exv10w75






Exhibit
10.75







CONSTRUCTION AGREEMENT

(BUILDING 9)




BETWEEN




NETWORK APPLIANCE, INC.

(“NAI”)




AND




BNP PARIBAS LEASING CORPORATION

(“BNPPLC”)




February 1, 2008


 









 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ENGAGEMENT AND AUTHORIZATION	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	GENERAL TERMS AND CONDITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	1	 	Additional definitions	 	 	2	 
	 	 	“97-10/Maximum Permitted Prepayment”	 	 	2	 
	 	 	“97-10/Meltdown Event”	 	 	2	 
	 	 	“97-10/Prepayment”	 	 	3	 
	 	 	“97-10/Project Costs”	 	 	3	 
	 	 	“97-10/Pronouncement”	 	 	4	 
	 	 	“NAI’s Estimate of Force Majeure Delays”	 	 	4	 
	 	 	“NAI’s Estimate of Force Majeure Excess Costs”	 	 	4	 
	 	 	“Accrued Construction Period Interest Expense”	 	 	4	 
	 	 	“Administrative Fee”	 	 	5	 
	 	 	“Affiliate’s Contract”	 	 	5	 
	 	 	“Arrangement Fee”	 	 	5	 
	 	 	“Capital Adequacy Charges”	 	 	5	 
	 	 	“Carrying Costs”	 	 	5	 
	 	 	“Commitment Fee Rate”	 	 	5	 
	 	 	“Commitment Fees”	 	 	6	 
	 	 	“Complete Taking”	 	 	6	 
	 	 	“Completion Date”	 	 	6	 
	 	 	“Completion Notice”	 	 	7	 
	 	 	“Construction Advances”	 	 	7	 
	 	 	“Construction Advance Request”	 	 	7	 
	 	 	“Construction Allowance”	 	 	7	 
	 	 	“Construction Budget”	 	 	7	 
	 	 	“Construction Project”	 	 	7	 
	 	 	“Covered Construction Period Losses”	 	 	7	 
	 	 	“Defective Work”	 	 	7	 
	 	 	“FOCB Notice”	 	 	7	 
	 	 	“Force Majeure Event”	 	 	8	 
	 	 	“Funded Construction Allowance”	 	 	8	 
	 	 	“Future Work”	 	 	8	 
	 	 	“Ground Lease Rents”	 	 	8	 
	 	 	“Increased Cost Charges”	 	 	8	 
	 	 	“Increased Commitment”	 	 	8	 
	 	 	“Increased Funding Commitment”	 	 	8	 
	 	 	“Increased Time Commitment”	 	 	9	 
	 	 	“Initial Advance”	 	 	9	 







 









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	“Maximum Construction Allowance”	 	 	9	 
	 	 	“Notice of NAI’s Intent to Terminate”	 	 	9	 
	 	 	“Notice of NAI’s Intent to Terminate Because of a Force Majeure Event”	 	 	9	 
	 	 	“Notice of Termination by NAI”	 	 	9	 
	 	 	“Outstanding Construction Allowance”	 	 	9	 
	 	 	“Owner’s Election to Continue Construction”	 	 	9	 
	 	 	“Pre-lease Casualty”	 	 	9	 
	 	 	“Pre-lease Force Majeure Delays”	 	 	9	 
	 	 	“Pre-lease Force Majeure Event”	 	 	9	 
	 	 	“Pre-lease Force Majeure Event Notice”	 	 	10	 
	 	 	“Pre-lease Force Majeure Excess Costs”	 	 	10	 
	 	 	“Pre-lease Force Majeure Losses”	 	 	10	 
	 	 	“Prior Work”	 	 	11	 
	 	 	“Projected Cost Overruns”	 	 	11	 
	 	 	“Reimbursable Construction Period Costs”	 	 	11	 
	 	 	“Remaining Proceeds”	 	 	11	 
	 	 	“Scope Change”	 	 	11	 
	 	 	“Target Completion Date”	 	 	12	 
	 	 	“Termination of NAI’s Work”	 	 	12	 
	 	 	“Third Party Contract”	 	 	12	 
	 	 	“Third Party Contract/Termination Fees”	 	 	12	 
	 	 	“Timing or Budget Shortfall”	 	 	12	 
	 	 	“Upfront Fees”	 	 	13	 
	 	 	“Work”	 	 	13	 
	 	 	“Work/Suspension Event”	 	 	13	 
	 	 	“Work/Suspension Notice”	 	 	13	 
	 	 	“Work/Suspension Period”	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2	 	Construction and Management of the Property by NAI	 	 	14	 
	 	 	(A)	 	The Construction Project	 	 	14	 
	 	 	 	 	(1)	 	Construction Approvals by BNPPLC	 	 	14	 
	 

	 	 	 	 	 	(a)
	 	Preconstruction Approvals by BNPPLC
	 	 	14	 
	 

	 	 	 	 	 	(b)
	 	Approval of Scope Changes
	 	 	14	 
	 	 	 	 	(2)	 	NAI’s Right to Possession and to Control Construction	 	 	14	 
	 

	 	 	 	 	 	(a)
	 	Performance of the Work
	 	 	15	 
	 

	 	 	 	 	 	(b)
	 	Third Party Contracts
	 	 	15	 
	 

	 	 	 	 	 	(c)
	 	Adequacy of Drawings, Specifications and Budgets
	 	 	16	 
	 

	 	 	 	 	 	(d)
	 	Existing Condition of the Land and Improvements
	 	 	16	 







(ii)









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(e)
	 	Correction of Defective Work
	 	 	16	 
	 

	 	 	 	 	 	(f)
	 	Clean Up
	 	 	16	 
	 

	 	 	 	 	 	(g)
	 	No Damage for Delays
	 	 	16	 
	 

	 	 	 	 	 	(h)
	 	No Fee For Construction Management
	 	 	17	 
	 	 	 	 	(3)	 	Quality of Work	 	 	17	 
	 	 	(B)	 	Completion Notice	 	 	17	 
	 	 	(C)	 	Status of Property Acquired With BNPPLC’s Funds	 	 	17	 
	 	 	(D)	 	Insurance	 	 	18	 
	 	 	 	 	(1)	 	Liability Insurance	 	 	18	 
	 	 	 	 	(2)	 	Property Insurance	 	 	18	 
	 	 	 	 	(3)	 	Failure of NAI to Obtain Insurance	 	 	19	 
	 	 	 	 	(4)	 	Waiver of Subrogation	 	 	19	 
	 	 	(E)	 	Condemnation	 	 	19	 
	 	 	(F)	 	Additional Representations, Warranties and Covenants of NAI Concerning the Property	 	 	20	 
	 	 	 	 	(1)	 	Payment of Local Impositions	 	 	20	 
	 	 	 	 	(2)	 	Operation and Maintenance	 	 	21	 
	 	 	 	 	(3)	 	Debts for Construction, Maintenance, Operation or Development	 	 	22	 
	 	 	 	 	(4)	 	Permitted Encumbrances and the Ground Lease	 	 	22	 
	 	 	 	 	(5)	 	Books and Records Concerning the Property	 	 	22	 
	 	 	(G)	 	BNPPLC’s Right of Access	 	 	22	 
	 	 	 	 	(1)	 	Access Generally	 	 	22	 
	 	 	 	 	(2)	 	Failure of NAI to Perform	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3	 	Amounts to be Added to the Lease Balance (in Addition to Construction Advances)	 	 	24	 
	 	 	(A)	 	Initial Advance	 	 	24	 
	 	 	(B)	 	Carrying Costs	 	 	24	 
	 	 	(C)	 	Commitment Fees	 	 	25	 
	 	 	(D)	 	Future Administrative Fees and Out-of-Pocket Costs	 	 	25	 
	 	 	(E)	 	Increased Cost Charges and Capital Adequacy Charges	 	 	26	 
	 	 	(F)	 	Ground Lease Payments	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	4	 	Construction Advances	 	 	27	 
	 	 	(A)	 	Costs Subject to Reimbursement Through Construction Advances	 	 	27	 
	 	 	(B)	 	Exclusions From Reimbursable Construction Period Costs	 	 	29	 
	 	 	(C)	 	Conditions to NAI’s Right to Receive Construction Advances	 	 	29	 
	 	 	 	 	(1)	 	Construction Advance Requests	 	 	29	 
	 	 	 	 	(2)	 	Amount of the Advances	 	 	30	 
	 

	 	 	 	 	 	(a)
	 	The Maximum Construction Allowance
	 	 	30	 







(iii)









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(b)
	 	Costs Previously Incurred by NAI
	 	 	30	 
	 

	 	 	 	 	 	(c)
	 	Limits During any Work/Suspension Period
	 	 	31	 
	 

	 	 	 	 	 	(d)
	 	Restrictions Imposed for Administrative Convenience
	 	 	31	 
	 	 	 	 	(3)	 	No Advances After Certain Dates	 	 	31	 
	 	 	(D)	 	Breakage Costs for Construction Advances Requested But Not Taken	 	 	31	 
	 	 	(E)	 	No Third Party Beneficiaries	 	 	32	 
	 	 	(F)	 	No Waiver	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	5	 	Application of Insurance and Condemnation Proceeds	 	 	32	 
	 	 	(A)	 	Collection and Application Generally	 	 	32	 
	 	 	(B)	 	Advances of Escrowed Proceeds to NAI	 	 	33	 
	 	 	(C)	 	Status of Escrowed Proceeds After Commencement of the Term of the Lease	 	 	33	 
	 	 	(D)	 	Special Provisions Applicable After a 97-10/Meltdown Event or Event of Default	 	 	33	 
	 	 	(E)	 	NAI’s Obligation to Restore	 	 	33	 
	 	 	(F)	 	Special Provisions Concerning a Complete Taking	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	6	 	Notice of Cost Overruns and Pre-lease Force Majeure Events	 	 	34	 
	 	 	(A)	 	Notice of Projected Cost Overruns	 	 	34	 
	 	 	(B)	 	Pre-lease Force Majeure Event Events and Notices	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	7	 	Suspension and Termination of NAI’s Work	 	 	34	 
	 	 	(A)	 	Rights and Obligations During a Work/Suspension Period	 	 	34	 
	 	 	(B)	 	NAI’s Election to Terminate NAI’s Work	 	 	34	 
	 	 	(C)	 	BNPPLC’s Election to Terminate NAI’s Work	 	 	38	 
	 	 	(D)	 	Surviving Rights and Obligations	 	 	38	 
	 	 	(E)	 	Cooperation After a Termination of NAI’s Work	 	 	38	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	8	 	Continuation of Construction by BNPPLC	 	 	40	 
	 	 	(A)	 	Owner’s Election to Continue Construction	 	 	40	 
	 	 	 	 	(1)	 	Take Control of the Property	 	 	40	 
	 	 	 	 	(2)	 	Continuation of Construction	 	 	40	 
	 	 	 	 	(3)	 	Arrange for Turnkey Construction	 	 	41	 
	 	 	 	 	(4)	 	Suspension or Termination of Construction by BNPPLC	 	 	41	 
	 	 	(B)	 	Powers Coupled With an Interest	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	9	 	NAI’s Obligation for 97-10/Prepayments	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	10	 	Indemnity for Covered Construction Period Losses	 	 	43	 







(iv)









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	(A)	 	Covenant to Indemnify Against Covered Construction Period Losses	 	 	43	 
	 	 	(B)	 	Certain Losses Included or Excluded	 	 	44	 
	 	 	 	 	(1)	 	Back to Back Claims by Participants Against BNPPLC	 	 	44	 
	 	 	 	 	(2)	 	Environmental	 	 	45	 
	 	 	 	 	(3)	 	Failure to Maintain a Safe Work Site	 	 	45	 
	 	 	 	 	(4)	 	Failure to Complete Construction	 	 	46	 
	 	 	 	 	(5)	 	Fraud	 	 	46	 
	 	 	 	 	(6)	 	Excluded Taxes and Established Misconduct	 	 	46	 
	 	 	(C)	 	Express Negligence Protection	 	 	46	 
	 	 	(D)	 	Survival of Indemnity	 	 	47	 
	 	 	(E)	 	Due Date for Indemnity Payments	 	 	47	 
	 	 	(F)	 	Order of Application of Payments	 	 	47	 
	 	 	(G)	 	Defense of BNPPLC	 	 	47	 
	 	 	 	 	(1)	 	Assumption of Defense	 	 	47	 
	 	 	 	 	(2)	 	Indemnity Not Contingent	 	 	47	 
	 	 	(H)	 	Notice of Claims	 	 	48	 
	 	 	(I)	 	Withholding of Consent to Settlements Proposed by NAI	 	 	48	 
	 	 	(J)	 	Settlements Without the Prior Consent of NAI	 	 	48	 
	 	 	 	 	(1)	 	Election to Pay Reasonable Settlement Costs in Lieu of Actual	 	 	48	 
	 	 	 	 	(2)	 	Conditions to Election	 	 	49	 
	 	 	 	 	(3)	 	Indemnity Survives Settlement	 	 	49	 
	 	 	(K)	 	No Authority to Admit Wrongdoing on the Part of NAI	 	 	49	 
	 	 	(L)	 	Refunds of Covered Construction Period Losses Paid by NAI	 	 	50	 
	 	 	 	 	(1)	 	Payment by BNPPLC After Refund	 	 	50	 
	 	 	 	 	(2)	 	Meaning of Refund	 	 	50	 
	 	 	 	 	(3)	 	Conditions to Payment	 	 	51	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	11	 	Characterization of Operative Documents; Remedies	 	 	51	 
	 	 	(A)	 	Characterization of Operative Documents	 	 	51	 
	 	 	 	 	(1)	 	Confirmation of Lien and Security Interest Granted in the Lease	 	 	51	 
	 	 	 	 	(2)	 	Foreclosure Remedies	 	 	51	 
	 	 	(B)	 	Notice Required So Long As the Purchase Option Continues Under the Purchase Agreement	 	 	52	 
	 	 	(C)	 	Remedies Cumulative	 	 	52	 
	 	 	(D)	 	Third Party Estoppels	 	 	53	 







(v)









 






TABLE OF CONTENTS

(Continued)




Exhibits and Schedules




			
	 	 	 
	Exhibit A
	 	Legal Description
	 	 	 
	Exhibit B
	 	Description of the Construction Project and Budget
	 	 	 
	Exhibit C
	 	Construction Advance Request Form
	 	 	 
	Exhibit D
	 	Pre-lease Force Majeure Event Notice
	 	 	 
	Exhibit E
	 	Notice of Termination by NAI’s Work
	 	 	 
	Exhibit F
	 	Notice of NAI’s Intent to Terminate
	 	 	 
	Exhibit G
	 	Notice of Increased Funding Commitment by BNPPLC
	 	 	 
	Exhibit H
	 	Notice of Increased Time Commitment by BNPPLC
	 	 	 
	Exhibit I
	 	Notice of Rescission of NAI’s Intent to Terminate
	 	 	 
	Exhibit J
	 	Form of Contractor Estoppel
	 	 	 
	Exhibit K
	 	Form of Design Professional Estoppel








(vi)











 





CONSTRUCTION AGREEMENT

(BUILDING 9)




          This CONSTRUCTION AGREEMENT (BUILDING 9) (this “Agreement”), dated as of February 1, 2008 (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, BNPPLC and NAI are executing a Common
Definitions and Provisions Agreement (Building 9) 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 Agreement for all purposes. As used in this Agreement, capitalized terms defined in
the Common Definitions and Provisions Agreement and not otherwise defined in this Agreement are
intended to have the respective meanings assigned to them in the Common Definitions and Provisions
Agreement.




          At the request of NAI and to facilitate the transaction contemplated in the other Operative
Documents, contemporaneously with this Agreement BNPPLC is executing and accepting a Ground Lease
(Building 9) from NAI (the “Ground Lease”), pursuant to which BNPPLC is acquiring a leasehold
estate in the Land described in Exhibit A and any existing Improvements on such Land.




          Also contemporaneously with this Agreement, BNPPLC and NAI are executing a Lease Agreement
(Building 9) (the “Lease”), pursuant to which the parties expect that NAI will lease the
Improvements on the Land described in Exhibit A from BNPPLC for a lease term that will
commence on the Completion Date (as defined below).




          In anticipation of the construction of new or additional Improvements for NAI’s use pursuant
to the Lease, BNPPLC and NAI have agreed upon the terms and conditions upon which BNPPLC is willing
to authorize NAI to arrange and manage such construction and upon which BNPPLC is willing to
provide funds for such construction, and by this Agreement BNPPLC and NAI desire to evidence such
agreement.




ENGAGEMENT AND AUTHORIZATION




          Subject to the terms and conditions set forth in this Agreement, BNPPLC does hereby
engage and authorize NAI — and NAI does hereby accept such engagement and authorization, as an
independent contractor for BNPPLC — to construct the Construction Project on the Land and to manage
such construction for BNPPLC. As more particularly provided in subparagraph 2(A)(2)
below, NAI will take possession and control of the Land and all Improvements on the Land to




 









 







accomplish such construction. However, the rights and authority granted to NAI by this Agreement
are expressly made subject and subordinate to the terms and condition hereinafter set forth and to
the Ground Lease, to the Permitted Encumbrances and to any other claims or encumbrances affecting
the Land or the Property that may be asserted by third parties other than Liens Removable by
BNPPLC.




GENERAL TERMS AND CONDITIONS



1       Additional definitions. As used in this Agreement, capitalized terms defined above will
have the respective meanings assigned to them above; as indicated above, capitalized terms that are
defined in the Common Definitions and Provisions Agreement and that are used but not defined herein
will have the respective meanings assigned to them in the Common Definitions and Provisions
Agreement; and, the following terms will have the following respective meanings:





“97-10/Maximum Permitted Prepayment” as of any date means the amount equal to eighty-nine
and nine-tenths of one percent (89.9%) of the aggregate of all 97-10/Project Costs paid or
incurred on or prior to such date.




“97-10/Meltdown Event” means any of the following:




          (a)     NAI gives a Notice of NAI’s Intent to Terminate and thereafter (i)
fails to rescind the same as described in subparagraph 7(B)(7) within ten
days after BNPPLC responds with any Increased Commitment, or (ii) gives a
Notice of Termination by NAI as provided in subparagraph 7(B)(1); or




          (b)     NAI gives a notice to terminate its Supplemental Payment Obligation
under the Purchase Agreement as described in subparagraph 6(B) of
the Purchase Agreement; or




          (c)     BNPPLC gives notice to NAI as described in subparagraph 7(C) to
cause a Termination of NAI’s Work; or




          (d)     NAI fails for any reason whatsoever to substantially complete the
Construction Project and give a Completion Notice to BNPPLC prior to the
Target Completion Date; or




          (e)     for any reason whatsoever (including the accrual of
Carrying Costs), the Funded Construction Allowance exceeds the



 



Construction Agreement (Building 9) – Page 2



 









 







Maximum Construction Allowance.




“97-10/Prepayment” means any payment to BNPPLC required by Paragraph 9, which in each case
will equal (A) the 97-10/Maximum Permitted Prepayment, computed as of the date on which the
payment becomes due, less (B) the sum of (1) the accreted value of any prior payments
actually received by BNPPLC from NAI constituting 97-10/Prepayments, and (2) amounts (if
any) then owed by BNPPLC to NAI pursuant to this Agreement as reimbursements for
Reimbursable Construction Period Costs paid by NAI and not theretofore reimbursed. For
purposes of the preceding sentence, “accreted value” of a payment means the amount of the
payment plus an amount equal to the interest that would have accrued on the payment if it
bore interest at the Effective Rate plus the Spread.




“97-10/Project Costs” means the following:




          (a)      costs incurred for the Work, including not only hard costs incurred for the new
Improvements described in Exhibit B, but also the following costs to the extent
reasonably incurred in connection with the Construction Project:




	 	 •	 	soft costs, such as architectural fees, engineering fees and
fees and costs paid in connection with obtaining project permits and approvals
required by governmental authorities or any Permitted Encumbrance,
	 
	 	 •	 	site preparation costs, and
	 
	 	 •	 	costs of offsite and other public improvements required as
conditions of governmental approvals for the Construction Project or required
by any Permitted Encumbrances;






          (b)      costs incurred to maintain insurance required by (and consistent with the
requirements of) this Agreement prior to the Completion Date;




          (c)      Local Impositions that have accrued or become due prior to the Completion Date;




          (d)      Accrued Construction Period Interest Expense; and




          (e)      any costs in addition to those described in clauses (a) through (d)
preceding that GAAP (as it exists on the Effective Date) would allow BNPPLC to capitalize as
part of the cost of the Property or that the 97-10/Pronouncement would allow
BNPPLC to characterize as project costs, including: (1) cancellation or termination
fees



 



Construction Agreement (Building 9) – Page 3



 










 







or other compensation payable by NAI or BNPPLC pursuant to any contract concerning the
Construction Project made by NAI or BNPPLC with any general contractor, architect, engineer
or other third party because of any election by NAI or BNPPLC to cancel or terminate such
contract, and (2) any costs that BNPPLC incurs and is allowed to capitalize to continue or
complete the Construction Project after any Owner’s Election to Continue Construction as
provided in subparagraph 8(A).




However, notwithstanding the foregoing, 97-10/Project Costs will not include Pre-lease Force
Majeure Losses, Administrative Fees, the Arrangement Fee or any legal fees which are
included in Transaction Expenses.




“97-10/Pronouncement” means the pronouncement issued by the Emerging Issues Task Force of
the Financial Accounting Standards Board in 1998 titled “EITF 97-10: The Effect of Lessee
Involvement in Asset Construction”, which provides that certain kinds of involvement by a
lessee in pre-lease commencement construction will cause the lessee to be considered as the
owner of the leased property during the construction period and then will require
application of the appropriate sale and leaseback accounting rules.




“NAI’s Estimate of Force Majeure Delays” has the meaning indicated in subparagraph 7(B)(4).




“NAI’s Estimate of Force Majeure Excess Costs” has the meaning indicated in subparagraph
7(B)(3).




“Accrued Construction Period Interest Expense” means interest that has accrued and
that BNPPLC has paid or is obligated to pay on Funding Advances for any period prior to the
Completion Date. Such interest will include a percentage, equal to the aggregate
Percentages of all Participants (under and as defined in the Participation Agreement), of
Carrying Costs and Commitment Fees that accrue after the execution of any Participation
Agreement and that are added to the Outstanding Construction Allowance as provided in this
Agreement, it being understood that the additional amounts BNPPLC must pay to the
Participants under the Participation Agreement because of the accrual of Carrying Costs and
Commitment Fees effectively constitute construction period interest on advances the
Participants make to BNPPLC under the Participation Agreement. Accrued Construction Period
Interest Expense will also include any interest and other finance charges that accrue prior
to the Completion Date because of Funding Advances provided to BNPPLC by BNPPLC’s Parent in
the form of loans, regardless of whether BNPPLC’s obligation in respect of such loans is
limited to BNPPLC’s interest in the Property. However, any such interest and other finance
charges accruing on Funding Advances provided by BNPPLC’s Parent and included in Accrued
Construction Period Interest Expense will not exceed the Carrying Costs attributable to the portion of the Lease Balance funded or maintained by



 



Construction Agreement (Building 9) – Page 4



 









 







such
Funding Advances. Further, Accrued Construction Period Interest will not include any
portion of Carrying Costs included in Pre-lease Force Majeure Losses (as set forth in the
definition thereof below) or interest or finance charges that BNPPLC must pay to the
Participants under the Participation Agreement because of the accrual of such portion of
Carrying Costs.




“Administrative Fee” has the meanings indicated in subparagraph 3(A) and subparagraph 3(D).




“Affiliate’s Contract” has the meaning indicated in subparagraph 2(A)(2)(b)2).




“Arrangement Fee” has the meaning indicated in subparagraph 3(A).




“Capital Adequacy Charges” has the meaning indicated in subparagraph 3(E)(1).




“Carrying Costs” has the meaning indicated in subparagraph 3(B).




“Commitment Fee Rate” means, for each Construction Period, the amount established as of the
date (in this definition, the “CFR 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 Commitment Fee Rate 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
Commitment Fee Rate under this definition, and no reduction in the Commitment Fee
Rate from one period to the next will be effective for purposes of this Agreement
unless, prior to the CFR Test Date for the next period, NAI shall have provided
BNPPLC with a written notice setting forth and certifying the calculation under this
definition that justifies the reduction; and




          (b)      if Commitment Fees are understated during any Construction Period because
of any misstatement, subsequently discovered, of Consolidated EBITDA or Consolidated
Debt for Borrowed Money, BNPPLC will be entitled to add to the Outstanding
Construction Allowance or (after the Completion Date) collect from NAI all
additional amounts that would have been added to the Outstanding Construction
Allowance hereunder or expected to be paid under the other



 



Construction Agreement (Building 9) – Page 5



 









 







Operative Documents but
for the misstatement, together with interest on each such additional amount computed
at the Default Rate from the date it would have been included in the Outstanding
Construction Allowance or expected to be paid to the date it is actually added or
paid.



	 	 	 	 	 	 	 	 	 
	 
	 	Levels	 	 	Ratio of Consolidated Debt for	 	 	Spread	 
	 	 	 	 	Borrowed Money to	 	 	 	 
	 	 	 	 	Consolidated EBITDA	 	 	 	 
	 	Level I
	 	 	less than 0.5
	 	 	6.0 basis points	 
	 	Level II
	 	 	greater than or equal to 0.5, but

less than 1.0
	 	 	7.0 basis points	 
	 	Level III
	 	 	greater than or equal to 1.0, but

less than 1.5
	 	 	8.0 basis points	 
	 	Level IV
	 	 	greater than or equal to 1.5, but

less than 2.0
	 	 	10.0 basis point	 
	 	Level V
	 	 	greater than or equal to 2.0
	 	 	15.0 basis points	 
	 






All determinations of the Commitment Fee Rate by BNPPLC will, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of this Agreement. Further
BNPPLC may, but will not be required, to rely on the determination of the Commitment Fee
Rate set forth in any notice delivered by NAI as described above in clause (a) of this
definition.




“Commitment Fees” has the meaning indicated in subparagraph 3(C).




“Complete Taking” means a taking by eminent domain prior to the Completion Date over NAI’s
objection of all of the Land or the Property, or so much thereof as to make it impossible to
complete the Construction Project for its intended uses on the Land regardless of any Scope
Changes BNPPLC may be willing to approve or any Increased
Commitment that BNPPLC may be willing to provide.




“Completion Date” means the date upon which NAI gives the notice to BNPPLC which is required
by subparagraph 2(B), after having substantially completed the Construction Project and
having obtained any certificate of occupancy or other permit (temporary or permanent)
required for the commencement of NAI’s use of the Improvements.



 



Construction Agreement (Building 9) – Page 6



 









 






“Completion Notice” means the notice required by subparagraph 2(B) from NAI to
BNPPLC, advising BNPPLC that NAI has substantially completed construction of the
Construction Project and has obtained any certificate of occupancy or other permit
(temporary or permanent) required for the commencement of NAI’s use of the Improvements.




“Construction Advances” means (1) actual advances of funds made by or on behalf of BNPPLC to
or on behalf of NAI as provided in Paragraph 4, which sets forth NAI’s rights to receive
advances for Reimbursable Construction Period Costs, and (2) other amounts paid or incurred
by BNPPLC that subparagraph 8(A) or other provisions of this Agreement allow BNPPLC to
characterize as Construction Advances. The term “Construction Advances” will not, however,
include advances of insurance proceeds, condemnation proceeds or other Escrowed Proceeds to
pay or reimburse costs of repairs or restoration.




“Construction Advance Request” has the meaning indicated in subparagraph 4(C)(1).




“Construction Allowance” means the allowance to be provided by BNPPLC for the design and
construction of the Construction Project, against which and from which Carrying Costs,
Construction Advances and other amounts will be or may be charged and paid as provided in
various provisions of this Agreement (including Paragraphs 3, 4 and 8).




“Construction Budget” means the budget for the Construction Project set forth in Exhibit
B.




“Construction Project” means the new buildings or other substantial Improvements to be
constructed, or the alteration of existing Improvements, as described generally in
Exhibit B.




“Covered Construction Period Losses” has the meaning indicated in subparagraph 10(A).




“Defective Work” has the meaning indicated in subparagraph 2(A)(2)(e).




“FOCB Notice” means a notice from BNPPLC to NAI advising NAI of any of the following events
or circumstances, and also advising NAI that because of any of the following events or
circumstances BNPPLC will be entitled to make the election described in subparagraph 7(C),
which will constitute a Termination of NAI’s Work and a 97-10/Meltdown Event:



 



Construction Agreement (Building 9) – Page 7



 









 






          (1)     NAI has taken action to cancel or terminate or reduce the coverage available
to BNPPLC under the builder’s risk insurance obtained for the Construction Project as
required by this Agreement, or NAI has otherwise failed to maintain any insurance or to
provide insurance certificates to BNPPLC as required by this Agreement and not cured such
failure within ten days after receiving notice thereof, or




          (2)     NAI has given any Pre-lease Force Majeure Event Notice to BNPPLC, or




          (3)     an Event of Default has occurred and is continuing; or




          (4)     a Work/Suspension Event has occurred and continued for more than thirty consecutive
days after NAI’s receipt of a Work/Suspension Notice advising NAI of such Work/Suspension
Event, and subsequent to such thirty day period the Work/Suspension Event has not been
rectified by NAI.




“Force Majeure Event” means (A) any taking of any part of the Property by eminent domain
prior to the Completion Date, and (B) any damage to the Improvements or disruption of the
Work that occurs prior to the Completion Date and that is caused by fire or acts of God
(such as flood, lightning, earthquake or hurricane), war, strikes and other labor disputes,
or riot or similar civil disturbance, but only to the extent such damage or disruption (i)
is beyond the control of and not caused in whole or in part by negligence, illegal acts or
willful misconduct on the part of NAI or of its employees or of any other party acting under
NAI’s control or with the approval or authorization of NAI, and (ii) could not have been
avoided or overcome by the exercise of due diligence or reasonable foresight on the part of
NAI or of any other such party.




“Funded Construction Allowance” means on any day the Outstanding Construction Allowance on
that day, including all Construction Advances and Carrying Costs added to the Outstanding
Construction Allowance on or prior to that day, plus the amount of any Qualified Prepayments
deducted on or prior to that day in the calculation of such Outstanding Construction
Allowance.




“Future Work” has the meaning indicated in subparagraph 4(C)(2)(b).




“Ground Lease Rents” has the meaning indicated in subparagraph 3(F).




“Increased Cost Charges” has the meaning indicated in subparagraph 3(E)(1).




“Increased Commitment” has the meaning indicated in subparagraph 7(B)(6).




“Increased Funding Commitment” has the meaning indicated in



 



Construction Agreement (Building 9) – Page 8



 









 







subparagraph 7(B)(6)(a).




“Increased Time Commitment” has the meaning indicated in subparagraph 7(B)(6)(b).




“Initial Advance” has the meaning indicated in subparagraph 3(A).




“Maximum Construction Allowance” means an amount equal to the difference computed by
subtracting the Initial Advance from $48,950,000, as such amount may be increased from time
to time by any Increased Funding Commitment made by BNPPLC as provided in subparagraph
7(B)(6).




“Notice of NAI’s Intent to Terminate” has the meaning indicated in subparagraph 7(B)(2).




“Notice of NAI’s Intent to Terminate Because of a Force Majeure Event” has the meaning
indicated in subparagraph 7(B)(5).




“Notice of Termination by NAI” has the meaning indicated in subparagraph 7(B)(1).




“Outstanding Construction Allowance” means, as of any date, the difference (but not less
than zero) of (A) the total Construction Advances made by or on behalf of BNPPLC on or prior
to such date in question, plus (B) all Carrying Costs, Commitment Fees, Administrative Fees,
Increased Cost Charges and Capital Adequacy Charges added on or prior to the date as
provided in Paragraph 3, less (C) any funds received and applied as Qualified Prepayments on
or prior to such date.




“Owner’s Election to Continue Construction” has the meaning indicated in subparagraph 8(A).




“Pre-lease Casualty” has the meaning indicated in subparagraph 2(A)(2)(a).




“Pre-lease Force Majeure Delays” means delays in the completion of the Work to the extent
(but only to the extent) caused solely by a Pre-lease Force Majeure Event.




“Pre-lease Force
Majeure Event” means a Force Majeure Event that occurs prior to the
Completion Date; provided, however, that if NAI does not notify BNPPLC of any such Force
Majeure Event by the delivery of a Pre-lease Force Majeure Event Notice within thirty days
after the Force Majeure Event first occurs or commences, then such Force Majeure Event will
not qualify as a “Pre-lease Force Majeure Event” for purposes of this Agreement or the other
Operative Documents.



 



Construction Agreement (Building 9) – Page 9




 











 






“Pre-lease Force Majeure Event Notice” has the meaning indicated in subparagraph 6(B).




“Pre-lease Force Majeure Excess Costs” means the amount (if any) by which the increases in
the costs of the Work resulting directly and solely from a Pre-lease Force Majeure Event
(such as, for example, the costs of repairing damage to the Improvements caused by a
Pre-lease Force Majeure Event) exceed the amounts available to pay or reimburse NAI for such
increased costs. Amounts available to pay or reimburse such increased costs will include
(a) insurance proceeds or any recovery from a third party (including any Escrowed Proceeds
held by BNPPLC), and (b) any part of the Construction Allowance (including any unused
contingency amount in the Construction Budget) not used or needed to cover other
Reimbursable Construction Period Costs.




“Pre-lease Force Majeure Losses” means any of the following Losses that BNPPLC suffers by
reason of any taking or damage to the Improvements which constitutes a Pre-lease Force
Majeure Event:





          (a)     the costs of repairing any such damage to the extent that such costs have,
as of the date of any required determination of Pre-lease Force Majeure Losses, been
paid or reimbursed from a Construction Advance (and thus are included in the Lease
Balance as of that date), to be distinguished from costs of repairs paid or
reimbursed from insurance proceeds or from any recovery from a third party;





          (b)     any diminution in the value of the Improvements resulting from any such
taking or resulting from any such damage that has not, as of the date of the
required determination of Pre-lease Force Majeure Losses, been repaired;





          (c)     any increase in the total amount of Carrying Costs, Commitment Fees,
Administrative Fees, Increased Cost Charges, Capital Adequacy Charges and Ground
Lease Rents (and any other amounts) added to the Lease Balance as provided in
Paragraph 3 solely by reason of Pre-lease Force Majeure Delays; and





          (d)     to the extent not already included in the increase described in the preceding
clause, all increases in Carrying Costs that are attributable to the amounts included in
Pre-lease Force Majeure Losses pursuant to the preceding clause (a);




but in each case such amounts will constitute Pre-lease Force Majeure Losses only to
the extent, if any, that they are not offset by condemnation or insurance proceeds which are
(1) paid by reason of such Pre-lease Force Majeure Event (including insurance proceeds paid
to compensate BNPPLC or NAI for increased financing costs, the lost time value of




 



Construction Agreement (Building 9) – Page 10



 









 







BNPPLC’s investment in the Project or business interruption) and (2) applied as a Qualified
Prepayment to reduce the Lease Balance.




Also, for purposes of this definition, the diminution in the value of the Improvements, as
described in the preceding clause (b), because of any damage that constitutes a Pre-lease
Force Majeure Event will not exceed the amount thereof estimated in good faith by any
independent appraiser or insurance adjuster engaged by BNPPLC to determine such amount after
BNPPLC has received a Pre-lease Force Majeure Event Notice as provided in subparagraph 6(B),
nor will it exceed the cost of repairing the damage as estimated in good faith by any such
independent insurance adjuster or as indicated by any bona fide written bid to make the
repairs that BNPPLC obtains from a reputable contractor capable of making the repairs.




“Prior Work” has the meaning indicated in subparagraph 4(C)(2)(b).




“Projected Cost Overruns” means the excess (if any), calculated as of the date of each
Construction Advance Request, of (1) the total of projected Reimbursable Construction Period
Costs yet to be incurred or for which NAI has yet to be reimbursed hereunder (including
projected Reimbursable Construction Period Costs for Future Work), over (2) the balance of
the remaining Construction Allowance then projected to be available to cover such costs. The
balance of the remaining Construction Allowance then projected to be available will equal:
(i) the amount (if any) by which the Maximum Construction Allowance exceeds the Funded
Construction Allowance, plus (ii) any Escrowed Proceeds then available or expected to be
available to cover costs of repairs and restoration that NAI will perform as part of the
Work after a casualty or condemnation, less (iii) all projected future Carrying Costs,
Commitment Fees, Administrative Fees and other amounts to be added to the Outstanding
Construction Allowance as provided in Paragraph 3.




“Reimbursable Construction Period Costs” has the meaning indicated in subparagraph 4(A).




“Remaining Proceeds” has the meaning indicated in subparagraph 5(A).




“Scope Change” means a change to the Construction Project that, if implemented, will
make the quality, function or capacity of the Improvements “materially different” (as
defined below in this subparagraph) than as described or inferred by the site plan or plans
and renderings referenced in Exhibit B. The term “Scope Change” is not intended to
include the mere refinement, correction or detailing of the site plan, plans or renderings
submitted to BNPPLC by NAI. As used in this definition, a “material difference” means a
difference that could reasonably be expected to (a) cause the Lease Balance to exceed



 



Construction Agreement (Building 9) – Page 11



 









 







the fair market value of the Property when the Construction Project is completed and all
Construction Advances required in connection therewith have been funded, or significantly
increase any such excess, (b) change the general character of the Improvements from that
needed to accommodate the uses to be permitted by subparagraph 2(A) of the Lease, or
(c) cause or exacerbate Projected Cost Overruns.




“Target Completion Date” means the last Business Day of the calendar month which includes
the second anniversary of the Effective Date, as such date may be extended from time to time
by any Increased Time Commitment made by BNPPLC as provided in subparagraph 7(B)(6)(b).




“Termination of NAI’s Work” means a termination of NAI’s rights and obligations to continue
the Work because of an election to terminate made by NAI pursuant to subparagraph 7(B) or
because of an election by BNPPLC made pursuant to subparagraph 7(C).




“Third Party Contract” has the meaning indicated in subparagraph 2(A)(2)(b)1).




“Third Party Contract/Termination Fees” means any amounts, however denominated, for which
NAI will be obligated under a Third Party Contract as a result of any election or decision
by NAI to terminate such Third Party Contract, including demobilization costs; provided,
however, amounts payable only by reason of Prior Work as of the date of any such termination
will not be characterized as Third Party Contract/Termination Fees. If NAI reserves an
absolute express right in a Third Party Contract to terminate such contract at any time,
without cause, for a specified U.S. dollar amount, such amount will constitute a Third Party
Contract/Termination Fee. If no such right is reserved in a Third Party Contract, the
amount of damages that NAI is required to pay (in addition to payments required for Prior
Work) upon a repudiation of the Third Party Contract by NAI will qualify as a “Third Party
Contract/Termination Fee” applicable to such contract for purposes of this Agreement.




“Timing or Budget Shortfall” means that, as of any time prior to the Completion Date,
(i) the remaining available Construction Allowance will not be sufficient to cover
Reimbursable Construction Period Costs yet to be paid or reimbursed from Construction
Advances (x) because the cost of the Work exceeds budgeted expectations (resulting in
Projected Cost Overruns) through no fault of NAI or its employees or any other party acting
under NAI’s control or with the approval or authorization of NAI, (y) because of any
Pre-lease Force Majeure Event or (z) because NAI can no longer satisfy conditions to
BNPPLC’s obligation to provide further Construction Advances, or (ii) the Work will not be
substantially completed prior to the Target Completion Date through no fault of NAI or its
employees or any other party acting under NAI’s control or with the approval or




 



Construction Agreement (Building 9) – Page 12



 









 







authorization of NAI. As used in this definition with respect to any party, the term
“fault” will not include inadequate estimation of time or dollars unless shown to be caused
by the negligence or wilful misconduct of that party.




“Upfront Fees” has the meaning indicated in subparagraph 3(A).




“Work” has the meaning indicated in subparagraph 2(A)(2)(a).




“Work/Suspension Event” means any of the following:




          (1)     Projected Cost Overruns have become more likely than not, in BNPPLC’s good faith
judgment (taking into account any notices or Construction Draw Requests from NAI indicating
that a Pre-lease Force Majeure Event may result in Projected Cost Overruns), and BNPPLC has
notified NAI of such judgement and the reasons therefor.




          (2)     Delays in the Work (including any delays resulting from damage to the Property by
fire or other casualty or from any taking of any part of the Property by condemnation) have
made it substantially unlikely, in BNPPLC’s good faith judgment, that NAI will be able to
complete the Construction Project in accordance with the requirements of this Agreement
prior to the Target Completion Date using only the funds available to NAI under this
Agreement, and BNPPLC has notified NAI of such judgement and the reasons therefor.




          (3)     BNPPLC has requested with respect to any Construction Advance, but NAI has failed
to provide within thirty days after receipt of the request: (1) invoices, requests for
payment from contractors and other evidence reasonably establishing that the costs and
expenses for which NAI has requested or is requesting reimbursement constitute actual
Reimbursable Construction Period Costs, and (2) canceled checks, lien waivers or other
evidence reasonably establishing that all prior Construction Advances paid to NAI have been
used by NAI to pay the Reimbursable Construction Period Costs for which the prior advances
were requested and made.




“Work/Suspension Notice” means a notice from BNPPLC to NAI advising NAI of any event or
circumstances that constitute a Work/Suspension Event and advising NAI that (1) before the
Work/Suspension Event is rectified BNPPLC may limit Construction Advances to NAI as
permitted by this Agreement, and (2) unless NAI does rectify the Work/Suspension Event
within thirty days after NAI’s receipt of such notice, BNPPLC may elect to send an FOCB
Notice in anticipation of a Termination of NAI’s Work.




“Work/Suspension Period” means any period (1) beginning with the date of any
Work/Suspension Notice, FOCB Notice or Notice of NAI’s Intent to Terminate, and (2)



 



Construction Agreement (Building 9) – Page 13



 









 







ending on the earlier of (a) the first date upon which (i) no Work/Suspension Events are
continuing, (ii) all previous FOCB Notices and Notices of NAI’s Intent to Terminate (if any)
have been rescinded, and (iii) no 97-10/Meltdown Events have occurred, or (b) the effective
date of any Termination of NAI’s Work as described in subparagraph 7(B) or subparagraph
7(C).


2       Construction and Management of the Property by NAI.





          (A)    The Construction Project.






          (1)     Construction Approvals by BNPPLC.




          (a)     Preconstruction Approvals by BNPPLC. NAI has submitted and obtained
BNPPLC’s approval of the site plan and descriptions of the Construction Project
referenced in Exhibit B. Also set forth in Exhibit B is a general
description of the Construction Project. The Construction Project, as constructed by
NAI pursuant to this Agreement, and all construction contracts and other agreements
executed or adopted by NAI in connection therewith, must not be inconsistent in any
material respect with the plans or other items referenced in Exhibit B,
except to the extent otherwise provided by any Scope Change approved by BNPPLC and
except as otherwise provided in subparagraph 8(A) if BNPPLC should make an Owner’s
Election to Continue Construction after any Termination of NAI’s Work.




          (b)     Approval of Scope Changes. Before making a Scope Change, NAI must
provide to BNPPLC a reasonably detailed written description of the Scope Change, a
revised Construction Budget and a copy of any changes to the drawings, plans and
specifications for the Improvements required in connection therewith, all of which
must be approved in writing by BNPPLC before the Scope Change is implemented. After
receiving such items, BNPPLC will endeavor in good faith to respond promptly (and in
any event no later than thirty days after such receipt) to any request by NAI for
approval of the Scope Change. BNPPLC will not, however, be liable for any failure
to provide a prompt response. Further, BNPPLC’s approval will not in any event
constitute a waiver of subparagraph 2(A)(3) or of any other provision of this
Agreement or other Operative Documents.




          (2)     NAI’s Right to Possession and to Control Construction. Subject to
the terms and conditions set forth in this Agreement, and prior to any Termination of NAI’s
Work as provided in subparagraphs 7(B) and 7(C), NAI will have possession of the Land and
all Improvements on the Land to the exclusion of BNPPLC and will have the sole




 



Construction Agreement (Building 9) – Page 14



 









 







right to control and the sole responsibility for the design and construction of the
Construction Project, including the means, methods, sequences and procedures implemented to
accomplish such design and construction. Although title to all Improvements will vest in
BNPPLC (as more particularly provided in subparagraph 2(C)), BNPPLC’s obligation with
respect to the Construction Project will be limited to the making of advances under and
subject to the conditions set forth in this Agreement. Without limiting the foregoing, NAI
acknowledges and agrees that:




          (a)      Performance of the Work. Except as provided in subparagraphs 7(A)
and 7(D), NAI must, using its best skill and judgment and in an expeditious and
economical manner not inconsistent with the interests of BNPPLC, perform or cause to
be performed all work required, and must provide or cause to be provided all
supplies and materials required, to design and complete construction of the
Construction Project (collectively, the “Work”) no later than the Target Completion
Date. The Work will include obtaining all necessary building permits and other
governmental approvals required in connection with the design and construction of
the Construction Project, or required in connection with the use and occupancy
thereof (e.g., certificates of occupancy). The Work will also include any repairs or
restoration required because of damage to Improvements by fire or other casualty
prior to the Completion Date (a “Pre-lease Casualty”); provided, however, the cost
of any such repairs or restoration will be subject to reimbursement not only through
Construction Advances made to NAI on and subject to the terms and conditions of this
Agreement, but also through the application of Escrowed Proceeds as provided in
Paragraph 5; and, provided further, like other Work, any such repairs and
restoration to be provided by NAI will be subject to subparagraphs 7(A) and 7(B),
which establish certain rights of NAI to suspend or discontinue any Work. NAI will
carefully schedule and supervise all Work, will check all materials and services
used in connection with all Work and will keep full and detailed accounts as may be
necessary to document expenditures made or expenses incurred for the Work.





          (b)      Third Party Contracts.





          1)     NAI will not enter into any construction contract or other agreement
with a third party concerning the Work or the Construction Project (a “Third
Party Contract”) in the name of BNPPLC or otherwise purport to bind BNPPLC
to any obligation to any third party.





          2)     In any Third Party Contract between NAI and any of its
Affiliates (an “Affiliate’s Contract”) NAI must reserve the right to
terminate such contract at any time, without cause, and without subjecting



 



Construction Agreement (Building 9) – Page 15



 









 







NAI to liability for any Third Party Contract/Termination Fee.
Further, NAI must not enter into any Affiliate’s Contract that obligates NAI
to pay more than would be required under an arms-length contract or that
would require NAI to pay its Affiliate any amount in excess of the sum of
actual, out-of-pocket direct costs and internal labor costs incurred by the
Affiliate to perform such contract.





          (c)     Adequacy of Drawings, Specifications and Budgets. BNPPLC has not
made and will not make any representations as to the adequacy of the Construction
Budget or any other budget or any site plans, renderings, plans, drawings or
specifications for the Construction Project, and no modification of any such
budgets, site plans, renderings, plans, drawings or specifications that may be
required from time to time will entitle NAI to any adjustment in the Construction
Allowance.




          (d)     Existing Condition of the Land and Improvements. NAI is familiar
with the conditions of the Land and any existing Improvements on the Land. NAI will
have no claim for damages against BNPPLC or for an increase in the Construction
Allowance or for an extension of the deadline specified in subparagraph 2(A)(2)(a)
for completing the Work by reason of any condition (concealed or otherwise) of or
affecting the Land or Improvements.




          (e)     Correction of Defective Work. NAI will promptly correct all Work
performed prior to any Termination of NAI’s Work that does not comply with the
requirements of this Agreement for any reason other than a Pre-lease Casualty
(“Defective Work”). If NAI fails to correct any Defective Work or fails to carry out
Work in accordance with this Agreement, BNPPLC may (but will not be required to)
order NAI to stop all Work until the cause for such failure has been eliminated.




          (f)     Clean Up. Upon the completion of all Work, NAI will remove all
waste material and rubbish from and about the Land, as well as all tools,
construction equipment, machinery and surplus materials. NAI will keep the Land and
the Improvements thereon in a reasonably safe and sightly condition as Work
progresses.




          (g)     No Damage for Delays. NAI will have no claim for damages
against BNPPLC or for an increase in the Construction Allowance by reason of any
delay in the performance of any Work. Nor will NAI have any claim for an extension
of the deadline specified in subparagraph 2(A)(2)(a) for completing the Work because
of any such period of delay, except that (i) in the case of any Pre-



 



Construction Agreement (Building 9) – Page 16



 









 







lease Force Majeure Delays, NAI will have certain rights as set forth in
subparagraph 7(B) and other provisions of this Agreement, and (ii) in the event of
intentional interference with the Work by BNPPLC itself for which NAI provides
written notice to cease, NAI will be entitled to an extension of the deadline
specified in subparagraph 2(A)(2)(a) as needed because of any delays resulting from
such intentional interference. It is also understood that any such intentional
interference by BNPPLC will constitute a Force Majeure Event. In no event, however,
will BNPPLC’s exercise of its rights and remedies permitted under this Agreement or
the other Operative Documents be construed as intentional interference with NAI’s
performance of any Work; and thus neither BNPPLC’s exercise of its right to withhold
Construction Advances at any time when NAI has failed to satisfy all conditions
herein to such advances, nor BNPPLC’s exercise of its right to terminate Work by NAI
as provided in subparagraph 7(C), be considered as intentional interference with the
Work or a Pre-lease Force Majeure Event.




          (h)     No Fee For Construction Management. NAI will have no claim under
this Agreement for any fee or other compensation or for any reimbursement of
internal administrative or overhead expenses (other than the out-of-pocket overhead
expenses properly included in the Construction Budget, if any), it being understood
that NAI is executing this Agreement in consideration of the rights expressly
granted to it herein and in the other Operative Documents.




          (3)     Quality of Work. NAI will cause the Work undertaken and administered by it
pursuant to this Agreement to be performed (a) in a safe and good and workmanlike manner,
(b) in accordance with Applicable Laws, and (c) in compliance with the provisions of this
Agreement and the material provisions of the Permitted Encumbrances.



          (B)     Completion Notice. Within fifteen Business Days after NAI substantially completes
construction of the Construction Project and obtains any certificate of occupancy or other permit
(temporary or permanent) required by Applicable Laws for the commencement of NAI’s use and
occupancy of the Improvements, NAI must provide a notice (a “Completion Notice”) to BNPPLC,
advising BNPPLC thereof, and thereby establish the Completion Date. For purposes of this
Agreement and the other Operative Documents, BNPPLC will be entitled to rely without investigation
upon any such notice given by NAI as evidence that NAI has, in fact, substantially completed the
Construction Project and has obtained any certificate of occupancy or other permit (temporary or
permanent) required for the commencement of NAI’s use of the Improvements, and after giving any
such notice NAI will be estopped from later claiming that the Completion Date has not occurred.





          (C)     Status of Property Acquired With BNPPLC’s Funds. All Improvements




 



Construction Agreement (Building 9) – Page 17



 









 







constructed on the Land as provided in this Agreement will constitute “Property” for purposes
of the Lease and other Operative Documents. Further, to the extent heretofore or hereafter
acquired (in whole or in part) with any portion of the Initial Advance or with any Construction
Advances or with other funds for which NAI receives reimbursement from the Initial Advance or
Construction Advances, all furnishings, furniture, chattels, permits, licenses, franchises,
certificates and other personal property of whatever nature will be considered as having been
acquired on behalf of BNPPLC by NAI and will constitute “Property” for purposes of the Lease and
other Operative Documents, as will all renewals or replacements of or substitutions for any such
Property. The parties intend that title to the Improvements and to any other such Property will
vest in BNPPLC without passing through NAI or NAI’s Affiliates before it is transferred to BNPPLC
from contractors, suppliers, vendors or other third Persons, but with the understanding that all
such Property will be accepted by BNPPLC subject to the terms and conditions of the other Operative
Documents, including subparagraph 4(C)(1) of the Lease (concerning the characterization of
the Lease and other Operative Documents for tax and certain other purposes). Although nothing
herein constitutes authorization of NAI by BNPPLC to bind BNPPLC to any construction contract or
other agreement with a third Person, any construction contract or other agreement executed by NAI
for the acquisition or construction of Improvements or other components of the Property may, as NAI
deems appropriate, provide for the direct transfer of title to BNPPLC as described in the
preceding sentence.





          (D)    Insurance.






          (1)     Liability Insurance. Throughout the period prior to any Termination of
NAI’s Work, NAI must maintain commercial general liability insurance against claims for
bodily and personal injury, death and property damage occurring in or upon or resulting from
any occurrence in or upon the Property under one or more insurance policies that satisfy the
Minimum Insurance Requirements, which are set forth in an exhibit to the Common Definitions
and Provisions Agreement. NAI must deliver and maintain with BNPPLC for each liability
insurance policy required by this Agreement written confirmation of the policy and the scope
of the coverage provided thereby issued by the applicable insurer or its authorized agent,
which confirmation must also satisfy the Minimum Insurance Requirements.




          (2)     Property Insurance. Throughout the period prior to any Termination
of NAI’s Work, NAI must also keep all Improvements (including all alterations, additions and
changes made to the Improvements) insured against fire and other casualty under one or more
property insurance policies that satisfy the Minimum Insurance Requirements. NAI must
deliver and maintain with BNPPLC for each property insurance policy required by this
Agreement written confirmation of the policy and the scope of the coverage provided thereby
issued by the applicable insurer or its authorized agent, which confirmation must also
satisfy the Minimum Insurance Requirements. If any of the



 



Construction Agreement (Building 9) – Page 18



 









 







Property is destroyed or damaged by fire, explosion, windstorm, hail or by any other
casualty against which insurance has been required hereunder, (i) BNPPLC may, but will not
be obligated to, make proof of loss if not made promptly by NAI after notice from BNPPLC,
(ii) each insurance company concerned is hereby authorized and directed to make payment for
such loss directly to BNPPLC for application as required by Paragraph 5, and (iii) BNPPLC
may settle, adjust or compromise any and all claims for loss, damage or destruction under
any policy or policies of insurance (provided, that so long as no 97-10/Meltdown Event has
occurred and no Event of Default has occurred and is continuing, BNPPLC must provide NAI
with at least forty-five days notice of BNPPLC’s intention to settle any such claim before
settling it unless NAI has already approved of the settlement by BNPPLC). 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. If any casualty results in
damage to or loss or destruction of the Property, NAI must give prompt notice thereof to
BNPPLC and Paragraph 5 will apply.




          (3)     Failure of NAI to Obtain Insurance. If NAI fails to obtain any insurance
or to provide confirmation of any insurance as required by this Agreement, 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 charge the cost of such insurance against the
Construction Allowance as if it were a Construction Advance paid to NAI as hereinafter
provided.




          (4)     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
for any and all Losses, to the extent that NAI is compensated by insurance or would be
compensated by the insurance policies contemplated in this Agreement, 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 Agreement. 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.




          (E)     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 must promptly notify the other (provided, however, BNPPLC will have
no liability for its failure to provide such notice) of the pendency of such proceedings. Prior to
any Termination of NAI’s Work, NAI must, if requested by BNPPLC, diligently



 



Construction Agreement (Building 9) – Page 19



 









 







prosecute any such proceedings and consult with BNPPLC, its attorneys and experts and
cooperate with them as reasonably requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds of sale in lieu of condemnation with
respect to the Property and all judgments, decrees and awards for injury or damage to the Property
will be paid to BNPPLC as Escrowed Proceeds, and all such proceeds will be applied as provided in
Paragraph 5. BNPPLC is hereby authorized, in its own name or in the name of NAI or in the name of
both, to settle and deliver valid acquittances for, or to challenge and to appeal from, any such
judgment, decree or award concerning condemnation of any of the Property (provided, that so long as
no 97-10/Meltdown Event has occurred and no Event of Default has occurred and is continuing, BNPPLC
must provide NAI with at least forty-five days notice of BNPPLC’s intention to settle any such
claim before settling it unless NAI has already approved of the settlement by BNPPLC). 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.




          (F)     Additional Representations, Warranties and Covenants of NAI Concerning the
Property. Without limiting the rights granted to NAI by other provisions of this Agreement to
be reimbursed from Construction Advances for the cost of complying with the following, NAI
represents, warrants and covenants as follows:





          (1)     Payment of Local Impositions. Throughout the period prior to any
Termination of NAI’s Work, NAI must pay or cause to be paid prior to delinquency all ad
valorem taxes assessed against the Property and other Local Impositions. If requested by
BNPPLC from time to time, NAI will furnish BNPPLC with receipts or other appropriate
evidence showing payment of all Local Impositions prior to the applicable delinquency date
therefor.




Notwithstanding the foregoing, NAI may in good faith, by appropriate proceedings,
contest the validity, applicability or amount of any asserted Local Imposition, and pending
such contest NAI will not be deemed in default under any of the provisions of this Agreement
because of the Local Imposition if (1) NAI diligently prosecutes such contest to completion
in a manner reasonably satisfactory to BNPPLC, and (2) NAI promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all costs, penalties
and interest thereon, promptly after such judgment becomes final; provided, however, in any
event each such contest must be concluded and the contested Local Impositions must be paid
by NAI prior to the earlier of (i) the date that any criminal prosecution is instituted or
overtly threatened against BNPPLC or its directors, officers or employees because of the
nonpayment thereof, or (ii) the date any writ or order is issued under which any property
owned or leased by BNPPLC (including the Property) may be seized or sold or any other action
is taken or overtly threatened against BNPPLC or against any property owned or leased by
BNPPLC because of the



 



Construction Agreement (Building 9) – Page 20



 









 







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 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.




          (2)     Operation and Maintenance. Throughout the period prior to any
Termination of NAI’s Work, 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 in connection therewith. (If NAI does
not promptly correct any failure of the Property to comply with Applicable Laws that is the
subject of a written complaint or demand for corrective action given by any Governmental
Authority to NAI, or to BNPPLC and forwarded by it to NAI, then for purposes of the
preceding sentence, NAI will be considered not to have maintained the Property “in
compliance with all Applicable Laws in all material respects” whether or not the
noncompliance would be material in the absence of the complaint or demand.) NAI must not
use or occupy, or allow the use or occupancy of, the Property in any manner which violates
any Applicable Law or which constitutes a public or private nuisance or which makes void,
voidable or cancelable any insurance then in force with respect thereto. Without limiting
the generality of the foregoing, NAI must not conduct or permit others to conduct Hazardous
Substance Activities on the Property, except Permitted Hazardous Substance Use and Remedial
Work; and NAI must 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 (1) storm water runoff, (2) fume hood emissions, (3) waste
water discharges through a publicly owned treatment works, (4) discharges that are a
necessary part of any Remedial Work, and (5) other similar discharges consistent with the
definition 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. To the extent that any of the following would, individually or in the aggregate,
increase the likelihood of a 97-10/Meltdown Event or materially and adversely affect the
value of the Property or the use of the Property for purposes permitted by this Agreement,
NAI must 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 must not do anything that
could



 



Construction Agreement (Building 9) – Page 21



 









 







reasonably be expected to significantly reduce the market value of the Property. If
NAI receives a notice or claim from any federal, state or other 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.




          (3)     Debts for Construction, Maintenance, Operation or Development. NAI must
promptly pay or cause to be paid all debts and liabilities incurred by it or its contractors
or subcontractors in the construction, maintenance, operation or development of the
Property. Such debts and liabilities will include those incurred for labor, material and
equipment and all debts and charges for utilities servicing the Property.




          (4)     Permitted Encumbrances and the Ground Lease. 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 or the Ground Lease
throughout the period prior to any Termination of NAI’s Work. NAI must not, without the
prior consent of BNPPLC, 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 encumbering BNPPLC’s
interest in the Property. (Whether BNPPLC must give any such consent requested by NAI prior
to the Completion Date will be governed by subparagraph 4(C) of the Closing
Certificate.)




          (5)     Books and Records Concerning the Property. NAI must keep books and records
that are accurate and complete in all material respects for NAI’s construction and
management of the Property as contemplated in this Agreement and 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.



          (G)     BNPPLC’s Right of Access.





          (1)     Access Generally. BNPPLC and BNPPLC’s representatives may enter the
Property at any time for the purpose of making inspections or performing any work BNPPLC is
authorized to undertake by the next subparagraph or for the purpose confirming whether NAI
has complied with the requirements of this Agreement or the other Operative Documents.
However, prior to any Termination of NAI’s Work, BNPPLC or BNPPLC’s representative will,
before making any entry upon the Property or performing any work on the Property authorized
by this Agreement, do the following




          (a)     BNPPLC will give NAI at least 24 hours notice, unless BNPPLC



 



Construction
Agreement (Building 9) – Page 22



 









 







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




          (b)     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
Agreement.




          (2)     Failure of NAI to Perform. If NAI fails to perform any act or to
take any action required of it by this Agreement or other Operative Documents, or to pay any
money which NAI is required by this Agreement or other Operative Documents to pay, and if
such failure or action constitutes an Event of Default or renders BNPPLC or any director,
officer, employee or Affiliate of BNPPLC at risk of criminal prosecution or renders BNPPLC’s
interest in the Property or any part thereof at risk of forfeiture by forced sale or
otherwise, then in addition to any other remedies specified herein or otherwise available,
BNPPLC may, perform or cause to be performed such act or take such action or pay such money.
(To the extent that expenses so incurred by BNPPLC, or money so paid by BNPPLC, qualify as a
Covered Construction Period Losses, NAI must pay the same to BNPPLC upon demand. If any
such expenses incurred or money paid do not qualify as Covered Construction Period Losses,
but do constitute 97-10/Project Costs, BNPPLC may treat them as Construction Advances
hereunder. To the extent that any such expenses incurred or money paid do not qualify as
Covered Construction Period Losses and do constitute 97-10/Project Costs, they will be
included – with interest – in the Balance of Unpaid Covered Construction Period Losses under
and as defined in the Purchase Agreement.) Further, BNPPLC, upon making such payment, 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 Agreement or otherwise, 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 permitted by BNPPLC hereunder on or in the Property
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 BNPPLC’s 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
Agreement and the other Operative



 



Construction Agreement (Building 9) – Page 23



 









 







Documents will not thereby be excused in any manner.


3       Amounts to be Added to the Lease Balance (in Addition to Construction Advances).




          (A)     Initial Advance. Upon execution and delivery of this Agreement by BNPPLC, an
advance (the “Initial Advance”) will be made by BNPPLC to cover the cost of certain Transaction
Expenses and other amounts described in this subparagraph. The amount of the Initial Advance, which
will be included in the Lease Balance, may be confirmed by a separate closing certificate executed
by NAI as of the Effective Date. An arrangement fee (the “Arrangement Fee”), an initial
administrative agency fee (an “Administrative Fee”) and upfront fees (the “Upfront Fees”) will all
be paid from the Initial Advance (and thus be included in the Lease Balance) in the amounts
provided in the Closing Letter. To the extent that BNPPLC does not itself use the entire the
Initial Advance to pay such fees and Transaction Expenses incurred by BNPPLC, the remainder thereof
will be advanced to NAI, with the understanding that NAI will use any such amount advanced for one
or more of the following purposes: (1) the payment or reimbursement of Transaction Expenses
incurred by NAI and all “soft costs” incurred by NAI in connection with the planning, design,
engineering, construction and permitting of the Construction Project; (2) the maintenance of the
Property; or (3) the payment of other amounts due pursuant to the Operative Documents. (Before
executing the separate closing certificate to confirm the Initial Advance, NAI will make a
reasonable effort to determine all prior expenses incurred by it as described in clause (1) of the
preceding sentence and to request an Initial Advance sufficient in amount to cover all such
expenses in addition to the Arrangement Fee, the initial Administrative Fee, the Upfront Fees and
all Transaction Expenses incurred by BNPPLC. However, no failure by NAI to identify and include
all such expenses in the amount of the requested Initial Advance will preclude NAI from requesting
reimbursement for the same through a subsequent Construction Advance as provided in Paragraph 4.
Reimbursable Construction Period Costs to be paid or reimbursed pursuant to Paragraph 4 will not be
limited to those incurred after the Effective Date.)




          (B)     Carrying Costs. For each Construction Period certain charges (“Carrying Costs”)
will accrue and be added to the Outstanding Construction Allowance on the last day of such
Construction Period (i.e., generally on the Advance Date upon which such Construction Period ends).
If, however, for any reason the Lease Balance (and thus the Outstanding Construction Allowance
included as a component thereof) must be determined as of any date between Advance Dates, the
Outstanding Construction Allowance determined on such date will include not only Carrying Costs
added on or before the immediately preceding Advance Date computed as described below, but also
Carrying Costs accruing on and after such preceding Advance Date



 



Construction Agreement (Building 9) – Page 24



 









 







to but not including the date in
question. Carrying Costs accruing for any Construction Period will be equal to:





	 	  •	 	the amount equal on the first day of such Construction Period
to the Lease Balance, times
	 
	 	  •	 	the sum of the Effective Rate and the Spread for such
Construction Period, times
	 
	 	  •	 	a fraction, the numerator of which is the number of days in
such Construction Period and the denominator of which is three hundred sixty.





          
(C)     Commitment Fees. For each Construction Period additional charges (“Commitment
Fees”) will accrue and be added to the Outstanding Construction Allowance on the last day of such
Construction Period (i.e., generally on the Advance Date upon which such Construction Period ends).
If, however, for any reason the Lease Balance (and thus the Outstanding Construction Allowance
included as a component thereof) must be determined as of any date between Advance Dates, the
Outstanding Construction Allowance determined on such date will include not only Commitment Fees
added on or before the immediately preceding Advance Date computed as described below, but also
Commitment Fees accruing on and after such preceding Advance Date to but not including the date in
question. Commitment Fees for each Construction Period will be computed as follows:





	 	  •	 	the Commitment Fee Rate for such Construction Period, times an
amount equal to:






(1) the Maximum Construction Allowance, less




(2) the Funded Construction Allowance on the first day of such Construction
Period; times




	 	  •	 	the number of days in such Construction Period; divided by
	 
	 	  •	 	three hundred sixty.





        
  (D)     Future Administrative Fees and Out-of-Pocket Costs. If the Completion Date
does not occur prior to the first anniversary of the Effective Date, then on each anniversary of
the Effective Date prior to the Completion Date, an administrative agency fee (also, an
“Administrative Fee”) will be added to the Outstanding Construction Allowance by BNPPLC in the
amount provided in the Closing Letter. Also, to the extent that BNPPLC incurs any out-of-pocket
costs prior to the Completion Date with respect to the administration of or performance of



 



Construction Agreement (Building 9) – Page 25



 









 







its obligations under this Agreement or other Operative Documents (e.g., any rents required by the
Ground Lease and any Attorneys’ Fees or other costs incurred to evaluate lien releases and other
information submitted by NAI with requests for Construction Advances), BNPPLC may add such costs to
the Outstanding Construction Allowance from time to time.




          (E)     Increased Cost Charges and Capital Adequacy Charges.





          (1)     If after the Effective Date there is any increase in the cost to BNPPLC’s Parent or
any Participant agreeing to make or making, funding or maintaining advances to BNPPLC in
connection with the Property because of any Banking Rules Change, then BNPPLC may agree or
become obligated to pay to BNPPLC’s Parent or such Participant, as the case may be,
additional amounts (“Increased Cost Charges”) sufficient to compensate BNPPLC’s Parent or
the Participant for such increased costs. Any Increased Cost Charges paid by BNPPLC or for
which BNPPLC becomes obligated to pay, prior to the Completion Date, will be added to the
Outstanding Construction Allowance by BNPPLC.




          (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 BNPPLC
to permit BNPPLC to maintain BNPPLC’s investment in the Property or to make Construction
Advances. To the extent that BNPPLC’s Parent or a Participant demands Capital Adequacy
Charges as compensation for the additional capital requirements reasonably allocable to such
investment or advances, and BNPPLC pays or becomes obligated to pay to BNPPLC’s Parent or
the Participant the amount so demanded prior to the Completion Date, such amount will also
be added to the Outstanding Construction Allowance by BNPPLC.




          (3)     Notwithstanding the foregoing provisions of this subparagraph 3(E), the
Outstanding Construction Allowance will not be increased by Increased Cost Charges or
Capital Adequacy Charges that arise or accrue (a) as a result of any change in the rating
assigned to BNPPLC by rating agencies or bank regulators in regard to BNPPLC’s
creditworthiness, record keeping or failure to comply with Applicable Laws (including
U.S. banking regulations applicable to subsidiaries of a bank holding company), or (b) more
than nine months prior to the date NAI is notified of the intent of BNPPLC’s Parent or a
Participant to make a claim for such charges; provided, that if the Banking Rules Change
which results in a claim for compensation is retroactive, then the nine month period will be
extended to include the period of the retroactive effect of such Banking Rules Change.
Further, BNPPLC will cause BNPPLC’s Parent and any Participant that is an Affiliate of
BNPPLC to use commercially reasonable efforts to reduce or eliminate any



 



Construction Agreement (Building 9) – Page 26



 









 







claim for compensation pursuant to this subparagraph 3(E), including a change in the office of
BNPPLC’s Parent or such Participant through which it provides and maintains Funding Advances
if such change will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of BNPPLC’s Parent or such Participant, be otherwise
disadvantageous to it. It is understood that NAI may also request similar commercial
reasonable efforts on the part of any Participant that is not an Affiliate of BNPPLC, but if
a claim for additional compensation by any such Participant is not eliminated or waived,
then NAI may request that BNPPLC replace such Participant under the Participation Agreement.



          (F)     Ground Lease Payments. All rentals payable by BNPPLC under the Ground Lease prior
to the Completion Date (“Ground Lease Rents”) will be added to the Outstanding Construction
Allowance by BNPPLC on the date paid.



4       Construction Advances.




          (A)     Costs Subject to Reimbursement Through Construction Advances. Subject to the terms
and conditions set forth herein, NAI will be entitled to a Construction Allowance, from which
BNPPLC will make Construction Advances on Advance Dates from time to time to pay or reimburse NAI
for the following costs (“Reimbursable Construction Period Costs”) to the extent the following
costs are not already included in Transaction Expenses paid by BNPPLC from the Initial Advance:





          (1)     the actual costs and expenses incurred or paid by NAI for the preparation,
negotiation and execution of this Agreement and the other Operative Documents;




          (2)     costs of the Work, including not only hard costs incurred for the new Improvements
described in Exhibit B, but also the following costs to the extent reasonably
incurred in connection with the Construction Project:




	 	 •	 	soft costs payable to third parties (whether or not incurred
prior to the Effective Date), such as legal fees, architectural fees,
engineering fees,
construction management fees, transaction management fees and fees and costs
paid in connection with obtaining project permits and approvals required by
governmental authorities or any of the Permitted Encumbrances,
	 
	 	 •	 	site preparation costs,
	 
	 	 •	 	costs of offsite and other public improvements required as conditions of





 



Construction Agreement (Building 9) – Page 27



 









 






	 	 	 	governmental approvals for the Construction Project, and






	 	 •	 	to the extent that funds from the Construction Allowance can be
used for such costs without causing Projected Cost Overruns, the costs of
constructing parking lots, driveways and other improvements on the land subject
to the Appurtenant Easements;






          (3)     the cost of title insurance in favor of BNPPLC and of maintaining other insurance
required by (and consistent with the requirements of) this Agreement prior to the Completion
Date, and costs of repairing any damage to the Improvements caused by a Pre-lease Casualty
to the extent such costs are not covered by Escrowed Proceeds made available to NAI as
provided herein prior to the Completion Date;




          (4)     Local Impositions that accrue or become due prior to the Completion Date;




          (5)     reasonable and ordinary out-of-pocket costs of operating and maintaining the
Property prior to the Completion Date in accordance with the requirements of this Agreement;




          (6)     Third Party Contract/Termination Fees, not to exceed in the aggregate ten percent
(10%) of the Maximum Construction Allowance, payable by NAI in connection with any Third
Party Contract between NAI and a Person not an Affiliate of NAI because of any election by
NAI to cancel or terminate such contract during a Work/Suspension Period; and




          (7)     furniture, trade fixtures and equipment and other tenant improvements to support
NAI’s use and occupancy of the Property for the permitted uses described in subparagraph
2(A) of the Lease, but that are not integral to or affixed in such a manner as to become
part of the Improvements, the aggregate cost of which does not exceed ten percent (10%) of
the Maximum Construction Allowance; provided, that no Construction Advance for furniture and
other items described in this clause will be required of BNPPLC or requested by NAI before
the Construction Project is substantially complete and substantially all other Reimbursable
Construction Period Costs have been paid or
reimbursed from Construction Advances.



 



Construction Agreement (Building 9) – Page 28




 











 





          (B)     Exclusions From Reimbursable Construction Period Costs. Notwithstanding
anything herein to the contrary, BNPPLC will not be required to make any Construction Advance to
pay or to reimburse or compensate NAI for Covered Construction Period Losses paid by NAI as
provided in subparagraph 10(A) or for any of the following Losses which may be incurred by NAI or
any other party:





          (1)     Environmental Losses;




          (2)     Losses that would not have been incurred but for any affirmative act taken by NAI
or by any of NAI’s contractors or subcontractors, which act is contrary to the other terms
and conditions of this Agreement or to the terms and conditions of the other Operative
Documents (e.g., undertaking a Scope Change without prior authorization of BNPPLC);




          (3)     Losses that would not have been incurred but for any fraud, misapplication of
Construction Advances or other funds, illegal acts or willful misconduct on the part of NAI
or its employees or of any other party acting under NAI’s control or with the approval or
authorization of NAI; and




          (4)     Losses that would not have been incurred but for any bankruptcy proceeding
involving NAI as the debtor.



          (C)     Conditions to NAI’s Right to Receive Construction Advances. BNPPLC’s obligation to
provide Construction Advances to NAI from time to time under this Agreement will be subject to the
following terms and conditions, all of which terms and conditions are intended for the sole benefit
of BNPPLC, and none of which will limit in any way the right of BNPPLC to treat costs or
expenditures incurred or paid by or on behalf of BNPPLC as Construction Advances pursuant to
subparagraph 8(A):





          (1)     Construction Advance Requests. NAI must make a written request (a
“Construction Advance Request”) for any Construction Advance, specifying the amount of such
advance, at least five Business Days prior to the Advance Date upon which the advance is to
be paid. To be effective for purposes of this Agreement, a Construction Advance Request must
be in substantially the form attached as Exhibit C. NAI will not submit more than
one Construction Advance Request in any calendar month.



 

Construction Agreement (Building 9) – Page 29




 









 









          (2)     Amount of the Advances.




          (a)     The Maximum Construction Allowance. NAI will not be entitled to
require any Construction Advance that would cause the Funded Construction Allowance
to exceed the Maximum Construction Allowance or that would increase the amount of
any such excess.





          (b)     Costs Previously Incurred by NAI. NAI will not be entitled to
require any Construction Advance that would cause the aggregate of all Construction
Advances to exceed the sum of:





          (i)  Reimbursable Construction Period Costs that NAI has, to the
reasonable satisfaction of BNPPLC, substantiated as having been paid or
incurred by NAI other than for Work (e.g., Local Impositions), plus





          (ii) the Reimbursable Construction Period Costs that NAI has, to the
reasonable satisfaction of BNPPLC, substantiated as having been paid or
incurred for Prior Work as of the date of the Construction Advance Request
in which NAI requests the advance.




As used in this Agreement, “Prior Work” means all labor and services actually
performed, and all materials actually delivered to the construction site, as part of
the Work in accordance with this Agreement prior to the date in question, and
“Future Work” means labor and services performed or to be performed, and materials
delivered or to be delivered, as part of the Work on or after the date in question.
For purposes of this Agreement, NAI and BNPPLC intend to allocate Reimbursable
Construction Period Costs between Prior Work and Future Work in a manner that is
generally consistent with the allocations expressed or implied in
construction-related contracts negotiated in good faith between NAI and third
parties not affiliated with NAI (e.g., a construction contractor engaged by NAI);
however, in order to verify the amount of Reimbursable Construction Period Costs
actually paid or incurred by NAI and the proper allocation thereof between Prior
Work and Future Work, BNPPLC will be entitled (but not required) to: (x) request,
receive and review copies of such agreements between NAI and third parties and of
draw requests, budgets or other supporting documents provided to NAI in connection
with or pursuant to such agreements as evidence of the allocations expressed or
implied therein, (y) from time to time engage one or more independent inspecting
architects, certified public accountants or other appropriate professional
consultants and, absent manifest error, rely without further investigation upon
their reports and recommendations, and (z) without waiving BNPPLC’s right to
challenge or verify allocations required with respect to future



 

Construction Agreement (Building 9) – Page 30




 









 









Construction Advances, rely without investigation upon the accuracy of NAI’s own
Construction Advance Requests.




          (c)     Limits During any Work/Suspension Period. Without limiting the
other terms and conditions imposed by this Agreement for the benefit of BNPPLC with
respect all Construction Advances, BNPPLC will have no obligation to make any
Construction Advance during any Work/Suspension Period that would cause the
aggregate of all Construction Advances to exceed the sum of:





          (i)  Reimbursable Construction Period Costs that NAI has, to the
reasonable satisfaction of BNPPLC, substantiated as having been paid or
incurred by NAI other than for Work (e.g., Local Impositions), plus





          (ii) the Reimbursable Construction Period Costs that NAI has, to the
reasonable satisfaction of BNPPLC, substantiated as having been paid or
incurred for Prior Work as of the date the Work/Suspension Period commenced.




For purposes of computing the limits described in this subparagraph 4(C)(2)(c),
Reimbursable Construction Period Costs “other than for Work” will include Third
Party Contract/Termination Fees that qualify as Reimbursable Construction Period
Costs pursuant to subparagraph 4(A)(6). However, as provided in subparagraph
4(A)(6), the amount of such Third Party Contract/Termination Fees subject to
reimbursement will not in any event exceed ten percent (10%) of the Maximum
Construction Allowance. If NAI fails to manage and administer Third Party Contracts
as necessary to ensure that NAI can (at any point in time) terminate all such
contracts without becoming liable for Third Party Contract/Termination Fees in
excess of ten percent (10%) of the Maximum Construction Allowance, then the excess
will be the responsibility of NAI.




          (d)     Restrictions Imposed for Administrative Convenience. NAI will not
request any Construction Advance (other than the final Construction Advance NAI
intends to request) for an amount less than $1,000,000.




          (3)     No Advances After Certain Dates. BNPPLC will have no obligation to make any
Construction Advance (x) after the last Advance Date, (y) on or after the Designated Sale
Date, or (z) on or after the effective date of any Termination of NAI’s Work pursuant to
subparagraph 7(B) or subparagraph 7(C).



          (D)     Breakage Costs for Construction Advances Requested But Not Taken. If NAI
requests but thereafter declines to accept any Construction Advance, or if NAI requests a



 

Construction Agreement (Building 9) – Page 31




 









 







Construction Advance that it is not permitted to take because of its failure to satisfy any of
the conditions specified in subparagraph 4(C), BNPPLC will be entitled to add any resulting
Breakage Costs to the Outstanding Construction Allowance and the Lease Balance.




          (E)     No Third Party Beneficiaries. No contractor or other third party will be entitled
to require BNPPLC to make advances as a third party beneficiary of this Agreement, and nothing
contained herein or in any of the other Operative Documents will be construed as an agreement
obligating BNPPLC to make advances to anyone other than NAI itself.




          (F)     No Waiver. No funding of Construction Advances and no failure of BNPPLC to object
to any Work proposed or performed by or for NAI will constitute a waiver by BNPPLC of the
requirements contained in this Agreement.



5       Application of Insurance and Condemnation Proceeds.




          (A)     Collection and Application Generally. This Paragraph 5 will govern the
application of proceeds received by BNPPLC or NAI from any third party prior to the commencement of
the Term of the Lease (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 Agreement or the Property. NAI will
promptly pay over to BNPPLC any insurance, condemnation or other proceeds covered by this Paragraph
5 which NAI may receive from any insurer, condemning authority or other third party. All proceeds
covered by this Paragraph 5, including those received by BNPPLC from NAI or third parties, will be
applied as follows:





          (1)     First, proceeds covered by this Paragraph 5 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 (the
“Remaining Proceeds”) will be applied, as hereinafter more particularly provided, either as
a Qualified Prepayment or to pay or reimburse NAI or BNPPLC for the actual out-of-pocket
costs of repairing or restoring the Property. Until any Remaining Proceeds received by
BNPPLC are applied by BNPPLC as a Qualified Prepayment or applied by



 

Construction Agreement (Building 9) – Page 32




 









 







BNPPLC to reimburse costs of repairs to or restoration of the Property pursuant to this
Paragraph 5, 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 5, BNPPLC will hold all such Escrowed Proceeds until they are advanced 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 Agreement. BNPPLC will so advance the Escrowed Proceeds as the applicable
repair or restoration progresses and upon compliance by NAI with such conditions and requirements
as may be reasonably imposed by BNPPLC, including conditions and requirements similar to those that
set forth herein for the payment of Construction Advances. In no event, however, will BNPPLC be
required to pay Escrowed Proceeds to NAI in excess of the actual out-of-pocket cost to NAI of the
applicable repair, restoration or replacement, as evidenced by invoices or other documentation
reasonably satisfactory to BNPPLC.




          (C)     Status of Escrowed Proceeds After Commencement of the Term of the Lease. Any
Remaining Proceeds governed by this Paragraph 5 which BNPPLC is continuing to hold as Escrowed
Proceeds when the Term of the Lease commences will be applied in accordance with the terms and
conditions of the Lease as if received by BNPPLC immediately after the Term commenced.




          (D)     Special Provisions Applicable After a 97-10/Meltdown Event or Event of Default.
Notwithstanding the foregoing, after any 97-10/Meltdown Event and when any Event of Default has
occurred and is continuing, BNPPLC will be entitled to receive and collect all insurance,
condemnation or other proceeds governed by this Paragraph 5 and to apply all Remaining Proceeds,
when and in such order and to such 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.




          (E)     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 any
part of the Property is taken by condemnation, NAI must to the maximum extent possible, as part of
the Work, restore the Property or the remainder thereof and continue construction of the
Construction Project on and subject to the terms and conditions set forth in this Agreement;
provided, however, like other Work, any such restoration and continuation of construction by NAI
will be subject to subparagraphs 7(A) and 7(B), which establish certain rights of NAI to suspend or
discontinue any Work; and, provided further, any additional costs required to complete the
Construction Project resulting from such a casualty or taking prior to the Completion Date will, to
the extent not covered by Remaining Proceeds paid to NAI as provided


 

Construction Agreement (Building 9) – Page 33




 









 







herein, be subject to reimbursement by BNPPLC as Reimbursable Construction Period Costs on the
same terms and conditions that apply to reimbursements of other costs of the Work hereunder.




          (F)     Special Provisions Concerning a Complete Taking. NAI may react to any threat of a
Complete Taking from a governmental authority by exercising NAI’s right to accelerate the
Designated Sale Date (as provided in the definition thereof) and by exercising the Purchase Option
under the Purchase Agreement. By so doing, NAI will put itself in a position to control
condemnation proceedings and to receive all proceeds of the Complete Taking. If, however, NAI does
not buy the Property pursuant to the Purchase Agreement prior to any Complete Taking, then BNPPLC
will be entitled to receive and retain all amounts paid for the Property in connection with the
Complete Taking, notwithstanding any contrary provision herein or in the other Operative Documents
and notwithstanding that such proceeds may exceed the Lease Balance.



6       Notice of Cost Overruns and Pre-lease Force Majeure Events.




          (A)     Notice of Projected Cost Overruns. If, at the time NAI submits any Construction
Advance Request, NAI believes for any reason (including any damage to the Property by fire or other
casualty or any taking of any part of the Property by condemnation) that Projected Cost Overruns
are more likely than not, NAI must state such belief in the Construction Advance Request and, if
NAI can reasonably do so, NAI will estimate the approximate amount of such Projected Cost Overruns.




          (B)     Pre-lease Force Majeure Event Events and Notices. NAI may from time to time
provide a notice to BNPPLC in the form attached as Exhibit D (a “Pre-lease Force Majeure
Event Notice”), describing any Pre-lease Force Majeure Event that has occurred or commenced within
the 30 days prior to such notice and setting forth NAI’s preliminary good faith estimate of any
Pre-lease Force Majeure Delays, Pre-lease Force Majeure Losses and Pre-lease Force Majeure Excess
Costs that are likely to result from such event. BNPPLC will have the option to respond to any
Pre-lease Force Majeure Event Notice with an FOCB Notice or, alternatively and if applicable, with
an Increased Commitment as provided in subparagraph 7(B)(6).



7       Suspension and Termination of NAI’s Work.




          (A)     Rights and Obligations During a Work/Suspension Period. During any Work/Suspension
Period, NAI will have the right to suspend the Work; however, the obligations of NAI which are to
survive any Termination of NAI’s Work as provided in subparagraph 7(D) will continue and survive
during any Work/Suspension Period.




          (B)     NAI’s Election to Terminate NAI’s Work. NAI may elect to terminate its
rights


 

Construction Agreement (Building 9) – Page 34




 









 







and obligations to continue Work at any time prior to the Completion Date if at such time NAI
believes in good faith that a Timing or Budget Shortfall exists. To be effective, however, any
such election by NAI must be made in accordance with the following provisions:





          (1)     Any such election by NAI to terminate its rights and obligations to continue the
Work must be made by notice to BNPPLC in the form of Exhibit E (a “Notice of
Termination by NAI”).




          (2)     At least forty-five days before giving any such Notice of Termination by NAI, NAI
must give a notice of NAI’s intent to terminate to BNPPLC in the form of Exhibit F
(a “Notice of NAI’s Intent to Terminate”), and the Notice of NAI’s Intent to Terminate must
state the reasons, in NAI’s good faith determination, for the Timing or Budget Shortfall.




          (3)     Without limiting the forgoing, prior to giving any Notice of Termination by NAI
predicated upon NAI’s belief that the remaining available Construction Allowance will not be
sufficient only because of Pre-lease Force Majeure Excess Costs incurred or anticipated as a
result of a Pre-lease Force Majeure Event, NAI must — after having notified BNPPLC of the
such event by the delivery of a Pre-lease Force Majeure Event Notice in accordance with
subparagraph 6(B) — expressly set forth such belief in the Notice of NAI’s Intent to
Terminate as indicated in Exhibit F. In any such Notice of NAI’s Intent to
Terminate, NAI must also specify its good faith estimate of the Pre-lease Force Majeure
Excess Costs likely to be incurred (“NAI’s Estimate of Force Majeure Excess Costs”).




          (4)     Similarly, prior to giving any Notice of Termination by NAI predicated upon NAI’s
belief that the Work will not be substantially complete before the Target Completion Date
only because of Pre-lease Force Majeure Delays resulting from a Pre-lease Force Majeure
Event, NAI must — after having notified BNPPLC of such event by the delivery of a Pre-lease
Force Majeure Event Notice in accordance with subparagraph 6(B) — expressly set forth such
belief in the Notice of NAI’s Intent to Terminate as indicated in Exhibit F. In any
such Notice of NAI’s Intent to Terminate, NAI must also specify its good faith estimate of
the Pre-lease Force Majeure Delays likely to occur (“NAI’s Estimate of Force Majeure
Delays”).




          (5)     As used herein, a “Notice of NAI’s Intent to Terminate Because of a Force
Majeure Event” means any Notice of NAI’s Intent to Terminate that sets forth NAI’s belief,
by the optional provisions contemplated in Exhibit F, that either or both: (a) the
remaining available Construction Allowance will not be sufficient only because of Pre-lease
Force Majeure Excess Costs incurred or anticipated as a result of a Pre-lease Force Majeure
Event, or (b) the Work will not be substantially complete before the Target


 

Construction Agreement (Building 9) – Page 35




 









 







Completion Date only because of Pre-lease Force Majeure Delays resulting from a
Pre-lease Force Majeure Event. Should any Termination of NAI’s Work occur before NAI sends
a Notice of NAI’s Intent to Terminate Because of a Force Majeure Event (in accordance with
this subparagraph and in the form attached as Exhibit F), such Termination of NAI’s
Work will, for purposes of determining whether any 97-10/Prepayment may be required pursuant
to Paragraph 9, be conclusively presumed to have occurred for reasons other than a Pre-lease
Force Majeure Event.




          (6)     After receipt of any Notice of NAI’s Intent to Terminate and before receipt of a
Notice of Termination by NAI, BNPPLC may, but will not be obligated to, respond to NAI with
certain commitments as follows (such a response being hereinafter called an “Increased
Commitment”):




          (a)     In the case of a Notice of Intent to Terminate Because of a Force Majeure
Event which expresses NAI’s belief that the remaining available Construction
Allowance will not be sufficient only because of Pre-lease Force Majeure Excess
Costs, BNPPLC may respond with a written commitment to increase the Construction
Allowance (an “Increased Funding Commitment”) by an amount at least equal to NAI’s
Estimate of Force Majeure Excess Costs as set forth in such Notice of NAI’s Intent
to Terminate. Any such Increased Funding Commitment may be in the form of
Exhibit G.




          (b)     In the case of a Notice of Intent to Terminate Because of a Force Majeure
Event which expresses NAI’s belief that the Work will not be substantially complete
before the Target Completion Date only because of Pre-lease Force Majeure Delays,
BNPPLC may respond with a written commitment to extend the Target Completion Date
(an “Increased Time Commitment”) by at least the number of days included in NAI’s
Estimate of Force Majeure Delays as set forth in such Notice of NAI’s Intent to
Terminate. Any such Increased Time Commitment may be in the form of Exhibit
H.




          (c)     In the case of a Notice of Intent to Terminate Because of a Force Majeure
Event which expresses NAI’s belief that both (i) the remaining available
Construction Allowance will not be sufficient only because of Pre-lease Force
Majeure Excess Costs and (ii) the Work will not be substantially complete before the
Target Completion Date only because of Pre-lease Force Majeure Delays, BNPPLC may
respond with both an Increased Funding Commitment and an Increased Time Commitment
as provided in the preceding subparagraphs (a) and (b).




          (d)     In the case of a Notice of Intent to Terminate which is not a Notice


 

Construction Agreement (Building 9) – Page 36




 









 







of Intent to Terminate Because of a Force Majeure Event (and thus not covered
by any of the preceding subparagraphs (a) through (c)), BNPPLC may require NAI to
promptly provide a good faith estimate of the minimum Increased Funding Commitment
or Increased Time Commitment (or both) reasonably required to eliminate the reasons
for NAI’s delivery of the Notice of Intent to Terminate. After receipt of NAI’s
good faith estimate, BNPPLC may respond with an Increased Funding Commitment or
Increased Time Commitment (or both) consistent with such estimate.




          (7)     If BNPPLC does respond to a Notice of NAI’s Intent to Terminate with an Increased
Commitment, NAI will be entitled to, and will not unreasonably refuse to, rescind such
Notice of NAI’s Intent to Terminate within ten days after receipt of such Increased
Commitment. To be effective, any such rescission must be by notice to BNPPLC in the form of
Exhibit I. In any event, except as provided in the next subparagraph, the failure
of NAI to so rescind any Notice of NAI’s Intent to Terminate within ten days after receipt
of the Increased Commitment will, for purposes of determining whether any 97-10/Prepayment
may be required pursuant to Paragraph 9, create a conclusive presumption that any
Termination of NAI’s Work after the date of such response was made for reasons other than a
Pre-lease Force Majeure Event.




          (8)     For the avoidance of doubt, BNPPLC acknowledges that NAI’s rescission of any Notice
of NAI’s Intent to Terminate (including any Notice of NAI’s Intent to Terminate Because of a
Force Majeure Event) after receipt of an Increased Commitment as described in the preceding
subsection will not preclude NAI from subsequently exercising its rights under this
subparagraph 7(B) in the event NAI subsequently believes in good faith that a Timing or
Budget Shortfall exists.




Thus, for example, if NAI rescinds a Notice of NAI’s Intent to Terminate Because of a Force
Majeure Event after receiving an Increased Commitment from BNPPLC, but subsequently
determines that such Increased Commitment is insufficient (through no fault of NAI or its
employees or any other party acting under NAI’s control or with the approval or
authorization of NAI) to rectify the Timing or Budget Shortfall which caused NAI to send
such notice, then NAI may deliver a second Notice of NAI’s Intent to Terminate Because of a
Force Majeure Event, and in response thereto BNPPLC may elect to provide yet another
Increased Commitment. Moreover, such process may be repeated any number of times, in each
case without causing NAI to lose its right to subsequently invoke this subparagraph 7(B) and
send yet another Notice of NAI’s Intent to Terminate (including another Notice of NAI’s
Intent to Terminate Because of a Force Majeure Event).




          (9)     Notwithstanding the foregoing, in the event of a Complete Taking, NAI


 

Construction Agreement (Building 9) – Page 37




 









 







may deliver a Notice of NAI’s Intent to Terminate Because of a Force Majeure Event that
explains the futility of continuing with the Construction Project on the Land regardless of
any willingness of BNPPLC to approve or consider Scope Changes or an Increased Commitment,
and no offer by BNPPLC of an Increased Commitment after a Complete Taking will preclude a
“Termination of NAI’s Work Because of a Pre-lease Force Majeure Event” for the purposes of
determining whether NAI must pay a 97-10/Prepayment pursuant to Paragraph 9.



          (C)     BNPPLC’s Election to Terminate NAI’s Work. By notice to NAI BNPPLC may elect to
terminate NAI’s rights and obligations to continue the Work at any time (i) more than thirty days
after BNPPLC has given an FOCB Notice to NAI, or (ii) after BNPPLC’s receipt of a Notice of NAI’s
Intent to Terminate and before an election by NAI to rescind the same as described in subparagraph
7(B)(7).




          (D)     Surviving Rights and Obligations. Following any Termination of NAI’s Work as
provided in subparagraph 7(B) or in 7(C), NAI will have no obligation to continue or complete any
Work; however, no such Termination of NAI’s Work will reduce or excuse the following rights and
obligations of the parties, it being intended that all such rights and obligations will survive and
continue after any Termination of NAI’s Work:





          (1)     NAI’s obligations described in the next subparagraph 7(E);




          (2)     the rights and obligations of NAI and BNPPLC under the Ground Lease;




          (3)     the rights and obligations of NAI and BNPPLC under the Purchase Agreement, other
than NAI’s Supplemental Payment Obligation if it has been terminated as provided in
subparagraph 6(B) of the Purchase Agreement;




          (4)     any obligations of NAI under the other Operative Documents by reason of any
misrepresentation or other act or omission of NAI that occurred prior to the Termination of
NAI’s Work or during any subsequent period in which NAI remains in possession or control of
the Construction Project; and




          (5)     NAI’s obligations to indemnify BNPPLC as set forth in subparagraph 10(A).



          (E)     Cooperation After a Termination of NAI’s Work. After any Termination of NAI’s
Work as provided in subparagraph 7(B) or subparagraph 7(C), NAI must comply with the following
terms and conditions, all of which will survive notwithstanding any such termination:





          (1)     NAI must promptly deliver copies to BNPPLC of all Third Party Contracts


 

Construction Agreement (Building 9) – Page 38




 









 







and purchase orders made by NAI in the performance of or in connection with the Work,
together with all plans, drawings, specifications, bonds and other materials relating to the
Work in NAI’s possession, including all papers and documents relating to governmental
permits, orders placed, bills and invoices, lien releases and financial management under
this Agreement. All such deliveries must be made free and clear of any liens, security
interests, or encumbrances, except such as may be created by the Operative Documents.




          (2)     Promptly after any request from BNPPLC made with respect to any Third Party
Contract, NAI must deliver a letter confirming: (i) whether NAI has performed any act or
executed any other instrument which invalidates or modifies such contract in whole or in
part (and, if so, the nature thereof); (ii) the extent to which such contract is valid and
subsisting and in full force and effect; (iii) that, to NAI’s knowledge, there are no
defaults or events of default then existing under such contract and, to NAI’s knowledge, no
event has occurred which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default (or, if there is a default or potential
default, the nature of such default in detail); (iv) whether the services and construction
contemplated by such contract are proceeding in a satisfactory manner in all material
respects (and if not, a detailed description of all significant problems with the progress
of the services or construction); (v) in reasonable detail the then critical dates projected
by NAI for work and deliveries required by such contract; (vi) the total amount received by
the other party to such contract for work or services provided by the other party through
the date of the letter; (vii) NAI’s good faith estimate of the total cost of completing the
services and work contemplated under such contract as of the date of the letter, together
with any current draw or payment schedule for the contract; and (viii) any other information
BNPPLC may reasonably request to allow it to decide what steps it should take concerning the
contract within BNPPLC’s rights under this Agreement and the other Operative Documents.




          (3)     As and to the extent requested by BNPPLC, NAI will make every reasonable effort
(but without any obligation to incur any expense or liability to do so, unless BNPPLC agrees
to reimburse the same with reasonable promptness) to secure any required consents or
approvals for an assignment of any then existing Third Party Contract to BNPPLC or its
designee, upon terms satisfactory to BNPPLC. To the extent assignable, any then existing
Third Party Contract will be assigned by NAI to BNPPLC upon request, without charge by NAI.




          (4)     If NAI has canceled any Third Party Contract before and in anticipation of a
Termination of NAI’s Work, then as and to the extent requested by BNPPLC, NAI must make
every reasonable effort (but without any obligation to incur any expense or liability to do
so, unless BNPPLC agrees to reimburse the same with reasonable promptness) to secure a
reinstatement of such Third Party Contract in favor of BNPPLC and upon terms


 

Construction Agreement (Building 9) – Page 39




 









 







satisfactory to BNPPLC.




          (5)     For a period not to exceed thirty days after the Termination of NAI’s Work, NAI
must take such steps as are reasonably necessary to preserve and protect Work completed and
in progress and to protect materials, equipment, and supplies at the Property or in transit.
Without regard to the conditions applicable to other payments required of BNPPLC by this
Agreement, BNPPLC must with reasonable promptness reimburse any reasonable out-of-pocket
expenses incurred by NAI to comply with this subparagraph (5); however, BNPPLC may at any
time or from time to time by notice to NAI limit or terminate such reimbursements as to
expenses incurred after NAI’s receipt of such notice, and thereafter NAI will be excused
from any obligation to incur expenses that BNPPLC may decline to reimburse.


8       Continuation of Construction by BNPPLC.




          (A)     Owner’s Election to Continue Construction. Without limiting BNPPLC’s other rights
and remedies under this Agreement or the other Operative Documents, and without terminating NAI’s
surviving obligations under this Agreement or NAI’s obligations under the other Operative
Documents, after any Termination of NAI’s Work as provided in subparagraph 7(B) or subparagraph
7(C), BNPPLC will be entitled (but not obligated) to take whatever action it deems necessary or
appropriate by the use of legal proceedings or otherwise to continue or complete the Construction
Project in a manner not substantially inconsistent (to the extent practicable under Applicable
Laws) with the general description of the Construction Project set forth in Exhibit B. (As
used herein, “Owner’s Election to Continue Construction” means any election by BNPPLC to continue
or complete the Construction Project pursuant to the preceding sentence.) After any Owner’s
Election to Continue Construction, BNPPLC may do any one or more of the following pursuant to this
subparagraph without further notice and regardless of whether any breach of this Agreement by NAI
is then continuing:





          (1)     Take Control of the Property. BNPPLC may cause NAI and any contractors or
other parties on the Property to vacate the Property until the Construction Project is
complete or BNPPLC elects not to continue work on the Construction Project.




          (2)     Continuation of Construction. BNPPLC may perform or cause to be performed
any work to complete or continue the construction of the Construction Project. In this
regard, so long as work ordered or undertaken by BNPPLC is not substantially inconsistent
(to the extent practicable under Applicable Laws) with the general description of the
Construction Project set forth in Exhibit B and the permitted use of the Property
set forth in the Lease, BNPPLC will have complete discretion to:




          (a)     proceed with construction according to such plans and


 

Construction Agreement (Building 9) – Page 40




 









 







specifications as BNPPLC may from time to time approve;




          (b)     establish and extend construction deadlines as BNPPLC from time to time
deems appropriate, without obligation to adhere to any deadlines for construction by
NAI set forth in this Agreement;




          (c)     hire, fire and replace architects, engineers, contractors, construction
managers and other consultants as BNPPLC from time to time deems appropriate,
without obligation to use, consider or compensate architects, engineers,
contractors, construction managers or other consultants previously selected or
engaged by NAI;




          (d)     determine the compensation that any architect, engineer, contractor,
construction manager or other consultant engaged by BNPPLC will be paid, and the
terms and conditions that will govern the payment of such compensation (including
whether payment will be due in advance, over the course of construction or on some
other basis and including whether contracts will be let on a fixed price basis, a
cost plus a fee basis or some other basis), as BNPPLC from time to time reasonably
deems appropriate;




          (e)     pay, settle or compromise existing or future bills and claims which are or
may be liens against the Property or as BNPPLC reasonably considers necessary or
desirable for the completion of the Construction Project or the removal of any
clouds on title to the Property;




          (f)     prosecute and defend all actions or proceedings in connection with the
construction of the Construction Project;




          (g)     select and change interior and exterior finishes for the Improvements and
landscaping as BNPPLC from time to time deems appropriate; and




          (h)     generally do anything that NAI itself might have done if NAI had satisfied
or obtained BNPPLC’s waiver of the conditions specified therein.




          (3)     Arrange for Turnkey Construction. Without limiting the generality of the
foregoing, BNPPLC may engage any contractor or real estate developer BNPPLC believes to be
reputable to take over and complete construction of the Construction Project on a “turnkey”
basis.




          (4)     Suspension or Termination of Construction by BNPPLC. Notwithstanding


 

Construction Agreement (Building 9) – Page 41




 









 







any Owner’s Election to Continue Construction, BNPPLC may subsequently elect at any
time to suspend or terminate further construction without obligation to NAI.


For purposes of the Operative Documents (including the determination of the Outstanding
Construction Allowance, the Lease Balance and the Break Even Price), after any Owner’s Election to
Continue Construction, all costs and expenditures incurred or paid by or on behalf of BNPPLC to
complete or continue construction as provided in this subparagraph 8(A) will be considered
Construction Advances, regardless of whether they cause the Funded Construction Allowance to exceed
the Maximum Construction Allowance. Further, as used in the preceding sentence, “costs incurred” by
BNPPLC will include costs that BNPPLC has become obligated to pay to any third party that is not an
Affiliate of BNPPLC (including any construction contractor), even if the payments for which BNPPLC
has become so obligated constitute prepayments for work or services to be rendered after payment
and notwithstanding that BNPPLC’s obligations for the payments may be conditioned upon matters
beyond BNPPLC’s control. For example, even if a construction contract between BNPPLC and a
contractor excuses BNPPLC from making further progress payments to the contractor upon NAI’s
failure to make any required 97-10/Prepayment under this Agreement, the obligation to make a
progress payment would nonetheless be “incurred” by BNPPLC, for purposes of determining whether
BNPPLC has incurred costs considered to be 97-10/Project Costs and Construction Advances, when
BNPPLC’s obligation to pay it became subject only to NAI’s payment of a 97-10/Prepayment or other
conditions beyond BNPPLC’s control.




          (B)     Powers Coupled With an Interest. BNPPLC’s rights under subparagraph 8(A) are
intended to constitute powers coupled with an interest which cannot be revoked.



9       NAI’s Obligation for 97-10/Prepayments. After any 97-10/Meltdown Event NAI must make a
97-10/Prepayment to BNPPLC within three Business Days after receipt from BNPPLC of any demand for
such a payment. BNPPLC may demand 97-10/Prepayments pursuant to this Paragraph at any time and
from time to time (as 97-10/Project Costs increase) after a 97-10/Meltdown Event. NAI acknowledges
that it is undertaking the obligation to make 97-10/Prepayments as provided in this Paragraph in
consideration of the rights afforded to it by this Agreement, but that such obligation is not
contingent upon any exercise by NAI of such rights or upon its rights under any other Operative
Documents. If a 97-10/Meltdown Event does occur, NAI’s obligation to make 97-10/Prepayments as
provided in this Paragraph will survive any Termination of NAI’s Work.



Notwithstanding the foregoing provisions of this Paragraph 9, if (as provided in
subparagraph 7(B)) NAI effectively makes the election for a Termination of NAI’s Work because of a
Pre-lease Force Majeure Event that resulted in Pre-lease Force Majeure Excess Costs or Pre-lease
Force Majeure Delays, then NAI will be excused from the obligation to make 97-10/Prepayments until
such time (if ever) that BNPPLC itself completes the Construction



 

Construction Agreement (Building 9) – Page 42




 









 






Project or causes it to be completed as BNPPLC is authorized to do by subparagraph 8(A).



10       Indemnity for Covered Construction Period Losses.




          (A)     Covenant to Indemnify Against Covered Construction Period Losses. Subject to the
qualifications in subparagraph 10(B), as directed by BNPPLC, NAI must indemnify and defend BNPPLC
from and against all of the following Losses (“Covered Construction Period Losses”):





          (1)     Losses suffered or incurred by BNPPLC, directly or indirectly, relating to or
arising out of, based on or as a result of any of the following which occurs or is alleged
to have occurred prior to any Termination of NAI’s Work: (i) any Hazardous Substance
Activity; (ii) any violation of any applicable Environmental Laws relating to the Land or
the Property or to the ownership, use, occupancy or operation thereof; (iii) any
investigation, inquiry, order, hearing, action, or other proceeding by or before any
governmental or quasi-governmental agency or authority in connection with any Hazardous
Substance Activity; or (iv) any claim, demand, cause of action or investigation, or any
action or other proceeding, whether meritorious or not, brought or asserted against BNPPLC
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 provision or any allegation of
any such matters;




          (2)     Losses incurred or suffered by BNPPLC that BNPPLC would not have incurred or
suffered but for any act or any omission of NAI or of any NAI’s contractors or
subcontractors during the period prior to any Termination of NAI’s Work (as provided in
subparagraphs 7(B) and 7(C)) or during any other period that NAI remains in possession or
control of the Construction Project (including any failure by NAI to obtain or maintain
insurance as required by this Agreement during such periods; but excluding, however, as
described below, certain Losses consisting of claims related to any failure of NAI to
complete the Construction Project);




          (3)     Losses incurred or suffered by BNPPLC that would not have been incurred but for any
fraud, misapplication of funds (including Construction Advances), illegal acts, or willful
misconduct on the part of NAI or its employees or of any other party acting under NAI’s
control or with the approval or authorization of NAI; and




          (4)     Losses incurred or suffered by BNPPLC that would not have been incurred but for any
bankruptcy proceeding involving NAI as the debtor.


NAI’s obligations under this indemnity will apply whether or not BNPPLC is also indemnified
as to the applicable Covered Construction Period Loss by any third party (including another



 

Construction Agreement (Building 9) – Page 43




 









 






Interested Party) and whether or not the Covered Construction Period Loss arises or accrues prior
to the Effective Date. Further, in the event, for income tax purposes, BNPPLC 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 BNPPLC is not entitled during the same
taxable year to a corresponding and equal deduction from its taxable income for the Covered
Construction Period Loss paid or reimbursed by such Original Indemnity Payment (in this provision,
the “Corresponding Loss”), then NAI must also pay to BNPPLC 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 BNPPLC’s income taxes because of credits or deductions that are attributable to the
BNPPLC’s payment or deemed payment of the Corresponding Loss and that are recognized for tax
purposes in the same taxable year during which BNPPLC 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 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.)




          (B)     Certain Losses Included or Excluded.





          (1)     Back to Back Claims by Participants Against BNPPLC. Losses for which BNPPLC is
entitled to be indemnified as described in subparagraph 10(A) will include claims made
against BNPPLC by any Participant, and amounts (if any) reimbursed by BNPPLC to any
Participant, because of the following:




          (a)     Losses suffered or incurred by such Participant, directly or
indirectly, relating to or arising out of any of the following which occurs or is
alleged to have occurred prior to any Termination of NAI’s Work: (i) any Hazardous
Substance Activity; (ii) any violation of any applicable Environmental Laws relating
to the Land or the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or authority
in connection with any Hazardous Substance Activity; or (iv) any claim, demand,
cause of action or investigation, or any action or other proceeding, whether
meritorious or not, brought or asserted against such Participant which directly or
indirectly relates to, arises from, is based on, or results from any of the



 

Construction Agreement (Building 9) – Page 44




 









 







matters described in clauses (i), (ii), or (iii) of this provision or any
allegation of any such matters;




          (b)     Losses incurred or suffered by such Participant that such Participant would
not have incurred or suffered but for any act or any omission of NAI or of any NAI’s
contractors or subcontractors during the period prior to any Termination of NAI’s
Work (as provided in subparagraphs 7(B) and 7(C)) or during any other period that
NAI remains in possession or control of the Construction Project (including any
failure by NAI to obtain or maintain insurance as required by this Agreement during
such periods; but excluding, however, as described below, certain Losses consisting
of claims related to any failure of NAI to complete the Construction Project);




          (c)     Losses incurred or suffered by such Participant that would not have been
incurred but for any fraud, misapplication of funds (including Construction
Advances), illegal acts, or willful misconduct on the part of NAI or its employees
or of any other party acting under NAI’s control or with the approval or
authorization of NAI; and




          (d)     Losses incurred or suffered by such Participant that would not have been
incurred but for any bankruptcy proceeding involving NAI as the debtor.




          (2)     Environmental. As used in clause (1) of the preceding subparagraph 10(A) and
clause (a) of the preceding subparagraph 10(B)(1), “Losses” will not include costs properly
incurred in connection with the Work to prevent the occurrence of a violation of
Environmental Laws that did not previously exist. (For example, Environmental Losses will
not include the increase in costs resulting from NAI’s installation of fire proofing
materials other than asbestos because of Environmental Laws that prohibit the use of
asbestos.) However, any costs to correct or answer for any violation of Environmental Laws
that occurred on or prior to the Effective Date or that NAI causes or permits to occur after
the Effective Date in connection with the Work or the Property will constitute Environmental
Losses. (Thus, for instance, if NAI releases Hazardous Materials from the Property in a
manner that contaminates ground water in violation of Environmental Laws, the costs of
correcting the contamination and any applicable fines or penalties will constitute
Environmental Losses for which NAI must indemnify and defend BNPPLC pursuant to subparagraph
10(A).)




          (3)     Failure to Maintain a Safe Work Site. If a third party asserts a claim for
damages against BNPPLC because of injuries the third party sustained while on the Land as a
result of NAI’s breach of its obligations under this Agreement to keep the Land and the
Improvements thereon in a reasonably safe condition as Work progresses under NAI’s


 

Construction Agreement (Building 9) – Page 45




 









 







direction and control, then any such claim and other Losses resulting from such claim
will constitute Covered Construction Period Losses under clause (2) of subparagraph 10(A).
Also, if the third party asserts a claim for damages against any Participant because of such
injuries, and if the Participant requires BNPPLC to reimburse the Participant’s Losses
attributable to such claim, then such reimbursement will constitute Covered Construction
Period Losses under clause (2) of subparagraph 10(A), consistent with understanding
confirmed by clause (b) of subparagraph 10(B)(1).




          (4)     Failure to Complete Construction. Additional costs of construction may result from
NAI’s failure to complete the Construction Project if a Termination of NAI’s Work occurs
pursuant to subparagraphs 7(B) and 7(C). Nevertheless, it is understood that a failure of
NAI to complete the Construction Project following any such Termination of NAI’s Work will
not necessarily constitute a breach of this Agreement, and clause (2) of subparagraph 10(A)
will not include any such additional costs of performing the Work or the cost to BNPPLC of
completing the Construction Project after the Termination of NAI’s Work. (To the extent,
however, that such costs qualify as 97-10/Project Costs, they may increase the 97-10/Maximum
Permitted Prepayment.)




          (5)     Fraud. As used in clause (3) of subparagraph 10(A) and clause (c) of subparagraph
10(B)(1), “fraud” or “willful misconduct” will include (i) any deliberate decision by NAI to
make a Scope Change without BNPPLC’s prior written approval, (ii) any fraud or intentional
misrepresentation by NAI, or its vendors, contractors or subcontractors regarding NAI’s
ongoing compliance with the requirements of this Agreement, and (iii) the performance by NAI
or its vendors, contractors or subcontractors of Defective Work, with NAI’s knowledge that
it constitutes Defective Work, prior to any Termination of NAI’s Work as provided in
subparagraphs 7(B) and 7(C).




          (6)     Excluded Taxes and Established Misconduct. Nothing in this Paragraph 10 or other
provisions of this Agreement will be construed to require NAI to reimburse or pay Excluded
Taxes or Losses incurred or suffered by BNPPLC that are proximately caused by (and
attributed by any applicable principles of comparative fault to) the Established Misconduct
of BNPPLC.



          (C)     Express Negligence Protection. Every release provided in this
Agreement for BNPPLC or any other Interested Party, and the indemnity provided for the benefit of
BNPPLC in the preceding subparagraph 10(A), will apply even if and when the subject matters thereof
are alleged to be caused by or to arise out of the negligence or strict liability of BNPPLC or
another Interested Party. Further, all such releases and the indemnity will apply even if
insurance obtained by NAI or required of NAI by this Agreement is not adequate to cover Losses
against or for which the releases and the indemnity are provided (although NAI’s liability for any
failure to



 

Construction Agreement (Building 9) – Page 46




 









 







obtain insurance required by this Agreement will not be limited to Losses against which indemnity is
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 may be indemnified
by NAI).




          (D)     Survival of Indemnity. NAI’s obligations under this Paragraph 10 will survive the
termination or expiration of this Agreement and any Termination of NAI’s Work with respect to
Losses suffered by BNPPLC resulting or arising from events or circumstances which existed or
occurred or are alleged to have existed or occurred prior to the Termination of NAI’s Work or
during any subsequent period in which NAI remains in possession or control of the Construction
Project, whether such Losses are asserted, suffered or paid before or after the Termination of
NAI’s Work.




          (E)     Due Date for Indemnity Payments. Any amount to be paid by NAI under this
Paragraph 10 will be due fifteen days after a notice requesting such payment is received by NAI.
Any such amount not paid by NAI when first due will bear interest at the Default Rate in effect
from time to time from the date it first became 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.




          (F)     Order of Application of Payments. BNPPLC will be entitled to apply any payments
by or on behalf of NAI against NAI’s obligations under this Paragraph 10 or against other amounts
owing by NAI and then past due under any of the other Operative Documents in the order the same
became due or in such other order as BNPPLC may elect.




          (G)     Defense of BNPPLC.





          (1)     Assumption of Defense. By notice to NAI BNPPLC may direct NAI to assume on behalf
of BNPPLC 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 Covered
Construction Period Loss. NAI must promptly comply with any such direction using counsel
selected by NAI and reasonably satisfactory to BNPPLC to represent BNPPLC. In the event NAI
fails to promptly comply with any such direction from BNPPLC, BNPPLC may contest or settle
the claim, proceeding or investigation using counsel of its own selection at NAI’s expense,
subject only to subparagraph 10(I) if that subparagraph is applicable.




          (2)     Indemnity Not Contingent. Also, although subparagraphs 10(I) and 10(J) will
apply to tort claims asserted against BNPPLC related to the Property, the right of BNPPLC to
be indemnified pursuant to subparagraph 10(A) for payments made to satisfy governmental
requirements (“Government Mandated Payments”) (e.g., fines payable


 

Construction Agreement (Building 9) – Page 47




 









 







because of any release of Hazardous Materials from the Property) 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 BNPPLC to be indemnified will be subject to subparagraph 10(K).



          (H)     Notice of Claims. If BNPPLC receives a written notice of a claim for taxes or a
claim alleging a tort or other unlawful conduct that BNPPLC believes is covered by the indemnity in
subparagraph 10(A), then BNPPLC 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 10(A); except that if such failure continues for more than fifteen days after the
notice is received by BNPPLC 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 BNPPLC against the Covered
Construction Period 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 10(A) 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.




          (I)     Withholding of Consent to Settlements Proposed by NAI. With regard to any tort
claim against BNPPLC for which NAI undertakes to defend BNPPLC as provided in subparagraph
10(G)(1), if BNPPLC 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 BNPPLC and other affected Interested Parties (if any) and their property interests from
any further obligation for or liens securing the applicable claim and from any interest, penalties
and other related liabilities, and (B) the settlement or compromise must not involve an admission
of fraud or criminal wrongdoing or result in some other material adverse consequence to BNPPLC or
any other Interested Party.




          (J)     Settlements Without the Prior Consent of NAI.





          (1)     Election to Pay Reasonable Settlement Costs in Lieu of Actual. Except as
otherwise provided in subparagraph 10(J)(2), if BNPPLC settles any tort claim for which


 

Construction Agreement (Building 9) – Page 48




 









 







it is entitled to be indemnified by NAI without NAI’s consent, then NAI may, by notice
given to BNPPLC no later than ten days after NAI is notified of the settlement, elect to pay
Reasonable Settlement Costs to BNPPLC in lieu of a payment or reimbursement of actual
settlement costs. (With respect to any tort claim asserted against BNPPLC, “Reasonable
Settlement Costs” means the maximum amount that a prudent Person in the position of BNPPLC,
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 BNPPLC 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, 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.




          (2)     Conditions to Election. Notwithstanding the foregoing, NAI will have no right to
elect to pay Reasonable Settlement Costs in lieu of actual settlement costs if BNPPLC
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 10(G)(1).




          (3)     Indemnity Survives Settlement. Except as provided in this subparagraph 10(J), no
settlement by BNPPLC of any claim made against it will excuse NAI from any obligation to
indemnify BNPPLC against the settlement costs or other Covered Construction Period Losses
suffered by reason of, in connection with, arising out of, or in any way related to such
claim.



          (K)     No Authority to Admit Wrongdoing on the Part of NAI. BNPPLC will not 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 BNPPLC claims a right to indemnification from
NAI under this Agreement.



Further, nothing herein contained, including the foregoing provisions concerning settlements
by BNPPLC of indemnified Losses, will be construed as authorizing BNPPLC 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


 

Construction Agreement (Building 9) – Page 49




 









 






continuing to contest the claim by reason of any provision set forth herein.



Moreover, so long as this Agreement or the Lease continues, BNPPLC’s right to settle any claim
involving the Property will not include the right to bind NAI to 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 10(K), BNPPLC 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.




          (L)     Refunds of Covered Construction Period Losses Paid by NAI.





          (1)     Payment by BNPPLC After Refund. If BNPPLC receives a refund of any Covered
Construction Period Losses paid, reimbursed or advanced by NAI pursuant to subparagraph
10(A), 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 such 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 Covered Construction Period Losses that was made by NAI.
If it is subsequently determined that BNPPLC was not entitled to such refund, the portion of
such refund that is repaid or recaptured will be treated as a Covered Construction Period
Loss for which NAI must indemnify BNPPLC pursuant to subparagraph 10(A) without regard to
subparagraph 10(B)(6). If, in connection 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 such interest and as a result of the 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 before NAI paid, reimbursed or
advanced the Covered Construction Period Losses refunded to BNPPLC.




          (2)     Meaning of Refund. With respect to Covered Construction Period Losses
incurred or suffered by BNPPLC and paid or reimbursed by NAI on an After Tax Basis, if


 

Construction Agreement (Building 9) – Page 50




 









 







taxes of BNPPLC 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 10(L) such reduction will be considered a “refund”.




          (3)     Conditions to Payment. Notwithstanding the foregoing, in no event will BNPPLC be
required to make any payment to NAI pursuant to this subparagraph 10(L) after any
97-10/Meltdown Event or when any Event of Default has occurred and is continuing.


11     Characterization of Operative Documents; Remedies.




          (A)     Characterization of Operative Documents.





          (1)     Confirmation of Lien and Security Interest Granted in the Lease. Reference is made
to subparagraph 4(C) of the Lease, in which NAI and BNPPLC have confirmed their intent that
(A) for the purposes of determining the proper accounting for the 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) the Lease and the other Operative Documents
(including this Agreement) 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 to the Lease,
NAI is granting to BNPPLC a lien upon and mortgaging and warranting title to the leasehold
estate in the Land created by the Ground Lease and the Improvements and all rights, titles
and interests of NAI in and to other Property, WITH POWER OF SALE, to secure all obligations
(monetary or otherwise) of NAI arising under or in connection with any of the Operative
Documents (including this Agreement). NAI further confirms and agrees that (i) its grant
of a lien and security interest as set forth in Exhibit B of the Lease is made as of
the Effective Date, even though the Term of the Lease will not commence before the
Completion Date, and (ii) the security interest granted in Exhibit B of the Lease
will extend to and cover all Third Party Contracts, now existing or made in the future.




          (2)     Foreclosure Remedies. Even before the Completion Date, 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 to the Lease, and at any time thereafter,
regardless of whether the Event of Default is continuing, if NAI has not


 

Construction Agreement (Building 9) – Page 51




 









 







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 to the Lease, and (ii) BNPPLC, in lieu of or in addition to exercising any
power of sale granted in Exhibit B to the Lease, may proceed by a suit or suits in
equity or at law for a foreclosure or sale of the Property 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 legal or equitable remedy permitted by law.



          (B)     Notice Required So Long As the Purchase Option Continues Under the Purchase
Agreement. Prior to the Designated Sale Date, so long as NAI remains in possession of the
Property and there has been no termination of the Purchase Option as provided in Paragraph
6(B) of the Purchase Agreement, BNPPLC’s right to complete any foreclosure sale as provided in
subparagraph 11(A)(2) 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
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 a sale authorized by subparagraph 11(A)(2). 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 complete a sale authorized by subparagraph 11(A)(2) 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.




          (C)     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
other Operative Documents (including the right to accelerate the Designated Sale Date, as provided
in the definition thereof in the Common Definitions and Provisions Agreement, and the right, when
applicable, to exercise the Put Option as provided in subparagraph 3(B) of the Purchase Agreement)
or now or hereafter existing in favor of BNPPLC under Applicable Laws. In addition to other
remedies provided in this Agreement, BNPPLC will be entitled, to the extent permitted by Applicable
Law or in equity, to injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of this Agreement.
Nothing contained in this Agreement 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
Agreement, 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



 

Construction Agreement (Building 9) – Page 52




 









 







to be proved, whether or not the amount be greater, equal to, or less than the amount BNPPLC
might recover under this Agreement. 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, including its right to exercise the Put Option provided in subparagraph 3(B) of
the Purchase Agreement if the conditions listed in subparagraph 3(B) of the Purchase Agreement are
satisfied; and BNPPLC will not be required to give the thirty day notice described in subparagraph
11(B) as a condition precedent to any acceleration of the Designated Sale Date or to taking any
action to enforce the Purchase Agreement




          (D)     Third Party Estoppels. If requested by BNPPLC with respect to any material
construction contract between NAI and a third party contractor for any part of the Work, NAI shall
cause the contractor to execute and deliver to BNPPLC an estoppel letter substantially in the form
of Exhibit J. Similarly, if requested by BNPPLC with respect to any material architectural
or engineering contract between NAI and a third party professional or firm for any part of the
Work, NAI shall cause the professional or firm thereunder to execute and deliver to BNPPLC an
estoppel letter substantially in the form of Exhibit K.




[The signature pages follow.]




 

Construction Agreement (Building 9) – Page 53




 











 





          IN WITNESS WHEREOF, this Construction Agreement (Building 9) is executed to be effective as of
February 1, 2008.




	 	 	 	 	 
	 	BNP PARIBAS LEASING CORPORATION, a 

Delaware
corporation

 	 
	 	By: 	
Lloyd G. Cox, Managing
Director 
 	 



 

Construction Agreement (Building 9) – Signature Page




 









 







[Continuation of signature pages for Construction Agreement (Building 9) dated as of February 1,
2008.]




	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware

corporation

 	 
	 	
By: 	
Ingemar Lanevi, Vice President and Corporate
Treasurer
 	 


 

Construction Agreement (Building 9) – Signature Page




 









 







Exhibit A




Legal Description



Parcel 9 and the Additional Leased Premises, as defined below, (collectively, the “Building 9
Ground Lease Premises”) as shown on that certain Vesting Tentative Parcel Map provided to BNP
Paribas Leasing Corporation (“BNPPLC”) by Network Appliance, Inc. (“NAI”) attached hereto and made
a part hereof (the “Tentative Map”), which has received preliminary approval from the City of
Sunnyvale, California, but not yet been filed for record in the office of the recorder of the
County of Santa Clara, State of California. As used herein, “Additional Leased Premises” means the
parking lots, driveways and other areas shaded in gray on the Tentative Map attached hereto within
the larger area designated as Common Lot A (consisting of 30.46 Acres, more or less) on the
Tentative Map. The northern boundary of the Additional Leased Premises is a line that runs along
the same line as the northern boundary of Common Lot A, as shown on the Tentative Map, extending
from the corner of two streets adjacent to the Additional Leased Premises to the northeast corner
of Parcel 12, as shown on the Tentative Map. The western boundary of the Additional Leased
Premises runs along the same line as (but extends beyond) the eastern boundary of Parcel 12, as
shown on the Tentative Map. The eastern boundary of the Additional Leased Premises runs along the
same line as the eastern boundary of Common Lot A, as shown on the Tentative Map. The southern
boundary of the Additional Leased Premises runs along the center of an existing or proposed
driveway which is situated between Parcel 8 and Parcel 9, as shown on the Tentative Map.



TOGETHER WITH, easements appurtenant to the Building 9 Ground Lease Premises as described in
Exhibit A attached to the Ground Lease.





 









 












 

Exhibit A to Construction Agreement (Building 9) – Page 2




 









 








Exhibit B




Description of the Construction Project and Construction Budget



Subject to future Scope Changes, the Construction Project will be substantially consistent with the
following general description and with the site plan attached as part of Exhibit A and the
elevations attached to this Exhibit:




	 	 	 
	Five-story office building, containing approximately 189,697 square feet of gross
building area and surrounding site improvements and an estimated net rentable area
is 177,537 square feet. Also:
	 
	 	 
	Number of Stories:

	 	Five
	 
	 	 
	Typical Story Height:

	 	15 feet
	 
	 	 
	Excavation and Foundation:

	 	Reinforced concrete slab and pier and beam
	 
	 	 
	Frame:

	 	Steel
	 
	 	 
	Walls:

	 	Glass fiber reinforced concrete (“GFRC”) and insulated windows
	 
	 	 
	Doors and Windows:

	 	Wood, metal, and metal-framed glass
	 
	 	 
	Roof:

	 	Built-up asphalt
	 
	 	 
	Electrical System
and Lighting:

	 	
Typical electricity suitable for normal office use;
interior lighting includes fluorescent tube and incandescent lighting
	 
	 	 
	Heating, Ventilating,
and Air-Conditioning
(“HVAC”):

	 	

Zoned heating and air-conditioning supplied by package HVAC system with
air ducts
	 
	 	 
	Plumbing:

	 	Typical fixtures for kitchen, restroom, water, gas connection, water
heater, and waste disposal
	 
	 	 
	Fire Protection:

	 	Wet-pipe sprinkler system throughout
	 
	 	 
	Interior Finish:

	 	Painted gypsum board and
acoustical tile






 









 






	 	 	 
	 

	 	ceilings; painted sheetrock
walls; and carpet, vinyl tile, and ceramic
tile flooring
	 
	 	 
	Miscellaneous Features:

	 	Handicapped restroom and parking facilities; elevators and
exterior design canopies over windows; wall inserts for proposed artwork;
bio-cell irrigation ditches around the perimeter of the building






          All of the improvements will be suitable for uses contemplated in the Lease and of a quality,
when complete to be considered first class facilities for such uses. The location of improvements,
including appurtenant parking areas, driveways and other facilities on the Land (or pursuant to
appurtenant easements described in Exhibit A to the Ground Lease) will be as shown in the Tentative
Parcel Map attached to and made a part of Exhibit A.




          The budget for the Construction Project is as shown on the attached pages.




 

Exhibit B to Construction Agreement (Building 9) – Page 2




 









 





Construction Budget



	 	 	 	 	 
	 	 		 
	Financing
	 	$	3,174,952	 
	Insurance
	 	 	225,739	 
	Design & Engineering
	 	 	1,376,638	 
	Permits
	 	 	2,210,318	 
	Site & Shell Construction
	 	 	20,115,776	 
	Interior Construction
	 	 	21,846,577	 
	 
	 	 	 
	Total B9
	 	$	48,950,000	 
	 
	 	 	 





 

Exhibit B to Construction Agreement (Building 9) – Page 3




 









 









 

Exhibit B to Construction Agreement (Building 9) – Page 4




 









 













 

Exhibit B to Construction Agreement (Building 9) – Page 5





 











 





Exhibit C




Construction Advance Request Form




[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”), between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”)



Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement or in the Common Definitions and Provisions Agreement referenced in the
Construction Agreement. This letter constitutes a Construction Advance Request, requesting a
Construction Advance of:




$____________________,


on the Advance Date that will occur on:




_______________, 20___.




          To induce BNPPLC to make such Construction Advance, NAI represents and warrants as follows:




I.       Calculation of limit imposed by Subparagraph 4(C)(2)(b) of the Construction Agreement:




	 	 	 
	(1) NAI has paid or incurred bona fide Reimbursable Construction Period
Costs other than for Work (e.g., property taxes) of no less than

	 	$____________
	 
	 	 
	(2) NAI has paid or incurred bona fide Reimbursable Construction Period
Costs for Prior Work of no less than

	 	$____________
	 
	 	 
	(3) NAI has received prior Construction Advances of

	 	$____________






 









 






	 	 	 
	LIMIT (1 + 2 - 3)

	 	$____________






II.      Projected Cost Overruns:



NAI [check one: ___ does / ___ does not ] believe that Projected Construction Overruns are more
likely than not. [If NAI does believe that Projected Cost Overruns are more likely than not, and if
NAI believes that the amount of such Projected Construction Overruns can be reasonably estimated,
NAI estimates the same at $_________.]




III.     Construction Advances Covering Pre-lease Force Majeure Losses:



Neither the Construction Advance requested by this letter nor prior Construction Advances (if any)
have been used or will be used to cover any costs of repairs that constitute Pre-lease Force
Majeure Losses, except as follows: (if there are no exceptions, insert “No Exceptions”)



 


 


 


 






IV.     Absence of Certain Work/Suspension Events:




          A. The Construction Project is progressing without significant interruption in a good and
workmanlike manner and substantially in accordance with Applicable Laws, with Permitted
Encumbrances and with the requirements of the Construction Agreement, except as follows: (if there
are no exceptions, insert “No Exceptions”)




 


 


 


 





          B. If NAI has received notice of any Defective Work, NAI has promptly corrected or is
diligently pursuing the correction of such Defective Work, except as follows: (if there are no
exceptions, insert “No Exceptions”)




 


 


 


 






 
Exhibit C to Construction Agreement (Building 9) – Page 2






 









 








	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware

 corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




 
Exhibit C to Construction Agreement (Building 9)
– Page 3





 











 





Exhibit D




Pre-lease Force Majeure Event Notice




[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”), between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement referenced above or in the Common Definitions and Provisions Agreement
referenced in the Construction Agreement.




          IMPORTANT: It is imperative that BNPPLC promptly review with legal counsel the ramifications
of this notice under the Construction Agreement and other Operative Documents.




          This letter constitutes a Pre-lease Force Majeure Event Notice, given as provided in
subparagraph 6(B) of the Construction Agreement to preserve the right of NAI to assert the
occurrence of a Pre-lease Force Majeure Event.




          NAI certifies to BNPPLC that the following Pre-lease Force Majeure Event occurred or commenced
on                     , 20     :




[INSERT DESCRIPTION OF EVENT HERE]




          NAI’s preliminary good faith estimate of the Pre-lease Force Majeure Delays, of the Pre-lease
Force Majeure Losses and of the Pre-lease Force Majeure Excess Costs likely to result from such
event are _________ days,
$___________________ and
$___________________, respectively. Such amounts,
however, are only estimates.



          NAI acknowledges that after NAI gives this notice, BNPPLC may at any time deliver an FOCB
Notice to NAI as described in the Construction Agreement.



 









 





	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware
corporation


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit D to Construction Agreement (Building 9) – Page 2




 









 








Exhibit E




Notice of Termination of NAI’s Work




[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”), between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement referenced above or in the Common Definitions and Provisions Agreement
referenced in the Construction Agreement.




          IMPORTANT: It is imperative that BNPPLC promptly review with legal counsel the ramifications
of this notice under the Construction Agreement and other Operative Documents.




          NAI has determined that the Construction Allowance to be provided to it under the Construction
Agreement will not be sufficient to cover all Reimbursable Construction Period Costs yet to be paid
or reimbursed from Construction Advances for the reason or reasons set forth in the Notice of NAI’s
Intent to Terminate dated                     , 200     , previously delivered to you as provided in subparagraph
7(B) of the Construction Agreement. That Notice of NAI’s Intent to Terminate has not been
rescinded by NAI.




          NAI hereby irrevocably and unconditionally elects to terminate its rights and obligations to
continue the Work under Construction Agreement effective as of the date of this letter (which, as
required by subparagraph 7(B) of the Construction Agreement, is a date not less than forty-five
days after the date the aforementioned Notice of NAI’s Intent to Terminate). This notice
constitutes a “Notice of Termination by NAI” as described in subparagraph 7(B) of the Construction
Agreement.




          NAI also acknowledges that a 97-10/Meltdown Event has occurred under and as defined in the
Construction Agreement, and that BNPPLC is thus entitled to demand and receive 97-10/Prepayments
under and as provided in Paragraph 9 of the Construction Agreement, unless the last sentence of
Paragraph 9 excuses NAI from paying the same.





 









 








	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware

corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit E to Construction Agreement (Building 9) – Page 2





 









 








Exhibit F




Notice of NAI’s Intent to Terminate




[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”) between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement referenced above or in the Common Definitions and Provisions Agreement
referenced in the Construction Agreement.




          IMPORTANT: It is imperative that BNPPLC promptly review with legal counsel the ramifications
of this notice under the Construction Agreement and other Operative Documents.




 





[DRAFTING NOTE: Unless this letter contains the alternative provisions set forth below as being
required after a Complete Taking in any “Notice of NAI’s Intent to Terminate Because of a Force
Majeure Event,” this letter must contain the following paragraph and inserts following such
paragraph as indicated:




          NAI has determined that the Construction Allowance to be provided to it under the Construction
Agreement will not be sufficient to cover all Reimbursable Construction Period Costs yet to be paid
or reimbursed from Construction Advances, because:





[INSERT ANY ONE OR MORE OF THE FOLLOWING REASONS THAT APPLY: (1) THE
COST OF THE WORK EXCEEDS BUDGETED EXPECTATIONS (RESULTING IN
PROJECTED COST OVERRUNS), (2) A PRE-LEASE FORCE MAJEURE EVENT HAS
OCCURRED, OR (3) NAI CAN NO LONGER SATISFY CONDITIONS TO BNPPLC’S
OBLIGATION TO PROVIDE CONSTRUCTION ADVANCES IN THE CONSTRUCTION
AGREEMENT.]



 









 





 






          The purpose of this letter is to give notice to BNPPLC and Participants of NAI’s intent to
terminate NAI’s rights and obligations to perform Work under the Construction Agreement. This
letter constitutes a “Notice of NAI’s Intent to Terminate” given pursuant to subparagraph 7(B) of
the Construction Agreement. As provided in that subparagraph, as a condition to any effective
Termination of NAI’s Work, NAI must deliver a subsequent notice of termination to BNPPLC and
Participants, no less than forty-five days after the date BNPPLC receives this letter.




 





[DRAFTING NOTE: Unless this letter contains the alternative provisions set forth below as being
required for any “Notice of NAI’s Intent to Terminate Because of a Force Majeure Event,” this
letter must contain the following paragraph:




          The period running from the date of BNPPLC’s receipt of this letter to the effective date of
any actual Termination of NAI’s Work by NAI or BNPPLC will constitute a Work/Suspension Period
under the Construction Agreement. During such period BNPPLC’s funding obligations will be limited
and NAI may suspend the Work to the extent so provided in the Construction Agreement. Moreover, NAI
acknowledges that the delivery of this Notice of Intent to Terminate is a 97-10/Meltdown Event.
Therefore, after receipt of this notice BNPPLC will have the rights to demand and receive
97-10/Prepayments from NAI as provided in Paragraph 9 of the Construction Agreement.]



[DRAFTING NOTE: This letter will qualify as a “Notice of NAI’s Intent to Terminate Because of a
Force Majeure Event” only if NAI includes one of the following alternative sets of provisions, as
applicable.]



[ALTERNATIVE #1 (Applies only if there has been a Complete Taking):




          This letter constitutes a “Notice of NAI’s Intent to Terminate Because of a Force Majeure
Event” as defined in the Construction Agreement. A Complete Taking has occurred. Thus, regardless
of any Scope Changes BNPPLC may be willing to approve or consider, and regardless of any Increased
Commitment BNPPLC may be willing to provide, it would be futile to continue the Construction
Project on the Land.




          NAI acknowledges and agrees that BNPPLC is entitled to all proceeds of the taking of the
Property and all such proceeds must be paid to BNPPLC. NAI has no right and will not assert any
right to share in such proceeds. NAI agrees to cooperate with BNPPLC as BNPPLC may from time to
time request in order to maximize BNPPLC’s recovery of such proceeds.]




 
Exhibit F to Construction Agreement (Building 9) – Page 2




 









 







[ALTERNATIVE #2 (applies in the event of a Pre-lease Force Majeure Event other than a
Complete Taking): Include the next (single sentence) paragraph, together with one or both (as
applicable) of the two paragraphs following the next (single sentence) paragraph, and together with
the remaining paragraphs after those two paragraphs, all with blanks filled in appropriately:




          This letter constitutes a “Notice of NAI’s Intent to Terminate Because of a Force Majeure
Event” as defined in the Construction Agreement.




          NAI now believes that the remaining available Construction Allowance will not be sufficient to
cover all Reimbursable Construction Period Costs yet to be paid or reimbursed from Construction
Advances only because of Pre-lease Force Majeure Excess Costs incurred or anticipated as a result
of one or more Pre-lease Force Majeure Events. BNPPLC has previously been notified of such
Pre-lease Force Majeure Event(s) by notice(s) dated                     , which NAI delivered to BNPPLC in
accordance with subparagraph 6(B) of the Construction Agreement. NAI’s current good faith
estimate of the Pre-lease Force Majeure Excess Costs that are most likely to be incurred because of
such Pre-lease Force Majeure Event(s) is $                                        .




          NAI now believes that the Work will not be substantially complete before the Target Completion
Date only because of Pre-lease Force Majeure Delays resulting from one or more Pre-lease Force
Majeure Events. BNPPLC has previously been notified of such Pre-lease Force Majeure Event(s) by
notice(s) dated                     , which NAI delivered to BNPPLC in accordance with subparagraph 6(B) of
the Construction Agreement. NAI’s current good faith estimate of the Pre-lease Force Majeure
Delays that are most likely to occur because of such Pre-lease Force Majeure Event(s) is
                                          days.



          Also be advised that, as provided in subparagraph 7(B) of the Construction Agreement, BNPPLC
is entitled to (but not obligated to) respond to this notice with an Increased Commitment.
Responding with an Increased Commitment will result in a conclusive presumption (for purposes of
calculating any 97-10/Prepayment required of NAI under the Purchase Agreement) that any Termination
of NAI’s Work is for reasons other than the Pre-lease Force Majeure Events of which BNPPLC has
previously been notified.




          In the event BNPPLC fails to respond with an Increased Commitment, the failure may
excuse NAI from the obligation to make a 97-10/Prepayment under Paragraph 9 of the Construction
Agreement notwithstanding any Termination of NAI’s Work, which would constitute a very material
adverse consequence to BNPPLC. Moreover, the Construction Agreement grants to NAI a right to cause
a Termination of NAI’s Work at any time more than forty-five
days after giving this notice,
provided that NAI continues to believe that a Timing or Budget Shortfall exists at that time.
Thus, if BNPPLC intends to respond with an Increased Commitment, BNPPLC would be well advised to do
so before the expiration of such forty-five




 
Exhibit F
to Construction Agreement (Building 9) – Page 3




 









 







day period.]




	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware

corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit F
to Construction Agreement (Building 9) – Page 4




 









 








Exhibit G




Notice of Increased Funding Commitment by BNPPLC




[Date]




Network Appliance, Inc.

7301 Kit Creek Road

Research Triangle Park, NC 27709

Attention: Ingemar Lanevi

Telecopy: (919) 476-5750




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”) between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement or in the Common Definitions and Provisions Agreement referenced in the
Construction Agreement.




          NAI has delivered a notice to BNPPLC dated                     , 20     , which by its terms expressed NAI’s
intent that it constitute a “Notice of NAI’s Intent to Terminate Because of a Force Majeure Event”
as defined in the Construction Agreement. In such notice, NAI advised BNPPLC of NAI’s intent to
terminate the Construction Agreement because of NAI’s belief that the Construction Allowance to be
provided to it under the Construction Agreement will not be sufficient to cover all Reimbursable
Construction Period Costs yet to be paid or reimbursed from Construction Advances. Such notice
also suggested NAI’s belief that, but for the cost of repairing damage to the Improvements caused
by a Pre-lease Force Majeure Event, the remaining available Construction Allowance would be
sufficient. In addition, such notice set forth the amount of $                     as NAI’s estimate of the
Pre-lease Force Majeure Excess Costs most likely to be incurred because of such Pre-lease Force
Majeure Event.




          This response to such notice constitutes an Increased Funding Commitment. BNPPLC hereby
commits to increase the amount of the Construction Allowance by $                     (the estimate given by
NAI as described above). Such commitment is made on and subject to all of the same terms and
conditions set forth in the Construction Agreement and other Operative Documents as being
applicable to the original Construction Allowance and to Construction Advances required thereunder.




          Please note that, according to the Construction Agreement, NAI will have ten days after
the date of any Increased Commitment (which may be comprised of this Increased Funding Commitment
and any separate Increased Time Commitment given contemporaneously herewith) within which NAI may
rescind the aforementioned Notice of NAI’s Intent to Terminate Because



 









 






of a Force Majeure Event by a notice given in the form prescribed by the Construction
Agreement. Any failure of NAI to so rescind the notice will constitute a 97-10/Meltdown Event
under and as defined in the Construction Agreement and will result in a conclusive presumption (for
purposes of calculating any 97-10/Prepayment required of NAI) that any Termination of NAI’s Work
occurred for reasons other than the Pre-lease Force Majeure Events of which BNPPLC has previously
been notified.




	 	 	 	 	 
	 	BNP PARIBAS LEASING CORPORATION, a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit G to Construction Agreement (Building 9) – Page 2





 









 








Exhibit H




Notice of Increased Time Commitment by BNPPLC




[Date]




Network Appliance, Inc.

7301 Kit Creek Road

Research Triangle Park, NC 27709

Attention: Ingemar Lanevi

Telecopy: (919) 476-5750




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”) between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement or in the Common Definitions and Provisions Agreement referenced in the
Construction Agreement.




          NAI has delivered a notice to BNPPLC dated                     , 20     , which by its terms expressed NAI’s
intent that it constitute a “Notice of NAI’s Intent to Terminate Because of a Force Majeure Event”
as defined in the Construction Agreement. In such notice, NAI advised BNPPLC of NAI’s intent to
elect a Termination of NAI’s Work because of NAI’s belief that the Work will not be substantially
complete prior to the Target Completion Date only because of Pre-lease Force Majeure Delays. Such
notice also expressed NAI’s belief that Pre-lease Force Majeure Delays are likely to be                      days in the aggregate.




          This response to such notice constitutes an Increased Time Commitment. BNPPLC hereby commits
to extend the Target Completion Date by                      days (the estimate given by NAI as described
above).




          Please note that, according to the Construction Agreement, NAI will have ten days after the
date of any Increased Commitment (which may be comprised of this Increased Time Commitment and any
separate Increased Funding Commitment given contemporaneously herewith) within which NAI may
rescind the aforementioned Notice of NAI’s Intent to Terminate Because of a Force Majeure Event by
a notice given in the form prescribed by the Construction Agreement. Any failure of NAI to so
rescind the notice will constitute a 97-10/Meltdown Event under and as defined in the Construction
Agreement and will result in a conclusive presumption (for purposes of calculating any
97-10/Prepayment required of NAI) that any Termination of NAI’s Work occurred for reasons other
than the Pre-lease Force Majeure Events of which BNPPLC has previously been notified.





 









 








	 	 	 	 	 
	 	BNP PARIBAS LEASING CORPORATION, a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit H to Construction Agreement (Building 9) – Page 2




 









 








Exhibit I




Rescission of Notice of NAI’s Intent to Terminate




[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




          Re: Construction Agreement (Building 9) dated as of February 1, 2008 (the “Construction
Agreement”) between Network Appliance, Inc. (“NAI”), a Delaware corporation, and BNP Paribas
Leasing Corporation (“BNPPLC”), a Delaware corporation




Gentlemen:




          Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Construction Agreement referenced above or in the Common Definitions and Provisions Agreement
referenced in the Construction Agreement.




          NAI has delivered to BNPPLC a Notice of NAI’s Intent to Terminate dated                     , 200     , and
BNPPLC has responded with an Increased Commitment as of                     , 200     . NAI hereby accepts
the Increased Commitment and, as provided in subparagraph 7(B) of the Construction Agreement,
rescinds such Notice of NAI’s Intent to Terminate.




          NAI acknowledges that, because of such rescission, NAI must, as a condition precedent to any
exercise of its remaining rights to terminate the Construction Agreement pursuant to subparagraph
7(B) thereof, deliver another Notice of NAI’s Intent to Terminate at least forty five days prior to
the effective date of the Termination of NAI’s Work.




	 	 	 	 	 
	 	NETWORK APPLIANCE, INC., a Delaware

corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 







Exhibit J




Estoppel From Contractor




                    , 200     




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox




          Re: Assignment of Construction Contract




Ladies and Gentlemen:




          The undersigned hereby represents to BNP Paribas Leasing Corporation, a Delaware corporation
(“BNPPLC”), and covenants with BNPPLC as follows:




          1     The undersigned has entered into that certain [Construction Contract] (the “Construction
Contract”) by and between the undersigned and Network Appliance, Inc. (“NAI”)
dated
__________, ___ for the
construction of the improvements to be constructed as part of NAI’s Sunnyvale campus leased by NAI
(the “Improvements”) on the land described in the Building 9 Documents described below (the “Land”
and, together with the Improvements and any other improvements now on or constructed in the future
on the Land, the “Project”).




          2     The undersigned has been advised that, by a Lease Agreement (Building 9) and a Construction
Agreement (Building 9), both dated as of February 1, 2008 (collectively, the “Building 9
Documents”), BNPPLC is leasing the Project to NAI and has agreed, subject to the terms and
conditions of the Building 9 Documents, to provide a construction allowance for the design and
construction of the Improvements. The undersigned has also been advised that the Building 9
Documents expressly provide that third parties (including the undersigned) are not intended as
beneficiaries of the Building 9 Documents and, thus, will have no standing to enforce any
obligations of NAI or BNPPLC under the Building 9 Documents, including any such obligation that
BNPPLC may have to provide the construction allowance. The undersigned understands that the
Building 9 Documents expressly provide that NAI is not authorized to enter into any construction
contract or other agreement with any third party in the name of BNPPLC or to otherwise bind BNPPLC
to any contract with a third party.




          3     A complete and correct copy of the Construction Contract is attached to this letter. The
Construction Contract is in full force and effect and has not been modified or amended, except as
provided in any written modifications or amendments which are also attached to this letter.




 









 








BNP Paribas Leasing Corporation

________________, 200__

Page 2




          4     The undersigned has not sent or received any notice of default or any other notice
for the purpose of terminating the Construction Contract, nor does the undesigned have knowledge of
any existing circumstance or event which, but for the elapse of time or otherwise, would constitute
a default by the undersigned or by NAI under the Construction Contract.




          The undersigned acknowledges and agrees that:




          a)     Title to all Improvements shall, when constructed on the Land, pass directly to BNPPLC, not
to NAI. BNPPLC shall not, however, be liable for, and the undersigned shall not assert, any claims,
demands or liabilities against BNPPLC arising under or in any way relating to the Construction
Contract; provided, this paragraph will not (1) be construed as a waiver of any statutory
mechanic’s or materialmen’s liens against the interests of NAI in and to the Land or the
improvements thereon that may otherwise exist or arise in favor of the undersigned, or (2) prohibit
the undersigned from asserting any claims or making demands against BNPPLC under the Construction
Contract if BNPPLC elects in writing, pursuant to paragraph b) below, to assume the Construction
Contract in the event NAI’s right to possession of the Land is terminated, it being understood that
in the event of such an assumption BNPPLC shall be liable for the unpaid balance of the contract
sum due for the work of the undersigned, payable pursuant to (and subject to the terms and
conditions set forth for the benefit of the owner in) the Construction Contract, but in no event
shall BNPPLC otherwise be personally liable for any acts or omissions on the part of NAI.




          b)     Upon any termination of NAI’s right to possession of the Project under the Building
9 Documents, including any eviction of NAI resulting from an Event of Default (as defined in the
Building 9 Documents), BNPPLC shall be entitled (but not obligated), by notice to the undersigned
and without the necessity of the execution of any other document, to assume NAI’s rights and
obligations under the Construction Contract, cure any defaults by NAI thereunder and enforce the
Construction Contract and all rights of NAI thereunder. Within ten days of receiving notice from
BNPPLC that NAI’s right to possession has been terminated, the undersigned shall send to BNPPLC a
written estoppel letter stating: (i) that the undersigned has not performed any act or executed any
other instrument which invalidates or modifies the Construction Contract in whole or in part (or,
if so, the nature of such modification); (ii) that the Construction Contract is valid and
subsisting and in full force and effect; (iii) that there are no defaults or events of default then
existing under the Construction Contract and no event has occurred which with the passage of time
or the giving of notice, or both, would constitute such a default or event of default (or, if there
is a default, the nature of such default in detail); (iv) that the construction contemplated by the
Construction Contract is proceeding in a satisfactory




 
Exhibit J to Construction Agreement (Building 9) – Page 2




 









 








BNP Paribas Leasing Corporation

________________, 200__
Page 3



manner in all material respects (or if not, a
detailed description of all significant problems with the progress of construction); (v) a
reasonably detailed report of the then critical dates projected by the undersigned for work and
deliveries required to complete the Project; (vi) the total amount received by the undersigned for
construction through the date of the letter; (vii) the estimated total cost of completing the
undersigned’s work as of the date of the letter, together with a current draw schedule; and (viii)
any other information BNPPLC may request to allow it to decide
whether to assume the Construction Contract. BNPPLC shall have seven days from receipt of such
written certificate containing all such requested information to decide whether to assume the
Construction Contract. If BNPPLC fails to assume the Construction Contract within such time, the
undersigned agrees that BNPPLC shall not be liable (and the undersigned shall not assert or bring
any action against BNPPLC, except to enforce statutory lien rights, if any, of the undersigned
against the Land or improvements on the Land) for any damages or other amounts resulting from the
breach or termination of the Construction Contract or under any other theory of liability of any
kind or nature, but rather the undersigned shall look solely to NAI (and statutory lien rights, if
any, of the undersigned against the Land and any improvements thereon) for the recovery of any such
damages or other amounts.




          c)     If BNPPLC notifies the undersigned that BNPPLC shall not assume the Construction Contract
pursuant to the preceding paragraph following the termination of NAI’s right to possession of the
Project under the Building 9 Documents, the undersigned shall immediately discontinue the work
under the Construction Contract and remove its personnel from the Project, and BNPPLC shall be
entitled to take exclusive possession of the Project. The undersigned shall also, upon request by
BNPPLC, deliver and assign to BNPPLC all plans and specifications and other contract documents
previously delivered to the undersigned (except that the undersigned may keep an original set of
the Construction Contract and other contract documents executed by NAI), all other material
relating to the work which belongs to BNPPLC or NAI, and all papers and documents relating to
governmental permits, orders placed, bills and invoices, lien releases and financial management
under the Construction Contract. Notwithstanding the undersigned’s receipt of any notice from
BNPPLC that BNPPLC declines to assume the Construction Contract, the undersigned shall for a period
not to exceed fifteen days after receipt of such notice take such steps, at BNPPLC’s expense, as
are reasonably necessary to preserve and protect work completed and in progress and to protect
materials, equipment and supplies at the site or in transit.




          d)     If the Construction Contract is terminated by NAI before BNPPLC is given the
opportunity to elect whether or not to assume the Construction Contract as provided herein, BNPPLC
shall nonetheless have the right hereunder to assume the Construction Contract, as if it




 
Exhibit J to Construction Agreement (Building 9) – Page 3




 









 








BNP Paribas Leasing Corporation

________________, 200__

Page 4




had not been terminated, upon any termination of NAI’s right to possession of the Project under the
Building 9 Documents; provided, however, that if the work of the undersigned under the Construction
Contract has been disrupted because of NAI’s termination of the Construction Contract, the
undersigned shall be entitled to an equitable adjustment to the price of the Construction Contract,
following any assumption thereof by BNPPLC, for the additional costs incurred by the undersigned
attributable to the disruption; and, provided further, that if BNPPLC does assume the Construction
Contract, BNPPLC shall receive a credit against the price of the
Construction Contract for any consideration paid to the undersigned by NAI because of NAI’s
prior termination of the Construction Contract (whether such consideration is designated a
termination fee, settlement payment or otherwise).




          e)     No action taken by BNPPLC or the undersigned with respect to the Construction Contract
shall prejudice any other rights or remedies of BNPPLC or the undersigned provided by law, by the
Building 9 Documents, by the Construction Contract or otherwise against NAI.




          f)     The undersigned agrees promptly to notify BNPPLC of any material default or claimed
material default by NAI under the Construction Contract of which the undersigned is aware,
describing with particularity the default and the action the undersigned believes is necessary to
cure the same. The undersigned will send any such notice to BNPPLC
prominently marked “URGENT –
NOTICE OF NAI’S DEFAULT UNDER CONSTRUCTION AGREEMENT WITH
NETWORK APPLIANCE, INC. – SUNNYVALE,
CALIFORNIA” at the address specified for notice below (or at such other addresses as BNPPLC shall
designate in notice sent to the undersigned), by certified or registered mail, return receipt
requested. Following receipt of such notice, the undersigned will permit BNPPLC or its designee to
cure any such default within the time period reasonably required for such cure, but in no event
less than thirty days. If it is necessary or helpful to take possession of all or any portion of
the Project to cure a default by NAI under the Construction Contract, the time permitted by the
undersigned for cure by BNPPLC will include the time necessary to terminate NAI’s right to
possession of the Project and evict NAI, provided that BNPPLC commences the steps required to
exercise such right within sixty days after it is entitled to do so under the terms of the Building
9 Documents and applicable law. If the undersigned incurs additional costs due to the extension of
the aforementioned cure period, the undersigned shall be entitled to an equitable adjustment to the
price of the Construction Contract for such additional costs.




          g)     Any notice or communication required or permitted hereunder shall be given in
writing, sent by (a) personal delivery or (b) expedited delivery service with proof of delivery or
(c) United States mail, postage prepaid, registered or certified mail or (d) telegram, telex or




 
Exhibit J
to Construction Agreement (Building 9) – Page 4





 









 








BNP Paribas Leasing Corporation

________________, 200__

Page 5




telecopy, addressed as follows:




	 	 	 	 	 	 	 
	To the undersigned:

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Telecopy: (     )      
-            	 	 
	 
	 	 	 	 	 	 
	To BNPPLC:

	 	 	 	BNP Paribas Leasing Corporation
	 

	 	 	 	12201 Merit Drive, Suite 860
	 

	 	 	 	Dallas, Texas 75251
	 

	 	 	 	Attention: Lloyd G. Cox
	 

	 	 	 	Telecopy: (972) 788-9191





A copy of any such notice or communication will also be sent to NAI by (a) personal delivery or (b)
expedited delivery service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as follows:




	 	 	 	 	 	 	 
	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	 	 






          h)     The undersigned acknowledges that it has all requisite authority to execute this letter.
The undersigned further acknowledges that BNPPLC has requested this letter, and is relying on the
truth and accuracy of the representations made herein, in connection with BNPPLC’s decision to
advance funds for construction under the Building 9 Documents with NAI.




 
Exhibit J
to Construction Agreement (Building 9) – Page 5




 









 








BNP Paribas Leasing Corporation

________________, 200__

Page 6




	 	 	 	 	 
	 	Very truly yours,

 	 
	 	 	 
	 	 	 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



          NAI joins in the execution of this letter solely for the purpose of evidencing its consent
hereto, including its consent to the provisions that would allow, but not require, BNPPLC to assume
the Construction Contract in the event NAI is evicted from the Project.




	 	 	 	 	 
	 	Network Appliance, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 
Exhibit J
to Construction Agreement (Building 9) – Page 6





 











 





Exhibit K




Estoppel From Design Professionals




_________, 200__




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox




          Re:     Assignment of [Architect’s Agreement/Engineering Contract]



Ladies and Gentlemen:




          The undersigned hereby represents to BNP Paribas Leasing Corporation, a Delaware corporation
(“BNPPLC”), and covenants with BNPPLC as follows:




          1     The undersigned has entered into that certain [Architect’s Agreement/Engineering Contract]
(the “Agreement”) by and between the undersigned and Network Appliance, Inc. (“NAI”) dated __________, ___
for the [design/engineering] of the improvements to be constructed as part of NAI’s Sunnyvale
campus leased by NAI (the “Improvements”) on the land described in the Building 9 Documents
described below (the “Land” and, together with the Improvements and any other improvements now on
or constructed in the future on the Land, the “Project”).




          2     The undersigned has been advised that, by a Lease Agreement (Building 9) and a Construction
Agreement (Building 9), both dated as of February 1, 2008 (collectively, the “Building 9
Documents”), BNPPLC is leasing the Project to NAI and has agreed, subject to the terms and
conditions of the Building 9 Documents, to provide a construction allowance for the design and
construction of the Improvements. The undersigned has also been advised that the Building 9
Documents expressly provide that third parties (including the undersigned) are not intended as
beneficiaries of the Building 9 Documents and, thus, will have no standing to enforce any
obligations of NAI or BNPPLC under the Building 9 Documents, including any such obligation that
BNPPLC may have to provide the construction allowance. The undersigned understands that the
Building 9 Documents expressly provide that NAI is not authorized to enter into any Agreement or
other agreement with any third party in the name of BNPPLC or to otherwise bind BNPPLC to any
contract with a third party.




          3     A complete and correct copy of the Agreement is attached to this letter. The Agreement is in
full force and effect and has not been modified or amended, except as provided in any written
modifications or amendments which are also attached to this letter.




 









 








BNP Paribas Leasing Corporation

________________, 200__

Page 2




          4     The undersigned has not sent or received any notice of default or any other notice
for the purpose of terminating the Agreement, nor does the undesigned have knowledge of any
existing circumstance or event which, but for the elapse of time or otherwise, would constitute a
default by the undersigned or by NAI under the Agreement.




          The undersigned acknowledges and agrees that:




          a)     BNPPLC shall not be liable for, and the undersigned shall not assert, any claims, demands
or liabilities against BNPPLC arising under or in any way relating to the Agreement; provided, this
paragraph will not (1) be construed as a waiver of any statutory mechanic’s or materialmen’s liens
against the interests of NAI in and to the Land or the improvements thereon that may otherwise
exist or arise in favor of the undersigned, or (2) prohibit the undersigned from asserting any
claims or making demands against BNPPLC under the Agreement if BNPPLC elects in writing, pursuant
to paragraph b) below, to assume the Agreement in the event NAI’s right to possession of the Land
is terminated, it being understood that in the event of such an assumption BNPPLC shall be liable
for the unpaid balance of the fees for services of the undersigned, payable pursuant to (and
subject to the terms and conditions set forth for the benefit of the owner in) the Agreement, but
in no event shall BNPPLC otherwise be personally liable for any acts or omissions on the part of
NAI.




          b)     Upon any termination of NAI’s right to possession of the Project under the Building
9 Documents, including any eviction of NAI resulting from an Event of Default (as defined in the
Building 9 Documents), BNPPLC shall be entitled (but not obligated), by notice to the undersigned
and without the necessity of the execution of any other document, to assume NAI’s rights and
obligations under the Agreement, cure any defaults by NAI thereunder and enforce the Agreement and
all rights of NAI thereunder. Within ten days of receiving notice from BNPPLC that NAI’s right to
possession has been terminated, the undersigned shall send to BNPPLC a written estoppel letter
stating: (i) that the undersigned has not performed any act or executed any other instrument which
invalidates or modifies the Agreement in whole or in part (or, if so, the nature of such
modification); (ii) that the Agreement is valid and subsisting and in full force and effect; (iii)
that there are no defaults or events of default then existing under the Agreement and no event has
occurred which with the passage of time or the giving of notice, or both, would constitute such a
default or event of default (or, if there is a default, the nature of such default in detail); (iv)
that the services contemplated by the Agreement are proceeding in a satisfactory manner in all
material respects (or if not, a detailed description of all significant problems with the progress
of services); (v) a reasonably detailed report of the then critical dates projected by the
undersigned for services required to complete the Project; (vi) the total amount




 

Exhibit K to Construction Agreement (Building 9) – Page 2




 









 






BNP Paribas Leasing Corporation

________________, 200__

Page 3




received by the
undersigned for services through the date of the letter; (vii) the estimated total
cost of completing such services as of the date of the letter, together with a current payment
schedule; and (viii) any other information BNPPLC may request to allow it to decide whether to
assume the Agreement. BNPPLC shall have seven days from receipt of such written certificate
containing all such requested information to decide whether to assume the Agreement. If BNPPLC
fails to assume the Agreement within such time, the undersigned agrees that BNPPLC shall not be
liable (and the undersigned shall not assert or bring any action against BNPPLC or, except to
enforce statutory lien rights, if any, of the undersigned against the Land or improvements on the
Land) for any damages or other amounts resulting from the breach or termination of the Agreement or
under any other theory of liability of any kind or nature, but rather the undersigned shall look
solely to NAI (and statutory lien rights, if any, of the undersigned against the Land and any
improvements thereon) for the recovery of any such damages or other amounts.




          c)     If BNPPLC notifies the undersigned that BNPPLC shall not assume the Agreement pursuant to
the preceding paragraph following the termination of NAI’s right to possession of the Project under
the Building 9 Documents, the undersigned shall immediately deliver and assign to BNPPLC the
following: (1) copies of all plans and specifications for the Project or any component thereof
previously generated by or delivered to the undersigned, (2) any other contract documents
previously delivered to the undersigned (except that the undersigned may keep an original set of
the Agreement and other contract documents executed by NAI), (3) any other material relating to the
services provided under the Agreement, and (4) to the extent available to the undersigned all
papers and documents relating to governmental permits, orders placed, bills and invoices, lien
releases and financial management under the Agreement. Notwithstanding the undersigned’s receipt of
any notice from BNPPLC that BNPPLC declines to assume the Agreement, the undersigned shall for a
period not to exceed thirty days after receipt of such notice take such steps, at BNPPLC’s expense,
as are reasonably necessary to preserve the utility and value of services completed and in progress
and to protect plans and specifications and other materials described in the preceding sentence.




          d)     If the Agreement is terminated by NAI before BNPPLC is given the opportunity to
elect whether or not to assume the Agreement as provided herein, BNPPLC shall nonetheless have the
right hereunder to assume the Agreement, as if it had not been terminated, upon any termination of
NAI’s right to possession of the Project under the Building 9 Documents; provided, however, that if
the services of the undersigned under the Agreement has been disrupted because of NAI’s termination
of the Agreement, the undersigned shall be entitled to an equitable adjustment to the price of the
Agreement, following any assumption thereof by



 

Exhibit K to Construction Agreement (Building 9) – Page 3





 









 




BNP Paribas Leasing Corporation

________________, 200__

Page 4







BNPPLC, for the additional costs incurred by the
undersigned attributable to the disruption; and,
provided further, that if BNPPLC does assume the Agreement, BNPPLC shall receive a credit
against the price of the Agreement for any consideration paid to the undersigned by NAI because of
NAI’s prior termination of the Agreement (whether such consideration is designated a termination
fee, settlement payment or otherwise).




          e)     No action taken by BNPPLC or the undersigned with respect to the Agreement shall prejudice
any other rights or remedies of BNPPLC or the undersigned provided by law, by the Building 9
Documents, by the Agreement or otherwise against NAI.




          f)     The undersigned agrees promptly to notify BNPPLC of any material default or claimed
material default by NAI under the Agreement of which the undersigned is aware, describing with
particularity the default and the action the undersigned believes is necessary to cure the same.
The undersigned will send any such notice to BNPPLC prominently marked “URGENT – NOTICE OF NAI’S
DEFAULT UNDER DESIGN AGREEMENT WITH NETWORK APPLIANCE, INC. – SUNNYVALE, CALIFORNIA” at the address
specified for notice below (or at such other addresses as BNPPLC shall designate in notice sent to
the undersigned), by certified or registered mail, return receipt requested. Following receipt of
such notice, the undersigned will permit BNPPLC or its designee to cure any such default within the
time period reasonably required for such cure, but in no event less than thirty days.




          g)     Any notice or communication required or permitted hereunder shall be given in writing, sent
by (a) personal delivery or (b) expedited delivery service with proof of delivery or (c) United
States mail, postage prepaid, registered or certified mail or (d) telegram, telex or telecopy,
addressed as follows:




	 	 	 	 	 
	To the undersigned:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	Telecopy: (___) ___-_________	 	 





 

Exhibit K to Construction Agreement (Building 9) – Page 4




 









 




BNP Paribas Leasing Corporation

________________, 200__

Page 5





	 	 	 
	To BNPPLC:

	 	BNP Paribas Leasing Corporation
	 

	 	12201 Merit Drive, Suite 860
	 

	 	Dallas, Texas 75251
	 

	 	Attention: Lloyd G. Cox
	 

	 	Telecopy: (972) 788-9191






A copy of any such notice or communication will also be sent to NAI by (a) personal delivery or (b)
expedited delivery service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as follows:




	 	 	 
	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






          h)     The undersigned acknowledges that it has all requisite authority to execute this letter.
The undersigned further acknowledges that BNPPLC has requested this letter, and is relying on the
truth and accuracy of the representations made herein, in connection with BNPPLC’s decision to
advance funds for design services under the Building 9 Documents with NAI.




	 	 	 	 	 
	 	Very truly yours,



 	 
	 	
 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 


 

Exhibit K to Construction Agreement (Building 9) – Page 5




 









 





BNP Paribas Leasing Corporation

________________, 200__

Page 6





	 	 	 	 	 



          NAI joins in the execution of this letter solely for the purpose of evidencing its consent
hereto, including its consent to the provisions that would allow, but not require, BNPPLC to assume
the Agreement in the event NAI is evicted from the Project.




	 	 	 	 	 
	 	Network Appliance, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 


 

Exhibit K to Construction Agreement (Building 9) – Page 6