exv10w5



 






Exhibit
10.5





LEASE AGREEMENT




BETWEEN




NETWORK APPLIANCE, INC.

(“NAI”)




AND




BNP PARIBAS LEASING CORPORATION

(“BNPPLC”)




December 15, 2005




 









 








TABLE OF CONTENTS




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






 









 






TABLE OF CONTENTS

(Continued)




	 	 	 	 	 
	 	 	Page
	 
	(B) Conditions to Replacement of Participants
	 	 	25	 
	 
	 	 	 	 
	7 Items Included in the Property
	 	 	26	 

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






(ii)




 









 





TABLE OF CONTENTS

(Continued)




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






(iii)




 









 








TABLE OF CONTENTS

(Continued)




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






	 	 	 
	Exhibits and Schedules
	 Exhibit A

	 	Legal Description
	
Exhibit B

	 	California Lien and Foreclosure Provisions






(iv)




 









 





LEASE AGREEMENT




     This LEASE AGREEMENT (this “Lease”), dated as of December 15, 2005 (the “Effective
Date”), is made by and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”), a Delaware corporation,
and NETWORK APPLIANCE, INC. (“NAI”), a Delaware corporation.



RECITALS




     Contemporaneously with the execution of this Lease, BNPPLC and NAI are executing a Common
Definitions and Provisions Agreement dated as of the Effective Date (the “Common Definitions and
Provisions Agreement”), which by this reference is incorporated into and made a part of this Lease
for all purposes. As used in this Lease, capitalized terms defined in the Common Definitions and
Provisions Agreement and not otherwise defined in this Lease are intended to have the respective
meanings assigned to them in the Common Definitions and Provisions Agreement.



     At the request of NAI and to facilitate the transactions contemplated in the other Operative
Documents, pursuant to the Ground Lease, BNPPLC is acquiring a leasehold estate in the Land
described in Exhibit A  and any existing improvements on the Land from NAI contemporaneously
with the execution of this Lease.



     In anticipation of BNPPLC’s acquisition of the leasehold estate under the Ground Lease and
other property described below, BNPPLC and NAI have reached agreement as to the terms and
conditions upon which BNPPLC is willing to sublease the Land to NAI and to lease to NAI any
existing Improvements and the Improvements to be constructed on the Land as hereinafter provided,
and by this Lease BNPPLC and NAI desire to evidence such agreement.



GRANTING CLAUSES




     BNPPLC does hereby LEASE, DEMISE and LET unto NAI for the Term (as hereinafter defined) all
right, title and interest of BNPPLC, now owned or hereafter acquired, in and to:




     (1) the Land, including the leasehold estate in the Land acquired by BNPPLC under the Ground
Lease;




     (2) any and all Improvements;




     (3) all easements and other rights appurtenant to the leasehold estate created by the Ground
Lease or to the Improvements; and




     (4) (A) any land lying within the right-of-way of any street, open or proposed, adjoining
the Land, (B) any sidewalks and alleys adjacent to the Land, and (C) any strips



 









 





     and gores between the Land and abutting land.


BNPPLC’s interest in all property described in clauses (1) through (4) above is hereinafter
referred to collectively as the “Real Property”.




     To the extent, but only to the extent, that assignable rights or interests in, to or under the
following have been or will be acquired by BNPPLC under the Ground Lease or as described in
subparagraph 7(A) below, BNPPLC also hereby grants and assigns to NAI for the term of this Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such rights or interests
of BNPPLC:




     (a) any goods, equipment, furnishings, furniture and other tangible personal property of
whatever nature that are located on the Real Property and all renewals or replacements of or
substitutions for any of the foregoing (collectively, the “Tangible Personal Property”);




     (b) the benefits, if any, conferred upon the owner of the Real Property by the Permitted
Encumbrances; and




     (c) any permits, licenses, franchises, certificates, and other rights and privileges against
third parties related to the Real Property, including warranties, if any, given by vendors
from whom any Tangible Personal Property was or may be acquired.



Such rights and interests of BNPPLC, whether now existing or hereafter arising, are hereinafter
collectively called the “Personal Property”. The Real Property and the Personal Property are
hereinafter sometimes collectively called the “Property.”



     However, the leasehold estate conveyed by this Lease and NAI’s rights hereunder are expressly
made subject and subordinate to the terms and conditions of this Lease and the Ground Lease, to the
matters listed in Exhibit B to the Closing Certificate and all other Permitted Encumbrances, and to
any other claims or encumbrances not constituting Liens Removable by BNPPLC.



GENERAL TERMS AND CONDITIONS




     The Property is leased by BNPPLC to NAI and is accepted and is to be used and possessed by NAI
upon and subject to the following terms and conditions:


1 Term; Lease Obligations Deferred Until Completion of Initial Improvements; Termination
Prior to Lease Commencement.



Lease Agreement — Page 2






 









 








     (A) Scheduled Term; Deferral of Obligations. The term of this Lease (the “Term”) will
not commence until a Completion Date occurs either (1) because of a Completion Notice given by NAI
to BNPPLC, as required by subparagraph 2(B) of the Construction Management Agreement after
NAI substantially completes the Construction Project, or (2) because of a Completion Notice given
by BNPPLC to NAI as described in subparagraph 8(C) of the Construction Management
Agreement, advising NAI (after an Owner’s Election to Complete Construction) that construction of
the Construction Project is substantially complete.



     The Term will begin on and include any such Completion Date (herein sometimes called the
"Lease Commencement Date”) and will end on the first Business Day of July, 2012\, unless the Term
is extended as provided in subparagraph 1(D) or sooner terminated as expressly provided in other
provisions of this Lease.



     BNPPLC and NAI intend to be legally bound by this Lease when it is executed by them. They
also intend, however, that this Lease will not impose any payment obligations upon either of them
prior to the Lease Commencement Date. Accordingly, neither NAI nor BNPPLC will have any obligation
to make any payments under this Lease until the Lease Commencement Date, and if this Lease
terminates before the Lease Commencement Date pursuant to
subparagraph 1(B) or subparagraph  1(C) , the Term
will never commence and neither party will have any obligation for payments by reason of this Lease
following the termination.



     Nothing
in this subparagraph  1(A) nor any other provision of this Lease will defer or terminate
the rights and obligations of the parties under the other Operative Documents. Unlike this Lease,
the other Operative Documents will, when executed, immediately impose payment obligations upon
BNPPLC and NAI.



     (B) Option of BNPPLC to Terminate. BNPPLC will have the option to terminate this
Lease, which BNPPLC may exercise by notice to NAI, at any time after any 97-10/Event or after
BNPPLC’s receipt of a Pre-lease Force Majeure Notice. Such option may be exercised by BNPPLC as it
deems appropriate in its sole and absolute discretion.



     (C) Automatic Termination. If NAI elects to accelerate the Designated Sale Date (as
provided in the definition thereof in the Common Definitions and Provisions Agreement) prior to the
Lease Commencement Date, or if a Termination of NAI’s Work occurs under and as provided in the
Construction Management Agreement before the Lease Commencement Date, then this Lease will
terminate automatically before the Term begins.



     (D) Extension of the Term. The Term may be extended at the option of NAI for up to two
successive periods of five years each; provided, however, that prior to each such extension the
following conditions must have been satisfied: (A) NAI must have delivered a notice of its election
to exercise the option at least one hundred eighty days prior to the end of the Term, and



Lease Agreement — Page 3




 









 







prior to the commencement of any such extension BNPPLC and NAI must have agreed in writing upon, and
received the written consent and approval of BNPPLC’s Parent and all Participants (other than
Participants being replaced at the request of NAI as provided in
Paragraph 6) to, (1) a
corresponding extension of the date specified in clause (1) of the definition of Designated Sale
Date in the Common Definitions and Provisions Agreement and of the term of the Ground Lease, and
(2) an adjustment to the Rent that NAI will be required to pay during the extension, it being
expected that the Rent for the extension may be different than the Rent required for the original
Term or any prior extension, and it being understood that the Rent for any extension must in all
events be satisfactory to both BNPPLC and NAI, each in its sole and absolute discretion; (B) at the
time of NAI’s exercise of its option to extend, no Event of Default has occurred and is continuing,
and no Event of Default will result from the extension; (C) immediately prior to any such
extension, this Lease must then remain in effect; and (D) if this Lease has been assigned by NAI,
then NAI must have executed a guaranty (or confirmed an existing guaranty, if applicable),
guaranteeing NAI’s assignee’s obligations under the Operative Documents throughout such extended
Term. With respect to the condition that BNPPLC and NAI must have agreed upon the Rent required
for any extension of the Term, neither NAI nor BNPPLC is willing to submit itself to a risk of
liability or loss of rights hereunder for being judged unreasonable. Accordingly, NAI and BNPPLC
will each have sole and absolute discretion in making its determination, and both NAI and BNPPLC
hereby disclaim any obligation express or implied to be reasonable in negotiating the Rent for any
such extension. Subject to the changes to the Rent and satisfaction of the other conditions
listed in this subparagraph, if NAI exercises its option to extend the Term as provided in this
subparagraph, this Lease will continue in full force and effect, and the leasehold estate hereby
granted to NAI will continue without interruption and without any loss of priority over other
interests in or claims against the Property that may be created or arise after the Effective Date
and before the extension.



2 Use and Condition of the Property.




     (A) Use. Subject to the Permitted Encumbrances, NAI may use and occupy the Property
during the Term, but only for the following purposes and other lawful purposes incidental thereto:




     (1) construction and development of the Construction Project;




     (2) administrative and office space;




     (3) activities related to NAI’s research and development or production of products that are
of substantially the same type and character as those regularly sold by NAI in the ordinary
course of its business as of the Effective Date;




     (4) cafeteria and other support facilities that NAI may provide to its employees;



Lease Agreement — Page 4




 









 






     and




     (5) other lawful purposes (including NAI’s research and development or production of
products that are not of substantially the same type and character as those regularly sold
by NAI in the ordinary course of its business as of the Effective Date) approved in advance
and in writing by BNPPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but NAI acknowledges that BNPPLC’s withholding of such approval
shall be reasonable if BNPPLC determines in good faith that (1) giving the approval may
materially increase BNPPLC’s risk of liability for any existing or future environmental
problem, or (2) giving the approval is likely to substantially increase BNPPLC’s
administrative burden of complying with or monitoring NAI’s compliance with the requirements
of this Improvements Lease or other Operative Documents).



     (B) Condition of the Property. NAI acknowledges that it has carefully and
fully inspected the Property and accepts the Property in its present state, AS IS, and
without any representation or warranty, express or implied, as to the condition of such property or
as to the use which may be made thereof. NAI also accepts the Property without any covenant,
representation or warranty, express or implied, by BNPPLC or its Affiliates regarding the title
thereto or the rights of any parties in possession of any part thereof, except as expressly set
forth in Paragraph. BNPPLC will not be responsible for any latent or other defect or change of
condition in the Land, Improvements or other Property or for any violations with respect thereto of
Applicable Laws. Further, BNPPLC will not be required to furnish to NAI any facilities or services
of any kind, including water, phone, sewer, steam, heat, gas, air conditioning, electricity, light
or power.



     (C) Consideration
for and Scope of Waiver. The provisions of subparagraph 2(B) have
been negotiated by BNPPLC and NAI as being consistent with the Rent payable under this Lease, and
such provisions are intended to be a complete exclusion and negation of any representations or
warranties of BNPPLC or its Affiliates, express or implied, with respect to the Property that may arise pursuant to any law now or hereafter in effect or otherwise,
except as expressly set forth herein.



     However, such exclusion of representations and warranties by BNPPLC is not intended to impair
any representations or warranties made by other parties, including any architects, engineers or
contractors engaged to work on the Construction Project, the benefit of which may pass to NAI
during the Term because of the definition of Personal Property and Property above.



Lease Agreement — Page 5





 










 






3 Rent.




     (A) Base Rent Generally. On each Base Rent Date through the end of the
Term, NAI must pay BNPPLC rent (“Base Rent”), calculated as provided below . Each payment
of Base Rent must be received by BNPPLC no later than 2:00 p.m. (Eastern time) on the date
it becomes due; if received after 2:00 p.m. (Eastern time) it will be considered for
purposes of this Lease as received on the next following Business Day. At least five days
prior to any Base Rent Date upon which an installment of Base Rent becomes due, BNPPLC
will notify NAI in writing of the amount of each installment, calculated as provided
below. Any failure by BNPPLC to so notify NAI, however, will not constitute a waiver of
BNPPLC’s right to payment, but absent such notice NAI will not be in default hereunder for
any underpayment resulting therefrom if NAI, in good faith, reasonably estimates the
payment required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPPLC of the
underpayment.



     (B) Calculation of and Due Dates for Base Rent. Payments of Base Rent
will be calculated and become due as follows:




     (1) Determination of Payment Due Dates Generally. For Base Rent Periods
subject to a LIBOR Period Election of six months, Base Rent will be payable in two
installments, with the first installment becoming due on the Base Rent Date that
occurs on the first Business Day of the third calendar month following the
commencement of such Base Rent Period, and with the second installment becoming
due on the Base Rent Date upon which the Base Rent Period ends. For all other Base
Rent Periods, Base Rent will be due in one installment on the Base Rent Date upon
which the Base Rent Period ends.




     (2) Special Adjustments to Base Rent Payment Dates and Periods.
Notwithstanding the foregoing, if NAI or any Applicable Purchaser purchases
BNPPLC’s interest in the Property pursuant to the Purchase Agreement, any accrued
unpaid Base Rent and all outstanding Additional Rent will be due on the date of
purchase in addition to the purchase price and other sums due to BNPPLC under the
Purchase Agreement.



Lease
Agreement — Page 6




 









 









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




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






     Only for the purpose of illustration, assume the following for a hypothetical Base
Rent Period: that prior to the first day of such Base Rent Period the Construction
Allowance has been fully funded, and no Pre-lease Force Majeure Losses have
occurred, but Qualified Prepayments have been received by BNPPLC, leaving a Lease
Balance of $50,000,000; that the Effective Rate for the Base Rent Period is 6%;
that the Spread is one hundred fifty basis points (150/100 of 1%); and that such
Base Rent Period contains exactly thirty days. Under such assumptions, the Base
Rent for the hypothetical Base Rent Period will equal:



$50,000,000 x [6% + 1.50%] x 30/360 = $312,500.





     (4) Fixed Rate Lock. At any time during the Term, NAI may deliver a notice
in the form attached to the Common Definitions and Provisions Agreement as
Annex 2 (a “Fixed Rate Lock Notice”), requesting that BNPPLC establish a
fixed rate for use in the calculation of the Effective Rate hereunder (a “Fixed
Rate Lock”) for all Base Rent Periods commencing on or after a date specified in
such notice, which date must be the first Business Day of a calendar month (the
“Fixed Rate Lock Date”). Promptly after receiving a Fixed Rate Lock Notice, BNPPLC
will enter into an Interest Rate Swap with BNP Paribas (the “Fixed Rate Swap”);
except that BNPPLC may decline to enter into the Fixed Rate Swap and to establish
a Fixed Rate Lock, if:




     (a) NAI does not deliver the Fixed Rate Lock Notice to BNPPLC at least ten
Business days prior to the Fixed Rate Lock Date specified therein;




     (b) NAI specifies a Fixed Rate Lock Date in the Fixed Rate Lock



Lease
Agreement — Page 7




 









 









Notice that is prior to the end of any Base Rent Period which commenced before BNPPLC
receives the Fixed Rate Lock Notice;




     (c) any notice has been given to accelerate the Designated Sale Date as
provided in the definition thereof in the Common Definitions and
Provisions Agreement;




     (d) the estimate of the Fixed Rate (hereinafter defined) specified by NAI
in the Fixed Rate Lock Notice is for any reason less than the fixed rate
available to BNPPLC under any Interest Rate Swap proposed by BNP Paribas;




     (e) at the time the Fixed Rate Lock Notice is given, the Interest Rate Swap
requested thereby is contrary to any Applicable Laws or any interpretation
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or any request
or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency (including, without
limitation, any such requirement imposed by the Board of Governors of the
United States Federal Reserve System); or




     (f)  any event has occurred or circumstance exists that constitutes a
Default, an Event of Default or a 97-10/Event.




The notional principal amount of the Fixed Rate Swap will equal the Lease Balance
on the date such notice is given. The fixed rate used to calculate payments
required of BNPPLC under the Fixed Rate Swap, as the counterparty designated the
fixed rate payor, will constitute the “Fixed Rate” for purposes of this Lease.



     (C) Early Termination of Fixed Rate Lock. After a Fixed Rate Lock is
established, BNPPLC may cause or suffer a termination in whole or in part of the Fixed
Rate Swap in the event that (i) NAI fails to make any payment of Base Rent required
hereunder on the Base Rent Date when it first becomes due, (ii) the Designated Sale Date
occurs before the date specified in clause (1) of the definition thereof in the Common
Definitions and Provisions Agreement, (iii) for any reason a Qualified Prepayment is
applied to reduce the Lease Balance, (iv) the Lease Balance on the Fixed Rate Lock Date is
less than the notional amount of the Fixed Rate Swap for any reason. NAI must reimburse to
BNPPLC any Fixed Rate Settlement Amount charged to BNPPLC in connection with such a
termination, and if the termination is a complete, rather than a partial, termination of
the Fixed Rate Swap then in effect, it will for purposes of this Lease constitute a
termination of the Fixed Rate Lock itself. Further, if BNPPLC is charged penalties or
interest because of its failure to make a timely payment required under the Fixed Rate
Swap, and if BNPPLC’s failure to make the timely payment was caused by NAI’s failure to
make a



Lease
Agreement — Page 8




 









 







timely payment of Base Rent or other amounts due hereunder or under other Operative
Documents, then such penalties or interest will constitute Losses against which BNPPLC is
entitled to be indemnified pursuant to subparagraph 5(C). If a Fixed Rate Lock is
terminated as provided in this subparagraph, NAI shall have no right to require BNPPLC to
enter into another Interest Rate Swap in order to establish a new fixed rate.




     (D) Additional Rent. All amounts which NAI is required to pay to or on
behalf of BNPPLC pursuant to this Lease, together with every charge, premium, interest and
cost set forth herein which may be added for nonpayment or late payment thereof, will
constitute rent (all such amounts, other than Base Rent, are herein called “Additional
Rent”; and, collectively, Base Rent and Additional Rent are herein sometimes called
"Rent”).



     (E) Administrative Fees. On each anniversary of the Effective Date after
the Completion Date and prior to the Designated Sale Date, NAI must pay BNPPLC an
administrative agency fee (an “Administrative Fee”) as provided in the Term Sheet. Each
payment of an Administrative Fee will represent Additional Rent for the first Base Rent
Period during which it first becomes due.



     (F) No Demand or Setoff. Except as expressly provided herein, NAI must
pay all Rent without notice or demand and without counterclaim, deduction, setoff or
defense.



     (G) Default Interest and Order of Application. All Rent will bear
interest, if not paid when first due, at the Default Rate in effect from time to time from
the date due until paid; provided, that nothing herein contained will be construed as
permitting the charging or collection of interest at a rate exceeding the maximum rate
permitted under Applicable Laws. BNPPLC may apply any amounts paid by or on behalf of NAI
against any Rent then past due in the order the same became due or in such other order as
BNPPLC elects.



     (H) Calculations by BNPPLC Are Conclusive. All calculations by BNPPLC of
Base Rent, Additional Rent or any amount needed to calculate Base Rent (including the
Effective Rate for any Base Rent Period and the Lease Balance) or Additional Rent will, in
the absence of clear and demonstrable error, be conclusive and binding upon NAI.



4 Nature of this Agreement.




     (A) “Net” Lease Generally. Subject only to the exceptions listed in
subparagraph 5(D) below, it is the intention of BNPPLC and NAI that Base Rent and other
payments herein specified will be absolutely net to BNPPLC and that NAI must pay all
costs, expenses and obligations of every kind relating to the Property or this Lease which
may arise or become due. Further, it is understood that all amounts payable by NAI to
BNPPLC under this Lease and the other Operative Documents are expressed as minimum
payments to be made net of any deduction



Lease
Agreement — Page 9




 









 







or withholding required under any Applicable
Laws.




     (B) No Termination. Except as expressly provided in this Lease itself,
this Lease will not terminate, nor will NAI have any right to terminate this Lease, nor
will NAI be entitled to any abatement of or setoff against the Rent, nor will the
obligations of NAI under this Lease be excused, for any reason whatsoever,
including any of the following: (i) any damage to or the destruction of all or any part of
the Property from whatever cause, (ii) the taking of the Property or any portion thereof
by eminent domain or otherwise for any reason, (iii) the prohibition, limitation or
restriction of NAI’s use or development of all or any portion of the Property or any
interference with such use by governmental action or otherwise, (iv) any eviction of NAI
or of anyone claiming through or under NAI, (v) any default on the part of BNPPLC under
this Lease or any of the other Operative Documents or any other agreement to which BNPPLC
and NAI are parties, (vi) the inadequacy in any way whatsoever of the design,
construction, assembly or installation of any improvements, fixtures or tangible personal
property included in the Property (it being understood that BNPPLC has not made, does not
make and will not make any representation express or implied as to the adequacy thereof),
(vii) any latent or other defect in the Property or any change in the condition thereof or
the existence with respect to the Property of any violations of Applicable Laws, (viii)
NAI’s ownership of any interest in the Property, or (ix) any other cause, whether similar
or dissimilar to the foregoing, any existing or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the obligations of NAI
hereunder be separate and independent of the covenants and agreements of BNPPLC, that Base
Rent and all other sums payable by NAI hereunder continue to be payable in all events and
that the obligations of NAI hereunder continue unaffected, unless the requirement to pay
or perform the same have been terminated or limited pursuant to an express provision of
this Lease. Without limiting the foregoing, NAI waives to the extent permitted by
Applicable Laws, except as otherwise expressly provided herein, all rights to which NAI
may now or hereafter be entitled by law (including any such rights arising because of any
“warranty of suitability” or other warranties implied as a matter of law) (i) to quit,
terminate or surrender this Lease or the Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.



     However, nothing in this subparagraph 4(B) will be construed as a waiver by NAI of
any right NAI may have at law or in equity to the following remedies, whether because of
BNPPLC’s failure to remove a Lien Removable by BNPPLC or because of any other default by
BNPPLC under this Lease: (i) the recovery of monetary damages in the case of any default
that continues beyond the period for cure provided in Paragraph 16, (ii) injunctive relief
in case of the violation, or attempted or threatened violation, by BNPPLC of any of the
express covenants, agreements, conditions or provisions of this Lease which are binding
upon BNPPLC (including the confidentiality provisions set forth in subparagraph 22(B)
below), or (iii) a decree compelling performance by BNPPLC of any of the express
covenants, agreements, conditions or provisions of this Lease which are binding upon
BNPPLC.



Lease
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(C) Characterization of this Lease.




     (1) Both NAI and BNPPLC intend that (A) for the purposes of determining the proper
accounting for this Lease by NAI, BNPPLC will be treated as the owner and landlord
of the Property and NAI will be treated as the tenant of the Property, and (B) for
income tax purposes and real estate, commercial law (including bankruptcy) and
regulatory purposes, (1) this Lease and the other Operative Documents will be
treated as a financing arrangement, (2) BNPPLC will be deemed a lender making
loans to NAI in the principal amount equal to the Lease Balance, which loans are
secured by the Property, and (3) NAI will be treated as the owner of the Property
and will be entitled to all tax benefits available to the owner of the Property.
Consistent with such intent, by the provisions set forth in Exhibit B, NAI
is granting to BNPPLC a lien upon and mortgaging and warranting title to the
leasehold estate in the Land created by the Ground Lease and the Improvements and
all rights, titles and interests of NAI in and to other Property, WITH POWER OF
SALE, to secure all obligations (monetary or otherwise) of NAI arising under or in
connection with any of the Operative Documents. Without limiting the generality of
the foregoing, NAI and BNPPLC desire that their intent as set forth in this
subparagraph be given effect both in the context of any bankruptcy, insolvency or
receivership proceedings concerning NAI or BNPPLC and in other contexts.
Accordingly, NAI and BNPPLC expect that in the event of any bankruptcy, insolvency
or receivership proceedings affecting NAI or BNPPLC or any enforcement or
collection actions arising out of such proceedings, the transactions evidenced by
this Lease and the other Operative Documents will be characterized and treated as
loans made to NAI by BNPPLC, as an unrelated third party lender to NAI, secured by
the Property.




     (2) Notwithstanding the foregoing, NAI acknowledges and agrees that none of BNPPLC
or the other Interested Parties has made, or will be deemed to have made, in the
Operative Documents or otherwise, any representations or warranties concerning how
this Lease and the other Operative Documents will be characterized or treated
under applicable accounting rules, income tax, regulatory, commercial or real
estate law, bankruptcy, insolvency or receivership law or any other rules or
requirements concerning the tax, accounting or legal characteristics of the
Operative Documents. NAI further acknowledges and agrees that it is sophisticated
and knowledgeable regarding all such matters and that it has, as it deemed
appropriate, obtained from and relied upon its own professional accountants,
counsel and other advisors for such tax, accounting and legal advice concerning
the Operative Documents.




     (3) In any event, NAI will be required by subparagraph 5(C) below to indemnify and
hold harmless BNPPLC from and against all actual additional taxes that may arise
or become due because of any refusal of taxing authorities to recognize and



Lease
Agreement — Page 11




 









 









give effect to the intention of the
parties as set forth in subparagraph 4(C)(1) (“Unexpected Recharacterization
Taxes”), including any actual, additional income or capital gain tax that may
become due because of payments to BNPPLC of the purchase price upon any sale under
the Purchase Agreement resulting from any insistence of such taxing authorities
that BNPPLC be treated as the “true owner” of the Property for tax purposes (a
“Forced Recharacterization”); provided, however, NAI will not be required to pay
or reimburse Unexpected Recharacterization Taxes to the extent that they are, in
any given tax year, eliminated or offset by actual savings to BNPPLC because of
additional depreciation deductions or other tax benefits available to BNPPLC in
the same year only by reason of the Forced Recharacterization (“Unexpected Tax
Savings”). To the extent Unexpected Recharacterization Taxes are eliminated or
offset by Unexpected Tax Savings in a given tax year, including the tax year in
which any sale under the Purchase Agreement occurs (the “Year of Sale”), such
Unexpected Recharacterization Taxes will constitute Excluded Taxes as provided in
clause (D) of the definition thereof in the Common Definitions and Provisions
Agreement. Also, for purposes of this provision, it is understood that any
depreciation deductions first available to BNPPLC in tax years prior to the Year
of Sale and resulting from a Forced Recharacterization (“Prior Year Depreciation
Deductions”) will be considered “available to BNPPLC” in the Year of Sale (and
thus will eliminate or offset any Unexpected Recharacterization Taxes resulting
from the recapture of such Prior Year Depreciation Deductions upon a sale under
the Purchase Agreement) to the extent that (A) such Prior Year Depreciation
Deductions are not otherwise used to generate Unexpected Tax Savings or Unexpected
Net Tax Benefits (as defined below), and (B) the tax laws and regulations
applicable in the Year of Sale effectively permit BNPPLC to carry over the Prior
Year Depreciation Deductions to the Year of Sale by allowing BNPPLC to carry over
net operating losses from the years in which the Prior Year Depreciation
Deductions were first available to BNPPLC to the Year of Sale.




     (4) After any Forced Recharacterization, BNPPLC will make a reasonable effort to
determine whether Unexpected Tax Savings exceed Unexpected Recharacterization
Taxes in any given tax year (any such excess being hereinafter called an
“Unexpected Net Tax Benefit”); and if BNPPLC does determine that an Unexpected Net
Tax Benefit has been realized and the amount thereof, BNPPLC will notify NAI of
the same and either credit the amount thereof against payments otherwise then due
or to become due from NAI under this Lease or the other Operative Documents or pay
the amount of such Unexpected Net Tax Benefit to NAI. It is understood, however,
that the tax position of BNPPLC (and the consolidated tax group of which it is a
part) may, in any given tax year, be such that no Unexpected Net Tax Benefit
exists or can be determined with a reasonable effort on the part of BNPPLC.
Therefore, BNPPLC makes no
representation that NAI will receive any credits or payments pursuant to this
provision after any Forced Recharacterization. Also, the determination by BNPPLC
of the amount of any Unexpected Net Tax Benefit will be conclusive absent clear
and manifest error, as will any determination by BNPPLC that the amount



Lease
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of any
Unexpected Net Tax Benefit in a given tax year cannot be calculated with a
reasonable effort. If NAI is dissatisfied with any such determination by BNPPLC
prior to the Designated Sale Date, NAI will be entitled to accelerate the
Designated Sale Date (as provided in clause (2) of the definition thereof), after
which NAI may purchase or cause an Applicable Purchaser to purchase the Property
on the accelerated Designated Sale Date pursuant to the Purchase Agreement.



5 Payment of Executory Costs and Losses Related to the Property.




     (A) Local Impositions. Subject only to the exceptions listed in
subparagraph 5(D) below, NAI must pay or cause to be paid prior to delinquency all Local
Impositions. If requested by BNPPLC from time to time, NAI must furnish BNPPLC with
receipts or other appropriate evidence showing payment of all Local Impositions at least
ten days prior to the applicable delinquency date therefor.



     Notwithstanding the foregoing, NAI may in good faith, by appropriate proceedings,
contest the validity, applicability or amount of any asserted Local Imposition, and
pending such contest NAI will not be deemed in default under any of the provisions of this
Lease because of the Local Imposition if (1) NAI diligently prosecutes such contest to
completion in a manner reasonably satisfactory to BNPPLC, and (2) NAI promptly causes to
be paid any amount adjudged by a court of competent jurisdiction to be due, with all
costs, penalties and interest thereon, promptly after such judgment becomes final;
provided, however, in any event each such contest must be concluded and the contested
Local Impositions must be paid by NAI prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPPLC or its directors,
officers or employees because of the nonpayment thereof or (ii) the date any writ or order
is issued under which any property owned or leased by BNPPLC (including the Property) may
be seized or sold or any other action is taken or overtly threatened against BNPPLC or
against any property owned or leased by BNPPLC because of the nonpayment thereof, or (iii)
any Designated Sale Date upon which, for any reason, NAI or an Affiliate of NAI or any
Applicable Purchaser does not purchase BNPPLC’s interest in the Property pursuant to the
Purchase Agreement for a price (when taken together with any Supplemental Payment paid by
NAI pursuant to the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) equal to the Break Even Price.



     (B) Increased Costs; Capital Adequacy Charges. Subject only to the
exceptions listed in subparagraph 5(D) below:




     (1) If there is any increase in the cost to BNPPLC’s Parent or any Participant of
agreeing to make or making, funding or maintaining advances to BNPPLC in
connection with the Property because of any Banking Rules Change, then NAI must
from



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Agreement — Page 13




 









 









time to time (after receipt of a request from BNPPLC’s Parent or such
Participant as provided below) pay to BNPPLC for the account of BNPPLC’s Parent or
such Participant, as the case may be, additional amounts sufficient to compensate
BNPPLC’s Parent or the Participant for such increased cost. A certificate as to
the amount of such increased cost, submitted to BNPPLC and NAI by BNPPLC’s Parent
or the Participant, will be conclusive and binding upon NAI, absent clear and
demonstrable error.




     (2) BNPPLC’s Parent or any Participant may demand additional payments (“Capital
Adequacy Charges”) if BNPPLC’s Parent or the Participant determines that any
Banking Rules Change affects the amount of capital to be maintained by it and that
the amount of such capital is increased by or based upon the existence of advances
made or to be made to or for BNPPLC to permit BNPPLC to maintain BNPPLC’s
investment in the Property. To the extent that BNPPLC’s Parent or any Participant
demands Capital Adequacy Charges as compensation for the additional capital
requirements reasonably allocable to such investment or advances, NAI must pay to
BNPPLC for the account of BNPPLC’s Parent or the Participant, as the case may be,
the amount so demanded.




     (3) Notwithstanding the foregoing provisions of this subparagraph 5(B), NAI will
not be obligated to pay any claim for compensation pursuant to this subparagraph
5(B) that arises or accrues (a) as a result of any change in the rating assigned
to BNPPLC by rating agencies or bank regulators in regard to BNPPLC’s
creditworthiness, record keeping or failure to comply with Applicable Laws
(including U.S. banking regulations applicable to subsidiaries of a bank holding
company), or (b) more than nine months prior to the date NAI is notified of the
intent of BNPPLC’s Parent or a Participant to make a claim for such charges;
provided, that if the Banking Rules Change which results in a claim for
compensation is retroactive, then the nine month period will be extended to
include the period of the retroactive effect of such Banking Rules Change.
Further, BNPPLC will cause BNPPLC’s Parent and any Participant that is an
Affiliate of BNPPLC to use commercially reasonable efforts to reduce or eliminate
any claim for compensation pursuant to this subparagraph 5(B), including a change
in the office of BNPPLC’s Parent or such Participant through which it provides and
maintains Funding Advances if such change will avoid the need for, or reduce the
amount of, such compensation and will not, in the reasonable judgment of BNPPLC’s
Parent or such Participant,
be otherwise disadvantageous to it. It is understood that NAI may also request
similar commercial reasonable efforts on the part of any Participant that is not
an Affiliate of BNPPLC, but if a claim for additional compensation by any such
Participant is not eliminated or waived, then NAI may request that BNPPLC replace
such Participant as provided in Paragraph 6. Nothing in this subparagraph will be
construed to require BNPPLC’s Parent or any Participant to create any new office
through which to make or maintain Funding Advances.



Lease
Agreement — Page 14




 









 









     (4) Any amount required to be paid by NAI under this subparagraph 5(B) will be due
ten days after a notice requesting such payment is received by NAI from BNPPLC’s
Parent or the applicable Participant.



     (C) NAI’s Payment of Other Losses; General Indemnification. Subject only
to the exceptions listed in subparagraph 5(D) below:




     (1) Agreement to Indemnify. As directed by BNPPLC, NAI must pay, reimburse,
indemnify, defend, protect and hold harmless BNPPLC and all other Interested
Parties from and against all Losses (including Environmental Losses) asserted
against or incurred or suffered by any of them at any time and from time to time
by reason of, in connection with, arising out of, or in any way related to the
following:




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





Lease
Agreement — Page 15





 









 









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






NAI’s obligations under this indemnity will apply whether or not any Interested
Party is also indemnified as to the applicable Loss by another Interested Party
and whether or not the Loss arises or accrues because of any condition of the
Property or other circumstance concerning the Property prior to the Effective
Date.




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



Lease
Agreement — Page 16




 









 

\




reimbursement of an Original Indemnity Payment, “After
Tax Basis” means that such payment or reimbursement is or will be made together
with the additional amount needed to gross up such Original Indemnity Payment as
described in this provision.)




     (2) Scope of Indemnities and Releases. Every indemnity and release
provided in this Lease and the other Operative Documents for the benefit of BNPPLC
or other Interested Parties, including the indemnity set forth in subparagraph
5(C)(1), will apply even if and when the subject matter of the indemnity or
release arises out of or results from the negligence or strict liability of BNPPLC
or any other Interested Party.  Further, all such indemnities and
releases will apply even if insurance obtained by NAI or required of NAI by this
Lease or the other Operative Documents is not adequate to cover Losses against or
for which the indemnities and releases are provided. (However, NAI’s liability for
any failure to obtain insurance required by this Lease or the other Operative
Documents will not be limited to Losses against which indemnities are provided, it
being understood that the parties have agreed upon insurance requirements for
reasons that extend beyond providing a source of payment for Losses against which
BNPPLC and other Interested Parties may be indemnified by NAI.)




     (3) Nonexclusive List of Costs Covered by Indemnity. Costs and expenses for which
NAI is responsible on an After Tax Basis pursuant to this subparagraph 5(C) will include all of the following, except to the extent that the
following are included in the Initial Advance or in the calculation of any Break
Even Price or Make Whole Amount paid to BNPPLC pursuant to the Purchase Agreement:




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





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






Such costs and expenses will also include all rent or other payments
required of BNPPLC under the Ground Lease, so long as this Lease remains
in force or NAI remains in possession of the Property or is entitled to
possession by this Lease. (It is understood, however, that with respect to
payments which are required by the Ground Lease from BNPPLC to NAI and for
which NAI is required to reimburse BNPPLC, such payments and the
corresponding reimbursements will be offset and deemed paid by offsetting book entries rather than by an actual transfer of funds back
and forth between the parties.)




(4) Defense and Settlement of Indemnified Claims.




     (a) By notice to NAI BNPPLC may direct NAI to assume on behalf of BNPPLC
or any other Interested Party and to conduct with due diligence and in
good faith the defense of and the response to any claim, proceeding or
investigation included in or concerning any Loss for which NAI is
responsible pursuant to subparagraph 5(C)(1). NAI must promptly comply
with any such direction using counsel selected by NAI and reasonably
satisfactory to BNPPLC to represent BNPPLC or the applicable Interested
Party. In the event NAI fails to promptly comply with any such direction
from BNPPLC, BNPPLC or any other affected Interested Party may contest or
settle the claim, proceeding or investigation using counsel of its own
selection at NAI’s expense, subject to subparagraph 5(D)(3) if that
subparagraph is applicable.




     (b) Also, although subparagraphs 5(D)(3) and 5(D)(4) will apply to tort
claims asserted against any Interested Party related to the Property, the
right of an Interested Party to be indemnified pursuant to this
subparagraph 5(C) for taxes or other payments made to satisfy governmental
requirements (“Government Mandated Payments”) will not be conditioned in
any way upon NAI having consented to or approved of, or having been
provided with an opportunity to defend against or contest, such Government
Mandated Payments. In all cases, however, including those which may
involve Government Mandated Payments, the rights of each Interested Party
to be indemnified will be subject to



Lease
Agreement — Page 18





 









 









     subparagraph 5(D)(5).




     (5) Payments Due. Any amount to be paid by NAI under this subparagraph 5(C) will be
due ten days after a notice requesting such payment is given to NAI, subject to
any applicable contest rights expressly granted to NAI by other provisions of this
Lease.




     (6) Survival. NAI’s obligations under this subparagraph 5(C) will survive the
termination or expiration of this Lease with respect to Losses suffered by any
Interested Party on or prior to, or by reason of any actual or alleged occurrence
or circumstances on or prior to, the later of the dates upon which (a) this Lease
terminates or expires, or (b) NAI surrenders possession and control of the
Property.




(D) Exceptions and Qualifications to Indemnities.




     (1) Exceptions. BNPPLC acknowledges and agrees that nothing in Paragraph 4 or the
preceding subparagraphs of this Paragraph 5 will be construed to require NAI to
pay or reimburse:




     • Excluded Taxes; or




     • Losses incurred or suffered by any Interested Party that are proximately
caused by (and attributed by any applicable principles of comparative
fault to) the Established Misconduct of that Interested Party; or




     • Losses that result from any Liens Removable by BNPPLC; or




     • Losses incurred or suffered by any of the Participants in connection
with the negotiation or execution of the Participation Agreement (or
supplements making them parties thereto) or in connection with any due
diligence Participants may undertake before entering into the
Participation Agreement; or




     • Local Impositions or other Losses contested, if and so long as they are
contested, by NAI in accordance with any of the provisions of this Lease
or other Operative Documents which expressly authorize such contests; or




     • transaction expenses or other Losses caused by or necessary to
accomplish any conveyance by BNPPLC to BNPPLC’s Parent or a Qualified
Affiliate which constitutes a Permitted Transfer only by reason of clause
(3) of the definition of Permitted Transfer in the Common Definitions and
Provisions Agreement ; or



Lease
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     • any amount which may from time to time be payable by BNPPLC to any
Participant representing the excess of “Base Rent” as defined in the
Participation Agreement over Base Rent as defined in and calculated
pursuant to this Lease and the Common Definitions and Provisions
Agreement; or




     • any decline in the value of the Property solely by reason of decline in
general market conditions and not because of any breach of this Lease or
other Operative Documents by NAI.




Further, without limiting BNPPLC’s rights (as provided in other provisions of this
Lease and other Operative Documents) to include the following in the calculation
of the Lease Balance, the Break Even Price and the Make Whole Amount (as
applicable) or to collect Base Rent, a Supplemental Payment and other amounts, the
calculation of which depends upon the Lease Balance, BNPPLC acknowledges and
agrees that nothing in Paragraph 4 or the preceding subparagraphs of this
Paragraph 5 will be construed to require NAI to pay or reimburse an Interested
Party for costs paid by BNPPLC with the proceeds of the Initial Advance as part of
the Transaction Expenses or with Construction Advances.




     (2) Notice of Claims. If an Interested Party receives a written notice of a claim
for taxes or a claim alleging a tort or other unlawful conduct that the Interested
Party believes is covered by the indemnity in subparagraph 5(C)(1), then such
Interested Party will be expected to promptly furnish a copy of such notice to
NAI. The failure to so provide a copy of the notice will not excuse NAI from its
obligations under subparagraph 5(C)(1); except that if such failure continues for
more than fifteen days after the notice is received by such Interested Party and
NAI is unaware of the matters described in the notice, with the result that NAI is
unable to assert defenses or to take other actions which could minimize its
obligations, then NAI will be excused from its obligation to indemnify such
Interested Party (and any Affiliate of such Interested Party) against Losses, if
any, which would not have been incurred or suffered but for such failure. For
example, if BNPPLC fails to provide NAI with a copy of a notice of an overdue tax
obligation covered by the indemnity set out in subparagraph 5(C)(1) and NAI is not
otherwise already aware of such obligation, and if as a result of such failure
BNPPLC becomes liable for penalties and interest covered by the indemnity in
excess of the penalties and interest that would have accrued if NAI had been
promptly provided with a copy of the notice, then NAI will be excused from any
obligation to BNPPLC (or any Affiliate of BNPPLC) to pay the excess.




     (3) Withholding of Consent to Settlements Proposed by NAI. With regard to any tort
claim against an Interested Party for which NAI undertakes to defend the
Interested Party as provided in subparagraph 5(C)(4)(a), if the Interested Party
unreasonably refuses to consent to a settlement of the claim which is proposed by
NAI



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and which will meet the conditions listed in the next sentence, NAI’s
liability for the cost of continuing the defense and for any other amounts payable
in respect of the claim will be limited to the total cost for which the settlement
proposed by NAI would have been accomplished but for the unreasonable refusal to
consent. Any such settlement proposed by NAI must meet the following conditions:
(A) at the time of the settlement by NAI, NAI must pay all amounts required to
release the Interested Party and its property interests from any further
obligation for or liens securing the applicable claim and from any interest, penalties and other related liabilities, and (B) the settlement or compromise must
not involve an admission of fraud or criminal wrongdoing or result in some other
material adverse consequence to the Interested Party.




     (4) Settlements Without the Prior Consent of NAI.




     (a) Except as otherwise provided in subparagraph 5(D)(4)(b), if any
Interested Party settles any tort claim for which it is entitled to be
indemnified by NAI without NAI’s consent, then NAI may, by notice given to
the Interested Party no later than ten days after NAI is notified of the
settlement, elect to pay Reasonable Settlement Costs to the Interested
Party in lieu of a payment or reimbursement of actual settlement costs.
(With respect to any tort claim asserted against an Interested Party,
“Reasonable Settlement Costs” means the maximum amount that a prudent
Person in the position of the Interested Party, but able to pay any
amount, might reasonably agree to pay to settle the tort claim, taking
into account the nature and amount of the claim, the relevant facts and
circumstances known to such Interested Party at the time of settlement and
the additional Attorneys Fees’ and other costs of defending the claim
which could be anticipated but for the settlement.) After making an
election to pay Reasonable Settlement Costs with regard to a particular
tort claim and a particular Interested Party, NAI will have no right to
rescind or revoke the election, despite any subsequent determination that
Reasonable Settlement Costs exceed actual settlement costs. It is
understood that Reasonable Settlement Costs may be more or less than
actual settlement costs and that a final determination of Reasonable
Settlement Costs may not be possible until after NAI must decide between
paying Reasonable Settlement Costs or paying actual settlement costs.




     (b) Notwithstanding the foregoing, NAI will have no right to elect to pay
Reasonable Settlement Costs in lieu of actual settlement costs if an
Interested Party settles claims without NAI’s consent at any time when an
Event of Default has occurred and is continuing or after a failure by NAI
to conduct with due diligence and in good faith the defense of and the
response to any claim, proceeding or investigation as provided in
subparagraph 5(C)(4)(a).



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     (c) Except as provided in this subparagraph 5(D)(4), no settlement by any
Interested Party of any claim made against it will excuse NAI from any
obligation to indemnify the Interested Party against the settlement costs
or other Losses suffered by reason of, in connection with, arising out of,
or in any way related to such claim.




     (5) No Authority to Admit Wrongdoing by NAI or to Bind NAI to any Settlement. No
Interested Party will under any circumstances have any authority to bind NAI to an
admission of wrongdoing or responsibility to any third party claimant with regard
to matters for which such Interested Party claims a right to indemnification from
NAI under this Lease.




Further, nothing herein contained, including the foregoing provisions concerning
settlements by Interested Parties of indemnified Losses, will be construed as
authorizing any Interested Party to bind NAI to do or refrain from doing anything
to satisfy a third party claimant. If, for example, a claim is made by a
Governmental Authority that NAI must refrain from some particular conduct on or
about the Land in order to comply with Applicable Laws, BNPPLC cannot bind NAI
(and will not purport to bind NAI) to any agreement to refrain from such conduct
or otherwise prevent NAI from continuing to contest the claim by reason of any
provision set forth herein.




Moreover, so long as this Lease continues, no Interested Party may settle any
claim involving the Property by executing any agreement (including any consent
decree proposed by any Governmental Authority) which purports to prohibit, limit
or impose conditions upon any use of the Property by NAI without the prior written
consent of NAI. In the case of any proposed settlement of a claim asserted by a
Governmental Authority against BNPPLC, NAI will not unreasonably withhold such
consent. However, for purposes of determining whether it is reasonable for NAI to
withhold such consent, any diligent ongoing undertaking by NAI to contest such the
claim on behalf of BNPPLC will be relevant.




Subject to the foregoing provisions in this subparagraph 5(D)(5), any Interested
Party may agree for itself (and only for itself) to act or refrain from doing
anything as demanded or requested by a third party claimant; provided, however, in
no event will such an agreement impede NAI from continuing to exercise its rights
to operate its business on the Property or elsewhere in any lawful manner deemed
appropriate by NAI, nor will any such agreement limit or impede NAI’s right to
contest claims raised by any third party claimants (including Governmental
Authorities) that NAI is not complying or has not complied with Applicable Laws.




     (6) Defense of Tax Claims. This Lease does not grant to NAI any right to



Lease
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control
the defense of or contest any tax claim for which an Interested Party may have a
right to indemnity under subparagraph 5(C), other than the right to contest Local
Impositions as provided in subparagraph 5(A), nor does this Lease grant to NAI the
right to inspect the income tax returns, books or records of any Interested Party.
Nevertheless, if a tax claim is asserted against BNPPLC for which it is entitled
to be indemnified pursuant to subparagraph 5(C), BNPPLC will consider in good faith any
defenses and strategies proposed by NAI with regard to such claim, provided that
NAI has delivered to BNPPLC at NAI’s expense an opinion of reputable tax counsel
to the effect that there is a reasonable basis (as defined in ABA Formal Opinion
85-532) for contesting such claim. Further, if any such tax claim is asserted
against BNPPLC which involves assertions that apply not only to the transactions
contemplated by this Lease, but also to other similar transactions in which BNPPLC
has participated, then BNPPLC will not settle the claim on a basis that results in
a disproportionately greater tax burden with respect to the transactions
contemplated herein than with respect to such other similar transactions. For
example, if taxing authorities assert that both this Lease and other comparable
lease agreements made by BNPPLC are not financing arrangements as intended by the
parties thereto, and on the basis of such assertions the taxing authorities claim
that BNPPLC owes income taxes which are not Excluded Taxes, then BNPPLC will not
settle the claim in a manner that would cause NAI’s liability under subparagraph
5(C) to be disproportionately greater than the indemnity obligation of another
similarly situated tenant of BNPPLC under another lease agreement with an
indemnity provision comparable to subparagraph 5(C). Also, BNPPLC will not grant
to another tenant the right to dictate to BNPPLC the tax position BNPPLC must take
in regard to the Property or the Operative Documents, except that BNPPLC may
include provisions comparable to the foregoing in other leases to assure other
tenants against a disproportionately greater burden than NAI will bear in regard
to any settlement of a tax claim by BNPPLC.




     (7) Indemnified Parties Other than Landlord. As a condition to making any indemnity
payment for Losses directly to any Interested Party other than BNPPLC itself, NAI
may require the Interested Party to confirm and agree in writing that it will be
obligated to make the payments to NAI as provided in subparagraph 5(E) in the
event the Interested Party subsequently receives a refund of the Losses covered by
such indemnity payment.




(E) Refunds and Credits Related to Losses Paid by NAI.




     (1)
If BNPPLC receives a refund of any Losses paid, reimbursed or advanced by NAI
pursuant to this Paragraph 5 that has not already been accounted for in the After
Tax Basis calculation described in subparagraph 5(C)(1), BNPPLC will promptly pay
to NAI the amount of such refund, plus or minus any net tax benefits or detriments
realized by BNPPLC as a result of the refund and such payment to NAI; provided,
that the amount



Lease
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payable to NAI will not exceed the amount of the indemnity payment
in respect of such refunded Losses that was made by NAI. If it is subsequently
determined that BNPPLC was not entitled to the refund, the portion of the refund that is repaid or recaptured will be treated as
a Loss for which NAI must indemnify BNPPLC pursuant to this Paragraph 5 without
regard to subparagraph 5(D). If, in connection with any such refund, BNPPLC also
receives an amount representing interest on such refund, BNPPLC will promptly pay
to NAI the amount of such interest, plus or minus any net tax benefits or
detriments realized by BNPPLC as a result of the receipt or accrual of the
interest and as a result of such payment to NAI; provided, that BNPPLC will not be
required to make any such payment in respect of the interest (if any) that is
fairly attributable to a period for which NAI had not yet paid, reimbursed or
advanced the Losses refunded to BNPPLC.




     (2) If any Interested Party (other than BNPPLC itself) receives a refund of any
Loss paid, reimbursed or advanced by NAI pursuant to this Paragraph 5 that has not
already been accounted for in the After Tax Basis calculation described in
subparagraph 5(C)(1), NAI may demand (and enforce the demand pursuant to any
agreement previously delivered by the Interested Party as provided in subparagraph
5(D)(7)) that such Interested Party promptly pay to NAI the amount of such refund,
plus or minus any net tax benefits or detriments realized by such Interested Party
as a result of the refund and such payment to NAI; provided, that the amount
payable to NAI will not exceed the amount of the indemnity payment in respect of
such refunded Losses that was made by NAI. If it is subsequently determined that
such Interested Party was not entitled to the refund, the portion of the refund
that is repaid or recaptured will be treated as a Loss for which NAI must
indemnify such Interested Party pursuant to this Paragraph 5 without regard to
subparagraph 5(D). If, in connection with any such refund, such Interested Party
also receives an amount representing interest on such refund, NAI may demand that
such Interested Party promptly pay to NAI the amount of such interest, plus or
minus any net tax benefits or detriments realized by such Interested Party as a
result of the receipt or accrual of the interest and as a result of such payment
to NAI; provided, that such Interested Party will not be required to make any such
payment in respect of the interest (if any) which is fairly attributable to a
period before NAI paid, reimbursed or advanced the Losses refunded to such
Interested Party.




     (3) With respect to Losses incurred or suffered by an Interested Party and paid or
reimbursed by NAI on an After Tax Basis, if taxes of such Interested Party which
are not subject to indemnification by NAI are reduced because of such Losses
(whether by reason of a deduction, credit or otherwise) and such reduction was not
taken into account in the calculation of the required reimbursement or payment by
NAI, then for purposes of this subparagraph 5(E) such reduction will be considered
a “refund”.




     (4) Notwithstanding the foregoing, in no event will BNPPLC or any other



Lease
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Interested
Party be required to make any payment to NAI pursuant to this subparagraph 5(E)
when an Event of Default has occurred and is continuing.



     (F) Reimbursement of Excluded Taxes Paid by NAI. If NAI is ever
required (by laws imposing withholding tax obligations or otherwise) to pay Excluded Taxes
that any Interested Party should have paid, but failed to pay when due, in connection with
this Lease, such Interested Party must reimburse NAI for such Excluded Taxes (together
with any additional amount required to preserve for NAI the full amount of such
reimbursement after related taxes are considered, calculated in the same manner that an
Additional Indemnity Payment would be calculated under subparagraph ? in the case of a
reimbursement owed by NAI to an Interested Party) within 30 days after such Interested
Party’s receipt of a written demand for such reimbursement by NAI.



6 Replacement of Participants.




     (A) NAI’s Right to Substitute Participants. So long as no Event of
Default exists, and subject to the terms and conditions set forth in subparagraph 6(B), if
any Participant which is not an Affiliate of BNPPLC (in this Paragraph, the “Unrelated
Participant”) (1) declines to approve the Rent for an extension of this Lease under
subparagraph 1(D), or (2) makes a demand for compensation under subparagraph 5(B), NAI may
request that BNPPLC execute Participation Agreement Supplements (as defined in the
Participation Agreement) as needed to transfer the rights of the Unrelated Participant
thereunder to one or more new Participants (in this subparagraph, whether one or more, the
"New Participants”) designated by NAI who are willing and able to accept such interests,
to make Funding Advances as necessary to terminate the Unrelated Participant’s right to
payments in respect of Base Rent and the Lease Balance under the Operative Documents.
BNPPLC will execute such Participation Agreement Supplements within ten Business Days of
the later to occur of such request by NAI and satisfaction of all conditions set forth in
subparagraph 6(B).



     (B) Conditions to Replacement of Participants. NAI and BNPPLC, working
together, will endeavor in good faith to identify New Participants that are willing to
replace any Unrelated Participant described in the preceding subparagraph and that are
acceptable to both NAI and BNPPLC. (The term New Participants may include new parties to
the Participation Agreement and it may include existing Participants that increase their
Funding Advances as needed to replace the Unrelated Participant.) However, nothing
contained herein will be construed to require BNPPLC itself to increase its Percentage (as
defined in the Participation Agreement) to replace an Unrelated Participant, and nothing
herein contained will be construed to require BNPPLC itself to provide or to obtain from
its Affiliates Funding Advances to replace the Funding Advances that an Unrelated
Participant has provided or agreed to provide. Also, New Participants will be subject to the approval of BNPPLC; provided, that BNPPLC must not unreasonably
withhold its approval for the substitution of any New Participant proposed by NAI



Lease
Agreement — Page 25




 









 







for any
Unrelated Participant so long as (i) no Event of Default has occurred and is continuing,
(ii) BNPPLC determines it can give such approval without violating Applicable Laws,
without breaching its obligations under the Participation Agreement, and without waiving
rights or remedies it has under this Lease or the other Operative Documents, (iii) BNPPLC
or BNPPLC’s Parent is not involved in any material litigation adverse to the New
Participant in any pending lawsuit or other legal proceeding, and (iv) all of the
conditions listed in the next sentence are satisfied. Any substitution of New Participants
for an Unrelated Participant as provided in this Paragraph will be subject to the
following conditions:





     (1) the proposed substitution does not include a waiver of rights by BNPPLC
against any Unrelated Participant or require BNPPLC to pay any amounts
out-of-pocket that is not reimbursed concurrently by NAI or the New Participants;




     (2) the New Participants must become parties to the Participation Agreement (by
executing supplements to that agreement as provided therein) and must provide all
funds due to the Unrelated Participant being replaced because of the termination
of the Unrelated Participants rights to receive payments in respect of Net Cash
Flow and Net Sales Proceeds (both as defined in the Participation Agreement);




     (3) the obligations of BNPPLC to the New Participants must not exceed the
obligations that BNPPLC would have had to the Unrelated Participant if there had
been no substitution, other than those for which NAI is liable.


Upon consummation of any such substitution NAI must pay to the replaced Participant
Breakage Costs, if any, incurred by the replaced Participant because of the substitution.




7 Items Included in the Property




     (A) Status of Property. All Improvements on the Land from time
to time will constitute “Property” covered by this Lease. Further, as
provided in the Construction Management Agreement, to the extent heretofore
or hereafter acquired by NAI (in whole or in part) with any portion of the
Initial Advance or with any Construction Advances or with other funds for
which NAI receives reimbursement from the Initial Advance or Construction
Advances, all furnishings, furniture, chattels, permits, licenses,
franchises, certificates and other personal property of whatever nature will
be deemed to have been acquired on behalf of BNPPLC by NAI and will
constitute “Property” covered by this Lease, as will all renewals or replacements of or substitutions for any such Property. Upon
request of BNPPLC, but not more often than once in any period of twelve
consecutive months, NAI will deliver to BNPPLC an inventory describing all
significant items of Personal Property (and, in the case of tangible
personal property, showing the make, model, serial number and location
thereof) other than Improvements, with a certification by NAI that such
inventory is true and complete and that all



Lease
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items specified in the inventory are covered by this Lease free and clear of any Lien other
than the Permitted Encumbrances or Liens Removable by BNPPLC.




     (B) Changes in the Land Covered by the Ground Lease. Upon any amendment of the
definition of the “Land” covered by the Ground Lease, the “Land” as defined in and covered by this
Lease and the other Operative Documents will also be so amended.



8 Environmental.




     (A) Environmental Covenants by NAI.




          (1) NAI will not conduct or permit others to conduct Hazardous Substance Activities on
the Property, except Permitted Hazardous Substance Use and Remedial Work.




          (2) NAI will not discharge or permit the discharge of anything (including Permitted
Hazardous Substances) on or from the Property that would require any permit under applicable
Environmental Laws, other than (i) storm water runoff, (ii) waste water discharges through a
publicly owned treatment works, (iii) discharges that are a necessary part of any Remedial
Work, and (iv) other similar discharges consistent with the definition herein of Permitted
Hazardous Substance Use which do not significantly increase the risk of Environmental Losses
to BNPPLC, in each case in strict compliance with Environmental Laws.




          (3) Following any discovery that Remedial Work is required by Environmental Laws or is
otherwise reasonably believed by BNPPLC to be required, and to the extent not inconsistent
with the other provisions of this Lease, NAI must promptly perform and diligently and
continuously pursue such Remedial Work.




          (4) If requested by BNPPLC in connection with any Remedial Work required by this
subparagraph, NAI must retain environmental consultants reasonably acceptable to BNPPLC to
evaluate any significant new information generated during NAI’s implementation of the
Remedial Work and to discuss with NAI whether such new information indicates the need for
any additional measures that NAI should take to protect the health and safety of persons
(including employees, contractors and subcontractors and their employees) or to protect the
environment. NAI must implement any such additional measures to the extent required with
respect to the Property by Environmental Laws or otherwise reasonably believed by BNPPLC to
be required.



     (B) Right of BNPPLC to do Remedial Work Not Performed by NAI. If NAI’s failure to
perform any Remedial Work required as provided in subparagraph 8(A) continues beyond the


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Environmental Cure Period (as defined below), BNPPLC may, in addition to any other remedies
available to it, conduct all or any part of the Remedial Work. To the extent that Remedial Work is
done by BNPPLC pursuant to the preceding sentence (including any removal of Hazardous Substances),
the cost thereof will be a demand obligation owing by NAI to BNPPLC. As used in
this subparagraph, “Environmental Cure Period” means the period ending on the earlier of: (1)
ninety days after NAI is notified of the breach which must be cured within such period or, if
during such ninety days NAI initiates the Remedial Work and diligently and continuously pursues it
in accordance with a timetable accepted and approved by applicable Governmental Authorities (which
may include delays waiting for permits or other authorizations), the date by which such Remedial
Work is to be completed according to such timetable, (2) the date that any writ or order is issued
for the levy or sale of any property owned by BNPPLC (including the Property) because of such
breach, (3) the date that any criminal action is instituted or overtly threatened against BNPPLC or
any of its directors, officers or employees because of such breach, or (4) any Designated Sale Date
upon which, for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser does not
purchase BNPPLC’s interest in the Property pursuant to the Purchase Agreement for a net price to
BNPPLC (when taken together with any Supplemental Payment paid by NAI pursuant to the Purchase
Agreement, in the case of a purchase by an Applicable Purchaser) equal to the Break Even Price.




     (C) Environmental Inspections and Reviews. BNPPLC reserves the right to retain
environmental consultants to review any report prepared by NAI or to conduct BNPPLC’s own
investigation to confirm whether NAI is complying with the requirements of this Paragraph 8. NAI
grants to BNPPLC and to BNPPLC’s agents, employees, consultants and contractors the right to enter
upon the Property during reasonable hours and after reasonable notice to inspect the Property and
to perform such tests as BNPPLC deems reasonably necessary or appropriate to review or investigate
Hazardous Substances in, on, under or about the Property or any discharge or reasonably suspected
discharge of Hazardous Substances into groundwater or surface water from the Property. NAI must
promptly reimburse BNPPLC for the fees of its environmental consultants and the costs of any such
inspections and tests; provided, however, BNPPLC’s right to reimbursement for the fees of any
consultant engaged as provided in this subparagraph or for the costs of any inspections or test
undertaken as provided in this subparagraph will be limited to the following circumstances: (1) an
Event of Default has occurred and is continuing at the time of such engagement, tests or
inspections; (2) NAI has not exercised the Purchase Option and BNPPLC has retained the consultant
to establish the condition of the Property prior to any conveyance thereof pursuant to the Purchase
Agreement or to the expiration of this Lease; (3) BNPPLC has retained the consultant to satisfy any
regulatory requirements applicable to BNPPLC or its Affiliates; (4) BNPPLC has retained the
consultant because it has reason to believe, and does in good faith believe, that a significant
violation of Environmental Laws concerning the Property has occurred; or (5) BNPPLC has retained
the consultant because BNPPLC has been notified of a possible violation of Environmental Laws
concerning the Property by any Governmental Authority having jurisdiction.


Lease Agreement — Page 28





 









 








     (D) Communications Regarding Environmental Matters.




     (1) NAI must promptly advise BNPPLC and Participants of (i) any discovery known to NAI
of any event or circumstance which would render any of the representations of NAI herein or
in any of the other Operative Documents concerning environmental matters materially
inaccurate or misleading if made at the time of such discovery and assuming that NAI was
aware of all relevant facts, (ii) any Remedial Work (or change in Remedial Work) required or
undertaken by NAI or its Affiliates in response
to any (A) discovery of any Hazardous Substances on, under or about the Property other than
Permitted Hazardous Substances or (B) any claim for damages resulting from Hazardous
Substance Activities, (iii) any discovery known to NAI of any occurrence or condition on any
real property adjoining or in the vicinity of the Property which would or could reasonably
be expected to cause the Property or any part thereof to be subject to any ownership,
occupancy, transferability or use restrictions under Environmental Laws, or (iv) any
investigation or inquiry known to NAI of any failure or alleged failure by NAI to comply
with Environmental Laws affecting the Property by any Governmental Authority responsible for
enforcing Environmental Laws. In such event, NAI will deliver to BNPPLC within thirty days
after BNPPLC’s request, a preliminary written environmental plan setting forth a general
description of the action that NAI proposes to take with respect thereto, if any, to bring
the Property into compliance with Environmental Laws or to correct any breach by NAI of this
Paragraph 8, including any proposed Remedial Work, the estimated cost and time of
completion, the name of the contractor and a copy of the construction contract, if any, and
such additional data, instruments, documents, agreements or other materials or information
as BNPPLC may reasonably request.




     (2) NAI will provide BNPPLC and Participants with copies of all material written
communications with Governmental Authorities relating to the matters listed in the preceding
clause (1). NAI will also provide BNPPLC and Participants with copies of any correspondence
from third Persons which threaten litigation over any significant failure or alleged
significant failure of NAI to maintain or operate the Property in accordance with
Environmental Laws.




     (3) Prior to NAI’s submission of a communication to any regulatory agency or third party
which causes, or potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any Remedial Work,
NAI must, to the extent practicable, deliver to BNPPLC and Participants a draft of the
proposed submission (together with the proposed date of submission), and in good faith
assess and consider any comments of BNPPLC regarding the same. Promptly after BNPPLC’s
request, NAI will meet with BNPPLC to discuss the submission, will provide any additional
information reasonably requested by BNPPLC


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and will provide a written explanation to BNPPLC
addressing the issues raised by comments (if any) of BNPPLC regarding the submission.



9 Insurance Required and Condemnation.




     (A) Liability Insurance. Throughout the Term NAI must maintain commercial general
liability insurance against claims for bodily and personal injury, death and property damage
occurring in or upon or resulting from any occurrence in or upon the Property under one or more
insurance policies that satisfy the Minimum Insurance Requirements. NAI must deliver and maintain
with BNPPLC for each liability insurance policy required by this Lease written confirmation of the
policy and the scope of the coverage provided thereby issued by the applicable insurer or its
authorized agent, which confirmation must also satisfy the Minimum Insurance Requirements.



     (B) Property Insurance.




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




     (2) If any of the Property is destroyed or damaged by fire, explosion, windstorm, hail
or by any other casualty against which insurance is required hereunder, (a) BNPPLC may, but
will not be obligated to, make proof of loss if not made promptly by NAI after notice from
BNPPLC, (b) each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to BNPPLC (or, if so instructed by BNPPLC, to NAI) for
application as required by Paragraph 10, and (c) BNPPLC will be entitled, in its own name or
in the name of NAI or in the name of both, to settle, adjust or compromise any and all
claims for loss, damage or destruction under any policy or policies of insurance; except
that, if any such claim is for less than $1,000,000, if no 97-10/Event has occurred and if
no Event of Default has occurred and is continuing, NAI alone will have the right to settle,
adjust or compromise the claim as NAI deems appropriate; and, except that, so long as no
97-10/Event has occurred and no Event of Default has occurred and is continuing, BNPPLC must
provide NAI with at least forty-five days notice of BNPPLC’s intention to settle any such
claim before settling it unless NAI has already approved of the settlement by BNPPLC.




     (3) BNPPLC will not in any event or circumstances be liable or responsible


Lease Agreement — Page 30




 









 






for failure
to collect, or to exercise diligence in the collection of, any insurance proceeds.




     (4) If any casualty results in damage to or loss or destruction of the Property, NAI
must give prompt notice thereof to BNPPLC and Paragraph 10 will apply.



     (C) Failure to Obtain Insurance. If NAI fails to obtain any insurance or to provide
confirmation of any such insurance as required by this Lease, BNPPLC will be entitled (but not
required) to obtain the insurance that NAI has failed to obtain or for which NAI has not provided
the required confirmation and, without limiting BNPPLC’s other remedies under the circumstances,
BNPPLC may require NAI to reimburse BNPPLC for the cost of such insurance and to pay interest
thereon computed at the Default Rate from the date such cost was paid by BNPPLC until the date of
reimbursement by NAI.



     (D) Condemnation. Immediately upon obtaining knowledge of the institution of any
proceedings for the condemnation of the Property or any portion thereof, or any other similar
governmental or quasi-governmental proceedings arising out of injury or damage to the Property or
any portion thereof, each party will promptly notify the other (provided, however, BNPPLC will have
no liability for its failure to provide such notice) of the pendency of such proceedings.
(As used herein, “condemnation of the Property” or words of like effect will include any indirect
condemnation by means of a taking of the Land or the Existing Appurtenant Easements or any part
thereof.) NAI must, at its expense, diligently prosecute any such proceedings and must consult
with BNPPLC, its attorneys and experts and cooperate with them as reasonably requested in the
carrying on or defense of any such proceedings. BNPPLC is hereby authorized, in its own name or in
the name of NAI or in the name of both, at any time after a 97-10/Event or when an Event of Default
has occurred and is continuing, but not otherwise without NAI’s prior consent, to execute and
deliver valid acquittances for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Property. BNPPLC will not in any event or circumstances be liable or
responsible for failure to collect, or to exercise diligence in the collection of, any such
proceeds, judgments, decrees or awards.



     Notwithstanding the foregoing provisions of this subparagraph, if condemnation proceeds
totaling not more than $1,000,000 are to be recovered as a result of a taking of less than all or
substantially all of the Property, NAI may directly receive and hold such proceeds so long as no
Event of Default has occurred and is continuing and so long as NAI applies such proceeds as
required herein.



     (E) Waiver of Subrogation. NAI, for itself and for any Person claiming through it
(including any insurance company claiming by way of subrogation), waives any and every claim which
arises or may arise in its favor against BNPPLC or any other Interested Party to recover Losses for
which NAI is compensated by insurance or would be compensated by the insurance contemplated in this
Lease, but for any deductible or self-insured retention maintained under


Lease Agreement — Page 31




 









 





such insurance or but for
a failure of NAI to maintain the insurance as required by this Lease. NAI agrees to have such
insurance policies properly endorsed so as to make them valid notwithstanding this waiver, if such
endorsement is required to prevent a loss of insurance.




10 Application of Insurance and Condemnation Proceeds.




     (A) Collection and Application of Insurance and Condemnation Proceeds Generally. This
Paragraph 10 will govern the application of proceeds received by BNPPLC or NAI during the Term from
any third party (1) under any property insurance policy as a result of damage to the Property
(including proceeds payable under any insurance policy covering the Property which is maintained by
NAI), (2) as compensation for any restriction placed upon the use or development of the Property or
for the condemnation of the Property or any portion thereof, or (3) because of any judgment, decree
or award for injury or damage to the Property (e.g.,damage resulting from a third party’s release
of Hazardous Materials onto the Property); excluding, however, any funds paid to BNPPLC by BNPPLC’s
Parent, by an Affiliate of BNPPLC or by any Participant that is made to compensate BNPPLC for any
Losses BNPPLC may suffer or incur in connection with this Lease or the Property. Except as
provided in subparagraph 10(D), NAI must promptly pay over to BNPPLC any insurance, condemnation or
other proceeds covered by this Paragraph 10 which NAI may receive from any insurer, condemning
authority or other third party. All proceeds covered by this Paragraph 10, including those received
by BNPPLC from NAI or third parties, will be applied as follows:




     (1) First, proceeds covered by this Paragraph 10 will be used to reimburse BNPPLC for
any reasonably costs and expenses, including Attorneys’ Fees, that BNPPLC incurred to
collect the proceeds.




     (2) Second, the proceeds remaining after such reimbursement to BNPPLC (hereinafter, the
“Remaining Proceeds”) will be applied, as hereinafter more particularly provided, either as
a Qualified Prepayment or to reimburse NAI or BNPPLC for the actual out-of-pocket costs of
repairing or restoring the Property. Until, however, any Remaining Proceeds received by
BNPPLC are applied by BNPPLC as a Qualified Prepayment or applied by BNPPLC to reimburse
costs of repairs to or restoration of the Property pursuant to this Paragraph 10, BNPPLC
will hold and maintain such Remaining Proceeds as Escrowed Proceeds in an interest bearing
account, and all interest earned on such account will be added to and made a part of such
Escrowed Proceeds.



     (B) Advances of Escrowed Proceeds to NAI. Except as otherwise provided below in this
Paragraph 10, BNPPLC will advance all Remaining Proceeds held by it as Escrowed Proceeds to
reimburse NAI for the actual out-of-pocket cost to NAI of repairing or restoring the Property in
accordance with the requirements of this Lease and the other Operative Documents as the applicable
repair or restoration, progresses and upon compliance by NAI with such terms,


Lease Agreement — Page 32




 









 





conditions and
requirements as may be reasonably imposed by BNPPLC to assure the completion of such repair or
restoration with available funds. So long as any Lease Balance remains outstanding, however, BNPPLC
will not be required to pay Escrowed Proceeds to NAI in excess of the actual out-of-pocket cost to
NAI of the applicable repair or restoration, as evidenced by invoices or other documentation
reasonably satisfactory to BNPPLC, it being understood that BNPPLC may retain and, after NAI has
completed the applicable repair or restoration and been reimbursed to out-of-pocket cost thereof,
apply any such excess (or so much thereof as is needed to reduce the Lease Balance to zero) as a
Qualified Prepayment.




     (C) Application of Escrowed Proceeds as a Qualified Prepayment. Provided no
97-10/Event has occurred and no Event of Default has occurred and is continuing, BNPPLC will apply
any Remaining Proceeds paid to it (or other amounts available for application as a Qualified
Prepayment) as a Qualified Prepayment on any date that BNPPLC is directed to do so by a notice from
NAI; however, if such a notice from NAI specifies an effective date for a Qualified Prepayment that
is less than five Business Days after BNPPLC’s actual receipt of the notice, BNPPLC may postpone
the date of the Qualified Prepayment to any date not later than five Business Days after BNPPLC’s
receipt of the notice. In any event, BNPPLC may deduct Breakage Costs or any Fixed Rate Settlement
Amount incurred in connection with any Qualified Prepayment from the Remaining Proceeds or other
amounts available for application as the Qualified Prepayment, and NAI must reimburse BNPPLC upon
request for any such Breakage Costs or Fixed Rate Settlement Amount that BNPPLC incurs but does not
deduct.



     (D) Right of NAI to Receive and Apply Remaining Proceeds Below a Certain Level. If,
after the Completion Date, any condemnation of any portion of the Property or any casualty
resulting in the diminution, destruction, demolition or damage to any portion of the Property will
(in the good faith judgment of BNPPLC) reduce the then current “AS IS” market value by less than
$1,000,000 and (in the good faith estimation of BNPPLC) be unlikely to result in
Remaining Proceeds of more than $1,000,000, and if no 97-10/Event has occurred and no Event of
Default has occurred and is continuing, then BNPPLC will, upon NAI’s request, instruct the
condemning authority or insurer, as applicable, to pay the Remaining Proceeds resulting therefrom
directly to NAI. NAI must apply any such Remaining Proceeds to the repair or restoration of the
Property to a safe and secure condition and to a value of no less than the value before taking or
casualty.



     (E) Special Provisions Applicable After a 97-10/Event or Event of Default.
Notwithstanding the foregoing, after any 97-10/Event, and when any Event of Default has occurred
and is continuing, BNPPLC will be entitled to receive and collect all insurance, condemnation or
other proceeds governed by this Paragraph 10 and to apply all Remaining Proceeds, when and to the
extent deemed appropriate by BNPPLC in its sole discretion, either (A) to the reimbursement of NAI
or BNPPLC for the out-of-pocket cost of repairing or restoring the Property, or (B) as Qualified
Prepayments.


Lease Agreement — Page 33


 









 








     (F) NAI’s Obligation to Restore. Regardless of the adequacy of any Remaining Proceeds
available to NAI hereunder, if on or after the Completion Date, the Property is damaged by fire or
other casualty or less than all or substantially all of the Property is taken by condemnation, NAI
must promptly restore or improve the Property or the remainder thereof to a value no less than the
Lease Balance and to a reasonably safe and sightly condition. If for some reason NAI is unable to
restore the Property or remainder thereof to a value of no less than the Lease Balance, then NAI
must nevertheless promptly restore the Property or remainder thereof to a reasonably safe and
sightly condition and pay to BNPPLC for application as a Qualified Prepayment the amount (if any),
as determined by BNPPLC, needed to reduce the Lease Balance to no more than the then current “AS
IS” market value of the Property or remainder thereof.



     (G) Takings of All or Substantially All of the Property on or after the Completion
Date. In the event of any taking of all or substantially all of the Property on or after the
Completion Date, BNPPLC will be entitled to apply all Remaining Proceeds (or so much thereof as is
required to reduce the Lease Balance to zero) as a Qualified Prepayment. Any taking of so much of
the Property as, in BNPPLC’s good faith judgment, makes it impracticable to restore or improve the
remainder thereof as required by part (1) of the preceding subparagraph will be considered a taking
of substantially all the Property for purposes of this Paragraph 10.



     (H) If Remaining Proceeds Exceed the Lease Balance. Notwithstanding the various
provisions of this Lease authorizing BNPPLC to apply Remaining Proceeds received by it during the
Term as a Qualified Prepayment, in the event any such Remaining Proceeds exceed the sum of (i) all
payments thereof to NAI, (ii) any application thereof to cover the costs of repairing or restoring
the Property and (iii) the Lease Balance, then the excess will not be applied as a Qualified
Prepayment, but rather will constitute Escrowed Proceeds which must, if NAI exercises the Purchase
Option pursuant to the Purchase Agreement, be delivered to NAI as provided therein.



11 Additional Representations, Warranties and Covenants of NAI Concerning the Property.
NAI represents, warrants and covenants as follows:




     (A) Operation and Maintenance. NAI must operate and maintain the Property in a good
and workmanlike manner and in compliance with Applicable Laws in all material respects and pay or
cause to be paid all fees or charges of any kind due in connection therewith. (If NAI does not
promptly correct any failure of the Property to comply with Applicable Laws that is the subject of
a written complaint or demand for corrective action given by any Governmental Authority to NAI, or
to BNPPLC and forwarded by it to NAI, then for purposes of the preceding sentence, NAI will be
considered not to have maintained the Property “in compliance with all Applicable Laws in all
material respects” whether or not the noncompliance would be material in the absence of the
complaint or demand.) NAI will not use or occupy, or allow the use or occupancy of, the Property
in any manner which violates any Applicable Laws or which


Lease Agreement — Page 34




 









 





constitutes a public or private nuisance
or which makes void, voidable or cancelable any insurance then in force with respect to the
Property. To the extent that any of the following would, individually or in the aggregate, increase
the likelihood of a 97-10/Event or materially and adversely affect the value of the Property or the
use of the Property for purposes permitted by this Lease, NAI will not, without BNPPLC’s prior
consent: (i) initiate or permit any zoning reclassification of the Property; (ii) seek any
variance under existing zoning ordinances applicable to the Property; (iii) use or permit the use
of the Property in a manner that would result in such use becoming a nonconforming use under
applicable zoning ordinances or similar laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Property; or (v) consent to the annexation of the Property to any
municipality. NAI will not cause or permit any drilling or exploration for, or extraction, removal
or production of, minerals from the surface or subsurface of the Property, and NAI will not do
anything that could reasonably be expected to significantly reduce the market value of the
Property. If NAI receives a notice or claim from any Governmental Authority that the Property is
not in compliance with any Applicable Law, or that any action may be taken against BNPPLC because
the Property does not comply with any Applicable Law, NAI must promptly furnish a copy of such
notice or claim to BNPPLC.




     Notwithstanding the foregoing, NAI may in good faith, by appropriate proceedings, contest the
validity and applicability of any Applicable Law with respect to the Property, and pending such
contest NAI will not be deemed in default hereunder because of the violation of such Applicable
Law, if NAI diligently prosecutes such contest to completion in a manner reasonably satisfactory to
BNPPLC, and if NAI promptly causes the Property to comply with any such Applicable Law upon a final
determination by a court of competent jurisdiction that the same is valid and applicable to the
Property; provided, however, in any event such contest must be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPPLC or the Property
because of such violation must be paid by NAI, all prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPPLC or any of its directors,
officers or employees because of such violation, (ii) the date that any action is taken or overtly
threatened by any Governmental Authority against BNPPLC or any property owned by BNPPLC (including
the Property) because of such violation, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser does not purchase BNPPLC’s interest
in the Property pursuant to the Purchase Agreement for a price to BNPPLC (when taken together with
any Supplemental Payment paid by NAI pursuant to the Purchase Agreement, in the case of a purchase
by an Applicable Purchaser) equal to the Break Even Price.



     (B) Debts for Construction, Maintenance, Operation or Development. NAI must cause all
debts and liabilities incurred in the construction, maintenance, operation or development of the
Property, including invoices for labor, material and equipment and all debts and charges for
utilities servicing the Property, to be promptly paid.


Lease Agreement — Page 35


 









 








     Notwithstanding the foregoing, NAI may in good faith, by appropriate proceedings, contest the
validity, applicability or amount of any asserted statutory liens in the nature of contractors’,
mechanics’ or materialmens’ liens, and pending such contest NAI will not be deemed in default under
this subparagraph because of the contested lien if (1) within thirty days after being asked to do
so by BNPPLC, NAI bonds over to BNPPLC’s reasonable satisfaction all such contested liens against
the Property alleged to secure an amount in excess of $1,000,000 (individually or in the
aggregate), (2) NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPPLC, and (3) NAI promptly causes to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all costs and interest thereon, promptly after such judgment
becomes final; provided, however, that in any event each such contest must be concluded and the
lien, interest and costs must be paid by NAI prior to the earlier of (i) the date that any criminal
prosecution is instituted or overtly threatened against BNPPLC or its directors, officers or
employees because of the nonpayment thereof, (ii) the date that any writ or order is issued under
which the Property or any other property in which BNPPLC has an interest may be seized or sold or
any other action is taken or overtly threatened against BNPPLC or any property in which BNPPLC has
an interest because of the nonpayment thereof, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser does not purchase BNPPLC’s interest
in the Property pursuant to the Purchase Agreement for a price to BNPPLC (when taken together with
any Supplemental Payment paid by NAI pursuant to the Purchase Agreement, in the case of a purchase
by an Applicable Purchaser) equal to the Break Even Price.



     (C) Repair, Maintenance, Alterations and Additions. NAI must keep the Property in good
order, operating condition and appearance and must cause all necessary repairs, renewals and
replacements to be promptly made. NAI will not allow any of the Property to be materially misused,
abused or wasted, and NAI will promptly replace any worn-out fixtures and tangible Personal
Property with fixtures and personal property comparable to the replaced items when new. NAI will
not, without the prior consent of BNPPLC, (i) remove from the Property any fixture or Personal
Property having significant value except such as are replaced by NAI by fixtures or Personal
Property of equal suitability and value, free and clear of any lien or security interest (and for
purposes of this clause “significant value” will mean any fixture or Personal Property that has a
value of more than $100,000 or that, when considered together with all other fixtures and Personal
Property removed and not replaced by NAI by items of equal suitability and value, has an aggregate
value of $500,000 or more) or (ii) make material new Improvements or alter Improvements in any
material respect following completion of the Work contemplated in the Construction Management
Agreement.



     However, provided that no 97-10/Event has occurred, and so long as no Event of Default has
occurred and is continuing, BNPPLC will not unreasonably withhold a consent requested by NAI
pursuant to the preceding sentence for the construction or alteration of Improvements. NAI
acknowledges, however, that BNPPLC’s refusal or failure to give such consent will be deemed


Lease Agreement — Page 36




 









 





reasonable if BNPPLC believes in good faith that the construction or alteration for which NAI is
requesting consent could have a material adverse impact upon the value of the Property (taken as
whole), or if NAI has not provided BNPPLC with adequate information to allow BNPPLC to properly
evaluate such impact on value.




     Without limiting the foregoing, NAI must notify BNPPLC before making any significant
alterations to the Improvements after the completion of the Construction Project, regardless of the
impact on the value of the Property expected to result from such alterations.



     (D) Permitted Encumbrances. NAI must comply with and will cause to be performed all of
the covenants, agreements and obligations imposed upon the owner of any interest in the Property by
the Permitted Encumbrances. Without limiting the foregoing, NAI must cause all amounts to be paid
when due, the payment of which is secured by any Lien against the Property created by the Permitted
Encumbrances. Without the prior consent of BNPPLC, NAI will not create any new Permitted
Encumbrance or enter into, initiate, approve or consent to any modification of any Permitted
Encumbrance that would create or expand or purport to create or expand obligations or restrictions
which would encumber BNPPLC’s interest in the Property or be binding upon BNPPLC itself. (Whether
BNPPLC must give any such consent requested by NAI during the Term of this Lease will be governed
by subparagraph 4(C) of the Closing Certificate.)



     (E) Books and Records Concerning the Property. NAI must keep books and records that are
accurate and complete in all material respects for the Property and, subject to Paragraph 22, must
permit all such books and records (including all contracts, statements, invoices, bills and claims
for labor, materials and services supplied for the construction and operation of any Improvements)
to be inspected and copied by BNPPLC during normal business hours. (BNPPLC will not over the
objection of NAI inspect or copy such materials more than once in any twelve month period unless
BNPPLC believes in good faith that more frequent inspection and copying is required to determine
whether a Default or an Event of Default has occurred and is continuing or to assess the effect
thereof or to properly exercise remedies with respect thereto.) This subparagraph will not be
construed as requiring NAI to regularly maintain separate books and records relating exclusively to
the Property, but NAI will as reasonably requested from time to time by BNPPLC construct or
abstract from its regularly maintained books and records information required by this subparagraph
relating to the Property.



12 Assignment and Subletting by NAI.




     (A) BNPPLC’s Consent Required. Without the prior consent of BNPPLC, NAI will not
assign, transfer, mortgage, pledge or hypothecate this Lease or any interest of NAI hereunder and
will not sublet all or any part of the Property, by operation of law or otherwise, except as
follows:


Lease Agreement — Page 37


 









 





     (1) So long as no 97-10/Event has occurred and no Event of Default has occurred and is
continuing, NAI may sublet (a) to Affiliates of NAI, or (b) no more than thirty-three
percent (33%) (computed on the basis of square footage) of the useable space in then
existing and completed building Improvements to Persons who are not NAI’s Affiliates,
subject to the conditions that (i) any such sublease by NAI must be made
expressly subject and subordinate to the terms hereof, (ii) the sublease must have a term
equal to or less than the remainder of the then effective Term of this Lease, and (iii) the
use permitted by the sublease must be expressly limited to uses consistent with subparagraph
2(A) or other uses approved in advance by BNPPLC as uses that will not present any
extraordinary risk of uninsured environmental or other liability.




     (2) So long as no 97-10/Event has occurred and no Event of Default has occurred and is
continuing, NAI may assign all of its rights under this Lease and the other Operative
Documents to an Affiliate of NAI, subject to the conditions that (a) the assignment must be
in writing and must unconditionally provide that the Affiliate assumes all of NAI’s
obligations hereunder and thereunder, and (b) NAI must execute an unconditional guaranty of
the obligations assumed by the Affiliate in form satisfactory to BNPPLC, confirming (x) that
notwithstanding the assignment NAI will remain primarily liable for all of the obligations
undertaken by NAI under the Operative Documents, (y) that such guaranty is a guaranty of
payment and not merely of collection, and (z) that NAI waives to the extent permitted by
Applicable Law all defenses otherwise available to guarantors or sureties.



     (B) Standard for BNPPLC’s Consent to Assignments and Certain Other Matters. Consents
and approvals of BNPPLC which are required by this Paragraph 12 will not be unreasonably withheld,
but NAI acknowledges that BNPPLC’s withholding of such consent or approval will be reasonable if
BNPPLC determines in good faith that (1) giving the approval may increase BNPPLC’s risk of
liability for any existing or future environmental problem, (2) giving the approval is likely to
substantially increase BNPPLC’s administrative burden of complying with or monitoring NAI’s
compliance with the requirements of this Lease, or (3) any transaction for which NAI has requested
the consent or approval would negate NAI’s representations in the Operative Documents regarding
ERISA or cause any of the Operative Documents (or any exercise of BNPPLC’s rights thereunder) to
constitute a violation of any provision of ERISA. Further, NAI acknowledges that BNPPLC may
reasonably require, as a condition to giving its consent to any assignment by NAI, that NAI execute
an unconditional guaranty providing that NAI will remain primarily liable for all of the tenant’s
obligations hereunder and under other Operative Documents. Any such guaranty must be a guaranty of
payment and not merely of collection, must provide that NAI waives to the extent permitted by
Applicable Law all defenses otherwise available to guarantors or sureties, and must otherwise be in
a form satisfactory to BNPPLC.



Lease Agreement — Page 38


 









 








     (C) Consent Not a Waiver. No consent by BNPPLC to a sale, assignment, transfer,
mortgage, pledge or hypothecation of this Lease or NAI’s interest hereunder, and no assignment or
subletting of the Property or any part thereof in accordance with this Lease or otherwise with
BNPPLC’s consent, will release NAI from liability hereunder; and any such consent will apply only
to the specific transaction thereby authorized and will not relieve NAI from any requirement of
obtaining the prior consent of BNPPLC to any further sale, assignment, transfer, mortgage, pledge
or hypothecation of this Lease or any interest of NAI hereunder.



13 Assignment by BNPPLC.




     (A) Restrictions on Transfers. Except by a Permitted Transfer, BNPPLC will not assign,
transfer, mortgage, pledge, encumber or hypothecate this Lease or the other Operative Documents or
any interest of BNPPLC in and to the Property during the Term without the prior consent of NAI,
which consent NAI may withhold in its sole discretion. Further, notwithstanding anything to the
contrary herein contained, if withholding taxes are imposed on the Rents payable to BNPPLC
hereunder because of BNPPLC’s assignment of this Lease to any citizen of, or any corporation or
other entity formed under the laws of, a country other than the United States, NAI will not be
required to compensate BNPPLC or any such assignee for the withholding tax.



     (B) Effect of Permitted Transfer or other Assignment by BNPPLC. If by a Permitted
Transfer BNPPLC sells or otherwise transfers the Property and assigns to the transferee all of
BNPPLC’s rights under this Lease and under the other Operative Documents, and if the transferee
expressly assumes all of BNPPLC’s obligations under this Lease and under the other Operative
Documents, then BNPPLC will thereby be released from any obligations arising after such assumption
under this Lease or under the other Operative Documents (other than any liability for a breach of
any continuing obligation to provide Construction Advances under the Construction Management
Agreement), and NAI must look solely to each successor in interest of BNPPLC for performance of
such obligations.



14 BNPPLC’s Right to Enter and to Perform for NAI .




     (A) Right to Enter. BNPPLC and BNPPLC’s representatives may, subject to subparagraph
14(C), enter the Property for the purpose of making inspections or performing any work BNPPLC is
authorized to undertake by the next subparagraph or for the purpose confirming whether NAI has
complied with the requirements of this Lease or the other Operative Documents. So long as no Event
of Default has occurred and is continuing and no apparent emergency exists which would justify
immediate entry, BNPPLC will give NAI at least two Business Days notice before making any such
entry over the objection of NAI and will limit any such entry to normal business hours.


Lease Agreement — Page 39



 









 








     (B) Performance for NAI. If NAI fails to perform any act or to take any action
required of it by this Lease or the Closing Certificate, or to pay any money which NAI is required
by this Lease or the Closing Certificate to pay, and if such failure or action constitutes an Event
of Default or renders BNPPLC or any director, officer, employee or Affiliate of BNPPLC at risk of
criminal prosecution or renders BNPPLC’s interest in the Property or any part thereof at risk of
forfeiture by forced sale or otherwise, then in addition to any other remedies specified herein or
otherwise available, BNPPLC may, perform or cause to be performed such act or take such action or
pay such money. Any expenses so incurred by BNPPLC, and any money so paid by BNPPLC, will be a
demand obligation owing by NAI to BNPPLC. Further, upon making such payment, BNPPLC will be
subrogated to all of the rights of the person, corporation or body politic receiving such payment.
But nothing herein will imply any duty upon the part of BNPPLC to do any work which under any
provision of this Lease NAI may be required to perform, and the performance thereof by BNPPLC will
not constitute a waiver of NAI’s default. BNPPLC may during the progress of any such work by BNPPLC
keep and store upon the Property all necessary materials, tools, and equipment. BNPPLC will not in
any event
be liable for inconvenience, annoyance, disturbance, loss of business, or other damage to NAI or
the subtenants or invitees of NAI by reason of the performance of any such work, or on account of
bringing materials, supplies and equipment into or through the Property during the course of such
work, and the obligations of NAI under this Lease will not thereby be excused in any manner.



     (C) Building Security. So long as NAI remains in possession of the Property, BNPPLC or
BNPPLC’s representative will, before making any inspection or performing any work on the Property
authorized by this Lease, do the following




     (1) BNPPLC will give NAI at least 24 hours notice, unless BNPPLC believes in good faith
that an emergency may exist or a Default has occurred and is continuing, because of which
significant damage to the Property or other significant Losses may be sustained if BNPPLC
delays entry to the Property; and




     (2) if then requested to do so by NAI in order to maintain NAI’s security, BNPPLC or its
representative will: (i) sign in at NAI’s security or information desk if NAI has such a
desk on the premises, (ii) wear a visitor’s badge or other reasonable identification, (iii)
permit an employee of NAI to observe such inspection or work, and (iv) comply with other
similar reasonable nondiscriminatory security requirements of NAI that do not, individually
or in the aggregate, significantly interfere with inspections or work of BNPPLC authorized
by this Lease.



15 Remedies.




     (A) Traditional Lease Remedies. At any time after an Event of Default and after BNPPLC
has given any notice required by subparagraph 15(C), BNPPLC will be entitled at



Lease Agreement — Page 40




 









 





BNPPLC’s option
(and without limiting BNPPLC in the exercise of any other right or remedy BNPPLC may have, and
without any further demand or notice except as expressly described in this subparagraph 15(A)), to
exercise any one or more of the following remedies:





     (1) By notice to NAI, BNPPLC may terminate NAI’s right to possession of the Property.
However, only a notice clearly and unequivocally confirming that BNPPLC has elected to
terminate NAI’s right of possession will be effective for purposes of this provision.




     (2) Upon termination of NAI’s right to possession as provided in the immediately
preceding subsection (1) and without further demand or notice, BNPPLC may re-enter the
Property in any manner not prohibited by Applicable Laws and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and remove any persons
in possession thereof. Any personal property on the Land may be removed and stored in a
warehouse or elsewhere, and in such event the cost of any such removal and storage will be
at the expense and risk of and for the account of NAI.




     (3) Upon termination of NAI’s right to possession as provided in the immediately
preceding subsection (1), this Lease will terminate and BNPPLC may
recover from NAI (subject to the limitations set forth in subparagraph ?) damages which
include the following:




     (a) the worth at the time of award of the unpaid Rent which had been earned at
the time of termination;




     (b) costs and expenses actually incurred by BNPPLC to repair damage to the
Property that NAI was obligated to (but failed to) repair prior to the termination;




     (c) the sum of the following (“Lease Termination Damages”):




     1) the worth at the time of award of the amount by which the unpaid Rent
which would have been earned after termination until the time of award
exceeds the amount of such rental loss that NAI proves could have been
reasonably avoided;




     2) the worth at the time of award of the amount by which the unpaid Rent
for the balance of the scheduled Term after the time of award exceeds the
amount of such rental loss that NAI proves could be reasonably avoided;


Lease Agreement — Page 41




 









 









     3) any other amount necessary to compensate BNPPLC for all the detriment
proximately caused by NAI’s failure to perform NAI’s obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including the costs and expenses of preparing and altering the
Property for reletting and all other costs and expenses of reletting
(including Attorneys’ Fees, advertising costs and brokers’ commissions), and




     (d) such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable California law.


The “worth at the time of award” of the amounts referred to in subparagraph 15(A)(3)(a) and
subparagraph 15(A)(3)(c)1) will be computed by allowing interest at the Default Rate. The
“worth at the time of award” of the amount referred to in subparagraph 15(A)(3)(c)2) will be
computed by discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).



Notwithstanding the foregoing, the total Lease Termination Damages which BNPPLC may recover
from NAI will be limited in amount to the extent required, if any, to prevent (I) the sum of
recoverable Lease Termination Damages, plus any Supplemental Payment that BNPPLC has
received or remains entitled to recover pursuant to the Purchase Agreement, from being more
than the Maximum Remarketing Obligation; provided, however, if a Supplemental Payment is
owed to BNPPLC according to the Purchase
Agreement, but NAI fails to pay it, this limitation upon BNPPLC’s right to recover Lease
Termination Damages will be of no effect. For purposes of this provision, “Maximum
Remarketing Obligation” is intended to have the meaning assigned to it in the Purchase
Agreement and is intended to be computed as of the date any award of Lease Termination
Damages to BNPPLC as if such date was the Designated Sale Date.




     (4) Even after a breach of this Lease or abandonment of the Property by NAI, BNPPLC may
continue this Lease in force and recover rent as it becomes due. Accordingly, despite any
breach or abandonment by NAI, this Lease will continue in effect for so long as BNPPLC does
not terminate NAI’s right to possession, and BNPPLC may enforce all of BNPPLC’s rights and
remedies under this Lease, including the right to recover the Rent as it becomes due under
this Lease. NAI’s right to possession will not be deemed to have been terminated by BNPPLC
except pursuant to subparagraph 15(A)(1) hereof. The following will not constitute a
termination of NAI’s right to possession:




     (a) Acts of maintenance or preservation or efforts to relet the Property;


Lease Agreement — Page 42




 









 









     (b) The appointment of a receiver upon the initiative of BNPPLC to protect
BNPPLC’s interest under this Lease; or




     (c) Reasonable withholding of consent to an assignment or subletting, or
terminating a subletting or assignment by NAI.



     (B) Foreclosure Remedies. At any time when an Event of Default has occurred and is
continuing, BNPPLC may notify NAI of BNPPLC’s intent to pursue remedies described in Exhibit
B, and at any time thereafter, regardless of whether the Event of Default is continuing, if NAI
has not already purchased the Property or caused an Applicable Purchaser to purchase the Property
pursuant to the Purchase Agreement, (i) BNPPLC will have the power and authority, to the extent
provided by law, after proper notice and lapse of such time as may be required by law, to sell or
arrange for a sale to foreclose\ its lien and security interest granted in Exhibit B, and
(ii) BNPPLC, in lieu of or in addition to exercising any power of sale granted in Exhibit
B, may proceed by a suit or suits in equity or at law, whether for a foreclosure or sale of the
Property, or against NAI for the Lease Balance, or for the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein granted, or for the
appointment of a receiver pending any foreclosure or sale of the Property, or for the enforcement
of any other appropriate legal or equitable remedy.



     (C) Notice Required So Long As the Purchase Option Continues Under the Purchase
Agreement. After the Term actually commences and so long as NAI remains in possession of the
Property and there has been no termination of the Purchase Option as provided in Paragraph
6(B) of the Purchase Agreement, BNPPLC’s right to exercise remedies provided in subparagraph
15(A) or to complete any foreclosure sale as provided in subparagraph 15(B) will be subject to the
condition precedent that BNPPLC has notified NAI, at a time when an Event of Default has occurred
and is continuing and no less than thirty days prior to exercising such remedies or completing such
a sale, of BNPPLC’s intent to do so. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option before losing possession of the
Property because of the remedies enumerated in subparagraph 15(A) or because of a sale authorized
by subparagraph 15(B). The condition precedent is not, however, intended to extend any period for
curing an Event of Default. Accordingly, if an Event of Default has occurred, and regardless of
whether any Event of Default is then continuing, BNPPLC may proceed immediately to exercise
remedies provided in subparagraph 15(A) or complete a sale authorized by subparagraph 15(B) at any
time after the earlier of (i) thirty days after BNPPLC has given such a notice to NAI, (ii) any
date upon which NAI relinquishes possession of the Property, or (iii) any termination of the
Purchase Option.



     (D) Enforceability. This Paragraph 15 will be enforceable to the maximum extent not
prohibited by Applicable Laws, and the unenforceability of any provision in this Paragraph will not
render any other provision unenforceable.


Lease Agreement — Page 43




 









 








     (E) Remedies Cumulative. No right or remedy herein conferred upon or reserved to BNPPLC
is intended to be exclusive of any other right or remedy, and each and every such right and remedy
will be cumulative and in addition to any other right or remedy given to BNPPLC hereunder or now or
hereafter existing in favor of BNPPLC under Applicable Laws, except as otherwise expressly provided
in this subparagraph ?. In addition to other remedies provided in this Lease, BNPPLC will be
entitled, to the extent permitted by Applicable Law or in equity, to injunctive relief in case of
the violation, or attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease, or to a decree compelling performance of any of the other
covenants, agreements, conditions or provisions of this Lease to be performed by NAI, or to any
other remedy allowed to BNPPLC at law or in equity. Nothing contained in this Lease will limit or
prejudice the right of BNPPLC to prove for and obtain in proceedings for bankruptcy or insolvency
of NAI by reason of the termination of this Lease, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing the proceedings in which, the
damages are to be proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the generality of the foregoing, nothing
contained herein will modify, limit or impair any of the rights and remedies of BNPPLC under the
Purchase Agreement, and BNPPLC will not be required to give the thirty day notice described in
subparagraph 15(C) as a condition precedent to any acceleration of the Designated Sale Date or to
taking any action to enforce the Purchase Agreement. However, to prevent a double recovery, BNPPLC
acknowledges that BNPPLC’s right to recover Lease Termination Damages may be limited by the last
provision of subparagraph 15(A)(3) above in the event BNPPLC collects or remains entitled to
collect a Supplemental Payment as provided in the Purchase Agreement.


16 Default by BNPPLC. If BNPPLC should default in the performance of any of its
obligations under this Lease, BNPPLC will have the time reasonably required, but in no event less
than thirty days, to cure such default after receipt of notice from NAI specifying such default and
specifying what action NAI believes is necessary to cure the default.



17 Quiet Enjoyment. Provided NAI pays the Base Rent and all Additional Rent payable
hereunder as and when due and payable and keeps and fulfills all of the terms, covenants,
agreements and conditions to be performed by NAI hereunder, BNPPLC will not during the Term disturb
NAI’s peaceable and quiet enjoyment of the Property; however, such enjoyment will be subject to the
terms and conditions of this Lease, to the Ground Lease, to Permitted
Encumbrances and to any other claims not constituting Liens Removable by BNPPLC. If any Lien
Removable by BNPPLC is established against the Property, BNPPLC will remove the Lien Removable by
BNPPLC promptly. Any breach by BNPPLC of this Paragraph will render BNPPLC liable to NAI for any
monetary damages proximately caused thereby, but as more specifically provided in subparagraph 4(B)
above, no such breach will entitle NAI to terminate this Lease or excuse NAI from its obligation to
pay Rent.



Lease Agreement — Page 44





 









 







18 Surrender Upon Termination. Unless NAI or an Applicable Purchaser is purchasing or
has purchased BNPPLC’s entire interest in the Property pursuant to the terms of the Purchase
Agreement, NAI must, upon the termination of NAI’s right to occupancy, surrender to BNPPLC the
Property, including Improvements constructed by NAI and fixtures and furnishings included in the
Property, free of all Hazardous Substances (including Permitted Hazardous Substances) and tenancies
and with all Improvements in substantially the same condition as of the date the same were
initially completed, excepting only (i) ordinary wear and tear that occurs between the maintenance,
repairs and replacements required by other provisions of this Lease, and (ii) demolition,
alterations and additions which are expressly permitted by the terms of this Lease and which have
been completed by NAI in a good and workmanlike manner in accordance with all Applicable Laws. Any
movable furniture or movable personal property belonging to NAI or any party claiming under NAI, if
not removed at the time of such termination and if BNPPLC so elects, will be deemed abandoned and
become the property of BNPPLC without any payment or offset therefor. If BNPPLC does not so elect,
BNPPLC may remove such property from the Property and store it at NAI’s risk and expense. NAI must
bear the expense of repairing any damage to the Property caused by such removal by BNPPLC or NAI.



19 Holding Over by NAI. Should NAI not purchase BNPPLC’s right, title and interest in
the Property as provided in the Purchase Agreement, but nonetheless continue to hold the Property
after the termination of this Lease without objection by BNPPLC, whether such termination occurs by
lapse of time or otherwise, such holding over will constitute and be construed as a tenancy from
day to day only on and subject to all of the terms, provisions, covenants and agreements on the
part of NAI hereunder. No payments of money by NAI to BNPPLC after the termination of this Lease
will reinstate, continue or extend the Term of this Lease and no extension of this Lease after the
termination thereof will be valid unless and until the same is reduced to writing and signed by
both BNPPLC and NAI.



20 Recording Memorandum. Contemporaneously with the execution of this Lease, the
parties will execute and record a memorandum of this Lease for purposes of effecting constructive
notice to all Persons of NAI’s rights hereunder.



21 Independent Obligations Evidenced by Other Operative Documents. NAI acknowledges and
agrees that nothing contained in this Lease will limit, modify or otherwise affect any of NAI’s
obligations under the other Operative Documents, which obligations are intended to be separate,
independent and in addition to, and not in lieu of, the obligations set forth herein. Further, in
the event of any inconsistency between the express terms and provisions of the Purchase Agreement
and the express terms and provisions of this Lease, the express terms and provisions of the
Purchase Agreement will control.



22 Proprietary Information and Confidentiality.



Lease Agreement — Page 45


 









 








     (A) Proprietary Information. NAI will have no obligation to provide proprietary
information (as defined in the next sentence) to BNPPLC, except and to the extent (1) expressly
required by other terms and conditions of the Operative Documents, or (2) requested by BNPPLC in
connection with any inspection of the Property pursuant to the various provisions hereof and, in
BNPPLC’s reasonably determination, required to allow BNPPLC to accomplish the purposes of such
inspection. (Before NAI delivers any such proprietary information in connection with any inspection
of the Property, NAI may require that BNPPLC confirm and ratify the confidentiality agreements
covering such proprietary information set forth herein.) For purposes of this Lease and the other
Operative Documents, “proprietary information” means NAI’s intellectual property, trade secrets and
other confidential information of value to NAI (including, among other things, information about
NAI’s manufacturing processes, products, marketing and corporate strategies) that (1) is received
by any representative of BNPPLC at the time of any on-site visit to the Property or (2) otherwise
delivered to BNPPLC by or on behalf of NAI and labeled “proprietary” or “confidential” or by some
other similar designation to identify it as information which NAI considers to be proprietary or
confidential.



     (B) Confidentiality. BNPPLC will endeavor in good faith to use reasonable precautions
to keep confidential any proprietary information that BNPPLC may receive from NAI or otherwise
discover with respect to NAI or NAI’s business in connection with the administration of this Lease
or any investigation by BNPPLC hereunder. This provision will not, however, render BNPPLC liable
for any disclosures of proprietary information made by it or its employees or representatives,
unless the disclosure is intentional and made for no reason other than to damage NAI’s business.
Also, this provision will not apply to disclosures: (i) specifically and previously authorized in
writing by NAI; (ii) to any assignee of BNPPLC as to any interest in the Property so long as such
assignee has agreed in writing to use its reasonable efforts to keep such information confidential
in accordance with the terms of this paragraph; (iii) to legal counsel, accountants, auditors,
environmental consultants and other professional advisors to BNPPLC so long as BNPPLC informs such
persons in writing (if practicable) of the confidential nature of such information and directs them
to treat such information confidentially; (iv) to regulatory officials having jurisdiction over
BNPPLC or BNPPLC’s Parent (although the disclosing party will request confidential treatment of the
disclosed information, if practicable); (v) as required by legal process (although the disclosing
party will request confidential treatment of the disclosed information, if practicable); (vi) of
information which has previously become publicly available through the actions or inactions of a
person other than BNPPLC not, to BNPPLC’s knowledge, in breach of an obligation of confidentiality
to NAI; (vii) to any Participant so long as the Participant is bound by and has not repudiated a
confidentiality provision concerning NAI’s proprietary information set forth in the Participation
Agreement; or (vii) that are reasonably believed by BNPPLC to be necessary or helpful to the
determination or enforcement of any contractual or other rights which BNPPLC has or may have
against NAI or its Affiliates or which BNPPLC has or may have concerning the Property (provided,
that BNPPLC must cooperate with NAI as NAI may reasonably request to mitigate any risk that such


Lease Agreement — Page 46




 









 





disclosures will result in subsequent disclosures of proprietary information which are not
necessary or helpful to any such determination or enforcement; such cooperation to include, for
example, BNPPLC’s agreement not to oppose a motion by NAI to seal records containing
proprietary information in any court proceeding initiated because of a dispute between the parties
over the Property or the Operative Documents).



Further, notwithstanding any other contrary provision contained in this Lease or the other
Operative Documents, BNPPLC and NAI (and each of their respective employees, representatives or
other agents) may disclose, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Lease and all materials of any kind (including opinions or
other tax analyses) that are provided to such party relating to such tax treatment and tax
structure, other than any information for which non-disclosure is reasonably necessary in order to
comply with applicable securities laws and other than any information the disclosure of which would
waive the attorney-client privilege, the tax advisor privilege under Section 7525 of the Internal
Revenue Code, or similar privileges.



[The signature pages follow.]



Lease Agreement — Page 47





 









 






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



	 	 	 	 	 
	 	 	BNP PARIBAS LEASING CORPORATION, a

Delaware corporation
	 
	 	 	 	 
	 

	 	By:	 	/s/  Lloyd G. Cox
	 

	 	 	 	 
	 

	 	 	 	Lloyd G. Cox, Managing Director






Lease
Agreement — Signature Page





 









 








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




	 	 	 	 	 
	 	 	NETWORK APPLIANCE, INC., a Delaware
 corporation
	 
	 	 	 	 
	 

	 	By:	 	/s/  Steven Gomo
	 

	 	 	 	 
	 

	 	 	 	Steven Gomo, Chief Financial Officer





Lease
Agreement — Signature Page





 









 








Exhibit A




Legal Description




Parcel 1, as shown on that certain Parcel Map which filed for record in the office of the recorder
of the County of Santa Clara, State of California on July 7, 1994, in Book 657 of Parcel Maps, Page
9.



APN: 110-32-6

ARB: 110-3-x65



TOGETHER WITH, easements appurtenant to Parcel 1 as described in Exhibit A attached to the
Ground Lease.




 









 








Exhibit B 




California Foreclosure Provisions




Without limiting any of the provisions set forth in the body of this Lease or other attachments to
this Lease, the following provisions are included in and made a part of this Lease for all
purposes:



GRANT OF LIEN AND SECURITY INTEREST.




     NAI, for and in consideration of the sum of Ten Dollars ($10.00) to NAI in hand paid by Lloyd
G. Cox, Trustee, of Dallas County, Texas (in this Exhibit called the “Trustee”), in order to secure
the recovery of the Lease Balance by BNPPLC and the payment of all of the other obligations,
covenants, agreements and undertakings of NAI under this Lease or other Operative Documents (in
this Exhibit called the “Secured Obligations”), does hereby irrevocably GRANT, BARGAIN, SELL,
CONVEY, TRANSFER, ASSIGN and SET OVER to the Trustee, IN TRUST WITH POWER OF SALE, for the benefit
of BNPPLC, the leasehold interest in the Land created by the Ground Lease, together with (i) all
the buildings and other improvements now on or hereafter located thereon; (ii) all materials,
equipment, fixtures or other property whatsoever now or hereafter attached or affixed to or
installed in said buildings and other improvements, including, but not limited to, all heating,
plumbing, lighting, water heating, refrigerating, incinerating, ventilating and air conditioning
equipment, utility lines and equipment (whether owned individually or jointly with others),
sprinkler systems, fire extinguishing apparatus and equipment, water tanks, engines, machines,
elevators, motors, cabinets, shades, blinds, partitions, window screens, screen doors, storm
windows, awnings, drapes, and floor coverings, and all fixtures, accessions and appurtenances
thereto, and all renewals or replacements of or substitutions for any of the foregoing, all of
which are hereby declared to be permanent fixtures and accessions to the freehold and part of the
realty conveyed herein as security for the obligations mentioned hereinabove; (iii) all easements
and rights of way now and at any time hereafter used in connection with any of the foregoing
property or as a means of ingress to or egress from the Land or for utilities to said property;
(iv) all interests of NAI in and to any streets, ways, alleys and/or strips of land adjoining said
land or any part thereof; (v) all rents, issues, profits, royalties, bonuses, income and other
benefits derived from or produced by the Land or Improvements; (vi) all leases or subleases of the
Land or Improvements or any part thereof now or hereafter in effect, including all security or
other deposits, advance or prepaid rents, and deposits or payments of similar nature; (vii) all
options to purchase or lease the Land or Improvements or any part thereof or interest therein, and
any greater estate in the Land or Improvements now owned or hereafter acquired by NAI; (viii) all
right, title, estate and interest of every kind and nature, at law or in equity, which NAI now has
or may hereafter acquire in the Land or Improvements; and (ix) all other claims and demands with
respect to the Land or Improvements or the
Collateral (as hereinafter defined), including all claims or demands to all proceeds of all
insurance now or hereafter in effect with respect to the Land, Improvements or Collateral, all
awards made for the taking by condemnation or the power of eminent domain, or by any proceeding or
purchase in lieu thereof, of the Land, Improvements or Collateral, or any part thereof, or any
damage or injury thereto, all awards resulting from a change of grade of



 









 





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



     TO HAVE AND TO HOLD the foregoing property (in this Exhibit called the “Mortgaged Property”)
unto the Trustee, IN TRUST, and his successors or substitutes in this trust and to his or their
successors and assigns upon the terms, provisions and conditions herein set forth for the benefit
of BNPPLC.



     In order to secure the Secured Obligations, NAI also hereby grants to BNPPLC a security
interest in: all components of the Property which constitute personalty, whether owned by NAI now
or hereafter, and all fixtures, accessions and appurtenances thereto, and all renewals or
replacements of or substitutions for any of the foregoing (including all building materials and
equipment now or hereafter delivered to said premises and intended to be installed or in or
incorporated as part of the Improvements); all rents and other amounts from and under leases of all
or any part of the Property; all issues, profits and proceeds from all or any part of the Property;
all proceeds (including premium refunds) of each policy of insurance relating to the Property; all
proceeds from the taking of the Property or any part thereof or any interest therein or right or
estate appurtenant thereto by eminent domain or by purchase in lieu thereof; all permits, licenses,
franchises, certificates, and other rights and privileges obtained in connection with the Property;
all plans, specifications, maps, surveys, reports, architectural, engineering and construction
contracts, books of account, insurance policies and other documents, of whatever kind or character,
relating to the use, construction upon, occupancy, leasing, sale or operation of the Property; all
proceeds and other amounts paid or owing to NAI under or pursuant to any and all contracts and
bonds relating to the construction, erection or renovation of the Property; and all oil, gas and
other hydrocarbons and other minerals produced from or allocated to the Property and all products
processed or obtained therefrom, the proceeds thereof, and all accounts and general intangibles
under which such proceeds may arise, together with any sums of money that may now or at any time
hereafter become due and payable to NAI by virtue of any and all royalties, overriding royalties,
bonuses, delay rentals and any other amount of any kind or character arising under any and all
present and future oil, gas and mining leases covering the Property or any part thereof (all of the
property described in this section are collectively called the “Collateral” in this Exhibit) and
all proceeds of the Collateral. (The Mortgaged Property and the Collateral are in this Exhibit
sometimes collectively called the “Security”.)



FORECLOSURE BY POWER OF SALE




     Upon the occurrence of any Event of Default, the Trustee, its successor or substitute, and/or
BNPPLC is authorized and empowered to execute all written notices then required by law to cause the
Security to be sold under power of sale to satisfy the Secured Obligations. Trustee shall give and
record such notices as the law then requires as a condition precedent to a trustee’s sale. When
the minimum period of time required by law after giving all required notices has elapsed, Trustee,
without notice to or demand upon NAI except as otherwise required by law,


Exhibit B
to Lease Agreement — Page 2





 









 








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



BNPPLC may elect to cause the Security or any part thereof to be sold under the power of sale
herein granted in any manner permitted by applicable law. In connection with any sale or sales


Exhibit B
to Lease Agreement — Page 3





 









 







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



Exhibit B
to Lease Agreement — Page 4





 









 








its best interest. Should BNPPLC
desire that more than one sale or other disposition of the Mortgaged Property be conducted, BNPPLC
may, at its option, cause the same to be conducted simultaneously, or successively, on the same
day, or on such different days or times and in such order as BNPPLC may deem to be in its best
interests, and no such sale shall exhaust the power of sale herein granted or terminate or
otherwise affect the lien granted by NAI herein on, or the security interests of BNPPLC in, any
part of the Security not sold, until all of the indebtedness secured hereby has been fully paid and
satisfied. In the event BNPPLC elects to dispose of the Security through more than one sale, NAI
agrees to pay the costs and expenses of each such sale and of any judicial proceedings wherein the
same may be made, including reasonable compensation to BNPPLC and Trustee, their agents and
counsel, and to pay all expenses, liabilities and advances made or incurred by BNPPLC and Trustee
(or either of them) in connection with such sale or sale, together with interest on all such
advances made by BNPPLC and Trustee (or either of them) at the Default Rate..



JUDICIAL FORECLOSURE




     This instrument shall be effective as a mortgage as well as a deed of trust and upon the
occurrence of an Event of Default may be foreclosed as to any of the Security in any manner
permitted by the laws of the State of California or of any other state in which any part of the
Security is situated, and any foreclosure suit may be brought by the Trustee or by BNPPLC. In the
event a foreclosure hereunder shall be commenced by the Trustee, or his substitute or successor,
BNPPLC may at any time before the sale of the Security direct the said Trustee to abandon the sale,
and may then institute suit for the collection of the Secured Obligations and for the judicial
foreclosure of this instrument. It is agreed that if BNPPLC should institute a suit for the
collection of the Secured Obligations and for the foreclosure of this instrument, BNPPLC may at any
time before the entry of a final judgment in said suit dismiss the same, and require the Trustee,
his substitute or successor to exercise the power of sale granted herein to sell the Security in
accordance with the provisions of this instrument.



BNPPLC AS PURCHASER




     BNPPLC shall have the right to become the purchaser at any sale held by any Trustee or
substitute or successor or by any receiver or public officer, and any BNPPLC purchasing at any such
sale shall have the right to credit upon the amount of the bid made therefor, to the extent
necessary to satisfy such bid, the outstanding Lease Balance and other Secured Obligations owing to
such BNPPLC.



UNIFORM COMMERCIAL CODE REMEDIES




     Upon the occurrence of an Event of Default, BNPPLC may exercise its rights of enforcement with
respect to the Collateral under the California Uniform Commercial Code, as


Exhibit B
to Lease Agreement — Page 5





 









 








amended, and in
conjunction with, in addition to or in substitution for those rights and remedies:




     (a) BNPPLC may enter upon the Land to take possession of, assemble and collect the
Collateral or to render it unusable; and




     (b) BNPPLC may require NAI to assemble the Collateral and make it available at a place
BNPPLC designates which is mutually convenient to allow BNPPLC to take possession or dispose
of the Collateral; and




     (c) written notice mailed to NAI as provided herein ten (10) days prior to the date of
public sale of the Collateral or prior to the date after which private sale of the
Collateral will be made shall constitute reasonable notice; and




     (d) any sale made pursuant to the provisions of this section shall be deemed to have been a
public sale conducted in a commercially reasonable manner if held contemporaneously with the
sale of the Mortgaged Property under power of sale as provided herein upon giving the same
notice with respect to the sale of the Collateral hereunder as is required for such sale of
the Mortgaged Property under power of sale; and




     (e) in the event of a foreclosure sale, whether made by the Trustee exercising the power of
sale granted herein, or under judgment of a court, the Collateral and the Mortgaged Property
may, at the option of BNPPLC, be sold as a whole; and




     (f) it shall not be necessary that BNPPLC take possession of the Collateral or any part
thereof prior to the time that any sale pursuant to the provisions of this section is
conducted and it shall not be necessary that the Collateral or any part thereof be present
at the location of such sale; and




     (g) prior to application of proceeds of disposition of the Collateral to the Secured
Obligations, such proceeds shall be applied to the reasonable expenses of retaking,
holding, preparing for sale or lease, selling, leasing and the like and the reasonable
attorney’s fees and legal expenses incurred by BNPPLC; and




     (h) any and all statements of fact or other recitals made in any bill of sale or assignment
or other instrument evidencing any foreclosure sale hereunder as to nonpayment of the
Secured Obligations or as to the occurrence of any Event of Default, or as to BNPPLC having
declared any of the Secured Obligations to be due and payable, or as to notice of time,
place and terms of sale and of the properties to be sold having been duly given, or as to
any other act or thing having been duly done by BNPPLC, shall be taken as prima facie
evidence of the truth of the facts so stated and recited; and




     (i) BNPPLC may appoint or delegate any one or more persons as agent to


Exhibit B
to Lease Agreement — Page 6





 









 









perform any act or
acts necessary or incident to any sale held by BNPPLC, including the sending of notices and
the conduct of the sale, but in the name and on behalf of BNPPLC.



APPOINTMENT OF A RECEIVER




     In addition to all other remedies herein provided for, if any Event of Default occurs or
continues after the Designated Sale Date,, BNPPLC shall as a matter of right be entitled to the
appointment of a receiver or receivers for all or any part of the Security, whether such
receivership be incident to a proposed sale of such property or otherwise, and without regard to
the adequacy of the security or the value of the Security or the solvency of any person or persons
liable for the payment of the Secured Obligations, and NAI does hereby irrevocably consent to the
appointment of such receiver or receivers, waives any and all defenses to such appointment and
agrees not to oppose any application therefor by BNPPLC, but nothing herein is to be construed to
deprive BNPPLC of any other right, remedy or privilege it may now have under the law to have a
receiver appointed. Any such receiver or receivers shall have all of the usual powers and duties
of receivers in like or similar cases and shall continue as such and exercise all such powers until
the date of confirmation of sale of the Security unless such receivership is sooner terminated.
Any money advanced by BNPPLC in connection with any such receivership shall be a demand obligation
owing by NAI to BNPPLC and shall bear interest from the date of making such advancement by BNPPLC
until paid at the Default Rate and shall be a part of the Secured Obligations and shall be secured
by this lien and by any other instrument securing the Secured Obligations.



PROVISIONS CONCERNING THE TRUSTEE




     Trustee accepts this trust when a Short Form Lease or memorandum referencing the provisions of
this Exhibit, duly executed and acknowledged, is made a public record as provided by law. The
trust hereby created shall be irrevocable by NAI.



     In the event the Trustee takes any action pursuant to the provisions of this Exhibit, NAI
shall pay to Trustee reasonable compensation for services rendered in the administration of this
trust, which shall be in addition to any required reimbursement for Attorney’s Fees or other
expenses.



     BNPPLC may appoint a substitute to replace and act as the Trustee hereunder in any manner now
or hereafter provided by law, or in lieu thereof, BNPPLC may from time to time, by an instrument in
writing, appoint substitutes as successor or successors to any Trustee named herein or acting
hereunder, which instrument, executed and acknowledged by BNPPLC and recorded in the Office of the
Recorder of the county in which the Property is located, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall thereupon and without conveyance from
the predecessor Trustee, succeed to all its title, estate,


Exhibit B
to Lease Agreement — Page 7





 









 








rights, powers and duties. Such
instrument must contain the name of the original NAI, Trustee and BNPPLC hereunder, the instrument
number of this Deed of Trust, and the name and address of the successor Trustee. In the event the
Secured Obligations are at any time owned by more than one person or entity, the holder or holders
of not less than a majority in the amount of such Secured Obligations shall have the right and
authority to make the appointment of a successor or substitute trustee provided for in the
preceding sentences. Such appointment and designation by BNPPLC or by the holder or holders of not
less than a majority of the Secured Obligations shall be full evidence of the right and authority
to make the same and of all facts therein recited. If BNPPLC is a corporation and such appointment
is executed in its behalf by an officer of such corporation, such appointment shall be conclusively
presumed to be executed with authority and shall be valid and sufficient without proof of any
action by the board of directors or any superior officer of the corporation. Upon the making of
any such appointment and designation, all of the estate and title of the Trustee in the Security
shall vest in the named successor or substitute trustee and he shall thereupon succeed to and shall
hold, possess and execute all the rights, powers, privileges, immunities and duties herein
conferred upon the Trustee; but nevertheless, upon the written request of BNPPLC or of the
successor or substitute Trustee, the Trustee ceasing to act shall execute and deliver an instrument
transferring to such successor or substitute Trustee all of the estate and title in the Security of
the Trustee so ceasing to act, together with all the rights, powers, privileges, immunities and
duties herein conferred upon the Trustee, and shall duly assign, transfer and deliver any of the
properties and moneys held by said Trustee hereunder to said successor or substitute Trustee. All
references herein to the Trustee shall be deemed to refer to the Trustee (including any successor
or substitute appointed and designated as herein provided) from time to time acting hereunder. NAI
hereby ratifies and confirms any and all acts which the herein named Trustee or his successor or
successors, substitute or substitutes, in this trust, shall do lawfully by virtue hereof.



     THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT OR ACT DONE BY THE TRUSTEE IN GOOD
FAITH, OR BE OTHERWISE RESPONSIBLE OR ACCOUNTABLE UNDER ANY CIRCUMSTANCES WHATSOEVER (INCLUDING THE
TRUSTEE’S NEGLIGENCE), EXCEPT FOR THE TRUSTEE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. The
Trustee shall have the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith
to be genuine. All moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by law), and the Trustee shall be under
no liability for interest on any moneys received by him hereunder. NAI WILL REIMBURSE THE TRUSTEE
FOR, AND INDEMNIFY AND SAVE HIM HARMLESS AGAINST, ANY AND ALL LIABILITY AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS’ FEES) WHICH MAY BE INCURRED BY HIM IN THE PERFORMANCE OF HER DUTIES HEREUNDER
(INCLUDING ANY LIABILITY AND EXPENSES RESULTING FROM THE TRUSTEE’S OWN NEGLIGENCE). The foregoing
indemnity shall not terminate upon release, foreclosure or


Exhibit B
to Lease Agreement — Page 8





 









 








other termination of this instrument.



MISCELLANEOUS




     BNPPLC may resort to any security given by this instrument or to any other security now
existing or hereafter given to secure the payment of the Secured Obligations, in whole or in part,
and in such portions and in such order as may seem best to BNPPLC in its sole and uncontrolled
discretion, and any such action shall not in anywise be considered as a waiver of any of the
rights, benefits, liens or security interests evidenced by this instrument.



     To the full extent NAI may do so, NAI agrees that NAI will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force pertaining to the
rights and remedies of sureties or redemption, and NAI, for NAI and NAI’s successors and assigns,
and for any and all persons ever claiming any interest in the Security, to the extent permitted by
law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of intention to mature or declare due the whole of the Secured Obligations,
notice of election to mature or declare due the whole of the Secured Obligations and all rights to
a marshaling of the assets of NAI, including the Security, or to a sale in inverse order of
alienation in the event of foreclosure of the liens and security interests hereby created. NAI
shall not have or assert any right under any statute or rule of law pertaining to the marshaling of
assets, sale in inverse order of alienation, the exemption of homestead, the administration of
estates of decedents or other matters whatever to defeat, reduce or affect the right of BNPPLC
under the terms of this instrument to a sale of the Security for the collection of the Secured
Obligations without any prior or different resort for collection, or the right of BNPPLC under the
terms of this instrument to the payment of the Secured Obligations out of the proceeds of sale of
the Security in preference to every other claimant whatever. If any law referred to in this
section and now in force, of which NAI or NAI’s successors and assigns and such other persons
claiming any interest in the Security might take advantage despite this provision, shall hereafter
be repealed or cease to be in force, such law shall not thereafter be deemed to preclude the
application of this provision.



     In the event there is a foreclosure sale hereunder and at the time of such sale NAI or NAI’s
successors or assigns or any other persons claiming any interest in the Security by, through or
under NAI are occupying or using the Security, or any part thereof, each and all shall immediately
become the tenant of the purchaser at such sale. Such tenancy shall be a tenancy from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per day based upon the
value of the property occupied, such rental to be due daily to the purchaser. In the event the
tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled
to institute and maintain an action to obtain possession in any court of competent jurisdiction in
California.



     NAI agrees to pay BNPPLC for each statement of BNPPLC (as beneficiary) regarding the


Exhibit B
to Lease Agreement — Page 9





 









 








obligations secured hereby the maximum fee allowed by law or, if there is no maximum fee, such
reasonable fee as is then charged by BNPPLC for rendering such statement.



     Notwithstanding any contrary provisions regarding the giving of notices in the Common
Definitions or Provisions Agreement or other Operative Documents, any service of a notice required
by California Civil Code §2924 shall be considered complete when the requirements of that statute
are met.



     All rights of action under this Exhibit be enforced by BNPPLC or Trustee without the
possession of any instruments secured hereby and without the production thereof or of this Lease or
other Operative Documents at any trial or other proceeding relative thereto.


Exhibit B
to Lease Agreement — Page 10





 










 










COMMON DEFINITIONS

AND PROVISIONS AGREEMENT



between

BNP PARIBAS LEASING CORPORATION



and



NETWORK APPLIANCE, INC.



Dated as of December 15, 2005






 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I — LIST OF DEFINED TERMS

	 	 	1	 
	97-10/Event

	 	 	1	 
	97-10/Maximum Permitted Prepayment

	 	 	1	 
	97-10/Prepayment

	 	 	1	 
	97-10/Project Costs

	 	 	1	 
	97-10/Pronouncement

	 	 	1	 
	ABR

	 	 	2	 
	ABR Period Election

	 	 	2	 
	Active Negligence

	 	 	2	 
	Additional Rent

	 	 	3	 
	Adjusted EBITDA

	 	 	3	 
	Administrative Fees

	 	 	3	 
	Advance Date

	 	 	3	 
	Affiliate

	 	 	3	 
	After Tax Basis

	 	 	3	 
	Applicable Laws

	 	 	3	 
	Applicable Purchaser

	 	 	3	 
	Arrangement Fee

	 	 	3	 
	Attorneys’ Fees

	 	 	3	 
	Balance of Unpaid Construction Period Losses

	 	 	4	 
	Banking Rules Change

	 	 	4	 
	Base Rent

	 	 	4	 
	Base Rent Commencement Date

	 	 	4	 
	Base Rent Date

	 	 	4	 
	Base Rent Period

	 	 	5	 
	BNPPLC

	 	 	6	 
	BNPPLC’s Parent

	 	 	6	 
	Breakage Costs

	 	 	6	 
	Break Even Price

	 	 	6	 
	Business Day

	 	 	6	 
	Capital Adequacy Charges

	 	 	7	 
	Carrying Costs

	 	 	7	 
	Closing Certificate

	 	 	7	 
	Closing Letter

	 	 	7	 
	Code

	 	 	7	 
	Commitment Fees

	 	 	7	 
	Common Definitions and Provisions Agreement

	 	 	7	 
	Completion Date

	 	 	7	 
	Completion Notice

	 	 	7	 
	Constituent Documents

	 	 	7	 






 









 






TABLE OF CONTENTS

(Continued)




	 	 	 	 	 
	 	 	Page
	Construction Advances

	 	 	7	 
	Construction Advance Request

	 	 	8	 
	Construction Allowance

	 	 	8	 
	Construction Management Agreement

	 	 	8	 
	Construction Period

	 	 	8	 
	Construction Project

	 	 	8	 
	Covered Construction Period Losses

	 	 	8	 
	Default

	 	 	8	 
	Default Rate

	 	 	8	 
	Defective Work

	 	 	8	 
	Designated Sale Date

	 	 	9	 
	Effective Date

	 	 	9	 
	Effective Rate

	 	 	9	 
	Eligible Financial Institution

	 	 	10	 
	Environmental Cutoff Date

	 	 	11	 
	Environmental Laws

	 	 	11	 
	Environmental Losses

	 	 	11	 
	Environmental Report

	 	 	11	 
	ERISA

	 	 	12	 
	ERISA Affiliate

	 	 	12	 
	ERISA Termination Event

	 	 	12	 
	Escrowed Proceeds

	 	 	12	 
	Established Misconduct

	 	 	13	 
	Eurocurrency Liabilities

	 	 	14	 
	Eurodollar Rate Reserve Percentage

	 	 	14	 
	Event of Default

	 	 	14	 
	Excluded Taxes

	 	 	16	 
	Fed Funds Rate

	 	 	17	 
	Fixed Rate

	 	 	18	 
	Fixed Rate Lock

	 	 	18	 
	Fixed Rate Lock Date

	 	 	18	 
	Fixed Rate Lock Termination

	 	 	18	 
	Fixed Rate Lock Termination Date

	 	 	18	 
	Fixed Rate Lock Notice

	 	 	18	 
	Fixed Rate Loss

	 	 	18	 
	Fixed Rate Settlement Amount

	 	 	18	 
	Fixed Rate Swap

	 	 	19	 
	Floating Rate Payor

	 	 	19	 





(ii)




 









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 
	 	 	Page
	FOCB Notice

	 	 	19	 
	Force Majeure Event

	 	 	19	 
	Fully Subordinated or Removable

	 	 	19	 
	Funded Construction Allowance

	 	 	20	 
	Funding Advances

	 	 	20	 
	Future Work

	 	 	20	 
	GAAP

	 	 	20	 
	Ground Lease

	 	 	20	 
	Hazardous Substance

	 	 	20	 
	Hazardous Substance Activity

	 	 	20	 
	Improvements

	 	 	21	 
	Increased Commitment

	 	 	21	 
	Increased Funding Commitment

	 	 	21	 
	Increased Time Commitment

	 	 	21	 
	Indebtedness

	 	 	21	 
	Initial Advance

	 	 	23	 
	Interested Party

	 	 	23	 
	Interest Rate Swap

	 	 	23	 
	Land

	 	 	23	 
	Lease

	 	 	24	 
	Lease Balance

	 	 	24	 
	Lease Termination Damages

	 	 	24	 
	Liabilities

	 	 	24	 
	LIBOR

	 	 	24	 
	LIBOR Period Election

	 	 	25	 
	Lien

	 	 	26	 
	Liens Removable by BNPPLC

	 	 	26	 
	Local Impositions

	 	 	27	 
	Losses

	 	 	27	 
	Market Quotation

	 	 	27	 
	Maximum Construction Allowance

	 	 	28	 
	Maximum Remarketing Obligation

	 	 	28	 
	Minimum Insurance Requirements

	 	 	28	 
	Multiemployer Plan

	 	 	28	 
	Notice of NAI’s Intent to Terminate

	 	 	28	 
	Notice of NAI’s Intent to Terminate Because of a Force Majeure Event

	 	 	 28	 
	Notice of Termination by NAI

	 	 	28	 
	Operative Documents

	 	 	28	 





(iii)




 









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 
	 	 	Page
	Outstanding Construction Allowance

	 	 	28	 
	Owner’s Election to Continue Construction

	 	 	28	 
	NAI

	 	 	28	 
	NAI’s Estimate of Force Majeure Excess Costs

	 	 	28	 
	NAI’s Estimate of Force Majeure Delays

	 	 	29	 
	NAI’s Initial Remarketing Right

	 	 	29	 
	Participant

	 	 	29	 
	Participation Agreement

	 	 	29	 
	Permitted Encumbrances

	 	 	29	 
	Permitted Hazardous Substance Use

	 	 	30	 
	Permitted Hazardous Substances

	 	 	30	 
	Permitted Transfer

	 	 	30	 
	Person

	 	 	31	 
	Personal Property

	 	 	31	 
	Plan

	 	 	31	 
	Pre-lease Casualty

	 	 	31	 
	Pre-lease Force Majeure Delays

	 	 	31	 
	Pre-lease Force Majeure Event

	 	 	31	 
	Pre-lease Force Majeure Event Notice

	 	 	31	 
	Pre-lease Force Majeure Excess Costs

	 	 	32	 
	Pre-lease Force Majeure Losses

	 	 	32	 
	Prime Rate

	 	 	32	 
	Prior Work

	 	 	32	 
	Projected Cost Overruns

	 	 	32	 
	Property

	 	 	32	 
	Purchase Agreement

	 	 	32	 
	Purchase Option

	 	 	32	 
	Qualified Affiliate

	 	 	32	 
	Qualified Income Payments

	 	 	32	 
	Qualified Prepayments

	 	 	33	 
	Real Property

	 	 	34	 
	Reimbursable Construction-Period Costs

	 	 	34	 
	Remedial Work

	 	 	34	 
	Rent

	 	 	34	 
	Responsible Financial Officer

	 	 	34	 
	Rolling Four Quarters Period

	 	 	34	 
	Scope Change

	 	 	34	 
	Spread

	 	 	34	 





(iv)




 









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 
	 	 	Page
	Subsidiary

	 	 	35	 
	Supplemental Payment

	 	 	35	 
	Supplemental Payment Obligation

	 	 	35	 
	Tangible Personal Property

	 	 	35	 
	Target Completion Date

	 	 	35	 
	Term

	 	 	35	 
	Term Sheet

	 	 	35	 
	Termination of NAI’s Work

	 	 	36	 
	Third Party Contract

	 	 	36	 
	Third Party Contract/Termination Fees

	 	 	36	 
	Total Debt

	 	 	36	 
	Transaction Expenses

	 	 	36	 
	Unfunded Benefit Liabilities

	 	 	36	 
	Work

	 	 	36	 
	Work/Suspension Event

	 	 	36	 
	Work/Suspension Notice

	 	 	36	 
	Work/Suspension Period

	 	 	36	 
	 
	 	 	 	 
	ARTICLE II — SHARED PROVISIONS

	 	 	37	 
	1.       Notices

	 	 	37	 
	2.       Severability

	 	 	38	 
	3.       No Merger

	 	 	39	 
	4.       No Implied Waiver

	 	 	39	 
	5.       Entire and Only Agreements

	 	 	39	 
	6.       Binding Effect

	 	 	39	 
	7.       Time is of the Essence

	 	 	39	 
	8.       Governing Law

	 	 	39	 
	9.       Paragraph Headings

	 	 	40	 
	10.     Negotiated Documents

	 	 	40	 
	11.     Terms Not Expressly Defined in an Operative Document

	 	 	40	 
	12.     Other Terms and References

	 	 	40	 
	13.     Execution in Counterparts

	 	 	41	 
	14.     Not a Partnership, Etc

	 	 	41	 
	15.     No Fiduciary Relationship Intended

	 	 	41	 





(v)





 









 






TABLE OF CONTENTS

(Continued)









	 	 	 
	 	 	Page
	 
	Annexes
	 
	Annex 1

	ABR Period Election Form
	 
	 	 
	Annex 2

	Fixed Rate Lock Notice Form
	 
	 	 
	Annex 3

	LIBOR Period Election Form
	 
	 	 
	Annex 4

	Minimum Insurance Requirements
	 
	 	 
	Annex 5

	Participation Agreement Form








(vi)









 








COMMON DEFINITIONS

AND PROVISIONS AGREEMENT




     This COMMON DEFINITIONS AND PROVISIONS AGREEMENT (this “Agreement”), dated as of December
15, 2005 (the “Effective Date”), is made by and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”),
a Delaware corporation, and NETWORK APPLIANCE, INC. (“NAI”), a Delaware corporation.



RECITALS




     Contemporaneously with the execution of this Common Definitions and Provisions Agreement, NAI
and BNPPLC are executing the Closing Certificate (as defined below), the Ground Lease (as defined
below), the Lease (as defined below), the Construction Management Agreement (as defined below) and
the Purchase Agreement (as defined below), all of which concern NAI or the Property (as defined
below). Each of the Closing Certificate, the Ground Lease, the Lease, the Construction Management
Agreement and the Purchase Agreement (together with this Common Definitions and Provisions
Agreement, the “Operative Documents”) are intended to create separate and independent obligations
upon the parties thereto. However, NAI and BNPPLC intend that all of the Operative Documents share
certain consistent definitions and other miscellaneous provisions. To that end, the parties are
executing this Common Definitions and Provisions Agreement and incorporating it by reference into
each of the other Operative Documents.



AGREEMENTS




ARTICLE I — LIST OF DEFINED TERMS




     Unless a clear contrary intention appears, the following terms will have the respective
indicated meanings as used herein and in the other Operative Documents:



     “97-10/Event” has the meaning indicated in the Construction Management Agreement.



     “97-10/Maximum Permitted Prepayment” has the meaning indicated in the Construction Management
Agreement .



     “97-10/Prepayment” has the meaning indicated in the Construction Management Agreement.



     “97-10/Project Costs”has the meaning indicated in the Construction Management Agreement.



     “97-10/Pronouncement” has the meaning indicated in the Construction Management
Agreement.



 









 





     “ABR” means, for any day, a fluctuating rate of interest per annum (rounded upwards, if
necessary, to the next 1/100th of 1%) equal to the higher of (a) the Prime Rate in effect on such
day and (b) the Fed Funds Rate in effect one day prior to such day plus 1/4 of 1% per annum. For
any period (including any Base Rent Period), “ABR” means the average of the ABR for each day during
such period.



     Notwithstanding the foregoing, for purposes of computing the Effective Rate for the first
short Construction Period that ends on the first day of December, 2005, ABR will equal the average
of the daily “cost of funds” rates that BNPPLC’s Parent charges internally to its Houston Branch
for the overnight use of funds on each day of such period.



     “ABR Period Election” means an election to have the Effective Rate for any Construction Period
or Base Rent Period calculated by reference to the ABR, rather than by reference to LIBOR or a
Fixed Rate. The first Construction Period will be subject to an ABR Period Election, and NAI may
(subject to the limitations and qualifications set forth in this definition) make any subsequent
Construction Period or Base Rent Period subject to an ABR Period Election by a notice given to
BNPPLC in the form attached as Annex 1 at least five Business Days prior to the
commencement of such Construction Period or Base Rent Period. After an ABR Period Election becomes
effective, it will remain in effect for all subsequent Construction Periods or Base Rent Periods
until the Fixed Rate Lock Date for any Fixed Rate Lock or a different election is made in
accordance with the provisions of this definition and the definitions of LIBOR Period Election. In
no event will changes in any ABR Period Election or LIBOR Period Election become effective except
upon the commencement of a new Construction Period or Base Rent Period. (For purposes of the
Operative Documents, a Base Rent Period Election for any Construction Period or Base Rent Period
will also be considered in effect on the Advance Date, Base Rent Commencement Date or Base Rent
Date upon which such period begins.)



     “Active Negligence” of any Person means, and is limited to, the negligent conduct on the
Property (and not mere omissions) by such Person or by others acting and authorized to act on such
Person’s behalf in a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Construction Management Agreement or the
Lease to carry) insurance. “Active Negligence” will not include (1) any negligent failure of
BNPPLC to act when the duty to act would not have been imposed but for BNPPLC’s status as owner of
any interest in the Land, the Improvements or any other Property or as a party to the transactions
described in the Lease or the other Operative Documents, (2) any negligent failure of any other
Interested Party to act when the duty to act would not have been imposed but for such party’s
contractual or other relationship to BNPPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Lease or other Operative Documents, or


Common Definitions and Provisions Agreement — Page 2

 









 








(3) the exercise in a lawful manner by BNPPLC (or any party lawfully claiming through or under
BNPPLC) of any right or remedy provided in or under the Lease or the other Operative Documents.




     “Additional Rent” has the meaning indicated in subparagraph 3(F) of the Lease.



     “Adjusted EBITDA” has the meaning indicated in subparagraph 3(A) of the Closing
Certificate.



     “Administrative Fees” means the fees identified as such in subparagraph 3(E) of the
Lease and subparagraph 3(A) of the Construction Management Agreement.



     “Advance Date” means, regardless of whether any Construction Advance is actually made on such
date, the first Business Day of every calendar month, beginning with the first Business Day in
December, 2005 and continuing regularly thereafter to and including the Base Rent Commencement
Date, which will be the last Advance Date.



     “Affiliate” of any Person means any other Person controlling, controlled by or under common
control with such Person. For purposes of this definition, the term “control” when used with
respect to any Person means the power to direct the management of policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract or otherwise, and
the terms “controlling” and “controlled” have meanings correlative to the foregoing.



     “After Tax Basis” has the meaning indicated in subparagraph 5(C)(1) of the Lease.



     “Applicable Laws” means any or all of the following, to the extent applicable to BNPPLC, NAI,
the Property or the Operative Documents, after giving effect to the contractual choice of law
provisions in the Operative Documents: restrictive covenants; zoning ordinances and building codes;
flood disaster laws; health, safety and environmental laws and
regulations; the Americans with Disabilities
Act and other laws pertaining to disabled persons; and other laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions.



     “Applicable Purchaser” means any third party designated by NAI to purchase BNPPLC’s interest
in the Property and in any Escrowed Proceeds as provided in the Purchase Agreement.



     “Arrangement Fee” has the meaning indicated in the Construction Management Agreement.



     “Attorneys’ Fees” means the expenses and reasonable fees of counsel to the parties
incurring the same, including costs or expenses of in-house counsel (whether or not accounted


Common Definitions and Provisions Agreement — Page 3

 









 








for as general overhead or administrative expenses) and printing, photostating, duplicating and other
expenses, air freight charges, and fees billed for law clerks, paralegals, librarians and others
not admitted to the bar but performing services under the supervision of an attorney. Such terms
will also include all such expenses and reasonable fees incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any manner of proceeding is brought
with respect to the matter for which such fees and expenses were incurred.




     “Balance of Unpaid Construction Period Losses” has the meaning indicated in the Purchase
Agreement.



     “Banking Rules Change” means either: (1) the introduction of or any change after the Effective
Date (other than any change by way of imposition or increase of reserve requirements included in
the Eurodollar Rate Reserve Percentage) in any law or regulation applicable to BNPPLC, BNPPLC’s
Parent or any Participant, or in the generally accepted interpretation by the institutional lending
community of any such law or regulation, or in the interpretation of any such law or regulation
asserted by any regulator, court or other governmental authority (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate Reserve Percentage)
or (2) the compliance by BNPPLC, BNPPLC’s Parent or any Participant with any new guideline or new
request issued after the Effective Date from any central bank or other governmental authority
(whether or not having the force of law).



     “Base Rent” means the rent payable by NAI pursuant to subparagraph 3(A) of the Lease.



     “Base Rent Commencement Date” means the first day that is both the first Business Day of a
calendar month and more than fifteen days after the Completion Date.



     “Base Rent Date” means a date upon which Base Rent must be paid under the Lease, all of which
dates will be the first Business Day of a calendar month. The first Base Rent Date will be
determined as follows:




     a) If an ABR Period Election or a LIBOR Period Election of one month is in effect on
the Base Rent Commencement Date, then the first Business Day of the first calendar
month following the Base Rent Commencement Date will be the first Base Rent Date.




     b) If a LIBOR Period Election of three months or six months is in effect on the Base
Rent Commencement Date, then the first Business Day of the third calendar month
following the Base Rent Commencement Date will be the first Base Rent Date.


Each successive Base Rent Date after the first Base Rent Date will be the first Business Day of the
first or third calendar month following the calendar month which includes the preceding Base Rent
Date, determined as follows:



Common Definitions and Provisions Agreement — Page 4




 









 









     (1) If an ABR Period Election or a LIBOR Period Election of one month is in
effect on a Base Rent Date, or if a Fixed Rate Lock commences or continues on a Base Rent
Date, then the first Business Day of the first calendar month following such Base
Rent Date will be the next following Base Rent Date.




     (2) If a LIBOR Period Election of three months or longer is in effect on a Base Rent
Date, then the first Business Day of the third calendar month following such Base
Rent Date will be the next following Base Rent Date.


Thus, for example, if the Base Rent Commencement Date falls on the first Business Day of September,
2006 and a LIBOR Period Election of three months commences on the Base Rent Commencement Date, then
the first Base Rent Date will be the first Business Day of December, 2006.




     “Base Rent Period” means a period for which Base Rent must be paid under the Lease, each of
which periods will correspond to the ABR Period Election or LIBOR Period Election for the period
(except when a Fixed Rate Lock continues in effect). The first Base Rent Period will begin on and
include the Base Rent Commencement Date, and each successive Base Rent Period will begin on and
include the Base Rent Date upon which the preceding Base Rent Period ends. Each Base Rent Period,
including the first Base Rent Period, will end on but not include the first or second Base Rent
Date after the Base Rent Date upon which such period began, determined as follows:




     (1) If an ABR Period Election or a LIBOR Period Election of one month or three months
is in effect for a Base Rent Period, or if a Fixed Rate Lock commences or continues on the
first day of the Base Rent Period, then such Base Rent Period will end on the first
Base Rent Date after the Base Rent Date upon which such period began.




     (2) If a LIBOR Period Election of six months is in effect for a Base Rent
Period, then such Base Rent Period will end on the second Base Rent Date after
the Base Rent Date upon which such period began.


The determination of Base Rent Periods can be illustrated by two examples:




     1) If NAI makes a LIBOR Period Election of three months for a hypothetical Base Rent
Period beginning on the first Business Day in January, 2007, then such Base Rent Period will
end on but not include the first Base Rent Date after it begins; that is, such Base Rent
Period will end on the first Business Day in April, 2007, the third calendar month after
January, 2007.



     2) If, however, NAI makes a LIBOR Period Election of six months for the
hypothetical Base Rent Period beginning the first Business Day in January, 2007, then


Common Definitions and Provisions Agreement — Page 5




 









 









such Base Rent Period will end on but not include the second Base Rent Date after it begins; that
is, the first Business Day in July, 2007.



     “BNPPLC” means BNPPLC Leasing Corporation, a Delaware corporation.



     “BNPPLC’s Parent” means BNP Paribas, a bank organized and existing under the laws of France,
and any successors of such bank.



     “Breakage Costs” means any and all costs, losses or expenses incurred or sustained by BNPPLC’s
Parent (as a Participant or otherwise) or any Participant, for which BNPPLC’s Parent or the
Participant requests reimbursement from BNPPLC, because of:




     (1) the resulting liquidation or redeployment of deposits or other funds that were used
to make or maintain Funding Advances upon application of a Qualified Prepayment or upon any
sale of the Property pursuant to the Purchase Agreement, if such application or sale occurs
on any day other than the last day of a Construction Period or Base Rent Period; or




     (2) the resulting liquidation or redeployment of deposits or other funds that were
reserved to provide a Construction Advance requested by NAI, if and when the Construction
Advance is not made as anticipated, either because NAI declined to accept the Construction
Advance for any reason or because NAI failed to satisfy any of the conditions to such
Construction Advance specified in the Construction Management Agreement; or




     (3) the resulting liquidation or redeployment of deposits or other funds that were used
to make or maintain Funding Advances upon the acceleration of the end of any Construction
Period or Base Rent Period because of an acceleration of the Designated Sale date as
described in clauses (2) or (3) of the definition thereof.


Breakage Costs will include, for example, losses on Funding Advances maintained by BNPPLC’s Parent
or any Participant which are attributable to any decline in LIBOR as of the effective date of any
application described in the clause (1) preceding, as compared to the LIBOR used to determine the
Effective Rate then in effect. Each determination of Breakage Costs by BNPPLC’s Parent or by any
Participant, as applicable, will be conclusive and binding upon NAI in the absence of clear and
demonstrable error.




     “Break Even Price” has the meaning indicated in the Purchase Agreement.



     “Business Day” means any day that is (1) not a Saturday, Sunday or day on which
commercial banks are generally closed or required to be closed in New York City, New York, and (2)
a day on which dealings in deposits of dollars are transacted in the London interbank


Common Definitions and Provisions Agreement — Page 6




 









 







market;provided, that if such dealings are suspended indefinitely for any reason, “Business Day” will mean
any day described in clause (1).




     “Capital Adequacy Charges” means any additional amounts BNPPLC’s Parent or any Participant
requests BNPPLC to pay as compensation for an increase in required capital as provided in
subparagraph 5(B)(2) of the Lease.



     “Carrying Costs” has the meaning indicated in the Construction Management Agreement.



     “Closing Certificate” means the Closing Certificate and Agreement dated as of the Effective
Date executed by NAI and BNPPLC, as such Closing Certificate and Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in accordance with its
terms.



     “Closing Letter” means the letter agreement dated as of the Effective Date between BNPPLC and
NAI confirming the amount of the Initial Advance and the Transactions Expenses paid from the
Initial Advance.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Commitment Fees” has the meaning indicated in the Construction Management Agreement.



     “Common Definitions and Provisions Agreement” means this Agreement, which is incorporated by
reference into each of the other Operative Documents, as this Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in accordance with its
terms.



     “Completion Date” has the meaning indicated in the Construction Management Agreement.



     “Completion Notice” has the meaning indicated in the Construction Management Agreement.



     “Constituent Documents” of any entity means the organizational documents pursuant to which
such entity was created and is governed, such as the articles of incorporation and bylaws of a
corporation, the articles of organization and regulations of a limited liability company or the
partnership agreement of a partnership.



     “Construction Advances” has the meaning indicated in the Construction Management Agreement.


Common Definitions and Provisions Agreement — Page 7




 









 








     “Construction Advance Request” has the meaning indicated in the Construction Management
Agreement.



     “Construction Allowance” has the meaning indicated in the Construction Management Agreement.



     “Construction Management Agreement” means the Construction Management Agreement dated as of
the Effective Date between BNPPLC and NAI, as such Construction Management Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to time in accordance
with its terms.



     “Construction Period” means each successive period of approximately one month, with the first
Construction Period beginning on and including the Effective Date and ending on but not including
the first Advance Date. Each successive Construction Period after the first Construction Period
will begin on and include the day on which the preceding Construction Period ends and will end on
but not include the next following Advance Date, until the last Construction Period, which will end
on but not include the earlier of the Base Rent Commencement Date or any Designated Sale Date upon
which NAI or any Applicable Purchaser purchases BNPPLC’s interest in the Property pursuant to the
Purchase Agreement.



     “Construction Project” has the meaning indicated in the Construction Management Agreement.



     “Covered Construction Period Losses” has the meaning indicated in the Construction Management
Agreement.



     “Default” means any event or circumstance which constitutes, or which would with the
passage of time or the giving of notice or both (if not cured within any applicable cure
period) constitute, an Event of Default.



     “Default Rate” means, a floating per annum rate equal to two percent (2%) above ABR, except
that for purposes of computing interest accruing for any period that commences thirty or more days
after the Designated Sale Date on any 97-10/Prepayment, Base Rent or Supplemental Payment that has
become due, but remains to be paid to BNPPLC by NAI, the Default Rate will mean a floating per
annum rate equal to five percent (5%) above ABR. Notwithstanding the foregoing, in no event will
the “Default Rate” at any time exceed the maximum interest rate permitted by Applicable Laws.



     “Defective Work” has the meaning indicated in the Construction Management Agreement.


Common Definitions and Provisions Agreement — Page 8




 









 








     “Designated Sale Date” means the earlier of:




     (1) the first Business Day of July, 2012; or




     (2) any Business Day designated as the “Designated Sale Date” for purposes of this
Agreement and the other Operative Documents in an irrevocable, unconditional notice given by
NAI to BNPPLC before any 97-10/Event has occurred; provided, that if the Business Day so
designated by NAI as the Designated Sale Date is not at least thirty days after the date of
such notice, the notice will be of no effect for purposes of this definition; and provided,
further, that to be effective, any such notice must include an irrevocable waiver by NAI of
any remaining right it may have under subparagraph 6(B) of the Purchase Agreement to
terminate the Supplemental Payment Obligation; or




     (3) any Business Day designated as the “Designated Sale Date” for purposes of this
Agreement and the other Operative Documents in a notice given by BNPPLC to NAI:




• after an Event of Default and after the Completion Date; or




• after a 97-10/Event or after BNPPLC’s receipt of a Pre-lease Force Majeure Notice from NAI
or; or




• following any change in the zoning or other Applicable Laws after the Completion Date
affecting the permitted use or development of the Property that, in BNPPLC’s judgment,
materially reduces the value of the Property; or




• following any discovery of conditions or circumstances on or about the Property after the
Completion Date, such as the presence of an endangered species, which are
likely to substantially impede the use or development of the Property and thereby, in
BNPPLC’s judgment, materially reduce the value of the Property; or




     (4) any date upon which the Lease terminates pursuant to subparagraph 1(B) or
subparagraph 1(C) of the Lease.



     “Effective Date” means December 15, 2005.



     “Effective Rate” means, for each Construction Period and for each Base Rent Period, a per
annum rate determined as follows:




     (1) In the case of any Construction Period or Base Rent Period subject to a
LIBOR Period Election, the Effective Rate will equal the rate per annum determined by
dividing (A) LIBOR for such Construction Period or Base Rent Period, by (B) one


Common Definitions and Provisions Agreement — Page 9




 









 









hundred percent (100%) minus the Eurodollar Rate Reserve Percentage for such Construction Period or
Base Rent Period.




     (2) In the case of any Construction Period or Base Rent Period that is not subject to a
LIBOR Period Election, the Effective Rate will equal the ABR for such Construction Period or
Base Rent Period.




     (3) Notwithstanding the foregoing, for any Base Rent Period that begins on or after the
Fixed Rate Lock Date applicable to a Fixed Rate Lock and that ends before or on the date
such Fixed Rate Lock is terminated as provided in subparagraph 3(C) of the Lease,
the Effective Rate will equal the Fixed Rate.


So long as any LIBOR Period Election remains in effect, as LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base Rent Period to Base
Rent Period, the Effective Rate will be automatically increased or decreased, as the case may be,
without prior notice to NAI. Also, during any period when no LIBOR Period Election or Fixed Rate
Lock is in effect, as the ABR changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, the Effective Rate will be automatically increased or decreased,
as the case may be, without prior notice to NAI.



If for any reason BNPPLC determines that it is impossible or unreasonably difficult to determine
the Effective Rate with respect to a given Construction Period or Base Rent Period in accordance
with the foregoing, then the “Effective Rate” for that Construction Period or Base Rent Period will
equal any published index or per annum interest rate determined in good faith by BNPPLC to be
comparable to LIBOR at the beginning of the first day of that period. A comparable interest rate
might be, for example, the then existing yield on short term United States Treasury obligations (as
compiled by and published in the then most recently published United States Federal Reserve
Statistical Release H.15(519) or its successor publication), plus or minus a fixed
adjustment based on BNPPLC’s comparison of past eurodollar market rates to past yields on such
Treasury obligations.



“Eligible Financial Institution” means (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and having total assets in
excess of $5,000,000,000; (b) a commercial bank organized under the laws of any other country which
is a member of the Organization for Economic Cooperation and Development (“OECD”) or has concluded
special lending arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country, and having total assets in
excess of $5,000,000,000; provided, that such bank is acting through a branch or agency located in
the United States; (c) the central bank of any country which is a member of the OECD; and (d) a
finance company, insurance company or other financial institution (whether a corporation,
partnership or other entity, but excluding any savings and loan association) which is engaged in
making, purchasing or otherwise investing in commercial loans



Common Definitions and Provisions Agreement — Page 10




 









 







in the ordinary course of its
business, and having total assets in excess of $5,000,000,000; provided, however, that in no event
shall any bank or other Person qualify as an Eligible Financial Institution at any time when it has
outstanding obligations with a credit rating less than investment grade from Standard & Poor’s, a
division of the McGraw-Hill Companies, or Moody’s Investors Service, Inc. or another nationally
recognized rating service.




     “Environmental Cutoff Date” means the later of the dates upon which (i) the Lease terminates
or NAI’s interests in the Property are sold at foreclosure as provided in Exhibit B
attached to the Lease, or (ii) NAI surrenders possession and control of the Property and ceases to
have interest in the Land or Improvements or rights with respect thereto under any of the Operative
Documents.



     “Environmental Laws” means any and all existing and future Applicable Laws pertaining to
safety, health or the environment, or to Hazardous Substances or Hazardous Substance Activities,
including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, and the Resource Conservation
and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste
Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984.



     “Environmental Losses” means Losses suffered or incurred by BNPPLC or any other Interested
Party, directly or indirectly, relating to or arising out of, based on or as a result of any of the
following: (i) any Hazardous Substance Activity that occurs or is alleged to have occurred on or
prior to the Environmental Cutoff Date; (ii) any violation of any applicable Environmental Laws
relating to the Land or the Property or to the ownership, use, occupancy or operation thereof that
occurs or is alleged to have occurred in whole or in part on or prior to the Environmental Cutoff
Date; (iii) any investigation, inquiry, order, hearing, action, or other proceeding by or before
any governmental or quasi-governmental agency or authority in
connection with any Hazardous Substance Activity that occurs or is alleged to have occurred in
whole or in part on or prior to the Environmental Cutoff Date; or (iv) any claim, demand, cause of
action or investigation, or any action or other proceeding, whether meritorious or not, brought or
asserted against any Interested Party which directly or indirectly relates to, arises from, is
based on, or results from any of the matters described in clauses (i), (ii), or (iii) of this
definition or any allegation of any such matters. For purposes of determining whether Losses
constitute “Environmental Losses,” as the term is used in the Lease, any actual or alleged
Hazardous Substance Activity or violation of Environmental Laws relating to the Land or the
Property will be presumed to have occurred prior to the Environmental Cutoff Date unless NAI
establishes by clear and convincing evidence to the contrary that the relevant Hazardous Substance
Activity or violation of Environmental Laws did not occur or commence prior to the Environmental
Cutoff Date.



     “Environmental Report” means, collectively, the following reports, which were


Common Definitions and Provisions Agreement — Page 11




 









 







provided
by NAI to BNPPLC prior to the Effective Date: (1) Phase I Environmental Site Assessment for
1330-1350 Geneva and 1345-1347 Crossman Avenue, Sunnyvale, California, dated November 1999 by Romig
Consulting Engineers, and (2).Phase I Environmental Site Assessment for 1260 Crossman Avenue
Property, Sunnyvale, California, dated September 1999 by Romig Consulting Engineers.




     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, together with all rules and regulations promulgated with respect thereto.



     “ERISA Affiliate” means any Person who for purposes of Title IV of ERISA is a member of NAI’s
controlled group, or under common control with NAI, within the meaning of Section 414 of the
Internal Revenue Code, and the regulations promulgated and rulings issued thereunder.



     “ERISA Termination Event” means (a) the occurrence with respect to any Plan of (1) a
reportable event described in Sections 4043(b)(5) or (6) of ERISA or (2) any other reportable event
described in Section 4043(b) of ERISA other than a reportable event not subject to the provision
for thirty-day notice to the Pension Benefit Guaranty Corporation pursuant to a waiver by such
corporation under Section 4043(a) of ERISA, or (b) the withdrawal of NAI or any ERISA Affiliate
from a Plan during a plan year in which it was a “substantial employer” as defined in Section
4001(a)(2) of ERISA, or (c) the filing of a notice of intent to terminate any Plan or the treatment
of any Plan amendment as a termination under Section 4041 of ERISA, or (d) the institution of
proceedings to terminate any Plan by the Pension Benefit Guaranty Corporation under Section 4042 of
ERISA, or (e) any other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Plan.



     “Escrowed Proceeds” means, subject to the exclusions specified in the next sentence,
any money that is received by BNPPLC from time to time during the Term (and any interest
earned thereon) from any party (1) under any property insurance policy as a result of damage to the
Property, (2) as compensation for any restriction imposed by any Governmental Authority upon the
use or development of the Property or for the condemnation of the Property or any portion thereof
(including any indirect condemnation by means of a taking of any of the Land or appurtenant
easements), (3) because of any judgment, decree or award for physical damage to the Property or (4)
as compensation under any title insurance policy or otherwise as a result of any title defect or
claimed title defect with respect to the Property; provided, however, in determining the amount of
“Escrowed Proceeds” there will be deducted all expenses and costs of every type, kind and nature
(including Attorneys’ Fees) incurred by BNPPLC to collect such proceeds. Notwithstanding the
foregoing, “Escrowed Proceeds” will not include (A) any payment to BNPPLC by a Participant or an
Affiliate of BNPPLC that is made to compensate BNPPLC for the Participant’s or Affiliate’s share of
any Losses BNPPLC may incur as a result of any of the events described in the preceding clauses (1)
through (4), (B) any money or proceeds that have


Common Definitions and Provisions Agreement — Page 12




 









 







been applied as a Qualified Prepayment or to pay
any Breakage Costs, Fixed Rate Settlement Amount or other costs incurred in connection with a
Qualified Prepayment, (C) any money or proceeds that, after no less than ten days notice to NAI,
BNPPLC returns or pays to a third party because of BNPPLC’s good faith belief that such return or
payment is required by law, (D) any money or proceeds paid by BNPPLC to NAI or offset against any
amount owed by NAI, or (E) any money or proceeds used by BNPPLC in accordance with the Lease for
repairs or the restoration of the Property or to obtain development rights or the release of
restrictions that will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph 10 of the Lease, transferred to a
purchaser under the Purchase Agreement as therein provided or applied as a Qualified Prepayment or
as otherwise described in the preceding sentence, BNPPLC will keep the same deposited in one or
more interest bearing accounts, and all interest earned on such account will be added to and made a
part of Escrowed Proceeds.




     “Established Misconduct” of a Person means, and is limited to:




     (1) if the Person is bound by the Operative Documents or the Participation Agreement,
conduct of such Person that constitutes a breach by it of the express provisions of the
Operative Documents or the Participation Agreement, as applicable, and that continues beyond
any period for cure provided therein, as determined in or as a necessary element of a final
judgment rendered against such Person by a court with jurisdiction to make such
determination, and




     (2) conduct of such Person or its Affiliates that has been determined to constitute
willful misconduct or Active Negligence in or as a necessary element of a final judgment
rendered against such Person by a court with jurisdiction to make such determination.


In no event, however, will Established Misconduct include actions of any Person undertaken in good
faith to mitigate Losses that such Person may suffer because of a breach or repudiation by NAI of
any of the Operative Documents. Further, negligence other than Active Negligence will not in any
event constitute Established Misconduct. For purposes of this definition, “conduct of a Person”
will consist of (1) the conduct of any employee of that Person to the extent (and only to the
extent) that the employee is acting within the scope of his employment by that Person, and (2) the
conduct of an agent of that Person (such as an independent environmental consultant engaged by that
Person), but only to the extent that the agent is (a) acting within the scope of the authority
granted to him by such Person, and (b) not acting with the consent or approval of or at the request
of or under the direction of NAI or NAI’s Affiliates, employees or agents. Established Misconduct
of one Interested Party will not be attributed to a second Interested Party unless the second
Interested Party is an Affiliate of the first, and it is understood that BNPPLC has not been
authorized, and nothing in the Participation Agreement will be construed as authorizing BNPPLC, to
act as an “agent” for any Participant as the term is used in this definition.



Common Definitions and Provisions Agreement — Page 13




 









 








     “Eurocurrency Liabilities” has the meaning indicated in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.



     “Eurodollar Rate Reserve Percentage” means, for purposes of determining the Effective Rate for
any Construction Period or Base Rent Period, the reserve percentage applicable two Business Days
before the first day of such period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve requirement) for
BNPPLC’s Parent with respect to liabilities or deposits consisting of or including Eurocurrency
Liabilities (or with respect to any other category or liabilities by reference to which LIBOR is
determined) having a term comparable to such period.



     “Event of Default” means any of the following:



     (A) NAI fails to pay when due any installment of Base Rent or Administrative Fees required by
the Lease, and such failure continues for three Business Days after NAI is notified in writing
thereof.



     (B) NAI fails to pay the full amount of any 97-10/Prepayment when due as provided in the
Construction Management Agreement or fails to pay the full amount of any Supplemental Payment as
provided in the Purchase Agreement on the Designated Sale Date.



     (C) NAI fails to pay when first due any amount required by the Operative Documents (other than
Base Rent or Administrative Fees required as provided in the Lease, any 97-10/Prepayment required
as provided in the Construction Management Agreement or any Supplemental Payment required as
provided in the Purchase Agreement) and such failure continues for ten Business Days after NAI is
notified thereof.



     (D) NAI fails to cause any representation or warranty of NAI contained in any of the Operative
Documents that was false or misleading in any material respect when made to be made true and not
misleading (other than as described in the other clauses of this definition), or NAI fails to
comply with any provision of the Operative Documents (other than as described in the other clauses
of this definition), and in either case does not cure such failure prior to the earlier of (A)
thirty days after notice thereof is given to NAI or (B) the date any writ or order is issued for
the levy or sale of any property owned by BNPPLC (including the Property) or any criminal
prosecution is instituted or overtly threatened against BNPPLC or any of its directors, officers or
employees because of such failure; provided, however, that so long as no such writ or order is
issued and no such criminal prosecution is instituted or overtly threatened, the period within
which such failure may be cured by NAI will be extended for a further period (not to exceed an
additional one hundred twenty days) as is necessary for the curing thereof with diligence, if (but
only if) (x) such failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI promptly commences to cure such failure and thereafter


Common Definitions and Provisions Agreement — Page 14




 









 







continuously prosecutes the curing thereof with reasonable diligence and (z) the extension of the
period for cure will not, in any event, cause the period for cure to extend to or beyond the
Designated Sale Date.




     (E) NAI abandons any material part of the Property.



     (F) NAI or any Subsidiary of NAI fails to pay any principal of or premium or interest on any
of its Indebtedness which is outstanding in a principal amount of at least $25,000,000 when the
same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure continues after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness; or any other event occurs
or condition exists under any agreement or instrument relating to any such Indebtedness and
continues after the applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate the maturity of such Indebtedness; or any
such Indebtedness is declared by the creditor to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case
prior to the stated maturity thereof.



     (G) NAI or any Subsidiary of NAI is generally not paying its debts as such debts become due,
or admits in writing its inability to pay its debts generally, or makes a general assignment for
the benefit of creditors; or any proceeding is instituted by or against NAI or any Subsidiary of
NAI seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such proceeding remains
undismissed or unstayed for a period of sixty consecutive days, or any of the actions sought
in such proceeding (including the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any substantial part of its
property) occurs; or NAI or any Subsidiary of NAI takes any corporate action to authorize any of
the actions set forth above in this clause.



     (H) Any order, judgment or decree is entered in any proceedings against NAI or any of NAI’s
Subsidiaries decreeing its dissolution and such order, judgment or decree remains unstayed and in
effect for more than sixty days.



     (I) Any order, judgment or decree is entered in any proceedings against NAI or any of
NAI’s Subsidiaries decreeing a divestiture of any of assets that represent a substantial part, or
the divestiture of the stock of any of NAI’s Subsidiaries whose assets represent a substantial
part, of the total assets of NAI and its Subsidiaries (determined on a consolidated basis in
accordance


Common Definitions and Provisions Agreement — Page 15




 









 







with GAAP) or which requires the divestiture of assets, or stock of any of NAI’s
Subsidiaries, which have contributed a substantial part of the net income of NAI and its
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for any of the three
fiscal years then most recently ended, and such order, judgment or decree remains unstayed and in
effect for more than sixty days.




     (J) A judgment or order for the payment of money in an amount (not covered by insurance) which
exceeds $25,000,000 is rendered against NAI or any of NAI’s Subsidiaries and either (i)
enforcement proceedings is commenced by any creditor upon such judgment, or (ii) within thirty days
after the entry thereof, such judgment or order is not discharged or execution thereof stayed
pending appeal, or within thirty days after the expiration of any such stay, such judgment is not
discharged.



     (K) Any ERISA Termination Event occurs that BNPPLC determines in good faith would constitute
grounds for a termination of any Plan or for the appointment by the appropriate United States
district court of a trustee to administer any Plan and such ERISA Termination Event is continuing
thirty days after notice to such effect is given to NAI by BNPPLC, or any Plan is terminated, or a
trustee is appointed by a United States district court to administer any Plan, or the Pension
Benefit Guaranty Corporation institutes proceedings to terminate any Plan or to appoint a trustee
to administer any Plan.



     (L) NAI enters into any transaction which would cause any of the Operative Documents or any
other document executed in connection herewith (or any exercise of BNPPLC’s rights hereunder or
thereunder) to constitute a non-exempt prohibited transaction under ERISA.



     (M) NAI fails to comply with the financial covenants set forth in subparagraph 3(B) of the
Closing Certificate.



     “Excluded Taxes” means:



     (A) taxes upon or measured by net income to the extent such taxes are payable in respect of
Base Rent or other Qualified Income Payments;



     (B) transfer or change of ownership taxes assessed because of BNPPLC’s transfer or conveyance
to any third party of any rights or interest in the Improvements Lease, the Purchase Agreement or
the Property (other than any such taxes assessed because of any Permitted Transfer under clauses
(1), (4) or (5) of the definition of Permitted Transfer in this Agreement);



     (C) federal, state and local income taxes upon any amounts paid as reimbursement for or
to satisfy Losses incurred by BNPPLC or any Participant to the extent, but only to the extent, such
taxes are offset by a corresponding reduction of BNPPLC’s or the applicable Participant’s


Common Definitions and Provisions Agreement — Page 16




 









 







income
taxes which are not otherwise subject to reimbursement or indemnification by NAI because of
BNPPLC’s or such Participant’s deduction of the reimbursed Losses from its taxable income or
because of any tax credits attributable thereto;




     (D) income taxes that are (i) payable by BNPPLC in respect of any Qualified Prepayment or any
net sales proceeds paid to BNPPLC upon a sale of the Property because of Forced Recharacterization
as described in subparagraph 4(C)(3) of the Lease, and (ii) offset in the same taxable period by a
reduction in the taxes of BNPPLC which are not otherwise subject to reimbursement or
indemnification by NAI resulting from depreciation deductions or other tax benefits available to
BNPPLC only because of the refusal of the tax authorities to treat the Lease and other Operative
Documents as a financing arrangement;



     (E) any withholding taxes that subparagraph 13(A) of the Lease excuses NAI from paying
or requires BNPPLC to pay; and



     (F) any franchise taxes payable by BNPPLC, but only to the extent that such franchise taxes
would be payable by BNPPLC even if the transactions contemplated by the Lease and the other
Operative Documents were characterized for tax purposes as a mere financing arrangement and not as
a lease or sale.


It is understood that if tax rates used to calculate income taxes which constitute Excluded Taxes
under clause (1) of this definition are increased, the resulting increase will not be subject to
reimbursement or indemnification by NAI. If, however, a change in Applicable Laws after the
Effective Date, as applied to the transactions contemplated by the Operative Documents on a
stand-alone basis, results in an increase in such income taxes for any reason other than an
increase in the applicable tax rates (e.g., a disallowance of deductions that would otherwise be
available against payments described in clause (1) of this definition), then for purposes of the
Operative Documents, the term “Excluded Taxes” will not include the actual increase in such
taxes attributable to the change. Accordingly, BNPPLC or any Participant may recover any such net
increase from NAI pursuant to subparagraph 5(B) of the Lease.



It is also understood that nothing in this definition of “Excluded Taxes” will prevent any Original
Indemnity Payment (as defined in subparagraph 5(C)(1) of the Lease) from being paid on an After Tax
Basis.




     “Fed Funds Rate” means, for any period, a fluctuating interest rate (expressed as a per
annum rate and rounded upwards, if necessary, to the next 1/16 of 1%) equal on each day during such
period to the weighted average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rates are not so published for any day which is a Business Day, the average
of the quotations for each day during such period on such transactions received


Common Definitions and Provisions Agreement — Page 17




 









 







by BNPPLC’s Parent from three Federal funds brokers of recognized standing selected by BNPPLC’s Parent.




     “Fixed Rate” means the fixed rate of interest established by BNPPLC’s execution of an Interest
Rate Swap as described in subparagraph 3(B)(4) of the Lease.



     “Fixed Rate Lock” shall have the meaning assigned to it in subparagraph 3(B)(4) of the
Lease.



     “Fixed Rate Lock Date” shall have the meaning assigned to it in subparagraph 3(B)(4)
of the Lease.



     “Fixed Rate Lock Termination” means any termination in whole or in part of the Fixed Rate Swap
as described in the first and second sentences of subparagraph 3(C) of the Lease.



     “Fixed Rate Lock Termination Date” means the date upon which a Fixed Rate Lock Termination is
effective. In the case of a Fixed Rate Lock Termination that results from BNPPLC’s receipt of a
Qualified Prepayment, the date such Qualified Prepayment is applied to reduce the Lease Balance
shall constitute the Fixed Rate Lock Termination Date. In the case of any Fixed Rate Lock
Termination resulting from an acceleration of the Designated Sale Date as provided in clauses (2)
or (3) the definition thereof in the this Common Definitions and Provisions Agreement, the Fixed
Rate Lock Termination Date shall constitute the Designated Sale Date.



     “Fixed Rate Lock Notice” shall have the meaning assigned to it in subparagraph 3(B)(4)
of the Lease.



     “Fixed Rate Loss” means an amount reasonably determined in good faith by the Floating Rate
Payor to be its total losses and costs in connection with any Fixed Rate Lock Termination. Fixed
Rate Loss will include any loss of bargain, cost of funding or, at the election of the Floating
Rate Payor but without duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position. The Floating Rate
Payor will be expected to determine the Fixed Rate Loss as of the date of the relevant Fixed Rate
Lock Termination Date, or, if that is not reasonably practicable, as of the earliest date
thereafter as is reasonably practicable. The Floating Rate Payor may (but need not) determine its
Fixed Rate Loss by reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.



     “Fixed Rate Settlement Amount” means, with respect to any Fixed Rate Lock Termination:




     (a) the Market Quotation for such Fixed Rate Lock Termination, if a Market


Common
Definitions and Provisions Agreement — Page 18


 









 









Quotation can be determined and if (in the reasonable belief of the Floating Rate Payor as the party
making the determination) determining a Market Quotation would produce a commercially
reasonable result; or




(b) the Fixed Rate Loss, if any, for such Fixed Rate Lock Termination if a Market Quotation
cannot be determined or would not (in the reasonable belief of the Floating Rate Payor as
the party making the determination) produce a commercially reasonable result.



     “Fixed Rate Swap” shall have the meaning assigned to it in subparagraph 3(B)(4) of the
Lease.



     “Floating Rate Payor” means BNP Paribas or any successor or assign of BNP Paribas under an
Interest Rate Swap.



     “FOCB Notice” has the meaning indicated in the Construction Management Agreement.



     “Force Majeure Event” has the meaning indicated in the Construction Management Agreement.



     “Fully Subordinated or Removable” means, with respect to any Lien encumbering the Land or any
appurtenant easement, that such Lien is, either by operation of Applicable Laws or by the express
terms of documents which grant or create such Lien:




     (1) fully subject and subordinate to the Ground Lease and to all rights and property
interests of the BNPPLC under the Operative Documents; or




     (2) subject to release and removal by BNPPLC or any subsequent owner of the Property at
any time after a Designated Sale Date without any requirement that BNPPLC or the subsequent
owner compensate the holder of such Lien or make any other significant payment in connection
with such release and removal;


provided, however, a Lien will not qualify as Fully Subordinated or Removable under clause (1)
preceding if a purchase of the Land by BNPPLC pursuant to the purchase option set forth in the
Ground Lease (as such option may be modified from time to time by agreement of lessor and lessee
under the Ground Lease) will not, by operation of law or the express agreement of the holder of the
Lien, effectively cut off and terminate such Lien insofar as it applies to or affects the
Improvements and the Land purchased by BNPPLC; and, provided further, a Lien will not qualify as
Fully Subordinated or Removable under clause (2) preceding if it provides or includes a power of
sale or other right or remedy in favor of the holder of such Lien which could result in a
foreclosure sale or other forfeiture of BNPPLC’s rights or interests under the Ground Lease or in
the Property.



Common Definitions and Provisions Agreement — Page 19





 










 






     “Funded Construction Allowace” has the meaning indicated in the Construction
Management Agreement.



     “Funding Advances” means all advances made by BNPPLC’s Parent or any Participant to or
on behalf of BNPPLC to allow BNPPLC to make the Initial Advance and to provide the Construction
Allowance or maintain its investment in the Property.



     “Future Work” has the meaning indicated in the Construction Management Agreement.



     “GAAP” means generally accepted accounting principles in the United States of America as in
effect from time to time, applied on a basis consistent with those used in the preparation of the
financial statements referred to in subparagraph 2(A)(4) of the Closing Certificate (except
for changes with which NAI’s independent public accountants concur).



     “Governmental Authority” means (1) the United States, the state, the county, the
municipality, and any other political subdivision in which the Land is located, and (2) any other
nation, state or other political subdivision or agency or instrumentality thereof having or
asserting jurisdiction over NAI or the Property.



     “Ground Lease” means the Ground Lease of the Land dated as of the Effective Date, from NAI to
BNPPLC, as such Ground Lease may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.



     “Hazardous Substance” means (i) any chemical, compound, material, mixture or substance that
is now or hereafter defined or listed in, regulated under, or otherwise classified pursuant to, any
Environmental Laws as a “hazardous substance,” “hazardous material,” “hazardous waste,” “extremely
hazardous waste or substance,” “infectious waste,” “toxic substance,” “toxic pollutant,” or any
other formulation intended to define, list or classify substances by reason of deleterious
properties, including ignitability, corrosiveness, reactivity, carcinogenicity, toxicity or
reproductive toxicity; (ii) petroleum, any fraction of petroleum, natural gas, natural gas liquids,
liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic
gas), and ash produced by a resource recovery facility utilizing a municipal solid waste stream,
and drilling fluids, produced waters and other wastes associated with the exploration, development
or production of crude oil, natural gas or geothermal resources; (iii) asbestos and any asbestos
containing material; and (iv) any other material that, because of its quantity, concentration or
physical or chemical characteristics, is the subject of regulation under Applicable Law or poses a
significant present or potential hazard to human health or safety or to the environment if released
into the workplace or the environment.



     “Hazardous Substance Activity” means any actual, proposed or threatened use, storage,
holding, release (including any spilling, leaking, leaching, pumping, pouring, emitting, emptying,
dumping, disposing into the environment, and the continuing migration into or through soil,


Common
Definitions and Provisions Agreement — Page 20


 









 







surface water, groundwater or any body of water), discharge, deposit,
placement, generation, processing, construction, treatment, abatement, removal, disposal,
disposition, handling or transportation of any Hazardous Substance from, under, in, into or on Land
or the Property, including the movement or migration of any Hazardous Substance from surrounding
property, surface water, groundwater or any body of water under, in, into or onto the Property and
any resulting residual Hazardous Substance contamination in, on or under the Property. “Hazardous
Substance Activity” also means any existence of Hazardous Substances on the Property that would
cause the Property or the owner or operator thereof to be in violation of, or that would subject
the Land or the Property to any remedial obligations under, any Environmental Laws, assuming
disclosure to the applicable Governmental Authorities of all relevant facts, conditions and
circumstances pertaining to the Property.




     “Improvements” means any and all (1) buildings and other real property improvements
previously or hereafter erected on the Land, and (2) equipment (e.g., HVAC systems, elevators and
plumbing fixtures) attached to the buildings or other real property improvements, the removal of
which would cause structural or other material damage to the buildings or other real property
improvements or would materially and adversely affect the value or use of the buildings or other
real property improvements.



     “Increased Commitment” has the meaning indicated in the Construction Management Agreement.



     “Increased Funding Commitment” has the meaning indicated in the Construction Management
Agreement.



     “Increased Time Commitment” has the meaning indicated in the Construction Management
Agreement.



     “Indebtedness” of any Person means (without duplication of any item) Liabilities of such
Person in any of the following categories:



          (A) Liabilities for borrowed money;




          (B) Liabilities constituting an obligation to pay the deferred purchase price of property or
services;




          (C) Liabilities evidenced by a bond, debenture, note or similar instrument;




          (D) Liabilities
which (1) would under GAAP be shown on such Person’s balance sheet as a
liability, and (2) are payable more than one year from the date of creation thereof (other than
reserves for taxes and reserves for contingent obligations);



Common Definitions and Provisions Agreement — Page 21




 









 








          (E) Liabilities constituting principal under leases capitalized in accordance with GAAP;




          (F) Liabilities arising under conditional sales or other title retention agreements;




          (G) Liabilities owing under direct or indirect guaranties of Liabilities of any other Person
or otherwise constituting obligations to purchase or acquire or to otherwise protect or
insure a creditor against loss in respect of Liabilities of any other Person (such as
obligations under working capital maintenance agreements, agreements to keep-well, or
agreements to purchase Liabilities, assets, goods, securities or services), but excluding
endorsements in the ordinary course of business of negotiable instruments in the course of
collection;




          (H) Liabilities (for example, repurchase agreements, mandatorily redeemable preferred stock
and sale/leaseback agreements) consisting of an obligation to purchase or redeem securities
or other property, if such Liabilities arises out of or in connection with the sale or
issuance of the same or similar securities or property;




          (I) Liabilities with respect to letters of credit or applications or reimbursement
agreements therefor;




          (J) Liabilities with respect to payments received in consideration of oil, gas, or other
commodities yet to be acquired or produced at the time of payment (including obligations
under “take-or-pay” contracts to deliver gas in return for payments already received and the
undischarged balance of any production payment created by such Person or for the creation of
which such Person directly or indirectly received payment);




          (K) Liabilities with respect to other obligations to deliver goods or services in
consideration of advance payments therefor; or




          (L) Liabilities under any “synthetic” or other lease of property or related documents
(including a separate purchase agreement) which obligate such Person or any of its
Affiliates (whether by purchasing or causing another Person to purchase any interest in the
leased property or otherwise) to guarantee a minimum residual value of the leased property
to the lessor.



For purposes of this definition, the amount of Liabilities described in the last clause of the
preceding sentence with respect to any lease classified according to GAAP as an “operating lease,”
will equal the sum of (1) the present value of rentals and other minimum lease payments required in
connection with such lease [calculated in accordance with SFAS 13 and other GAAP relevant to the
determination of the whether such lease must be accounted for as an operating



Common Definitions and Provisions Agreement — Page 22




 









 







lease or capital
lease], plus (2) the fair value of the property covered by
the lease; except that such amount will not exceed the price, as of the date a determination of
Indebtedness is required hereunder, for which the lessee can purchase the leased property pursuant
to any valid ongoing purchase option if, upon such a purchase, the lessee will be excused from
paying rentals or other minimum lease payments that would otherwise accrue after the purchase.



Notwithstanding the foregoing, the “Indebtedness” of any Person will not include Liabilities that
were incurred by such Person on ordinary trade terms to vendors, suppliers, or other Persons
providing goods and services for use by such Person in the ordinary course of its business, unless
and until such Liabilities are outstanding more than 90 days past the original invoice or billing
date therefor.




     “Initial Advance ” has the meaning indicated in the Construction Management Agreement.



     “Interested Party” means each of following Persons and their Affiliates: (1) BNPPLC and its
successors and permitted assigns as to the Property or any part thereof or any interest therein,
(2) BNPPLC’s Parent, and (3) any Participants and their successors and permitted assigns under the
Participation Agreement; provided, however, none of the following Persons will constitute an
Interested Party: (a) any Person to whom BNPPLC may transfer an interest in the Property by a
conveyance that is not a Permitted Transfer and others that cannot lawfully claim an interest in
the Property except through or under a transfer by such a Person, (b) NAI and its Affiliates, (c)
any Person claiming through or under a conveyance made by NAI after any purchase by NAI of BNPPLC’s
interest in the Property pursuant to the Purchase Agreement, or (d) any Applicable Purchaser
designated by NAI under the Purchase Agreement who purchases the Property pursuant to a sale
arranged by NAI and any Person that cannot lawfully claim an interest in the Property except
through or under a conveyance from such an Applicable Purchaser.



     “Interest Rate Swap” means an interest rate exchange transaction, entered into between
BNPPLC, as the fixed rate payor, and BNP Paribas, as the swap counterparty and floating rate payor,
under the them most recent form of Master Agreement published by the International Swaps and
Derivatives Association, Inc., as supplemented by the definitions and such schedules, annexes,
exhibits and supplements as are agreed upon by the parties thereto, pursuant to which BNP Paribas
agrees to pay monthly to BNPPLC a floating rate of interest equal to LIBOR and BNPPLC agrees to pay
monthly to BNP Paribas a fixed rate of interest for a term that commences on the Fixed Rate Lock
Date and ends on the last day of the scheduled Term of the Lease. The notional principal amount
used for any such interest rate exchange transaction will equal the Lease Balance calculated as of
the date such transaction is entered into.



     “Land” means the land described in Exhibit A attached to the Closing Certificate, the
Lease, the Ground Lease and the Purchase Agreement.


Common Definitions and Provisions Agreement — Page 23





 









 








     “Lease” means the Lease Agreement dated as of the Effective Date between BNPPLC, as landlord,
and NAI, as tenant, pursuant to which NAI has agreed to lease BNPPLC’s interest in the Property, as
such Lease Agreement may be extended, supplemented, amended, restated or otherwise modified from
time to time in accordance with its terms.



     “Lease Balance” as of any date means the amount equal to the sum of the Initial Advance, plus
the sum of all Construction Advances, Carrying Costs and other amounts added to the Outstanding
Construction Allowance as provided in the Construction Management Agreement on or prior to such
date, minus all funds actually received by BNPPLC and applied as Qualified Prepayments on or prior
to such date. Under no circumstances will any payment of Base Rent or other Qualified Income
Payments reduce the Lease Balance.



     “Lease
Termination Damages” has the meaning indicated in
subparagraph? of the Lease.



     “Liabilities” means, as to any Person, all indebtedness, liabilities and obligations of such
Person, whether matured or unmatured, liquidated or unliquidated, primary or secondary, direct or
indirect, absolute, fixed or contingent, and whether or not required to be considered pursuant to
GAAP.



     “LIBOR” means, for purposes of determining the Effective Rate for any Construction Period or
Base Rent Period, the per annum rate equal to:



          (a) the offered rate for deposits in U.S. dollars which appears on Moneyline Telerate Page
3750, British Bankers Association Interest Settlement Rates as of 11:00 a.m., London time,
on the day that is two London Banking Days (hereinafter defined) prior to the day upon which
such Base Rent Period begins (the “Reset Date”), or




          (b) if no such rate appears on Moneyline Telerate Page 3750, the rate per annum determined
by BNPPLC’s Parent on the basis of rates offered for deposits in U.S. dollars by four major
banks in the London interbank market selected by BNPPLC’s Parent (“Reference Banks”) at
approximately 11:00 a.m., London time, on the day that is two London Banking Days preceding
the Reset Date to prime banks in the London interbank market for a period corresponding as
nearly as possible to such Base Rent Period. If this clause (b) applies, BNPPLC’s Parent
will request the principal London office of each of the Reference banks to provide a
quotation of its rate. If at least two quotations are provided, “LIBOR” for the applicable
Base Rent Period will be the arithmetic mean of the quotations. If, however, fewer than two
quotations are provided as requested, “LIBOR” for the applicable Base Rent Period will be
the arithmetic mean of the rates quoted by major banks in New York selected by BNPPLC’s
Parent, at approximately 11:00 a.m., New York time, on the Reset
Date for loans in U.S. dollars to leading U.S. banks for a period corresponding as nearly as
possible to such Base Rent Period.



Common Definitions and Provisions Agreement — Page 24





 









 







As used in this definition, “London Banking Day” means any day on which commercial banks are open
for general business (including dealings in foreign exchange and foreign currency deposits) in
London, England.




     “LIBOR Period Election” means an election to have the Effective Rate for any Construction
Period or Base Rent Period calculated by reference to LIBOR, rather than by reference to the ABR or
the Fixed Rate, and to have such period extend for approximately one month, three months or six
months. Subject to the limitations and qualifications set forth in this definition, NAI may make
any Construction Period or Base Rent Period subject to a LIBOR Period Election by a notice given to
BNPPLC in the form attached as Annex 3 at least five Business Days prior to the commencement
of such Construction Period or Base Rent Period. After a LIBOR Period Election becomes effective,
it will remain in effect for all subsequent Construction Periods or Base Rent Periods until a
different election is made in accordance with the provisions of this definition and the definition
of ABR Period Election above. (For purposes of the Construction Management Agreement and the Lease
a LIBOR Period Election for any Construction Period or Base Rent Period will also be considered the
LIBOR Period Election in effect on the Advance Date, Base Rent Commencement Date or Base Rent Date
upon which such period begins.) Notwithstanding the foregoing:




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




Common Definitions and Provisions Agreement — Page 25




 









 









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





     “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, any agreement to sell receivables with
recourse, and the filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).



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


Common Definitions and Provisions Agreement — Page 26




 









 








     “Local Impositions” means all sales, excise, ad valorem, gross receipts, business, transfer,
stamp, occupancy, rental and other taxes (other than taxes on net income and corporate franchise
taxes), levies, fees, charges, surcharges, assessments, interest, additions to tax, or penalties
imposed by the State of California or any agency or political subdivision thereof upon BNPPLC or
any owner of the Property or any part of or interest in the Property because of (i) the Lease or
other Operative Documents, (ii) the status of record title to the Property, (iii) the ownership,
leasing, occupancy, sale or operation of the Property or any part thereof or interest therein, or
(iv) the Permitted Encumbrances; excluding, however, Excluded Taxes. “Local Impositions” will
include any real estate taxes imposed because of a change of use or ownership of the Property
resulting from, or occurring on or prior to the date of, any sale by BNPPLC pursuant to the
Purchase Agreement.



     “Losses” means the following: any and all losses, liabilities, damages (whether actual,
consequential, punitive or otherwise denominated), demands, claims, administrative or legal
proceedings, actions, judgments, causes of action, assessments, fines, penalties, costs of
settlement and other costs and expenses (including Attorneys’ Fees and the fees of outside
accountants and environmental consultants), of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote, known and unknown.



     “Market Quotation” means, with respect to any Fixed Rate Lock Termination, an amount
determined by the Floating Rate Payor on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid by the Floating Rate Payor in
consideration of an agreement between it and the quoting Reference Market-maker to enter into a
transaction (the “Replacement Transaction”) that would have the effect of preserving for the
Floating Rate Payor the economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each applicable condition
precedent) that would, but for the occurrence of the relevant Fixed Rate Lock Termination, have
been required under the Fixed Rate Swap. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith, agree. The Floating
Rate Payor (or its agent) will request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without regard to different time zones)
on the effective date of or as soon as reasonably practicable after the relevant Fixed Rate Lock
Termination. The date and time as of which those quotations are to be obtained will be selected in
good faith by the Floating Rate Payor. If more than three quotations are provided, the Market
Quotation will be the arithmetic mean of the quotations, without regard to the quotations having
the highest and lowest values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of
such Fixed Rate Lock Termination cannot be determined.


Common Definitions and Provisions Agreement — Page 27




 









 








     “Material Adverse Effect” means a material adverse effect on (a) the assets, operations or
businesses of NAI, (b) the ability of NAI to perform any of its obligations under the Operative
Documents, (c) the rights of or benefits available to the BNPPLC under the Operative Documents, (d)
the value, utility or useful life of the Property or (e) the priority, perfection or status of any
of BNPPLC’s interests in the Property or in any of the Operative Documents.



     “Maximum Construction Allowance” has the meaning indicated in the Construction Management
Agreement.



     “Maximum Remarketing Obligation” has the meaning indicated in the Purchase Agreement.



     “Minimum
Insurance Requirements” means the insurance requirements
outlined in Annex 4 
attached to this Agreement.



     “Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) of ERISA to which
contributions have been made by NAI or any ERISA Affiliate during the preceding six years and which
is covered by Title IV of ERISA.



     “Notice of NAI’s Intent to Terminate” has the meaning indicated in the Construction
Management Agreement.



     “Notice of NAI’s Intent to Terminate Because of a Force Majeure Event” has the meaning
indicated in the Construction Management Agreement.



     “Notice of Termination by NAI” has the meaning indicated in the Construction Management
Agreement.



     “Operative Documents” means the Closing Certificate, the Ground Lease, the Lease, the
Construction Management Agreement, the Purchase Agreement and this Common Definitions and
Provisions Agreement.



     “Outstanding Construction Allowance” has the meaning indicated in the Construction Management
Agreement.



     “Owner’s Election to Continue Construction” has the meaning indicated in the Construction
Management Agreement.



     “NAI” means Network Appliance, Inc., a Delaware corporation.



     “NAI’s Estimate of Force Majeure Excess Costs” has the meaning indicated in the Construction
Management Agreement.


Common Definitions and Provisions Agreement — Page 28




 









 








     “NAI’s Estimate of Force Majeure Delays” has the meaning indicated in the Construction
Management Agreement.



     “NAI’s Initial Remarketing Right” has the meaning indicated in the Purchase Agreement.



     “Participant” means any Person other than BNPPLC that from time to time, by executing a
Participation Agreement or supplements as contemplated therein, becomes a party to the
Participation Agreement and thereby agrees to participate in all or some of the risks and rewards
to BNPPLC of the Operative Documents; provided, however, no such Person will qualify as a
Participant for purposes of the Operative Documents unless approved to be a Participant by NAI. As
of the Effective Date, there are no Participants, but BNPPLC may from time to time request NAI’s
approval for prospective Participants. NAI will not unreasonably withhold or delay any approval
required for any prospective Participant which is an Eligible Financial Institution. However, as
to any prospective Participant that is not an Eligible Financial Institution, NAI may withhold such
approval in its sole discretion. Further, it is understood that if giving such approval will
increase NAI’s liability for withholding taxes or other taxes not constituting Excluded Taxes under
tax laws or regulations then in effect, NAI may reasonably refuse to give such approval.



     “Participation Agreement” means a Participation Agreement in substantially the form attached
to this Agreement as Annex 5, pursuant to which one or more other Persons agree with BNPPLC
to participate in the risks and rewards to BNPPLC of the Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified from time to time
in accordance with its terms. It is understood, however, that because any such Participation
Agreement will expressly make NAI a third party beneficiary of each Participant’s obligations
thereunder to make advances to BNPPLC in connection with Construction Advances under the
Construction Management Agreement, NAI’s consent will be required to any amendment of the
Participation Agreement that limits or excuses such obligations.



     “Permitted Encumbrances” means (i) the encumbrances and other matters affecting the Property
that are set forth in Exhibit B attached to the Closing Certificate, (ii) any easement
agreement or other document affecting title to the Property executed by BNPPLC at the request of or
with the consent of NAI, (iii) any Liens securing the payment of Local Impositions which are not
delinquent or claimed to be delinquent or which are being contested in accordance with
subparagraph 5(A) of the Lease, (iv) statutory liens, if any, in the nature of contractors’,
mechanics’ or materialmen’s liens for amounts not past due or claimed to be past due for more than
thirty days or which are being contested in accordance with
subparagraph 11(B) of the Lease, (v) Liens which are Fully Subordinated or Removable, and
(vi) any documents or maps which NAI executes and records, with the consent of BNPPLC as provided
in subparagraph 4(C) of the Closing Certificate, to establish a condominium regime that
covers the Property and other adjacent properties.


Common Definitions and Provisions Agreement — Page 29




 









 









     “Permitted Hazardous Substance Use” means the use, generation, storage and offsite disposal
of Permitted Hazardous Substances in strict accordance with applicable Environmental Laws and with
due care given the nature of the Hazardous Substances involved; provided, the scope and nature of
such use, generation, storage and disposal will not:




     (1) exceed that reasonably required for the construction of the Construction Project in
accordance with the Construction Management Agreement or for the use and operation of the
Property for the purposes expressly permitted under subparagraph
2(A) of the Lease; or




     (2) include any disposal, discharge or other release of Hazardous Substances from the
Property in any manner that might allow such substances to reach surface water or
groundwater, except (i) through a lawful and properly authorized discharge (A) to a publicly
owned treatment works or (B) with rainwater or storm water runoff in accordance with
Applicable Laws and any permits obtained by NAI that govern such runoff; or (ii) any such
disposal, discharge or other release of Hazardous Substances for which no permits are
required and which are not otherwise regulated under applicable Environmental Laws.


Further, notwithstanding anything to the contrary herein contained, Permitted Hazardous Substance
Use will not include any use of the Property (including as a landfill, incinerator or other waste
disposal facility) in a manner that requires a treatment, storage or disposal permit under the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980,
the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of
1984..




     “Permitted Hazardous Substances” means Hazardous Substances used and reasonably required for
the construction of the Construction Project or for the use and operation of the Property by NAI
and its permitted subtenants and assigns for the purposes expressly
permitted by subparagraph 2(A) of the Lease, in either case in strict compliance with all Environmental Laws and with due
care given the nature of the Hazardous Substances involved. Without limiting the generality of the
foregoing, Permitted Hazardous Substances will include usual and customary office, laboratory and
janitorial products.




     “Permitted Transfer” means any one or more of the following:




     (1) the creation or conveyance by BNPPLC of rights and interests in favor of Participants
pursuant to the Participation Agreement;




     (2) any lien, security interest or assignment covering the Property or the Rents which is
granted by BNPPLC in favor of Participants or an agent appointed for them to secure their
rights under the Participation Agreement, and any subsequent assignment or


Common Definitions and Provisions Agreement — Page 30




 









 







conveyance made
to accomplish a foreclosure of such lien or security interest, provided that such lien,
security interest or assignment and any such subsequent assignment or conveyance are all
made expressly subject to the rights of NAI under the Operative Documents;





     (3) other than as described in the preceding clauses, any conveyance to BNPPLC’s Parent or
to any Qualified Affiliate of BNPPLC of all or any interest in or rights with respect to the
Property or any portion thereof, provided that NAI must be notified before any such
conveyance to BNPPLC’s Parent or a Qualified Affiliate which will be recorded in the real
property records of the county in which the Land is situated;




     (4) any assignment or conveyance by BNPPLC requested by NAI or required by any Permitted
Encumbrance, by the Purchase Agreement or by Applicable Laws; or




     (5) any assignment or conveyance after a Designated Sale Date on which NAI does not
purchase or cause an Applicable Purchaser to purchase BNPPLC’s interest in the Property and,
if applicable, after the expiration of the thirty day cure period specified in Paragraph
3(A) of the Purchase Agreement.



     “Person” means an individual, a corporation, a partnership, an unincorporated organization,
an association, a joint stock company, a joint venture, a trust, an estate, a government or agency
or political subdivision thereof or other entity, whether acting in an individual, fiduciary or
other capacity.



     “Personal
Property” has the meaning indicated on page 2 of the Lease.



     “Plan” means any employee benefit or other plan established or maintained, or to which
contributions have been made, by NAI or any ERISA Affiliate during the preceding six years and
which is covered by Title IV of ERISA, including any Multiemployer Plan.



     “Pre-lease Casualty” has the meaning indicated in the Construction Management Agreement.



     “Pre-lease Force Majeure Delays” has the meaning indicated in the Construction Management
Agreement.



     “Pre-lease Force Majeure Event” has the meaning indicated in the Construction Management
Agreement.



     “Pre-lease Force Majeure Event Notice” has the meaning indicated in the Construction
Management Agreement.


Common Definitions and Provisions Agreement — Page 31


 









 








     “Pre-lease Force Majeure Excess Costs” has the meaning indicated in the Construction
Management Agreement.



     “Pre-lease Force Majeure Losses” has the meaning indicated in the Construction Management
Agreement.



     “Prime Rate” means the prime interest rate or equivalent charged by BNPPLC’s Parent in the
United States of America as announced or published by BNPPLC’s Parent from time to time, which need
not be the lowest interest rate charged by BNPPLC’s Parent. If for any reason BNPPLC’s Parent does
not announce or publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit Commercial de France
as selected by BNPPLC will be used to compute the rate describe in the preceding sentence. The
prime rate or equivalent announced or published by such bank need not be the lowest rate charged by
it. The Prime Rate may change from time to time after the Effective Date without notice to NAI as
of the effective time of each change in rates described in this definition.



     “Prior Work” has the meaning indicated in the Construction Management Agreement.



     “Projected Cost Overruns” has the meaning indicated in the Construction Management Agreement.



     “Property” means the Personal Property and the Real Property, collectively. The fee interest
in the Land itself will not be included in the Property, but the leasehold estate conveyed to
BNPPLC under the Ground Lease will be included.



     “Purchase Agreement” means the Purchase Agreement dated as of the Effective Date between
BNPPLC and NAI, as such Purchase Agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.



     “Purchase Option” has the meaning indicated in the Purchase Agreement.



     “Qualified Affiliate” means any Person that, like BNPPLC, (i) is one hundred percent (100%)
owned, directly or indirectly, by BNPPLC’s Parent or any successor of such bank, (ii) can make (and
has in writing made) the same representations to NAI that BNPPLC has made in subparagraphs 4(A)
and 4(B) of the Closing Certificate, and (iii) is an



     entity organized under the laws of the State of Delaware or another state within the United States
of America.



     “Qualified Income Payments” means: (A) Base Rent; (B) payments that are made to BNPPLC only
because the following amounts are capitalized (i.e.,the added to the Lease Balance) as described in
subparagraph 3 of the Construction Management Agreement: the Arrangement Fee,
Administrative Fees, Commitment Fees, Increased Cost Charges and Capital Adequacy Charges; (C)
payments of the following made to BNPPLC to satisfy the Lease: Administrative Fees, Increased Cost
Charges and Capital


Common Definitions and Provisions Agreement — Page 32





 









 







Adequacy Charges; (D) any interest paid to BNPPLC or any Participant pursuant
to subparagraph 3(G) of the Lease; (E) payments by BNPPLC to Participants required under the
Participation Agreements because of BNPPLC’s receipt of payments described in the preceding clauses
(A) through (D).




     “Qualified Prepayments” means any payments received by BNPPLC from time to time during the
Term (1) under any property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction placed upon the use or development of the Property or for the
condemnation of the Property or any portion thereof (including any indirect condemnation by means
of a taking of any of the Land or appurtenant easements), (3) because of any judgment, decree or
award for injury or damage to the Property, or (4) under any title insurance policy or otherwise as
a result of any title defect or claimed title defect with respect to the Property. For the
purposes of determining the amount of any Qualified Prepayment and other amounts dependent upon
Qualified Prepayments (e.g., the Lease Balance, the Outstanding Construction Allowance and the
Break Even Price):



          (i) there shall be deducted all expenses and costs of every kind, type and nature (including
taxes and Attorneys’ Fees) incurred by BNPPLC with respect to the collection or application
of such payments;




          (ii) Qualified Prepayments shall not include any payment to BNPPLC by a Participant or an
Affiliate of BNPPLC that is made to compensate BNPPLC for the Participant’s or Affiliate’s
share of any Losses BNPPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4);




          (iii) Qualified Prepayments shall not include any payments received by BNPPLC that BNPPLC
has paid or is obligated to pay to NAI for the repair, restoration or replacement of the
Property or that BNPPLC is holding as Escrowed Proceeds in accordance
with the Paragraph 10 of
the Lease or other provisions of the Operative Documents;




          (iv) payments described in the preceding clauses (i) through (iii) will be considered as
Escrowed Proceeds, not Qualified Prepayments, until they are actually applied as Qualified
Prepayments by BNPPLC as provided in Paragraph 10 of the Lease; and




          (v) in no event will interest that accrues under the Purchase Agreement on a past due
Supplemental Payment constitute a Qualified Prepayment.




For purposes of computing the total Qualified Prepayments (and other amounts dependent upon
Qualified Prepayments, such as the Lease Balance, the Outstanding Construction Allowance and


Common Definitions and Provisions Agreement — Page 33




 









 







the
Break Even Price) paid to or received by BNPPLC as of any date, payments described in the preceding
clauses (1) through (4) will be considered as Escrowed Proceeds, not Qualified Prepayments, until
they are actually applied as Qualified Prepayments by BNPPLC as provided in the Paragraph 10
of the Lease.




     “Real Property” has the meaning indicated on page of the Lease.



     “Reimbursable Construction-Period Costs” has the meaning indicated in the Construction
Management Agreement.



     “Remedial Work” means any investigation, monitoring, clean-up, containment, remediation,
removal, payment of response costs, or restoration work and the preparation and implementation of
any closure or other required remedial plans that any governmental agency or political subdivision
requires or approves (or could reasonably be expected to require if it was aware of all relevant
circumstances concerning the Property), whether by judicial order or otherwise, because of the
presence of or suspected presence of Hazardous Substances in, on, under or about the Property or
because of any prior Hazardous Substance Activity.



     “Rent” means the Base Rent and all Additional Rent.



     “Responsible Financial Officer” means the chief financial officer, the controller, the
treasurer or the assistant treasurer of NAI.



     “Rolling Four Quarters Period” has the meaning indicated in subparagraph 3(A) of the
Closing Certificate.



     “Scope Change” has the meaning indicated in the Construction Management Agreement.



     “Spread” means, for Construction Period and for any period beginning on and including the
Base Rent Commencement Date or a Base Rent Date and ending on but not including the next Base Rent
Date, the amount established as of the date (in this definition, the “Spread Test Date”) that is
two Business Days prior to such period by reference to the pricing grid below, based upon the ratio
calculated by dividing (1) Adjusted EBITDA for the then latest Rolling Four Quarters Period that
ended prior to (and for which NAI has reported earnings as necessary to compute Adjusted EBITDA)
into (2) the Total Debt of
NAI and its Subsidiaries (determined on a consolidated basis) as of the end of such Rolling Four
Quarters Period. In each case, the Spread will be established at the Level in the pricing grid
below which corresponds to such ratio; provided, that:



          (a) promptly after earnings are reported by NAI for the latest quarter in any Rolling Four
Quarters Period, NAI must notify BNPPLC of any resulting change in the Spread under this
definition, and no reduction in the Spread from one period to the next



Common Definitions and Provisions Agreement — Page 34




 









 







     will be effective for
purposes of the Operative Documents unless, prior to the Spread Test Date for the next
period, NAI shall have provided BNPPLC with a written notice setting forth and certifying
the calculation under this definition that justifies the reduction; and




     (c) notwithstanding anything to the contrary in this definition, after any 97-10/Event and
on any date when an Event of Default has occurred and is continuing, the Unsecured Spread
will equal the Default Rate less the Effective Rate.



	 	 	 	 	 
	Levels	 	Ratio of Total Debt to Adjusted EBITDA	 	Spread
	Level I

	 	less than 0.5
	 	57.5 basis points
	Level II

	 	greater than or equal to 0.5, but less
than 1.0
	 	75.0 basis points
	Level III

	 	greater than or equal to 1.0
	 	95.0 basis points
	 

	 	 
	 	 






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


     “Subsidiary” means, with respect to any Person, any Affiliate of which at least a majority of
the securities or other ownership interests having ordinary voting power then exercisable for the
election of directors or other persons performing similar functions are at the time owned directly
or indirectly by such Person.



     “Supplemental Payment” has the meaning indicated in the Purchase Agreement.



     “Supplemental Payment Obligation” has the meaning indicated in the Purchase Agreement.



     “Tangible
Personal Property” has the meaning indicated on page 2 of the Lease.



     “Target Completion Date” has the meaning indicated in the Construction Management Agreement.



     “Term”
has the meaning indicated in subparagraph 1(A) of the Lease.



     “Term Sheet” means the letter dated as of September 7, 2005 from BNPPLC to NAI


Common Definitions and Provisions Agreement — Page 35





 









 







concerning the
Property.




     “Termination of NAI’s Work” has the meaning indicated in the Construction Management
Agreement.



     “Third Party Contract” has the meaning indicated in the Construction Management Agreement.



     “Third Party Contract/Termination Fees” has the meaning indicated in the Construction
Management Agreement.



     “Total Debt” has the meaning indicated in subparagraph 3(A) of the Closing
Certificate.



     “Transaction Expenses” means costs incurred in connection with the preparation and
negotiation of the Operative Documents and related documents and the consummation of the
transactions contemplated therein.



     “Unfunded Benefit Liabilities” means, with respect to any Plan, the amount (if any) by which
the present value of all benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA)
under the Plan exceeds the market value of all Plan assets allocable to such benefit liabilities,
as determined on the most recent valuation date of the Plan and in accordance with the provisions
of ERISA for calculating the potential liability of NAI or any ERISA Affiliate under Title IV of
ERISA.



     “Work” has the meaning indicated in the Construction Management Agreement.



     “Work/Suspension Event” has the meaning indicated in the Construction Management Agreement.



     “Work/Suspension Notice” has the meaning indicated in the Construction Management Agreement.



     “Work/Suspension Period” has the meaning indicated in the Construction Management Agreement.


Common Definitions and Provisions Agreement — Page 36





 










 






ARTICLE II — SHARED PROVISIONS




     The following provisions will apply to and govern the construction of this Agreement and
the other Operative Documents (including attachments), except to the extent (if any) a clear,
contrary intent is expressed herein or therein:



     1. Notices. The provision of any Operative Document, or of any Applicable Laws with
reference to the sending, mailing or delivery of any notice or demand under any Operative Document
or with reference to the making of any payment required under any Operative Document, will be
deemed to be complied with when and if the following steps are taken:




     (i) All Rent and other amounts required to be paid by NAI to BNPPLC must be paid to BNPPLC
in immediately available funds by wire transfer to:


Federal Reserve Bank of New York

BNP Paribas — New York Branch

Favor: BNP Paribas Leasing Corporation

ABA 026 007 689

/AC/ 0200-517000-070-78

Reference: Network Appliance, Inc./California-Lease





or at such other place and in such other manner as BNPPLC may designate in a notice to NAI.




     (ii) All advances paid to NAI by BNPPLC under the Construction Management Agreement or in
connection therewith will be paid by wire transfer to:


Wells Fargo Bank

San Francisco, CA

ABA#121000248

Acct#4311-790562

Account of: Network Appliance

Reference: BNP Lease





or at such other place and in such other manner as NAI may reasonably designate from time to
time by notice to BNPPLC signed by a Responsible Financial Officer of NAI.




     (iii) All notices, demands, approvals, consents and other communications to be made under
any Operative Document to or by the parties thereto must, to be effective for purpose of
such Operative Document, be in writing. Notices, demands and other communications required
or permitted under any Operative Document are to be sent to



Common Definitions and Provisions Agreement — Page 37





 









 









the addresses set forth below
(or in the case of communications to Participants, at the addresses set forth in
Schedule 1 to the Participation Agreement) and will be given by any of the following
means: (A) personal service (including local and overnight courier), with proof of delivery
or attempted delivery retained; (B) electronic communication, whether by electronic mail or
telecopying (if confirmed in writing sent by United States first class mail, return receipt
requested); or (C) registered or certified first class mail, return receipt requested. Such
addresses may be changed by notice to the other parties given in the same manner as provided
above. Any notice or other communication sent pursuant to clause (A) or (B) hereof will be
deemed received upon such personal service or upon dispatch by electronic means, and, if
sent pursuant to clause (C) will be deemed received five days following deposit in the mail.


Address of BNPPLC:



BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140



Address of NAI:



Network Appliance, Inc.

7301 Kit Creek Road

Research Triangle Park, NC 27709

Attention: Ingemar Lanevi

Telecopy: (919) 476-5750



With a copy to:



Network Appliance, Inc.

495 East Java Drive

Sunnyvale, California 94089

Attention: Mr. Thom Bryant

Telecopy: (408)-822-4463




     2. Severability. If any term or provision of any Operative Document or the application
thereof is to any extent held by a court of competent jurisdiction to be invalid and unenforceable,
the remainder of such document, or the application of such term or provision other than to the
extent to which it is invalid or unenforceable, will not be affected thereby.



Common Definitions and Provisions Agreement — Page 38




 









 








     3. No Merger. There will be no merger of the Lease or of the leasehold estate created by
the Lease or of the mortgage and security interest granted in subparagraph 4(C)(1) of the Lease
with any other interest in the Property by reason of the fact that the same person may acquire or
hold, directly or indirectly, the Lease or the leasehold estate created hereby or such mortgage and
security interest and any other interest in the Property, unless all Persons with an interest in
the Property that would be adversely affected by any such merger specifically agree in writing that
such a merger has occurred. There will be no merger of the Purchase Agreement or of the purchase
options or obligations created by the Purchase Agreement with any other interest in the Property by
reason of the fact that the same person may acquire or hold, directly or indirectly, the rights and
options granted by the Purchase Agreement and any other interest in the Property, unless all
Persons with an interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger has occurred.



     4. No Implied Waiver. The failure of BNPPLC or NAI to insist at any time upon the strict
performance of any covenant or agreement or to exercise any option, right, power or remedy
contained in any Operative Document will not be construed as a waiver or a relinquishment thereof
for the future. The waiver of or redress for any breach of any Operative Document by any party
thereto will not prevent a similar subsequent act from constituting a violation. Any express waiver
of any provision of any Operative Document will affect only the term or condition specified in such
waiver and only for the time and in the manner specifically stated therein. No waiver by any party
to any Operative Document of any provision therein will be deemed to have been made unless
expressed in writing and signed by the party to be bound by the waiver. A receipt by BNPPLC of any
Rent with knowledge of the breach by NAI of any covenant or agreement contained in the Lease or any
other Operative Document will not be deemed a waiver of such breach.



     5. Entire and Only Agreements. The Operative Documents supersede any prior negotiations
and agreements between BNPPLC and NAI concerning the Property, and no amendment or modification of
any Operative Document will be binding or valid unless expressed in a writing executed by all
parties to such Operative Document.



     6. Binding Effect. Except to the extent, if any, expressly provided to the contrary in any
Operative Document with respect to assignments thereof, all of the covenants, agreements, terms and
conditions to be observed and performed by the parties to the Operative
Documents will be applicable to and binding upon their respective successors and, to the extent
assignment is permitted thereunder, their respective assigns.



     7. Time is of the Essence. Time is of the essence as to all obligations of NAI and BNPPLC
and all notices required of NAI and BNPPLC under the Operative Documents.



     8. Governing Law. Each Operative Document will be governed by and construed in accordance
with the laws of the State of California without regard to conflict or choice of laws.



Common Definitions and Provisions Agreement — Page 39




 









 








     9. Paragraph Headings. The paragraph and section headings contained in the Operative
Documents are for convenience only and will in no way enlarge or limit the scope or meaning of the
various and several provisions thereof.



     10. Negotiated Documents. All parties to each Operative Document and their counsel have
reviewed and revised or requested revisions to such Operative Document, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party will not apply to
the construction or interpretation of any Operative Documents or any amendments thereof.



     11. Terms Not Expressly Defined in an Operative Document. As used in any Operative
Document, a capitalized term that is not defined therein or in this Agreement, but is defined in
another Operative Document, will have the meaning ascribed to it in the other Operative Document.



     12. Other Terms and References. Words of any gender used in each Operative Document will
be held and construed to include any other gender, and words in the singular number will be held to
include the plural and vice versa, unless the context otherwise requires. References in any
Operative Document to Paragraphs, subparagraphs, Sections, subsections or other subdivisions refer
to the corresponding Paragraphs, subparagraphs, Sections, subsections or subdivisions of that
Operative Document, unless specific reference is made to another document or instrument. References
in any Operative Document to any Schedule or Exhibit refer to the corresponding Schedule or Exhibit
attached to that Operative Document, which are made a part thereof by such reference. All
capitalized terms used in each Operative Document which refer to other documents will be deemed to
refer to such other documents as they may be renewed, extended, supplemented, amended or otherwise
modified from time to time, provided such documents are not renewed, extended or modified in breach
of any provision contained in the Operative Documents or, in the case of any other document to
which BNPPLC is a party or of which BNPPLC is an intended beneficiary, without the consent of
BNPPLC. All accounting terms used but not specifically defined in any Operative Document will be
construed in accordance with GAAP. The words “this [Agreement]”, “herein”, “hereof”, “hereby”,
“hereunder” and words of similar import when used in each Operative Document refer to that
Operative Document as a whole and not to any particular subdivision unless expressly so limited.
The phrases “this Paragraph”, “this subparagraph”, “this Section”, “this subsection” and similar
phrases used in any operative document refer only to the Paragraph, subparagraph, Section,
subsection or other subdivision described in which the phrase occurs. As used in the Operative
Documents the word “or” is not exclusive. As used in the Operative Documents, the words
“include”, “including” and similar terms will be construed as if followed by “without
limitation to”. The rule of ejusdem generis will not be applied to limit the generality of a term
in any of the Operative Documents when followed by specific examples. When used to qualify any



Common Definitions and Provisions Agreement — Page 40




 









 







representation or warranty made by a Person, the phrases “to the knowledge of [such Person]” or “to
the best knowledge of [such Person]” are intended to mean only that such Person does not have
knowledge of facts or circumstances which make the representation or warranty false or misleading
in some material respect; such phrases are not intended to suggest that the Person does indeed know
the representation or warranty is true.




     13. Execution in Counterparts. To facilitate execution, each of the Operative Documents
may be executed in multiple identical counterparts. It will not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required to bind any party,
appear on each counterpart. All counterparts, taken together, will collectively constitute a single
instrument. But it will not be necessary in making proof of any of the Operative Documents to
produce or account for more than a single counterpart containing the respective signatures of, or
on behalf of, each of the parties to such document. Any signature page may be detached from one
counterpart and then attached to a second counterpart with identical provisions without impairing
the legal effect of the signatures on the signature page. Signing and sending a counterpart (or a
signature page detached from the counterpart) by facsimile or other electronic means to another
party will have the same legal effect as signing and delivering an original counterpart to the
other party. A copy (including a copy produced by facsimile or other electronic means) of any
signature page that has been signed by or on behalf of a party to any of the Operative Documents
will be as effective as the original signature page for the purpose of proving such party’s
agreement to be bound.



     14. Not a Partnership, Etc. Nothing in any Operative Document is intended to create any
partnership, joint venture, or other joint enterprise between BNPPLC and NAI.



     15. No Fiduciary Relationship Intended. Neither the execution of the Operative Documents
or other documents referenced in this Agreement nor administration thereof by BNPPLC will create
any fiduciary obligations of BNPPLC to NAI Moreover, BNPPLC and NAI disclaim any intent to create
any fiduciary or special relationship between themselves under or by reason of the Operative
Documents or the transactions described therein or any other documents or agreements referenced
therein.



[The signature pages follow.]



Common Definitions and Provisions Agreement — Page 41




 









 








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



	 	 	 	 	 	 	 
	 	 	BNP PARIBAS LEASING CORPORATION, a Delaware

corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Lloyd G. Cox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Lloyd G. Cox, Managing Director	 	 






Common Definitions and Provisions Agreement — Signature Page






 









 







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




	 	 	 	 	 	 	 
	 	 	NETWORK APPLIANCE, INC., a Delaware
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Steven Gomo	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Steven Gomo, Chief Financial Officer	 	 






Common Definitions and Provisions Agreement — Signature Page





 









 








Annex 1



Notice of ABR Period Election



[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




Gentlemen:




     Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Common Definitions and Provisions Agreement dated as of December 15, 2005, between you, BNP
Paribas Leasing Corporation, and the undersigned, Network Appliance, Inc.. This letter constitutes
notice of our election to make the first Construction Period or Base Rent Period beginning on or
after                                        , 20                     subject to an ABR Period Election.



     We understand that until a different election becomes effective as provided in definitions of
“ABR Period Election” and “LIBOR Period Election” in the Common Definitions and Provisions
Agreement, all subsequent Construction Periods or Base Rent Periods will also be subject to an ABR
Period Election.


NOTE: YOU ARE ENTITLED TO DISREGARD THIS NOTICE IF THE DATE SPECIFIED ABOVE CONCERNING THE
COMMENCEMENT OF THE ABR PERIOD ELECTION IS LESS THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF THIS
NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE
IS DEFECTIVE.




	 	 	 	 	 	 	 	 	 
	 	 	NETWORK APPLIANCE, INC., a Delaware	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





[cc all Participants]




 









 








Annex 2



Fixed Rate Lock Notice



[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




Gentlemen:




     Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Common Definitions and Provisions Agreement dated as of December 15, 2005, between you, BNP
Paribas Leasing Corporation, and the undersigned, Network Appliance, Inc.. By this letter, which
is given pursuant to subparagraph 3(B)(4) of the Lease, NAI requests that BNPPLC promptly
establish a Fixed Rate for a notional amount equal to the Lease Balance as of the date of this
letter for use in the calculation of the Effective Rate for all Base Rent Periods commencing on or
after the following Fixed Rate Lock Date:                                         , 20                    .



     As contemplated in the conditions set forth in subparagraph 3(B)(4) of the Lease, such
Fixed Rate Lock Date is the first Business Day of a calendar month which falls after the projected
Base Rent Commencement Date; such Fixed Rate Lock Date does not fall prior to the end of any Base
Rent Period which has commenced or will commence before BNPPLC receives this notice; and NAI
expects BNPPLC to receive this notice more than ten days prior to such Fixed Rate Lock Date.



     In an earlier phone conversation today between a representative of NAI and                      at the
New York Branch of BNP Paribas, NAI requested an estimate from BNP Paribas of the Fixed Rate that
would be established by BNPPLC and BNP Paribas entering into an Interest Rate Swap. The estimate
provided by telephone was:                      percent (                    %) per annum.



     By this letter, NAI confirms that it will accept such a rate or any lower rate as the Fixed
Rate for purposes of the Lease.


NOTE: BNPPLC shall be entitled to disregard this notice if the conditions to a Fixed
Rate Lock, as specified in subparagraph 3(B)(4) of the Lease, have not been satisfied.
However, NAI requests that BNPPLC notify NAI immediately if for any reason BNPPLC believes this
notice will not be effective.




 









 








	 	 	 	 	 	 	 	 	 
	 	 	NETWORK APPLIANCE, INC., a Delaware	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





[cc all Participants]




Annex 2 — Page 2




 









 








Annex 3



Notice of LIBOR Period Election



[Date]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




Gentlemen:




     Capitalized terms used in this letter are intended to have the meanings assigned to them in
the Common Definitions and Provisions Agreement dated as of December 15, 2005, between you, BNP
Paribas Leasing Corporation, and the undersigned, Network Appliance, Inc.. This letter constitutes
notice of our election to make the first Construction Period or Base Rent Period beginning on or
after                                        ,
20                    
subject to a LIBOR Period Election of                                          month(s).



     We understand that until a different election becomes effective as provided in definitions of
“ABR Period Election” and “LIBOR Period Election” in the Common Definitions and Provisions
Agreement, all subsequent Construction Periods or Base Rent Periods will also be subject to the
same LIBOR Period Election.


NOTE: YOU ARE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS SPECIFIED ABOVE IS
NOT A PERMITTED NUMBER UNDER THE DEFINITION OF “LIBOR PERIOD ELECTION” IN THE COMMON DEFINITIONS
AND PROVISIONS AGREEMENT, OR IF THE DATE SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF THE LIBOR
PERIOD ELECTION IS LESS THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK
THAT YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.




	 	 	 	 	 	 	 	 	 
	 	 	NETWORK APPLIANCE, INC., a Delaware	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





[cc all Participants]




 









 








Annex 4



Minimum Insurance Requirements




A. PROVISIONS APPLICABLE BOTH BEFORE AND AFTER THE COMPLETION DATE.




     1. Other Requirements Not Affected: The insurance coverages required by this Annex
represent minimum requirements of BNPPLC and other Interested Parties and are not to be construed
to modify or limit NAI’s indemnities or other agreements in the Agreement to which this Annex is
attached or in any other Operative Document. Such required coverages do not constitute a
representation or determination by BNPPLC of the minimum insurance coverages NAI should maintain
for its own protection.



     2. Requirements Apply Only to the Property: Further, the insurance coverages
required by this Annex apply only to the Property, it being understood that nothing in this Annex
is intended to impose minimum insurance requirements upon NAI with respect to other properties
owned or leased by NAI.



     3. Failure to Obtain: Failure of BNPPLC to demand certificate or other evidence of
full compliance with these insurance requirements, or failure of BNPPLC to identify a deficiency
from evidence that is provided, will not be construed as a waiver of NAI’s obligation to maintain
required insurance.



     4. Copies of Policies: NAI must provide to BNPPLC, at the offices of NAI, copies of
all insurance policies required herein within ten (10) days after receipt of a request for such
copies from BNPPLC or as soon as practicable if policies are in the process of being issued by the
applicable insurer. Such copies must be certified as complete and correct by an authorized
representative of the applicable insurer, subject to availability from the insurance company.



     5. Inconsistent Endorsements. The insurance policies maintained to comply with these
requirements will contain no endorsements that restrict, limit, or exclude coverages in any manner
that is inconsistent with these express requirements without the prior express written approval of
BNPPLC.



     6. Limits of Liability. The limits of liability necessary to satisfy these
requirements may be provided by a single policy of insurance or by a combination of primary and
umbrella/excess policies, but in no event will the total limits of liability available for any one
occurrence or accident be less than the amount required herein.



     7. Additional Insured Status. Additional insured status will be provided in favor



Annex
4 — Page 1





 









 







of BNPPLC and other Interested Parties on all liability insurance required herein except workers’
compensation and employer’s liability. Such additional insured status will be provided on a basis
that neither limits coverage to the additional insured by reason of its negligence (sole or
otherwise) nor excludes coverage for completed operations with respect to construction of the
Improvements.




     8. Primary Liability. The insurance policies maintained to comply with these
requirements will be primary to all insurance available to BNPPLC and other Interested Parties,
collectively or individually, with BNPPLC and other Interested Parties’ insurance being excess,
secondary and non-contributing (except in the case of workers’ compensation and employer’s
liability insurance). Where necessary, coverage will be endorsed to provide such primary
liability.



B. PROVISIONS APPLICABLE BEFORE THE COMPLETION DATE.




     1. General Terms and Conditions.




A. Definitions: For purposes of this Annex:




“Construction Period Policies” means insurance policies that satisfy
the minimum requirements set forth in this Annex and that NAI has obtained or
required its Contractors to obtain with respect to the Property prior to the
Completion Date.




“Contractor” will include subcontractors of any tier.




“ISO” means Insurance Services Office.




B. Status and Rating of Insurance Company. All insurance coverages required herein
prior to the Completion Date will be written through insurance companies admitted to do
business in the State of California and rated upon each renewal no less than A-: VII in the
then most current edition of A.M. Best’s Key Rating Guide.




C. Waiver of Subrogation. All insurance coverages carried by NAI with respect to
the Construction Project, whether required herein or not, will provide a waiver of
subrogation in favor of BNPPLC and other Interested Parties.




D. Release and Waiver: Without limiting other waivers or provisions in favor of
BNPPLC and other Interested Parties in any of the Operative Documents or other attachments
thereto, NAI hereby releases, and agrees to cause all Contractors performing any Work prior
to the Completion Date (other than subcontractors providing goods and/or



Annex
4 — Page 2





 









 









services with a
value of less than $100,000) to release, BNPPLC and all other Interested Parties from any
and all claims or causes of action whatsoever that NAI and/or such Contractors might
otherwise now or hereafter have resulting from or in any way connected with any loss covered
by insurance, whether required herein or not, or which would have been covered by insurance
required herein but for a failure of NAI and/or its Contractors to maintain such insurance.




E. Initial Insurance Representations to BNPPLC and Other Interested Parties: NAI
represents, acknowledges and agrees that:




     1. Any Construction Period Policies not previously obtained will be
obtained by NAI (or by the primary Contractor engaged by NAI to perform the
Work), and the initial premiums for all Construction Period Policies will be
paid, before NAI requests Construction Advances that cause the Lease Balance
to exceed $2,000,000; and notwithstanding anything to the contrary in the
Construction Management Agreement, BNPPLC may refuse to fund any
Construction Advances that would cause the Lease Balance to exceed
$2,000,000 prior to such time as BNPPLC is satisfied that NAI has obtained
and paid the premiums for the Construction Period Policies. Moreover, in the
case of the Builder’s Risk Policy, the premium must be paid or prepaid for
the entire period through the projected Completion Date before the Lease
Balance exceeds $2,000,000.




     2. The coverages provided by the Construction Period Policies will not
be terminated or modified to reduce, limit or qualify coverages in any
material respect without BNPPLC’s prior written consent in each case by
reason of any act or omission on the part of NAI or anyone acting for or
authorized to act for NAI (including any Contractor engaged by NAI to obtain
the Construction Period Policies for NAI). Without limiting the foregoing,
NAI will not do or authorize any act or omission
that could cause the coverage provided with respect to any Improvements by
the Builder’s Risk Policy to expire or lapse before the Completion Date.




     3. NAI must notify BNPPLC with reasonable promptness of any possible
damage claims known to NAI that NAI believes are, individually or taken
together, reasonably likely to a exceed seventy-five percent (75%) of any
aggregate limit of the Builder’s Risk Policy required herein.




     4. NAI will endeavor in good faith to cause each certificate of



Annex
4 — Page 3




 









 









insurance which is provided to BNPPLC by an insurer, or its authorized
representative, at the request of NAI in regard to any Construction Period
Policies to include the following express provision:




This is to certify that the policies of insurance described
herein have been issued to the Insured for whom this
certificate is executed and are in force at this time. In
the event of cancellation or non-renewal of coverage
affecting the certificate holder, other than by reason of
nonpayment of premium, thirty (30) days prior written notice
will be given to the certificate holder by certified mail or
registered mail, return receipt requested. In the event of
cancellation or non-renewal of coverage affecting the
certificate holder by reason of nonpayment of premium, ten
(10) days prior written notice will be given to the
certificate holder by certified mail or registered mail,
return receipt requested.




It is understood, however, that an insurer issuing such a certificate may
decline to include the foregoing statement in the certificate, in which case
NAI will instead deliver the certificate to BNPPLC with a cover letter from
NAI itself which states substantially as follows:




Enclosed is a certificate of insurance, which has been
issued by an insurer or its authorized representative, and
which we are providing to you to confirm that policies
described in the certificate have been issued to NAI or
another insured named in the certificate and are in force at
this time. NAI also certifies to you that such policies
have been issued, and in the event of any cancellation, non- renewal,
or reduction in coverage affecting you (BNP Paribas
Leasing Corporation) or other Interested Parties, NAI will
give you thirty (30) days prior written notice by certified
mail or registered mail, return receipt requested.




     5. NAI will also endeavor in good faith to cause each Construction
Period Policy to be endorsed to provide, in effect, that (A) in the event of
cancellation, non-renewal, or reduction in coverage affecting BNPPLC, other
than by reason of nonpayment of premium, thirty (30) days prior written
notice will be given by the insurer to BNPPLC by certified mail or
registered mail, return receipt requested; and (B) in the event of
cancellation, non-renewal, or reduction in coverage affecting



Annex
4 — Page 4




 









 









BNPPLC by
reason of nonpayment of premium, ten (10) days prior written notice will be
given by the insurer to BNPPLC by certified mail or registered mail, return
receipt requested.



     2. Commercial General Liability Insurance. Throughout the period from the Effective
Date to the Completion Date, NAI will maintain commercial general liability insurance in accordance
with the following requirements:




A. Coverage: Such insurance will cover liability (as to claims covered by the form
of CGL policy specified below, including claims for bodily injury and property damage)
arising from any occurrence on or about the Land or from any operations conducted on or
about the Land, including but not limited to tort liability assumed under any of the
Operative Documents. Defense will be provided as an additional benefit and not included
within the limit of liability.




B. Form: Commercial General Liability Occurrence form (ISO CG 0001, dated 12 04, or
an equivalent substitute form providing the same or greater coverage, and in any case
written to provide primary coverage to BNPPLC as provided in Part A.8 above).




C. Amount of Insurance: Coverage will be provided with limits of not less than:



	 	 	 	 	 
	i. Each Occurrence Limit

	 	$	1,000,000	 
	ii. General Aggregate Limit

	 	$	2,000,000	 
	iii. Product-Completed
Operations Aggregate Limit

	 	$	2,000,000	 
	iv. Personal and Advertising Injury Limit

	 	$	1,000,000	 







D. Required Endorsements:



	 	 	 	 	 	 	 
	 

	 	i.
	 	Additional Insured.
	 	as required in Part A.7 above.
	 
	 	 	 	 	 	 
	 

	 	ii.
	 	Aggregate Per Location
	 	The aggregate limit will apply
separately to each location through use of an Aggregate Limit of Insurance Per
Location endorsement (ISO CG 2504 1185 or its equivalent).
	 
	 	 	 	 	 	 
	 

	 	iii.
	 	Notice of Cancellation,	 	 






Annex
4 — Page 5





 









 








	 	 	 	 	 	 	 
	 

	 	 	 	Nonrenewal or	 	 
	 

	 	 	 	Reduction in Coverage:
	 	Consistent with Part B.1.E.5 above.
	 
	 	 	 	 	 	 
	 

	 	iv.
	 	Personal Injury Liability:
	 	The personal injury contractual liability exclusion will be deleted.
	 
	 	 	 	 	 	 
	 

	 	v.
	 	Primary Liability:
	 	As required in Part A.8 above.
	 
	 	 	 	 	 	 
	 

	 	vi.
	 	Waiver of Subrogation:
	 	As required in Part B.1.C above.







E. Deductible or Self Insured Retention Under Liability Policies: If a gap in the
liability insurance coverage provided to BNPPLC or another Interested Party under any
Construction Period Policy results from any deductible, self-insured retention or other
similar arrangement to which NAI agrees, then such gap must be covered by one or more other
Construction Period Policies, such that liability insurance protection afforded to BNPPLC
and other Interested Parties by all such Construction Period Policies, taken together, is no
less than it would be if NAI had not agreed to the deductible, self-insured retention or
other similar arrangement.



     3. Workers’ Compensation/Employer’s Liability Insurance. Throughout the period from
the Effective Date to the Completion Date, NAI will maintain workers’ compensation and employer’s
liability insurance in accordance with the following requirements:




A. Coverage: Such insurance will cover liability arising out of NAI’s employment of
workers and anyone for whom NAI may be liable for workers’ compensation claims.




B. Amount of Insurance: Coverage will be provided with a limit of not less than:



	 	 	 	 	 	 	 
	 

	 	i.
	 	Workers’ Compensation:
	 	Statutory limits.
	 
	 	 	 	 	 	 
	 

	 	ii.
	 	Employer’s Liability:
	 	$1,000,000 each accident and each disease.







C. Required Endorsements:



	 	 	 	 	 	 	 
	 

	 	i.
	 	Notice of Cancellation,	 	 
	 

	 	 	 	Nonrenewal or Reduction	 	 
	 

	 	 	 	in Coverage:
	 	Consistent with Part B.1.E.5 above.
	 
	 	 	 	 	 	 
	 

	 	ii.
	 	Waiver of Subrogation:
	 	As required in Part B.1.C above.






Annex
4 — Page 6





 









 








     4. Umbrella/Excess Liability Insurance. Throughout the period from the Effective
Date to the Completion Date, NAI will maintain umbrella/excess liability insurance in accordance
with the following requirements:




A. Coverage: Such insurance will be excess over and be no less broad than all
coverages described in the preceding subsections 1, 2 and 3 and will include a drop-down
provision if commercially available.




B. Form: This policy will have the same inception and expiration dates as the
commercial general liability insurance required above or a nonconcurrency endorsement.




C. Amount of Insurance: Coverage will be provided with a limit of not less than
$10,000,000 per occurrence and in the aggregate.



     5. Builders Risk Insurance. Throughout the period from the Effective Date to the
Completion Date, NAI will maintain or cause to be maintained property insurance (Builders Risk
Insurance) in accordance with the following requirements:




A. Insureds: Protection will extend to BNPPLC as a Named Insured or Additional
Named Insured as its interest may appear; and the policy will be modified if necessary so
that the protection afforded to BNPPLC is not reduced or impaired by acts or omissions of
NAI or any other beneficiary or insured. (Such modification of the policy may be by
endorsement comparable to a standard mortgagee clause; not limited, however, by its terms to
BNPPLC’s rights “as a mortgagee” and not conditioned upon rights of the insurer
to be subrogated to BNPPLC’s rights under the Operative Documents in the event of a payment
of insurance proceeds to BNPPLC.)




B. Covered Property: Such insurance will cover:




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





Annex
4 — Page 7





 









 









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






C. Form: Coverage will be on an “all risk” form, will include theft, flood,
earthquake, and earthquake sprinkler leakage, and be written on a completed-value basis with
no co-insurance provision. No protective safeguard warranty will be permitted.




D. Amount of Insurance: Real property coverage will be provided in an amount equal
at all times to the full replacement value, exclusive of land, foundation, footings,
excavations and grading.




E. Deductibles. Deductibles applicable to the Builder’s Risk Policy will not exceed
the following:



	 	 	 	 	 
	i.

	 	All Risks of Direct Damage, Per
Occurrence, except flood and earthquake
	 	$50,000
	 
	 	 	 	 
	ii.

	 	Delayed Opening Waiting Period
	 	30 Days
	 
	 	 	 	 
	iii

	 	Flood, Per Occurrence
	 	$50,000 or excess of NFIP if
in Flood Zone A
	 
	 	 	 	 
	iv

	 	Earthquake and Earthquake
Sprinkler Leakage, Per Occurrence
	 	5% of total project value at
risk at the time of the
loss, subject to a minimum
of $100,000







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




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





Annex
4 — Page 8




 









 









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






G. Required Endorsements and Minimum Sublimits:



	 	 	 	 	 
	i.

	 	Additional Expenses Due To Delay
In Completion Project, including but
not limited to financing costs including
interest expenses, insurance expenses,
	 	Included with specific
sublimits (based on an
estimated 12 period of
indemnity) as follows:
	 

	 	professional fees and taxes;	 	 
	 

	 	 	 	$1,900,000 — construction
financing interest.
	 
	 	 	 	 
	 

	 	 	 	$380,000 — real estate taxes
	 
	 	 	 	 
	 

	 	 	 	$204,000 — insurance
premiums
	 
	 	 	 	 
	ii.

	 	Agreed Value;
	 	No coinsurance
	 
	 	 	 	 
	iii.

	 	Boiler & Machinery on
a Comprehensive Basis;
	 	Included without sublimit
	 
	 	 	 	 
	iv.

	 	Damage Resulting From
or Arising From Error, Omission
or Deficiency In Design,
Specifications, Workmanship
or Materials, Including Collapse;
	 	Included without sublimit
	 
	 	 	 	 
	v.

	 	Debris Removal Additional
Limit; Debris Removal
	 	$4,000,000 sublimit
	 
	 	 	 	 
	vi.

	 	Earthquake including
Sprinkler Leakage;
	 	$10,000,000 sublimit
	 
	 	 	 	 
	vii.

	 	Expediting Expenses;
	 	$50,000 sublimit
	 
	 	 	 	 
	viii.

	 	Flood — Annual Aggregate
including Earthquake
Sprinkler Leakage;
	 	$10,000,000 sublimit






Annex
4 — Page 9




 









 








	 	 	 	 	 
	ix.

	 	Freezing;
	 	$100,000 sublimit
	 
	 	 	 	 
	x.

	 	Notice of Cancellation
or Reduction;
	 	Consistent with Part
B.1.E.5 above
	 
	 	 	 	 
	xi.

	 	Occupancy Clause;
	 	Consistent with Part B.5.F
above
	 
	 	 	 	 
	xii.

	 	Demolition /Increased Cost of
Cost of Construction — Per Occurrence
	 	$1,000,000 sublimit
	 
	 	 	 	 
	xiii.

	 	Pollutant Clean-Up
and Removal, provided that
such condition ensues following
a loss from a covered peril;
	 	Included in Debris Removal

sublimit
	 
	 	 	 	 
	xiv.

	 	Preservation of Property;
	 	Included without sublimit
	 
	 	 	 	 
	xv.

	 	Repair, Replace or Re-erect Valuation Clause;
	 	 Included without sublimit
	 
	 	 	 	 
	xvi.

	 	Testing;
	 	Included without sublimit
	 
	 	 	 	 
	xvii.

	 	Waiver of Subrogation.
	 	As required in Part B.1.C
above






     6. Evidence of Insurance. NAI will provide confirmation of the insurance required
prior to the Completion Date in accordance with the following:




A. Provision of Evidence. Evidence of the insurance coverage required to be
maintained by NAI, represented by certificates of insurance or policies and endorsements
issued by the insurance company or its legal agent, must be furnished to BNPPLC prior to the
Effective Date. New certificates of insurance or policies and endorsements will be provided
to BNPPLC prior to or concurrent with the termination date of the current certificates of
insurance or policies and endorsements.




B. Form:



	 	 	 	 	 
	 

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






Annex
4 — Page 10





 









 








	 	 	 	 	 
	 

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







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



	 	 	 	 	 
	 

	 	i.
	 	BNPPLC as a certificate holder with correct mailing address as provided
by BNPPLC.
	 
	 	 	 	 
	 

	 	ii.
	 	Insured’s name, which must match that on the Agreement to which this
Annex is attached.
	 
	 	 	 	 
	 

	 	iii.
	 	Insurance companies affording each coverage, policy number of each
coverage, policy dates of each coverage, all coverages and limits described
herein, and signature of authorized representative of insurance company.
	 
	 	 	 	 
	 

	 	iv.
	 	Producer of the certificate with correct address and phone number
listed.
	 
	 	 	 	 
	 

	 	v.
	 	Additional or named insured status of BNPPLC as required by this Annex.
	 
	 	 	 	 
	 

	 	vi.
	 	Aggregate limits per location (except as to the umbrella liability
insurance) required by this Annex.
	 
	 	 	 	 
	 

	 	vii.
	 	Amount of any deductibles and/or retentions.
	 
	 	 	 	 
	 

	 	viii.
	 	Cancellation, nonrenewal and reduction in coverage notification
consistent with Part B.1.E.5 above. Additionally, NAI will endeavor
in good faith to cause any insurer issuing to BNPPLC a certificate on
ACORD form 25 to delete the words “endeavor to” and “but failure to
mail such notice shall impose no obligation or liability of any kind
upon Company, it agents or representatives” from the cancellation
provision of such form.
	 
	 	 	 	 
	 

	 	ix.
	 	Primary status as required by this Annex.
	 
	 	 	 	 
	 

	 	x.
	 	Waivers of subrogation as required by this Annex.







D. Required Endorsements. A copy of each required endorsement will, if and as
requested by BNPPLC from time to time, also be provided.



Annex
4 — Page 11





 









 









E. Commencement of Construction. Commencement of construction without provision of
the required certificate of insurance and/or required policies and endorsements, or without
compliance with any other provision of this Annex or the Agreement to which it is attached,
will not constitute a waiver by BNPPLC of any rights. BNPPLC will have the right, but not
the obligation, of prohibiting NAI or any Contractor from performing any work until such
certificate of insurance and/or required policies and endorsements are received by BNPPLC.



     7. Contractor’s Insurance: To the extent, if any, necessary to preserve or provide
liability coverage for BNPPLC and other Interested Parties with regard to operations performed on
or about the Property prior to the Completion Date, NAI will require Contractors to provide (or
will provide the coverage on behalf of Contractors) similar to that required of NAI by the
foregoing provisions of this Annex. In the event NAI requires any Contractor to maintain
Construction Period Policies necessary to comply with these insurance requirements, NAI will also
require such Contractor to provide and maintain certificates of insurance containing provisions as
described herein (modified to recognize the Contractor, rather than NAI, as named insured)
enumerating, among other things, the waivers of subrogation, additional or named insured status,
and primary liability as required herein; and in such event NAI will cause the Contractor to make
those insurance certificates available to BNPPLC upon request.



C. PROVISIONS APPLICABLE AFTER THE COMPLETION DATE.




     1. Liability Insurance: After the Completion Date and throughout the Term of the
Lease, NAI must maintain commercial general liability insurance against claims for bodily injury,
death, advertising injury and property damage occurring in or upon or resulting from any occurrence
in or upon the Property under one or more insurance policies, all in such amounts, with such
insurance companies and upon such terms and conditions (including self-insurance, whether by
deductible, retention, or otherwise) as are consistent with NAI’s normal insurance practices in the
United States. In any event, policies under which NAI maintains such liability insurance must
provide, by endorsement or otherwise, that BNPPLC and other Interested Parties are also insured
thereunder against such claims with coverage that is not limited by any negligence or allegation of
negligence on their part and with coverage that is primary, not merely excess over or contributory
with the other commercial general liability coverage they may themselves maintain.



     2. Property Insurance: After the Completion Date and throughout the Term of the Lease,
NAI must keep all Improvements (including all alterations, additions and changes made to the
Improvements) insured against fire and other casualty under one or more property insurance
policies, all in such amounts, with such insurance companies and upon such terms and
conditions (including self-insurance, whether by deductible, retention, or otherwise) as are
consistent with NAI’s normal insurance practices in the United States. In any event, policies
under which NAI



Annex
4 — Page 12




 









 







maintains such insurance must:




	 	 	 	 	 
	 

	 	i.
	 	show BNPPLC as an additional insured as its interest may appear; and
	 
	 	 	 	 
	 

	 	ii
	 	provide that the protection afforded to BNPPLC thereunder is primary (such that
any policies maintained by BNPPLC itself will be excess, secondary and noncontributing)
and is not to be reduced or impaired by acts or omissions of NAI or any other
beneficiary or insured.






     3. Evidence of Insurance. NAI will provide confirmation of the insurance required
after the Completion Date in accordance with the following:




A. Provision of Evidence. Evidence of the insurance coverage required to be
maintained by NAI, represented by certificates of insurance, evidence of insurance, and
endorsements issued by the insurance company or its legal agent, must be furnished to BNPPLC
prior to the Completion Date. New certificates of insurance, evidence of insurance, and
endorsements will be provided to BNPPLC prior to or concurrent with the termination date of
the current certificates of insurance, evidence of insurance, and endorsements.




B. Form:



	 	 	 	 	 
	 

	 	i
	 	The property insurance will be evidenced by ACORD form 28, “Evidence of
Property Insurance”, completed in a manner reasonably satisfactory to BNPPLC
to show compliance with the requirements of this Annex.
	 
	 	 	 	 
	 

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







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



	 	 	 	 	 
	 

	 	i.
	 	BNPPLC as a certificate holder with correct mailing address as provided
by BNPPLC.
	 
	 	 	 	 
	 

	 	ii.
	 	Insured’s name, which must match that on the Agreement to which this
Annex is attached.






Annex
4 — Page 13





 









 








	 	 	 	 	 
	 

	 	iii.
	 	Insurance companies affording each coverage, policy number of each
coverage, policy dates of each coverage, all coverages and limits described
herein, and signature of authorized representative of insurance company.
	 
	 	 	 	 
	 

	 	iv.
	 	Producer of the certificate with correct address and phone number
listed.
	 
	 	 	 	 
	 

	 	v.
	 	Additional or named insured status of BNPPLC as required by this Annex.
	 
	 	 	 	 
	 

	 	vi.
	 	Aggregate limits.
	 
	 	 	 	 
	 

	 	vii.
	 	Amount of any deductibles and/or retentions.
	 
	 	 	 	 
	 

	 	viii.
	 	Primary status as required by this Annex.
	 
	 	 	 	 
	 

	 	ix.
	 	Waivers of subrogation as required by this Annex.






Annex
4 — Page 14




 









 








Annex 5



Participation Agreement Form



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





 









 












PARTICIPATION AGREEMENT



BETWEEN



BNP PARIBAS LEASING CORPORATION

(“BNPPLC”)



AND




Banks or Other Financial Institutions

Designated as Participants in this Agreement




(“Participants”)




                                        , 200                    









Annex
5 — Page 2





 









 







PARTICIPATION AGREEMENT




     This PARTICIPATION AGREEMENT (this “Agreement”), dated as of                                         , 200                    , is
made by and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”), a Delaware corporation, and
***[PARTICIPANTS’ NAMES] (“Participants”).



RECITALS




     Contemporaneously with the execution of this Agreement, BNPPLC and Network Appliance, Inc.
(“NAI”), a Delaware corporation, are executing a Common Definitions and Provisions Agreement dated
as of                                         , 200                     (the “Original Effective Date”) (the “Common Definitions and Provisions
Agreement”). As used in this Agreement, capitalized terms defined in the Common Definitions and
Provisions Agreement and not otherwise defined in this Agreement are intended to have the
respective meanings assigned to them in the Common Definitions and Provisions Agreement.



     At the request of NAI, BNPPLC is executing a Ground Lease to acquire from NAI a leasehold
estate of less than 35 years in the Land and any existing Improvements on the Land
contemporaneously with the execution of this Agreement.



     Also contemporaneously with the execution of this Agreement, BNPPLC and NAI are executing a
Construction Management Agreement (the “Construction Management Agreement”), a Lease Agreement (the
“Lease”) and a Closing Certificate and Agreement (the “Closing Certificate”), all dated as of the
Original Effective Date. Pursuant to the Construction Management Agreement, BNPPLC is agreeing to
provide funding for the construction of new Improvements. When the term of the Lease commences,
the Lease will cover all Improvements on the Land.



     Pursuant to a Purchase Agreement dated as of the Original Effective Date (the “Purchase
Agreement”) between BNPPLC and NAI, NAI will have the right to purchase, among other things,
BNPPLC’s leasehold estate under the Ground Lease on and subject to the terms and conditions set
forth in the Purchase Agreement.



     By this Agreement, the parties desire to evidence the Participants’ agreement to participate
with BNPPLC in certain of the risks and rewards to BNPPLC of the Common Definitions and Provisions
Agreement, the Ground Lease, the Construction Management Agreement, the Lease, the Closing
Certificate and the Purchase Agreement (collectively, the “Operative Documents”), which
participation is to be accomplished through the exchange of promises to make payments computed by
reference to the sums paid or received by BNPPLC from time to time pursuant to the Operative
Documents, all as more particularly provided below.



Annex 5 — Page 3




 









 









AGREEMENTS




     Participants agree to participate with BNPPLC in, and BNPPLC agrees to share with the
Participants, the risks and rewards of the Operative Documents upon and subject to the following
terms, provisions, covenants, agreements and conditions:


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




     (a) “Anticipated Advances” means (1) the Initial Funding Advance and other amounts (other than
Commitment Fees and Carrying Costs) that are added to the Outstanding Construction Allowance from
time to time pursuant to Paragraph 3 of the Construction Management Agreement, and (2)
advances of funds by or on behalf of BNPPLC to or on behalf of NAI pursuant to Paragraph 4
of the Construction Management Agreement. Any other amounts paid out-of-pocket by BNPPLC from time
to time that BNPPLC is entitled to treat as Construction Advances pursuant to the express terms of
the Construction Management Agreement (see subparagraphs 2(G)(2) and 8(A) of the
Construction Management Agreement) will constitute Protective Advances, not Anticipated Advances,
for purposes of this Agreement.



     (b) “Back to Back Construction-Period Indemnity Claim” means a claim by BNPPLC against NAI for
payment of a Covered Construction Period Loss that BNPPLC may assert under the Construction
Management Agreement in order to cover or reimburse a claim made against BNPPLC itself by another
Interested Party because of Uncovered Construction-Period Participant Losses suffered by the other
Interested Party.



     (c) “Back to Back Construction-Period Indemnity Payment” means a payment made to BNPPLC by or
on behalf of NAI in satisfaction of a Back to Back Construction-Period Indemnity Claim.



     (d) “Bank Specific Lease Charges” means payments made to BNPPLC by or on behalf of NAI for the
account of a Participant or any other Interested Party under subparagraph 5(B) of the
Lease. Bank Specific Lease Charges include, for example, payments made to compensate a Participant
for an increase in costs related to advances made by the Participant hereunder and attributable to
a Banking Rules Change.



     (e) “Base Rent” means amounts payable as Base Rent under and as defined in the Lease,
except that each such amount payable for any period during which a Fixed Rate Lock



Annex
5 — Page 4




 









 







remains in
effect be adjusted, for purposes of calculating the payments required this Agreement, to equal the
Base Rent that would have been required for such period under the Lease if such Fixed Rate Lock had
not been in effect and a one month LIBOR Period Election had been in effect. In no event, however,
will any Fixed Rate Settlement Amounts be included in or deducted from amounts that constitute Base
Rent for purposes of this Agreement.




     (f) “Critical Event” means any of the following:




     (i) any failure by NAI to purchase BNPPLC’s interest in the Property or to cause an
Applicable Purchaser to purchase BNPPLC’s interest in the Property when required under the
Purchase Agreement;




     (ii) any failure by NAI to pay Base Rent which continues for 10 days; or




     (iii) any Issue 97-10/Event; or




     (iv) any delivery by NAI of a Pre-lease Force Majeure Event Notice; or




     (v) any Termination of NAI’s Work which may occur as provided in the Construction
Management Agreement prior to the Completion Date.



     (g) “Critical Remedy” means BNPPLC’s right to do any of the following: (a) file a lawsuit
against NAI to enforce the Operative Documents; (b) send a notice to terminate NAI’s rights and
obligations to continue Work as provided in subparagraph 7(C) of the Construction
Management Agreement; and (c) make the election to accelerate the Designated Sale Date as described
in the definition thereof in the Common Definitions and Provisions Agreement.



     (h) “Defaulting Participant” means any Participant that has failed to make a payment when due
to BNPPLC equal to the Participant’s Percentage of an Anticipated Advance as required by
subparagraph 3(B) below.



     (i) “Deferred Construction-Period Compensation” means any additional amount paid to
BNPPLC pursuant to the Purchase Agreement only because of — and which BNPPLC would not have been
paid or allowed to retain but for — Losses that are included in any Balance of Unpaid Construction
Period Losses, but that do not qualify as Protective Advances hereunder and do not consist of
reductions in Carrying Costs or Base Rent resulting from a Pre-lease Force Majeure Loss. (Should
the Property not be sold by BNPPLC until after NAI no longer has any right to purchase or arrange a
purchase by an Applicable Purchaser pursuant to the Purchase Agreement, sales proceeds — net of
sales expenses — will nevertheless be allocated for purposes of this Agreement among Net Sales
Proceeds, Deferred Construction-Period Compensation and Unrecovered Protective Advances as if NAI
had arranged the sale pursuant to the Purchase



Annex
5 — Page 5






 









 








Agreement.)




     (j) “Distributable Payments” means any payments actually received by BNPPLC under the
Operative Documents as (or in satisfaction of NAI’s obligations for) any of the following or
interest on past due amounts thereof:




     (i) Base Rent;




     (ii) Qualified Prepayments (including 97-10/Prepayments);




     (iii) Bank Specific Lease Charges;




     (iv) Back to Back Construction-Period Indemnity Payments;




     (v) any Supplemental Payment; and




     (vi) Net Sales Proceeds and any Deferred Construction-Period Compensation that BNPPLC
excluded from sales proceeds received by it for purposes of calculating Net Sales Proceeds.



     (k) “Late Payment Rate” means (a) for each day (other than as set forth in clause (b) of this
sentence) the Fed Funds Rate or (b) for the purpose of computing interest on past due payments for
each day following the fifth day after such payments first became due, a rate of three percent (3%)
per annum in excess of the Prime Rate then in effect; except that the Late Payment Rate will not,
notwithstanding anything to the contrary herein contained, exceed the maximum rate of interest
permitted by applicable law.



     (l) “Majority” means, at the time any determination thereof is required, any of the
Participants and BNPPLC, the aggregate Percentages of which equal or exceed sixty-seven percent
(67%) of the Percentages of BNPPLC and of all the Participants then entitled to vote under
subparagraph 6(A).



     (m) “Net Cash Flow” means payments actually received by BNPPLC under the Operative
Documents as (or in satisfaction of NAI’s obligations for) Base Rent, Qualified Prepayments
(including 97-10/Prepayments) or a Supplemental Payment or as interest on past due Base Rent,
Qualified Prepayments or a Supplemental Payment; except that the following will be deducted or
excluded from such payments for purposes of calculating Net Cash Flow: (a) any Deferred
Construction-Period Compensation included in any Supplemental Payment; and (b) any Unrecovered
Protective Advances for which any Participant has not fully reimbursed its Percentage to BNPPLC as
provided in subparagraph 3(C). By deducting any Unrecovered Protective Advance in the calculation
of Net Cash Flow, BNPPLC will be considered to have



Annex
5 — Page 6






 









 







“recovered” such Protective Advance for
purposes of calculating “Excess Reimbursements” under and as defined in subparagraph 3(C). Further,
if BNPPLC deducts Unrecovered Protective Advances in the calculation of Net Cash Flow, but later
receives payment from NAI (in excess of other amounts then due from NAI) for the same Protective
Advances, such payment to BNPPLC by NAI will also constitute Net Cash Flow for purposes of this
Agreement.




     (n) “Net Sales Proceeds” means, subject to the deductions and exclusions described below in
this definition:




     (1) all payments actually received by BNPPLC under the Purchase Agreement as (or in
satisfaction of NAI’s or an Applicable Purchaser’s obligations for) the purchase price for
BNPPLC’s interest in Property or in Escrowed Proceeds; and




     (2) if the Property is not sold pursuant to the Purchase Agreement on the Designated
Sale Date, then all rents and sales, condemnation and insurance proceeds actually received
by BNPPLC (other than sales proceeds paid or to be paid by BNPPLC to NAI pursuant to
Paragraph 3(E) of the Purchase Agreement) from any sale or lease after the
Designated Sale Date of any interest in, or because of any subsequent taking or damage to,
the Property.


For purposes of calculating Net Sales Proceeds, the following will be deducted or excluded from
such payments (without duplication of any item): (i) any excess sales proceeds that BNPPLC is
required by the Purchase Agreement to pay over to NAI; (ii) any Deferred Construction-Period
Compensation; (iii) any amounts applied by BNPPLC to pay, or received by BNPPLC as reimbursement
for, bona fide costs of a sale of the Property; and (iv) any other Unrecovered Protective Advances
for which any Participant has not fully reimbursed its Percentage to BNPPLC as provided in
subparagraph 3(C). Without limiting the foregoing, after any Designated Sale Date upon which
neither NAI nor an Applicable Purchaser purchases BNPPLC’s interest in the Property, BNPPLC may
deduct the following as Unrecovered Protective Advances: (x) ad valorem taxes, (y) insurance
premiums; and (z) other Losses of every kind suffered or incurred by BNPPLC (other than general
overhead) with respect to the ownership, operation or maintenance of the Property after the
Designated Sale Date, other than Unrecovered Protective Advances for which all Participants have
paid BNPPLC their respective Percentages thereof as required by subparagraph 3(C). By deducting
any Unrecovered Protective Advances in the calculation of Net Sales Proceeds, BNPPLC will be
considered to have “recovered” such Protective Advances for purposes of calculating Excess
Reimbursements under and as defined in subparagraph 3(C). Also, if BNPPLC deducts Unrecovered
Protective Advances in the calculation of Net Sales Proceeds, but later receives payment from NAI
(in excess of other amounts then due from NAI) for the same Protective Advances, such payment to
BNPPLC by NAI will constitute Net Sales Proceeds for purposes of this Agreement.




Annex
5 — Page 7




 









 








     (o) “Participants” means [Participants’ Names] and each of the other undersigned
parties designated as Participants in the signature pages to this Agreement, and any other
financial institutions which may hereafter become parties to this Agreement (by joining with BNPPLC
in completing and executing a Participation Agreement Supplement).



     (p) “Participation Agreement Supplement” means a Participation Agreement Supplement in
substantially the form attached hereto as Exhibit A, completed and executed by BNPPLC and a
Participant, adding the Participant as a party to this Agreement and to the Agency Agreement,
changing a Participant’s Percentage or removing a Participant as a party to this Agreement.



     (q) “Participation Amount” of BNPPLC or any Participant means the outstanding balance from
time to time of the total investment made by BNPPLC under the Operative Documents or by the
applicable Participant hereunder, as determined by BNPPLC. The Participation Amount of BNPPLC and
each Participant will equal its share of the outstanding principal balance that would be due from
NAI from time to time if BNPPLC had made a loan (and the Participants had participated in the loan)
to NAI for NAI’s construction of improvements authorized by the Construction Management Agreement,
instead of BNPPLC’s having acquired the Property itself and having leased the same to NAI as
provided in the Operative Documents. Absent a failure by any Participant to make a payment
required by subparagraph 3(B) or some other unexpected occurrence, it is expected that (a) the
Participation Amounts of BNPPLC and the Participants will always be in proportion to their
respective Percentages set forth in Schedule 1, and (b) the total Participation Amounts of BNPPLC
and all Participants on and prior to the Designated Sale Date will equal the Lease Balance computed
from time to time as described in the Common Definitions and Provisions Agreement.



     (r) “Percentage” of each Participant means, subject to change as provided in subparagraph 4(A)
and to change by a Participation Agreement Supplement, the percentage designated as the
Participant’s “Percentage” in Schedule 1. “Percentage” of BNPPLC means a percentage that, at the
time a determination of such Percentage is required hereunder, is equal to 100% less the sum of the
Percentages of all the Participants.



     (s) “Protective Advances” means any payments, other than Anticipated Advances or
Excluded Taxes, made by or on behalf of BNPPLC at any time or from time to time because of, arising
out of or related to, in whole or in part: (1) the Property or the construction, protection,
preservation, operation, ownership or sale thereof; (2) any of the Operative Documents or the
transactions contemplated therein; or (3) BNPPLC’s status as a party to any of the Operative
Documents or anything done by BNPPLC to enforce the obligations of NAI under the Operative
Documents (whether done upon BNPPLC’s own initiative or upon the direction of the Majority).
Protective Advances will include any and all payments by BNPPLC (including those paid to attorneys,
accountants, experts and other advisors) for which NAI is obligated to indemnify or



Annex
5 — Page 8






 









 







reimburse BNPPLC by ***Paragraph 5 of the Lease or would be so obligated if the Term of Lease had
commenced.




     (t) “Uncovered Construction-Period Participant Loss” means a Loss incurred or suffered
by a Participant (1) for which, if BNPPLC must pay or reimburse such Loss to the Participant,
BNPPLC can in turn require payment or reimbursement from NAI under the indemnity against Covered
Construction Period Losses set forth in Construction Management Agreement (e.g., Losses arising
because of fraud, misapplication of funds, illegal acts, or willful misconduct on the part of the
NAI or its employees or agents or any other party for whom NAI is responsible), and (2) for which
the Participant is not otherwise indemnified directly by or compensated by NAI or by insurance
maintained by NAI.



     (u) “Unrecovered Protective Advances” means Protective Advances that have not been repaid to
BNPPLC by or on behalf of NAI and have not otherwise been previously recovered by BNPPLC through
deductions from Net Cash Flow or Net Sales Proceeds as provided in the definitions of those terms
above.



17. Payments From BNPPLC to Each Participant.




     (a) Payments Computed by Reference to Net Cash Flow and Net Sales Proceeds. Upon the
actual receipt of any Net Cash Flow, Net Sales Proceeds or interest thereon, BNPPLC will pay each
Participant an amount equal to such Participant’s Percentage times such Net Cash Flow, Net Sales
Proceeds or interest, as the case may be.



     (b) Payments Computed by Reference to Bank Specific Lease Charges. If BNPPLC
actually receives any Bank Specific Lease Charges (or interest thereon) for the account of a
particular Participant, then BNPPLC promises to promptly make a payment to such Participant equal
to such Bank Specific Lease Charges (or interest thereon). If requested by any Participant, BNPPLC
will make a demand upon NAI for payment of any Bank Specific Lease Charges due for the account of
such Participant.



     (c) Payments Computed by Reference to Back to Back Construction-Period Indemnity
Payments. If BNPPLC actually receives any Back to Back Construction-Period Indemnity Payment
(or interest thereon) in satisfaction of a Back to Back Construction-Period Indemnity Claim
asserted for Losses for which BNPPLC is obligated to a particular Participant, then BNPPLC promises
to make a payment to such Participant equal to such Back to Back Construction-Period Indemnity
Payment (or interest thereon). If a Participant incurs or suffers an Uncovered Construction-Period
Participant Loss, BNPPLC must compensate such Participant for the Uncovered Construction-Period
Participant Loss; subject to the condition, however, that BNPPLC’s obligation to so compensate a
Participant will be satisfied only from any Back to Back Construction-Period Indemnity Payments received by BNPPLC on
account of such



Annex
5 — Page 9







 









 







obligation, it being understood that BNPPLC will have no personal liability for any
such obligation.




     (d) Payments Computed by Reference to Deferred Construction-Period Compensation. If
BNPPLC actually receives any Deferred Construction-Period Compensation, and if any Participant
suffered Losses included in the Unpaid Balance of Construction Period Losses for which such
Deferred Construction-Period Compensation was paid, BNPPLC promises to pay such Participant a
fraction of such Deferred Construction-Period Compensation. The numerator of the fraction will
equal the Losses suffered by such Participant (and interest thereon) that are included in the
Balance of Unpaid Construction-Period Losses as of the Designated Sale Date, and the denominator
will equal the total Losses (and interest thereon) — other than Protective Advances and reduced
Carrying Costs or Commitment Fees (and interest thereon) — which are included in the Balance of
Unpaid Construction Period Losses as of the Designated Sale Date.



     (e) Timing; Manner of Payment. Each payment required of BNPPLC by this Article 2 must
be made prior to 3:00 p.m., New York time, on the same day that BNPPLC actually receives the
corresponding Distributable Payment (in good funds), if BNPPLC’s receipt of the corresponding
Distributable Payment occurs prior to 2:00 P.M., New York time; if, however, BNPPLC’s receipt of
the Distributable Payment (in good funds) occurs on any day after 2:00 p.m., New York time, the
payments required from BNPPLC to the Participants will not be due until 12:00 noon, New York time,
on the next Business Day. All payments from BNPPLC to the Participants will be by transfer of
federal funds pursuant to the wiring instructions set forth in Schedule 1. Each payment owing to a
Participant by BNPPLC will bear interest from the date it is due until it is paid by BNPPLC at the
Late Payment Rate calculated on the basis of a 360-day year. Any payment by BNPPLC to a
Participant after the time of day specified herein for such payment will be deemed not paid until
the next following Business Day for purposes of this Agreement.



     (f) Meaning of Actually Received. As used herein with respect to payments,
“actually received” and words of like effect will include not only payments made directly from NAI
or any Applicable Purchaser, but also amounts paid by others on NAI’s behalf, amounts realized by
way of setoff, amounts realized upon the disposition of collateral under any documents that may be
given from time to time to secure NAI’s obligations under the Lease or Purchase Agreement (net of
the costs of disposition and further net of any amounts that must be returned to NAI or any third
party having an interest in such collateral), and the fair market value of any property or services
accepted in lieu of a cash payment (though it is understood that nothing herein contained will
require BNPPLC to accept property or services in lieu of a cash payment required by the Operative
Documents and that BNPPLC will not agree to accept property or services in lieu of any cash
Distributable Payment without the Participants’ prior written consent). Also, with respect to Base
Rent included in the definition of Net Cash Flow,



Annex
5 — Page 10







 









 







any Base Rent that BNPPLC receives as calculated
in the Lease during a Fixed Rate Lock Period will be deemed the “actual receipt” of Base Rent as
adjusted in accordance with the definition of “Base Rent” set forth above. The phrase “actually
received” will not, however, include amounts received by BNPPLC from any of the Participants or
from any affiliate of BNPPLC unless the context otherwise indicates. Finally, if payments due to
BNPPLC from NAI are reduced only because of credits attributable to a reduction of BNPPLC’s taxes
not subject to indemnification by NAI, as described in subparagraph 4(C)(4) of the Lease,
then the payments that BNPPLC would have received but for the credits will be considered as having
been actually received by BNPPLC for purposes of this Agreement.




18. Payments From the Participants to BNPPLC.




     (a) Initial Funding Advance. Each of the original Participants joining in the
execution of this Agreement promises to pay to BNPPLC, contemporaneously with the execution of this
Agreement, an initial payment as set forth below such Participant’s name on Schedule 1, equal to
the Participant’s Percentage times the outstanding Lease Balance as of the date hereof.




[***DRAFTING NOTE: This provision assumes that the effective date of this
Agreement will coincide with the first day of a new Base Rent Period or Construction
Period. If that assumption is not correct, an adjustment should be made to address
accrued Base Rent not yet paid or Carrying Costs not yet capitalized.]



BNPPLC will have no obligation hereunder to any of the original Participants that fails to pay
such initial payment. Such initial payment will be due no later than 12:00 noon, New York time, on
the effective date of this Agreement.



     (b) Future Advances. In the event any remaining Anticipated Advances may be required
of BNPPLC pursuant to the Construction Management Agreement after the date of this Agreement:




     (i) General. Subject to the limitation set forth in subparagraph 3(B)(3), each
Participant promises to make payments to BNPPLC equal to such Participant’s Percentage (as
such Percentage may be adjusted from time to time pursuant to subparagraph 4(A)) times the
total amount of each such Anticipated Advance.




     (ii) Timing. Before 12:00 noon, New York time, on the third Business
Day prior to any date on which BNPPLC expects to make a payment of an Anticipated Advance as
provided in Paragraph 4 of the Construction Management Agreement, BNPPLC will notify
the Participants of the amount of such payment, and each Participant must pay to BNPPLC such
Participant’s Percentage times such amount prior to 12:00



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noon, New York time, on such date.
The failure of any Participant to make a payment required by this subparagraph 3(B) will,
for purposes of this Agreement, be deemed to continue until the Participant actually pays
all past due amounts required by this subparagraph 3(B), together with interest thereon at
the Late Payment Rate.




     (iii) Limitation on Advances by Participant. Notwithstanding anything herein
to the contrary or any adjustment to any Participant’s Percentage pursuant to subparagraph
4(A), the total of all payments required of any Participant to BNPPLC by this subparagraph
3(B) (excluding interest on past due payments required by subparagraph 3(B)(2)) because of
Anticipated Advances (in contrast to Protective Advances) will not exceed the amount that
would cause such Participant’s Participation Amount to exceed the Participation Amount
specified for such Participant in Schedule 1.



     (c) Protective Advances.




     (i) General. If NAI fails to pay or reimburse any Protective Advance to
BNPPLC within ten days after BNPPLC makes a demand or request therefor, BNPPLC may notify
the Participants of such failure. Promptly after receipt of any such notice, each
Participant must pay to BNPPLC an amount equal to such Participant’s Percentage times the
Protective Advance described in the notice, EVEN IF THE PROTECTIVE ADVANCE WOULD NOT HAVE
BEEN PAID BUT FOR ANY ACTUAL OR ALLEGED NEGLIGENCE OF BNPPLC OR ITS AFFILIATES OR
REPRESENTATIVES AND EVEN IF THE PROTECTIVE ADVANCE WOULD NOT HAVE BEEN PAID BUT FOR ANY
ENVIRONMENTAL LOSSES OR OTHER MATTERS OR CIRCUMSTANCES FOR WHICH BNPPLC MAY BE STRICTLY
LIABLE. After any Participant has paid its respective Percentage times the Protective
Advance to BNPPLC, BNPPLC must pay to such Participant an amount equal to its Adjusted
Percentage (as defined below) times any subsequent Excess Reimbursement (as defined below)
or interest thereon actually received by BNPPLC for such Protective Advance. As used in
this Agreement the “Adjusted Percentage” of any Participant will equal (i) such
Participant’s Percentage, divided by (ii) the sum of BNPPLC’s Percentage and the Percentages
of all Participants who have paid BNPPLC their respective shares of the Protective Advance
at issue. As used in this Agreement, the term “Excess Reimbursement” will mean, for the
Protective Advance at issue, (A) amounts reimbursed or paid by NAI to (or otherwise
recovered by) BNPPLC on account of such Protective Advance, less (B) (i) the total amount of such
Protective Advance, times (ii) the Percentages of any Participants that have not paid BNPPLC
their respective Percentages of such Protective Advance.




     (ii) Exceptions. Notwithstanding the foregoing, no Participant will be
required to make any payment pursuant to this subparagraph 3(C) related to a Protective



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Advance that is paid only because of a transfer or assignment by BNPPLC of its right to
receive Distributable Payments or its rights and interests in and to the Property, the
Operative Documents or this Agreement to BNPPLC’s Affiliates. Further, nothing in this
subparagraph 3(C) will be construed to require a payment by a Participant for that portion
or percentage, if any, of a Protective Advance required only because of (and attributed by
any applicable principles of comparative fault to): (a) conduct of BNPPLC or a
Representative of BNPPLC that has been determined to constitute gross negligence or wilful
misconduct in or as a necessary element of a final judgment rendered against BNPPLC or such
Representative by a court with jurisdiction to make such determination; (b) any
representation made by BNPPLC in the Operative Documents that is false in any material
respect and that BNPPLC knew was false at the time of BNPPLC’s execution of the Operative
Documents; or (c) Liens Removable by BNPPLC. As used in this Agreement, “gross negligence”
of BNPPLC will not include any negligent failure of BNPPLC to act when the duty to act would
not have been imposed but for BNPPLC’s status as owner of the Property or as a party to the
Operative Documents or this Agreement.



     (d) Method of Payment. All payments made by the Participants to BNPPLC will be made
by transfer of federal funds to BNPPLC pursuant to the wiring instructions for BNPPLC set forth on
Schedule 1. Each payment owing to BNPPLC by any Participant must be paid to BNPPLC on the date
specified herein or, if not specified, on demand and will bear interest from the date due until the
date paid by the Participant at the Late Payment Rate calculated on the basis of a 360-day year.
Any payment by a Participant to BNPPLC after the time of day specified herein for such payment will
be deemed not paid until the next following Business Day for purposes of this Agreement.



19. Other Adjustments, Deductions and Investments.




     (a) Defaulting Participants.




     (i) Adjustments Because of Defaulting Participants. If any Anticipated Advance
may be required of BNPPLC after the date of this Agreement, with respect to which any
Defaulting Participant fails to make the payment required by subparagraph 3(B), the other
Participants will nonetheless be required to make the payments to BNPPLC required by
subparagraph 3(B). Further, in such event:




     A BNPPLC may reduce any Defaulting Participant’s Percentage as needed to
prevent the Defaulting Participant from receiving a share of Net Cash Flow or Net
Sales Proceeds that is in excess of the percentage computed by dividing the
Participation Balance of such Defaulting Participant by the total Participation
Balances of BNPPLC and all Participants collectively from time to



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time. Such
reduction in the Defaulting Participant’s Percentage will not cure such
Participant’s default hereunder nor constitute BNPPLC’s sole remedy for such
default, it being understood that other remedies provided herein or available at law
or in equity will be in addition to any such reduction.




     B Without limiting BNPPLC’s other remedies hereunder, for purposes of computing
payments that would otherwise be required to a Defaulting Participant because of
BNPPLC’s receipt of Net Cash Flow, BNPPLC may deduct from any Net Cash Flow actually
received by BNPPLC the amount by which such Net Cash Flow was increased by
Commitment Fees that accrued after the date the Defaulting Participant failed to
make any payment required by subparagraph 3(B) and before the date upon the
Defaulting Participant completely cured any such failure.




     (ii) Defaulting Participant’s Cure. After a failure to make a payment required
by subparagraph 3(B), a Defaulting Participant may cure such failure by paying to BNPPLC all
or part of such payment and interest thereon at the Late Payment Rate. In no event,
however, will any such failure by a Defaulting Participant be considered cured before BNPPLC
has effectively recovered the payment, together with such interest, either by reason of
payments made to BNPPLC by the Defaulting Participant or by BNPPLC’s exercise of other
remedies as provided in subparagraph 4(A)(1)(a) or subparagraph 4(B).



     (b) Setoff. In the event that one party to this Agreement has failed to pay to a
second party hereto any amount when due hereunder, the second party may deduct such amount and
interest thereon at the Late Payment Rate from any payments due from it under this Agreement to the
first party. Without limitation, BNPPLC may setoff amounts owed to it by any Defaulting
Participant against any termination fee payable to such Defaulting Participant pursuant to
subparagraph 6(D) below if BNPPLC elects to reduce such Defaulting Participant’s Percentage to zero
as provided in subparagraph 6(D).



     (c) Sharing of Payments. Each Participant agrees that if for any reason it
obtains a payment made by or for NAI that reduces any Distributable Payment, and if such payment
will cause such Participant to receive more than it would have received had such payment been made
instead to BNPPLC and generated the payments by BNPPLC contemplated in this Agreement, then (1)
such Participant must promptly purchase interests in the rights of other parties to this Agreement
as necessary to cause BNPPLC and all Participants to share payments as they otherwise would have
done under this Agreement, and (2) such other adjustments will be made from time to time as is
equitable to ensure that BNPPLC and all Participants share all payments of (or that operate to
reduce) Distributable Payments as they otherwise would have done under this Agreement. If, however,
the payment received by the purchasing Participant or any part thereof is later recovered from the
purchasing Participant, the purchase provided for in this



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subparagraph will be rescinded, and the
price paid by the purchasing Participant to other parties will be repaid by them to the purchasing
Participant to the extent of such recovery. Also, if the purchasing Participant is required by
court order to pay interest on the payment so recovered, then amounts repaid to the purchasing
Participant by the other parties will be repaid with interest, computed in the same manner as the
interest required by the court order. Nothing in this subparagraph will in any way affect the right
of BNPPLC or any Participant to obtain payment (whether by exercise of rights of banker’s lien,
set-off or counterclaim or otherwise) of indebtedness or obligations other than those established
by this Agreement or any of the Operative Documents.




     (d) Withholding Taxes. BNPPLC may deduct any United States withholding tax required
on payments to a Participant hereunder from such payments, and the Participant must reimburse
BNPPLC for any such taxes BNPPLC is required to pay and that BNPPLC has not deducted. If BNPPLC is
uncertain whether United States withholding tax is required, BNPPLC may, after notice to the
applicable Participant, deduct the withholding tax except during any period when BNPPLC is excused
from such withholding because of the Participant’s delivery to BNPPLC of (i) a statement in
duplicate conforming to the requirements of United States Treasury Regulation Section 1.1441-5(b)
or (ii) two duly completed copies of Internal Revenue Service Form W-8BEN or any successor form
thereto (“Form W-8BEN”) relating to the Participant and claiming complete exemption from
withholding tax on all amounts to be received by the Participant pursuant to this Agreement or
(iii) a valid United States Internal Revenue Service Form W-8ECI or any successor form thereto
(“Form W-8ECI”) relating to the Participant and claiming complete exemption from withholding tax on
all amounts to be received by the Participant pursuant to this Agreement. Any Participant will, if
requested by BNPPLC, deliver to BNPPLC subsequent statements with respect to such Treasury
Regulation or two additional copies of Form W-8BEN or Form W-8ECI, or the applicable replacement
forms, on or before the date that any prior such delivered statements or forms expire or become
obsolete. If any such statement or form delivered by a Participant to BNPPLC becomes invalid or
inapplicable as to such Participant, such Participant must promptly
inform BNPPLC. The obligations of each Participant pursuant to this subparagraph 4(D) will
survive the termination of this Agreement.



     (e) Order of Application. For purposes of this Agreement, as between BNPPLC and
Participants, BNPPLC will be entitled (but not required) to apply payments received from NAI under
the Operative Documents or from any sale of the Property or any interest therein or portion thereof
to pay or reimburse then outstanding Unrecovered Protective Advances and Fixed Rate Settlement
Amounts (and interest thereon), if any, regardless of how NAI may otherwise have designated such
payments or may otherwise be entitled to characterize such payments. In addition, BNPPLC may
allocate any such payments to reduce various outstanding Unrecovered Protective Advances in such
order as BNPPLC deems appropriate.



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     (f) Investments Pending Dispute Resolution; Overnight Investments. Whenever
BNPPLC in good faith determines that it does not have all information needed to determine how
payments to the Participants must be made on account of any Distributable Payments, or whenever
BNPPLC in good faith determines that there is any dispute among the Participants about payments
which must be made on account of Distributable Payments, BNPPLC may choose to defer the payments to
Participants which are the subject of such missing information or dispute. However, to minimize
any such deferral, BNPPLC must attempt diligently to obtain any missing information needed to
determine how payments to the Participants must be made. Also, pending any such deferral, or if
BNPPLC is otherwise required to invest funds pending distribution to the Participants, BNPPLC must
endeavor to invest the payments at issue. In addition, if BNPPLC receives any Distributable
Payment after 2:00 p.m., New York time, on any day and will not make payments to Participants in
connection therewith until the next Business Day pursuant to subparagraph 2(E), then BNPPLC must
endeavor to invest such payments overnight; however, BNPPLC will have no liability to the
Participants if BNPPLC is unable to make such investments. Investments by BNPPLC will be in the
overnight federal funds market pending distribution, and the interest earned on each dollar of
principal so invested will be paid to the Person entitled to receive such dollar of principal when
the principal is paid to such Person.



20. Nature of this Agreement.




     (a) No Conveyance. This Agreement is intended to create contractual rights in
favor of each Participant to receive payments from BNPPLC, but it is not intended to convey or
assign to the Participants any interest in the Property or in the Operative Documents or in the payments to be made to BNPPLC thereunder. In no event will any
Participant exercise or attempt to exercise any right or remedy of BNPPLC under the Operative
Documents. Nothing in this Agreement will be construed to grant to the Participants any right to
enforce NAI’s obligations under the Operative Documents, nor is in anything in this Agreement to be
construed to all any Participant to collect directly from NAI any payments due under the Operative
Documents. Although BNPPLC’s obligations for payments to the Participants hereunder will be
computed by reference to funds actually received as Distributable Payments, this Agreement will not
be construed as an assignment of Distributable Payments themselves or any interest therein, it
being understood that (without limiting or expanding the dollar amount of such obligations) BNPPLC
may satisfy such obligations from other funds available to it, thereby reserving Distributable
Payments for payment to other creditors or for other purposes, as BNPPLC determines in its sole
discretion.



     (b) Not a Partnership, Etc. Neither the execution of this Agreement, nor



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the sharing of risks and rewards under the Operative Documents, nor any agreement to share in
profits or losses arising as a result of the transactions contemplated thereby, is intended to be
or to create, and the foregoing will be construed not to be or to create any partnership, joint
venture, or other joint enterprise between BNPPLC and any Participant. Neither the execution of
this Agreement nor the management and administration of the Operative Documents or other related
documents by BNPPLC, nor any other right, duty or obligation of BNPPLC under or pursuant to this
Agreement is intended to be or to create any fiduciary relationship between BNPPLC and any
Participant.




21. Amendments; Waivers; Exercise of Rights and Remedies Against NAI.




     (a) Limitations Upon the Rights of BNPPLC. Subject to subparagraph 6(C), but
notwithstanding anything else to the contrary in this Agreement:




     (i) BNPPLC will not:




     A without the prior written consent of all Participants, execute any waiver,
modification or amendment of the Operative Documents that would: (1) increase the
Maximum Construction Allowance under the Operative Documents and thereby increase
the amounts the Participants may be required to pay to BNPPLC hereunder; (2) reduce
or postpone (or reasonably be expected to reduce or postpone) any payments that any
Participant would, but for such modification or amendment, be expected to receive
from BNPPLC hereunder (including any extension of the Designated Sale Date); or (3)
except as otherwise expressly contemplated in the Operative Documents, release
BNPPLC’s interest in all or a substantial part of the Property; or




     B over the written objection of a Majority, affirmatively make a Decision Not
to Sell at a Loss pursuant to the Purchase Agreement.




However, this subparagraph 6(A)(1) will not limit BNPPLC’s right to forebear from
exercising rights against NAI to the extent BNPPLC determines in good faith that such
forbearance is appropriate and is permitted by the following subsections in this
subparagraph 6(A). Upon the direction of the Majority, BNPPLC will execute any waiver,
modification or amendment of the Operative Documents requested by NAI; subject to the
conditions, however, that: (A) the waiver, modification or amendment is not prohibited by
the forgoing provisions of this Agreement, (B) the waiver, modification or amendment does
not (1) increase the amount BNPPLC may be required to pay to NAI or anyone else, or (2)
reduce or postpone (and cannot reasonably be expected to reduce or postpone) any payments
that BNPPLC would, but for such modification or amendment,



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be expected to receive, or (3)
release BNPPLC’s interest in all or a substantial part of the Property; and (C) BNPPLC is
not excused from executing the waiver, modification or amendment by subparagraph 6(C).




     (ii) BNPPLC will, with reasonable promptness, provide the Participants with copies of
all default notices it sends or receives under the Operative Documents and notify the
Participants of any Event of Default under the Lease or Critical Event of which BNPPLC is actually aware and of any other matters known to BNPPLC which,
in BNPPLC’s reasonable judgment, are likely to materially affect the payments any
Participant will be required to make or be entitled to receive under this Agreement, but
BNPPLC will not in any event be liable to any Participant for BNPPLC’s failure to do so
unless such failure constitutes gross negligence or wilful misconduct on the part of BNPPLC.




     (iii) Before exercising any Critical Remedy, or if requested in writing by any
Participant at any time when a Critical Event has occurred and is continuing, BNPPLC will
call a meeting with the Participants to discuss what action by BNPPLC, if any, is
appropriate under the Operative Documents and what direction, if any, a Majority may give to
BNPPLC. The meeting will be scheduled during regular business hours in the offices of
BNPPLC’s Parent in Dallas, Texas, or another appropriate location in Dallas, Texas, not
earlier than five and not later than twenty Business Days after BNPPLC’s receipt of the
written request from any Participant. BNPPLC will attempt in good faith and with reasonable
diligence to comply with the direction of a Majority if, when a Critical Event or an Event
of Default have occurred and be continuing, a Majority directs BNPPLC in writing to do the
following, as applicable under the circumstances: (a) send any default notice to NAI
required before a Critical Event can become an Event of Default, or (b) exercise any one or
more Critical Remedies. However, if BNPPLC is not a member of the Majority voting pursuant
to this subparagraph 6(A)(3) in favor of any such action, then BNPPLC may require that it
first receive the written agreement (in form reasonably acceptable to BNPPLC) of the members
of the Majority so voting to indemnify BNPPLC from and against all costs, liabilities and
claims that may be incurred by or asserted against BNPPLC because of the action the Majority
directs BNPPLC to take. In no event will any Participant instigate any suit or other action
directly against NAI with respect to the Operative Documents or the Property, even if the
Participant would, but for this Agreement, be entitled to do so as a party or third party
beneficiary under the Operative Documents or otherwise.




     (iv) In the event NAI (a) fails to make any 97-10/Prepayment required pursuant
to Paragraph 9 of the Construction Management Agreement following a termination of
the Supplemental Payment Obligation pursuant to subparagraph 5(B) of the Purchase
Agreement, or (b) fails to make any Supplemental Payment when required to do so



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pursuant to
the Purchase Agreement, then BNPPLC must, unless the Participants otherwise agree in
writing, bring suit against NAI to enforce the Operative Documents in such form as is
recommended by reputable counsel no later than sixty days after the expiration of any
applicable cure or grace period given NAI by the express terms of the Purchase Agreement or
other Operative Documents, and thereafter BNPPLC must prosecute the suit with reasonable
diligence in accordance with the advice of reputable counsel. If BNPPLC acquires the
interests of NAI in any of the Property as a result of such suit or otherwise, BNPPLC will thereafter proceed with
reasonable diligence to sell the Property in a commercially reasonable manner to one or more
bona fide third party purchasers and will in any event have consummated the sale of the
entire Property (through a single sale of the entire property or a series of sales of parts)
within five years following the date BNPPLC recovers possession of the Property at the best
price or prices BNPPLC believes are reasonably attainable within such time. Further, after
the Designated Sale Date and prior to BNPPLC’s sale of the entire Property, BNPPLC will
retain a property management company experienced in the area where the Property is located
to manage the operation of the Property and pursue the leasing of any completed improvements
which are part of the Property. BNPPLC will not retain an Affiliate of BNPPLC to act as the
property manager except under a bona fide, arms-length management contract containing
commercially reasonable terms. Further, after the Designated Sale Date and until BNPPLC
sells the Property, BNPPLC will (i) endeavor in good faith to maintain, or will obtain the
agreement of one or more tenants to maintain, the Property in good order and repair, (ii)
procure and maintain casualty insurance against risks customarily insured against by owners
of comparable properties, in amounts sufficient to eliminate the effects of coinsurance,
(iii) keep and allow the Participants to review accurate books and records covering the
operation of the Property, and (iv) pay prior to delinquency all taxes and assessments
lawfully levied against the Property.


Notwithstanding the foregoing, any Participants that have failed to fund any amount due hereunder,
including any Percentage of a Protective Advance, and that have not corrected such failure within
five Business Days after being notified thereof, will have no voting or consent rights under this
subparagraph 6(A) and no rights to require BNPPLC to call a meeting pursuant to subparagraph
6(A)(3) until such failure is corrected.




     (b) Rights of BNPPLC Generally. Subject to the limitations set forth in subparagraph
6(A):




     (i) BNPPLC will have the exclusive right to take any action and to exercise any
available powers, rights and remedies to enforce the obligations of NAI under the Operative
Documents or to refrain from taking any such action or exercising any such power, right or
remedy.



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     (ii) BNPPLC may (i) give any consent, waiver or approval requested by NAI with
respect to any construction or other approval contemplated in the Construction Management
Agreement, Lease or other Operative Documents or (ii) waive or consent to any adverse title
claims affecting the Property, subject the condition that, in either case, BNPPLC believes
in good faith that such action will not have a material adverse effect upon the obligations
or ability of NAI to make the payments required under the Operative Documents or upon the
rights and remedies, taken as whole, of BNPPLC under the Operative Documents or upon the Participants’ hereunder.



     (c) Conflicts and Purchase Agreement Defaults. Notwithstanding anything to the
contrary herein contained, BNPPLC may, even over the objection of any Participant or the Majority,
(A) take any action recommended in writing by reputable counsel and believed in good faith by
BNPPLC to be required of BNPPLC by the Operative Documents or any law, rule or regulation to which
BNPPLC is subject, (B) refrain from taking any action if BNPPLC believes in good faith that the
action is prohibited by the Operative Documents or any law, rule or regulation to which BNPPLC is
subject, and if reputable counsel recommends in writing that BNPPLC refrain from taking the action,
and (C) after notice to the Participants, bring and prosecute a suit against NAI in the form
recommended by and in accordance with advice of reputable counsel at any time when a breach of the
Operative Documents by NAI has put BNPPLC (or any of its officers or employees) at risk of criminal
prosecution or significant liability to third parties or at any time after NAI or an Applicable
Purchaser fails to purchase the Property on the Designated Sale Date pursuant to the Purchase
Agreement. (If, however, BNPPLC takes any action or refrains from taking any action over the
objection of a Majority pursuant to the preceding sentence, BNPPLC must provide the Majority a
written explanation (including a copy of a supporting written recommendation of counsel) of the
basis for BNPPLC’s conclusion that taking the action, or refraining from taking the action, is
permitted by the preceding sentence.) Further, nothing herein contained will be construed to
require BNPPLC to agree to modify the Operative Documents or to take any action or refrain from
taking any action in any manner that could increase BNPPLC’s liability to NAI or others, that could
reduce or postpone payments to which BNPPLC is entitled thereunder, or that could reduce the scope
and coverage of the indemnities provided for BNPPLC’s benefit in the Operative Documents.



     (d) Refusal to Give Consents; Failure to Fund. If any Participant declines to
consent to any amendment, modification, waiver, release or consent for which the Participant’s
consent is requested or required by reason of this Agreement, or if any Participant fails to pay
any amount owed by it hereunder, BNPPLC will have the right, but not the obligation and without
limiting any other remedy of BNPPLC, to reduce such Participant’s Percentage to zero and to
terminate such Participant’s rights to receive any further payments under Article 2 of this
Agreement by paying to such Participant a termination fee equal to the total amount it would be
entitled to receive from BNPPLC hereunder if the date of such payment were the Designated Sale Date
and on such date NAI had itself purchased BNPPLC’s interest in the Property pursuant to and in



Annex
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accordance with the Purchase Agreement. No Participant’s rights to receive payments equal to such
Participant’s Adjusted Percentage of any Excess Reimbursement of a Protective Advance or interest
thereon as provided in subparagraph 3(C) will be impaired or affected by any termination
contemplated in this subparagraph 6(D); accordingly, BNPPLC will not, as a condition to such a
termination, be required to reimburse a Participant for any payments the Participant has made in
connection with Protective Advances pursuant to subparagraph 3(C).



22. Required Repayments. Each Participant must repay to BNPPLC, upon written request or
demand by BNPPLC (i) any sums paid by BNPPLC to such Participant under this Agreement from, or that
were computed by reference to, any Distributable Payment or other amounts which BNPPLC is required
to return or pay over to another party, whether pursuant to any bankruptcy or insolvency law or
proceeding or otherwise and (ii) any interest or other amount that BNPPLC is also required to pay
to another party with respect to such sums. Such repayment by a Participant will not constitute a
release of such Participant’s right to receive payments from BNPPLC hereunder upon BNPPLC’s receipt
of any such Distributable Payment or other amount (or any interest thereon) that BNPPLC may later
recover. Without limiting the foregoing, this Paragraph will apply in the case of any
reimbursement by BNPPLC to NAI of all or any portion of any Supplemental Payment or
97-10/Prepayment as required by ***subparagraph 3(E)(4) of the Purchase Agreement in the
event of a Deemed Sale (as defined in the Purchase Agreement). Accordingly, in the event of any
such reimbursement required by reason of a Deemed Sale, each Participant must repay to BNPPLC the
amount previously received by it by reason of the Supplemental Payment or 97-10/Prepayment or
portion thereof so reimbursed.



23. NAI Information; Independent Analysis. Prior to the execution of this
Agreement, BNPPLC has provided to the Participants copies of the executed Operative Documents and
of various certificates, legal opinions and other documents delivered to BNPPLC by or on behalf of
NAI with respect to the Operative Documents. In the future, BNPPLC will provide (A) to all
Participants copies of all amendments of the Operative Documents and certificates and legal
opinions, if any, delivered by or on behalf of NAI in connection therewith, and (B) to any
Participant, as reasonably required to comply with a specific, reasonable written request for
information made by the Participant, copies of other information readily available to BNPPLC
concerning NAI and the transactions contemplated in the Operative Documents. However, BNPPLC will
not be liable for its failure to provide the Participants any of the foregoing documents unless
such failure constitutes gross negligence or wilful misconduct on BNPPLC’s part, and any Attorney’s
Fees or other costs of collecting, assembling and providing copies of information requested by a
Participant pursuant to clause (B) of the preceding sentence will be reimbursed to BNPPLC by the
Participant. Each Participant has entered into this Agreement without reliance upon
representations made outside this Agreement by BNPPLC or by any Affiliate, agent or attorney of
BNPPLC and only after independently reviewing such documents, independently making such
inspections, independently consulting with counsel and




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independently collecting and verifying such
information, as the Participant determined to be necessary or appropriate. Without limiting the
foregoing, each Participant has independently reviewed the Operative Documents and independently
made such inquiries and investigations of NAI and the Property as the Participant determined to be
necessary or appropriate before executing this Agreement.



24. Performance through Representatives. BNPPLC may perform any of its duties hereunder
by or through officers, directors, employees, attorneys or agents (collectively,
“Representatives”), and BNPPLC and its Representatives may rely, and will be fully protected in
relying, upon any communication or document believed by it or them to be genuine and correct and to
have been signed or made by the proper Person and, with respect to legal matters, upon the opinion
of counsel selected by BNPPLC. The Participants acknowledge that BNPPLC’s Parent may act as agent
for BNPPLC with respect to the administration of this Agreement, and to the extent it does so, it
will be a Representative of BNPPLC hereunder.



25. Duty of Care. Neither BNPPLC nor any of its Representatives will be liable or
responsible to any Participant or any other Person for any action taken or omitted to be taken by
BNPPLC or any of its Representatives under this Agreement or in relation to the Operative Documents
or the Property (even if negligent or related to a matter for which BNPPLC or any of its
Representatives may otherwise be strictly liable); except that this provision will not
excuse BNPPLC from liability for failing to make timely payments required of BNPPLC to the
Participants by the express provisions of Article 2 or subparagraph 3(C) or from liability for
actions taken or omitted to be taken by BNPPLC which constitute gross negligence or wilful
misconduct. Without limiting the generality of the foregoing, BNPPLC (1) may consult with legal
counsel (including counsel for NAI), independent public accountants and other experts selected by
it and will not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (2) makes no warranty or
representation to the Participants except as provided in Article 12 and will not be responsible to
the Participants for any statements, warranties or representations made in or in connection with
the Operative Documents; (3) will not have any duty to the Participants to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions of the Operative
Documents or to inspect the Property or the books and records of NAI; (4) will not be responsible
to the Participants for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Operative Documents or any instrument or document furnished in
connection therewith; (5) may rely upon the representations and warranties of NAI and the
Participants in exercising its powers hereunder unless BNPPLC has actual knowledge that such
representations and warranties are untrue; and (6) will incur no liability under or in respect of
the Operative Documents by acting upon any notice, consent, certificate or other instrument or
writing (including any telecopy, telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper Person or Persons.




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26. Representations by Each Participant. Each Participant represents that as of
the date it became a party to this Agreement:




     (a) Nature of this Agreement. It is the type of financial institution set forth under
its name in Schedule 1, or in the Participation Agreement Schedule which made it a party to this
Agreement, and it is entering into this Agreement for its own account in respect of a commercial
transaction made in ordinary course of its business and not with a view to or in connection with
any subparticipation, sale or distribution to any Person (other than its Affiliates). Such
Participant does not consider the acceptance of the risk participation hereunder to constitute the
“purchase” or “sale” of a “security” within the meaning of any federal or state securities statute
or law, or any rule or regulations under any of the foregoing.



     (b) No Default or Violation. To such Participant’s knowledge, the execution, delivery
and performance of this Agreement do not and will not contravene, result in a breach of or
constitute a default under any material contract or agreement to which the Participant is a party
or by which the Participant is bound and do not violate or contravene any law, order, decree, rule
or regulation to which the Participant is subject.



     (c) No Suits. To such Participant’s knowledge, there are no judicial or
administrative actions, suits or proceedings involving the validity, enforceability or priority of
this Agreement and no such suits or proceedings are threatened.



     (d) Organization. Such Participant is duly incorporated and legally existing under
the laws of jurisdiction indicated in Schedule 1 or in the Participation Agreement Schedule which
made it a party to this Agreement. Such Participant has all requisite power and all material
governmental certificates of authority, licenses, permits, qualifications and other documentation
necessary to perform its obligations under this Agreement.



     (e) Enforceability. This Agreement constitutes a legal, valid and binding obligation
of such Participant, enforceable in accordance with its terms, subject to bankruptcy and other laws
affecting creditors’ rights generally and general equitable principles. The execution and delivery
of, and performance under, this Agreement are within such Participant’s powers and have been duly
authorized by all requisite action and are not in contravention of the powers of the charter or
other corporate papers of the Participant.



     (f) No Funding With Plan Assets. Such Participant has not and will not provide
advances required by this Participation Agreement from the assets of any employee benefit plan (or
its related trust).



27. Representations by BNPPLC. BNPPLC represents to each Participant, as of the date such
Participant became a party to this Agreement, that:



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     (a) No Default or Violation. To BNPPLC’s knowledge, its execution, delivery
and performance of this Agreement and the Operative Documents do not contravene, result in a breach
of or constitute a default under any material contract or agreement to which BNPPLC is a party or
by which BNPPLC is bound and do not violate or contravene any law, order, decree, rule or
regulation to which BNPPLC is subject.



     (b) No Suits. To BNPPLC’s knowledge, there are no judicial or administrative actions,
suits or proceedings involving the validity, enforceability or priority of this Agreement and no
such suits or proceedings are threatened.



     (c) Organization. BNPPLC is duly incorporated and legally existing under the laws of
Delaware. BNPPLC has all requisite power and all material governmental certificates of authority,
licenses, permits, qualifications and other documentation necessary to perform its obligations
under this Agreement.



     (d) Enforceability. This Agreement and the Operative Documents constitute legal,
valid and binding obligations of BNPPLC, enforceable in accordance with their respective terms,
subject to bankruptcy and other laws affecting creditors’ rights generally and general equitable
principles. BNPPLC’s execution and delivery of, and performance under, this Agreement and the
Operative Documents are within BNPPLC’s powers and have been duly authorized by all requisite
action and are not in contravention of the powers of the charter, by-laws or other corporate papers
of BNPPLC; except that BNPPLC makes no representation or warranty that conditions imposed by any
state or local Applicable Laws to the purchase, ownership, lease or operation of the Property have
been satisfied.



     (e) Liens Removable by BNPPLC. BNPPLC will not create or permit any Liens Removable
by BNPPLC not claimed by, through or under any of the Participants (other than BNPPLC’s
Affiliates), without NAI’s consent.



     (f) BNPPLC’s Status as a Subsidiary of a Bank Holding Company. As of the effective date of this Agreement, BNPPLC is a “subsidiary” of a “bank holding company” (as
those terms are defined in Chapter 17 of Title 12 of the United States Code).



28. Assignments.




     (a) By the Participants Generally. Except as expressly provided below, no
Participant may assign or attempt to assign any interest in or rights under this Agreement without
the prior written consent of BNPPLC, which consent will not be unreasonably withheld so long as the
Participant requesting the approval is not in default hereunder; however, this provision will not
prevent a Participant from transferring its rights hereunder to its Affiliates or to any other
Participants who are already parties to this Agreement. Notwithstanding any permitted



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assignment
by a Participant, if the assignment is to any Person that does not qualify as a “Participant” for
purposes of the Operative Documents (which, as more particularly provided in the definition of
Participant in the Common Definitions and Provisions Agreement, may require the written approval of
such Person by NAI), then such Participant’s obligations under this Agreement will remain
unchanged, such Participant will remain primarily responsible for the performance of its
obligations hereunder, and BNPPLC may continue to deal solely and directly with such Participant in
connection with all rights and obligations under this Agreement. In the event, however, of a
permitted assignment by a Participant to a Person that does qualify as a “Participant” for purposes
of the Operative Documents, accomplished by the execution of appropriate Participation Agreement
Supplements as herein provided, the assigning Participant will not be liable for any failure by the
assignee to fulfill the obligations assumed hereunder by the assignee by reason of such assignment.




     (b) By BNPPLC. Except as expressly provided herein, BNPPLC may not assign or attempt
to assign any rights under or interest in the Operative Documents or this Agreement or any interest
in the Property without all of the Participants’ prior written consents, which consents will not be
unreasonably withheld. By a Participation Agreement Supplement, BNPPLC may, without the prior
written consent of any Participant, assign participations in the Operative Documents or the
payments required to BNPPLC thereunder to any then existing Participant and to other financial
institutions or Affiliates of financial institutions approved by NAI. In addition, BNPPLC may
assign its right to receive Distributable Payments and its rights and interests in and to the
Property, the Operative Documents and this Agreement to Affiliates of BNPPLC that do not become
Participants, but in such event BNPPLC’s obligations under this Agreement will remain unchanged,
BNPPLC will remain primarily responsible for the performance of its obligations hereunder, and all
Distributable Payments received by any such Affiliates as assignee of BNPPLC will, for purposes of
computing payments required to any Participant hereunder, be considered as received by BNPPLC. In
addition, BNPPLC will be permitted to transfer any rights or interests as BNPPLC believes in good
faith to be necessary to satisfy the Operative Documents or Applicable Laws.



     (c) Execution of Participation Agreement Supplements. Promptly after the execution of
a Participation Agreement Supplement by BNPPLC and any Participant, BNPPLC will provide a copy
thereof to all other Participants, but the other Participants need not join in or approve the
Participation Agreement Supplement for it to be effective.



     (d) Regulation A. Notwithstanding subparagraphs 13(A) or 13(B), a Participant may
assign and pledge all or any portion of its rights under this Agreement to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve
System and any Operating Circulars issued by such Federal Reserve Bank.



     (e) Costs. Each Participant must pay all costs incurred by BNPPLC in
connection



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with any permitted assignment by or through such Participant, including, but not limited
to, reasonable fees and disbursements of its counsel, and any transfer taxes or other taxes
assessed because of such assignment which NAI is not required to pay under the Lease.



29. GOVERNING LAW; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL. This Agreement will
be deemed a contract made under the laws of the State of Texas and will be construed and enforced
in accordance with and governed by the laws of the State of Texas and the laws of the United States
of America, without regard to principles of conflict of laws. Each of BNPPLC and the Participants
hereby irrevocably submits itself to the non-exclusive jurisdiction of the state and the federal
courts sitting in Dallas, Texas, and agrees and consents that service of process may be made upon
it in any legal proceeding relating to this Agreement by any means allowed under Texas or federal
law. Each of BNPPLC and the Participants hereby waives and agrees not to assert, by way of motion,
as a defense or otherwise, that any such proceeding which is brought in a court in Dallas, Texas is
brought in an inconvenient forum or that the venue thereof is improper. Each of BNPPLC and the
Participants, knowingly, voluntarily and intentionally waives any right to a jury trial of any
dispute relating to this agreement and agrees that any such dispute will be tried before a
judge sitting without a jury.



30. Termination. This Agreement will terminate on the first date on which all obligations
of NAI under the Operative Documents have been indefeasibly paid or otherwise satisfied or excused,
BNPPLC has ceased to have any rights in the Property and each party hereto has fully performed its
obligations hereunder to the other parties hereto. The agreements of BNPPLC and the Participants in subparagraph 3(C) (which
concerns payments by Participants of their respective Percentages of Protective Advances) will
survive the termination of this Agreement. Following any sale of the Property by BNPPLC pursuant
to the Purchase Agreement and the payment to any Participant of all amounts payable to such
Participant hereunder (including, without limitation, such Participant’s Percentage of all Net
Sales Proceeds payable by NAI and any Applicable Purchaser on the Designated Sale Date), such
Participant will execute and deliver such a quitclaim and release (in recordable form) to NAI or
any Applicable Purchaser.



31. Miscellaneous.




     (a) Reliance by Others. None of the provisions of this Agreement will inure to the
benefit of any Person other than the Participants and BNPPLC and BNPPLC’s Representatives;
consequently, no Person other than the Participants and BNPPLC may rely upon or raise as a defense,
in any manner whatsoever, the failure of any Participant or BNPPLC to comply with the provisions of
this Agreement. None of the Participants nor BNPPLC will incur any liability to any other Person
for any act of omission of another.



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     Notwithstanding the foregoing, however, NAI will be a third party beneficiary of each
Participant’s obligations to make advances as provided in subparagraph 3(B) above, of the
representations of each Participant in Paragraph 11, of each Participant’s agreement to provided a
release and quitclaim of the Property pursuant to the last sentence of Paragraph 15 and of each
Participant’s agreements in Paragraph 17. As a third party beneficiary of the obligations of the
Participants specified in the preceding sentence, NAI will have standing to exercise any remedies
available at law or in equity (including the recovery of monetary damages) against any Participant
in NAI’s own name if that Participant breaches such obligations. Further, BNPPLC may assign to NAI
any claims it may have against a Participant because of the Participant’s breach of any of the
provisions referenced in this paragraph or because of any adverse title claim made against the
Property by, through or under the Participant. Each Participant acknowledges that NAI will be
relying on the commitments of the Participant to make payments required by this Agreement, as
needed to satisfy any condition to Anticipated Advances concerning funding by Participants set
forth in subparagraph 4(G) of the Construction Management Agreement.



     (b) Waivers, Etc. No delay or omission by any party to exercise any right under this
Agreement will impair any such right, nor will it be construed to be a waiver thereof. No waiver
of any single breach or default under this Agreement will be deemed a waiver of any other breach or
default. Any waiver, consent, or approval under this Agreement must be in writing to be effective.



     (c) Severability. The illegality or unenforceability of any provision of this
Agreement will not in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement.



     (d) Notices. All notices, demands, approvals, consents and other communications to be
made hereunder to or by the parties hereto must, to be effective for purpose of this Agreement, be
in writing. Notices, demands and other communications required or permitted hereunder are to be
sent to the addresses set forth in Schedule 1 to this Agreement and must be given by any of the
following means: (A) personal service, with proof of delivery or attempted delivery retained; (B)
electronic communication, whether by telex, telegram or telecopying (if confirmed in writing sent
by United States first class mail, return receipt requested); or (C) registered or certified first
class mail, return receipt requested. Such addresses may be changed by notice to the other parties
given in the same manner as provided above. Any notice or other communication sent pursuant to
clause (A) or (C) hereof will be deemed received (whether or not actually received) upon first
attempted delivery at the proper notice address on any Business Day between 9:00 A.M. and 5:00
P.M., and any notice or other communication sent pursuant to clause (B) hereof will be deemed
received upon dispatch by electronic means.



     (e) Construction. Words of any gender used in this Agreement will be held and
construed to include any other gender, and words in the singular number will be held to include



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the
plural and vice versa, unless the context otherwise requires. References herein to Paragraphs,
subparagraphs or other subdivisions will refer to the corresponding Paragraph, subparagraphs or
subdivisions of this Agreement, unless specific reference is made to another document or
instrument. References herein to any Schedule or Exhibit will refer to the corresponding Schedule
or Exhibit attached hereto, which will be made a part hereof by such reference. All capitalized
terms used in this Agreement which refer to other documents will be deemed to refer to such other
documents as they may be renewed, extended, supplemented, amended or otherwise modified from time
to time so long as the documents are not renewed, extended or modified in breach of any provision
contained herein or therein or, in the case of any other document to which BNPPLC is a party or of
which BNPPLC is an intended beneficiary, without the consent of BNPPLC. All accounting terms used
but not specifically defined herein will be construed in accordance with GAAP. The words “this
Agreement”, “herein”, “hereof”, “hereby”, “hereunder” and words of similar import when used in this
Agreement refer to this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The phrases “this Paragraph” and “this subparagraph” and “this subsection” and similar
phrases used herein refer only to the Paragraphs, subparagraphs or subsections hereof in which the
phrase occurs. As used herein the word “or” is not exclusive. As used herein the words “include”,
“including” and similar terms will be construed as if followed by “without limitation to”.




     (f) Headings. The paragraph and section headings contained in this Agreement are for
convenience only and will in no way enlarge or limit the scope or meaning of the various and
several provisions hereof.



     (g) Entire Agreement. This Agreement (a) embodies the entire agreement between the
parties, supersedes all prior agreements and understandings between the parties, if any, relating
to the subject matter hereof, and may be amended only by an instrument in writing executed by an
authorized representative of each party to be bound by such amendment, and (b) has been executed in
a number of identical counterparts, each of which will be deemed an original for all purposes and
all of which constitute, collectively, one agreement or certificate; but, in making proof of this
Agreement it will not be necessary to produce or account for more than one such counterpart signed
by each party thereto.



     (h) Further Assurances. Subject to any restriction in the Operative Documents, each
of BNPPLC and the Participants will promptly execute and deliver all further instruments and
documents and take all further action as any of them may reasonably request in order to evidence
the agreements made hereunder and otherwise to effect the purposes of this Agreement.



     (i) Impairment of Operative Documents. Nothing herein contained (including the
provisions governing the application of payments in subparagraph 4(E) and the provisions
authorizing assignments by BNPPLC in subparagraph 13(B)) will impair or modify NAI’s rights under
the Operative Documents.



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     (j) Books and Records. BNPPLC will keep accurate books and records in which
full, true and correct entries will be promptly made as to all payments made and received
concerning the Property and will permit all such books and records (excluding any information that
would otherwise be protected by BNPPLC’s attorney client privilege) to be inspected and copied by
the Participants and their duly accredited representatives at all times during reasonable business
hours after five Business Days advance notice. This subparagraph will not be construed as
requiring BNPPLC to regularly maintain separate books and records relating exclusively to the
Property; however, upon reasonable request of a Participant, BNPPLC will, at the requesting
Participant’s expense, construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.



     (k) Definition of Knowledge. Representations and warranties made in this Agreement
but limited to the “knowledge” of BNPPLC or any Participant, as the case may be, will be limited to the present
actual knowledge of the officers or other employees of such party primarily responsible for
reviewing and negotiating this Agreement. Also, as used herein with respect to the existence of
any facts or circumstances after the date of this Agreement, “knowledge” of BNPPLC or a
Participant, as the case may be, will be limited to the present actual knowledge at the time in
question of the officers or other employees of such party primarily responsible for administering
this Agreement. However, none of the officers or employees of any party to this Agreement will be
personally liable for any representations or warranties made herein or for taking or failing to
take any action required hereby.



     (l) Attorneys’ Fees. If any party to this Agreement commences any legal action or
other proceeding against another party hereto to enforce any of the terms of this Agreement, or
because of any breach of the other party or dispute hereunder, the successful or prevailing party
will be entitled to recover from the nonprevailing party all Attorneys’ Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is prosecuted to a final judgment.
Any such Attorneys’ Fees incurred by any party in enforcing a judgment in its favor under this
Agreement will be recoverable separately from such judgment, and the obligation for such Attorneys’
Fees is intended to be severable from other provisions of this Agreement and not to be merged into
any such judgment.


32. Confidentiality Concerning NAI’s Proprietary Information. Each Participant agrees to
use reasonable precautions to keep confidential any “proprietary information” of NAI (as defined in
the Lease) that such Participant may receive from BNPPLC or NAI or otherwise discover with respect
to NAI or NAI’s business as a result of Participant’s involvement with the transactions
contemplated in the Operative Documents, except for disclosures: (i) specifically and previously
authorized in writing by NAI; (ii) to any assignee of the Participant as to any interest hereunder
so long as such assignee has agreed in writing to use its reasonable efforts to keep such
information confidential in accordance with the terms of this Paragraph; (iii) to legal counsel,
accountants, auditors, environmental consultants and other




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professional advisors to the Participant
so long as the Participant informs such persons in writing (if practicable) of the confidential
nature of such information and directs them to treat such information confidentially; (iv) to
regulatory officials having jurisdiction over the Participant (although the disclosing party will
request confidential treatment of the disclosed information, if practicable); (v) as required by
legal process (although the disclosing party will request confidential treatment of the disclosed
information, if practicable); and (vi) of information which has previously become publicly
available through the actions or inactions of a person other than the Participant not, to the
Participant’s knowledge, in breach of an obligation of confidentiality to NAI. Further,
notwithstanding any other contrary provision contained in this Agreement or any related agreements
by which any Participant is bound, BNPPLC and Participants (and each of their respective employees,
representatives or other agents) may disclose, without limitation of any kind, the tax treatment
and tax structure of the transactions contemplated by this Agreement or the Operative Documents and
all materials of any kind (including opinions or other tax analyses) that are provided to such
party relating to such tax treatment and tax structure, other than any information for which
non-disclosure is reasonably necessary in order to comply with applicable securities laws.




[The signature pages follow.]




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     IN WITNESS WHEREOF, this Participation Agreement is executed to be effective as of
                                                            , 200                    .



	 	 	 	 	 	 	 
	 	 	BNP PARIBAS LEASING CORPORATION, a	 	 
	 

	 	Delaware corporation
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Lloyd G. Cox, Managing Director	 	 






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




	 	 	 	 	 	 	 
	 	 	[PARTICIPANTS’ NAMES], a                     	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[Officer’s Name], [Officer’s Title]	 	 






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SCHEDULE 1




A. BNPPLC: BNP PARIBAS LEASING CORPORATION,




   a Delaware corporation




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




BNP Paribas Leasing Corporation

12201 Merit Drive

Suite 860

Dallas, Texas 75251



Attention: Lloyd G. Cox



Telephone: (972) 788-9191

Facsimile: (972) 788-9140





	 	4.	 	Payment Instructions:




Federal Reserve Bank of New York

ABA 026007689 BNP Paribas

/BNP/ BNP Houston

/AC/ 14334000176

/Ref/ NAI/                      Operating Lease





	 	5.	 	Operations Contact:




BNP Paribas Leasing Corporation

12201 Merit Drive

Suite 860

Dallas, Texas 75251



Attention: Lloyd G. Cox



Telephone: (972) 788-9191

Facsimile: (972) 788-9140




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SCHEDULE 1




B. Participant: [Participants’ Names]





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




____________

____________

____________



Telephone: (___) ___-____

Facsimile:  (___) ___-____





	 	4.	 	Payment Instructions:




***Federal Reserve Bank of New York

ABA _____________

__________________

__________________

/Ref/ ____________





	 	5.	 	Operations Contact:




____________

____________

____________



Telephone: (___) ___-____

Facsimile:  (___) ___-____





	 	6.	 	“Initial Payment” Due from






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





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Exhibit A




SUPPLEMENT TO PARTICIPATION AGREEMENT




[_____________, _____]




BNP Paribas Leasing Corporation

12201 Merit Drive, Suite 860

Dallas, Texas 75251

Attention: Lloyd G. Cox, Managing Director

Telecopy: (972) 788-9140




Gentlemen:




     Reference is made to the Participation Agreement dated as of                     , 200___(as
heretofore amended, the “Participation Agreement”) between BNP Paribas Leasing Corporation
(“BNPPLC”), a Delaware corporation, and ***[Participants’ Names] and other banks or financial
institutions which have or may from time to time become Participants under and as defined in such
Participation Agreement (collectively, the “Participants”). Unless otherwise defined herein, all
capitalized terms used in this Supplement have the respective meanings given to those terms in the
Participation Agreement.


[NOTE: THE NEXT TWO PARAGRAPHS, AND THE ADDENDUM TO SCHEDULE 1 ATTACHED TO THIS EXHIBIT,
WILL BE INCLUDED ONLY AS PART OF A SUPPLEMENT THAT ADDS A NEW PARTICIPANT UNDER THE PARTICIPATION
AGREEMENT:




     The undersigned, by executing and delivering this Supplement to BNPPLC, hereby agrees to
become a party to the Participation Agreement referenced therein, in each case as a Participant and
agrees to be bound by all of the terms thereof applicable to Participants. The undersigned hereby
agrees that its Percentage under the Participation Agreement will be ___ percent
(___%), effective as of the date of this letter. Contemporaneously with the execution
of this letter, the undersigned is paying to BNPPLC the sum of $                     in
consideration of the rights it is acquiring as a Participant under the Participation Agreement with
the foregoing Percentage.



     Schedule 1 attached to the Participation Agreement is amended by the addition of an Addendum
(concerning the undersigned) in the form attached to this Supplement.]


[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT REDUCES AN EXISTING
PARTICIPANT’S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:




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     In consideration of the payment of $                     to the undersigned, the
receipt and sufficiency of which is hereby acknowledged by the undersigned, the undersigned hereby
agrees that its Percentage under the Participation Agreement is reduced to percent (___),
effective as of the date of this letter.]


[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT INCREASES AN EXISTING
PARTICIPANT’S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:




     The undersigned hereby agrees that its Percentage under the Participation Agreement is
increased to                      percent (___%), effective as of the date of
this letter. Contemporaneously with the execution of this letter, the undersigned is paying BNPPLC
the sum of $                     in consideration of such increase.]



     IN WITNESS WHEREOF, the undersigned has executed this Supplement as of the day and year
indicated above.



	 	 	 	 	 	 	 	 	 
	 

	 	[NAME]	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 	 	 	 	 	 





Accepted and agreed:




BNP PARIBAS LEASING CORPORATION




	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Printed Name:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 





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Addendum to Schedule 1




Participant:                                         





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




______________________

______________________

______________________



Attention: ___________



Telephone: ___________

Facsimile: ___________





	 	4.	 	Payment Instructions:




Bank:             ______________________

Account:        ______________________

Account No.: ______________________

ABA No.:      ______________________

Reference:     ______________________





	 	5.	 	Operations Contact:




______________________

______________________

______________________



Attention: ___________



Telephone: ___________

Facsimile: ___________




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