1
Exhibit 10.73
PLEDGE AGREEMENT
(PHASE IV - IMPROVEMENTS)
AMONG
BNP LEASING CORPORATION
("BNPLC")
BNP PARIBAS, AS AGENT
("AGENT")
NETWORK APPLIANCE, INC.
("NAI")
AND
PARTICIPANTS AS DESCRIBED HEREIN
OCTOBER 2, 2000
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INTERPRETATION......................................................2
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement.....................2
Section 1.2 Definitions..................................................................2
Account.............................................................................2
Account Office......................................................................2
Agent...............................................................................2
BNPLC...............................................................................2
BNPLC's Corresponding Obligations to Participants...................................2
Cash Collateral.....................................................................2
Certificate of Deposit..............................................................2
Collateral..........................................................................2
Collateral Imbalance................................................................2
Collateral Percentage...............................................................3
Default.............................................................................3
Deposit Taker.......................................................................3
Deposit Taker Losses................................................................3
Deposit Taker's Acknowledgment and Agreement........................................3
Disqualified Deposit Taker..........................................................3
Event of Default....................................................................3
Excluded Deposit Taker Losses.......................................................4
Initially Qualified Deposit Taker...................................................4
Lien................................................................................5
Material Lease Default..............................................................5
Minimum Collateral Value............................................................5
NAI.................................................................................6
NAI's Purchase Agreement Obligations................................................6
Notice of Security Interest.........................................................6
Other Liable Party..................................................................6
Participants........................................................................6
Participation Agreement.............................................................6
Percentage..........................................................................6
Qualified Pledge....................................................................6
Secured Obligations.................................................................6
Supplement..........................................................................6
Transaction Documents...............................................................6
Transition Account..................................................................6
UCC.................................................................................6
Unaffiliated Deposit Taker..........................................................7
Value...............................................................................7
Section 1.3 Attachments..................................................................7
Section 1.4 Amendment of Defined Instruments.............................................7
-i-
3
TABLE OF CONTENTS
PAGE
----
Section 1.5 References and Titles........................................................7
ARTICLE II SECURITY INTEREST...................................................................7
Section 2.1 Pledge and Grant of Security Interest........................................7
Section 2.2 Return of Collateral After the Secured Obligations are
Satisfied in Full............................................................8
ARTICLE III DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE AND INITIAL DEPOSIT TAKER.............8
Section 3.1 Minimum Collateral Percentage................................................8
Section 3.2 Initial Deposit Taker........................................................8
ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS................................................8
Section 4.1 Qualification of Deposit Takers Generally....................................8
Section 4.2 Additional Requirement Prior to the Base Rent Commencement
Date (All Buildings).........................................................9
Section 4.3 Replacement of Participants Proposed by NAI..................................9
Section 4.4 Mandatory Substitutions for Unaffiliated Deposit Takers
and Disqualified Deposit Takers.............................................10
Section 4.5 Voluntary Substitution of Deposit Takers....................................10
Section 4.6 Delivery of Notice of Security Interest by NAI and Agent....................11
Section 4.7 Constructive Possession of Collateral.......................................11
Section 4.8 Attempted Setoff by Deposit Takers..........................................11
Section 4.9 Deposit Taker Losses........................................................12
Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply
with this Agreement.........................................................12
Section 4.11 Losses Resulting from Failure of an Unaffiliated Deposit
Taker to Comply with this Agreement.........................................12
ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL........................................12
Section 5.1 Delivery of Funds by NAI....................................................12
Section 5.2 Transition Account..........................................................13
Section 5.3 Allocation of Cash Collateral Among Deposit Takers..........................13
Section 5.4 Issuance and Redemption of Certificates of Deposit..........................13
Section 5.5 Status of the Accounts Under the Reserve Requirement
Regulations.................................................................14
-ii-
4
TABLE OF CONTENTS
PAGE
----
Section 5.6 Acknowledgment by NAI that Requirements of this Agreement
are Commercially Reasonable.................................................14
ARTICLE VI WITHDRAWAL OF CASH COLLATERAL......................................................14
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date..................14
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants.........................15
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC....................................15
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by
Disqualified Deposit Takers.................................................16
ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI.............................................16
Section 7.1 Representations of NAI......................................................16
Section 7.2 Covenants of NAI............................................................17
ARTICLE VIII AUTHORIZED ACTION BY AGENT..........................................................18
Section 8.1 Power of Attorney...........................................................18
ARTICLE IX DEFAULT AND REMEDIES...............................................................18
Section 9.1 Remedies....................................................................18
ARTICLE X OTHER RECOURSE.....................................................................19
Section 10.1 Recovery Not Limited........................................................19
ARTICLE XI PROVISIONS CONCERNING AGENT........................................................19
Section 11.1 Appointment and Authority...................................................20
Section 11.2 Exculpation, Agent's Reliance, Etc..........................................20
Section 11.3 Participant's Credit Decisions..............................................20
Section 11.4 Indemnity...................................................................21
Section 11.5 Agent's Rights as Participant and Deposit Taker.............................21
Section 11.6 Investments.................................................................21
Section 11.7 Benefit of Article XI.......................................................21
Section 11.8 Resignation.................................................................22
ARTICLE XII MISCELLANEOUS......................................................................22
-iii-
5
TABLE OF CONTENTS
PAGE
----
Section 12.1 Provisions Incorporated From Other Operative Documents......................22
Section 12.2 Cumulative Rights, etc......................................................22
Section 12.3 Survival of Agreements......................................................22
Section 12.4 Other Liable Party..........................................................22
Section 12.5 Termination.................................................................23
Section 12.6 Amendment and Restatement...................................................23
Attachment 1 Form of Certificate of Deposit
Attachment 2 Supplement to Pledge Agreement (Phase IV - Land)
Attachment 3 Form of Notice of Security Interest
Attachment 4 Alternate Form of Notice of Security Interest (Unaffiliated
Deposit Taker)
Attachment 5 Examples of Calculations
Attachment 6 Notice of NAI's Requirement to Withdraw Excess Cash Collateral
Attachment 7 Notice of NAI's Requirement of Direct Payments to Participants
Attachment 8 Notice of NAI's Requirement of Direct Payments to BNPLC
Attachment 9 Notice of NAI's Requirement of a Withdrawal of Cash Collateral
from a Disqualified Deposit Taker
Schedule 1 Financial Covenants and Negative Covenants
-iv-
6
PLEDGE AGREEMENT
(PHASE IV - IMPROVEMENTS)
This PLEDGE AGREEMENT (PHASE IV - IMPROVEMENTS) (this "AGREEMENT") is
made as of October 2, 2000 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BNP PARIBAS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and BNP PARIBAS,
acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"), is made and dated as of the Effective Date.
RECITALS
A. NAI and BNPLC are parties to: (i) a Common Definitions and Provisions
Agreement (Phase IV - Improvements) dated as of the Effective Date (the "COMMON
DEFINITIONS AND PROVISIONS AGREEMENT (PHASE IV - IMPROVEMENTS)"); and (ii) a
Purchase Agreement (Phase IV - Improvements) dated as of the Effective Date (the
"PURCHASE AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL
PAYMENT" or "ISSUE 97-10 PREPAYMENT" (both as defined in the Common Definitions
and Provisions Agreement (Phase IV - Improvements)), in consideration of the
rights granted to NAI by the Purchase Agreement.
B. NAI, BNPLC, and BNPLC's Parent previously executed a Pledge Agreement
(Phase IV - Improvements) dated as of December 20, 1999 (the "PRIOR PLEDGE
AGREEMENT"), to which The Bank of Nova Scotia, Comerica Bank-California, FBTC
Leasing Corp., The Industrial Bank of Japan, KeyBank National Association, and
Xxxxx Fargo Bank, N.A. (collectively, the "NON-BNP PARTICIPANTS") were made a
party pursuant to various Supplements to Pledge Agreement dated February 22,
2000. Concurrently herewith, the Non-BNP Participants have agreed to terminate
and release their interests in the Prior Participation Agreement and all
Operative Documents executed in connection therewith. NAI, BNPLC, and BNPLC's
Parent have agreed to amend, restate and replace the Prior Pledge Agreement with
this Agreement as provided in Section 12.6 below.
C. Pursuant to a Participation Agreement dated the date hereof (the
"PARTICIPATION AGREEMENT"), BNPLC's Parent has agreed with BNPLC to participate
in the risks and rewards to BNPLC of the Purchase Agreement and other Operative
Documents (as defined in the Common Definitions and Provisions Agreement (Phase
IV - Improvements)), and the parties to this Agreement anticipate that other
financial institutions may become parties to the Participation Agreement as
Participants, agreeing to participate in the risks and rewards to BNPLC of the
Purchase Agreement and other Operative Documents.
D. NAI may from time to time deliver cash collateral for its obligations
to BNPLC under the Purchase Agreement and for BNPLC's corresponding obligations
to Participants under the Participation Agreement. This Agreement sets forth the
terms and conditions governing such cash collateral.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
7
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement.
All capitalized terms used in this Agreement which are defined in Article I of
the Common Definitions and Provisions Agreement (Phase IV - Improvements) and
not otherwise defined herein shall have the same meanings herein as set forth in
the Common Definitions and Provisions Agreement (Phase IV - Improvements). All
terms used in this Agreement which are defined in the UCC and not otherwise
defined herein shall have the same meanings herein as set forth therein, except
where the context otherwise requires.
Section 1.2 Definitions. When used in this Agreement, the following
terms shall have the following respective meanings:
"ACCOUNT" shall mean any deposit account maintained by a Deposit Taker
into which Cash Collateral may be deposited at any time, excluding the
Transition Account.
"ACCOUNT OFFICE" shall mean, with respect to any Account maintained by
any Deposit Taker, the office of such Deposit Taker in California or New York at
which such Account is maintained as specified in the applicable Deposit Taker's
Acknowledgment and Agreement.
"AGENT" shall have the meaning given to that term in the introductory
paragraph hereof.
"BNPLC" shall have the meaning given to that term in the introductory
paragraph hereof.
"BNPLC's CORRESPONDING OBLIGATIONS TO PARTICIPANTS" shall mean BNPLC's
obligations under the Participation Agreement to pay Participants their
respective Percentages of (or amounts equal to their respective Percentages of)
sums "actually received by BNPLC" (as defined in the Participation Agreement) in
satisfaction of NAI's Purchase Agreement Obligations; provided, however, any
modification of the Participation Agreement executed after the date hereof
without NAI's written consent shall not be considered for purposes of
determining BNPLC's Corresponding Obligations to Participants under this
Agreement.
"CASH COLLATERAL" shall mean all money of NAI which NAI has delivered to
Agent for deposit with a Deposit Taker pursuant to this Agreement, and (ii) any
additional money delivered to Agent as Collateral pursuant to Section 4.9.
"CERTIFICATE OF DEPOSIT" shall mean a certificate of deposit issued by a
Deposit Taker as required by Section 5.4 below to evidence an Account into which
Cash Collateral has been deposited pursuant to this Agreement. Each Certificate
of Deposit shall be issued in an amount equal to the Value of the Account which
it evidences and shall otherwise be in the form set forth as ATTACHMENT 1.
"COLLATERAL" shall have the meaning given to that term in Section 2.1
hereof.
"COLLATERAL IMBALANCE" shall mean on any date prior to the Designated
Sale Date that the Value (without duplication) of Accounts maintained by and
Certificates of Deposit issued by the Deposit Taker for any Participant (other
than a Disqualified Deposit Taker) does not equal such Participant's Percentage,
multiplied by the lesser of (1) the Minimum Collateral Value in effect on such
date, or (2) the aggregate Value of all Collateral subject to this Agreement on
such date. For purposes of determining whether a Collateral Imbalance exists,
the Value of any Accounts maintained by a bank that
-2-
8
is acting as Deposit Taker for two or more Participants will be deemed to be
held for them in proportion to their respective Percentages, and the Value of
any Accounts maintained by a bank as Deposit Taker for both a Participant and
BNPLC (as in the case of BNPLC's Parent acting as Deposit Taker for itself, as a
Participant, and for BNPLC) will be deemed to be held for the Participant only
to the extent necessary to prevent or mitigate a Collateral Imbalance and
otherwise for BNPLC.
"COLLATERAL PERCENTAGE" shall mean one hundred percent (100%).
"DEFAULT" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"DEPOSIT TAKER" for BNPLC shall mean BNPLC's Parent and for each
Participant shall mean the Participant itself; provided, that each of BNPLC and
the Participants, for itself only, may from time to time designate another
Deposit Taker as provided in Sections 3.2, 4.2, 4.4 and 4.5 below.
"DEPOSIT TAKER LOSSES" shall mean the Value of any Cash Collateral
delivered to a Deposit Taker, but that the Deposit Taker will not (because of
the insolvency of the Deposit Taker, offsets by the Deposit Taker in violation
of the Deposit Taker's Acknowledgment and Agreement, or otherwise) return to NAI
or return to Agent for disposition or application as provided herein or as
required by applicable law.
"DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT" shall have the meaning
given to that term in subsection 4.1.2 hereof.
"DISQUALIFIED DEPOSIT TAKER" shall mean any Deposit Taker with whom
Agent may decline to deposit Collateral pursuant to Section 4.1.
"EVENT OF DEFAULT" shall mean the occurrence of any of the following:
(a) the failure by NAI to pay all or any part of NAI's
Purchase Agreement Obligations when due, after giving effect to
any applicable notice and grace periods expressly provided for in
the Purchase Agreement;
(b) the failure by NAI to provide funds as and when
required by Section 5.1 of this Agreement, if within seven
Business Days after such failure commences NAI does not (1) cure
such failure by delivering the funds required by Section 5.1, and
(2) pay to BNPLC as additional Rent under the Improvements Lease
an amount equal to interest at the Default Rate on such funds for
the period from which they were first due to the date of receipt
by Agent;
(c) the failure of the pledge or security interest
contemplated herein in the Transition Account or any Account,
Certificate of Deposit or Cash Collateral to be a Qualified
Pledge (regardless of the characterization of the Transition
Account or any Accounts, Certificates of Deposit or Cash
Collateral as deposit accounts, instruments or general
intangibles under the UCC), if within five Business Days after
NAI becomes aware of such failure, NAI does not (1) notify Agent,
BNPLC and the Participants of such failure, and (2) cure such
failure, and (3) to the extent required by Section 7.2.9, pay
-3-
9
to BNPLC any additional Base Rent that has accrued under the
Improvements Lease because of (or that would have accrued if
BNPLC had been aware of) such failure, together with interest at
the Default Rate on any such additional Base Rent;
(d) the failure of any representation herein by NAI to be
true (other than a failure described in another clause of this
definition of Event of Default), if such failure is not cured
within thirty days after NAI receives written notice thereof from
Agent;
(e) the failure of any representation made by NAI in
subsection 7.1.1 to be true, if within fifteen (15) days after
NAI becomes aware of such failure, NAI does not (1) notify Agent,
BNPLC and the Participants of such failure, and (2) cure such
failure, and (3) pay to BNPLC any additional Base Rent that has
accrued under the Improvements Lease because of (or that would
have accrued if BNPLC had been aware of) such failure, and (4)
pay to BNPLC interest at the Default Rate on any such additional
Base Rent;
(f) the failure by NAI timely and properly to observe,
keep or perform any covenant, agreement, warranty or condition
herein required to be observed, kept or performed (other than a
failure described in another clause of this definition of Event
of Default), if such failure is not cured within thirty days
after NAI receives written notice thereof from Agent; and
(g) the failure by BNPLC to pay when due on or after the
Designated Sale Date any of BNPLC's Corresponding Obligations to
Participants, after giving effect to any applicable notice and
grace periods expressly provided for in the Participation
Agreement.
Notwithstanding the foregoing, if ever the aggregate Value of Cash
Collateral held by Agent and the Deposit Takers exceeds the Minimum
Collateral Value then in effect, a failure of the pledge or security
interest contemplated herein in such excess Cash Collateral to be a
valid, perfected, first priority pledge or security interest shall not
constitute an Event of Default under this Agreement. Accordingly, to
provide a cure as required to avoid an Event of Default under clauses or
(e) of this definition, NAI could deliver additional Cash Collateral -
the pledge of which or security interest in which created by this
Agreement is a Qualified Pledge - sufficient in amount to cause the
aggregate Value of the Cash Collateral then held by Agent and the
Deposit Takers subject to a Qualified Pledge hereunder to equal or
exceed the Minimum Collateral Value.
"EXCLUDED DEPOSIT TAKER LOSSES" shall mean the Value of any Cash
Collateral delivered to an Unaffiliated Deposit Taker, but that the Unaffiliated
Deposit Taker will not (because of the insolvency of the Unaffiliated Deposit
Taker, offsets by the Unaffiliated Deposit Taker in violation of its Deposit
Taker's Acknowledgment and Agreement, or otherwise) return to NAI or return to
Agent for disposition or application as provided herein or as required by
applicable law.
"INITIALLY QUALIFIED DEPOSIT TAKER" means (1) BNP Paribas, acting
through any branch, office or agency that can lawfully maintain an Account as a
Deposit Taker hereunder, (2) The Bank of New York, acting through any branch,
office or agency that can lawfully maintain an Account as a Deposit Taker
hereunder, and (3) any of the fifty largest (measured by total assets) U.S.
banks, or one of the one
-4-
10
hundred largest (measured by total assets) banks in the world, with debt ratings
of at least A- (in the case of long term debt) and A-1 (in the case of short
term debt) or the equivalent thereof by Standard and Poor's Corporation, and
(ii) A3 (in the case of long term debt) and P-2 (in the case of short term debt)
or the equivalent thereof by Xxxxx'x Investor Service, Inc. The parties believe
it improbable that the ratings systems used by Standard and Poor's Corporation
and by Xxxxx'x Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, NAI shall be entitled to
select and use a comparable ratings systems as a substitute for the S&P Rating
or the Xxxxx Rating, as the case may be, for purposes of determining the status
of any bank as an Initially Qualified Deposit Taker.
"LIEN" shall mean, with respect to any property or assets, any right or
interest therein of a creditor to secure indebtedness of any kind which is owed
to him or any other arrangement with such creditor which provides for the
payment of such indebtedness out of such property or assets or which allows him
to have such indebtedness satisfied out of such property or assets prior to the
general creditors of any owner thereof, including any lien, mortgage, security
interest, pledge, deposit, production payment, rights of a vendor under any
title retention or conditional sale agreement or lease substantially equivalent
thereto, tax lien, mechanic's or materialman's lien, or any other charge or
encumbrance for security purposes, whether arising by law or agreement or
otherwise, but excluding any right of setoff which arises without agreement in
the ordinary course of business. "Lien" also means any filed financing
statement, any registration with an issuer of uncertificated securities, or any
other arrangement which would serve to perfect a Lien described in the preceding
sentence, regardless of whether such financing statement is filed, such
registration is made, or such arrangement is undertaken before or after such
Lien exists.
"MATERIAL LEASE DEFAULT" shall mean any of the following:
(1) "Event of Default" under and as defined in the
Improvements Lease, including any such Event of Default
consisting of a failure of NAI to comply with the requirements of
Exhibit I attached to the Improvements Lease; and
(2) (a) any failure of NAI to make any payment required by
and when first due under the Improvements Lease, regardless of
whether any period provided in the Improvements Lease for the
cure of such failure by NAI shall have expired, and (b) any other
default, event or condition which would, with the giving of any
requisite notices and the passage of any requisite periods of
time, constitute an "Event of Default" under and as defined in
the Improvements Lease, if such other default, event or failure
involves a material noncompliance with Applicable Law. (For
purposes of this definition, "material" noncompliance with
Applicable Law will include any noncompliance, the correction of
which has been requested by a governmental authority, or because
of which a threat of action against the Property or BNPLC has
been asserted by a governmental authority.)
"MINIMUM COLLATERAL VALUE" shall mean (1) as of the Designated Sale Date
or any prior date, an amount equal to the Collateral Percentage multiplied by
the Stipulated Loss Value determined as of that date in accordance with the
Improvements Lease; and (2) as of any date after the Designated Sale
-5-
11
Date, an amount equal to the Break Even Price plus any unpaid interest accrued
on past due amounts payable pursuant to Paragraph 1(a) of the Purchase
Agreement.
"NAI" shall have the meaning given to that term in the introductory
paragraph hereof.
"NAI'S PURCHASE AGREEMENT OBLIGATIONS" shall mean all of NAI's
obligations under the Purchase Agreement, including NAI's obligation to pay any
Supplemental Payment as required under subparagraph 1(A) of the Purchase
Agreement, (ii) NAI's obligation to pay any Issue 97-10 Prepayment as required
by subparagraph 4(C) of the Purchase Agreement, and (iii) any damages incurred
by BNPLC because of (A) NAI's breach of the Purchase Agreement or (B) the
rejection by NAI of the Purchase Agreement in any bankruptcy or insolvency
proceeding.
"NOTICE OF SECURITY INTEREST" shall have the meaning given to that term
in subsection 4.1.1 hereof.
"OTHER LIABLE PARTY" shall mean any Person, other than NAI, who may now
or may at any time hereafter be primarily or secondarily liable for any of the
Secured Obligations or who may now or may at any time hereafter have granted to
Agent a pledge of or security interest in any of the Collateral.
"PARTICIPANTS" shall mean BNPLC's Parent and any other financial
institutions which may hereafter become parties to this Agreement by completing,
executing and delivering to NAI and Agent a Supplement, and (ii) the
Participation Agreement.
"PARTICIPATION AGREEMENT" shall have the meaning given to such term in
Recital B hereof.
"PERCENTAGE" shall mean with respect to each Participant and the Deposit
Taker for such Participant, such Participant's "Percentage" under and as defined
in the Participation Agreement for purposes of computing such Participant's
right thereunder to receive payments of (or amounts equal to a percentage of)
any sales proceeds or Supplemental Payment received by BNPLC under the Purchase
Agreement. Percentages may be adjusted from time to time as provided in the
Participation Agreement or as provided in supplements thereto executed as
provided in the Participation Agreement.
"QUALIFIED PLEDGE" means a pledge or security interest that constitutes
a valid, perfected, first priority pledge or security interest.
"SECURED OBLIGATIONS" shall mean and include both NAI's Purchase
Agreement Obligations and BNPLC's Corresponding Obligations to Participants.
"SUPPLEMENT" shall mean a supplement to this Agreement in the form of
ATTACHMENT 2.
"TRANSACTION DOCUMENTS" shall mean, collectively, this Agreement, the
Improvements Lease, the Purchase Agreement and the Participation Agreement.
"TRANSITION ACCOUNT" shall have the meaning given it in Section 5.2.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of California from time to time, and the Uniform Commercial Code as in effect in
any other jurisdiction which governs the
-6-
12
perfection or non-perfection of the pledge of and security interests in the
Collateral created by this Agreement.
"UNAFFILIATED DEPOSIT TAKER" means (1) the bank designated as provided
in Section 3.2 to act as the initial Deposit Taker for BNPLC and the
Participants, or (2) any other Deposit Taker designated as provided in Article
IV prior to the Base Rent Commencement Date (All Buildings) (and thus having to
meet the requirements of Section 4.2).
"VALUE" shall mean with respect to any Account, Certificate of Deposit
or Cash Collateral on any date, a dollar value determined as follows (without
duplication):
(a) cash shall be valued at its face amount on such date;
(b) an Account shall be valued at the principal balance
thereof on such date; and
(c) a Certificate of Deposit shall be valued at the face
amount thereof.
Section 1.3 Attachments. All attachments to this Agreement are a part
hereof for all purposes.
Section 1.4 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including
references to the Improvements Lease, Purchase Agreement and Participation
Agreement) also refer to and include all valid renewals, extensions, amendments,
modifications, supplements or restatements of any such agreement, instrument or
document; provided that nothing contained in this Section shall be construed to
authorize any Person to execute or enter into any such renewal, extension,
amendment, modification, supplement or restatement.
Section 1.5 References and Titles. All references in this Agreement to
Attachments, Articles, Sections, subsections, and other subdivisions refer to
the Attachments, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any subdivision are for convenience only and do not constitute any part of
any such subdivision and shall be disregarded in construing the language
contained in this Agreement. The words "this Agreement", "herein", "hereof",
"hereby", "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited. The
phrases "this Article," "this Section" and "this subsection" and similar phrases
refer only to the Articles, Sections or subsections hereof in which the phrase
occurs. The word "or" is not exclusive, and the word "including" (in all of its
forms) means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless the
context otherwise requires.
ARTICLE II SECURITY INTEREST
Section 2.1 Pledge and Grant of Security Interest. As security for the
Secured Obligations, NAI hereby pledges and assigns to Agent (for the ratable
benefit of BNPLC and the Participants) and grants to Agent (for the ratable
benefit of BNPLC and the Participants) a continuing security interest and
-7-
13
lien in and against all right, title and interest of NAI in and to the following
property, whether now owned or hereafter acquired by NAI (collectively and
severally, the "COLLATERAL"):
(a) All Cash Collateral, all Accounts, the Transition Account and
all Certificates of Deposit issued from time to time and general
intangibles arising therefrom or relating thereto (however, "general
intangibles" as used in this clause shall not include any general
intangibles not related to Cash Collateral, Accounts, the Transition
Account or Certificates of Deposit issued from time to time, and thus
will not include, without limitation, any intellectual property of NAI);
and all documents, instruments and agreements evidencing the same; and
all extensions, renewals, modifications and replacements of the
foregoing; and any interest or other amounts payable in connection
therewith; and
(b) All proceeds of the foregoing (including whatever is
receivable or received when Collateral or proceeds is invested, sold,
collected, exchanged, returned, substituted or otherwise disposed of,
whether such disposition is voluntary or involuntary, including rights
to payment and return premiums and insurance proceeds under insurance
with respect to any Collateral, and all rights to payment with respect
to any cause of action affecting or relating to the Collateral).
The pledge, assignment and grant of a security interest made by NAI hereunder is
for security of the Secured Obligations only; the parties to this Agreement do
not intend that NAI's delivery of the Collateral to Agent as herein provided
will constitute an advance payment of any Secured Obligations or liquidated
damages, nor do the parties intend that the Collateral increase the dollar
amount of the Secured Obligations.
Section 2.2 Return of Collateral After the Secured Obligations are
Satisfied in Full. If any proceeds of Collateral remain after all Secured
Obligations have been paid in full, Agent will deliver or direct the Deposit
Takers to deliver such proceeds to NAI or other Persons entitled thereto by law.
ARTICLE III DESIGNATION OF MINIMUM COLLATERAL
PERCENTAGE AND INITIAL DEPOSIT TAKER
Section 3.1 Minimum Collateral Percentage. At all times the Collateral
Percentage shall be one hundred percent (100%).
Section 3.2 Initial Deposit Taker. NAI has requested that BNPLC and the
Participants each designate The Bank of New York as its initial Deposit Taker,
and BNPLC and the Participants have agreed to do so with the understanding of
all parties that such Deposit Taker is an Unaffiliated Deposit Taker for
purposes of this Agreement. Contemporaneously with the execution of this
Agreement, such Deposit Taker is receiving a Notice of Security Agreement and
responding with a Deposit Taker's Acknowledgment and Agreement, as contemplated
in subsections 4.1.1 and 4.1.2 below.
ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS
Section 4.1 Qualification of Deposit Takers Generally. Agent may decline
to deposit or maintain Collateral hereunder with any Person designated as a
Deposit Taker, if such Person has failed to satisfy or no longer satisfies the
following requirements:
-8-
14
4.1.1 Such Person must have received from Agent and NAI a
completed, executed Notice of Security Interest (a "NOTICE OF SECURITY
INTEREST"), either in the form of ATTACHMENT 3 or in the form of
ATTACHMENT 4 as described in Section 4.6, which specifically identifies
any and all Accounts in which such Person shall hold Cash Collateral
delivered to it pursuant to this Agreement and which designates Account
Offices with respect to all such Accounts in New York or California.
4.1.2 Such Person must have executed the Acknowledgment and
Agreement at the end of such Notice of Security Interest (the "DEPOSIT
TAKER'S ACKNOWLEDGMENT AND AGREEMENT") and returned the same to Agent.
Further, such Person must have complied with the Deposit Taker's
Acknowledgment and Agreement, and the representations set forth therein
with respect to such Person must continue to be true and correct.
4.1.3 Such Person must be a commercial bank, organized under the
laws of the United States of America or a state thereof or under the
laws of another country which is doing business in the United States of
America; must be authorized to maintain deposit accounts for others
through Account Offices in New York or California (as specified in the
Deposit Taker's Acknowledgment and Agreement); and must be an Affiliate
of BNPLC or the Participant for whom such Person will act as Deposit
Taker or must have a combined capital, surplus and undivided profits of
at least $500,000,000.
4.1.4 Such Person must have complied with the provisions in this
Agreement applicable to Deposit Takers, including the provisions of
Section 5.4 concerning the issuance and redemption of Certificates of
Deposit.
Section 4.2 Additional Requirement Prior to the Base Rent Commencement
Date (All Buildings). Prior to the Base Rent Commencement Date (All Buildings),
no Deposit Taker may be an Affiliate of BNPLC. However, on or after the Base
Rent Commencement Date (All Buildings): (1) BNPLC and BNPLC's Parent may each
designate BNPLC's Parent as its Deposit Taker pursuant to Section 4.5; (2) any
other Participant may designate itself as its Deposit Taker pursuant to Section
4.5, provided that the other Participant is not itself a Disqualified Deposit
Taker; and (3) pursuant to Section 4.6, Agent and NAI must promptly upon request
execute and deliver any properly completed Notice of Security Interest requested
by BNPLC or the applicable Participant to facilitate the designations
contemplated in this sentence.
Section 4.3 Replacement of Participants Proposed by NAI. So long as no
Event of Default has occurred and is continuing, BNPLC shall not unreasonably
withhold its approval for a substitution under the Participation Agreement of a
new Participant proposed by NAI for any Participant, the Deposit Taker for whom
would no longer meet the requirements for an Initially Qualified Deposit Taker;
provided, however, that (A) the proposed substitution can be accomplished
without a release or breach by BNPLC of its rights and obligations under the
Participation Agreement; (B) the new Participant will agree (by executing a
Supplement and a supplement to the Participation Agreement as contemplated
therein and by other agreements as may be reasonably required by BNPLC and NAI)
to become a party to the Participation Agreement and to this Agreement, to
designate an Initially Qualified Deposit Taker as the Deposit Taker for it under
this Agreement and to accept a Percentage under the Participation Agreement
equal to the Percentage of the Participant to be replaced; (C) the new
Participant (or NAI) will provide the funds to pay the termination fee required
by Section 6.4 of the
-9-
15
Participation Agreement to accomplish the substitution; (D) NAI (or the new
Participant) agrees in writing to indemnify and defend BNPLC for any and all
Losses incurred by BNPLC in connection with or because of the substitution,
including the cost of preparing supplements to the Participation Agreement and
this Agreement and including any cost of defending and paying any claim asserted
by the Participant to be replaced because of the substitution (but not including
any liability of BNPLC to such Participant for damages caused by BNPLC's bad
faith or gross negligence in the performance of BNPLC's obligations under the
Participation Agreement prior to the substitution); (E) the new Participant
shall be a reputable financial institution having a net worth of no less than
seven and one half percent (7.5%) of total assets and total assets of no less
than $10,000,000,000.00 (all according to then recent audited financial
statements); and (F) in no event will BNPLC be required to approve a
substitution pursuant to this Section 4.3 which will replace a Participant that
is an Affiliate of BNPLC. BNPLC shall attempt in good faith to assist (and cause
BNPLC's Parent to attempt in good faith to assist) NAI in identifying a new
Participant that NAI may propose to substitute for an existing Participant
pursuant to this Section, as NAI may reasonably request from time to time.
However, in no event shall BNPLC itself, or any of its Affiliates, be required
to take the Percentage of any Participant to be replaced.
Section 4.4 Mandatory Substitutions for Unaffiliated Deposit Takers and
Disqualified Deposit Takers.
4.4.1 As of the Base Rent Commencement Date (All Buildings), the
party for whom each Unaffiliated Deposit Taker is acting (i.e., BNPLC or
the applicable Participant) shall designate a substitute Deposit Taker
who is not an Unaffiliated Deposit Taker and cause the substitute to
satisfy the requirements set forth in Section 4.1. (The substitutions
required by this subsection will result in a transfer of Collateral from
interest bearing accounts maintained with Unaffiliated Deposit Takers to
non-interest bearing Accounts maintained with Deposit Takers that are
not Unaffiliated Deposit Takers.)
4.4.2 If, after the Base Rent Commencement Date (All Buildings),
any Deposit Taker shall cease to satisfy the requirements set forth in
Section 4.1, the party for whom such Disqualified Deposit Taker has been
designated as Deposit Taker (i.e., BNPLC or the applicable Participant)
shall promptly (1) provide notice thereof to Agent and NAI, and (2)
designate a substitute Deposit Taker and cause the substitute to satisfy
the requirements set forth in Section 4.1.
4.4.3 Pending the designation of a substitute Deposit Taker when
required by this Section 4.4 and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral
held by the Deposit Taker to be replaced and deposit such Collateral
with other Deposit Takers, subject to Section 5.3 below. If at any time
no Deposit Takers have been designated that meet the requirements of
Section 4.1 and, if applicable, Section 4.2, then Agent shall itself
select one or more Deposit Takers for BNPLC and the Participants meeting
such requirements.
Section 4.5 Voluntary Substitution of Deposit Takers. With the written
approval of Agent, which approval will not be unreasonably withheld, BNPLC or
any Participant may at any time designate for itself a new Deposit Taker (in
replacement of any prior Deposit Taker acting for it hereunder); provided, the
Person so designated has satisfied the requirements set forth in Section 4.1;
and, provided
-10-
16
further, unless the designation of a new Deposit Taker is required by Section
4.4, at the time of the replacement such Person must be an Initially Qualified
Deposit Taker.
Section 4.6 Delivery of Notice of Security Interest by NAI and Agent. To
the extent required for the designation of a new Deposit Taker by BNPLC or any
Participant pursuant to Section 4.5, or to permit the substitution or
replacement of a Deposit Taker for BNPLC or any Participant as provided in
Sections 4.4 and 4.5, NAI and Agent shall promptly execute and deliver any
properly completed Notice of Security Interest requested by BNPLC or the
applicable Participant. The form of Notice of Security Agreement attached as
ATTACHMENT 3 shall be used for any Deposit Taker other than an Unaffiliated
Deposit Taker. The form of Notice of Security Agreement attached as ATTACHMENT 4
shall be used for any Unaffiliated Deposit Taker.
In the case of any Notice of Security Agreement to be used for an
Unaffiliated Deposit Taker, the form attached as ATTACHMENT 4 shall be completed
by the insertion (as suggested by the clause in brackets at the end of the
Acknowledgment and Agreement which is part of such form) of a description of how
interest will be calculated on Collateral held by such Unaffiliated Deposit
Taker from time to time. The Notice and Agreement used for the initial Deposit
Taker (designated as provided in Section 3.2) confirms that such Deposit Taker
will pay interest at a rate, initially, equal to 6.1%. NAI acknowledges,
however, that such Notice and Agreement also gives the initial Deposit Taker the
right to adjust such rate from time to time, and neither BNPLC nor Agent nor any
Participant has assured NAI of any minimum rate of interest or of any method of
calculating interest on Collateral held from time to time by any other
Unaffiliated Deposit Taker. Any party (be it BNPLC or any Participant or Agent)
designating another Unaffiliated Deposit Taker to act as a replacement of the
initial Deposit Taker, as provided in other provisions of this Agreement, will
attempt in good faith to persuade the replacement to pay interest on Collateral
at a reasonable rate for time deposits, but no such party shall have any
liability hereunder, nor shall NAI have any defense hereunder or under the other
Operative Documents, because of the refusal of the replacement to pay a rate of
interest satisfactory to NAI.
Section 4.7 Constructive Possession of Collateral. The possession by a
Deposit Taker of any deposit accounts, money, instruments, chattel paper or
other property constituting Collateral or evidencing Collateral shall be deemed
to be possession by Agent or a person designated by Agent, for purposes of
perfecting the security interest granted to Agent hereunder pursuant to the UCC
or other Applicable Law; and notifications to a Deposit Taker by other Persons
holding any such property, and Acknowledgments, receipts or confirmations from
any such Persons delivered to a Deposit Taker, shall be deemed notifications to,
or Acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of such Deposit Taker for the benefit of Agent
for the purposes of perfecting such security interests under Applicable Law.
Section 4.8 Attempted Setoff by Deposit Takers. By delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, without in each case first obtaining
the prior written authorization of Agent, Secured Obligations owed to it against
any Collateral held by it from time to time. Further, by delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, without in each case first obtaining
the prior written authorization of both NAI and Agent, obligations owed to it
other than Secured Obligations against any Collateral held by it from time to
time. Any Deposit Taker for BNPLC or a Participant shall not be permitted by
BNPLC or the applicable Participant, as the case may be, to violate such
agreements. However, NAI acknowledges
-11-
17
and agrees (without limiting its right to recover damages from a Deposit Taker
that violates such agreements) that Agent shall not be responsible for, or be
deemed to have taken any action against NAI because of, any Deposit Taker's
violation of such agreements; and, neither BNPLC nor any Participant shall be
responsible for, or be deemed to have taken any action against NAI because of,
any violation of such agreements by a Deposit Taker for another party.
Section 4.9 Deposit Taker Losses. Agent shall not be responsible for any
Deposit Taker Losses (including Excluded Deposit Taker Losses). However, Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant (other
than Excluded Deposit Taker Losses) shall reduce the amount of BNPLC's
Corresponding Obligations to Participants which are payable to such Participant
as provided in Section 2.2 of the Participation Agreement. Further, when Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant (other
than Excluded Deposit Taker Losses) are incurred in excess of the payments of
Secured Obligations that such Participant would then have been entitled to
receive under the Participation Agreement but for such Deposit Taker Losses,
such Participant must immediately pay the excess to Agent as additional
Collateral hereunder, failing which NAI may recover any damages suffered by it
because of the Deposit Taker Losses from such Deposit Taker or such Participant.
Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply
with this Agreement. Except as provided in the next Section, any Participant,
the Deposit Taker for whom has failed to comply with the requirements of this
Agreement or any Notices of Security Interest and any Deposit Taker's
Acknowledgments and Agreements (the "RESPONSIBLE PARTICIPANT") must defend,
indemnify, and hold harmless BNPLC, Agent and the other Participants from and
against any Losses resulting from such failure. Without limiting the foregoing,
if the failure of a Deposit Taker for a Responsible Participant to comply
strictly with the terms of this Agreement (including, without limitation, the
provisions of Section 5.4 concerning the issuance and redemption of Certificates
of Deposit and the requirement that any cash deposits be held in a deposit
account located in either New York or California) causes, in whole or in part,
the security interest of Agent in the Collateral held by such Deposit Taker to
be unperfected, then any and all Losses suffered as a result of such
nonperfection shall, except as provided in the next Section, be borne solely by
the Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.
Section 4.11 Losses Resulting from Failure of an Unaffiliated Deposit
Taker to Comply with this Agreement. Neither Agent, nor BNPLC nor any
Participant shall be responsible to NAI or any other party hereto for Excluded
Deposit Taker Losses or for any Losses resulting from the acts or omissions of
any Unaffiliated Deposit Taker, including Losses caused by a failure of an
Unaffiliated Deposit Taker to comply with the terms of this Agreement.
ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL
Section 5.1 Delivery of Funds by NAI. On each Base Rent Date, NAI must
deliver to Agent, subject to the pledge and security interest created hereby,
funds as Cash Collateral then needed (if any) to cause the Value of the
Collateral to be no less than the Minimum Collateral Value. Each delivery of
funds required by the preceding sentence must be received by Agent no later than
12:00 noon (San Francisco time) on the date it is required; if received after
12:00 noon it will be considered for purposes of this Agreement and the other
Operative Documents as received on the next following Business Day. At least
five Business Days prior to any Base Rent Date upon which it is expected that
NAI will be
-12-
18
required to deliver additional funds pursuant to this Section, NAI shall notify
BNPLC, Agent and each of the Participants thereof and of the amount NAI expects
to deliver to Agent as Cash Collateral on the applicable Base Rent Date. In
addition to required deliveries of Cash Collateral as provided in the foregoing
provisions, NAI may on any date (whether or not a Base Rent Date) deliver
additional Cash Collateral to Agent as necessary to prevent any Default from
becoming an Event of Default. Upon receipt of any funds delivered to it by NAI
as Cash Collateral, Agent shall immediately deposit the same with the Deposit
Takers in accordance with the requirements of Sections 5.3 and 5.4 below.
Section 5.2 Transition Account. Pending deposit in the Accounts or other
application as provided herein, all Cash Collateral received by Agent shall be
credited to and held by Agent in an account (the "TRANSITION ACCOUNT") styled
"NAI Collateral Account, held for the benefit of BNP Leasing Corporation and the
Participants," separate and apart from all other property and funds of NAI or
other Persons, and no other property or funds shall be deposited in the
Transition Account. The books and records of Agent shall reflect that the
Transition Account and all Cash Collateral on deposit therein are owned by NAI,
subject to a pledge and security interest in favor of Agent for the benefit of
BNPLC and Participants.
Section 5.3 Allocation of Cash Collateral Among Deposit Takers. Funds
received by Agent from NAI as Cash Collateral will be allocated for deposit
among the Deposit Takers as follows:
first, to the extent possible the funds will be allocated as required to
rectify and prevent any Collateral Imbalance; and
second, the funds will be allocated to the Deposit Taker for BNPLC,
unless the Deposit Taker for BNPLC has become a Disqualified Deposit
Taker, in which case the funds will be allocated to other Deposit Takers
who are not Disqualified Deposit Takers as Agent deems appropriate.
Further, if for any reason a Collateral Imbalance is determined by Agent to
exist, Agent shall, as required to rectify or mitigate the Collateral Imbalance,
promptly reallocate Collateral among Deposit Takers by withdrawing Cash
Collateral from some Accounts and redepositing it in other Accounts. (If any
party to this Agreement believes that the Value of the Accounts held by a
particular Deposit Taker causes a Collateral Imbalance to exist, that party will
promptly notify BNPLC, NAI and Agent.) Subject to the foregoing, and provided
that Agent does not thereby create or exacerbate a Collateral Imbalance, Agent
may withdraw and redeposit Cash Collateral in order to reallocate the same among
Deposit Takers from time to time as Agent deems appropriate. For purposes of
illustration only, examples of the allocations required by this Section are set
forth in ATTACHMENT 5.
Section 5.4 Issuance and Redemption of Certificates of Deposit. Upon the
receipt of any deposit of Cash Collateral from Agent, each Deposit Taker shall
issue or cause to be issued a Certificate of Deposit evidencing the Account into
which such deposit is made and deliver such Certificate of Deposit to (or upon
the written direction of) Agent for the benefit of BNPLC and the Participants.
Each Certificate of Deposit shall be issued in an amount equal to the Value of
the Account which it evidences and shall otherwise be in the form indicated in
ATTACHMENT 1 to this Agreement. When Cash Collateral is deposited into an
Account that is already evidenced by an outstanding Certificate of Deposit held
by Agent, and when any Unaffiliated Deposit Taker is expected to add interest to
the principal balance of an Account that is already evidenced by an outstanding
Certificate of Deposit held by Agent, Agent will surrender the outstanding
Certificate of Deposit to the Deposit Taker that issued it
-13-
19
and will direct in writing that Deposit Taker to issue or cause the issue of a
new Certificate of Deposit in exchange, evidencing the total amount of Cash
Collateral then in the Account after the deposit or the addition of the
interest. A Deposit Taker that has issued or caused to be issued a Certificate
of Deposit may require the surrender of the Certificate of Deposit as a
condition to a withdrawal from the Account evidenced thereby, including any
withdrawal required or permitted by this Agreement. Upon surrender of a
Certificate of Deposit in connection with a withdrawal of less than all of the
Cash Collateral in the Account evidenced thereby, the applicable Deposit Taker
will concurrently issue or cause to be issued as directed in writing by the
Agent a new Certificate of Deposit to Agent, evidencing the balance of the Cash
Collateral remaining on deposit in the Account after the withdrawal.
Notwithstanding the foregoing, if any Certificate of Deposit held by Agent shall
be destroyed, lost or stolen, the Deposit Taker that issued the Certificate,
upon the written request of Agent, shall issue or cause to be issued a new
Certificate of Deposit to Agent in lieu of and in substitution for the
Certificate of Deposit so destroyed, lost or stolen. However, as applicant for
the substitute Certificate of Deposit, Agent must indemnify (at no cost to NAI)
the applicable Deposit Taker against any liability on the Certificate of Deposit
destroyed, lost or stolen, and Agent shall furnish to the Deposit Taker an
affidavit of an officer of Agent setting forth the fact of destruction, loss or
theft and confirming the status of Agent as holder of the Certificate of Deposit
immediately prior to the destruction, loss or theft. If any Certificate of
Deposit held by Agent shall become mutilated, the Deposit Taker that issued or
caused to be issued the Certificate, upon the written request of Agent, shall
issue or cause to be issued a new Certificate of Deposit to Agent in exchange
and substitution for the mutilated Certificate of Deposit. Agent shall hold all
Certificates of Deposit for the benefit of BNPLC and the Participants, subject
to the pledge and security interest created hereby.
Section 5.5 Status of the Accounts Under the Reserve Requirement
Regulations. Deposit Takers shall be permitted to structure the Accounts as
nonpersonal time deposits under 12 C.F.R., Part II, Chapter 204 (commonly known
as "Regulation D"). Accordingly, each Deposit Taker may require at least seven
days advance notice of any withdrawal or transfer of funds from Accounts it
maintains and may limit the number of withdrawals or transfers from such
Accounts to no more than six in any calendar month, notwithstanding anything to
the contrary herein or in any deposit agreement that NAI and any Deposit Taker
may enter into with respect to any Account. As necessary to satisfy the seven
days notice requirement with respect to withdrawals by Agent when required by
NAI pursuant to the provisions below, Agent shall notify Deposit Takers promptly
after receipt of any notice from NAI described in subsection 6.1.2 or 6.2.1 or
in Section 6.3.
Section 5.6 Acknowledgment by NAI that Requirements of this Agreement
are Commercially Reasonable. NAI acknowledges and agrees that the requirements
set forth herein concerning receipt, deposit, withdrawal, allocation,
application and distribution of Cash Collateral by Agent, including the
requirements and time periods set forth in the next Article, are commercially
reasonable.
ARTICLE VI WITHDRAWAL OF CASH COLLATERAL
NAI may not withdraw Cash Collateral, except as follows:
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date.
NAI may require Agent to present Certificates of Deposit for payment and
withdraw Cash Collateral from Accounts on any date prior to the Designated Sale
Date and to deliver such Cash Collateral to NAI (which delivery shall be free
and clear of all liens and security interests hereunder); provided, however,
that in each case:
-14-
20
6.1.1 Such withdrawal and delivery of the Cash Collateral to NAI
will not cause the Value of the remaining Collateral to be less than the
Minimum Collateral Value.
6.1.2 by a notice in the form of ATTACHMENT 6, NAI must give
Agent, BNPLC and the Participants notice of the required withdrawal at
least ten days prior to the date upon which the withdrawal is to occur.
6.1.3 No Default or Event of Default shall have occurred and be
continuing at the time NAI gives the notice required by the preceding
subsection or on the date upon which the withdrawal is required.
6.1.4 NAI must pay to Agent any and all costs incurred by Agent
in connection with the withdrawal.
6.1.5 Agent shall determine the Accounts from which to make any
withdrawal required by NAI pursuant to this Section as necessary to
prevent or mitigate any Collateral Imbalance.
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants. To reduce the "Break Even
Price" or "Supplemental Payment" required under (and as defined in) the Purchase
Agreement (and, thus, to reduce the Secured Obligations), NAI may require Agent
to withdraw Cash Collateral then held by or for Agent pursuant to this Agreement
on the Designated Sale Date and to deliver the same on the Designated Sale Date
or on any date thereafter prior to an Event of Default (which delivery shall be
free and clear of all liens and security interests hereunder) directly to the
Participants in proportion to their respective rights to payment of BNPLC's
Corresponding Obligations to Participants and for application thereto or the
reduction thereof pursuant to Section 2.6 of the Participation Agreement;
provided, that:
6.2.1 by a notice in the form of ATTACHMENT 7, NAI must have
notified Agent, BNPLC and each of the Participants of the required
withdrawal and payment to Participants at least ten days prior to the
date upon which it is to occur;
6.2.2 the required withdrawal shall be made as determined by
Agent, first, from the Accounts maintained by the Deposit Takers for the
Participants, and then (to the extent necessary) from the Accounts
maintained by the Deposit Taker for BNPLC; and
6.2.3 in any event, no withdrawals or payments directly to
Participants shall be required by this Section 6.2 (or permitted over
the objection of BNPLC) in excess of those required to satisfy BNPLC's
Corresponding Obligations to Participants or to reduce such obligations
to zero under the Participation Agreement.
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC. To satisfy NAI's Purchase Agreement
Obligations, NAI may require Agent to withdraw any Cash Collateral held by the
Deposit Taker for BNPLC pursuant to this Agreement on the Designated Sale Date
and to deliver the same on the Designated Sale Date or on any date thereafter
prior to an Event of Default (which delivery shall be free and clear of all
liens and security interests hereunder) directly to BNPLC as a payment on behalf
of NAI of amounts due under the Purchase Agreement; provided, that by a notice
in the form of ATTACHMENT 8, NAI must have notified Agent
-15-
21
and BNPLC of the required withdrawal and payment to BNPLC at least ten days
prior to the date upon which it is to occur.
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by
Disqualified Deposit Takers. NAI may from time to time prior to the Designated
Sale Date (regardless of the existence of any Default or Event of Default)
require Agent to withdraw any or all Cash Collateral from any Account maintained
by a Disqualified Deposit Taker and deposit it, still subject to the pledge and
grant of security interest hereunder, with other Deposit Takers who are not
Disqualified Deposit Takers (in accordance with the requirements of Sections 5.3
and 5.4) on any date prior to the Designated Sale Date; provided, that by a
notice in the form of ATTACHMENT 9, NAI must have notified Agent, BNPLC and each
of the Participants of the required withdrawal at least ten days prior to the
date upon which it is to occur.
ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI
Section 7.1 Representations of NAI. NAI represents to BNPLC, Agent and
the Participants as follows:
7.1.1 NAI is the legal and beneficial owner of the Collateral
(or, in the case of after-acquired Collateral, at the time NAI acquires
rights in the Collateral, will be the legal and beneficial owner
thereof). No other Person has (or, in the case of after-acquired
Collateral, at the time NAI acquires rights therein, will have) any
right, title, claim or interest (by way of Lien, purchase option or
otherwise) in, against or to the Collateral, except for rights created
hereunder.
7.1.2 Agent has (or in the case of after-acquired Collateral, at
the time NAI acquires rights therein, will have) a valid, first
priority, perfected pledge of and security interest in the Collateral,
regardless of the characterization of the Collateral as deposit
accounts, instruments or general intangibles under the UCC, but assuming
that the representations of each Deposit Taker in its Deposit Taker's
Acknowledgment and Agreement are true.
7.1.3 NAI has delivered to Agent, together with all necessary
stock powers, endorsements, assignments and other necessary instruments
of transfer, the originals of all documents, instruments and agreements
evidencing Accounts, Certificates of Deposit or Cash Collateral.
7.1.4 NAI's chief executive office is located at the address of
NAI set forth in Article II of the Common Definitions and Provisions
Agreement (Phase IV - Improvements) or at another address in California
specified in a notice that NAI has given to Agent as required by Section
7.2.4.
7.1.5 To the knowledge of NAI, neither the ownership or the
intended use of the Collateral by NAI, nor the pledge of Accounts or the
grant of the security interest by NAI to Agent herein, nor the exercise
by Agent of its rights or remedies hereunder, will (i) violate any
provision of (a) Applicable Law, (b) the articles or certificate of
incorporation, charter or bylaws of NAI, or (c) any agreement, judgment,
license, order or permit applicable to or binding upon NAI, or (ii)
result in or require the creation of any Lien, charge or encumbrance
upon any assets or properties of NAI except as expressly contemplated in
this Agreement. Except as expressly contemplated in this Agreement, to
the knowledge of NAI no consent, approval, authorization or
-16-
22
order of, and no notice to or filing with any court, governmental
authority or third party is required in connection with the pledge or
grant by NAI of the security interest contemplated herein or the
exercise by Agent of its rights and remedies hereunder.
Section 7.2 Covenants of NAI. NAI hereby agrees as follows:
7.2.1 NAI, at NAI's expense, shall promptly procure, execute and
deliver to Agent all documents, instruments and agreements and perform
all acts which are necessary, or which Agent may reasonably request, to
establish, maintain, preserve, protect and perfect the Collateral, the
pledge thereof to Agent or the security interest granted to Agent
therein and the first priority of such pledge or security interest or to
enable Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
preceding sentence, NAI shall (A) procure, execute and deliver to Agent
all stock powers, endorsements, assignments, financing statements and
other instruments of transfer requested by Agent, (B) deliver to Agent
promptly upon receipt all originals of Collateral consisting of
instruments, documents and chattel paper, (C) cause the security
interest of Agent in any Collateral consisting of securities to be
recorded or registered in the books of any financial intermediary or
clearing corporation requested by Agent, and (D) reimburse Agent upon
request for any legal opinion Agent may elect to obtain from a
nationally recognized commercial law firm authorized to practice in New
York concerning the enforceability, first priority and perfection of
Agent's security interest in any Collateral maintained in New York, if
BNPLC or any Participant should at any time elect to use a Deposit Taker
that will maintain one or more Accounts in New York.
7.2.2 NAI shall not use or consent to any use of any Collateral
in violation of any provision of the this Agreement or any other
Transaction Document or any Applicable Law.
7.2.3 NAI shall pay promptly when due all taxes and other
governmental charges, all Liens and all other charges now or hereafter
imposed upon, relating to or affecting any Collateral.
7.2.4 Without thirty days' prior written notice to Agent, NAI
shall not change NAI's name or place of business (or, if NAI has more
than one place of business, its chief executive office).
7.2.5 NAI shall appear in and defend, on behalf of Agent, any
action or proceeding which may affect NAI's title to or Agent's interest
in the Collateral.
7.2.6 Subject to the express rights of NAI under Article VI, NAI
shall not surrender or lose possession of (other than to Agent or a
Deposit Taker pursuant hereto), sell, encumber, lease, rent, option, or
otherwise dispose of or transfer any Collateral or right or interest
therein, and NAI shall keep the Collateral free of all Liens.
7.2.7 NAI will not take any action which would in any manner
impair the value or enforceability of Agent's pledge of or security
interest in any Collateral, nor will NAI fail to take any action which
is required to prevent (and which NAI knows is required to prevent) an
impairment of the value or enforceability of Agent's pledge of or
security interest in any Collateral.
-17-
23
7.2.8 NAI shall pay (and shall indemnify and hold harmless Agent
from and against) all Losses incurred by Agent in connection with or
because of (A) the interest acquired by Agent in any Collateral pursuant
to this Agreement, or (B) the negotiation or administration of this
Agreement, whether such Losses are incurred at the time of execution of
this Agreement or at any time in the future. Costs and expenses included
in such Losses may include, without limitation, all filing and recording
fees, taxes, UCC search fees and Attorneys' Fees incurred by Agent with
respect to the Collateral.
7.2.9 Without limiting the foregoing, within five Business Days
after NAI becomes aware of any failure of the pledge or security
interest contemplated herein in the Transition Account or any Account,
Certificate of Deposit or Cash Collateral to be a valid, perfected,
first priority pledge or security interest (regardless of the
characterization of the Transition Account or any Accounts, Certificates
of Deposit or Cash Collateral as deposit accounts, instruments or
general intangibles under the UCC), NAI shall notify Agent, BNPLC and
the Participants of such failure. In addition, if the failure would not
exist but for NAI's delivery of Cash Collateral to Agent subject to
prior Liens or other claims by one or more third parties, or but for the
grant by NAI itself of any Lien or other interest in the Collateral to
one or more third parties, then, in addition to any other remedies
available to BNPLC or Agent under the circumstances, NAI must pay to
BNPLC any additional Base Rent that has accrued under the Improvements
Lease because of (or that would have accrued if BNPLC had been aware of)
the failure, together with interest at the Default Rate on any such
additional Base Rent.
ARTICLE VIII AUTHORIZED ACTION BY AGENT
Section 8.1 Power of Attorney. NAI hereby irrevocably appoints Agent as
NAI's attorney-in-fact for the purpose of authorizing Agent to perform (but
Agent shall not be obligated to and shall incur no liability to NAI or any third
party for failure to perform) any act which NAI is obligated by this Agreement
to perform, and to exercise, consistent with the other provisions of this
Agreement, such rights and powers as NAI might exercise with respect to the
Collateral during any period in which a Default or Event of Default has occurred
and is continuing, including the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension, reorganization,
deposit, merger, consolidation or other agreement pertaining to, or deposit,
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any indebtedness of NAI relating to the Collateral;
and (f) execute UCC financing statements and other documents, instruments and
agreements required hereunder. NAI agrees that such care as Agent gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Agent's possession; provided, however, that Agent shall
not be obligated to NAI to give any notice or take any action to preserve rights
against any other Person in connection with the Secured Obligations or with
respect to the Collateral.
ARTICLE IX DEFAULT AND REMEDIES
Section 9.1 Remedies. In addition to all other rights and remedies
granted to Agent, BNPLC or the Participants by this Agreement, the Improvements
Lease, the Purchase Agreement, the Participation Agreement, the UCC and other
Applicable Laws, Agent may, upon the occurrence and
-18-
24
during the continuance of any Event of Default, exercise any one or more of the
following rights and remedies, all of which will be in furtherance of its rights
as a secured party under the UCC:
(a) Agent may collect, receive, appropriate or realize upon the
Collateral or otherwise foreclose or enforce the pledge of or security
interests in any or all Collateral in any manner permitted by Applicable
Law or in this Agreement; and
(b) Agent may notify any or all Deposit Takers to pay all or any
portion of the Collateral held by such Deposit Taker(s) directly to
Agent.
Agent shall distribute the proceeds of all Collateral received by Agent after
the occurrence of an Event of Default to BNPLC and the Participants for
application to the Secured Obligations. If any proceeds of Collateral remain
after all Secured Obligations have been paid in full, Agent will deliver or
direct the Deposit Takers to deliver such proceeds to NAI or other Persons
entitled thereto. In any case where notice of any sale or disposition of any
Collateral is required, NAI hereby agrees that seven (7) Business Days notice of
such sale or disposition is reasonable.
ARTICLE X OTHER RECOURSE
Section 10.1 Recovery Not Limited. To the fullest extent permitted by
applicable law, NAI waives any right to require that Agent, BNPLC or the
Participants proceed against any other Person, exhaust any Collateral or other
security for the Secured Obligations, or to have any Other Liable Party joined
with NAI in any suit arising out of the Secured Obligations or this Agreement,
or pursue any other remedy in their power. NAI waives any and all notice of
acceptance of this Agreement. NAI further waives notice of the creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations of any Other Liable Party from time to time and any defense
arising by reason of any disability or other defense of any Other Liable Party
or by reason of the cessation from any cause whatsoever of the liability of any
Other Liable Party. Until all of the Secured Obligations shall have been paid in
full, NAI shall have no right to subrogation, reimbursement, contribution or
indemnity against any Other Liable Party and NAI waives the right to enforce any
remedy which Agent, BNPLC or any Participant has or may hereafter have against
any Other Liable Party, and waives any benefit of and any right to participate
in any other security whatsoever now or hereafter held by Agent, BNPLC or any
Participant. NAI authorizes Agent, BNPLC and the Participants, without notice or
demand and without any reservation of rights against NAI and without affecting
NAI's liability hereunder or on the Secured Obligations, from time to time to
(a) take or hold any other property of any type from any other Person as
security for the Secured Obligations, and exchange, enforce, waive and release
any or all of such other property, (b) after any Event of Default, apply or
require the application of the Collateral (in accordance with this Agreement) or
such other property in any order they may determine and to direct the order or
manner of sale thereof as they may determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
Other Liable Party with respect to any or all of the Secured Obligations or
other security for the Secured Obligations, and (d) release or substitute any
Other Liable Party.
ARTICLE XI PROVISIONS CONCERNING AGENT
In the event of any conflict between the following and other provisions
in this Agreement, the following will control:
-19-
25
Section 11.1 Appointment and Authority. BNPLC and each Participant
hereby irrevocably authorizes Agent, and Agent hereby undertakes, to take all
actions and to exercise such powers under this Agreement as are specifically
delegated to Agent by the terms hereof, together with all other powers
reasonably incidental thereto. The relationship of Agent to the Participants is
only that of one commercial bank acting as collateral agent for others, and
nothing herein shall be construed to constitute Agent a trustee or other
fiduciary for any Participant or anyone claiming through or under a Participant
nor to impose on Agent duties and obligations other than those expressly
provided for in this Agreement. With respect to any matters not expressly
provided for in this Agreement and any matters which this Agreement places
within the discretion of Agent, Agent shall not be required to exercise any
discretion or take any action, and it may request instructions from BNPLC and
Participants with respect to any such matter, in which case it shall be required
to act or to refrain from acting (and shall be fully protected and free from
liability to all Participants in so acting or refraining from acting) upon the
instructions of the Majority, as defined in the Participation Agreement,
including itself as a Participant and BNPLC; provided, however, that Agent shall
not be required to take any action which exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to this Agreement
or the other documents referenced herein or to Applicable Law.
Section 11.2 Exculpation, Agent's Reliance, Etc.. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that each
shall be liable for its own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent (1) may treat the rights of any
Participant under its Participation Agreement as continuing until Agent receives
written notice of the assignment or transfer of those rights in accordance with
such Participation Agreement, signed by such Participant and in form
satisfactory to Agent; (2) may consult with legal counsel (including counsel for
NAI), independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, unless the
action taken or omitted constitutes misconduct; (3) makes no warranty or
representation and shall not be responsible for any statements, warranties or
representations made in or in connection with this Agreement or the other
documents referenced herein; (4) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of the Transaction Documents on the part of any party thereto, or to
inspect the property (including the books and records) of any party thereto; (5)
shall not be responsible to any Participant for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document or any instrument or document furnished in connection therewith; (6)
may rely upon the representations and warranties of NAI, Participants and
Deposit Takers in exercising its powers hereunder; and (7) shall incur no
liability under or in respect of the Transaction Documents by acting upon any
notice, consent, certificate or other instrument or writing (including any
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
Section 11.3 Participant's Credit Decisions. Each Participant
acknowledges that it has, independently and without reliance upon Agent or any
other Participant, made its own analysis of NAI and the transactions
contemplated hereby and its own independent decision to enter into the
Transaction Documents to which it is a party. Each Participant also acknowledges
that it will, independently and without reliance upon Agent or any other
Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Transaction Documents.
-20-
26
Section 11.4 Indemnity. Each Participant agrees to indemnify Agent (to
the extent not reimbursed by NAI within ten days after demand) from and against
such Participant's Percentage of any and all Losses of any kind or nature
whatsoever which to any extent (in whole or in part) may be imposed on, incurred
by, or asserted against Agent growing out of, resulting from or in any other way
associated with any of the Collateral, the Transaction Documents and the
transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LOSSES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED,
IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,
PROVIDED ONLY THAT NO PARTICIPANT SHALL BE OBLIGATED UNDER THIS SECTION TO
INDEMNIFY AGENT FOR THAT PORTION, IF ANY, OF ANY LOSS WHICH IS PROXIMATELY
CAUSED BY AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED IN A FINAL JUDGMENT RENDERED AGAINST AGENT. Cumulative of the
foregoing, each Participant agrees to reimburse Agent promptly upon demand for
such Participant's Percentage share of any costs and expenses to be paid to
Agent by NAI hereunder to the extent that Agent is not timely reimbursed by NAI
as provided in subsection 7.2.8. As used in this Section the term "Agent" shall
refer not only to the Person designated as such in the introductory paragraph of
this Agreement, but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.
Section 11.5 Agent's Rights as Participant and Deposit Taker. In its
capacity as a Participant, BNP Paribas shall have the same rights and
obligations as any Participant and may exercise such rights as though it were
not Agent. In its capacity as a Deposit Taker, BNP Paribas shall have the same
rights and obligations as any Deposit Taker and may exercise such rights as
though it were not Agent. BNP Paribas and any of its Affiliates may accept
deposits from, lend money to, act as Trustee under indentures of, and generally
engage in any kind of business with NAI or its Affiliates, all as if BNP Paribas
were not designated as the Agent hereunder and without any duty to account
therefor to any other Participant.
Section 11.6 Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute any funds which it has received
hereunder, or whenever Agent in good faith determines that there is any dispute
among BNPLC and Participants about how such funds should be distributed, Agent
may choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Agent is otherwise required to
invest funds pending distribution, Agent shall invest such funds pending
distribution, all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
BNPLC or Participants shall be held by Agent pending such distribution solely as
Agent hereunder, and Agent shall have no equitable title to any portion thereof.
Section 11.7 Benefit of Article XI. The provisions of this Article
(other than the following Section 11.8) are intended solely for the benefit of
Agent, BNPLC and Participants, and NAI shall not be entitled to rely on any such
provision or assert any such provision in a claim or defense against Agent,
BNPLC or any Participant. Agent, BNPLC and Participants may waive or amend such
provisions as they desire without any notice to or consent of NAI.
-21-
27
Section 11.8 Resignation. Agent may resign at any time by giving written
notice thereof to BNPLC, Participants and NAI. Upon any such resignation the
Majority (as defined in the Participation Agreement) shall have the right to
appoint a successor Agent, subject to NAI's consent, such consent not to be
unreasonably withheld. A successor must be appointed for any retiring Agent, and
such Agent's resignation shall become effective when such successor accepts such
appointment. If, within thirty days after the date of the retiring Agent's
resignation, no successor Agent has been appointed and has accepted such
appointment, then the retiring Agent may appoint a successor Agent, which shall
be a commercial bank organized or licensed to conduct a banking or trust
business under the laws of the United States of America or of any state thereof.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder, the provisions
of this Section 11.8 shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
ARTICLE XII MISCELLANEOUS
Section 12.1 Provisions Incorporated From Other Operative Documents.
Reference is made to the Common Definitions and Provisions Agreement (Phase IV -
Improvements), to the Purchase Agreement and to the Participation Agreement for
a statement of the terms thereof. Without limiting the generality of the
foregoing, the provisions of Article II of the Common Definitions and Provisions
Agreement (Phase IV - Improvements) are incorporated into this Agreement for all
purposes as if set forth in this Article.
Section 12.2 Cumulative Rights, etc.. Except as herein expressly
provided to the contrary, the rights, powers and remedies of Agent, BNPLC and
the Participants under this Agreement shall be in addition to all rights, powers
and remedies given to them by virtue of any Applicable Law, any other
Transaction Document or any other agreement, all of which rights, powers, and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing their respective rights hereunder. NAI waives any right to
require Agent, BNPLC or any Participant to proceed against any Person or to
exhaust any Collateral or to pursue any remedy in Agent's, BNPLC's or such
Participant's power.
Section 12.3 Survival of Agreements. All representations and warranties
of NAI herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Transaction Documents and the creation of the Secured Obligations and
continue until terminated or released as provided herein.
Section 12.4 Other Liable Party. Neither this Agreement nor the exercise
by Agent or the failure of Agent to exercise any right, power or remedy
conferred herein or by law shall be construed as relieving any Other Liable
Party from liability on the Secured Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any other agreement evidencing or securing the Secured
Obligations to which NAI or any Other Liable Party may be a party, and
notwithstanding the reorganization, death, incapacity or bankruptcy of any Other
Liable Party, or any other event or proceeding affecting any Other Liable Party.
-22-
28
Section 12.5 Termination. Following the Designated Sale Date, upon
satisfaction in full of all Secured Obligations and upon written request for the
termination hereof delivered by NAI to Agent, (i) this Agreement and the pledge
and security interest created hereby shall terminate and all rights to the
Collateral shall revert to NAI and (ii) Agent will, upon NAI's request and at
NAI's expense execute and deliver to NAI such documents as NAI shall reasonably
request to evidence such termination and release.
Section 12.6 Amendment and Restatement. This Agreement amends, restates
and replaces the Prior Pledge Agreement referenced in the recitals at the
beginning of this Agreement.
[The signature pages follow.]
-23-
29
IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Pledge Agreement (Phase IV -
Improvements) to be executed as of October 2, 2000.
"NAI"
NETWORK APPLIANCE, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
30
[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective as of October 2, 2000]
"BNPLC"
BNP LEASING CORPORATION
By:
--------------------------------------
Xxxxx X. Xxx, Senior Vice President
31
[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective as of October 2, 2000]
"AGENT"
BNP PARIBAS
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
"PARTICIPANT"
BNP PARIBAS
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
32
ATTACHMENT 1
TO PLEDGE AGREEMENT
The form of Certificate of Deposit used to evidence any Account
maintained with a Deposit Taker that is not an Unaffiliated Deposit Taker will
be as set forth in Annex 1 attached to and made a part of the ATTACHMENT 1. The
form of Certificate of Deposit used to evidence any Account maintained with an
Unaffiliated Deposit Taker will be as set forth in Annex 2 attached to and made
a part of the ATTACHMENT 1.
As the Annexes attached to this ATTACHMENT indicate, Accounts maintained
with Unaffiliated Deposit Takers (before the Base Rent Commencement Date (All
Buildings)) are expected to earn interest, whereas Accounts maintained by
Deposit Takers (after the Base Rent Commencement Date (All Buildings)) are
expected to be non-interest bearing. (See subparagraph 3(b) of the Improvements
Lease where the impact of non-interest bearing Accounts on Base Rent accruing
thereunder is explained.)
33
ANNEX 1
TO ATTACHMENT 1 TO PLEDGE AGREEMENT
CERTIFICATE OF DEPOSIT
(No. _________)
[---------, -----]
[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]
PAYABLE TO
THE ORDER OF: BNP Paribas, as Agent under the Pledge Agreement
(Phase IV-Improvements) dated as of October 2, 2000, among
Network Appliance, Inc., BNP Leasing Corporation, BNP
Paribas and any other financial institutions which are
from time to time Participants under such Pledge Agreement
(Phase IV-Improvements) and BNP Paribas, acting in its
capacity as agent for BNPLC and the Participants
Dollars
--------------------------------------------------------------------------------
in current funds, without interest, seven days after presentment of this
certificate properly endorsed.
The bank issuing this certificate acknowledges and certifies that on the
date indicated above the payee deposited the dollar amount indicated above, and
that such amount shall be payable as provided above.
-----------------------------------------
Authorized Signature
-2-
34
ANNEX 2
TO ATTACHMENT 1 TO PLEDGE AGREEMENT
CERTIFICATE OF DEPOSIT
(No. _________)
[---------, -----]
[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]
PAYABLE TO
THE ORDER OF: BNP Paribas, as Agent under the Pledge Agreement
(Phase IV-Improvements) dated as of October 2, 2000, among
Network Appliance, Inc., BNP Leasing Corporation, BNP
Paribas and any other financial institutions which are
from time to time Participants under such Pledge Agreement
(Phase IV-Improvements) and BNP Paribas, acting in its
capacity as agent for BNPLC and the Participants
Dollars
--------------------------------------------------------------------------------
in current funds, with interest as provided below, upon the first business day
that is at least seven days after presentment of this certificate properly
endorsed.
Interest will accrue on the deposit evidenced by this certificate from the date
first written above to the first business day of the first calendar month after
the date first written above at the rate of _____ percent (___%) per annum.
The bank issuing this certificate acknowledges and certifies that on the date
indicated above the payee deposited the dollar amount indicated above, and that
such amount shall be payable as provided above.
-----------------------------------------
Authorized Signature
35
ATTACHMENT 2
TO PLEDGE AGREEMENT
SUPPLEMENT TO PLEDGE AGREEMENT
[----------, ----]
BNP Paribas
_______________
_______________
_______________
Network Appliance, Inc.
_______________
_______________
_______________
1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Supplement have the respective meanings given to those terms in the Pledge
Agreement.
2. The undersigned hereby certifies to Agent and NAI that the
undersigned has become a party to the Participation Agreement by executing a
supplement as provided therein and that its Percentage thereunder is ______%.
3. The undersigned, by executing and delivering this Supplement to NAI
and Agent, hereby agrees to become a party to the Pledge Agreement and agrees to
be bound by all of the terms thereof applicable to Participants. The Deposit
Taker for the undersigned shall be _________________, until such time as another
Deposit Taker for the undersigned shall be designated in accordance with
Sections 4.4 or 4.5 of the Pledge Agreement. The undersigned certifies to Agent
and NAI that such Deposit Taker is an Initially Qualified Deposit Taker and
satisfies the requirements for a Deposit Taker set forth in Section 4.1 of the
Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Supplement as of
the day and year indicated above.
[ ]
---------------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
36
ATTACHMENT 3
TO PLEDGE AGREEMENT
NOTICE OF SECURITY INTEREST
[__________, 20__]
[Name of Deposit Taker]
[Address of Deposit Taker]
1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Notice have the respective meanings given to those terms in the Pledge
Agreement.
2. NAI has informed Agent that NAI has established with the addressee of
this Notice ("DEPOSIT TAKER") the following non-interest bearing Account in the
name of Agent to be maintained at the following Account Office:
Account Account Account
Type Office Number
----------------- ------------- ----------
Time Deposit
------------- ----------
NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account, and that to evidence such Account and the amount of Cash
Collateral held therein from time to time, NAI has authorized Deposit Taker to
issue Certificates of Deposit payable to the order of Agent as provided in the
Pledge Agreement.
3. NAI and Agent hereby notify Deposit Taker that, pursuant to the
Pledge Agreement, NAI has granted to Agent, for the ratable benefit of BNPLC and
the Participants as security for the Secured Obligations, a pledge of and
security interest in all Accounts and other Collateral maintained by NAI with
Deposit Taker, including the Account described in Section 2 above.
4. In furtherance of such grant, NAI and Agent hereby authorize and
direct Deposit Taker to:
(a) hold all Collateral for Agent and as Agent's bailee, separate
and apart from all other property and funds of NAI and all other Persons
and to permit no other funds to be deposited or credited to the Account
described above;
37
(b) make a notation in its books and records of the interest of
Agent in the Collateral and that the Account described above and all
deposits therein or sums credited thereto are subject to a pledge and
security interest in favor of Agent;
(c) issue and redeem Certificates of Deposit evidencing such
Account, as directed by Agent pursuant to the Pledge Agreement,
including Sections 5.4 and 5.5 of the Pledge Agreement which provide as
follows:
Section 5.4 Issuance and Redemption of Certificates of
Deposit. Upon the receipt of any deposit of Cash Collateral from
Agent, each Deposit Taker shall issue or cause to be issued a
Certificate of Deposit evidencing the Account into which such
deposit is made and deliver such Certificate of Deposit to (or
upon the written direction of) Agent for the benefit of BNPLC and
the Participants. Each Certificate of Deposit shall be issued in
an amount equal to the Value of the Account which it evidences
and shall otherwise be in the form set forth as [Annex 1 to this
Notice of Security Interest]. When Cash Collateral is deposited
into an Account that is already evidenced by an outstanding
Certificate of Deposit held by Agent, and when any Unaffiliated
Deposit Taker is expected to add interest to the principal
balance of an Account that is already evidenced by an outstanding
Certificate of Deposit held by Agent, Agent will surrender the
outstanding Certificate of Deposit to the Deposit Taker that
issued it and will direct in writing that Deposit Taker to issue
or cause the issue of a new Certificate of Deposit in exchange,
evidencing the total amount of Cash Collateral then in the
Account after the deposit or the addition of the interest. A
Deposit Taker that has issued or caused to be issued a
Certificate of Deposit may require the surrender of the
Certificate of Deposit as a condition to a withdrawal from the
Account evidenced thereby, including any withdrawal required or
permitted by this Agreement. Upon surrender of a Certificate of
Deposit in connection with a withdrawal of less than all of the
Cash Collateral in the Account evidenced thereby, the applicable
Deposit Taker will concurrently issue or cause to be issued as
directed in writing by the Agent a new Certificate of Deposit to
Agent, evidencing the balance of the Cash Collateral remaining on
deposit in the Account after the withdrawal. Notwithstanding the
foregoing, if any Certificate of Deposit held by Agent shall be
destroyed, lost or stolen, the Deposit Taker that issued the
Certificate, upon the written request of Agent, shall issue or
cause to be issued a new Certificate of Deposit to Agent in lieu
of and in substitution for the Certificate of Deposit so
destroyed, lost or stolen. However, as applicant for the
substitute Certificate of Deposit, Agent must indemnify (at no
cost to NAI) the applicable Deposit Taker against any liability
on the Certificate of Deposit destroyed, lost or stolen, and
Agent shall furnish to the Deposit Taker an affidavit of an
officer of Agent setting forth the fact of destruction, loss or
theft and confirming the status of Agent as holder of the
Certificate of Deposit immediately prior to the destruction, loss
or theft. If any Certificate of Deposit held by Agent shall
become mutilated, the Deposit Taker that issued or caused to be
issued the Certificate, upon the written request of Agent, shall
issue or cause to be issued a new Certificate of Deposit to Agent
in exchange and substitution for the mutilated Certificate of
Deposit. Agent shall hold all Certificates of Deposit for the
benefit of BNPLC and the Participants, subject to the pledge and
security interest created hereby.
Section 5.5 Status of the Accounts Under the Reserve
Requirement Regulations. Deposit Takers shall be permitted to
structure the Accounts as nonpersonal time deposits under 12
C.F.R., Part II, Chapter 204 (commonly known as "Regulation D").
Accordingly, each Deposit Taker may require at least seven days
advance notice of any withdrawal or transfer of funds from
Accounts it maintains and may limit the number of withdrawals or
transfers from such Accounts to no more than six in any calendar
month, notwithstanding anything to the contrary herein or in any
deposit
-2-
38
agreement that NAI and any Deposit Taker may enter into with
respect to any Account....;
(d) take such other steps as Agent may reasonably request to
record, maintain, validate and perfect its pledge of and security
interest in the Collateral; and
(e) upon receipt of notice from Agent that an Event of Default
has occurred, transfer and deliver to Agent or its nominee, together
with all necessary endorsements, all or such portion of the Collateral
held by Deposit Taker as Agent shall direct; provided, however, that in
connection therewith Deposit Taker may require compliance by Agent with
the provisions in Sections 5.4 and 5.5 of the Pledge Agreement for
redemption of any outstanding Certificate of Deposit which evidences the
Account.
5. NAI and Agent agree that (a) the possession by Deposit Taker of all
money, instruments, chattel paper and other property constituting Collateral
shall be deemed to be possession by Agent or a person designated by Agent, for
purposes of perfecting the security interest granted to Agent under the Pledge
Agreement pursuant to Section 9305, 8313 or 8213 of the UCC (as the case may
be), and (b) notifications by Deposit Taker to other Persons holding any such
property, and acknowledgments, receipts or confirmations from such Persons
delivered to Deposit Taker, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of Deposit Taker for the benefit of Agent for
the purposes of perfecting such security interests under applicable law.
6. As contemplated by the Pledge Agreement, please acknowledge Deposit
Taker's receipt of, and consent to, this notice and confirm the representations
and agreements set forth in the Acknowledgment and Agreement attached hereto by
executing the same and returning this letter to Agent. For your files, a copy of
this letter is enclosed which you may retain. The authorizations and directions
set forth herein may not be revoked or modified without the written consent of
Agent.
"AGENT"
BNP Paribas
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
"NAI"
Network Appliance, Inc.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-3-
39
ACKNOWLEDGMENT AND AGREEMENT
OF DEPOSIT TAKER
Deposit Taker hereby acknowledges receipt of, and consents to, the above
notice, acknowledges that it will hold the Collateral for Agent and as Agent's
bailee, agrees to comply with the authorizations and directions set forth above
and represents to and agrees with NAI and Agent as follows:
(a) Deposit Taker is a commercial bank, organized under the laws
of the United States of America or a state thereof or under the laws of
another country which is doing business in the United States of America.
Deposit Taker is authorized to maintain deposit accounts for others
through the Account Office specified in the above notice, and Deposit
Taker will not move the accounts described in the above notice to other
offices without the prior written authorization of Agent and NAI.
(b) Deposit Taker has a combined capital, surplus and undivided
profits of at least $500,000,000.
(c) The information set forth above regarding the Account
established by NAI with Deposit Taker is accurate. Such Account is
currently open and Deposit Taker has no prior notice of any other
pledge, security interest, Lien, adverse claim or interest in such
Account.
(d) Deposit Taker shall promptly notify NAI and Agent if the
representations made by Deposit Taker above cease to be true and
correct.
(e) Deposit Taker shall not allow the withdrawal of funds from
such Account by any Person other than Agent, or (ii) WITHOUT IN EACH
CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, setoff or
attempt to setoff any amount (including Secured Obligations owed to
Deposit Taker, if any) against any Collateral held from time to time by
Deposit Taker.
[ ]
---------------------------------------
By:
--------------------------------------
Name:
Title:
-----------------------------------
[Date]
-4-
40
ANNEX 1
TO NOTICE OF SECURITY INTEREST
CERTIFICATE OF DEPOSIT
(No. _________)
[---------, -----]
[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]
PAYABLE TO
THE ORDER OF: BNP PARIBAS, as Agent under the Pledge Agreement
(Phase IV-Improvements) dated as of October 2, 2000, among
Network Appliance, Inc., BNP Leasing Corporation, BNP
Paribas and any other financial institutions which are
from time to time Participants under such Pledge Agreement
(Phase IV-Improvements) and BNP Paribas, acting in its
capacity as agent for BNPLC and the Participants
Dollars
--------------------------------------------------------------------------------
in current funds, without interest, seven days after presentment of this
certificate properly endorsed.
The bank issuing this certificate acknowledges and certifies that on the
date indicated above the payee deposited the dollar amount indicated above, and
that such amount shall be payable as provided above.
-----------------------------------------
Authorized Signature
41
ATTACHMENT 4
TO PLEDGE AGREEMENT
NOTICE OF SECURITY INTEREST
[__________, 20__]
[Name of Deposit Taker]
[Address of Deposit Taker]
1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Notice have the respective meanings given to those terms in the Pledge
Agreement.
2. NAI has informed Agent that NAI has established with the addressee of
this Notice ("DEPOSIT TAKER") the following Account in the name of Agent to be
maintained at the following Account Office:
Account Account Account
Type Office Number
----------------- ------------- ----------
Time Deposit
------------- ----------
NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account, and that to evidence such Account and the amount of Cash
Collateral held therein from time to time, NAI has authorized Deposit Taker to
issue Certificates of Deposit payable to the order of Agent as provided in the
Pledge Agreement.
3. NAI and Agent hereby notify Deposit Taker that, pursuant to the
Pledge Agreement, NAI has granted to Agent, for the ratable benefit of BNPLC and
the Participants as security for the Secured Obligations, a pledge of and
security interest in all Accounts and other Collateral maintained by NAI with
Deposit Taker, including the Account described in Section 2 above.
4. In furtherance of such grant, NAI and Agent hereby authorize and
direct Deposit Taker to:
(a) hold all Collateral for Agent and as Agent's bailee, separate
and apart from all other property and funds of NAI and all other Persons
and to permit no other funds to be deposited or credited to the Account
described above;
42
(b) make a notation in its books and records of the interest of
Agent in the Collateral and that the Account described above and all
deposits therein or sums credited thereto are subject to a pledge and
security interest in favor of Agent;
(c) cause Certificates of Deposit evidencing such Account to be
issued and redeemed, as directed by Agent in writing pursuant to this
Notice and in accordance with Sections 5.4 and 5.5 of the Pledge
Agreement, which provide as follows:
Section 5.4 Issuance and Redemption of Certificates of
Deposit. Upon the receipt of any deposit of Cash Collateral from
Agent, each Deposit Taker shall issue or cause to be issued a
Certificate of Deposit evidencing the Account into which such
deposit is made and deliver such Certificate of Deposit to (or
upon the written direction of) Agent for the benefit of BNPLC
and the Participants. Each Certificate of Deposit shall be
issued in an amount equal to the Value of the Account which it
evidences and shall otherwise be in the form set forth as [Annex
1 to this Notice of Security Interest]. When Cash Collateral is
deposited into an Account that is already evidenced by an
outstanding Certificate of Deposit held by Agent, and when any
Unaffiliated Deposit Taker is expected to add interest to the
principal balance of an Account that is already evidenced by an
outstanding Certificate of Deposit held by Agent, Agent will
surrender the outstanding Certificate of Deposit to the Deposit
Taker that issued it and will direct in writing that Deposit
Taker to issue or cause the issue of a new Certificate of
Deposit in exchange, evidencing the total amount of Cash
Collateral then in the Account after the deposit or the addition
of the interest. A Deposit Taker that has issued or caused to be
issued a Certificate of Deposit may require the surrender of the
Certificate of Deposit as a condition to a withdrawal from the
Account evidenced thereby, including any withdrawal required or
permitted by this Agreement. Upon surrender of a Certificate of
Deposit in connection with a withdrawal of less than all of the
Cash Collateral in the Account evidenced thereby, the applicable
Deposit Taker will concurrently issue or cause to be issued as
directed in writing by the Agent a new Certificate of Deposit to
Agent, evidencing the balance of the Cash Collateral remaining
on deposit in the Account after the withdrawal. Notwithstanding
the foregoing, if any Certificate of Deposit held by Agent shall
be destroyed, lost or stolen, the Deposit Taker that issued the
Certificate, upon the written request of Agent, shall issue or
cause to be issued a new Certificate of Deposit to Agent in lieu
of and in substitution for the Certificate of Deposit so
destroyed, lost or stolen. However, as applicant for the
substitute Certificate of Deposit, Agent must indemnify (at no
cost to NAI) the applicable Deposit Taker against any liability
on the Certificate of Deposit destroyed, lost or stolen, and
Agent shall furnish to the Deposit Taker an affidavit of an
officer of Agent setting forth the fact of destruction, loss or
theft and confirming the status of Agent as holder of the
Certificate of Deposit immediately prior to the destruction,
loss or theft. If any Certificate of Deposit held by Agent shall
become mutilated, the Deposit Taker that issued or caused to be
issued the Certificate, upon the written request of Agent, shall
issue or cause to be issued a new Certificate of Deposit to
Agent in exchange and substitution for the mutilated Certificate
of Deposit. Agent shall hold all Certificates of Deposit for the
benefit of BNPLC and the Participants, subject to the pledge and
security interest created hereby.
Section 5.5 Status of the Accounts Under the Reserve
Requirement Regulations. Deposit Takers shall be permitted to
structure the Accounts as nonpersonal time deposits under 12
C.F.R., Part II, Chapter 204 (commonly known as "Regulation D").
Accordingly, each Deposit Taker may require at least seven days
advance notice of any withdrawal or transfer of funds from
Accounts it maintains and may limit the number of withdrawals or
transfers from such Accounts to no more than six in any calendar
month, notwithstanding anything to the contrary herein or in any
deposit
-2-
43
agreement that NAI and any Deposit Taker may enter into with
respect to any Account....;
(d) take such other steps, at the cost and expense of the Agent
or NAI, as Agent may reasonably request to maintain, validate and
perfect its pledge of and security interest in the Collateral; and
(e) upon receipt of written notice from Agent that an Event of
Default has occurred, transfer and deliver to Agent or its nominee,
together with all necessary endorsements, all or such portion of the
Collateral held by Deposit Taker as Agent shall direct; provided,
however, that in connection therewith Agent shall comply with the
provisions in Sections 5.4 and 5.5 of the Pledge Agreement for
redemption of any outstanding Certificate of Deposit which evidences the
Account.
5. NAI and Agent agree that (a) the possession by Deposit Taker of all
money, instruments, chattel paper and other property constituting Collateral
shall be deemed to be possession by Agent or a person designated by Agent, for
purposes of perfecting the security interest granted to Agent under the Pledge
Agreement pursuant to Section 9305, 8313 or 8213 of the UCC (as the case may
be), and (b) notifications by Deposit Taker to other Persons holding any such
property, and acknowledgments, receipts or confirmations from such Persons
delivered to Deposit Taker, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of Deposit Taker for the benefit of Agent for
the purposes of perfecting such security interests under applicable law.
6. Concerning the Deposit Taker, Agent and NAI agree as follows:
(a) Compensation
(i) Contemporaneously with the time of execution of this
Notice, NAI or Agent is executing a separate fee schedule or
agreement submitted by Deposit Taker, describing the fees NAI or
Agent, as applicable, will pay to Deposit Taker for maintaining
the Account as described herein.
(ii) Agent and NAI, jointly and severally, shall be
liable for and shall reimburse and indemnify Deposit Taker and
hold Deposit Taker harmless from and against any and all claims,
losses, liabilities, costs, damages or expenses (including
reasonable attorneys' fees and expenses) (collectively,
"Losses") arising from or in connection with or related to this
Notice or being Deposit Taker hereunder (including but not
limited to Losses incurred by Deposit Taker in connection with
its successful defense, in whole or in part, of any claim of
gross negligence or willful misconduct on its part), provided,
however, that nothing contained herein shall require Deposit
Taker to be indemnified for Losses caused by its gross
negligence or willful misconduct.
(b) Certain Rights of the Deposit Taker
(i) The duties, responsibilities and obligations of
Deposit Taker shall be limited to those expressly set forth
herein and no duties, responsibilities or obligations
-3-
44
shall be inferred or implied. Deposit Taker shall not be subject
to, nor required to comply with, any other agreement between or
among any or all of the other parties hereto or to which any
such party is a party, even though reference thereto may be made
herein, or to comply with any direction or instruction (other
than those contained herein or delivered in accordance with this
Notice) from any party any entity acting on its behalf. Deposit
Taker shall not be required to, and shall not, expend or risk
any of its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder.
(ii) If at any time Deposit Taker is served with any
judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process which in any
way affects the Account (including but not limited to orders of
attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Account),
Deposit Taker is authorized to comply therewith as it or its
legal counsel of its own choosing deems necessary; and if
Deposit Taker complies with any such judicial or administrative
order, judgment, decree, writ or other form of judicial or
administrative process, Deposit Taker shall not be liable to any
of the parties hereto or to any other person or entity even
though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have
been without legal force or effect.
(iii) Deposit Taker shall not be liable for any action
taken or omitted or for any loss or injury resulting from its
actions or its performance or lack of performance of its duties
hereunder in the absence of gross negligence or willful
misconduct on its part. In no event shall Deposit Taker be
liable (x) for acting in accordance with or relying upon any
instruction, notice, demand, certificate or document from Agent
or any officer of Agent acting or purporting to act on behalf of
Agent, (y) for any consequential, punitive or special damages,
(z) for the acts or omissions of its nominees, correspondents,
designees, subagents or subcustodians.
(iv) Deposit Taker may consult with legal counsel as to
any matter relating to this Notice, and Deposit Taker shall not
incur any liability in acting in good faith in accordance with
any advice from such counsel. All reasonable fees charged by
such counsel in connection with any such consultation shall be
subject to reimbursement by Agent and NAI pursuant to
subparagraph 6(a)(ii) above.
(v) Deposit Taker shall not incur any liability for not
performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the
control of Deposit Taker (including but not limited to any act
or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or
other wire or communication facility).
(vi) Deposit Taker shall not be responsible in any
respect for the form, execution, validity, value or genuineness
of documents or securities deposited hereunder, or for any
description therein, or for the identity, authority or rights of
persons executing or delivering or purporting to execute or
deliver any such document, security or endorsement.
-4-
45
(vii) In the event of any ambiguity or uncertainty
hereunder or in any notice, instruction or other communication
received by Deposit Taker hereunder, Deposit Taker may, in its
sole discretion, refrain from taking any action other than
retain possession of the Account, unless Deposit Taker receives
written instructions, signed by Agent, which eliminates such
ambiguity or uncertainty.
(c) Notices and Payment Instructions.
(i) Notices, instructions or other communications shall
be in writing and shall be sent to the addresses set forth below
by any of the following means: (A) personal service, with proof
of delivery retained; (B) telecopy (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. Any party may change its address set forth below by
notice given to the other parties in the manner described in
this subparagraph.
Address of Agent:
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
And for any type of funding notices, with a copy to:
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx/Xxx Xxxx
Telecopy: (000) 000-0000
Address of NAI:
Network Appliance, Inc.
Attn: Xxxxxx Xxxxxxxx
0000 Xxx Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Address of Deposit Taker
The Bank of New York
Insurance Trust & Escrow - 21W
Attention: Xxxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy : (000) 000-0000
-5-
46
(ii) Notices to Deposit Taker shall be deemed to be
given when actually received by Deposit Taker's Corporate Trust
Department. Deposit Taker is authorized to comply with and rely
upon any notices, instructions or other communications believed
by it to have been sent or given by the Agent or by a person or
persons authorized by the Agent. Whenever under the terms hereof
the time for giving a notice or performing an act falls upon a
Saturday, Sunday, or banking holiday, such time shall be
extended to the next day on which Deposit Taker is open for
business.
(iii) All funds to be deposited into the Account shall
be paid in immediately available funds by wire transfer to:
-----------------
-----------------
-----------------
-----------------
or in such other manner as Deposit Taker may designate in a
notice to Agent and NAI.
(iv) All funds to paid from the Account by Deposit Taker
to Agent shall be paid in immediately available funds by wire
transfer to:
Federal Reserve Bank of New York
ABA 000000000 BNP Paribas
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Withdrawal
(d) Resignation and Removal
(i) Agent may remove Deposit Taker at any time by giving
to NAI and to Deposit Taker thirty (30) calendar days' prior
notice in writing signed by Agent. Deposit Taker may resign at
any time by giving to Agent and NAI fifteen (15) calendar days'
prior written notice thereof.
(ii) Upon the effective date of any removal or
resignation of Deposit Taker, Agent must surrender any
outstanding Certificate of Deposit that evidences the Account to
Deposit Taker, whereupon Deposit Taker shall deliver the funds
then held by it in the Account to Agent in accordance with
payment instructions herein. Although Agent may be required by
the Pledge Agreement to promptly distribute such funds to one or
more successor Deposit Takers, Deposit Taker shall have no
liability or responsibility whatsoever for the proper
distribution of application by Agent of any such funds paid to
Agent by Deposit Taker or for the designation or appointment of
any successor Deposit Takers.
(iii) Upon delivery of the funds deposited in the
Account to Agent as provided in the preceding subparagraph,
Deposit Taker shall have no further duties, responsibilities or
obligations hereunder.
-6-
47
7. NAI and Agent further agree with Deposit Taker as follows:
(a) Governing Law. This Notice shall be interpreted, construed,
enforced and administered in accordance with the internal substantive
laws (and not the choice of law rules) of the State of New York. Each of
the parties hereto (i.e., Agent, NAI and Deposit Taker) hereby submits
to the personal jurisdiction of and each agrees that all proceedings
relating hereto shall be brought in courts located within the City and
State of New York or elsewhere in the United States as Deposit Taker may
select. Each of the parties hereto also hereby waives the right to trial
by jury and to assert counterclaims in any such proceedings. To the
extent that in any jurisdiction any party hereto may be entitled to
claim, for itself or its assets, immunity from suit, execution,
attachment (whether before or after judgment) or other legal process,
each hereby irrevocably agrees not to claim, and hereby waives, such
immunity. Each party hereto also waives personal service of process and
consents to service of process by certified or registered mail, return
receipt requested, directed to it at the address last specified for
notices hereunder, and such service shall be deemed completed ten (10)
calendar days after the same is so mailed.
(b) Amendment. Except as otherwise permitted herein, this Notice
may be modified only by a written amendment signed by all the parties
hereto, and no waiver of any provision hereof shall be effective unless
expressed in a writing signed by the party to be charged.
(c) Waiver. The rights and remedies conferred by this Notice
upon the parties hereto shall be cumulative, and the exercise or waiver
of any such right or remedy shall not preclude or inhibit the exercise
of any additional rights or remedies. The waiver of any right or remedy
hereunder shall not preclude the subsequent exercise of such right or
remedy.
(d) Representations and Warranties. Each party hereto hereby
represents and warrants (a) that this Notice been duly authorized,
executed and delivered on its behalf and constitutes its legal, valid
and binding obligation and (b) that the execution, delivery and
performance of the terms of this Notice by such party do not and will
not violate any applicable law or regulation.
(e) Unenforceability. The invalidity, illegality or
unenforceability of any provision of this Notice shall in no way affect
the validity, legality or enforceability of any other provision; and if
any provision is held to be enforceable as a matter of law, the other
provisions shall not be affected thereby and shall remain in full force
and effect.
(f) Entire Agreement. As between NAI and Agent, on the one hand,
and Deposit Taker, on the other, this Notice (including the
Acknowledgment and Agreement of Deposit Taker attached hereto and made a
part hereof) shall constitute the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior oral or
written agreements in regard thereto. As between NAI and Agent, however,
nothing contained in this Notice will be construed to impair the rights
of Agent under the Pledge Agreement.
(g) Termination. This Notice shall terminate upon the
distribution of all property from the Account as provided herein.
-7-
48
(h) Counterparts. This Notice may be executed by each of the
parties hereto in any number of counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original and
all such counterparts shall together constitute one and the same
agreement.
(i) Taxes. The Deposit Taker does not have any interest in the
property deposited in the Account hereunder but is serving as the bailee
of Agent only and having only possession thereof. Pursuant to
subparagraph 6(a)(ii) above, Deposit Taker shall be entitled to be
reimbursed and indemnified upon request for any transfer taxes or other
taxes relating to the Accounts incurred in connection herewith. Any
payments of income from the Account shall be subject to withholding
regulations then in force with respect to United States taxes. The other
parties hereto will provide the Deposit Taker with appropriate W-9 forms
for tax I.D., number certifications, or W-8 forms for non-resident alien
certifications. It is understood that the Deposit Taker shall be
responsible for income reporting only with respect to income earned on
the Account and is not responsible for any other reporting.
(j) Survival. The provisions of paragraphs 6(a) and 7(i) shall
survive the termination of this Notice or the resignation or removal of
the Deposit Taker.
8. As contemplated by the Pledge Agreement, please acknowledge Deposit
Taker's receipt of, and consent to, this notice and confirm the representations
and agreements set forth in the Acknowledgment and Agreement attached hereto by
executing the same and returning this letter to Agent. For your files, a copy of
this letter is enclosed which you may retain. The authorizations and directions
set forth herein may not be revoked or modified without the written consent of
Agent.
"AGENT"
BNP Paribas
By:
--------------------
Name:
--------------------
Title:
--------------------
"NAI"
Network Appliance, Inc.
By:
--------------------
Name:
--------------------
Title:
--------------------
-8-
49
ACKNOWLEDGMENT AND AGREEMENT
OF DEPOSIT TAKER
Deposit Taker hereby acknowledges receipt of, and consents to, the above
notice, acknowledges that it will hold the Collateral for Agent and as Agent's
bailee, agrees to comply with the authorizations and directions set forth above
and represents to and agrees with NAI and Agent as follows:
(a) Deposit Taker is a commercial bank, organized under the laws
of the United States of America or a state thereof or under the laws of
another country which is doing business in the United States of America.
Deposit Taker is authorized to maintain deposit accounts for others
through the Account Office specified in the above notice, and Deposit
Taker will not move the accounts described in the above notice to other
offices without the prior written authorization of Agent and NAI.
(b) Deposit Taker has a combined capital, surplus and undivided
profits of at least $500,000,000.
(c) The information set forth above regarding the Account
established by NAI with Deposit Taker is accurate. Such Account is
currently open and Deposit Taker has no prior notice of any other
pledge, security interest, Lien, adverse claim or interest in such
Account.
(d) Deposit Taker shall promptly notify NAI and Agent if the
representations made by Deposit Taker above cease to be true and
correct.
(e) Deposit Taker shall not allow the withdrawal of funds from
such Account by any Person other than Agent, or (ii) WITHOUT IN EACH
CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, setoff or
attempt to setoff any amount (including Secured Obligations owed to
Deposit Taker, if any) against any Collateral held from time to time by
Deposit Taker.
Deposit Taker further agrees that the Account described in the foregoing
Notice of Security Agreement will bear interest at the rate or rates specified
by Deposit Taker in the Certificates of Deposit it from time to time issues or
cause to be issued to evidence such Account. The rate or rates specified by
Deposit Taker in the Certificates of Deposit issued by it will be established as
follows:
[DESCRIBE HOW RATES FOR CD'S WILL BE ESTABLISHED. THESE WILL BE THE RATES USED
TO "FILL IN THE BLANK" FOR THE INTEREST RATE PROVISION OF EACH CERTIFICATE OF
DEPOSIT.]
All accrued unpaid interest earned on the Account will be added to the
principal balance of the Account on the first Business Day of each calendar
month. If for any reason Agent shall withdraw or be paid all principal in the
Account on a day other than the first Business Day of any calendar month, then
any accrued, unpaid interest on the Account to the date of such withdrawal or
payment will also be paid to Agent by Deposit Taker on the date of such
withdrawal or payment.
-9-
50
[ ]
---------------------------------------
By:
-----------------------------------
Name:
Title:
-------------------------
[Date]
-10-
51
ANNEX 1
TO NOTICE OF SECURITY INTEREST
CERTIFICATE OF DEPOSIT
(No. _________)
[_________, _____]
[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]
PAYABLE TO
THE ORDER OF: BNP PARIBAS, as Agent under the Pledge Agreement (Phase
IV-Improvements) dated as of October 2, 2000, among
Network Appliance, Inc., BNP Leasing Corporation, BNP
Paribas and any other financial institutions which are
from time to time Participants under such Pledge
Agreement (Phase IV-Improvements) and BNP Paribas,
acting in its capacity as agent for BNPLC and the
Participants
Dollars
---------------------------------------------------------------------- ---------
in current funds, with interest as provided below, upon the first business day
that is at least seven days after presentment of this certificate properly
endorsed.
Interest will accrue on the deposit evidenced by this certificate from
the date first written above to the first business day of the first calendar
month after the date first written above at the rate of _____ percent (___%) per
annum.
The bank issuing this certificate acknowledges and certifies that on the
date indicated above the payee deposited the dollar amount indicated above, and
that such amount shall be payable as provided above.
--------------------------------------
Authorized Signature
52
ATTACHMENT 5
TO PLEDGE AGREEMENT
EXAMPLES OF CALCULATIONS REQUIRED
TO AVOID A COLLATERAL IMBALANCE
The examples below are provided to illustrate the calculations required
for allocations of Cash Collateral in a manner that will avoid a Collateral
Imbalance. The examples are not intended to reflect actual numbers under this
Agreement or actual Percentages of BNPLC or any of the Participants; nor are the
examples intended to provide a formula for the allocations that would be
appropriate in every case.
EXAMPLE NO. 1
Assumptions:
1. Two Participants ("Participant A" and "Participant B") are parties to
the Participation Agreement with BNPLC. Participant A's Percentage is
50% and Participant B's Percentage is 45%, leaving BNPLC with a
Percentage of 5%.
2. On the Base Rent Commencement Date (All Buildings), Funding Advances
(including those to cover Carrying Costs under the Improvements Lease)
totaled $12,000,000, resulting in a Stipulated Loss Value of
$12,000,000, allocable as follows:
A BNPLC's Parent (providing BNPLC's share) (5%).........................$600,000
B Participant A (50%)..................................................6,000,000
C Participant B (45%)..................................................5,400,000
----------
TOTAL ..................................................................$12,000,000
3. The Minimum Collateral Value on the Base Rent Commencement Date (All
Buildings) was $12,000,000 (reflecting a Collateral Percentage of 100%
times Stipulated Loss Value).
4. On the Base Rent Commencement Date (All Buildings), NAI had delivered to
Agent Cash Collateral of $12,000,000, equal to the Minimum Collateral
Value, as required by Section 5.1 of this Agreement.
Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the $12,000,000 to the
Deposit Takers for BNPLC and the Participants as follows:
A. BNPLC's Deposit Taker (5% of Minimum Collateral Value)..........................$600,000
B. Participant A's Deposit Taker (50% of Minimum Collateral Value)...............$6,000,000
C. Participant B's Deposit Taker (45% of Minimum Collateral Value)..............$5,400,000
----------
TOTAL ............................................................................$12,000,000
53
EXAMPLE NO. 2
Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:
1. Effective as of the first Base Rent Date, a new Participant approved by
NAI ("Participant C") became a party to this Agreement and the
Participation Agreement, taking a Percentage of 20%. Simultaneously,
Participant A and Participant B entered into supplements to the
Participation Agreement which reduced their Percentages to 40% and 35%,
respectively.
Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPLC and the Participants with the
following amounts:
A. BNPLC's Deposit Taker (5% of Minimum Collateral Value)..........................$600,000
B. Participant A's Deposit Taker (40% of Minimum Collateral Value).............. $4,800,000
C. Participant B's Deposit Taker (35% of Minimum Collateral Value).............. $4,200,000
D. Participant C's Deposit Taker (20% of Minimum Collateral Value ............. $2,400,000
----------
TOTAL ............................................................................$12,000,000
-2-
54
ATTACHMENT 6
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL
[________, _____]
BNP Paribas
[address of BNP]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires you to withdraw from the Accounts and return to NAI the
following amount:
____________________________ Dollars ($__________)
on the following date:
__________, ____
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that:
1. Your withdrawal and delivery of the amount specified above to NAI
will not cause the Value of the remaining Collateral to be less than the Minimum
Collateral Value. After giving effect to such withdrawal, the Collateral
remaining in the Accounts maintained by the Deposit Takers will be:
____________________________ Dollars ($__________),
and the Minimum Collateral Value on the date specified above will equal:
____________________________ Dollars ($__________).
Such Minimum Collateral Value equals the Collateral Percentage of:
55
__________ percent (___%),
times the Stipulated Loss Value of:
____________________________ Dollars ($__________).
2. NAI is giving this notice to you, BNPLC and the Participants at least
ten days prior to the Base Rent Date specified above.
3. No Default or Event of Default has occurred and is continuing as of
the date of this notice, and NAI does not anticipate that any Default or Event
of Default will have occurred and be continuing on the date upon which the
withdrawal is required.
4. NAI agrees that you may determine the Accounts from which to make any
withdrawal required by NAI pursuant to this Section as necessary to prevent or
mitigate any Collateral Imbalance.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS ABOVE ARE
NOT CORRECT OR IF THE DATE FOR WITHDRAWAL SPECIFIED ABOVE IS LESS THAN TEN DAYS
AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY NAI
IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Takers seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to avoid a Collateral
Imbalance.
Network Appliance, Inc.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[cc BNPLC and all Participants]
-2-
56
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH EXCESS COLLATERAL
[_________, _____]
Deposit Takers on the
Attached Distribution List
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires you to withdraw from the Accounts and return to NAI the
amounts listed below on the following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:
Deposit Taker Account No. Amount
1.____________________ _________________________________ $__________________
2.____________________ _________________________________ $__________________
3.____________________ _________________________________ $__________________
4.____________________ _________________________________ $__________________
TOTAL WITHDRAWALS: $__________________
BNP Paribas, AS AGENT
Name:
--------------------------
Title:
-------------------------
[cc BNPLC and NAI]
-3-
57
ATTACHMENT 7
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENTS TO PARTICIPANTS
[_________, _____]
BNP Paribas
[address of BNP]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.2 of the Pledge
Agreement, NAI requires you to withdraw from the Accounts and pay directly to
Participants (in proportion to their respective Percentages) the following
amount:
________________________ Dollars ($_______)
on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):
__________, ____
The amount specified above equals the following percentage (equal to the
aggregate of all Participant's Percentages):
__________ percent (___%),
times the total of all Cash Collateral presently pledged under the Pledge
Agreement:
____________________________ Dollars ($__________).
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you, BNPLC and the
Participants at least ten days prior to the date of required withdrawal and
payment specified above.
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to
58
Deposit Takers seven days prior to the withdrawal of Cash Collateral required by
this notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to comply with
subsection 6.2.2 of the Pledge Agreement.
Network Appliance, Inc.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[cc BNPLC and all Participants]
-2-
59
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH COLLATERAL FOR
DIRECT PAYMENTS TO PARTICIPANTS
[_________, _____]
Deposit Takers on the
Attached Distribution List
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.2
of the Pledge Agreement, NAI requires Agent to withdraw from the Accounts and
pay to the Participants (in proportion to their respective Percentages) the
amounts listed below on the following date:
__________, ____
Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:
Deposit Taker Account No. Amount
1.______________________ _________________________________ $__________________
2.______________________ _________________________________ $__________________
3.______________________ _________________________________ $__________________
4.______________________ _________________________________ $__________________
TOTAL WITHDRAWALS: $__________________
BNP Paribas, AS AGENT
Name:
-----------------------------
Title:
----------------------------
[cc BNPLC and NAI]
-3-
60
ATTACHMENT 8
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENT TO BNPLC
[_________, _____]
BNP Paribas
[address of BNP]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.3 of the Pledge
Agreement, NAI requires you to withdraw from the Account maintained by the
Deposit Taker and pay directly to BNPLC on behalf of NAI as a payment required
by the Purchase Agreement the following amount:
________________________ Dollars ($_______)
on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):
__________, ____
To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you and BNPLC at least ten
days prior to the date of required withdrawal and payment specified above.
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Taker seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Taker for BNPLC to advise it
of your intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to comply with Section
6.3 of the Pledge Agreement.
61
Network Appliance, Inc.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[cc BNPLC]
-2-
62
ANNEX 1
TO NAI'S NOTICE OF REQUIREMENT OF
DIRECT PAYMENT TO BNPLC
[_________, _____]
[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.3
of the Pledge Agreement, NAI requires Agent to withdraw from the Accounts
maintained by you, as Deposit Taker for BNPLC, the sum of:
________________________ Dollars ($_______)
Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Account maintained by you as Deposit Taker
for BNPLC, and with this letter the undersigned is presenting Certificate(s) of
Deposit as required in connection with such withdrawal:
BNP PARIBAS, AS AGENT
Name:
-------------------------------------
Title:
------------------------------------
[cc BNPLC and NAI]
-3-
63
ATTACHMENT 9
TO PLEDGE AGREEMENT
NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER
[_________, _____]
BNP Paribas
[address of BNP]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.4 of the Pledge
Agreement, NAI requires you to withdraw from the following Account maintained by
the following Deposit Taker:
Deposit Taker Account No.
____________________________ ___________________
____________________________ ___________________
Cash Collateral in the following amount:
________________________ Dollars ($_______)
and to deposit such Cash Collateral with other Deposit Takers who are not
Disqualified Deposit Takers no later than ten days after the date upon which you
receive this notice.
To assure you that NAI has the right to require such withdrawal, and to
induce you to comply with this notice, NAI certifies to you that the Deposit
Taker specified above has become a Disqualified Deposit Taker because it no
longer satisfies the requirements listed in Section 4.1 of the Pledge Agreement.
Specifically, such Deposit Taker no longer satisfies the following requirements:
[NAI MUST INSERT HERE A DESCRIPTION OF WHICH REQUIREMENTS THE DEPOSIT TAKER NO
LONGER SATISFIES AND HOW NAI HAS DETERMINED THAT THE REQUIREMENTS ARE NO LONGER
SATISFIED, ALL IN SUFFICIENT DETAIL TO
64
PERMIT THE PARTICIPANT FOR WHOM SUCH DEPOSIT TAKER HAS BEEN MAINTAINING AN
ACCOUNT TO RESPOND IF IT BELIEVES THAT NAI IS IN ERROR.]
Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to the
Deposit Taker specified above seven days prior to the withdrawal of Cash
Collateral required by this notice. For your convenience, we have attached a
letter as Annex 1 to this notice that you might execute and send to such Deposit
Taker to advise it of your intent to withdraw and of your presentment of
Certificates of Deposit as required in connection therewith. The attached letter
also sets forth the amount NAI believes you must withdraw to comply with Section
6.4 of the Pledge Agreement.
Network Appliance, Inc.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[cc BNPLC]
-2-
65
ANNEX 1
TO NAI'S NOTICE OF REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER
[_________, _____]
[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]
Re: Pledge Agreement (Phase IV - Improvements) dated as of October
2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
BNP Paribas and any other financial institutions which are from
time to time Participants under such Pledge Agreement (Phase IV
- Improvements) and BNP Paribas, acting in its capacity as agent
for BNPLC and the Participants
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.4
of the Pledge Agreement, NAI requires Agent to withdraw from the Accounts
maintained by you, as Deposit Taker for BNPLC, the sum of:
________________________ Dollars ($_______)
Accordingly, on such date, the undersigned intends to withdraw such
amount from the Account maintained by you as Deposit Taker (Account No.
________), and with this letter the undersigned is presenting Certificate(s) of
Deposit as required in connection with such withdrawal:
BNP PARIBAS, AS AGENT
Name:
------------------------------------
Title:
-----------------------------------
[cc BNPLC and NAI]
-3-
66
Schedule 1
Financial Covenants and Negative Covenants
This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase IV - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of October 2, 2000 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase IV - Land) (the
"LAND LEASE" and, together with the Improvements Lease, the "LEASES") dated to
be effective as of the Effective Date, between BNPLC and NAI, (c) the Pledge
Agreement (Phase IV - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and BNP
Paribas, as a Participant and as agent for any financial institutions that
become Participants thereunder from time to time, and (d) the Pledge Agreement
(Phase IV - Land) (collectively with the Pledge Agreement (Improvements), the
"PLEDGE AGREEMENTS") dated to be effective as of the Effective Date, among
BNPLC, NAI, and BNP Paribas, as a Participant and as agent for any financial
institutions that become Participants thereunder from time to time.
PART I - DEFINED TERMS
In this Schedule 1, capitalized terms used but not defined herein shall
have the meaning assigned to them in the Leases or the Common Definitions and
Provisions Agreements referenced in the Leases; and the following capitalized
terms shall have the following meanings:
"ADJUSTED NET INCOME" means, for any fiscal period of NAI, the aggregate
net income earned (or net losses incurred) during such period by NAI and
its Subsidiaries (determined on a consolidated basis), plus any
Permitted Non-Cash Charges deducted in determining such net income (or
net loss).
"ADJUSTED EBIT" means, for any accounting period, net income (or net
loss) of NAI and its Subsidiaries (determined on a consolidated basis),
plus the amounts (if any) which, in the determination of net income (or
net loss) for such period, have been deducted for (a) interest expense,
(b) income tax expense (c) rent expense under leases of property, and
(d) Permitted Non-Cash Charges.
"CONSOLIDATED TANGIBLE NET WORTH" means the excess of (1) the total
assets, other than Intangible Assets, of NAI and its Subsidiaries
(determined on a consolidated basis) over (2) the total liabilities of
NAI and its Subsidiaries (determined on a consolidated basis).
"DEBT" as used in this Exhibit shall have the meaning assigned to it in
the Common Definitions and Provisions Agreements, where "Debt" of any
Person is defined to mean (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such
Person for the deferred purchase price of property or services (except
trade payables and accrued expenses constituting current liabilities in
the ordinary course of business); (c) the face amount of any outstanding
letters of credit issued for the account of such Person; (d) obligations
of such Person arising under acceptance facilities; (e) guaranties,
endorsements (other than for collection in the ordinary course of
business) and other contingent obligations of such Person to purchase,
to provide funds for payment, to provide funds to invest in any Person,
or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations
of such
-4-
67
Person as lessee under Capital Leases; and (h) the obligations of such
Person, contingent or otherwise, under any lease of property or related
documents (including a separate purchase agreement) which provide that
such Person or any of its Affiliates must purchase or cause another
Person to purchase any interest in the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor.
For purposes of this definition, the amount of the obligations described
in clause (h) of the preceding sentence with respect to any lease
classified according to GAAP as an "operating lease," shall 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 lease or capital lease],
plus (2) the fair value of the property covered by the lease; provided,
however, that such amount shall not exceed the price, as of the date a
determination of Debt 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 shall be excused from paying
rentals or other minimum lease payments that would otherwise accrue
after the purchase.
"FIXED CHARGES" means, for any accounting period, the sum (without
duplication of any item) of the following charges or costs incurred or
paid by NAI and its Subsidiaries (determined on a consolidated basis):
(a) gross interest expense, plus (b) amortization of principal or debt
discount in respect of all Debt during such period, plus (c) rent
payable under all leases of property during such period, plus (d) taxes
payable during such period.
"INTANGIBLE ASSETS" means assets of NAI and its Subsidiaries (determined
on a consolidated basis) that are properly classified as "INTANGIBLE
ASSETS" in accordance with GAAP and, in any event, shall include
goodwill, patents, trade names, trademarks, copyrights, franchises,
experimental expense, organization expense, unamortized debt discount
and expense, and deferred charges (other than prepaid insurance, prepaid
taxes and current deferred taxes to the extent any such prepaid or
deferred items are classified on the balance sheet of NAI and its
consolidated Subsidiaries as current assets in accordance with GAAP and
with the concurrence of NAI's independent public accountants).
"PERMITTED NON-CASH CHARGES" means the amounts (if any) which, in the
determination of net income (or net loss) for any relevant fiscal
period, have been deducted by NAI or its Subsidiaries for non-cash
charges made to write down goodwill or research and development costs in
connection with acquisitions permitted by this Schedule 1.
"QUICK RATIO" means the ratio of:
(A) the sum (without duplication of any item) of the
following assets of NAI and its Subsidiaries (determined on a
consolidated basis): Collateral delivered and pledged under the
Pledge Agreements in accordance with the requirements thereof
(if any); plus unencumbered cash; plus unencumbered short term
cash investments; plus other unencumbered marketable securities
which are classified as short term investments in accordance
with GAAP; plus unencumbered accounts receivable, computed net
of reserves for uncollectible amounts as determined in
accordance with GAAP, to
(B) the sum (without duplication of any item) of (1) all
liabilities of NAI and its Subsidiaries (determined on a
consolidated basis) treated as current liabilities in accordance
with
-5-
68
GAAP, plus (2) other obligations included in total Debt of NAI and its
Subsidiaries (determined on a consolidated basis), the payment of which
is due on demand or will become due within one year after the date on
which the applicable determination of Quick Ratio is required hereunder.
"ROLLING FOUR QUARTER PERIOD" means a period of four consecutive fiscal quarters
of NAI, the last of which quarters ends after December 31, 1999.
PART II - FINANCIAL COVENANTS FOR LEASE AGREEMENT
NAI covenants that it shall not at any time suffer or permit:
1. Minimum Unencumbered Cash and Cash Equivalents. The sum (without
duplication of any item) of the unrestricted cash, Collateral delivered
and pledged under the Pledge Agreements in accordance with the
requirements thereof (if any), unencumbered short term cash investments
and unencumbered marketable securities classified as short term
investments according to GAAP of NAI and its Subsidiaries (determined on
a consolidated basis) to be less than total Debt of NAI and its
Subsidiaries (determined on a consolidated basis).
2. Minimum Tangible Net Worth. Consolidated Tangible Net Worth to be less
than the sum of: (a) ninety percent of the Consolidated Tangible Net
Worth as of October 30, 1998; plus (b) seventy-five percent of NAI's net
income (computed without deduction for net losses in any fiscal quarter)
earned in each fiscal quarter since October 30, 1998; plus (c)
one-hundred percent of the net proceeds of sales of stock in NAI or its
Subsidiaries (other than sales to NAI or its Subsidiaries) after October
30, 1998; less (d) Permitted Non-Cash Charges for any period after
October 30, 1998.
3. Minimum Quick Ratio. The Quick Ratio to be less than 1.50 to 1.00.
4. Minimum Fixed Charge Coverage. The ratio of (a) Adjusted EBIT for any
Rolling Four Quarter Period to (b) Fixed Charges for the same Rolling
Four Quarter Period, to be less than 1.50 to 1.00.
5. Minimum Profitability. Adjusted Net Income to be less than $1.00 in more
than one fiscal quarter of any Rolling Four Quarter Period.
6. Maximum Leverage Ratio. the ratio of (a) total Debt of NAI and its
Subsidiaries (determined on a consolidated basis) at the end of any
Rolling Four Quarter Period to (b) the Adjusted EBIT for the same Four
Quarter Rolling Period, to exceed 3.00 to 1.00.
PART III - OTHER COVENANTS
Without limiting NAI's obligations under the other provisions of the Operative
Documents, during the Term, NAI shall not, without the prior written consent of
BNPLC in each case:
A. Liens. Create, incur, assume or suffer to exist, or permit any of its
Consolidated Subsidiaries to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
provided that the following shall be permitted except to the extent that they
would encumber any interest in the Property in violation of other provisions of
the Operative Documents:
-6-
69
1. Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if they are being contested in good faith
by appropriate proceedings and for which appropriate reserves are maintained;
2. Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than thirty (30) days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
3. Liens under workmen's compensation, unemployment insurance,
social security or similar laws (other than ERISA);
4. Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases,
public or statutory obligations, surety, stay, appeal, indemnity, performance or
other similar bonds, or other similar obligations arising in the ordinary course
of business;
5. judgment and other similar Liens against assets other than
the Property or any part thereof in an aggregate amount not in excess of
$3,000,000 arising in connection with court proceedings; provided that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith by appropriate
proceedings;
6. easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by NAI or any such Consolidated Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
7. Liens securing obligations of such a Consolidated Subsidiary
to NAI or to another such Consolidated Subsidiary;
8. Liens not otherwise permitted by this subparagraph A (and not
encumbering the Property or any Collateral) incurred in connection with the
incurrence of additional Debt or asserted to secure Unfunded Benefit
Liabilities, provided that (a) the sum of the aggregate principal amount of all
outstanding obligations secured by Liens incurred pursuant to this clause shall
not at any time exceed five percent (5%) of Consolidated Tangible Net Worth at
such time; and (b) such Liens do not constitute Liens against NAI's interest in
any material Subsidiary or blanket Liens against all or substantially all of the
inventory, receivables, general intangibles or equipment of NAI or of any
material Subsidiary of NAI (for purposes of this clause, a "material Subsidiary"
means any subsidiary whose assets represent a substantial part of the total
assets of NAI and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP); and
9. Liens incurred in connection with any renewals, extensions or
refundings of any Debt secured by Liens described in the preceding clauses of
this subparagraph A, provided that there is no increase in the aggregate
principal amount of Debt secured thereby from that which was outstanding as of
the date of such renewal, extension or refunding and no additional property is
encumbered.
-7-
70
B. Transactions with Affiliates. Enter into or permit any Subsidiary of
NAI to enter into any material transactions (including, without limitation, the
purchase, sale or exchange of property or the rendering of any service) with any
Affiliates of NAI except on terms (1) that would not cause or result in a
Default by NAI under the financial covenants set forth in Part II of this
Schedule, and (2) that are no less favorable to NAI or the relevant Subsidiary
than those that would have been obtained in a comparable transaction on an arm's
length basis from an unrelated Person.
C. Compliance. Fail to preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; or fail to comply with the provisions of all documents
pursuant to which NAI is organized and/or which govern NAI's continued existence
and with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to NAI and/or its business.
D. Insurance. Fail to maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of NAI,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to BNPLC, or fail to deliver to BNPLC from
time to time at BNPLC's request schedules setting forth all insurance then in
effect.
E. Facilities. Fail to keep all properties useful or necessary to NAI's
business in good repair and condition, or to from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall be
fully and efficiently preserved and maintained.
F. Taxes and Other Liabilities. Fail to pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as NAI may in good faith contest
or as to which a bona fide dispute may arise, and (b) for which NAI has made
provisions, to BNPLC's satisfaction, for eventual payment thereof in the event
that NAI is obligated to make such payment.
G. Capital Expenditures. Make any additional investment in fixed assets
in any fiscal year in excess of an aggregate of twenty percent (20%) of NAI's
total assets as of the end of the prior fiscal year.
H. Merger, Consolidation, Transfer of Assets. Merge into or consolidate
with any other entity (unless NAI is the surviving entity and remains in
compliance of all provisions of the Operative Documents); or make any
substantial change in the nature of NAI's business as conducted as of the date
hereof; or sell, lease, transfer or otherwise dispose of all or a substantial or
material portion of NAI's assets except in the ordinary course of its business.
I. Loans, Advances, Investments. Make any loans or advances to or
investments in any person or entity, except (a) any of the foregoing existing as
of, and disclosed to BNPLC prior to, the date hereof, (b) loans to employees for
travel advances, relocation loans and other loans in the ordinary course of
business, (c) investments in accordance with NAI's investment policy, as in
effect from time to time, (d) existing investments in subsidiaries and joint
ventures which have been disclosed to BNPLC in writing prior to the date hereof,
and new investments in subsidiaries and joint ventures in amounts up
-8-
71
to an aggregated of $10,000,000.00, (e) loans to employees, officers, directors
to finance or refinance the purchase of equity securities of NAI.
J. Dividends, Distributions. Declare or pay any dividend or distribution
either in cash, stock or any other property on NAI's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of
any class of NAI's stock now or hereafter outstanding.
-9-
