4 — Page 3

 

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insurance which is provided to BNPPLC by an insurer, or its authorized
representative, at the request of NAI in regard to any Construction Period
Policies to include the following express provision:
This is to certify that the policies of insurance described herein have been
issued to the Insured for whom this certificate is executed and are in force at
this time. In the event of cancellation or non-renewal of coverage affecting the
certificate holder, other than by reason of nonpayment of premium, thirty
(30) days prior written notice will be given to the certificate holder by
certified mail or registered mail, return receipt requested. In the event of
cancellation or non-renewal of coverage affecting the certificate holder by
reason of nonpayment of premium, ten (10) days prior written notice will be
given to the certificate holder by certified mail or registered mail, return
receipt requested.
It is understood, however, that an insurer issuing such a certificate may
decline to include the foregoing statement in the certificate, in which case NAI
will instead deliver the certificate to BNPPLC with a cover letter from NAI
itself which states substantially as follows:
Enclosed is a certificate of insurance, which has been issued by an insurer or
its authorized representative, and which we are providing to you to confirm that
policies described in the certificate have been issued to NAI or another insured
named in the certificate and are in force at this time. NAI also certifies to
you that such policies have been issued, and in the event of any cancellation,
non- renewal, or reduction in coverage affecting you (BNP Paribas Leasing
Corporation) or other Interested Parties, NAI will give you thirty (30) days
prior written notice by certified mail or registered mail, return receipt
requested.
     5. NAI will also endeavor in good faith to cause each Construction Period
Policy to be endorsed to provide, in effect, that (A) in the event of
cancellation, non-renewal, or reduction in coverage affecting BNPPLC, other than
by reason of nonpayment of premium, thirty (30) days prior written notice will
be given by the insurer to BNPPLC by certified mail or registered mail, return
receipt requested; and (B) in the event of cancellation, non-renewal, or
reduction in coverage affecting
Annex 4 — Page 4

 

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BNPPLC by reason of nonpayment of premium, ten (10) days prior written notice
will be given by the insurer to BNPPLC by certified mail or registered mail,
return receipt requested.
     2. Commercial General Liability Insurance. Throughout the period from the
Effective Date to the Completion Date, NAI will maintain commercial general
liability insurance in accordance with the following requirements:
A. Coverage: Such insurance will cover liability (as to claims covered by the
form of CGL policy specified below, including claims for bodily injury and
property damage) arising from any occurrence on or about the Land or from any
operations conducted on or about the Land, including but not limited to tort
liability assumed under any of the Operative Documents. Defense will be provided
as an additional benefit and not included within the limit of liability.
B. Form: Commercial General Liability Occurrence form (ISO CG 0001, dated 12 04,
or an equivalent substitute form providing the same or greater coverage, and in
any case written to provide primary coverage to BNPPLC as provided in Part A.8
above).
C. Amount of Insurance: Coverage will be provided with limits of not less than:

         
i. Each Occurrence Limit
  $ 1,000,000  
ii. General Aggregate Limit
  $ 2,000,000  
iii. Product-Completed Operations Aggregate Limit
  $ 2,000,000  
iv. Personal and Advertising Injury Limit
  $ 1,000,000  

D. Required Endorsements:

             
 
  i.   Additional Insured.   as required in Part A.7 above.
 
           
 
  ii.   Aggregate Per Location   The aggregate limit will apply separately to
each location through use of an Aggregate Limit of Insurance Per Location
endorsement (ISO CG 2504 1185 or its equivalent).
 
           
 
  iii.   Notice of Cancellation,    

Annex 4 — Page 5

 

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      Nonrenewal or    
 
      Reduction in Coverage:   Consistent with Part B.1.E.5 above.
 
           
 
  iv.   Personal Injury Liability:   The personal injury contractual liability
exclusion will be deleted.
 
           
 
  v.   Primary Liability:   As required in Part A.8 above.
 
           
 
  vi.   Waiver of Subrogation:   As required in Part B.1.C above.

E. Deductible or Self Insured Retention Under Liability Policies: If a gap in
the liability insurance coverage provided to BNPPLC or another Interested Party
under any Construction Period Policy results from any deductible, self-insured
retention or other similar arrangement to which NAI agrees, then such gap must
be covered by one or more other Construction Period Policies, such that
liability insurance protection afforded to BNPPLC and other Interested Parties
by all such Construction Period Policies, taken together, is no less than it
would be if NAI had not agreed to the deductible, self-insured retention or
other similar arrangement.
     3. Workers’ Compensation/Employer’s Liability Insurance. Throughout the
period from the Effective Date to the Completion Date, NAI will maintain
workers’ compensation and employer’s liability insurance in accordance with the
following requirements:
A. Coverage: Such insurance will cover liability arising out of NAI’s employment
of workers and anyone for whom NAI may be liable for workers’ compensation
claims.
B. Amount of Insurance: Coverage will be provided with a limit of not less than:

             
 
  i.   Workers’ Compensation:   Statutory limits.
 
           
 
  ii.   Employer’s Liability:   $1,000,000 each accident and each disease.

C. Required Endorsements:

             
 
  i.   Notice of Cancellation,    
 
      Nonrenewal or Reduction    
 
      in Coverage:   Consistent with Part B.1.E.5 above.
 
           
 
  ii.   Waiver of Subrogation:   As required in Part B.1.C above.

Annex 4 — Page 6

 

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     4. Umbrella/Excess Liability Insurance. Throughout the period from the
Effective Date to the Completion Date, NAI will maintain umbrella/excess
liability insurance in accordance with the following requirements:
A. Coverage: Such insurance will be excess over and be no less broad than all
coverages described in the preceding subsections 1, 2 and 3 and will include a
drop-down provision if commercially available.
B. Form: This policy will have the same inception and expiration dates as the
commercial general liability insurance required above or a nonconcurrency
endorsement.
C. Amount of Insurance: Coverage will be provided with a limit of not less than
$10,000,000 per occurrence and in the aggregate.
     5. Builders Risk Insurance. Throughout the period from the Effective Date
to the Completion Date, NAI will maintain or cause to be maintained property
insurance (Builders Risk Insurance) in accordance with the following
requirements:
A. Insureds: Protection will extend to BNPPLC as a Named Insured or Additional
Named Insured as its interest may appear; and the policy will be modified if
necessary so that the protection afforded to BNPPLC is not reduced or impaired
by acts or omissions of NAI or any other beneficiary or insured. (Such
modification of the policy may be by endorsement comparable to a standard
mortgagee clause; not limited, however, by its terms to BNPPLC’s rights “as a
mortgagee” and not conditioned upon rights of the insurer to be subrogated to
BNPPLC’s rights under the Operative Documents in the event of a payment of
insurance proceeds to BNPPLC.)
B. Covered Property: Such insurance will cover:

  i.   Improvements and any equipment made or to be made a permanent part of the
Property;     ii.   structure(s) under construction;     iii.   property
including materials and supplies on site for installation;     iv.   property
including materials and supplies at other locations but intended for use at the
site;     v.   property including materials and supplies in transit to the site
for installation; and

Annex 4 — Page 7

 

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  vi.   temporary structures (e.g., scaffolding, falsework, and temporary
buildings) located at the site.

C. Form: Coverage will be on an “all risk” form, will include theft, flood,
earthquake, and earthquake sprinkler leakage, and be written on a
completed-value basis with no co-insurance provision. No protective safeguard
warranty will be permitted.
D. Amount of Insurance: Real property coverage will be provided in an amount
equal at all times to the full replacement value, exclusive of land, foundation,
footings, excavations and grading.
E. Deductibles. Deductibles applicable to the Builder’s Risk Policy will not
exceed the following:

         
i.
  All Risks of Direct Damage, Per Occurrence, except flood and earthquake  
$50,000
 
       
ii.
  Delayed Opening Waiting Period   30 Days
 
       
iii
  Flood, Per Occurrence   $50,000 or excess of NFIP if in Flood Zone A
 
       
iv
  Earthquake and Earthquake Sprinkler Leakage, Per Occurrence   5% of total
project value at risk at the time of the loss, subject to a minimum of $100,000

F. Termination of Coverage: The termination of coverage provision will be
endorsed to permit occupancy of the covered property being constructed. Further,
NAI will maintain or cause the insurance to be maintained in effect, unless
otherwise provided for the Operative Documents, until the earliest of the
following dates:

  i.   the date on which all persons and organizations who are insureds under
the policy agree that it is terminated;     ii.   any termination or expiration
of the Lease upon the Designated Sale Date, which is the date upon which final
payment is expected under the Operative Documents; or

Annex 4 — Page 8

 

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  iii.   the date on which the insurable interests in the Covered Property of
all insureds other than NAI have ceased;

G. Required Endorsements and Minimum Sublimits:

         
i.
  Additional Expenses Due To Delay In Completion Project, including but not
limited to financing costs including interest expenses, insurance expenses,  
Included with specific sublimits (based on an estimated 12 period of indemnity)
as follows:
 
  professional fees and taxes;    
 
      $1,900,000 — construction financing interest.
 
       
 
      $380,000 — real estate taxes
 
       
 
      $204,000 — insurance premiums
 
       
ii.
  Agreed Value;   No coinsurance
 
       
iii.
  Boiler & Machinery on a Comprehensive Basis;   Included without sublimit
 
       
iv.
  Damage Resulting From or Arising From Error, Omission or Deficiency In Design,
Specifications, Workmanship or Materials, Including Collapse;   Included without
sublimit
 
       
v.
  Debris Removal Additional Limit; Debris Removal   $4,000,000 sublimit
 
       
vi.
  Earthquake including Sprinkler Leakage;   $10,000,000 sublimit
 
       
vii.
  Expediting Expenses;   $50,000 sublimit
 
       
viii.
  Flood — Annual Aggregate including Earthquake Sprinkler Leakage;   $10,000,000
sublimit

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ix.
  Freezing;   $100,000 sublimit
 
       
x.
  Notice of Cancellation or Reduction;   Consistent with Part B.1.E.5 above
 
       
xi.
  Occupancy Clause;   Consistent with Part B.5.F above
 
       
xii.
  Demolition /Increased Cost of Cost of Construction — Per Occurrence  
$1,000,000 sublimit
 
       
xiii.
  Pollutant Clean-Up and Removal, provided that such condition ensues following
a loss from a covered peril;   Included in Debris Removal
sublimit
 
       
xiv.
  Preservation of Property;   Included without sublimit
 
       
xv.
  Repair, Replace or Re-erect Valuation Clause;   Included without sublimit
 
       
xvi.
  Testing;   Included without sublimit
 
       
xvii.
  Waiver of Subrogation.   As required in Part B.1.C above

     6. Evidence of Insurance. NAI will provide confirmation of the insurance
required prior to the Completion Date in accordance with the following:
A. Provision of Evidence. Evidence of the insurance coverage required to be
maintained by NAI, represented by certificates of insurance or policies and
endorsements issued by the insurance company or its legal agent, must be
furnished to BNPPLC prior to the Effective Date. New certificates of insurance
or policies and endorsements will be provided to BNPPLC prior to or concurrent
with the termination date of the current certificates of insurance or policies
and endorsements.
B. Form:

         
 
  i   The Builders Risk Insurance will be evidenced by ACORD form 28, “Evidence
of Property Insurance”, completed in a manner satisfactory to BNPPLC to show
compliance with the requirements of this Annex. To the extent requested by
BNPPLC, copies of endorsements to such insurance must be attached to such form.

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  ii.   All liability insurance required herein will be evidenced by ACORD form
25, “Certificate of Insurance”, in each case completed in a manner satisfactory
to BNPPLC to show compliance with the requirements of this Annex. To the extent
requested by BNPPLC, copies of endorsements to this insurance must be attached
to such form.

C. Specifications: Such certificates of insurance or policies and endorsements
will specify:

         
 
  i.   BNPPLC as a certificate holder with correct mailing address as provided
by BNPPLC.
 
       
 
  ii.   Insured’s name, which must match that on the Agreement to which this
Annex is attached.
 
       
 
  iii.   Insurance companies affording each coverage, policy number of each
coverage, policy dates of each coverage, all coverages and limits described
herein, and signature of authorized representative of insurance company.
 
       
 
  iv.   Producer of the certificate with correct address and phone number
listed.
 
       
 
  v.   Additional or named insured status of BNPPLC as required by this Annex.
 
       
 
  vi.   Aggregate limits per location (except as to the umbrella liability
insurance) required by this Annex.
 
       
 
  vii.   Amount of any deductibles and/or retentions.
 
       
 
  viii.   Cancellation, nonrenewal and reduction in coverage notification
consistent with Part B.1.E.5 above. Additionally, NAI will endeavor in good
faith to cause any insurer issuing to BNPPLC a certificate on ACORD form 25 to
delete the words “endeavor to” and “but failure to mail such notice shall impose
no obligation or liability of any kind upon Company, it agents or
representatives” from the cancellation provision of such form.
 
       
 
  ix.   Primary status as required by this Annex.
 
       
 
  x.   Waivers of subrogation as required by this Annex.

D. Required Endorsements. A copy of each required endorsement will, if and as
requested by BNPPLC from time to time, also be provided.
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E. Commencement of Construction. Commencement of construction without provision
of the required certificate of insurance and/or required policies and
endorsements, or without compliance with any other provision of this Annex or
the Agreement to which it is attached, will not constitute a waiver by BNPPLC of
any rights. BNPPLC will have the right, but not the obligation, of prohibiting
NAI or any Contractor from performing any work until such certificate of
insurance and/or required policies and endorsements are received by BNPPLC.
     7. Contractor’s Insurance: To the extent, if any, necessary to preserve or
provide liability coverage for BNPPLC and other Interested Parties with regard
to operations performed on or about the Property prior to the Completion Date,
NAI will require Contractors to provide (or will provide the coverage on behalf
of Contractors) similar to that required of NAI by the foregoing provisions of
this Annex. In the event NAI requires any Contractor to maintain Construction
Period Policies necessary to comply with these insurance requirements, NAI will
also require such Contractor to provide and maintain certificates of insurance
containing provisions as described herein (modified to recognize the Contractor,
rather than NAI, as named insured) enumerating, among other things, the waivers
of subrogation, additional or named insured status, and primary liability as
required herein; and in such event NAI will cause the Contractor to make those
insurance certificates available to BNPPLC upon request.
C. PROVISIONS APPLICABLE AFTER THE COMPLETION DATE.
     1. Liability Insurance: After the Completion Date and throughout the Term
of the Lease, NAI must maintain commercial general liability insurance against
claims for bodily injury, death, advertising injury and property damage
occurring in or upon or resulting from any occurrence in or upon the Property
under one or more insurance policies, all in such amounts, with such insurance
companies and upon such terms and conditions (including self-insurance, whether
by deductible, retention, or otherwise) as are consistent with NAI’s normal
insurance practices in the United States. In any event, policies under which NAI
maintains such liability insurance must provide, by endorsement or otherwise,
that BNPPLC and other Interested Parties are also insured thereunder against
such claims with coverage that is not limited by any negligence or allegation of
negligence on their part and with coverage that is primary, not merely excess
over or contributory with the other commercial general liability coverage they
may themselves maintain.
     2. Property Insurance: After the Completion Date and throughout the Term of
the Lease, NAI must keep all Improvements (including all alterations, additions
and changes made to the Improvements) insured against fire and other casualty
under one or more property insurance policies, all in such amounts, with such
insurance companies and upon such terms and conditions (including
self-insurance, whether by deductible, retention, or otherwise) as are
consistent with NAI’s normal insurance practices in the United States. In any
event, policies under which NAI
Annex 4 — Page 12

 

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maintains such insurance must:

         
 
  i.   show BNPPLC as an additional insured as its interest may appear; and
 
       
 
  ii   provide that the protection afforded to BNPPLC thereunder is primary
(such that any policies maintained by BNPPLC itself will be excess, secondary
and noncontributing) and is not to be reduced or impaired by acts or omissions
of NAI or any other beneficiary or insured.

     3. Evidence of Insurance. NAI will provide confirmation of the insurance
required after the Completion Date in accordance with the following:
A. Provision of Evidence. Evidence of the insurance coverage required to be
maintained by NAI, represented by certificates of insurance, evidence of
insurance, and endorsements issued by the insurance company or its legal agent,
must be furnished to BNPPLC prior to the Completion Date. New certificates of
insurance, evidence of insurance, and endorsements will be provided to BNPPLC
prior to or concurrent with the termination date of the current certificates of
insurance, evidence of insurance, and endorsements.
B. Form:

         
 
  i   The property insurance will be evidenced by ACORD form 28, “Evidence of
Property Insurance”, completed in a manner reasonably satisfactory to BNPPLC to
show compliance with the requirements of this Annex.
 
       
 
  ii.   The liability insurance will be evidenced by ACORD form 25, “Certificate
of Insurance”, in each case completed in a manner reasonably satisfactory to
BNPPLC to show compliance with the requirements of this Annex. To the extent
requested by BNPPLC, copies of endorsements giving additional insured status to
BNPPLC and other Interested Parties must be attached to such form.

C. Specifications: Such certificates of insurance or policies and endorsements
will specify:

         
 
  i.   BNPPLC as a certificate holder with correct mailing address as provided
by BNPPLC.
 
       
 
  ii.   Insured’s name, which must match that on the Agreement to which this
Annex is attached.

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  iii.   Insurance companies affording each coverage, policy number of each
coverage, policy dates of each coverage, all coverages and limits described
herein, and signature of authorized representative of insurance company.
 
       
 
  iv.   Producer of the certificate with correct address and phone number
listed.
 
       
 
  v.   Additional or named insured status of BNPPLC as required by this Annex.
 
       
 
  vi.   Aggregate limits.
 
       
 
  vii.   Amount of any deductibles and/or retentions.
 
       
 
  viii.   Primary status as required by this Annex.
 
       
 
  ix.   Waivers of subrogation as required by this Annex.

Annex 4 — Page 14

 

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Annex 5
Participation Agreement Form
Attached to and made a part of this Annex is a form of Participation Agreement
that may be used by BNPPLC to share risks and rewards of the Operative Documents
with other parties.

 

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PARTICIPATION AGREEMENT

BETWEEN

BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)

AND
Banks or Other Financial Institutions
Designated as Participants in this Agreement
(“Participants”)
                                        , 200                    
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PARTICIPATION AGREEMENT
     This PARTICIPATION AGREEMENT (this “Agreement”), dated as of
                                        , 200                    , is made by
and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”), a Delaware corporation,
and ***[PARTICIPANTS’ NAMES] (“Participants”).
RECITALS
     Contemporaneously with the execution of this Agreement, BNPPLC and Network
Appliance, Inc. (“NAI”), a Delaware corporation, are executing a Common
Definitions and Provisions Agreement dated as of
                                        , 200                     (the “Original
Effective Date”) (the “Common Definitions and Provisions Agreement”). As used in
this Agreement, capitalized terms defined in the Common Definitions and
Provisions Agreement and not otherwise defined in this Agreement are intended to
have the respective meanings assigned to them in the Common Definitions and
Provisions Agreement.
     At the request of NAI, BNPPLC is executing a Ground Lease to acquire from
NAI a leasehold estate of less than 35 years in the Land and any existing
Improvements on the Land contemporaneously with the execution of this Agreement.
     Also contemporaneously with the execution of this Agreement, BNPPLC and NAI
are executing a Construction Management Agreement (the “Construction Management
Agreement”), a Lease Agreement (the “Lease”) and a Closing Certificate and
Agreement (the “Closing Certificate”), all dated as of the Original Effective
Date. Pursuant to the Construction Management Agreement, BNPPLC is agreeing to
provide funding for the construction of new Improvements. When the term of the
Lease commences, the Lease will cover all Improvements on the Land.
     Pursuant to a Purchase Agreement dated as of the Original Effective Date
(the “Purchase Agreement”) between BNPPLC and NAI, NAI will have the right to
purchase, among other things, BNPPLC’s leasehold estate under the Ground Lease
on and subject to the terms and conditions set forth in the Purchase Agreement.
     By this Agreement, the parties desire to evidence the Participants’
agreement to participate with BNPPLC in certain of the risks and rewards to
BNPPLC of the Common Definitions and Provisions Agreement, the Ground Lease, the
Construction Management Agreement, the Lease, the Closing Certificate and the
Purchase Agreement (collectively, the “Operative Documents”), which
participation is to be accomplished through the exchange of promises to make
payments computed by reference to the sums paid or received by BNPPLC from time
to time pursuant to the Operative Documents, all as more particularly provided
below.
Annex 5 — Page 3

 

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AGREEMENTS
     Participants agree to participate with BNPPLC in, and BNPPLC agrees to
share with the Participants, the risks and rewards of the Operative Documents
upon and subject to the following terms, provisions, covenants, agreements and
conditions:
16. Additional Definitions. As used in this Agreement, capitalized terms defined
above have the respective meanings assigned to them above; as indicated above,
capitalized terms that are defined in the Common Definitions and Provisions
Agreement and that are used but not otherwise defined have the respective
meanings assigned to them in the Common Definitions and Provisions Agreement;
and, the following terms have the following respective meanings:
     (a) “Anticipated Advances” means (1) the Initial Funding Advance and other
amounts (other than Commitment Fees and Carrying Costs) that are added to the
Outstanding Construction Allowance from time to time pursuant to Paragraph 3 of
the Construction Management Agreement, and (2) advances of funds by or on behalf
of BNPPLC to or on behalf of NAI pursuant to Paragraph 4 of the Construction
Management Agreement. Any other amounts paid out-of-pocket by BNPPLC from time
to time that BNPPLC is entitled to treat as Construction Advances pursuant to
the express terms of the Construction Management Agreement (see subparagraphs
2(G)(2) and 8(A) of the Construction Management Agreement) will constitute
Protective Advances, not Anticipated Advances, for purposes of this Agreement.
     (b) “Back to Back Construction-Period Indemnity Claim” means a claim by
BNPPLC against NAI for payment of a Covered Construction Period Loss that BNPPLC
may assert under the Construction Management Agreement in order to cover or
reimburse a claim made against BNPPLC itself by another Interested Party because
of Uncovered Construction-Period Participant Losses suffered by the other
Interested Party.
     (c) “Back to Back Construction-Period Indemnity Payment” means a payment
made to BNPPLC by or on behalf of NAI in satisfaction of a Back to Back
Construction-Period Indemnity Claim.
     (d) “Bank Specific Lease Charges” means payments made to BNPPLC by or on
behalf of NAI for the account of a Participant or any other Interested Party
under subparagraph 5(B) of the Lease. Bank Specific Lease Charges include, for
example, payments made to compensate a Participant for an increase in costs
related to advances made by the Participant hereunder and attributable to a
Banking Rules Change.
     (e) “Base Rent” means amounts payable as Base Rent under and as defined in
the Lease, except that each such amount payable for any period during which a
Fixed Rate Lock
Annex 5 — Page 4

 

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remains in effect be adjusted, for purposes of calculating the payments required
this Agreement, to equal the Base Rent that would have been required for such
period under the Lease if such Fixed Rate Lock had not been in effect and a one
month LIBOR Period Election had been in effect. In no event, however, will any
Fixed Rate Settlement Amounts be included in or deducted from amounts that
constitute Base Rent for purposes of this Agreement.
     (f) “Critical Event” means any of the following:
     (i) any failure by NAI to purchase BNPPLC’s interest in the Property or to
cause an Applicable Purchaser to purchase BNPPLC’s interest in the Property when
required under the Purchase Agreement;
     (ii) any failure by NAI to pay Base Rent which continues for 10 days; or
     (iii) any Issue 97-10/Event; or
     (iv) any delivery by NAI of a Pre-lease Force Majeure Event Notice; or
     (v) any Termination of NAI’s Work which may occur as provided in the
Construction Management Agreement prior to the Completion Date.
     (g) “Critical Remedy” means BNPPLC’s right to do any of the following:
(a) file a lawsuit against NAI to enforce the Operative Documents; (b) send a
notice to terminate NAI’s rights and obligations to continue Work as provided in
subparagraph 7(C) of the Construction Management Agreement; and (c) make the
election to accelerate the Designated Sale Date as described in the definition
thereof in the Common Definitions and Provisions Agreement.
     (h) “Defaulting Participant” means any Participant that has failed to make
a payment when due to BNPPLC equal to the Participant’s Percentage of an
Anticipated Advance as required by subparagraph 3(B) below.
     (i) “Deferred Construction-Period Compensation” means any additional amount
paid to BNPPLC pursuant to the Purchase Agreement only because of — and which
BNPPLC would not have been paid or allowed to retain but for — Losses that are
included in any Balance of Unpaid Construction Period Losses, but that do not
qualify as Protective Advances hereunder and do not consist of reductions in
Carrying Costs or Base Rent resulting from a Pre-lease Force Majeure Loss.
(Should the Property not be sold by BNPPLC until after NAI no longer has any
right to purchase or arrange a purchase by an Applicable Purchaser pursuant to
the Purchase Agreement, sales proceeds — net of sales expenses — will
nevertheless be allocated for purposes of this Agreement among Net Sales
Proceeds, Deferred Construction-Period Compensation and Unrecovered Protective
Advances as if NAI had arranged the sale pursuant to the Purchase
Annex 5 — Page 5

 

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Agreement.)
     (j) “Distributable Payments” means any payments actually received by BNPPLC
under the Operative Documents as (or in satisfaction of NAI’s obligations for)
any of the following or interest on past due amounts thereof:
     (i) Base Rent;
     (ii) Qualified Prepayments (including 97-10/Prepayments);
     (iii) Bank Specific Lease Charges;
     (iv) Back to Back Construction-Period Indemnity Payments;
     (v) any Supplemental Payment; and
     (vi) Net Sales Proceeds and any Deferred Construction-Period Compensation
that BNPPLC excluded from sales proceeds received by it for purposes of
calculating Net Sales Proceeds.
     (k) “Late Payment Rate” means (a) for each day (other than as set forth in
clause (b) of this sentence) the Fed Funds Rate or (b) for the purpose of
computing interest on past due payments for each day following the fifth day
after such payments first became due, a rate of three percent (3%) per annum in
excess of the Prime Rate then in effect; except that the Late Payment Rate will
not, notwithstanding anything to the contrary herein contained, exceed the
maximum rate of interest permitted by applicable law.
     (l) “Majority” means, at the time any determination thereof is required,
any of the Participants and BNPPLC, the aggregate Percentages of which equal or
exceed sixty-seven percent (67%) of the Percentages of BNPPLC and of all the
Participants then entitled to vote under subparagraph 6(A).
     (m) “Net Cash Flow” means payments actually received by BNPPLC under the
Operative Documents as (or in satisfaction of NAI’s obligations for) Base Rent,
Qualified Prepayments (including 97-10/Prepayments) or a Supplemental Payment or
as interest on past due Base Rent, Qualified Prepayments or a Supplemental
Payment; except that the following will be deducted or excluded from such
payments for purposes of calculating Net Cash Flow: (a) any Deferred
Construction-Period Compensation included in any Supplemental Payment; and
(b) any Unrecovered Protective Advances for which any Participant has not fully
reimbursed its Percentage to BNPPLC as provided in subparagraph 3(C). By
deducting any Unrecovered Protective Advance in the calculation of Net Cash
Flow, BNPPLC will be considered to have
Annex 5 — Page 6

 

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“recovered” such Protective Advance for purposes of calculating “Excess
Reimbursements” under and as defined in subparagraph 3(C). Further, if BNPPLC
deducts Unrecovered Protective Advances in the calculation of Net Cash Flow, but
later receives payment from NAI (in excess of other amounts then due from NAI)
for the same Protective Advances, such payment to BNPPLC by NAI will also
constitute Net Cash Flow for purposes of this Agreement.
     (n) “Net Sales Proceeds” means, subject to the deductions and exclusions
described below in this definition:
     (1) all payments actually received by BNPPLC under the Purchase Agreement
as (or in satisfaction of NAI’s or an Applicable Purchaser’s obligations for)
the purchase price for BNPPLC’s interest in Property or in Escrowed Proceeds;
and
     (2) if the Property is not sold pursuant to the Purchase Agreement on the
Designated Sale Date, then all rents and sales, condemnation and insurance
proceeds actually received by BNPPLC (other than sales proceeds paid or to be
paid by BNPPLC to NAI pursuant to Paragraph 3(E) of the Purchase Agreement) from
any sale or lease after the Designated Sale Date of any interest in, or because
of any subsequent taking or damage to, the Property.
For purposes of calculating Net Sales Proceeds, the following will be deducted
or excluded from such payments (without duplication of any item): (i) any excess
sales proceeds that BNPPLC is required by the Purchase Agreement to pay over to
NAI; (ii) any Deferred Construction-Period Compensation; (iii) any amounts
applied by BNPPLC to pay, or received by BNPPLC as reimbursement for, bona fide
costs of a sale of the Property; and (iv) any other Unrecovered Protective
Advances for which any Participant has not fully reimbursed its Percentage to
BNPPLC as provided in subparagraph 3(C). Without limiting the foregoing, after
any Designated Sale Date upon which neither NAI nor an Applicable Purchaser
purchases BNPPLC’s interest in the Property, BNPPLC may deduct the following as
Unrecovered Protective Advances: (x) ad valorem taxes, (y) insurance premiums;
and (z) other Losses of every kind suffered or incurred by BNPPLC (other than
general overhead) with respect to the ownership, operation or maintenance of the
Property after the Designated Sale Date, other than Unrecovered Protective
Advances for which all Participants have paid BNPPLC their respective
Percentages thereof as required by subparagraph 3(C). By deducting any
Unrecovered Protective Advances in the calculation of Net Sales Proceeds, BNPPLC
will be considered to have “recovered” such Protective Advances for purposes of
calculating Excess Reimbursements under and as defined in subparagraph 3(C).
Also, if BNPPLC deducts Unrecovered Protective Advances in the calculation of
Net Sales Proceeds, but later receives payment from NAI (in excess of other
amounts then due from NAI) for the same Protective Advances, such payment to
BNPPLC by NAI will constitute Net Sales Proceeds for purposes of this Agreement.
Annex 5 — Page 7

 

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     (o) “Participants” means [Participants’ Names] and each of the other
undersigned parties designated as Participants in the signature pages to this
Agreement, and any other financial institutions which may hereafter become
parties to this Agreement (by joining with BNPPLC in completing and executing a
Participation Agreement Supplement).
     (p) “Participation Agreement Supplement” means a Participation Agreement
Supplement in substantially the form attached hereto as Exhibit A, completed and
executed by BNPPLC and a Participant, adding the Participant as a party to this
Agreement and to the Agency Agreement, changing a Participant’s Percentage or
removing a Participant as a party to this Agreement.
     (q) “Participation Amount” of BNPPLC or any Participant means the
outstanding balance from time to time of the total investment made by BNPPLC
under the Operative Documents or by the applicable Participant hereunder, as
determined by BNPPLC. The Participation Amount of BNPPLC and each Participant
will equal its share of the outstanding principal balance that would be due from
NAI from time to time if BNPPLC had made a loan (and the Participants had
participated in the loan) to NAI for NAI’s construction of improvements
authorized by the Construction Management Agreement, instead of BNPPLC’s having
acquired the Property itself and having leased the same to NAI as provided in
the Operative Documents. Absent a failure by any Participant to make a payment
required by subparagraph 3(B) or some other unexpected occurrence, it is
expected that (a) the Participation Amounts of BNPPLC and the Participants will
always be in proportion to their respective Percentages set forth in Schedule 1,
and (b) the total Participation Amounts of BNPPLC and all Participants on and
prior to the Designated Sale Date will equal the Lease Balance computed from
time to time as described in the Common Definitions and Provisions Agreement.
     (r) “Percentage” of each Participant means, subject to change as provided
in subparagraph 4(A) and to change by a Participation Agreement Supplement, the
percentage designated as the Participant’s “Percentage” in Schedule 1.
“Percentage” of BNPPLC means a percentage that, at the time a determination of
such Percentage is required hereunder, is equal to 100% less the sum of the
Percentages of all the Participants.
     (s) “Protective Advances” means any payments, other than Anticipated
Advances or Excluded Taxes, made by or on behalf of BNPPLC at any time or from
time to time because of, arising out of or related to, in whole or in part:
(1) the Property or the construction, protection, preservation, operation,
ownership or sale thereof; (2) any of the Operative Documents or the
transactions contemplated therein; or (3) BNPPLC’s status as a party to any of
the Operative Documents or anything done by BNPPLC to enforce the obligations of
NAI under the Operative Documents (whether done upon BNPPLC’s own initiative or
upon the direction of the Majority). Protective Advances will include any and
all payments by BNPPLC (including those paid to attorneys, accountants, experts
and other advisors) for which NAI is obligated to indemnify or
Annex 5 — Page 8

 

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reimburse BNPPLC by ***Paragraph 5 of the Lease or would be so obligated if the
Term of Lease had commenced.
     (t) “Uncovered Construction-Period Participant Loss” means a Loss incurred
or suffered by a Participant (1) for which, if BNPPLC must pay or reimburse such
Loss to the Participant, BNPPLC can in turn require payment or reimbursement
from NAI under the indemnity against Covered Construction Period Losses set
forth in Construction Management Agreement (e.g., Losses arising because of
fraud, misapplication of funds, illegal acts, or willful misconduct on the part
of the NAI or its employees or agents or any other party for whom NAI is
responsible), and (2) for which the Participant is not otherwise indemnified
directly by or compensated by NAI or by insurance maintained by NAI.
     (u) “Unrecovered Protective Advances” means Protective Advances that have
not been repaid to BNPPLC by or on behalf of NAI and have not otherwise been
previously recovered by BNPPLC through deductions from Net Cash Flow or Net
Sales Proceeds as provided in the definitions of those terms above.
17. Payments From BNPPLC to Each Participant.
     (a) Payments Computed by Reference to Net Cash Flow and Net Sales Proceeds.
Upon the actual receipt of any Net Cash Flow, Net Sales Proceeds or interest
thereon, BNPPLC will pay each Participant an amount equal to such Participant’s
Percentage times such Net Cash Flow, Net Sales Proceeds or interest, as the case
may be.
     (b) Payments Computed by Reference to Bank Specific Lease Charges. If
BNPPLC actually receives any Bank Specific Lease Charges (or interest thereon)
for the account of a particular Participant, then BNPPLC promises to promptly
make a payment to such Participant equal to such Bank Specific Lease Charges (or
interest thereon). If requested by any Participant, BNPPLC will make a demand
upon NAI for payment of any Bank Specific Lease Charges due for the account of
such Participant.
     (c) Payments Computed by Reference to Back to Back Construction-Period
Indemnity Payments. If BNPPLC actually receives any Back to Back
Construction-Period Indemnity Payment (or interest thereon) in satisfaction of a
Back to Back Construction-Period Indemnity Claim asserted for Losses for which
BNPPLC is obligated to a particular Participant, then BNPPLC promises to make a
payment to such Participant equal to such Back to Back Construction-Period
Indemnity Payment (or interest thereon). If a Participant incurs or suffers an
Uncovered Construction-Period Participant Loss, BNPPLC must compensate such
Participant for the Uncovered Construction-Period Participant Loss; subject to
the condition, however, that BNPPLC’s obligation to so compensate a Participant
will be satisfied only from any Back to Back Construction-Period Indemnity
Payments received by BNPPLC on account of such
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obligation, it being understood that BNPPLC will have no personal liability for
any such obligation.
     (d) Payments Computed by Reference to Deferred Construction-Period
Compensation. If BNPPLC actually receives any Deferred Construction-Period
Compensation, and if any Participant suffered Losses included in the Unpaid
Balance of Construction Period Losses for which such Deferred
Construction-Period Compensation was paid, BNPPLC promises to pay such
Participant a fraction of such Deferred Construction-Period Compensation. The
numerator of the fraction will equal the Losses suffered by such Participant
(and interest thereon) that are included in the Balance of Unpaid
Construction-Period Losses as of the Designated Sale Date, and the denominator
will equal the total Losses (and interest thereon) — other than Protective
Advances and reduced Carrying Costs or Commitment Fees (and interest thereon) —
which are included in the Balance of Unpaid Construction Period Losses as of the
Designated Sale Date.
     (e) Timing; Manner of Payment. Each payment required of BNPPLC by this
Article 2 must be made prior to 3:00 p.m., New York time, on the same day that
BNPPLC actually receives the corresponding Distributable Payment (in good
funds), if BNPPLC’s receipt of the corresponding Distributable Payment occurs
prior to 2:00 P.M., New York time; if, however, BNPPLC’s receipt of the
Distributable Payment (in good funds) occurs on any day after 2:00 p.m., New
York time, the payments required from BNPPLC to the Participants will not be due
until 12:00 noon, New York time, on the next Business Day. All payments from
BNPPLC to the Participants will be by transfer of federal funds pursuant to the
wiring instructions set forth in Schedule 1. Each payment owing to a Participant
by BNPPLC will bear interest from the date it is due until it is paid by BNPPLC
at the Late Payment Rate calculated on the basis of a 360-day year. Any payment
by BNPPLC to a Participant after the time of day specified herein for such
payment will be deemed not paid until the next following Business Day for
purposes of this Agreement.
     (f) Meaning of Actually Received. As used herein with respect to payments,
“actually received” and words of like effect will include not only payments made
directly from NAI or any Applicable Purchaser, but also amounts paid by others
on NAI’s behalf, amounts realized by way of setoff, amounts realized upon the
disposition of collateral under any documents that may be given from time to
time to secure NAI’s obligations under the Lease or Purchase Agreement (net of
the costs of disposition and further net of any amounts that must be returned to
NAI or any third party having an interest in such collateral), and the fair
market value of any property or services accepted in lieu of a cash payment
(though it is understood that nothing herein contained will require BNPPLC to
accept property or services in lieu of a cash payment required by the Operative
Documents and that BNPPLC will not agree to accept property or services in lieu
of any cash Distributable Payment without the Participants’ prior written
consent). Also, with respect to Base Rent included in the definition of Net Cash
Flow,
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any Base Rent that BNPPLC receives as calculated in the Lease during a Fixed
Rate Lock Period will be deemed the “actual receipt” of Base Rent as adjusted in
accordance with the definition of “Base Rent” set forth above. The phrase
“actually received” will not, however, include amounts received by BNPPLC from
any of the Participants or from any affiliate of BNPPLC unless the context
otherwise indicates. Finally, if payments due to BNPPLC from NAI are reduced
only because of credits attributable to a reduction of BNPPLC’s taxes not
subject to indemnification by NAI, as described in subparagraph 4(C)(4) of the
Lease, then the payments that BNPPLC would have received but for the credits
will be considered as having been actually received by BNPPLC for purposes of
this Agreement.
18. Payments From the Participants to BNPPLC.
     (a) Initial Funding Advance. Each of the original Participants joining in
the execution of this Agreement promises to pay to BNPPLC, contemporaneously
with the execution of this Agreement, an initial payment as set forth below such
Participant’s name on Schedule 1, equal to the Participant’s Percentage times
the outstanding Lease Balance as of the date hereof.
[***DRAFTING NOTE: This provision assumes that the effective date of this
Agreement will coincide with the first day of a new Base Rent Period or
Construction Period. If that assumption is not correct, an adjustment should be
made to address accrued Base Rent not yet paid or Carrying Costs not yet
capitalized.]
BNPPLC will have no obligation hereunder to any of the original Participants
that fails to pay such initial payment. Such initial payment will be due no
later than 12:00 noon, New York time, on the effective date of this Agreement.
     (b) Future Advances. In the event any remaining Anticipated Advances may be
required of BNPPLC pursuant to the Construction Management Agreement after the
date of this Agreement:
     (i) General. Subject to the limitation set forth in subparagraph 3(B)(3),
each Participant promises to make payments to BNPPLC equal to such Participant’s
Percentage (as such Percentage may be adjusted from time to time pursuant to
subparagraph 4(A)) times the total amount of each such Anticipated Advance.
     (ii) Timing. Before 12:00 noon, New York time, on the third Business Day
prior to any date on which BNPPLC expects to make a payment of an Anticipated
Advance as provided in Paragraph 4 of the Construction Management Agreement,
BNPPLC will notify the Participants of the amount of such payment, and each
Participant must pay to BNPPLC such Participant’s Percentage times such amount
prior to 12:00
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noon, New York time, on such date. The failure of any Participant to make a
payment required by this subparagraph 3(B) will, for purposes of this Agreement,
be deemed to continue until the Participant actually pays all past due amounts
required by this subparagraph 3(B), together with interest thereon at the Late
Payment Rate.
     (iii) Limitation on Advances by Participant. Notwithstanding anything
herein to the contrary or any adjustment to any Participant’s Percentage
pursuant to subparagraph 4(A), the total of all payments required of any
Participant to BNPPLC by this subparagraph 3(B) (excluding interest on past due
payments required by subparagraph 3(B)(2)) because of Anticipated Advances (in
contrast to Protective Advances) will not exceed the amount that would cause
such Participant’s Participation Amount to exceed the Participation Amount
specified for such Participant in Schedule 1.
     (c) Protective Advances.
     (i) General. If NAI fails to pay or reimburse any Protective Advance to
BNPPLC within ten days after BNPPLC makes a demand or request therefor, BNPPLC
may notify the Participants of such failure. Promptly after receipt of any such
notice, each Participant must pay to BNPPLC an amount equal to such
Participant’s Percentage times the Protective Advance described in the notice,
EVEN IF THE PROTECTIVE ADVANCE WOULD NOT HAVE BEEN PAID BUT FOR ANY ACTUAL OR
ALLEGED NEGLIGENCE OF BNPPLC OR ITS AFFILIATES OR REPRESENTATIVES AND EVEN IF
THE PROTECTIVE ADVANCE WOULD NOT HAVE BEEN PAID BUT FOR ANY ENVIRONMENTAL LOSSES
OR OTHER MATTERS OR CIRCUMSTANCES FOR WHICH BNPPLC MAY BE STRICTLY LIABLE. After
any Participant has paid its respective Percentage times the Protective Advance
to BNPPLC, BNPPLC must pay to such Participant an amount equal to its Adjusted
Percentage (as defined below) times any subsequent Excess Reimbursement (as
defined below) or interest thereon actually received by BNPPLC for such
Protective Advance. As used in this Agreement the “Adjusted Percentage” of any
Participant will equal (i) such Participant’s Percentage, divided by (ii) the
sum of BNPPLC’s Percentage and the Percentages of all Participants who have paid
BNPPLC their respective shares of the Protective Advance at issue. As used in
this Agreement, the term “Excess Reimbursement” will mean, for the Protective
Advance at issue, (A) amounts reimbursed or paid by NAI to (or otherwise
recovered by) BNPPLC on account of such Protective Advance, less (B) (i) the
total amount of such Protective Advance, times (ii) the Percentages of any
Participants that have not paid BNPPLC their respective Percentages of such
Protective Advance.
     (ii) Exceptions. Notwithstanding the foregoing, no Participant will be
required to make any payment pursuant to this subparagraph 3(C) related to a
Protective
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Advance that is paid only because of a transfer or assignment by BNPPLC of its
right to receive Distributable Payments or its rights and interests in and to
the Property, the Operative Documents or this Agreement to BNPPLC’s Affiliates.
Further, nothing in this subparagraph 3(C) will be construed to require a
payment by a Participant for that portion or percentage, if any, of a Protective
Advance required only because of (and attributed by any applicable principles of
comparative fault to): (a) conduct of BNPPLC or a Representative of BNPPLC that
has been determined to constitute gross negligence or wilful misconduct in or as
a necessary element of a final judgment rendered against BNPPLC or such
Representative by a court with jurisdiction to make such determination; (b) any
representation made by BNPPLC in the Operative Documents that is false in any
material respect and that BNPPLC knew was false at the time of BNPPLC’s
execution of the Operative Documents; or (c) Liens Removable by BNPPLC. As used
in this Agreement, “gross negligence” of BNPPLC will not include any negligent
failure of BNPPLC to act when the duty to act would not have been imposed but
for BNPPLC’s status as owner of the Property or as a party to the Operative
Documents or this Agreement.
     (d) Method of Payment. All payments made by the Participants to BNPPLC will
be made by transfer of federal funds to BNPPLC pursuant to the wiring
instructions for BNPPLC set forth on Schedule 1. Each payment owing to BNPPLC by
any Participant must be paid to BNPPLC on the date specified herein or, if not
specified, on demand and will bear interest from the date due until the date
paid by the Participant at the Late Payment Rate calculated on the basis of a
360-day year. Any payment by a Participant to BNPPLC after the time of day
specified herein for such payment will be deemed not paid until the next
following Business Day for purposes of this Agreement.
19. Other Adjustments, Deductions and Investments.
     (a) Defaulting Participants.
     (i) Adjustments Because of Defaulting Participants. If any Anticipated
Advance may be required of BNPPLC after the date of this Agreement, with respect
to which any Defaulting Participant fails to make the payment required by
subparagraph 3(B), the other Participants will nonetheless be required to make
the payments to BNPPLC required by subparagraph 3(B). Further, in such event:
     A BNPPLC may reduce any Defaulting Participant’s Percentage as needed to
prevent the Defaulting Participant from receiving a share of Net Cash Flow or
Net Sales Proceeds that is in excess of the percentage computed by dividing the
Participation Balance of such Defaulting Participant by the total Participation
Balances of BNPPLC and all Participants collectively from time to
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time. Such reduction in the Defaulting Participant’s Percentage will not cure
such Participant’s default hereunder nor constitute BNPPLC’s sole remedy for
such default, it being understood that other remedies provided herein or
available at law or in equity will be in addition to any such reduction.
     B Without limiting BNPPLC’s other remedies hereunder, for purposes of
computing payments that would otherwise be required to a Defaulting Participant
because of BNPPLC’s receipt of Net Cash Flow, BNPPLC may deduct from any Net
Cash Flow actually received by BNPPLC the amount by which such Net Cash Flow was
increased by Commitment Fees that accrued after the date the Defaulting
Participant failed to make any payment required by subparagraph 3(B) and before
the date upon the Defaulting Participant completely cured any such failure.
     (ii) Defaulting Participant’s Cure. After a failure to make a payment
required by subparagraph 3(B), a Defaulting Participant may cure such failure by
paying to BNPPLC all or part of such payment and interest thereon at the Late
Payment Rate. In no event, however, will any such failure by a Defaulting
Participant be considered cured before BNPPLC has effectively recovered the
payment, together with such interest, either by reason of payments made to
BNPPLC by the Defaulting Participant or by BNPPLC’s exercise of other remedies
as provided in subparagraph 4(A)(1)(a) or subparagraph 4(B).
     (b) Setoff. In the event that one party to this Agreement has failed to pay
to a second party hereto any amount when due hereunder, the second party may
deduct such amount and interest thereon at the Late Payment Rate from any
payments due from it under this Agreement to the first party. Without
limitation, BNPPLC may setoff amounts owed to it by any Defaulting Participant
against any termination fee payable to such Defaulting Participant pursuant to
subparagraph 6(D) below if BNPPLC elects to reduce such Defaulting Participant’s
Percentage to zero as provided in subparagraph 6(D).
     (c) Sharing of Payments. Each Participant agrees that if for any reason it
obtains a payment made by or for NAI that reduces any Distributable Payment, and
if such payment will cause such Participant to receive more than it would have
received had such payment been made instead to BNPPLC and generated the payments
by BNPPLC contemplated in this Agreement, then (1) such Participant must
promptly purchase interests in the rights of other parties to this Agreement as
necessary to cause BNPPLC and all Participants to share payments as they
otherwise would have done under this Agreement, and (2) such other adjustments
will be made from time to time as is equitable to ensure that BNPPLC and all
Participants share all payments of (or that operate to reduce) Distributable
Payments as they otherwise would have done under this Agreement. If, however,
the payment received by the purchasing Participant or any part thereof is later
recovered from the purchasing Participant, the purchase provided for in this
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subparagraph will be rescinded, and the price paid by the purchasing Participant
to other parties will be repaid by them to the purchasing Participant to the
extent of such recovery. Also, if the purchasing Participant is required by
court order to pay interest on the payment so recovered, then amounts repaid to
the purchasing Participant by the other parties will be repaid with interest,
computed in the same manner as the interest required by the court order. Nothing
in this subparagraph will in any way affect the right of BNPPLC or any
Participant to obtain payment (whether by exercise of rights of banker’s lien,
set-off or counterclaim or otherwise) of indebtedness or obligations other than
those established by this Agreement or any of the Operative Documents.
     (d) Withholding Taxes. BNPPLC may deduct any United States withholding tax
required on payments to a Participant hereunder from such payments, and the
Participant must reimburse BNPPLC for any such taxes BNPPLC is required to pay
and that BNPPLC has not deducted. If BNPPLC is uncertain whether United States
withholding tax is required, BNPPLC may, after notice to the applicable
Participant, deduct the withholding tax except during any period when BNPPLC is
excused from such withholding because of the Participant’s delivery to BNPPLC of
(i) a statement in duplicate conforming to the requirements of United States
Treasury Regulation Section 1.1441-5(b) or (ii) two duly completed copies of
Internal Revenue Service Form W-8BEN or any successor form thereto
(“Form W-8BEN”) relating to the Participant and claiming complete exemption from
withholding tax on all amounts to be received by the Participant pursuant to
this Agreement or (iii) a valid United States Internal Revenue Service Form
W-8ECI or any successor form thereto (“Form W-8ECI”) relating to the Participant
and claiming complete exemption from withholding tax on all amounts to be
received by the Participant pursuant to this Agreement. Any Participant will, if
requested by BNPPLC, deliver to BNPPLC subsequent statements with respect to
such Treasury Regulation or two additional copies of Form W-8BEN or Form W-8ECI,
or the applicable replacement forms, on or before the date that any prior such
delivered statements or forms expire or become obsolete. If any such statement
or form delivered by a Participant to BNPPLC becomes invalid or inapplicable as
to such Participant, such Participant must promptly inform BNPPLC. The
obligations of each Participant pursuant to this subparagraph 4(D) will survive
the termination of this Agreement.
     (e) Order of Application. For purposes of this Agreement, as between BNPPLC
and Participants, BNPPLC will be entitled (but not required) to apply payments
received from NAI under the Operative Documents or from any sale of the Property
or any interest therein or portion thereof to pay or reimburse then outstanding
Unrecovered Protective Advances and Fixed Rate Settlement Amounts (and interest
thereon), if any, regardless of how NAI may otherwise have designated such
payments or may otherwise be entitled to characterize such payments. In
addition, BNPPLC may allocate any such payments to reduce various outstanding
Unrecovered Protective Advances in such order as BNPPLC deems appropriate.
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     (f) Investments Pending Dispute Resolution; Overnight Investments. Whenever
BNPPLC in good faith determines that it does not have all information needed to
determine how payments to the Participants must be made on account of any
Distributable Payments, or whenever BNPPLC in good faith determines that there
is any dispute among the Participants about payments which must be made on
account of Distributable Payments, BNPPLC may choose to defer the payments to
Participants which are the subject of such missing information or dispute.
However, to minimize any such deferral, BNPPLC must attempt diligently to obtain
any missing information needed to determine how payments to the Participants
must be made. Also, pending any such deferral, or if BNPPLC is otherwise
required to invest funds pending distribution to the Participants, BNPPLC must
endeavor to invest the payments at issue. In addition, if BNPPLC receives any
Distributable Payment after 2:00 p.m., New York time, on any day and will not
make payments to Participants in connection therewith until the next Business
Day pursuant to subparagraph 2(E), then BNPPLC must endeavor to invest such
payments overnight; however, BNPPLC will have no liability to the Participants
if BNPPLC is unable to make such investments. Investments by BNPPLC will be in
the overnight federal funds market pending distribution, and the interest earned
on each dollar of principal so invested will be paid to the Person entitled to
receive such dollar of principal when the principal is paid to such Person.
20. Nature of this Agreement.
     (a) No Conveyance. This Agreement is intended to create contractual rights
in favor of each Participant to receive payments from BNPPLC, but it is not
intended to convey or assign to the Participants any interest in the Property or
in the Operative Documents or in the payments to be made to BNPPLC thereunder.
In no event will any Participant exercise or attempt to exercise any right or
remedy of BNPPLC under the Operative Documents. Nothing in this Agreement will
be construed to grant to the Participants any right to enforce NAI’s obligations
under the Operative Documents, nor is in anything in this Agreement to be
construed to all any Participant to collect directly from NAI any payments due
under the Operative Documents. Although BNPPLC’s obligations for payments to the
Participants hereunder will be computed by reference to funds actually received
as Distributable Payments, this Agreement will not be construed as an assignment
of Distributable Payments themselves or any interest therein, it being
understood that (without limiting or expanding the dollar amount of such
obligations) BNPPLC may satisfy such obligations from other funds available to
it, thereby reserving Distributable Payments for payment to other creditors or
for other purposes, as BNPPLC determines in its sole discretion.
     (b) Not a Partnership, Etc. Neither the execution of this Agreement, nor
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the sharing of risks and rewards under the Operative Documents, nor any
agreement to share in profits or losses arising as a result of the transactions
contemplated thereby, is intended to be or to create, and the foregoing will be
construed not to be or to create any partnership, joint venture, or other joint
enterprise between BNPPLC and any Participant. Neither the execution of this
Agreement nor the management and administration of the Operative Documents or
other related documents by BNPPLC, nor any other right, duty or obligation of
BNPPLC under or pursuant to this Agreement is intended to be or to create any
fiduciary relationship between BNPPLC and any Participant.
21. Amendments; Waivers; Exercise of Rights and Remedies Against NAI.
     (a) Limitations Upon the Rights of BNPPLC. Subject to subparagraph 6(C),
but notwithstanding anything else to the contrary in this Agreement:
     (i) BNPPLC will not:
     A without the prior written consent of all Participants, execute any
waiver, modification or amendment of the Operative Documents that would:
(1) increase the Maximum Construction Allowance under the Operative Documents
and thereby increase the amounts the Participants may be required to pay to
BNPPLC hereunder; (2) reduce or postpone (or reasonably be expected to reduce or
postpone) any payments that any Participant would, but for such modification or
amendment, be expected to receive from BNPPLC hereunder (including any extension
of the Designated Sale Date); or (3) except as otherwise expressly contemplated
in the Operative Documents, release BNPPLC’s interest in all or a substantial
part of the Property; or
     B over the written objection of a Majority, affirmatively make a Decision
Not to Sell at a Loss pursuant to the Purchase Agreement.
However, this subparagraph 6(A)(1) will not limit BNPPLC’s right to forebear
from exercising rights against NAI to the extent BNPPLC determines in good faith
that such forbearance is appropriate and is permitted by the following
subsections in this subparagraph 6(A). Upon the direction of the Majority,
BNPPLC will execute any waiver, modification or amendment of the Operative
Documents requested by NAI; subject to the conditions, however, that: (A) the
waiver, modification or amendment is not prohibited by the forgoing provisions
of this Agreement, (B) the waiver, modification or amendment does not
(1) increase the amount BNPPLC may be required to pay to NAI or anyone else, or
(2) reduce or postpone (and cannot reasonably be expected to reduce or postpone)
any payments that BNPPLC would, but for such modification or amendment,
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be expected to receive, or (3) release BNPPLC’s interest in all or a substantial
part of the Property; and (C) BNPPLC is not excused from executing the waiver,
modification or amendment by subparagraph 6(C).
     (ii) BNPPLC will, with reasonable promptness, provide the Participants with
copies of all default notices it sends or receives under the Operative Documents
and notify the Participants of any Event of Default under the Lease or Critical
Event of which BNPPLC is actually aware and of any other matters known to BNPPLC
which, in BNPPLC’s reasonable judgment, are likely to materially affect the
payments any Participant will be required to make or be entitled to receive
under this Agreement, but BNPPLC will not in any event be liable to any
Participant for BNPPLC’s failure to do so unless such failure constitutes gross
negligence or wilful misconduct on the part of BNPPLC.
     (iii) Before exercising any Critical Remedy, or if requested in writing by
any Participant at any time when a Critical Event has occurred and is
continuing, BNPPLC will call a meeting with the Participants to discuss what
action by BNPPLC, if any, is appropriate under the Operative Documents and what
direction, if any, a Majority may give to BNPPLC. The meeting will be scheduled
during regular business hours in the offices of BNPPLC’s Parent in Dallas,
Texas, or another appropriate location in Dallas, Texas, not earlier than five
and not later than twenty Business Days after BNPPLC’s receipt of the written
request from any Participant. BNPPLC will attempt in good faith and with
reasonable diligence to comply with the direction of a Majority if, when a
Critical Event or an Event of Default have occurred and be continuing, a
Majority directs BNPPLC in writing to do the following, as applicable under the
circumstances: (a) send any default notice to NAI required before a Critical
Event can become an Event of Default, or (b) exercise any one or more Critical
Remedies. However, if BNPPLC is not a member of the Majority voting pursuant to
this subparagraph 6(A)(3) in favor of any such action, then BNPPLC may require
that it first receive the written agreement (in form reasonably acceptable to
BNPPLC) of the members of the Majority so voting to indemnify BNPPLC from and
against all costs, liabilities and claims that may be incurred by or asserted
against BNPPLC because of the action the Majority directs BNPPLC to take. In no
event will any Participant instigate any suit or other action directly against
NAI with respect to the Operative Documents or the Property, even if the
Participant would, but for this Agreement, be entitled to do so as a party or
third party beneficiary under the Operative Documents or otherwise.
     (iv) In the event NAI (a) fails to make any 97-10/Prepayment required
pursuant to Paragraph 9 of the Construction Management Agreement following a
termination of the Supplemental Payment Obligation pursuant to subparagraph 5(B)
of the Purchase Agreement, or (b) fails to make any Supplemental Payment when
required to do so
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pursuant to the Purchase Agreement, then BNPPLC must, unless the Participants
otherwise agree in writing, bring suit against NAI to enforce the Operative
Documents in such form as is recommended by reputable counsel no later than
sixty days after the expiration of any applicable cure or grace period given NAI
by the express terms of the Purchase Agreement or other Operative Documents, and
thereafter BNPPLC must prosecute the suit with reasonable diligence in
accordance with the advice of reputable counsel. If BNPPLC acquires the
interests of NAI in any of the Property as a result of such suit or otherwise,
BNPPLC will thereafter proceed with reasonable diligence to sell the Property in
a commercially reasonable manner to one or more bona fide third party purchasers
and will in any event have consummated the sale of the entire Property (through
a single sale of the entire property or a series of sales of parts) within five
years following the date BNPPLC recovers possession of the Property at the best
price or prices BNPPLC believes are reasonably attainable within such time.
Further, after the Designated Sale Date and prior to BNPPLC’s sale of the entire
Property, BNPPLC will retain a property management company experienced in the
area where the Property is located to manage the operation of the Property and
pursue the leasing of any completed improvements which are part of the Property.
BNPPLC will not retain an Affiliate of BNPPLC to act as the property manager
except under a bona fide, arms-length management contract containing
commercially reasonable terms. Further, after the Designated Sale Date and until
BNPPLC sells the Property, BNPPLC will (i) endeavor in good faith to maintain,
or will obtain the agreement of one or more tenants to maintain, the Property in
good order and repair, (ii) procure and maintain casualty insurance against
risks customarily insured against by owners of comparable properties, in amounts
sufficient to eliminate the effects of coinsurance, (iii) keep and allow the
Participants to review accurate books and records covering the operation of the
Property, and (iv) pay prior to delinquency all taxes and assessments lawfully
levied against the Property.
Notwithstanding the foregoing, any Participants that have failed to fund any
amount due hereunder, including any Percentage of a Protective Advance, and that
have not corrected such failure within five Business Days after being notified
thereof, will have no voting or consent rights under this subparagraph 6(A) and
no rights to require BNPPLC to call a meeting pursuant to subparagraph 6(A)(3)
until such failure is corrected.
     (b) Rights of BNPPLC Generally. Subject to the limitations set forth in
subparagraph 6(A):
     (i) BNPPLC will have the exclusive right to take any action and to exercise
any available powers, rights and remedies to enforce the obligations of NAI
under the Operative Documents or to refrain from taking any such action or
exercising any such power, right or remedy.
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     (ii) BNPPLC may (i) give any consent, waiver or approval requested by NAI
with respect to any construction or other approval contemplated in the
Construction Management Agreement, Lease or other Operative Documents or
(ii) waive or consent to any adverse title claims affecting the Property,
subject the condition that, in either case, BNPPLC believes in good faith that
such action will not have a material adverse effect upon the obligations or
ability of NAI to make the payments required under the Operative Documents or
upon the rights and remedies, taken as whole, of BNPPLC under the Operative
Documents or upon the Participants’ hereunder.
     (c) Conflicts and Purchase Agreement Defaults. Notwithstanding anything to
the contrary herein contained, BNPPLC may, even over the objection of any
Participant or the Majority, (A) take any action recommended in writing by
reputable counsel and believed in good faith by BNPPLC to be required of BNPPLC
by the Operative Documents or any law, rule or regulation to which BNPPLC is
subject, (B) refrain from taking any action if BNPPLC believes in good faith
that the action is prohibited by the Operative Documents or any law, rule or
regulation to which BNPPLC is subject, and if reputable counsel recommends in
writing that BNPPLC refrain from taking the action, and (C) after notice to the
Participants, bring and prosecute a suit against NAI in the form recommended by
and in accordance with advice of reputable counsel at any time when a breach of
the Operative Documents by NAI has put BNPPLC (or any of its officers or
employees) at risk of criminal prosecution or significant liability to third
parties or at any time after NAI or an Applicable Purchaser fails to purchase
the Property on the Designated Sale Date pursuant to the Purchase Agreement.
(If, however, BNPPLC takes any action or refrains from taking any action over
the objection of a Majority pursuant to the preceding sentence, BNPPLC must
provide the Majority a written explanation (including a copy of a supporting
written recommendation of counsel) of the basis for BNPPLC’s conclusion that
taking the action, or refraining from taking the action, is permitted by the
preceding sentence.) Further, nothing herein contained will be construed to
require BNPPLC to agree to modify the Operative Documents or to take any action
or refrain from taking any action in any manner that could increase BNPPLC’s
liability to NAI or others, that could reduce or postpone payments to which
BNPPLC is entitled thereunder, or that could reduce the scope and coverage of
the indemnities provided for BNPPLC’s benefit in the Operative Documents.
     (d) Refusal to Give Consents; Failure to Fund. If any Participant declines
to consent to any amendment, modification, waiver, release or consent for which
the Participant’s consent is requested or required by reason of this Agreement,
or if any Participant fails to pay any amount owed by it hereunder, BNPPLC will
have the right, but not the obligation and without limiting any other remedy of
BNPPLC, to reduce such Participant’s Percentage to zero and to terminate such
Participant’s rights to receive any further payments under Article 2 of this
Agreement by paying to such Participant a termination fee equal to the total
amount it would be entitled to receive from BNPPLC hereunder if the date of such
payment were the Designated Sale Date and on such date NAI had itself purchased
BNPPLC’s interest in the Property pursuant to and in
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accordance with the Purchase Agreement. No Participant’s rights to receive
payments equal to such Participant’s Adjusted Percentage of any Excess
Reimbursement of a Protective Advance or interest thereon as provided in
subparagraph 3(C) will be impaired or affected by any termination contemplated
in this subparagraph 6(D); accordingly, BNPPLC will not, as a condition to such
a termination, be required to reimburse a Participant for any payments the
Participant has made in connection with Protective Advances pursuant to
subparagraph 3(C).
22. Required Repayments. Each Participant must repay to BNPPLC, upon written
request or demand by BNPPLC (i) any sums paid by BNPPLC to such Participant
under this Agreement from, or that were computed by reference to, any
Distributable Payment or other amounts which BNPPLC is required to return or pay
over to another party, whether pursuant to any bankruptcy or insolvency law or
proceeding or otherwise and (ii) any interest or other amount that BNPPLC is
also required to pay to another party with respect to such sums. Such repayment
by a Participant will not constitute a release of such Participant’s right to
receive payments from BNPPLC hereunder upon BNPPLC’s receipt of any such
Distributable Payment or other amount (or any interest thereon) that BNPPLC may
later recover. Without limiting the foregoing, this Paragraph will apply in the
case of any reimbursement by BNPPLC to NAI of all or any portion of any
Supplemental Payment or 97-10/Prepayment as required by ***subparagraph 3(E)(4)
of the Purchase Agreement in the event of a Deemed Sale (as defined in the
Purchase Agreement). Accordingly, in the event of any such reimbursement
required by reason of a Deemed Sale, each Participant must repay to BNPPLC the
amount previously received by it by reason of the Supplemental Payment or
97-10/Prepayment or portion thereof so reimbursed.
23. NAI Information; Independent Analysis. Prior to the execution of this
Agreement, BNPPLC has provided to the Participants copies of the executed
Operative Documents and of various certificates, legal opinions and other
documents delivered to BNPPLC by or on behalf of NAI with respect to the
Operative Documents. In the future, BNPPLC will provide (A) to all Participants
copies of all amendments of the Operative Documents and certificates and legal
opinions, if any, delivered by or on behalf of NAI in connection therewith, and
(B) to any Participant, as reasonably required to comply with a specific,
reasonable written request for information made by the Participant, copies of
other information readily available to BNPPLC concerning NAI and the
transactions contemplated in the Operative Documents. However, BNPPLC will not
be liable for its failure to provide the Participants any of the foregoing
documents unless such failure constitutes gross negligence or wilful misconduct
on BNPPLC’s part, and any Attorney’s Fees or other costs of collecting,
assembling and providing copies of information requested by a Participant
pursuant to clause (B) of the preceding sentence will be reimbursed to BNPPLC by
the Participant. Each Participant has entered into this Agreement without
reliance upon representations made outside this Agreement by BNPPLC or by any
Affiliate, agent or attorney of BNPPLC and only after independently reviewing
such documents, independently making such inspections, independently consulting
with counsel and
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independently collecting and verifying such information, as the Participant
determined to be necessary or appropriate. Without limiting the foregoing, each
Participant has independently reviewed the Operative Documents and independently
made such inquiries and investigations of NAI and the Property as the
Participant determined to be necessary or appropriate before executing this
Agreement.
24. Performance through Representatives. BNPPLC may perform any of its duties
hereunder by or through officers, directors, employees, attorneys or agents
(collectively, “Representatives”), and BNPPLC and its Representatives may rely,
and will be fully protected in relying, upon any communication or document
believed by it or them to be genuine and correct and to have been signed or made
by the proper Person and, with respect to legal matters, upon the opinion of
counsel selected by BNPPLC. The Participants acknowledge that BNPPLC’s Parent
may act as agent for BNPPLC with respect to the administration of this
Agreement, and to the extent it does so, it will be a Representative of BNPPLC
hereunder.
25. Duty of Care. Neither BNPPLC nor any of its Representatives will be liable
or responsible to any Participant or any other Person for any action taken or
omitted to be taken by BNPPLC or any of its Representatives under this Agreement
or in relation to the Operative Documents or the Property (even if negligent or
related to a matter for which BNPPLC or any of its Representatives may otherwise
be strictly liable); except that this provision will not excuse BNPPLC from
liability for failing to make timely payments required of BNPPLC to the
Participants by the express provisions of Article 2 or subparagraph 3(C) or from
liability for actions taken or omitted to be taken by BNPPLC which constitute
gross negligence or wilful misconduct. Without limiting the generality of the
foregoing, BNPPLC (1) may consult with legal counsel (including counsel for
NAI), independent public accountants and other experts selected by it and will
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (2) makes no
warranty or representation to the Participants except as provided in Article 12
and will not be responsible to the Participants for any statements, warranties
or representations made in or in connection with the Operative Documents;
(3) will not have any duty to the Participants to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
the Operative Documents or to inspect the Property or the books and records of
NAI; (4) will not be responsible to the Participants for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Operative Documents or any instrument or document furnished in connection
therewith; (5) may rely upon the representations and warranties of NAI and the
Participants in exercising its powers hereunder unless BNPPLC has actual
knowledge that such representations and warranties are untrue; and (6) will
incur no liability under or in respect of the Operative 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.
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26. Representations by Each Participant. Each Participant represents that as of
the date it became a party to this Agreement:
     (a) Nature of this Agreement. It is the type of financial institution set
forth under its name in Schedule 1, or in the Participation Agreement Schedule
which made it a party to this Agreement, and it is entering into this Agreement
for its own account in respect of a commercial transaction made in ordinary
course of its business and not with a view to or in connection with any
subparticipation, sale or distribution to any Person (other than its
Affiliates). Such Participant does not consider the acceptance of the risk
participation hereunder to constitute the “purchase” or “sale” of a “security”
within the meaning of any federal or state securities statute or law, or any
rule or regulations under any of the foregoing.
     (b) No Default or Violation. To such Participant’s knowledge, the
execution, delivery and performance of this Agreement do not and will not
contravene, result in a breach of or constitute a default under any material
contract or agreement to which the Participant is a party or by which the
Participant is bound and do not violate or contravene any law, order, decree,
rule or regulation to which the Participant is subject.
     (c) No Suits. To such Participant’s knowledge, there are no judicial or
administrative actions, suits or proceedings involving the validity,
enforceability or priority of this Agreement and no such suits or proceedings
are threatened.
     (d) Organization. Such Participant is duly incorporated and legally
existing under the laws of jurisdiction indicated in Schedule 1 or in the
Participation Agreement Schedule which made it a party to this Agreement. Such
Participant has all requisite power and all material governmental certificates
of authority, licenses, permits, qualifications and other documentation
necessary to perform its obligations under this Agreement.
     (e) Enforceability. This Agreement constitutes a legal, valid and binding
obligation of such Participant, enforceable in accordance with its terms,
subject to bankruptcy and other laws affecting creditors’ rights generally and
general equitable principles. The execution and delivery of, and performance
under, this Agreement are within such Participant’s powers and have been duly
authorized by all requisite action and are not in contravention of the powers of
the charter or other corporate papers of the Participant.
     (f) No Funding With Plan Assets. Such Participant has not and will not
provide advances required by this Participation Agreement from the assets of any
employee benefit plan (or its related trust).
27. Representations by BNPPLC. BNPPLC represents to each Participant, as of the
date such Participant became a party to this Agreement, that:
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     (a) No Default or Violation. To BNPPLC’s knowledge, its execution, delivery
and performance of this Agreement and the Operative Documents do not contravene,
result in a breach of or constitute a default under any material contract or
agreement to which BNPPLC is a party or by which BNPPLC is bound and do not
violate or contravene any law, order, decree, rule or regulation to which BNPPLC
is subject.
     (b) No Suits. To BNPPLC’s knowledge, there are no judicial or
administrative actions, suits or proceedings involving the validity,
enforceability or priority of this Agreement and no such suits or proceedings
are threatened.
     (c) Organization. BNPPLC is duly incorporated and legally existing under
the laws of Delaware. BNPPLC has all requisite power and all material
governmental certificates of authority, licenses, permits, qualifications and
other documentation necessary to perform its obligations under this Agreement.
     (d) Enforceability. This Agreement and the Operative Documents constitute
legal, valid and binding obligations of BNPPLC, enforceable in accordance with
their respective terms, subject to bankruptcy and other laws affecting
creditors’ rights generally and general equitable principles. BNPPLC’s execution
and delivery of, and performance under, this Agreement and the Operative
Documents are within BNPPLC’s powers and have been duly authorized by all
requisite action and are not in contravention of the powers of the charter,
by-laws or other corporate papers of BNPPLC; except that BNPPLC makes no
representation or warranty that conditions imposed by any state or local
Applicable Laws to the purchase, ownership, lease or operation of the Property
have been satisfied.
     (e) Liens Removable by BNPPLC. BNPPLC will not create or permit any Liens
Removable by BNPPLC not claimed by, through or under any of the Participants
(other than BNPPLC’s Affiliates), without NAI’s consent.
     (f) BNPPLC’s Status as a Subsidiary of a Bank Holding Company. As of the
effective date of this Agreement, BNPPLC is a “subsidiary” of a “bank holding
company” (as those terms are defined in Chapter 17 of Title 12 of the United
States Code).
28. Assignments.
     (a) By the Participants Generally. Except as expressly provided below, no
Participant may assign or attempt to assign any interest in or rights under this
Agreement without the prior written consent of BNPPLC, which consent will not be
unreasonably withheld so long as the Participant requesting the approval is not
in default hereunder; however, this provision will not prevent a Participant
from transferring its rights hereunder to its Affiliates or to any other
Participants who are already parties to this Agreement. Notwithstanding any
permitted
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assignment by a Participant, if the assignment is to any Person that does not
qualify as a “Participant” for purposes of the Operative Documents (which, as
more particularly provided in the definition of Participant in the Common
Definitions and Provisions Agreement, may require the written approval of such
Person by NAI), then such Participant’s obligations under this Agreement will
remain unchanged, such Participant will remain primarily responsible for the
performance of its obligations hereunder, and BNPPLC may continue to deal solely
and directly with such Participant in connection with all rights and obligations
under this Agreement. In the event, however, of a permitted assignment by a
Participant to a Person that does qualify as a “Participant” for purposes of the
Operative Documents, accomplished by the execution of appropriate Participation
Agreement Supplements as herein provided, the assigning Participant will not be
liable for any failure by the assignee to fulfill the obligations assumed
hereunder by the assignee by reason of such assignment.
     (b) By BNPPLC. Except as expressly provided herein, BNPPLC may not assign
or attempt to assign any rights under or interest in the Operative Documents or
this Agreement or any interest in the Property without all of the Participants’
prior written consents, which consents will not be unreasonably withheld. By a
Participation Agreement Supplement, BNPPLC may, without the prior written
consent of any Participant, assign participations in the Operative Documents or
the payments required to BNPPLC thereunder to any then existing Participant and
to other financial institutions or Affiliates of financial institutions approved
by NAI. In addition, BNPPLC may assign its right to receive Distributable
Payments and its rights and interests in and to the Property, the Operative
Documents and this Agreement to Affiliates of BNPPLC that do not become
Participants, but in such event BNPPLC’s obligations under this Agreement will
remain unchanged, BNPPLC will remain primarily responsible for the performance
of its obligations hereunder, and all Distributable Payments received by any
such Affiliates as assignee of BNPPLC will, for purposes of computing payments
required to any Participant hereunder, be considered as received by BNPPLC. In
addition, BNPPLC will be permitted to transfer any rights or interests as BNPPLC
believes in good faith to be necessary to satisfy the Operative Documents or
Applicable Laws.
     (c) Execution of Participation Agreement Supplements. Promptly after the
execution of a Participation Agreement Supplement by BNPPLC and any Participant,
BNPPLC will provide a copy thereof to all other Participants, but the other
Participants need not join in or approve the Participation Agreement Supplement
for it to be effective.
     (d) Regulation A. Notwithstanding subparagraphs 13(A) or 13(B), a
Participant may assign and pledge all or any portion of its rights under this
Agreement to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circulars issued by such Federal Reserve Bank.
     (e) Costs. Each Participant must pay all costs incurred by BNPPLC in
connection
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with any permitted assignment by or through such Participant, including, but not
limited to, reasonable fees and disbursements of its counsel, and any transfer
taxes or other taxes assessed because of such assignment which NAI is not
required to pay under the Lease.
29. GOVERNING LAW; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL. This Agreement
will be deemed a contract made under the laws of the State of Texas and will be
construed and enforced in accordance with and governed by the laws of the State
of Texas and the laws of the United States of America, without regard to
principles of conflict of laws. Each of BNPPLC and the Participants hereby
irrevocably submits itself to the non-exclusive jurisdiction of the state and
the federal courts sitting in Dallas, Texas, and agrees and consents that
service of process may be made upon it in any legal proceeding relating to this
Agreement by any means allowed under Texas or federal law. Each of BNPPLC and
the Participants hereby waives and agrees not to assert, by way of motion, as a
defense or otherwise, that any such proceeding which is brought in a court in
Dallas, Texas is brought in an inconvenient forum or that the venue thereof is
improper. Each of BNPPLC and the Participants, knowingly, voluntarily and
intentionally waives any right to a jury trial of any dispute relating to this
agreement and agrees that any such dispute will be tried before a judge sitting
without a jury.
30. Termination. This Agreement will terminate on the first date on which all
obligations of NAI under the Operative Documents have been indefeasibly paid or
otherwise satisfied or excused, BNPPLC has ceased to have any rights in the
Property and each party hereto has fully performed its obligations hereunder to
the other parties hereto. The agreements of BNPPLC and the Participants in
subparagraph 3(C) (which concerns payments by Participants of their respective
Percentages of Protective Advances) will survive the termination of this
Agreement. Following any sale of the Property by BNPPLC pursuant to the Purchase
Agreement and the payment to any Participant of all amounts payable to such
Participant hereunder (including, without limitation, such Participant’s
Percentage of all Net Sales Proceeds payable by NAI and any Applicable Purchaser
on the Designated Sale Date), such Participant will execute and deliver such a
quitclaim and release (in recordable form) to NAI or any Applicable Purchaser.
31. Miscellaneous.
     (a) Reliance by Others. None of the provisions of this Agreement will inure
to the benefit of any Person other than the Participants and BNPPLC and BNPPLC’s
Representatives; consequently, no Person other than the Participants and BNPPLC
may rely upon or raise as a defense, in any manner whatsoever, the failure of
any Participant or BNPPLC to comply with the provisions of this Agreement. None
of the Participants nor BNPPLC will incur any liability to any other Person for
any act of omission of another.
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     Notwithstanding the foregoing, however, NAI will be a third party
beneficiary of each Participant’s obligations to make advances as provided in
subparagraph 3(B) above, of the representations of each Participant in
Paragraph 11, of each Participant’s agreement to provided a release and
quitclaim of the Property pursuant to the last sentence of Paragraph 15 and of
each Participant’s agreements in Paragraph 17. As a third party beneficiary of
the obligations of the Participants specified in the preceding sentence, NAI
will have standing to exercise any remedies available at law or in equity
(including the recovery of monetary damages) against any Participant in NAI’s
own name if that Participant breaches such obligations. Further, BNPPLC may
assign to NAI any claims it may have against a Participant because of the
Participant’s breach of any of the provisions referenced in this paragraph or
because of any adverse title claim made against the Property by, through or
under the Participant. Each Participant acknowledges that NAI will be relying on
the commitments of the Participant to make payments required by this Agreement,
as needed to satisfy any condition to Anticipated Advances concerning funding by
Participants set forth in subparagraph 4(G) of the Construction Management
Agreement.
     (b) Waivers, Etc. No delay or omission by any party to exercise any right
under this Agreement will impair any such right, nor will it be construed to be
a waiver thereof. No waiver of any single breach or default under this Agreement
will be deemed a waiver of any other breach or default. Any waiver, consent, or
approval under this Agreement must be in writing to be effective.
     (c) Severability. The illegality or unenforceability of any provision of
this Agreement will not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement.
     (d) Notices. All notices, demands, approvals, consents and other
communications to be made hereunder to or by the parties hereto must, to be
effective for purpose of this Agreement, be in writing. Notices, demands and
other communications required or permitted hereunder are to be sent to the
addresses set forth in Schedule 1 to this Agreement and must be given by any of
the following means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by notice to the other
parties given in the same manner as provided above. Any notice or other
communication sent pursuant to clause (A) or (C) hereof will be deemed received
(whether or not actually received) upon first attempted delivery at the proper
notice address on any Business Day between 9:00 A.M. and 5:00 P.M., and any
notice or other communication sent pursuant to clause (B) hereof will be deemed
received upon dispatch by electronic means.
     (e) Construction. Words of any gender used in this Agreement will be held
and construed to include any other gender, and words in the singular number will
be held to include
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the plural and vice versa, unless the context otherwise requires. References
herein to Paragraphs, subparagraphs or other subdivisions will refer to the
corresponding Paragraph, subparagraphs or subdivisions of this Agreement, unless
specific reference is made to another document or instrument. References herein
to any Schedule or Exhibit will refer to the corresponding Schedule or Exhibit
attached hereto, which will be made a part hereof by such reference. All
capitalized terms used in this Agreement which refer to other documents will be
deemed to refer to such other documents as they may be renewed, extended,
supplemented, amended or otherwise modified from time to time so long as the
documents are not renewed, extended or modified in breach of any provision
contained herein or therein or, in the case of any other document to which
BNPPLC is a party or of which BNPPLC is an intended beneficiary, without the
consent of BNPPLC. All accounting terms used but not specifically defined herein
will be construed in accordance with GAAP. The words “this Agreement”, “herein”,
“hereof”, “hereby”, “hereunder” and words of similar import when used in this
Agreement refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The phrases “this Paragraph” and “this
subparagraph” and “this subsection” and similar phrases used herein refer only
to the Paragraphs, subparagraphs or subsections hereof in which the phrase
occurs. As used herein the word “or” is not exclusive. As used herein the words
“include”, “including” and similar terms will be construed as if followed by
“without limitation to”.
     (f) Headings. The paragraph and section headings contained in this
Agreement are for convenience only and will in no way enlarge or limit the scope
or meaning of the various and several provisions hereof.
     (g) Entire Agreement. This Agreement (a) embodies the entire agreement
between the parties, supersedes all prior agreements and understandings between
the parties, if any, relating to the subject matter hereof, and may be amended
only by an instrument in writing executed by an authorized representative of
each party to be bound by such amendment, and (b) has been executed in a number
of identical counterparts, each of which will be deemed an original for all
purposes and all of which constitute, collectively, one agreement or
certificate; but, in making proof of this Agreement it will not be necessary to
produce or account for more than one such counterpart signed by each party
thereto.
     (h) Further Assurances. Subject to any restriction in the Operative
Documents, each of BNPPLC and the Participants will promptly execute and deliver
all further instruments and documents and take all further action as any of them
may reasonably request in order to evidence the agreements made hereunder and
otherwise to effect the purposes of this Agreement.
     (i) Impairment of Operative Documents. Nothing herein contained (including
the provisions governing the application of payments in subparagraph 4(E) and
the provisions authorizing assignments by BNPPLC in subparagraph 13(B)) will
impair or modify NAI’s rights under the Operative Documents.
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     (j) Books and Records. BNPPLC will keep accurate books and records in which
full, true and correct entries will be promptly made as to all payments made and
received concerning the Property and will permit all such books and records
(excluding any information that would otherwise be protected by BNPPLC’s
attorney client privilege) to be inspected and copied by the Participants and
their duly accredited representatives at all times during reasonable business
hours after five Business Days advance notice. This subparagraph will not be
construed as requiring BNPPLC to regularly maintain separate books and records
relating exclusively to the Property; however, upon reasonable request of a
Participant, BNPPLC will, at the requesting Participant’s expense, construct or
abstract from its regularly maintained books and records information required by
this subparagraph relating to the Property.
     (k) Definition of Knowledge. Representations and warranties made in this
Agreement but limited to the “knowledge” of BNPPLC or any Participant, as the
case may be, will be limited to the present actual knowledge of the officers or
other employees of such party primarily responsible for reviewing and
negotiating this Agreement. Also, as used herein with respect to the existence
of any facts or circumstances after the date of this Agreement, “knowledge” of
BNPPLC or a Participant, as the case may be, will be limited to the present
actual knowledge at the time in question of the officers or other employees of
such party primarily responsible for administering this Agreement. However, none
of the officers or employees of any party to this Agreement will be personally
liable for any representations or warranties made herein or for taking or
failing to take any action required hereby.
     (l) Attorneys’ Fees. If any party to this Agreement commences any legal
action or other proceeding against another party hereto to enforce any of the
terms of this Agreement, or because of any breach of the other party or dispute
hereunder, the successful or prevailing party will be entitled to recover from
the nonprevailing party all Attorneys’ Fees incurred in connection therewith,
whether or not such controversy, claim or dispute is prosecuted to a final
judgment. Any such Attorneys’ Fees incurred by any party in enforcing a judgment
in its favor under this Agreement will be recoverable separately from such
judgment, and the obligation for such Attorneys’ Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment.
32. Confidentiality Concerning NAI’s Proprietary Information. Each Participant
agrees to use reasonable precautions to keep confidential any “proprietary
information” of NAI (as defined in the Lease) that such Participant may receive
from BNPPLC or NAI or otherwise discover with respect to NAI or NAI’s business
as a result of Participant’s involvement with the transactions contemplated in
the Operative Documents, except for disclosures: (i) specifically and previously
authorized in writing by NAI; (ii) to any assignee of the Participant as to any
interest hereunder so long as such assignee has agreed in writing to use its
reasonable efforts to keep such information confidential in accordance with the
terms of this Paragraph; (iii) to legal counsel, accountants, auditors,
environmental consultants and other
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professional advisors to the Participant so long as the Participant informs such
persons in writing (if practicable) of the confidential nature of such
information and directs them to treat such information confidentially; (iv) to
regulatory officials having jurisdiction over the Participant (although the
disclosing party will request confidential treatment of the disclosed
information, if practicable); (v) as required by legal process (although the
disclosing party will request confidential treatment of the disclosed
information, if practicable); and (vi) of information which has previously
become publicly available through the actions or inactions of a person other
than the Participant not, to the Participant’s knowledge, in breach of an
obligation of confidentiality to NAI. Further, notwithstanding any other
contrary provision contained in this Agreement or any related agreements by
which any Participant is bound, BNPPLC and Participants (and each of their
respective employees, representatives or other agents) may disclose, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement or the Operative Documents and all materials of
any kind (including opinions or other tax analyses) that are provided to such
party relating to such tax treatment and tax structure, other than any
information for which non-disclosure is reasonably necessary in order to comply
with applicable securities laws.
[The signature pages follow.]
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     IN WITNESS WHEREOF, this Participation Agreement is executed to be
effective as of                                                             ,
200                    .

                  BNP PARIBAS LEASING CORPORATION, a    
 
  Delaware corporation    
 
           
 
  By:        
 
           
 
      Lloyd G. Cox, Managing Director    

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[Continuation of signature pages for Participation Agreement dated as of
                                        , 200                    .]

                  [PARTICIPANTS’ NAMES], a                         
 
           
 
  By:        
 
           
 
      [Officer’s Name], [Officer’s Title]    

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SCHEDULE 1
A. BNPPLC: BNP PARIBAS LEASING CORPORATION,
   a Delaware corporation

  1.   Amount Retained: $                         2.   Initial Percentage:
     ___%     3.   Address for Notices:

BNP Paribas Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telephone: (972) 788-9191
Facsimile: (972) 788-9140

  4.   Payment Instructions:

Federal Reserve Bank of New York
ABA 026007689 BNP Paribas
/BNP/ BNP Houston
/AC/ 14334000176
/Ref/ NAI/                      Operating Lease

  5.   Operations Contact:

BNP Paribas Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telephone: (972) 788-9191
Facsimile: (972) 788-9140
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SCHEDULE 1
B. Participant: [Participants’ Names]

  1.   Amount of Participation: $                         2.   Percentage:
     ___%     3.   Address for Notices:

____________
____________
____________
Telephone: (___) ___-____
Facsimile:  (___) ___-____

  4.   Payment Instructions:

***Federal Reserve Bank of New York
ABA _____________
__________________
__________________
/Ref/ ____________

  5.   Operations Contact:

____________
____________
____________
Telephone: (___) ___-____
Facsimile:  (___) ___-____

  6.   “Initial Payment” Due from

      Participant to BNPPLC:           An amount equal to the Percentage
specified above times the Initial Funding Advance
                                                  under the Construction
Management Agreement.

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Exhibit A
SUPPLEMENT TO PARTICIPATION AGREEMENT
[_____________, _____]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director
Telecopy: (972) 788-9140
Gentlemen:
     Reference is made to the Participation Agreement dated as of
                    , 200___(as heretofore amended, the “Participation
Agreement”) between BNP Paribas Leasing Corporation (“BNPPLC”), a Delaware
corporation, and ***[Participants’ Names] and other banks or financial
institutions which have or may from time to time become Participants under and
as defined in such Participation Agreement (collectively, the “Participants”).
Unless otherwise defined herein, all capitalized terms used in this Supplement
have the respective meanings given to those terms in the Participation
Agreement.
[NOTE: THE NEXT TWO PARAGRAPHS, AND THE ADDENDUM TO SCHEDULE 1 ATTACHED TO THIS
EXHIBIT, WILL BE INCLUDED ONLY AS PART OF A SUPPLEMENT THAT ADDS A NEW
PARTICIPANT UNDER THE PARTICIPATION AGREEMENT:
     The undersigned, by executing and delivering this Supplement to BNPPLC,
hereby agrees to become a party to the Participation Agreement referenced
therein, in each case as a Participant and agrees to be bound by all of the
terms thereof applicable to Participants. The undersigned hereby agrees that its
Percentage under the Participation Agreement will be ___ percent (___%),
effective as of the date of this letter. Contemporaneously with the execution of
this letter, the undersigned is paying to BNPPLC the sum of
$                     in consideration of the rights it is acquiring as a
Participant under the Participation Agreement with the foregoing Percentage.
     Schedule 1 attached to the Participation Agreement is amended by the
addition of an Addendum (concerning the undersigned) in the form attached to
this Supplement.]
[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT REDUCES AN
EXISTING PARTICIPANT’S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:
Annex 5 — Page 35

 

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     In consideration of the payment of $                     to the
undersigned, the receipt and sufficiency of which is hereby acknowledged by the
undersigned, the undersigned hereby agrees that its Percentage under the
Participation Agreement is reduced to percent (___), effective as of the date of
this letter.]
[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT INCREASES
AN EXISTING PARTICIPANT’S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:
     The undersigned hereby agrees that its Percentage under the Participation
Agreement is increased to                      percent (___%), effective as of
the date of this letter. Contemporaneously with the execution of this letter,
the undersigned is paying BNPPLC the sum of $                     in
consideration of such increase.]
     IN WITNESS WHEREOF, the undersigned has executed this Supplement as of the
day and year indicated above.

                 
 
  [NAME]            
 
                     
 
               
 
  By:                             Printed Name:    
 
               
 
      Title:                    

Accepted and agreed:
BNP PARIBAS LEASING CORPORATION

                 
By:
                         
 
               
 
  Printed Name:            
 
             
 
               
 
  Title:                        

Annex 5 — Page 36

 

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Addendum to Schedule 1
Participant:                                         

  1.   Amount of Participation: $                         2.   Percentage:
     ___%     3.   Address for Notices:

______________________
______________________
______________________
Attention: ___________
Telephone: ___________
Facsimile: ___________

  4.   Payment Instructions:

Bank:             ______________________
Account:        ______________________
Account No.: ______________________
ABA No.:      ______________________
Reference:     ______________________

  5.   Operations Contact:

______________________
______________________
______________________
Attention: ___________
Telephone: ___________
Facsimile: ___________
Annex 5 — Page 37