Exhibit 10.64

LEASE AGREEMENT
(MOFFETT BUSINESS CENTER)
BETWEEN
NETWORK APPLIANCE, INC.
(“NAI”)
AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)
November 29, 2007

 

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TABLE OF CONTENTS

                              Page  
 
                1   Term     3  
 
  (A)   Scheduled Term     3  
 
  (B)   Extension of the Term     3  
 
                2   Use and Condition of the Property     4  
 
  (A)   Use     4  
 
  (B)   Condition of the Property     4  
 
  (C)   Consideration for and Scope of Waiver     5  
 
                3   Rent     5  
 
  (A)   Base Rent Generally     5  
 
  (B)   Calculation of and Due Dates for Base Rent     5  
 
      (1)     Determination of Payment Due Dates Generally     6  
 
      (2)     Special Adjustments to Base Rent Payment Dates and Periods     6  
 
      (3)     Base Rent Formula     6  
 
      (4)     Fixed Rate Lock     6  
 
  (C)   Early Termination of Fixed Rate Lock     7  
 
  (D)   Additional Rent     8  
 
  (E)   Arrangement Fee and Upfront Fees     8  
 
  (F)   Administrative Fees     8  
 
  (G)   No Demand or Setoff     8  
 
  (H)   Default Interest and Order of Application     8  
 
  (I)   Calculations by BNPPLC Are Conclusive     9  
 
                4   Nature of this Agreement     9  
 
  (A)   “Net” Lease Generally     9  
 
  (B)   No Termination     9  
 
  (C)   Characterization of this Lease     10  
 
                5   Payment of Executory Costs and Losses Related to the
Property     12  
 
  (A)   Local Impositions     12  
 
  (B)   Increased Costs; Capital Adequacy Charges     13  
 
  (C)   NAI’s Payment of Other Losses; General Indemnification     14  
 
  (D)   Exceptions and Qualifications to Indemnities     18  
 
  (E)   Refunds and Credits Related to Losses Paid by NAI     23  
 
  (F)   Reimbursement of Excluded Taxes Paid by NAI     24  
 
  (G)   Collection on Behalf of Participants     24  
 
                6   Replacement of Participants     24  
 
  (A)   NAI’s Right to Substitute Participants     24  
 
  (B)   Conditions to Replacement of Participants     25  

 

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TABLE OF CONTENTS
(Continued)

                              Page  
 
                7   Items Included in the Property     26  
 
                8   Environmental     26  
 
  (A)   Environmental Covenants by NAI     26  
 
  (B)   Right of BNPPLC to do Remedial Work Not Performed by NAI     27  
 
  (C)   Environmental Inspections and Reviews     27  
 
  (D)   Communications Regarding Environmental Matters     28  
 
                9   Insurance Required and Condemnation     29  
 
  (A)   Liability Insurance     29  
 
  (B)   Property Insurance     29  
 
  (C)   Failure to Obtain Insurance     30  
 
  (D)   Condemnation     30  
 
  (E)   Waiver of Subrogation     31  
 
                10   Application of Insurance and Condemnation Proceeds     31  
 
  (A)   Collection and Application of Insurance and Condemnation Proceeds
Generally     31  
 
  (B)   Advances of Escrowed Proceeds to NAI     32  
 
  (C)   Application of Escrowed Proceeds as a Qualified Prepayment     32  
 
  (D)   Right of NAI to Receive and Apply Remaining Proceeds Below a Certain
Level     33  
 
  (E)   Special Provisions Applicable After an Event of Default     33  
 
  (F)   NAI’s Obligation to Restore     33  
 
  (G)   Takings of All or Substantially All of the Property     33  
 
  (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  
 
  (D)   Permitted Encumbrances     36  
 
  (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  

(ii)

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TABLE OF CONTENTS
(Continued)

                              Page  
 
               
 
  (C)   Consent Not a Waiver     38  
 
                13   Assignment by BNPPLC     38  
 
  (A)   Restrictions on Transfers     38  
 
  (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     39  
 
  (C)   Building Security     40  
 
                15   Remedies     40  
 
  (A)   Traditional Lease Remedies     40  
 
  (B)   Foreclosure Remedies     42  
 
  (C)   Notice Required So Long As the Purchase Option Continues Under the
Purchase Agreement     43  
 
  (D)   Enforceability     43  
 
  (E)   Remedies Cumulative     43  
 
                16   Default by BNPPLC     44  
 
                17   Quiet Enjoyment     44  
 
                18   Surrender Upon Termination     44  
 
                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  
 
  (A)   Proprietary Information     45  
 
  (B)   Confidentiality     46  

(iii)

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TABLE OF CONTENTS
(Continued)
     
Exhibits and Schedules

                  Page
Exhibit A
  Legal Description    
Exhibit B
  California Lien and Foreclosure Provisions    

(iv)

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LEASE AGREEMENT
(MOFFETT BUSINESS CENTER)
     This LEASE AGREEMENT (MOFFETT BUSINESS CENTER) (this “Lease”), dated as of
November 29, 2007 (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 (Moffett Business
Center) 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, BNPPLC is acquiring the Land described in
Exhibit A and improvements on the Land from AMB Property, L.P., a Delaware
limited partnership, (the “Prior Owner”) contemporaneously with the execution of
this Lease.
     In anticipation of BNPPLC’s acquisition of the Land and other property
described below, BNPPLC and NAI have reached agreement as to the terms and
conditions upon which BNPPLC is willing to lease to NAI the Land and the
Improvements, 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 all interests in the Land acquired by BNPPLC from
the Prior Owner;
     (2) any and all Improvements;
     (3) all easements and other rights appurtenant to the Land 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 from the
Prior Owner or as described in Paragraph 7 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 or Tangible
Personal 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, to the matters listed in Exhibit B to the Closing Certificate
(including the Existing Space Leases) and all other Permitted Encumbrances, and
to any other claims or encumbrances not constituting Liens Removable by BNPPLC.
     Without limiting the foregoing, it is understood that so long as NAI
continues to be entitled to possession of the Property pursuant to this Lease,
NAI’s possession will extend to and include (to the exclusion of BNPPLC) not
only the Improvements, but also the Land (subject only to BNPPLC’s limited right
of entry on and subject to the terms and conditions set forth in this Lease),
and NAI will be entitled to any benefits conferred upon the owner of the
Property by Permitted Encumbrances, including the right to receive and retain
rents as they become due under Existing Space Leases and to otherwise enforce
Existing Space Leases during the term of this Lease. Accordingly, it is the
intent of the parties that BNPPLC will not assume or retain
 
Lease Agreement (Moffett Business Center) — Page 2

 

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responsibility for the condition of the Land or the Improvements or for any
obligations undertaken by NAI under the Existing Space Leases or under other
Permitted Encumbrances.
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.
     (A) Scheduled Term. The term of this Lease (the “Term”) will commence on
the Effective Date and will end on the first Business Day of December, 2012,
unless extended as provided in subparagraph 1(B) or sooner terminated as
expressly provided in other provisions of this Lease.
     (B) 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 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 (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. Similarly, neither
BNPPLC’s Parent nor any Participant is expected to submit itself to a risk of
liability or loss of rights for being judged to have unreasonably withheld
consent or approval to any extension of the Term. Accordingly, NAI, BNPPLC,
BNPPLC’s Parent and Participants 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
 
Lease Agreement (Moffett Business Center) — Page 3

 

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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) administrative and office space;
     (2) 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;
     (3) cafeteria and other support facilities that NAI may provide to its
employees; and
     (4) 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 (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
Lease or other Operative Documents).
The foregoing provisions of this subparagraph will not prevent a tenant under an
Existing Space Lease executed prior to the Effective Date from using the space
covered thereby for purposes expressly authorized by the terms and conditions of
such Existing Space Lease.
     (B) Condition of the Property. NAI acknowledges that it has carefully and
fully inspected the Property and accepts the Property in its present state, AS
IS, and without any representation or warranty, express or implied, as to the
condition of such property or as to the use which may be made thereof. NAI also
accepts the Property without any covenant, representation or warranty,
 
Lease Agreement (Moffett Business Center) — Page 4

 

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express or implied, by BNPPLC or other Interested Parties regarding the title
thereto or the rights of any parties in possession of any part thereof, except
as expressly set forth in Paragraph 17. 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 other
Interested Parties, 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 the Prior Owner, the benefit of which may pass to NAI during the Term
because of the definition of Personal Property and Property above.
3 Rent.
     (A) Base Rent Generally. On each Base Rent Date through the end of the
Term, NAI must pay BNPPLC rent (“Base Rent”), calculated as provided below .
Each payment of Base Rent must be received by BNPPLC no later than 1:00 p.m.
(Eastern time) on the date it becomes due; if received after 1:00 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
 
Lease Agreement (Moffett Business Center) — Page 5

 

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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.
     (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, 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 Qualified Prepayments have been received by BNPPLC, leaving a Lease
Balance of $30,000,000; 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, Base Rent
for the hypothetical Base Rent Period will equal:
$30,000,000 x [6% + 1.50%] x 30/360 = $187,500.
     (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
 
Lease Agreement (Moffett Business Center) — Page 6

 

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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 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.
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
 
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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 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) Arrangement Fee and Upfront Fees. In addition to other amounts payable
by NAI hereunder, contemporaneously with the execution of this Lease NAI must
pay BNPPLC an arrangement fee (the “Arrangement Fee”) and upfront fees (the
“Upfront Fees”) as provided in the Closing Letter. The Arrangement Fee and the
Upfront Fees will represent Additional Rent for the first Base Rent Period.
     (F) Administrative Fees. In addition to other amounts payable by NAI
hereunder, on or before each anniversary of the Effective Date and prior to the
Designated Sale Date, NAI must pay BNPPLC an annual administrative agency fee
(an “Administrative Fee”) as provided in the Closing Letter. Each payment of an
Administrative Fee will represent Additional Rent for the first Base Rent Period
during which it first becomes due.
     (G) 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.
     (H) 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.
     (I) 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
 
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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 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, (ix) any breach of an Existing Space Lease by the
tenant thereunder, or (x) 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.
 
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     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.
     (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 commercial law (including real estate and
bankruptcy law) 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 Land 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
 
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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 additional taxes that
may arise or become due because of any refusal of taxing authorities to
recognize and give effect to the intention of the parties as set forth in
subparagraph 4(C)(1) (“Unexpected Recharacterization Taxes”), including any
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
 
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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 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 earliest 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.
 
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     (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 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) in the case of BNPPLC’s Parent, 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) in the case of
BNPPLC’s Parent or any Participant, more than nine months prior to the date NAI
is notified of the intent of BNPPLC’s Parent or such 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
 
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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.
     (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;     •  
Existing Space Leases or other Permitted Encumbrances or any violation thereof;

 
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  •   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;     •   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     •   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 rates charged to corporations by
 
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federal, state and local tax authorities, as applicable, for the relevant period
or periods) imposed because of the receipt or constructive receipt of 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 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;

 
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  •   survey fees;     •   title policy premiums and escrow fees;     •   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.

          (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 or the other
Interested Party, as applicable, to represent BNPPLC or the other Interested
Party, as applicable. 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 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
 
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     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 to the extent 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     •   transaction expenses (including Attorneys’ Fees) incurred by
any of the Participants in connection with the drafting, 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     •   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

 
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  •   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.
     (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 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
 
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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).
     (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
 
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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
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. Further, if any such tax claim is asserted against BNPPLC
which involves assertions that apply not only to the
 
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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)(2) 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 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
 
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     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
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 5(C)(1) 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
 
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reimbursement by NAI.
     (G) Collection on Behalf of Participants. BNPPLC may, on behalf of any
Participant or its Affiliates, collect any amount that becomes due from NAI to
such Participant or its Affiliates pursuant to subparagraph 5(B) or 5(C), in
which case BNPPLC will be obligated to such Participant in respect of the
collected amount as provided in the Participation Agreement. Alternatively, as
provided in the Participation Agreement, BNPPLC may assign the right to collect
any such amount to such Participant, in which case the Participant will be
entitled to collect the same directly from NAI.
6 Replacement of Participants.
     (A) NAI’s Right to Substitute Participants. During the Term, 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(B), 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 and 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 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
 
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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 are 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 Participant’s rights to receive payments in respect
of Net Cash Flow and Net Sales Proceeds (both as defined in the Participation
Agreement); and
     (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. The Land and all Improvements on the Land from
time to time will constitute “Property” covered by this Lease. Further, to the
extent heretofore or hereafter acquired by NAI (in whole or in part) with any
portion of the Initial Advance or with other funds for which NAI receives
reimbursement from the Initial Advance, 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), with a certification by NAI that
such inventory is true and complete and that all 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.
 
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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 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
earliest 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
 
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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.
     (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
 
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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 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, all in such amounts,
with such insurance companies and upon such terms and
 
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conditions (including self-insurance, whether by deductible, retention, or
otherwise) as are consistent with NAI’s normal insurance practices in the
country where the Land is located. In any event, policies under which NAI
maintains such insurance will provide, by endorsement or otherwise, that BNPPLC
and the 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. 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.
     (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, 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 country where the
Property is located. In any event, policies under which NAI maintains such
insurance will (a) provide coverage for the full replacement cost of the
Improvements (exclusive of footings and foundations) and on a basis that
eliminates any risk of reduced coverage under co-insurance provisions, (b) show
BNPPLC as an insured as its interest may appear and (c) 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. 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.
     (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 and 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, during the Term, so long as no Event of Default has occurred and is
continuing,
 
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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
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. 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 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 during the Term, so long as no Event
of Default has occurred and is continuing and 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
 
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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 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 reasonable 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
 
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as the applicable repair or restoration, progresses and upon compliance by NAI
with such terms, 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 for the 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
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 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 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 an Event of Default.
Notwithstanding the foregoing, 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. Further, when any Event of Default has occurred and is continuing,
if the Remaining Proceeds paid to BNPPLC with respect to any damage or
destruction of the Property are reduced by
 
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reason of any insurance deductible or self-insured retention, NAI must pay to
BNPPLC upon demand an additional amount equal to the full amount of such
deductible or self insured retention, whereupon the additional amount paid will
be added to the Remaining Proceeds and applied as such by BNPPLC in accordance
with the provisions of this Lease.
     (F) NAI’s Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, if the Property is damaged by
fire or other casualty or less than all or substantially all of the Property is
taken by condemnation, NAI must either (1) 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, or (2) 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. In the event of
any taking of all or substantially all of the Property, 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 Paragraph 10 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 made to
NAI to reimburse it for the costs of repairs and restoration to the Property,
(ii) any application thereof to cover costs incurred by BNPPLC for the repair or
restoration the Property and (iii) the Lease Balance, such 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 the purchaser of the Property (be it NAI or an
Applicable Purchaser) 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
 
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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 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, 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
earliest 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
 
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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.
     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 earliest 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.
     However, during the Term, 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,
 
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however, that BNPPLC’s refusal or failure to give such consent will be deemed
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, 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) During the Term, so long as no Event of Default has occurred and is
continuing, NAI may sublet (a) to Affiliates of NAI, or (b) any or all 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) During the Term, so long as 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 performance 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.
     (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
 
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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, 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 of confirming whether NAI has complied with the requirements
of this Lease or the other Operative Documents. During the Term, 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.
     (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
 
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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.
In addition, such inspections shall be subject to the rights of tenants under
Existing Space Leases.
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 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
 
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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 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;
     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
 
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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 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, in and of
themselves, will not constitute a termination of NAI’s right to possession:
     (a) Acts of maintenance or preservation or efforts to relet the Property;
     (b) The appointment of a receiver upon the initiative of BNPPLC to protect
BNPPLC’s interest under this Lease; or
     (c) Reasonable withholding of consent to an assignment or subletting,
 
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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. During the Term, so long as NAI remains in possession of the
Property, 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 earliest 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.
     (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 under this Lease or other Operative
Documents or now or hereafter existing in favor of BNPPLC under Applicable Laws,
except as otherwise expressly provided in the last provision of subparagraph
15(A)(3) above. In addition to other remedies provided in this Lease, BNPPLC
 
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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 Existing Space Leases and other 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.
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
 
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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; except that the Base Rent required for
each day the holding over continues will be due and payable by NAI to BNPPLC
upon demand and will equal the difference computed by subtracting (a) any
interest accruing on such day under the Purchase Agreement on any past due
Supplemental Payment, from (b) an amount equal to (i) the difference computed by
subtracting any Supplemental Payment previously made by NAI to BNPPLC from the
Lease Balance, times (ii) the per annum Default Rate computed as of such day,
divided by (iii) three hundred sixty. 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.
     (A) Proprietary Information. NAI will have no obligation to provide
proprietary
 
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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 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
 
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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.]
 
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     IN WITNESS WHEREOF, this Lease Agreement (Moffett Business Center) is
executed to be effective as of November 29, 2007.

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

 
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[Continuation of signature pages for Lease Agreement (Moffett Business Center)
dated as of November 29, 2007]

            NETWORK APPLIANCE, INC., a Delaware corporation
      By:           Ingemar Lanevi, Vice President and Corporate Treasurer      
       

 
Lease Agreement (Moffett Business Center) — Signature Page

 

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Exhibit A
Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SUNNYVALE, COUNTY
OF SANTA CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL ONE:
All of Parcel 1 as shown upon that certain Map entitled, “Parcel Map being a
resubdivision of Parcel 6 as shown on Map recorded in Book 214 of Maps, at Page
23, Santa Clara County Records”, which Map was filed for record in the Office of
the Recorder of the County of Santa Clara, State of California on March 1, 1978
in Book 413, at Page 53.
PARCEL TWO:
All of Parcel A, as shown upon that certain Map entitled, “Parcel Map being a
resubdivision of Parcels 2 and 3, as shown on that certain Map recorded March 1,
1978 in Book 413 of Maps, at Page 53, Santa Clara County Records”, which Map was
filed for record in the Office of the Recorder of the County of Santa Clara,
State of California on August 21, 1979 in Book 448 of Maps, at Pages 18 and 19.
APN: 110-36-014, 110-36-015

 

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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 Land, 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 streets, and all awards
for severance damages; and (vi) all rights, estates, powers and privileges
appurtenant or incident to the foregoing.

 

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     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 will 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, will 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
 
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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 will 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 will
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 is sold; and, if the proceeds of such sale of less than
the whole of the Mortgaged Property is 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 will
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 will never have any right to require the sale of less than the whole of the
Mortgaged Property but BNPPLC will 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 will 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, will 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 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
 
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personal property hereunder will 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 will 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, will, 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 will 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 will 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 will 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, will
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 will 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 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 will exhaust the power of
sale herein granted or terminate or otherwise affect the lien granted by NAI
herein on, or the security
 
Exhibit B to Lease Agreement (Moffett Business Center) — Page 4

 

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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 will 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 is 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 will 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 will 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 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
 
Exhibit B to Lease Agreement (Moffett Business Center) — Page 5

 

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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 will 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 will 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 will 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 will 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, will 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
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 will as a
matter of right be entitled to the
 
Exhibit B to Lease Agreement (Moffett Business Center) — Page 6

 

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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 will have all of the usual powers and duties of
receivers in like or similar cases and will 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 will be a demand obligation owing by NAI to BNPPLC
and will bear interest from the date of making such advancement by BNPPLC until
paid at the Default Rate and will be a part of the Secured Obligations and will
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 will be
irrevocable by NAI.
     In the event the Trustee takes any action pursuant to the provisions of
this Exhibit, NAI must pay to Trustee reasonable compensation for services
rendered in the administration of this trust, which will 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, will be conclusive proof of
proper substitution of such successor Trustee or Trustees, who will thereupon
and without conveyance from the predecessor Trustee, succeed to all its title,
estate, 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 will 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 will be full evidence of the right
and authority to make the same and of all facts therein recited. If
 
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BNPPLC is a corporation and such appointment is executed in its behalf by an
officer of such corporation, such appointment will be conclusively presumed to
be executed with authority and will 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 will vest in the named successor or
substitute trustee and he will thereupon succeed to and will 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 must
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 must 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 will 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, do
lawfully by virtue hereof.
     THE TRUSTEE WILL 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 will 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 will, 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 will 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 will not terminate upon release, foreclosure or 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
will not in anywise be considered as a waiver of any of the rights, benefits,
liens or security interests evidenced by this instrument.
 
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     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 will 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, is hereafter repealed or ceases 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 will immediately become the tenant
of the purchaser at such sale. Such tenancy will 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 will 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 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 will 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 (Moffett Business Center) — Page 9

 

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COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(MOFFETT BUSINESS CENTER)
between
BNP PARIBAS LEASING CORPORATION
and
NETWORK APPLIANCE, INC.
Dated as of November 29, 2007

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE I — LIST OF DEFINED TERMS
    1  
ABR
    1  
ABR Period Election
    1  
Active Negligence
    2  
Additional Rent
    2  
Administrative Fees
    2  
Affiliate
    2  
After Tax Basis
    2  
Applicable Laws
    2  
Applicable Purchaser
    3  
Arrangement Fee
    3  
Attorneys’ Fees
    3  
Banking Rules Change
    3  
Base Rent
    3  
Base Rent Date
    3  
Base Rent Period
    4  
BNPPLC
    4  
BNPPLC’s Parent
    4  
Breakage Costs
    4  
Break Even Price
    5  
Business Day
    5  
Capital Adequacy Charges
    5  
Closing Certificate
    5  
Closing Letter
    5  
Code
    5  
Common Definitions and Provisions Agreement
    6  
Consolidated Debt for Borrowed Money
    6  
Consolidated EBITDA
    6  
Constituent Documents
    6  
Default
    6  
Default Rate
    6  
Designated Sale Date
    6  
Effective Date
    7  
Effective Rate
    7  
Eligible Financial Institution
    8  
Environmental Cutoff Date
    8  
Environmental Laws
    8  
Environmental Losses
    9  
Environmental Report
    9  
Existing Space Leases
    10  
ERISA
    10  

 

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TABLE OF CONTENTS
(Continued)

              Page    
ERISA Affiliate
    10  
ERISA Termination Event
    10  
Escrowed Proceeds
    10  
Established Misconduct
    11  
Eurocurrency Liabilities
    12  
Eurodollar Rate Reserve Percentage
    12  
Event of Default
    12  
Excluded Taxes
    14  
Fed Funds Rate
    16  
Fixed Rate
    16  
Fixed Rate Lock
    16  
Fixed Rate Lock Date
    16  
Fixed Rate Lock Termination
    16  
Fixed Rate Lock Termination Date
    16  
Fixed Rate Lock Notice
    16  
Fixed Rate Loss
    16  
Fixed Rate Settlement Amount
    17  
Fixed Rate Swap
    17  
Floating Rate Payor
    17  
Fully Subordinated or Removable
    17  
Funding Advances
    17  
GAAP
    17  
Hazardous Substance
    18  
Hazardous Substance Activity
    18  
Improvements
    18  
Indebtedness
    19  
Initial Advance
    20  
Interested Party
    20  
Interest Rate Swap
    21  
Land
    21  
Lease
    21  
Lease Balance
    21  
Lease Termination Damages
    21  
Liabilities
    21  
LIBOR
    21  
LIBOR Period Election
    22  
Lien
    23  
Liens Removable by BNPPLC
    23  
Local Impositions
    24  

(ii)

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TABLE OF CONTENTS
(Continued)

              Page    
Losses
    24  
Market Quotation
    25  
Maximum Remarketing Obligation
    25  
Multiemployer Plan
    25  
NAI
    25  
Operative Documents
    25  
Participant
    26  
Participation Agreement
    26  
Permitted Encumbrances
    26  
Permitted Hazardous Substance Use
    27  
Permitted Hazardous Substances
    27  
Permitted Transfer
    27  
Person
    28  
Personal Property
    28  
Plan
    28  
Prime Rate
    28  
Prior Owner
    28  
Property
    29  
Purchase Agreement
    29  
Purchase Option
    29  
Qualified Affiliate
    29  
Qualified Income Payments
    29  
Qualified Prepayments
    29  
Real Property
    30  
Remedial Work
    30  
Rent
    30  
Responsible Financial Officer
    30  
Rolling Four Quarters Period
    30  
Spread
    30  
Subsidiary
    32  
Supplemental Payment
    32  
Supplemental Payment Obligation
    32  
Tangible Personal Property
    32  
Term
    32  
Transaction Expenses
    32  
Unfunded Benefit Liabilities
    33  
Upfront Fees
    33  

(iii)

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TABLE OF CONTENTS
(Continued)

              Page    
ARTICLE II — SHARED PROVISIONS
    33  
1.   Notices
    33  
2.   Severability
    35  
3.   No Merger
    35  
4.   No Implied Waiver
    35  
5.   Entire and Only Agreements
    35  
6.   Binding Effect
    35  
7.   Time is of the Essence
    36  
8.   Governing Law
    36  
9.   Paragraph Headings
    36  
10. Negotiated Documents
    36  
11. Terms Not Expressly Defined in an Operative Document
    36  
12. Other Terms and References
    36  
13. Execution in Counterparts
    37  
14. Not a Partnership, Etc
    37  
15. No Fiduciary Relationship Intended
    37  
 
        Annexes
 
       
Annex 1
ABR Period Election Form   
Annex 2
Fixed Rate Lock Notice Form  
Annex 3
LIBOR Period Election Form  

(iv) 

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COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(MOFFETT BUSINESS CENTER)
     This COMMON DEFINITIONS AND PROVISIONS AGREEMENT (MOFFETT BUSINESS CENTER)
(this “Agreement”), dated as of November 29, 2007 (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 Agreement, NAI and BNPPLC are
executing the Closing Certificate (as defined below), the Lease (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 Lease
and the Purchase Agreement (together with this 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 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:
     “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.
     “ABR Period Election” means an election to have the Effective Rate for any
Base Rent Period calculated by reference to the ABR, rather than by reference to
LIBOR or a Fixed Rate. NAI may (subject to the limitations and qualifications
set forth in this definition) make any Base Rent Period after the first 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 period. After an ABR Period Election becomes effective, it will remain
in effect for all subsequent 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

 

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definition 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 Base Rent Period. (For purposes of the Operative Documents, an ABR
Period Election for any Base Rent Period will also be considered in effect on
the Effective 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 (other than NAI) in a
manner that proximately causes actual bodily injury or property damage for which
NAI does not carry (and is not obligated by 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 (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.
     “Administrative Fees” means the fees identified as such in subparagraph
3(F) of the Lease.
     “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 to purchase
BNPPLC’s
 
Common Definitions and Provisions Agreement (Moffett Business Center) — Page 2

 

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interest in the Property and in any Escrowed Proceeds as provided in the
Purchase Agreement.
     “Arrangement Fee” has the meaning indicated in subparagraph 3(E) of the
Lease.
     “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 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.
     “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 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 the first Business Day of the first calendar
month following the Effective 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:
     (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 a Base Rent Date falls on the first Business Day of
September, 2008 and a
 
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LIBOR Period Election of three months commences on such Base Rent Date, then the
first Base Rent Date thereafter will be the first Business Day of December,
2008.
     “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 Effective
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 but not include 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 but not include 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, 2009, 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 but not include the first
Business Day in April, 2009, the third calendar month after January, 2009.
     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, 2009,
then such Base Rent Period will end on but not include the second Base Rent Date
after it begins; that is, the first Business Day in July, 2009.
     “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:
 
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     (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 Base Rent Period; or
     (2) 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 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 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.
     “Closing Certificate” means the Closing Certificate and Agreement (Moffett
Business Center) 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.
     “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
 
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accordance with its terms.
     “Consolidated Debt for Borrowed Money” has the meaning indicated in
subparagraph 3(A) of the Closing Certificate.
     “Consolidated EBITDA” has the meaning indicated in subparagraph 3(A) of the
Closing Certificate.
     “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.
     “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
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.
     “Designated Sale Date” means the earliest of:
     (1) the date upon which the Term is scheduled to expire as provided in
Paragraph 1(A) of the Lease (i.e., the first Business Day of December, 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; provided, that if the Business Day
so designated by NAI as the Designated Sale Date is not at least twenty 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 exercise by NAI of the Purchase Option under
subparagraph 2(A)(1) of the Purchase Agreement and thereby obligate NAI to
tender payment of the full Break Even Price to BNPPLC on the Business Day so
designated; 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:
 
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  •   when an Event of Default has occurred and is continuing; or     •  
following any change in the zoning or other Applicable Laws 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, 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;

provided, however, that if the Business Day so designated by BNPPLC 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; or
     (4) the first Business Day after the commencement of any Event of Default
described in clauses (G), (H) or (I) of the definition Event of Default herein
that occurs because of any bankruptcy proceeding instituted by or against NAI,
as debtor, under Title 11 of the United States Code.
     “Effective Date” means November 29, 2007.
     “Effective Rate” means, for each Base Rent Period, a per annum rate
determined as follows:
     (1) In the case of any 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 period, by (B) one hundred percent (100%) minus the
Eurodollar Rate Reserve Percentage for such period.
     (2) In the case of any Base Rent Period that is not subject to a LIBOR
Period Election, the Effective Rate will equal the ABR for such period.
     (4) 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 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 Base
Rent Period to Base Rent Period, the Effective Rate will be automatically
 
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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 Base Rent
Period in accordance with the foregoing, then the “Effective Rate” for that 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 Base Rent 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 in the ordinary course of its business, and having total assets
in excess of $5,000,000,000; provided, however, that in no event will 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.
 
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     “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 provided by NAI to BNPPLC prior to the Effective Date:

  •   September 2007 Phase I Environmental Site Assessment by WSP Environmental
Strategies, 549 Baltic Way, 603-611 Baltic Way, 641 Baltic Way and 632-634
Caribbean Drive Sunnyvale , CA;     •   Clayton Environmental Consultants. Phase
I Environmental Site Assessment of the Four Building Complex at 549 and 611
Baltic Way and 632 Caribbean, Sunnyvale, CA. May 6, 1993;     •   Clayton
Environmental Consultants. Phase I Environmental Site Assessment of the Four
Building Complex at 549, 611 and 641 Baltic and 632 and 646 Caribbean Drive,
Sunnyvale, CA. March 20, 1996;     •   Versar, Inc. Phase I Environmental Site
Assessment of Moffett Business Center at 549, 603-611 Baltic Way and 632 and 646
Caribbean Drive, Sunnyvale, CA. November 20, 1996; and     •   Versar, Inc.
Asbestos Survey of Moffett Business Center at 549, 603-611 Baltic Way and 632
and 646 Caribbean Drive, Sunnyvale, CA. November 1996.

 
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     “Existing Space Leases” means leases or subleases from NAI of space within
the Improvements, if any, which are existing as of the Effective Date and are
included in the list of Permitted Encumbrances attached as Exhibit B to the
Closing Certificate.
     “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, (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 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
 
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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) neither NAI nor 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.
     “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.
 
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     “Eurodollar Rate Reserve Percentage” means, for purposes of determining the
Effective Rate for any Base Rent Period, the reserve percentage applicable two
Business Days before the first day of such Base Rent 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 Base
Rent 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 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 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 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.
 
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     (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 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
 
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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(C) of the Closing Certificate.
     (N) Any Change in Control (as defined in subparagraph 3(A) of the Closing
Certificate) shall occur.
     “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 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
 
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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 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.
 
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     “Fixed Rate Lock” has the meaning assigned to it in subparagraph 3(B)(4) of
the Lease.
     “Fixed Rate Lock Date” has 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 will 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 this Agreement, the Fixed Rate Lock Termination
Date will constitute the Designated Sale Date.
     “Fixed Rate Lock Notice” has the meaning assigned to it in subparagraph
3(B)(4) of the Lease, which includes a reference to the form attached as Annex
2.
     “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
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.
 
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     “Fixed Rate Swap” has 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.
     “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 all rights and property interests of
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 (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 in the
Property.
     “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 or maintain its investment in the Property.
     “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.
     “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,
 
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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, 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.
     “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
 
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creation thereof (other than reserves for taxes and reserves for contingent
obligations);
     (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
 
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relevant to the determination of the whether such lease must be accounted for as
an operating lease or capital lease], plus (2) the fair value of the property
covered by the lease; 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” means, collectively, all advances made by BNPPLC’s Parent
(directly or through one or more of its Affiliates) and by Participants to or on
behalf of BNPPLC on or prior to the Effective Date to cover the purchase price
payable by BNPPLC to the for its interest in the Land and Improvements and other
Property, if any, and to cover the cost to BNPPLC of certain Transaction
Expenses and other amounts confirmed in the Closing Letter.
     “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) the
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 then 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.
 
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     “Land” means the land described in Exhibit A attached to the Closing
Certificate, the Lease and the Purchase Agreement.
     “Lease” means the Lease Agreement (Moffett Business Center) 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, 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
15(A)(3)(c) 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 Base
Rent Period, the per annum rate equal to:
     (a) the offered rate for deposits in U.S. dollars as of approximately 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”), as reported:
     (1) on Reuters Screen LIBOR01 page (or any replacement page or pages on
which London interbank rates of major banks for U.S. dollars are displayed) by
the Reuters service; or
     (2) on Moneyline Telerate Page 3750, British Bankers Association Interest
Settlement Rates, or another news page selected by BNPPLC’s Parent if the
Reuters Screen LIBOR01 page is removed from the Reuters system or changed such
that, in the opinion of BNPPLC’s Parent, the interest rates shown on it no
longer represent the same kind of interest rates as when the Operative Documents
were executed; or
     (b) if such offered rate is for any reason unavailable, 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
 
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(“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 the
applicable 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” will be
the arithmetic mean of the quotations. If, however, fewer than two quotations
are provided, “LIBOR” 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 the applicable Base Rent
Period.)
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 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. The first Base Rent Period will be
subject to a LIBOR Period Election of one month; and, subject to the limitations
and qualifications set forth in this definition, NAI may make any subsequent
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 period. After a LIBOR Period Election becomes effective, it
will remain in effect for all subsequent 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 Lease a LIBOR
Period Election for any Base Rent Period will also be considered the LIBOR
Period Election in effect on the Effective Date or Base Rent Date upon which
such Base Rent Period begins.) Notwithstanding the foregoing:

  •   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 Base Rent Period.     •   In the event BNPPLC determines
that it would be unlawful (or any central bank

 
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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 Base Rent Period if the Base Rent accrued during such period at a rate
based upon LIBOR, NAI will be deemed to have made such Base Rent Period subject
to an ABR Period Election, not a LIBOR Period Election.

  •   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
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
Base Rent Period, NAI will be deemed to have made an ABR Period Election for
that particular 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, (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
 
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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.
     “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
 
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quotation has the same highest value or lowest value, then one of such
quotations will 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.
     “Material Adverse Effect” means a material adverse effect on (a) the
assets, operations, financial condition 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 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 Remarketing Obligation” has the meaning indicated in the Purchase
Agreement.
     “Multiemployer Plan” means a multiemployer plan as defined in Section 3(37)
of ERISA to which contributions have been made by NAI or any ERISA Affiliate
during the preceding six years and which is covered by Title IV of ERISA.
     “NAI” means Network Appliance, Inc., a Delaware corporation.
     “Operative Documents” means the Closing Letter, the Closing Certificate,
the Lease, the Purchase Agreement and this Common Definitions and Provisions
Agreement.
     “Participant” means any Person other than BNPPLC that from time to time, by
executing the 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 (i) such Person is approved to be a Participant
by NAI or (ii) such Person becomes a Participant when an Event of Default has
occurred and is continuing. As of the Effective Date, NAI has approved only BANK
OF AMERICA, N.A.; GOLDMAN SACHS CREDIT PARTNERS L.P.; JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION; KEYBANK NATIONAL ASSOCIATION; MORGAN STANLEY BANK;
SUMITOMO MITSUI BANKING CORPORATION; and WELLS FARGO BANK, N.A. (all of which
are original parties to the Participation Agreement). BNPPLC may, however, from
time to time request NAI’s approval for other 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 already a party to the Participation
Agreement or 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 the Participation Agreement (Moffet
Business
 
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Center) dated as of the Effective Date, pursuant to which BANK OF AMERICA, N.A.;
GOLDMAN SACHS CREDIT PARTNERS L.P.; JPMORGAN CHASE BANK, NATIONAL ASSOCIATION;
KEYBANK NATIONAL ASSOCIATION; MORGAN STANLEY BANK; SUMITOMO MITSUI BANKING
CORPORATION; and WELLS FARGO BANK, N.A. are agreeing 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 the 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 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, and (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.
     “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 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
 
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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 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 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 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 and Participants 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.
 
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     “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.
     “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 Owner” means AMB Property, L.P., a Delaware limited partnership,
which is at the request and direction of NAI conveying the Property to BNPPLC
contemporaneously with the execution of the Operative Documents.
     “Property” means the Personal Property and the Real Property, collectively.
     “Purchase Agreement” means the Purchase Agreement (Moffett Business Center)
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 (except that it need not be incorporated in or qualified
to do business in Delaware), 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 of the
following made to BNPPLC to satisfy the Lease: the Upfront Fees, the Arrangement
Fee, Administrative Fees, Increased Cost Charges and Capital Adequacy Charges;
(C) any interest paid to BNPPLC or any Participant pursuant to subparagraph 3(H)
of the Lease; and (D) payments by BNPPLC to Participants required under the
Participation Agreements because of BNPPLC’s receipt of payments described in
the preceding clauses (A) through (C).
 
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     “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, (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
and the Break Even Price):
     (i) there will 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 will 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 will 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 and 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 2 of the Lease.
     “Remedial Work” means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other required remedial plans
that any governmental agency or
 
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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.
     “Spread” means, for any period beginning on and including the Effective
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) Consolidated
EBITDA for the then latest Rolling Four Quarters Period that ended prior to (and
for which NAI has reported earnings as necessary to compute Consolidated EBITDA)
into (2) the Consolidated Debt for Borrowed Money 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 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;
     (b) if Carrying Costs are understated or Base Rent is underpaid for any
Period because of any misstatement, subsequently discovered, of Consolidated
EBITDA or Consolidated Debt for Borrowed Money used for purposes of the pricing
grid below, BNPPLC will be entitled to collect from NAI all additional payments
that would have been expected under the Operative Documents but for the
misstatement, together with interest on each such additional payment computed at
the Default Rate from the date it would have been expected to the date it is
actually paid; and
     (c) notwithstanding anything to the contrary in this definition, on any
date when an Event of Default has occurred and is continuing, the Spread will
equal the Default
 
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Rate less the Effective Rate.

          Levels   Ratio of Consolidated Debt for Borrowed   Spread     Money to
Consolidated EBITDA      
Level I
  less than 0.5   35.0 basis points
Level II
  greater than or equal to 0.5, but less than 1.0   45.0 basis points
Level III
  greater than or equal to 1.0, but less than 1.5   55.0 basis points
Level IV
  greater than or equal to 1.5, but less than 2.0   70.0 basis points
Level IV
  greater than or equal to 2.0   85.0 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.
     “Term” has the meaning indicated in subparagraph 1(A) of the Lease.
     “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.
 
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     “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.
     “Upfront Fees” has the meaning indicated in subparagraph 3(E) of the Lease.
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. Any provision of (1) any of the Operative Documents, (2) any
other document which references this provision for purposes of establishing
notice requirements (in this provision, a “Related Document”), or (3) any
Applicable Law, that makes reference to any required payment from NAI to BNPPLC
or that makes reference to the sending, mailing or delivery of any notice or
demand will be subject to the following provisions (except that any notice given
by BNPPLC to satisfy any statutory requirement, including any notice of eviction
or foreclosure, will be considered sufficient if it satisfies the statutory
requirements applicable to the notice, regardless of whether the notice or
payment satisfies the following provisions):
     (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./Building 9 Lease
or at such other place and in such other manner as BNPPLC may designate in a
notice to NAI.
     (ii) All notices, demands, approvals, consents and other communications to
be made under any Operative Document or Related Document to or by the parties
thereto must, to be effective for purposes thereof, be in writing. Notices,
demands and other communications required or permitted under any Operative
Document or Related
 
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Document must 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. Notices, demands and other communications required or permitted by any
Related Document are to be sent to the addresses set forth therein; and notices,
demands and other communications required or permitted by under any Operative
Document are to be sent to the following addresses (or in the case of
communications to Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement):
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
However, any party to any Operative Document or Related Document may change its
address above or in the Related Document, as applicable, by written notice to
the other parties to such Operative Document or Related Document given in
accordance with this
 
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provision.
     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.
     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 thereby 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 any party to any Operative Document to
insist at any time upon the strict performance of any covenant or agreement
therein or to exercise any option, right, power or remedy contained therein 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 any party to any Operative Document of any payment thereunder
(including the receipt by BNPPLC of any Rent paid under the Lease) with
knowledge of the breach by another party of any covenant or agreement contained
in that 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
 
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assignment is permitted thereunder, their respective assigns.
     7. Time is of the Essence. Time is of the essence as to all obligations
created by the Operative Documents and as to all notices expressly required by
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 principles that might require the application of the
laws of another jurisdiction.
     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 or NAI is a party or intended beneficiary, without its
consent. 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
 
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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, and 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 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 NAI
and BNPPLC or any other Interested Party.
     15. No Fiduciary Relationship Intended. Neither the execution of the
Operative Documents or other documents referenced in this Agreement nor the
administration thereof by BNPPLC will create any fiduciary obligations of BNPPLC
(or any other Interested Party) to NAI. Moreover, BNPPLC and NAI disclaim any
intent to create any fiduciary or special relationship between themselves (or on
the part of any other Interested Party) 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.]
 
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     IN WITNESS WHEREOF, this Common Definitions and Provisions Agreement
(Moffett Business Center) is executed to be effective as of November 29, 2007.

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

 
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Signature Page

 

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[Continuation of signature pages for Common Definitions and Provisions Agreement
(Moffett Business Center) dated as of November 29, 2007]

            NETWORK APPLIANCE, INC., a Delaware corporation
      By:           Ingemar Lanevi, Vice President and Corporate      
Treasurer     

 
Comman Definitions and Provisions Agreement (Moffett Business Center) —
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 (Moffett
Business Center) dated as of November 29, 2007, between you, BNP Paribas Leasing
Corporation, and the undersigned, Network Appliance, Inc. This letter
constitutes notice of our election to make the first 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 (Moffett Business Center), all
subsequent 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 FIVE
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 (Moffett
Business Center) dated as of November 29, 2007, 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 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 will 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 (Moffett
Business Center) dated as of November 29, 2007, between you, BNP Paribas Leasing
Corporation, and the undersigned, Network Appliance, Inc.. This letter
constitutes notice of our election to make the first 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 (Moffett Business Center), all
subsequent 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 (MOFFETT BUSINESS
CENTER), OR IF THE DATE SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR
PERIOD ELECTION IS LESS THAN FIVE 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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     “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.
     “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 Owner” means AMB Property, L.P., a Delaware limited partnership,
which is at the request and direction of NAI conveying the Property to BNPPLC
contemporaneously with the execution of the Operative Documents.
     “Property” means the Personal Property and the Real Property, collectively.
     “Purchase Agreement” means the Purchase Agreement (Moffett Business Center)
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 (except that it need not be incorporated in or qualified
to do business in Delaware), 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 of the
following made to BNPPLC to satisfy the Lease: the Upfront Fees, the Arrangement
Fee, Administrative Fees, Increased Cost Charges and Capital Adequacy Charges;
(C) any interest paid to BNPPLC or any Participant pursuant to subparagraph 3(H)
of the Lease; and (D) payments by BNPPLC to Participants required under the
Participation Agreements because of BNPPLC’s receipt of payments described in
the preceding clauses (A) through (C).
 
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     “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, (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
and the Break Even Price):
     (i) there will 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 will 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 will 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 and 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 2 of the Lease.
     “Remedial Work” means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other required remedial plans
that any governmental agency or
 
Comman Definitions and Provisions Agreement (Moffett Business Center) — Page 29

 

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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.
     “Spread” means, for any period beginning on and including the Effective
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) Consolidated
EBITDA for the then latest Rolling Four Quarters Period that ended prior to (and
for which NAI has reported earnings as necessary to compute Consolidated EBITDA)
into (2) the Consolidated Debt for Borrowed Money 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 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;
     (b) if Carrying Costs are understated or Base Rent is underpaid for any
Period because of any misstatement, subsequently discovered, of Consolidated
EBITDA or Consolidated Debt for Borrowed Money used for purposes of the pricing
grid below, BNPPLC will be entitled to collect from NAI all additional payments
that would have been expected under the Operative Documents but for the
misstatement, together with interest on each such additional payment computed at
the Default Rate from the date it would have been expected to the date it is
actually paid; and
     (c) notwithstanding anything to the contrary in this definition, on any
date when an Event of Default has occurred and is continuing, the Spread will
equal the Default
 
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Rate less the Effective Rate.

          Levels   Ratio of Consolidated Debt for Borrowed   Spread     Money to
Consolidated EBITDA      
Level I
  less than 0.5   35.0 basis points
Level II
  greater than or equal to 0.5, but less than 1.0   45.0 basis points
Level III
  greater than or equal to 1.0, but less than 1.5   55.0 basis points
Level IV
  greater than or equal to 1.5, but less than 2.0   70.0 basis points
Level IV
  greater than or equal to 2.0   85.0 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.
     “Term” has the meaning indicated in subparagraph 1(A) of the Lease.
     “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.
 
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     “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.
     “Upfront Fees” has the meaning indicated in subparagraph 3(E) of the Lease.
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. Any provision of (1) any of the Operative Documents, (2) any
other document which references this provision for purposes of establishing
notice requirements (in this provision, a “Related Document”), or (3) any
Applicable Law, that makes reference to any required payment from NAI to BNPPLC
or that makes reference to the sending, mailing or delivery of any notice or
demand will be subject to the following provisions (except that any notice given
by BNPPLC to satisfy any statutory requirement, including any notice of eviction
or foreclosure, will be considered sufficient if it satisfies the statutory
requirements applicable to the notice, regardless of whether the notice or
payment satisfies the following provisions):
     (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./Building 9 Lease
or at such other place and in such other manner as BNPPLC may designate in a
notice to NAI.
     (ii) All notices, demands, approvals, consents and other communications to
be made under any Operative Document or Related Document to or by the parties
thereto must, to be effective for purposes thereof, be in writing. Notices,
demands and other communications required or permitted under any Operative
Document or Related
 
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Document must 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. Notices, demands and other communications required or permitted by any
Related Document are to be sent to the addresses set forth therein; and notices,
demands and other communications required or permitted by under any Operative
Document are to be sent to the following addresses (or in the case of
communications to Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement):
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
However, any party to any Operative Document or Related Document may change its
address above or in the Related Document, as applicable, by written notice to
the other parties to such Operative Document or Related Document given in
accordance with this
 
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provision.
     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.
     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 thereby 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 any party to any Operative Document to
insist at any time upon the strict performance of any covenant or agreement
therein or to exercise any option, right, power or remedy contained therein 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 any party to any Operative Document of any payment thereunder
(including the receipt by BNPPLC of any Rent paid under the Lease) with
knowledge of the breach by another party of any covenant or agreement contained
in that 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
 
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assignment is permitted thereunder, their respective assigns.
     7. Time is of the Essence. Time is of the essence as to all obligations
created by the Operative Documents and as to all notices expressly required by
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 principles that might require the application of the
laws of another jurisdiction.
     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 or NAI is a party or intended beneficiary, without its
consent. 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
 
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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, and 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 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 NAI
and BNPPLC or any other Interested Party.
     15. No Fiduciary Relationship Intended. Neither the execution of the
Operative Documents or other documents referenced in this Agreement nor the
administration thereof by BNPPLC will create any fiduciary obligations of BNPPLC
(or any other Interested Party) to NAI. Moreover, BNPPLC and NAI disclaim any
intent to create any fiduciary or special relationship between themselves (or on
the part of any other Interested Party) 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.]
 
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     IN WITNESS WHEREOF, this Common Definitions and Provisions Agreement
(Moffett Business Center) is executed to be effective as of November 29, 2007.

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

 

Comman Definitions and Provisions Agreement (Moffett Business Center) —
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[Continuation of signature pages for Common Definitions and Provisions Agreement
(Moffett Business Center) dated as of November 29, 2007]

            NETWORK APPLIANCE, INC., a Delaware corporation
      By:           Ingemar Lanevi, Vice President and Corporate       
Treasurer     

 
Comman Definitions and Provisions Agreement (Moffett Business Center) —
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 (Moffett
Business Center) dated as of November 29, 2007, between you, BNP Paribas Leasing
Corporation, and the undersigned, Network Appliance, Inc. This letter
constitutes notice of our election to make the first 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 (Moffett Business Center), all
subsequent 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 FIVE
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]
 
Comman Definitions and Provisions Agreement (Moffett Business Center) —
Signature Page

 

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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 (Moffett
Business Center) dated as of November 29, 2007, 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 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 will 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 (Moffett
Business Center) dated as of November 29, 2007, between you, BNP Paribas Leasing
Corporation, and the undersigned, Network Appliance, Inc.. This letter
constitutes notice of our election to make the first 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 (Moffett Business Center), all
subsequent 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 (MOFFETT BUSINESS
CENTER), OR IF THE DATE SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR
PERIOD ELECTION IS LESS THAN FIVE 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]